<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended Commission file number
December 31, 1993 1-3560
P. H. GLATFELTER COMPANY
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Pennsylvania 23-0628360
- --------------------------------- --------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
228 S. Main Street
Spring Grove, Pennsylvania 17362
- --------------------------------- --------------
(Address of principal (Zip Code)
executive offices)
Registrant's telephone number, (717) 225-4711
including area code --------------
Securities registered pursuant to Section 12(b) of the Act:
Common Stock American Stock Exchange Inc.
- ---------------------- -------------------------------------------
(Title of each class) (Name of each exchange on which registered)
Securities registered pursuant to Section 12(g) of the Act:
None
--------------
(Title of Class)
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
----- -----
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of the registrant's knowledge, in the definitive proxy statement
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X] [Check]
The aggregate market value of the Common Stock of the Registrant held by non-
affiliates at March 2, 1994 was $447,110,330.
Common Stock outstanding at March 2, 1994: 43,987,328 Shares
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the following documents are incorporated by reference in
this Report on Form 10-K.
1. Proxy Statement dated March 17, 1994 (Part III)
<PAGE>
PART I
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Item 1. Business.
- ------ --------
The Registrant, a paper manufacturing company, began operations in
Spring Grove, Pennsylvania in 1864 and was incorporated as a Pennsylvania
corporation in 1905. On January 30, 1979 the Registrant acquired by merger
Bergstrom Paper Company ("Bergstrom") with paper mills located in Wisconsin and
Ohio. The Ohio mill was sold on September 10, 1984. On May 7, 1987 the
Registrant acquired all of the outstanding capital stock of Ecusta Corporation
("Ecusta") with a paper mill located in North Carolina and other operations in
North Dakota, Canada and Australia. Ecusta was merged into and became a
division of the Registrant on June 30, 1987.
The Registrant's present papermaking operations are located in Spring
Grove, Pennsylvania, Pisgah Forest, North Carolina and Neenah, Wisconsin. It
manufactures printing papers and tobacco and other specialty papers. The
Registrant's products are used principally for case bound and quality paperback
books, commercial and financial printing, converting and cigarette
manufacturing.
The Registrant sells its products throughout the United States and in
a number of foreign countries. Net export sales in 1993, 1992 and 1991 were
$38,577,000, $48,830,000 and $60,311,000, respectively. In 1993, sales of paper
for book publishing and commercial printing generally were made through
wholesale paper merchants, whereas sales of paper to cigarette manufacturers,
financial printers and converters generally were made directly. No single user
of the Registrant's products accounted for more than 10% of the Registrant's
1993 net dollar sales. In 1993, the Registrant did not supply tobacco paper
products to the domestic tobacco operations of Philip Morris Companies, Inc., in
accordance with a decision communicated by Philip Morris to the Registrant on
October 29, 1992. Philip Morris had been one of Registrant's six domestic
customers for tobacco paper products. Sales to Philip Morris amounted to 7.5%
of the Registrant's total sales in 1992. During 1993, the Registrant succeeded
in redirecting the lost Philip Morris product volume to printing paper
customers. However, these sales were not as profitable as sales to Philip
Morris in 1992. In addition, due to increased competitive pressure and cost-
cutting measures within the tobacco industry, sales to remaining tobacco paper
customers in 1993 were less profitable than in 1992. As a result, the 1993
profit performance of the Registrant's Pisgah Forest mill was sharply below that
of 1992. The Registrant
<PAGE>
continues its efforts to maximize utilization of its Pisgah Forest mill assets
by attempting to direct sales volume to its most profitable grades and by
controlling costs. Even with these efforts, the 1994 profit performance of the
Pisgah Forest mill is not expected to improve over that of 1993.
Set forth below is the amount (in thousands) and percentage of net
sales contributed by each of the Registrant's two classes of similar products
during each of the years ended December 31, 1993, 1992 and 1991.
<TABLE>
<CAPTION>
Year Ended December 31,
1993 1992 1991
---- ---- ----
Net Sales % Net Sales % Net Sales %
--------- -- --------- -- --------- --
<S> <C> <C> <C> <C> <C> <C>
Printing
Papers $341,528 72% $348,497 64% $365,224 64%
Tobacco
and Other
Specialty
Papers 131,981 28% 191,560 36% 202,540 36%
-------- --- -------- --- -------- ---
Total $473,509 100% $540,057 100% $567,764 100%
</TABLE>
Printing and specialty papers are manufactured in each of the
Registrant's mills. Tobacco papers are manufactured in the Registrant's Pisgah
Forest mill.
The competitiveness of the markets in which the Registrant sells its
products varies. There are numerous concerns in the United States manufacturing
printing papers, and no one company holds a dominant position. Capacity in the
uncoated free-sheet industry, which includes uncoated printing papers, is
expected to increase in the first quarter of 1994. Industry operating rates
should improve, particularly in the latter half of the year, once the new
capacity is absorbed by the market. In the interim, competition with respect to
printing papers is likely to be intense with continuing pressure on prices. In
the tobacco papers business, while there is only one significant domestic
competitor, there are numerous international competitors. Despite recent events
described above, the Registrant remains a major tobacco papers supplier to the
domestic tobacco products industry. Declining consumption of cigarettes in the
United States, the shift to lower-priced and lower-cost cigarettes and lower-
priced tobacco paper products from foreign manufacturers caused tobacco
companies to pressure the Registrant to reduce prices, but have not, and are not
expected to, affect the Registrant's relative competitive
2
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position. Increasing foreign production of tobacco products by U.S. companies
may have an adverse effect on the Registrant's overall competitive position.
Service, product performance and technological advances are important
competitive factors in the Registrant's business. The Registrant believes its
reputation in these areas continues to be excellent.
Backlogs are not significant in the Registrant's business.
The principal raw material used at the Spring Grove mill is pulpwood.
In 1993, the Registrant acquired approximately 83% of its pulpwood from saw
mills and independent logging contractors and 17% from Company-owned
timberlands. Hardwood purchases constituted slightly more than half of the
pulpwood acquired and softwood the balance. Hardwoods are growing in abundance
within a relatively short distance of the Registrant's Spring Grove mill.
Softwood is obtained primarily from Maryland, Delaware and Virginia. In order
to protect its sources of pulpwood, the Registrant has actively promoted
conservation and forest management among suppliers and woodland owners. In
addition, its subsidiary, The Glatfelter Pulp Wood Company, has acquired, and is
acquiring, woodlands, particularly softwood growing land, with the objective of
having sufficient softwood growing on its lands to provide a significant portion
of the Spring Grove mill's future softwood requirements. Wood chips produced
from sawmill waste also accounted for a substantial amount of the Registrant's
pulpwood purchases for the Spring Grove mill.
The Neenah mill uses high-grade recycled wastepaper as its principal
raw material. There is currently an adequate supply of wastepaper.
The major raw materials used at the Pisgah Forest mill are purchased
wood pulp and processed flax straw, which is derived from linseed flax plants.
Flax has become a less important raw material as a result of the loss of
business of Philip Morris (referred to above), since it was the Registrant's
major customer for flax-based products. In addition, declining consumption of
cigarettes in the United States and the shift to lower-priced and lower-cost
cigarettes, which are manufactured using predominately wood pulp-based tobacco
papers, has caused further deterioration in demand for flax-based papers. This
has necessitated the purchase of additional wood pulp to manufacture products to
replace the lost flax-based business. The current supply of flax and wood pulp
is sufficient for the present and anticipated future operations at the Pisgah
Forest mill.
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Due to sufficient levels of processed flax straw inventory, the
Registrant elected not to contract for the purchase of flax straw for 1994. The
Registrant's future operations in North Dakota and Canada are contingent upon
the Registrant's ongoing review of the demand for and profitability of its flax-
based tobacco papers.
Wood pulp purchased from others comprised approximately 109,000 short
tons or 25% of the total 1993 fiber requirements of the Registrant. Wood pulp
is currently in more than adequate supply.
The Registrant is subject to numerous Federal, state and foreign laws
and rules and regulations thereunder with respect to solid waste disposal and
the abatement of air and water pollution and noise. It has been the
Registrant's experience over many years that directives with respect to the
abatement of pollution have periodically been made increasingly stringent.
During the past twenty years or more, the Registrant has taken a number of
measures and spent substantial sums of money both for the installation of
facilities and operating expenses in order to abate air, water and noise
pollution and to alleviate the problem of disposal of solid waste. In spite of
the measures it has already taken, the Registrant expects that compliance with
the laws and the rules and regulations thereunder relating to solid waste
disposal and the abatement of air and water pollution could become increasingly
difficult and that such compliance, when and if technologically feasible, will
require additional capital expenditures and operating expenses. For further
information with respect to such compliance, reference is made to Item 3 of this
report.
Compliance with government environmental regulations is a matter of
high priority to the Registrant. In order to meet environmental requirements,
the Registrant has undertaken certain projects, the most significant of which is
the Spring Grove pulpmill modernization. The related construction cost for all
of these projects, based on presently available information, is estimated to be
$34 million in 1994 and $7 million in 1995, including approximately $31 million
in 1994 for the Spring Grove pulpmill modernization project. The pulpmill
modernization project began in 1990 and is expected to be completed in 1994.
The total cost of the pulpmill modernization project is expected to be $170
million (exclusive of capitalized interest) of which $20 million was expended in
1991 or prior thereto, $48 million in 1992 and $71 million in 1993. Since
capital expenditures for pollution abatement generally do not increase the
productivity or efficiency of the Registrant's mills, the Registrant's earnings
will be adversely affected to the extent that selling prices cannot be increased
to offset incremental operating costs, including depreciation, resulting from
such capital expenditures,
4
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additional interest expense or the loss of any income which otherwise could have
been earned on the amounts expended for environmental purposes. The Registrant
does not expect, however, that its capital expenditures for, or operating costs
of, pollution abatement facilities for its present mills will have a significant
adverse effect on its competitive position.
The Registrant's Spring Grove mill generates all of its steam
requirements and is 100% self-sufficient in electrical energy generation. It
also produces excess electricity which is sold to the local power company under
a long-term co-generation contract, which resulted in 1993 net energy sales of
$5,602,000. Principal fuel sources used by the Registrant's Spring Grove mill
are coal, spent chemicals, bark and wood waste, and oil which in 1993 were used
to produce approximately 66%, 27%, 6% and 1%, respectively, of the total energy
internally generated at the Spring Grove mill.
The Pisgah Forest mill generates all of its steam requirements and a
majority of its electrical requirements (63% in 1993) and purchases electric
power for the remainder. The principal fuel source used at the Pisgah Forest
mill is coal (98.5% in 1993).
The Neenah mill generates all of its steam requirements and a portion
of its electric power requirements (13% in 1993) and purchases the remainder of
its electric power requirements. Gas and oil were used to produce 81% and 19%,
respectively, of the mill's internally generated energy during 1993.
At December 31, 1993, the Registrant had 3,019 active full-time
employees.
Hourly employees at the Registrant's mills are represented by
different locals of the United Paperworkers International Union, AFL-CIO. A
labor agreement covering approximately 1,025 employees at the Pisgah Forest mill
expires in October 1996. Under this agreement, wages increased 2.75% in 1993
and are to increase 3% in both 1994 and 1995. A five-year labor agreement
covering approximately 770 hourly employees in Spring Grove was ratified in 1993
and expires in January 1998. Under this agreement, wages increased by 2.5% in
1993 and are to increase by 3% in each of the four years, 1994 through 1997. In
January 1994, a new five-year labor agreement covering Neenah employees
(approximately 320) was ratified. Under this agreement, which expires in August
1997, wages increased 2.75% in 1993 and are to increase 3% in each of 1994, 1995
and 1996.
5
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Item 2. Properties.
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The Registrant's executive offices are located in Spring Grove,
Pennsylvania, 11 miles southwest of York. The Registrant's paper mills are
located in Spring Grove, Pennsylvania, Pisgah Forest, North Carolina and Neenah,
Wisconsin.
The Spring Grove facilities include seven uncoated paper machines with
a daily capacity ranging from 11 to 273 tons and an aggregate annual capacity of
about 279,000 tons of finished paper. The machines have been rebuilt and
modernized from time to time. A high speed off-machine coater gives the
Registrant a potential annual production capacity for coated paper of
approximately 48,000 tons. Since uncoated paper is used in producing coated
paper, this does not represent an increase in the Spring Grove plant capacity.
The pulpmill has a production capacity of approximately 550 tons of bleached
pulp per day.
The Pisgah Forest facilities include twelve paper machines, stock
preparation equipment and a modified kraft bleached flax pulpmill with thirteen
rotary digesters. The annual light weight paper capacity is approximately
98,000 tons. This represents a recent 7,000 ton increase due to a shift from
tobacco paper to printing paper. Nine paper machines are essentially identical
while the newer three machines have design variations specific for the products
produced. Converting equipment includes winders, calendars, slitters,
perforators and printing presses.
The Neenah facilities, consisting of a paper manufacturing mill,
converting plant and offices, are located at two sites. The Neenah mill
includes three paper machines, with an aggregate annual capacity of
approximately 156,000 tons, a wastepaper processing and warehousing building, a
wastepaper de-inking and bleaching plant, stock preparation equipment, power
plant, water treatment and waste treatment plants, and warehousing space. The
converting plant contains a paper processing area and warehouse space.
The Glatfelter Pulp Wood Company, a subsidiary of the Registrant, owns
and manages approximately 109,000 acres of land, most of which is timberland.
The Registrant owns substantially all of the properties used in its
papermaking operations except for certain land leased from the City of Neenah
under leases expiring in 2050, on which wastewater treatment and storage
facilities and a parking lot are located. All of the Registrant's properties,
other than those which are leased, are free from any major liens or
encumbrances. The Registrant considers that all of its buildings are in good
6
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structural condition and well maintained and its properties are suitable and
adequate for present operations.
Item 3. Pending Legal Proceedings.
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The Registrant does not believe that the environmental matters
discussed below will have a material effect on its business or consolidated
financial position.
On May 16, 1989, the Pennsylvania Environmental Hearing Board approved
and entered an Amended Consent Adjudication between the Registrant and the
Pennsylvania Department of Environmental Resources ("DER") in connection with
the Registrant's permit to discharge effluent into the West Branch of the
Codorus Creek. The Amended Consent Adjudication establishes limitations on in-
stream color, and requires the Registrant to conduct certain studies and to
submit certain reports regarding internal and external measures to control the
discharge of color and certain other adverse byproducts of chlorine bleaching to
the West Branch of the Codorus Creek.
During 1990 and again in 1991, the Pennsylvania DER proposed to
reissue the Registrant's waste water discharge permit on terms with which the
Registrant does not agree. The Registrant is contesting these terms. Among
those terms is an unacceptable term concerning a suspected discharge of 2,3,7,8
tetrachlorodibenzo-p-dioxin ("dioxin"). At the behest of the United States
Environmental Protection Agency ("EPA"), DER has included the Registrant's
Spring Grove mill on the list of dischargers submitted to and approved by EPA
pursuant to Section 304(l) of the Clean Water Act. EPA has approved that list
because EPA suspects that the Spring Grove mill may discharge dioxin in
concentrations of concern. The Registrant believes that the Spring Grove mill
should not be included on the discharger list.
The Registrant has been identified by EPA and the Ohio Environmental
Protection Agency as one of 34 potentially responsible parties ("PRP") for the
clean-up of the Cardington Road Landfill in Montgomery County, Ohio. EPA has
selected a remedy estimated to cost approximately $8.2 million and, by letter
dated February 9, 1994, demanded that the PRPs perform a remedial design.
Appleton Paper, Inc., which purchased the Registrant's West Carrolton, Ohio
mill, was previously identified as a PRP and has demanded that the Company
indemnify it for costs incurred in connection with this landfill, but did not
receive the February 9 letter. On March 25, 1994 the Registrant received
notice that the court in Cardington Road Site Coalition v. Snyder Properties,
------------------------------ ------------------
Inc. (Case No. C-3-88-632 S.D. Ohio), a superfund cost recovery action brought
- ----
by the PRPs who implemented the remedial investigation, had authorized the
filing of a complaint naming the Registrant as a third-party defendant in such
action.
7
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The Wisconsin DNR has reissued the Registrant's wastewater discharge
permit for the Neenah mill on terms unacceptable to the Registrant. The
Registrant has requested an adjudicatory hearing on the terms of that permit.
The Wisconsin Paper Council is presently engaged in joint negotiation of some
issues common to a number of permits issued at the same time to similar mills.
The Registrant has been named as a fourth-party defendant in an action
captioned United States v. Modern Trash Removal of York, Inc., Civil No.
---------------------------------------------------
92-0819, pending in the United States District Court for the Middle District of
Pennsylvania. The action, brought pursuant to the Comprehensive Environmental
Response, Compensation and Liability Act and the Pennsylvania Hazardous Sites
Cleanup Act, seeks contribution from the Registrant for its alleged share of
past and future costs incurred during the cleanup of the Modern Sanitation
Landfill (the "Landfill") located in Windsor and Lower Windsor Townships, York
County, Pennsylvania. Modern Trash Removal York, Inc., a subsidiary of Waste
Management, Inc., has agreed in principle to defend and to indemnify the
Registrant against any liability the Registrant may have with respect to the
cleanup of the Landfill. The terms of a definitive agreement are currently
being negotiated.
Item 4. Submission of Matters to a Vote of Security Holders.
- ------ ---------------------------------------------------
Not Applicable.
Executive Officers of the Registrant.
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<TABLE>
<CAPTION>
Executive Officers Office (a) Age
- ------------------ ------ ---
<S> <C> <C>
T. C. Norris Chairman of the Board, 55
President and Chief
Executive Officer and
Director
R. W. Wand Vice President - 54
Administration
R. P. Newcomer Vice President and 45
Treasurer (b)
R. S. Lawrence Vice President - General 54
Manager, Ecusta Division (c)
J. F. Myers Vice President - 55
Manufacturing Technology (d)
</TABLE>
8
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<TABLE>
<S> <C> <C>
G. H. Glatfelter II Vice President - General 42
Manager, Glatfelter Paper
Division (e)
C. M. Smith Comptroller (f) 35
R. S. Wood Secretary and 36
Assistant Treasurer (g)
</TABLE>
Officers are elected to serve at the pleasure of the Board of
Directors. Except in the case of officers elected to fill a new position or a
vacancy occurring at some other date, officers are elected at the annual meeting
of the Board held immediately after the annual meeting of shareholders.
____________________
(a) Unless otherwise indicated, the offices listed have been held for five or
more years.
(b) Mr. Newcomer became Vice President and Treasurer on May 1, 1993. From June
1, 1989 to April 30, 1993 he was Assistant Comptroller. From January 1,
1988 to May 31, 1989 he was Corporate Manager, Budgets and Financial
Analysis.
(c) Mr. Lawrence became Vice President - General Manager, Ecusta Division on
May 1, 1993. From February 1, 1989 to April 30, 1993 he was Director of
Planning, Acquisitions and Governmental Affairs.
(d) Dr. Myers became Vice President - Manufacturing Technology on April 26,
1989. From April 27, 1988 to April 26, 1989, he was Vice President -
Manufacturing, Glatfelter Paper Division.
(e) Mr. Glatfelter became Vice President - General Manager, Glatfelter Paper
Division on May 1, 1993. From April 1989 until May 1993, he was General
Manager, Glatfelter Paper Division. From April 1988 to April 1989, he was
Assistant to the Chief Executive Officer.
(f) Mr. Smith became Comptroller on May 1, 1993. From December 1990 to May
1993, he was a Financial Analyst. From January 1988 to December 1990, he
was Comptroller for Flagship Cleaning Services, Inc.
(g) Mr. Wood became Secretary and Assistant Treasurer on September 23, 1992.
From December 22, 1987 to September 22, 1992 he was Assistant Secretary and
Assistant Treasurer.
9
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PART II
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Item 5. Market for the Registrant's Common Stock and Related Stockholder
- ------ ---------------------------------------------------- -----------
Matters.
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Common Stock Prices and Dividends Paid Information
The table below shows the high and low prices of the Company's common stock on
the American Stock Exchange (Ticker Symbol "GLT") and the dividends paid per
share for each quarter during the past two years. Stock prices and dividends
paid per share have been adjusted to reflect the two-for-one common stock
split effected April 22, 1992.
<TABLE>
<CAPTION>
1993 1992
_________________________________________________________________
_________________________________________________________________
Quarter High Low Dividends High Low Dividends
<S> <C> <C> <C> <C> <C> <C>
1st $19 1/8 $16 3/4 $.175 $29 1/2 $26 7/8 $.15
2nd 19 1/2 15 3/4 .175 28 5/8 23 .175
3rd 19 15 3/8 .175 25 1/2 21 1/4 .175
4th 19 1/8 15 1/8 .175 24 3/4 17 3/8 .175
</TABLE>
As of December 31, 1993, the Company had 5,030 shareholders of record. A
number of the shareholders of record are nominees.
Item 6. Selected Financial Data.
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Five-Year Summary of Selected Consolidated Financial Data
<TABLE>
<CAPTION>
Year Ended December 31
1993 1992 1991 1990 1989
------- ------- ------- ------- -------
(in thousands except per share amounts)
<S> <C> <C> <C> <C> <C>
Net sales $473,509 $540,057 $567,764 $625,429 $598,777
Income before
accounting
changes 20,409(a) 56,544 76,049 88,332 92,864
Income per
common share
before
accounting
changes $ .46(a) $ 1.27 $ 1.67 $ 1.88 $ 1.93
Total assets 842,087(b) 648,464 630,115 598,842 550,015
Debt 150,000 10,100 _ _ 1,100
Cash dividends
declared per
common share $ .70 $ .70 $ .60 $ .575 $ .50
</TABLE>
(a) After impact of an after tax charge for unusual items of $8,430,000 or
$.19 per share and the effect of an increased federal corporate income tax
rate of $3,587,000 or $.08 per share.
(b) Includes an increase of $61,062,000 for the adoption of Statement of
Financial Accounting Standard No. 109.
Item 7. Management's Discussion and Analysis of Financial Condition and
- ------ ------------------------------------------------- -------------
Results of Operations.
---------------------
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Financial Condition
Liquidity:
During 1993, the primary source of cash and marketable securities was the
Company's issuance of $150,000,000 principal amount of its 5 7/8% Notes.
The Notes will mature on March 1, 1998, and may not be redeemed prior to
maturity. In addition to the proceeds of such issuance, the Company
generated $45,380,000 of cash from operations. These funds were used for,
among other things, capital spending of $112,820,000, the payment of
$30,847,000 in dividends and the retirement of $41,100,000 of short-term
debt, $10,100,000 of which was outstanding as of December 31, 1992. During
1993, the Company's cash and cash equivalents increased by $16,089,000. In
addition, the Company's marketable securities increased by $27,184,000.
The Company expects to meet all its near and long-term cash needs from
internally generated funds, cash, cash equivalents, marketable securities
and bank lines of credit, as discussed in Note 12 of the Notes to
Consolidated Financial Statements, or a combination of these sources.
Capital Resources:
Capital spending in 1993 of $112,820,000 was $22,504,000 higher than in
1992, due primarily to the Company's pulpmill modernization project at its
Spring Grove mill. Capital spending in 1994 is expected to decrease
significantly from 1993 due to the completion of the pulpmill modernization
project, offset somewhat by an estimated $15,000,000 of cash
expenditures related to the purchase and installation of a new turbine
generator. The new turbine generator is expected to be operational in the
first quarter of 1995 at a total cost in excess of $20,000,000.
10
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Results of Operations
The Company classifies its sales into two product groups: 1) printing
papers; and 2) tobacco and other specialty papers. Significant production
capacity increases have occurred in the printing paper industry in 1991,
1992 and 1993. As a result, printing paper prices were down slightly in
1993 compared to 1992. The Company's printing paper volume was up slightly
in 1993, as printing paper volume gains at the Pisgah Forest mill offset
volume decreases at the Neenah mill.
The trend of declining domestic tobacco consumption continued in 1993, with
no change in the trend expected. On October 29, 1992, Philip Morris
Companies, Inc. informed the Company that, effective January 1, 1993, it
would cease to make purchases from the Company for its domestic tobacco
operations. Sales to this customer in 1992 were 7.5% of total sales for the
year. The Company's dollar amount of sales of tobacco paper products direct
to foreign tobacco product manufacturers declined in 1993 as a result of
sharply lower unit prices due to increased foreign competition.
Most of the Company's printing paper sales are directed at the uncoated
free-sheet segment of the industry. Industry uncoated free-sheet capacity
is expected to increase in the first quarter of 1994. Industry operating
rates should improve, particularly in the latter half of the year once the
new capacity is absorbed by the market. Product pricing is expected to be
relatively flat compared to 1993, with any significant improvements not
anticipated until the third or fourth quarter. Profit from operations for
the Spring Grove and Neenah mills is expected to decline modestly in 1994
as a result of unchanged selling prices and increases in wood costs, pulp
costs, depreciation, salaries, wages and other manufacturing costs.
During 1993, the Company succeeded in redirecting the lost Philip Morris
product volume to printing paper customers. These sales were not as
profitable as sales to Philip Morris were in 1992. In addition, due to
increased competitive pressure and cost-cutting measures within the tobacco
industry, sales to remaining tobacco customers in 1993 were less profitable
than in 1992. As a result, the 1993 profit performance of the Company's
Pisgah Forest mill was sharply below that of 1992. The Company continues
its efforts to maximize utilization of its Pisgah Forest mill assets by
attempting to direct sales volume to its most profitable grades and by
controlling costs. Even with these efforts, the 1994 profit performance of
the Pisgah Forest mill is not expected to improve over that of 1993.
Effective January 1, 1993, the Company adopted the provisions of Statements
of Financial Accounting Standards No. 106, "Employers' Accounting for
Postretirement Benefits Other Than Pension" ("SFAS No. 106"), No. 109
"Accounting for Income Taxes" ("SFAS No. 109"), and No. 112 "Employers'
Accounting for Postemployment Benefits" ("SFAS No. 112"). The combined 1993
net of tax charge due to the adoption of these standards was approximately
$4.2 million, or $.09 per common share. Note 1(h) of the Notes to
Consolidated Financial Statements further describes the expected effects of
implementing these Standards.
During 1993, the Company incurred net unusual charges of $13,229,000, or $.19
per common share, due to rightsizing and restructuring costs of $16,363,000,
partially offset by a gain of $1,492,000 on the disposal of its Ecusta
Division's airplane and a credit of $1,642,000 resulting from the updating of
estimates relating to SFAS No. 106, subsequent to its adoption on January 1,
1993. The rightsizing and restructuring costs include provisions for the costs
of early retirements and other terminations in 1993 and other one-time net
costs relating to the rightsizing and restructuring of the Company's
operations.
During 1993, the Company's inventory level increased approximately
$10,500,000. This increase was primarily due to an increase in the
Company's finished goods inventory. This increase was the result of
increased stocking levels to meet customer demand, primarily in the
financial printing market. The Company also purchased a large quantity of
pulp near the end of 1993 at an attractively low price. This purchase also
resulted in an increase in the Company's accounts payable balance at
December 31, 1993.
1993 Compared to 1992
Net sales in 1993 decreased $66,548,000 from 1992 with lower tobacco paper
sales accounting for 94% of this decrease. Tobacco paper sales were
adversely impacted by the loss of the Philip Morris domestic tobacco paper
business. Increased competitive pressure and cost-cutting measures taken by
the remaining domestic and foreign customers resulted in lower unit prices
and lower revenues.
Profit from operations, before restructuring charges, accounting changes,
interest income and expense and taxes, was $48,563,000 compared to
$90,302,000 in 1992, a decrease of 46.2%.
The Company's Pisgah Forest mill showed a decline in profits from
operations of $29,018,000 in 1993 compared to 1992. Net sales decreased
$47,707,000 for the reasons noted above.
Profit from operations at the Neenah mill showed a decline of $6,997,000 in
1993 compared to 1992. Net sales declined $8,651,000 in 1993 due primarily
to lower sales volume.
The Spring Grove mill had a decrease in its profits from operations of
$5,724,000 in 1993 compared to 1992. Net sales were $10,190,000 lower in
1993. The Spring Grove mill had a 4% decrease in average net selling price,
primarily as a result of less favorable product mix.
Selling, administrative and general expenses decreased $3,728,000 in 1993,
$3,640,000 of which was the result of lower management incentive bonuses
and profit sharing expenses.
Net interest income increased by $2,414,000 in 1993 due to increased cash
available for investment as a result of the $150,000,000 debt issuance.
Interest on debt increased by $2,824,000, net of an increase in capitalized
interest of $4,050,000.
1992 Compared to 1991
Net sales in 1992 decreased $27,707,000 from 1991. Lower printing paper
sales accounted for 60% of this decrease with lower sales of tobacco and
other specialty papers accounting for the balance. Higher unit sales were
more than offset by lower unit prices and unfavorable mix changes within
both product categories.
In 1992, profit from operations, before net interest income and income
taxes, was $90,302,000 compared to $120,912,000 in 1991, a decrease of
25.3%.
The Company's Pisgah Forest mill showed a decline in profit from operations
of $12,278,000 in 1992 compared to 1991. Net sales declined $12,814,000 as
a result of a less favorable mix of product sales and lower international
and domestic tobacco paper sales.
Profit from operations at the Neenah mill showed a decline of $9,999,000 in
1992. Net sales declined $9,187,000 in 1992 due mainly to lower unit prices
as volume was virtually the same.
The Spring Grove mill had a decrease in its profits from operations of
$8,333,000 in 1992. Net sales were $5,706,000 lower in 1992. Volume increased
by 2.1% in 1992, but lower unit prices and a less favorable product mix more
than offset the increased volume. Increases in salaries, wages, depreciation
and other manufacturing costs were also contributing factors.
Selling, administrative and general expenses decreased by $6,999,000 in
1992; $4,406,000 of which was the result of lower management incentive
11
<PAGE>
bonus and profit sharing expenses. The balance was as a result of the
Company's ongoing cost control measures.
Net interest income declined by $1,814,000 in 1992 due to reduced
investment in interest-bearing securities and lower interest rates.
Effects of Changing Prices
The moderate levels of inflation during recent years have not had a
material effect on the Company's net sales, revenues or income from
operations. Although the replacement cost of assets increases during
inflationary periods, earnings and cash flow can be maintained through an
increase in selling prices.
Item 8. Financial Statements and Supplementary Data.
- ------ -------------------------------------------
Consolidated Statements of Income and Retained Earnings
P. H. Glatfelter Company and subsidiaries
For the Years Ended December 31, 1993, 1992 and 1991
<TABLE>
<CAPTION>
1993 1992 1991
--------- -------- --------
(in thousands except
per share amounts)
<S> <C> <C> <C>
NET SALES $473,509 $540,057 $567,764
OTHER INCOME:
Interest on investments and other - net 2,873 459 2,273
Energy sales - net 5,602 5,870 6,236
Gain from property dispositions, etc. - net 21 1,453 727
--------- -------- --------
Total 482,005 547,839 577,000
--------- -------- --------
COSTS AND EXPENSES:
Cost of products sold 399,252 422,033 411,771
Selling, administrative and general expenses 31,317 35,045 42,044
Interest on debt (Notes 1(g)and 12) 2,824 -
--------- -------- --------
433,393 457,078 453,815
Unusual items (Note 2) 13,229 - -
--------- -------- --------
Total costs and expenses 446,622 457,078 453,815
--------- -------- --------
INCOME BEFORE INCOME TAXES
AND ACCOUNTING CHANGES 35,383 90,761 123,185
--------- -------- --------
INCOME TAXES (Note 8):
Current 8,167 24,536 43,801
Deferred 3,220 9,681 3,335
Impact of federal tax rate change 3,587 - -
--------- -------- --------
Total 14,974 34,217 47,136
--------- -------- --------
INCOME BEFORE ACCOUNTING CHANGES 20,409 56,544 76,049
ACCOUNTING CHANGES (Note 1(h)) (4,193) - -
--------- -------- --------
NET INCOME 16,216 56,544 76,049
RETAINED EARNINGS AT BEGINNING OF YEAR 560,388 534,755 485,711
--------- -------- --------
Total 576,604 591,299 561,760
CASH DIVIDENDS DECLARED:
Common stock (per share: 1993, $.70; 1992, $.70;
1991, $.60) and preferred stock (Note 3) 30,834 30,911 27,005
--------- -------- --------
RETAINED EARNINGS AT END OF YEAR $545,770 $560,388 $534,755
========= ======== ========
INCOME PER COMMON SHARE (Notes 1(b) and 3):
Income before accounting changes $ .46 $ 1.27 $ 1.67
Impact of accounting changes (.09) - -
--------- -------- --------
Net income $ .37 $ 1.27 $ 1.67
========= ======== ========
</TABLE>
See notes to consolidated financial statements.
Consolidated Balance Sheets
P. H. Glatfelter Company and subsidiaries
December 31, 1993 and 1992
<TABLE>
<CAPTION>
ASSETS
1993 1992
---------- ----------
(in thousands)
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents (Note 1(c)) $ 19,182 $ 3,093
Marketable securities (Notes 1(c) and 12) 27,184 -
Accounts receivable (less allowance for
doubtful accounts -
1993, $1,838,000; 1992, $890,000) 34,340 38,540
Inventories (Note 1(d)) 98,930 88,423
Prepaid expenses 1,305 471
---------- ----------
Total current assets 180,941 130,527
---------- ----------
PLANT, EQUIPMENT AND TIMBERLANDS AT COST (Notes 1(e), 1(g) and 9):
Land and buildings 94,330 82,764
Machinery and equipment 626,322 542,915
Other 26,234 27,563
Less accumulated depreciation (296,925) (265,264)
---------- ----------
Total 449,961 387,978
Construction in progress 154,545 82,403
Timberlands, less depletion 16,607 16,389
---------- ----------
Plant, equipment and timberlands - net 621,113 486,770
---------- ----------
OTHER ASSETS (Note 6) 40,033 31,167
---------- ----------
Total $ 842,087 $ 648,464
========== ==========
LIABILITIES
<CAPTION>
1993 1992
---------- ----------
(in thousands)
<S> <C> <C>
CURRENT LIABILITIES:
Short-term bank borrowings (Note 12) $ - $ 10,100
Accounts payable 39,935 33,430
Dividends payable 7,698 7,711
Federal, state and local taxes 4,872 8,275
Accrued compensation, other expenses
and deferred income taxes 28,972 26,335
---------- ----------
Total current liabilities 81,477 85,851
---------- ----------
LONG-TERM DEBT (Note 12) 150,000 -
DEFERRED INCOME TAXES (Notes 1(f), 1(h) and 8) 130,509 89,269
</TABLE>
12
<PAGE>
<TABLE>
<S> <C> <C>
OTHER LONG-TERM LIABILITIES (Notes 5 and 7) 38,701 16,295
COMMITMENTS AND CONTINGENCIES (Notes 9 and 10)
SHAREHOLDERS' EQUITY (Notes 3, 4 and 5):
Capital Stock:
4 5/8 % preferred - 250
Common, $.01 par value; authorized - 120,000,000
shares; issued (including shares in treasury:
1993, 10,374,652; 1992, 10,304,707) -
54,361,980 shares 544 544
Capital in excess of par value 39,323 38,633
Retained earnings 545,770 560,388
---------- ----------
Total 585,637 599,815
Less cost of common and preferred
stock in treasury (144,237) (142,766)
---------- ----------
Shareholders' equity 441,400 457,049
---------- ----------
Total $ 842,087 $ 648,464
========== ==========
</TABLE>
See notes to consolidated financial statements.
Consolidated Statements of Cash Flows
P. H. Glatfelter Company and subsidiaries
For the Years Ended December 31, 1993, 1992 and 1991
<TABLE>
<CAPTION>
1993 1992 1991
---- ---- ----
(in thousands)
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $16,216 $56,544 $76,049
Accounting changes 4,193 - -
Items included in net income not using (providing) cash:
Depreciation and depletion 38,132 31,893 30,694
Expense related to employee stock
purchase plans 855 879 800
(Gain) loss on disposition
of fixed assets (541) (172) 518
Changes in assets and liabilities:
Accounts receivable 4,200 4,237 7,038
Inventories (10,507) 769 (3,176)
Other assets and prepaid expenses (10,919) (8,074) (3,774)
Accounts payable, accrued compensation, other expenses,
deferred income taxes and other
long-term liabilities 7,057 (8,535) 294
Federal, state and local taxes (3,403) (5,751) (1,601)
Deferred income taxes - noncurrent 97 9,682 3,363
------- ------- -------
Net cash provided by
operating activities 45,380 81,472 110,205
CASH FLOWS FROM INVESTING ACTIVITIES: ------- ------- -------
Purchase of marketable securities - net (27,184) - -
Proceeds from disposal of fixed assets 1,841 1,213 256
Additions to plant, equipment
and timberlands (112,820) (90,316) (46,582)
Increase (decrease) in liabilities
related to fixed asset acquisitions 1,705 3,294 (5,201)
------- ------- -------
Net cash used in investing activities (136,458) (85,809) (51,527)
------- ------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds of long-term debt issuance 150,000 - -
Borrowing (repayment) of short-term debt (10,100) 10,100 -
Dividends paid (30,847) (29,896) (27,087)
Purchases of common and preferred stock (4,281) (19,683) (17,305)
Employees' contribution - common stock
issued under employee stock purchase plans 2,395 2,149 1,925
------- ------- -------
Net cash provided by (used in)
financing activities 107,167 (37,330) (42,467)
------- ------- -------
Net increase (decrease) in cash
and cash equivalents 16,089 (41,667) 16,211
CASH AND CASH EQUIVALENTS:
At beginning of year 3,093 44,760 28,549
------- ------- -------
At end of year $19,182 $ 3,093 $44,760
======= ======= =======
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash Paid For:
Interest (net of amount capitalized) $ 155 $ - $ -
Income taxes 11,716 30,354 45,446
======= ======= =======
</TABLE>
See notes to consolidated financial statements.
1. Summary of Significant Accounting Policies
(a) Principles of Consolidation
The accounts of the Company, and its wholly-owned, significant
subsidiaries, are included in the consolidated financial statements. All
intercompany transactions have been eliminated. Certain reclassifications
have been made of previously reported amounts in order to conform with
classifications used in the current year.
(b) Earnings per Share
Net income per share of common stock is computed on the basis of the
weighted average number of shares of common stock and common stock
equivalents (Note 5) outstanding during each year.
The 1993 net income per share of common stock of $.37, as presented in the
Consolidated Statements of Income and Retained Earnings, appropriately
reflects the negative impact of rightsizing and restructuring charges (Note
2), adopting certain Statements of Financial Accounting Standards (Note
1(h)) and the increase in the federal corporate income tax rate from 34% to
35% (Note 8). The 1993 net income per share of common stock, exclusive of
these items, would have been $.73. A reconciliation of these amounts
follows:
<TABLE>
<S> <C>
Net income per share of common
stock reported $ .37
After tax impact of:
Rightsizing and restructuring charges .19
Accounting changes .09
Increase in federal corporate income tax rate .08
-------
Net income per share of common stock
exclusive of the above items $ .73
=======
</TABLE>
13
<PAGE>
(c) Cash Equivalents and Investments
The Company considers all highly liquid financial instruments with
effective maturities at date of purchase of three months or less to be cash
equivalents. Highly liquid financial instruments with maturities in excess
of three months but which the Company considers available for sale are
classified as marketable securities on the Company's Consolidated Balance
Sheets.
Effective January 1, 1994, the Company changed its accounting for
investments in debt and equity securities to conform to Statement of
Financial Accounting Standards No. 115, "Accounting for Certain Investments
in Debt and Equity Securities" ("SFAS No. 115"). All of the Company's
securities are either "available for sale" or "held to maturity" as defined
by SFAS No. 115. As noted in Note 1(i), the Company's marketable securities
approximate fair value. The adoption of this standard is not expected to
have a material impact on the Company's Consolidated Balance Sheets or
Consolidated Statements of Income and Retained Earnings.
(d) Inventories
Inventories are stated at the lower of cost or market. Raw materials and
in-process and finished inventories are valued using the last-in, first-out
(LIFO) method, and the supplies inventory is valued principally using the
average cost method. Inventories at December 31 are as follows:
<TABLE>
<CAPTION>
1993 1992 1991
---- ---- ----
(in thousands)
<S> <C> <C> <C>
Raw materials $37,340 $32,473 $29,329
In-process
and finished 33,503 28,039 33,133
Supplies 28,087 27,911 26,730
------- ------- -------
Total $98,930 $88,423 $89,192
======= ======= =======
</TABLE>
If the Company had valued all inventories using the average cost method,
inventories would have been $2,141,000 lower than reported at December 31,
1993, and $1,105,000 and $3,168,000 greater than reported at December 31,
1992 and 1991, respectively. Net income would not have been significantly
different than that reported.
At December 31, 1993, the value of the above inventories exceeded
inventories for income tax purposes by approximately $27,000,000.
(e) Plant, Equipment and Timberlands
Depreciation is computed for financial reporting on the straight-line
method over the estimated useful lives of the respective assets and for
income taxes principally on accelerated methods over lives established by
statute or Treasury Department procedures. Provision is made for deferred
income taxes applicable to this difference.
Maintenance and repairs are charged to income and major renewals and
betterments are capitalized. At the time property is retired or sold, the
cost and related reserve are eliminated and any resultant gain or loss is
included in income.
Depletion of the cost of timber is computed on a unit rate of usage by
growing area based on estimated quantities of recoverable material.
(f) Income Tax Accounting
Effective January 1, 1993, the Company changed its policy of accounting for
income taxes to conform to Statement of Financial Accounting Standards No.
109, "Accounting for Income Taxes" ("SFAS No. 109") (Note 8). The Company
previously followed Accounting Principles Board Opinion No. 11, "Accounting
for Income Taxes". Deferred taxes are provided for differences between
amounts shown for financial reporting purposes and those included with tax
return filings that will reverse in future periods.
(g) Interest Expense Capitalized
The Company capitalizes interest expense incurred in connection with
qualified additions to property. The Company capitalized $4,138,000 and
$88,000 of interest in 1993 and 1992, respectively. No interest was
capitalized in 1991.
(h) Accounting Changes for Statements of Financial
Accounting Standards
Effective January 1, 1993, the Company adopted the provisions of Statements
of Financial Accounting Standards No. 106, "Employers' Accounting for
Postretirement Benefits Other Than Pensions" ("SFAS No. 106"), No. 112,
"Employers' Accounting for Postemployment Benefits" ("SFAS No. 112"), and
No. 109, "Accounting for Income Taxes" ("SFAS No. 109"). The cumulative
effect of the accounting changes, net of tax charges (credits) due to the
adoption of these Standards, is as follows:
<TABLE>
<S> <C>
SFAS No. 106 $ 12,850,000
SFAS No. 112 1,967,000
SFAS No. 109 (10,624,000)
------------
$ 4,193,000
============
</TABLE>
SFAS No. 106 requires recognition of the cost of retiree health and
insurance benefits during an employee's active service. The cumulative
effect, as of January 1, 1993, of the adoption of SFAS No. 106 was a
one-time charge for postretirement health care costs of $20,900,000 which,
after deferred income tax benefits of $8,050,000, resulted in a 1993 first
quarter net charge of $12,850,000.
The Company had previously recognized the cost of postretirement benefits
in the period benefits were paid. The effect of this change in accounting
for the year ended December 31, 1993 was an additional pre-tax expense of
approximately $770,000. The postretirement expense for the years ended
December 31, 1992 and 1991 were approximately $1,320,000 and $1,358,000,
respectively.
The pro forma effect on operations of this change for the years ended
December 31, 1992 and 1991 would have been an additional pre-tax expense of
approximately $855,000 and $647,000, respectively.
SFAS No. 112 requires employers to recognize the obligation to provide
postemployment benefits under certain conditions. Such benefits, relating
primarily to disability-related benefits, were not previously recognized by
the Company until paid. The cumulative effect as of January 1, 1993 of the
adoption of SFAS No. 112 was a provision for accrued postemployment
benefits of $3,201,000 which, after deferred income tax benefits of
$1,234,000, resulted in a 1993 first quarter net charge of $1,967,000. The
pro forma effect on operations of this change for the years ended December
31, 1992 and 1991 would not have been significant.
SFAS No. 109 requires a remeasurement of the Company's Ecusta Division
acquisition which results in an increase in the fair value of the acquired
assets and the establishment of a deferred income tax liability for the
difference between the book and tax values of such assets. The adoption of
SFAS No. 109 also resulted in a reversal of deferred income taxes provided
during years when the effective income tax rates were higher than those
currently in effect. The cumulative effect of these changes was an increase
in plant and equipment of approximately $61,062,000; an increase in
deferred income taxes of approximately $50,438,000; and a credit to
operations as a cumulative effect of the change in method of accounting for
income taxes of approximately $10,624,000. The pro forma effect on
14
<PAGE>
operations of this change for the years ended December 31, 1992 and 1991,
would not have been significant.
(i) Fair Market Value of Financial Instruments
In 1993, the Company adopted SFAS 107, "Disclosures About Fair Value of
Financial Instruments". This Statement requires that fair values be
disclosed for most of the Company's financial instruments. The amounts
reported in the Consolidated Balance Sheets for cash and cash equivalents,
marketable securities, trade receivables, certain other current assets and
long-term debt approximate fair value.
2. Rightsizing and Restructuring (Unusual Items)
During 1993, the Company incurred net pre-tax unusual charges of
$13,229,000, including rightsizing and restructuring costs of $16,363,000,
partially offset by a gain of $1,492,000 on the disposal of its Ecusta
Division's airplane and a credit of $1,642,000 resulting from the updating
of estimates relating to SFAS No. 106, subsequent to its adoption on
January 1, 1993. The rightsizing and restructuring costs include provisions
for the costs of early retirements and other terminations in 1993 and other
one-time net costs relating to the rightsizing and restructuring of the
Company's operations. The after tax impact of these charges was $8,430,000,
or $.19 per common share.
3. Capital Stock
A summary of the number of shares of common stock outstanding follows:
<TABLE>
<CAPTION>
1993 1992 1991
---- ---- ----
<S> <C> <C> <C>
Balance at
beginning of year 44,057,273 44,629,402 45,174,890
Delivery of
treasury shares:
Restricted
common stock
award plan
(Note 5) - 62,256 -
Employee stock
purchase plans 186,955 131,471 101,512
Purchase of stock
for treasury (256,900) (765,856) (647,000)
---------- ---------- ----------
Balance at
end of year 43,987,328 44,057,273 44,629,402
========== ========== ==========
</TABLE>
Under the employee stock purchase plans, eligible employees may acquire
shares of the Company's common stock at its fair market value. Employees
may contribute up to 10% of their compensation, as defined, and the Company
will contribute, as specified in the plans, amounts up to 50% of the
employee's contribution but not more than 3% of the employee's
compensation, as defined.
On September 22, 1993, the Company's Board of Directors called for the
redemption of all 3,147 outstanding shares of 4 5/8 % preferred stock. The
preferred shares were redeemed on October 27, 1993 for $50.75 per share.
The redeemed shares of preferred stock and all shares of preferred stock
held in treasury were cancelled on October 27, 1993. At December 31, 1993,
the Company had 40,000 shares of preferred stock which are authorized but
not issued. A summary of preferred stock follows:
<TABLE>
<CAPTION>
Cost of
Shares Treasury Treasury
Issued Shares Stock
------ ------ -----
(in thousands)
<S> <C> <C> <C>
December 31, 1991 6,000 2,793 $ 85
1992 5,000 1,813 54
1993 - - -
</TABLE>
4. Capital in Excess of Par Value
A summary of changes in capital in excess of par value follows:
<TABLE>
<CAPTION>
1993 1992 1991
---- ---- ----
(in thousands)
<S> <C> <C> <C>
Balance at
beginning of year $ 38,633 $ 37,758 $ 36,267
Two-for-one
common stock split - (272) -
Deficiency
of compensation value
net of tax benefits
under average cost
of treasury shares
delivered under restricted
common stock award
plan (Note 5 ) - (96) -
Excess of market value
over average cost of
treasury shares
delivered under
employee stock
purchase plans 656 1,225 1,473
Excess of par value
over cost of preferred
shares redeemed 34 18 18
--------- ---------- ---------
Balance at
end of year $ 39,323 $ 38,633 $ 37,758
========= ========== =========
</TABLE>
5. Key Employee Long-Term Incentive Plan and Restricted Common Stock Award
Plan
On April 22, 1992, the common shareholders approved the 1992 Key Employee
Long-Term Incentive Plan which authorizes the issuance of up to 3,000,000
shares of the Company's common stock to eligible participants. The Plan
provides for incentive stock options, non-qualified stock options, restricted
stock awards, performance shares and performance units. The Company's 1988
Restricted Common Stock Award Plan (1988 Plan) was simultaneously amended to
provide that no further awards of common shares may be made thereunder.
On May 1, 1993, the Company granted to certain key employees non-qualified
stock options to purchase an aggregate of up to 940,000 shares of common
stock. Subject to certain conditions, beginning on January 1, 1994, the
stock options are exercisable for 25% of such common stock and for an
additional 25% of such common stock beginning on January 1 of each of the
next three years. The stock options, which expire on April 30, 2003, were
granted at an exercise price of approximately $18 per share, representing
the average of the fair market values of the Company's common stock on
April 30, 1993 and May 3, 1993.
During 1988 and 1991, 755,000 and 76,000 shares, respectively, were awarded
under the 1988 Plan. Awarded shares will be subject to forfeiture, in whole
15
<PAGE>
or in part, if the recipient ceases to be an employee within a specified
period of time. Compensation expense equal to the market value of awarded
shares on the award date is recognized over the period from the award date
to the date the forfeiture provisions lapse. The Company may reduce
the number of shares otherwise required to be delivered by an amount which
would have a market value equal to the taxes withheld by the Company on
delivery. The Company may also, at its sole discretion, elect to pay to the
recipients in cash an amount equal to the market value of the shares that
would otherwise be required to be delivered. In conjunction with the Company's
rightsizing and restructuring, the vesting dates were accelerated to 1993 for
120,000 shares and to 1994 for 28,000 shares.
In 1993, under the 1988 Plan, in lieu of delivering 271,000 shares, the
Company elected to pay in cash an amount equal to market value of such
shares. On May 1, 1992, 62,256 shares were delivered from treasury (after
reduction of 33,744 shares for taxes). On December 1, 1992, the Company
paid cash in lieu of delivering 26,000 shares. In 1991, the Company paid
cash in lieu of delivering 36,000 shares. Shares awarded under the 1988
Plan cease to be subject to forfeiture as follows: 52,000 in 1994, 182,000
in 1996, and 20,000 in each of 1997, 1998, and 1999.
6. Pension Plans
The Company and its subsidiaries have trusteed, noncontributory pension
plans covering substantially all of their employees. The benefits are
based, in the case of certain plans, on average salary and years of service
and, in the case of other plans, on a fixed amount for each year of
service. Plan provisions and funding met the requirements of the Employee
Retirement Income Security Act of 1974. Pension income of $4,205,000,
$2,760,000, and $1,868,000 was recognized in 1993, 1992 and 1991,
respectively.
As discussed in Note 2, during 1993, the Company incurred rightsizing and
restructuring costs, including provisions for the costs of termination
benefits. In accordance with Statement of Financial Accounting Standards
No. 88, "Employers' Accounting for Settlements and Curtailments of Defined
Benefit Pension Plans and for Termination Benefits", the Company recognized
a charge of $7,978,000 related to early retirement termination benefits.
The following table sets forth the status of the Company's plans at
December 31, 1993 and 1992:
<TABLE>
<CAPTION>
1993 1992
---- ----
Overfunded Underfunded Overfunded Underfunded
Plans Plans Plans Plans
---------- ----------- ---------- -----------
(in thousands)
<S> <C> <C> <C> <C>
Actuarial present value of
accumulated benefit
obligation:
Vested employees $(112,271) $ (10,750) $ (77,852) $ (21,856)
Nonvested employees (6,427) (559) (777) (1,280)
--------- --------- --------- ---------
Total $(118,698) $ (11,309) $ (78,629) $ (23,136)
========= ========= ========= =========
Projected benefit
obligation for services
rendered to date $(135,764) $ (12,296) $ (96,896) $ (24,249)
Plan assets at fair value
(primarily stocks,
bonds and cash equivalents) 230,436 - 194,197 13,561
--------- --------- --------- ---------
Plan assets in excess of
(less than)
projected benefit
obligation 94,672 (12,296) 97,301 (10,688)
Unrecognized net (gain)
loss from past
experience different
from that assumed (45,704) 1,481 (47,259) 55
Unrecognized prior
service cost 10,789 33 3,906 3,323
Unrecognized net (asset)
liability at January 1 (21,240) 3,464 (23,634) 3,857
--------- --------- --------- ---------
Prepaid (accrued) pension
cost $ 38,517 $ (7,318) $ 30,314 $ (3,453)
========= ========= ========= =========
</TABLE>
Net pension income, excluding unusual charges, includes the following
components (in thousands):
<TABLE>
<CAPTION>
1993 1992 1991
---- ---- ----
<S> <C> <C> <C>
Service cost - benefits earned
during period $ (3,462) $ (3,795) $ (3,682)
Interest cost on projected
benefit obligation (9,529) (8,370) (7,864)
Actual return on plan assets 21,938 19,486 40,307
Net amortization and (deferral) (4,742) (4,561) (26,893)
-------- -------- ----------
Net pension income $ 4,205 $ 2,760 $ 1,868
======== ========= ==========
</TABLE>
The assumed rates of discount, increase in long-term compensation levels
and expected long-term return on assets were 7.0%, 3.5% and 8.5%,
respectively, in 1993 and 7.5%, 3.5% and 8.0%, respectively, in 1992 and
1991.
7. Other Postretirement Benefits
The Company provides certain health care benefits to
eligible retired employees. These benefits include a comprehensive medical
plan for retirees prior to age 65 and supplemental premium payments to
retirees over age 65 to help defray the costs of Medicare. As discussed in
Note 1(h), the Company adopted SFAS No. 106, effective January 1, 1993. The
plan is not funded; claims are paid as incurred.
The following table sets forth the plan's status as of December 31, 1993:
<TABLE>
<CAPTION>
Accumulated postretirement
benefit obligation: (in thousands)
<S> <C>
Retirees $ 9,978
Fully eligible active plan participants 3,770
Other active plan participants 11,254
---------
Accumulated postretirement
benefit obligation 25,002
Unrecognized net loss (2,384)
---------
Accrued postretirement benefit cost $ 22,618
=========
</TABLE>
Net periodic postretirement benefit cost for 1993
included the following components:
16
<PAGE>
<TABLE>
<CAPTION>
(in thousands)
<S> <C>
Service cost $ 586
Interest on accumulated
benefit obligation 1,587
---------
Net periodic postretirement
benefit cost $ 2,173
=========
</TABLE>
The Company assumes an increase in the annual rate of per capita cost of
covered health benefits of 11.0% for 1994 decreasing by approximately 1%
per year to 5.5% in 2000. The weighted average discount rate used in
determining the accumulated postretirement benefit obligation is 7.0%. An
increase in the assumed health care cost trend rate of 1% for each year
would increase the December 31, 1993 accumulated postretirement benefit
obligation by approximately $1,820,000 and the net periodic postretirement
benefit cost by approximately $215,000.
8. Income Taxes
As discussed in Note 1(f), effective January 1, 1993, the Company adopted
SFAS No. 109. Under SFAS No. 109, income taxes are recognized for (a) the
amount of taxes payable or refundable for the current year, and (b)
deferred tax liabilities and assets for the future tax consequences of
events that have been recognized in the Company's financial statements or
tax returns. The effects of income taxes are measured based on effective
tax law and rates.
During 1993, federal tax legislation was enacted that significantly changed
the Company's 1993 income tax provisions. The principal provision of the
new law affecting the Company is an increase in the federal corporate
income tax rate from 34% to 35%. Taxes currently payable and deferred tax
liabilities increased by $226,000 and $3,361,000, respectively, as a result of
the new law. As a result, income tax expense from continuing operations for
the year was increased by $3,587,000, causing a reduction in net income by the
same amount and a reduction in earnings per share of $.08.
Set forth below are the domestic and foreign components of income before
income taxes and accounting changes:
<TABLE>
<CAPTION>
1993 1992 1991
---- ---- ----
(in thousands)
<S> <C> <C> <C>
United States $ 33,388 $ 86,405 $ 117,286
Foreign 1,995 4,356 5,899
-------- -------- ---------
Total pretax income $ 35,383 $ 90,761 $ 123,185
======== ======== =========
</TABLE>
The income tax provision consists of the following:
<TABLE>
<CAPTION>
1993 1992 1991
---- ---- ----
Current: (in thousands)
<S> <C> <C> <C>
Federal $ 6,423 $ 19,688 $ 35,202
State 1,060 4,064 7,718
Foreign 684 784 881
-------- -------- ---------
Total current
tax provision $ 8,167 $ 24,536 $ 43,801
-------- -------- ---------
Deferred:
Federal $ 2,583 $ 8,657 $ 2,899
State 762 1,145 413
Foreign (125) (121) 23
-------- -------- ---------
Total deferred
tax provision $ 3,220 $ 9,681 $ 3,335
-------- -------- ---------
Impact of federal
tax rate change 3,587 - -
-------- -------- ---------
Total income tax provision $ 14,974 $ 34,217 $ 47,136
======== ======== =========
</TABLE>
The net deferred tax amounts reported on the Company's Consolidated Balance
Sheet at December 31, 1993 are as follows:
<TABLE>
<CAPTION>
Federal State Foreign Total
------- ----- ------- -----
(in thousands)
<S> <C> <C> <C> <C>
Current liability $ 5,555 $ 713 $ - $ 6,268
Long-term liability 114,752 14,720 1,037 130,509
</TABLE>
Following are components of the net deferred tax balance at December 31,
1993:
<TABLE>
<CAPTION>
Federal State Foreign Total
------- ----- ------- -----
(in thousands)
<S> <C> <C> <C> <C>
Deferred tax assets:
Current $ 3,791 $ 486 $ - $ 4,277
Long-term 13,877 1,781 - 15,658
-------- ------- ------- --------
$ 17,668 $ 2,267 $ - $ 19,935
======== ======= ======= ========
Deferred tax liabilities:
Current $ 9,346 $ 1,199 $ - $ 10,545
Long-term 128,629 16,501 1,037 146,167
-------- ------- ------- --------
$137,975 $17,700 $ 1,037 $156,712
======== ======= ======= ========
</TABLE>
The tax effects of temporary differences at December 31, 1993 are as
follows:
<TABLE>
<CAPTION>
Deferred tax assets: (in thousands)
<S> <C>
Reserves $ 3,710
Compensation 5,697
Postretirement pension benefits 8,258
Postretirement healthcare benefits 1,264
Other 1,006
--------
$ 19,935
========
Deferred tax liabilities:
Property $131,667
Pension 11,069
Inventories 10,132
Other 3,844
--------
$156,712
========
</TABLE>
A reconciliation between the provision for income taxes, computed by
applying the statutory federal income tax rate of 35% for 1993, and 34% for
1992 and 1991, to income before income taxes, and the actual provision for
17
<PAGE>
income taxes follows:
<TABLE>
<CAPTION>
1993 1992 1991
---- ---- ----
(in thousands)
<S> <C> <C> <C>
Federal income tax provision
at statutory rate $ 12,384 $ 30,859 $ 41,883
State income taxes, net of
federal income tax benefit 1,156 3,864 5,705
Tax effect of non-deductible
depreciation - Ecusta property - 1,979 1,952
Tax effect of exempt earnings
of foreign sales corporation (218) (568) (825)
SFAS No. 109 impact of rate increase 2,977 -
Other, including tax-exempt interest (1,325) (1,917) (1,579)
--------- --------- ---------
Actual provision for income taxes $ 14,974 $ 34,217 $ 47,136
========= ========= =========
</TABLE>
9. Commitments and Contingencies
In order to meet environmental requirements, the Company has undertaken
certain projects, the most significant of which relates to the
modernization of the Spring Grove pulpmill. The related construction cost
for all of these projects, based on presently available information, is
estimated to be $34 million in 1994 and $7 million in 1995, including
approximately $31 million in 1994 for the pulpmill modernization project.
The pulpmill modernization project began in 1990 and is expected to be
completed in 1994. The total cost of the project is expected to be $170
million (exclusive of capitalized interest) of which $20 million was
expended through 1991, $48 million in 1992 and $71 million in 1993.
On October 29, 1992, Philip Morris Companies, Inc. informed the Company
that, effective January 1, 1993, it would cease to make purchases from the
Company for its domestic tobacco operations. Sales to this customer in 1992
were 7.5% of total sales for the year. During 1993, the Company succeeded
in redirecting the lost Philip Morris product volume to printing paper
customers. These sales were not as profitable as sales to Philip Morris in
1992. In addition, due to increased competitive pressure and cost-cutting
measures within the tobacco industry, sales to remaining tobacco paper
customers in 1993 were less profitable than in 1992. As a result, the 1993
profit performance of the Company's Pisgah Forest mill was sharply below
that of 1992. The Company continues its efforts to maximize utilization of
its Pisgah Forest mill assets by attempting to direct sales volume to its
most profitable grades and by controlling costs. Even with these efforts,
the 1994 profit performance of the Pisgah Forest mill is not expected to
improve over that of 1993.
10. Legal Proceedings
The Company is involved in lawsuits and administrative proceedings under
the environmental protection laws and various lawsuits pertaining to other
matters. Although the ultimate outcome of these matters cannot be predicted
with certainty, the Company's management, after consultation with legal
counsel, does not expect that they will have a material adverse effect on the
Company's financial position or results of operations.
11. Foreign Sales
Net sales in dollars to foreign customers were 8.1%, 9.0% and 10.6% of total
net sales in 1993, 1992, and 1991, respectively.
12. Borrowings
The Company has available lines of credit from two different banks
aggregating $70,000,000 at interest rates approximating money market rates.
In March 1993, the Company issued $150,000,000 principal amount of its 5 7/8%
Notes. These Notes will mature on March 1, 1998 and may not be redeemed prior
to maturity. Interest on the Notes is payable semiannually on March 1 and
September 1. The Notes are unsecured obligations of the Company.
In March 1993, the Company entered into an interest rate swap agreement
having a total notational principal amount of $50,000,000. Under the
agreement, the Company receives a fixed rate of 5 7/8 % and pays a floating
rate, as determined at six-month intervals. The floating rate is 4.0375%
for the six-month period ending March 1, 1994. The agreement converts a
portion of the Company's debt obligation from a fixed rate to a floating
rate basis. During 1993, the Company recognized $2,448,000 of interest
income and $1,677,000 of interest expense, resulting in a net credit of
$771,000. This net amount is included in "Interest on debt" on the
Company's Consolidated Statements of Income and Retained Earnings. The
Company has pledged $2,500,000 of its marketable securities as security
under the swap agreement.
The Company has approximately $9,500,000 of letters of credit outstanding
as of December 31, 1993. The Company bears the credit risk on this amount
to the extent that the Company does not comply with the provisions of
certain agreements. The letters of credit do not reduce the amount
available under the Company's lines of credit.
Independent Auditors' Report
P. H. Glatfelter Company,
Its Shareholders and Directors:
We have audited the accompanying consolidated balance sheets of P. H.
Glatfelter Company and subsidiaries as of December 31, 1993 and 1992, and
the related consolidated statements of income and retained earnings, and
cash flows for each of the three years in the period ended December 31,
1993. Our audits also included the financial statement schedules listed in the
Index at Item 14. These financial statements and financial statement schedules
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements and the financial statement
schedules based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, such consolidated financial statements present fairly, in all
material respects, the financial position of P. H. Glatfelter Company and
subsidiaries at December 31, 1993 and 1992, and the results of their
operations and their cash flows for each of the three years in the period
ended December 31, 1993 in conformity with generally accepted accounting
principles. Also, in our opinion, such financial statement schedules, when
considered in relation to the basic consolidated financial statements taken as
a whole, present fairly in all material respects the information set forth
therein.
As discussed in Note 1(h) to the consolidated financial statements, the
Company changed its method of accounting for income taxes, postretirement
benefits other than pensions and postemployment benefits as of January 1,
1993.
Deloitte & Touche
Philadelphia, Pennsylvania
February 11, 1994
18
<PAGE>
QUARTERLY FINANCIAL DATA
<TABLE>
<CAPTION>
Income Before Income Per
Net Sales Gross Profit Accounting Changes Common Share
In Thousands In Thousands In Thousands Before Accounting
Changes
1993 1992 1993 1992 1993 1992 1993 1992
---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
First $122,529 $138,653 $19,985 $31,982 $(199)(b) $14,932 $(.01)(b) $ .33%(a)
Second 122,351 138,913 21,207 32,367 9,335 15,447 .21 .35
Third 116,270 133,437 16,423 25,951 2,879(c) 11,932 .07(c) .27
Fourth 112,359 129,054 16,642 27,724 8,394 14,233 .19 .32
-------- -------- ------- -------- ------- ------- ----- -----
Total $473,509 $540,057 $74,257 $118,024 $20,409(d) $56,544 $.46(d) $1.27
======== ======== ======= ======== ======= ======= ===== =====
</TABLE>
(a) Adjusted for two-for-one common stock split effected April 22, 1992.
(b) After impact of an after tax charge for unusual items of $8,430,000 or $.19
per share.
(c) After impact of the effect of an increased federal corporate income tax
rate of $3,472,000 or $.08 per share.
(d) After impact of an after tax charge for unusual items of $8,430,000 or $.19
per share and the effect of an increased federal corporate income tax rate of
$3,587,000 or $.08 per share.
19
<PAGE>
Item 9. Changes in and Disagreements With Accountants on Accounting and
- ------ ---------------------------------------------------------------
Financial Disclosure.
--------------------
Not Applicable.
PART III
--------
Item 10. Directors and Executive Officers of the Registrant.
- ------- --------------------------------------------------
(a) Directors. The information with respect to directors required
---------
under this item is incorporated herein by reference to pages 1 through 3 of the
Registrant's Proxy Statement dated March 17, 1994.
(b) Executive Officers of the Registrant. The information with
------------------------------------
respect to the executive officers required under this item is set forth in Part
I of this Report.
Item 11. Executive Compensation.
- ------- ----------------------
The information required under this item is incorporated herein by
reference to pages 5 through 12 of the Registrant's Proxy Statement dated March
17, 1994.
20
<PAGE>
Item 12. Security Ownership of Certain Beneficial Owners and Management.
- ------- --------------------------------------------------------------
The information required under this item is incorporated herein by
reference to pages 13 through 15 of the Registrant's Proxy Statement dated March
17, 1994.
Item 13. Certain Relationships and Related Transactions.
- ------- ----------------------------------------------
The information required under this item is incorporated herein by
reference to page 12 of the Registrant's Proxy Statement dated March 17, 1994.
PART IV
-------
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.
- ------- ----------------------------------------------------------------
(a) 1. A. Financial Statements filed as part of this report:
Consolidated Statements of Income and Retained
Earnings for the Years Ended December 31, 1993,
1992 and 1991
Consolidated Balance Sheets, December 31, 1993
and 1992
Consolidated Statements of Cash Flows for the
Years Ended December 31, 1993, 1992 and 1991
Notes to Consolidated Financial Statements for
the Years Ended December 31, 1993, 1992 and
1991
B. Supplementary Data for each of the three years in the
period ended December 31, 1993.
2. Financial Statement Schedules (Consolidated):
For Each of the Three Years in the Period Ended December 31,
1993:
V - Plant, Equipment, and Timberlands
VI - Reserves for Depreciation of Plant and Equipment
IX - Short-term Borrowings
Schedules other than those listed above are omitted because of the
absence of conditions under which they
21
<PAGE>
are required or because the required information is included in the
Notes to the Consolidated Financial Statements.
Individual financial statements of the Registrant are not presented
inasmuch as the Registrant is primarily an operating company and its
consolidated subsidiaries are wholly-owned.
3. Executive Compensation Plans and Arrangements: see Exhibits 10(a)
through 10(h), described below.
Exhibits:
Number Description of Documents
- ------ ------------------------
(3)(a) Articles of Amendment dated April 27, 1977, including restated
Articles of Incorporation, as amended by Articles of Merger dated
January 30, 1979, by Articles of Amendment dated April 25, 1984
(incorporated by reference to Exhibit (3) of Registrant's
Quarterly Report on Form 10-Q for the quarter ended March 31,
1984) and by Articles of Amendment dated April 23, 1986
(incorporated by reference to Exhibit (3) of Registrant's
Quarterly Report on Form 10-Q for the quarter ended March 31,
1986; a Statement of Reduction of Authorized Shares dated May
12, 1980; a Statement of Reduction of Authorized Shares dated
September 23, 1981; a Statement of Reduction of Authorized Shares
dated August 2, 1982; a Statement of Reduction of Authorized
Shares dated July 29, 1983; a Statement of Reduction of
Authorized Shares dated October 15, 1984 (incorporated by
reference to Exhibit (3)(b) of Registrant's Form 10-K for the
year ended December 31, 1984); a Statement of Reduction of
Authorized Shares dated December 24, 1985 (incorporated by
reference to Exhibit (3)(b) of Registrant's Form 10-K for the
year ended December 31, 1985); a Statement of Reduction of
Authorized Shares dated July 11, 1986 (incorporated by reference
to Exhibit (3)(b) of Registrant's Form 10-K for the year ended
December 31, 1986); a Statement of Reduction of Authorized Shares
dated March 25, 1988 (incorporated by reference to Exhibit (3)(b)
of Registrant's Form 10-K for the year ended December 31, 1987);
a Statement of Reduction of Authorized Shares dated November 9,
1988 (incorporated by reference to Exhibit (3)(b) of
22
<PAGE>
Registrant's Form 10-K for the year ended December 31, 1988); a
Statement of Reduction of Authorized Shares dated April 24, 1989
(incorporated by reference to Exhibit 3(b) of Registrant's Form
10-K for the year ended December 31, 1989); Articles of Amendment
dated November 29, 1990 (incorporated by reference to Exhibit
3(b) of Registrant's Form 10-K for the year ended December 31,
1990); Articles of Amendment dated June 26, 1991 (incorporated by
reference to Exhibit 3(b) of Registrant's Form 10-K for the year
ended December 31, 1991); and Articles of Amendment dated August
7, 1992 (incorporated by reference to Exhibit 3(b) of
Registrant's Form 10-K for the year ended December 31, 1992).
(3)(b) Articles of Amendment dated July 30, 1993 and dated January 26,
1994.
(3)(c) Articles of Incorporation, as amended through January 26, 1994
(restated for the purpose of filing on EDGAR).
(3)(d) By-Laws as amended through March 16, 1994.
(4)(a) Indenture between P. H. Glatfelter Company and Wachovia Bank of
Georgia, N.A. as Trustee dated as of January 15, 1993.
(4)(b) Form of Note issued to Purchasers of 5 7/8% Notes due March 1,
1998 (incorporated by reference to Exhibit 4(b) of Registrant's
Form 10-K for the year ended December 31, 1992).
(9) P. H. Glatfelter Family Shareholders' Voting Trust dated July 1,
1993 (incorporated by reference to Exhibit 1 of the Schedule 13D
filed by P. H. Glatfelter Family Shareholders' Voting Trust dated
July 1, 1993).
(10)(a) P. H. Glatfelter Company Management Incentive Plans, effective
January 1, 1982, as amended and restated effective January 1,
1994.
(10)(b) P. H. Glatfelter Company Management Incentive Plans, Operating
Rules, as revised through February 18, 1994.
23
<PAGE>
(10)(c) P. H. Glatfelter Company 1988 Restricted Common Stock Award Plan,
as amended and restated June 24, 1992 (incorporated by reference
to Exhibit (10)(c) of Registrant's Form 10-K for the year ended
December 31, 1992).
(10)(d) P. H. Glatfelter Company Supplemental Executive Retirement Plan,
effective January 1, 1988, as amended and restated March 17, 1993
(incorporated by reference to Exhibit (10)(d) of Registrant's
Form 10-K for the year ended December 31, 1992).
(10)(e) Deferral Benefit Pension Plan of Ecusta Division, effective May
22, 1986 (incorporated by reference to Exhibit (10)(ee) of
Registrant's Form 10-K for the year ended December 31, 1987).
(10)(f) Description of Executive Salary Continuation Plan (incorporated
by reference to Exhibit (10)(g) of Registrant's Form 10-K for the
year ended December 31, 1990).
(10)(g) P. H. Glatfelter Company Plan of Supplemental Retirement Benefits
for the Management Committee, as amended and restated effective
June 28, 1989 (incorporated by reference to Exhibit (10)(h) of
Registrant's Form 10-K for the year ended December 31, 1989).
(10)(h) P.H. Glatfelter Company 1992 Key Employee Long-Term Incentive
Plan, effective April 22, 1992 (incorporated by reference to
Exhibit (10)(i) of Registrant's Form 10-K for the year ended
December 31, 1992).
(11) Computation of Earnings Per Share
(21) Subsidiaries of the Registrant
(23) Consent of Independent Certified Public Auditors
(b) The Registrant filed the following report on Form 8-K during the
quarter ended December 31, 1993:
N O N E
24
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
P. H. GLATFELTER COMPANY
(Registrant)
March 25, 1994
By /s/ T. C. Norris
------------------------
T. C. Norris
Chairman of the Board
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant in the capacities and on the dates indicated:
<TABLE>
<CAPTION>
Date Signature Capacity
---- --------- --------
<S> <C> <C>
March 25, 1994 /s/ T. C. Norris Principal Executive
------------------------ Officer and Director
T. C. Norris
March 25, 1994 /s/ R. P. Newcomer Principal Financial
------------------------ Officer, Vice
R. P. Newcomer President and
Treasurer
March 25, 1994 /s/ C. M. Smith Comptroller
------------------------
C. M. Smith
March 25, 1994 /s/ G. Baldwin, Jr. Director
------------------------
G. Baldwin, Jr.
March 25, 1994 /s/ R. E. Chappell Director
------------------------
R. E. Chappell
March 25, 1994 /s/ G. H. Glatfelter Director
------------------------
G. H. Glatfelter
March 25, 1994 /s/ G. H. Glatfelter II Director
------------------------
G. H. Glatfelter II
March 25, 1994 /s/ P. H. Glatfelter III Director
------------------------
P. H. Glatfelter III
March , 1994 Director
------------------------
R. S. Hillas
March 25, 1994 /s/ M. A. Johnson II Director
------------------------
M. A. Johnson
</TABLE>
25
<PAGE>
<TABLE>
<S> <C> <C>
March 25, 1994 /s/ J. W. Kennedy Director
------------------------
J. W. Kennedy
March 25, 1994 /s/ P. R. Roedel Director
------------------------
P. R. Roedel
March 25, 1994 /s/ J. M. Sanzo Director
------------------------
J. M. Sanzo
March , 1994 Director
------------------------
R.L. Smoot
</TABLE>
26
<PAGE>
P. H. GLATFELTER COMPANY AND SUBSIDIARIES
Supplementary Data and
Financial Statement Schedules
For Each of the Three Years in the
Period Ended December 31, 1993
Prepared for Filing As Part of
Annual Report (Form 10-K)
to the Securities and Exchange Commission
<PAGE>
P. H. GLATFELTER COMPANY AND SUBSIDIARIES
SUPPLEMENTARY DATA
FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 1993
- --------------------------------------------------------------------------------
A. PLANT, EQUIPMENT AND TIMBERLANDS
Plant and equipment are depreciated for financial reporting purposes over
the following estimated service lives:
<TABLE>
<S> <C>
Buildings 10 to 60 years
Machinery and equipment 5 to 25 years
Other:
Water storage - reservoirs, dams, etc. 15 to 40 years
Furniture, fixtures, automobiles, trucks,
airplane, etc. 3 to 20 years
</TABLE>
Additions to buildings and machinery and equipment in 1993 include $3.8
million relating to the precision sheeter and $1.0 million relating to
the sludge water treatment project at the Spring Grove Mill; $6.5 million
for the #5 paper machine rebuild at the Neenah Mill; and $4.7 million for
the refining stock blend system and $2.0 million related to the #10 paper
machine dryer rebuild at the Pisgah Forest Mill. Additions to
construction in progress in 1993 include $71.1 million relating to the
ongoing Pulp Mill Modernization project at the Spring Grove Mill.
Retirements in 1993 include $1.5 million related to the disposal of the
Pisgah Forest Mill's airplane and $0.4 million related to the #10 paper
machine dryer at the Pisgah Forest Mill.
Additions to buildings and machinery and equipment in 1992 include $4.2
million for the Mill Information Processing System, $3.3 million relating
to upgrades of one of the largest paper machines, and $2.2 million
relating to the woodwaste/sludge/bark project, all at the Spring Grove
Mill. Additions to construction in progress in 1992 include $47.7 million
relating to the ongoing Pulp Mill Modernization project at the Spring
Grove Mill. Retirements in 1992 include $3.6 million for retirement of
equipment being removed as part of the Pulp Mill Modernization project
and $2.4 million for trade-in of an airplane.
Additions to buildings and machinery and equipment in 1991 include $5.2
million relating to the sludge combustor at the Neenah Mill and $1.8
million for the rebuild of one of the largest paper machines at the
Pisgah Forest Mill. Net additions to construction in progress in 1991
included approximately $17.4 million primarily relating to the new wood
yard currently under construction at the Spring Grove Mill.
F-2
<PAGE>
B. ALLOWANCES FOR DOUBTFUL ACCOUNTS AND SALES DISCOUNTS
<TABLE>
<CAPTION>
Allowances for
-------------------------------------------------------------------------------
Doubtful Accounts Sales Discounts
------------------------------------- ---------------------------------------
1993 1992 1991 1993 1992 1991
<S> <C> <C> <C> <C> <C> <C>
Balance, beginning
of year $ 890,000 $880,000 $ 875,000 $ 490,000 $ 557,000 $ 602,000
Provision 981,000 10,000 26,000 6,524,800 6,454,000 6,390,000
Write-offs, recoveries
and discounts allowed (33,000) (21,000) (6,460,500) (6,521,000) (6,435,000)
---------- -------- ---------- ---------- ---------- ----------
Balance, end of year $1,838,000 $890,000 $ 880,000 $ 554,300 $ 490,000 $ 557,000
========== ======== ========== ========== ========== ==========
</TABLE>
The provision for doubtful accounts is included in administrative expense
and the provision for sales discounts is deducted from sales. The related
allowances are deducted from accounts receivable.
C. SUPPLEMENTARY INCOME STATEMENT INFORMATION
Maintenance and repairs charged to costs and expenses for each of the three
years in the period ended December 31, 1993 were: 1993 - $48,156,000;
1992 - $49,111,000; and 1991 - $47,045,000.
Depreciation and amortization of intangible assets, taxes (other than
payroll and income taxes), royalties and advertising costs have not been
shown since each does not exceed 1% of total net sales as reported in the
consolidated statements of income and retained earnings.
F-3
<PAGE>
FINANCIAL STATEMENT SCHEDULE V
P. H. GLATFELTER COMPANY AND SUBSIDIARIES
<TABLE>
PLANT, EQUIPMENT AND TIMBERLANDS
FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 1993
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Column A Column B Column C Column D Column E Column F
Balance at Other Balance
Beginning Changes - at End
CLASSIFICATION of Year Additions Retirements Add (Deduct) of Year
<S> <C> <C> <C> <C> <C>
Year Ended December 31, 1993:
Land (other than land included
in items below) $ 4,845,868 $ 6,668 $ 13,833 $ (14,493) (d) $ 4,824,210
Buildings 77,917,930 1,900,721 (c) 75,755 9,762,529 (e) 89,505,425
Machinery and equipment 542,915,791 36,944,943 (c) 4,365,446 (c) 50,826,663 (e) 626,321,951
Other:
Water storage - reservoirs, dams, etc. 6,515,774 6,515,774
Furniture, fixtures, automobiles, trucks,
airplane, etc. 21,047,333 676,711 2,075,102 69,497 (e) 19,718,439
Construction in progress 82,403,017 72,142,310 (b)(c) (84) (d) 154,545,243
Timberlands, less depletion 16,389,950 1,148,228 71,419 (859,392) (a) 16,607,367
------------ ------------ ----------- ----------- ------------
TOTAL $752,035,663 $112,819,581 $ 6,601,555 $59,784,720 $918,038,409
============ ============ =========== =========== ============
Year Ended December 31, 1992:
Land (other than land included
in items below) $ 4,912,980 $ 296 $ 11,400 $ (56,008) (d) $ 4,845,868
Buildings 77,541,897 1,870,031 (c) 1,405,539 (88,459) (d) 77,917,930
Machinery and equipment 520,442,475 30,988,198 (c) 7,680,496 (c) (834,386) (d) 542,915,791
Other:
Water storage - reservoirs, dams, etc. 6,515,774 6,515,774
Furniture, fixtures, automobiles, trucks,
airplane, etc. 19,152,432 4,968,580 3,104,538 (c) 30,859 (d) 21,047,333
Construction in progress 30,673,746 51,730,055 (b)(c) (784) (d) 82,403,017
Timberlands, less depletion 16,530,526 758,704 28,808 (870,472) (a) 16,389,950
------------ ------------ ----------- ----------- ------------
TOTAL $675,769,830 $ 90,315,864 $12,230,781 $(1,819,250) $752,035,663
============ ============ =========== =========== ============
Year Ended December 31, 1991:
Land (other than land included
in items below) $ 4,818,161 $ 142,293 $ 52,419 $ 4,945 (d) $ 4,912,980
Buildings 71,927,015 3,206,824 (c) 32,932 2,440,990 (d) 77,541,897
Machinery and equipment 500,512,627 24,446,213 (c) 2,086,313 (2,430,052) (d) 520,442,475
Other:
Water storage - reservoirs, dams, etc. 6,515,774 6,515,774
Furniture, fixtures, automobiles, trucks,
airplane, etc. 18,738,432 794,874 441,150 60,276 (d) 19,152,432
Construction in progress 14,529,411 16,143,917 (b)(c) 418 (d) 30,673,746
Timberlands, less depletion 15,625,325 1,847,915 19,370 (923,344) (a) 16,530,526
------------ ------------ ----------- ----------- ------------
TOTAL $632,666,745 $ 46,582,036 $ 2,632,184 $ (846,767) $675,769,830
============ ============ =========== =========== ============
</TABLE>
(a) Depletion credited directly to asset account and charged to costs and
expenses.
(b) Net change during year.
(c) See supplementary data (Note A) for description of significant additions
and retirements.
(d) Reclassification and other.
(e) Adjustment for the implementation of FASB Statement No. 109 Accounting for
Income Taxes.
F-4
<PAGE>
FINANCIAL STATEMENT SCHEDULE VI
P. H. GLATFELTER COMPANY AND SUBSIDIARIES
<TABLE>
RESERVES FOR DEPRECIATION OF PLANT AND EQUIPMENT
FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 1993
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Column A Column B Column C Column D Column E Column F
Additions
Balance at Charged to Other Balance
Beginning Costs and Changes - at End
CLASSIFICATION of Year Expenses Retirements Add (Deduct) of Year
<S> <C> <C> <C> <C> <C>
Year Ended December 31, 1993:
Buildings $ 27,966,103 $ 2,601,787 $ 65,394 $ (6,001) (a) $ 30,496,495
Machinery and equipment 220,068,543 32,422,460 3,345,064 (b) (120,921) (a) 249,025,018
Other:
Water storage - reservoirs, dams, etc. 4,476,239 156,991 4,633,230
Furniture, fixtures, automobiles, trucks,
airplane, etc. 12,753,133 2,091,467 2,058,423 (16,198) (a) 12,769,979
------------ ------------- ----------- ----------- ------------
TOTAL $265,264,018 $ 37,272,705 $ 5,468,881 $ (143,120) $296,924,722
============ ============= =========== =========== ============
Year Ended December 31, 1992:
Buildings $ 26,947,577 $ 2,195,147 $ 1,159,147 $ (17,608) (a) $ 27,966,103
Machinery and equipment 200,471,039 26,549,333 6,602,927 (b) (348,902) (a) 220,068,543
Other:
Water storage - reservoirs, dams, etc. 4,307,650 168,589 4,476,239
Furniture, fixtures, automobiles, trucks,
airplane, etc. 13,799,134 2,109,255 3,190,418 (b) 35,162 (a) 12,753,133
Reserve for retirements 422,148 422,148
------------ ------------- ----------- ----------- ------------
TOTAL $245,947,548 $ 31,022,458 $11,374,640 $ (331,348) $265,264,018
============ ============= =========== =========== ============
Year Ended December 31, 1991:
Buildings $ 24,674,172 $ 2,298,171 $ 25,793 $ 1,027 (a) $ 26,947,577
Machinery and equipment 176,903,806 24,926,966 1,366,068 6,335 (a) 200,471,039
Other:
Water storage - reservoirs, dams, etc. 4,139,041 168,609 4,307,650
Furniture, fixtures, automobiles, trucks,
airplane, etc. 11,855,327 2,376,905 432,754 (344) (a) 13,799,134
Reserve for retirements 422,148 422,148
------------ ------------- ----------- ----------- ------------
TOTAL $217,994,494 $ 29,770,651 $ 1,824,615 $ 7,018 $245,947,548
============ ============= =========== =========== ============
</TABLE>
(a) Reclassification and other.
(b) Accumulated depreciation with respect to retirements. See supplementary
data (Note A).
F-5
<PAGE>
FINANCIAL STATEMENT SCHEDULE IX
P. H. GLATFELTER COMPANY AND SUBSIDIARIES
<TABLE>
SCHEDULE OF SHORT-TERM BORROWINGS
FOR EACH OF THE TWO YEARS IN THE PERIOD ENDED DECEMBER 31, 1993
- ------------------------------------------------------------------------------------------------------------
<CAPTION>
Weighted
Maximum Average Average
Category Weighted Amount Amount Interest
of Aggregate Balance Average Outstanding Outstanding Rate
Short-Term at End Interest During During During
Borrowings (d) of Period Rate the Period the Period the Period
<S> <C> <C> <C> <C> <C>
Year ended December 31, 1993
Represents short-term borrowings
under line of credit agreements
at money market rates determined
at time of advance. N/A N/A $ 39,100,000 (a) $ 5,308,000 (b) 3.32% (c)
Year ended December 31, 1992
Represents short-term borrowings
under line of credit agreement
at money market rates determined
at time of advance. $ 10,100,000 3.61% 10,100,000 (a) 2,217,000 (b) 3.61% (c)
</TABLE>
(a) Maximum amount outstanding at any month end during period.
(b) Average computed by summing amount outstanding at month end during the year
and dividing by 12.
(c) Weighted average computed using balance outstanding at end of each month
and interest rate in place at that time.
(d) No short-term borrowings during the year ended December 31, 1991.
Note - In March of 1993 the Company issued $150,000,000 principal amount of
notes and used a portion of the proceeds to repay the outstanding balance
of short-term borrowings of $41,100,000.
N/A - Not applicable.
F-6
<PAGE>
Index to Exhibits
-----------------
Number
- ------
(3)(a) Articles of Amendment dated April 27, 1977, including restated
Articles of Incorporation, as amended by Articles of Merger dated
January 30, 1979, by Articles of Amendment dated April 25, 1984
(incorporated by reference to Exhibit (3) of Registrant's
Quarterly Report on Form 10-Q for the quarter ended March 31,
1984) and by Articles of Amendment dated April 23, 1986
(incorporated by reference to Exhibit (3) of Registrant's
Quarterly Report on Form 10-Q for the quarter ended March 31,
1986; a Statement of Reduction of Authorized Shares dated May
12, 1980; a Statement of Reduction of Authorized Shares dated
September 23, 1981; a Statement of Reduction of Authorized Shares
dated August 2, 1982; a Statement of Reduction of Authorized
Shares dated July 29, 1983; a Statement of Reduction of
Authorized Shares dated October 15, 1984 (incorporated by
reference to Exhibit (3)(b) of Registrant's Form 10-K for the
year ended December 31, 1984); a Statement of Reduction of
Authorized Shares dated December 24, 1985 (incorporated by
reference to Exhibit (3)(b) of Registrant's Form 10-K for the
year ended December 31, 1985); a Statement of Reduction of
Authorized Shares dated July 11, 1986 (incorporated by reference
to Exhibit (3)(b) of Registrant's Form 10-K for the year ended
December 31, 1986); a Statement of Reduction of Authorized Shares
dated March 25, 1988 (incorporated by reference to Exhibit (3)(b)
of Registrant's Form 10-K for the year ended December 31, 1987);
a Statement of Reduction of Authorized Shares dated November 9,
1988 (incorporated by reference to Exhibit (3)(b) of Registrant's
Form 10-K for the year ended December 31, 1988); a Statement of
Reduction of Authorized Shares dated April 24, 1989 (incorporated
by reference to Exhibit 3(b) of Registrant's Form 10-K for the
year ended December 31, 1989); Articles of Amendment dated
November 29, 1990 (incorporated by reference to Exhibit 3(b) of
Registrant's Form 10-K for the year ended December 31, 1990);
Articles of Amendment dated June 26, 1991 (incorporated by
reference to Exhibit 3(b) of Registrant's Form 10-K for the year
ended December 31, 1991); and Articles of Amendment dated August
7, 1992 (incorporated by reference to Exhibit 3(b) of
Registrant's Form 10-K for the year ended December 31, 1992).
<PAGE>
(3)(b) Articles of Amendment dated July 30, 1993 and dated January 26,
1994.
(3)(c) Articles of Incorporation, as amended through January 26, 1994
(restated for the purpose of filing on EDGAR).
(3)(d) By-Laws as amended through March 16, 1994.
(4)(a) Indenture between P. H. Glatfelter Company and Wachovia Bank of
Georgia, N.A. as Trustee dated as of January 15, 1993.
(4)(b) Form of Note issued to Purchasers of 5 7/8% Notes due March 1,
1998 (incorporated by reference to Exhibit 4(b) of Registrant's
Form 10-K for the year ended December 31, 1992).
(9) P. H. Glatfelter Family Shareholders' Voting Trust dated July 1,
1993 (incorporated by reference to Exhibit 1 of the Schedule 13D
filed by P. H. Glatfelter Family Shareholders' Voting Trust dated
July 1, 1993).
(10)(a) P. H. Glatfelter Company Management Incentive Plans, effective
January 1, 1982, as amended and restated effective January 1,
1994.
(10)(b) P. H. Glatfelter Company Management Incentive Plans, Operating
Rules, as revised through February 18, 1994.
(10)(c) P. H. Glatfelter Company 1988 Restricted Common Stock Award Plan,
as amended and restated June 24, 1992 (incorporated by reference
to Exhibit (10)(c) of Registrant's Form 10-K for the year ended
December 31, 1992).
(10)(d) P. H. Glatfelter Company Supplemental Executive Retirement Plan,
effective January 1, 1988, as amended and restated March 17, 1993
(incorporated by reference to Exhibit (10)(d) of Registrant's
Form 10-K for the year ended December 31, 1992).
(10)(e) Deferral Benefit Pension Plan of Ecusta Division, effective May
22, 1986 (incorporated by reference to Exhibit (10)(ee) of
Registrant's Form 10-K for the year ended December 31, 1987).
(10)(f) Description of Executive Salary Continuation Plan (incorporated
by reference to Exhibit (10)(g) of Registrant's Form 10-K for the
year ended December 31, 1990).
<PAGE>
(10)(g) P. H. Glatfelter Company Plan of Supplemental Retirement Benefits
for the Management Committee, as amended and restated effective
June 28, 1989 (incorporated by reference to Exhibit (10)(h) of
Registrant's Form 10-K for the year ended December 31, 1989).
(10)(h) P.H. Glatfelter Company 1992 Key Employee Long-Term Incentive
Plan, effective April 22, 1992 (incorporated by reference to
Exhibit (10)(i) of Registrant's Form 10-K for the year ended
December 31, 1992).
(11) Computation of Earnings Per Share
(21) Subsidiaries of the Registrant
(23) Consent of Independent Certified Public Auditors
<PAGE>
Exhibit 3.A
Filed this 27th day of
------ ----------
April , 1977
------------------------ --
APPLICANT'S ACC'T NO. Commonwealth of Pennsylvania
Department of State
DSCB: BCL-805 (Rev. 8-72)
---------------------------
Filing Fee: $40 (Line for numbering)
AB-2 140599
/s/ C. DeLores Tucker
Secretary of the Commonwealth
Articles of COMMONWEALTH OF PENNSYLVANIA
Amendment-- DEPARTMENT OF STATE
Domestic Business Corporation CORPORATION BUREAU
In compliance with the requirements of section 806 of the Business
Corporation Law, act of May 5, 1933 (P. L. 364) (15 P. S. (S)1806), the
undersigned corporation, desiring to amend its Articles, does hereby certify
that:
1. The name of the corporation is:
P. H. GLATFELTER COMPANY
- ------------------------------------------------------------------------------
2. The location of its registered office in this Commonwealth is (the
Department of State is hereby authorized to correct the following statement to
conform to the records of the Department):
- ------------------------------------------------------------------------------
(Number) (Street)
Spring Grove Pennsylvania 17362
- ------------------------------------------------------------------------------
(City) (Zip Code)
3. The statute by or under which it was incorporated is:
Act of April 29, 1874 P.L. 73
- ------------------------------------------------------------------------------
4. The date of its incorporation is: December 16, 1905
----------------------------------------
5. (Check, and if appropriate, complete one of the following):
[x] The meeting of the shareholders of the corporation at which the
amendment was adopted was held at the time and place and pursuant to the kind
and period of notice herein stated.
Time: The 27th day of April , 1977.
----------- ------------- --
Place: Principal offices of P.H. Glatfelter Company, Spring Grove, Pa. 1736
--------------------------------------------------------------------
Kind and period of notice Written notice mailed on March 16, 1977,
------------------------------------------------
42 days prior to the annual meeting.
----------------------------------------------------------------------------
[_] The amendment was adopted by a consent in writing, setting forth the
action so taken, signed by all of the shareholders entitled to vote thereon
and filed with the Secretary of the corporation.
6. At the time of the action of shareholders:
(a) The total number of shares outstanding was:
Common - 1,951,525 shares; 4-1/2% Cumulative Preferred Stock - 6,467 shares
----------------------------------------------------------------------------
4-5/8% Cumulative Preferred Stock, Series of 1955 - 20,256 shares
(b) The number of shares entitled to vote was:
1,951,525 shares of Common Stock
----------------------------------------------------------------------------
M. BURR KEIM COMPANY, PHILADELPHIA
<PAGE>
7. In the action taken by the shareholders:
(a) The number of shares voted in favor of the amendment was:
1,673,363 shares of Common Stock
- -------------------------------------------------------------------------------
(b) The number of shares voted against the amendment was:
1,684 shares of Common Stock
- -------------------------------------------------------------------------------
8. The amendment adopted by the shareholders, set forth in full, is as
follows:
See Exhibit "A" attached hereto and made part hereof.
IN TESTIMONY WHEREOF, the undersigned corporation has caused these
Articles of Amendment to be signed by a duly authorized officer and its
corporate seal, duly attested by another such officer, to be hereunto affixed
this 27th day of April, 1977.
---- ----- --
P. H. Glatfelter Company
-----------------------------------
(NAME OF CORPORATION)
Attest:
/s/ Signature Appears Here By: /s/ Signature Appears Here
- -------------------------------- -----------------------------------
(SIGNATURE) (SIGNATURE)
Secretary President
- -------------------------------- -----------------------------------
(TITLE: SECRETARY, ASSISTANT (TITLE: PRESIDENT,VICE PRESIDENT,
SECRETARY, ETC.) ETC.)
(CORPORATE SEAL)
INSTRUCTIONS FOR COMPLETION OF FORM
A. Any necessary copies of Form DSCB:17.2 (Consent to Appropriation of
Name) or Form DSCB:17.3 (Consent to use of Similar Name) shall
accompany Articles of Amendment effecting a change of name.
B. Any necessary governmental approvals shall accompany this form.
C. Where action is taken by partial written consent pursuant to the
Articles, the second alternate of Paragraph 5 should be modified
accordingly.
D. If the shares of any class were entitled to vote as a class, the number
of shares of each class so entitled and the number of shares of all
other classes entitled to vote should be set forth in Paragraph 6(b).
E. If the shares of any class were entitled to vote as a class, the number
of shares of such class and the number of shares of all other classes
voted for and against such amendment respectively should be set forth
in Paragraphs 7(a) and 7(b).
F. BCL (S)807 (15 P.S. (S)1807) requires that the corporation shall
advertise its intention to file or the filing of Articles of Amendment.
Proofs of publication of such advertising should not be delivered to
the Department, but should be filed with the minutes of the
corporation.
- -------------------------------------------------------------------------------
<PAGE>
EXHIBIT A
RESOLVED that P.H. Glatfelter Company, pursuant to the provisions of
Section 801 of the Pennsylvania Business Corporation Law, approved May 5,
1933, as amended, hereby amends and restates its Articles of Incorporation, as
amended, in their entirety so that the same shall read in full as follows:
P. H. GLATFELTER COMPANY
ARTICLES OF INCORPORATION
1. The name of the corporation is
P. H. GLATFELTER COMPANY
2. The location and post office address of its registered office in this
Commonwealth is Spring Grove, York County, Pennsylvania.
3. the purpose or purposes for which the corporation is organized are to
acquire by purchase, or otherwise, own, buy, sell and deal in standing timber
lands, and to buy, cut, haul, drive and sell timber and logs, and to saw and
otherwise work the same, and to buy, manufacture and sell lumber, bark, wood,
pulp and all products made therefrom; to manufacture, produce, purchases, sell
and deal in any and all kinds of papers, and in all ingredients, products and
compounds thereof, and in any and all materials that now are or hereafter may
be used in or in connection with such manufacture, including the manufacture
of wood pulp and any other fibre; and to engage in, and to do, any other
lawful act concerning any or all lawful business for which corporations may be
incorporated under the Business Corporation Law of the Commonwealth of
Pennsylvania, including, but not limited to, manufacturing, processing, owing,
using and dealing in personal property of every class and description,
engaging in research and development, furnishing services, and acquiring,
owning, using and disposing of real property of any nature whatsoever.
4. The term for which the corporation is to exist is perpetual.
5. The aggregate number of shares which the corporation (hereinafter
referred to as the "Company") has authority to issue is 8,068,000 shares
divided into two classes consisting of (a) 68,000 shares of Preferred Stock of
the par value of $50 each; and (b) 8,000,000 shares of Common Stock of the par
value of $2.50 each. Each share of Common Stock of the par value of $5.00
which is issued and outstanding when this provision becomes effective,
including each share owned by the Company, shall be reclassified as two fully
paid and non-assessable shares of Common Stock of the par value of $2.50 each,
which shall be included in the 8,000,000 shares of Common Stock herein
authorized.
The designations and the powers, preferences and rights, and the
qualifications, limitations or restrictions thereof, of the classes of stock
of the Company which are fixed by the Articles of Incorporation, and the
express grant of authority to the Board of Directors of the Company
(hereinafter referred to as the "Board of Directors") to fix by resolution or
resolutions the designations and the powers, preferences and rights, and the
qualifications, limitations or restrictions thereof, of the shares of
Preferred Stock, which are not fixed by the Articles of Incorporation, are as
follows:
PREFERRED STOCK
1. The Preferred Stock may be issued at any time or from time to time in
any amount, not exceeding in the aggregate the total number of shares of
Preferred Stock hereinabove authorized, as Preferred Stock of one or more
series, as hereinafter provided, and for such lawful consideration as shall be
fixed from time to time by the Board of Directors. All shares of any one
series of
A-1
<PAGE>
Preferred Stock shall be alike in every particular, each series of Preferred
Stock shall be distinctively designated by letter or descriptive words, and
all series of Preferred Stock shall rank equally and be identical in all
respects except as permitted by the provisions of Section 2 of this Article.
2. To the extent that this Article does not establish series of Preferred
Stock and fix and determine the variations in the relative rights and
preferences as between series, authority is hereby expressly granted to and
vested in the Board of Directors at any time, or from time to time, to
authorize the issue of Preferred Stock as Preferred Stock of one or more
series and, in connection with the creation of each such series, to fix by
resolution or resolutions providing for the issue of shares thereof the
designations, preferences and relative, participating, optional or other
special rights, and qualifications, limitations or restrictions thereof, of
such series, to the full extent now or hereafter permitted by the laws of the
Commonwealth of Pennsylvania, in respect of the matters set forth in the
following subdivisions (a) to (g), inclusive:
(a) The designation of such series;
(b) The dividend rate of such series;
(c) The price at, and the terms and conditions on, which shares of
such series may be redeemed, subject to the provisions of subdivision (e) of
Section 3 of this Article;
(d) The amounts payable upon shares of such series in the event of
voluntary liquidation of the Company;
(e) Subject to the limitations provided by law, whether or not the
shares of such series shall be entitled to the benefit of a sinking fund to be
applied to the purchase or redemption of shares of such series, and if so
entitled, the amount of such fund, the manner of its application and the
sinking fund redemption price;
(f) Whether or not the shares of such series shall be made convertible
into, or exchangeable for, shares of any other class or classes or of any
other series of the same or any other class or classes of stock of the
Company, and, if made so convertible or exchangeable, the conversion price or
prices, or the rates of exchange, and the adjustments, if any, at which, and
all other terms and conditions upon which, such conversion or exchange may be
made; and
(g) Whether or not the shares of such series shall be entitled to
other special rights in addition to those in this Article provided for,
including, without limitation, restrictive provisions with respect to the
issue of additional shares of stock of the same class or series, or of any
other class of the Company, or of any subsidiary, restrictive provisions with
respect to the payment of dividends upon, or the making of any other
distribution in respect of, or the making of any purchase or redemption of,
stock of any class of the Company or of any subsidiary, and the incurring of
indebtedness, secured or unsecured, by the Company or by any subsidiary, and,
if so, the nature thereof.
The Board of Directors may from time to time authorize and direct by
resolution or resolutions an increase in the number of shares of any series of
Preferred Stock already created by specifying that any or all unissued shares
of Preferred Stock shall be assigned to and included in such series and or a
decrease in the number of shares of any such series (but not below the number
of shares thereof then outstanding) by specifying that any or all unissued
shares of Preferred Stock previously assigned to such series shall no longer
be included therein.
41/2% Cumulative Preferred Stock
The series of the authorized shares of Preferred Stock of the par value
of Fifty Dollars ($50) per share designated as 41/2% Cumulative Preferred
Stock (hereinafter called "41/2% Preferred Stock"), of which 20,000 shares
were issued and at one time outstanding, shall consist of 7,000
A-2
<PAGE>
shares; and the shares of said series shall have, in addition to the rights
and preferences granted by law and the other provisions of this Article, the
following relative rights and preferences:
(i) The dividend rate of the 4 1/2% Preferred Stock shall be four
and one-half percent (4 1/2%) per share per annum, and no more, upon the
par value thereof.
(ii) The redemption price per share of the 4 1/2% Preferred Stock
shall be $50 plus an amount equal to full cumulative dividends, as defined
in Section 3 (f) of this Article, thereon to the date fixed by the Board of
Directors as the redemption date.
(iii) In the event of any voluntary liquidation, dissolution or
winding up of the Company, the holders of the 4 1/2% Preferred Stock shall
be entitled to receive an amount equal to the redemption price specified
in subsection (ii) above for every share thereof respectively held by
them, before any distribution shall be made to the holders of the Common
Stock.
(iv) The 4 1/2% Preferred Stock shall be entitled to the benefit
of a sinking fund to be applied to the purchase or redemption of such
series as follows;
The 4 1/2% Preferred Stock shall be subject to redemption through the
operation of a Sinking Fund hereinbelow provided for at the Sinking Fund
redemption price which shall be $50 per share plus an amount equal to all
accumulated and unpaid dividends thereon, whether or not earned or
declared, to the date fixed for redemption.
On or before March 25 in each year, if any 4 1/2% Preferred Stock
remains outstanding or owned by the Company and if the amount in the
Sinking Fund shall be less than the Sinking Fund redemption price of all
outstanding 4 1/2% Preferred Stock (including 4 1/2% Preferred Stock owned
by the Company) the Company shall, subject to the conditions hereinafter
set forth, set aside a sum (hereinafter called "Sinking Fund Instalment")
in cash equal to the aggregate par value of 2 1/2% of the greatest number
of shares of 4 1/2% Preferred Stock at any one time theretofore
outstanding (including 4 1/2% Preferred Stock owned by the Company);
provided, however, that such amount may be reduced, at the option of the
Company, by the aggregate par value of such number of shares of 4 1/2%
Preferred Stock theretofore acquired by the Company by purchase other than
through the Sinking Fund or by voluntary redemption and not therefore used
to reduce the amount of any Sinking Fund Instalment or theretofore
restored to the status of authorized and unissued Preferred Stock and
classified as to series, as the Board of Directors shall specify by
resolution. The Company may omit to set aside in any year such portion of
any Sinking Fund Instalment as be in excess of the net income of the
Company for the immediately preceding fiscal year, determined in
accordance with sound accounting practice, after deducting therefrom
dividend requirements during such year on all outstanding Preferred Stock
and the Company shall not set aside any Sinking Fund Instalment unless
full cumulative dividends on the Preferred Stock to the end of the then
current dividend period shall have been paid or declared and set apart for
payment. If, however, the Company shall omit to set aside the full amount
of any Sinking Fund Instalment owing to any deficiency in net income as
above provided, or if for any other reason (including the fact that
dividends have not been provided for) the Company shall fail to set aside
on or before the date due the full amount of any Sinking Fund Instalment,
or if the Company shall fail to apply amounts in the Sinking Fund as
herein provided, the Company shall be deemed to be in arrears in
connection with its Sinking Fund obligations in respect of the 4 1/2%
Preferred Stock until such time as the full amount which the Company shall
have omitted or failed to set aside shall have been set aside and applied
as herein provided.
From each Sinking Fund Instalment, together with all amounts from
prior instalments not theretofore applied to the purchase or redemption of
4 1/2% Preferred Stock, the Company shall use its best efforts to purchase,
from time to time, in the open market, on any stock exchange or at private
sale, as the Board of Directors may determine, and at the lowest available
price (not exceeding the Sinking Fund redemption price) such number of
outstand-
A-3
<PAGE>
ing shares of 4 1/2% Preferred Stock as the amount then in the Sinking
Fund shall be sufficient to purchase, as nearly as may be. On July 1 of
each year, if the unexpended balance in the Sinking Fund shall be
sufficient to redeem one hundred or more shares of 4 1/2% Preferred Stock
(or less than one hundred shares if the Company so desires) the Company
shall apply such unexpended balance to the redemption on August 1 of such
year of such number of outstanding shares of 4 1/2% Preferred Stock at
the Sinking Fund redemption price as said balance shall be sufficient to
redeem, as nearly as may be. Any such redemption shall be accomplished in
the manner and with the effect provided in Section 3(c) of this Article.
(v) The 4 1/2% Preferred Stock shall not be convertible.
(vi) So long as any shares of 4 1/2% Preferred Stock shall be
outstanding, the Company shall not create, assume or guarantee or permit
any subsidiary to create, assume or guarantee at any one time or from
time to time any funded debt in excess of $36,000,000 at any one time
outstanding (except any purchase money mortgage upon property acquired
after January 1, 1947, and any mortgage to which such property may be
subject at the time of its acquisition) unless notice of the intention of
the Company to create, assume or guarantee such funded debt shall be
given to the holders of the 4 1/2% Preferred Stock and a meeting of said
shareholders called upon thirty days' written notice or on such longer
notice as may be provided by law. At said meeting the holders of 4 1/2%
Preferred Stock shall vote for or against the creation, assumption or
guaranty of such proposed funded debt and the negative vote of the
holders of forty per cent (40%) of the 4 1/2% Preferred Stock then
outstanding shall absolutely prevent the creation, assumption or guaranty
of any such funded debt by the Company.
4 5/8% Cumulative Preferred Stock, Series of 1955
-------------------------------------------------
The series of the authorized shares of Preferred Stock of the par value
of Fifty Dollars ($50) per share designated as 4 5/8% Cumulative Preferred
Stock, Series of 1955 (hereinafter called "Preferred Stock, Series of 1955"),
of which 40,000 shares were issued and at one time outstanding, shall consist
of 21,000 shares; and the shares of said series shall have, in addition to the
rights and preferences granted by law and the other provisions of this
Article, the following relative rights and preferences:
(i) The dividend rate of the Preferred Stock, Series of 1955, shall
be four and five-eighths per cent (4 5/8%) per share per annum, and no
more, upon the par value thereof.
(ii) The redemption price per share of the Preferred Stock, Series
of 1955, shall be $50.75 plus an amount equal to full cumulative
dividends, as defined in Section 3(f) of this Article, thereon to the
date fixed by the Board of Directors as the redemption date.
(iii) In the event of any voluntary liquidation, dissolution or
winding up of the Company, the holders of the Preferred Stock, Series of
1955, shall be entitled to receive an amount equal to the redemption
price specified in subsection (ii) above for every share thereof
respectively held by them, before any distribution shall be made to the
holders of the Common Stock.
(iv) The Preferred Stock, Series of 1955, shall be entitled to the
benefit of a sinking fund to be applied to the purchase or redemption of
such series as follows:
The Preferred Stock, Series of 1955, shall be subject to redemption
through the operation of a Sinking Fund for the Preferred Stock, Series
of 1955, hereinbelow provided for at the Sinking Fund redemption price
which shall be $50 per share plus an amount equal to all accumulated and
unpaid dividends thereon, whether or not earned or declared, to the date
fixed for redemption.
On or before March 25 in each year, if any Preferred Stock, Series
of 1955, remains outstanding or owned by the Company and if the amount in
the Sinking Fund shall be less
A-4
<PAGE>
than the Sinking Fund redemption price of all outstanding Preferred
Stock, Series of 1955, (including Preferred Stock, Series of 1955, owned
by the Company) the Company shall, subject to the conditions hereinafter
set forth, set aside a sum (hereinafter called "Sinking Fund Instalment")
in cash equal to the aggregate par value of 2 1/2% of the greatest number
of shares of Preferred Stock, Series of 1955, at any one time theretofore
outstanding (including Preferred Stock, Series of 1955, owned by the
Company); provided, however, that any such amount may be reduced, at the
option of the Company, by the aggregate par value of such number of
shares of Preferred Stock, Series of 1955, theretofore acquired by the
Company by purchase other than through the Sinking Fund or by voluntary
redemption and not therefore used to reduce the amount of any Sinking
Fund Instalment or theretofore restored to the status of authorized and
unissued Preferred Stock and classified as to series, as the Board of
Directors shall specify by resolution. The Company may omit to set aside
in any year such portion of any Sinking Fund Instalment as shall be in
excess of the net income of the Company for the immediately preceding
fiscal year, determined in accordance with sound accounting practice,
after deducting therefrom dividend requirements during such year on all
outstanding Preferred Stock, and the Company shall not set aside any
Sinking Fund Instalment unless full cumulative dividends on all
outstanding Preferred Stock to the end of the then current dividend
period shall have been paid or declared and set apart for payment. If,
however, the Company shall omit to set aside the full amount of any
Sinking Fund Instalment owing to any deficiency in net income as above
provided, or if for any other reason (including the fact that dividends
have not been provided for) the Company shall fail to set aside on or
before the date due the full amount of any Sinking Fund Instalment, of if
the Company shall fail to apply amounts in the Sinking Fund as herein
provided, the Company shall be deemed to be in arrears in connection with
its Sinking Fund obligations in respect of the Preferred Stock, Series of
1955, until such time as the full amount which the Company shall have
omitted or failed to set aside shall have been set aside and applied as
herein provided.
From each Sinking Fund Instalment, together with all amounts from
prior instalments not theretofore applied to the purchase or redemption
of Preferred Stock, Series of 1955, the Company shall use its best
efforts to purchase, from time to time, in the open market, on any stock
exchange or at private sale, as the Board of Directors may determine, and
at the lowest available price (not exceeding the Sinking Fund redemption
price) such number of outstanding shares of Preferred Stock, Series of
1955, as the amount then in the Sinking Fund shall be sufficient to
purchase, as nearly as may be. On July 1 of each year, the unexpended
balance in the Sinking Fund shall be sufficient to redeem one hundred or
more shares of Preferred Stock, Series of 1955 (or less than one hundred
shares if the Company so desires) the Company shall apply such unexpended
balance to the redemption on August 1 of such year of such number of
outstanding shares of Preferred Stock, Series of 1955, at the Sinking
Fund redemption price as said balance shall be sufficient to redeem, as
nearly as may be. Any such redemption shall be accomplished in the manner
and with the effect provided in Section 3(e) of this Article.
(v) The Preferred Stock, Series of 1955, shall not be convertible.
(vi) The Preferred Stock, Series of 1955, shall be entitled to no
other special rights in addition to those provided herein and in the
other provisions of this Article.
3. (a) The holders of shares of Preferred Stock of each series shall be
entitled to receive, when and as declared by the Board of Directors, dividends
at the rate for such series fixed in Section 2 of this Article or fixed by
resolution or resolutions as provided in Section 2 of this Article, and no
more, payable quarterly on the first days of February, May, August and
November in each year (the quarterly periods ending on the first days of such
months, respectively, being herein designated as dividend periods), in each
case from the date of cumulation, as hereinafter in subdivision (f) of this
Section 3 defined, of such series. Such dividends shall be cumulative
A-5
<PAGE>
(whether or not in any dividend period or periods there shall be net profits
or net assets of the Company legally available for the payment of such
dividends), so that if at any time full cumulative dividends upon the
outstanding Preferred Stock of all series to the end of the then current
dividend period shall not have been paid or declared and set apart for payment,
the amount of the deficiency shall be fully paid, but without interest, either
by redemption and the payment or deposit, as provided in subdivision (e)
hereof, of the redemption price thereof or by dividends in the amount of such
deficiency paid or declared and set apart for payment on each such series,
before any sum or sums shall be set aside for or applied to the purchase or
redemption of Preferred Stock of any series, Common Stock or any other class
of stock ranking junior to the Preferred Stock and before any dividend shall
be paid or declared or any other distribution ordered or made upon the Common
Stock or any other class of stock ranking junior to the Preferred Stock,
provided that any moneys theretofore set aside for any sinking fund provided
for in Section 2 of this Article or by resolution or resolutions as provided
in Section 2 of this Article may be applied to the purchase or redemption of
the Preferred Stock in accordance with the terms of Section 2 of this Article
or in accordance with the terms of such resolution or resolutions.
All dividends declared on the Preferred Stock of the respective series
outstanding shall be declared pro rata, so that the amounts of dividends
declared per share on the Preferred Stock of different series shall in all
cases bear to each other the same ratio that full cumulative dividends on
such respective series bear to each other.
(b) After full cumulative dividends to the end of the then current
dividend period upon the outstanding Preferred Stock of all series shall have
been paid or declared and set apart for payment, and before any sum or sums
shall be set aside for, or applied to, the purchase of Common Stock or any
other class of stock ranking junior to the Preferred Stock and before any
dividend shall be paid or declared or any other distribution ordered or made
upon the Common Stock or any other class of stock ranking junior to the
Preferred Stock, the Company shall set aside as a sinking fund, when and as
required, out of any funds legally available for that purpose, in respect of
each series of Preferred Stock any shares of which shall at the time be
outstanding and in respect of which a sinking fund for the purchase or
redemption thereof has been provided for in Section 2 of this Article or by
resolution or resolutions as provided in Section 2 of this Article, the sum or
sums required by the terms of Section 2 of this Article or by the terms of
such resolution or resolutions as a sinking fund to be applied in the manner
specified therein.
Preferred Stock of any series purchased or redeemed by the use of sinking
fund moneys or purchases or redeemed otherwise than by the use of sinking fund
moneys are applied by the Company as a credit against sinking fund payments,
shall be cancelled and shall not be reissued.
(c) After full cumulative dividends to the end of the then current
dividend period upon the Preferred Stock of all series then outstanding shall
have been paid or declared and set apart for payment, and after the Company
shall have complied with the provisions of the foregoing subdivision (b) of
this Section 3 in respect of any and all amounts then or theretofore required
to be set aside or applied in respect of any sinking fund mentioned in said
subdivision (b), then and not otherwise, the holders of the Common Stock
shall, subject to the provisions of this Article and of any resolution
providing for the issue of any series of the Preferred Stock, be entitled to
receive such dividends as may be declared by the Board of Directors.
(d) In the event of any liquidation, dissolution or winding up of
the Company, the holders of the Preferred Stock of each series then
outstanding shall be entitled to receive out of the assets of the Company
available for distribution to its stockholders, whether from capital, surplus
or earnings, before any distribution of the assets shall be made to the
holders of the Common Stock or any other class of stock ranking junior to the
Preferred Stock, if such liquidation, dissolution or winding up shall be
involuntary, the sum of $50 for every share of their holdings of Preferred
Stock of such series plus full cumulative dividends thereon to the date of
final distribution, and if such liquidation, dissolution or winding up shall
be voluntary, the amount
A-6
<PAGE>
fixed in Section 2 of this Article or fixed by resolution or resolutions as
provided in Section 2 of this Article for every share of their holdings of
Preferred Stock of such series; and in the event of any such distribution of
assets, the holders of the Common Stock shall be entitled, to the exclusion
of the holders of the Preferred Stock, to share ratably in all assets of the
Company thereafter remaining according to the number of shares of the Common
Stock held by them respectively. If upon any liquidation, dissolution or
winding up of the Company the amounts payable on or with respect to the
Preferred Stock of all series are not paid in full, the holders of shares of
Preferred Stock of all series shall share ratably in any distribution of
assets in proportion to the respective amounts which would be payable in
respect of the shares held by them upon such distribution if all amounts
payable on or with respect to the Preferred Stock of all series were paid
in full. Neither the merger or consolidation of the Company into or with any
other corporation, nor the merger or consolidation of any other corporation
into or with the Company, nor a sale or lease of all or substantially all the
assets of the Company, shall be deemed to be a liquidation, dissolution or
winding up of the Company.
(e) The Preferred Stock of all series, or of any series thereof, or
any part of any series thereof, at any time outstanding, may be redeemed by
the Company, at its election expressed by resolution of the Board of
Directors, at any time or from time to time (which time, when fixed in each
case, is hereinafter called the redemption date), upon not less than thirty
(30) days' previous notice to the holders of record of the Preferred Stock
to be redeemed, given by mail in such manner as may be prescribed by
resolution or resolutions of the Board of Directors, at the redemption price
or prices fixed in Section 2 of this Article or fixed by resolution or
resolutions as provided in Section 2 of the Article for the Preferred Stock to
be redeemed. If less than all the outstanding shares of the Preferred Stock of
any series is to be redeemed, the redemption may be made either by lot or pro
rata in such manner as may be prescribed by resolution of the Board of
Directors. The Company may, if it so elects, provide moneys for the payment of
the redemption price by depositing the amount thereof, after notice of
redemption has first been mailed, for the account of the holders of Preferred
Stock entitled thereto with a bank or trust company doing business in the City
of Philadelphia, Pennsylvania, or in the Borough of Manhattan, in the City of
New York, and having capital and surplus of at least Five Million Dollars
($5,000,000) (the date of any such deposit being hereinafter called the "date
of deposit"). In such event, the notice of redemption shall include a
statement of the date of deposit and the name and address of the bank or
trust company with which the deposit will be made. From and after the
redemption date (unless default shall be made by the Company in providing
moneys for the payment of the redemption price), or, if the Company shall make
such deposit on or before the date specified therefore in the notice, then on
and after the date of deposit, all rights of the holders thereof as
stockholders of the Company shall cease and terminate, except the right to
receive the redemption price as hereinafter provided and except any conversion
rights not theretofore expired. Anything herein or in any resolution
providing for the issue of any series of the Preferred Stock to the contrary
notwithstanding, said redemption price shall include an amount equal to full
cumulative dividends on the Preferred Stock to be redeemed to the redemption
date thereof, and the Company shall not be required to declare or pay on such
Preferred Stock to be redeemed, and the holders thereof shall not be entitled
to receive, any dividends in addition to those thus reflected in the
redemption price: provided, however, that the Company may pay in regular
course any dividends thus reflected in the redemption price either to the
holders of record on the record date fixed for determination of stockholders
entitled to receive such dividends (in which event, anything herein to the
contrary notwithstanding, the amount so deposited need not include any
dividends so paid or to be paid), or as part of the redemption price upon
surrender of the certificates for the shares redeemed. On and after the
redemption date, or, if the Company shall elect to deposit the moneys for such
redemption as herein provided, then on and after the date of deposit, the
holders of record of the Preferred Stock to be redeemed shall be entitled to
receive the redemption price upon actual delivery to the Company or, in the
event of such a deposit, to the bank or trust company with which such deposit
is made, of certificates for the number of shares to be redeemed
A-7
<PAGE>
(such certificate, if required, to be properly stamped for transfer and duly
endorsed in blank or accompanied by proper instruments of assignment and
transfer thereof duly endorsed in blank). Any moneys so deposited which shall
remain unclaimed by the holders of such Preferred Stock at the end of six (6)
years after the redemption date shall be paid by such bank or trust company to
the Company; provided, however, that all moneys so deposited, which shall not
be required for such redemption because of the exercise of any right of
conversion or exchange, shall be returned to the Company forthwith. Any
interest accrued on moneys so deposited shall be paid to the Company from
time to time.
Preferred Stock redeemed pursuant to the provisions of this subdivision
(e) shall be cancelled and shall not be reissued.
(f) The term "full cumulative dividends" whenever used in this
Article with reference to any share of any series of the Preferred Stock shall
be deemed to mean (whether or not in any dividend period, or any part thereof,
in respect of which such term is used there shall have been net profits or net
assets of the Company legally available for the payment of such dividends)
that amount which shall be obtained by multiplying the full dividend rate for
such series fixed in Section 2 of this Article or fixed by resolution or
resolutions as provided in Section 2 of this Article by the period of time
elapsed from the date of cumulation of such series to the date as of which
full cumulative dividends are to be computed (including the elapsed portion of
the current dividend period), less the amount of all dividends paid, or
deemed paid upon such share.
The term "date of cumulation" as used in this Article with reference to
any series of the Preferred Stock shall be deemed to mean the February 1, May
1, August 1, or November 1 on which, or next preceding the date on which,
shares of Preferred Stock of such series shall first be issued.
In the event of the issue of additional Preferred Stock of any then
existing series, all dividends paid on Preferred Stock of such series prior to
the issue of such additional Preferred Stock, and all dividends declared and
payable to holders of Preferred Stock of such series of record on any date
prior to such additional issue, shall be deemed to have been paid on the
additional Preferred Stock so issued.
The term "stock ranking junior to the Preferred Stock", whenever used in
this Article, shall mean the stock of the Company over which the Preferred
Stock has preference or priority in the payment of dividends or in the
distribution of assets on any dissolution, liquidation or winding up of the
Company.
(g) Except as otherwise required by the statutes of the
Commonwealth of Pennsylvania and as otherwise provided in this Article, and
subject to the provisions of the by-laws of the Company, as from time to time
amended, with respect to the closing of the transfer books and the fixing of a
record date for the determination of stockholders entitled to vote, the
holders of the Common Stock shall exclusively possess voting power for the
election of directors and for all other purposes, and the holders of the
Preferred Stock shall have no voting power and shall not be entitled to any
notice of any meeting of stockholders:
Provided, however, that if and whenever a default in preferred dividends,
as hereinafter defined, shall exist, the holders of the outstanding Preferred
Stock, voting separately as a class, shall have the right to elect two
directors at the annual meeting of stockholders of the Company for the
election of directors next succeeding the occurrence of such default, and at
each such annual meeting thereafter so long and only so long as such default
shall exist. The term of office of each such director elected by the holders
of the Preferred Stock as aforesaid shall continue until the next annual
meeting of stockholders of the Company for the election of directors,
notwithstanding that prior to the end of such term the default in preferred
dividends shall cease to exist. If, prior to the end of such term, a vacancy
in the office of such director shall occur by reason of his
A-8
<PAGE>
death, resignation, removal or disability, or for any other cause, such
vacancy shall be filled for the remainder of the term in the manner provided
in the by-laws of the Company; provided, that, if such vacancy shall be filled
by election by the stockholders at a meeting thereof, the holders of the then
outstanding Preferred Stock, voting separately as a class, shall have the
right to fill such vacancy for the remainder of the term, unless at the time
of such election no default in preferred dividends shall exist. At any meeting
of stockholders at which the holders of Preferred Stock shall be entitled to
vote for the election of a director or directors as aforesaid, the holders of
twenty-five per cent (25%) of the then outstanding Preferred Stock present in
person or by proxy shall be sufficient to constitute a quorum for the election
of such director or directors and for no other purpose, and the vote of the
holders of a majority of the Preferred Stock so present at such meeting at
which there shall be a quorum, shall be sufficient to elect such director or
directors. For the purposes of this subdivision (g), a default in preferred
dividends shall be deemed to have occurred whenever, on any dividend payment
date, the amount of unpaid full cumulative dividends upon any series of the
Preferred Stock shall be equivalent to eight (8) quarterly dividends thereon
or more, and, having so occurred, such default shall be deemed to exist
thereafter until, but only until, full cumulative dividends on all shares of
Preferred Stock then outstanding of each and every series, to the end of the
last preceding dividend period, shall have been paid. Nothing herein contained
shall be deemed to prevent an amendment of the by-laws of the Company, in the
manner therein provided, which shall increase the number of directors of the
Company or to prevent any other change in the number of directors of the
Company.
(h) So long as any shares of the Preferred Stock of any series shall be
outstanding, the Company shall not without the consent given by resolution
adopted at a meeting duly called for that purpose of the holders of record of
at least two-thirds of the number of shares of the Preferred Stock of all
series then outstanding:
(1) alter or change the designations or the powers, preferences or
rights, or the qualifications, limitations or restrictions thereof, of the
Preferred Stock or of any series thereof in any material respect prejudicial
to the holders thereof;
(2) create any new class of stock having preference over the
Preferred Stock as to dividend; or assets, or create any obligation or
security of the Company convertible into shares of stock of any class having
such preference over the Preferred Stock;
(3) sell, transfer or lease all, or substantially all, the assets of
the Company unless as a part of such transaction or prior thereto the
Preferred Stock of all series shall be retired or called for redemption and
the necessary funds therefor deposited as provided in subdivision (e) hereof;
or
(4) effect a statutory merger or consolidation of or with any other
corporation or corporations; provided that such consent shall not be necessary
if as a result of such merger or consolidation (A) the Company shall be the
surviving corporation and the Preferred Stock then outstanding shall continue
to be outstanding; there shall be no alteration or change in the designations
or the powers, preferences or rights, or the qualifications, limitations or
restrictions thereof, in any material respect prejudicial to the holders
thereof, there shall be no increase in the authorized number of shares of
Preferred Stock, and there shall not be created any new class of stock having
preference over, or being on a parity with, the Preferred Stock as to dividends
or assets,or (B) if the Company shall not be the surviving corporation, the
shares of the Preferred Stock of each series then outstanding shall be
converted into, or be exchangeable for, a like number of shares of preferred
stock of the surviving corporation which preferred stock shall have
substantially the same designations, powers, preferences and rights, and
qualifications, limitations, or restrictions thereof, as the Preferred Stock of
such series, and there shall not be outstanding or created any class of stock
of the surviving corporation having preference over, or being on a parity
with, such preferred stock as to dividends or assets.
A-9
<PAGE>
(i) So long as any share of the Preferred Stock of any series shall be
outstanding, the Company shall not without the consent given by resolution
adopted at a meeting duly called for that purpose of the holders of record of
at least a majority of the number of shares of the Preferred Stock of all
series then outstanding, increase the authorized number of shares of the
Preferred Stock or create any new class of stock which shall be on a parity
with the Preferred Stock as to dividends or assets, or create any obligation
or security of the Company convertible into shares of stock of any class which
shall be on a parity with the Preferred Stock as to dividends or assets.
The holders of the Preferred Stock shall not be entitled to subscribe to
any increased issue of the Preferred Stock or the Common Stock unless such
privilege is provided for by resolution of the holders of the Common Stock and
the Board of Directors of the Company.
Anything in this Article hereof or in any resolution or resolutions
providing for the issue of Preferred Stock of any series contained to the
contrary notwithstanding, dividends upon shares of stock of any class of the
Company shall be payable only out of unreserved and unrestricted earned
surplus of the Company legally available for dividends, and the rights of the
holders of all classes of stock of the Company in respect of the payment of
dividends shall at all times be subject to the power of the Board of Directors
from time to time to set aside such reserves and to make such other
provisions, if any, as said Board shall deem to be necessary or advisable for
working capital, for additions and improvements to plant and equipment, for
expansion of the Company's business (including the acquisition of real and
personal property for that purpose) or for any other purpose of the Company.
COMMON STOCK
The holders of Common Stock shall have no preemptive rights and the
Company shall have the right to issue any shares of its capital stock, option
rights or securities having conversion or option rights without first offering
such shares, rights or securities to the holders of the Common Stock.
A-10
<PAGE>
[LOGO OF COMMONWEALTH OF PENNSYLVANIA APPEARS HERE]
WHEREAS, Under the provisions of the business Corporation Law, approved
the 5th day of May, A.D. 1933, PL 364, as amended, and of the Professional
Corporation Law, act of July 9, 1970, (No. 160) the Department of State is
authorized and required to issue a
CERTIFICATE OF AMENDMENT
evidencing the amendment and restatement of the Articles of Incorporation in
their entirety of a professional corporation organized under or subject to the
provisions of such Laws.
WHEREAS, The stipulations and conditions of such Laws pertaining to the
amendment of Articles of Incorporation have been fully complied with by
P. H. GLATFELTER COMPANY
HENCEFORTH, The "Articles," as defined in Article I of the Business
Corporation Law, shall not include any prior documents;
THEREFORE, KNOW YE, That subject to the Constitution of the
Commonwealth and under the authority of the Business Corporation Law and the
Professional Corporation Law, I do by these present, which I have caused to be
sealed with the Great Seal of the Commonwealth, extend the rights and powers
of the corporation named above, in accordance, with the terms and provisions
of the Articles of Amendment presented by it to the Department of State, with
full power and authority to use and enjoy such rights and powers, subject to
all the provisions and restrictions of the Business Corporation Law, the
Professional Corporation Law and all other applicable laws of the
Commonwealth.
GIVEN under my Hand and the Great Seal of the
Commonwealth, at the City of Harrisburg,
this 27th day of April in the year of
our Lord one thousand nine hundred and
seventy-seven and of the Commonwealth the
two hundred and first.
/s/ C. DeLores Tucker
----------------------------------------
Secretary of the Commonwealth
<PAGE>
[LOGO OF COMMONWEALTH OF PENNSYLVANIA APPEARS HERE]
January 31, 1979
IN RE: "P. H. GLATFELTER COMPANY"
I, BARTON A. FIELDS, Acting Secretary of the Commonwealth of the
Commonwealth of Pennsylvania do hereby certify that the foregoing and annexed
is a true and corect photocopy of Articles and Certificates of Merger
which appear of record in this Department.
[STATE SEAL APPEARS HERE] IN TESTIMONY WHEREOF, I have hereunto
set my hand and caused the seal of the
Secretary's Office to be affixed, the day
and year above written.
/s/Barton A. Fields
-----------------------------------
ACTING Secretary of the Commonwealth
<PAGE>
[LOGO COMMONWEALTH OF PENNSYLVANIA]
Whereas, Under the provisions of Article IX of the Business Corporation Law
(Act of May 5,1933, P,L, 364), as amended, the Department of State is
authorized and required to issue a
CERTIFICATE OF MERGER
evidencing the merger of any one or more domestic corporations,and any one or
more foreign corporations into one such corporations under the provisions of
that law; and
Whereas, The stipulations and conditions of that law relating to the merger of
such corporations have been fully complied with by Bergstrom Paper Company, a
Wisconsin corporation, and P. H. Glatfelter Company a Pennsylvania
corporation.
It is, Therefore, Certified, That from the Articles of Merger filed with the
Department of State, it appears that Bergstrom Paper Company the Wisconsin
corporation, has been merged into P. H. Glatfelter Company, being the
Pennsylvania corporation.
Therefore, Know Ye, that subject to the Constitution of this Commonwealth,
and under authority of the Business Corporation Law, I DO BY THESE PRESENTS,
which I have caused to be sealed with the Great Seal of the Commonwealth,
hereby declare that the Pennslyvania corporation shall be the surviving
corporation, under the name, style and title of P. H. Glatfelter Company.
Given under my hand and the Great Seal
of the Commonwealth, at the City
of Harrisburg, this 30th day of
January in the year of our Lord
one thousand nine hundred and
seventy-nine and of the Common-
wealth the two hundred and third
------------------------------
Secretary of the Commonwealth
<PAGE>
Filed this 30th day of_____
January, 1979
APPLICANT'S ACC'T NO Commonwealth of Pennsylvania
Department of State
DSCB:BCL-903 (Rev.8-72) ============================
(Line for numbering)
Filing Fee:$80 plus $20
for each party
corporation COMMONWEALTH OF PENNSYLVANIA
in excess of two DEPARTMENT OF STATE
AMB-B CORPORATION BUREAU
Articles of Merger- /s/Barton A. Fields
Business Corporation Acting Secretary of the Commonwealth
In compliance with the requirements of section 903 of the Business
Corporation Law, act of May 5,1933 (P.L. 364)(15 P.S.(S)1903), the undersigned
corporations, desiring to effect a merger, hereby certify that:
1. The name of the corporation surviving the merger is:
P. H. GLATFELTER COMPANY
- -------------------------------------------------------------------------------
2. (Check and complete one of the following):
[X] The surviving corporation is a domestic corporation and the location of
its registered office in this Commonwealth is (the Department of State is
hereby authorized to correct the following statement to conform to the records
of the Department):
- -------------------------------------------------------------------------------
(Number) (Street)
Spring Grove Pennsylvania 17362
- -------------------------------------------------------------------------------
(City) (Zip Code)
[ ] The surviving corporation is a foreign corporation incorporated under the
laws of_______________________________ and the location of its office
(Name of Jurisdiction)
registered with such domiciliary jurisdiction is:
- --------------------------------------------------------------------------------
(Number) (Street)
- -------------------------------------------------------------------------------
(City) (State) (Zip Code)
3. The name and the location of the registered office of each other domestic
business corporation and qualified foreign business corporation which is a
party to the plan of merger are as follows:
Bergstrom Paper Company (not qualified in Pennsylvania)
Bergstrom Road
Neenah, Wisconsin
<PAGE>
IN TESTIMONY WHEREOF, each undersigned corporation has caused these
Articles of Merger to be signed by a duly authorized officer and its corporate
seal, duly attested by another such officer, to be hereunto affixed this
30th day of January 19 79 .
- ---------------- -------------------- ----
P. H. GLATFELTER COMPANY
---------------------------------------
(NAME OF CORPORATION)
By: [SIGNATURE APPEARS HERE]
---------------------------------------
(SIGNATURE)
President
----------------------------------------
(TITLE: PRESIDENT, VICE PRESIDENT, ETC.)
Attest:
[SIGNATURE APPEARS HERE]
- --------------------------------------
(SIGNATURE)
SECRETARY
- --------------------------------------
(TITLE: SECRETARY, ASSISTANT SECRETARY,
ETC.)
(CORPORATE SEAL)
BERGSTROM PAPER COMPANY
-----------------------------------------
(NAME OF CORPORATION)
By: [SIGNATURE APPEARS HERE]
-----------------------------------------
(SIGNATURE)
PRESIDENT
-----------------------------------------
(TITLE: PRESIDENT, VICE PRESIDENT, ETC.)
Attest:
[SIGNATURE APPEARS HERE]
- --------------------------------------
(SIGNATURE)
SECRETARY
- --------------------------------------
(TITLE: SECRETARY, ASSISTANT SECRETARY,
ETC.)
(CORPORATE SEAL)
<PAGE>
EXHIBIT A
PLAN OF MERGER
of
BERGSTROM PAPER COMPANY
into
P.H. GLATFELTER COMPANY
PLAN OF MERGER of Bergstrom Paper Company, a Wisconsin corporation
("Bergstrom"), with and into P.H. Glatfelter Company: a Pennsylvania
corporation ("Glatfelter" or the "Surviving Corporation"), which two
corporations are hereinafter sometimes collectively called the "Constituent
Corporations".
ARTICLE I
The Merger, The Effective Date and The Surviving Corporation
1.01 The Merger. Bergstrom shall be merged with and into Glatfelter
(the "Merger").
1.02 The Effective Date. The Merger shall become effective and shall be
consummated by operation of law without further act or deed upon the part of
the Constituent Corporations on the date and at the time specified in the
Articles of Merger filed and recorded with respect thereto pursuant to the
Pennsylvania Business Corporation Law and the Wisconsin Business Corporation
Law (the "Effective Date").
1.03 The Surviving Corporation. On the Effective Date, the Constituent
Corporations shall become a single corporation, Glatfelter, the Surviving
Corporation, which shall continue its existence under Pennsylvania law. The
separate existence and corporate organization of Bergstrom shall be terminated
and shall cease. The Surviving Corporation shall possess all the rights,
privileges, powers, immunities and franchises of each of the Constituent
Corporations. All the rights, privileges, powers, immunities and franchises of
each of the Constituent Corporations and all the property, real, personal
and mixed, of each of the Constituent Corporations and all debts due on
whatever account, including subscriptions to shares, and all other choices in
action, and all and every other interest, of or belonging to or due to each of
the Constituent Corporations, shall be taken and deemed to be transferred to
and vested in the Surviving Corporation without further act or deed; and the
title to any real estate or interest therein, vested in either of the
Constituent Corporations, shall not revert or be in any way impaired by reason
of the Merger. The Surviving Corporation shall be responsible and liable for
all the liabilities and obligations of each of the Constituent Corporations
but the liabilities of the Constituent Corporations, or of their shareholders,
directors, or officers, shall not be affected by the Merger, nor shall the
rights of the creditors thereof or of any persons dealing with such
corporations, or any liens upon the property of such corporations, be impaired
by the Merger, and any claim existing or action or proceeding pending by or
against either of such corporations may be prosecuted to judgment as if the
Merger had not taken place, or the Surviving Corporation may be proceeded
against or substituted in its place. Except as otherwise specifically set
forth in this Plan of Merger, the identity, existence, purposes, powers,
franchises, rights, immunities and liabilities of Glatfelter shall continue
unaffected and unimpaired by the Merger.
ARTICLE II
Articles of Incorporation and By-Laws of the Surviving Corporation
The Articles of Incorporation and By-Laws of Glatfelter in effect
immediately prior to the Effective Date shall remain unchanged and shall
continue to be the Articles of Incorporation and By-Laws of the Surviving
Corporation until altered, amended, or repealed in accordance with the
provisions thereof and of applicable law, except that the first paragraph of
Article 5 of the Articles of Incorporation shall be amended to read in full as
follows:
<PAGE>
"5. The aggregate number of shares which the corporation (hereinafter
referred to as the "Company") has authority to issue is 12,065,000 shares
divided into two classes consisting of (a) 65,000 shares of Preferred Stock of
the par value of $50 each (of which class a series of 6,000 shares is
designated as 4 1/2% Cumulative Preferred Stock and a series of 19,000 shares
is designated as 4 5/8% Cumulative Preferred Stock Series of 1955); and (b)
12,000,000 shares of Common Stock of the par value of $2.50 each."
ARTICLE III
MANNER AND BASIS OF CONVERTING SHARES
OF THE CONSTITUENT CORPORATIONS
3.01 Basis of Conversion. On the Effective Date:
(1) Each share of 4 1/2% Cumulative Preferred Stock, 4 5/8% Cumulative
Preferred Stock, Series of 1955, and Common Stock of Glatfelter then
issued (including shares held in the treasury of Glatfelter) shall
continue to be one issued share of 4 1/2% Cumulative Preferred Stock,
4 5/8% Cumulative Preferred Stock, Series of 1955, and Common Stock of
Glatfelter, respectively.
(2) Each share of Common Stock of Bergstrom, par value $1 per share
("Bergstrom Common Stock"), which is held in its treasury immediately prior
to the Effective Date shall be cancelled.
(3) Each share of Bergstrom Common Stock which is outstanding
immediately prior to the Effective Date and with respect to which the
holder thereof shall have filed the required prior written objection with
Bergstrom, shall not have voted in favor of the Merger and shall make or
shall have made written demand for the payment of the fair value of such
share pursuant to the Wisconsin Business Corporation Law (all such shares
in the aggregate being hereinafter referred to as "Dissenting Shares")
shall be cancelled.
(4) Each share of Bergstrom Common Stock which is outstanding
immediately prior to the Effective Date and which under the terms of
Section 3.03 of this Plan of Merger is to be converted into Common Stock
of Glatfelter, par value $2.50 per share ("Glatfelter Common Stock") shall
be converted into 1.2 shares of Glatfelter Common Stock; provided that no
fractional shares shall be issued.
(5) Each Bergstrom shareholder who would otherwise be entitled to
receive a fractional share of Glatfelter Common Stock shall receive in
lieu thereof payment in cash. The amount of such payment in cash in lieu
of such fractional share shall be determined by multiplying such fraction
of a share by the quoted closing price of Glatfelter Common Stock on the
American Stock Exchange on the last day on which Glatfelter Common Stock
is traded on such Exchange next preceding the Effective Date.
(6) Each share of Bergstrom Common Stock which is outstanding
immediately prior to the Effective Date and which under the terms of
Section 3.03 of this Plan of Merger is to be converted into cash shall be
converted into the right to receive $31.75 in cash (the "Cash Election
Price").
3.02 Elections. Each holder of Bergstrom Common Stock shall have the right
to submit a request specifying the number of his shares of Bergstrom Common
Stock which he desires to have converted into Glatfelter Common Stock and the
number of his shares of Bergstrom Common Stock which he desires to have
converted into cash in accordance with the following procedure:
(1) Any holder of Bergstrom Common Stock may specify in a request
made in accordance with the provisions of this Section 3.02 (herein called an
"Election") (a) the number of shares owned by such holder which such holder
shall desire to have converted into cash ("Cash Election"), (b) the number of
shares owned by such holder which such holder shall desire to
<PAGE>
have converted into cash provided all such shares are converted into cash,
otherwise such shares shall be converted into Glatfelter Common Stock
("Conditional Cash Election") and (c) the number of shares owned by such
holder which such holder shall desire to have converted into Glatfelter
Common Stock ("Stock Election").
(2) Glatfelter shall authorize a commercial bank or trust company in
the United States to receive Elections and such commercial bank or trust
company so authorized by Glatfelter shall be deemed to be the "Exchange
Agent".
(3) Glatfelter and Bergstrom shall prepare a form on which to make
Elections ("Election Form") which shall be mailed to the holders of record
of Bergstrom Common Stock entitled to vote on this Plan of Merger not later
than three days after the mailing of proxy material in connection with the
meeting of Bergstrom shareholders to vote on this Plan of Merger and to
their transferees of record as soon as practicable after any such transfer.
(4) An Election shall be made by completing the Election Form in
accordance with the instructions set forth therein and delivering it to the
Exchange Agent, together with certificates for the shares of Bergstrom
Common Stock covered thereby or an appropriate guarantee of delivery of such
certificates to the Exchange Agent within 10 business days of delivery of
such guarantee, prior to 5 P.M. Eastern Time on the business day ("Election
Date") immediately preceding the day on which the Bergstrom shareholders
meet to vote on this Plan of Merger. A guarantee of delivery may only be
made by a member of a registered national securities exchange, a member of
the National Association of Securities Dealers, Inc. or a commercial bank or
trust company in the United States.
(5) Any holder of Bergstrom Common Stock may at any time prior to 5
P.M. Eastern Time on the Election Date change his Election by written
notice, accompanied by a properly completed revised Election Form, delivered
to the Exchange Agent.
(6) Any holder of Bergstrom Common Stock may at any time prior to 5
P.M. Eastern Time on the Election Date withdraw his Election by written
notice delivered to the Exchange Agent or by withdrawal of his
certificates for Bergstrom Common Stock previously deposited with, or the
guarantee of delivery thereof previously delivered to, the Exchange Agent.
Any holder of Bergstrom Common Stock who shall have deposited with the
Exchange Agent certificates for shares of Bergstrom Common Stock shall
again have the right to withdraw such certificates and thereby revoke his
Election at any time prior to the Effective Date, but only after the
expiration of the period of 60 days following the Election Date. Any such
shareholder who revokes his Election as set forth above shall be deemed
not to have made an Election.
(7) Any Election made with respect to Dissenting Shares shall be void
and of no effect.
(8) Glatfelter and Bergstrom shall have the right to make rules
governing the validity of Election Forms, the manner and extent to which
Elections are to be taken into account in making the determinations
prescribed by Section 3.03, the issuance and delivery of certificates for
Glatfelter Common Stock, the payment for shares of Bergstrom Common Stock
converted into cash and the payment of cash in lieu of issuing fractional
shares of Glatfelter Common Stock. Any such rule shall be binding upon all
persons concerned, provided that it shall have a reasonable purpose and
shall be applied uniformly.
3.03 Manner of Conversion. The manner in which each outstanding share of
Bergstrom Common Stock shall be converted into shares of Glatfelter Common Stock
or the right to receive the Cash Election Price shall be as follows:
(1) All outstanding shares of Bergstrom Common Stock covered by a
Stock Election shall be converted into Glatfelter Common Stock on the basis
set forth in Section 3.01(4) hereof.
<PAGE>
(2) All outstanding shares of Bergstrom Common Stock covered by a Cash
Election or a Conditional Cash Election or not covered by an Election
exclusive of Dissenting Shares, if any, shall be converted into the right to
receive the Cash Election Price; provided, however, that in no event shall the
number of outstanding shares of Bergstrom Common Stock converted into the
right to receive the Cash Election Price exceed the Maximum Cash Conversions.
The "Maximum Cash Conversions" means the number of outstanding shares of
Bergstrom Common Stock, which, if converted into the right to receive the Cash
Election Price, would result in the Cash Payable in the Merger being equal to
49% of the Total Consideration of the Merger. The "Cash Payable" in the
Merger means the sum of (i) the product of the number of Dissenting Shares, if
any, times the Cash Election Price, (ii) the amount of cash to be paid in lien
of the issuance of fractional shares of Glatfelter Common Stock pursuant to
Section 3.01(5) hereof and (iii) the product of the number of outstanding
shares of Bergstrom Common Stock which are converted into the right to receive
the Cash Election Price times the Cash Election Price. The "Total
Consideration" of the Merger means the Cash Payable in the Merger plus the
product of the number of shares of Glatfelter Common Stock issued in the
Merger times the fair market value per share of Glatfelter Common Stock on the
Effective Date, determined in accordance with the principles of Treasury
Regulation (S)(S)20.2031-2 (or any successor regulation) as in effect on the
Effective Date.
(3) If the aggregate number of outstanding shares of Bergstrom Common Stock
covered by a Cash Election or a Conditional Cash Election or not covered by an
Election, exclusive of Dissenting Shares, if any, exceeds the Maximum Cash
Conversions, then the shares of Bergstrom Common Stock covered by a Cash
Election or a Conditional Cash Election or not covered by an Election,
exclusive of Dissenting Shares, if any, to be converted into the right to
receive the Cash Election Price shall be determined in accordance with the
following priorities until the number of shares so determined, as nearly as
practicable, equals (but shall not exceed) the Maximum Cash Conversions:
First: All or if necessary, a portion of the outstanding shares of
Bergstrom Common Stock covered by a Cash Election;
Second: All, or if necessary, a portion of the outstanding shares of
Bergstrom Common Stock not covered by an Election, exclusive of Dissenting
Shares, if any;
Third: All, or if necessary, a portion of the outstanding shares of
Bergstrom Common Stock covered by a Conditional Cash Election.
If only a portion of the outstanding shares of Bergstrom Common Stock
covered by a Cash Election or not covered by an Election, exclusive of
Dissenting Shares, if any, are to be converted into the right to receive the
Cash Election Price, the shares so converted shall be selected by proration
among the holders of all shares covered by a Cash Election or not covered by
an Election, exclusive of Dissenting Shares, if any, as the case may be, in
accordance with the number of shares held by each of them. If only a portion
of the outstanding shares of Bergstrom Common Stock covered by a Conditional
Cash Election are to be converted into the right to receive the Cash Election
Price, the shares so converted shall be selected by lot or other equitable
method by the Exchange Agent, such selection to be made first from those
Conditional Cash Elections covering numbers of shares which would be converted
into fewer than 100 shares of Glatfelter Common Stock, and then if necessary,
from the remaining Conditional Cash Elections.
(4) All outstanding shares of Bergstrom Common Stock covered by Cash
Elections or Conditional Cash Elections or not covered by an Election,
exclusive of Dissenting Shares, if any, which are not converted into the right
to receive the Cash Election Price shall be converted into shares of
Glatfelter Common Stock on the basis set forth in Section 3.01(4) hereof.
<PAGE>
3.04 Exchange of Certificates. After the Effective Date each holder of an
outstanding certificate or certificates theretofore representing shares of
Bergstrom Common Stock exclusive of Dissenting Shares, if any, who has not
already done so shall,upon surrender of the same to the Exchange Agent,
be entitled to receive in exchange therefor a certificate or certificates
representing the number of shares of Glatfelter Common Stock and/or cash into
which such shares of Bergstrom Common Stock have been converted on the basis
set forth herein. Until surrendered as provided herein, outstanding
certificates which, prior to the Effective Date, represented shares of
Bergstrom Common Stock exclusive of Dissenting Shares, if any, shall be deemed
for all corporate purposes to evidence the ownership of the number of shares of
Glatfelter Common Stock and/or the right to receive cash on the basis provided
herein as though such surrender and exchange had taken place, except that the
holders of such certificates representing shares of Glatfelter Common Stock
shall not be entitled to exercise voting rights or to receive dividends or
other distributions in respect to Glatfelter Common Stock.
Any such cash, dividend or other distribution will be remitted, without
interest,to the former Bergstrom shareholder entitled thereto at the time such
certificates formerly representing shares of Bergstrom Common Stock are
exchanged as provided herein.
ARTICLE IV
Merger Procedure
Following the approval of this Plan of Merger by the Board of Directors of
each of the Constituent Corporations, it shall be submitted for approval by a
vote of the holders of Bergstrom Common Stock in accordance with the Wisconsin
Business Corporation Law and by a vote of the holders of Glatfelter Common
Stock in accordance with the Pennsylvania Business Corporation Law. After such
approval of this Plan of Merger by the holders of Bergstrom Common Stock and
the holders of Glatfelter Common Stock, appropriate Articles of Merger shall,
if the Merger is not abandoned pursuant to the provisions hereof, be filed and
recorded in the manner provided in the Pennsylvania Business Corporation Law
and the Wisconsin Business Corporation Law; and the officers of each of the
Constituent Corporations, both prior to and following the Effective Date,
shall execute all such other documents and shall take all such other actions
as may be necessary or advisable in order to cause this Plan of Merger to be
carried out in accordance with its terms.
ARTICLE V
Termination of the Plan of Merger
Notwithstanding the approval of this Plan of Merger by the holders of
Bergstrom Common Stock and by the holders of Glatfelter Common Stock, this
Plan of Merger shall forthwith terminate, and the Merger contemplated hereby
be abandoned, in the event that the Agreement and Plan of Reorganization
between Glatfelter and Bergstrom shall be terminated as therein provided.
ARTICLE VI
Miscellaneous
After the Effective Date, from time to time and as and when requested in
writing by the Surviving Corporation, or by its successors or assigns, to the
extent permitted by law, the officers of Bergstrom are fully authorized to
act on behalf of Bergstrom with respect to the due execution in the name of
Bergstrom of tax returns, instruments of transfer or conveyance and other
documents where the execution thereof is required or convenient to comply
with any provision of law, of any contract to which Bergstrom was a party or
of this Plan of Merger.
21
<PAGE>
APPLICANT'S ACC'T NO. 80-30 1798 Filed this 27th day of
------------------- ----
DSCB:BCL--709 (Rev. 8-72) (Line for numbering) May, 1980 Commonwealth
140599 ---
Filing Fee: $40 of Pennsylvania
AB-2 COMMONWEALTH OF Department of State
PENNSYLVANIA
Statement of Reduction DEPARTMENT OF STATE /s/ William R. Davis
of Authorized Shares-- CORPORATION BUREAU
Domestic Business Corporation Secretary of
the Commonwealth slg
- ------------------------------------------------------------------------------
In compliance with the requirements of section 709 of the Business
Corporation Law, act of May 5, 1933 (P. L. 364) (15 P. S. (S)1709), the
undersigned corporation, desiring to effect a reduction in its authorized
shares, does hereby certify that:
1. The name of the corporation is:
P. H. GLATFELTER COMPANY
- ------------------------------------------------------------------------------
2. The location of its registered office in this Commonwealth is (the
Department of State is hereby authorized to correct the following statement to
conform to the records of the Department):
- -------------------------------------------------------------------------------
(NUMBER) (STREET)
Spring Grove, Pennsylvania 17632
- -------------------------------------------------------------------------------
(CITY) (ZIP CODE)
3. The aggregate number of shares which the corporation had authority to
issue is: 12,063,500 shares divided into two classes consisting of (a) 63,500
shares of Preferred Stock of the par value of $50 each (of which class a
series of 5,500 shares is designated as 4-1/2% Cumulative Preferred Stock and
series of 18,000 shares is designated as 4-5/8% Cumulative Preferred Stock,
Series of 1955); and (b) 12,000,000 shares of Common Stock of the par value of
$2.50 each.
4. (Check, and if appropriate, complete one or more of the following):
[X] The provisions of the Articles of the corporation prohibiting the
reissue of the shares to which this statement relates are as follows:
"Preferred Stock of any series purchased or redeemed by the use of
sinking fund moneys or purchased or redeemed otherwise than by the use of
sinking fund moneys and applied by the Company as a credit against sinking
fund payments, shall be cancelled and shall not be reissued.
The Company Stock has applied 500 shares of its 4-1/2% Cumulative
Preferred Stock and 1,000 shares of its 4-5/8% Cumulative Preferred Stock,
Series of 1955, as a credit against sinking fund requirements and has cancelled
such shares.
<PAGE>
[_] The shares to which this statement relates have been acquired on
conversion thereof into or exchange thereof for other shares of the
corporation.
[_] The resolution of the board of directors directing the reduction in
authorized shares to which this statement relates is set forth in Exhibit A
attached hereto and made a part hereof.
[_] The resolution of the shareholders approving the reduction in
authorized shares to which this statement relates is set forth in Exhibit B
attached hereto and made a part hereof. At the time of the action of
shareholders:
(i) The total number of shares outstanding was:
- --------------------------------------------------------------------------------
(ii) The number of shares entitled to vote was:
- --------------------------------------------------------------------------------
In the action taken by the shareholders:
(iii) The number of shares voted in favor of the reduction was:
- --------------------------------------------------------------------------------
(iv) The number of shares voted against the reduction was:
- --------------------------------------------------------------------------------
5. The number of shares which the corporation has authority to issue after
giving effect to such reduction is:
12,062,000 shares divided into two classes consisting of (a) 62,000 shares of
Preferred Stock of the par value of $50 each (of which class a series of
5,000 shares is designated as 4-1/2% Cumulative Preferred Stock and a
series of 17,000 shares is designated as 4-5/8% Cumulative Preferred Stock,
Series of 1955); and (b) 12,000,000 shares of Common Stock of the par value
of $2.50 each.
IN TESTIMONY WHEREOF, the undersigned corporation has caused this
statement to be signed by a duly authorized officer and its corporate seal,
duly attested by another such officer, to be hereunto affixed this 12th day of
May, 1980.
P. H. GLATFELTER COMPANY
---------------------------------------
(NAME OF CORPORATION)
By: (Signature Appears Here)
---------------------------------------
(SIGNATURE)
Executive Vice President, Treasurer &
Chief Financial Officer
---------------------------------------
(TITLE: PRESIDENT, VICE PRESIDENT, ETC.)
Attest:
(Signature Appears Here)
- ---------------------------------------------
(Signature)
Vice President and Secretary
- ---------------------------------------------
(TITLE, SECRETARY, ASSISTANT SECRETARY, ETC.)
(CORPORATE SEAL)
<PAGE>
Filed this 8th day of
October, 1981
Commonwealth of Pennsylvania
Department of State
APPLICANT'S ACC'T NO. /s/ William L. Davis
Secretary of the Commonwealth
DSCB:BCL-709 (Rev. 8-72) 81765 1341
---------------------
Filing Fee: $40 (Line for numbering)
AB-2 140599
Statement of Reduction COMMONWEALTH OF PENNSYLVANIA
of Authorized Shares-- DEPARTMENT OF STATE
Domestic Business Corporation CORPORATION BUREAU
- ---------------------------------------------------------------------------
(Box for Certification) pjd
In compliance with the requirements of section 709 of the Business
Corporation Law, act of May 5, 1933 (P. L. 364) (15 P. S. (S)1709), the
undersigned corporation, desiring to effect a reduction in its authorized
shares, does hereby certify that:
1. The name of the corporation is:
P. H. GLATFELTER COMPANY
- ----------------------------------------------------------------------------
2. The location of its registered office in this Commonwealth is (the Department
of State is hereby authorized to correct the following statement to conform to
the records of the Department):
- ----------------------------------------------------------------------------
(Number) (Street)
Spring Grove, Pennsylvania 17362
- ----------------------------------------------------------------------------
(City) (Zip Code)
3. The aggregate number of shares which the corporation had authority to issue
is: 12,062,000 shares divided into two classes consisting of (a) 62,000 shares
of Preferred Stock of the par value of $50 each (of which class a series of
5,000 shares is designated as 4-1/2% Cumulative Preferred Stock and a series of
17,000 shares is designated as 4-5/8% Cumulative Preferred Stock, Series of
1955); and (b) 12,000,000 shares of Common Stock of the par value of $2.50 each.
4. (Check, and if appropriate, complete one or more of the following):
[X] The provisions of the Articles of the corporation prohibiting the
reissue of the shares to which this statement relates are as follows:
"Preferred Stock of any series purchased or redeemed by the use of sinking
fund moneys or purchased or redeemed otherwise than by the use of sinking fund
moneys and applied by the Company as a credit against sinking fund payments,
shall be cancelled and shall not be reissued."
The Company has applied 500 shares of its 4-1/2% Cumulative Preferred Stock and
1,000 shares of its 4-5/8% Cumulative Preferred Stock, Series of 1955, as a
credit against sinking fund requirements and has cancelled such shares.
<PAGE>
[_] The shares to which this statement relates have been acquired on
conversion thereof into or exchange thereof for other shares of the
corporation.
[_] The resolution of the board of directors directing the reduction in
authorized shares to which this statement relates is set forth in Exhibit A
attached hereto and made a part hereof.
[_] The resolution of the shareholders approving the reduction in
authorized shares to which this statement relates is set forth in Exhibit B
attached hereto and made a part hereof. At the time of the action of
shareholders:
(i) The total number of shares outstanding was:
- -------------------------------------------------------------------------------
(ii) The number of shares entitled to vote was:
- -------------------------------------------------------------------------------
In the action taken by the shareholders:
(iii) The number of shares voted in favor of the reduction was:
- -------------------------------------------------------------------------------
(iv) The number of shares voted against the reduction was:
- -------------------------------------------------------------------------------
5. The number of shares which the corporation has authority to issue after
giving effect to such reduction is:
12,060,500 shares divided into two classes consisting of (a) 60,500 shares of
Preferred Stock of the par value of $50 each (of which class a series of 4,500
shares is designated as 4-1/2% Cumulative Preferred Stock and a series of
16,000 shares is designated as 4-5/8% Cumulative Preferred Stock, Series of
1955); and (b) 12,000,000 shares of Common Stock of the par value of $2.50
each.
IN TESTIMONY WHEREOF, the undersigned corporation has caused this
statement to be signed by a duly authorized officer and its corporate seal,
duly attested by another such officer, to be hereunto affixed this 23rd day of
September, 1981.
P. H. GLATFELTER COMPANY
----------------------------------------
(NAME OF CORPORATION)
By: [SIGNATURE APPEARS HERE]
----------------------------------------
(SIGNATURE)
EXECUTIVE VICE PRESIDENT
----------------------------------------
(TITLE: PRESIDENT, VICE PRESIDENT, ETC.)
Attest:
/S/ SAMUEL L. COZZENA
- ------------------------------------------
(SIGNATURE)
SECRETARY
- -------------------------------------------
(TITLE: SECRETARY, ASSISTANT SECRETARY, ETC.)
(CORPORATE SEAL)
<PAGE>
Filed this 4th day of
--- -----
October 1982
--------------------
APPLICANTS ACCT NO Commonwealth of Pennsylvania
Department of State
DSCB BCI--709 (Rev. 8-73) ----------------------
(Line for numbering)
Statement of Reduction COMMONWEALTH OF PENNSYLVANIA
of Authorized Shares-- DEPARTMENT OF STATE
Domestic Business Corporation CORPORATION BUREAU Secretary of the Commonwealth
- --------------------------------------------------------------------------------
(Box for Certification)
In compliance with the requirements of section 709 of the Business
Corporation: Law, act of May 5, 1933 (15 P. S. (S)1709), the
undersigned corporation, desiring to effect a reduction in its authorized
shares, does hereby certify that:
1. The name of the corporation is:
P.H. GLATFELTER COMPANY
- --------------------------------------------------------------------------------
2. The location of its registered office in this Commonwealth is (the Department
of State is hereby authorized to correct the following statement to conform to
the records of the Department):
- --------------------------------------------------------------------------------
(NUMBER) (STREET)
SPRING GROVE PENNSYLVANIA 17362
- --------------------------------------------------------------------------------
(CITY) (STATE) (ZIP CODE)
3. The aggregate number of shares which the corporation had authority to issue
is: 12,060,500 shares divided into two classes consisting of (a) 60,500 shares
of Preferred Stock of the par value of $50 each (of which class a series of
4,500 shares is designated as 4-1/2% Cumulative Preferred Stock and a series of
16,000 shares is designated as 4-5/8% Cumulative Preferred Stock, Series of
1955); and (b) 12,000,000 shares of Common Stock of the par value of $2.50
each.
4. (Check, and if appropriate, complete one or more of the following):
[X] The provisions of the Articles of the corporation prohibiting the
reissue of the shares to which this statement relates are as follows:
"Preferred Stock of any series purchased or redeemed by the use of sinking
fund moneys or purchased or redeemed otherwise than by the use of sinking fund
moneys and applied by the Company as a credit against sinking fund payments,
shall be cancelled and shall not be reissued."
The Company has applied 500 shares of its 4-1/2% Cumulative Preferred
Stock and 1,000 shares of its 4-5/8% Cumulative Preferred Stock, Series of 1955,
as a credit against sinking fund requirements and has cancelled such shares.
<PAGE>
[_] The shares to which this statement relates have been acquired on
conversion thereof into or exchange thereof for other shares of the
corporation.
[_] The resolution of the board of directors directing the reduction in
authorized shares to which this statement relates is set forth in Exhibit A
attached hereto and made a part hereof.
[_] The resolution of the shareholders approving the reduction in
authorized shares to which this statement relates is set forth in Exhibit B
attached hereto and made a part hereof. At the time of the action of
shareholders:
(i) The total number of shares outstanding was:
- --------------------------------------------------------------------------------
(ii) The number of shares entitled to vote was:
- --------------------------------------------------------------------------------
In the action taken by the shareholders:
(iii) The number of shares voted in favor of the reduction was:
- --------------------------------------------------------------------------------
(iv) The number of shares voted against the reduction was:
- --------------------------------------------------------------------------------
5. The number of shares which the corporation has authority to issue after
giving effect to such reduction is:
12,059,000 shares divided into two classes consisting of (a) 59,000 shares of
Preferred Stock of the par value of $50 each (of which class a series of
4,000 shares is designated as 4-1/2% Cumulative Preferred Stock and a
series of 15,000 shares is designated as 4-5/8% Cumulative Preferred Stock,
Series of 1955); and (b) 12,000,000 shares of Common Stock of the par value
of $2.50 each.
IN TESTIMONY WHEREOF, the undersigned corporation has caused this
statement to be signed by a duly authorized officer and its corporate seal,
duly attested by another such officer, to be hereunto affixed this 2nd day of
August, 1982.
P. H. GLATFELTER COMPANY
---------------------------------------
(NAME OF CORPORATION)
By: (Signature Appears Here)
---------------------------------------
(SIGNATURE)
Executive Vice President, Treasurer &
Chief Financial Officer
---------------------------------------
(TITLE: PRESIDENT, VICE PRESIDENT, ETC.)
Attest:
(Signature Appears Here)
- ---------------------------------------------
(Signature)
Secretary and Assistant Treasurer
- ---------------------------------------------
(TITLE, SECRETARY, ASSISTANT SECRETARY, ETC.)
(CORPORATE SEAL)
<PAGE>
83491699
-----------------------------
(Line for numbering)
140599
COMMONWEALTH OF PENNSYLVANIA
DEPARTMENT OF STATE
CORPORATION BUREAU
APPLICANT'S ACC'T NO. Filed this 12th day of
August, 1983
DSCB:BCL -- 709 (Rev. 8-72) Commonwealth of Pennsylvania
Department of State
Filing Fee: $40
AB-2 /s/ William R. Davis
Statement of Reductions Secretary of the Commonwealth
of Authorized Shares --
Domestic Business Corporation
- --------------------------------------------------------------------------------
(Box for Certification) vod
In compliance with the requirements of section 709 or the Business
Corporation Law, act of May 5, 1933 (P. L. 364)(15 P. S. (S)1709), the
undersigned corporation, desiring to effect a reduction in its authorized
shares, does hereby certify that:
1. The name of the corporation is:
P. H. GLATFELTER COMPANY
- --------------------------------------------------------------------------------
2. The location of its registered office in this Commonwealth is the
Department of State is hereby authorized to correct the following statement to
conform to the records of the Department):
- --------------------------------------------------------------------------------
(Number) (Street)
Spring Grove, Pennsylvania 17362
- --------------------------------------------------------------------------------
(City) (Zip Code)
3. The aggregate number of shares which the corporation had authority to
issue is: 12,059,000 shares divided into two classes consisting of (a)
59,000 shares of Preferred Stock of the par value of $50 each (of which
class a series of 4,000 shares is designated as 4-1/2% Cumulative
Preferred Stock and a series of 15,000 shares is designated as 4-5/8%
Cumulative Preferred Stock, Series of 1955); and (b) 12,000,000 shares of
Common Stock of the par value of $2.50 each.
4. (Check, and if appropriate, complete one or more of the following):
[X] The provisions of the Articles of the corporation prohibiting the
reissue of the shares to which this statement relates are as follows:
"Preferred Stock of any series purchased or redeemed by the use of
sinking fund moneys or purchased or redeemed otherwise than by the use of
sinking fund moneys and applied by the Company as a credit against sinking
fund payments, shall be cancelled and shall not be reissued."
The Company has applied 500 shares of its 4-1/2% Cumulative Preferred
Stock and 1,000 shares of its 4-5/8% Cumulative Preferred Stock, Series of
1955, as a credit against sinking fund requirements and has cancelled such
shares.
<PAGE>
[ ] The shares to which this statement relates have been acquired on
conversion thereof into or exchange thereof for other shares of the
corporation.
[ ] The resolution of the board of directors directing the reduction in
authorized shares to which this statement relates is set forth in Exhibit A
attached hereto and made a part hereof.
[ ] The resolution of the shareholders approving the reduction in
authorized shares to which this statement relates is set forth in Exhibit B
attached hereto and made a part hereof. At the time of the action of
shareholders:
(i) The total number of shares outstanding was:
- --------------------------------------------------------------------------------
(ii) The number of shares entitled to vote was:
- --------------------------------------------------------------------------------
In the action taken by the shareholders:
(iii) The number of shares voted in favor of the reduction was:
- --------------------------------------------------------------------------------
(iv) The number of shares voted against the reduction was:
- --------------------------------------------------------------------------------
5. The number of shares which the corporation has authority to issue after
giving effect to such reduction is:
12,057,500 shares divided into two classes consisting of (a) 57,500 shares of
Preferred Stock of the par value of $50 each (of which class a series of 3,500
shares is designated as 4-1/2% Cumulative Preferred Stock and a Series of
14,000 shares is designated as 4-5/8% Cumulative Preferred Stock, Series of
1955); and (b) 12,000,000 shares of Common Stock of the par value of $2.50 each.
IN TESTIMONY WHEREOF, the undersigned corporation has caused this statement to
be signed by a duly authorized officer and its corporate seal, duly attested
by another such officer, to be hereunto affixed this 29th day of July, 1983.
P.H. GLATFELTER COMPANY
---------------------------------
(NAME OF CORPORATION)
By: (SIGNATURE APPEARS HERE)
---------------------------------
(SIGNATURE)
Executive Vice President
---------------------------------
(TITLE PRESIDENT, VICE PRESIDENT,
ETC.)
Attest:
(SIGNATURE APPEARS HERE)
- -----------------------------
(SIGNATURE)
Secretary and Asst. Treasurer
- -----------------------------
(TITLE SECRETARY, ASSISTANT
SECRETARY, ETC.)
(CORPORATE SEAL)
<PAGE>
EXHIBIT 3.B
Microfilm Number Filed with the Department of State on
----------- -----------
Security Number 140599
------------
-------------------------------------------------
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. (S)1915 (relating to
articles of amendment), the undersigned business corporation, desiring to
amend its Articles, hereby states that:
The name of the corporation is: P. H. Glatfelter Company
----------------------------------------------
-----------------------------------------------------------------------------
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) 228 South Main Street Spring Grove Pennsylvania 17362 York
---------------------------------------------------------------------------
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.
The statute by or under which it was incorporated is: Act of April 29, 1874,
-------------------------
P.L. 73
------------------------------------------------------------------------------
The date of its incorporation is: December 16, 1905
---------------------------------------------
(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
(Check one of the following):
The amendment was adopted by the shareholders (or members) pursuant to 15
--- Pa.C.S. (S)1914(a) and (b).
X The amendment was adopted by the board of directors pursuant to 15
--- Pa.C.S. (S)1914(c).
(Check, and if appropriate complete, one of the following):
The amendment adopted by the corporation, set forth in full, is as
--- follows:
The amendment adopted by the corporation as set forth in full in Exhibit
--- A attached hereto and made a part hereof.
<PAGE>
8. (Check if the amendment restates the Articles):
---- 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 dual authorized officer thereof this 30th day
------
of July, 1993.
------------
P.H. GLATFELTER COMPANY
--------------------------------
(Name of Corporation)
BY:
-----------------------------
(Signature)
TITLE: Secretary
--------------------------
<PAGE>
EXHIBIT A
Resolutions of Board of Directors
P. H. Glatfelter Company
RESOLVED, that the actions of the Company in applying
1,000 shares of its 4-5/8% Cumulative Preferred Stock, Series of
1955, as a credit against sinking fund requirements and
cancelling such shares be, and they hereby are, ratified and
confirmed.
RESOLVED, that as a result of the aforesaid
cancellation of 1,000 shares of the Company's 4-5/8% Cumulative
Preferred Stock, Series of 1955, the first sentence of the first
paragraph of Article 5 of the Articles of Incorporation of the
Company is amended to read as follows:
The aggregate number of shares which the
Corporation (hereinafter referred to as the
"Company") has authority to issue is 120,044,000
shares divided into two classes consisting of (a)
44,000 shares of Preferred Stock of the par value
of $50 each; and (b) 120,000,000 shares of Common
Stock of the par value of $.01 each.
RESOLVED, that the proper officers of the Company be,
and they hereby are, authorized and directed to execute and
deliver on behalf of the Company the necessary documents and to
take or cause to be taken such further action as they deem
necessary of desirable to carry out the purposes of the foregoing
resolutions.
<PAGE>
Microfilm Number Filed with the Department of State on FEB 09, 1994
--------- ---------------
Entity number 140599 [Signature Appears Here]
------------ -------------------------------
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. (S)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: P.H. Glatfelter Company
---------------------------------------------
- -------------------------------------------------------------------------------
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) 228 South Main Street Spring Grove, Pennsylvania 17362 York
-------------------------------------------------------------------------
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: Act of April 29,
-----------------------
1874, P.L. 73
- -------------
4. The date of its incorporation is: December 16, 1905
-------------------------------------------
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.
X The amendment shall be effective on at
--- -------------------- -----------------
Date Hour
6. (Check one of the following):
The amendment was adopted by the shareholders (or members) pursuant to 15
---
Pa.C.S. (S)1914(a) and (b).
X The amendment was adopted by the board of directors pursuant to 15 Pa.C.S.
---
(S)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 as set forth in full in Exhibit
---
A attached hereto and made a part hereof.
<PAGE>
8. (Check if the amendment restates the Articles):
--- 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
26th day of January, 1994.
P. H. Glatfelter Company
-------------------------------------------
(Name of Corporation)
BY: (Signature Appears Here)
----------------------------------------
(Signature)
TITLE: Secretary
------------------------------------
<PAGE>
EXHIBIT A
Resolutions of Board of Directors
P. H. Glatfelter Company
RESOLVED, that the Company hereby redeem on October 27, 1993 (the "date
fixed for redemption") all of the Company's outstanding 4-5/8% Cumulative
Preferred Stock at the redemption price of $50.75 per share together with
accrued and unpaid dividends thereon to the date fixed for redemption, and the
proper officers are authorized to cause notice of such redemption to be mailed
to each of the holders of 4-5/8% Cumulative Preferred Stock and to cause to be
given such notice of redemption as may be required by the Company's Articles of
Incorporation, as amended, and such officers are authorized and directed to take
such other action as may be necessary or desirable in connection with the
redemption of such 4-5/8% Cumulative Preferred Stock, including the making of
necessary arrangements to pay on behalf of the Company the redemption price of
such 4-5/8% Cumulative Preferred Stock.
RESOLVED, that upon the acquisition of all of the Company's outstanding
shares of 4-5/8% Cumulative Preferred Stock by their redemption on October 27,
1993 pursuant to the foregoing resolutions, such shares shall be cancelled and
the number of shares of 4-5/8% Cumulative Preferred Stock which the Company is
authorized to issue shall be reduced by the number of such shares so redeemed.
RESOLVED, that as a result of the aforesaid redemption of all of the
Company's 4-5/8% Cumulative Preferred Stock, the first sentence of the first
paragraph of Article 5 of the Articles of Incorporation of the Company, as
amended, be further amended to read as follows:
The aggregate number of shares which the Corporation (hereinafter
referred to as the "Company") has authority to issue is
120,040,000 shares divided into two classes consisting of (a)
40,000 shares of Preferred Stock of the par value of $50 each;
and (b) 120,000,000 shares of Common Stock of the par value of
$.01 each.
RESOLVED, that the proper officers of the Company be, and they hereby
are, authorized and directed to execute Articles of Amendment on behalf of the
Company and file such Articles of Amendment with the Secretary of the
Commonwealth of Pennsylvania on behalf of the Company.
<PAGE>
RESOLVED, that the proper officers of the Company are hereby authorized
to do or cause to be done such further acts and to execute such further
documents as they deem necessary and desirable to carry out the purposes of
the foregoing resolutions.
<PAGE>
Exhibit 3.C
P. H. GLATFELTER COMPANY
ARTICLES OF INCORPORATION
-------------------------
1. The name of the corporation is
P. H. GLATFELTER COMPANY
2. The location and post office address of its registered office in this
Commonwealth is Spring Grove, York County, Pennsylvania.
3. The purpose or purposes for which the corporation is organized are to
acquire by purchase, or otherwise, own, buy, sell and deal in standing timber
lands, and to buy, cut, haul, drive and sell timber and logs, and to saw and
otherwise work the same, and to buy, manufacture and sell lumber, bark, wood,
pulp and all products made therefrom; to manufacture, produce, purchase, sell
and deal in any and all kinds of papers, and in all ingredients, products and
compounds thereof, and in any and all materials that now are or hereafter may be
used in or in connection with such manufacture, including the manufacture of
wood pulp and any other fibre; and to engage in, and to do, any other lawful act
concerning any or all lawful business for which corporations may be incorporated
under the Business Corporation Law of the Commonwealth of Pennsylvania,
including, but not limited to, manufacturing, processing, owning, using and
dealing in personal property of every class and description, engaging in
research and development, furnishing services, and acquiring, owning, using and
disposing of real property of any nature whatsoever.
4. The term for which the corporation is to exist is perpetual.
5. The aggregate number of shares which the corporation (hereinafter
referred to as the "Company") has authority to issue is 120,040,000 shares
divided into two classes consisting of (a) 40,000 shares of Preferred Stock of
the par value of $50 each; and (b) 120,000,000 shares of Common Stock of the par
value of $.01 each. Each share of Common Stock of the par value of $.01 each
which is issued and outstanding when this provision becomes effective, including
each share owned by the Company, shall be reclassified as two fully paid and
non-assessable shares of Common Stock of the par value of $.01 each, which shall
be included in the 120,000,000 shares of Common Stock herein authorized.
<PAGE>
The designations and the powers, preferences and rights, and the
qualifications, limitations or restrictions thereof, of the classes of stock of
the Company which are fixed by the Articles of Incorporation, and the express
grant of authority to the Board of Directors of the Company (hereinafter
referred to as the "Board of Directors") to fix by resolution or resolutions the
designations and the powers, preferences and rights, and the qualifications,
limitations or restrictions thereof, of the shares of Preferred Stock, which are
not fixed by the Articles of Incorporation, are as follows:
PREFERRED STOCK
---------------
1. The Preferred Stock may be issued at any time or from time to time in
any amount, not exceeding in the aggregate the total number of shares of
Preferred Stock hereinabove authorized, as Preferred Stock of one or more
series, as hereinafter provided, and for such lawful consideration as shall be
fixed from time to time by the Board of Directors. All shares of any one series
of Preferred Stock shall be alike in every particular, each series of Preferred
Stock shall be distinctively designated by letter or descriptive words, and all
series of Preferred Stock shall rank equally and be identical in all respects
except as permitted by the provisions of Section 2 of this Article.
2. To the extent that this Article does not establish series of Preferred
Stock and fix and determine the variations in the relative rights and
preferences as between series, authority is hereby expressly granted to and
vested in the Board of Directors at any time, or from time to time, to authorize
the issue of Preferred Stock as Preferred Stock of one or more series and, in
connection with the creation of each such series, to fix by resolution or
resolutions providing for the issue of shares thereof the designations,
preferences and relative, participating, optional or other special rights, and
qualifications, limitations or restrictions thereof, of such series, to the full
extent now or hereafter permitted by the laws of the Commonwealth of
Pennsylvania, in respect of the matters set forth in the following subdivisions
(a) to (g), inclusive:
(a) The designation of such series;
(b) The dividend rate of such series;
(c) The price at, and the terms and conditions on, which shares of
such series may be redeemed, subject to the provisions of subdivision (e) of
Section 3 of this Article;
2
<PAGE>
(d) The amounts payable upon shares of such series in the event of
voluntary liquidation of the Company;
(e) Subject to the limitations provided by law, whether or not the
shares of such series shall be entitled to the benefit of a sinking fund to be
applied to the purchase or redemption of shares of such series, and if so
entitled, the amount of such fund, the manner of its application and the
sinking fund redemption price;
(f) Whether or not the shares of such series shall be made
convertible into, or exchangeable for, shares of any other class or classes or
of any other series of the same or any other class or classes of stock of the
Company, and, if made so convertible or exchangeable, the conversion price or
prices, or the rates of exchange, and the adjustments, if any, at which, and
all other terms and conditions upon which, such conversion or exchange may be
made; and
(g) Whether or not the shares of such series shall be entitled to
other special rights in addition to those in this Article provided for,
including, without limitation, restrictive provisions with respect to the
issue of additional shares of stock of the same class or series or of any
other class of the Company or of any subsidiary, restrictive provisions with
respect to the payment of dividends upon, or the making of any other
distribution in respect of, or the making of any purchase or redemption of,
stock of any class of the Company or of any subsidiary, and the incurring of
indebtedness, secured or unsecured, by the Company or by any subsidiary, and,
if so, the nature thereof.
The Board of Directors may from time to time authorize and direct by
resolution or resolutions an increase in the number of shares of any series of
Preferred Stock already created by specifying that any or all unissued shares of
Preferred Stock shall be assigned to and included in such series and/or a
decrease in the number of shares of any such series (but not below the number of
shares thereof then outstanding) by specifying that any or all unissued shares
of Preferred Stock previously assigned to such series shall no longer be
included therein.
4-1/2% Cumulative Preferred Stock
---------------------------------
The series of the authorized shares of Preferred Stock of the par value of
Fifty Dollars ($50) per share designated at 4-1/2% Cumulative Preferred Stock
(hereinafter called "4-1/2% Preferred Stock"), of which 20,000 shares were
issued and at one time outstanding, shall consist of 7,000 shares; and the
shares
3
<PAGE>
of said series shall have, in addition to the rights and preferences granted by
law and the other provisions of this Article, the following relative rights and
preferences:
(i) The dividend rate of the 4-1/2% Preferred Stock shall
be four and one-half percent (4-1/2%) per share per annum, and no
more, upon the par value thereof.
(ii) The redemption price per share of the 4-1/2% Preferred
Stock shall be $50 plus an amount equal to full cumulative dividends,
as defined in Section 3(f) of this Article, thereon to the date fixed
by the Board of Directors as the redemption date.
(iii) In the event of any voluntary liquidation,
dissolution or winding up of the Company, the holders of the 4-1/2%
Preferred Stock shall be entitled to receive an amount equal to the
redemption price specified in subsection (ii) above for every share
thereof respectively held by them, before any distribution shall be
made to the holders of the Common Stock.
(iv) The 4-1/2% Preferred Stock shall be entitled to the
benefit of a sinking fund to be applied to the purchase or redemption
of such series as follows:
The 4-1/2% Preferred Stock shall be subject to redemption through
the operation of a Sinking Fund hereinbelow provided for at the
Sinking Fund redemption price which shall be $50 per share plus an
amount equal to all accumulated and unpaid dividends thereon, whether
or not earned or declared, to the date fixed for redemption.
On or before March 25 in each year, if any 4-1/2% Preferred Stock
remains outstanding or owned by the Company and if the amount in the
Sinking Fund shall be less than the Sinking Fund redemption price of
all outstanding 4-1/2% Preferred Stock (including 4-1/2% Preferred
Stock owned by the Company) the Company shall, subject to the
conditions hereinafter set forth, set aside a sum (hereinafter called
"Sinking Fund Installment") in cash equal to the aggregate par value
of 2-1/2% of the greatest number of shares of 4-1/2% Preferred Stock
at any one time theretofore outstanding (including 4-1/2% Preferred
Stock owned by the Company); provided, however, that such amount may
be reduced, at the option of the Company, by the aggregate
4
<PAGE>
par value of such number of shares of 4-1/2% Preferred Stock
theretofore acquired by the Company by purchase other than through the
Sinking Fund or by voluntary redemption and not therefore used to
reduce the amount of any Sinking Fund Installment or theretofore
restored to the status of authorized and unissued Preferred Stock and
classified as to series, as the Board of Directors shall specify by
resolution. The Company may omit to set aside in any year such
portion of any Sinking Fund Installment as shall be in excess of the
net income of the Company for the immediately preceding fiscal year,
determined in accordance with sound accounting practice, after
deducting therefrom dividend requirements during such year on all
outstanding Preferred Stock, and the Company shall not set aside any
Sinking Fund Installment unless full cumulative dividends on the
Preferred Stock to the end of the then current dividend period shall
have been paid or declared and set apart for payment. If, however,
the Company shall omit to set aside the full amount of any Sinking
Fund Installment owing to any deficiency in net income as above
provided, or if for any other reason (including the fact that
dividends have not been provided for) the Company shall fail to set
aside on or before the date due the full amount of any Sinking Fund
Installment, or if the Company shall fail to apply amounts in the
Sinking Fund as herein provided, the Company shall be deemed to be in
arrears in connection with its Sinking Fund obligations in respect of
the 4-1/2% Preferred Stock until such time as the full amount which
the Company shall have omitted or failed to set aside shall have been
set aside and applied as herein provided.
From each Sinking Fund Installment, together with all amounts
from prior installments not theretofore applied to the purchase or
redemption of 4-1/2% Preferred Stock, the Company shall use its best
efforts to purchase, from time to time, in the open market, on any
stock exchange or at private sale, as the Board of Directors may
determine, and at the lowest available price (not exceeding the
Sinking Fund redemption price) such number of outstanding shares of 4-
1/2% Preferred Stock as the amount then in the Sinking Fund shall be
sufficient to purchase, as nearly as may be. On July 1 of each year,
if the unexpended balance in the Sinking Fund shall be sufficient to
redeem one hundred or more shares of 4-1/2% Preferred Stock (or less
than one hundred shares if the Company so desires) the Company shall
apply such unexpended balance to the redemption on August 1 of such
year of such number of outstanding
5
<PAGE>
shares of 4-1/2% Preferred Stock at the Sinking Fund redemption price
as said balance shall be sufficient to redeem, as nearly as may be.
Any such redemption shall be accomplished in the manner and with the
effect provided in Section 3(e) of this Article.
(v) The 4-1/2% Preferred Stock shall not be convertible.
(vi) So long as any shares of 4-1/2% Preferred Stock shall
be outstanding, the Company shall not create, assume or guarantee or
permit any subsidiary to create, assume or guarantee at any one time
or from time to time any funded debt in excess of $36,000,000 at any
one time outstanding (except any purchase money mortgage upon property
acquired after January 1, 1947, and any mortgage to which such
property may be subject at the time of its acquisition) unless notice
of the intention of the Company to create, assume or guarantee such
funded debt shall be given to the holders of the 4-1/2% Preferred
Stock and a meeting of said shareholders called upon thirty days'
written notice or on such longer notice as may be provided by law. At
said meeting the holders of 4-1/2% Preferred Stock shall vote for or
against the creation, assumption or guaranty of such proposed funded
debt and the negative vote of the holders of forty percent (40%) of
the 4-1/2% Preferred Stock then outstanding shall absolutely prevent
the creation, assumption or guaranty of any such funded debt by the
Company.
4-5/8% Cumulative Preferred Stock, Series of 1955
-------------------------------------------------
The series of the authorized shares of Preferred Stock of the par
value of Fifty Dollars ($50) per share designated as 4-5/8% Cumulative Preferred
Stock, Series of 1955 (hereinafter called "Preferred Stock, Series of 1955"), of
which 40,000 shares were issued and at one time outstanding, shall consist of
21,000 shares; and the shares of said series shall have, in addition to the
rights and preferences granted by law and the other provisions of this Article,
the following relative rights and preferences:
(i) The dividend rate of the Preferred Stock, Series of
1955, shall be four and five-eighths percent (4-5/8%) per share per
annum, and no more, upon the par value thereof.
(ii) The redemption price per share of the Preferred Stock,
Series of 1955, shall be $50.75 plus
6
<PAGE>
an amount equal to full cumulative dividends, as defined in Section
3(f) of this Article, thereon to the date fixed by the Board of
Directors as the redemption date.
(iii) In the event of any voluntary liquidation,
dissolution or winding up of the Company, the holders of the Preferred
Stock, Series of 1955, shall be entitled to receive an amount equal to
the redemption price specified in subsection (ii) above for every
share thereof respectively held by them, before any distribution shall
be made to the holders of the Common Stock.
(iv) The Preferred Stock, Series of 1955, shall be entitled
to the benefit of a sinking fund to be applied to the purchase or
redemption of such series as follows:
The Preferred Stock, Series of 1955, shall be subject to
redemption through the operation of a Sinking Fund for the Preferred
Stock, Series of 1955, hereinbelow provided for at the Sinking Fund
redemption price which shall be $50 per share plus an amount equal to
all accumulated and unpaid dividends thereon, whether or not earned or
declared, to the date fixed for redemption.
On or before March 25 in each year, if any Preferred Stock,
Series of 1955, remains outstanding or owned by the Company and if the
amount in the Sinking Fund shall be less than the Sinking Fund
redemption price of all outstanding Preferred Stock, Series of 1955
(including Preferred Stock, Series of 1955, owned by the Company), the
Company shall, subject to the conditions hereinafter set forth, set
aside a sum (hereinafter called "Sinking Fund Installment") in cash
equal to the aggregate par value of 2-1/2% of the greatest number of
shares of Preferred Stock, Series of 1955, at any one time theretofore
outstanding (including Preferred Stock, Series of 1955, owned by the
Company); provided, however, that any such amount may be reduced, at
the option of the Company, by the aggregate par value of such number
of shares of Preferred Stock, Series of 1955, theretofore acquired by
the Company by purchase other than through the Sinking Fund or by
voluntary redemption and not therefore used to reduce the amount of
any Sinking Fund Installment or theretofore restored to the status of
authorized and unissued Preferred Stock and classified as to series,
as the Board of Directors shall specify
7
<PAGE>
by resolution. The Company may omit to set aside in any year such
portion of any Sinking Fund Installment as shall be in excess of the
net income of the Company for the immediately preceding fiscal year,
determined in accordance with sound accounting practice, after
deducting therefrom dividend requirements during such year on all
outstanding Preferred Stock, and the Company shall not set aside any
Sinking Fund Installment unless full cumulative dividends on all
outstanding Preferred Stock to the end of the then current dividend
period shall have been paid or declared and set apart for payment.
If, however, the Company shall omit to set aside the full amount of
any Sinking Fund Installment owing to any deficiency in net income as
above provided, or if for any other reason (including the fact that
dividends have not been provided for) the Company shall fail to set
aside on or before the date due the full amount of any Sinking Fund
Installment, or if the Company shall fail to apply amounts in the
Sinking Fund as herein provided, the Company shall be deemed to be in
arrears in connection with its Sinking Fund obligations in respect of
the Preferred Stock, Series of 1955, until such time as the full
amount which the Company shall have omitted or failed to set aside
shall have been set aside and applied as herein provided.
From each Sinking Fund Installment, together with all amounts
from prior installments not theretofore applied to the purchase or
redemption of Preferred Stock, Series of 1955, the Company shall use
its best efforts to purchase, from time to time, in the open market,
on any stock exchange or at private sale, as the Board of Directors
may determine, and at the lowest available price (not exceeding the
Sinking Fund redemption price) such number of outstanding shares of
Preferred Stock, Series of 1955, as the amount then in the Sinking
Fund shall be sufficient to purchase, as nearly as may be. On July 1
of each year, if the unexpended balance in the Sinking Fund shall be
sufficient to redeem one hundred or more shares of Preferred Stock,
Series of 1955, (or less than one hundred shares if the Company so
desires) the Company shall apply such unexpended balance to the
redemption on August 1 of such year of such number of outstanding
shares of Preferred Stock, Series of 1955, at the Sinking Fund
redemption price as said balance shall be sufficient to redeem, as
nearly as may be. Any such redemption shall be accomplished in the
manner and with the effect provided in Section 3(e) of this Article.
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(v) The Preferred Stock, Series of 1955, shall not be
convertible.
(vi) The Preferred Stock, Series of 1955, shall be entitled
to no other special rights in addition to those provided herein and in
the other provisions of this Article.
3. (a) The holders of shares of Preferred Stock of each series
shall be entitled to receive, when and as declared by the Board of Directors,
dividends at the rate for such series fixed in Section 2 of this Article or
fixed by resolution or resolutions as provided in Section 2 of this Article and
no more, payable quarterly on the first days of February, May, August and
November in each year (the quarterly periods ending on the first days of such
months, respectively, being herein designated as dividend periods), in each case
from the date of cumulation, as hereinafter in subdivision (f) of this Section 3
defined, of such series. Such dividends shall be cumulative (whether or not in
any dividend period or periods there shall be net profits or net assets of the
Company legally available for the payment of such dividends), so that if at any
time full cumulative dividends upon the outstanding Preferred Stock of all
series to the end of the then current dividend period shall not have been paid
or declared and set apart for payment, the amount of the deficiency shall be
fully paid, but without interest, either by redemption and the payment or
deposit, as provided in subdivision (e) hereof, of the redemption price thereof
or by dividends in the amount of such deficiency paid or declared and set apart
for payment on each such series, before any sum or sums shall be set aside for
or applied to the purchase or redemption of Preferred Stock of any series,
Common Stock or any other class of stock ranking junior to the Preferred Stock
and before any dividend shall be paid or declared or any other distribution
ordered or made upon the Common Stock or any other class of stock ranking junior
to the Preferred Stock, provided that any moneys theretofore set aside for any
sinking fund provided for in Section 2 of this Article or by resolution or
resolutions as provided in Section 2 of this Article may be applied to the
purchase or redemption of the Preferred Stock in accordance with the terms of
Section 2 of this Article or in accordance with the terms of such resolution or
resolutions.
All dividends declared on the Preferred Stock of the respective series
outstanding shall be declared pro rata, so that the amounts of dividends
declared per share on the Preferred Stock of different series shall in all cases
bear to each other the same ratio that full cumulative dividends on such
respective series bear to each other.
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(b) After full cumulative dividends to the end of the then
current dividend period upon the outstanding Preferred Stock of all series
shall have been paid or declared and set apart for payment, and before any sum
or sums shall be set aside for, or applied to, the purchase of Common Stock or
any other class of stock ranking junior to the Preferred Stock and before any
dividend shall be paid or declared or any other distribution ordered or made
upon the Common Stock or any other class of stock ranking junior to the
Preferred Stock, the Company shall set aside as a sinking fund, when and as
required, out of any funds legally available for that purpose, in respect of
each series of Preferred Stock any shares of which shall at the time be
outstanding and in respect of which a sinking fund for the purchase or
redemption thereof has been provided for in Section 2 of this Article or by
resolution or resolutions as provided in Section 2 of this Article, the sum or
sums required by the terms of Section 2 of this Article or by the terms of
such resolution or resolutions as a sinking fund to be applied in the manner
specified therein.
Preferred Stock of any series purchased or redeemed by the use of
sinking fund moneys or purchased or redeemed otherwise than by the use of
sinking fund moneys and applied by the Company as a credit against sinking fund
payments, shall be cancelled and shall not be reissued.
(c) After full cumulative dividends to the end of the then
current dividend period upon the Preferred Stock of all series then outstanding
shall have been paid or declared and set apart for payment, and after the
Company shall have complied with the provisions of the foregoing subdivision (b)
of this Section 3 in respect of any and all amounts then or theretofore required
to be set aside or applied in respect of any sinking fund mentioned in said
subdivision (b), then and not otherwise, the holders of the Common Stock shall,
subject to the provisions of this Article and of any resolution providing for
the issue of any series of the Preferred Stock, be entitled to receive such
dividends as may be declared by the Board of Directors.
(d) In the event of any liquidation, dissolution or winding
up of the Company, the holders of the Preferred Stock of each series then
outstanding shall be entitled to receive out of the assets of the Company
available for distribution to its stockholders, whether from capital, surplus or
earnings, before any distribution of the assets shall be made to the holders of
the Common Stock or any other class of stock ranking junior to the Preferred
Stock, if such liquidation, dissolution or winding up shall be involuntary, the
sum of $50 for every share of their holdings of Preferred Stock of such series
plus full cumulative dividends thereon to the date of final distribution, and if
such liquidation, dissolution or winding up shall be voluntary, the
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amount fixed in Section 2 of this Article or fixed by resolution or resolutions
as provided in Section 2 of this Article for every share of their holdings of
Preferred Stock of such series; and in the event of any such distribution of
assets, the holders of the Common Stock shall be entitled, to the exclusion of
the holders of the Preferred Stock, to share ratably in all assets of the
Company thereafter remaining according to the number of shares of the Common
Stock held by them respectively. If upon any liquidation, dissolution or
winding up of the Company the amounts payable on or with respect to the
Preferred Stock of all series are not paid in full, the holders of shares of
Preferred Stock of all series shall share ratably in any distribution of assets
in proportion to the respective amounts which would be payable in respect of the
shares held by them upon such distribution if all amounts payable on or with
respect to the Preferred Stock of all series were paid in full. Neither the
merger or consolidation of the Company into or with any other corporation, nor
the merger or consolidation of any other corporation into or with the Company,
nor a sale or lease of all or substantially all the assets of the Company, shall
be deemed to be a liquidation, dissolution or winding up of the Company.
(e) The Preferred Stock of all series, or of any series
thereof, or any part of any series thereof, at any time outstanding, may be
redeemed by the Company, at its election expressed by resolution of the Board of
Directors, at any time or from time to time (which time, when fixed in each
case, is hereinafter called the "redemption date"), upon not less than thirty
(30) days' previous notice to the holders of record of the Preferred Stock to be
redeemed, given by mail in such manner as may be prescribed by resolution or
resolutions of the Board of Directors, at the redemption price or prices fixed
in Section 2 of this Article or fixed by resolution or resolutions as provided
in Section 2 of this Article for the Preferred Stock to be redeemed. If less
than all the outstanding shares of the Preferred Stock of any series is to be
redeemed, the redemption may be made either by lot or pro rata in such manner as
may be prescribed by resolution of the Board of Directors. The Company may, if
it so elects, provide moneys for the payment of the redemption price by
depositing the amount thereof, after notice of redemption has first been mailed,
for the account of the holders of Preferred Stock entitled thereto with a bank
or trust company doing business in the City of Philadelphia, Pennsylvania, or in
the Borough of Manhattan, in the City of New York, and having capital and
surplus of at least Five Million Dollars ($5,000,000) (the date of any such
deposit being hereinafter called the "date of deposit"). In such event, the
notice of redemption shall include a statement of the date of deposit and the
name and address of the bank or trust company with which the deposit will be
made. From and after the redemption date (unless default shall be made by the
Company in providing moneys for the
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payment of the redemption price), or, if the Company shall make such deposit on
or before the date specified therefor in the notice, then on and after the date
of deposit, all rights of the holders thereof as stockholders of the Company
shall cease and terminate, except the right to receive the redemption price as
hereinafter provided and except any conversion rights not theretofore expired.
Anything herein or in any resolution providing for the issue of any series of
the Preferred Stock to the contrary notwithstanding, said redemption price shall
include an amount equal to full cumulative dividends on the Preferred Stock to
be redeemed to the redemption date thereof, and the Company shall not be
required to declare or pay on such Preferred Stock to be redeemed, and the
holders thereof shall not be entitled to receive, any dividends in addition to
those thus reflected in the redemption price; provided, however, that the
Company may pay in regular course any dividends thus reflected in the redemption
price either to the holders of record on the record date fixed for determination
of stockholders entitled to receive such dividends (in which event, anything
herein to the contrary notwithstanding, the amount so deposited need not include
any dividends so paid or to be paid), or as part of the redemption price upon
surrender of the certificates for the shares redeemed. On and after the
redemption date, or, if the Company shall elect to deposit the moneys for such
redemption as herein provided, then on and after the date of deposit, the
holders of record of the Preferred Stock to be redeemed shall be entitled to
receive the redemption price upon actual delivery to the Company or, in the
event of such a deposit, to the bank or trust company with which such deposit is
made, of certificates for the number of shares to be redeemed (such
certificates, if required, to be properly stamped for transfer and duly endorsed
in blank or accompanied by proper instruments of assignment and transfer duly
endorsed in blank). Any moneys so deposited which shall remain unclaimed by the
holders of such Preferred Stock at the end of six (6) years after the redemption
date shall be paid by such bank or trust company to the Company; provided,
however, that all moneys so deposited, which shall not be required for such
redemption because of the exercise of any right of conversion or exchange, shall
be returned to the Company forthwith. Any interest accrued on moneys so
deposited shall be paid to the Company from time to time.
Preferred Stock redeemed pursuant to the provisions of this
subdivision (e) shall be cancelled and shall not be reissued.
(f) The term "full cumulative dividends" whenever used in
this Article with reference to any share of any series of the Preferred Stock
shall be deemed to mean (whether or not in any dividend period, or any part
thereof, in respect of which such term is used there shall have been net profits
or net assets
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of the Company legally available for the payment of such dividends) that amount
which shall be obtained by multiplying the full dividend rate for such series
fixed in Section 2 of this Article or fixed by resolution or resolutions as
provided in Section 2 of this Article by the period of time elapsed from the
date of cumulation of such series to the date as of which full cumulative
dividends are to be computed (including the elapsed portion of the current
dividend period), less the amount of all dividends paid, or deemed paid upon
such share.
The term "date of cumulation" as used in this Article with reference
to any series of the Preferred Stock shall be deemed to mean the February 1, May
1, August 1 or November 1 on which, or next preceding the date on which, shares
of Preferred Stock of such series shall first be issued.
In the event of the issue of additional Preferred Stock of any then
existing series, all dividends paid on Preferred Stock of such series prior to
the issue of such additional Preferred Stock, and all dividends declared and
payable to holders of Preferred Stock of such series of record on any date prior
to such additional issue, shall be deemed to have been paid on the additional
Preferred Stock so issued.
The term "stock ranking junior to the Preferred Stock", whenever used
in this Article, shall mean any stock of the Company over which the Preferred
Stock has preference or priority in the payment of dividends or in the
distribution of assets on any dissolution, liquidation or winding up of the
Company.
(g) Except as otherwise required by the statutes of the
Commonwealth of Pennsylvania and as otherwise provided in this Article, and
subject to the provisions of the by-laws of the Company, as from time to time
amended, with respect to the closing of the transfer books and the fixing of a
record date for the determination of stockholders entitled to vote, the holders
of the Common Stock shall exclusively possess voting power for the election of
directors and for all other purposes, and the holders of the Preferred Stock
shall have no voting power and shall not be entitled to any notice of any
meeting of stockholders.
Provided, however, that if and whenever a default in preferred
dividends, as hereinafter defined, shall exist, the holders of the outstanding
Preferred Stock, voting separately as a class, shall have the right to elect two
directors at the annual meeting of stockholders of the Company for the election
of directors next succeeding the occurrence of such default, and at each such
annual meeting thereafter so long and only so long as such default shall exist.
The term of office of each such director elected by the holders of the Preferred
Stock as
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aforesaid shall continue until the next annual meeting of stockholders of the
Company for the election of directors, notwithstanding that prior to the end of
such term the default in preferred dividends shall cease to exist. If, prior to
the end of such term, a vacancy in the office of such director shall occur by
reason of his death, resignation, removal or disability, or for any other cause,
such vacancy shall be filed for the remainder of the term in the manner provided
in the by-laws of the Company; provided, that, if such vacancy shall be filled
by election by the stockholders at a meeting thereof, the holders of the then
outstanding Preferred Stock, voting separately as a class, shall have the right
to fill such vacancy for the remainder of the term, unless at the time of such
election o default in preferred dividends shall exist. At any meeting of
stockholders at which the holders of Preferred Stock shall be entitled to vote
for the election of a director or directors as aforesaid, the holders of twenty-
five percent (25%) of the then outstanding Preferred Stock present in person or
by proxy shall be sufficient to constitute a quorum for the election of such
director or directors and for no other purpose, and the vote of the holders of a
majority of the Preferred Stock so present at such meeting at which there shall
be a quorum, shall be sufficient to elect such director or directors. For the
purposes of this subdivision (g), a default in preferred dividends shall be
deemed to have occurred whenever, on any dividend payment date, the amount of
unpaid full cumulative dividends upon any series of the Preferred Stock shall be
equivalent to eight (8) quarterly dividends thereon or more, and, having so
occurred, such default shall be deemed to exist thereafter until, but only
until, full cumulative dividends on all shares of Preferred Stock then
outstanding of each and every series, to the end of the last preceding dividend
period, shall have been paid. Nothing herein contained shall be deemed to
prevent an amendment of the by-laws of the Company, in the manner therein
provided, which shall increase the number of directors of the Company or to
prevent any other change in the number of directors of the Company.
(h) So long as any shares of the Preferred Stock of any
series shall be outstanding, the Company shall not without the consent given by
resolution adopted at a meeting duly called for that purpose of the holders of
record of at least two-thirds of the number of shares of the Preferred Stock of
all series then outstanding:
(1) alter or change the designations or the powers,
preferences or rights, or the qualifications, limitations or restrictions
thereof, of the Preferred Stock or of any series thereof in any material respect
prejudicial to the holders thereof;
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(2) create any new class of stock having preference over the
Preferred Stock as to dividends or assets, or create any obligation or security
of the Company convertible into shares of stock of any class having such
preference over the Preferred Stock;
(3) sell, transfer or lease all, or substantially all, the
assets of the Company unless as a part of such transaction or prior thereto
the Preferred Stock of all series shall be retired or called for redemption
and the necessary funds therefor deposited as provided in subdivision (e)
hereof; or
(4) effect a statutory merger or consolidation of or with
any other corporation or corporations; provided that such consent shall not be
necessary if as a result of such merger or consolidation (A) the Company shall
be the surviving corporation and the Preferred Stock then outstanding shall
continue to be outstanding, there shall be no alteration or change in the
designations or the powers, preferences or rights, or the qualifications,
limitations or restrictions thereof, in any material respect prejudicial to
the holders thereof, there shall be no increase in the authorized number of
shares of Preferred Stock, and there shall not be created any new class of
stock having preference over, or being on a parity with, the Preferred Stock
as to dividends or assets, or (B) if the Company shall not be the surviving
corporation, the shares of the Preferred Stock of each series then outstanding
shall be converted into, or be exchangeable for, a like number of shares of
preferred stock of the surviving corporation which preferred stock shall have
substantially the same designations, powers, preferences and rights, and
qualifications, limitations or restrictions thereof, as the Preferred Stock of
such series, and there shall not be outstanding or created any class of stock
of the surviving corporation having preference over, or being on a parity
with, such preferred stock as to dividends or assets.
(i) So long as any shares of the Preferred Stock of any
series shall be outstanding, the Company shall not, without the consent given by
resolution adopted at a meeting duly called for that purpose of the holders of
record of at least a majority of the number of shares of the Preferred Stock of
all series then outstanding, increase the authorized number of shares of the
Preferred Stock or create any new class of stock which shall be on a parity with
the Preferred Stock as to dividends or assets, or create any obligation or
security of the Company convertible into shares of stock of any class which
shall be on a parity with the Preferred Stock as to dividends or assets.
The holders of the Preferred Stock shall not be entitled to subscribe
to any increased issue of the Preferred
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Stock or the Common Stock unless such privilege is provided for by resolution of
the holders of the Common Stock and the Board of Directors of the Company.
Anything in this Article hereof or in any resolution or resolutions
providing for the issue of Preferred Stock of any series contained to the
contrary notwithstanding, dividends upon shares of stock of any class of the
Company shall be payable only out of unreserved and unrestricted earned surplus
of the Company legally available for dividends, and the rights of the holders of
all classes of stock of the Company in respect of the payment of dividends shall
at all times be subject to the power of the Board of Directors from time to time
to set aside such reserves and to make such other provisions, if any, as said
Board shall deem to be necessary or advisable for working capital, for additions
and improvements to plant and equipment, for expansion of the Company's business
(including the acquisition of real and personal property for that purpose) or
for any other proper purpose of the Company.
COMMON STOCK
------------
The holders of Common Stock shall have no preemptive rights and the
Company shall have the right to issue any shares of its capital stock, option
rights or securities having conversion or option rights without first offering
such shares, rights or securities to the holders of the Common Stock.
**************
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Exhibit 3.D
As amended by the Board of
Directors at a meeting
held March 16, 1994
P. H. GLATFELTER COMPANY
BY-LAWS
ARTICLE I
MEETINGS OF SHAREHOLDERS AND RECORD DATE
1.1 ANNUAL MEETING. An annual meeting of shareholders for the election of
directors and the transaction of such other business as may properly come before
the meeting shall be held on the fourth Wednesday in April of each year at 10:00
A.M. If the day fixed for the meeting is a legal holiday, the meeting shall be
held at the same hour on the next succeeding full business day which is not a
legal holiday.
1.2 SPECIAL MEETINGS. Special meetings of the shareholders may be called
at any time by the Board of Directors, the Chairman of the Board or the
President.
1.3 PLACE. The annual meeting of shareholders shall be held at the
principal office of the Company. Other meetings of shareholders may be held at
such place in Pennsylvania or elsewhere as the Board of Directors may designate.
1.4 NOTICE. Written notice stating the place, day and hour of each
meeting of shareholders and, in the case of a special meeting, the general
nature of the business to be transacted shall be given by the Secretary at least
ten days
<PAGE>
before the meeting to each shareholder of record entitled to vote at the
meeting.
1.5 QUORUM. Except as otherwise provided in the Articles of
Incorporation, the presence in person or by proxy of shareholders entitled to
cast at least a majority of the votes which all shareholders are entitled to
cast on a particular matter shall constitute a quorum for the purpose of
considering such matter at a meeting of shareholders, but less than a quorum may
adjourn from time to time to reconvene at such time and place as they may
determine. When a quorum is present, except as may be otherwise specified in
the Articles of Incorporation or provided by law, all matters shall be decided
by the vote of the holders of a majority of the votes entitled to be cast at the
meeting, in person or by proxy.
1.6 RECORD DATES. The Board of Directors may fix a time not more than
ninety days prior to the date of any meeting of shareholders, or the date fixed
for the payment of any dividend or distribution, or the date for the allotment
of rights, or the date when any change or conversion or exchange of shares will
be made or go into effect, as a record date for the determination of the
shareholders entitled to notice of or to vote at any such meeting, or to receive
payment of any such dividend or distribution, or to receive any such allotment
of rights, or to exercise the rights in respect to any such change, conversion
or exchange of shares. In such case, only such shareholders as shall be
shareholders of record at the close of
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business on the date so fixed shall be entitled to notice of or to vote at such
meeting, or to receive payment of such dividend or distribution, or to receive
such allotment of rights, or to exercise such rights in respect to any change,
conversion or exchange of shares, as the case may be, notwithstanding any
transfer of any shares on the books of the Company after the record date so
fixed.
ARTICLE II
DIRECTORS
2.1 NUMBER AND TERM. The Board of Directors shall consist of twelve
persons, comprising three classes of four directors each. At each annual
meeting of shareholders, the successors to those directors whose terms expire in
that year shall be elected to hold office for a term of three years each, so
that the term of office of one class of directors shall expire in each year.
2.2 AGE QUALIFICATION. No person, other than an officer or employee of
the Company, shall be elected or reelected a director after reaching 72 years of
age; provided, however, that at the 1993 annual meeting of shareholders Garza
Baldwin, Jr. and John W. Kennedy may each be reelected a director for one
additional three-year term. When the term of any director, other than Garza
Baldwin, Jr. or John W. Kennedy or an officer or employee of the Company,
extends beyond the date when the
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director reaches 72 years of age, such director shall resign from the Board of
Directors effective at the annual meeting of shareholders next succeeding his
72nd birthday.
2.3 VACANCIES. In the case of any vacancy in the Board of Directors by
death, resignation or for any other cause, including an increase in the number
of directors, the Board may fill the vacancy by choosing a director to serve
until the next selection of the class for which such director has been chosen
and until his successor has been selected and qualified or until his earlier
death, resignation or removal.
2.4 ANNUAL MEETING. An annual meeting of the Board of Directors
shall be held each year as soon as practicable after the annual meeting of
shareholders, at the place where such meeting of shareholders was held or at
such other place as the Board of Directors may determine, for the purposes of
organization, election of officers and the transaction of such other business as
shall come before the meeting. No notice of the meeting need be given.
2.5 REGULAR MEETINGS. Regular meetings of the Board of Directors may
be held without notice at such times and at such places as the Board of
Directors may determine.
2.6 SPECIAL MEETINGS. Special meetings of the Board of Directors may
be called by the Chairman of the Board, the President or any three or more
directors. Notice of every special meeting shall be given to each director not
later than the second day immediately preceding the day of such meeting in
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the case of notice by mail, telegram or courier service, and not later than the
day immediately preceding the day of such meeting in the case of notice
delivered personally or by telephone, telex, TWX or facsimile transmission.
Such notice shall state the time and place of the meeting, but, except as
otherwise provided in the by-laws, neither the business to be transacted at, nor
the purpose of, any special meeting of the Board of Directors need be specified
in the notice, or waiver of notice, of such meeting.
2.7 QUORUM. A majority of the directors in office shall constitute a
quorum for the transaction of business but less than a quorum may adjourn from
time to time to reconvene at such time and place as they may determine.
2.8 COMPENSATION. Directors shall receive such compensation for
their services as shall be fixed by the Board of Directors.
2.9 COMMITTEES. The Board of Directors may, by resolution adopted by
a majority of the whole Board, designate one or more committees, each committee
to consist of two or more of the directors of the Company. The Board may
designate one or more directors as alternate members of any Committee, who may
replace any absent or disqualified member at any meeting of the committee. Any
such committee to the extent provided in such resolution shall have and exercise
the authority of the Board of Directors in the management of the business and
affairs of the Company.
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2.10 PARTICIPATION IN MEETINGS BY COMMUNICATIONS EQUIPMENT. One or
more directors may participate in a meeting of the Board of Directors or a
committee of the Board by means of conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other.
2.11 LIABILITY OF DIRECTORS. A director of the Company shall not be
personally liable for monetary damages for any action taken, or any failure to
take any action, on or after January 27, 1987 unless he has breached or failed
to perform the duties of his office as provided for under Section 1713 of the
Pennsylvania Business Corporation Law of 1988, as amended, and the breach or
failure to perform constitutes self-dealing, willful misconduct or recklessness.
Any repeal, amendment, or modification of this Paragraph shall be prospective
only and shall not increase, but may decrease, the liability of a director with
respect to actions or failures to act occurring prior to such change.
2.12 OFFICERS. The Board of Directors shall have power to elect or
appoint at any time a Chairman of the Board, a President, one or more Vice
Presidents, a Secretary, a Treasurer, a Comptroller and such other officers as
the Board of Directors may deem advisable. Any two or more offices may be held
by the same person.
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2.13 TERM. Each officer shall hold office until his successor is
elected or appointed and qualified or until his death, resignation or removal by
the Board of Directors.
2.14 AUTHORITY, DUTIES AND COMPENSATION. All officers shall have such
authority, perform such duties and receive such compensation as may be provided
in the by-laws or as may be determined by the Board of Directors.
2.15 CHAIRMAN OF THE BOARD. The Chairman of the Board shall preside
at all meetings of the Board of Directors and of the Executive Committee, and in
the absence or disability of the President shall have the authority and perform
the duties of the President.
2.16 PRESIDENT. The President shall be the chief executive officer of
the Company and shall preside at all meetings of the shareholders and, in the
absence or disability of the Chairman of the Board, of the Executive Committee
of the Board of Directors. He shall be responsible for the general management
of the business, subject to the control of the Board of Directors. In the
absence or disability of the Chairman, or if that office is vacant, the
President shall preside at all meetings of the Board of Directors.
2.17 VICE PRESIDENTS. In the absence or disability of the President
and Chairman of the Board, the Vice Presidents in the order designated by the
Board of Directors shall have the authority and perform the duties of the
President.
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2.18 SECRETARY. The Secretary shall give notice of meetings of the
shareholders, of the Board of Directors and of the Executive Committee, attend
all such meetings and record the proceedings thereof. In the absence or
disability of the Secretary, an Assistant Secretary or any other person
designated by the Board of Directors or the President shall have the authority
and perform the duties of the Secretary.
2.19 TREASURER. The Treasurer shall have charge of the securities of
the Company and the deposit and disbursement of its funds, subject to the
control of the Board of Directors. In the absence or disability of the
Treasurer, an Assistant Treasurer or any other person designated by the Board of
Directors or the President shall have the authority and perform the duties of
the Treasurer.
2.20 COMPTROLLER. The Comptroller shall be the principal accounting
officer and shall keep books recording the business transactions of the Company.
He shall be in charge of the accounts of all of its offices and shall promptly
report and properly record in the books of the Company all relevant data
relating to the Company's business.
ARTICLE III
INDEMNIFICATION
3.1 INDEMNIFICATION OF DIRECTORS, OFFICERS AND OTHER PERSONS. The
Company shall indemnify any director or officer of
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the Company or any of its subsidiaries who was or is an "authorized
representative" of the Company (which shall mean for the purposes of Paragraphs
3.1. through 3.7, a director or officer of the Company, or a person serving at
the request of the Company as a director, officer, partner, fiduciary or trustee
of another corporation, partnership, joint venture, trust, employee benefit plan
or other enterprise) and who was or is a "party" (which shall include for
purposes of Paragraphs 3.1 through 3.7 the giving of testimony or similar
involvement) or is threatened to be made a party to any "proceeding" (which
shall mean for purposes of Paragraphs 3.1 through 3.7 any threatened, pending or
completed action, suit, appeal or other proceeding of any nature, whether civil,
criminal, administrative or investigative, whether formal or informal, and
whether brought by or in the right of the Company, its shareholders or
otherwise) by reason of the fact that such person was or is an authorized
representative of the Company to the fullest extent permitted by law, including
without limitation indemnification against expenses (which shall include for
purposes of Paragraphs 3.1 through 3.7 attorneys' fees and disbursements),
damages, punitive damages, judgments, penalties, fines and amounts paid in
settlement actually and reasonably incurred by such person in connection with
such proceeding unless the act or failure to act giving rise to the claim is
finally determined by a court to have constituted willful misconduct or
recklessness. If an authorized representative is not entitled to
indemnification in respect of a portion of any liabilities to
9
<PAGE>
which such person may be subject, the Company shall nonetheless indemnify such
person to the maximum extent for the remaining portion of the liabilities.
3.2 ADVANCEMENT OF EXPENSES. The Company shall pay the expenses
(including attorneys' fees and disbursements) actually and reasonably incurred
in defending a proceeding on behalf of any person entitled to indemnification
under Paragraph 3.1 in advance of the final disposition of such proceeding upon
receipt of an undertaking by or on behalf of such person to repay such amount if
it shall ultimately be determined that such person is not entitled to be
indemnified by the Company as authorized in Paragraphs 3.1 through 3.7 and may
pay such expenses in advance on behalf of any employee or agent on receipt of a
similar undertaking. The financial ability of such authorized representative to
make such repayment shall not be prerequisite to the making of an advance.
3.3 EMPLOYEE BENEFIT PLANS. For purposes of Paragraphs 3.1 through 3.7,
the Company shall be deemed to have requested an officer or director to serve as
fiduciary with respect to an employee benefit plan where the performance by such
person of duties to the Company also imposes duties on, or otherwise involves
services by, such person as a fiduciary with respect to the plan; excise taxes
assessed on an authorized representative with respect to any transaction with an
employee benefit plan shall be deemed "fines"; and action taken or omitted by
such person with respect to an employee benefit plan in the
10
<PAGE>
performance of duties for a purpose reasonably believed to be in the interest of
the participants and beneficiaries of the plan shall be deemed to be for a
purpose which is not opposed to the best interests of the Company.
3.4 SECURITY FOR INDEMNIFICATION OBLIGATIONS. To further effect, satisfy
or secure the indemnification obligations provided herein or otherwise, the
Company may maintain insurance, obtain a letter of credit, act as self-insurer,
create a reserve, trust, escrow, cash collateral or other fund or account, enter
into indemnification agreements, pledge or grant a security interest in any
assets or properties of the Company, or use any other mechanism or arrangement
whatsoever in such amounts, at such costs, and upon such other terms and
conditions as the Board of Directors shall deem appropriate.
3.5 RELIANCE UPON PROVISIONS. Each person who shall act as an authorized
representative of the Company shall be deemed to be doing so in reliance upon
the rights of indemnification provided by these Paragraphs 3.1 through 3.7.
3.6 AMENDMENT OR REPEAL. All rights of indemnification under Paragraphs
3.1 through 3.7 shall be deemed a contract between the Company and the person
entitled to indemnification under these Paragraphs 3.1 through 3.7 pursuant to
which the Company and each such person intend to be legally bound. Any repeal,
amendment or modification hereof shall be prospective only and shall not limit,
but may expand, any rights or obligations in respect of any proceeding whether
commenced
11
<PAGE>
prior to or after such change to the extent such proceeding pertains to actions
or failures to act occurring prior to such change.
3.7 SCOPE. The indemnification, as authorized by these Paragraphs 3.1
through 3.7, shall not be deemed exclusive of any other rights to which those
seeking indemnification or advancement of expenses may be entitled under any
statute, agreement, vote of shareholders or disinterested directors or
otherwise, both as to action in an official capacity and as to action in any
other capacity while holding such office. The indemnification and advancement
of expenses provided by or granted pursuant to these Paragraphs 3.1 through 3.7
shall continue as to a person who has ceased to be an officer or director in
respect of matters arising prior to such time, and shall inure to the benefit of
the heirs and personal representatives of such person.
ARTICLE VI
STOCK CERTIFICATES AND CORPORATE SEAL
4.1 EXECUTION. Certificates for shares of capital stock of the
Company shall be signed by the President or a Vice President and by the
Secretary, an Assistant Secretary, the Treasurer or an Assistant Treasurer, but
where a certificate is signed by a transfer agent or a registrar, the signature
of any corporate officer may be a facsimile, engraved or printed. The
12
<PAGE>
corporate seal, which may be a facsimile, engraved or printed, shall appear on
each certificate but need not be attested. In case any officer who has signed
or whose facsimile signature has been placed upon any certificate shall have
ceased to be such officer because of death, resignation or otherwise, before the
certificate is issued, it may be issued by the Company with the same effect as
if the officer had not ceased to be such at the date of its issue. No
certificate for shares of capital stock of the Company shall be issued in place
of any certificate alleged to have been lost, stolen or destroyed, except in
such manner and upon such terms as the Board of Directors shall authorize.
4.2 SEAL. The Company shall have a corporate seal which shall bear
the name of the Company and State and year of its incorporation. The seal shall
be in the custody of the Secretary and may be used by causing it or a facsimile
to be impressed or reproduced upon or affixed to any document.
ARTICLE V
NOTICES
5.1 FORM OF NOTICE. Whenever written notice is required to be given to
any person by law, the Articles of Incorporation or these by-laws, it may be
given to such person either personally or by telephone or by sending a copy
thereof by first class or express mail, postage prepaid, or by telegram (with
messenger service specified), telex or TWX (with answerback
13
<PAGE>
received) or courier service, charges prepaid, or by facsimile transmission, to
the address (or the telex, TWX or facsimile number) appearing on the books of
the Company or, in the case of a director, to the address supplied by the
director to the Company for the purpose of notice. If the notice is sent by
mail, telegraph or courier service, it shall be deemed to have been given to the
person entitled thereto when deposited in the United States mail or with a
telegraph office or courier service for delivery to that person or, in the case
of telex or TWX, when dispatched or, in the case of facsimile transmission, when
received. A notice of meeting shall specify the place, day and hour of the
meeting.
5.2 WAIVER OF NOTICE. Any notice required to be given under these by-
laws may be effectively waived by the person entitled thereto by written waiver
signed before or after the meeting to which such notice would relate or by
attendance at such meeting otherwise than for the purpose of objecting, at the
beginning of the meeting, to the transaction of any business because the meeting
was not lawfully called or convened.
ARTICLE VI
AMENDMENTS
6.1 AMENDMENTS. These by-laws may be amended or repealed and new by-laws
may be adopted by the affirmative vote of a majority of the directors of the
Company or by the
14
<PAGE>
affirmative vote of shareholders entitled to cast a majority of the votes which
all shareholders are entitled to cast at any annual, regular or special meeting
of directors or shareholders, as the case may be; provided, however, that new
by-laws may not be adopted and these by-laws may not be amended or repealed in
any way that limits indemnification rights, increases the liability of directors
or changes the manner or vote required for any such adoption, amendment or
repeal, except by the affirmative vote of the shareholders entitled to cast at
least a majority of the votes which all shareholders are entitled to cast
thereon. In the case of a meeting of shareholders, written notice shall be
given to each shareholder entitled to vote thereat that the purpose, or one of
the purposes, of the meeting is to consider the adoption, amendment or repeal of
the by-laws.
ARTICLE VII
EMERGENCY BY-LAWS
7.1 WHEN OPERATIVE. The emergency by-laws provided by the following
Paragraphs shall be operative during any emergency resulting from warlike
damage or an attack on the United States or any nuclear or atomic disaster,
notwithstanding any different provision in the preceding Paragraphs of the by-
laws or in the Articles of Incorporation of the Company or in the Pennsylvania
Business Corporation Law. To the extent not inconsistent with these emergency
by-laws, the by-laws provided in the preceding
15
<PAGE>
Paragraphs shall remain in effect during such emergency and upon the termination
of such emergency the emergency by-laws shall cease to be operative unless and
until another such emergency shall occur.
7.2 MEETINGS. During any such emergency:
(a) Any meeting of the Board of Directors may be called by any
director. Whenever any officer of the Company who is not a director has
reason to believe that no director is available to participate in a meeting,
such officer may call a meeting to be held under the provisions of this
Paragraph.
(b) Notice of each meeting called under the provisions of this
Paragraph shall be given by the person calling the meeting or at his request
by any officer of the Company. The notice shall specify the time and the
place of the meeting, which shall be the head office of the Company at the time
if feasible and otherwise any other place specified in the notice. Notice need
be given only to such of the directors as it may be feasible to reach at the
time and may be given by such means as may be feasible at the time, including
publication or radio. If given by mail, messenger, telephone or telegram, the
notice shall be addressed to the director at his residence or business address
or such other place as the person giving the notice shall deem suitable. In
the case of meetings called by an officer who is not a director, notice shall
also be given similarly, to the extent feasible, to the persons named on the
list referred to in part (c) of this Paragraph. Notice shall be given at least
two
16
<PAGE>
days before the meeting if feasible in the judgment of the person giving the
notice and otherwise the meeting may be held on any shorter notice he shall deem
suitable.
(c) At any meeting called under the provisions of this
Paragraph, the director or directors present shall constitute a quorum for the
transaction of business. If no director attends a meeting called by an officer
who is not a director and if there are present at least three of the persons
named on a numbered list of personnel approved by the Board of Directors before
the emergency, those present (but not more than the seven appearing highest in
priority on such list) shall be deemed directors for such meeting and shall
constitute a quorum for the transaction of business.
7.3 LINES OF SUCCESSION. The Board of Directors, during as well as
before any such emergency, may provide, and from time to time modify, lines of
succession in the event that during such an emergency any or all officers or
agents of the Company shall for any reason be rendered incapable of discharging
their duties.
7.4 OFFICES. The Board of Directors, during as well as before any
such emergency, may, effective in the emergency, change the head office or
designate several alternative head offices or regional offices, or authorize the
officers so to do.
7.5 LIABILITY. No officer, director or employee acting in accordance
with these emergency by-laws shall be liable except for willful misconduct.
17
<PAGE>
7.6 REPEAL OR CHANGE. These emergency by-laws shall be subject to
repeal or change by further action of the Board of Directors or by action of the
shareholders, except that no such repeal or change shall modify the provisions
of the next preceding Paragraph with regard to action or inaction prior to the
time of such repeal or change.
ARTICLE VIII
PENNSYLVANIA ACT 36 OF 1990
8.1 FIDUCIARY DUTY. Subsections (a) through (d) of Section 1715 of the
Pennsylvania Business Corporation Law of 1988, as amended, shall not be
applicable to the Company.
8.2 CONTROL-SHARE ACQUISITIONS. Subchapter G of Chapter 25 of the
Pennsylvania Business Corporation Law of 1988, as amended, (relating to control-
share acquisitions), shall not be applicable to the Company.
8.3 DISGORGEMENT. Subchapter H of Chapter 25 of the Pennsylvania
Business Corporation Law of 1988, as amended, (relating to disgorgement by
certain controlling shareholders following attempts to acquire control), shall
not be applicable to the Company.
18
<PAGE>
Exhibit 4.A
================================================================================
P. H. GLATFELTER COMPANY
AND
WACHOVIA BANK OF GEORGIA, N.A.
as Trustee
Indenture
Dated as of January 15, 1993
_________________________
================================================================================
<PAGE>
CROSS REFERENCE SHEET*
_______________
Between
Provisions of Trust Indenture Act of 1939 and Indenture to be dated as
of January 15, 1993 between P. H. GLATFELTER COMPANY and WACHOVIA BANK OF
GEORGIA, N.A., Trustee:
<TABLE>
<CAPTION>
Section of the Acts Section of Indenture
<S> <C>
310(a)(1) and (2)...................................... 6.8
310(a)(3) and (4)...................................... Inapplicable
310(a)(5).............................................. 6.8
310(b)................................................. 6.8
310(c)................................................. Inapplicable
311(a)................................................. 6.13
311(b)................................................. 6.13
311(c)................................................. Inapplicable
312(a)................................................. 4.1
312(b)................................................. 4.4
312(c)................................................. 4.4
313(a)................................................. 4.3
313(b)(1).............................................. Inapplicable
313(b)(2).............................................. 4.3
313(c)................................................. 4.3
313(d)................................................. 4.3
314(a)................................................. 4.2
314(b)................................................. Inapplicable
314(c)(1) and (2)...................................... 11.5
314(c)(3).............................................. Inapplicable
314(d)................................................. Inapplicable
314(e)................................................. 11.5
314(f)................................................. Inapplicable
315(a), (c) and (d).................................... 6.1
315(b)................................................. 5.15
315(e)................................................. 5.16
316(a)(1).............................................. 5.13 and 5.14
316(a)(2).............................................. Not Required
316(a)(last sentence).................................. 7.4
316(b)................................................. 5.10
316(c)................................................. 7.2
317(a)................................................. 5.3 and 5.4
317(b)................................................. 3.4(a) and (b)
318(a)................................................. 11.7
</TABLE>
- ---------------------
* This Cross Reference Sheet is not part of the Indenture.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
PARTIES..................................................................... 1
RECITALS.................................................................... 1
<CAPTION>
ARTICLE ONE
DEFINITIONS
<S> <C>
Section 1.1 Certain Terms Defined.......................................... 1
<CAPTION>
ARTICLE TWO
SECURITIES
<S> <C>
Section 2.1 Forms Generally................................................ 8
Section 2.2 Form of Trustee's Certificate of Authentication................ 8
Section 2.3 Title; Payment and Terms....................................... 9
Section 2.4 Authentication and Delivery of Securities...................... 11
Section 2.5 Execution of Securities........................................ 14
Section 2.6 Certificate of Authentication.................................. 15
Section 2.7 Denomination and Date of Securities; Payments
of Interest.................................................. 15
Section 2.8 Registration, Transfer and Exchange............................ 16
Section 2.9 Mutilated, Defaced, Destroyed, Lost and Stolen Securities...... 19
Section 2.10 Cancellation of Securities; Destruction Thereof................ 20
Section 2.11 Temporary Securities........................................... 20
Section 2.12 CUSIP Numbers.................................................. 21
<CAPTION>
ARTICLE THREE
COVENANTS OF THE ISSUER
<S> <C>
Section 3.1 Payment of Principal and Interest.............................. 21
Section 3.2 Offices for Payments, etc...................................... 22
Section 3.3 Appointment to Fill a Vacancy in Office of Trustee............. 23
Section 3.4 Paying Agents.................................................. 23
Section 3.5 Statements as to Compliance.................................... 24
Section 3.6 Merger, Consolidation or Sale of Assets........................ 24
Section 3.7 Limitation on Liens............................................ 24
Section 3.8 Limitation on Subsidiary Indebtedness.......................... 26
Section 3.9 Limitation on Sale and Lease-Back.............................. 27
Section 3.10 Corporate Existence............................................ 27
</TABLE>
(i)
<PAGE>
<TABLE>
<CAPTION>
Page
----
ARTICLE FOUR
SECURITYHOLDERS LISTS AND REPORTS BY
THE ISSUER AND THE TRUSTEE
<S> <C>
Section 4.1 Issuer to Furnish Trustee Information as to Names and
Addresses of Securityholders................................. 27
Section 4.2 Reports by the Issuer.......................................... 28
Section 4.3 Reports by the Trustee......................................... 28
Section 4.4 Communication by Holders with Other Holders.................... 28
<CAPTION>
ARTICLE FIVE
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
ON EVENT OF DEFAULT
<S> <C>
Section 5.1 Event of Default Defined; Acceleration of Maturity;
Waiver of Default............................................ 29
Section 5.2 Acceleration of Maturity; Recission and Annulment.............. 31
Section 5.3 Collection of Indebtedness by Trustee; Trustee May Prove Debt.. 32
Section 5.4 Trustee May File Proofs of Claim............................... 33
Section 5.5 Trustee May Enforce Claims without Possession of Securities.... 34
Section 5.6 Application of Proceeds........................................ 35
Section 5.7 Suits for Enforcement.......................................... 36
Section 5.8 Restoration of Rights on Abandonment of Proceedings............ 36
Section 5.9 Limitations on Suits by Securityholders........................ 36
Section 5.10 Unconditional Right of Securityholders to Institute
Certain Suits................................................ 37
Section 5.11 Powers and Remedies Cumulative; Delay or Omission Not
Waiver of Default............................................ 37
Section 5.12 Delay or Omission Not Waiver................................... 38
Section 5.13 Control by Holders of Securities............................... 38
Section 5.14 Waiver of Past Defaults........................................ 38
Section 5.15 Trustee to Give Notice of Default, but may Withhold in
Certain Circumstances........................................ 39
Section 5.16 Right of Court to Require Filing of Undertaking to Pay Costs... 39
<CAPTION>
ARTICLE SIX
CONCERNING THE TRUSTEE
<S> <C>
Section 6.1 Duties and Responsibilities of the Trustee;
During Default; Prior to Default............................. 40
Section 6.2 Certain Rights of the Trustee.................................. 41
</TABLE>
(ii)
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C>
Section 6.3 Trustee Not Responsible for Recitals, Disposition of
Securities or Application of Proceeds Thereof................ 43
Section 6.4 Trustee and Agents May Hold Securities; Collections, etc....... 43
Section 6.5 Moneys Held by Trustee......................................... 43
Section 6.6 Compensation and Indemnification of Trustee and
Its Prior Claim.............................................. 43
Section 6.7 Right of Trustee to Rely on Officer's Certificate, etc......... 44
Section 6.8 Persons Eligible for Appointment as Trustee; Disqualification.. 45
Section 6.9 Resignation and Removal; Appointment of Successor Trustee...... 45
Section 6.10 Acceptance of Appointment by Successor Trustee................. 47
Section 6.11 Merger, Conversion, Consolidation or Succession to Business
of Trustee................................................... 48
Section 6.12 Appointment of Authenticating Agent............................ 49
Section 6.13 Preferential Collection of Claims Against the Company.......... 50
<CAPTION>
ARTICLE SEVEN
CONCERNING THE SECURITYHOLDERS
<S> <C>
Section 7.1 Evidence of Action Taken by Securityholders.................... 50
Section 7.2 Proof of Execution of Instruments and of Holding of
Securities................................................... 50
Section 7.3 Holders to Be Treated as Owners................................ 51
Section 7.4 Securities Owned by Issuer Deemed Not Outstanding.............. 51
Section 7.5 Principal Amount of Original Issue Discount Securities......... 52
Section 7.6 Right of Revocation of Action Taken............................ 52
<CAPTION>
ARTICLE EIGHT
SUPPLEMENTAL INDENTURES
<S> <C>
Section 8.1 Supplemental Indentures Without Consent of Securityholders..... 53
Section 8.2 Supplemental Indentures with Consent of Securityholders........ 55
Section 8.3 Effect of Supplemental Indenture............................... 56
Section 8.4 Documents to Be Given to Trustee............................... 57
Section 8.5 Notation on Securities in Respect of Supplemental Indentures... 57
Section 8.6 Conformity with Trust Indenture Act............................ 57
</TABLE>
(iii)
<PAGE>
<TABLE>
<CAPTION>
Page
----
ARTICLE NINE
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
<S> <C>
Section 9.1 Issuer May Consolidate, etc. on Certain Terms................. 57
Section 9.2 Successor Issuer Substituted.................................. 58
<CAPTION>
ARTICLE TEN
SATISFACTION AND DISCHARGE OF INDENTURE;
CLAIMED MONEYS
<S> <C>
Section 10.1 Satisfaction and Discharge of Securities of any Series........ 59
Section 10.2 Satisfaction and Discharge of Indenture....................... 63
Section 10.3 Application by Trustee of Funds Deposited for Payment
of Securities............................................... 64
Section 10.4 Repayment of Moneys Held by Paying Agent...................... 64
Section 10.5 Return of Moneys Held by Trustee and Paying Agent
Unclaimed for Two Years..................................... 64
Section 10.6 Indemnity for U.S. Government Obligations..................... 65
Section 10.7 Reinstatement Provision....................................... 65
<CAPTION>
ARTICLE ELEVEN
MISCELLANEOUS PROVISIONS
<S> <C>
Section 11.1 Incorporators, Stockholders, Officers and Directors of
Issuer Exempt From Individual Liability..................... 65
Section 11.2 Provisions of Indenture for the Sole Benefit of Parties
and Holders of Securities................................... 65
Section 11.3 Successors and Assigns of Issuer Bound by Indenture........... 66
Section 11.4 Notices and Demands on Issuer, Trustee and Holders of
Securities.................................................. 66
Section 11.5 Officer's Certificates and Opinions of Counsel;
Statements to Be Contained Therein.......................... 67
Section 11.6 Payments Due on Saturdays, Sundays and Holidays............... 68
Section 11.7 Conflict of Any Provision of Indenture with Trust
Indenture Act of 1939....................................... 68
Section 11.8 New York Law to Govern........................................ 68
Section 11.9 Counterparts.................................................. 68
Section 11.10 Effect of Headings............................................ 68
Section 11.11 Securities in a Foreign Currency or in ECU.................... 69
Section 11.12 Judgment Currency............................................. 69
TESTIMONIUM................................................................. 71
SIGNATURES.................................................................. 71
</TABLE>
(iv)
<PAGE>
THIS INDENTURE, dated as of January 15, 1993, between P. H. GLATFELTER
COMPANY, a Pennsylvania corporation (the "Issuer"), and WACHOVIA BANK OF
GEORGIA, N.A., a national banking association authorized under the laws of the
United States (the "Trustee"),
W I T N E S S E T H:
WHEREAS, the Issuer has duly authorized the issue from time to time of
its unsecured debentures, notes or other evidences of indebtedness to be issued
(the "Securities") up to such principal amount or amounts as may from time to
time be authorized in accordance with the terms of this Indenture;
WHEREAS, the Issuer has duly authorized the execution and delivery of
this Indenture to provide, among other things, for the authentication, delivery
and administration of the Securities; and
WHEREAS, all things necessary to make this Indenture a valid indenture
and agreement according to its terms have been done;
NOW, THEREFORE:
In consideration of the premises and the purchase of the Securities by
the holders thereof, the Issuer and the Trustee mutually covenant and agree for
the equal and proportionate benefit of the respective holders from time to time
of the Securities as follows:
ARTICLE ONE
DEFINITIONS
-----------
Section 1.1 Certain Terms Defined. The following terms (except as
---------------------
otherwise expressly provided or unless the context otherwise clearly requires)
for all purposes of this Indenture and of any indenture supplemental hereto
shall have the respective meanings specified in this Section and include the
plural as well as the singular. All other terms used in this Indenture that are
defined in the Trust Indenture Act of 1939 or the definitions of which in the
Securities Act of 1933 are referred to in the Trust Indenture Act of 1939,
including terms defined therein by reference to the Securities Act of 1933
(except as herein otherwise expressly provided or unless the context otherwise
requires), shall have the meanings assigned to
<PAGE>
such terms in the Trust Indenture Act of 1939 and in the Securities Act of 1933
as in force at the date of this Indenture. All accounting terms used herein and
not expressly defined shall have the meanings assigned to such terms in
accordance with generally accepted accounting principles, and the term
"generally accepted accounting principles" means such accounting principles as
- -----------------------------------------
are generally accepted at the date hereof except as otherwise provided in any
indenture supplemental hereto. The words "herein," "hereof" and "hereunder" and
------ ------ ---------
other words of similar import refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision. The terms defined in this
Article have the meanings assigned to them in this Article and include the
plural as well as the singular.
"Authenticating Agent" shall have the meaning set forth in
--------------------
Section 6.12.
"Board of Directors" means either the Board of Directors of the Issuer
------------------
or any committee of such Board duly authorized to act on its behalf.
"Board Resolution" means a copy of one or more resolutions, certified
----------------
by the secretary or an assistant secretary of the Issuer to have been duly
adopted or consented to by the Board of Directors and to be in full force and
effect, and delivered to the Trustee.
"Business Day" means, with respect to any Security, a day that in the
------------
city (or in any of the cities, if more than one) in which amounts are payable,
as specified in the form of such Security, which is not a Saturday, Sunday, or a
day on which banking institutions are authorized or required by law or
regulation to close in such city (or cities) or Atlanta, Georgia or in New York
City.
"Capitalized Lease Obligation" means obligations under a lease that
----------------------------
are required to be capitalized for financial reporting purposes in accordance
with generally accepted accounting principles, and the amount of Indebtedness
represented by such obligations shall be the capitalized amount of such
obligations determined in accordance with generally accepted accounting
principles.
"Commission" means the Securities and Exchange Commission, as from
----------
time to time constituted, created under the Securities Exchange Act of 1934, or
if at any time after the execution and delivery of this Indenture such
Commission is not existing and performing the duties now assigned to it under
the Trust Indenture Act of 1939, then the body performing such duties on such
date.
2
<PAGE>
"Consolidated Net Income" with respect to any person means, for any
-----------------------
period, the aggregate of the net income of such person and its Subsidiaries for
such period, determined on a consolidated basis in accordance with generally
accepted accounting principles.
"Consolidated Net Tangible Assets" means the aggregate amount of
--------------------------------
assets (less applicable reserves and other properly deductible items) after
deducting therefrom (a) all liabilities, (b) all goodwill, trade names,
trademarks, patents, unamortized debt discount and expense and other like
intangibles and (c) minority interests in Subsidiaries, all as set forth on the
most recent consolidated balance sheet of the Issuer and its consolidated
Subsidiaries and computed in accordance with generally accepted accounting
principles.
"Corporate Trust Office" means the office of the Trustee at which the
----------------------
corporate trust business of the Trustee shall, at any particular time, be
principally administered, which office is, at the date as of which this
Indenture is dated, located at 191 Peachtree Street N.E., Atlanta, Georgia
30303.
"covenant defeasance" shall have the meaning set forth in
-------------------
Section 10.1(B).
"Depositary" means, with respect to the Securities issuable or issued
----------
in the form of one or more Global Securities, the person designated as
Depositary by the Issuer pursuant to Section 2.3 until a successor Depositary
shall have become such pursuant to the applicable provision of this Indenture,
and thereafter "Depositary" shall mean or include each person who is then a
Depositary hereunder.
"Dollar" means the coin or currency of the United States of America as
------
at the time of payment is legal tender for the payment of public and private
debts.
"ECU" means the European Currency Unit as defined and revised from
---
time to time by the Council of European Communities.
"Event of Default" means any event or condition specified as such
----------------
in Section 5.1.
"Foreign Currency" means a currency issued by the government of a
----------------
country other than the United States.
"Global Security" means a Security issued to the Depositary in
---------------
accordance with Section 2.4, and bearing the legend prescribed in Section 2.4.
3
<PAGE>
"Holder," "Holder of Securities," "Securityholder" or other similar
------ -------------------- --------------
terms mean the person in whose name such Security is registered in the security
register kept by the Issuer for that purpose in accordance with the terms
hereof.
"Indebtedness" of any person shall mean, at any date, any of the
------------
following (without duplication): (a) all obligations, unconditional or
contingent, of such person for borrowed money or evidenced by bonds, debentures,
notes or other similar instruments or letters of credit; (b) all obligations of
such person to pay the deferred purchase price of property or services, except
accounts payable and accrued liabilities, in each case, arising in the ordinary
course of business; (c) Capitalized Lease Obligations of such person; (d)
reimbursement obligations of such person with respect to letters of credit; (e)
all Indebtedness of others secured by a lien on any asset of such person,
whether or not such indebtedness is assumed or guaranteed by such person; and
(f) all Indebtedness of others guaranteed by such person; and the amount thereof
shall be the outstanding principal balance of any such unconditional obligations
as described in (a) through (f) and the maximum liability of any such
conditional obligations at such date.
"Indenture" means this instrument as originally executed and delivered
---------
or, if amended or supplemented as herein provided, as so amended or supplemented
or both, and shall include the forms and terms of Securities established as
contemplated hereunder.
"Interest" means, when used with respect to non-interest bearing
--------
Securities, interest payable after maturity.
"Issuer" means, P. H. Glatfelter Company, a Pennsylvania corporation,
------
and, subject to Article Nine, its successors and assigns.
"Issuer Order" means a written statement, request or order of the
------------
Issuer signed in its name by the chairman or vice chairman of the Board of
Directors, the president, any vice president, the secretary or the treasurer of
the Issuer.
"Judgment Currency" shall have the meaning set forth in Section 11.12.
-----------------
"Long-Term Indebtedness" means all Indebtedness of the Issuer maturing
----------------------
by its terms more than one year after, or which is renewable or extendable at
the option of the Issuer for a period ending more than one year after, the date
as of which Long-Term Indebtedness is being determined, and shall include
Indebtedness of others that constitutes Indebtedness of the Issuer.
4
<PAGE>
"Officer's Certificate" means a certificate signed by the chairman or
---------------------
vice chairman of the Board of Directors, the president, any vice president, the
treasurer or the secretary of the Issuer and delivered to the Trustee. Each
such certificate shall comply with Section 314 of the Trust Indenture Act of
1939 and include the statements provided for in Section 11.5.
"Opinion of Counsel" means an opinion in writing signed by Ballard
------------------
Spahr Andrews & Ingersoll, counsel to the Issuer, or by such other legal counsel
who may be an employee of or counsel to the Issuer and who shall be reasonably
satisfactory to the Trustee. Each such opinion shall comply with Section 314 of
the Trust Indenture Act of 1939 and include the statements provided for in
Section 11.5.
"Original issue date" of any Security (or portion thereof) means the
-------------------
earlier of (a) the date of such Security or (b) the date of any Security (or
portion thereof) for which such Security was issued (directly or indirectly) on
registration of transfer, exchange or substitution.
"Original Issue Discount Security" means any Security that provides
--------------------------------
for an amount less than the principal amount thereof to be due and payable upon
a declaration of acceleration of the maturity thereof pursuant to Section 5.2.
"Outstanding" when used with reference to Securities, shall, subject
-----------
to the provisions of Section 7.4, mean, as of any particular time, all
Securities authenticated and delivered by the Trustee under this Indenture,
except
(a) Securities theretofore cancelled by the Trustee or delivered
to the Trustee for cancellation;
(b) Securities, or portions thereof, for the payment or
redemption of which moneys or U.S. Government Obligations (as provided for
in Section 10.1) in the necessary amount shall have been deposited in trust
with the Trustee or with any paying agent (other than the Issuer) or shall
have been set aside, segregated and held in trust by the Trustee for the
Holders of such Securities (if the Issuer shall act as its own paying
agent), provided that if such Securities, or portions thereof, are to be
--------
redeemed prior to the maturity thereof, notice of such redemption shall
have been given as herein provided, or provision satisfactory to the
Trustee shall have been made for giving such notice;
(c) Securities which shall have been paid or in substitution for
which other Securities shall have been authenticated and delivered pursuant
to the terms of Section
5
<PAGE>
2.9 (except with respect to any such Security as to which proof
satisfactory to the Trustee is presented that such Security is held by a
person in whose hands such Security is a legal, valid and binding
obligation of the Issuer); and
(d) Securities with respect to which the Issuer has effected
defeasance as provided in Section 10.1(A).
In determining whether the Holders of the requisite principal amount
of Outstanding Securities have given any request, demand, authorization,
direction, notice, consent or waiver hereunder, the principal amount of an
Original Issue Discount Security that shall be deemed to be Outstanding for such
purposes shall be the amount of the principal thereof that would be due and
payable as of the date of such determination upon a declaration of acceleration
of the maturity thereof pursuant to Section 5.2.
"Periodic Offering" means an offering of Securities from time to time,
-----------------
the specific terms of which Securities, including, without limitation, the rate
or rates of interest, if any, thereon, the stated maturity or maturities thereof
and the redemption provisions, if any, with respect thereto, are to be
determined by the Issuer or its agents upon the issuance of such Securities.
"person" means any individual, corporation, partnership, joint
------
venture, association, joint stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"principal" whenever used with reference to the Securities or any
---------
Security or any portion thereof, shall be deemed to include "and premium, if
any."
"record date" shall have the meaning set forth in Section 2.7.
-----------
"Required Currency" shall have the meaning set forth in Section 11.12.
-----------------
"Responsible Officer" when used with respect to the Trustee means the
-------------------
chairman of the Board of Directors, any vice chairman of the Board of Directors,
the chairman of the trust committee, the chairman of the executive committee,
any vice chairman of the executive committee, the president, any vice president
(whether or not designated by numbers or words added before or after the title
"vice president"), the cashier, the secretary, the treasurer, any trust officer,
any assistant trust officer, any assistant vice president, any assistant
cashier, any assistant secretary, any assistant treasurer, or any other
6
<PAGE>
officer or assistant officer of the Trustee customarily performing functions
similar to those performed by the persons who at the time shall be such
officers, respectively, or to whom any corporate trust matter is referred
because of his knowledge of and familiarity with the particular subject.
"Sale and Leaseback Transaction" has the meaning set forth in Section
------------------------------
3.9.
"Security" or "Securities" has the meaning stated in the first recital
-------- ----------
of this Indenture, or, as the case may be, Securities that have been
authenticated and delivered under this Indenture.
"Subsidiary" means any corporation, partnership or other entity the
----------
outstanding securities or interests of which having ordinary voting power to
elect a majority of the board of directors or similar governing body of such
corporation, partnership or other entity (whether or not any other class of
securities has or might have voting power by reason of the happening of a
contingency) are at the time owned or controlled directly or indirectly by the
Issuer or one or more Subsidiaries or by the Issuer and one or more
Subsidiaries.
"Trustee" means the person identified as "Trustee" in the first
-------
paragraph hereof and, subject to the provisions of Article Six, shall also
include any successor trustee.
"Trust Indenture Act of 1939" means the Trust Indenture Act of 1939,
---------------------------
as amended by the Trust Indenture Reform Act of 1990, as in force at the date as
of which this Indenture was originally executed, except as provided in Section
8.6.
"U.S. Government Obligations" shall have the meaning set forth in
---------------------------
Section 10.1(A).
"Yield to Maturity" means, as the context may require, the yield to
-----------------
maturity (i) on the Securities or (ii) if the Securities are issuable from time
to time, on a Security, calculated at the time of issuance of such Security, or,
if applicable, at the most recent redetermination of interest on such Security,
and calculated in accordance with the constant interest method or such other
accepted financial practice as is specified in the terms of such Security.
7
<PAGE>
ARTICLE TWO
SECURITIES
----------
Section 2.1 Forms Generally. The Securities shall be substantially
---------------
in such form (not inconsistent with this Indenture) as shall be established by
or pursuant to one or more Board Resolutions (as set forth in a Board Resolution
or, to the extent established pursuant to rather than set forth in a Board
Resolution, an Officer's Certificate detailing such establishment) or in one or
more indentures supplemental hereto, in each case with such appropriate
insertions, omissions, substitutions and other variations as are required or
permitted by this Indenture or any indenture supplement hereto and may have
imprinted or otherwise reproduced thereon such legend or legends or
endorsements, not inconsistent with the provisions of this Indenture, as may be
required to comply with any law or with any rules or regulations pursuant
thereto, or with any rules of any securities exchange or to conform to general
usage, all as may be determined by the officer executing such Securities as
evidenced by his execution of such Securities.
The definitive Securities shall be printed, lithographed or engraved
on steel engraved borders or may be produced in any other manner, all as
determined by the officers executing such Securities as evidenced by their
execution of such Securities.
Section 2.2 Form of Trustee's Certificate of Authentication. The
-----------------------------------------------
Trustee's certificate of authentication on all Securities shall be in
substantially the following form:
Date:
"This is one of the Securities referred to in the within-mentioned
Indenture.
WACHOVIA BANK OF GEORGIA, N.A.
as Trustee
By
---------------------------
Authorized Signatory"
If at any time there shall be an Authenticating Agent appointed with
respect to the Securities, then the Trustee's certificate of authentication to
be borne by the Securities shall be substantially as follows:
8
<PAGE>
"This is one of the Securities referred to in the within-mentioned
Indenture.
-----------------------------,
as Authentication Agent
By
---------------------------
Authorized Signatory"
Section 2.3 Title; Payment and Terms. The aggregate principal amount
------------------------
of Securities which may be authenticated and delivered and Outstanding under the
Indenture is unlimited. The Securities of any series may be issued up to the
aggregate principal amount of Securities from time to time authorized by or
pursuant to a Board Resolution.
There shall be established in or pursuant to one or more Board
Resolutions (and to the extent established pursuant to rather than set forth in
a Board Resolution, in an Officer's Certificate detailing such establishment) or
established in one or more indentures supplemental hereto, prior to the initial
issuance of Securities,
(1) the title and designation of the Securities (which shall
distinguish the Securities of that series from all other series of
Securities);
(2) if other than Dollars, the coin or currency in which the
Securities are denominated (including, but not limited to, any Foreign
Currency or ECU);
(3) the date or dates on which the principal of the Securities
is payable (which, if so provided by Board Resolution, may be determined by
the Issuer from time to time and set forth in the Securities of the series
issued from time to time);
(4) the rate or rates at which the Securities shall bear
interest, if any, the date or dates from which such interest shall accrue,
on which such interest shall be payable and on which a record shall be
taken for the determination of Holders to whom interest is payable and/or
the method by which such rate, or rates or date or dates shall be
determined;
(5) the place or places where the principal of and any interest
on Securities shall be payable (if other than as provided in Section 3.2);
9
<PAGE>
(6) the right, if any, of the Issuer to redeem Securities, in
whole or in part, at its option and the period or periods within which,
the price or prices at which and any terms and conditions upon which
Securities may be so redeemed, pursuant to any sinking fund or otherwise;
(7) the obligation, if any, of the Issuer to redeem, purchase or
repay Securities pursuant to any mandatory redemption, sinking fund or
analogous provisions or at the option of a Holder thereof and the price or
prices at which and the period or periods within which and any terms and
conditions upon which Securities shall be redeemed, purchased or repaid, in
whole or in part, pursuant to such obligation;
(8) if other than denominations of $1,000 and any integral
multiple thereof, the denominations in which Securities shall be issuable;
(9) if other than the principal amount thereof, the portion of
the principal amount of Securities which shall be payable upon declaration
of acceleration of the maturity thereof;
(10) if other than the coin or currency in which the Securities
are denominated, the coin or currency in which payment of the principal of
or interest on the Securities shall be payable;
(11) if the principal of or interest on the Securities are to be
payable, at the election of the Issuer or a Holder thereof, in a coin or
currency other than that in which the Securities are denominated or stated
to be payable, the period or periods within which, and the terms and
conditions upon which, such election may be made;
(12) if the amount of payments of principal of and interest on
the Securities may be determined with reference to an index based on a coin
or currency other than that in which the Securities are denominated, the
manner in which such amounts shall be determined;
(13) whether the Securities will be permanent or temporary and
whether the Securities will be issuable as Global Securities;
(14) whether and under what circumstances the Issuer will pay
additional amounts on the Securities held by a person who is not a U.S.
person in respect of any tax, assessment or governmental charge withheld or
deducted and,
10
<PAGE>
if so, whether the Issuer will have the option to redeem such Securities
rather than pay such additional amounts;
(15) if the Securities are to be issuable in definitive form
(whether upon original issue or upon exchange of a temporary Security) only
upon receipt of certain certificates or other documents or satisfaction of
other conditions, the form and terms of such certificates, documents or
conditions;
(16) if a person other than Wachovia Bank of Georgia, N.A. is to
act as Trustee for the Securities, the name and location of the Corporate
Trust Office of such Trustee;
(17) any trustees (other than the Trustee named herein),
Depositaries, authenticating or paying agents, transfer agents or
registrars or any other agents with respect to the Securities;
(18) any other events of default or covenants with respect to
the Securities, whether or not such events of default or covenants are
consistent with the events of default or covenants set forth herein;
(19) whether the Securities are to be listed on any stock
exchange and, in such case, the name of the stock exchange; and
(20) any other terms (which terms shall not be inconsistent with
the provisions of this Indenture).
All Securities shall be substantially identical, except as to
denomination and except as may otherwise be provided by or pursuant to the Board
Resolution or Officer's Certificate referred to above or as set forth in any
indenture supplemental hereto. All Securities need not be issued at the same
time and may be issued from time to time, consistent with the terms of this
Indenture, if so provided by or pursuant to such Board Resolution, such
Officer's Certificate or in any indenture supplemental hereto. All Securities
governed by this Indenture and any indenture supplement hereto shall be
registered on the security register of the Issuer.
Section 2.4 Authentication and Delivery of Securities. The Issuer
-----------------------------------------
may deliver Securities executed by the Issuer to the Trustee for authentication
together with the applicable documents referred to below in this Section, and
the Trustee shall thereupon authenticate and deliver such Securities to or upon
the order of the Issuer (contained in the Issuer Order referred to below in this
Section) or pursuant to such procedures acceptable
11
<PAGE>
to the Trustee and to such recipients as may be specified from time to time by
an Issuer Order. The maturity date, original issue date, interest rate and any
other terms of the Securities shall be determined by or pursuant to such Issuer
Order and procedures. If provided for in such procedures, such Issuer Order may
authorize authentication and delivery pursuant to written instructions from the
Issuer or its duly authorized agent. In authenticating such Securities and
accepting the additional responsibilities under this Indenture in relation to
such Securities, the Trustee shall be entitled to receive (in the case of
subparagraphs 2, 3 and 4 below only at or before the time of the first request
of the Issuer to the Trustee to authenticate Securities) and (subject to Section
6.1) shall be fully protected in relying upon, unless and until such documents
have been superseded or revoked:
(1) an Issuer Order requesting such authentication and setting
forth delivery instructions if the Securities are not to be delivered to
the Issuer, provided that, with respect to Securities subject to a Periodic
Offering, (a) such Issuer Order may be delivered by the Issuer to the
Trustee prior to the delivery to the Trustee of such Securities for
authentication and delivery, (b) the Trustee shall authenticate and deliver
Securities for original issue from time to time, in an aggregate principal
amount not exceeding the aggregate principal amount established for such
Securities, pursuant to an Issuer Order or pursuant to procedures
acceptable to the Trustee as may be specified from time to time by an
Issuer Order, (c) the maturity date or dates, original issue date or dates,
interest rate or rates and any other terms of Securities shall be
determined by an Issuer Order or pursuant to such procedures and (d) if
provided for in such procedures, such Issuer Order may authorize
authentication and delivery pursuant to written instructions from the
Issuer or its duly authorized agent or agents;
(2) any Board Resolution, Officer's Certificate and/or executed
supplemental indenture referred to in Section 2.1 or 2.3 by or pursuant to
which the forms and terms of the Securities were established;
(3) an Officer's Certificate setting forth the form or forms and
terms of the Securities, stating that the form or forms and terms of the
Securities have been established pursuant to Sections 2.1 and 2.3 and
comply with this Indenture, and covering such other matters as the Trustee
may reasonably request; and
12
<PAGE>
(4) either an Opinion of Counsel, or a letter addressed to the
Trustee permitting it to rely on an Opinion of Counsel, substantially to
the effect that:
(a) the forms of the Securities have been duly authorized
and established in conformity with the provisions of this Indenture;
(b) the terms of the Securities have been duly authorized
and established in conformity with the provisions of this Indenture;
(c) when the Securities have been executed by the Issuer
and authenticated by the Trustee in accordance with the provisions of
this Indenture and delivered to and duly paid for by the purchasers
thereof, they will have been duly issued under this Indenture and will
be valid and legally binding obligations of the Issuer, enforceable in
accordance with their respective terms, and will be entitled to the
benefits of this Indenture; and
(d) the execution and delivery by the Issuer of, and the
performance by the Issuer of its obligations under, the Securities
will not contravene any provision of applicable law or the certificate
of incorporation or by-laws of the Issuer or any agreement or other
instrument binding upon the Issuer or any of its Subsidiaries that is
material to the Issuer and its Subsidiaries, considered as one
enterprise, or any judgment, order or decree of any governmental body,
agency or court having jurisdiction over the Issuer or any Subsidiary,
and no consent, approval or authorization of any governmental body or
agency is required for the performance by the Issuer of its
obligations under the Securities except such as are specified and have
been obtained and such as may be required by the securities or blue
sky laws of the various states in connection with the offer and sale
of the Securities.
In rendering such opinions, such counsel may qualify any opinions as
to enforceability by stating that such enforceability may be limited by
bankruptcy, insolvency, reorganization, liquidation, moratorium and other
similar laws affecting the rights and remedies of creditors and is subject to
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law). Such counsel may rely, as to
all matters governed by the laws of jurisdictions other than the Commonwealth of
Pennsylvania and the federal law of the United States, upon opinions of other
13
<PAGE>
counsel (copies of which shall be delivered to the Trustee), who shall be
counsel reasonably satisfactory to the Trustee, in which case the opinion shall
state that such counsel believes he and the Trustee are entitled so to rely.
Such counsel may also state, inter alia, that, insofar as such opinion involves
----- ----
factual matters, he has relied, to the extent he deems proper, upon certificates
of officers of the Issuer and its Subsidiaries and certificates of public
officials.
The Trustee shall have the right to decline to authenticate and
deliver any Securities under this Section if the Trustee, being advised by
counsel, determines that such action may not lawfully be taken by the Issuer or
if the Trustee in good faith by its board of directors or board of trustees,
executive committee, or a trust committee of directors or trustees or a
Responsible Officer shall determine that such action would expose the Trustee to
any liability or would affect the Trustee's own rights, duties or immunities
under the Securities, this Indenture or otherwise.
If the Issuer shall establish pursuant to Section 2.3 that the
Securities are to be issued in the form of one or more Global Securities, then
the Issuer shall execute and the Trustee shall, in accordance with this Section
and the Issuer Order, authenticate and deliver one or more Global Securities
that (i) shall represent and shall be denominated in an amount equal to the
aggregate principal amount of all of the Securities issued and not yet
cancelled, (ii) shall be registered in the name of the Depositary for such
Global Security or Securities or the nominee of such Depositary, (iii) shall be
delivered by the Trustee to such Depositary or pursuant to such Depositary's
instructions and (iv) shall bear a legend substantially to the following effect:
"Unless and until it is exchanged in whole or in part for Securities in
definitive registered form in accordance with the provisions of the Indenture
and the terms of this Security, this Security may not be transferred except as a
whole by the Depositary to a nominee of the Depositary or by a nominee of the
Depositary to the Depositary or another nominee of the Depositary or by the
Depositary or any such nominee to a successor Depositary or a nominee of such
successor Depositary."
Each Depositary designated pursuant to Section 2.3 must, at the time
of its designation and at all times while it serves as Depositary, be a clearing
agency registered under the Securities Exchange Act of 1934, and any other
applicable statute or regulation.
Section 2.5 Execution of Securities. The Securities shall be signed
-----------------------
on behalf of the Issuer by any person who is at such time the chairman or vice
chairman of its Board of Directors or its president or any vice president or its
treasurer or its
14
<PAGE>
secretary, under its corporate seal which may, but need not, be attested. Such
signature(s) may be the manual or facsimile signature(s) of the present or any
future such officer(s). The seal of the Issuer may be in the form of a
facsimile thereof and may be impressed, affixed, imprinted or otherwise
reproduced on the Securities. Typographical and other minor errors or defects
in any such reproduction of the seal or any such signature shall not affect the
validity or enforceability of any Security that has been duly authenticated and
delivered by the Trustee.
In case any officer of the Issuer who shall have signed any of the
Securities shall cease to be such officer before the Security so signed shall be
authenticated and delivered by the Trustee or disposed of by the Issuer, such
Security nevertheless may be authenticated and delivered or disposed of as
though the person who signed such Security had not ceased to be such officer of
the Issuer; and any Security may be signed on behalf of the Issuer by such
person(s) as, at the actual date of the execution of such Security, shall be the
proper officer(s) of the Issuer, although at the date of the execution and
delivery of this Indenture any such person was not such an officer.
Section 2.6 Certificate of Authentication. Only such Securities as
-----------------------------
shall bear thereon a certificate of authentication substantially in the form
hereinbefore recited, executed by the Trustee by the manual signature of one of
its authorized officers at such time, shall be entitled to the benefits of this
Indenture or be valid or obligatory for any purpose. The execution of such
certificate by the Trustee upon any Security executed by the Issuer shall be
conclusive evidence that the Security so authenticated has been duly
authenticated and delivered hereunder and that the Holder is entitled to the
benefits of this Indenture.
Section 2.7 Denomination and Date of Securities; Payments of
------------------------------------------------
Interest. The Securities shall be issuable as Securities in denominations
- --------
established as contemplated by Section 2.3 or, if not so established, in
denominations of $1,000 and any integral multiple thereof. The Securities shall
be numbered, lettered or otherwise distinguished in such manner or in accordance
with such plan as the officer(s) of the Issuer executing the same may determine
with the approval of the Trustee, as evidenced by the execution and
authentication thereof.
Each Security shall be dated the date of its authentication. The
Securities shall bear interest, if any, from the date, and such interest shall
be payable on the dates, established as contemplated by Section 2.3.
15
<PAGE>
The person in whose name any Security is registered at the close of
business on any record date applicable thereto with respect to any interest
payment date shall be entitled to receive the interest, if any, payable on such
interest payment date notwithstanding any transfer or exchange of such Security
subsequent to the record date and prior to such interest payment date, except if
and to the extent the Issuer shall default in the payment of the interest due on
such interest payment date, in which case such defaulted interest shall be paid
to the persons in whose names Outstanding Securities are registered at the close
of business on a subsequent record date (which shall be not less than five
Business Days prior to the date of payment of such defaulted interest)
established by notice given by mail by or on behalf of the Issuer to the Holders
of Securities not less than 15 days preceding such subsequent record date. The
term "record date" as used with respect to any interest payment date (except a
date for payment of defaulted interest) for the Securities shall mean the date
specified as such in the terms of the Securities established as contemplated by
Section 2.3, or, if no such date is so established, if such interest payment
date is the first day of a calendar month, the fifteenth day of the next
preceding calendar month, or, if such interest payment date is the fifteenth day
of a calendar month, the first day of such calendar month, whether or not such
record date is a Business Day. The Issuer may make payment of any defaulted
interest in any other lawful manner not inconsistent with the requirements of
any securities exchange on which the Securities may be listed, and upon such
notice as may be required by such exchange, if, after notice given by the Issuer
to the Trustee of the proposed payment pursuant to this provision, such payment
shall be deemed practicable by the Trustee.
Section 2.8 Registration, Transfer and Exchange. The Issuer will
-----------------------------------
keep at the Corporate Trust Office a register or registers in which, subject to
such reasonable regulations as it may prescribe, it will provide for the
registration of Securities and the registration of transfer of Securities.
Such register shall be in written form in the English language or in any other
form capable of being converted into such form within a reasonable time. At all
reasonable times such register or registers shall be open for inspection by the
Trustee.
Upon due presentation for registration of transfer of any Security at
any such office or agency to be maintained for the purpose as provided in
Section 3.2, the Issuer shall execute and the Trustee shall authenticate and
deliver in the name of the transferee or transferees a new Security or
Securities of the same maturity date, interest rate and original issue date in
authorized denominations for a like aggregate principal amount.
16
<PAGE>
At the option of the Holder thereof, Securities (other than a Global
Security, except as set forth below) may be exchanged for a Security or
Securities having authorized denominations and an equal aggregate principal
amount, upon surrender of such Securities to be exchanged at the office or
agency of the Issuer that shall be maintained for such purpose in accordance
with Section 3.2 and upon payment, if the Issuer shall so require, of the
charges hereinafter provided. Whenever any Securities are so surrendered for
exchange, the Issuer shall execute, and the Trustee shall authenticate and
deliver, the Securities which the Holder making the exchange is entitled to
receive. All Securities surrendered upon any exchange or transfer provided for
in this Indenture shall be promptly cancelled and destroyed pursuant to Section
2.10.
All Securities presented for registration of transfer, exchange,
redemption or payment shall (if so required by the Issuer or the Trustee) be
duly endorsed by, or be accompanied by a written instrument or instruments of
transfer in form satisfactory to the Issuer and the Trustee duly executed by,
the Holder or his attorney duly authorized in writing.
The Issuer may require payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in connection with any exchange or
registration of transfer of Securities. No service charge shall be made for any
such transaction.
The Issuer shall not be required to exchange or register a transfer of
(a) any Securities for a period of 15 days next preceding the first mailing of
notice of redemption of Securities to be redeemed or (b) any Securities
selected, called or being called for redemption, in whole or in part, except, in
the case of any Security to be redeemed in part, the portion thereof not so to
be redeemed.
Notwithstanding any other provision of this Section 2.8, unless and
until it is exchanged in whole or in part for Securities in definitive
registered form, a Global Security representing all or a portion of the
Securities may not be transferred except as a whole by the Depositary to a
nominee of such Depositary or by a nominee of such Depositary to such Depositary
or another nominee of such Depositary or by such Depositary or any such nominee
to a successor Depositary or a nominee of such successor Depositary.
If at any time the Depositary for any Securities represented by one or
more Global Securities notifies the Issuer that it is unwilling or unable to
continue as Depositary for such Securities or if at any time the Depositary for
such Securities shall no longer be eligible under the last paragraph of Section
17
<PAGE>
2.4, the Issuer shall appoint a successor Depositary eligible under the last
paragraph of Section 2.4 with respect to such Securities. If a successor
Depositary eligible under the last paragraph of Section 2.4 for such Securities
is not appointed by the Issuer within 90 days after the Issuer receives such
notice or becomes aware of such ineligibility, the Issuer's election pursuant to
Section 2.3 that such Securities be represented by one or more Global Securities
shall no longer be effective and the Issuer will execute, and the Trustee, upon
receipt of an Officer's Certificate for the authentication and delivery of
definitive Securities, will authenticate and deliver, Securities in definitive
registered form without coupons, in any authorized denominations, in an
aggregate principal amount equal to the principal amount of the Global Security
or Global Securities representing such Securities in exchange for such Global
Security or Global Securities.
The Issuer may at any time and in its sole discretion determine that
the Securities issued in the form of one or more Global Securities shall no
longer be represented by a Global Security or Securities. In such event the
Issuer will execute, and the Trustee, upon receipt of an Officer's Certificate
for the authentication and delivery of definitive Securities, will authenticate
and deliver, Securities in definitive registered form, in any authorized
denominations, in an aggregate principal amount equal to the principal amount of
the Global Security or Global Securities representing such Securities, in
exchange for such Global Security or Global Securities.
If specified by the Issuer pursuant to Section 2.3 with respect to
Securities represented by a Global Security, the Depositary for such Global
Security may surrender such Global Security in exchange in whole or in part for
Securities in definitive registered form on such terms as are acceptable to the
Issuer and such Depositary. Thereupon, the Issuer shall execute, and the
Trustee shall authenticate and deliver, without service charge,
(i) to the person specified by such Depositary a new Security or
Securities, of any authorized denominations as requested by such person, in
an aggregate principal amount equal to and in exchange for such person's
beneficial interest in the Global Security; and
(ii) to such Depositary a new Global Security in a denomination equal
to the difference, if any, between the principal amount of the surrendered
Global Security and the aggregate principal amount of Securities
authenticated and delivered pursuant to clause (i) above.
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Upon the exchange of a Global Security for Securities in definitive
registered form, in authorized denominations, such Global Security shall be
cancelled by the Trustee or, upon instruction from the Trustee, an agent of the
Issuer or the Trustee. Securities in definitive registered form issued in
exchange for a Global Security pursuant to this Section 2.8 shall be registered
in such names and in such authorized denominations as the Depositary for such
Global Security, pursuant to instructions from its direct or indirect
participants or otherwise, shall instruct the Trustee or an agent of the Issuer
or the Trustee. The Trustee or such agent shall deliver such Securities to or
as directed by the persons in whose names such Securities are so registered.
All Securities issued upon any transfer or exchange of Securities
shall be valid obligations of the Issuer, evidencing the same debt, and entitled
to the same benefits under this Indenture, as the Securities surrendered upon
such transfer or exchange.
Section 2.9 Mutilated, Defaced, Destroyed, Lost and Stolen
----------------------------------------------
Securities. In case any temporary or definitive Security shall become
- ----------
mutilated, defaced or be destroyed, lost or stolen and, in the absence of notice
to the Issuer or the Trustee that the Security has been purchased by a bona fide
purchaser, the Issuer in its discretion may execute, and upon an Issuer Order,
the Trustee shall authenticate and deliver a new Security of the same maturity
date, interest rate and original issue date, bearing a number or other
distinguishing symbol not contemporaneously outstanding, in exchange and
substitution for the mutilated or defaced Security, or in lieu of and in
substitution for the Security so destroyed, lost or stolen. In every case the
applicant for a substitute Security shall furnish to the Issuer and to the
Trustee and any agent of the Issuer or the Trustee such security or indemnity as
may be required by them to indemnify and defend and to save each of them
harmless and, in every case of destruction, loss or theft, evidence to their
satisfaction of the destruction, loss or theft of such Security and of the
ownership thereof and in the case of mutilation or defacement shall surrender
the Security to the Trustee or such agent.
Upon the issuance of any substitute Security, the Issuer may require
the payment of a sum sufficient to cover any tax or other governmental charge
that may be imposed in relation thereto and any other expenses (including the
fees and expenses of the Trustee or its agents) connected therewith. In case
any Security which has matured or is about to mature or has been called for
redemption in full shall become mutilated or defaced or be destroyed, lost or
stolen, the Issuer may instead of issuing a substitute Security, pay or
authorize the payment of
19
<PAGE>
the same (without surrender thereof except in the case of a mutilated or defaced
Security) if the applicant for such payment shall furnish to the Issuer and to
the Trustee and any agent of the Issuer or the Trustee such security or
indemnity as any of them may require to save each of them harmless, and, in
every case of destruction, loss or theft, the applicant shall also furnish to
the Issuer and the Trustee and any agent of the Issuer or the Trustee evidence
to their satisfaction of the destruction, loss or theft of such Security and of
the ownership thereof.
Every substitute Security issued pursuant to the provisions of this
Section by virtue of the fact that any Security is destroyed, lost or stolen
shall constitute an additional contractual obligation of the Issuer, whether or
not the destroyed, lost or stolen Security shall be at any time enforceable by
anyone and shall be entitled to all the benefits of (but shall be subject to all
the limitations of rights set forth in) this Indenture equally and
proportionately with any and all other Securities of duly authenticated and
delivered hereunder. All Securities shall be held and owned upon the express
condition that, to the extent permitted by law, the foregoing provisions are
exclusive with respect to the replacement or payment of mutilated, defaced or
destroyed, lost or stolen Securities and shall preclude any and all other rights
or remedies notwithstanding any law or statute existing or hereafter enacted to
the contrary with respect to the replacement or payment of negotiable
instruments or other securities without their surrender.
Section 2.10 Cancellation of Securities; Destruction Thereof. All
-----------------------------------------------
Securities surrendered for payment, redemption, registration of transfer or
exchange, or for credit against any payment in respect of a sinking or analogous
fund, if surrendered to the Issuer or any agent of the Issuer or the Trustee or
any agent of the Trustee, shall be delivered to the Trustee or its agent for
cancellation or, if surrendered to the Trustee, shall be cancelled by it; and no
Securities shall be issued in lieu thereof except as expressly permitted by any
of the provisions of this Indenture. All cancelled Securities held by the
Trustee or its agents shall be destroyed and certification of their destruction
delivered to the Issuer unless, by an Issuer Order, the Issuer shall direct that
cancelled Securities be returned to it. If the Issuer or its agent shall
acquire any of the Securities, such acquisition shall not operate as a
redemption or satisfaction of the indebtedness represented by such Securities
unless and until the same are delivered to the Trustee or its agent for
cancellation.
Section 2.11 Temporary Securities. Pending the preparation of
--------------------
definitive Securities, the Issuer may execute and upon an Issuer Order the
Trustee shall authenticate and deliver
20
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temporary Securities (printed, lithographed, typewritten or otherwise
reproduced, in each case in form satisfactory to the Trustee). Temporary
Securities shall be issuable as Securities of any authorized denomination, and
substantially in the form of the definitive Securities but with such omissions,
insertions and variations as may be appropriate for temporary Securities, all as
may be determined by the Issuer with the concurrence of the Trustee as evidenced
by the execution and authentication thereof. Temporary Securities may contain
such references to any provisions of this Indenture as may be appropriate. Any
such temporary Securities may be in global form, representing such of the
Outstanding Securities of such series as shall be specified therein. Every
temporary Security shall be executed by the Issuer and be authenticated by the
Trustee upon the same conditions and in substantially the same manner, and with
like effect, as the definitive Securities. Without unreasonable delay the
Issuer shall execute and shall furnish definitive Securities and thereupon
temporary Securities may be surrendered in exchange therefor without charge at
each office or agency to be maintained by the Issuer for that purpose pursuant
to Section 3.2, and the Trustee shall authenticate and deliver in exchange for
such temporary Securities an equal aggregate principal amount of definitive
Securities having authorized denominations. Until so exchanged, the temporary
Securities shall be entitled to the same benefits under this Indenture as
definitive Securities, unless otherwise established pursuant to Section 2.3.
Section 2.12 CUSIP Numbers. The Issuer in issuing the Securities may
-------------
use "CUSIP" numbers (if then generally in use) and, if so, the Trustee shall use
"CUSIP" numbers in notices of redemption as a convenience to Holders; provided
--------
that any such notice may state that no representation is made as to the
correctness of such numbers either as printed on the Securities or as contained
in any notice of a redemption and that reliance may be placed only on the other
identification numbers printed on the Securities. Any redemption of Securities
shall not be affected by any defect in or omission of "CUSIP" numbers.
ARTICLE THREE
COVENANTS OF THE ISSUER
-----------------------
Section 3.1 Payment of Principal and Interest. The Issuer covenants
---------------------------------
and agrees for the benefit of the Holders of Securities that it will duly and
punctually pay or cause to be paid the principal of, and interest on, each of
the Securities (together with any additional amounts, payable pursuant to the
terms of such Securities) at the place or places, at the respective times and in
the manner provided in such Securities
21
<PAGE>
and in this Indenture. The interest on Securities (together with any additional
amounts payable pursuant to the terms of such Securities) shall be payable only
to, or upon the written order of, the Holders thereof and at the option of the
Issuer may be paid by mailing checks for such interest payable to or upon the
written order of such Holders at their last addresses as they appear on the
register of the Issuer with respect to such Securities.
Section 3.2 Offices for Payments, etc. The Issuer will maintain in
-------------------------
the Borough of Manhattan, the City of New York, an office or agency where the
Securities may be presented for payment or where interest on such securities may
be paid, an office or agency where the Securities may be presented for exchange
as is provided in this Indenture and, if applicable, pursuant to Section 2.8 an
office or agency where the Securities may be presented for registration of
transfer as provided in this Indenture. The Issuer hereby initially appoints
the office of the Trustee care/of Manufacturers Hanover Trust Company, Bank
Window, 55 Water Street, 2nd Floor, New York, New York 10041 as its offices or
agencies for each of the foregoing purposes.
The Issuer will maintain in the Borough of Manhattan, the City of New
York, an office or agency where notices and demands to or upon the Issuer in
respect of the Securities or this Indenture may be served. The Issuer hereby
initially appoints the office of Wachovia International Banking Corporation, 152
West 57th Street, 37th Floor, New York, New York 10019 (c/o Wachovia Bank of
Georgia, N.A.) as its office or agency where notices and demands to or upon the
Issuer in respect of the Securities or this Indenture may be served.
The Issuer will give to the Trustee written notice of the location of
each such office or agency and of any change of location thereof. In case the
Issuer shall fail to maintain any office or agency required by this Section to
be located in the Borough of Manhattan, the City of New York, or shall fail to
give such notice of the location or of any change in the location of any of the
above offices or agencies, presentations and demands may be made and notices may
be served at the Corporate Trust Office of the Trustee.
The Issuer may from time to time designate one or more additional
offices or agencies where the Securities appertaining thereto may be presented
for payment, where interest on such Securities may be paid, where the Securities
may be presented for exchange as provided in this Indenture, where the
Securities may be presented for registration of transfer as provided in this
Indenture, and where notices and demands to or upon the Issuer in respect of the
Securities and this Indenture may be served, and the Issuer may from time to
time rescind any such designation, as
22
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the Issuer may deem desirable or expedient; provided, however, that no such
-------- -------
designation or rescission shall in any manner relieve the Issuer of its
obligation to maintain the offices or agencies provided for in the immediately
preceding paragraphs. The Issuer hereby initially appoints the office of the
Trustee set forth in Section 11.4 as such an additional office. The Issuer will
give to the Trustee prompt written notice of any such additional designation or
any such rescission thereof.
Section 3.3 Appointment to Fill a Vacancy in Office of Trustee. The
--------------------------------------------------
Issuer, whenever necessary to avoid or fill a vacancy in the office of Trustee,
will appoint, in the manner provided in Section 6.9, a Trustee, so that there
shall at all times be a Trustee with respect to the Securities hereunder.
Section 3.4 Paying Agents. Unless otherwise specified in a
-------------
resolution, the Trustee for any series of Securities shall also act as the
paying agent for such series of Securities. Whenever the Issuer shall appoint a
paying agent other than the Trustee with respect to any series of Securities, it
will cause such paying agent to execute and deliver to the Trustee an instrument
in which such agent shall agree with the Trustee, subject to the provisions of
this Section, that such paying agent,
(a) will hold all sums received by it as such agent for the payment
of the principal of or interest on such series of Securities (whether such
sums have been paid to it by the Issuer or by any other obligor on such
series of Securities) in trust for the benefit of the holders of such
series of Securities) or of the Trustee, until such sums shall be paid to
such Holders or otherwise disposed of as herein provided;
(b) will give the Trustee notice of any failure by the Issuer (or by
any other obligor on such series of Securities) to make any payment of the
principal of or interest on such series of Securities when the same shall
be due and payable; and
(c) at any time during the continuance of any such failure, upon the
written request of the Trustee, it will forthwith pay to the Trustee all
sums so held in trust by such paying agent.
The Issuer will, on or prior to each due date of the principal of or
interest on such series of Securities, deposit with the paying agent a sum
sufficient to pay such principal or interest so becoming due, and (unless such
paying agent is the Trustee) the Issuer will promptly notify the Trustee of its
action or any failure to take such action.
23
<PAGE>
If the Issuer shall act as its own paying agent with respect to such
series of Securities, it will, on or before each due date of the principal of or
interest on such series of Securities, set aside, segregate and hold in trust
for the benefit of the holders of such series of Securities a sum sufficient to
pay such principal or interest so becoming due. The Issuer will promptly notify
the Trustee of its action or any failure to take such action.
Anything in this Section to the contrary notwithstanding, the Issuer
may at any time, for the purpose of obtaining a satisfaction and discharge with
respect to such series of Securities hereunder, or for any other reason, pay or
cause to be paid, or by Issuer Order direct any paying agent to pay to the
Trustee all sums held in trust by the Issuer or any paying agent hereunder, as
required by this Section, such sums to be held by the Trustee upon the trusts
herein contained.
Anything in this Section to the contrary notwithstanding, the
agreement to hold sums in trust as provided in this Section is subject to the
provisions of Sections 10.3 and 10.4.
Section 3.5 Statements as to Compliance. The Issuer will deliver to
---------------------------
the Trustee annually, commencing July 1, 1993, a certificate, dated June 30 of
each such year, of its principal executive officer, principal financial officer
or principal accounting officer, stating whether or not to the best knowledge of
the signer thereof, after a review of the activities of the Issuer during such
year ending June 30 (or since the date of this Indenture for the certificate
dated July 1, 1993) and performance under this Indenture has been made under
such signer's supervision, the Issuer is in compliance (without regard to
periods of grace or notice requirements) with all conditions and covenants under
this Indenture, and if the Issuer shall not be in compliance, specifying such
non-compliance and the nature and status thereof as to which such signer may
have knowledge.
Section 3.6 Merger, Consolidation or Sale of Assets. The Issuer will
---------------------------------------
not merge or consolidate with or into, or sell, lease, convey or otherwise
dispose of, directly or indirectly, all or substantially all of its properties
or assets to another corporation, person or entity (whether or not affiliated
with the Company) in one transaction or a series of related transactions except
as permitted in Section 9.1.
Section 3.7 Limitation on Liens.
-------------------
The Issuer will not, and will not permit any Subsidiary to, directly
or indirectly, create, incur, assume or suffer to exist, any mortgage, pledge,
security interest or lien (any such
24
<PAGE>
mortgage, pledge, security interest or lien being hereinafter referred to as a
"lien" or "liens") of or upon any of their respective properties or assets,
whether real or personal, tangible or intangible, or otherwise, whether owned at
the date of this Indenture or thereafter acquired ("Property"); provided,
--------
however, that the foregoing shall not apply to any of the following:
- -------
(1) liens on any Property created or assumed contemporaneously with
(or within 120 days after) the acquisition of such Property to secure or
provide for the payment or refinancing of all or any substantial part of
the purchase price of such Property or the cost of improvements to such
Property; provided that (i) the principal amount of the Indebtedness
--------
secured by such liens does not exceed 100% of the costs of such Property
and/or improvements and (ii) such liens shall not apply to any Property of
the Issuer or any Subsidiary, other than the acquired Property and any
improvements with respect thereto;
(2) liens on any Property existing at the time of acquisition
thereof; provided, that such liens (i) shall not extend to any Property of
--------
the Issuer or any Subsidiary other than the Property so acquired and (ii)
are not incurred in connection with or in contemplation of the acquisition
of the Property acquired;
(3) liens on any Property to secure Indebtedness of a Subsidiary to
the Issuer or to another Subsidiary;
(4) liens for taxes, government assessments or government charges or
levies not yet due or which are being contested in good faith by
appropriate proceedings, to the extent that a reserve or other appropriate
provision, if any, is made in accordance with generally accepted accounting
principles;
(5) warehousemen's, mechanics', carriers', materialmen's, repairmen's
and other like liens incurred in the ordinary course of the Company's or
any Subsidiaries' businesses and liens securing reimbursement obligations
with respect to trade letters of credit, banker's acceptances and sight
drafts incurred in the ordinary course of the Company's or any of its
Subsidiaries' businesses which encumber documents and other property
relating to such trade letters of credit, banker's acceptances and sight
drafts;
(6) liens existing on the date of this Indenture;
(7) in addition to liens incurred in connection with any Indebtedness
permitted by any other provision of this
25
<PAGE>
Section 3.7, liens securing indebtedness in an aggregate principal amount
which does not (together with all then outstanding Indebtedness permitted
by subsection 3.8(iii)) in the aggregate at the time such lien is incurred,
exceed 10% of Consolidated Net Tangible Assets;
(8) liens on any Property in favor of the United States of America or
any State thereof or the Commonwealth of Puerto Rico, or any department,
agency or instrumentality or political subdivision of the United States of
America or any State thereof or the Commonwealth of Puerto Rico, to secure
partial, progress, advance or other payments, or other obligations pursuant
to any contract or statute or to secure any indebtedness or obligations
incurred for the purpose of financing all or any part of the cost of
acquiring, constructing or improving the Property subject to such liens
(including liens incurred in connection with pollution control, industrial
revenue, Title XI maritime financings or similar financings);
(9) liens on timberlands in connection with an arrangement under
which the Issuer and/or one or more Subsidiaries are obligated to cut or
pay for timber in order to provide the lienholder with a specified amount
of money, however reasonably determined; or
(10) any extension, renewal or replacement (or successive extensions,
renewals or replacements) in whole or in part, of any lien referred to in
the foregoing clauses (1) to (9) inclusive; provided, however, that the
-------- -------
principal amount of Indebtedness secured thereby shall not be in excess of
the outstanding principal amount of Indebtedness so secured at the time of
such extension, renewal or replacement, and that such extension, renewal or
replacement shall be limited to all or a part of the Property which secured
the lien so extended, renewed or replaced (plus improvements on such
Property).
Section 3.8 Limitation on Subsidiary Indebtedness. No Subsidiary
-------------------------------------
may, directly or indirectly, create, incur, assume or suffer to exist any
Indebtedness unless (i) such Indebtedness is secured by liens permitted by the
preceding Section 3.7, (ii) such Indebtedness is payable to the Issuer or
another Subsidiary or (iii) the amount of such Indebtedness (together with all
other then outstanding Indebtedness incurred by such Subsidiary and all other
Subsidiaries pursuant to this clause (iii) and together with all then
outstanding Indebtedness encumbered by liens permitted by subsection 3.7(7)) in
the aggregate does not exceed 10% of Consolidated Net Tangible Assets.
26
<PAGE>
Section 3.9 Limitation on Sale and Lease-Back. The Issuer will not,
---------------------------------
nor will it permit any Subsidiary to, enter into directly or indirectly any
arrangement with any person (other than the Issuer or any Subsidiary) providing
for the leasing by the Issuer or a Subsidiary of any Property (except for
temporary leases for a term, including any renewal thereof, of not more than
three years), which Property has been or is to be sold or transferred by the
Issuer or such Subsidiary to such person (herein referred to as a "Sale and
Lease-Back Transaction"), unless either (1) the Issuer or such Subsidiary would
be entitled, pursuant to the provisions of Sections 3.7 and 3.8, to incur
Indebtedness secured by a lien on the Property to be leased equal to or
exceeding the amount of the net proceeds received by the Issuer or such
Subsidiary with respect to such Sale and Lease-Back Transaction or (2) within 90
days after the effective date of any such Sale and Lease-Back Transaction, the
Issuer or such Subsidiary applies an amount (net of applicable taxes) equal to
the greater of (x) the net proceeds of such sale or transfer and (y) the fair
value at the time of the transaction (as determined by the Board of Directors)
of the Property so leased to either (i) the retirement (other than any mandatory
retirement) of any funded Indebtedness of the Issuer or any Subsidiary which by
its terms is senior to, or pari passu with, the Securities or (ii) in lieu of
---- -----
applying all or any part of such proceeds to such retirement, the Issuer may
deliver Securities to the Trustee for cancellation and an amount equal to the
principal amount of the Securities so delivered shall be credited to the
obligation of the Issuer to apply such proceeds as aforesaid.
Section 3.10 Corporate Existence. Subject to Article Nine, the
-------------------
Issuer will do or cause to be done all things necessary to preserve and keep in
full force and effect its corporate existence, rights (charter and statutory)
and franchises; provided, however, that the Issuer shall not be required to
-------- -------
preserve any right or franchise if the Board of Directors shall determine that
the preservation thereof is no longer desirable in the conduct of the business
of the Issuer and that the loss thereof is not disadvantageous in any material
respect to the Holders.
ARTICLE FOUR
SECURITYHOLDERS LISTS AND REPORTS BY
THE ISSUER AND THE TRUSTEE
------------------------------------
Section 4.1 Issuer to Furnish Trustee Information as to Names and
-----------------------------------------------------
Addresses of Securityholders. If and so long as the Trustee shall not be the
- ----------------------------
Security registrar for any particular
27
<PAGE>
series of Securities, the Issuer and any other obligor on such series of
Securities will furnish or cause to be furnished to the Trustee a list in such
form as the Trustee may reasonably require of the names and addresses of the
Holders of such series of Securities pursuant to Section 312 of the Trust
Indenture Act of 1939 (a) not more than 15 days after each record date for the
payment of interest on such Securities, as hereinabove specified, as of such
record date and semi-annually on dates to be determined pursuant to Section 2.3
for non-interest bearing Securities in each year, but in no event less
frequently than semi-annually, and (b) at such other times as the Trustee may
request in writing, within 30 days after receipt by the Issuer of any such
request as of a date not more than 15 days prior to the time such information is
furnished. The Trustee shall preserve, in as current a form as is reasonably
practicable, all such information so furnished to it or received by it in the
capacity of paying agent.
Section 4.2 Reports by the Issuer. The Issuer covenants to file with
---------------------
the Trustee, within 15 days after the Issuer is required to file the same with
the Commission, copies of the annual reports and of the information, documents
and other reports that the Issuer may be required to file with the Commission
pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934
or pursuant to Section 314 of the Trust Indenture Act of 1939. The Issuer shall
also comply with the other provisions of Section 314(a) of the Trust Indenture
Act of 1939.
Section 4.3 Reports by the Trustee. Any Trustee's report required
----------------------
under Section 313 of the Trust Indenture Act of 1939 shall be transmitted, or
filed as the case may be, on or before September 1 in each year beginning
September 1, 1993, as provided in Sections 313(c) and 313(d) of the Trust
Indenture Act of 1939, so long as any Securities are Outstanding hereunder, and
shall be dated as of a date convenient to the Trustee no more than 60 days prior
thereto.
Section 4.4 Communication by Holders with Other Holders.
-------------------------------------------
Securityholders of each series may communicate pursuant to Section 312(b) of the
Trust Indenture Act of 1939 with other Securityholders of such series with
respect to their rights under this Indenture or the Securities of such series.
The Issuer, the Trustee and other persons shall have the protection of Section
312(c) of the Trust Indenture Act of 1939.
28
<PAGE>
ARTICLE FIVE
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
ON EVENT OF DEFAULT
-------------------------------------------
Section 5.1 Event of Default Defined; Acceleration of Maturity;
----------------------------------------------------
Waiver of Default. "Event of Default" with respect to any particular series of
- -----------------
Securities (unless otherwise specified in respect to any particular series of
Securities pursuant to Section 2.3) wherever used herein, means each one of the
following events which shall have occurred and be continuing (whatever the
reason for such Event of Default and whether it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(a) default in the payment of any installment of interest upon
any Security of that series as and when the same shall become due and
payable, and continuance of such default for a period of 30 days;
(b) default in the payment of all or any part of the principal
on any Security of that series as and when the same shall become due and
payable either at maturity, upon any redemption, by declaration or
otherwise or default in the deposit of any sinking fund payment when and as
due by the terms of any Security of such series;
(c) failure on the part of the Issuer duly to observe or perform
any other of the covenants or agreements on the part of the Issuer in such
Securities (other than a covenant or warranty in respect of such
Securities, a default in the performance or breach of which is elsewhere in
this Section specifically dealt with) or in this Indenture continued for a
period of 60 days after the date on which written notice specifying such
failure, stating that such notice is a "Notice of Default" hereunder and
demanding that the Issuer remedy the same, shall have been given by
registered or certified mail, return receipt requested, to the Issuer by
the Trustee for the Securities of such series, or to the Issuer and the
Trustee by the Holders of at least 25% in aggregate principal amount of the
Outstanding Securities of the series affected thereby;
(d) (i) an event of default or any other event shall occur or
condition shall exist (if the effect of such event of default or other
event or condition is to accelerate, or to permit the acceleration of, the
maturity of Indebtedness of the Issuer or its Subsidiaries) under any
29
<PAGE>
agreement or instrument relating to such Indebtedness in a principal
amount of at least $10,000,000; or any such Indebtedness shall otherwise be
declared to be due and payable, or required to be prepaid (other than by a
regularly scheduled required prepayment), prior to the stated maturity
thereof; or (ii) failure on the part of the Issuer to make any payment of
principal or interest or any payment under a guarantee in respect of any
Indebtedness in each case in an amount of at least $10,000,000 on the date
such payment is due (or within any grace period specified in the agreement
or other instrument governing such Indebtedness);
(e) any final non-appealable judgment or order for the payment
of money in excess of $10,000,000 shall be rendered against the Issuer and
either (i) enforcement proceedings shall have been commenced by any
creditor upon such judgment or order or (ii) there shall be any period of
30 consecutive days during which a stay of enforcement of such judgment or
order, by reason of a pending appeal or otherwise, shall not be in effect;
(f) a court having jurisdiction in the premises shall enter a
decree or order for relief in respect of the Issuer in an involuntary case
under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or appointing a receiver, liquidator, assignee,
custodian, trustee, sequestrator (or similar official) of the Issuer or for
any substantial part of its property or ordering the winding up or
liquidation of its affairs and such decree or order shall remain unstayed
and in effect for a period of 90 consecutive days;
(g) the Issuer shall commence a voluntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, or consent to the entry of an order for relief in an involuntary
case under any such law, or consent to the appointment or taking possession
by a receiver, liquidator, assignee, custodian, trustee, sequestrator (or
similar official) of the Issuer or for any substantial part of its
property, or make any general assignment for the benefit of creditors;
(h) if the Issuer ceases, or issues a press release or files a
Current Report on Form 8-K (or successor form) pursuant to the Securities
Exchange Act of 1934, as amended, stating that it intends to cease, to
carry on the papermaking business, except in accordance with Section 9.1
hereof, or all or a substantial part of the Company's assets are seized or
appropriated; or
30
<PAGE>
(i) any other event of default established by or pursuant to a
Board Resolution, an Officer's Certificate or in the supplemental indenture
under which such series of Securities are issued or in the form of such
Security.
Section 5.2 Acceleration of Maturity; Recission and Annulment. If an
-------------------------------------------------
Event of Default described in clause (f), (g) or (h) occurs and is continuing,
then, and in each and every such case, the entire principal (or, if any
Securities are Original Issue Discount Securities, such portion of the principal
as may be specified in the terms thereof) of all the Securities then
Outstanding, and the interest accrued thereon, if any, shall become immediately
due and payable.
If an Event of Default with respect to a particular series of
Securities described in clauses (a), (b), (c), (d), (e) or (i) occurs and is
continuing, then, and in each and every such case, either the Trustee or the
Holders of not less than 25% in aggregate principal amount of the Outstanding
Securities of such series by notice in writing to the Issuer (and to the Trustee
if given by Securityholders), may declare the entire principal (or, if such
Securities are Original Issue Discount Securities, such portion of the principal
amount as may be specified in the terms of such Securities) of all Securities of
such series and the interest accrued thereon, if any, to be due and payable
immediately, and upon any such declaration, the same shall become immediately
due and payable.
The foregoing provisions, however, are subject to the condition that
if, at any time after the principal (or, if the Securities are Original Issue
Discount Securities, such portion of the principal as may be specified in the
terms of that series) of any particular series of Securities shall have been so
declared due and payable, and before any judgment or decree for the payment of
the moneys due shall have been obtained or entered as hereinafter provided, the
Issuer shall pay or shall deposit with the Trustee a sum sufficient to pay all
matured installments of interest upon all the Securities of such series and the
principal of any and all Securities of such series which shall have become due
otherwise than by acceleration (with interest upon such principal and, to the
extent that payment of such interest is enforceable under applicable law, on
overdue installments of interest, at the same rate as the rate of interest or
Yield to Maturity (in the case of Original Issue Discount Securities) specified
in the terms of such series to the date of such payment or deposit) and such
amount as shall be sufficient to cover reasonable compensation to the Trustee
and each predecessor Trustee, their respective agents, attorneys and counsel,
and all other reasonable expenses and liabilities incurred, and all reasonable
advances made, by the Trustee and each predecessor Trustee except as a result of
negligence or bad
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faith, and if any and all Events of Default under the Indenture, other than the
non-payment of the principal of Securities of such series which shall have
become due by acceleration, shall have been cured, waived or otherwise remedied
as provided herein, then and in every such case the Holders of a majority in
aggregate principal amount of such series of Securities then Outstanding, by
written notice to the Issuer and to the Trustee, may rescind and annul such
declaration and its consequences but no such rescission and annulment shall
extend to or shall affect any subsequent default or shall impair any right
consequent thereon.
For all purposes under this Indenture, if a portion of the principal
of any Original Issue Discount Securities of a particular series shall have been
accelerated and declared due and payable pursuant to the provisions hereof,
then, from and after such declaration, unless such declaration has been
rescinded and annulled, the principal amount of any such Original Issue Discount
Securities shall be deemed, for all purposes hereunder, to be such portion of
the principal thereof as shall be due and payable as a result of such
acceleration, and payment of such portion of the principal thereof as shall be
due and payable as a result of such acceleration, together with interest, if
any, thereon and all other amounts owing thereunder, shall constitute payment in
full of such Original Issue Discount Securities.
Section 5.3 Collection of Indebtedness by Trustee; Trustee May Prove
--------------------------------------------------------
Debt. (a) The Issuer covenants that (i) in case default shall be made in the
- ----
payment of any installment of interest on any series of Securities when such
interest shall have become due and payable and such default shall have continued
for a period of 30 days or (ii) in case default shall be made in the payment of
all or any part of the principal of any series of Securities when the same shall
have become due and payable, whether upon maturity of such series of Securities
or upon any redemption or by acceleration or otherwise, then upon demand of the
Trustee, the Issuer will pay to the Trustee for the benefit of the Holders of
such series of Securities the whole amount that then shall have become due and
payable on all such Securities for principal or interest as the case may be
(with interest to the date of such payment upon the overdue principal and, to
the extent that payment of such interest is enforceable under applicable law, on
overdue installments of interest at the same rate as the rate of interest (or
Yield to Maturity in the case of Original Issue Discount Securities) specified
in such series of Securities); and in addition thereto, such further amount as
shall be sufficient to cover the reasonable costs and expenses of collection,
including reasonable compensation to the Trustee and each predecessor Trustee,
their respective agents, attorneys and counsel, and any reasonable expenses and
liabilities incurred, and all reasonable disbursements and advances made, by the
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Trustee and each predecessor Trustee except as a result of its negligence or bad
faith.
Until such demand is made by the Trustee, the Issuer may pay the
principal of and interest on such Securities to the registered Holders, whether
or not such Securities are overdue.
In case the Issuer shall fail forthwith to pay such amounts upon such
demand, the Trustee, in its own name and as trustee of an express trust, shall
be entitled and empowered to institute any action or proceeding at law or in
equity for the collection of the sums so due and unpaid, and may prosecute any
such action or proceeding to judgment or final decree, and may enforce any such
judgment or final decree against the Issuer or other obligor upon such series of
Securities and collect in the manner provided by law out of the property of the
Issuer or other obligor upon such series of Securities, wherever situated, the
moneys adjudged or decreed to be payable.
(b) If an Event of Default specified in Section 5.1(a) or (b) occurs
and is continuing with respect to a series of Securities and the Issuer fails to
pay such amounts forthwith upon demand, the Trustee may recover judgment in its
own name and as trustee of an express trust against the Issuer for the
collection of such sums due and unpaid.
Section 5.4 Trustee May File Proofs of Claim. In case there shall
--------------------------------
be pending proceedings relative to the Issuer or any other obligor upon any
Securities under Title 11 of the United States Code or any other applicable
Federal or state bankruptcy, insolvency or other similar law or in case a
receiver, assignee or trustee in bankruptcy or reorganization, liquidator,
sequestrator or similar official shall have been appointed for, or taken
possession of, the Issuer or its property or such other obligor, or in case of
any other comparable judicial proceedings relative to the Issuer or other
obligor upon such Securities, or to the creditors or property of the Issuer or
such other obligor, the Trustee (irrespective of whether the principal of any
such Securities shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Trustee shall have made
any demand pursuant to the provisions of this Section) shall be entitled and
empowered, by intervention in such proceedings or otherwise:
(a) to file and prove a claim or claims for the whole amount of
principal and interest (or, if such Securities are Original Issue Discount
Securities, such portion of the principal amount as may be specified in the
terms of such Securities) owing and unpaid in respect of such Securities,
and to file such other papers or documents as may be necessary or advisable
in order to have the claims
33
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of the Trustee (including any claim for reasonable compensation to the
Trustee and each predecessor Trustee, and their respective agents,
attorneys and counsel, and for reimbursement of all expenses and
liabilities incurred, and all disbursements and advances made, by the
Trustee and each predecessor Trustee, except as a result of negligence or
bad faith) and of the Holders of such Securities allowed in any judicial
proceedings relative to the Issuer or other obligor upon such Securities,
or to the creditors or property of the Issuer or such other obligor;
(b) unless prohibited by applicable law and regulations, to vote
on behalf of the Holders of such Securities in any election of a trustee or
a standby trustee in arrangement, reorganization, liquidation or other
bankruptcy or insolvency proceedings or person performing similar functions
in comparable proceedings; and
(c) to collect and receive any moneys or other property payable
or deliverable on any such claims, and to distribute all amounts received
with respect to the claims of the Securityholders of such series and of the
Trustee on their behalf;
and any trustee, receiver, liquidator, custodian or other similar official is
hereby authorized by each of the Securityholders of such series to make payments
to the Trustee, and, in the event that the Trustee shall consent to the making
of payments directly to the Securityholders of such series, to pay to the
Trustee such amounts as shall be sufficient to cover reasonable compensation to
the Trustee, each predecessor Trustee and their respective agents, attorneys and
counsel, and all other expenses and liabilities incurred, and all advances made,
by the Trustee and each predecessor Trustee and all other amounts due the
Trustee under Section 6.6 in each case except as a result of negligence or bad
faith.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or vote for or accept or adopt on behalf of any
Securityholder of such series any plan of reorganization, arrangement,
adjustment or composition affecting the Securities of such series or the rights
of any Holder thereof, or to authorize the Trustee to vote in respect of the
claim of any Securityholder in any such proceeding except, as aforesaid, to vote
for the election of a trustee in bankruptcy or similar person.
Section 5.5 Trustee May Enforce Claims without Possession of
------------------------------------------------
Securities. All rights of action and of asserting claims under this Indenture,
- ----------
or under any of the Securities may be enforced by the Trustee without the
possession of any of the
34
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Securities or the production thereof in any trial or other proceedings relative
thereto, and any such action or proceedings instituted by the Trustee shall be
brought in its own name as trustee of an express trust, and any recovery of
judgment, subject to the payment of the expenses, disbursements, compensation
and advances of the Trustee, each predecessor Trustee and their respective
agents and attorneys, shall be for the ratable benefit of the Holders of the
Securities in respect of which such action was taken. In any proceedings
brought by the Trustee (and also any proceedings involving the interpretation of
any provision of this Indenture to which the Trustee shall be a party) the
Trustee shall be held to represent all the Holders of the Securities in respect
to which such action was taken, and it shall not be necessary to make any
Holders of such Securities parties to any such proceedings.
Section 5.6 Application of Proceeds. Any moneys collected by the
-----------------------
Trustee pursuant to this Article in respect of any particular series of
Securities shall be applied in the following order at the date or dates fixed by
the Trustee and, in case of the distribution of such moneys on account of
principal or interest, upon presentation of the several Securities in respect of
which monies have been collected and stamping (or otherwise noting) thereon the
payment, or issuing Securities in reduced amounts in exchange for the presented
Securities if only partially paid, or upon surrender thereof if fully paid:
FIRST: To the payment of costs and expenses with respect to such
series in respect of which monies have been collected, including payment of
all amounts due the Trustee and each predecessor Trustee under Section 6.6,
and all advances made by the Trustee and each predecessor Trustee and their
respective agents and attorneys except as a result of negligence or bad
faith;
SECOND: In case the principal of the Securities in respect of which
moneys have been collected shall not have become and be then due and
payable, to the payment of interest on the Securities in default in the
order of the maturity of the installments of such interest, with interest
(to the extent that such interest has been collected by the Trustee) upon
the overdue installments of interest at the same rate as the rate of
interest or Yield to Maturity (in the case of Original Issue Discount
Securities) specified in such Securities, such payments to be made ratably
to the persons entitled thereto, without discrimination or preference;
THIRD: In case the principal of the Securities in respect of which
moneys have been collected shall have become and shall be then due and
payable, to the payment of
35
<PAGE>
the whole amount then owing and unpaid upon all the Securities for
principal and interest, with interest upon the overdue principal, and (to
the extent that such interest has been collected by the Trustee) upon
overdue installments of interest at the same rate as the rate of interest
or Yield to Maturity (in the case of Original Issue Discount Securities)
specified in the Securities; and in case such moneys shall be insufficient
to pay in full the whole amount so due and unpaid upon the Securities, then
to the payment of such principal and interest or Yield to Maturity, without
preference or priority of principal over interest or Yield to Maturity, or
of interest or Yield to Maturity over principal, or of any installment of
interest over any other installment of interest, or of any Security over
any other Security, ratably to the aggregate of such principal and accrued
and unpaid interest or Yield to Maturity; and
FOURTH: To the payment of the remainder, if any, to the Issuer or any
other person lawfully entitled thereto.
Section 5.7 Suits for Enforcement. In case an Event of Default has
---------------------
occurred, has not been waived and is continuing, the Trustee may in its
discretion proceed to protect and enforce the rights vested in it by this
Indenture by such appropriate judicial proceedings as the Trustee shall deem
most effectual to protect and enforce any of such rights, either at law or in
equity or in bankruptcy or otherwise, whether for the specific enforcement of
any covenant or agreement contained in this Indenture or in aid of the exercise
of any power granted in this Indenture or to enforce any other legal or
equitable right vested in the Trustee by this Indenture or by law.
Section 5.8 Restoration of Rights on Abandonment of Proceedings. In
---------------------------------------------------
case the Trustee or any Holder shall have proceeded to enforce any right under
this Indenture and such proceedings shall have been discontinued or abandoned
for any reason, or shall have been determined adversely to the Trustee or to
such Holder, then and in every such case the Issuer, the Trustee and the
Securityholders shall be restored respectively to their former positions and
rights hereunder, and all rights, remedies and powers of the Issuer, the Trustee
and the Securityholders shall continue as though no such proceedings had been
taken.
Section 5.9 Limitations on Suits by Securityholders. No Holder of
---------------------------------------
any Security of any particular series shall have any right by virtue or by
availing of any provision of this Indenture to institute any action or
proceeding at law or in equity or in bankruptcy or otherwise upon or under or
with respect to this Indenture, or for the appointment of a trustee, receiver,
liquidator, custodian or other similar official or for any other
36
<PAGE>
remedy hereunder, unless an Event of Default with respect to that series shall
have occurred and be continuing and such Holder previously shall have given to
the Trustee written notice of default and of the continuance thereof, as
hereinbefore provided, and unless also the Holders of not less than 25% in
aggregate principal amount of the Securities of such series then Outstanding
shall have made written request upon the Trustee to institute such action or
proceedings in its own name as Trustee hereunder and shall have offered to the
Trustee such reasonable indemnity as it may require against the costs, expenses
and liabilities to be incurred therein or thereby and the Trustee for 60 days
after its receipt of such notice, request and offer of indemnity shall have
failed to institute any such action or proceeding and no direction inconsistent
with such written request shall have been given to the Trustee pursuant to
Section 5.13; it being understood and intended, and being expressly covenanted
by the Holder of every Security with every other Holder and the Trustee, that no
one or more Holders of Securities shall have any right in any manner whatever by
virtue or by availing of any provision of this Indenture to affect, disturb or
prejudice the rights of any other such Holder of Securities, or to obtain or
seek to obtain priority over or preference to any other such Holder or to
enforce any right under this Indenture, except in the manner herein provided and
for the equal, ratable and common benefit of all Holders of Securities of a
particular series. For the protection and enforcement of the provisions of this
Section, each and every Securityholder and the Trustee shall be entitled to such
relief as can be given at law or in equity.
Section 5.10 Unconditional Right of Securityholders to Institute
---------------------------------------------------
Certain Suits. Notwithstanding any other provision in this Indenture and any
- -------------
provision of any Security, the right of any Holder of any Security to receive
payment of the principal of and interest on such Security on or after the
respective due dates expressed in such Security, or to institute suit for the
enforcement of any such payment on or after such respective dates, shall not be
impaired or affected without the consent of such Holder.
Section 5.11 Powers and Remedies Cumulative; Delay or Omission Not
-----------------------------------------------------
Waiver of Default. Except as provided in Section 5.9, no right or remedy herein
- -----------------
conferred upon or reserved to the Trustee or to the Holders of Securities is
intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at law
or in equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
37
<PAGE>
Section 5.12 Delay or Omission Not Waiver. No delay or omission of
----------------------------
the Trustee or of any Holder of Securities to exercise any right or power
accruing upon any Event of Default occurring and continuing as aforesaid shall
impair any such right or power or shall be construed to be a waiver of any such
Event of Default or an acquiescence therein; and, subject to Section 5.9, every
right, power and remedy given by this Indenture or by law to the Trustee or to
the Holders of Securities may be exercised from time to time, and as often as
shall be deemed expedient, by the Trustee or by the Holders of Securities.
Section 5.13 Control by Holders of Securities. The Holders of a
--------------------------------
majority in aggregate principal amount of the Securities of any particular
series at the time Outstanding shall have the right to direct the time, method
and place of conducting any proceeding for any remedy available to the Trustee,
or exercising any trust or power conferred on the Trustee with respect to the
Securities of such series by this Indenture; provided that such direction shall
--------
not be otherwise than in accordance with law and the provisions of this
Indenture and, provided, further, that (subject to the provisions of Section
-------- -------
6.1) the Trustee shall have the right to decline to follow any such direction if
the Trustee, being advised by counsel, shall determine that the action or
proceeding so directed may not lawfully be taken or if the Trustee in good faith
by its board of directors, the executive committee, or a trust committee of
directors or Responsible Officer of the Trustee shall determine that the action
or proceedings so directed would expose the Trustee to any liability or if the
Trustee in good faith shall so determine that the actions or forebearances
specified in or pursuant to such direction would be unduly prejudicial to the
interests of Holders of the Securities not joining in the giving of said
direction, it being understood that (subject to Section 6.1) the Trustee shall
have no duty to ascertain whether or not such actions or forebearances are
unduly prejudicial to such Holders.
Nothing in this Indenture shall impair the right of the Trustee in its
discretion to take any action deemed proper by the Trustee and which is not
inconsistent with such direction or directions by Securityholders.
Section 5.14 Waiver of Past Defaults. Prior to the acceleration of
-----------------------
the maturity of any Securities of any particular series as provided in Section
5.1, the Holders of a majority in aggregate principal amount of the Securities
of such series at the time Outstanding with respect to which an Event of Default
shall have occurred and be continuing may on behalf of the Holders of all such
Securities of such series, upon written notice to the Trustee, waive any past
default or Event of Default
38
<PAGE>
described in Section 5.1 and its consequences, except a default in respect of a
covenant or provision hereof which cannot be modified or amended without the
consent of the Holder of each Security affected. In the case of any such
waiver, the Issuer, the Trustee and Holders of all such Securities of such
series shall be restored to their former positions and rights hereunder,
respectively; but no such waiver shall extend to any subsequent or other default
or Event of Default or impair any right consequent thereon.
Upon any such waiver, such default shall cease to exist and be deemed
to have been cured and not to have occurred, and any Event of Default arising
therefrom shall be deemed to have been cured, and not to have occurred for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or Event of Default or impair any right consequent thereon.
Section 5.15 Trustee to Give Notice of Default, but may Withhold in
------------------------------------------------------
Certain Circumstances. The Trustee shall, within 90 days after the occurrence
- ---------------------
of any default with respect to the Securities of any particular series, give
notice of such default known to the Trustee to all Holders of Securities of such
series in the manner and to the extent provided in Sections 3.4 and 11.4, unless
in each case such defaults shall have been cured before the mailing or
publication of such notice (the term "defaults" for the purpose of this Section
being hereby defined to mean any event or condition which is, or with notice or
lapse of time or both would become, an Event of Default); provided that, except
--------
in the case of default in the payment of the principal of or interest on any of
the Securities, or in the payment of any sinking fund installment, the Trustee
shall be protected in withholding such notice if and so long as the board of
directors, the executive committee, or a trust committee of directors or
trustees and/or Responsible Officers of the Trustee in good faith determines
that the withholding of such notice is in the interests of the Securityholders
of such series.
Section 5.16 Right of Court to Require Filing of Undertaking to Pay
------------------------------------------------------
Costs. The parties to this Indenture agree, and each Holder of any Security by
- -----
his acceptance thereof shall be deemed to have agreed, that any court may in its
discretion require, in any suit for the enforcement of any right or remedy under
this Indenture or in any suit against the Trustee for any action taken or
omitted by it as Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section shall not apply to any suit
39
<PAGE>
instituted by the Trustee, to any suit instituted by any Securityholder, or
group of Securityholders, holding in the aggregate more than 10% in aggregate
principal amount of the Securities of a particular series Outstanding or to any
suit instituted by any Securityholder for the enforcement of the payment of the
principal of or interest on any Security on or after the due date expressed in
such Security or any date fixed for redemption.
ARTICLE SIX
CONCERNING THE TRUSTEE
----------------------
Section 6.1 Duties and Responsibilities of the Trustee; During
--------------------------------------------------
Default; Prior to Default. The Trustee, prior to the occurrence of an Event of
- -------------------------
Default with respect to the Securities of any particular series and after the
curing or waving of all Events of Default which may have occurred, undertakes to
perform such duties and only such duties as are specifically set forth in this
Indenture. In case an Event of Default with respect to the Securities of any
particular series has occurred (which has not been cured or waived) the Trustee
shall exercise with respect to the Securities of such series such of the rights
and powers vested in it by this Indenture, and use the same degree of care and
skill in their exercise, as a prudent man would exercise or use under the
circumstances in the conduct of his own affairs.
No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own wilful misconduct, except that
(a) prior to the occurrence of an Event of Default with respect to
the Securities of any particular series and after the curing or waiving of
all such Events of Default which may have occurred:
(i) the duties and obligations of the Trustee with respect to
the Securities of such series shall be determined solely by the
express provisions of this Indenture, and the Trustee shall not be
liable except for the performance of such duties and obligations as
are specifically set forth in this Indenture, and no implied covenants
or obligations shall be read into this Indenture against the Trustee;
and
40
<PAGE>
(ii) in the absence of bad faith on the part of the Trustee, the
Trustee may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon any
statements, certificates or opinions furnished to the Trustee and
conforming to the requirements of this Indenture; but in the case of
any such statements, certificates or opinions which by any provision
hereof are specifically required to be furnished to the Trustee, the
Trustee shall be under a duty to examine the same to determine whether
or not they conform to the requirements of this Indenture;
(b) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer or Responsible Officers of the
Trustee, unless it shall be proved that the Trustee was negligent in
ascertaining the pertinent facts; and
(c) the Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with the
direction of the Holders pursuant to Section 5.9 relating to the time, method
and place of conducting any proceeding for any remedy available to the Trustee,
or exercising any trust or power conferred upon the Trustee, under this
Indenture.
None of the provisions contained in this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur personal financial
liability in the performance of any of its duties or in the exercise of any of
its rights or powers.
The provisions of this Section 6.1 are in furtherance of and subject
to Section 315 of the Trust Indenture Act of 1939.
Section 6.2 Certain Rights of the Trustee. In furtherance of and
-----------------------------
subject to the Trust Indenture Act of 1939, and subject to Section 6.1:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, Officer's Certificate or any
other certificate, statement, instrument, opinion, report, notice, request,
consent, order, bond, debenture, note, security or other paper or document
believed by it to be genuine and to have been signed or presented by the
proper party or parties and the Trustee need not investigate any fact or
matter stated in any such document;
41
<PAGE>
(b) any request, direction, order or demand of the Issuer
mentioned herein shall be sufficiently evidenced by an Officer's
Certificate (unless other evidence in respect thereof be herein
specifically prescribed); and any resolution of the Board of Directors may
be evidenced to the Trustee by a copy thereof certified by the secretary or
an assistant secretary of the Issuer;
(c) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless
other evidence be herein specifically prescribed) may, in the absence of
bad faith on its part, rely upon an Officer's Certificate;
(d) the Trustee may consult with counsel and any written advice
or any Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted to be taken
by it hereunder in good faith and in reliance thereon in accordance with
such advice or Opinion of Counsel;
(e) the Trustee shall be under no obligation to exercise any of
the trusts or powers vested in it by this Indenture at the request, order
or direction of any of the Securityholders pursuant to the provisions of
this Indenture, unless such Securityholders shall have offered to the
Trustee security and indemnity reasonably satisfactory to the Trustee
against any costs, expenses and liabilities which might be incurred therein
or thereby;
(f) the Trustee shall not be liable for any action taken or
omitted by it in good faith and believed by it to be authorized or within
the discretion, rights or powers conferred upon it by this Indenture;
(g) prior to the occurrence of an Event of Default hereunder and
after the curing or waiving of all Events of Default, the Trustee shall not
be bound to make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report, notice,
request, consent, order, approval, appraisal, bond, debenture, note,
security or other paper or document unless requested in writing to do so by
the Holders of not less than a majority in aggregate principal amount of
the Securities of a series then Outstanding; provided that, if the payment
--------
within a reasonable time to the Trustee of the costs, expenses, or
liabilities (including, without limitation reasonable fees and expenses of
counsel) which are likely to be incurred by it in the making of such
42
<PAGE>
investigation is, in the opinion of the Trustee, not reasonably assured to
the Trustee by the security and indemnity afforded to it by the terms of
this Indenture, the Trustee may require indemnity and security reasonably
satisfactory to it against such costs, expenses or liabilities as a
condition to proceeding; all such costs and expenses of every such
investigation shall be paid by the Issuer or, if paid by the Trustee or any
predecessor Trustee, shall be repaid by the Issuer upon demand; and
(h) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys not regularly in its employ and the Trustee shall not
be responsible for any misconduct or negligence on the part of any such
agent or attorney appointed with due care by it hereunder.
Section 6.3 Trustee Not Responsible for Recitals, Disposition of
----------------------------------------------------
Securities or Application of Proceeds Thereof. The recitals contained herein
- ---------------------------------------------
and in the Securities, except the Trustee's certificates of authentication,
shall be taken as the statements of the Issuer, and the Trustee assumes no
responsibility for the correctness of the same. The Trustee makes no
representation as to the validity or sufficiency of this Indenture or of the
Securities. The Trustee shall not be accountable for the use or application by
the Issuer of any of the Securities or of the proceeds thereof.
Section 6.4 Trustee and Agents May Hold Securities; Collections, etc.
---------------------------------------------------------
The Trustee or any agent of the Issuer or the Trustee, in its individual or any
other capacity, may become the owner or pledgee of Securities with the same
rights it would have if it were not the Trustee or such agent and may otherwise
deal with the Issuer and receive, collect, hold and retain collections from the
Issuer with the same rights it would have if it were not the Trustee or such
agent; provided, however, that the Trustee must comply with Section 6.13.
-------- -------
Section 6.5 Moneys Held by Trustee. Subject to the provisions of
----------------------
Section 10.4 hereof, all moneys received by the Trustee shall, until used or
applied as herein provided, be held in trust for the purposes for which they
were received, but need not be segregated from other funds except to the extent
required by mandatory provisions of law. Neither the Trustee nor any agent of
the Issuer or the Trustee shall be under any liability for interest on any
moneys received by it hereunder.
Section 6.6 Compensation and Indemnification of Trustee and Its Prior
---------------------------------------------------------
Claim. The Issuer covenants and agrees to pay to the Trustee from time to time,
- -----
and the Trustee shall be entitled to, reasonable compensation as shall be agreed
to in
43
<PAGE>
writing between the Issuer and the Trustee (which shall not be limited by any
provision of law in regard to the compensation of a trustee of an express trust)
and the Issuer covenants and agrees to pay or reimburse the Trustee and each
predecessor Trustee upon its request for all reasonable expenses, disbursements
and advances incurred or made by or on behalf of it in accordance with any of
the provisions of this Indenture (including the reasonable compensation,
expenses and disbursements of its counsel and of all agents and other persons
not regularly in its employ) except any such expense, disbursement or advance as
may arise from its negligence or bad faith. The Issuer also covenants to
indemnify and hold harmless the Trustee and each predecessor Trustee, and the
directors, officers, employees and agents of each thereof, for and against, any
and all loss, liability or expense incurred without negligence or bad faith on
such party's part (including, without limitation, reasonable fees and expenses
of its counsel), arising out of or in connection with the acceptance or
administration of this Indenture or the trusts hereunder and its duties
hereunder, including the costs and expenses of defending itself against or
investigating any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder. The obligations of the
Issuer under this Section 6.6 to compensate and indemnify the Trustee and each
predecessor Trustee and to pay or reimburse the Trustee and each predecessor
Trustee for losses, costs, liabilities, expenses, disbursements and advances
shall constitute additional indebtedness hereunder and shall survive the
satisfaction and discharge of this Indenture. Such additional indebtedness
shall be a senior claim to that of the Securities upon all property and funds
held or collected by the Trustee as such, except funds held in trust for the
payment of principal of or interest on particular Securities, and the Securities
are hereby subordinated to such senior claim and the Trustee shall have a lien
therefor prior to the Securities on all such property and funds. Such lien
shall survive the satisfaction and discharge of this Indenture.
When the Trustee incurs expenses or renders services in connection
with an Event of Default specified in Section 5.1(f) or Section 5.1(g), the
expenses (including the reasonable charges and expenses of its counsel) and the
compensation for the services are intended to constitute expenses of
administration under any applicable Federal or state bankruptcy, insolvency or
other similar law.
Section 6.7 Right of Trustee to Rely on Officer's Certificate, etc.
------------------------------------------------------
Subject to Sections 6.1 and 6.2, whenever in the administration of the trusts of
this Indenture the Trustee shall deem it necessary or desirable that a matter be
proved or established prior to taking or suffering or omitting any action
hereunder, such matter (unless other evidence in respect thereof
44
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be herein specifically prescribed) may, in the absence of negligence or bad
faith on the part of the Trustee, be deemed to be conclusively proved and
established by an Officer's Certificate delivered to the Trustee, and such
certificate, in the absence of negligence or bad faith on the part of the
Trustee, shall be full warrant to the Trustee for any action taken, suffered or
omitted by it under the provisions of this Indenture upon the faith thereof.
Section 6.8 Persons Eligible for Appointment as Trustee;
--------------------------------------------
Disqualification. This Indenture shall always have a Trustee who satisfies the
- ----------------
requirements of Section 310(a) of the Trust Indenture Act of 1939. The Trustee
shall at all times be a corporation organized and doing business under the laws
of the United States of America or of any State or the District of Columbia
having a combined capital and surplus of at least $10,000,000, and which is
authorized under such laws to exercise corporate trust powers and is subject to
supervision or examination by Federal, State or District of Columbia authority.
Such corporation shall have a place of business in the Borough of Manhattan, the
City of New York. If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of the aforesaid supervising or
examining authority, then for the purposes of this Section, the combined capital
and surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. In
case at any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section 6.8 the Trustee shall resign immediately in the
manner and with the effect specified in Section 6.9.
No obligor upon the Securities or person directly or indirectly
controlling, controlled by or under common control with such obligor shall serve
as Trustee for any series of Securities.
The Trustee shall comply with Section 310(b) of the Trust Indenture
Act of 1939.
The provisions of this Section 6.8 are in furtherance of and subject
to Section 310(a) of the Trust Indenture Act of 1939.
Section 6.9 Resignation and Removal; Appointment of Successor
-------------------------------------------------
Trustee.
(a) The Trustee, or any trustee or trustees hereafter appointed,
may at any time resign with respect to the Securities by giving written
notice of resignation to the Issuer and by mailing notice of such
resignation to the Holders of then Outstanding Securities at their
addresses as
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they shall appear on the registry books. Upon receiving such notice of
resignation, the Issuer shall promptly appoint a successor trustee or
trustees with respect to the Securities by written instrument in duplicate,
executed by authority of the Board of Directors, one copy of which
instrument shall be delivered to the resigning Trustee and one copy to the
successor trustee or trustees. If no successor trustee shall have been so
appointed with respect to the Securities and have accepted appointment
within 30 days after the mailing of such notice of resignation, the
resigning trustee may petition any court of competent jurisdiction for the
appointment of a successor trustee, or any Securityholder who has been a
bona fide Holder of a Security or Securities for at least six months may,
---- ----
subject to the provisions of Section 5.16, on behalf of himself and all
others similarly situated, petition any such court for the appointment of a
successor trustee. Such court may thereupon, after such notice, if any, as
it may deem proper and prescribe, appoint a successor trustee.
(b) In case at any time any of the following shall occur:
(i) the Trustee shall fail to comply with the provisions of
Section 310(b) of the Trust Indenture Act of 1939 with respect to the
Securities after written request therefor by the Issuer or by any
Securityholder who has been a bona fide Holder of a Security or
---- ----
Securities for at least six months; or
(ii) the Trustee shall cease to be eligible in accordance
with the provisions of Section 6.8 and Section 310(a) of the Trust
Indenture Act of 1939 and shall fail to resign after written request
therefor by the Issuer or by any Securityholder; or
(iii) the Trustee shall become incapable of acting with
respect to the Securities, or shall be adjudged a bankrupt or
insolvent, or a receiver or liquidator of the Trustee or of its
property shall be appointed, or any public officer shall take charge
or control of the Trustee or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation; or
(iv) the Trustee and the Issuer fail to agree on the
Trustee's fees after good faith negotiations;
then, in any such case, the Issuer may remove the Trustee and appoint a
successor trustee by written instrument, in duplicate,
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executed by order of the Board of Directors of the Issuer, one copy of which
instrument shall be delivered to the Trustee so removed and one copy to the
successor trustee, or, subject to the provisions of Section 315(a) of the Trust
Indenture Act of 1939, any Securityholder who has been a bona fide Holder of a
---- ----
Security or Securities for at least six months may on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor trustee with respect
to the Securities. Such court may thereupon, after such notice, if any, as it
may deem proper and prescribe, remove the Trustee and appoint a successor
trustee.
(c) The Holders of a majority in aggregate principal amount of
the Securities at the time Outstanding may at any time remove the Trustee
and appoint a successor trustee by delivering to the Trustee so removed, to
the successor trustee so appointed and to the Issuer the evidence provided
for in Section 7.1 of the action in that regard taken by the
Securityholders.
(d) Any resignation or removal of the Trustee and any
appointment of a successor trustee pursuant to any of the provisions of
this Section 6.9 shall become effective upon acceptance of appointment by
the successor trustee as provided in Section 6.10.
Section 6.10 Acceptance of Appointment by Successor Trustee. Any
----------------------------------------------
successor trustee appointed as provided in Section 6.9 shall execute and deliver
to the Issuer and to its predecessor Trustee an instrument accepting such
appointment hereunder, and thereupon the resignation or removal of the
predecessor Trustee with respect to the Securities shall become effective and
such successor trustee, without any further act, deed or conveyance, shall
become vested with all rights, powers, duties and obligations with respect to
the Securities of its predecessor hereunder, with like effect as if originally
named as Trustee hereunder; but, nevertheless, on the written request of the
Issuer or of the successor trustee, upon payment of its charges then unpaid, the
trustee ceasing to act shall, subject to Section 10.4, duly assign, transfer and
deliver to the successor trustee all moneys at the time held by it hereunder and
shall execute and deliver an instrument transferring to such successor trustee
all such rights, powers, duties and obligations. Upon request of any such
successor trustee, the Issuer shall execute any and all instruments in writing
for more fully and certainly vesting in and confirming to such successor trustee
all such rights and powers. Any trustee ceasing to act shall, nevertheless,
retain a prior claim and lien upon all property or funds held or collected by
such trustee to secure any amounts then due it pursuant to the provisions of
Section 6.6.
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If a successor trustee is appointed with respect to the Securities,
the Issuer, the predecessor Trustee and each successor trustee shall execute and
deliver an indenture supplemental hereto which shall add to or change any of the
provisions of this Indenture as shall be necessary to provide for or facilitate
the administration of the trusts hereunder.
No successor trustee with respect to the Securities shall accept
appointment as provided in this Section 6.10 unless at the time of such
acceptance such successor trustee shall be qualified under Section 310(b) of the
Trust Indenture Act of 1939 and eligible under the provisions of Section 6.8.
Upon acceptance of appointment by any successor trustee as provided in
this Section 6.10, the Issuer shall give notice thereof to the Holders of
Securities, by mailing such notice to such Holders at their addresses as they
shall appear on the registry books. If the acceptance of appointment is
substantially contemporaneous with the resignation, then the notice called for
by the preceding sentence may be combined with the notice called for by Section
6.9. If the Issuer fails to give such notice within ten days after acceptance
of appointment by the successor trustee, the successor trustee shall cause such
notice to be given at the expense of the Issuer.
Section 6.11 Merger, Conversion, Consolidation or Succession to
--------------------------------------------------
Business of Trustee. Any corporation into which the Trustee may be merged or
- -------------------
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Trustee shall be a
party, or any corporation succeeding to the corporate trust business of the
Trustee, shall be the successor of the Trustee hereunder, provided that such
--------
corporation shall be qualified under Section 310(b) of the Trust Indenture Act
of 1939 and eligible under the provisions of Section 6.8, without the execution
or filing of any paper or any further act on the part of any of the parties
hereto, anything herein to the contrary notwithstanding.
In case at the time such successor to the Trustee shall succeed to the
Trusts created by this Indenture any of the Securities shall have been
authenticated but not delivered, any such successor to the Trustee may adopt the
certificate of authentication of any predecessor Trustee and deliver such
Securities so authenticated and, in case at that time any of the Securities
shall not have been authenticated, any successor to the Trustee may
authenticate such Securities either in the name or any predecessor Trustee
hereunder or in the name of the successor trustee; and in all such cases such
certificate shall have the full force which it is anywhere in the Securities or
in this Indenture provided that the certificate of the Trustee shall
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have; provided that the right to adopt the certificate of authentication of any
--------
predecessor Trustee or to authenticate Securities in the name of any predecessor
Trustee shall apply only to its successor or successors by merger, conversion or
consolidation.
Section 6.12 Appointment of Authenticating Agent. As long as any
-----------------------------------
Securities remain Outstanding, the Trustee may, by an instrument in writing,
appoint with the approval of the Issuer an authenticating agent (the
"Authenticating Agent") which shall be authorized to act on behalf of the
Trustee to authenticate Securities, including Securities issued upon exchange,
registration of transfer, partial redemption or pursuant to Section 2.9.
Securities authenticated by such Authenticating Agent shall be entitled to the
benefits of this Indenture and shall be valid and obligatory for all purposes as
if authenticated by the Trustee. Whenever reference is made in this Indenture
to the authentication and delivery of Securities by the Trustee or to the
Trustee's certificate of authentication, such reference shall be deemed to
include authentication and delivery on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication executed on behalf of
the Trustee by such Authenticating Agent. Such Authenticating Agent shall at
all times be a corporation organized and doing business under the laws of the
United States of America or of any State, authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus of at least
$5,000,000 (determined as provided in Section 6.8 with respect to the Trustee)
and subject to supervision or examination by Federal or state authority.
Any corporation into which any Authenticating Agent may be merged or
converted, or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which any Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency business
of any Authenticating Agent, shall continue to be the Authenticating Agent with
respect of Securities for which it served as Authenticating Agent without the
execution or filing of any paper or any further act on the part of the Trustee
or such Authenticating Agent. Any Authenticating Agent may at any time, and if
it shall cease to be eligible shall, resign by giving written notice of
resignation to the Trustee and to the Issuer.
Upon receiving such a notice of resignation or upon such a
termination, or in case at any time any Authenticating Agent shall cease to be
eligible in accordance with the provisions of this Section 6.12, the Trustee
may, with the approval of the Issuer, appoint a successor Authenticating Agent
and the Issuer shall provide notice of such appointment to all Holders of
Securities in the manner and to the extent provided in
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Section 11.4. Any successor Authenticating Agent upon acceptance of its
appointment hereunder shall become vested with all rights, powers, duties and
responsibilities of its predecessor hereunder, with like effect as if originally
named as Authenticating Agent. The Issuer agrees to pay to the Authenticating
Agent from time to time reasonable compensation. The Authenticating Agent for
the Securities shall have no responsibility or liability for any action taken by
it as such at the direction of the Trustee.
Sections 6.2, 6.3, 6.4, 6.6 and 7.3 shall be applicable to any
Authenticating Agent.
Section 6.13 Preferential Collection of Claims Against the Company.
-----------------------------------------------------
The Trustee shall comply with Section 311(a) of the Trust Indenture Act of 1939,
excluding any creditor relationship listed in Section 311(b) of the Trust
Indenture Act of 1939. A Trustee who has resigned or been removed shall be
subject to Section 311(a) of the Trust Indenture Act of 1939 to the extent
indicated therein.
ARTICLE SEVEN
CONCERNING THE SECURITYHOLDERS
------------------------------
Section 7.1 Evidence of Action Taken by Securityholders. Any
-------------------------------------------
request, demand, authorization, direction, notice, consent, waiver or other
action provided by this Indenture to be given or taken by a specified percentage
in principal amount of the Holders of Securities of any particular series,
including but not limited to the matters set forth in Sections 5.9 and 5.10, may
be embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such specified percentage of Securityholders of such series in
person or by agent duly appointed in writing; and, except as herein otherwise
expressly provided, such action shall become effective when such instrument or
instruments are delivered to the Trustee. Proof of execution of any instrument
or of a writing appointing any such agent shall be sufficient for any purpose of
this Indenture and (subject to Sections 6.1 and 6.2) conclusive in favor of the
Trustee and the Issuer, if made in the manner provided in this Article.
Section 7.2 Proof of Execution of Instruments and of Holding of
---------------------------------------------------
Securities. Subject to Sections 6.1 and 6.2, the execution of any instrument by
- ----------
a Securityholder or his agent or proxy may be proved in the following manner:
(a) The fact and date of the execution by any Holder of any
instrument may be proved by the certificate of
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any notary public or other officer of any jurisdiction authorized to take
acknowledgements of deeds or administer oaths that the person executing
such instruments acknowledged to him the execution thereof, or by an
affidavit of a witness to such execution sworn to before any such notary or
other such officer. Where such execution is by or on behalf of any legal
entity other than an individual, such certificate or affidavit shall also
constitute sufficient proof of the authority of the person executing the
same. Subject to Sections 6.1 and 6.2, the fact and date of the execution
of any such instrument and the amount and numbers of Securities held by the
person so executing such instrument and the amount and numbers of any
Security or Securities may also be proven in accordance with such
reasonable rules and regulations as may be prescribed by the Trustee or in
any other reasonable manner which the Trustee may deem sufficient.
(b) The principal amount and the ownership of such Securities
shall be proved by the Security register or by a certificate of the
Security registrar.
The Issuer may set a record date for purposes of determining the
identity of Holders of Securities entitled to vote or consent to any action
referred to in Section 7.1, which record date may be set at any time or from
time to time by notice to the Trustee, for any date or dates (in the case of any
adjournment or reconsideration) not more than 60 days nor less than five days
prior to the proposed date of such vote or consent, and thereafter,
notwithstanding any other provisions hereof, only Holders of Securities of
record on such record date shall be entitled to so vote or give such consent or
revoke such vote or consent.
Section 7.3 Holders to Be Treated as Owners. The Issuer, the Trustee
-------------------------------
and any agent of the Issuer or the Trustee may deem and treat the person in
whose name any Security shall be registered upon the Security register as the
absolute owner of such Security (whether or not such Security shall be overdue
and notwithstanding any notation of ownership or other writing thereon) for the
purpose of receiving payment of or on account of the principal of and, subject
to the provisions of this Indenture, interest on such Security and for all other
purposes; and neither the Issuer nor the Trustee nor any agent of the Issuer
or the Trustee shall be affected by any notice to the contrary.
Section 7.4 Securities Owned by Issuer Deemed Not Outstanding. In
-------------------------------------------------
determining whether the Holders of the requisite aggregate principal amount of
Outstanding Securities of any particular series have concurred in any direction,
consent or
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waiver under the Indenture, Securities which are owned by the Issuer or any
other obligor on the Securities with respect to which such determination is
being made or by any person directly or indirectly controlling or controlled by
or under direct or indirect common control with the Issuer or any other obligor
on the Securities with respect to which such determination is being made shall
be disregarded and deemed not to be Outstanding for the purpose of any such
determination, except that for the purpose of determining whether the Trustee
shall be protected in relying on any such direction, consent or waiver, only
Securities which the Trustee knows are so owned shall be so disregarded.
Securities so owned which have been pledged in good faith may be regarded as
Outstanding if the pledgee establishes to the satisfaction of the Trustee the
pledgee's right so to act with respect to such Securities and that the pledgee
is not the Issuer or any other obligor upon the Securities or any person
directly or indirectly controlling or controlled by or under direct or indirect
common control with the Issuer or any other obligor on such Securities. In case
of a dispute as to such right, the advice of counsel shall be full protection in
respect of any decision made by the Trustee in accordance with such advice.
Upon request of the Trustee, the Issuer shall furnish to the Trustee promptly an
Officer's Certificate listing and identifying all Securities, if any, known by
the Issuer to be owned or held by or for the account of any of the above-
described persons; and, subject to Sections 6.1 and 6.2, the Trustee shall be
entitled to accept such Officer's Certificate as conclusive evidence of the
facts therein set forth and of the fact that all Securities not listed therein
are Outstanding for the purpose of any such determination.
Section 7.5 Principal Amount of Original Issue Discount Securities.
------------------------------------------------------
In determining whether the Holders of the requisite principal amount of
Outstanding Securities have given any request, demand, authorization, direction,
notice, consent or waiver under this Indenture, the principal amount of an
Original Issue Discount Security that may be counted in making such
determination and that shall be deemed to be Outstanding for such purposes shall
be equal to the amount of the principal thereof that would be due and payable
upon a declaration of acceleration of the maturity date thereof pursuant to
Section 5.2 at the time the taking of such action by the Holders of such
requisite principal amount is evidenced to the Trustee for such Securities.
Section 7.6 Right of Revocation of Action Taken. At any time prior
-----------------------------------
to (but not after) the evidencing to the Trustee, as provided in Section 7.1, of
the taking of any action by the Holders of the percentage in aggregate principal
amount of the Securities of any particular series, specified in this Indenture
in connection with such action, any Holder of a Security of such series the
serial number of which is shown by the evidence to be
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included among the serial numbers of the Securities of such series the Holders
of which have consented to such action may, by filing written notice at the
Corporate Trust Office and upon proof of holding as provided in this Article,
revoke such action so far as concerns such Security to the extent such Security
would be deemed to be Outstanding pursuant to Section 7.4. Except as aforesaid,
any such action taken by the Holder of any Security shall be conclusive and
binding upon such Holder and upon all future Holders and owners of such Security
and of any Securities issued in exchange or substitution therefor or on
registration of transfer thereof, irrespective of whether or not any notation in
regard thereto is made upon any such Security. Any action taken by the Holders
of the percentage in aggregate principal amount of the Securities of any
particular series, specified in this Indenture in connection with such action
shall be conclusively binding upon the Issuer, the Trustee and the Holders of
all the Securities of such series affected by such action.
ARTICLE EIGHT
SUPPLEMENTAL INDENTURES
-----------------------
Section 8.1 Supplemental Indentures Without Consent of
------------------------------------------
Securityholders. The Issuer, when authorized by a resolution of its Board of
- ---------------
Directors (which resolution may provide general terms or parameters for such
action and may provide that the specific terms of such action may be determined
in accordance with or pursuant to an Issuer Order), and the Trustee may from
time to time and at any time enter into an indenture or indentures supplemental
hereto for one or more of the following purposes:
(a) to convey, transfer, assign, mortgage or pledge to the
Trustee as security for the Securities any property or assets;
(b) to evidence the succession of another corporation to the
Issuer, or successive successions, and the assumption by the successor
corporation of the covenants, agreements and obligations of the Issuer
pursuant to Article Nine;
(c) to add to the covenants of the Issuer such further
covenants, restrictions, conditions or provisions as the Issuer and the
Trustee shall consider to be for the protection of the Holders of
Securities of any particular series and to make the occurrence, or the
occurrence and continuance, of a default in any such additional covenants,
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restrictions, conditions or provisions an Event of Default permitting the
enforcement of all or any of the several remedies provided in this
Indenture as herein set forth; provided that in respect of any such
--------
additional covenant, restriction, condition or provision such supplemental
indenture may provide for a particular period of grace after default (which
period may be shorter or longer than that allowed in the case of other
defaults) or may provide for an immediate enforcement upon such an Event of
Default or may limit the remedies available to the Trustee upon such an
Event of Default or may limit the right of the Holders of a majority in
aggregate principal amount of the Securities to waive such an Event of
Default;
(d) to cure any ambiguity or to correct or supplement any
provision contained herein or in any supplemental indenture which may be
defective or inconsistent with any other provision contained herein or in
any supplemental indenture, or to make any other provisions as the Issuer
may deem necessary or desirable, provided that no such provisions shall
--------
adversely affect the interests of the Holders of the Securities;
(e) to establish the forms of Securities as permitted by
Sections 2.1 and 2.3;
(f) to evidence and provide for the acceptance of appointment
hereunder by a successor trustee with respect to the Securities and to add
to or change any of the provisions of this Indenture as shall be necessary
to provide for or facilitate the administration of the trusts hereunder by
more than one trustee, pursuant to the requirements of Section 6.10;
(g) to add to the conditions, limitations and restrictions on
the authorized amount, form, terms or purposes of issue, authentication and
delivery of Securities, as herein set forth, other conditions, limitations
and restrictions thereafter to be observed;
(h) to supplement any of the provisions of this Indenture to
such extent as shall be necessary to permit or facilitate the defeasance
and discharge of any series of Securities pursuant to Section 10.1;
provided, however, that any such action shall not adversely affect the
-------- -------
interests of the Holders of Securities of such series or any other series
of Securities in any material respect; and
(i) to add to or change or eliminate any provisions of this
Indenture as shall be necessary or
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desirable in accordance with any amendments to the Trust Indenture Act.
The Trustee is hereby authorized to join with the Issuer in the
execution of any such supplemental indenture, to make any further appropriate
agreements and stipulations which may be therein contained and to accept the
conveyance, transfer, assignment, mortgage or pledge of any property thereunder,
but the Trustee shall not be obligated to enter into any such supplemental
indenture which affects the Trustee's own rights, duties or immunities under
this Indenture or otherwise.
Any supplemental indenture authorized by the provisions of this
Section may be executed without the consent of the Holders of any of the
Securities at the time Outstanding, notwithstanding any of the provisions of
Section 8.2.
Section 8.2 Supplemental Indentures with Consent of Securityholders.
-------------------------------------------------------
With the consent (evidenced as provided in Article Seven) of the Holders of not
less than a two-thirds in aggregate principal amount of the Securities of each
affected series at the time Outstanding by such supplemental indenture, the
Issuer, when authorized by a resolution of its Board of Directors (which
resolution may provide general terms or parameters for such action and may
provide that the specific terms of such action may be determined in accordance
with or pursuant to an Issuer Order), and the Trustee may, from time to time and
at any time, enter into an indenture or indentures supplemental hereto for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of this Indenture or of any supplemental indenture or of
modifying in any manner the rights of the Holders of the Securities of each
affected series; provided that no such supplemental indenture shall (a) change
--------
the final maturity of any security, or reduce the principal amount thereof, or
reduce the rate or extend the time of payment of interest thereon, or reduce any
amount payable on redemption thereof, or make the principal thereof (including
any amount in respect of original issue discount), or interest thereon payable
in any coin or currency other than that provided in the Securities of such
series or in accordance with the terms thereof, or reduce the amount of the
principal of an Original Issue Discount Security that would be due and payable
upon an acceleration of the maturity thereof pursuant to Section 5.2 or the
amount thereof provable in bankruptcy pursuant to Section 5.2, or change the
place at which principal of or interest on the Securities of such series is
payable, or alter the provisions of Sections 5.10, 5.14, 11.11 or 11.12 or
impair or affect the right of any Holder of Securities of such series to
institute suit for the payment thereof or, if the Securities of such series
provide therefor, any right of repayment at the option of the Holder of
Securities of such series, in each case without the consent of
55
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the Holder of each Security so affected, or (b) reduce the aforesaid percentage
in principal amount of Securities of such series, the consent of the Holders of
which is required for any such supplemental indenture, or the consent of the
Holders of which is required for any waiver (of compliance with certain
provisions of this Indenture of certain defaults hereunder and their
consequences) without the consent of the Holders of each Security so affected,
or (c) modify any of the provisions of this Section, except to increase any such
percentage or to provide that certain other provisions of this Indenture cannot
be modified or waived without the consent of the Holder of each Security
affected thereby.
Upon the request of the Issuer, accompanied by a copy of a resolution
of the Board of Directors (which resolution may provide general terms or
parameters for such action and may provide that the specific terms of such
action may be determined in accordance with or pursuant to an Issuer Order)
certified by the secretary or an assistant secretary of the Issuer authorizing
the execution of any such supplemental indenture, and upon the filing with the
Trustee of evidence of the consent of the Holders of the Securities of each
affected series as aforesaid and other documents, if any, required by Section
7.1, the Trustee shall join with the Issuer in the execution of such
supplemental indenture unless such supplemental indenture affects the Trustee's
own rights, duties or immunities under this Indenture or otherwise, in which
case the Trustee in its discretion may, but shall not be obligated to, enter
into such supplemental indenture.
It shall not be necessary for the consent of the Securityholders under
this Section to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such consent shall approve the
substance thereof.
Promptly after the execution by the Issuer and the Trustee of any
supplemental indenture pursuant to the provisions of this Section, the Trustee
shall give notice thereof to the Holders of then Outstanding Securities
affected, by mailing a notice thereof by first-class mail to such Holders at
their addresses as they shall appear on the Security register, and such notice
shall set forth in general terms the substance of such supplemental indenture.
Any failure of the Issuer to give such notice, or any defect therein, shall not,
however, in any way impair or affect the validity of any such supplemental
indenture.
Section 8.3 Effect of Supplemental Indenture. Upon the execution of
--------------------------------
any supplemental indenture pursuant to the provisions hereof, this Indenture
shall be and be deemed to be modified and amended in accordance therewith and
the respective rights, limitations of rights, obligations, duties and immunities
56
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under this Indenture of the Trustee, the Issuer and the Holders of Securities
affected thereby shall thereafter be determined, exercised and enforced
hereunder subject in all respects to such modifications and amendments, and all
the terms and conditions of any such supplemental indenture shall be and be
deemed to be part of the terms and conditions of this Indenture for any and all
purposes.
Section 8.4 Documents to Be Given to Trustee. The Trustee for any
--------------------------------
series of Securities, subject to the provisions of Section 6.1 and 6.2, may
receive an Officer's Certificate and an Opinion of Counsel as conclusive
evidence that any supplemental indenture executed pursuant to this Article 8
complies with the applicable provisions of this Indenture.
Section 8.5 Notation on Securities in Respect of Supplemental
-------------------------------------------------
Indentures. Securities authenticated and delivered after the execution of any
- ----------
supplemental indenture pursuant to the provisions of this Article may bear a
notation in form approved by the Trustee as to any matter provided for by such
supplemental indenture or as to any action taken by Securityholders. If the
Issuer or the Trustee shall so determine, new Securities so modified as to
conform, in the opinion of the Trustee and the Board of Directors, to any
modification of this Indenture contained in any such supplemental indenture may
be prepared by the Issuer, authenticated by the Trustee and delivered in
exchange for the Securities then Outstanding.
Section 8.6 Conformity with Trust Indenture Act. Every supplemental
-----------------------------------
indenture executed pursuant to this Article shall conform to the requirements of
the Trust Indenture Act as then in effect. The Trustee shall receive an Opinion
of Counsel and an Officer's Certificate prepared in accordance with Section 11.5
as conclusive evidence that each supplemental indenture executed pursuant to
this Article 8 complies with the requirements of this Article 8 and the Trust
Indenture Act of 1939.
ARTICLE NINE
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
-----------------------------------------
Section 9.1 Issuer May Consolidate, etc. on Certain Terms. The
---------------------------------------------
Issuer shall not consolidate with or merge into any other corporation or sell,
lease, convey, transfer or otherwise dispose of all or substantially all of its
properties or assets in one transaction or a series of related transactions to
any person unless:
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(1) the corporation formed by such consolidation or into which
the Issuer is merged or the person which acquires by conveyance or transfer
the properties and assets of the Issuer substantially as an entirety shall
be a corporation organized and existing under the laws of the United States
of America, any State thereof or the District of Columbia, and the
transferee or successor corporation, if other than the Issuer, shall
expressly assume, by an indenture supplemental hereto, executed and
delivered to the Trustee for each series of Securities, in form
satisfactory to each such Trustee, the due and punctual payment of the
principal of and interest, if any, (including all additional amounts, if
any, payable pursuant to this Indenture) on all the Securities and the
performance of every covenant of this Indenture on the part of the Issuer
to be performed or observed;
(2) immediately after giving effect to such transaction, no
Event of Default with respect to any series of Securities, and no event
which, after notice or lapse of time or both, would become an Event of
Default with respect to any series of Securities, shall have happened and
be continuing; and
(3) the Issuer has delivered to the Trustee for each series of
Securities an Officers' Certificate and an Opinion of Counsel each stating
that such consolidation, merger, conveyance or transfer and such
supplemental indenture comply with the applicable provisions of this
Indenture and that all conditions precedent herein provided for relating to
such transaction have been complied with.
Section 9.2 Successor Issuer Substituted. In case of any such
----------------------------
consolidation, merger, sale or conveyance and upon the assumption by the
successor corporation by supplemental indenture, executed and delivered to the
Trustee and satisfactory in form to the Trustee, of the due and punctual payment
of the principal of and interest on all of the Securities and the due and
punctual performance of all of the covenants and conditions of this Indenture to
be performed by the Issuer, such successor corporation shall succeed to and be
substituted for the Issuer, with the same effect as if it had been named herein
as the Issuer and the predecessor Issuer shall thereupon be released from all
obligations hereunder and under the Securities. Such successor corporation
thereupon may cause to be signed, and may issue either in its own name or in the
name of the Issuer any or all of the Securities issuable hereunder which
theretofore shall not have been signed by the Issuer and delivered to the
Trustee; and, upon the order of such successor corporation instead of the Issuer
and subject to all the terms, conditions and limitations in this Indenture
prescribed, the Trustee or the Authenticating
58
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Agent on its behalf shall authenticate and shall deliver any Securities which
previously shall have been signed and delivered by the officers of the Issuer to
the Trustee or the Authenticating Agent on its behalf for authentication, and
any Securities which such successor corporation thereafter shall cause to be
signed and delivered to the Trustee or the Authenticating Agent on its behalf
for that purpose. All the Securities so issued shall in all respects have the
same legal rank and benefit under this Indenture as the Securities theretofore
or thereafter issued in accordance with the terms of this Indenture as though
all of such Securities had been issued at the date of the execution hereof.
In case of any such consolidation, merger, sale or conveyance such
changes in phraseology and form (but not in substance) may be made in the
Securities thereafter to be issued as may be appropriate.
In the event of any such sale or conveyance (other than a conveyance
by way of lease) the Issuer or any successor corporation which shall theretofore
have become such in the manner described in this Article shall be discharged
from all obligations and covenants under this Indenture and the Securities and
may be liquidated and dissolved.
ARTICLE TEN
SATISFACTION AND DISCHARGE OF INDENTURE;
CLAIMED MONEYS
----------------------------------------
Section 10.1 Satisfaction and Discharge of Securities of any Series.
------------------------------------------------------
(A) If at any time (a) the Issuer shall have paid or caused to be paid the
principal of and interest on all the Securities Outstanding hereunder of any
particular series (other than Securities which have been destroyed, lost or
stolen and which have been replaced or paid as provided in Section 2.9) as and
when the same shall have become due and payable or (b) the Issuer shall have
delivered to the Trustee for cancellation all Securities of any particular
series theretofore authenticated (other than any Securities which shall have
been destroyed, lost or stolen and which shall have been replaced or paid as
provided in Section 2.9) or (c) in the case of Securities of any particular
series where the exact amount (including the currency of payment) of principal
of and interest due on which can be determined at the time of making the deposit
referred to in clause (ii) below,
(i) all the Securities of such series not theretofore delivered
to the Trustee for cancellation shall
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have become due and payable, or are by their terms to become due and
payable within one year or are to be called for redemption within one year
under arrangements satisfactory to the Trustee for the giving of notice of
redemption;
(ii) the Issuer shall have irrevocably deposited or caused to
be deposited with the Trustee as trust funds the entire amount in cash
(other than moneys repaid by the Trustee or any paying agent to the
Issuer in accordance with Section 10.4) or, in the case of Securities the
payments on which may only be made in Dollars, direct obligations of the
United States of America, backed by its full faith and credit ("U.S.
Government Obligations") maturing as to principal and interest at such
times and in such amounts as will insure the availability of cash, or a
combination thereof, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification
thereof delivered to the Trustee, to pay, in whole, the principal and
interest on all Securities of such series on each date that such
principal or interest is due and payable; and
(iii) if, in the case of clause (c), (1) the Issuer shall also
pay or cause to be paid all other sums payable hereunder by the Issuer; (2)
such deposit will not result in a breach or violation of, or constitute a
default under, this Indenture or any agreement or instrument to which the
Issuer is a party or by which it is bound; (3) the Issuer has delivered to
the Trustee an Opinion of Counsel based on the fact that (I) the Issuer has
received from, or there has been published by, the Internal Revenue Service
a ruling or (II) since the date hereof, there has been a change in the
applicable Federal income tax law, in either case to the effect that, and
such opinion shall confirm that, the Holders of the Securities of the
affected series appertaining thereto will not recognize income, gain or
loss for Federal income tax purposes as a result of such deposit,
defeasance and discharge and will be subject to Federal income tax on the
same amount and in the same manner and at the same times, as would have
been the case if such deposit defeasance and discharge had not occurred;
(4) the Issuer has delivered to the Trustee an Officer's Certificate and an
Opinion of Counsel, each stating that all conditions precedent provided for
relating to the deposit contemplated by clause (c) of this Section 10.1(A)
have been complied with; (5) such deposit shall not cause the Trustee to
have a conflicting interest for purposes of the Trust Indenture Act of 1939
with respect to any securities of the Issuer; and (6) such deposit shall
not cause any Securities then listed on any registered national securities
exchange under the Securities Exchange Act of 1934, as amended, to be
delisted;
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then the Issuer shall be deemed to have satisfied and discharged the entire
Indebtedness on all the Securities of such series and this Indenture shall cease
to be of further effect with respect to the Securities of such series (except as
to (i) rights of registration of transfer and exchange of Securities and the
Issuer's right of optional redemption, if any, (ii) substitution of mutilated,
defaced, destroyed, lost or stolen Securities, (iii) rights of Holders of
Securities of such series to receive payments of principal thereof and interest
thereon, upon the original stated due dates therefor (but not upon
acceleration), and remaining rights of the Holders to receive mandatory sinking
fund payments, if any, (iv) the rights, obligations, duties and immunities of
the Trustee hereunder, (v) the rights of the Holders of Securities of such
series as beneficiaries hereof with respect to the property so deposited with
the Trustee payable to all or any of them, and (vi) the obligations of the
Issuer under Section 3.2) and, so long as no Event of Default shall be
continuing, the Trustee, on demand of the Issuer accompanied by an Officer's
Certificate and an Opinion of Counsel which comply with Section 11.5 and at the
reasonable cost and expense of the Issuer, shall execute proper instruments
acknowledging such satisfaction and discharging of this Indenture with respect
to the Securities of the affected series; provided that the rights of Holders of
--------
the Securities of such series to receive amounts in respect of principal of and
interest on the Securities held by them shall not be delayed longer than
required by then-applicable mandatory rules or policies of any securities
exchange upon which such Securities are listed. The Issuer agrees to reimburse
the Trustee for any reasonable costs or expenses (including, without limitation,
reasonable fees and expenses of counsel) thereafter reasonably and properly
incurred and to compensate the Trustee for any services thereafter reasonably
and properly rendered by the Trustee in connection with this Indenture or the
Securities.
Notwithstanding the satisfaction and discharge of this Indenture, (i)
any obligations of the Issuer under Sections 2.8 (other than the first paragraph
of Section 2.8), 2.9, 2.11, 3.2, 4.1 and 6.9 shall survive for a period of three
years after the date upon which principal and interest on such series of
Securities shall have been paid (provided such three year period will not
include such time as the Trustee or any paying agent is unable to apply any
money by reason of any order or judgment of any court or government authority as
described in Section 10.7) and (ii) any obligations of the Issuer to the Trustee
under Sections 6.6 and 11.12 and the first paragraph of Section 2.8 and the
obligations of the Issuer and the Trustee for any series of Securities under
Article 10 and any rights of the Holders of the Securities under Section 10.5
shall survive.
(B) The Issuer shall be released from its obligations under
Sections 3.6, 3.7, 3.8, 3.9 and 3.10 with respect to the
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Securities of any particular series Outstanding on and after the date the
conditions set forth below are satisfied (hereinafter, "covenant defeasance").
For this purpose, such covenant defeasance means that, with respect to the
Outstanding Securities of the affected series, the Issuer may omit to comply
with and shall have no liability in respect of any term, condition or limitation
set forth in such Sections, whether directly or indirectly by reason of any
reference elsewhere herein to such Sections or by reason of any reference in
such Sections to any other provision herein or in any other document and such
omission to comply shall not constitute an Event of Default with respect to such
series of Securities under Section 5.1, but the remainder of this Indenture and
such Securities shall be unaffected thereby. The following shall be the
conditions to application of this subsection (B) of this Section 10.1:
(a) The Issuer has irrevocably deposited or caused to be
deposited with the Trustee as trust funds in trust for the purpose of
making the following payments, specifically pledged as security for, and
dedicated solely to, the benefit of the holders of the Securities of the
affected series, (i) cash in an amount, or (ii) in the case of Securities
the payments on which may only be made in Dollars, U.S. Government
Obligations maturing as to principal and interest at such times and in such
amounts as will insure the availability of cash or (iii) a combination
thereof, sufficient, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee, to pay, in whole, the principal and interest on
all Securities of the affected series.
(b) No Event of Default or event which with notice or lapse of
time or both would become an Event of Default with respect to the
Securities of the affected series shall have occurred and be continuing on
the date of such deposit or, insofar as subsections 5.1(f) and (g) are
concerned, at any time during the period ending on the 91st day after the
date of such deposit (it being understood that this condition shall not be
deemed satisfied until the expiration of such period).
(c) Such covenant defeasance shall not cause the Trustee to have
a conflicting interest for purposes of the Trust Indenture Act of 1939 with
respect to any securities of the Issuer.
(d) Such covenant defeasance shall not result in a breach or
violation of, or constitute a default under, this Indenture or any other
agreement or instrument to which the Issuer is a party or by which it is
bound.
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(e) Such covenant defeasance shall not cause any Securities then
listed on any registered national securities exchange under the Securities
Exchange Act of 1934, as amended, to be delisted.
(f) The Issuer shall have delivered to the Trustee an Officer's
Certificate and Opinion of Counsel to the effect that the Holders of the
Securities of the affected series will not recognize income, gain or loss
for Federal income tax purposes as a result of such covenant defeasance and
will be subject to Federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if such covenant
defeasance had not occurred.
(g) The Issuer shall have delivered to the Trustee an Officer's
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for relating to the covenant defeasance contemplated by
this provision have been complied with.
Section 10.2 Satisfaction and Discharge of Indenture. Upon
---------------------------------------
compliance by the Issuer with the provisions of Section 10.1(A) as to the
satisfaction and discharge of each series of Securities issued hereunder, and if
the Issuer has paid or caused to be paid all other sums payable under this
Indenture, this Indenture shall cease to be of any further effect (except as
otherwise provided herein). Upon Issuer Order and receipt of an Opinion of
Counsel and an Officer's Certificate, stating that all conditions precedent
provided for in this Indenture relating to such proposed action have been
complied with, the Trustees for all series of Securities (at the expense of the
Issuer) shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture.
Notwithstanding the satisfaction and discharge of this Indenture, (i)
any obligations of the Issuer under Sections 2.8 (other than the first paragraph
of Section 2.8), 2.9, 2.11, 3.2, 4.1 and 6.9 shall survive for a period of three
years after the date upon which principal and interest on such series of
Securities shall have been paid (provided such three year period will not
include such time as the Trustee or any paying agent is unable to apply any
money by reason of any order or judgment of any court or government authority as
described in Section 10.7) and (ii) any obligations of the Issuer to the Trustee
under Sections 6.6 and 11.12 and the first paragraph of Section 2.8 and the
obligations of the Issuer and the Trustee for any series of Securities under
Article 10 and any rights of the Holders of the Securities under Section 10.5
shall survive.
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Section 10.3 Application by Trustee of Funds Deposited for Payment of
--------------------------------------------------------
Securities. Subject to Section 10.4, all moneys deposited with the Trustee
- ----------
pursuant to Section 10.1 shall be held in trust and applied by it to the payment
to the Holders of the particular Securities for the payment or redemption of
which such moneys have been deposited with the Trustee, of all sums due and to
become due thereon for principal and interest; but such money need not be
segregated from other funds except to the extent required by law.
Section 10.4 Repayment of Moneys Held by Paying Agent. In connection
----------------------------------------
with the satisfaction and discharge of this Indenture with respect to all
Securities issued hereunder, all moneys then held by any paying agent under the
provisions of this Indenture shall, upon demand of the Issuer, be repaid to it
or paid to the Trustee and thereupon such paying agent shall be released from
all further liability with respect to such moneys.
Section 10.5 Return of Moneys Held by Trustee and Paying Agent
-------------------------------------------------
Unclaimed for Two Years. Any moneys deposited with or paid to the Trustee or
- -----------------------
any paying agent for the payment of the principal of or interest on any Security
and not applied but remaining unclaimed for two years after the date upon which
such principal or interest shall have become due and payable (provided such two
year period will not include such time as the Trustee or any paying agent is
unable to apply any money by reason of any order or judgment of any court or
government authority as described in Section 10.7), shall, upon the written
request of the Issuer and unless otherwise required by mandatory provisions of
applicable escheat or abandoned or unclaimed property law, be repaid to the
Issuer by the Trustee or such paying agent, and the Holder of the Securities
shall be entitled thereafter to look only to the Issuer (subject to applicable
escheat or abandoned property or unclaimed property law) with respect to any
payment which such Holder may be entitled to collect hereunder, and all
liability of the Trustee or any paying agent with respect to such moneys shall
thereupon cease; provided, however, that the Trustee or such paying agent,
-------- -------
before being required to make any such repayment with respect to moneys
deposited with it for any payment in respect of Securities, shall at the expense
of the Issuer, mail by first-class mail to Holders of such affected Securities
at their addresses as they shall appear on the Security register, notice that
such moneys remain and that, after a date specified therein, which shall not be
less than 30 days from the date of such mailing or publication, any unclaimed
balance of such money then remaining will be repaid to the Issuer.
Notwithstanding any provision to the contrary in this Section 10.5 the
Issuer shall not take any action under this Section 10.5 with respect to the
Securities of any series which
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is in violation of the rules or requirements of any stock exchange on which the
Securities of such series are listed.
Section 10.6 Indemnity for U.S. Government Obligations. The Issuer
-----------------------------------------
shall pay and indemnify the Trustee against any tax, fee or other charge imposed
on or assessed against the U.S. Government Obligations deposited pursuant to
Section 10.1 or the principal or interest received in respect of such
Obligations.
Section 10.7 Reinstatement Provision. If the Trustee or any paying
-----------------------
agent is unable to apply any money in accordance with this Article 10 by reason
of any order or judgment of any court or governmental authority enjoining,
restraining or otherwise prohibiting such application then the Issuer's
obligations under this Indenture and the Securities of the affected series shall
be revived and reinstated as though no deposit had occurred pursuant to Section
10.1 until such time as the Trustee or such paying agent is permitted to apply
all such money in accordance with Section 10.2; provided, however, that if the
-------- -------
Issuer makes any payment of interest on or principal of any Security of the
affected series following the reinstatement of its obligations, the Issuer shall
be subrogated to the rights of the Holders of such Securities to receive such
payment from the money held by the Trustee or such paying agent.
ARTICLE ELEVEN
MISCELLANEOUS PROVISIONS
------------------------
Section 11.1 Incorporators, Stockholders, Officers and Directors of
------------------------------------------------------
Issuer Exempt From Individual Liability. No recourse under or upon any
- ---------------------------------------
obligation, covenant or agreement contained in this Indenture, or in any
Security, or because of any indebtedness evidenced thereby, shall be had against
any incorporator, as such, or against any past, present or future stockholder,
officer or director, as such, of the Issuer or of any successor, either directly
or through the Issuer or any successor, under rule of law, statute or
constitutional provision or by the enforcement of any assessment or by any legal
or equitable proceeding or otherwise, all such liability being expressly waived
and released by the acceptance of the Securities by the Holders thereof and as
part of the consideration for the issue of the Securities.
Section 11.2 Provisions of Indenture for the Sole Benefit of Parties
-------------------------------------------------------
and Holders of Securities. Nothing in this Indenture or in the Securities,
- -------------------------
express or implied, shall give or be construed to give to any person, firm or
corporation, other
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than the parties hereto and their successors and the Holders of the Securities,
if any, any legal or equitable right, remedy or claim under this Indenture or
under any covenant or provision herein contained, all such covenants and
provisions being for the sole benefit of the parties hereto and their successors
and of the Holders of the Securities.
Section 11.3 Successors and Assigns of Issuer Bound by Indenture.
---------------------------------------------------
All the covenants, stipulations, promises and agreements in this Indenture
contained by or on behalf of the Issuer shall bind its successors and assigns,
whether so expressed or not.
Section 11.4 Notices and Demands on Issuer, Trustee and Holders of
-----------------------------------------------------
Securities. Any notice or demand which by any provision of this Indenture is
- ----------
required or permitted to be given or served by the Trustee or by the Holders of
Securities to or on the Issuer may be given or served by being deposited postage
prepaid, first-class mail (except as otherwise specifically provided herein)
addressed (until another address of the Issuer is filed by the Issuer with the
Trustee) to P. H. Glatfelter Company, 228 South Main Street, Spring Grove,
Pennsylvania 17362, Attention: Secretary. Any notice, direction, request or
demand by the Issuer or any Holder of Securities to or upon the Trustee shall be
deemed to have been sufficiently given or served by being deposited postage
prepaid, first-class mail (except as otherwise specifically provided herein)
addressed (until another address of the Trustee is filed by the Trustee with the
Issuer) to Wachovia Bank of Georgia, N.A., 191 Peachtree Street, Twenty-Second
Floor, Atlanta, Georgia 30303-1757, Attention: Corporate Trust Department.
Notice to Holders of Securities shall be sufficiently given (unless
otherwise herein expressly provided) if in writing and mailed, first-class
postage prepaid, to each Holder entitled thereto, at his last address as it
appears in the Security register. In any case where notice to such Holders is
given by mail, neither the failure to mail such notice, nor any defect in any
notice so mailed, to any particular Holder shall affect the sufficiency of such
notice with respect to other Holders.
Where this Indenture provides for notice in any manner, such notice
may be waived in writing by the person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Holders shall be filed with the Trustee, but such
filing shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver.
In case, by reason of the suspension of or irregularities in regular
mail service, it shall be impracticable
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to mail notice to the Issuer when such notice is required to be given pursuant
to any provision of this Indenture, then any manner of giving such notice as
shall be reasonably satisfactory to the Trustee shall be deemed to be a
sufficient giving of such notice.
Section 11.5 Officer's Certificates and Opinions of Counsel;
-----------------------------------------------
Statements to Be Contained Therein. Upon any application or demand by the
- ----------------------------------
Issuer to the Trustee to take any action under any of the provisions of this
Indenture or any supplemental indenture, the Issuer shall furnish to the Trustee
an Officer's Certificate stating that all conditions precedent provided for in
this Indenture relating to the proposed action have been complied with and an
Opinion of Counsel stating that in the opinion of such counsel all such
conditions precedent have been complied with, except that in the case of any
such application or demand as to which the furnishing of such documents is
specifically required by any provision of this Indenture relating to such
particular application or demand, no additional certificate or opinion need be
furnished.
Each certificate or opinion provided for in this Indenture and
delivered to the Trustee with respect to compliance with a condition or covenant
provided for in this Indenture shall include (a) a statement that the person
giving such certificate or opinion has read such covenant or condition, (b) a
brief statement as to the nature and scope of the examination or investigation
upon which the statements or opinions contained in such certificate or opinion
are based, (c) a statement that, in the opinion of such person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with, and (d) a statement as to whether or not, in the opinion of such
person, such condition or covenant has been complied with.
Any certificate, statement or opinion of an officer of the Issuer may
be based, insofar as it relates to legal matters, upon a certificate or opinion
of or representations by counsel, unless such officer knows that the certificate
or opinion or representation with respect to the matters upon which his
certificate, statement or opinion may be based as aforesaid are erroneous, or in
the exercise of reasonable care should know that the same are erroneous. Any
certificate, statement or opinion of counsel may be based, insofar as it relates
to factual matters, on information with respect to which is in the possession of
the Issuer, upon the certificate, statement or opinion of or representations by
an officer or officers of the Issuer, unless such counsel knows that the
certificate, statement or opinion or representations with respect to matters
upon which his certificate, statement or opinion may be based as aforesaid are
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erroneous, or in the exercise of reasonable care should know that the same are
erroneous.
Any certificate, statement or opinion of an officer of the Issuer or
of counsel may be based, insofar as it relates to accounting matters, upon a
certificate or opinion of or representations by an accountant or firm of
accountants in the employ of the Issuer, unless such officer or counsel, as the
case may be, knows that the certificate or opinion or representations with
respect to the accounting matters upon which his certificate, statement or
opinion may be based as aforesaid are erroneous, or in the exercise of
reasonable care should know that the same are erroneous.
Any certificate or opinion of any independent firm of public
accountants filed with and directed to the Trustee shall contain a statement
that such firm is independent.
Section 11.6 Payments Due on Saturdays, Sundays and Holidays. If the
-----------------------------------------------
date of maturity of interest on or principal of the Securities or the date fixed
for redemption or repayment of any such Security shall not be a Business Day,
then payment of interest or principal need not be made on such date, but may be
made on the next succeeding Business Day with the same force and effect as if
made on the date of maturity or the date fixed for redemption, and no interest
shall accrue for the intervening period.
Section 11.7 Conflict of Any Provision of Indenture with Trust
-------------------------------------------------
Indenture Act of 1939. If and to the extent that any provision of this
- ---------------------
Indenture limits, qualifies, or conflicts with the duties imposed by, or with
another provision (an "incorporated provision") included in this Indenture by
any of the provisions of the Trust Indenture Act of 1939, such imposed duties or
incorporated provision shall control.
Section 11.8 New York Law to Govern. This Indenture and each
----------------------
Security shall be deemed to be a contract under the laws of the State of New
York, and for all purposes shall be construed in accordance with the laws of
such State, except as may otherwise be required by mandatory provisions of law.
Section 11.9 Counterparts. This Indenture may be executed in any
------------
number of counterparts, each of which shall be an original; but such
counterparts shall together constitute but one and the same instrument.
Section 11.10 Effect of Headings. The Article and Section headings
------------------
herein and the Table of Contents are for convenience only and shall not affect
the construction hereof.
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Section 11.11 Securities in a Foreign Currency or in ECU. Unless
------------------------------------------
otherwise specified in an Officer's Certificate delivered pursuant to Section
2.3 of this Indenture with respect to the Securities, whenever for purposes of
this Indenture any action may be taken by the Holders of a specified percentage
in aggregate principal amount of the Securities and, at such time, there are
Outstanding Securities which are denominated in a coin or currency other than
Dollars (including ECUs), then the principal amount of Securities which shall be
deemed to be Outstanding for the purpose of taking such action shall be that
amount of Dollars that could be obtained for such amount at the Market Exchange
Rate. For purposes of this Section 11.11, Market Exchange Rate shall mean the
noon Dollar buying rate in New York City for cable transfers of that currency as
published by the Federal Reserve Bank of New York; provided, however, in the
-------- -------
case of ECUs, Market Exchange Rate shall mean the rate of exchange determined by
the Commission of the European Communities (or any successor thereto) as
published in the Official Journal of the European Communities (such publication
or any successor publication, the "Journal"). If such Market Exchange Rate is
not available for any reason with respect to such currency, the Trustee shall
use, in its sole discretion and without liability on its part, such quotation of
the Federal Reserve Bank of New York or, in the case of ECUs, the rate of
exchange as published in the Journal, as of the most recent available date, or
quotations or, in the case of ECUs, rates of exchange from one or more major
banks in the City of New York or in the country of issue of the currency in
question, which for purposes of the ECU shall be Brussels, Belgium, or such
other quotations or, in the case of ECUs, rates of exchange as the Trustee shall
deem appropriate. The provisions of this paragraph shall apply in determining
the equivalent principal amount in respect of Securities denominated in a
currency other than Dollars in connection with any action taken by Holders of
Securities pursuant to the terms of this Indenture.
All decisions and determinations of the Trustee regarding the Market
Exchange Rate or any alternative determination provided for in the preceding
paragraph shall be in its sole discretion and shall, in the absence of manifest
error, be conclusive to the extent permitted by law for all purposes and
irrevocably binding on the Issuer and all Holders.
Section 11.12 Judgment Currency. The Issuer agrees to the fullest
-----------------
extent that it may effectively do so under applicable law, that (a) if for the
purpose of obtaining judgment in any court it is necessary to convert the sum
due in respect of the principal of or interest on the Securities (the "Required
Currency") into a currency in which a judgment will be rendered (the "Judgment
Currency") the rate of exchange used shall be the rate at which in accordance
with normal banking procedures the
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Trustee could purchase in the City of New York the Required Currency with the
Judgment Currency on the day on which final unappealable judgment is entered,
unless such day is not a New York Banking Day, then, to the extent permitted by
applicable law, the rate of exchange used shall be the rate at which in
accordance with normal banking procedures the Trustee could purchase in the City
of New York the Required Currency with the Judgment Currency on the New York
Banking Day preceding the day on which final unappealable judgment is entered
and (b) its obligations under this Indenture to make payments in the Required
Currency (i) shall not be discharged or satisfied by any tender, or any recovery
pursuant to any judgment (whether or not entered in accordance with subsection
(a)), in any currency other than the Required Currency, except to the extent
that such tender or recovery shall result in the actual receipt, by the payee,
of the full amount of the Required Currency expressed to be payable in respect
of such payments, (ii) shall be enforceable as an alternative or additional
cause of action for the purpose of recovering in the Required Currency the
amount, if any, by which such actual receipt shall fall short of the full amount
of the Required Currency so expressed to be payable and (iii) shall not be
affected by judgment being obtained for and other sum due under this Indenture.
For purposes of the forgoing, "New York Banking Day" means any day except a
Saturday, Sunday or a legal holiday in the City of New York or a day on which
banking institutions in the City of New York are authorized or required by law
or executive order to close.
70
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, and their respective corporate seals to be hereunto affixed
and attested, all as of the date first above written.
P. H. GLATFELTER COMPANY
By: /s/ M.A. Johnson II
-------------------
Name: M. A. Johnson II
Title: Executive Vice
President, Treasurer
and Chief Financial
Officer
[CORPORATE SEAL]
Attest:
By: /s/ R.S. Wood
-------------
Secretary
WACHOVIA BANK OF GEORGIA,
N.A., Trustee
By: /s/ J.A. Shaw
-------------
Name: J. A. Shaw
Title: Vice President
[CORPORATE SEAL]
Attest:
By: /s/ George T. Hogan
------------------------
Assistant Vice President
<PAGE>
STATE OF )
) ss.:
COUNTY OF )
On this 25th day of February, 1993 before me personally came M. A.
Johnson II, to me personally known, who, being by me duly sworn, did depose and
say that he is the Executive Vice President, Treasurer and Chief Financial
Officer of P. H. Glatfelter Company, one of the corporations described in and
which executed the above instrument; that he knows the corporate seal of said
corporation; that the seal affixed to said instrument is such corporate seal,
that it was so affixed by authority of the Board of Directors of said
corporation, and that he signed his name thereto by like authority.
[NOTARIAL SEAL]
/s/ Jacqueline Giura
--------------------
Notary Public
<PAGE>
STATE OF )
) ss.:
COUNTY OF )
On this 25th day of February, 1993 before me personally came J.A.
Shaw, to me personally known, who, being by me duly sworn, did depose and say
that he is a Vice President of Wachovia Bank of Georgia, N.A., one of the
corporations described in and which executed the above instrument; that he knows
the corporate seal of said corporation; that the seal affixed to said instrument
is such corporate seal, that it was so affixed by authority of the Board of
Directors of said corporation, and that he signed his name thereto by like
authority.
[NOTARIAL SEAL]
/s/ Barbara A. Connor
---------------------
Notary Public
<PAGE>
Exhibit 10.A
P. H. GLATFELTER COMPANY
MANAGEMENT INCENTIVE PLAN
AMENDED AND RESTATED EFFECTIVE JANUARY 1, 1994
<PAGE>
2
P. H. GLATFELTER COMPANY
MANAGEMENT INCENTIVE PLAN
-------------------------
AMENDED AND RESTATED EFFECTIVE JANUARY 1, 1994
1. Purpose of the Plan
-------------------
The purpose of the Management Incentive Plan, hereinafter called the
"Plan", is to provide an incentive to greater efforts on the part of key
salaried employees to increase profits of P. H. Glatfelter Company,
hereinafter, together with its subsidiaries, called the "Company".
The underlying objectives of the Plan are as follows:
(a) Maximize the annual return on shareholders' equity.
(b) Promote and reward management teamwork at both corporate and mill
levels.
(c) Enable the Company to attract and retain a talented management team.
(d) Assure that Plan awards are at risk annually.
(e) Reward key mill management personnel on the basis of both mill and
corporate financial results.
(f) Provide above-average incentive award potential to key salaried
employees of the Company whose base salaries are generally below
average market rates.
<PAGE>
3
2. Profit Centers of the Plan
--------------------------
In order to accomplish the objectives of the Plan, the Company and each of
its mills shall be treated as a separate profit center for the purpose of
rewarding those employees, who through the exercise of their
responsibilities, are in a position to have a significant bearing on the
success and profitability of their profit center, and therefore on the
profitability of the Company. In addition, a Glatfelter Paper Group profit
center shall represent a combination of the Spring Grove and Neenah mill
profit centers. The profit centers are identified as follows:
Corporate Profit Center
Glatfelter Paper Group Profit Center
Spring Grove Mill Profit Center
Neenah Mill Profit Center
Ecusta Mill Profit Center
3. Amendment or Termination of the Plan
------------------------------------
This Plan is an amendment and restatement of the P. H. Glatfelter Company
Management Incentive Plan and shall continue in force from year to year
until amended, modified or terminated. The Company reserves the right by
action of its Board of Directors or the Compensation Committee thereof,
hereinafter called the "Committee", at any time to amend or modify the Plan
in any respect or to terminate the Plan in its entirety, provided that, if
the
<PAGE>
4
Plan is in effect at the beginning of a fiscal year, it may not be
terminated or amended for such year.
4. Administration of the Plan
--------------------------
The management of the Plan shall be vested in the Committee. The majority
of the members of the Committee at any time in office shall constitute a
quorum for the transaction of business at any meeting. Any determination
or action of the Committee may be made or taken by a majority of its
members present at any meeting at which a quorum is present or without a
meeting by unanimous written consent executed by all the members then in
office.
5. Participants in the Plan
------------------------
(a) The participants in the Plan and the profit center to which they are
assigned for each fiscal year shall be proposed by the Chief Executive
Officer and approved by the Committee on or before the December 31
immediately preceding such fiscal year. In this respect, the action of the
Committee shall be final. Participation is limited to selected management
and highly compensated salaried employees of the Company. Nothing herein
contained shall be construed as giving any salaried employee the right to
participate in the Plan, except after approval by the Committee, and then
his participation shall be subject to all the provisions of the Plan.
<PAGE>
5
(b) The criteria that will be considered by the Committee in approving a
participant shall include position responsibilities, organizational
reporting relationship, current salary grade and/or rate, individual
performance expectations, and competitive practices.
(c) If a participant shall transfer from one profit center to another
during the year, his incentive award shall be determined on the basis of
the financial results of each profit center for each fiscal year, prorated
based on service to each profit center during such fiscal year. The
participant's salary grade at the time he is approved by the Committee as a
participant in the Plan for such year shall be such participant's salary
grade for purposes of determining the maximum, target and minimum awards
for each profit center.
(d) If a participant's employment by the Company should terminate during
the fiscal year by reason of his death, retirement or permanent disability,
his incentive award shall be determined on the basis of the financial
results of his profit center for such fiscal year and his base salary
midpoint for such fiscal year, prorated to reflect his services prior to
his death, retirement or permanent disability, and shall be paid either to
him or as appropriate, his beneficiary as designated under the Company's
Group Life Insurance Plan. A participant who has been removed from the
payroll of the Company during the fiscal year for any reason, other than
his death, retirement, or permanent disability, shall not participate in
the Plan for such fiscal year, unless the
<PAGE>
6
Committee, in its sole discretion, determines that he shall so
participate. The decision of the Committee in this regard shall be final.
(e) In consideration of the payments to be made in accordance with the
provisions of the Plan, the participants may not be participants in the
Company's Conference Group award program.
6. Determination of Incentive Compensation Awards
----------------------------------------------
(a) The Plan shall provide incentive awards based on certain measurements
of profitability in each of the Company's profit centers. Such
profitability shall be measured by the return on average shareholders'
equity (ROSE) in the case of the Corporate Profit Center and by both the
return on average shareholders' equity (ROSE) of the Company and the return
on average capital employed (ROCE) for the applicable mill profit center.
In the case of the Glatfelter Paper Group, the financial results of the
Spring Grove and Neenah mill profit centers will be combined for purpose of
calculating return on average capital employed. The determination of
profit center profitability shall be based on the audited consolidated
financial statements of the Company and on the Company's internal financial
statements for each mill after the audit adjustments have been applied.
(b) The amount of an individual's award shall be based on a percentage of
such individual's base salary midpoint for the salary grade approved for
him by the Committee. If such salary midpoints are revised at any time in
a fiscal year, the Committee will revise the midpoints applicable to such
year.
<PAGE>
7
The incentive award as a percentage of base salary midpoint will vary based
on the applicable ROSE and ROCE levels achieved for the Plan year.
(c) The ROSE and ROCE factors are a measure of profitability and will be
established in the operating rules for each profit center, adopted annually
by the Committee in accordance with Paragraph 8. The incentive award shall
equal the base salary midpoint multiplied by the Incentive Award Factor
which will vary in relationship to the actual ROSE and ROCE levels achieved
for the year.
7. Payment of Individual Incentive Awards
--------------------------------------
(a) Each year after the Committee has approved the participants in the
Plan for the following year in accordance with Paragraph 5(a), the
participants shall make an election by February 1 of such following year to
receive their incentive award in cash or to defer the receipt of 25%, 50%,
75% or 100% of the award to a future period, specifying irrevocably the
timing of the future payment(s) in accordance with the deferred options set
forth on Schedule A, hereto. The amount of deferred awards shall be
adjusted at the end of each calendar quarter by crediting the cumulative
deferred awards with interest for the quarter based on the prime rate of
interest on the last business day of the quarter at Morgan Guaranty Trust
Company of New York (or such comparable rate as is determined by the
Committee if such prime rate is unavailable or, if in the opinion of the
Committee it no longer reflects the rate of interest on such bank's demand
<PAGE>
8
loans to its most credit-worthy customers). The interest credit shall be
earned from the date when the award would have been paid if not deferred
and shall be compounded on the accumulated award and accrued interest.
Should a deferred award be paid during a quarter, interest on the amount of
such payment shall be accrued at the rate used for the immediately
preceding quarter.
(b) Cash incentive awards shall be paid annually as promptly as
practicable after the Company's certified public accountants have completed
their examination of the Company's year-end consolidated financial
statements.
(c) Deferred incentive awards shall be paid on the first Monday in April
of each year pursuant to a participant's election to defer receipt of his
award. In the event a participant who has deferred an award determines
that he has a financial hardship which necessitates the acceleration of the
payment of the deferred award, he shall submit his request to release the
funds to the Committee which shall consider the circumstances and, in its
sole discretion, determine whether the request shall be approved.
(d) If a participant separates from the Company before age 55, or after
age 55 without being vested by the terms of the Company's Pension Plans for
Salaried Employees, including the Supplemental Executive Retirement Plan
(collectively, the "Pension Plans"), such participant will receive the
unpaid amount of his cumulative deferred award(s) in a lump sum within 30
<PAGE>
9
days of his separation date or at the sole discretion and option of the
Committee, as stipulated on his election form. If such participant
separates after age 55 and is vested under the terms of the Company's
Pension Plans, his deferred award(s) will be paid as stipulated on his
election form(s). If a participant should die before his deferred award(s)
has been completely paid out, the unpaid amount will be paid in a lump sum
to his designated beneficiary, as designated under the Company's Group Life
Insurance Plan, on a timely basis after his death.
8. Management Incentive Plan Adjustment Supplement
-----------------------------------------------
The Company will supplement the basic monthly pension payable under the
Company's Pension Plans, with respect to an employee who is a participant
in the Plan and elected to defer incentive awards in accordance with
Paragraph 7 of the Plan as provided in the Plan of Supplemental Retirement
Benefits for the Management Committee.
9. Management Incentive Plan Operating Rules
-----------------------------------------
On or prior to December 31 immediately preceding each fiscal year, the
Committee shall adopt preliminary operating rules for each of the profit
centers for such fiscal year, which operating rules shall be adjusted by
the Committee and become final promptly after the completion of the audit
of the Company's consolidated financial statements for the fiscal year
immediately preceding the fiscal year to which such operating rules relate.
These operating rules will establish maximum, target and minimum Incentive
<PAGE>
10
Award Factors for each salary grade and the corresponding maximum, target
and minimum rates of return on average shareholders' equity and rates of
return on average capital employed for each of the individual profit
centers, based on historical and anticipated rates of return for the profit
centers, (or alternative awards where there are unusual operating
circumstances) and such other administrative and procedural rules which the
Committee considers appropriate.
10. Definitions
-----------
For the purpose of determining the incentive awards under the Plan, the
following definitions shall apply:
(a) Return on Average Shareholders' Equity (ROSE) shall mean Incentive
Income divided by Average Shareholders' Equity.
(b) Incentive income shall mean income before income taxes as reported for
the fiscal year in the Company's audited consolidated financial
statements...
(i) before provision is made for the amounts paid or payable under
the Plan, the Employees' Profit Sharing Plans, and the Spring
Grove Conference Group award program, and
(ii) after such adjustment, if any, as shall be made to exclude, to
the extent that the Committee in its sole discretion may
determine, the whole or any part of any item which is both
unusual in nature and infrequent in occurrence.
<PAGE>
11
(c) Average Shareholders' Equity shall mean the average of the
shareholders' equity as reported in each of the Company's monthly internal
financial statements during the fiscal year.
(d) The "Incentive Award Factor" shall be the percentage of base salary
midpoint for each salary grade corresponding to the maximum, target and
minimum rates of return established for the corporate, mill, and the paper
group profit centers in the operating rules.
(e) Return on Capital Employed (ROCE) shall mean Operating Profit divided
by Average Capital Employed. ROCE shall be based on the Company's internal
financial reports for each of the Spring Grove, Neenah, and Ecusta mills
after the year-end audit adjustments by the Company's independent certified
public accountants have been applied to the accounting records and related
reports. In the case of the Spring Grove mill profit center, the Return on
Capital Employed shall be based on the consolidated financial reports for
the Spring Grove mill and The Glatfelter Pulp Wood Company. In the case of
the Glatfelter Paper Group profit center, the Return on Capital Employed
shall be based on the consolidated financial reports for the Spring Grove
mill, The Glatfelter Pulp Wood Company, and the Neenah mill.
(f) Operating Profit shall mean operating profit as reported for the
fiscal year in the Company's internal financial statements by mill and for
The Glatfelter Pulp Wood Company...
<PAGE>
12
(i) before provision is made for the amounts paid or payable under
the Plan, the Employees' Profit Sharing Plans, and the Spring
Grove Conference Group award program, and
(ii) after such adjustment, if any, as shall be made to exclude, to
the extent that the Committee in its sole discretion may
determine, the whole or any part of any item which is both
unusual in nature and infrequent in occurrence.
(g) Average Capital Employed shall mean the sum of the average of
inventories and net property, plant, and equipment as shown in the
Company's monthly internal financial statements by mill and for the
Glatfelter Pulp Wood Company during the fiscal year.
(h) Retirement shall mean voluntary separation from service by a
participant who has achieved an age whereby he is eligible for and has
elected to receive early retirement under the Company's Pension Plans.
(i) Disability shall mean a disability due to any medically determinable
physical or mental impairment that prevents a participant from fulfilling
the duties that such participant was performing at the time of the
occurrence of such disability and which can be expected to result in death
or which has lasted or can be expected to last for a continuous period of
more than twelve months, as determined by the Committee in its sole
discretion.
<PAGE>
13
11. Rights Not Transferable
-----------------------
Rights to incentive cash awards and deferred incentive awards are not
transferable by a participant except upon the death of the participant by
operation of will or the laws of intestacy.
12. Funding
-------
The Plan is not funded. All awards that are not received in cash shall
remain as part of the general assets of the Company and shall not be deemed
held in trust for the benefit of the participant.
13. Withholding of Applicable Taxes
-------------------------------
The Company shall have the right to withhold amounts from incentive cash
awards and deferred incentive awards as shall be required to be withheld by
the Company pursuant to any statute or other governmental regulation or
ruling.
14. Conclusion
----------
The interpretation of the Plan or any provision thereof or the operating
rules made by the Committee shall be binding upon both the Company and
every participant in the Plan. While it is the intention of the Company to
provide a fair and reasonable basis for the determination of incentive
compensation awards and the selection of the participants, the Plan is not
an employment contract between the Company and the salaried employees or
any participants and shall not constitute an agreement by the Company to
continue any participant in its employ for any period of time
notwithstanding
<PAGE>
14
that the termination of the employment of a participant during a fiscal
year will preclude an incentive award to such participant for such year.
<PAGE>
Exhibit 10.B
15
P. H. GLATFELTER COMPANY
MANAGEMENT INCENTIVE PLAN
OPERATING RULES FOR 1994
General
- -------
The following management incentive plan operating rules are in effect for the
year 1994.
<PAGE>
16
Maximum, Target, Minimum Awards by Grade
- ----------------------------------------
The table below shows maximum, target and minimum awards as percentages of
base salary midpoints for each salary grade. This table applies to all
participants, in all profit centers.
<TABLE>
<CAPTION>
Award as % of Base Salary Midpoint
----------------------------------
Salary Grade Target Maximum Minimum
- ------------ ------ ------- -------
<S> <C> <C> <C>
25 70 100 32.5
24 65 100 27.5
23 60 100 22.5
22 55 100 17.5
21 50 100 12.5
20 45 90 11.25
19 40 80 10.0
18 40 80 10.0
17 35 70 8.75
16 35 70 8.75
15 30 60 7.5
14 30 60 7.5
13 25 50 6.25
12 25 50 6.25
11 20 40 5.0
10 20 40 5.0
9 20 40 5.0
</TABLE>
<PAGE>
17
Return on Shareholders' Equity (ROSE) and Return on Capital Employed (ROCE)
- ---------------------------------------------------------------------------
Factors
- -------
The weighted average of the ROSE and ROCE factors set forth below define the
returns necessary to achieve the target awards for each profit center.
<TABLE>
<CAPTION>
Corporate Profit Center
- -----------------------
Year ROSE Weighting Factor
---- ----- ----------------
<S> <C> <C>
1992 Actual 20.3% 10%
1993 Actual 12.1% 30%
1994 Budget 10.3% 60%
----
Weighted Avg. - Target 11.8%
</TABLE>
<TABLE>
<CAPTION>
Glatfelter Paper Group Profit Center
- ------------------------------------
Year ROCE Weighting Factor
---- ---- ----------------
<S> <C> <C>
1992 Actual 15.8% 10%
1993 Actual 10.7% 30%
1994 Budget 9.3% 60%
----
Weighted Avg. - Target 10.4%
</TABLE>
<TABLE>
<CAPTION>
Spring Grove Mill Profit Center
- ------------------------------------
Year ROCE Weighting Factor
---- ---- ----------------
<S> <C> <C>
1992 Actual 13.4% 10%
1993 Actual 9.8% 30%
1994 Budget 6.8% 60%
----
Weighted Avg. - Target 8.4%
</TABLE>
<PAGE>
18
<TABLE>
<CAPTION>
Neenah Mill Profit Center
- ---------------------------
Year ROCE Weighting Factor
----- ---- ----------------
<S> <C> <C>
1992 Actual 26.1% 10%
1993 Actual 15.2% 30%
1994 Budget 22.4% 60%
----
Weighted Avg. - Target 20.6%
</TABLE>
<TABLE>
<CAPTION>
Ecusta Mill Profit Center
- ---------------------------
Year ROCE Weighting Factor
---- ---- ----------------
<S> <C> <C>
1992 Actual 11.9% 10%
1993 Actual 2.7% 30%
1994 Budget 1.3% 60%
----
Weighted Avg. - Target 2.8%
</TABLE>
The ROSE and ROCE factors set forth below define the returns necessary
to achieve the maximum and minimum awards for each profit center.
<TABLE>
<CAPTION>
Corporate Profit Center
- -----------------------
ROSE
----
<S> <C>
Maximum 17.65%
Target 11.80%
Minimum 7.86%
</TABLE>
<TABLE>
<CAPTION>
Glatfelter Paper Group Profit Center
- ------------------------------------
ROCE
----
<S> <C>
Maximum 14.65%
Target 10.40%
Minimum 6.85%
</TABLE>
<PAGE>
19
<TABLE>
<CAPTION>
Spring Grove Mill Profit Center
- -------------------------------
ROCE
----
<S> <C>
Maximum 10.92%
Target 8.40%
Minimum 5.46%
</TABLE>
<TABLE>
<CAPTION>
Neenah Mill Profit Center
- -------------------------
ROCE
----
<S> <C>
Maximum 35.02%
Target 20.60%
Minimum 14.42%
</TABLE>
<TABLE>
<CAPTION>
Ecusta Mill Profit Center
- -------------------------
ROCE
----
<S> <C>
Maximum 4.20%
Target 2.80%
Minimum 1.29%
</TABLE>
For the purposes of determining the Incentive Award Factor, all rates of
return will be computed to one decimal. Should the actual rate of return fall
between the maximum, target or minimum values in the table, the Incentive Award
Factor will vary proportionately to the interval between the actual rate of
return and the maximum, target or minimum values into which it falls.
<PAGE>
20
The Incentive Award Factor for the mill profit centers will be based on the
aggregate of 80% of the ROCE factor for the mill and 20% of the ROSE factor for
the Company. The award factor for the Glatfelter Paper Group reflects the
combination of the financial results for the Spring Grove and Neenah mills and
will be based on the aggregate of 80% of the ROCE for combined mills and 20% of
the ROSE for the Company.
<PAGE>
EXHIBIT 11
P. H. GLATFELTER COMPANY AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER SHARE
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
1989 1990 1991 1992 1993
<S> <C> <C> <C> <C> <C>
Weighted average number of common shares:
Shares outstanding, beginning of year 24,010,876 23,487,847 22,587,445 22,314,701 44,057,273
Adjusted for stock split in 1992
exclusive of shares below --
applied retroactively 24,010,876 23,487,847 22,587,445 22,314,701
Issued for employee stock
purchase plans 39,244 46,512 38,012 42,810 73,745
Adjusted for stock award plan -- 2,380 2,226 40,876 41,674
Shares of treasury stock to be issued
under restricted stock award plan
common stock equivalents 550,032 522,160 468,334 484,149 290,343
Shares acquired and held in treasury (317,776) (543,180) (122,824) (524,257) (106,601)
----------- ----------- ----------- ----------- -----------
Total 48,295,632 47,003,412 45,599,288 44,673,778 44,314,760
=========== =========== =========== =========== ===========
Income before accounting changes $92,863,897 $88,331,631 $76,048,900 $56,544,143 $20,408,988
Accounting changes (4,193,461)
----------- ----------- ----------- ----------- -----------
Net income 92,863,897 88,331,631 76,048,900 56,544,143 16,215,527
Preferred dividends (7,462) (7,462) (7,451) (7,368) (5,501)
----------- ----------- ----------- ----------- -----------
Net income applicable to common shares $92,856,435 $88,324,169 $76,041,449 $56,536,775 $16,210,026
=========== =========== =========== =========== ===========
Income per common share
before accounting changes $1.92 $1.88 $1.67 $1.27 $0.46
===== ===== ===== ===== =====
Net income per common share $1.92 $1.88 $1.67 $1.27 $0.37
===== ===== ===== ===== =====
</TABLE>
<PAGE>
Exhibit 21
LIST OF SUBSIDIARIES
Ecusta Australia Pty. Limited
Ecusta Fibers Ltd.
Ecusta Export Trading Corp.
Glatfelter Investments, Inc.
The Glatfelter Pulpwood Company
Spring Grove Water Company
Glatfelter of Nevada
<PAGE>
Exhibit 23
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
P. H. Glatfelter Company:
We hereby consent to the incorporation by reference in the Registration
Statements of P. H. Glatfelter Company on Form S-8 (Registration Nos. 33-24858,
33-25884, 33-53338 and 33-37198) of our reports dated February 11, 1994 on the
consolidated financial statements of P. H. Glatfelter Company and subsidiaries
appearing in and incorporated by reference in your Annual Report on Form 10-K
for the year ended December 31, 1993.
DELOITTE & TOUCHE
Philadelphia, Pennsylvania
February 11, 1994
