<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 12, 1997
REGISTRATION NO. 333-36395
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 2
TO
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
P. H. GLATFELTER COMPANY
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
PENNSYLVANIA 2621 23-0628360
(STATE OR JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NUMBER)
</TABLE>
228 SOUTH MAIN STREET, SPRING GROVE, PENNSYLVANIA 17362, (717) 225-4711
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
R. S. WOOD
SECRETARY AND TREASURER
P. H. GLATFELTER COMPANY
228 SOUTH MAIN STREET, SPRING GROVE, PENNSYLVANIA 17362, (717) 225-4711
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
------------------------
COPIES TO:
<TABLE>
<S> <C>
MORRIS CHESTON, JR., ESQ. STUART H. COLEMAN, ESQ.
BALLARD SPAHR ANDREWS & INGERSOLL STROOCK & STROOCK & LAVAN LLP
1735 MARKET STREET 180 MAIDEN LANE
PHILADELPHIA, PA 19103 NEW YORK, NEW YORK 10038
(215) 665-8500 (212) 806-5400
</TABLE>
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this Registration Statement becomes effective.
If the securities being registered on this form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [ ]
------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
================================================================================
<PAGE> 2
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.
P. H. GLATFELTER COMPANY
OFFER TO EXCHANGE
Its 6 7/8% Notes due 2007, Series B
For Any and All of Its Outstanding 6 7/8% Notes due
2007
The Exchange Offer will expire at 5:00 P.M.
[P.H. GLATFELTER COMPANY LOGO]
New York City time, on December 15, 1997, unless
extended.
------------------------
P. H. Glatfelter Company, a Pennsylvania corporation (the "Company"), hereby
offers, upon the terms and conditions set forth in this Prospectus (as the same
may be amended or supplemented from time to time, the "Prospectus") and the
accompanying Letter of Transmittal (which together constitute the "Exchange
Offer"), to exchange $1,000 principal amount of its 6 7/8% Notes due 2007,
Series B (the "Exchange Notes"), which will have been registered under the
Securities Act of 1933, as amended (the "Securities Act"), pursuant to a
Registration Statement of which this Prospectus is a part (the "Exchange Offer
Registration Statement"), for each $1,000 principal amount of its outstanding
6 7/8% Notes due 2007 (the "Old Notes" and collectively with the Exchange Notes,
the "Notes"), of which $150,000,000 aggregate principal amount is outstanding.
The Company has no debt which ranks senior to the Notes and $150,000,000
principal amount of debt which ranks on a pari passu basis with the Notes. The
form and terms of the Exchange Notes are identical in all material respects to
the form and term of the Old Notes (which they replace) except that (i) the
Exchange Notes will bear a Series B designation and will have been registered
under the Securities Act and therefore will not be subject to certain
restrictions on transfer applicable to the Old Notes and will not be entitled to
registration rights, (ii) the Exchange Notes are issuable in minimum
denominations of $1,000 compared to minimum denominations of $100,000 for the
Old Notes, and (iii) the Exchange Notes will not bear legends restricting their
transfer and will not contain certain provisions which were included in the
terms of the Old Notes relating to an increase in the interest rate in certain
circumstances relating to the timing of the Exchange Offer. The Exchange Notes
will evidence the same debt as the Old Notes (which they replace) and will be
issued under and be entitled to the benefits of the Indenture, dated July 22,
1997, between the Company and The Bank of New York, as Trustee (the
"Indenture"), governing the Notes. See "The Exchange Offer" and "Description of
Notes."
The Company will accept for exchange any and all Old Notes validly tendered
and not withdrawn prior to 5:00 p.m., New York City time, on December 15, 1997,
unless extended by the Company in its sole discretion (the "Expiration Date").
Notwithstanding the foregoing, the Company will not extend the Expiration Date
beyond December 19, 1997. Tenders of Old Notes may be withdrawn at any time
prior to 5:00 p.m. on the Expiration Date. The Exchange Offer is subject to
certain customary conditions. The Old Notes were sold by the Company on July 22,
1997 to the Initial Purchasers (as defined) in a transaction not registered
under the Securities Act in reliance upon an exemption under the Securities Act.
The Initial Purchasers subsequently placed the Old Notes with qualified
institutional buyers that agreed to comply with certain transfer restrictions
and other conditions in reliance upon Rule 144A under the Securities Act.
Accordingly, the Old Notes may not be reoffered, resold or otherwise transferred
in the United States unless registered under the Securities Act or unless an
applicable exemption from the registration requirements of the Securities Act is
available. The Exchange Notes are being offered hereunder in order to satisfy
the obligations of the Company under the Registration Rights Agreement (as
defined) entered into by the Company in connection with the offering of the Old
Notes. See "The Exchange Offer."
Based on no-action letters issued by the staff (the "Staff") of the
Securities and Exchange Commission (the "Commission") to third parties, the
Company believes the Exchange Notes issued pursuant to the Exchange Offer may be
offered for resale, resold and otherwise transferred by any holder thereof
(other than holders who are broker-dealers) without further compliance with the
registration and prospectus delivery provisions of the Securities Act. However,
any purchaser of Old Notes who is an affiliate of the Company or who intends to
participate in the Exchange Offer for the purpose of distributing the Exchange
Notes, or any broker-dealer who purchased the Old Notes from the Company to
resell pursuant to Rule 144A or any other available exemption under the
Securities Act, (i) will not be able to rely on the interpretation of the Staff
set forth in the above-mentioned no-action letters, (ii) will not be entitled to
tender its Old Notes in the Exchange Offer and (iii) must comply with the
registration and prospectus delivery requirements of the Securities Act in
connection with any sale or transfer of the Old Notes unless such sale or
transfer is made pursuant to an exemption from such requirements. Each
broker-dealer that acquired Old Notes for its own account as a result of
market-making or other trading activities (a "Participating Broker-Dealer") that
receives Exchange Notes for its own account pursuant to the Exchange Offer must
acknowledge that it will deliver a prospectus in connection with any resale of
such Exchange Notes. The Letter of Transmittal states that by so acknowledging
and by delivering a prospectus, a Participating Broker-Dealer will not be deemed
to admit that it is an "underwriter" within the meaning of the Securities Act.
This Prospectus, as it may be amended or supplemented from time to time, may be
used by a Participating Broker-Dealer in connection with resales of Exchange
Notes received in exchange for Old Notes where such Old Notes were acquired by
such Participating Broker-Dealer as a result of market-making activities or
other trading activities. The Company has agreed that, for a period of up to 180
days after the Expiration Date, it will make this Prospectus available to any
Participating Broker-Dealer for use in connection with any such resale. See
"Plan of Distribution."
Holders of Old Notes not tendered and accepted in the Exchange Offer will
continue to hold such Notes and will be entitled to all the rights and benefits
other than registration rights and will be subject to the limitations applicable
thereto under the Indenture and with respect to transfer under the Securities
Act. The Company will pay all the expenses incurred by it incident to the
Exchange Offer. See "The Exchange Offer."
Interest on the Exchange Notes will accrue from the last January 15 or July
15 (each an "Interest Payment Date") on which interest was paid on the Old Notes
surrendered in exchange therefore or, if no interest has been paid on the Old
Notes, from July 22, 1997.
Prior to the Exchange Offer, there has been only a limited secondary market
and no public market for the Notes. The Exchange Notes will be a new issue of
securities for which there currently is no market. Although the Initial
Purchasers have informed the Company that they each currently intend to make a
market in the Exchange Notes, they are not obligated to do so, and any such
market making may be discontinued at any time without notice. Accordingly, there
can be no assurance as to the development or liquidity of any market for the
Exchange Notes. The Company currently does not intend to apply for listing of
the Exchange Notes on any securities exchange or for quotation through Nasdaq.
WE ARE NOT ASKING FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND ONE.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------------------
THE DATE OF THIS PROSPECTUS IS NOVEMBER 12, 1997
<PAGE> 3
AVAILABLE INFORMATION
The Company has filed with the Commission a Registration Statement on Form
S-4 (the "Exchange Offer Registration Statement," which term shall encompass all
amendments, exhibits, annexes and schedules thereto) pursuant to the Securities
Act, and the rules and regulations promulgated thereunder, covering the Exchange
Notes being offered hereby. This Prospectus does not contain all the information
set forth in the Exchange Offer Registration Statement. For further information
with respect to the Company and the Exchange Offer, reference is made to the
Exchange Offer Registration Statement. Statements made in this Prospectus as to
the contents of any contract, agreement or other document referred to are not
necessarily complete and in each instance reference is made to the copy of such
contract, agreement or other document filed as an exhibit to the Exchange Offer
Registration Statement, and each such statement shall be deemed qualified in its
entirety by such reference.
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Commission. The Exchange Offer Registration Statement, including the exhibits
thereto, together with reports, proxy statements and other information filed by
the Company may be inspected and copied at the public reference facilities
maintained by the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549,
at the Regional Offices of the Commission: 7 World Trade Center, New York, New
York 10048; and Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661-2511; and copies of such materials can be obtained by mail from
the Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates. The Company's Common Stock is
listed on the American Stock Exchange. Such information may also be accessed
electronically by means of the Commission's home page on the Internet
(http://www.sec.gov). Such reports, proxy statements and other information
concerning the Company can also be inspected and copied at the offices of the
American Stock Exchange, 86 Trinity Place, New York, New York 10005.
Whether or not the Company is obligated under the Exchange Act to file such
reports, information and documents in the future, the Company, while any of the
Notes remain outstanding, has agreed to furnish to the holders of the Notes and
file with the Commission (unless the Commission will not accept such a filing)
(i) all quarterly and annual financial information that would be required to be
contained in a filing with the Commission on Forms 10-Q and 10-K if the Company
were required to file such forms, including for each a "Management's Discussion
and Analysis of Results of Operations and Financial Condition" and, with respect
to the annual information only, a report thereon by the Company's independent
certified public accountants and (ii) all reports that would be required to be
filed with the Commission on Form 8-K if the Company were required to file such
reports. In addition, for so long as any Notes remain outstanding, the Company
has agreed to make available to any beneficial owner or prospective purchaser of
the Notes, in connection with any sale thereof, the information required
pursuant to Rule 144A(d)(4) promulgated under the Securities Act, during any
period in which the Company is not subject to Section 13 or 15(d) of the
Exchange Act.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission are
incorporated in this Prospectus by reference:
1. The Company's Annual Report on Form 10-K and Amendment No. 1
thereto on Form 10-K/A for the fiscal year ended December 31, 1996.
2. The Company's Quarterly Reports on Form 10-Q for the fiscal
quarters ended March 31, 1997 and June 30, 1997.
3. The Company's Current Reports on Form 8-K dated January 27, 1997,
January 30, 1997 and July 11, 1997.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act on or after the date of this Prospectus and prior to
the termination of the Exchange Offer shall be deemed to
2
<PAGE> 4
be incorporated by reference in this Prospectus and to be a part hereof from and
after the respective dates of filing of such documents. Any statement contained
in a document incorporated or deemed to be incorporated by reference herein or
contained in this Prospectus shall be deemed to be modified or superseded for
purposes of this Prospectus to the extent that any statement contained herein or
in any other subsequently filed document which also is incorporated or deemed to
be incorporated by reference herein modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person to whom a copy of
this Prospectus has been delivered, on the written or oral request of such
person, a copy of any or all of the documents which have been or may be
incorporated in this Prospectus by reference (other than exhibits to such
documents unless such exhibits are specifically incorporated by reference in any
such documents). Such requests should be directed to the Secretary, at the
principal offices of the Company, 228 South Main Street, Spring Glove,
Pennsylvania 17362, telephone number (717) 225-4711. In order to ensure timely
delivery of the documents, any request should be made not later than five (5)
days prior to the Expiration Date.
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
This Prospectus may include "forward-looking statements" within the meaning
of the Private Securities Litigation Reform Act of 1995. Any statements with
regard to the Company's expectations as to industry conditions and its financial
results, demand for or pricing of its products and other aspects of its business
may constitute forward looking statements. Although the Company makes such
statements based on assumptions which it believes to be reasonable, there can be
no assurance that actual results will not differ materially from the Company's
expectations. Accordingly, the Company hereby identifies the following important
factors, among others, which could cause its results to differ from any results
which might be projected, forecasted or estimated in any such forward-looking
statements: (i) variations in demand for or pricing of its products, (ii)
changes in the cost or availability of raw materials used by the Company, in
particular market pulp, pulp substitutes and wastepaper; (iii) changes in
industry paper production capacity, including the construction of new mills, the
closing of mills and incremental changes due to capital expenditures or
productivity increases; (iv) the gain or loss of significant customers; (v) cost
and other effects of environmental compliance, cleanup, damages, remediation or
restoration, or personal injury or property damage related thereto, such as the
cost of natural resource restoration or damages related to the presence of
polychlorinated biphenyls ("PCBs") in the lower Fox River on which the Company's
Neenah mill is located; (vi) significant changes in cigarette consumption, both
domestically and internationally; (vii) enactment of adverse state or federal
legislation or changes in government policy or regulation; (viii) adverse
results in litigation; and (ix) disruptions in production and/or increased costs
due to labor disputes.
3
<PAGE> 5
PROSPECTUS SUMMARY
The following summary does not purport to be complete and is qualified in
its entirety by reference to the more detailed information, including the
audited Consolidated Financial Statements of the Company, including the notes
thereto, and the unaudited Condensed Consolidated Financial Statements of the
Company, including the notes thereto, appearing elsewhere herein or incorporated
by reference herein. Unless the context otherwise requires, references in this
Prospectus to the "Company" shall include the Company and its subsidiaries.
THE COMPANY
The Company is a manufacturer of printing papers and tobacco and other
specialty papers. The Company sells its products in most parts of the United
States and in a number of foreign countries, either through wholesale paper
merchants, brokers and agents, or direct to customers.
Most of the Company's printing paper products are sold into the uncoated
free-sheet portion of the industry. The Company's printing paper products are
used principally for the printing of case bound and quality paperback books,
commercial and financial printing and envelope converting. Sales of paper for
book publishing and commercial printing are generally made through wholesale
paper merchants, while sales of paper to financial printers and converters are
generally made directly.
The Company's tobacco and other specialty papers are used for cigarette
manufacturing and other specialty uses such as the manufacture of playing cards,
stamps, labels and surgical gowns. Sales of these papers are generally made
directly to the converter of the paper.
The Company's paper mills are located in Spring Grove, Pennsylvania, Pisgah
Forest, North Carolina, and Neenah, Wisconsin. The Spring Grove facility is an
integrated paper manufacturing plant, producing a substantial part of its fiber
requirements from pulpwood. The Pisgah Forest mill produces flax fiber pulp used
to manufacture some of its tobacco paper products and utilizes purchased virgin
wood pulp and deinked pulp to manufacture nearly all of its other papers. The
Neenah mill recycles a wide range of high-grade wastepapers to provide its
principal fiber raw material. All three mills recycle internally generated waste
to supply part of the fiber required for operations.
The Company began operations in Spring Grove, Pennsylvania in 1864 and was
incorporated as a Pennsylvania corporation in 1905. Its principal offices are
located at 228 South Main Street, Spring Grove, Pennsylvania 17362, telephone
number (717) 225-4711.
THE OLD NOTES OFFERING
Notes...................... The Old Notes were sold by the Company on July 22,
1997 to Bear, Stearns & Co. Inc. and BT Securities
Corporation (collectively, the "Initial
Purchasers") pursuant to a Purchase Agreement dated
July 22, 1997 (the "Purchase Agreement"). The
Initial Purchasers subsequently resold the Old
Notes to qualified institutional buyers that agreed
to comply with certain transfer restrictions and
other conditions pursuant to Rule 144A under the
Securities Act.
Registration Rights
Agreement.................. Pursuant to the Purchase Agreement, the Company and
the Initial Purchasers entered into a Registration
Rights Agreement dated July 22, 1997 (the
"Registration Rights Agreement"), which grants the
holders of the Notes certain exchange and
registration rights. The Exchange Offer is intended
to satisfy such exchange rights which terminate
upon the consummation of the Exchange Offer.
4
<PAGE> 6
THE EXCHANGE OFFER
Securities Offered......... $150,000,000 aggregate principal amount of 6 7/8%
Notes due 2007, Series B (the "Exchange Notes").
The Exchange Offer......... $1,000 principal amount of the Exchange Notes in
exchange for each $1,000 principal amount of Old
Notes. As of the date hereof, $150,000,000
aggregate principal amount of Old Notes are
outstanding. The Company will issue the Exchange
Notes to holders on or promptly after the
Expiration Date.
Based on existing interpretations of the Securities
Act by the Staff set forth in several no-action
letters to third parties, and subject to the
immediately following sentence, the Company
believes that the Exchange Notes issued pursuant to
the Exchange Offer may be offered for resale,
resold and otherwise transferred by the holders
thereof (other than holders who are broker-dealers)
without further compliance with the registration
and prospectus delivery provisions of the
Securities Act. However, any purchaser of Old Notes
who is an affiliate of the Company or who intends
to participate in the Exchange Offer for the
purpose of distributing the Exchange Notes, or any
broker-dealer who purchased the Old Notes from the
Company to resell pursuant to Rule 144A or any
other available exemption under the Securities Act,
(i) will not be able to rely on the interpretation
of the Staff set forth in the above-mentioned
no-action letters, (ii) will not be entitled to
tender its Old Notes in the Exchange Offer and
(iii) must comply with the registration and
prospectus delivery requirements of the Securities
Act in connection with any sale or transfer of the
Old Notes unless such sale or transfer is made
pursuant to an exemption from such requirements.
Each broker-dealer that acquired Old Notes for its
own account as a result of market-making or other
trading activities (a "Participating
Broker-Dealer") that receives Exchange Notes for
its own account pursuant to the Exchange Offer must
acknowledge that it will deliver a prospectus in
connection with any resale of such Exchange Notes.
The Letter of Transmittal states that by so
acknowledging and by delivering a prospectus, a
Participating Broker-Dealer will not be deemed to
admit that it is an "underwriter" within the
meaning of the Securities Act. This Prospectus, as
it may be amended or supplemented from time to
time, may be used by a Participating Broker-Dealer
in connection with resales of Exchange Notes
received in exchange for Old Notes where such Old
Notes were acquired by such Participating
Broker-Dealer as a result of market-making
activities or other trading activities. The Company
has agreed that, for a period not to exceed 180
days after the Expiration Date, it will make this
Prospectus available to any Participating Broker-
Dealer for use in connection with any such resale.
See "Plan of Distribution." Failure to comply with
such prospectus delivery requirements may result in
liability under the Securities Act for which the
holder is not indemnified by the Company.
Expiration Date............ 5:00 p.m., New York City time, on December 15, 1997
unless the Exchange Offer is extended, in which
case the term "Expiration Date" means the latest
date and time to which the Exchange Offer is
extended.
5
<PAGE> 7
Accrued Interest on the
Exchange Notes and on
the Old Notes............ Each Exchange Note, and any Old Note not exchanged,
will bear interest at the rate set forth on the
cover page hereof from the later of July 22, 1997
and the most recent Interest Payment Date to which
interest has been paid on the Exchange Notes or on
the Old Notes exchanged for the Exchange Notes, as
the case may be, payable semi-annually on January
15 and July 15 in each year, commencing January 15,
1998, to the person in whose name the Exchange Note
(or any predecessor Note) is registered at the
close of business on the January 1 or the July 1
next preceding such Interest Payment Date. See
"Description of Notes -- Principal, Maturity and
Interest."
Conditions to the Exchange
Offer.................... The Exchange Offer is subject to certain customary
conditions, which may be waived by the Company. See
"The Exchange Offer -- Conditions."
Procedures for Tendering
Old Notes.................. Each holder of Old Notes wishing to accept the
Exchange Offer must complete, sign and date the
accompanying Letter of Transmittal, or a facsimile
thereof, in accordance with the instructions
contained herein and therein, and mail or otherwise
deliver such Letter of Transmittal, or such
facsimile, together with the Old Notes and any
other required documentation, or an Agent's Message
(as defined) in lieu thereof, to the Exchange Agent
(as defined) at the address set forth herein. By
executing the Letter of Transmittal, each holder
will represent to the Company that, among other
things, the Exchange Notes acquired pursuant to the
Exchange Offer are being obtained in the ordinary
course of business of the person receiving such
Exchange Notes, whether or not such person is the
holder, that neither the holder nor any such other
person has any arrangement or understanding with
any person to participate in the distribution of
such Exchange Notes and that neither the holder nor
any such other person is an "affiliate," as defined
under Rule 405 of the Securities Act, of the
Company. See "The Exchange Offer -- Purpose and
Effect of the Exchange Offer" and "-- Procedures
for Tendering."
Untendered Old Notes....... Following the consummation of the Exchange Offer,
holders of Old Notes eligible to participate but
who do not tender their Old Notes will not have any
further exchange or registration rights and such
Old Notes will continue to be subject to certain
restrictions on transfer. Accordingly, the
liquidity of the market for such Old Notes could be
adversely affected.
Consequences of Failure to
Exchange................. The Old Notes that are not exchanged pursuant to
the Exchange Offer will remain restricted
securities. Accordingly, such Old Notes may be
resold only (i) to the Company, (ii) pursuant to
Rule 144A or Rule 144 under the Securities Act or
pursuant to some other exemption under the
Securities Act (iii) outside the United states to a
foreign person pursuant to the requirements of Rule
904 under the Securities Act or (iv) pursuant to an
effective registration statement under the
Securities Act. See "The Exchange
Offer -- Consequences of Failure to Exchange."
6
<PAGE> 8
Shelf Registration
Statement.................. If any holder of the Old Notes that participates in
the Exchange Offer does not receive Exchange Notes
on the date of the exchange that may be sold
without restriction under state and federal
securities laws (other than due solely to the
status of such holder as an affiliate of the
Company within the meaning of the Securities Act or
to the holder having an arrangement with any person
to participate in a distribution (within the
meaning of the Securities Act), and under certain
other circumstances), the Company has agreed to
register the resale of the Old Notes on a shelf
registration statement (the "Shelf Registration
Statement") and use its best efforts to cause it to
be declared effective by the Commission as promptly
as practical on or after the consummation of the
Exchange Offer. The holders of Old Notes which are
registered for resale will be named in the Shelf
Registration Statement. The Company has agreed to
maintain the effectiveness of the Shelf
Registration Statement for, under certain
circumstances, a maximum of two years, to cover
resales of the Old Notes held by any such holders.
See "The Exchange Offer -- Purpose and Effect of
the Exchange Offer."
Special Procedures for
Beneficial Owners.......... Any beneficial owner whose Old Notes are registered
in the name of a broker, dealer, commercial bank,
trust company or other nominee and who wishes to
tender should contact such registered holder
promptly and instruct such registered holder to
tender on such beneficial owner's behalf. If such
beneficial owner wishes to tender on such owner's
own behalf such owner must, prior to completing and
executing the Letter of Transmittal and delivering
its Old Notes, either make appropriate arrangements
to register ownership of the Old Notes in such
owner's name or obtain a properly completed bond
power from the registered holder. The transfer of
registered ownership may take considerable time.
The Company will keep the Exchange Offer open for
not less than thirty days in order to provide for
the transfer of registered ownership.
Guaranteed Delivery
Procedures............... Holders of Old Notes who wish to tender their Old
Notes and whose Old Notes are not immediately
available or who cannot deliver their Old Notes,
the Letter of Transmittal or any other documents
required by the Letter of Transmittal, or an
Agent's Message in lieu thereof, to the Exchange
Agent (or comply with the procedures for book-entry
transfer) prior to the Expiration Date must tender
their Old Notes according to the guaranteed
delivery procedures set forth in "The Exchange
Offer -- Guaranteed Delivery Procedures."
Withdrawal Rights.......... Tenders may be withdrawn at any time prior to 5:00
p.m., New York City time on the Expiration Date.
Acceptance of Old Notes and
Delivery of Exchange
Notes.................... The Company will accept for exchange any and all
Old Notes which are properly tendered and not
withdrawn in the Exchange Offer prior to 5:00 p.m.,
New York City time on the Expiration Date. The
Exchange Notes issued pursuant to the Exchange
Offer will be delivered promptly following the
Expiration Date. See "The Exchange Offer -- Purpose
and Effect of the Exchange Offer."
Accounting Treatment....... The Exchange Notes will be recorded at the same
carrying value as the Old Notes, which is face
value, as reflected in the Company's accounting
7
<PAGE> 9
records on the date of exchange. See "The Exchange
Offer -- Accounting Treatment."
Federal Income Tax
Considerations........... The exchange of the Exchange Notes for the Old
Notes pursuant to the Exchange Offer should not be
a taxable event to the holder and thus the holder
should not recognize any taxable gain or loss as a
result of the exchange. See "Certain Federal Income
Tax Consequences."
Use of Proceeds............ There will be no cash proceeds to the Company from
the exchange pursuant to the Exchange Offer.
Exchange Agent............. The Bank of New York.
THE EXCHANGE NOTES
General.................... The form and terms of the Exchange Notes are the
same as the form and terms of the Old Notes (which
they replace) except that (i) the Exchange Notes
bear a Series B designation, (ii) the Exchange
Notes have been registered under the Securities Act
and, therefore, will not bear legends restricting
the transfer thereof, (iii) the holders of Exchange
Notes will not be entitled to certain rights under
the Registration Rights Agreement, including the
provisions providing for an increase in the
interest rate on the Old Notes in certain
circumstances relating to the timing of the
Exchange Offer (other than with respect to periods
prior to the issuance of such Exchange Notes),
which rights will terminate when the Exchange Offer
is consummated and (iv) the Exchange Notes will be
issuable in minimum denominations of $1,000
compared to minimum denominations of $100,000 for
the Old Notes. See "The Exchange Offer -- Purpose
and Effect of the Exchange Offer." The Exchange
Notes will evidence the same debt as the Old Notes
and will be entitled to the benefits of the
Indenture. See "The Exchange Offer -- Terms of the
Exchange Offer."
Securities Offered......... $150,000,000 aggregate principal amount of 6 7/8%
Notes due 2007, Series B.
Maturity Date.............. July 15, 2007.
Interest Payment Dates..... Each January 15 and July 15, commencing January 15,
1998.
Record Dates............... Each January 1 and July 1.
Denominations.............. The Exchange Notes will be issued in minimum
denominations of $1,000 and integral multiples of
$1,000 in excess thereof.
Optional Redemption........ The Notes are redeemable, in whole or in part, at
the option of the Company at any time at a
redemption price equal to the greater of (i) 100%
of their principal amount, plus accrued and unpaid
interest thereon to the date of redemption, or (ii)
the sum of (a) the present values of the remaining
scheduled payments of principal and interest
thereon discounted to the date of redemption on a
semiannual basis (assuming a 360-day year
consisting of twelve 30-day months) at the Adjusted
Treasury Rate (as defined herein), plus (b) accrued
interest on the Notes to the date of redemption. If
a redemption date does not fall on an Interest
Payment Date, then, with respect to the interest
payment immediately succeeding the redemption date,
only the unaccrued portion
8
<PAGE> 10
of such interest payment as of the redemption date
shall be included in any calculation pursuant to
clause (ii)(a).
Sinking Fund............... None.
Ranking.................... The Exchange Notes will constitute unsecured
unsubordinated indebtedness of the Company and will
rank equally in right of payment, on a pari passu
basis, with all existing and future unsecured and
unsubordinated indebtedness of the Company. The
Exchange Notes will be effectively subordinated to
all existing and future indebtedness, trade
payables, guarantees, lease obligations, letter of
credit obligations and other obligations of the
Company's subsidiaries.
Absence of Market for
the Exchange Notes....... The Exchange Notes will be a new issue of
securities for which there currently is no market.
Although the Initial Purchasers have informed the
Company that they currently intend to make a market
in the Exchange Notes, the Initial Purchasers are
not obligated to do so, and any such market-making
may be discontinued at any time without notice.
Accordingly, there can be no assurance as to the
development or liquidity of any market for the
Exchange Notes. The Company does not intend to
apply for listing of the Exchange Notes on any
securities exchange or for quotation on Nasdaq.
Modification of the
Indenture.................. The Company and the Trustee, without the consent of
the holders of the Notes, may amend the Indenture,
if in the opinion of the Trustee, such change does
not adversely affect the rights of the holders in
any material respect. Other modifications to the
Indenture may be made with the consent of holders
of a majority of the principal amount of the Notes
then outstanding except that consent is required
from all holders of Notes in instances such as
reductions in the amount or timing of interest
payments, reductions in the principal and changes
in the maturity, redemption or repurchase dates of
the Notes. See "Description of
Notes -- Modification."
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratios of earnings to fixed charges for
the Company for the fiscal years ended December 31, 1992, 1993, 1994, 1995 and
1996 and for the nine months ended September 30, 1996 and 1997. For the purpose
of computing the ratio of earnings to fixed charges, (1) "earnings" consist of
income before income taxes and interest on debt (excluding interest capitalized
during the period) and (2) "fixed charges" consist of total interest on debt
(including interest capitalized during the period). Fixed charges for the nine
months ended September 30, 1997 include accrued interest on the Old Notes for a
portion of the period and also include accrued interest on the 5 7/8% Notes (as
defined below), as to which the Company has defeased certain covenants. As a
result, the ratios set forth below are not indicative of expected future ratios.
<TABLE>
<CAPTION>
NINE MONTHS
ENDED
SEPTEMBER
YEAR ENDED DECEMBER 31, 30,
---------------------------------------- ------------
1992 1993 1994 1995 1996 1996 1997
------- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges........... 1,031.4 5.5 -- (a) 11.5 11.5 11.3 6.4
</TABLE>
- ---------------
(a) Earnings were insufficient to cover fixed charges by $195,840,000. See
footnote (a) to the Selected Consolidated Financial Data on page 12.
9
<PAGE> 11
RECENT DEVELOPMENTS
GWS VALUCH, INC.
In February 1997, the Company formed GWS Valuch, Inc. ("GWS Valuch"), a
corporation organized under the laws of the State of Delaware, with the
intention that GWS Valuch would qualify, in accordance with an opinion of
counsel received by the Company in February 1997, as a real estate investment
trust ("REIT"). GWS Valuch's qualification as a REIT will provide the Company
with certain tax benefits. The Company invested approximately $122,500,000 to
acquire approximately 99.9% of the voting Class A common stock of GWS Valuch.
GWS Valuch also issued to the Company 150,000 shares of step-down preferred
stock (the "Step-Down Preferred Stock") having a liquidation preference of
$150,000,000, with an initial dividend of approximately 13.9% and an effective
yield of approximately 8.1%. GWS Valuch was consolidated in the Company's
financial statements and a line item entitled "preferred stock of subsidiary"
was reported on the Condensed Consolidated Balance Sheet dated June 30, 1997. On
the Company's Condensed Consolidated Statements of Income and Retained Earnings
for the period ended June 30, 1997, a "preferred stock of subsidiary-expense"
was reported which was based on the effective yield of the Step-Down Preferred
Stock.
Immediately following the establishment and capitalization of GWS Valuch on
February 24, 1997, the Company borrowed $270,000,000 from GWS Valuch under a
note subsequently secured by mortgages on the Company's Spring Grove,
Pennsylvania mill and certain timberlands located in Pennsylvania and Virginia
which have an aggregate fair market value equal to or in excess of 110% of the
principal amount of such note. Using the proceeds of the note and other
available cash, the Company immediately repaid, with interest, an amount
initially borrowed to purchase the Class A common stock of GWS Valuch.
Subsequent to the above transactions, the Internal Revenue Service
announced in Notice 97-21, 1997-11 I.R.B. 9 (February 27, 1997) (the "Notice")
that it intended to issue regulations with retroactive effect on transactions
using self-amortizing investments in conduit financing entities. As a result of
the issuance of the Notice, there has been a substantially increased likelihood
that the Company could lose certain tax benefits arising from GWS Valuch's
Step-Down Preferred Stock financing. Accordingly, on July 2, 1997, GWS Valuch
redeemed all 150,000 outstanding shares of the Step-Down Preferred Stock.
DEFEASANCE OF CERTAIN COVENANTS RELATING TO OUTSTANDING NOTES
On February 24, 1997, the Company deposited approximately $154,757,000 into
a trust to defease certain covenants under the indenture dated as of January 15,
1993 under which the $150,000,000 principal amount of the Company's 5 7/8% notes
due March 1, 1998 (the "5 7/8% Notes") are outstanding. On March 1, 1997,
$4,406,000 of the amount in trust was used to pay interest due on the 5 7/8%
Notes. The balance of the amount in trust and interest earned thereon will be
applied solely to pay the principal of, and remaining interest due on, the
5 7/8% Notes through the date of maturity thereof.
BANK FACILITY
On June 30, 1997, the Company entered into a short-term, unsecured loan
(the "Bank Facility") with Bankers Trust Company in the principal amount of
approximately $144,675,000. The proceeds from the Bank Facility were contributed
by the Company to GWS Valuch in exchange for approximately 145,000 shares of
Class A common stock, and were used by GWS Valuch to redeem the Step-Down
Preferred Stock. The principal amount of the Bank Facility, together with all
accrued and unpaid interest thereon, was repaid by the Company on July 22, 1997
with the proceeds from the sale of the Old Notes.
USE OF PROCEEDS
The Exchange Offer is intended to satisfy certain of the Company's
obligations under the Registration Rights Agreement. The Company will not
receive any cash proceeds from the issuance of the Exchange Notes in the
Exchange Offer. The Net Proceeds of approximately $148,654,000 from the issuance
of the Old Notes were used to repay the amounts outstanding under the Bank
Facility and for general corporate purposes.
10
<PAGE> 12
CAPITALIZATION
The following table sets forth as of September 30, 1997 the capitalization
of the Company. The table should be read in conjunction with the Company's
Consolidated Financial Statements and unaudited Condensed Consolidated Financial
Statements incorporated by reference herein.
<TABLE>
<CAPTION>
SEPTEMBER 30,
1997
-------------
<S> <C>
Long-term debt(a):
6 7/8% Notes due 2007............................................... $ 150,000
--------
Total long-term debt........................................ 150,000
Shareholders' equity:
Common stock........................................................ 544
Capital in excess of par value...................................... 42,444
Retained earnings................................................... 471,648
--------
Total....................................................... 514,636
Less cost of common stock in treasury............................... (180,096)
--------
Total shareholders' equity.................................. 334,540
Total capitalization.............................. $ 484,540
========
</TABLE>
- ---------------
(a) Excludes $150,000,000 principal amount of the Company's 5 7/8% Notes. See
"Recent Developments -- Defeasance of Certain Covenants Relating to
Outstanding Notes."
11
<PAGE> 13
SELECTED CONSOLIDATED FINANCIAL DATA
The selected financial data presented below as of and for the fiscal years
ended December 31, 1994, 1995 and 1996 are derived from the Company's
Consolidated Financial Statements which are incorporated by reference herein and
have been audited by Deloitte & Touche LLP, independent certified public
accountants. The selected financial data as of and for the fiscal years ended
December 31, 1992 and 1993 are derived from the Company's Consolidated Financial
Statements. The selected financial data presented below as of and for the nine
months ended September 30, 1996 and 1997 are derived from the Company's
unaudited Condensed Consolidated Financial Statements. The unaudited Condensed
Consolidated Financial Statements for the nine months ended September 30, 1996
and 1997, in the opinion of management, include all adjustments (all of which
were of a normal recurring nature) necessary to fairly present the financial
information for such periods. The results of operations for the nine months
ended September 30, 1997 are not necessarily indicative of the results to be
expected for the full fiscal year. This data should be read in conjunction with
the Company's Consolidated Financial Statements and unaudited Condensed
Consolidated Financial Statements, including the notes thereto, incorporated by
reference herein.
<TABLE>
<CAPTION>
NINE MONTHS
ENDED
YEAR ENDED DECEMBER 31, SEPTEMBER 30,
------------------------------------------ ---------------
1992 1993 1994 1995 1996 1996 1997
------ ------ ------ ------ ------ ------ ------
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Net sales............................ $540.1 $473.5 $478.3 $623.7 $566.1 $424.8 $423.3
Cost of products sold................ 422.0 399.3 437.7 482.1 434.5 327.0 345.0
Selling, general and administrative
expenses.......................... 35.0 31.3 27.2 36.4 35.5 27.6 27.4
Other expense (income) -- net........ (7.7) (5.7) (2.7) (2.4) (1.8) (1.1) (0.5)
Unusual items -- expense(a).......... -- 13.2 208.9 -- -- -- --
------ ------ ------ ------ ------ ------ ------
Income (loss) before income taxes.... 90.8 35.4 (192.8) 107.6 97.9 71.3 51.4
====== ====== ====== ====== ====== ====== ======
Income (loss) before accounting
changes........................... $ 56.5 $ 20.4 (118.3) $ 65.8 $ 60.4 $ 43.5 $ 31.5
------ ------ ------ ------ ------ ------ ------
Income (loss) per common share before
accounting changes(b)............. $ 1.27 $ 0.46 $(2.67) $ 1.49 $ 1.41 $ 1.01 $ 0.74
Cash dividends declared per
share(b).......................... $ 0.70 $ 0.70 $ 0.70 $ 0.70 $ 0.70 $0.525 $0.525
BALANCE SHEET DATA (AS OF THE END OF
THE PERIOD):
Working capital...................... $ 44.7 $ 94.5 $ 31.1 $ 76.4 $101.9 $ 91.7 $ 87.7
Total assets(c)...................... 648.5 842.1 650.8 673.1 715.3 696.0 871.5
Long-term debt (excluding current
maturities)....................... -- 150.0 150.0 150.0 150.0 150.0 150.0
Shareholders' equity................. 457.0 441.4 295.7 315.4 331.0 321.7 334.5
</TABLE>
- ---------------
(a) Reflects a pre-tax charge for right sizing and restructuring of $13,229,000
in 1993 and a pre-tax charge for writedown of impaired assets of
$208,949,000 in 1994.
(b) Income (loss) per common share before accounting changes and cash dividends
declared per share have been computed on the basis of the weighted average
number of shares of common stock and common stock equivalents outstanding
each year. See Notes 1(b) and 3 to the Company's Consolidated Financial
Statements incorporated by reference herein.
(c) Includes an increase of $61,062,000 in 1993 for the adoption of Statement of
Financial Accounting Standards No. 109.
12
<PAGE> 14
BUSINESS
The Company is a manufacturer of printing papers and tobacco and other
specialty papers. The Company sells its products in most parts of the United
States and in a number of foreign countries, either through wholesale paper
merchants, brokers and agents, or direct to customers.
Most of the Company's printing paper products are sold into the uncoated
free-sheet portion of the industry. The Company's printing paper products are
used principally for the printing of case bound and quality paperback books,
commercial and financial printing and envelope converting. Sales of paper for
book publishing and commercial printing are generally made through wholesale
paper merchants, while sales of paper to financial printers and converters
generally are made directly.
The Company's tobacco and other specialty papers are used for cigarette
manufacturing and other specialty uses such as the manufacturer of playing
cards, stamps, labels and surgical gowns. Sales of these papers are generally
made directly to the converter of the paper.
The Company's paper mills are located in Spring Grove, Pennsylvania, Pisgah
Forest, North Carolina, and Neenah, Wisconsin. The Spring Grove facility is an
integrated paper manufacturing plant, producing a substantial part of its fiber
requirements from pulpwood. The Pisgah Forest mill produces flax fiber pulp used
to manufacture some of its tobacco paper products and utilizes purchased virgin
wood pulp and deinked pulp to manufacture nearly all of its other papers. The
Neenah mill recycles a wide range of high-grade wastepapers to provide its
principal fiber raw material. All three mills recycle internally generated waste
to supply part of the fiber required for operations.
The Company began operations in Spring Grove, Pennsylvania in 1864 and was
incorporated as a Pennsylvania corporation in 1905. Its principal offices are
located at 228 South Main Street, Spring Grove, Pennsylvania 17362, telephone
number (717) 225-4711.
ENVIRONMENTAL MATTERS
The Company is subject to loss contingencies resulting from regulation by
various federal, state, local and foreign governmental authorities with respect
to the environmental impact of air and water emissions and noise from its mills
as well as its disposal of solid waste generated by its operations. In order to
comply with environmental laws and regulations, the Company has incurred
substantial capital and operating expenditures over the past several years.
During 1996, 1995 and 1994, the Company expended approximately $2,000,000,
$5,000,000 and $2,000,000, respectively, for environmental capital projects and
incurred approximately $15,200,000, $14,600,000 and $15,300,000, respectively,
in operating costs related to complying with environmental laws and regulations.
In addition, during 1995 and 1994, the Company expended approximately $4,000,000
and approximately $28,000,000, respectively, on a pulp mill modernization
project which in total cost $171,000,000. Although the project was driven by
environmental considerations, the Company received numerous other benefits. The
Company anticipates that environmental regulation of the Company's operations
will continue to become more burdensome and that capital and operating
expenditures will continue, and perhaps increase, in the future. In addition,
the Company may incur obligations to remove or mitigate any adverse effects on
the environment resulting from its operations, including the restoration of
natural resources, and liability for personal injury and damage to property,
including natural resources.
The amount and timing of future expenditures for environmental compliance,
clean-up, remediation and personal injury, natural resource damage and property
damage liability cannot be ascertained with any certainty due to, among other
things, the unknown extent and nature of any contamination, the extent and
timing of any technological advances for pollution control, the remedial or
restoration actions which may be required and the number and financial resources
of any other responsible parties.
The Company and six other companies which operate or formerly operated
facilities on the lower Fox River in Wisconsin continue to negotiate with the
State of Wisconsin, the United States Departments of the Interior and Justice
and the United States Fish & Wildlife Service regarding claims for natural
resources restoration and damages under the federal Comprehensive Environmental
Response, Compensation and Liability Act ("CERCLA") and other laws associated
with the alleged discharge of polychlorinated biphenyls
13
<PAGE> 15
("PCBs") into the lower Fox River on which the Company's Neenah mill is located.
Effective as of March 1, 1997, the Company and the six other companies entered
into an agreement with the United States which provided that, between March 1
and May 29, 1997, all limitations periods were tolled and the parties would
forbear from litigation; the parties have entered into an agreement to extend
the time of the tolling and forbearance agreement to December 2, 1997.
On June 17, 1997, the United States Environmental Protection Agency
("EPA"), Region 5, announced its intention to begin the process to list the
lower Fox River on the National Priorities List ("NPL") maintained by EPA under
CERCLA. Further, by letter dated July 3, 1997, EPA provided "special notice"
under CERCLA and invited the Company and the six other companies to begin
discussions concerning terms under which the companies would agree to perform a
remedial investigation and feasibility study ("RI/FS") for the site and to
further extend the tolling and forbearance agreement. In the event the companies
and EPA are unable to reach agreement on terms under which the companies would
perform the RI/FS, EPA has stated it may conduct an RI/FS and seek to recover
the costs incurred from the companies.
On July 11, 1997, the Wisconsin Department of Natural Resources, the United
States Department of the Interior, the Menominee Indian Tribe of Wisconsin, the
Oneida Tribe of Indians of Wisconsin, the National Oceanic and Atmospheric
Administration and EPA entered into a Memorandum of Agreement (the "MOA") which
provides for coordination and cooperation among those parties in addressing the
release or threat of release of hazardous substances into the lower Fox River,
Green Bay and Lake Michigan environment. The MOA sets forth a mutual goal of
remediating and/or responding to hazardous substance releases and threats of
releases, and restoring injured and potentially injured natural resources. The
MOA further states that, based on current information, removal of the PCB
contaminated sediments in the lower Fox River is expected to be the principal,
but not exclusive, action undertaken to achieve restoration and rehabilitation
of injured natural resources. The MOA anticipates funding from the Company and
the six other companies, all of which are identified as potentially responsible
parties.
The Company, with advice from its environmental consultants, continues to
believe that an aggressive effort, as currently proposed by the governmental
authorities, to remove PCB contaminated sediments, many of which are buried
under cleaner material or are otherwise unlikely to move, would be
environmentally detrimental and therefore inappropriate. Furthermore, the
Company's share of the cost of such removal, depending on the amount of
sediments to be removed, could exceed its available resources. The Company
believes it will be able to persuade the parties to the MOA or a court against
removal of a substantial amount of PCB contaminated sediments. There can be no
assurance, however, that the Company will be successful in arguing that removal
of PCB contaminated sediments is inappropriate, that it would prevail in any
resulting litigation or that its share of the cost of any such removal would not
have a material adverse effect on the Company's financial condition, liquidity
and results of operation.
The Company's current assessment, after consultation with legal counsel, is
that future expenditures for environmental matters are not likely to have a
material adverse effect on the Company's financial condition or liquidity, but
could have a material adverse effect on the Company's results of operations in a
given year; however, there can be no assurance that the Company's reserves will
be adequate or that a material adverse effect on the Company's financial
condition or liquidity will not occur at some future time.
For further information with respect to environmental matters affecting the
Company, see the Company's reports incorporated by reference herein. See
"Incorporation of Certain Documents by Reference."
DESCRIPTION OF NOTES
Set forth below is a summary of certain provisions of the Notes. The
Exchange Notes, like the Old Notes, will be issued pursuant to the indenture
(the "Indenture") dated as of July 22, 1997 (the "Issue Date") between the
Company and The Bank of New York, as Trustee (the "Trustee"). The terms of the
Indenture are also governed by certain provisions contained in the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"). The following
summary of certain provisions of the Indenture does not purport to be complete
and is subject to, and is qualified in its entirety by reference to, the Trust
Indenture Act and to all of
14
<PAGE> 16
the provisions of the Indenture, including the definitions of certain terms
therein and those terms made a part of the Indenture by reference to the Trust
Indenture Act as in effect on the date of the Indenture. A copy of the Indenture
may be obtained from the Company. The form and terms of the Exchange Notes are
identical in all material respects to the form and terms of the Old Notes (which
they replace) except that (i) the Exchange Notes will bear a Series B
designation and will have been registered under the Securities Act and,
therefore, will not bear legends restricting the transfer thereof, (ii) the
holders of Exchange Notes will not be entitled to certain rights under the
Registration Rights Agreement, including the provisions providing for an
increase in the interest rate on the Old Notes in certain circumstances relating
to the timing of the Exchange Offer, which rights will terminate when the
Exchange Offer is consummated and (iii) the Exchange Notes will be issued in
minimum denominations of $1,000 compared to minimum denominations of $100,000
for the Old Notes. No service charge will be made for any registration of
transfer, exchange or redemption of Exchange Notes, except in certain
circumstances for any tax or other governmental charge that may be imposed in
connection therewith. The Old Notes and the Exchange Notes shall be treated as
one class for all purposes under the Indenture, including amendments, waivers
and redemptions.
PRINCIPAL, MATURITY AND INTEREST
The Notes will mature on July 15, 2007, will be limited to $150,000,000
aggregate principal amount at any one time outstanding (including any Exchange
Notes that may be issued from time to time in exchange for the Old Notes) and
will be unsecured unsubordinated obligations of the Company. Each Exchange Note
will bear interest at the rate set forth on the cover page hereof from the later
of July 22, 1997 and the most recent Interest Payment Date to which interest has
been paid on the Exchange Notes or on the Old Notes exchanged for the Exchange
Notes, as the case may be, payable semiannually on January 15 and July 15 in
each year, commencing January 15, 1998, to the person in whose name the Exchange
Note (or any predecessor Note) is registered at the close of business on the
January 1 or the July 1 next preceding such Interest Payment Date whether or not
such January 1 or July 1 is a Business Day. Interest will be computed on the
basis of a 360-day year comprised of twelve 30-day months.
Holders of Old Notes whose Old Notes are accepted for exchange will not
receive accrued interest on such Old Notes for any period from and after the
last Interest Payment Date to which interest has been paid or duly provided for
on such Old Notes prior to the original issue date of the Exchange Notes or, if
no such interest has been paid or duly provided for, will not receive any
accrued interest on such Old Notes, and will be deemed to have waived the right
to receive any interest on such Old Notes accrued from and after such Interest
Payment Date or, if no such interest has been paid or duly provided for, from
and after July 22, 1997.
Principal of and interest on the Notes will be payable, and the Notes will
be transferable, at the office of the Trustee maintained at The Bank of New
York, 101 Barclay Street, Floor 21 West, New York, New York 10286, Attention:
Corporate Trust Trustee Administration. The Notes will be issued only in fully
registered form without coupons, in denominations of $1,000 and any integral
multiple of $1,000 in excess thereof. No service charge will be made for any
registration of transfer, exchange or redemption of Notes, except in certain
circumstances for any tax or other governmental charge that may be imposed in
connection therewith. The Notes and the Exchange Notes shall be one class for
all purposes under the Indenture, including amendments, waivers and redemptions.
RANKING; SUBSIDIARIES
The Notes will constitute unsecured and unsubordinated indebtedness of the
Company and will rank equally in right of payment, on a pari passu basis, with
all existing and future unsecured and unsubordinated senior indebtedness of the
Company. The Company has no debt which ranks senior to the Notes and
$150,000,000 principal amount of debt which ranks on a pari passu basis with the
Notes. The Notes are obligations exclusively of the Company. Some of the
Company's consolidated assets are held by its subsidiaries. Accordingly, the
cash flow of the Company and the consequent ability to service its debt,
including the Notes, are in small part dependent upon the earnings of such
subsidiaries. The Notes will be effectively subordinated to all existing and
future indebtedness, trade payables, guarantees, lease obligations, letter of
credit obligations and other obligations of the Company's subsidiaries.
15
<PAGE> 17
OPTIONAL REDEMPTION
The Notes will be redeemable, in whole or in part, at the option of the
Company at any time, upon not less than 30 nor more than 60 days' notice, in
principal amounts of $1,000 or integral multiples thereof, at a redemption price
equal to the greater of (i) 100% of the principal amount of the Notes, plus
accrued and unpaid interest thereon to the date of redemption, or (ii) as
determined by a Quotation Agent (as defined below), the sum of (a) the present
values of the remaining scheduled payments of principal and interest thereon
discounted to the redemption date on a semiannual basis (assuming a 360-day year
consisting of twelve 30-day months) at the Adjusted Treasury Rate, plus (b)
accrued interest on the Notes to the date of redemption. If a redemption date
does not fall on an Interest Payment Date, then, with respect to the interest
payment immediately succeeding the redemption date, only the unaccrued portion
of such interest payment as of the redemption date shall be included in any
calculation pursuant to clause (ii)(a).
"Adjusted Treasury Rate" means, with respect to any redemption date, the
rate per annum equal to the semiannual equivalent yield to maturity of the
Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue
(expressed as a percentage of the principal amount) equal to the Comparable
Treasury Price for such redemption date, plus 0.15%.
"Comparable Treasury Issue" means the United States Treasury security
selected by a Quotation Agent as having a maturity comparable to the remaining
term of the Notes to be redeemed that would be utilized, at the time of
selection and in accordance with customary financial practice, in pricing new
issues of corporate debt securities of comparable maturity to the remaining term
of such Notes.
"Comparable Treasury Price" means, with respect to any redemption date, (A)
the average of the Reference Treasury Dealer Quotations for such redemption
date, after excluding the highest and lowest of such Reference Treasury Dealer
Quotations, or (B) if the Trustee obtains three or fewer such Reference Treasury
Dealer Quotations, the average of all such Quotations.
"Quotation Agent" means one of the Reference Treasury Dealers appointed by
the Company.
"Reference Treasury Dealer" means (i) each of Bear Stearns & Co. Inc. and
BT Securities Corporation, and their respective successors; provided, however,
that if any of the foregoing shall cease to be a primary U.S. Government
securities dealer in New York City (a "Primary Treasury Dealer"), the Company
shall substitute therefor another Primary Treasury Dealer; and (ii) any other
Primary Treasury Dealer selected by the Company.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any redemption date, the average, as determined by
the Trustee, of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) quoted in
writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m. on the
third Business Day preceding such redemption date.
If less than all of the Notes are to be redeemed, the Trustee shall select,
in such manner as it shall deem fair and appropriate, the particular Notes to be
redeemed or any portion thereof that is an integral multiple of $1,000.
SINKING FUND
There will be no sinking fund payments for the Notes.
CERTAIN COVENANTS
Limitation on Liens. The Company 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 (a "lien") of or upon any of
their respective properties or assets, whether currently owned or hereafter
acquired. This limitation does not apply, however, to any of the following: (1)
the mortgages to be entered into by the Company and its subsidiary, The
Glatfelter Pulp Wood Company in favor of its subsidiary, GWS Valuch; (2) liens
on any property or asset securing or providing for the payment or refinancing of
the purchase price of such property or
16
<PAGE> 18
asset or the cost of improvements thereto created or assumed contemporaneously
with (or within 120 days after) the acquisition of such properties or assets;
provided that (i) the principal amount of the indebtedness secured by such liens
does not exceed 100% of the costs of such property or asset and/or improvements
and (ii) such liens shall not apply to any property or asset of the Company or
any subsidiary, other than the acquired property or asset and any improvements
with respect thereto; (3) liens on any properties or assets existing at the time
of acquisition thereof, provided that such liens (i) shall not extend to any
properties or assets of the Company or any subsidiary other than properties or
assets so acquired and (ii) are not incurred in connection with or in
contemplation of the acquisition of the properties or assets acquired; (4) liens
on any property or asset to secure indebtedness of a subsidiary to the Company
or to another subsidiary or of the Company to a subsidiary; (5) 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; (6) warehousemen's, mechanics',
carriers', materialmen's, repairmen's and other like liens incurred in the
ordinary course of business, and liens securing reimbursement obligations with
respect to trade letters of credit, banker's acceptances and sight drafts
incurred in the ordinary course of business which encumber documents and other
property relating to such letters of credit, banker's acceptances and sight
drafts; (7) liens existing on the Issue Date; (8) additional liens securing
indebtedness in an aggregate principal amount which does not in the aggregate at
the time any such lien is incurred, exceed 10% of Consolidated Net Tangible
Assets; (9) liens on any property or asset in favor of the United States or any
State thereof or the Commonwealth of Puerto Rico, or any department, agency or
instrumentality or political subdivision of the United States or any State
thereof or the Commonwealth of Puerto Rico, to secure payments, indebtedness 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 or asset
subject to such liens (including liens incurred in connection with
pollution-control, industrial revenue, certain maritime financing or similar
financing); (10) liens on timberlands in connection with an arrangement under
which the Company and/or one or more of its 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 (11) 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 (10) inclusive, to
the extent such lien, as so extended, renewed or replaced, is limited to all or
a part of the property or asset which secured the lien so extended, renewed or
replaced (plus improvements on such property or asset) and 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.
For purposes hereof, "Consolidated Net Tangible Assets" means the aggregate
amount of assets (less applicable reserves and other properly deductible items)
after deducting therefrom (a) total current liabilities (excluding debt or any
guaranty thereof due within 12 months) and (b) all goodwill, trade names,
trademarks, patents, unamortized debt discount and expense and other like
intangibles, all as set forth in the most recent consolidated balance sheet of
the Company and its subsidiaries and computed in accordance with generally
accepted accounting principles.
Limitation on Sale and Lease-Back Transactions. The Company will not, nor
will it permit any subsidiary to, enter into directly or indirectly any
arrangement with any person (other than the Company or any subsidiary) providing
for the sale and lease-back by the Company or a subsidiary of any property or
asset (except for temporary leases for a term, including any renewal thereof, of
not more than three years), unless either (1) the Company or such subsidiary
would be entitled under the Limitation on Liens covenant described above to
incur indebtedness secured by a lien on the property or asset to be leased equal
to or exceeding the amount of the net proceeds received by the Company or such
subsidiary with respect to such sale and lease-back or (2) within 90 days after
the effective date of any such sale and lease-back, the Company 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 of the property or asset so leased to the retirement (other
than any mandatory retirement) of any funded indebtedness of the Company or any
subsidiary which by its terms is senior to, or pari passu with, the Notes.
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EVENTS OF DEFAULT
An Event of Default with respect to the Notes is defined under the
Indenture as being: (a) default in payment of any principal of or any premium on
the Notes, either at maturity, upon any redemption, by acceleration, declaration
or otherwise; (b) default for 30 days in payment of any interest on the Notes;
(c) default for 60 days after written notice in the observance or performance of
any other covenant or agreement in the Notes or the Indenture; (d) certain
events of bankruptcy, insolvency or reorganization of the Company; (e) certain
events of default with respect to indebtedness or guaranties of the Company or
its subsidiaries exceeding $10 million in aggregate principal amount; or (f) any
failure by the Company to pay any final, non-appealable judgement or order for
the payment of money in excess of $10 million and either (i) enforcement
proceedings shall have been commenced by any creditor upon such judgement or
order or (ii) there shall be any period of 30 consecutive days during which a
stay of enforcement of such judgement or order, by reason of a pending appeal or
otherwise, shall not be in effect. If an Event of Default occurs, the Trustee
may pursue all legal remedies available to it, including commencing a judicial
proceeding for the collection of sums so due and unpaid.
If an Event of Default (other than an Event of Default specified in clause
(d)) occurs and is continuing, then either the Trustee or the holders of at
least 25% in aggregate principal amount of the Notes by notice as provided in
the Indenture may declare the principal amount of all of the Notes to be due and
payable immediately and upon any such declaration such principal amount (or
specified portion thereof) plus accrued and unpaid interest (and premium, if
any) shall become immediately due and payable. If an Event of Default specified
in clause (d) occurs, the principal of (and premium if any) and any accrued and
unpaid interest on the Notes shall become immediately due and payable without
any declaration or other act on the part of the Trustee or any holder. At any
time after a declaration of acceleration with respect to Notes has been made,
but before a judgment or decree for payment of money has been obtained by the
Trustee, the holders of a majority in aggregate principal amount of the Notes
may, under certain circumstances, rescind and annul such acceleration.
The Indenture provides that, subject to the duty of the Trustee during
default to act with the required standard of care, the Trustee will be under no
obligation to exercise any of its rights or powers under the Indenture at the
request or direction of any of the holders, unless such holders shall have
offered to the Trustee reasonable indemnity. Subject to such provisions for the
indemnification of the Trustee, the holders of a majority in aggregate principal
amount of the Notes will 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 Notes.
The Company is required to furnish to the Trustee annually a statement as
to the performance by the Company of certain of its obligations under the
Indenture and as to any default in such performance.
MODIFICATION
The Indenture provides that the Company and the Trustee may enter into
supplemental indentures without the consent of the holders of Notes generally
to: (a) secure the Notes; (b) evidence the assumption by a successor corporation
of the obligations of the Company; (c) add covenants for the benefit of the
holders of the Notes, or surrender any right or power conferred upon the Company
in the Indenture; (d) add any additional Events of Default; (e) cure any
ambiguity, correct or supplement any provision of the Indenture which may be
inconsistent with any other provision of the Indenture, or make any other
provisions with respect to matters or questions arising under the Indenture,
provided such action will not adversely affect the interests of the holders of
the Notes in any material respect; (f) evidence and provide for the acceptance
of appointment by a successor trustee; (g) permit or facilitate the defeasance
and discharge of the Notes, provided that such action does not adversely effect
the interests of the holders of the Notes; and (h) comply with the requirements
of the Commission in order to effect or maintain the qualifications of the
Indenture under the Trust Indenture Act.
Modifications and amendments of the Indenture may be made by the Company
and the Trustee with the consent of the holders of not less than a majority in
aggregate principal amount of the Notes; provided,
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however, that no such modification or amendment may, without the consent of the
holder of each Note affected thereby, change the stated maturity of the
principal of, or any installment of principal of or interest on, any Note,
reduce the principal amount of, or premium or interest on, any Note, change the
place of payment where or coin or currency in which the principal of, or any
premium or interest on any Note is payable, impair the right to institute suit
for the enforcement of any payment on or with respect to any Note, reduce the
percentage in principal amount of outstanding Notes, the consent of the holders
of which is required for modification or amendment of the Indenture or for
waiver of compliance with certain provisions of the Indenture or for waiver of
certain defaults or modifications to any of the above provisions.
The holders of not less than a majority in aggregate principal amount of
the Notes may, on behalf of the holders of all Notes, waive compliance by the
Company with certain restrictive provisions of the Indenture. The holders of not
less than a majority in aggregate principal amount of the Notes may, on behalf
of the holders of all Notes, waive any past default under the Indenture, except
a default (1) in the payment of principal of, or any premium or interest on, any
Note, or (2) in respect of a covenant or provision of the Indenture which cannot
be modified or amended without the consent of the holder of each Note.
CONSOLIDATION, MERGER AND SALE OF ASSETS
The Company will not, in a single transaction or a series of related
transactions, consolidate with or merge into any other person or convey,
transfer or lease its properties and assets substantially as an entirety to any
person and the Company may not permit any person to consolidate with or merge
into the Company or convey, transfer or lease all or substantially all of its
properties and assets to the Company, unless (i) the person formed by such
consolidation or into which the Company is merged or the person which acquires
by conveyance or transfer, or which leases, the properties and assets of the
Company substantially as an entirety is a corporation, partnership or trust, is
organized and validly existing under the laws of the United States of America,
any State thereof or the District of Columbia and expressly assumes, by a
supplemental indenture, the due and punctual payment of the principal of (and
premium, if any) and interest on all the Notes and the performance or observance
of every covenant of the Indenture on the part of the Company to be performed or
observed; (ii) immediately after giving effect to such transaction, no Event of
Default, and no event which, after notice or lapse of time or both, would become
an Event of Default, shall have happened and be continuing; and (iii) the
Company has delivered to the Trustee an Officers' Certificate and an Opinion of
Counsel, each stating that such consolidation, merger, conveyance, transfer or
lease and, if a supplemental indenture is required in connection with such
transaction, such supplemental indenture, comply with the provisions of the
Indenture and that all conditions precedent therein provided for relating to
such transaction have been complied with. There may be uncertainty as to what
constitutes "substantially all" of an entity's assets, and any such
determination would depend upon the facts of the particular transaction.
UNCLAIMED MONIES
The Indenture provides that any principal or interest remaining unclaimed
for two years, subject to certain conditions, after the date upon which such
principal or interest shall have become due and payable may be repaid to the
Company unless otherwise required by applicable escheat or abandoned or
unclaimed property laws, and the holder of any Notes shall be entitled
thereafter to look only to the Company (subject to applicable escheat or
abandoned or unclaimed property laws) and only as a general creditor thereof for
any payment which such holder may be entitled to collect.
DEFEASANCE PROVISIONS
Defeasance and Discharge. The Indenture provides that the Company will be
discharged from any and all obligations in respect of the Notes (except for
certain obligations to register the transfer or exchange of Notes, to replace
stolen, lost or mutilated Notes, to maintain paying agencies and to hold moneys
for payment in trust) upon the deposit with the Trustee, in trust, of money,
U.S. Government Obligations or a combination thereof, which through the payment
of interest and principal thereof in accordance with their terms will provide
money in an amount sufficient to pay any installment of principal of (and
premium, if any) and interest on the Stated Maturity (as defined in the
Indenture) of such payments in accordance with the terms
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of the Indenture and the Notes. Such discharge may only occur if there has been
a change in applicable Federal law or the Company has received from, or there
has been published by, the United States Internal Revenue Service a ruling to
the effect that such a discharge will not be deemed, or result in, a taxable
event with respect to holders of the Notes. The term "U.S. Government
Obligations" is defined to mean direct obligations of the United States of
America, backed by its full faith and credit.
Defeasance of Certain Covenants and Events of Default. The Company may
omit to comply with the restrictive covenants described in "-- Certain
Covenants -- Limitation on Liens" and "-- Certain Covenants -- Limitation on
Sale and Lease-Back Transactions" and the omission with respect thereof shall
not be an Event of Default. To exercise such option, the Company must deposit
with the Trustee money, U.S. Government Obligations or a combination thereof,
which through the payment of interest and principal thereof in accordance with
their terms will provide money in an amount sufficient to pay any installment of
principal of (and premium, if any) and interest on the Stated Maturity of such
payments in accordance with the terms of the Indenture and the Notes. The
Company will also be required to deliver to the Trustee an opinion of counsel to
the effect that the deposit and related covenant defeasance will not cause the
holders of the Notes to recognize income, gain or loss for Federal income tax
purposes.
Defeasance and Events of Default. In the event the Company exercises its
option to omit compliance with certain covenants of the Indenture and the Notes
are declared due and payable because of the occurrence of an Event of Default,
the amount of money and U.S. Government Obligations on deposit with the Trustee
will be sufficient to pay amounts due on the Notes at the time of their Stated
Maturity, but may not be sufficient to pay amounts due on the Notes at the time
of the acceleration resulting from such Event of Default. However, the Company
shall remain liable for such payments.
GOVERNING LAW
The Indenture and the Notes will be governed by and construed in accordance
with the laws of the State of New York, without giving effect to the conflicts
of law principles thereof.
BOOK-ENTRY; DELIVERY AND FORM
The certificates representing the Exchange Notes will be issued in fully
registered form, without coupons. Except as described below, the Exchange Notes
will be deposited with, or on behalf of, The Depository Trust Company ("DTC"),
New York, New York, as depository (the "Depository"), and registered in the name
of Cede & Co., as DTC's nominee, in the form of one or more global Exchange Note
certificates (the "Global Certificate").
Global Certificates. Ownership of beneficial interests in a Global
Certificate will be limited to persons who have accounts with DTC
("participants") or persons who hold interests through participants. Ownership
of beneficial interests in the Global Certificates will be shown on, and the
transfer of these ownership interests will be effected only through, records
maintained by DTC or its nominee (with respect to interests of participants) and
the records of participants (with respect to interests of persons other than
participants).
So long as DTC, or its nominee, is the registered owner or holder of a
Global Certificate, DTC or such nominee, as the case may be, will be considered
the sole owner or holder of the Exchange Notes represented by such Global
Certificate for all purposes under the Indenture and the Notes. In addition, no
beneficial owner of an interest in a Global Certificate will be able to transfer
that interest except in accordance with DTC's applicable procedures (in addition
to those under the Indenture referred to herein).
Payments on Global Certificates will be made to DTC, or its nominee, as the
registered owner thereof. Neither the Company, the Trustee nor any paying agent
will have any responsibility or liability for any aspect of the records relating
to or payments made on account of beneficial ownership interests in the Global
Certificates or for maintaining, supervising or reviewing any records relating
to such beneficial ownership interests.
The Company expects that DTC, or its nominee, upon receipt of any payment
in respect of a Global Certificate representing any Exchange Notes held by it or
its nominee, will immediately credit participants'
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accounts with payments in amounts proportionate to their respective beneficial
interests in the principal amount of such Global Certificate for such Exchange
Notes as shown on the records of DTC or its nominee. The Company also expects
that payments by participants to owners of beneficial interests in such Global
Certificate held through such participants will be governed by standing
instructions and customary practices, as is now the case with securities held
for the accounts of customers registered in the names of nominees for such
customers. Such payments will be the responsibility of such participants.
Transfers between participants in DTC will be effected in the ordinary way
in accordance with DTC rules. The laws of some states require that certain
persons take physical delivery of securities in definitive form. Consequently,
the ability to transfer beneficial interests in a Global Certificate to such
persons may be limited. Because DTC can only act on behalf of participants, who
in turn act on behalf of indirect participants (as defined below) and certain
banks, the ability of a person having a beneficial interest in a Global
Certificate to pledge such interest to persons or entities that do not
participate in the DTC system or otherwise take actions in respect of such
interest, may be affected by the lack of a physical certificate of such
interest.
The Company believes that it is the policy of DTC that it will take any
action permitted to be taken by a holder of Exchange Notes (including the
presentation of Notes for exchange as described below under "Exchange Offer")
only at the direction of one or more participants to whose account interests in
the Global Certificates are credited and only in respect of such portion of the
aggregate principal amount of the Exchange Notes as to which such participant or
participants has or have given such direction.
The Indenture provides that if (i) the Depository notifies the Company that
it is unwilling or unable to continue as Depository, or if the Depository ceases
to be eligible under the Indenture and a successor depository is not appointed
by the Company within 90 days, (ii) the Company determines that the Exchange
Notes shall no longer be represented by Global Certificates and executes and
delivers to the Trustee a Company Order to such effect or (iii) an Event of
Default or event which, with notice or lapse of time or both, would constitute
an Event of Default with respect to the Exchange Notes shall have occurred and
be continuing, the Global Certificates will be exchanged for Exchange Notes in
definitive form of like tenor and of an equal aggregate principal amount, in
authorized denominations. Such definitive Exchange Notes shall be registered in
such name or names as the Depository shall instruct the Trustee. It is expected
that such instructions may be based upon directions received by the Depository
from participants with respect to ownership of beneficial interests in Global
Certificates.
DTC has advised the Company as follows: DTC is a limited-purpose trust
company organized under the New York Banking Law, a "banking organization"
within the meaning of the New York Banking Law, a member of the Federal Reserve
System, a "clearing corporation" within the meaning of the New York Uniform
Commercial Code and a "clearing agency" registered pursuant to the provisions of
Section 17A of the Exchange Act. DTC holds securities that its participants
deposit with DTC and facilitates the settlement among participants of securities
transactions, such as transfers and pledges, in deposited securities through
electronic computerized book-entry changes in participants' accounts, thereby
eliminating the need for physical movement of securities certificates. Direct
participants include securities brokers and dealers, banks, trust companies,
clearing corporations and certain other organizations. DTC is owned by a number
of its direct participants and by the New York Stock Exchange, Inc., the
American Stock Exchange, Inc. and the National Association of Securities
Dealers, Inc. Access to the DTC system is also available to others such as
securities brokers and dealers, banks and trust companies that clear through or
maintain a custodial relationship with a direct participant, either directly or
indirectly ("indirect participants"). The rules applicable to DTC and its
participants are on file with the Commission.
Although DTC has agreed to the foregoing procedures in order to facilitate
transfers of interests in the Global Certificates among participants of DTC, it
is under no obligation to perform or continue to perform such procedures, and
such procedures may be discontinued at any time. Neither the Company nor the
Trustee will have any responsibility for the performance by DTC or its
participants or indirect participants of their respective obligations under the
rules and procedures governing their operations.
In case any Exchange Note shall become mutilated, defaced, destroyed, lost
or stolen, the Company will execute and, upon the Company's request, the Trustee
will authenticate and deliver a new Exchange Note, of
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like tenor and equal principal amount in exchange and substitution for such
Exchange Note (upon surrender and cancellation thereof) or in lieu of and
substitution for such Exchange Note. In case such Exchange Note is destroyed,
lost or stolen, the applicant for a substituted Exchange Note shall furnish to
the Company and the Trustee such security or indemnity as may be required by
them to hold each of them harmless, and, in every case of destruction, loss or
theft of such Exchange Note, the applicant shall also furnish to the Company or
the Trustee satisfactory evidence of the destruction, loss or theft of such
Exchange Note and of the ownership thereof. Upon the issuance of any substituted
Exchange Note, the Company may require the payment by the registered holder
thereof of a sum sufficient to cover fees and expenses connected therewith.
REGARDING THE TRUSTEE
The Trust Indenture Act contains limitations on the rights of the Trustee,
should it become a creditor of the Company, to obtain payment of claims in
certain cases or to realize on certain property received by it in respect of any
such claims, as security or otherwise. The Trustee is permitted to engage in
other transactions with the Company and its subsidiaries from time to time,
provided that if the Trustee acquires any conflicting interest it must eliminate
such conflict upon the occurrence of an Event of Default, or else resign. The
Bank of New York is the trustee under the indenture for the 5 7/8% Notes,
rendered services to GWS Valuch as redemption and paying agent for the Step-Down
Preferred Stock and acts as service agent for payments under, and certain other
matters related to, the Company's loan from GWS Valuch.
THE EXCHANGE OFFER
PURPOSE AND EFFECT OF THE EXCHANGE OFFER
The Old Notes were originally sold by the Company on July 22, 1997 to the
Initial Purchasers pursuant to the Purchase Agreement. The Initial Purchasers
subsequently resold the Old Notes to QIB's in reliance on Rule 144A under the
Securities Act. As a condition to the Purchase Agreement, the Company entered
into the Registration Rights Agreement with the Initial Purchasers (the
"Registration Rights Agreement"). Pursuant to the Registration Rights Agreement,
the Company agreed, for the benefit of the holders of the Notes, to (i) use its
best efforts to file with the Commission the Exchange Offer Registration
Statement relating to the Exchange Offer for the Exchange Notes, which will have
terms identical in all material respects to the Old Notes (except that the
Exchange Notes will not contain terms with respect to transfer restrictions,
will have different minimum denominations and will not provide for any increase
in the interest rate thereon under the circumstances described below) and (ii)
use its best efforts to cause the Exchange Offer Registration Statement to be
declared effective under the Securities Act within 120 calendar days after the
Issue Date. Promptly after the Exchange Offer Registration Statement has been
declared effective, the Company will offer the Exchange Notes in exchange for
surrender of the Old Notes. The Company will keep the Exchange Offer open for
not less than 30 calendar days (or longer if required by applicable law) after
the date notice of the Exchange Offer is mailed to the holders of the Old Notes.
For each Old Note validly tendered to the Company pursuant to the Exchange
Offer, the holder of such Old Note will receive an Exchange Note having a
principal amount equal to that of the tendered Old Note. Interest on each
Exchange Note will accrue from the last Interest Payment Date on which interest
was paid on the Old Note tendered in exchange therefor or, if no interest has
been paid on such Note, from the Issue Date.
Based on existing interpretations of the Securities Act by the Staff set
forth in several no-action letters to third parties, and subject to the
immediately following sentence, the Company believes that the Exchange Notes
issued pursuant to the Exchange Offer may be offered for resale, resold and
otherwise transferred by the holders thereof (other than holders who are
broker-dealers) without further compliance with the registration and prospectus
delivery provisions of the Securities Act. However, any purchaser of Old Notes
who is an affiliate of the Company or who intends to participate in the Exchange
Offer for the purpose of distributing the Exchange Notes, or any broker-dealer
who purchased the Old Notes from the Company to resell pursuant to Rule 144A or
any other available exemption under the Securities Act, (i) will not be able to
rely on the interpretation of the Staff set forth in the above-mentioned
no-action letters, (ii) will not be entitled to tender its Old Notes in the
Exchange Offer and (iii) must comply with the registration and prospectus
delivery
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requirements of the Securities Act in connection with any sale or transfer of
the Old Notes unless such sale or transfer is made pursuant to an exemption from
such requirements. The Company does not intend to seek its own no-action letter
and there can be no assurance that the Staff would make a similar determination
with respect to the Exchange Notes as it has in such no-action letters to third
parties.
Each holder of the Old Notes (other than certain specified holders) who
wishes to exchange the Old Notes for Exchange Notes in the Exchange Offer will
be required to represent that (i) it is not an affiliate of the Company, (ii)
the Exchange Notes to be received by it are being acquired in the ordinary
course of its business and (iii) at the time of the Exchange Offer, it has no
arrangement with any person to participate in the distribution (within the
meaning of the Securities Act) of the Exchange Notes. In addition, in connection
with any resales of Exchange Notes, any broker-dealer (a "Participating
Broker-Dealer") who acquired the Old Notes for its own account as a result of
market-making or other trading activities must deliver a prospectus meeting the
requirements of the Securities Act. The Staff has taken the position in the
above-mentioned no-action letters that Participating Broker-Dealers may fulfill
their prospectus delivery requirements with respect to the Exchange Notes (other
than a resale of an unsold allotment from the original sale of the Old Notes)
with the prospectus contained in the Exchange Offer Registration Statement.
Under the Registration Rights Agreement, the Company is required to allow
Participating Broker-Dealers and other persons, if any, subject to similar
prospectus delivery requirements to use the prospectus contained in the Exchange
Offer Registration Statement in connection with the resale of such Exchange
Notes.
If, (i) because of any change in law or in currently prevailing
interpretations of the Staff, the Company is not permitted to effect the
Exchange Offer, (ii) the Company has not exchanged Exchange Notes for all Old
Notes validly tendered in accordance with the terms of the Exchange Offer on or
prior to the 150th calendar day after the Issue Date, (iii) in certain
circumstances, certain holders of unregistered Exchange Notes so request, or
(iv) in the case of any holder that participates in the Exchange Offer, such
holder does not receive Exchange Notes on the date of the exchange that may be
sold without restriction under state and federal securities laws (other than due
solely to the status of such holder as an affiliate of the Company within the
meaning of the Securities Act or to the holder having an arrangement with any
person to participate in a distribution (within the meaning of the Securities
Act)), then in each case, the Company will (x) promptly deliver to the holders
and the Trustee written notice thereof and (y) at its sole expense, (a) as
promptly as practicable, file a shelf registration covering resales of the Notes
(the "Shelf Registration Statement"), (b) use its best efforts to cause the
Shelf Registration Statement to be declared effective under Securities Act and
(c) use its best efforts to keep effective the Shelf Registration Statement
until the earlier of two years after its effective date or such time as all of
the applicable Notes have been sold thereunder. The Company will, in the event
that a Shelf Registration Statement is filed, provide to each holder copies of
the prospectus that is a part of the Shelf Registration Statement, notify each
such holder when the Shelf Registration Statement for the Notes has become
effective and take certain other actions as are required to permit unrestricted
resales of the Notes. A holder that sells Notes pursuant to the Shelf
Registration Statement will be required to be named as a selling security holder
in the related prospectus and to deliver a prospectus to purchasers, will be
subject to certain of the civil liability provisions under the Securities Act in
connection with such sales and will be bound by the provisions of the
Registration Rights Agreement that are applicable to such a holder (including
certain indemnification rights and obligations).
Each Old Note contains a legend to the effect that the holder of such Old
Note by its acceptance thereof, will be deemed to have agreed to be bound by the
provisions of the Registration Rights Agreement. In that regard, each holder
will be deemed to have agreed that, upon its receipt of notice from the Company
of the occurrence of any event which makes any statement in the prospectus which
is part of the Shelf Registration Statement (or, in the case of Participating
Broker-Dealers, the prospectus which is a part of the Exchange Offer
Registration Statement) untrue in any material respect or which requires the
making of any changes in such prospectus in order to make the statements therein
not misleading or of certain other events specified in the Registration Rights
Agreement, such holder (or Participating Broker-Dealer, as the case may be) will
suspend the sale of Notes pursuant to such prospectus until the Company has
amended or supplemented such prospectus to correct such misstatement or omission
and has furnished copies of the amended or supplemented prospectus to such
holder (or Participating Broker-Dealer, as the case may be) or the Company has
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given notice that the sale of the Old Notes may be resumed, as the case may be.
If the Company shall give such notice to suspend the sale of the Notes, it shall
extend the relevant period referred to above during which it is required to keep
effective the Shelf Registration Statement (or the period during which
Participating Broker-Dealers are entitled to use the prospectus included in the
Exchange Offer Registration Statement in connection with the resale of Exchange
Notes, as the case may be) by the number of days during the period from and
including the date of the giving of such notice to and including the date when
holders shall have received copies of the supplemented or amended prospectus
necessary to permit resales of the Notes or to and including the date on which
the Company has given notice that the sale of Notes, may be resumed, as the case
may be.
If the Company fails to comply with the above provisions or if the Exchange
Offer Registration Statement or the Shelf Registration Statement fails to become
effective, then, as liquidated damages, additional interest (the "Additional
Interest") shall become payable in respect of the Old Notes as follows:
(i) if (A) neither the Exchange Offer Registration Statement nor a
Shelf Registration Statement is declared effective by the Commission on or
prior to the 120th calendar day after the Issue Date or (B) notwithstanding
that the Company has exchanged or will exchange Exchange Notes for all Old
Notes validly tendered in accordance with the terms of the Exchange Offer,
the Company is required to file a Shelf Registration Statement and such
Shelf Registration Statement is not declared effective by the Commission on
or prior to the 120th calendar day after the date such filing obligation
arises, then, for the first 90 days commencing on the 121st calendar day
after (x) the Issue Date, in the case of (A) above, or (y) the date such
filing obligations arises, in the case of (B) above, then Additional
Interest shall accrue on the principal amount of the Old Notes over and
above the stated interest at a rate of 0.25% per annum, such Additional
Interest rate increasing by an additional 0.25% per annum at the beginning
of each subsequent 90-day period; or
(ii) if (A) the Company has not exchanged Exchange Notes for all Old
Notes validly tendered in accordance with the terms of the Exchange Offer
on or prior to the 150th calendar day after the Issue Date or (B) if
applicable, the Shelf Registration Statement has been declared effective
and such Shelf Registration Statement ceases to be effective at any time
prior to the second anniversary of its effective date (other than after
such time as all Notes have been disposed of thereunder), then Additional
Interest shall accrue on the principal amount of the Old Notes over and
above the stated interest at a rate of 0.25% per annum for the first 90
days commencing on (x) the 151st calendar day after such Issue Date, in the
case of (A) above or (y) the day such Shelf Registration Statement ceases
to be effective in the case of (B) above such Additional Interest rate
increasing by an additional 0.25% per annum at the beginning of each
subsequent 90-day period;
provided, however, that the Additional Interest rate on the Old Notes may not
exceed in the aggregate 1.0% per annum; provided further, however, that (1) upon
the effectiveness of the Exchange Offer Registration Statement or a Shelf
Registration Statement (in the case of clause (i) above) or (2) upon the
exchange of Exchange Notes for all Old Notes validly tendered (in the case of
clause (ii)(A) above) or upon the effectiveness of the Shelf Registration
Statement which had ceased to remain effective (in the case of clause (ii)(B)
above) Additional Interest on the Old Notes as a result of such clause (or the
relevant subclause thereof, as the case may be), shall cease to accrue.
Any amounts of Additional Interest due pursuant to clause (i) or (ii) above
will be payable in cash on January 15 and July 15 of each year to the holders of
record on the preceding January 1 or July 1, respectively. The amount of
Additional Interest will be determined by multiplying the applicable Additional
Interest rate by the principal amount of the Old Notes multiplied by a fraction,
the numerator of which is the number of days such Additional Interest rate was
applicable during such period (determined on the basis of a 360-day year
comprised of twelve 30-day months), and the denominator of which is 360.
The summary herein of certain provisions of the Registration Rights
Agreement does not purport to be complete and is subject to, and is qualified in
its entirety by, all the provisions of the Registration Rights Agreement, a copy
of which is filed as an exhibit to the Exchange Offer Registration Statement of
which this Prospectus is a part. In addition, the information set forth above
concerning certain interpretations of and
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<PAGE> 26
positions taken by the Commission is not intended to constitute legal advice,
and perspective investors should consult their own legal advisors with respect
to such matters.
Following the consummation of the Exchange Offer, holders of the Old Notes
who were eligible to participate in the Exchange Offer but who did not tender
their Old Notes will not have any further registration rights and such Old Notes
will continue to be subject to certain restrictions on transfer. Accordingly,
the liquidity of the market for such Old Notes could be adversely affected.
TERMS OF THE EXCHANGE OFFER
Upon the terms and subject to the conditions set forth in this Prospectus
and in the Letter of Transmittal, the Company will accept any and all Old Notes
validly tendered and not withdrawn prior to 5:00 p.m., New York City time, on
the Expiration Date. The Company will issue $1,000 principal amount of Exchange
Notes in exchange for each $1,000 principal amount of outstanding Old Notes
accepted in the Exchange Offer. Holders may tender some or all of their Old
Notes pursuant to the Exchange Offer. However, Old Notes may be tendered only in
integral multiples of $1,000.
The form and terms of the Exchange Notes are the same as the form and terms
of the Old Notes except that (i) the Exchange Notes bear a Series B and the
Exchange Notes will have been registered under the Securities Act and hence will
not bear legends restricting the transfer thereof, (ii) the holders of the
Exchange Notes will not be entitled to certain rights under the Registration
Rights Agreement, including the provisions providing for Additional Interest
(other than with respect to periods prior to the issuance of such Exchange
Notes), all of which rights will terminate when the Exchange Offer is
consummated and (iii) the Exchange Notes will be issued in minimum denominations
of $1,000 compared to minimum denominations of $100,000 for the Old Notes. The
Exchange Notes will evidence the same debt as the Old Notes and will be entitled
to the benefits of the Indenture.
As of the date of this Prospectus, $150,000,000 aggregate principal amount
of Old Notes were outstanding. The Company has fixed the close of business on
November 5, 1997 as the record date for the Exchange Offer for purposes of
determining the persons to whom this Prospectus and the Letter of Transmittal
will be mailed initially.
Holders of Old Notes do not have any appraisal or dissenters' rights under
the Business Corporation Law of Pennsylvania or the Indenture in connection with
the Exchange Offer. The Company intends to conduct the Exchange Offer in
accordance with the applicable requirements of the Exchange Act and the rules
and regulations of the Commission thereunder.
The Company shall be deemed to have accepted validly tendered Old Notes
when, as and if the Company has given oral or written notice thereof to the
Exchange Agent. The Exchange Agent will act as agent for the tendering holders
for the purpose of receiving the Exchange Notes from the Company.
If any tendered Old Notes are not accepted for exchange because of an
invalid tender, the occurrence of certain other events set forth herein or
otherwise, the certificates for any such unaccepted Old Notes will be returned,
without expense, to the tendering holder thereof as promptly as practicable
after the Expiration Date.
Holders who tender Old Notes in the Exchange Offer will not be required to
pay brokerage commissions or fees or, subject to the instructions in the Letter
of Transmittal, transfer taxes with respect to the exchange of Old Notes
pursuant to the Exchange Offer. The Company will pay all charges and expenses,
other than transfer taxes in certain circumstances, in connection with the
Exchange Offer. See "-- Fees and Expenses."
NEITHER THE BOARD OF DIRECTORS OF THE COMPANY NOR THE COMPANY MAKES ANY
RECOMMENDATION TO HOLDERS OF OLD NOTES AS TO WHETHER TO TENDER OR REFRAIN FROM
TENDERING ALL OR ANY PORTION OF THEIR OLD NOTES PURSUANT TO THE EXCHANGE OFFER.
IN ADDITION, NO ONE HAS BEEN AUTHORIZED TO MAKE ANY SUCH RECOMMENDATION. HOLDERS
OF OLD NOTES MUST MAKE THEIR OWN DECISION WHETHER TO TENDER PURSUANT TO THE
EXCHANGE OFFER AND, IF SO,
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THE AGGREGATE AMOUNT OF OLD NOTES TO TENDER AFTER READING THIS PROSPECTUS AND
THE LETTER OF TRANSMITTAL AND CONSULTING WITH THEIR ADVISERS, IF ANY, BASED ON
THEIR OWN FINANCIAL POSITION AND REQUIREMENTS.
EXPIRATION DATE; EXTENSIONS; AMENDMENTS
The term "Expiration Date" shall mean 5:00 p.m., New York City time, on
December 15, 1997, unless the Company, in its sole discretion, extends the
Exchange Offer, in which case the term "Expiration Date" shall mean the latest
date and time to which the Exchange Offer is extended. Notwithstanding the
foregoing, the Company will not extend the Expiration Date beyond December 19,
1997.
The Company may extend the Exchange Offer at any time and from time to time
by giving oral or written notice to the Exchange Agent or by press release and
mailing to the registered holders an announcement thereof, each on or before the
Expiration Date.
The Company reserves the right, in its sole discretion, (i) to delay
accepting any Old Notes, to extend the Exchange Offer or to terminate the
Exchange Offer if any of the conditions set forth below under "-- Conditions"
shall not have been satisfied, by giving oral or written notice of such delay,
extension or termination to the Exchange Agent or (ii) to amend the terms of the
Exchange Offer in any manner. Any such delay in acceptance, extension,
termination or amendment will be followed as promptly as practicable by oral or
written notice thereof to the registered holders.
PROCEDURES FOR TENDERING
Only a registered holder of Old Notes may tender such Old Notes in the
Exchange Offer. To tender in the Exchange Offer, a holder must complete, sign
and date the Letter of Transmittal, or a facsimile thereof, have the signatures
thereon guaranteed if required by the Letter of Transmittal, and mail or
otherwise deliver such Letter of Transmittal or such facsimile, together with
the Old Notes and any other required documents, to the "Exchange Agent" prior to
5:00 p.m., New York City time, on the Expiration Date. To be tendered
effectively, the Old Notes, Letter of Transmittal and other required documents
(or an Agent's Message in lieu thereof) must be completed and received by the
Exchange Agent at the address set forth below under "Exchange Agent" prior to
5:00 p.m., New York City time, on the Expiration Date. Delivery of the Old Notes
may be made by book-entry transfer in accordance with the procedures described
below. Confirmation of such book-entry transfer must be received by the Exchange
Agent prior to the Expiration Date.
By executing the Letter of Transmittal, each holder will make to the
Company the representations set forth above in the third paragraph under the
heading "-- Purpose and Effect of the Exchange Offer."
The tender by a holder and the acceptance thereof by the Company will
constitute agreement between such holder and the Company in accordance with the
terms and subject to the conditions set forth herein and in the Letter of
Transmittal.
THE METHOD OF DELIVERY OF OLD NOTES AND THE LETTER OF TRANSMITTAL AND ALL
OTHER REQUIRED DOCUMENTS TO THE EXCHANGE AGENT IS AT THE ELECTION AND SOLE RISK
OF THE HOLDER. AS AN ALTERNATIVE TO DELIVERY BY MAIL, HOLDERS MAY WISH TO
CONSIDER OVERNIGHT OR HAND DELIVERY SERVICE. IN ALL CASES, SUFFICIENT TIME
SHOULD BE ALLOWED TO ASSURE DELIVERY TO THE EXCHANGE AGENT BEFORE THE EXPIRATION
DATE. NO LETTER OF TRANSMITTAL OR NOTES SHOULD BE SENT TO THE COMPANY. HOLDERS
MAY REQUEST THEIR RESPECTIVE BROKERS, DEALERS, COMMERCIAL BANKS, TRUST COMPANIES
OR NOMINEES TO EFFECT THE ABOVE TRANSACTIONS FOR SUCH HOLDERS.
Any beneficial owner whose Old Notes are registered in the name of a
broker, dealer, commercial bank, trust company or other nominee and who wishes
to tender should contact the registered holder promptly and instruct such
registered holder to tender on such beneficial owner's behalf. See the
instructions included with the Letter of Transmittal.
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Signatures on a Letter of Transmittal or a notice of withdrawal, as the
case may be, must be guaranteed by an Eligible Institution (as defined below)
unless the Old Notes tendered pursuant thereto are tendered (i) by a registered
holder who has not completed the box entitled "Special Issuance Instructions" or
"Special Delivery Instructions" on the Letter of Transmittal or (ii) for the
account of an Eligible Institution. In the event that signatures on a Letter of
Transmittal or a notice of withdrawal, as the case may be, are required to be
guaranteed, such guarantee must be by an Eligible Institution. As used in this
Prospectus, Eligible Institution has the meaning set forth for such term in the
Letter of Transmittal.
If the Letter of Transmittal is signed by a person other than the
registered holder of any Old Notes listed therein, such Old Notes must be
endorsed or accompanied by a properly completed bond power, signed by such
registered holder as such registered holder's name appears on such Old Notes
with the signature thereon guaranteed by an Eligible Institution.
If the Letter of Transmittal or any Old Notes or bond powers are signed by
trustees, executors administrators, guardians, attorneys-in-fact, officers of
corporations or others acting in a fiduciary or representative capacity, such
persons should so indicate when signing, and evidence satisfactory to the
Company of their authority to so act must be submitted with the Letter of
Transmittal.
The Exchange Agent will establish an account at the book-entry transfer
facility, The Depository Trust Company (the "Book-Entry Transfer Facility") for
purposes of the Exchange Offer promptly after the date of this Prospectus, and
any financial institution that is a participant in the Book-Entry Transfer
Facility's systems may make book-entry delivery of Old Notes by causing the
Book-Entry Transfer Facility to transfer such Old Notes into the Exchange
Agent's account with respect to the Old Notes in accordance with the Book-Entry
Transfer Facility's procedures for such transfer. The Letter of Transmittal with
any required signature guarantees and any other required documents (or an
Agent's Message in lieu thereof), must be received by the Exchange Agent at its
address set forth below on or prior to the Expiration Date, or, if the
guaranteed delivery procedures described below are complied with, within the
time period provided under such procedures. Delivery of documents to the
Book-Entry Transfer Facility does not constitute delivery to the Exchange Agent.
The Exchange Agent and DTC have confirmed that the Exchange Offer is
eligible for the DTC Automated Tender Offer Program ("ATOP"). Accordingly, DTC
participants may electronically transmit their acceptance of the Exchange Offer
by causing DTC to transfer Old Notes in accordance with DTC's ATOP procedures
for transfer. DTC will then send an Agent's Message to the Exchange Agent. DTC
participants may also withdraw tendered Old Notes electronically by causing DTC
to transfer Old Notes back to the participant's account through DTC's ATOP
procedures for transfer. DTC will then send an Agent's Message of such
withdrawal to the Exchange Agent.
The term "Agent's Message" means a message transmitted by DTC, received by
the Exchange Agent and forming part of the confirmation of a book-entry
transfer, which states that DTC has received an express acknowledgment from the
participant in DTC tendering Old Notes which are the subject of such book-entry
confirmation, that such participant has received and agrees to be bound by the
terms of the Letter of Transmittal and that the Company may enforce such
agreement against such participant. In the case of an Agent's Message relating
to guaranteed delivery, the term means a message transmitted by DTC and received
by the Exchange Agent, which states that DTC has received an express
acknowledgment from the participant in DTC tendering Old Notes that such
participant has received and agrees to be bound by the Notice of Guaranteed
Delivery. In the case of an Agent's Message relating to withdrawal of tenders,
the term means a message transmitted by DTC and received by the Exchange Agent,
which states that DTC has received an express acknowledgement from the
participant in DTC which tendered the Old Notes that such participant has
withdrawn its tender and specifying the name and account number to which the Old
Notes have been credited.
All questions as to the validity, form, eligibility (including time of
receipt), acceptance of tendered Old Notes and withdrawal of tendered Old Notes
will be determined by the Company in its sole discretion, which determination
will be final and binding. The Company reserves the absolute right to reject any
and all Old Notes not properly tendered or any Old Notes the Company's
acceptance of which would, in the opinion of
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<PAGE> 29
counsel for the Company, be unlawful. The Company also reserves the right in its
sole discretion to waive any defects, irregularities or conditions of tender as
to particular Old Notes. The Company's interpretation of the terms and
conditions of the Exchange Offer (including the instructions in the Letter of
Transmittal) will be final and binding on all parties. Unless waived, any
defects or irregularities in connection with tenders of Old Notes must be cured
within such time as the Company shall determine. Although the Company intends to
notify holders of defects or irregularities with respect to tenders of Old
Notes, neither the Company, the Exchange Agent nor any other person shall incur
any liability for failure to give such notification. Tenders of Old Notes will
not be deemed to have been made until such defects or irregularities have been
cured or waived. Any Old Notes received by the Exchange Agent that are not
properly tendered and as to which the defects or irregularities have not been
cured or waived will be returned by the Exchange Agent to the tendering holders,
unless otherwise provided in the Letter of Transmittal, as soon as practicable
following the Expiration Date.
GUARANTEED DELIVERY PROCEDURES
Holders who wish to tender their Old Notes and (i) whose Old Notes are not
immediately available, (ii) for whom time will not permit delivery of their Old
Notes, the Letter of Transmittal or any other required documents, or an Agent's
message in lieu thereof, to the Exchange Agent prior to the Expiration Date or
(iii) who cannot complete the procedures for book-entry transfer, prior to the
Expiration Date, may effect a tender if:
(a) the tender is made through an Eligible Institution;
(b) prior to the Expiration Date, the Exchange Agent receives from
such Eligible Institution a properly completed and duly executed Notice of
Guaranteed Delivery (by facsimile transmission, mail or hand delivery)
setting forth the name and address of the holder, the certificate number(s)
of such Old Notes and the principal amount of Old Notes tendered, or an
Agent's message in lieu thereof, stating that the tender is being made
thereby and guaranteeing that, within two New York Stock Exchange trading
days after the Expiration Date, the Letter of Transmittal (or facsimile
thereof) together with the certificate(s) representing the Old Notes (or a
confirmation of book-entry transfer of such Old Notes into the Exchange
Agent's account at the Book-Entry Transfer Facility), and any other
documents required by the Letter of Transmittal, or an Agent's message in
lieu thereof, will be deposited by the Eligible Institution with the
Exchange Agent; and
(c) such properly completed and executed Letter of Transmittal (or
facsimile thereof), as well as the certificate(s) representing all tendered
Old Notes in proper form for transfer (or a confirmation of book-entry
transfer of such Old Notes into the Exchange Agent's account at the
Book-Entry Transfer Facility), and all other documents required by the
Letter of Transmittal, or an Agent's message in lieu thereof, are received
by the Exchange Agent upon two New York Stock Exchange trading days after
the Expiration Date.
Upon request to the Exchange Agent, a Notice of Guaranteed Delivery will be
sent to holders who wish to tender their Old Notes according to the guaranteed
delivery procedures set forth above.
WITHDRAWAL OF TENDERS
Except as otherwise provided herein, tenders of Old Notes may be withdrawn
at any time prior to 5:00 p.m., New York City time, on the Expiration Date.
To withdraw a tender of Old Notes in the Exchange Offer, a letter or
facsimile transmission notice of withdrawal, or an Agent's Message in lieu
thereof, must be received by the Exchange Agent at its address set forth herein
prior to 5:00 p.m., New York City time, on the Expiration Date. Any such notice
of withdrawal must (i) specify the name of the person having deposited the Old
Notes to be withdrawn (the "Depositor"), (ii) identify the Old Notes to be
withdrawn (including the certificate number(s) and principal amount of such Old
Notes, or, in the case of Old Notes transferred by book-entry transfer, the name
and number of the account at the Book-Entry Transfer Facility to be credited),
(iii) be signed by the holder in the same manner
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<PAGE> 30
as the original signature on the Letter of Transmittal by which such Old Notes
were tendered (including any required signature guarantees) or be accompanied by
documents of transfer sufficient to have the Trustee with respect to the Old
Notes register the transfer of such Old Notes into the name of the person
withdrawing the tender and (iv) specify the name in which any such Old Notes are
to be registered, if different from that of the Depositor. All questions as to
the validity, form and eligibility (including time of receipt) of such notices
will be determined by the Company, whose determination shall be final and
binding on all parties. Any Old Notes so withdrawn will be deemed not to have
been validly tendered for purposes of the Exchange Offer and no Exchange Notes
will be issued with respect thereto unless the Old Notes so withdrawn are
validly retendered. Any Old Notes which have been tendered but which are not
accepted for exchange will be returned to the holder thereof without cost to
such holder as soon as practicable after withdrawal, rejection of tender or
termination of the Exchange Offer. Properly withdrawn Old Notes may be
retendered by following one of the procedures described above under
"-- Procedures for Tendering" at any time prior to the Expiration Date.
CONDITIONS
Notwithstanding any other term of the Exchange Offer, the Company shall not
be required to accept for exchange, or exchange Exchange Notes for, any Old
Notes, and may terminate or amend the Exchange Offer as provided herein before
the acceptance of such Old Notes, if:
(a) any action or proceeding is instituted or threatened in any court
or by or before any governmental agency with respect to the Exchange Offer
which, in the sole judgment of the Company, might materially impair the
ability of the Company to proceed with the Exchange Offer or any material
adverse development has occurred in any existing action or proceeding with
respect to the Company or any of its subsidiaries; or
(b) any law, statute, rule, regulation or interpretation by the Staff
of the Commission is proposed, adopted or enacted, which, in the sole
judgment of the Company, might materially impair the ability of the Company
to proceed with the Exchange Offer or materially impair the contemplated
benefits of the Exchange Offer to the Company; or
(c) any governmental approval has not been obtained, which approval
the Company shall, in its sole discretion, deem necessary for the
consummation of the Exchange Offer as contemplated hereby.
If the Company determines in its sole discretion that any of the conditions
are not satisfied, the Company may (i) refuse to accept any Old Notes and return
all tendered Old Notes to the tendering holders, (ii) extend the Exchange Offer
and retain all Old Notes tendered prior to the expiration of the Exchange Offer,
subject, however, to the rights of holders to withdraw such Old Notes (see
"-- Withdrawal of Tenders") or (iii) waive such unsatisfied conditions with
respect to the Exchange Offer and accept all properly tendered Old Notes which
have not been withdrawn.
EXCHANGE AGENT
The Bank of New York has been appointed as Exchange Agent for the Exchange
Offer. Questions and requests for assistance, requests for additional copies of
this Prospectus or of the Letter of Transmittal and requests for Notice of
Guaranteed Delivery should be directed to the Exchange Agent addressed as
follows:
The Bank of New York
101 Barclay Street -- 7E
New York, New York 10286
Attention: Reorganization Section, Enrique Lopez
Telephone: (212) 815-2742
Facsimile: (212) 815-6339
Delivery to an address other than as set forth above will not constitute a
valid delivery.
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FEES AND EXPENSES
The expenses of soliciting tenders will be borne by the Company. The
principal solicitation is being made by mail; however, additional solicitation
may be made by telegraph, telecopy, telephone or in person by officers and
regular employees of the Company and its affiliates.
The Company has not retained any dealer-manager in connection with the
Exchange Offer and will not make any payments to brokers, dealers, or others
soliciting acceptances of the Exchange Offer. The Company, however, will pay the
Exchange Agent reasonable and customary fees for its services and will reimburse
it for its reasonable out-of-pocket expenses in connection therewith.
The cash expenses to be incurred in connection with the Exchange Offer will
be paid by the Company. Such expenses include fees and expenses of the Exchange
Agent and Trustee, accounting and legal fees and printing costs, among others.
ACCOUNTING TREATMENT
The Exchange Notes will be recorded at the same carrying value as the Old
Notes, which is face value, as reflected in the Company's accounting records on
the date of exchange. Accordingly, no gain or loss for accounting purposes will
be recognized by the Company. The expenses of the Exchange Offer will be
expensed over the term of the Exchange Notes.
CONSEQUENCES OF FAILURE TO EXCHANGE
The Old Notes that are not exchanged for Exchange Notes pursuant to the
Exchange Offer will remain restricted securities. Accordingly, such Old Notes
may be resold only (i) to the Company (upon redemption thereof or otherwise),
(ii) so long as the Old Notes are eligible for resale pursuant to Rule 144A, to
a person inside the United States whom the seller reasonably believes is a
qualified institutional buyer within the meaning of Rule 144A under the
Securities Act in a transaction meeting the requirements of Rule 144A, in
accordance with Rule 144 under the Securities Act, or pursuant to another
exemption from the registration requirements of the Securities Act (and based
upon an opinion of counsel reasonably acceptable to the Company), (iii) outside
the United States to a foreign person in a transaction meeting the requirements
of Rule 904 under the Securities Act, or (iv) pursuant to an effective
registration statement under the Securities Act, in each case in accordance with
any applicable securities laws of any state of the United States. To the extent
that Old Notes are tendered and accepted in the Exchange Offer, the trading
market for untendered and tendered but unaccepted Old Notes could be adversely
affected.
RESALE OF THE EXCHANGE NOTES
With respect to resales of Exchange Notes, based on interpretations by the
Staff set forth in no-action letters issued to third parties, the Company
believes that a holder or other person who receives Exchange Notes, whether or
not such person is the holder (other than a person that is an "affiliate" of the
Company within the meaning of Rule 405 under the Securities Act) who receives
Exchange Notes in exchange for Old Notes in the ordinary course of business and
who is not participating, does not intend to participate, and has no arrangement
or understanding with any person to participate, in the distribution of the
Exchange Notes, will be allowed to resell the Exchange Notes to the public
without further registration under the Securities Act and without delivering to
the purchasers of the Exchange Notes a prospectus that satisfies the
requirements Section 10 of the Securities Act. However, if any holder acquires
Exchange Notes in the Exchange Offer for the purpose of distributing or
participating in a distribution of the Exchange Notes, such holder cannot rely
on the position of the Staff enunciated in such no-action letters or any similar
interpretive letters, and must comply with the registration and prospectus
delivery requirements of the Securities Act in connection with any resale
transaction, unless an exemption from registration is otherwise available.
Further, each Participating Broker-Dealer that receives Exchange Notes for its
own account in exchange for Old Notes, where such Old Notes were acquired by
such Participating Broker-Dealer as a result of market-making activities or
other trading activities, must acknowledge that it will deliver a prospectus in
connection with any resale of such Exchange Notes.
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<PAGE> 32
As contemplated by these no-action letters and the Registration Rights
Agreement, each holder accepting the Exchange Offer is required to represent to
the Company in the Letter of Transmittal that (i) the Exchange Notes are to be
acquired by the holder or the person receiving such Exchange Notes, whether or
not such person is the holder, in the ordinary course of business, (ii) the
holder or any such other person (other than a broker-dealer referred to in the
next sentence) is not engaging and does not intend to engage, in the
distribution of the Exchange Notes, (iii) the holder or any such other person
has no arrangement or understanding with any person to participate in the
distribution of the Exchange Notes, (iv) neither the holder nor any such other
person is an "affiliate" of the Company within the meaning of Rule 405 under the
Securities Act, and (v) the holder or any such other person acknowledges that if
such holder or other person participates in the Exchange Offer for the purpose
of distributing the Exchange Notes it must comply with the registration and
prospectus delivery requirements of the Securities Act in connection with any
resale of the Exchange Notes and cannot rely on those no-action letters. As
indicated above, each Participating Broker-Dealer that receives an Exchange Note
for its own account in exchange for Old Notes must acknowledge that it will
deliver a prospectus in connection with any resale of such Exchange Notes. For a
description of the procedures for such resales by Participating Broker-Dealers,
see "Plan of Distribution."
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following discussion is based upon current provisions of the Internal
Revenue Code of 1986, as amended, applicable Treasury regulations, judicial
authority and administrative rulings and practice. There can be no assurance
that the Internal Revenue Service (the "Service") will not take a contrary view,
and no ruling from the Service has been or will be sought. Legislative, judicial
or administrative changes or interpretations may be forthcoming that could alter
or modify the statements and conditions set forth herein. Any such changes or
interpretations may or may not be retroactive and could affect the tax
consequences to holders. Certain holders (including insurance companies,
tax-exempt organizations, financial institutions, broker-dealers, foreign
corporations and persons who are not citizens or residents of the United States)
may be subject to special rules not discussed below. The Company recommends that
each holder consult such holder's own tax advisor as to the particular tax
consequences of exchanging such holder's Notes for Exchange Notes, including the
applicability and effect of any state, local or foreign tax laws.
The exchange of the Notes for the Exchange Notes pursuant to the Exchange
Offer should not be a taxable event to the holder and thus the holder should not
recognize any taxable gain or loss as a result of the exchange. A holder's
adjusted tax basis in the Exchange Notes will be the same as his adjusted tax
basis in the Notes exchanged therefor, and his holding period for the Notes will
be included in his holding period for the Exchange Notes if the Notes are held
as capital assets on the Expiration Date. Although the exchange of the Notes for
the Exchange Notes will not create additional "market discount" or "amortizable
bond premium," to the extent that a holder acquired the Notes at a market
discount or with amortizable bond premium, such discount or premium would
generally carry over to the Exchange Notes received in exchange for the Notes.
Such holders should consult their tax advisors regarding the United States
Federal income tax treatment of such market discount and amortizable bond
premium.
PLAN OF DISTRIBUTION
Each broker-dealer that acquired Old Notes for its own account as a result
of market-making or other trading activities (a "Participating Broker-Dealer")
and that receives Exchange Notes for its own account pursuant to the Exchange
Offer must acknowledge that it will deliver a prospectus in connection with any
resale of such Exchange Notes. This Prospectus, as it may be amended or
supplemented from time to time, may be used by a Participating Broker-Dealer in
connection with resales of Exchange Notes received in exchange for Old Notes
where such Old Notes were acquired as a result of market-making activities or
other trading activities. The Company has agreed that for a period not to exceed
180 days after the Expiration Date, it will make this Prospectus, as amended or
supplemented, available to any Participating Broker-Dealer for use in connection
with any such resale. In addition, until February 10, 1998, all dealers
effecting transactions in the Exchange Notes may be required to deliver a
prospectus.
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The Company will not receive any proceeds from any sales of the Exchange
Notes by Participating Broker-Dealers. Exchange Notes received by Participating
Broker-Dealers for their own account pursuant to the Exchange Offer may be sold
from time to time in one or more transactions in the over-the-counter market, in
negotiated transactions, through the writing of options on the Exchange Notes or
a combination of such methods of resale, at market prices prevailing at the time
of resale, at prices related to such prevailing market prices or negotiated
prices. Any such resale may be made directly to purchasers or to or through
brokers or dealers who may receive compensation in the form of commissions or
concessions from any such Participating Broker-Dealer and/or the purchasers of
any such Exchange Notes. Any Participating Broker-Dealer that resells the
Exchange Notes that were received by it for its own account pursuant to the
Exchange Offer and any broker or dealer that participates in a distribution of
such Exchange Notes may be deemed to be an "underwriter" within the meaning of
the Securities Act and any profit on any such resale of Exchange Notes and any
commissions or concessions received by any such persons may be deemed to be
underwriting compensation under the Securities Act. The Letter of Transmittal
states that by acknowledging that it will deliver and by delivering a
prospectus, a Participating Broker-Dealer will not be deemed to admit that it is
an "underwriter" within the meaning of the Securities Act.
For a period not to exceed 180 days after the Expiration Date the Company
will promptly send additional copies of this Prospectus and any amendment or
supplement to this Prospectus to any Participating Broker-Dealer that requests
such documents in the Letter of Transmittal.
LEGAL MATTERS
Certain legal matters in connection with the issuance of Exchange Notes
offered hereby will be passed upon for the Company by Ballard Spahr Andrews &
Ingersoll, Philadelphia, Pennsylvania.
EXPERTS
The consolidated financial statements and the related financial statement
schedule incorporated in this Prospectus by reference from the Company's Annual
Report on Form 10-K and Amendment No. 1 thereto on Form 10-K/A for the year
ended December 31, 1996 have been audited by Deloitte & Touche LLP, independent
auditors, as stated in their report, which is incorporated herein by reference,
and have been so incorporated in reliance upon the report of such firm given
upon their authority as experts in accounting and auditing.
With respect to the unaudited interim financial information for the periods
ended March 31, 1997 and 1996 and June 30, 1997 and 1996, which is incorporated
herein by reference, Deloitte & Touche LLP have applied limited procedures in
accordance with professional standards for a review of such information.
However, as stated in their reports included in the Company's Quarterly Reports
on Form 10-Q for the quarters ended March 31, 1997 and June 30, 1997 and
incorporated by reference herein, they did not audit and they do not express an
opinion on that interim financial information. Accordingly, the degree of
reliance on their reports on such information should be restricted in light of
the limited nature of the review procedures applied. Deloitte & Touche LLP are
not subject to the liability provisions of Section 11 of the Securities Act for
their reports on the unaudited interim financial information because those
reports are not "reports" or a "part" of the registration statement prepared or
certified by an accountant within the meaning of Sections 7 and 11 of the
Securities Act.
32
<PAGE> 34
============================================================
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS IN CONNECTION WITH THE OFFER CONTAINED IN THIS PROSPECTUS, AND,
IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY THE COMPANY OR THE INITIAL PURCHASERS. THIS PROSPECTUS
DOES NOT CONSTITUTE AN OFFER TO SELL, OR THE SOLICITATION OF AN OFFER TO BUY,
ANY SECURITY OTHER THAN THE NOTES OFFERED HEREBY, NOR DOES IT CONSTITUTE AN
OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE NOTES TO ANYONE IN
ANY JURISDICTION WHERE, OR TO ANY PERSON TO WHOM, IT WOULD BE UNLAWFUL TO MAKE
SUCH AN OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY
SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT
THERE HAS NOT BEEN A CHANGE IN THE INFORMATION SET FORTH IN THIS PROSPECTUS OR
IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF.
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information...................... 2
Incorporation of Certain Documents by
Reference................................ 2
Prospectus Summary......................... 4
Recent Developments........................ 10
Use of Proceeds............................ 10
Capitalization............................. 11
Selected Consolidated Financial Data....... 12
Business................................... 13
Description of Notes....................... 14
The Exchange Offer......................... 22
Certain Federal Income Tax Consequences.... 31
Plan of Distribution....................... 31
Legal Matters.............................. 32
Experts.................................... 32
</TABLE>
UNTIL FEBRUARY 10, 1998 (90 DAYS AFTER THE DATE OF THIS PROSPECTUS), ALL DEALERS
EFFECTING TRANSACTIONS IN THE EXCHANGE NOTES OFFERED HEREBY, WHETHER OR NOT
PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS.
THIS IS IN ADDITION TO THE OBLIGATION OF DEALERS TO DELIVER A PROSPECTUS WHEN
ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR
SUBSCRIPTIONS.
============================================================
============================================================
GLATFELTER LOGO
P. H. GLATFELTER COMPANY
OFFER TO EXCHANGE ITS
6 7/8% NOTES DUE 2007, SERIES B
FOR ANY AND ALL OF
ITS OUTSTANDING
6 7/8% NOTES DUE 2007
--------------------
PROSPECTUS
--------------------
NOVEMBER 12, 1997
PRINTED ON ECUSTA NYALITE(R)
MANUFACTURED BY THE ECUSTA DIVISION OF THE
P. H. GLATFELTER COMPANY
BASIS 25 X 38 -- 27 LBS.
============================================================
<PAGE> 35
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Pennsylvania Business Corporation Law of 1988 authorizes the Company to
grant indemnities to directors and officers in terms sufficiently broad to
permit indemnification of such persons under certain circumstances for
liabilities (including reimbursement for expenses incurred) arising under the
Securities Act.
The Company's By-laws include a provision to eliminate the personal
liability of its directors for monetary damages for breach or alleged breach of
their duty of care to the full extent permitted by Pennsylvania law. In
addition, Article III of the Company's By-laws provides:
INDEMNIFICATION
3.1 Indemnification of Directors, Officers and Other Persons. The Company
shall indemnify any director or officer of 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, 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 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 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
II-1
<PAGE> 36
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 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.
The Company has insurance coverage for losses by any person who is or
hereafter may be a director or officer of the Company arising from claims
against that person for any wrongful act (subject to certain exceptions) in his
capacity as a director or officer of the Company. The policy also provides for
reimbursement to the Company for indemnification given by the Company, pursuant
to common statutory law or its Articles of Incorporation or By-laws, to any such
person arising from any such claim. The policy's coverage is limited to a
maximum of $10,000,000 for each loss and each policy year and there is a
deductible of $1,000,000 for the Company.
II-2
<PAGE> 37
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -------------------------------------------------------------------------------------
<C> <S>
3.1 Articles of Amendment dated April 27, 1977, including restated Articles of
Incorporation (incorporated by reference to Exhibit 3(a) of Company's Annual Report
on Form 10-K for the year ended December 31, 1993) as amended by Articles of Merger
dated January 30, 1979 (incorporated by reference to Exhibit 3(a) of Company's Annual
Report on Form 10-K for the year ended December 31, 1993); a Statement of Reduction
of Authorized Shares dated May 12, 1980 (incorporated by reference to Exhibit 3(a) of
Company's Annual Report on Form 10-K for the year ended December 31, 1993); a
Statement of Reduction of Authorized Shares dated September 23, 1981 (incorporated by
reference to Exhibit 3(a) of Company's Annual Report on Form 10-K for the year ended
December 31, 1993); a Statement of Reduction of Authorized Shares dated August 2,
1982 (incorporated by reference to Exhibit 3(a) of Company's Annual Report on Form
10-K for the year ended December 31, 1993); a Statement of Reduction of Authorized
Shares dated July 29, 1983 (incorporated by reference to Exhibit 3(a) of Company's
Annual Report on Form 10-K for the year ended December 31, 1993); by Articles of
Amendment dated April 25, 1984 (incorporated by reference to Exhibit 3(a) of
Company's Annual Report on Form 10-K for the year ended December 31, 1984); a
Statement of Reduction of Authorized Shares dated October 15, 1984 (incorporated by
reference to Exhibit (3)(b) of Company'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 Company's Form 10-K for the year
ended December 31, 1985); by Articles of Amendment dated April 23, 1986 (incorporated
by reference to Exhibit (3) of Company's Quarterly Report on Form 10-Q for the
quarter ended March 31, 1986); a Statement of Reduction of Authorized Shares dated
July 11, 1986 (incorporated by reference to Exhibit (3)(b) of Company'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 Company'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
Company'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 Company'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 Company'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 Company's Form 10-K for the year ended
December 31, 1991); Articles of Amendment dated August 7, 1992 (incorporated by
reference to Exhibit 3(b) of Company's Form 10-K for the year ended December 31,
1992); Articles of Amendment dated July 30, 1993 (incorporated by reference to
Exhibit 3(b) of Company's Form 10-K for the year ended December 31, 1993); and
Articles of Amendment dated January 26, 1994 (incorporated by reference to Exhibit
3(b) of Company's Form 10-K for the year ended December 31, 1993).
3.2 Articles of Incorporation, as amended through January 26, 1994 (restated for the
purpose of filing on EDGAR) (incorporated by reference to Exhibit 3(c) of Company's
Form 10-K for the year ended December 31, 1993).
3.3 By-Laws, as amended through March 14, 1996 (incorporated by reference to Exhibit 3(c)
of Company's Form 10-K for the year ended December 31, 1996).
*4.1 Indenture, dated as of July 22, 1997, between P. H. Glatfelter Company and The Bank
of New York, relating to the 6 7/8% Notes due 2007.
*4.2 Purchase Agreement, dated as of July 17, 1997, among P. H. Glatfelter Company, Bear,
Stearns & Co. Inc. and BT Securities Corporation, relating to the 6 7/8% Notes.
*4.3 Registration Rights Agreement, dated as of July 22, 1997, among P. H. Glatfelter
Company, Bear, Stearns & Co. Inc. and BT Securities Corporation, relating to the
6 7/8% Notes due 2007.
4.4 Indenture between P. H. Glatfelter Company and Wachovia Bank of Georgia, N.A., as
Trustee, dated as of January 15, 1993 (incorporated by reference to Exhibit 4(a) of
Company's Form 10-K for the year ended December 31, 1993).
</TABLE>
II-3
<PAGE> 38
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -------------------------------------------------------------------------------------
<C> <S>
4.5 Form of Note issued to Purchasers of 5 7/8% Notes due March 1, 1998 (incorporated by
reference to Exhibit 4(b) of Company's Form 10-K for the year ended December 31,
1992).
*4.6 Escrow Agreement, dated as of February 24, 1997 between P. H. Glatfelter Company and
the Bank of New York relating to 5 7/8% Notes due March 1, 1998 (incorporated by
reference to Exhibit (4)(c) of the Company's Form 10-K for the year ended December
31, 1996).
4.7 Loan Agreement, dated February 24, 1997 between P. H. Glatfelter Company, as
borrower, and GWS Valuch, Inc., as lender (incorporated by reference to Exhibit 10(h)
of the Company's Form 10-K for the year ended December 31, 1996).
5.1 Opinion of Ballard Spahr Andrews & Ingersoll.
10.1 P. H. Glatfelter Company Management Incentive Plan, adopted as of January 1, 1994, as
amended and restated effective March 13, 1997 (incorporated by reference to Exhibit B
of Company's Proxy Statement dated March 14, 1997).
10.2 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 Company's Form
10-K for the year ended December 31, 1992).
10.3 P. H. Glatfelter Company Supplemental Executive Retirement Plan, effective January 1,
1988, as amended and restated December 22, 1994 (incorporated by reference to Exhibit
10(c) of Company's Form 10-K for the year ended December 31, 1994).
10.4 Deferral Benefit Pension Plan of Ecusta Division, effective May 22, 1986
(incorporated by reference to Exhibit 10(ee) of Company's Form 10-K for the year
ended December 31, 1987).
10.5 Description of Executive Salary Continuation Plan (incorporated by reference to
Exhibit 10(g) of Company's Form 10-K for the year ended December 31, 1990).
10.6 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 Company's Form 10-K for the year ended December 31, 1989).
10.7 P. H. Glatfelter Company 1992 Key Employee Long-Term Incentive Plan, as amended April
23, 1997 (incorporated by reference to Exhibit A of Company's Proxy Statement dated
March 14, 1997).
10.8 Agreement between the State of Wisconsin and Certain Companies Concerning the Fox
River, dated as of January 31, 1997, among P. H. Glatfelter Company, Fort Howard
Corporation, NCR Corporation, Appleton Papers Inc., Riverside Paper Corporation, U.S.
Paper Mills, Wisconsin Tissue Mills Inc. and the State of Wisconsin (incorporated by
reference to Exhibit 10(i) of the Company's Form 10-K for the year ended December 31,
1996).
12.1 Statement of Ratio of Earnings to Fixed Charges.
15.1 Letter in Lieu of Consent Regarding Review Report of Unaudited Interim Financial
Information.
*21.1 Subsidiaries of P. H. Glatfelter Company.
23.1 Consent of Deloitte & Touche LLP.
*23.2 Consent of Ballard Spahr Andrews & Ingersoll (included in Exhibit 5.1).
*24.1 Powers of Attorney (included in Signature Page).
*25.1 Statement of Eligibility of Trustee.
*99.1 Form of Letter of Transmittal.
*99.2 Form of Notice of Guaranteed Delivery.
*99.3 Form of Exchange Agent Agreement.
</TABLE>
- ---------------
* Previously filed.
II-4
<PAGE> 39
ITEM 22. UNDERTAKINGS.
The undersigned Company hereby undertakes:
(1) To file, during any period in which any offers or sales are being made,
a post-effective amendment to the registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933 (the "Securities Act");
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement; and
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement.
(2) That, for the purpose of determining any liability under the Securities
Act, each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offering therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
(4) That prior to any public reoffering of the securities registered
hereunder through use of a prospectus which is a part of this registration
statement, by any person or party who is deemed to be an underwriter within the
meaning of Rule 145(c), the issuer undertakes that such reoffering prospectus
will contain the information called for by the applicable registration form with
respect to reofferings by persons who may be deemed underwriters, in addition to
the information called for by the other items of the applicable form.
(5) That every prospectus: (i) that is filed pursuant to paragraph (4)
immediately preceding, or (ii) that purports to meet the requirements of Section
10(a)(3) of the Securities Act and is used in connection with an offering of
securities subject to Rule 415, will be filed as a part of an amendment to the
registration statement and will not be used until such amendment is effective,
and that, for purposes of determining any liability under the Securities Act of
1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(6) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Company pursuant to the foregoing provisions or otherwise, the Company has been
advised that in the opinion of the Securities and Exchange Commission (the
"SEC") such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the Company
of expenses incurred or paid by a director, officer or controlling person of the
Company in the successful defense of any action, suit or proceeding) is asserted
by such director, officer or controlling person in connection with the
securities being registered, the Company will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.
(7) To respond to requests for information that is incorporated by
reference into the Prospectus pursuant to Item 4, 10(b), 11 or 13 of this form,
within one business day of receipt of such request, and to send the incorporated
documents by first class mail or other equally prompt means. This includes
information contained in documents filed subsequent to the effective date of the
registration statement through the date of the request.
(8) That, for purposes of determining any liability under the Securities
Act, each filing of the Company's annual report pursuant to section 13(a) or
section 15(d) of the Securities Exchange Act of 1934 (and, where
II-5
<PAGE> 40
applicable, each filing of an employee benefit plan's annual report pursuant to
section 15(d) of the Securities Exchange Act of 1934) that is incorporated by
reference in the registration statement shall be deemed to be a new Registration
Statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(9) That, for purposes of determining any liability under the Securities
Act, the information omitted from the form of prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the Company pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of this Registration
Statement as of that time it was declared effective.
(10) It will file an application for the purpose of determining the
eligibility of the trustee to act under subsection (a) of Section 310 of the
Trust Indenture Act in accordance with the rules and regulations prescribed by
the SEC under Section 305(b)(2) of the Trust Indenture Act.
II-6
<PAGE> 41
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Company
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-4 and has duly caused this Amendment No. 2 to
the Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Spring Grove, Commonwealth of
Pennsylvania, on November 12, 1997.
P. H. GLATFELTER COMPANY
By: /s/ T.C. NORRIS
------------------------------------
T. C. Norris
Chairman, President, Chief Executive
Officer and Director
------------------------
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 2 to the Registration Statement has been signed by the following persons in
the capacities and on the date indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------------ ------------------------------ ------------------
<C> <S> <C>
/s/ T. C. NORRIS Chairman, President, Chief November 12, 1997
- ------------------------------------------ Executive Officer and Director
T. C. Norris
* Senior Vice President and November 12, 1997
- ------------------------------------------ Director
G. H. Glatfelter II
* Senior Vice President and November 12, 1997
- ------------------------------------------ Chief Financial Officer
R. P. Newcomer
* Comptroller November 12, 1997
- ------------------------------------------
C. M. Smith
* Director November 12, 1997
- ------------------------------------------
R. E. Chappell
* Director November 12, 1997
- ------------------------------------------
N. DeBenedictis
* Director November 12, 1997
- ------------------------------------------
G. H. Glatfelter
* Director November 12, 1997
- ------------------------------------------
R. S. Hillas
* Director November 12, 1997
- ------------------------------------------
M. A. Johnson II
* Director November 12, 1997
- ------------------------------------------
R. W. Kelso
</TABLE>
II-7
<PAGE> 42
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------------ ------------------------------ ------------------
<C> <S> <C>
* Director November 12, 1997
- ------------------------------------------
P. R. Roedel
* Director November 12, 1997
- ------------------------------------------
J. M. Sanzo
* Director November 12, 1997
- ------------------------------------------
R. L. Smoot
*By /s/ T.C. NORRIS
- ------------------------------------------
T.C. Norris
Attorney-in-Fact
</TABLE>
II-8
<PAGE> 43
EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE
- ------ -------------------------------------------------------------------------- ------------
<C> <S> <C>
3.1 Articles of Amendment dated April 27, 1977, including restated Articles of
Incorporation (incorporated by reference to Exhibit 3(a) of Company's
Annual Report on Form 10-K for the year ended December 31, 1993) as
amended by Articles of Merger dated January 30, 1979 (incorporated by
reference to Exhibit 3(a) of Company's Annual Report on Form 10-K for the
year ended December 31, 1993); a Statement of Reduction of Authorized
Shares dated May 12, 1980 (incorporated by reference to Exhibit 3(a) of
Company's Annual Report on Form 10-K for the year ended December 31,
1993); a Statement of Reduction of Authorized Shares dated September 23,
1981 (incorporated by reference to Exhibit 3(a) of Company's Annual Report
on Form 10-K for the year ended December 31, 1993); a Statement of
Reduction of Authorized Shares dated August 2, 1982 (incorporated by
reference to Exhibit 3(a) of Company's Annual Report on Form 10-K for the
year ended December 31, 1993); a Statement of Reduction of Authorized
Shares dated July 29, 1983 (incorporated by reference to Exhibit 3(a) of
Company's Annual Report on Form 10-K for the year ended December 31,
1993); by Articles of Amendment dated April 25, 1984 (incorporated by
reference to Exhibit 3(a) of Company's Annual Report on Form 10-K for the
year ended December 31, 1984); a Statement of Reduction of Authorized
Shares dated October 15, 1984 (incorporated by reference to Exhibit (3)(b)
of Company'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 Company's Form 10-K for the year ended
December 31, 1985); by Articles of Amendment dated April 23, 1986
(incorporated by reference to Exhibit (3) of Company's Quarterly Report on
Form 10-Q for the quarter ended March 31, 1986); a Statement of Reduction
of Authorized Shares dated July 11, 1986 (incorporated by reference to
Exhibit (3)(b) of Company'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 Company'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 Company'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 Company'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 Company'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 Company's Form 10-K for the
year ended December 31, 1991); Articles of Amendment dated August 7, 1992
(incorporated by reference to Exhibit 3(b) of Company's Form 10-K for the
year ended December 31, 1992); Articles of Amendment dated July 30, 1993
(incorporated by reference to Exhibit 3(b) of Company's Form 10-K for the
year ended December 31, 1993); and Articles of Amendment dated January 26,
1994 (incorporated by reference to Exhibit 3(b) of Company's Form 10-K for
the year ended December 31, 1993).........................................
3.2 Articles of Incorporation, as amended through January 26, 1994 (restated
for the purpose of filing on EDGAR) (incorporated by reference to Exhibit
3(c) of Company's Form 10-K for the year ended December 31, 1993).........
3.3 By-Laws, as amended through March 14, 1996 (incorporated by reference to
Exhibit 3(c) of Company's Form 10-K for the year ended December 31,
1996).....................................................................
</TABLE>
<PAGE> 44
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE
- ------ -------------------------------------------------------------------------- ------------
<C> <S> <C>
*4.1 Indenture, dated as of July 22, 1997, between P. H. Glatfelter Company and
The Bank of New York, relating to the 6 7/8% Notes due 2007...............
*4.2 Purchase Agreement, dated as of July 17, 1997, among P. H. Glatfelter
Company, Bear, Stearns & Co. Inc. and BT Securities Corporation, relating
to the 6 7/8% Notes.......................................................
*4.3 Registration Rights Agreement, dated as of July 22, 1997, among P. H.
Glatfelter Company, Bear, Stearns & Co. Inc. and BT Securities
Corporation, relating to the 6 7/8% Notes due 2007........................
4.4 Indenture between P. H. Glatfelter Company and Wachovia Bank of Georgia,
N.A., as Trustee, dated as of January 15, 1993 (incorporated by reference
to Exhibit 4(a) of Company's Form 10-K for the year ended December 31,
1993).....................................................................
4.5 Form of Note issued to Purchasers of 5 7/8% Notes due March 1, 1998
(incorporated by reference to Exhibit 4(b) of Company's Form 10-K for the
year ended December 31, 1992).............................................
4.6 Escrow Agreement, dated as of February 24, 1997 between P. H. Glatfelter
Company and the Bank of New York relating to 5 7/8% Notes due March 1,
1998 (incorporated by reference to Exhibit (4)(c) of the Company's Form
10-K for the year ended December 31, 1996)................................
4.7 Loan Agreement, dated February 24, 1997 between P. H. Glatfelter Company,
as borrower, and GWS Valuch, Inc., as lender (incorporated by reference to
Exhibit 10(h) of the Company's Form 10-K for the year ended December 31,
1996).....................................................................
5.1 Opinion of Ballard Spahr Andrews & Ingersoll..............................
10.1 P. H. Glatfelter Company Management Incentive Plan, adopted as of January
1, 1994, as amended and restated effective March 13, 1997 (incorporated by
reference to Exhibit B of Company's Proxy Statement dated March 14,
1997).....................................................................
10.2 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 Company's Form 10-K for the year ended December 31, 1992)........
10.3 P. H. Glatfelter Company Supplemental Executive Retirement Plan, effective
January 1, 1988, as amended and restated December 22, 1994 (incorporated
by reference to Exhibit 10(c) of Company's Form 10-K for the year ended
December 31, 1994)........................................................
10.4 Deferral Benefit Pension Plan of Ecusta Division, effective May 22, 1986
(incorporated by reference to Exhibit 10(ee) of Company's From 10-K for
the year ended December 31, 1987).........................................
10.5 Description of Executive Salary Continuation Plan (incorporated by
reference to Exhibit 10(g) of Company's Form 10-K for the year ended
December 31, 1990)........................................................
10.6 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 Company's Form 10-K for the
year ended December 31, 1989).............................................
10.7 P. H. Glatfelter Company 1992 Key Employee Long-Term Incentive Plan, as
amended April 23, 1997 (incorporated by reference to Exhibit A of
Company's Proxy Statement dated March 14, 1997)...........................
</TABLE>
<PAGE> 45
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE
- ------ -------------------------------------------------------------------------- ------------
<C> <S> <C>
10.8 Agreement between the State of Wisconsin and Certain Companies Concerning
the Fox River, dated as of January 31, 1997, among P. H. Glatfelter
Company, Fort Howard Corporation, NCR Corporation, Appleton Papers Inc.,
Riverside Paper Corporation, U.S. Paper Mills, Wisconsin Tissue Mills Inc.
and the State of Wisconsin (incorporated by reference to Exhibit 10(i) of
the Company's Form 10-K for the year ended December 31, 1996).............
12.1 Statement of Ratio of Earnings to Fixed Charges...........................
15.1 Letter in Lieu of Consent Regarding Review Report of Unaudited Interim
Financial Information.....................................................
*21.1 Subsidiaries of P. H. Glatfelter Company..................................
23.1 Consent of Deloitte & Touche LLP..........................................
*23.2 Consent of Ballard Spahr Andrews & Ingersoll (included in Exhibit 5.1)....
*24.1 Powers of Attorney (included in Signature Page)...........................
*25.1 Statement of Eligibility of Trustee.......................................
*99.1 Form of Letter of Transmittal.............................................
*99.2 Form of Notice of Guaranteed Delivery.....................................
*99.3 Form of Exchange Agent Agreement..........................................
</TABLE>
- ---------------
* Previously filed.
<PAGE> 1
EXHIBIT 5.1
[BALLARD SPAHR ANDREWS & INGERSOLL LETTERHEAD]
November 12, 1997
P. H. Glatfelter Company
228 South Main Street
Spring Grove, PA 17362
Re: Registration Statement on Form S-4 for
P. H. Glatfelter Company (the "Company")
Ladies and Gentlemen:
We have acted as your counsel and are rendering this opinion
in connection with the Company's proposed offer to exchange $1,000 principal
amount of its 6 7/8% Notes due 2007, Series B (the "Exchange Notes"), for each
$1,000 principal amount of its outstanding 6 7/8% Notes due 2007 (the "Old
Notes"), of which $150,000,000 aggregate principal amount is outstanding. The
Old Notes were issued, and the Exchange Notes will be issued, under an Indenture
dated as of July 22, 1997 (the "Indenture") by and between the Company and The
Bank of New York, as Trustee (the "Trustee").
In connection with this opinion, we have examined the
originals or copies, certified or otherwise identified to our satisfaction, of
the Registration Statement on Form S-4 (the "Exchange Offer Registration
Statement") filed on this date pursuant to the Securities Act of 1933, as
amended (the "Securities Act"), and all exhibits thereto, the Indenture, the
Articles of Incorporation, as amended, and By-laws, as amended, of the Company
and certain resolutions adopted by the Board of Directors of the Company
relating to the authorization and issuance of the Exchange Notes. We have also
examined the form of the Exchange Notes, and we assume that the Exchange Notes
will be authenticated by the Trustee and, as authenticated, will conform to the
form thereof examined by us. In addition, we have made such inquiries of
officers and representatives of the Company, have ascertained to our
satisfaction such other matters and have considered such matters of law as and
to the extent we have deemed necessary for the purposes of this opinion.
<PAGE> 2
P. H. Glatfelter Company
November 12, 1997
Page 2
In all cases, we have assumed the genuineness of all
signatures, the legal capacity of natural persons, the authenticity of all
documents submitted to us as originals, the conformity to originals of all
documents submitted to us as certified, photostatic or conformed copies, the
authenticity of originals of all such latter documents, and the accuracy and
completeness of all records, information and statements submitted to us by
officers and representatives of the Company.
For the purpose of this opinion, we have also assumed that:
(1) the proposed exchange will be carried out on the basis set forth in the
Exchange Offer Registration Statement; (2) the Exchange Notes will be
executed, authenticated and delivered as provided in the Indenture; and (3)
requisite authorizations, approvals, consents or exemptions under the securities
laws of the various states and other jurisdictions of the United States shall
have been obtained.
Based upon the foregoing, we are of the opinion, so far as the
laws of Pennsylvania are concerned, that, subject to the foregoing assumptions,
when properly authenticated and delivered by the Trustee in accordance with the
Indenture, the Exchange Notes will be legally issued and binding obligations of
the Company.
We express no opinion as to the law of any jurisdiction other
than the federal law of the United States and the law of the Commonwealth of
Pennsylvania.
We hereby consent to the sole use of this opinion as an
exhibit to the Exchange Offer Registration Statement and to the use of our name
under the heading "Legal Matters" in the Prospectus included therein. This
opinion is not to be used, circulated, quoted, referred to or relied upon by any
other person or for any other purpose without our prior written consent.
Very truly yours,
/s/ BALLARD SPAHR ANDREWS & INGERSOLL
<PAGE> 1
EXHIBIT 12.1
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(Dollar in thousands)
<TABLE>
<CAPTION>
Nine Months
Ended
Year Ended December 31, September 30,
1992 1993 1994 1995 1996 1996 1997
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Earnings:
Income before
income taxes $90,761 $35,383 ($192,774) $107,612 $ 97,905 $71,334 $51,350
Add:
Interest on debt -- 2,824 6,364 10,265 9,308 6,957 9,549
------- ------- --------- -------- -------- ------- -------
Earnings as defined $90,761 $38,207 ($186,410) $117,877 $107,213 $78,291 $60,899
======= ======= ========= ======== ======== ======= =======
Fixed charges:
Interest on debt $ -- $ 2,824 $ 6,364 $ 10,265 $ 9,308 $ 6,957 $ 9,549
Capitalized Interest 88 4,138 3,066 -- -- -- --
------- ------- --------- -------- -------- ------- -------
Fixed charges as defined $ 88 $ 6,962 $ 9,430 $ 10,265 $ 9,308 $ 6,957 $ 9,549
======= ======= ========= ======== ======== ======= =======
Ratio of earnings to
fixed charges 1,031.4 5.5 ---(a) 11.5 11.5 11.3 6.4
======= ======= ========= ======== ======== ======= =======
</TABLE>
(a) Earnings were insufficient to cover fixed charges by $195,840,000.
For the purpose of computing the ratio of earnings to fixed charges, (1)
"earnings" consist of income before income taxes and interest on debt (excluding
interest capitalized during the period) and (2) "fixed charges" consist of total
interest on debt (including interest capitalized during the period.)
<PAGE> 1
EXHIBIT (15.1)
LETTER IN LIEU OF CONSENT REGARDING REVIEW REPORT OF UNAUDITED INTERIM FINANCIAL
INFORMATION
P. H. Glatfelter Company:
We have reviewed, in accordance with standards established by the American
Institute of Certified Public Accountants, the unaudited condensed consolidated
financial statements of P. H. Glatfelter Company and subsidiaries for the
periods ended March 31, 1997 and 1996 and June 30, 1997 and 1996, as indicated
in our reports dated April 14, 1997 and July 16, 1997, respectively; because we
did not perform an audit, we expressed no opinion on that information.
We are aware that our reports referred to above, which are included in your
Quarterly Reports on Form 10-Q for the quarters ended March 31, 1997 and June
30, 1997 are incorporated by reference in this Amendment No. 2 to Registration
Statement No. 333-36395 on Form S-4.
We are also aware that the aforementioned reports, pursuant to Rule 436(c)
under the Securities Act of 1933, are not considered a part of the Registration
Statement prepared or certified by an accountant or a report prepared or
certified by an accountant within the meaning of Sections 7 and 11 of that Act.
/s/ Deloitte & Touche LLP
Philadelphia, Pennsylvania
November 11, 1997
<PAGE> 1
EXHIBIT (23.1)
INDEPENDENT AUDITORS' CONSENT
P. H. Glatfelter Company:
We consent to the incorporation by reference in this Amendment No. 2 to
Registration Statement No. 333-36395 of P. H. Glatfelter Company on Form S-4 of
our report dated February 24, 1997, appearing in the Annual Report on Form 10-K
and Amendment No. 1 thereto on Form 10-K/A of P. H. Glatfelter Company for the
year ended December 31, 1996 and to the reference to us under the headings
"Selected Consolidated Financial Data" and "Experts" in the Prospectus, which is
part of this Registration Statement.
/s/ Deloitte & Touche LLP
Philadelphia, Pennsylvania
November 11, 1997
