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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
RULE 13E-3 TRANSACTION STATEMENT
(PURSUANT TO SECTION 13(E) OF THE SECURITIES EXCHANGE ACT OF 1934)
(Amendment No. 4)
ARTISTIC GREETINGS INCORPORATED
(Name of Issuer)
ARTISTIC GREETINGS INCORPORATED
ARTISTIC DIRECT INCORPORATED
Mr. Thomas C. Wyckoff
(Name of Persons Filing Statement)
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TITLE CUSIP NUMBER
- -------------------------------------------- --------------------------------------------
Common Stock
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(Title and CUSIP Number of Class of Securities)
ARTISTIC GREETINGS INCORPORATED
ONE KOMER CENTER
P.O. BOX 1999
ELMIRA, NEW YORK 14902-1999
(212) 735-4500
(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications on Behalf of the Person Filing Statement)
This statement is filed in connection with (check the appropriate box):
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a. /X/ The filing of solicitation materials or an information statement subject to
Regulation 14A, Regulation 14C or Rule 13e-3 (c) under the Securities Exchange Act
of 1934.
b. / / The filing of a registration statement under the Securities Act of 1933.
c. / / A tender offer.
d. / / None of the above.
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Check the following box if the soliciting materials or information statement
referred to in checking box (a) are preliminary copies: /X/
CALCULATION OF FILING FEE
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Transaction Amount of Filing Fee
Valuation*
$33,307,414 $6,662
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* Solely for purposes of calculating the filing fee and computed pursuant to
Section 13(e)(3) of the Securities Exchange Act of 1934, as amended, and
Rule 0-11(b)(1) thereunder, the transaction value equals the total amount of
funds required to purchase all shares of the class of Common Stock pursuant
to the merger described in the Proxy Statement.
/X/ Check box if any part of the fee is offset as provided by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the form
or schedule and the date of its filing.
Amount Previously Paid: $6,662
Form or Registration No.: Schedule 14A Proxy Statement
Filing Party: Artistic Greetings Incorporated
Date Filed: January 26, 1998
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This Rule 13e-3 Transaction Statement (the "Statement") relates to the
merger and the asset sale by Artistic Greetings Incorporated, a Delaware
corporation (the "Company"), described in its preliminary proxy statement, dated
April [ ], 1998 (the "Proxy Statement"), whereby AGI Acquisition Co. ("Newco"),
a Delaware corporation and a wholly owned subsidiary of MDC Communications
Corporation ("MDC"), an Ontario, Canada corporation, will merge with and into
the Company, pursuant to which (a) the Company will be the surviving corporation
and will become a wholly owned subsidiary of MDC and (b) each outstanding share
of common stock, par value $0.10 per share, of the Company (other than stock of
the Company owned by the Company, MDC or any of their respective subsidiaries)
will be converted into the right to receive $5.70 in cash, without interest.
Contemporaneously therewith, the Company will sell certain assets relating to
the personalized product and catalog businesses of the Company (the "P&C
Businesses") to Artistic Direct Incorporated, a New York corporation ("ADI").
This Amendment ("Amendment No. 4 to Schedule 13E-3") amends Amendment No. 3 to
Schedule 13E-3, dated April 16, 1998 (as hereby amended, the "Schedule 13E-3").
This Statement amends and restates in entirety all of the Items of Schedule
13E-3.
The following cross reference sheet below is being supplied pursuant to
General Instruction F to Schedule 13E-3 and shows the location of the
information required to be included in response to the items of this Statement
in the Preliminary Proxy Statement on Schedule 14A (the "Schedule 14A") filed by
the Company with the Securities and Exchange Commission (the "Commission") on
the date hereof. The information set forth in the Schedule 14A is hereby
expressly incorporated herein by reference and the responses to each item herein
are qualified in their entirety by the corresponding responses in the Schedule
14A.
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CROSS-REFERENCE SHEET
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SCHEDULE 13E-3 ITEMS LOCATION OF SCHEDULE 13E-3 ITEMS IN SCHEDULE 14A
- -------------------- --------------------------------------------------------------------------------------------
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Item l(a) INTRODUCTION
Item l(b) SUMMARY
Item l(c) PRICE RANGE OF SHARES AND DIVIDENDS
Item l(d) PRICE RANGE OF SHARES AND DIVIDENDS
Item l(e) Not Applicable
Item l(f) *
Item 2(a)-(d),(g) INTRODUCTION; Schedule I
Item 2(e),(f) *
Item 3(a) SPECIAL FACTORS--Background of the Merger; THE ASSET PURCHASE AGREEMENT
Item 3(b) SPECIAL FACTORS--Background of the Merger; THE ASSET PURCHASE AGREEMENT; ANNEX II
Item 4(a) INTRODUCTION; SPECIAL FACTORS--Background of the Merger; SPECIAL FACTORS--Interests of
Certain Persons; THE MERGER AGREEMENT; THE ASSET PURCHASE AGREEMENT; THE STOCKHOLDERS
AGREEMENT; SPECIAL FACTORS--Plans for the Company after the Merger
Item 4(b) INTRODUCTION; SPECIAL FACTORS--Background of the Merger; SPECIAL FACTORS--Interests of
Certain Persons; THE MERGER AGREEMENT; THE ASSET PURCHASE AGREEMENT; THE STOCKHOLDERS
AGREEMENT; SPECIAL FACTORS--Plans for the Company after the Merger
Item 5(a) SPECIAL FACTORS--Plans for the Company after the Merger; SPECIAL FACTORS--Certain Effects of
the Asset Sale; THE MERGER AGREEMENT; THE ASSET PURCHASE AGREEMENT
Item 5(b) SPECIAL FACTORS--Plans for the Company after the Merger; SPECIAL FACTORS--CERTAIN EFFECTS OF
THE ASSET SALE; THE ASSET PURCHASE AGREEMENT
Item 5(c) Not Applicable
Item 5(d) Not Applicable
Item 5(e) Not Applicable
Item 5(f) Not Applicable
Item 5(g) Not Applicable
Item 6 SOURCE AND AMOUNTS OF FUNDS; EXPENSES
Item 7(a) SPECIAL FACTORS--Background of the Merger; SPECIAL FACTORS--Plans for the Company After the
Merger
Item 7(b) SPECIAL FACTORS--Background of the Merger
Item 7(c) SPECIAL FACTORS--Background of the Merger
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2
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SCHEDULE 13E-3 ITEMS LOCATION OF SCHEDULE 13E-3 ITEMS IN SCHEDULE 14A
- -------------------- --------------------------------------------------------------------------------------------
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Item 7(d) SPECIAL FACTORS--Plans for the Company After the Merger; SPECIAL FACTORS--Certain Effects of
the Consummation of the Merger; CERTAIN FEDERAL INCOME TAX CONSEQUENCES
Item 8(a) SPECIAL FACTORS--Background of the Merger; SPECIAL FACTORS-- Recommendation of the Company's
Board of Directors; SPECIAL FACTORS-- Perspective of ADI and Mr. Wyckoff; SPECIAL
FACTORS--Opinion of Financial Advisor; SPECIAL FACTORS--Interests of Certain Persons
Item 8(b) SPECIAL FACTORS--Background of the Merger; SPECIAL FACTORS--Opinion of Financial Advisor;
SPECIAL FACTORS--Interests of Certain Persons
Item 8(c) INTRODUCTION--Voting at the Special Meeting; RIGHTS OF OBJECTING STOCKHOLDERS
Item 8(d) SPECIAL FACTORS--Background of the Merger; SPECIAL FACTORS--Certain Effects of the
Consummation of the Merger
Item 8(e) SPECIAL FACTORS--Background of the Merger; SPECIAL FACTORS--Certain Effects of the
Consummation of the Merger
Item 8(f) Not Applicable
Item 9 SPECIAL FACTORS--Opinion of Financial Advisor
Item 10 SPECIAL FACTORS--Interests of Certain Persons; SECURITY OWNERSHIP OF CERTAIN PERSONS
Item 11 THE MERGER AGREEMENT; THE STOCKHOLDERS AGREEMENT; THE ASSET PURCHASE AGREEMENT
Item 12(a) SPECIAL FACTORS--Interests of Certain Persons; THE STOCKHOLDERS AGREEMENT
Item 12(b) SUMMARY; SPECIAL FACTORS--Background of the Merger
Item 13(a) RIGHTS OF OBJECTING STOCKHOLDERS
Item 13(b) Not Applicable
Item 13(c) Not Applicable
Item 14(a) SELECTED CONSOLIDATED FINANCIAL DATA
Item 14(b) Not Applicable
Item 15(a) SPECIAL FACTORS--Interest of Certain Persons
Item 15(b) SPECIAL FACTORS--Background of the Merger; SPECIAL FACTORS--Interest of Certain Persons;
SOURCE AND AMOUNT OF FUNDS; EXPENSES
Item 16 THE PROXY STATEMENT
Item 17 *
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* The Item is located in this Schedule 13E-3 only.
3
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ITEM 1. ISSUER AND CLASS OF SECURITY SUBJECT TO THE TRANSACTION.
(a) Artistic Greetings Incorporated (the "Company") is a Delaware corporation
that has its principal executive offices at One Komer Center, P.O. Box 1999,
Elmira, New York 14902-1999.
(b) The Company's common stock, par value $0.10 per share (the "Shares"). The
Board of Directors of the Company has fixed the close of business on
[ ], 1998 as the record date (the "Record Date") for the determination
of stockholders entitled to notice of, and to vote at, the special meeting of
stockholders (the "Special Meeting"). Accordingly, only holders of record of the
Shares at the close of business on the Record Date will be entitled to vote at
the Special Meeting. At the close of business on the Record Date, there were
[ ] Shares outstanding and entitled to vote, held by approximately
[ ] stockholders of record.
(c) The Shares are listed on The Nasdaq Stock Market ("Nasdaq"). The information
appearing under the caption "PRICE RANGE OF SHARES AND DIVIDENDS" in the Proxy
Statement is incorporated herein by reference.
(d) The information appearing under the caption "PRICE RANGE OF SHARES AND
DIVIDENDS" in the Proxy Statement is incorporated herein by reference.
(e) Not applicable.
(f) Since the commencement of the Company's second full fiscal year preceding
the date of this Schedule 13e-3, the Company has purchased 500,000 Shares on May
30, 1997 at a price of $5.00 per share, pursuant to the exercise of a previously
granted put right. Since the commencement of the Company's second full fiscal
year preceding the date of this Schedule 13E-3, Mr. Wyckoff purchased 1,000
Shares on February 1, 1996 at a price of $2.63 per share, 5,400 Shares on March
7, 1996 at a price of $2.88 per share and was granted 10,000 Shares on August 8,
1996 by the Company.
ITEM 2. IDENTITY AND BACKGROUND.
(a)-(d) and (g) This statement is filed by the Company, who is the issuer of the
class of equity securities which is the subject of the Rule 13e-3 transaction,
Artist Direct Incorporated ("ADI") and Mr. Thomas C. Wyckoff (Chief Operating
Officer of the Company). The information set forth in Schedule I of the Revised
Proxy Statement is incorporated herein by reference.
(e), (f) During the last five years, none of the Company, ADI and, to the
best of their knowledge, any of their respective executive officers or
directors, including Mr. Wyckoff, has been (i) convicted in a criminal
proceeding (excluding traffic violations or similar misdemeanors) or (ii) party
to a civil proceeding of a judicial or administrative body of competent
jurisdiction and as result of such proceeding was or is subject to a judgment,
decree or final order enjoining further violations of, or prohibiting or
mandating activities subject to, federal or state securities laws or finding any
violation of such laws.
ITEM 3. PAST CONTRACTS, TRANSACTIONS OR NEGOTIATIONS.
(a) The information appearing under the captions "SPECIAL FACTORS--Background of
the Merger," and "THE ASSET PURCHASE AGREEMENT" in the Proxy Statement is
incorporated herein by reference.
(b) The information appearing under the captions "SPECIAL FACTORS--Background of
the Merger," "THE ASSET PURCHASE AGREEMENT" and Annex II in the Proxy Statement
is incorporated herein by reference.
4
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ITEM 4. TERMS OF THE TRANSACTION.
(a) The information appearing under the captions "INTRODUCTION;" "SPECIAL
FACTORS--Background of the Merger," "SPECIAL FACTORS--Interests of Certain
Persons," "THE MERGER AGREEMENT," "THE ASSET PURCHASE AGREEMENT," "THE
STOCKHOLDERS AGREEMENT" and "SPECIAL FACTORS--Plans for the Company after the
Merger" in the Proxy Statement is incorporated herein by reference.
(b) The information appearing under the captions "INTRODUCTION," "SPECIAL
FACTORS--Background of the Merger," "SPECIAL FACTORS--Interests of Certain
Persons," "THE MERGER AGREEMENT," "THE ASSET PURCHASE AGREEMENT," "THE
STOCKHOLDERS AGREEMENT" and "SPECIAL FACTORS--Plans for the Company after the
Merger" in the Proxy Statement is incorporated herein by reference.
ITEM 5. PLANS OR PROPOSALS OF THE ISSUER OR AFFILIATE.
(a) The information appearing under the captions "SPECIAL FACTORS--Plans for the
Company after the Merger," "SPECIAL FACTORS--Certain Effects of the Asset Sale,"
"THE MERGER AGREEMENT," and "THE ASSET PURCHASE AGREEMENT" in the Information
Statement is incorporated herein by reference.
(b) The information appearing under the captions "SPECIAL FACTORS--Plans for the
Company after the Merger," "SPECIAL FACTORS--Certain Effects of the Asset Sale"
and "THE ASSET PURCHASE AGREEMENT" in the Information Statement is incorporated
herein by reference.
(c)-(g) Not applicable.
ITEM 6. SOURCE AND AMOUNTS OF FUNDS OR OTHER CONSIDERATION.
(a)-(d) The information appearing under the caption "SOURCE AND AMOUNTS OF
FUNDS; EXPENSES" in the Proxy Statement is incorporated herein by reference.
ITEM 7. PURPOSE(S), ALTERNATIVES, REASONS AND EFFECTS.
(a) The information appearing under the captions "SPECIAL FACTORS--Background of
the Merger" and "SPECIAL FACTORS--Plans for the Company After the Merger" in the
Proxy Statement is incorporated herein.
(b) The information appearing under the caption "SPECIAL FACTORS--Background of
the Merger" in the Proxy Statement is incorporated herein by reference.
(c) The information appearing under the caption "SPECIAL FACTORS--Background of
the Merger" in the Proxy Statement is incorporated herein by reference.
(d) The information appearing under the captions "SPECIAL FACTORS--Plans for the
Company After the Merger," "SPECIAL FACTORS--Certain Effects of the Consummation
of the Merger," "SPECIAL FACTORS--Certain Effects of the Asset Sale" and
"CERTAIN FEDERAL INCOME TAX CONSEQUENCES" in the Proxy Statement is incorporated
herein by reference.
ITEM 8. FAIRNESS OF THE TRANSACTION.
(a)-(b) The information appearing under the captions "SPECIAL
FACTORS--Background of the Merger," "SPECIAL FACTORS--Recommendation of the
Company's Board of Directors," "SPECIAL FACTORS--Perspective of ADI and Mr.
Wyckoff," "SPECIAL FACTORS--Opinion of Financial Advisor" and "SPECIAL
FACTORS--Interests of Certain Persons" is incorporated herein by reference.
5
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(c) The information appearing under the captions "INTRODUCTION--Voting at the
Special Meeting" and "RIGHTS OF OBJECTING STOCKHOLDERS" in the Proxy Statement
is incorporated herein by reference.
(d)-(e) The information appearing under the captions "SPECIAL
FACTORS--Background of the Merger" and "SPECIAL FACTORS--Certain Effects of the
Consummation of the Merger" in the Proxy Statement is incorporated herein by
reference.
(f) Not applicable.
ITEM 9. REPORTS, OPINIONS, APPRAISALS AND CERTAIN NEGOTIATIONS.
(a)-(c) The information appearing under the caption "SPECIAL FACTORS--Opinion of
Financial Advisor" in the Proxy Statement is incorporated herein by reference.
ITEM 10. INTEREST IN SECURITIES OF THE ISSUER.
(a)-(b) The information appearing under the caption "SPECIAL FACTORS--Interests
of Certain Persons" and "SECURITY OWNERSHIP OF CERTAIN PERSONS" in the Proxy
Statement is incorporated herein by reference.
ITEM 11. CONTRACTS, ARRANGEMENTS OR UNDERSTANDINGS WITH RESPECT TO THE ISSUER'S
SECURITIES.
The information appearing under the captions "THE MERGER AGREEMENT," "THE
STOCKHOLDERS AGREEMENT" and "THE ASSET PURCHASE AGREEMENT" in the Proxy
Statement is incorporated herein by reference.
ITEM 12. PRESENT INTENTION AND RECOMMENDATION OF CERTAIN PERSONS WITH REGARD TO
THE TRANSACTION.
(a) The information appearing under the captions "SPECIAL FACTORS--Interests of
Certain Persons" and "THE STOCKHOLDERS AGREEMENT" in the Proxy Statement is
incorporated herein by reference.
(b) The information appearing under the captions "SUMMARY" and "SPECIAL FACTORS
- --Background of the Merger" in the Proxy Statement is incorporated herein by
reference.
ITEM 13. OTHER PROVISIONS OF THE TRANSACTION.
(a) The information appearing under the captions "RIGHTS OF OBJECTING
STOCKHOLDERS" in the Proxy Statement is incorporated herein by reference.
(b) Not applicable.
(c) Not applicable.
ITEM 14. FINANCIAL INFORMATION.
(a) The information appearing (i) under the caption "SELECTED CONSOLIDATED
FINANCIAL DATA" in the Proxy Statement and (ii) in the financial statements
included in the Annual Report on Form 10-K for the year ended December 31, 1997
to be attached as Annex VI to the Proxy Statement is incorporated herein by
reference.
(b) Not applicable.
6
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ITEM 15. PERSONS AND ASSETS EMPLOYED, RETAINED OR UTILIZED.
(a) The officers and employees of the Company will perform tasks which would be
expected to arise in connection with the transaction. The information appearing
under the caption "SPECIAL FACTORS-- Interest of Certain Persons" in the Proxy
Statement is incorporated herein by reference.
(b) The information appearing under the captions "SPECIAL FACTORS--Background of
the Merger," "SPECIAL FACTORS--Interest of Certain Persons" and "SOURCE AND
AMOUNT OF FUNDS; EXPENSES" in the Proxy Statement is incorporated herein by
reference.
ITEM 16. ADDITIONAL INFORMATION.
Reference is hereby made to the Proxy Statement, which is referenced hereto
as Exhibit (d), and incorporated in its entirety herein by reference.
ITEM 17. MATERIAL TO BE FILED AS EXHIBITS.
(a)(1) NationsCredit Commercial Corporation Commitment Letter.*
(a)(2) Empire State Economic Development Fund Resolutions.**
(a)(3) Chemung County Industrial Development Agency Letter.**
(a)(4) City of Elmira Industrial Loan Letter.**
(a)(5) Chemung Canal Trust Company Loan Agreement.
(b) Opinion of PaineWebber Incorporated.*
(c)(1) Agreement and Plan of Merger, dated December 21, 1997.*
(c)(2) Stockholders Agreement, dated December 21, 1997.*
(c)(3) Asset Purchase Agreement, dated December 21, 1997.*
(d) Proxy Statement, dated April [ ], 1998, incorporated by reference to
Schedule 13E-3.
(e) Text of Section 262 of the General Corporation Law of the State of
Delaware.***
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* Filed with the Schedule 13E-3, dated January 26, 1998.
** Filed with Amendment No. 1 to Schedule 13E-3, dated March 13, 1998.
*** Filed with Amendment No. 3 to Schedule 13E-3 dated April 16, 1998.
7
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SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify that
the information set forth in this statement is true, complete and correct.
Dated: April 22, 1998
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ARTISTIC GREETINGS INCORPORATED
By: /s/ STUART KOMER
-----------------------------------------
Name: Stuart Komer
Title: Chairman of the Board
ARTISTIC DIRECT INCORPORATED
By: /s/ THOMAS C. WYCKOFF
-----------------------------------------
Name: Thomas C. Wyckoff
Title:
/s/ THOMAS C. WYCKOFF
-----------------------------------------
Thomas C. Wyckoff
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8
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EXHIBIT (E)
TEXT OF SECTION 262 OF THE
GENERAL CORPORATION LAW OF THE STATE OF DELAWARE
SECTION 262, APPRAISAL RIGHTS.
(a) Any stockholder of a corporation of this State who holds shares of
stock on the date of the making of a demand pursuant to subsection (d) of this
section with respect to such shares, who continuously holds such shares through
the effective date of the merger or consolidation, who has otherwise complied
with subsection (d) of this section and who has neither voted in favor of the
merger or consolidation nor consented thereto in writing pursuant to Section 228
of this title shall be entitled to an appraisal by the Court of Chancery of the
fair value of the stockholder's shares of stock under the circumstances
described in subsections (b) and (c) of this section. As used in this section,
the word "stockholder" means a holder of record of stock in a stock corporation
and also a member of record of a nonstock corporation; the words "stock" and
"share" mean and include what is ordinarily meant by those words and also
membership or membership interest of a member of a nonstock corporation; and the
words "depository receipt" mean a receipt or other instrument issued by a
depository representing an interest in one or more shares, or fractions thereof,
solely of stock of a corporation, which stock is deposited with the depository.
(b) Appraisal rights shall be available for the shares of any class or
series of stock of a constituent corporation in a merger or consolidation to be
effected pursuant to Section 251 (other than a merger effected pursuant to
Section 251(g) of this title), Section 252, Section 254, Section 257, Section
258, Section 263 or Section 264 of this title:
(1) Provided, however, that no appraisal rights under this section
shall be available for the shares of any class or series of stock, which
stock, or depository receipts in respect thereof, at the record date fixed
to determine the stockholders entitled to receive notice of and to vote at
the meeting of stockholders to act upon the agreement of merger or
consolidation, were either (i) listed on a national securities exchange or
designated as a national market system security on an interdealer quotation
system by the National Association of Securities Dealers, Inc. or (ii) held
of record by more than 2,000 holders; and further provided that no appraisal
rights shall be available for any shares of stock of the constituent
corporation surviving a merger if the merger did not require for its
approval the vote of the stockholders of the surviving corporation as
provided in subsection (f) of Section 251 of this title.
(2) Notwithstanding paragraph (1) of this subsection, appraisal rights
under this section shall be available for the shares of any class or series
of stock of a constituent corporation if the holders thereof are required by
the terms of an agreement of merger or consolidation pursuant to Sections
251, 252, 254, 257, 258, 263 and 264 of this title to accept for such stock
anything except:
a. Shares of stock of the corporation surviving or resulting from
such merger or consolidation, or depository receipts in respect thereof;
b. Shares of stock of any other corporation, or depository receipts
in respect thereof, which shares of stock (OR DEPOSITORY RECEIPTS IN
RESPECT THEREOF) or depository receipts at the effective date of the
merger or consolidation will be either listed on a national securities
exchange or designated as a national market system security on an
interdealer quotation system by the National Association of Securities
Dealers, Inc. or held of record by more than 2,000 holders;
c. Cash in lieu of fractional shares or fractional depository
receipts described in the foregoing subparagraphs a. and b. of this
paragraph; or
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d. Any combination of the shares of stock, depository receipts and
cash in lieu of fractional shares or fractional depository receipts
described in the foregoing subparagraphs a., b. and c. of this paragraph.
(3) In the event all of the stock of a subsidiary Delaware corporation
party to a merger effected under Section 253 of this title is not owned by
the parent corporation immediately prior to the merger, appraisal rights
shall be available for the shares of the subsidiary Delaware corporation.
(c) Any corporation may provide in its certificate of incorporation that
appraisal rights under this section shall be available for the shares of any
class or series of its stock as a result of an amendment to its certificate of
incorporation, any merger or consolidation in which the corporation is a
constituent corporation or the sale of all or substantially all of the assets of
the corporation. If the certificate of incorporation contains such a provision,
the procedures of this section, including those set forth in subsections (d) and
(e) of this section, shall apply as nearly as is practicable.
(d) Appraisal rights shall be perfected as follows:
(1) If a proposed merger or consolidation for which appraisal rights
are provided under this section is to be submitted for approval at a meeting
of stockholders, the corporation, not less than 20 days prior to the
meeting, shall notify each of its stockholders who was such on the record
date for such meeting with respect to shares for which appraisal rights are
available pursuant to subsections (b) or (c) hereof that appraisal rights
are available for any or all of the shares of the constituent corporations,
and shall include in such notice a copy of this section. Each stockholder
electing to demand the appraisal of his shares shall deliver to the
corporation, before the taking of the vote on the merger or consolidation, a
written demand for appraisal of his shares. Such demand will be sufficient
if it reasonably informs the corporation of the identity of the stockholder
and that the stockholder intends thereby to demand the appraisal of his
shares. A proxy or vote against the merger or consolidation shall not
constitute such a demand. A stockholder electing to take such action must do
so by a separate written demand as herein provided. Within 10 days after the
effective date of such merger or consolidation, the surviving or resulting
corporation shall notify each stockholder of each constituent corporation
who has complied with this subsection and has not voted in favor of or
consented to the merger or consolidation of the date that the merger or
consolidation has become effective; or
(2) If the merger or consolidation was approved pursuant to Section 228
or Section 253 of this title, each constituent corporation, either before
the effective date of the merger or consolidation or within ten days
thereafter, shall notify each of the holders of any class or series of stock
of such constituent corporation who are entitled to appraisal rights of the
approval of the merger or consolidation and that appraisal rights are
available for any or all shares of such class or series of stock of such
constituent corporation, and shall include in such notice a copy of this
section; provided that, if the notice is given on or after the effective
date of the merger or consolidation, such notice shall be given by the
surviving or resulting corporation to all such holders of any class or
series of stock of a constituent corporation that are entitled to appraisal
rights. Such notice may, and, if given on or after the effective date of the
merger or consolidation, shall, also notify such stockholders of the
effective date of the merger or consolidation. Any stockholder entitled to
appraisal rights may, within 20 days after the date of mailing of such
notice, demand in writing from the surviving or resulting corporation the
appraisal of such holder's shares. Such demand will be sufficient if it
reasonably informs the corporation of the identity of the stockholder and
that the stockholder intends thereby to demand the appraisal of such
holder's shares. If such notice did not notify stockholders of the effective
date of the merger or consolidation, either (i) each such constituent
corporation shall send a second notice before the effective date of the
merger or consolidation notifying each of the holders of any class or series
of stock of such constituent corporation that are entitled to appraisal
rights of the effective date of the merger or consolidation or (ii) the
surviving or resulting corporation shall send such a second notice
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to all such holders on or within 10 days after such effective date;
provided, however, that if such second notice is sent more than 20 days
following the sending of the first notice, such second notice need only be
sent to each stockholder who is entitled to appraisal rights and who has
demanded appraisal of such holder's shares in accordance with this
subsection. An affidavit of the secretary or assistant secretary or of the
transfer agent of the corporation that is required to give either notice
that such notice has been given shall, in the absence of fraud, be prima
facie evidence of the facts stated therein. For purposes of determining the
stockholders entitled to receive either notice, each constituent corporation
may fix, in advance, a record date that shall be not more than 10 days prior
to the date the notice is given, provided that if the notice is given on or
after the effective date of the merger or consolidation, the record date
shall be such effective date. If no record date is fixed and the notice is
given prior to the effective date, the record date shall be the close of
business on the day next preceding the day on which the notice is given.
(e) Within 120 days after the effective date of the merger or consolidation,
the surviving or resulting corporation or any stockholder who has complied with
subsections (a) and (d) hereof and who is otherwise entitled to appraisal
rights, may file a petition in the Court of Chancery demanding a determination
of the value of the stock of all such stockholders. Notwithstanding the
foregoing, at any time within 60 days after the effective date of the merger or
consolidation, any stockholder shall have the right to withdraw his demand for
appraisal and to accept the terms offered upon the merger or consolidation.
Within 120 days after the effective date of the merger or consolidation, any
stockholder who has complied with the requirements of subsections (a) and (d)
hereof, upon written request, shall be entitled to receive from the corporation
surviving the merger or resulting from the consolidation a statement setting
forth the aggregate number of shares not voted in favor of the merger or
consolidation and with respect to which demands for appraisal have been received
and the aggregate number of holders of such shares. Such written statement shall
be mailed to the stockholder within 10 days after his written request for such a
statement is received by the surviving or resulting corporation or within 10
days after expiration of the period for delivery of demands for appraisal under
subsection (d) hereof, whichever is later.
(f) Upon the filing of any such petition by a stockholder, service of a copy
thereof shall be made upon the surviving or resulting corporation, which shall
within 20 days after such service file in the office of the Register in Chancery
in which the petition was filed a duly verified list containing the names and
addresses of all stockholders who have demanded payment for their shares and
with whom agreements as to the value of their shares have not been reached by
the surviving or resulting corporation. If the petition shall be filed by the
surviving or resulting corporation, the petition shall be accompanied by such a
duly verified list. The Register in Chancery, if so ordered by the Court, shall
give notice of the time and place fixed for the hearing of such petition by
registered or certified mail to the surviving or resulting corporation and to
the stockholders shown on the list at the addresses therein stated. Such notice
shall also be given by 1 or more publications at least 1 week before the day of
the hearing, in a newspaper of general circulation published in the City of
Wilmington, Delaware or such publication as the Court deems advisable. The forms
of the notices by mail and by publication shall be approved by the Court, and
the costs thereof shall be borne by the surviving or resulting corporation.
(g) At the hearing on such petition, the Court shall determine the
stockholders who have complied with this section and who have become entitled to
appraisal rights. The Court may require the stockholders who have demanded an
appraisal for their shares and who hold stock represented by certificates to
submit their certificates of stock to the Register in Chancery for notation
thereon of the pendency of the appraisal proceedings; and if any stockholder
fails to comply with such direction, the Court may dismiss the proceedings as to
such stockholder.
(h) After determining the stockholders entitled to an appraisal, the Court
shall appraise the shares, determining their fair value exclusive of any element
of value arising from the accomplishment or expectation of the merger or
consolidation, together with a fair rate of interest, if any, to be paid upon
the amount determined to be the fair value. In determining such fair value, the
Court shall take into account
E-3
<PAGE>
all relevant factors. In determining the fair rate of interest, the Court may
consider all relevant factors, including the rate of interest which the
surviving or resulting corporation would have had to pay to borrow money during
the pendency of the proceeding. Upon application by the surviving or resulting
corporation or by any stockholder entitled to participate in the appraisal
proceeding, the Court may, in its discretion, permit discovery or other pretrial
proceedings and may proceed to trial upon the appraisal prior to the final
determination of the stockholder entitled to an appraisal. Any stockholder whose
name appears on the list filed by the surviving or resulting corporation
pursuant to subsection (f) of this section and who has submitted his
certificates of stock to the Register in Chancery, if such is required, may
participate fully in all proceedings until it is finally determined that he is
not entitled to appraisal rights under this section.
(i) The Court shall direct the payment of the fair value of the shares,
together with interest, if any, by the surviving or resulting corporation to the
stockholders entitled thereto. Interest may be simple or compound, as the Court
may direct. Payment shall be so made to each such stockholder, in the case of
holders of uncertificated stock forthwith, and the case of holders of shares
represented by certificates upon the surrender to the corporation of the
certificates representing such stock. The Court's decree may be enforced as
other decrees in the Court of Chancery may be enforced, whether such surviving
or resulting corporation be a corporation of this State or of any state.
(j) The costs of the proceeding may be determined by the Court and taxed
upon the parties as the Court deems equitable in the circumstances. Upon
application of a stockholder, the Court may order all or a portion of the
expenses incurred by any stockholder in connection with the appraisal
proceeding, including, without limitation, reasonable attorney's fees and the
fees and expenses of experts, to be charged pro rata against the value of all
the shares entitled to an appraisal.
(k) From and after the effective date of the merger or consolidation, no
stockholder who has demanded his appraisal rights as provided in subsection (d)
of this section shall be entitled to vote such stock for any purpose or to
receive payment of dividends or other distributions on the stock (except
dividends or other distributions payable to stockholders of record at a date
which is prior to the effective date of the merger or consolidation); provided,
however, that if no petition for an appraisal shall be filed within the time
provided in subsection (e) of this section, or if such stockholder shall deliver
to the surviving or resulting corporation a written withdrawal of his demand for
an appraisal and an acceptance of the merger or consolidation, either within 60
days after the effective date of the merger or consolidation as provided in
subsection (e) of this section or thereafter with the written approval of the
corporation, then the right of such stockholder to an appraisal shall cease.
Notwithstanding the foregoing, no appraisal proceeding in the Court of Chancery
shall be dismissed as to any stockholder without the approval of the Court, and
such approval may be conditioned upon such terms as the Court deems just.
(l) The shares of the surviving or resulting corporation to which the shares
of such objecting stockholders would have been converted had they assented to
the merger or consolidation shall have the status of authorized and unissued
shares of the surviving or resulting corporation.
E-4
<PAGE>
EXHIBIT (a)(5)
<TABLE>
<CAPTION>
- -------------------------- ------------------------------------------------------------------- --------------------
(Logo - Chemung BORROWER Variable Rate
- -------------------------- ------------------------------------------------------------------- --------------------
<S> <C> <C>
Canal Trust Co.) Thomas C. Wyckoff Commercial
- -------------------------- ------------------------------------------------------------------- --------------------
Katherine B Wyckoff Promissory
- -------------------------- ------------------------------------------------------------------- --------------------
ADDRESS Note
- -------------------------- ------------------------------------------------------------------- --------------------
111 Drive A Strathmont Park
- -------------------------- ------------------------------------------------------------------- --------------------
Elmira, NY 14905
- -------------------------- ------------------------------------------------------------------- --------------------
TELEPHONE NO. Identification No.
- -------------------------- ------------------------------------------------------------------- --------------------
735-4555
<CAPTION>
- ----------- ------------------ -------------------- ---------------- ------------------ ------------------ --------------
OFFICER INTEREST PRINCIPAL FUNDING MATURITY CUSTOMER LOAN
INITIALS RATE AMOUNT DATE DATE NUMBER NUMBER
- ----------- ------------------ -------------------- ---------------- ------------------ ------------------ --------------
<S> <C> <C> <C> <C> <C> <C>
JEC VARIABLE $500,000.00 05/01/98 05/01/03
- ----------- ------------------ -------------------- ---------------- ------------------ ------------------ --------------
</TABLE>
PROMISE TO PAY
For value received, Borrower promises to pay to the order of Lender indicated
above the principal amount of FIVE HUNDRE THOUSAND AND NO/100 Dollars
($500,000.00) plus Interest on the unpaid principal balance at the rate and in
the manner described below, until all amounts owing under this Note are paid in
full. All amounts received by Lender shall be applied first to accrued unpaid
Interest, then to unpaid principal, and then to any late charges or expenses or
in any other order as determined by Lender, in Lender's sole discretion, as
permitted by law.
INTEREST RATE: This Note has a variable interest rate feature. The Interest rate
on this Note may change from time to time if the Index Rate identified below
changes. Interest shall be computed on the basis of 365 DAYS AND THE ACTUAL
NUMBER OF DAYS per year. So long as there is not default under this Note,
Interest on this Note shall be calculated at a variable rate equal to 250/1000
percent (0.250%) per annum UNDER the Index Rate. The Initial Index Rate is EIGHT
AND 500/1000 percent (8.500%) per annum. The Initial Interest rate on this Note
shall be EIGHT AND 250/1000 percent (8.250%) per annum. Any change in the
interest rate resulting from a change in the Index Rate will be effective on:
the day the index changes.
INDEX RATE: The Index Rate for this Note shall be:
The prime rate as published in the Wall St. Journal
MINIMUM RATE/MAXIMUM RATE: The minimum interest rate on this Note shall be N/A
percent (N/A%) per annum. The maximum interest rate on this Note shall not
exceed SIXTEEN AND NO/1000 percent (16.000%) per annum, or if less, or if a
maximum rate is not indicated, the maximum interest rate Lender is permitted to
charge by law.
DEFAULT RATE: In the event of any default under this Note, the Lender may, in
its discretion, determine that all mounts owed to Lender shall bear interest at
the lesser of :_______________________________________________________,
Or the maximum interest rate Lender is permitted to charge by law.
PAYMENT SCHEDULE: Borrower shall pay the principal and interest according to the
following schedule:
ON DEMAND, BUT IF NO DEMAND IS MADE, THEN 19 INTEREST ONLY PAYMENTS BEGINNING
AUGUST 1, 1998 AND CONTINUING AT SQUARTERLY TIME INTERVALS THEREAFTER. A FINAL
PAYMENT OF THE UNPAID PRINCIPAL BALANCE PLUS ACCRUED INTERST IS DUE AND PAYABLE
ON MAY 1, 2003.
All payments will be made to Lender at its address described above, or at any
other address so designated by Lender, and in lawful currency of the United
State of America.
RENEWAL: If checked, [ ] this Note is a renewal of Loan Number
SECURITY: To secure the payment and performance of obligations incurred under
this Note, Borrower grants Lender a security interest in, and pledges and
assigns to Lender, all of Borrower's rights, title, and interest, in all monies,
instruments, savings, checking an other deposit accounts of Borrowers'
(excluding IRA, Keogh and trust accounts and deposits subject to tax penalties
if so assigned) that are now or in the future in Lender's custody or control.
[] If checked, the obligations under this Note are also secured by a lien on
<PAGE>
and/or security interest in the property described in the documents executed in
connection with this Note as well as any other property designated as security
now or in the future.
PREPAYMENT: This Note may be prepaid in part or in full on or before its
maturity date. If this Note contains more than one installment, any partial
prepayment will not affect the due date or the amount of any subsequent
installment, unless agreed to, in writing, by Borrower and lender. If this Note
is prepaid in full, there will be: [X] No minimum finance charge or prepayment
penalty. [ ] A minimum finance charge of $__________. [ ] A prepayment penalty
of:
LATE PAYMENT CHARGE: If a payment is received more than 10 days late, Borrower
will be charged a late payment charge of:
[ ] % of the unpaid late installment; [X] $5.00 or 5.00% of the unpaid late
installment, which ever is [ ] greater [X] less; as permitted by law.
- -------------------------------------------------------------------------------
BORROWER ACNOWLEDGES THAT BORROWER HAS READ, UNDERSTANDS, AND AGREES TO THE
TERMS AND CONDITOINS OF THIS NOTE INCLUDING THE PROVISIONS ON THE REVERSE SIDE.
BORROWER ACKNOWLEDGES RECEIPT OF AN EXACT COPY OF THIS NOTE.
NOTE DATE:
BORROWER: Thomas C Wyckoff BORROWER: Katherine B Wyckoff
___________________________________ ______________________________
BORROWER: BORROWER:
___________________________________ ______________________________
BORROWER: BORROWER:
___________________________________ ______________________________
BORROWER: BORROWER:
___________________________________ ______________________________
<PAGE>
TERMS AND CONDITIONS
1. DEFAULT: Borrower will be in default under this Note in the event that
Borrower, any guarantor or any other third party pledging collateral to secure
this Note:
(a) fails to make any payment on this Note or any other indebtedness
to Lender when due;
(b) fails to perform any obligation or breaches any warranty or
covenant to Lender contained in this Note, any security
instrument, or any other present or future written agreement
regarding this or any other indebtedness of Borrower to Lender;
(c) Provides or causes any false or misleading signature or
representation to be provided to Lender;
(d) Allows the collateral securing this Note (if any) to be lost,
stolen, destroyed, damaged in any material respect, or subjected
to seizure or confiscation;
(e) Permits the entry or service of any garnishment, judgment, tax
levy, attachment or lien against Borrower, any guarantor, or any
of their property;
(f) Dies, becomes legally incompetent, is dissolved or terminated,
ceases to operate its business, becomes insolvent, makes an
assignment for the benefit of creditors, fails to pay debts as
they become due, or becomes the subject of any bankruptcy,
insolvency or debtor rehabilitation proceeding; or
(g) Causes Lender to deem itself insecure due to a significant decline
in the value of any real or personal property securing payment of
this Note.
2. RIGHTS OF LENDER ON DEFAULT: If there is a default under this Note, Lender
will be entitled to exercise one or more of the following remedies without
notice or demand (except as required by law):
(a) to declare the principal amount plus accrued interest under this
Note and all other present and future obligations of Borrower
immediately due and payable in full;
(b) to collect the outstanding obligations of Borrower with or without
resorting to judicial process; (c) to take possession of any
collateral in any manner permitted by law; (d) to require Borrower
to deliver and make available to Lender any collateral at a place
reasonably convenient to Borrower and Lender;
(e) to sell lease or otherwise dispose of any collateral and collect
any deficiency balance with or without resorting to legal process;
(f) to set-off Borrower's obligations against any amounts due to
Borrower including, but not limited to monies, instruments, and
deposit accounts maintained with Lender; and
(g) to exercise all other rights available to Lender under any other
written agreement or applicable law.
Lender's' rights are cumulative and may be exercised together, separately, and
in any order. Lender's remedies under this paragraph are in addition to those
available at common law, including, but not limited to, the right of set off.
3. DEMAND FEATURE. If this Note contains a demand feature, Lender's right to
demand payment, at any time, and from time to time, shall be in Lender's sole
and absolute discretion, whether or not any default has occurred.
4. FINANCIAL INFORMATION. Borrower will at all times keep proper books of record
and account in which full, true and correct entries shall be make in accordance
with generally accepted accounting principles and will deliver to Lender, within
ninety (90) days after the end of each fiscal year of Borrower, a copy of the
annual financial statements of Borrower relating to such fiscal year, such
statements to include (i) the balance sheet of Borrower as at the end of such
fiscal year and (ii) the related income statement, statement of retained
earnings and statement of changes in the financial position of Borrower for such
fiscal year, prepared by such certified public accountants as may be reasonably
satisfactory to Lender. Borrower also agrees to deliver to Lender within fifteen
(15) days after filing same, a copy of Borrower's income tax return and also,
from time to time, such other financial information with respect to Borrower as
Lender may request.
5. MODIFICATION AND WAIVER: The modification or waiver of any of Borrower's
obligations or Lender's rights under this Note must be contained in a writing
signed by Lender. Lender may perform any of Borrower's obligations or delay or
fail to exercise any of its rights without causing a waiver of those obligations
or rights. A waiver on one occasion will not constitute a waiver on any other
occasion. Borrower's obligations under this Note shall not be affected if Lender
amends, compromises, exchanges, fails to exercise, impairs or releases any of
the obligations belonging to any co-borrower or guarantor or any f its rights
against any co-borrower, guarantor or collateral.
<PAGE>
6. SEVERABILITY AND INTEREST LIMITATION: If any provision of this Note is
invalid, illegal or unenforceable, the validity, legality, and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
Notwithstanding anything contained in this Note to the contrary, in no event
shall interest accrue under this Note, before or after maturity, at a rate in
excess of the highest rate permitted by applicable law, and if interest
(including any charge or fee held to be interest by a court of competent
jurisdiction) in excess thereof be paid, any excess shall constitute a payment
of, and be applied to, the principal balance hereof, and if the principal
balance has been fully paid, then such interest shall be repaid to the Borrower.
7. ASSIGNMENT: Borrower will not be entitled to assign any of its rights,
remedies or obligations described in this Note without one prior written comment
of Lender which may be withheld by Lender in its sale discretion. Lender will be
entitled to assign some or all of its rights and remedies described in this Note
without notice to or the prior consent of Borrower in any manner.
8. NOTICE: Any notice or other communication to be provided to Borrower or
Lender under this Note shall be in writing and sent to the parties at the
addresses described in this Note or such other address as the parties may
designate in writing from time to time.
9. APPLICABLE LAW: This Note shall be governed by the laws or the state of New
York, Borrower consents to the jurisdiction and venue of any court located in
the state of New York, in the event of any legal proceeding pertaining to the
negotiation, execution, performance or enforcement of any term or condition
contained in this Note or any related loan document and agrees not to commence
or seek to remove such legal proceeding in or to a different court.
10. COLLECTION COSTS: If Lender hires an attorney to assist in collecting any
amount due or enforcing any right or remedy under this Note, Borrower agrees to
pay Lender's reasonable attorney's fees, to the extend permitted by applicable
law, and collection costs.
11. MISCELLANEOUS: This Note is being executed for commercial purposes. Borrower
and Lender agree that time is of the essence. Borrower waives presentment,
demand for payment, notice or dishonor and protest. Borrower hereby waives any
right to trial by jury in any civil action arising out of, or based upon, this
Note or the collateral securing this Note. All references to Borrower in this
Note shall include all of the parties signing this Note, and this Note shall be
binding upon the heirs, successors and assigns of Borrower and Lender. If there
is more than one Borrower, they will be obligated jointly and individually. This
Note and any related documents represent the complete and integrated
understanding between Borrower and Lender pertaining to the terms and conditions
of those documents.
12. ADDITIONAL TERMS:
