<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended February 28, 1995
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 For the transition period from ________________ to
________________
Commission file number 0-17051
Tuscarora Incorporated
(Exact name of registrant as specified in the charter.)
Pennsylvania 25-1119372
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
800 Fifth Avenue
New Brighton, Pennsylvania 15066
(Address of principal executive offices)
(Zip Code)
412-843-8200
(Registrant's telephone number, including area code)
Not applicable
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months and (2) has been subject to such
filing requirements for at least the past 90 days.
Yes X No
---- ----
As of April 3, 1995, 6,152,192 shares of Common Stock, without par
value, of the registrant were outstanding.
<PAGE> 2
Tuscarora Incorporated
INDEX
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
Part I. Financial Information:
Item 1. Financial Statements
Condensed Consolidated Balance Sheets at
February 28, 1995 and August 31, 1994 3
Condensed Consolidated Statements of
Income - Three and six month periods ended
February 28, 1995 and February 28, 1994 4
Condensed Consolidated Statements of
Cash Flows - Six months ended February 28,
1995 and February 28, 1994 5
Notes to Condensed Consolidated Financial
Statements 6-7
Item 2. Management's Discussion and Analysis
of Financial Condition and Results
of Operations 8-10
Part II. Other Information:
Item 4. Submission of Matters to a Vote of
Security Holders 11
Item 6. Exhibits and Reports on Form 8-K 11
</TABLE>
2
<PAGE> 3
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Tuscarora Incorporated
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
February 28, August 31,
1995 1994
------------- ------------
(Unaudited)
<S> <C> <C>
ASSETS
------
Current Assets
Cash and cash equivalents $ 1,073,325 $ 3,671,490
Trade accounts receivable, net of
provision for losses 18,848,532 16,773,835
Inventories 17,280,827 14,270,863
Prepaid expenses and other current assets 1,996,831 919,084
------------- ------------
39,199,515 35,635,272
Property, Plant and Equipment, net 61,093,457 55,356,331
Other Assets, net 4,096,026 3,233,891
------------- ------------
Total Assets $ 104,388,998 $ 94,225,494
============= ============
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
Current Liabilities
Current maturities of long-term debt $ 3,644,026 $ 3,667,977
Accounts payable 12,391,181 13,350,738
Accrued income taxes 86,131 301,610
Accrued payroll and related taxes 943,042 747,693
Other current liabilities 1,958,081 1,019,436
------------- ------------
19,022,461 19,087,454
Long-Term Debt - less current maturities 31,975,450 25,284,404
Deferred Income Taxes 1,530,963 1,680,889
Supplemental Pension Benefits 955,262 992,798
------------- ------------
Total Liabilities 53,484,136 47,045,545
Shareholders' Equity
Preferred Stock - par value $.01 per share;
authorized shares, 1,000,000; none issued - -
Common Stock - without par value; authorized
shares, 20,000,000; issued shares, 6,197,134
at February 28, 1995 and 6,193,714 at
August 31, 1994 6,197,134 6,193,714
Capital surplus 2,198,315 2,171,217
Retained earnings 42,898,559 39,234,310
Cumulative foreign currency translation adjustment 21,403 -
------------- ------------
51,315,411 47,599,241
Less cost of reacquired shares of Common Stock;
45,396 at February 28, 1995 and 46,625 at
August 31, 1994 410,549 419,292
------------- ------------
Total Shareholders' Equity 50,904,862 47,179,949
------------- ------------
Total Liabilities and Shareholders' Equity $ 104,388,998 $ 94,225,494
============= ============
</TABLE>
Note: The consolidated balance sheet at August 31, 1994 has been taken from
the audited financial statements and condensed.
See notes to condensed consolidated financial statements.
3
<PAGE> 4
Tuscarora Incorporated
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
February 28, February 28, February 28, February 28,
1995 1994 1995 1994
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Net Sales $ 37,890,171 $ 26,659,953 $ 76,809,994 $ 55,947,532
Cost of Sales 29,114,584 20,852,576 58,256,052 43,032,928
------------ ------------ ------------ ------------
Gross profit 8,775,587 5,807,377 18,553,942 12,914,604
Selling and Administrative Expenses 5,137,071 4,037,199 10,229,988 8,128,973
Interest Expense 569,398 312,397 1,031,287 631,172
Other (Income) Expense 27,798 5,147 151,602 1,947
------------ ------------ ------------ ------------
Total expenses 5,734,267 4,354,743 11,412,877 8,762,092
------------ ------------ ------------ ------------
Income before income taxes 3,041,320 1,452,634 7,141,065 4,152,512
Provision for Income Taxes 1,201,321 549,790 2,800,222 1,601,572
------------ ------------ ------------ ------------
Net income $ 1,839,999 $ 902,844 $ 4,340,843 $ 2,550,940
============ ============ ============ ============
Net income per share $.30 $.15 $.71 $.42
==== ==== ==== ====
Weighted average number of
shares of Common Stock
outstanding 6,150,701 6,120,266 6,149,380 6,117,672
========= ========= ========= =========
</TABLE>
See notes to condensed consolidated financial statements.
4
<PAGE> 5
Tuscarora Incorporated
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
February 28, February 28,
1995 1994
------------ ------------
<S> <C> <C>
Operating Activities
Net Income $ 4,340,843 $ 2,550,940
Adjustments to Reconcile Net Income to Cash
Provided by Operations:
Depreciation 4,888,635 4,688,891
Amortization 324,114 274,859
Provision for losses on receivables 290,000 165,000
Decrease in deferred income taxes (149,926) (314,369)
Loss on sale of property, plant
and equipment, net 21,440 18,721
Stock compensation expense 5,051 5,556
Changes in Operating Assets and Liabilities:
Decrease (increase):
Trade accounts receivable (2,364,697) (882,412)
Inventories (3,009,964) (713,809)
Prepaid expenses and other current assets (1,058,995) (458,379)
Other assets (1,186,249) (357,495)
Increase (decrease):
Accounts payable (959,557) 123,933
Accrued income taxes (215,479) -
Accrued payroll and related taxes 195,349 (104,710)
Other current liabilities 938,645 96,780
Supplemental pension benefits (37,536) -
------------ -----------
Net cash provided by operating activities 2,021,674 5,093,506
------------ -----------
Investing Activities
Purchase of property, plant and equipment (10,803,916) (5,670,822)
Proceeds from sale of property, plant and
equipment 156,715 33,083
------------ -----------
Net cash (used for) investing activities (10,647,201) (5,637,739)
------------ -----------
Financing Activities
Proceeds from long-term debt 8,711,500 1,500,000
Payments on long-term debt (2,044,405) (1,984,764)
Dividends paid (676,594) (611,641)
Proceeds from sale of Common Stock 34,210 45,730
------------ -----------
Net cash provided by (used for)
financing activities 6,024,711 (1,050,675)
------------ -----------
Effects of foreign currency translation adjustment
on cash and cash equivalents 2,651 -
------------ -----------
Net (decrease) in cash and cash equivalents (2,598,165) (1,594,908)
Cash and Cash Equivalents at Beginning of Period 3,671,490 2,030,021
------------ -----------
Cash and Cash Equivalents at End of Period $ 1,073,325 $ 435,113
============ ===========
</TABLE>
See notes to condensed consolidated financial statements.
5
<PAGE> 6
Tuscarora Incorporated
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The condensed consolidated balance sheet at February 28, 1995 and the
consolidated statements of income and consolidated statements of cash
flows for the periods ended February 28, 1995 and February 28, 1994 have
been prepared by the Company, without audit. In the opinion of
Management, all adjustments necessary to present fairly the financial
position, results of operations and changes in cash flows at February 28,
1995 and for all periods presented have been made.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted. It is suggested
that these condensed consolidated financial statements be read in
conjunction with the financial statements and notes thereto included in
the Company's 1994 Annual Report to Shareholders. The results of
operations for the period ended February 28, 1995 are not necessarily
indicative of the operating results for the full year.
2. INVENTORIES
Inventories are summarized as follows:
<TABLE>
<CAPTION>
February 28, August 31,
1995 1994
------------ ------------
<S> <C> <C>
Finished goods $ 9,183,840 $ 6,851,928
Work in process 368,774 300,414
Raw materials 6,282,982 6,050,686
Supplies 1,445,231 1,067,835
------------ ------------
$ 17,280,827 $ 14,270,863
============ ============
</TABLE>
3. ACQUISITIONS
On September 6, 1994, the Company purchased substantially all the assets
and assumed substantially all the liabilities of Astrofoam, Inc., a
manufacturer of precision fabricated foam products, specialty corrugated
paperboard products and plastic cushion packaging products in Holden,
Massachusetts, for approximately $2,200,000. The Company is continuing
the business acquired at the same location under a lease from the seller.
A portion of the purchase price has been allocated to a covenant not to
compete and goodwill. The Company also agreed to pay additional
consideration to the seller based on sales realized from the business
acquired.
On February 3, 1995, the Company purchased substantially all the assets
and assumed substantially all the liabilities of the custom molding
business of M.Y. Trondex Limited in Northampton, England and Glasgow,
Scotland for approximately $2,700,000. The Company is operating the
Northampton facility under a lease from the seller and the Glasgow
facility under a lease from a third party. The Company will also pay
additional consideration to the seller based on the sales realized from
the business acquired.
6
<PAGE> 7
4. CLAIMS AND CONTINGENCIES
The Company is involved in certain legal and administrative proceedings,
including one proceeding with respect to a Superfund site, which may
result in the Company becoming liable for a portion of certain
environmental cleanup costs. With respect to the Superfund site, the
Company believes that its share of the cleanup costs should not be
significant. The aggregate amount of the cleanup costs from these
proceedings, which should be payable over several years, cannot be
reasonably estimated. In the opinion of Management, the disposition of
these matters should not have a material adverse effect on the Company's
financial position.
5. FOREIGN CURRENCY TRANSLATION
The financial statements of the Company's United Kingdom subsidiary (see
Note 3) are maintained in their functional currency (British pound
sterling) and translated into U.S. dollars in accordance with Statement
of Financial Accounting Standards No. 52. Assets and liabilities are
translated at current exchange rates in effect at the balance sheet date
and shareholders' equity is translated at historical exchange rates.
Revenues and expenses are translated at the average exchange rate for
each period. Translation adjustments, which result from the process of
translating British pound sterling financial statements into U.S.
dollars, are accumulated in a separate component of stockholders' equity
in accordance with Statement No. 52.
6. OTHER INFORMATION
In November 1992, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 112, "Employers'
Accounting for Postemployment Benefits". This statement requires
recognition of benefits provided by an employer to former or inactive
employees after employment but before retirement. The statement must be
implemented prior to the end of the 1995 fiscal year. Management
believes that the impact of SFAS No. 112 will not be material.
7
<PAGE> 8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS - SECOND QUARTER FISCAL 1995
COMPARED TO SECOND QUARTER FISCAL 1994
Net sales for the quarter ended February 28, 1995 totaled $37,890,000, an
increase of 42.1% from net sales of $26,660,000 for the same period in fiscal
1994. The increase is due to continued strong growth in virtually all
geographic and end-use markets that the Company serves and reflects an increase
in selling prices to customers for custom molded products which became
effective during the first fiscal quarter. Substantial sales increases from
the second quarter of fiscal 1994 were experienced in both the Company's custom
molded and integrated materials operations. Approximately 42% of the sales
increase was attributable to the acquisition of a similar business in April
1994 and to the Astrofoam, Inc. and M.Y. Trondex acquisitions in September 1994
and February 1995, respectively (see Note 3 of the Notes to Consolidated
Condensed Financial Statements). The M.Y Trondex acquisition was the Company's
first acquisition of a custom molding business in a foreign country (see also
Note 5 of the Notes to Consolidated Financial Statements). Sales gains are
expected to be favorable for the remainder of fiscal 1995 based on current
customer order placement rates and prospects for continued strength in the
economy.
Gross profit for the quarter ended February 28, 1995 was $8,776,000, a
51.1% increase from $5,807,000 in the same quarter of fiscal 1994. The gross
profit margin increased to 23.2% from 21.8% primarily due to the increase in
net sales which resulted in a more efficient use of the Company's manufacturing
capacity in both the Company's custom molded and integrated materials
operations.
Selling and administrative expenses increased $1,100,000 or 27.2% for the
quarter ended February 28, 1995 but decreased as a percentage of net sales to
13.6% from 15.1% in the same period of the prior fiscal year. The dollar
increase was due primarily to added employee costs in connection with the
acquisitions of similar businesses in April and September 1994 and February
1995, and increased commissions associated with the higher sales level.
Interest expense for the quarter ended February 28, 1995 was $569,000
compared to $312,000 in the second quarter of fiscal 1994. The increase of
$257,000 was due to a higher level of outstanding debt coupled with higher
interest rates.
Income before income taxes for the quarter ended February 28, 1995
increased to $3,041,000 from $1,453,000 for the same period of fiscal 1994, an
increase of 109.4%.
The provision for income taxes for the quarter ended February 28, 1995
increased due to the increased income before income taxes.
Net income for the quarter ended February 28, 1995 was $1,840,000, an
increase of 103.8% from $903,000 for the same period of fiscal 1994. The
increase was due primarily to the increase in net sales and gross profit.
The net sales and net income for the three months ended February 28,
1995 are Company records for a second fiscal quarter.
8
<PAGE> 9
RESULTS OF OPERATIONS - SIX MONTHS ENDED FEBRUARY 28, 1995
COMPARED TO SIX MONTHS ENDED FEBRUARY 28, 1994
Net sales for the six months ended February 28, 1995 totaled $76,810,000,
an increase of 37.3% from net sales of $55,948,000 for the same period in
fiscal 1994. The increase is attributable to the same factors as resulted in
the increase for the quarter ended February 28, 1995 and also reflects
substantial sales increases from the first six months of fiscal 1994 in both
the Company's custom molded and integrated materials operations. Approximately
44% of the sales increase was attributable to the acquisition of a similar
business in April 1994 and to the Astrofoam, Inc. and M.Y. Trondex acquisitions
in September 1994 and February 1995, respectively.
Gross profit for the six months ended February 28, 1995 was $18,554,000, a
43.7% increase from $12,915,000 in the same quarter of fiscal 1994. The gross
profit margin increased to 24.2% from 23.1% primarily due to the increase in
net sales which resulted in a more efficient use of the Company's manufacturing
capacity in both the Company's custom molded and integrated materials
operations and to the consumption in the first quarter of raw materials
purchased by the Company prior to a price increase from the Company's
suppliers.
Selling and administrative expenses increased $2,101,000 or 25.8% for the
six months ended February 28, 1995 but decreased as a percentage of net sales
to 13.3% from 14.5% in the same period of the prior fiscal year. The dollar
increase was due primarily to increased employee costs and travel expenses in
connection with the acquisitions of similar businesses in April and September
1994 and February 1995 and increased commissions associated with the higher
sales level.
Interest expense for the six months ended February 28, 1995 was $1,031,000
compared to $631,000 in the first six months of fiscal 1994. The increase of
$400,000 was due to a higher level of outstanding debt coupled with higher
interest rates.
Income before income taxes for the six months ended February 28, 1995
increased to $7,141,000 from $4,153,000 for the same period of fiscal 1994, an
increase of 72.0%.
The provision for income taxes for the six months ended February 28, 1995
increased due to the increased income before income taxes.
Net income for the six months ended February 28, 1995 was $4,341,000, an
increase of 70.2% from $2,551,000 for the same period of fiscal 1994. The
increase was due primarily to the increase in net sales and gross profit.
The net sales and net income are Company records for a six-month period.
LIQUIDITY AND CAPITAL RESOURCES
For the six months ended February 28, 1995 net cash provided by operating
activities amounted to $2,022,000 compared to $5,094,000 for the same period of
fiscal 1994. Depreciation and amortization for the periods ended February 28,
1995 and 1994 amounted to $5,213,000 and $4,964,000 respectively. Because a
substantial portion of cash flow provided from operations results from
depreciation and amortization, the Company believes that its liquidity would
not be adversely affected should a period of reduced earnings occur.
9
<PAGE> 10
As of February 28, 1995, the Company's accounts receivable and inventories
increased due to the increased sales levels and the Astrofoam, Inc. and M.Y.
Trondex acquisitions.
Capital expenditures during the six months ended February 28, 1995
amounted to $10,804,000. Of this amount $8,942,816 related to machinery and
equipment, including equipment acquired in the acquisitions. Capital
expenditures for environmental control equipment amounted to $698,000.
As of February 28, 1995, the Company had borrowed $30,402,000 under a
credit agreement with its principal bank, including $10,162,000 out of
$12,000,000 under a revolving credit facility. During the six months ended
February 28, 1995, the Company increased its borrowing under the revolving
credit facility by $8,712,000, including $1,500,000 to finance a substantial
portion of the purchase price of the Astrofoam, Inc. acquisition and
$2,712,000 to finance the M.Y. Trondex acquisition.
Total long-term debt increased from $25,284,000 at August 31, 1994 to
$31,975,000 at February 28, 1995 as a result of the increased borrowing under
the revolving credit facility. The Company expects to convert $10,000,000 of
the amount borrowed under the revolving credit facility to a term loan under
the credit agreement with its principal bank so as to substantially increase
the amount available under the revolving credit facility.
Cash provided by operating activities as supplemented by the amount
available under the revolving credit agreement should be sufficient to enable
the Company to continue to fund its operating requirements, capital
expenditures and dividend payments.
INFLATION
The impact of inflation on the Company's financial position and results of
operations during the period discussed was not significant.
10
<PAGE> 11
PART II. OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Company's Annual Meeting of Shareholders was held on December 15,
1994. The holders of 5,568,637 shares of the Company's Common Stock
(approximately 90.59% of the shares entitled to be voted) were present at the
meeting in person or by proxy. The matters voted upon at the meeting were (i)
the election of four persons to serve as directors for a three-year term
expiring at the annual meeting of shareholders in 1997, (ii) the approval of
the amendment of the Company's 1989 Stock Incentive Plan to increase the total
number of shares of the Company's Common Stock which may be issued thereunder
by an additional 300,000 shares and (iii) the ratification of the appointment
of S. R. Snodgrass, A.C. as the independent public accountants to audit the
financial statements of the Company and its subsidiaries for the 1995 fiscal
year.
Karen L. Farkas, Robert W. Kampmeinert, David C. O'Leary and Harold F.
Reed, Jr., the nominees of the Company's Board of Directors, were elected to
serve as directors until 1997. There were no other nominees. Shares were
voted as follows:
<TABLE>
<CAPTION>
Withhold
Name For Vote For
---------------------- ----------- --------
<S> <C> <C>
Karen L. Farkas 5,520,205 48,432
Robert W. Kampmeinert 5,532,005 36,632
David C. O'Leary 5,546,597 22,040
Harold F. Reed, Jr. 5,540,597 28,040
</TABLE>
The amendment of the Company's 1989 Stock Incentive Plan to increase the
total number of shares of the Company's Common Stock which may be issued
thereunder by an additional 300,000 shares was approved: affirmative votes,
5,358,057 shares; negative votes, 90,844 shares; and abstained, 119,736 shares.
The appointment of S. R. Snodgrass, A.C. as the independent public
accountants for the 1995 fiscal year was ratified: affirmative votes,
5,553,097 shares; negative votes, 7,860 shares; and abstained, 7,680 shares.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
The exhibits listed below are filed as a part of this quarterly report.
<TABLE>
<CAPTION>
Exhibit No. Document
- - ----------- -------------------------------------------------------
<S> <C>
3.(ii) By-laws, as amended and restated effective December 15,
1994, filed herewith.
10.6 Deferred Compensation Plan for Non-Employee Directors,
as adopted by the Company's Board of Directors on
December 14, 1994, filed herewith.*
</TABLE>
11
<PAGE> 12
<TABLE>
<S> <C>
10.7 Retirement Policy and Plan for Non-Employee Directors,
as amended by the Company's Board of Directors on
December 14, 1994, filed herewith.*
11 Computation of Net Income Per Share, filed herewith.
27 Financial Data Schedule, filed herewith.
</TABLE>
____________
* Management contract or compensatory plan, contract or arrangement
required to be filed by Item 601(b)(10)(iii) of Regulation S-K.
(b) Reports on Form 8-K
No events which resulted in the filing of a current report on Form 8-K
occurred during the fiscal quarter ended February 28, 1995.
12
<PAGE> 13
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Tuscarora Incorporated
(Registrant)
Date: April 13, 1995 By /s/ John P. O'Leary, Jr.
--------------------------
John P. O'Leary, Jr.,
President and
Chief Executive Officer
Date: April 13, 1995 By /s/ Brian C. Mullins
--------------------------
Brian C. Mullins,
Vice President and
Treasurer (Principal
Financial Officer and
Principal Accounting
Officer)
13
<PAGE> 14
Tuscarora Incorporated
FORM 10-Q FOR QUARTER ENDED FEBRUARY 28, 1995
EXHIBIT LIST
The following exhibits are required to be filed with this quarterly report
on Form 10-Q. Exhibits are incorporated herein by reference to other documents
pursuant to Rule 12b-23 under the Securities Exchange Act of 1934, as amended,
as indicated in the index. Exhibits not incorporated herein by reference
follow this index.
<TABLE>
<CAPTION>
Exhibit
No. Document
- - ----------- -------------------------------------------------------
<S> <C>
3.(ii) By-laws, as amended and restated effective December 15,
1994, filed herewith.
10.6 Deferred Compensation Plan for Non-Employee Directors,
as adopted by the Company's Board of Directors on
December 14, 1994, filed herewith.*
10.7 Retirement Policy and Plan for Non-Employee Directors,
as amended by the Company's Board of Directors on
December 14, 1994, filed herewith.*
11 Computation of Net Income Per Share, filed herewith.
27 Financial Data Schedule, filed herewith.
</TABLE>
_________
* Management contract or compensatory plan, contract or arrangement
required to be filed by Item 601(b)(10)(iii) of Regulation S-K.
<PAGE> 1
Exhibit 3.(ii)
BY-LAWS
of
TUSCARORA INCORPORATED
(a Pennsylvania corporation)
As Amended and Restated Effective
December 15, 1994
<PAGE> 2
Index to By-Laws
----------------
<TABLE>
<CAPTION>
Section Page
- - ------- ----
<S> <C> <C>
ARTICLE I
SHAREHOLDERS
------------
1.01 Annual Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.02 Special Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.03 Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.04 Meetings by Telephone . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE II
DIRECTORS
---------
2.01 Number, Election and Term of Office . . . . . . . . . . . . . . . . . . . 3
2.02 Regular Meetings; Notice . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.03 Annual Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.04 Special Meetings; Notice . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.05 Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.06 Meetings by Telephone . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.07 Presumption of Assent . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.08 Catastrophe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.09 Resignations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.10 Committees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.11 Personal Liability of Directors . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE III
OFFICERS AND EMPLOYEES
----------------------
3.01 Officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.02 Additional Officers; Other Agents and
Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.03 The President . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.04 The Vice Presidents . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.05 The Secretary and Assistant Secretaries . . . . . . . . . . . . . . . . . 10
3.06 The Treasurer and Assistant Treasurers . . . . . . . . . . . . . . . . . . 11
3.07 Vacancies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.08 Delegation of Duties . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
ARTICLE IV
SHARES OF CAPITAL STOCK
-----------------------
4.01 Share Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
4.02 Transfer of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
4.03 Lost, Stolen, Destroyed or Mutilated
Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
4.04 Regulations Relating to Shares . . . . . . . . . . . . . . . . . . . . . . 14
4.05 Holders of Record . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
</TABLE>
(i)
<PAGE> 3
<TABLE>
<S> <C> <C>
ARTICLE V
MISCELLANEOUS CORPORATE TRANSACTIONS AND DOCUMENTS
--------------------------------------------------
5.01 Execution of Notes, Checks, Contracts
and Other Instruments . . . . . . . . . . . . . . . . . . . . . . . . . . 15
5.02 Voting Securities Owned by the Company . . . . . . . . . . . . . . . . . . 15
ARTICLE VI
GENERAL PROVISIONS
------------------
6.01 Offices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
6.02 Corporate Seal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
6.03 Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
6.04 Conflict with Articles . . . . . . . . . . . . . . . . . . . . . . . . . . 16
ARTICLE VII
AMENDMENTS
----------
7.01 Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
</TABLE>
(ii)
<PAGE> 4
TUSCARORA INCORPORATED
BY-LAWS
ARTICLE I
SHAREHOLDERS
------------
Section 1.01. ANNUAL MEETINGS. Annual meetings of the
shareholders shall be held on the third Friday of December in each year if not
a legal holiday, and if a legal holiday, then on the next succeeding day which
is not a legal holiday, at 11:00 a.m. at the principal business office of the
Company, or at such other date, time and place as may be fixed by the Board of
Directors. Written notice of the annual meeting shall be given at least ten
days prior to the meeting to each shareholder entitled to vote thereat. Any
business may be transacted at the annual meeting regardless of whether the
notice calling such meeting contains a reference thereto, except as otherwise
required by law.
Section 1.02. SPECIAL MEETINGS. Special meetings of the
shareholders may be called at any time, for the purpose or purposes set forth
in the call, by the President or the Board of Directors, by delivering a
written request to the Secretary. Special meetings shall be held at the
principal business office of the Company, or at such other place as may be
fixed by the Board of Directors. The Secretary shall thereupon fix the time
and date
<PAGE> 5
of such special meeting, which shall be held not more than sixty days after the
receipt of such request, and shall give due notice thereof. Written notice of
each special meeting shall be given at least five days prior to the meeting to
each shareholder entitled to vote thereat. Such notice shall specify the
general nature of the business to be transacted at such special meeting, and no
other business may be transacted at such special meeting.
Section 1.03. ORGANIZATION. A Chairman of the Board and Vice
Chairman shall be designated by the Directors. The Chairman of the Board, or
in his absence, the Vice Chairman, or in his absence, the President, or in his
absence, a Director designated by the Board, shall preside, and the Secretary,
or in his absence any Assistant Secretary, shall take the minutes, at all
meetings of the shareholders. In the absence of the Secretary and an Assistant
Secretary, the presiding officer shall designate any person to take the minutes
of the meeting.
Section 1.04. MEETINGS BY TELEPHONE. One or more
shareholders may participate in any annual or special meeting of the
shareholders by means of conference telephone or similar communications
equipment by means of which all persons participating in the meeting can hear
each other. Participation in a meeting in this manner by a shareholder will be
considered to be attendance in person for all purposes under these By-Laws.
-2-
<PAGE> 6
ARTICLE II
DIRECTORS
---------
Section 2.01. NUMBER, ELECTION AND TERM OF OFFICE. The
number, election and term of office of Directors shall be as set forth in
Article 8th (or any successor article thereto) of the Articles of the Company.
Section 2.02. REGULAR MEETINGS; NOTICE. Regular meetings of
the Board of Directors shall be held at such time and place as shall be
designated by the Board of Directors from time to time. Notice of such regular
meetings shall not be required, except as otherwise expressly required herein
or by law, and except that whenever the time or place of regular meetings shall
be initially fixed and then changed, notice of such action shall be given
promptly by telephone or otherwise to each Director not participating in such
action. Any business may be transacted at any regular meeting.
Section 2.03. ANNUAL MEETINGS. A regular meeting of the
Board of Directors shall be held immediately after and at the same place as the
annual meeting of the shareholders. Such regular meeting shall be the annual
organization meeting at which the Board of Directors shall organize itself by
electing officers and appointing members of standing committees of the Board of
Directors and may transact any other business.
-3-
<PAGE> 7
Section 2.04. SPECIAL MEETINGS; NOTICE. Special meetings of
the Board of Directors may be called at any time by the Board itself, or by the
President, or by at least one-fourth of the Directors, to be held at such place
and day and hour as shall be specified by the person or persons calling the
meeting. Notice of every special meeting of the Board of Directors shall be
given by the Secretary to each Director at least two days before the meeting.
Any business may be transacted at any special meeting regardless of whether the
notice calling such meeting contains a reference thereto, except as otherwise
required by law.
Section 2.05. ORGANIZATION. At all meetings of the Board of
Directors, the presence of at least a majority of the Directors in office shall
be necessary and sufficient to constitute a quorum for the transaction of
business. If a quorum is not present at any meeting, the meeting may be
adjourned from time to time by a majority of the Directors present until a
quorum as aforesaid shall be present, but notice of the time and place to which
such meeting is adjourned shall be given to any Directors not present either by
being sent by telegraph or given personally or by telephone at least eight
hours prior to the hour of reconvening. Except as otherwise provided in the
Articles of the Company, resolutions of the Board shall be adopted, and any
action of the Board upon any matter shall be valid and effective, with the
affirmative vote of a majority of the Directors present at a meeting duly
convened and at which a quorum is present. The Chairman of the Board, if he is
present, or if not, the Vice
-4-
<PAGE> 8
Chairman, if he is present, or if not, the President, if he is present, or if
not, a Director designated by the Board, shall preside at each meeting of the
Board. The Secretary, or in his absence any Assistant Secretary, shall take
the minutes at all meetings of the Board of Directors. In the absence of the
Secretary and an Assistant Secretary, the presiding officer shall designate any
person to take the minutes of the meeting.
Section 2.06. MEETINGS BY TELEPHONE. One or more Directors
may participate in any regular or special meeting of the Board of Directors or
of a committee of the Board of Directors by means of conference telephone or
similar communications equipment by means of which all persons participating in
the meeting can hear each other. Participation in a meeting in this manner by
a Director will be considered to be attendance in person for all purposes under
these By-Laws.
Section 2.07. PRESUMPTION OF ASSENT. Minutes of each meeting
of the Board shall be made available to each Director at or before the next
succeeding meeting. Each Director shall be presumed to have assented to such
minutes unless his objection thereto shall be made to the Secretary at or
within two days after such succeeding meeting.
Section 2.08. CATASTROPHE. Notwithstanding any other
provisions of the Pennsylvania Business Corporation Law, the Articles or these
By-Laws, if any emergency resulting from warlike
-5-
<PAGE> 9
damage or an attack on the United States or any nuclear or atomic disaster, or
any other national or local disaster, causes a majority of the Board to be
incapable of acting as such because of death or other physical disability or
difficulties of communication or transportation, the other Director or
Directors shall constitute a quorum for the sole purpose of electing Directors
to replace the Directors so incapable of acting. The Directors so elected
shall serve until such replaced Directors are able to attend meetings of the
Board or until the shareholders act to elect Directors for such purpose.
Questions as to the existence of such an emergency or disaster or as to the
fact of such incapacity shall be conclusively determined by such other Director
or Directors.
Section 2.09. RESIGNATIONS. Any Director may resign by
submitting his resignation to the Secretary. Such resignation shall become
effective upon its receipt by the Secretary or as otherwise specified therein.
Section 2.10. COMMITTEES. By resolution adopted by a
majority of the whole Board, standing or temporary committees, which may
include an Executive Committee, consisting of at least two Directors may be
appointed by the Board of Directors from time to time. Each such committee
shall have and exercise such authority of the Board of Directors in the
management of the business and affairs of the Company as the Board may specify
from time to time, which may include declaration of dividends,
-6-
<PAGE> 10
authorization of the issuance and terms of sale of stock or debt securities,
fixing the relative rights and preferences of preferred stock or other
securities issued by the Company and any other action which the Pennsylvania
Business Corporation Law provides shall or may be taken by the Board of
Directors. The Board may designate one or more Directors as alternate members
of any committee to replace any absent or disqualified member at any meeting of
the committee, and in the event of such absence or disqualification, the member
or members of such committee present at any meeting and not disqualified from
voting, whether or not such member or members constitute a quorum, may
unanimously appoint another Director to act at the meeting in the place of any
such absent or disqualified member. Any action taken by any committee shall be
subject to alteration or revocation by the Board of Directors; provided,
however, that third parties shall not be prejudiced by such alteration or
revocation.
Section 2.11. Personal Liability of Directors.
-------------------------------
(a) ELIMINATION OF LIABILITY. To the fullest extent that
the laws of the Commonwealth of Pennsylvania, as in effect on January 27, 1987
or as thereafter amended, permit elimination or limitation of the liability of
directors, no Director of the Company shall be personally liable for monetary
damages as such for any action taken, or any failure to take any action, as a
Director.
-7-
<PAGE> 11
(b) This Section 2.11 shall not apply to any actions filed
prior to January 27, 1987, nor to any breach of performance of duty or any
failure of performance of duty by any Director of the Company occurring prior
to January 27, 1987. The provisions of this Section 2.11 shall be deemed to be
a contract with each Director of the Company who serves as such at any time
while this Section 2.11 is in effect, and each such Director shall be deemed to
be so serving in reliance on the provisions of this Section 2.11. Any
amendment or repeal of this Section 2.11 or adoption of any other By-Law of
this Company or provision of the Articles of this Company which has the effect
of increasing Director liability shall operate prospectively only and shall not
have any effect with respect to any action taken, or any failure to act, by a
Director prior to such amendment, repeal, By-Law or other provision becoming
effective.
(c) This Section 2.11 can be amended, altered, changed or
repealed only if the Article of the Company which is substantially identical to
this Section 2.11 is at the same time amended, altered, changed or repealed in
a substantially identical manner.
ARTICLE III
OFFICERS AND EMPLOYEES
----------------------
Section 3.01. OFFICERS. The officers of the Company shall be
the President, the Secretary and the Treasurer, and may
-8-
<PAGE> 12
include one or more Vice Presidents as the Board may from time to time
determine, all of whom shall be elected by the Board. Any two or more offices
may be held by the same person. Each officer shall hold office at the pleasure
of the Board, or until his death or resignation.
Section 3.02. ADDITIONAL OFFICERS; OTHER AGENTS AND
EMPLOYEES. The Board of Directors may from time to time elect or employ such
additional officers, assistant officers, agents, employees and independent
contractors as the Board deems advisable; the Board or the Chief Executive
Officer shall prescribe their duties, conditions of employment and
compensation; and the Board shall have the right to dismiss them at any time,
without prejudice to their contract rights, if any. The Chief Executive
Officer may employ from time to time such other agents, employees and
independent contractors as he may deem advisable for the prompt and orderly
transaction of the business of the Company, and he may prescribe their duties
and the conditions of their employment, fix their compensation and dismiss them
at any time, without prejudice to their contract rights, if any.
Section 3.03. THE PRESIDENT. The President shall be the
Chief Executive Officer. Subject to the control of the Board of Directors, the
President shall have general management and executive powers over all the
business, property and employees of the Company and shall see that the policies
and programs adopted or approved by the Board of Directors are carried out.
-9-
<PAGE> 13
Section 3.04. THE VICE PRESIDENTS. Each Vice President shall
have such powers and duties as from time to time may be prescribed by the Board
of Directors or the officer of the Company to whom such Vice President is
directly responsible as determined by the Board of Directors or the Chief
Executive Officer.
Section 3.05. THE SECRETARY AND ASSISTANT SECRETARIES. It
shall be the duty of the Secretary (a) to keep an original or duplicate record
of the proceedings of the shareholders and the Board of Directors, and a copy
of the Articles and of the By-Laws; (b) to give such notices as may be required
by law or these By-Laws; (c) to be custodian of the corporate records and of
the seal of the Company and see that the seal is affixed to such documents as
may be necessary or advisable; (d) to have charge of and keep, or cause to be
kept by a transfer agent or registrar, the stock books of the Company and such
records as to the identity of the shareholders, and as to the shares issued to
and held of record by them, as may be required by law; and (e) to exercise all
powers and duties incident to the office of Secretary; and the Secretary shall
have such further powers and duties as from time to time may be prescribed in
these By-Laws or by the Board of Directors or the Chief Executive Officer. The
Secretary by virtue of his office shall be an Assistant Treasurer. Each
officer of the Company by virtue of his office shall be an Assistant Secretary.
The Assistant Secretaries shall assist the Secretary in the performance of his
duties and shall also exercise such further powers and duties as from time to
time may be prescribed
-10-
<PAGE> 14
by the Board of Directors, the Chief Executive Officer or the Secretary. At
the direction of the Secretary or in his absence or disability, an Assistant
Secretary shall exercise the powers and duties of the Secretary.
Section 3.06. THE TREASURER AND ASSISTANT TREASURERS. It
shall be the duty of the Treasurer (a) to keep the Company's contracts,
insurance policies, leases, deeds and other business records; (b) to see that
the Company's lists, books, reports, statements, tax returns, certificates and
other documents and records required by law are properly prepared, kept and
filed; (c) to be the principal officer in charge of tax and financial matters,
budgeting and accounting of the Company; (d) to have charge and custody of and
be responsible for the Company's funds, securities and investments; (e) to
receive and give receipts for checks, notes, obligations, funds and securities
of the Company, and deposit monies and other valuable effects in the name and
to the credit of the Company, in such depositories as shall be designated by
the Board of Directors; (f) subject to the provisions of Section 5.01 hereof,
to cause the funds of the Company to be disbursed by payment in cash or by
checks or drafts upon the authorized depositories of the Company, and to cause
to be taken and preserved proper vouchers for such disbursements; (g) to render
to the Board of Directors and the Chief Executive Officer whenever they may
require it an account of all his transactions as Treasurer, and reports as to
the financial position and operations of the Company; (h) to keep appropriate,
-11-
<PAGE> 15
complete and accurate books and records of account of all the Company's
business and transactions; and (i) to exercise all powers and duties incident
to the office of Treasurer; and the Treasurer shall have such further duties
from time to time as may be prescribed in these By-Laws or by the Board of
Directors or the Chief Executive Officer. The Assistant Treasurers shall
assist the Treasurer in the performance of his duties and shall also exercise
such further powers and duties as from time to time may be prescribed by the
Board of Directors, the Chief Executive Officer or the Treasurer. At the
direction of the Treasurer or in his absence or disability, an Assistant
Treasurer shall exercise the powers and duties of the Treasurer.
Section 3.07. VACANCIES. Any vacancy in any office or
position by reason of death, resignation, removal, disqualification, disability
or other cause shall be filled in the manner provided in this Article III for
regular election or appointment to such office.
Section 3.08. DELEGATION OF DUTIES. The Board of Directors
may in its discretion delegate for the time being the powers and duties, or any
of them, of any officer to any other person whom it may select.
-12-
<PAGE> 16
ARTICLE IV
SHARES OF CAPITAL STOCK
-----------------------
Section 4.01. SHARE CERTIFICATES. Every holder of fully-paid
stock of the Company shall be entitled to a certificate or certificates, to be
in such form as the Board of Directors may from time to time prescribe, and
signed (in facsimile or otherwise, as permitted by law) by the Chairman of the
Board, if an officer of the Company, the Vice Chairman, if an officer of the
Company, or the President and the Secretary or the Treasurer or an Assistant
Secretary or an Assistant Treasurer and sealed with the corporate seal or a
facsimile thereof, which shall represent the number and class of shares of
stock owned by such holder. The Board may authorize the issuance of
certificates for fractional shares or, in lieu thereof, scrip or other evidence
of ownership, which may (or may not) as determined by the Board entitle the
holder thereof to voting, dividends or other rights of shareholders. In case
any officer of the Company who has signed, or whose facsimile signature has
been placed upon any share certificate, shall have ceased to be such officer
because of death, resignation, or otherwise, before the certificate is issued,
the share certificate may, nonetheless, be issued by the Company with the same
effect as if such person had not ceased to be such officer at the date of issue
of the share certificate.
Section 4.02. TRANSFER OF SHARES. Transfers of shares of
stock of the Company shall be made on the books of the Company
-13-
<PAGE> 17
only upon surrender to the Company of the certificate or certificates for such
shares properly endorsed, by the shareholder or by his assignee, agent or legal
representative, who shall furnish proper evidence of assignment, authority or
legal succession, or by the agent of one of the foregoing thereunto duly
authorized by an instrument duly executed and filed with the Company, in
accordance with regular commercial practice.
Section 4.03. LOST, STOLEN, DESTROYED OR MUTILATED
CERTIFICATES. New certificates for shares of stock may be issued to replace
certificates lost, stolen, destroyed or mutilated upon such conditions as the
Board of Directors may from time to time determine.
Section 4.04. REGULATIONS RELATING TO SHARES. The Board of
Directors shall have power and authority to make all such rules and regulations
not inconsistent with these By-Laws as it may deem expedient concerning the
issue, transfer and registration of certificates representing shares of the
Company.
Section 4.05. HOLDERS OF RECORD. The Company shall be
entitled to treat the holder of record of any share or shares of stock of the
Company as the holder and owner in fact thereof for all purposes and shall not
be bound to recognize any equitable or other claim to or interest in such
shares on the part of any other person, whether or not it shall have express or
other notice thereof, except as otherwise expressly provided by law.
-14-
<PAGE> 18
ARTICLE V
MISCELLANEOUS CORPORATE TRANSACTIONS AND DOCUMENTS
--------------------------------------------------
Section 5.01. EXECUTION OF NOTES, CHECKS, CONTRACTS AND OTHER
INSTRUMENTS. All notes, bonds, drafts, acceptances, checks, endorsements
(other than for deposit), guarantees and all evidences of indebtedness of the
Company whatsoever, and all deeds, mortgages, contracts and other instruments
requiring execution by the Company, may be signed by the Chairman of the Board,
if an officer of the Company, the Vice Chairman, if an officer of the Company,
the President, any Vice President or the Treasurer, and authority to sign any
of the foregoing, which may be general or confined to specific instances, may
be conferred by the Board upon any other person or persons. Any person having
authority to sign on behalf of the Company may delegate, from time to time, by
instrument in writing, all or any part of such authority to any other person or
persons if authorized to do so by the Board, which authority may be general or
confined to specific instances. Facsimile signatures on checks may be used if
authorized by the Board.
Section 5.02. VOTING SECURITIES OWNED BY THE COMPANY.
Securities owned by the Company and having voting power in any other Company
may be voted by the Chairman of the Board, if an officer of the Company, the
Vice Chairman, if an officer of the Company, the President, any Vice President
or the Treasurer, unless the Board confers authority to vote with respect
thereto,
-15-
<PAGE> 19
which may be general or confined to specific investments, upon some other
person. Any person authorized to vote such securities shall have the power to
appoint proxies, with general power of substitution.
ARTICLE VI
GENERAL PROVISIONS
------------------
Section 6.01. OFFICES. The principal business office of the
Company shall be at 800 Fifth Avenue, New Brighton, Pennsylvania 15066. The
Company may also have offices at such other places within or without the
Commonwealth of Pennsylvania as the business of the Company may require.
Section 6.02. CORPORATE SEAL. The Board of Directors shall
prescribe the form of a suitable corporate seal, which shall contain the full
name of the Company and the year and state of incorporation.
Section 6.03. FISCAL YEAR. The fiscal year of the Company
shall end on August 31 or such other day as shall be fixed by the Board of
Directors.
Section 6.04. CONFLICT WITH ARTICLES. To the extent any of
the provisions hereof conflict with the terms of the Articles of the Company,
the terms of the Articles shall control.
-16-
<PAGE> 20
ARTICLE VII
AMENDMENTS
----------
Section 7.01. AMENDMENTS. Subject to Section 2.11 hereof,
these By-Laws may be amended, altered or repealed, and new by-laws may be
adopted, in the manner provided for in Section 10.1 of Article 10th of the
Articles of the Company (or any successor section thereto). No provision of
these By-Laws shall vest any property or contract right in any person.
-17-
<PAGE> 1
Exhibit 10.6
TUSCARORA INCORPORATED
----------------------
DEFERRED COMPENSATION PLAN FOR NON-EMPLOYEE DIRECTORS
-----------------------------------------------------
1. Purpose
-------
The purpose of the Deferred Compensation Plan for Non-Employee
Directors (the "Plan") is to offer each non-employee member of the
Board of Directors (the "Board") of Tuscarora Incorporated (the
"Company") the opportunity to defer receipt of the compensation to be
earned for services as a director of the Company until after
termination of service as a director.
2. Definitions
-----------
(a) "Account" or "Accounts" means one or more of the Interest
Account or the Stock Account maintained for a Participant.
(b) "Beneficiary" means the beneficiary provided for under
Section 7.
(c) "Committee" means the Compensation Committee (or any
successor) of the Board.
(d) "Common Stock" means the Common Stock, without par value, of
the Company.
(e) "Common Stock Unit" means a hypothetical share of the Common
Stock.
(f) "Compensation" means a Participant's annual retainer, fees for
attending meetings of the Board (i.e., Board meeting fees) and
compensation as chairman or a member of a Board Committee.
(g) "Interest Account" means a bookkeeping account maintained for
a Participant who elects to defer Compensation to it and to
which interest equivalents are credited.
(h) "Participant" means an eligible director who has elected to
participate in the Plan.
(i) "Stock Account" means a bookkeeping account maintained for a
Participant who elects to defer Compensation to it and to
which Common Stock Units are credited.
<PAGE> 2
3. Eligibility
-----------
All directors of the Corporation who are not at the time also serving
as salaried employees of the Company are eligible to participate in
the Plan.
4. Deferral of Compensation
------------------------
(a) For any fiscal year, a Participant may elect to have (i) all
but not part of his or her Board meeting fees and/or (ii) all
but not part of his or her other Compensation deferred under
the Plan and credited to either the Interest Account or the
Stock Account.
(b) Except for the 1995 fiscal year, (i) each deferral election
must be made in writing prior to the start of the fiscal year
for which it is to become effective and (ii) will be
irrevocable for the next succeeding fiscal year, and unless
revoked in writing or superseded by a new election in writing
effective for fiscal years after the year in which such
revocation or new election is made, continue in effect for
each fiscal year thereafter. For the 1995 fiscal year,
deferral elections may be made prior to the 1994 Annual
Meeting of Shareholders by all directors who will continue as
directors after the Annual Meeting and within 30 days after
the Annual Meeting by new directors elected at the Annual
Meeting. Each deferral election must be made on a deferral
election form approved by the Company's Chief Financial
Officer.
(c) A deferred amount will be credited on the books of the Company
as a bookkeeping entry to the Interest Account or the Stock
Account of the Participant on the same date that the amount
would otherwise be paid to the Participant. No assets of the
Company will be segregated or earmarked in respect to any
amount credited to an Account and all Account balances will
constitute unsecured contractual obligations of the Company to
the Participants.
(d) Deferred amounts credited to the Interest Account will accrue
interest equivalents at a rate equal to 100% of the highest
Applicable Federal Rate for the period commencing on each
January 1 or July 1, as the case may be, determined pursuant
to Section 1274(d) of the Internal Revenue Code of 1986, as
amended, and any applicable regulations promulgated thereunder
or in connection therewith, or such other rate as may be
required by any applicable successor law or regulation.
Interest equivalents will be compounded semi-annually as of
each January 1 and July 1.
-2-
<PAGE> 3
(e) Deferred amounts credited to the Stock Account will be
converted to Common Stock Units. The number of Common
Stock Units to be credited to the Stock Account of a
Participant will be the number determined by dividing the
deferred amount credited to the Stock Account by the closing
sales price of a share of the Common Stock on the date as of
which the deferred amount is credited (or if the Common Stock
was not traded on that date, on the next preceding date on
which it was traded), on the NASDAQ National Market System, as
reported in The Wall Street Journal. The number of Common
Stock Units will be carried to three decimal places. In
addition, dividend equivalents will be credited to each Stock
Account as additional Common Stock Units as of each dividend
payment date. The number of additional Common Stock Units to
be credited to the Stock Account of a Participant will be the
number determined by dividing the product of (i) the dividend
per share of the Common Stock which is payable as of the
dividend payment date, and (ii) the number of Common Stock
Units credited to the Stock Account as of the applicable
dividend record date by (iii) the closing sales price of a
share of the Common Stock on the dividend payment date (or if
the Common Stock was not traded on that date, on the next
preceding date on which it was traded) on the NASDAQ National
Market System, as reported in The Wall Street Journal. The
number of additional Common Stock Units will also be carried
to three decimal places.
(f) In the event of any change in the outstanding shares of the
Common Stock, or in the number thereof, by reason of any stock
dividend or split, recapitalization, reorganization, merger,
consolidation, combination, sale of assets, exchange of
shares, spin-off or similar change, unless the Committee shall
determine otherwise, a corresponding change will be made in
the Common Stock Units, or the number thereof, credited to the
Stock Account, and any such change will be conclusive and
binding for all purposes.
5. Transfers Between the Accounts
------------------------------
Transfers may not be made between the Accounts.
6. Payments From the Accounts
--------------------------
(a) Payments from the Accounts will be made in cash.
(b) A Participant may elect to have payments from his or her
Interest Account and/or Stock Account made in a lump sum or in
up to 10 annual installments after the Participant ceases to
be a director of the Company. Separate payment elections may
be made with respect to payments from the Interest Account and
the Stock Account. If a lump sum payment is elected, the
payment will be made
-3-
<PAGE> 4
within 30 days after director status ceases. If
installment payments are elected, the first installment
payment will be made within 30 days after director status
ceases and installments after the first installment will be
paid within 30 days after the first day of January of each
year after the first installment.
(c) The initial payment election with respect to the Interest
Account or Stock Account must be made in writing at the same
time as the initial deferral election to the Interest Account
or the Stock Account. Each initial payment election with
respect to the Interest Account or the Stock Account is
irrevocable except that by making a new payment election prior
to the commencement of a fiscal year, a Participant may change
the payment method prospectively with respect to Compensation
deferred to the Interest Account or the Stock Account for
fiscal years commencing after the new payment election is
made. Each payment election must be made on a payment
election form approved by the Company's Chief Financial
Officer.
(d) In the case of installment payments from an Account, the
amount of each installment will be calculated so as to provide
approximately equal payments over the period designated. In
calculating the amount to be paid from the Stock Fund, the
value of Common Stock Units will be calculated on the basis of
the closing sales price of a share of the Common Stock on the
day prior to the date of payment (or if the Common Stock is
not traded on that date, on the next preceding date on which
it was traded) on the NASDAQ National Market System as
reported in The Wall Street Journal.
(e) In the event of the death of a Participant prior to the
payment of all amounts hereunder, payment from the Accounts
will be made to the Participant's Beneficiary in the same
manner as previously elected by the Participant or in a lump
sum as designated by the Participant in the Participant's
beneficiary designation form (see Section 7 below). In the
event that no person designated as Beneficiary survives the
Participant, payment from the Accounts will be made in a lump
sum to the Participant's estate.
7. Beneficiary Designation.
-----------------------
At the time of a Participant's initial deferral election, the
Participant must designate in writing the person or persons to be
Beneficiary to receive any unpaid amounts under the Plan after the
death of the Participant. A Beneficiary designation may be changed at
any time prior to the death of the Participant. Each Beneficiary
designation must be made on a beneficiary designation form approved by
the Company's Chief Financial Officer.
-4-
<PAGE> 5
8. General Provisions
------------------
(a) The Board may modify or amend the Plan, in whole or in part,
from time to time, or terminate the Plan at any time, without
the consent of any Participant or Beneficiary; provided,
however, that any modification, amendment or termination must
be of general application to all Participants and
Beneficiaries and must not, without the consent of the
Participant or, in the event of his or her death, the
Participant's Beneficiary adversely affect (i) any amount
credited to the Participant's Account(s) or (ii) the right of
the Participant to receive all amounts credited to the
Participant's Account(s), as of the date of such modification,
amendment or termination.
(b) The rights of a Participant (or Beneficiary) to the payment of
deferred compensation as provided in the Plan may not be
assigned, transferred, pledged or encumbered in any respect.
No Participant or Beneficiary) may borrow against an Account.
No account may be subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance,
charge, garnishment, execution or levy of any kind, whether
voluntary or involuntary, including any liability which is for
alimony or other payments for the support of a spouse or
former spouse, or for any other relative of any Participant
(or Beneficiary).
(c) The Committee has full power to administer and interpret the
Plan and to adopt such rules, regulations, procedures and
resolutions consistent with the terms of the Plan as the
Committee deems necessary or advisable to carry out the terms
of the Plan.
(d) The place of administration of the Plan is conclusively deemed
to be within the Commonwealth of Pennsylvania, and the
validity, construction, interpretation and administration of
the Plan, and of any determinations or decisions made
thereunder, and the rights of any and all persons having or
claiming to have any interest therein or thereunder, will be
governed by, and determined exclusively and solely in
accordance with, the laws of the Commonwealth of Pennsylvania.
-5-
<PAGE> 1
Exhibit 10.7
TUSCARORA INCORPORATED
RETIREMENT POLICY AND PLAN FOR NON-EMPLOYEE DIRECTORS
(As Amended by the Board of Directors on December 14, 1994)
The purpose of the Retirement Policy and Plan for Non-Employee
Directors (the "Plan") is to set forth the policy of Tuscarora Incorporated
(the "Company") with regard to the retirement of directors of the Company who
are not current or former employees of the Company (the "Non-Employee
Directors") and to provide retiring Non-Employee Directors with post-retirement
benefits in recognition of their service to the Company.
SECTION I.
Retirement Policy;
Application to Present Directors
--------------------------------
It is the policy of the Company that Non-Employee Directors
not be nominated by the Board of Directors for reelection as directors after
the Non-Employee Directors have reached the age of 70.
The policy set forth in of the preceding paragraph does not
apply to any Non-Employee Director who is a director as of the effective date
of the Plan.
SECTION II.
Retirement Benefits
-------------------
Any Non-Employee Director who (i) has retired from the Board,
(ii) has reached the age of 60 and (iii) had completed at least five years of
service on the Board of Directors of the Company at the time he retired from
the Board shall receive a retirement benefit equal to 50% of the maximum amount
payable each year to active Non-Employee Directors as a retainer and for
attendance at meetings of the Board. Payments will be made to retired
Non-Employee Directors at the same time and in the same manner as payments are
made to active directors. The Non-Employee Director benefits shall not include
any compensation for committees served upon or bonuses provided to active
directors.
Non-Employee Director benefits for any Non-Employee Director
shall terminate upon the earliest to occur of (i) expiration of a period of
time equal to the period of time the Non-Employee Director served upon the
Board of the Company, (ii) the death of such director or (iii) the tenth
anniversary of the date on which the Non-Employee Director retires from the
Board of Directors. There are no survivor benefits payable under the Plan.
<PAGE> 2
A Non-Employee Director shall not be considered to have
"retired" if, among other things, such director is involuntarily terminated by
the Board.
SECTION III.
Administration
--------------
The Plan shall be administered by the Board of Directors of
the Company. The Board shall interpret the Plan and prescribe such rules,
regulations and procedures in connection with the operations of the Plan as it
shall deem to be necessary and advisable for the administration of the Plan
consistent with the purposes of the Plan.
Neither the Company nor the Board shall be liable for any act
done or interpretation made in good faith or for any good faith omission to act
with respect to the Plan, including without limitation interpretation of what
constitutes "retirement" of a Director and what constitutes ordinary director
compensation at any time.
SECTION IV.
Amendment or Termination of Plan
--------------------------------
The Board reserves the right to amend or terminate the Plan at
any time. No amendment or termination shall affect the rights under the Plan
of any retired Non-Employee Director receiving benefits at the time of such
amendment or termination, nor shall it result in the forfeiture of any benefits
paid under the Plan before the effective date of the amendment or termination.
SECTION V.
Effective Date
--------------
The Plan shall become effective on June 25, 1991.
-2-
<PAGE> 1
Tuscarora Incorporated
EXHIBIT 11 - COMPUTATION OF NET INCOME PER SHARE
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
February 28, February 28, February 28, February 28,
1995 1994 1995 1994
------------ ------------ ------------ ------------
(In thousands, except per share data)
<S> <C> <C> <C> <C>
PRIMARY
Weighted average number of
shares of Common Stock outstanding 6,151 6,120 6,149 6,118
Net effect of dilutive stock
options - based on the
treasury stock method using
average market price 104 94 95 78
----- ----- ----- -----
TOTAL 6,255 6,214 6,244 6,196
===== ===== ===== =====
Net income 1,840 903 4,341 2,551
===== ===== ===== =====
Per share amount $ .29 $ .15 $ .70 $ .41
===== ===== ===== =====
FULLY DILUTED
Weighted average number of
shares of Common Stock outstanding 6,151 6,120 6,149 6,118
Net effect of dilutive stock
options - based on the
treasury stock method using
greater of average market
price or closing market price 136 98 137 97
----- ----- ----- -----
TOTAL 6,287 6,218 6,286 6,215
===== ===== ===== =====
Net income 1,840 903 4,341 2,551
===== ===== ===== =====
Per share amount $ .29 $ .15 $ .69 $ .41
===== ===== ===== =====
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> AUG-31-1995
<PERIOD-END> FEB-28-1995
<CASH> 1,073,325
<SECURITIES> 0
<RECEIVABLES> 19,742,633
<ALLOWANCES> 894,101
<INVENTORY> 17,280,827
<CURRENT-ASSETS> 39,199,515
<PP&E> 125,882,606
<DEPRECIATION> 64,789,149
<TOTAL-ASSETS> 104,388,998
<CURRENT-LIABILITIES> 19,022,461
<BONDS> 31,975,450
<COMMON> 6,197,134
0
0
<OTHER-SE> 44,707,728
<TOTAL-LIABILITY-AND-EQUITY> 104,388,998
<SALES> 76,809,994
<TOTAL-REVENUES> 76,809,994
<CGS> 58,256,052
<TOTAL-COSTS> 58,256,052
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 290,000
<INTEREST-EXPENSE> 1,031,287
<INCOME-PRETAX> 7,141,065
<INCOME-TAX> 2,800,222
<INCOME-CONTINUING> 4,340,843
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,340,843
<EPS-PRIMARY> .70
<EPS-DILUTED> .69
</TABLE>
