<PAGE> 1
INFORMATION STATEMENT PURSUANT TO SECTION 14(c) OF THE
SECURITIES EXCHANGE ACT OF 1934
Check the appropriate box:
[ X ] Preliminary Information Statement
[ ] Confidential, for use of the Commission Only (as permitted by Rule
14c-5(d)(2))
[ ] Definitive Information Statement
PDG REMEDIATION, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
Payment of Filing Fee (Check the appropriate box):
[ X ] $125 per Exchange Act Rules 0-11(c)(1)(ii), or 14c-5(g)
[ ] Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-11.
1) Title of each class of securities to which transaction applies:
________________________________________________________________________________
2) Aggregate number of securities to which transaction applies:
________________________________________________________________________________
3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11:*
________________________________________________________________________________
4) Proposed maximum aggregate value of transaction:
________________________________________________________________________________
5) Total fee paid:
________________________________________________________________________________
*Set forth the amount on which the filing fee is calculated and state how it
was determined.
[ ] Fee paid previously with preliminary materials
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
________________________________________________________________________________
2) Form, Schedule or Registration Statement No.:
________________________________________________________________________________
3) Filing Party:
________________________________________________________________________________
4) Date Filed:
________________________________________________________________________________
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INFORMATION STATEMENT
PDG REMEDIATION, INC.
300 OXFORD DRIVE
MONROEVILLE, PENNSYLVANIA 15146
(412) 856-6100
WE ARE NOT ASKING FOR A PROXY AND YOU ARE
REQUESTED NOT TO SEND US A PROXY
This Information Statement is being furnished to all shareholders of PDG
Remediation, Inc. (the "Corporation") in connection with an action to be taken
by written consent of the shareholders of the Corporation. This Information
Statement is being sent to the shareholders of the Corporation on or about
September __, 1996. No meeting of the Corporation's shareholders will be held
with respect to the matter which is the subject of the written consent. The
consent of shareholders holding 59.5% of the votes entitled to be cast has
already been accepted and as a result the action has been approved and no
further consents are being solicited.
THE WRITTEN CONSENT
This Information Statement is being furnished in connection with the written
consent in lieu of a meeting of the shareholders. The sole purpose of the
written consent is to change the jurisdiction of incorporation of the
Corporation from the Commonwealth of Pennsylvania to the State of Delaware (the
"Reincorporation") pursuant to the Agreement and Plan of Merger (the "Merger
Agreement") between the Corporation and ICHOR Corporation, a Delaware
corporation recently formed for this purpose ("ICHOR").
PDG Environmental, Inc. ("PDGE") controls approximately 59.5% of the common
stock, par value $.01, of the Corporation (the "Common Stock"). See "Security
Ownership of Certain Beneficial Owners and Management." PDGE has executed a
written consent in favor of the Reincorporation and the adoption of Merger
Agreement. As a result, the Reincorporation will occur unless the Board of
Directors of the Corporation determines not to proceed with the
Reincorporation. Pursuant to applicable provisions of the Pennsylvania
Business Corporation Law of 1988, as amended, the Corporation is required to
offer dissenters' rights to shareholders objecting to the Reincorporation. See
"DISSENTERS RIGHTS."
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information as of September 16, 1996 with
respect to beneficial ownership of the Corporation's Common Stock by: (i) all
persons known to the Corporation to be considered to own beneficially more than
five (5%) percent of the Corporation's Common Stock; (ii) all directors of the
Corporation; and (iii) all of the Corporation's executive officers and
directors as a group.
<TABLE>
<CAPTION>
AMOUNT AND NATURE PERCENTAGE OF CLASS
OF BENEFICIAL OF COMMON
NAME OF BENEFICIAL OWNER OWNERSHIP OF STOCK SHARES OWNED(1)
------------------------ ------------------ ---------------
<S> <C> <C>
PDG Environmental, Inc. (2) 1,470,320 59.5%
300 Oxford Drive
Monroeville, Pennsylvania 15146
</TABLE>
<PAGE> 3
<TABLE>
<CAPTION>
AMOUNT AND NATURE PERCENTAGE OF CLASS
OF BENEFICIAL OF COMMON
NAME OF BENEFICIAL OWNER OWNERSHIP OF STOCK SHARES OWNED(1)
------------------------ ------------------ ---------------
<S> <C> <C>
Anthony J. Pace 146,300 5.9%
981 Madison Avenue, 2nd Floor
New York, New York 10021
Kennedy Capital Management, Inc. 183,000 7.4%
425 N. New Ballas Road, Suite 181
St. Louis, Missouri 63141
John M. Musacchio (3)(4)(5) 116,716 4.7%
Edgar Berkey (3)(5)(6) 12,500 *
Jimmy Lee (3)(6) 10,000 *
Michael Smith (3)(6) 10,000 *
Roy Zanatta (3)(6) 10,000 *
Leonard Petersen (3)(6) 10,000 *
All directors and officers of the
Corporation as a group, including
those named above (9 persons) 239,216 9.7%
--------------------------------- ------- ----
</TABLE>
Notes:
(1) Percentage ownership based on 2,470,320 shares of Common Stock.
(2) PDG Environmental, Inc., has entered into a binding agreement to sell its
59.5% ownership interest to CVD Financial subject to certain conditions.
(3) Director
(4) Officer
(5) Includes 12,500 shares of Common Stock that may be acquired by Dr. Berkey,
and 116,666 shares of Common Stock that may be acquired by Mr. Musacchio,
pursuant to options granted under the Corporation's Amended 1994 Stock
Option Plan and the Corporation's 1995 Stock Option Plan.
(6) Includes 10,000 shares of Common Stock that may be acquired by Messrs. Lee,
Smith, Zanatta and Petersen under the Corporation's Amended 1994 Stock
Option Plan.
* Indicates less than 1%.
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THE REINCORPORATION
The Corporation's Board of Directors has approved, and for the reasons set
forth below, PDGE has consented to, a change in the domicile of the Corporation
from Pennsylvania to Delaware by means of a merger. The general effect of the
Reincorporation will be that the Corporation in the future will be governed by
the corporation laws of Delaware rather than the corporation laws of
Pennsylvania. The effect of Reincorporation on the rights of the Corporation's
shareholders is set forth below.
The Reincorporation will be effected by the Merger Agreement pursuant to which
the Corporation will be merged with and into ICHOR, which was recently formed
for the purpose of effecting the Reincorporation. ICHOR will be the surviving
corporation and its only business immediately after the Reincorporation will be
the Corporation's business. Upon completion of the Reincorporation, the name
of the Corporation will remain ICHOR Corporation, as the name change is one of
the intended reasons for the Reincorporation.
Pursuant to the Merger Agreement, the form of which is attached hereto as Annex
A, upon the effective date of the Reincorporation, each outstanding share of
the Corporation's Common Stock will automatically be converted into one share
of ICHOR common stock, par value $.01 per share ("ICHOR Common Stock"). Each
share of the Corporation's preferred stock, par value $.01 per share (the
"Preferred Stock"), will automatically be converted into one share of ICHOR
preferred stock, par value $.01 per share ("ICHOR Preferred Stock"). Each
outstanding option or warrant representing the right to purchase Common Stock
of the Corporation will continue to represent the right to purchase the same
number of shares of ICHOR Common Stock upon the same terms and conditions.
IT WILL NOT BE NECESSARY FOR SHAREHOLDERS OF THE CORPORATION TO EXCHANGE THEIR
CERTIFICATES REPRESENTING SHARES OF THE CORPORATION'S COMMON OR PREFERRED STOCK
FOR CERTIFICATES REPRESENTING SHARES OF ICHOR COMMON STOCK OR ICHOR PREFERRED
STOCK. HOWEVER, SHAREHOLDERS MAY EXCHANGE THEIR CERTIFICATES IF THEY SO
CHOOSE. Adoption of the Reincorporation will not affect the listing of shares
of the Corporation on the NASDAQ Small Cap market. After the Reincorporation,
shares of ICHOR Common Stock will be traded on the NASDAQ Small Cap market
without interruption under the symbol "PDGS." Redeemable common stock warrants
of ICHOR will continue to trade on the NASDAQ Small Cap Market without
interruption under the symbol "PDGSW." These are the same symbols under which
shares of the Corporation's Common Stock and redeemable Common Stock purchase
warrants traded before the Reincorporation.
Under Pennsylvania law, and pursuant to the provisions of the Articles of
Incorporation and By-laws of the Corporation, shareholders of the Corporation
may act by written consent and without a meeting. Further, under Pennsylvania
law, the majority of the votes cast by all shareholders entitled to vote
thereon are necessary to adopt the Reincorporation. PDGE, which controls
approximately 59.5% of the Common Stock, has consented in writing to the
Reincorporation and the adoption of the Merger Agreement. As a result, subject
to the following, the Reincorporation will occur on the effective date set
forth in the Merger Agreement (the "Effective Date"). No further action by the
remaining shareholders of the Corporation is necessary. It is expected that
the Effective Date of the Reincorporation will be October __, 1996. However,
the Reincorporation may be delayed or abandoned if in the opinion of the Board
of Directors of the Corporation or ICHOR, circumstances arise that make it
inadvisable to proceed with the Reincorporation.
At the effective time of the Reincorporation, the Board of Directors of the
Corporation will become the Board of Directors of ICHOR. The Reincorporation
will effect only a change in the legal domicile of
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the Corporation and change the name of the Corporation to ICHOR Corporation.
The Reincorporation will NOT effect any significant change in the business,
operations, management, location of the principal executive offices or
liabilities of the Corporation. The Merger Agreement provides that the
officers of the Corporation will be the officers of ICHOR following the
Reincorporation. All employee benefit plans of the Corporation will be
continued by ICHOR and each share of the Corporation's Common Stock reserved
for issuance upon the exercise of all stock options or warrants for the
purchase of shares of the Corporation will be converted into a share of ICHOR
Common Stock reserved for issuance upon the exercise of stock options or
warrants for the purchase of shares of ICHOR at the same price per share, upon
the same terms and subject to the same conditions as set forth in the
Corporation's stock option plans or warrant agreements as the case may be.
PRINCIPAL REASONS FOR THE REINCORPORATION
PDGE'S PENDING SALE OF THE CORPORATION'S COMMON STOCK.
On September 3, 1996, PDGE and its principal lender, CVD Financial Corporation,
a Delaware corporation ("CVD"), entered into a certain loan modification
agreement effective as of July 31, 1996 (the "Loan Modification Agreement").
Pursuant to the Loan Modification Agreement, among other things, PDGE agreed to
sell, transfer and convey to CVD or its assigns 1,470,320 issued and
outstanding shares of Common Stock of the Corporation owned by PDGE. The sale
of such stock is subject to and conditioned upon: (a) the effective
Reincorporation of the Corporation as a Delaware corporation, on or before
November 1, 1996, including the filing of a certificate of incorporation in
Delaware and the adoption of by-laws each containing (as and where appropriate)
provisions expressly electing not to be governed by Section 203 of the Delaware
General Corporation Law and such other provisions as are acceptable to CVD in
its sole discretion; (b) the closing of the purchase and sale of the shares of
Common Stock on or before November 1, 1996; (c) the Reincorporation resulting
in no material liabilities to the Corporation, as determined in the sole
discretion of CVD; and (d) the Reincorporation resulting in not more than 5% of
the shareholders of the Corporation exercising their dissenters' rights. As a
result, the Reincorporation is being effected so that PDGE can sell the shares
of Common Stock owned by it to CVD or its assigns, which management of the
Corporation believes is in the best interests of the Corporation.
As a Pennsylvania "registered corporation," the Corporation is governed by the
provisions of the Pennsylvania Business Corporation Law of 1988, as amended
(the "BCL"). Included in the BCL are subchapters E, F, G, H, I and J of
Chapter 25, each relating to some aspect of change-in-control transactions.
CVD has informed the Corporation that it believes that the provisions of these
subchapters may adversely affect CVD's rights as a potential majority
shareholder of the Corporation. By reincorporating under Delaware law and by
assuring that the provisions of Section 203 of the Delaware General Corporation
Law do not apply to the surviving corporation, there will be no state law
"anti-takeover" provisions which affect CVD's ability to effect transactions
which may result in a change of control of the Corporation.
Specifically, because the Corporation is currently incorporated under
Pennsylvania law, a closing on the purchase by CVD of PDGE's shares will
potentially cause the occurrence of a "control transaction" pursuant to
provisions of Subchapter E of Chapter 25 of the BCL. In the event of such a
"control transaction," CVD may be required, among other things, to make a cash
payment to shareholders of the Corporation, other than PDGE, who so demand, in
the amount of the fair market value of each voting share. CVD does not wish to
make such a payment. However, pursuant to the terms of the Merger Agreement,
and pursuant to the terms of the BCL, the Corporation must offer dissenters'
rights to shareholders objecting to the Reincorporation. See "DISSENTERS'
RIGHTS."
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In addition, pursuant to Subchapter F of Chapter 25 of the BCL, if the
Reincorporation does not occur and CVD acquires PDGE's shares, CVD may be
prohibited from entering into certain "business combination" transactions with
the Corporation for a period of time after CVD's acquisition of PDGE's shares.
Such "business combinations" include, among other things, a merger,
consolidation, share exchange or division between CVD or any of its related
entities and the Corporation, any sale or lease, exchange, mortgage, pledge,
transfer or other disposition of significant assets of the Corporation to or
with CVD or any of its affiliates, or any subsidiary thereof or the issuance by
the Corporation of any shares of the Corporation having an aggregate market
value of 5% or more of the market value of all outstanding shares of the
Corporation. While CVD has not informed the Corporation of any current intent
to enter into any such business combination, it has informed the Corporation
that it does not wish to be limited in its ability to do so. After the
Reincorporation, CVD would not be so limited.
Further, pursuant to Subchapter G of Chapter 25 of the BCL, if CVD were to
acquire PDGE's shares, it could be argued that such a transaction would be a
"control share acquisition" transaction, as a result of which CVD's shares
would not have any voting rights unless such rights were restored by the
affirmative vote of the remaining shareholders of the Corporation. Upon the
Reincorporation, there would be no such potential restriction on CVD's ability
to vote any shares acquired by it. Also, under Subchapter H of Chapter 25 of
the BCL, if CVD were to acquire PDGE's shares of the Corporation's Common Stock
and then sell such shares within an 18-month period thereafter, it could be
argued that the Corporation could recover any profit earned by CVD in such
subsequent sale. While CVD has not informed the Corporation of any intent to
sell any shares it obtains from PDGE within such 18-month period of time, it
has informed the Corporation of its desire, in the event of such a sale, that
CVD not be forced to disgorge any profits made from such a sale to the
Corporation. Upon the Reincorporation, there would be no such requirement.
Section 203 of the Delaware General Corporation Law regulates certain business
combination transactions in a manner similar to Subchapter F of Chapter 25 of
the BCL. However, pursuant to the Certificate of Incorporation of ICHOR, which
will govern the surviving corporation after the Reincorporation, ICHOR is
expressly "opting out" of the effect of Section 203 of the Delaware General
Corporation Law. As a result, interested shareholders (including CVD) who
acquire a controlling interest in the Corporation will not be restricted in
effecting business combinations between themselves or their affiliates and the
Corporation. The Corporation believes that the Reincorporation, including
opting out of Section 203 of the Delaware General Corporation Law, will have
the effect of taking away all state law statutory provisions considered to be
of an "anti-takeover" nature.
DELAWARE HAS DEVELOPED CONSIDERABLE EXPERTISE IN DEALING WITH CORPORATION LEGAL
ISSUES.
For many years the State of Delaware has followed a policy of encouraging
incorporation in that state and, in furtherance of that policy, has long been a
leader in adopting, construing and implementing comprehensive, flexible
corporate laws responsive to the legal and business needs of corporations
organized under its laws. The Delaware General Corporation Law is widely
regarded as the most extensive and well-defined body of corporate law in the
United States. Because of Delaware's prominence as the state of incorporation
for many major corporations, both the legislature and courts in Delaware have
demonstrated an ability and a willingness to act quickly and effectively to
meet changing business needs. Moreover, the Delaware courts have rendered a
substantial number of decisions interpreting and explaining Delaware law and
public policies with respect to corporate issues. This is especially true in
the areas of director liability and contests for corporate control and the
related issues of a board's fiduciary duties in responding to unsolicited
tender offers, aggressive market buying programs, proxy contests and other
types of efforts to acquire control of a corporation or otherwise influence
decisions of the corporation in a manner that is not in the best interests of
the corporation or its shareholders. As a result, many corporations have
initially chosen Delaware for their state of
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incorporation or have subsequently changed their corporate domicile to Delaware
in a manner similar to that proposed by the Corporation. Although the
Pennsylvania's BCL is substantially similar to and generally based upon the
Delaware General Corporation Law, the Pennsylvania courts have issued fewer
decisions interpreting or explaining the BCL.
CHANGE OF CORPORATION'S NAME.
As a result of the Reincorporation, the name of the surviving corporation will
be ICHOR Corporation. The Board of Directors and management of the Corporation
has been contemplating a change of the Corporation's name for several months
and believes that such a change is in the best interests of the Corporation for
a number of reasons. The Corporation was formed as a wholly owned subsidiary
of PDGE in July 1994. In October 1994, PDGE reorganized its subsidiaries,
including the Corporation, by capitalizing the Corporation with PDGE's
environmental remediation services businesses to separate that business segment
from PDGE's other business segment. However, upon the acquisition by CVD of
PDGE's shares of Common Stock of the Corporation, PDGE will no longer have any
interest in the Corporation. In addition, from the time of the capitalization
of the Corporation as described above, PDGE and the Corporation have operated
their businesses as separate and independent operations. Moreover, the Board of
Directors and management of the Corporation believe that the current name of
the Corporation does not accurately reflect all of the lines of business into
which the Corporation may diversify in the future. For all of these reasons,
the Board of Directors of the Corporation believes that the change of the name
of the Corporation through the Reincorporation is in the best interests of the
Corporation.
FINANCIAL CONSIDERATIONS
The Board of Directors and management of the Corporation believe that the sale
by PDGE of its shares and the Reincorporation are in the best interests of the
Corporation and its shareholders because of the potential financial support
that a purchase of PDGE's shares could provide to the Corporation. However,
CVD has not committed to provide any financial support to the Corporation.
Because of PDGE's financial condition, PDGE has been unable to support the
level of bonding that would permit the Corporation to undertake certain types
of significant projects that require payment or performance bonds. In
addition, PDGE and the Corporation are currently guarantors of the obligations
of PDG Environmental Services, Inc., a wholly owned subsidiary of the
Corporation ("PDGES"), under a project financing arrangement with Sirrom
Environmental Funding LLC. PDGE has indicated that it does not wish to
guarantee any additional obligations incurred by PDGES to Sirrom.
DISSENTERS' RIGHTS
The following is a brief summary of Subchapter D of Chapter 15 of the BCL which
sets forth the procedure by which a shareholder of the Corporation may dissent
from the Reincorporation and demand statutory rights to obtain payment for the
fair value of his or her shares. This summary is qualified in its entirety by
reference to Subchapter D of Chapter 15 of the BCL, a copy of which is attached
hereto as Annex B, and shareholders are urged to read Subchapter D in its
entirety. This notice is intended to comply with Section 1575 of the BCL and
to constitute notice to the Corporation's shareholders of their right to
dissent and to obtain payment for the fair value of their shares. Any
shareholder who wishes to dissent must send a demand for payment and deposit
the certificates representing his or her shares to the Secretary of the
Corporation at 300 Oxford Drive, Monroeville, Pennsylvania 15146 by not later
than _________, 1996, [SHOULD BE AT LEAST 30 DAYS FROM THE MAILING DATE]. Upon
the deposit of certificates representing shares by holders attempting to assert
their dissenters' rights, such shares shall be held by the Corporation and
shall not be transferable. A form for demanding payment is included as Annex C
attached hereto.
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A shareholder who fails to deposit the certificate(s) representing the shares
for which he or she wishes to exercise dissenters' rights by _________, 1996
shall not have any right under Subchapter D of Chapter 15 to receive payment
for the fair value of his or her shares. Upon timely receipt of demand for
payment, the Corporation shall either remit to the dissenters who have made a
demand and deposited their certificates the amount that the Corporation
estimates to be the fair market value of the shares or provide written notice
that no remittance will be made. Such remittance or notice shall be
accompanied by: (i) a closing balance sheet and statement of income for the
fiscal year ended January 31, 1996 as well as the latest available interim
financial statements; (ii) a statement of the estimated fair market value of
the shares; and (iii) a notice of the right of the dissenter to demand payment
or supplemental payment. If the Corporation does not then remit the amount of
its estimate of the fair market value of the shares, it shall return all
certificates that have been deposited with a notation on such certificate that
the demand has been made. Shares with respect to which such notation has been
made may be transferred so long as each new certificate issued therefore shall
bear a similar notation together with the name of the original dissenting
holder or owner of such shares. A transferee of such shares shall not acquire
by such transfer any rights of the Corporation other than those that the
original dissenter had after making demand for payment.
If the Corporation gives notice of its estimate of the fair value without
remitting such amount or remits payment of its estimate and the dissenter
believes that the amount stated or remitted is less than fair market value of
his or her shares, he or she may send to the Corporation his or her own
estimate of the fair value which shall be deemed a demand for payment of the
amount of the deficiency. If the dissenter does not file his or her own
estimate within 30 days after the mailing by the Corporation of its remittance
or notice, the dissenter shall be entitled to no more than the amount stated in
the notice or remitted to him or her by the Corporation.
Within 60 days after the latest of (i) the Effective Date of the
Reincorporation, (ii) the timely receipt of any demands for payment, or (iii)
the timely receipt of any estimates of the dissenter's fair market value
differing from the Corporation's estimate, if any demands for payment remain
unsettled, the Corporation may file in the court of appropriate jurisdiction an
application for relief requesting that the fair market value be determined by
the court. If the Corporation fails to file an application to the court, any
dissenter who made demands and who has not already settled his claim against
the Corporation may do so in the name of the Corporation at any time within 30
days after the expiration of such 60-day period. If a dissenter does not file
an application within such 30-day period, each dissenter entitled to file an
application shall be paid the Corporation's estimate and no more and may bring
an action to recover any amount not previously remitted.
The cost and expense of any proceeding relating to valuation, including the
reasonable compensation and expenses of an appraiser appointed by the court,
shall be determined by the court and assessed against the Corporation, except
that any part of the costs and expenses may be apportioned and assessed by the
court as the court deems appropriate against all or some of the dissenters who
are parties and whose action in demanding the supplemental payment the Court
finds to be dilatory, obdurate, arbitrary, vexatious or in bad faith. Fees and
expenses of counsel and experts for the respective parties may be assessed as
the court deems appropriate against the Corporation and in favor of any and all
dissenters if the Corporation failed to comply substantially with the
requirements of Subchapter D of Chapter 15 of the BCL and may be assessed
against either the Corporation or a dissenter, in favor of the other party, if
the court finds that the party against whom the fees and expenses are assessed
acted in bad faith or in an obdurate, arbitrary or vexatious manner.
Pursuant to the Loan Modification Agreement, CVD is not required to purchase
PDGE's shares of the Corporation's common stock if more than 5% of the
shareholders of the Corporation exercise dissenters' rights. Under
Pennsylvania law, the Board of Directors of the Corporation, even after receipt
of the
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written consent of a majority of the shareholders of the Corporation, may
decide to abandon the Reincorporation. If more than 5% of the Corporation's
shareholders exercise dissenters' rights and if CVD elects not to purchase
PDGE's shares, the Board may or may not determine to abandon the
Reincorporation. If the Reincorporation is abandoned, the Corporation will
return the certificates of any shareholder who demanded dissenters rights and
deposited his or her certificates with the Corporation.
FEDERAL INCOME TAX CONSEQUENCES OF THE REINCORPORATION
Set forth below is a summary of certain Federal income tax consequences to the
Corporation's shareholders who become holders of ICHOR Common Stock in exchange
for the Corporation's Common Stock as a result of the Reincorporation. This
summary does not discuss all aspects of Federal taxation that may be relevant
to particular shareholders, such as dealers in securities and certain holders
of stock options or shares acquired upon exercise of stock options. In view of
the individual nature of tax consequences, shareholders are urged to consult
their own tax advisors as to the specific tax consequences to them of the
Reincorporation, including the applicability of federal, state, local and
foreign tax laws.
The Corporation has not requested a ruling from the Internal Revenue Service
with respect to the Federal income tax consequences of the Reincorporation
under the Internal Revenue Code of 1986, as amended (the "Code"). The
Corporation will, however, receive an opinion from its legal counsel, Thorp,
Reed & Armstrong, substantially to the effect that: (i) the Reincorporation
will constitute a tax-free reorganization under Section 368(a)(1)(F) of the
Code; (ii) no gain or loss will be recognized by holders of capital stock of
the Corporation upon receipt of capital stock of ICHOR pursuant to the
Reincorporation; (iii) the aggregate tax basis of the capital stock of ICHOR
received by each shareholder will be the same as the aggregate tax basis of the
capital stock of the Corporation held by such shareholder at the time of the
Reincorporation, and (iv) the holding period of the capital stock of ICHOR
received by each shareholder of the Corporation will include the period for
which such shareholder held the capital stock of the Corporation surrendered in
exchange therefor, provided that such capital stock of the Corporation was held
by such shareholder as a capital asset at the time of the Reincorporation.
ALTHOUGH IT IS NOT ANTICIPATED THAT STATE OR LOCAL INCOME TAX CONSEQUENCES TO
SHAREHOLDERS WILL VARY FROM THE FEDERAL INCOME TAX CONSEQUENCES DESCRIBED
ABOVE, SHAREHOLDERS SHOULD CONSULT WITH THEIR OWN TAX ADVISORS AS TO THE EFFECT
OF THE REINCORPORATION UNDER STATE, LOCAL OR FOREIGN INCOME TAX LAWS.
The Corporation will not recognize gain or loss for Federal income tax purposes
as a result of the Reincorporation. ICHOR will succeed, without adjustment, to
the Federal income tax attributes of the Corporation. The Corporation is
currently subject to Pennsylvania state income taxes and capital stock taxes.
Upon the Reincorporation, ICHOR will be subject to Pennsylvania state income
taxes and will be obligated to pay annual franchise tax in Delaware.
Shareholders should be aware that ICHOR'S franchise taxes in the State of
Delaware are likely to be higher than the Corporation's capital stock taxes in
the Commonwealth of Pennsylvania. Based upon current information, the
Corporation estimates that annual franchise taxes for Delaware will be
approximately $15,000 higher than the amount of capital stock taxes that the
Corporation paid to Pennsylvania for the fiscal year ended January 31, 1996.
ACCOUNTING TREATMENT OF THE REINCORPORATION
The reincorporation will be accounted for as a reorganization of companies
under common control in a manner similar to pooling of interests accounting.
Therefore, the historical financial statements will be carried forward as if
the merging companies had been one company.
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ANNEX A
AGREEMENT AND PLAN OF MERGER
PARTIES:
THIS AGREEMENT AND PLAN OF MERGER ("Merger Agreement") is entered into by
and between PDG Remediation, Inc., a Pennsylvania corporation ("PDGR"), and
ICHOR Corporation, a Delaware corporation ("ICHOR").
RECITALS:
1. PDGR is a corporation duly organized and existing under the laws of the
Commonwealth of Pennsylvania.
2. ICHOR is a corporation duly organized and existing under the laws of the
State of Delaware.
3. On the date of this Merger Agreement, PDGR's authorized capital consists
of 35,000,000 shares of stock, consisting of 30,000,000 shares of common stock,
par value $.01 per share (the "PDGR Common Stock"), of which 2,470,320 shares
are issued and outstanding, and 5,000,000 shares of preferred stock, par value
$.01 per share ("PDGR Preferred Stock"), of which [_______] shares are issued
and outstanding.
4. On the date of this Merger Agreement, ICHOR's authorized capital
consists of 35,000,000 shares of stock, consisting of 30,000,000 shares of
common stock, par value $.01 per share (the "ICHOR Common Stock"), of which 100
shares are issued and outstanding and owned by PDGR, and 5,000,000 shares of
preferred stock, par value $.01 per share ("ICHOR Preferred Stock"), none of
which shares are issued and outstanding.
5. The respective Boards of Directors of PDGR and ICHOR have determined
that it is advisable and in the best interests of each such corporation that
PDGR merge with and into ICHOR upon the terms and subject to the conditions of
this Merger Agreement for the purpose of effecting the reincorporation of PDGR
in the State of Delaware.
6. The respective Boards of Directors of PDGR and ICHOR have, by
resolutions duly adopted, approved and adopted this Merger Agreement. PDGR has
adopted this Merger Agreement as the sole stockholder of ICHOR and the Board of
Directors of PDGR has directed that this Merger Agreement be submitted to a
vote of its shareholders. The affirmative vote of the holders of a majority of
the shares of PDGR Common Stock outstanding must approve this Merger Agreement
for it to become effective.
<PAGE> 11
7. The parties intend by this Merger Agreement to effect a "reorganization"
under Section 368 of the Internal Revenue Code of 1986, as amended.
TERMS AND PROVISIONS:
In consideration of the foregoing recitals and of the following terms and
provisions, and subject to the following conditions, the parties hereto,
intending to be legally bound hereby, agree as follows:
1. Merger. At the Effective Time (as defined in this Section 1), PDGR
shall be merged with and into ICHOR (the "Merger"). ICHOR shall be the
corporation surviving the Merger (hereinafter sometimes referred to as the
"Surviving Corporation"), and the separate corporate existence of PDGR shall
cease. The Merger shall become effective upon the filing of a Certificate of
Merger with the Secretary of State of the State of Delaware. The date and time
when the Merger shall become effective is herein referred to as the "Effective
Time."
2. Governing Documents.
a. The Certificate of Incorporation of ICHOR as it may be amended or
restated subject to applicable law, and as in effect immediately prior to the
Effective Time, shall constitute the Certificate of Incorporation of the
Surviving Corporation without further change or amendment until thereafter
amended in accordance with the provisions thereof and applicable law.
b. The Bylaws of ICHOR as in effect immediately prior to the Effective
Time shall constitute the Bylaws of the Surviving Corporation without change or
amendment until thereafter amended in accordance with the provisions thereof
and applicable law.
3. Officers and Directors. The persons who are officers and directors of
PDGR immediately prior to the Effective Time shall, after the Effective Time,
be the officers and directors of the Surviving Corporation, without change
until their successors have been duly elected or appointed and qualified or
until their earlier death, resignation or removal in accordance with the
Surviving Corporation's Certificate of Incorporation and Bylaws and applicable
law.
4. Name. The name of the Surviving Corporation shall continue to be ICHOR
Corporation.
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<PAGE> 12
5. Succession. At the Effective Time, the separate corporate existence of
PDGR shall cease, and the Surviving Corporation shall possess all the rights,
privileges, powers and franchises of a public or private nature and be subject
to all the restrictions, disabilities and duties of PDGR; and all the rights,
privileges, powers and franchises of PDGR, and all property, real, personal and
mixed, and all debts due to PDGR on whatever account, as well for share
subscriptions and all other things in action, shall be vested in the Surviving
Corporation; and all property, rights, privileges, powers and franchises, and
all and every other interest shall be thereafter as effectively the property of
the Surviving Corporation as the same were of PDGR, and the title to any real
estate vested by deed or otherwise shall not revert or be in any way impaired
by reason of the Merger, but all rights of creditors and liens upon any
property of PDGR shall be preserved unimpaired, and all debts, liabilities and
duties of PDGR shall thenceforth attach to the Surviving Corporation and may be
enforced against it to the same extent as if such debts, liabilities and duties
had been incurred or contracted by it; provided, however, that such liens upon
property of PDGR will be limited to the property affected thereby immediately
prior to the Merger. All corporate acts, plans, policies, agreements,
arrangements, approvals and authorizations of PDGR, its shareholders, Board of
Directors and committees thereof, officers and agents which were valid and
effective immediately prior to the Effective Time, shall be taken for all
purposes as the acts, plans, policies, agreements, arrangements, approvals and
authorizations of the Surviving Corporation, its shareholders, Board of
Directors and committees thereof, respectively, and shall be as effective and
binding thereon as the same were with respect to PDGR.
6. Conversion of Shares. At the Effective Time, by virtue of the Merger
and without any action on the part of the holder thereof:
a. Each share of PDGR Common Stock outstanding immediately prior to the
Effective Time shall be converted into, and shall become, one fully paid and
nonassessable share of ICHOR Common Stock.
[b. Each share of PDGR Preferred Stock outstanding immediately prior to
the Effective Time shall be converted into, and shall become, one fully paid
and nonassessable share of ICHOR Preferred Stock.]
c. The 100 shares of ICHOR Common Stock issued and outstanding in the
name of PDGR shall be cancelled and retired, and
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<PAGE> 13
no payment shall be made with respect thereto, and such shares shall resume the
status of unauthorized and unissued shares of ICHOR Common Stock.
7. Stock Certificates.
a. At and after the Effective Time, all of the outstanding certificates
which immediately prior to the Effective Time represented shares of PDGR Common
Stock shall be deemed for all purposes to evidence ownership of, and to
represent shares of, ICHOR Common Stock into which the shares of PDGR Common
Stock formerly represented by such certificates have been converted as herein
provided. The registered owner on the books and records of PDGR or its
transfer agent of any such outstanding stock certificate shall, until such
certificates shall have been surrendered for transfer or otherwise accounted
for to the Surviving Corporation or its transfer agent, have and be entitled to
exercise any voting or other rights with respect to and to receive any
dividends and other distributions upon the shares of ICHOR Common Stock
evidenced by such outstanding certificate as above provided. Nothing contained
herein shall be deemed to require the holder of any shares of PDGR Common Stock
to surrender the certificate or certificates representing such shares in
exchange for a certificate or certificates representing shares of ICHOR Common
Stock.
[b. At and after the Effective Time, all of the outstanding certificates
which immediately prior to the Effective Time represented shares of PDGR
Preferred Stock shall be deemed for all purposes to evidence ownership of, and
to represent shares of, ICHOR Preferred Stock into which the shares of PDGR
Preferred Stock formerly represented by such certificates have been converted
as herein provided. The registered owner on the books and records of PDGR or
its transfer agent of any such outstanding stock certificate shall, until such
certificates shall have been surrendered for transfer or otherwise accounted
for to the Surviving Corporation or its transfer agent, have and be entitled to
exercise any voting or other rights with respect to and to receive any
dividends and other distributions upon the shares of ICHOR Preferred Stock
evidenced by such outstanding certificate as above provided. Nothing contained
herein shall be deemed to require the holder of any shares of PDGR Preferred
Stock to surrender the certificate or certificates representing such shares in
exchange for a certificate or certificates representing shares of ICHOR
Preferred Stock.]
8. Options. Each right in or to, or option to purchase, shares of PDGR
Common Stock, granted under PDGR's 1995 Qualified Incentive Stock Option Plan
(the "1995 Plan") or its Amended 1994 Stock Option Plan (the "1994 Plan")
(collectively, the "Plans") or otherwise, which is outstanding immediately
prior to the Effective Time, shall, by virtue of the Merger and without any
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<PAGE> 14
action on the part of the holder thereof, be converted into and become a right
in or to, or an option to purchase at the same option price per share, the same
number of shares of ICHOR Common Stock, upon the same terms and subject to the
same conditions as set forth in the 1994 Plan or the 1995 Plan, as the case may
be, or otherwise as in effect at the Effective Time. The same number of shares
of ICHOR Common Stock shall be reserved for purposes of the outstanding options
as is equal to the number of shares of PDGR Common Stock so reserved as of the
Effective Time. As of the Effective Time, the Surviving Corporation hereby
assumes the 1994 Plan and the 1995 Plan and all obligations of PDGR under such
Plans, including the outstanding rights or options or portions thereof granted
pursuant to the Plans and otherwise.
9. Other Employee Benefit Plans. As of the Effective Time, the Surviving
Corporation hereby assumes all obligations of PDGR under any and all employee
benefit plans in effect as of the Effective Time or with respect to which
employee rights or accrued benefits are outstanding as of the Effective Time.
10. Warrants. Each warrant to purchase PDGR Common Stock (collectively,
the "PDGR Warrants") which is outstanding immediately prior to the Effective
Time shall, by virtue of the Merger and without any action on the part of the
holder thereof, be converted into and become a warrant to purchase the same
number of shares of ICHOR Common Stock at the same exercise price per share,
upon the same terms and subject to the same conditions as set forth in the
applicable warrant agreement or warrant certificate as in effect at the
Effective Time. The same number of shares of ICHOR Common Stock shall be
reserved for purposes of the exercise of the outstanding PDGR Warrants as is
equal to the number of shares of PDGR Common Stock so reserved as of the
Effective Time. As of the Effective Time, the Surviving Corporation hereby
assumes all obligations of PDGR with respect to the PDGR Warrants.
At and after the Effective Time, all of the outstanding certificates which
immediately prior to the Effective Time represented PDGR Warrants shall be
deemed for all purposes to evidence ownership of, and to represent, warrants to
purchase shares of ICHOR Common Stock. The registered owner on the books and
records of PDGR or its transfer agent of any such outstanding warrant
certificate shall, until such certificates shall have been surrendered for
transfer or otherwise accounted for to the Surviving Corporation or its
transfer agent, have and be entitled to exercise any rights with respect to the
warrants evidenced by such outstanding warrant certificate as above provided.
Nothing contained herein shall be deemed to require the holder of any PDGR
Warrants to surrender the warrant certificate or certificates representing such
PDGR Warrants in exchange for a certificate or certificates representing
warrants to purchase ICHOR Common Stock.
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<PAGE> 15
11. Conditions. The consummation of the Merger is subject to satisfaction
of the following conditions prior to the Effective Time:
a. The Merger shall have received the requisite approval of the holders
of a majority of the shares of PDGR Common Stock and all necessary action shall
have been taken to authorize the execution, delivery and performance of the
Merger Agreement by PDGR and ICHOR.
b. All approvals and consents necessary or desirable, if any, in
connection with the consummation of the Merger shall have been obtained.
c. No suit, action, proceeding or other litigation shall have been
commenced or threatened to be commenced which, in the opinion of PDGR or ICHOR,
would pose a material restriction on or impair consummation of the Merger,
performance of this Merger Agreement or the conduct of the business of ICHOR
after the Effective Time, or create a risk of subjecting PDGR or ICHOR, or their
respective shareholders, officers or directors, to material damages, costs,
liability or other relief in connection with the Merger or this Merger
Agreement.
12. Governing Law. This Merger Agreement shall be governed by and
construed in accordance with the laws of the Commonwealth of Pennsylvania
applicable to contracts entered into and to be performed wholly within the
Commonwealth of Pennsylvania, except to the extent that the laws of the State
of Delaware are mandatorily applicable to the Merger.
13. Amendment. Subject to applicable law and subject to the rights of
PDGR's shareholders further to approve any amendment which would have a
material adverse effect on such shareholders, this Merger Agreement may be
amended, modified or supplemented by written agreement of the parties hereto at
any time prior to the Effective Time with respect to any of the terms contained
herein.
14. Deferral or Abandonment. At any time prior to the Effective Time,
this Merger Agreement may be terminated and the Merger may be abandoned or the
time or consummation of the Merger may be deferred for a reasonable time by the
Board of Directors of either PDGR or ICHOR or both, notwithstanding approval of
this Merger Agreement by the shareholders of PDGR or the stockholder of ICHOR,
or both, if circumstances arise which, in the opinion of the Board of Directors
of PDGR or ICHOR, make the Merger inadvisable or such deferral of the time of
consummation thereof advisable.
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<PAGE> 16
15. Counterparts. This Merger Agreement may be executed in any number of
counterparts, each of which when taken alone shall constitute an original
instrument and when taken together shall constitute one and the same Agreement.
16. Further Assurances. From time to time, as and when required or
requested by either PDGR or ICHOR, as applicable, or by its respective
successors and assigns, there shall be executed and delivered on behalf of the
other corporation, or by its respective successors and assigns, such deeds,
assignments and other instruments, and there shall be taken or caused to be
taken by it all such further and other action, as shall be appropriate or
necessary in order to vest, perfect or confirm, of record or otherwise, in the
Surviving Corporation the title to and possession of all property, interests,
assets, rights, privileges, immunities, powers, franchises and authority of
PDGR and otherwise to carry out the purposes of this Merger Agreement, and the
officers and directors of each corporation are fully authorized in the name and
on behalf of such corporation or otherwise, to take any and all such action and
to execute and deliver any and all such deeds, assignments and other
instruments.
IN WITNESS WHEREOF, PDGR and ICHOR have caused this Merger Agreement to be
signed by their respective duly authorized officers and delivered this _____
day of ______________, 1996.
PDG Remediation, Inc.
Attest:
___________________________ By:_____________________________
Secretary Title:__________________________
ICHOR Corporation
Attest:
___________________________ By:_____________________________
Secretary Title:__________________________
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<PAGE> 17
ANNEX B
SUBCHAPTER D - DISSENTERS RIGHTS
SECTION 1571. APPLICATION AND EFFECT OF SUBCHAPTER.
(A) GENERAL RULE. - Except as otherwise provided in subsection (b), any
shareholder of a business corporation shall have the right to dissent from, and
to obtain payment of the fair value of his shares in the event of, any
corporation action, or to otherwise obtain fair value for his shares, where
this part expressly provides that a shareholder shall have the rights and
remedies provided in this subchapter. See:
Section 1906(c) (relating to dissenters rights upon special treatment).
Section 1930 (relating to dissenters rights).
Section 1931(d) (relating to dissenters rights in share exchanges).
1932(c) (relating to dissenters rights in asset transfers).
Section 1952(d) (relating to dissenters rights in division).
Section 1962(c) (relating to dissenters rights in conversion).
Section 2104(b) (relating to procedure).
Section 2324 (relating to corporation option where a restriction or transfer
of a security is held invalid). 2325(b) (relating to minimum vote
requirement). 2704(c) (relating to dissenters rights upon election).
Section 2705(d) (relating to dissenters rights upon renewal of election).
Section 2907(a) (relating to proceedings to terminate breach of qualifying
conditions). Section 7104(b)(3) (relating to procedure).
(B) EXCEPTIONS. --
(1) Except as otherwise provided in paragraph (2), the holders of the shares
of any class or series of shares that, at the record date fixed to determine
the shareholders entitled to notice of and to vote at the meeting at which a
plan specified in any of section 1930, 1931(d), 1932(c) or 1952(d) is to be
voted on, are either:
(i) listed on a national securities exchange; or
(ii) held of record by more than 2,000 shareholders; shall not have the
right to obtain payment of the fair value of any such shares under this
subchapter.
(2) Paragraph (1) shall not apply to and dissenters rights shall be
available without regard to the exception provided in that paragraph in the
case of:
<PAGE> 18
(i) Shares converted by a plan if the shares are not converted solely into
shares of the acquiring, surviving, new or other corporation or solely into
such shares and money in lieu of fractional shares.
(ii) Shares of any preferred or special class unless the articles, the plan
or the terms of the transaction entitle all shareholders of the class to
vote thereon and require for the adoption of the plan or the effectuation of
the transaction of affirmative vote of a majority of the votes cast by all
shareholders of the class.
(iii) Shares entitled to dissenters rights under section 1906(c) (relating
to dissenters rights upon special treatment).
(3) The shareholders of a corporation that acquires by purchase, lease,
exchange or other disposition all or substantially all of the shares, property
or assets of another corporation by the issuance of shares, obligations or
otherwise, with or without assuming the liabilities of the other corporation
and with or without the intervention of another corporation or other person,
shall not be entitled to the rights and remedies of dissenting shareholders
provided in this subchapter regardless of the fact, if it be the case, that the
acquisition was accomplished by the issuance of voting shares of the
corporation to be outstanding immediately after the acquisition sufficient to
elect a majority or more of the directors of the corporation.
(C) GRANT OF OPTIONAL DISSENTERS RIGHTS. - The bylaws or a resolution of
the board of directors may direct that all or a part of the shareholders shall
have dissenters rights in connection with any corporate action or other
transaction that would otherwise not entitle such shareholders to dissenters
rights.
(D) NOTICE OF DISSENTERS RIGHTS. - Unless otherwise provided by statute, if
a proposed corporate action that would give rise to dissenters rights under
this subpart is submitted to a vote at a meeting of shareholders, there shall
be included in or enclosed with the notice of meeting:
(1) a statement of the proposed action and a statement that the
shareholders have a right to dissent and obtain payment of the fair value of
their shares by complying with the terms of the subchapter; and
(2) a copy of this subchapter.
(E) OTHER STATUTES. - The procedures of this subchapter shall also be
applicable to any transaction described in any statute
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other than this part that makes reference to this subchapter for the purpose of
granting dissenters rights.
(F) CERTAIN PROVISIONS OF ARTICLES INEFFECTIVE. - This subchapter may not be
relaxed by any provision of the articles.
(G) CROSS REFERENCES. - See sections 1105 (relating to restriction on
equitable relief), 1904 (relating to de facto transaction doctrine abolished)
and 2512 (relating to dissenters rights procedure).
SECTION 1572. DEFINITIONS.
The following words and phrases when used in this subchapter shall have the
meanings given to them in this section unless the context clearly indicates
otherwise:
"CORPORATION." The issuer of the shares held or owned by the dissenter before
the corporate action or the successor by merger, consolidation, division,
conversion or otherwise of that issuer. A plan of division may designate which
of the resulting corporations is the successor corporation for the purposes of
this subchapter. The successor corporation in a division shall have sole
responsibility for payments to dissenters and other liabilities under this
subchapter except as otherwise provided in the plan of division.
"DISSENTER." A shareholder or beneficial owner who is entitled to and does
assert dissenters rights under this subchapter and who has performed every act
required up to the time involved for the assertion of those rights.
"FAIR VALUE." The fair value of shares immediately before the effectuation
of the corporate action to which the dissenter objects, taking into account all
relevant factors, but excluding any appreciation or depreciation in
anticipation of the corporate action.
"INTEREST". Interest from the effective date of the corporate action until
the date of payment at such rate as is fair and equitable under all the
circumstances, taking into account all relevant factors, including the average
rate currently paid by the corporation on its principal bank loans.
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<PAGE> 20
SECTION 1573. RECORD AND BENEFICIAL HOLDERS AND OWNERS.
(A) RECORD HOLDERS OF SHARES. - A record holder of shares of a business
corporation may assert dissenters rights as to fewer than all of the shares
registered in his name only if he dissents with respect to all the shares of
the same class or series beneficially owned by any one person and discloses the
name and address of the person or persons on whose behalf he dissents. In that
event, his rights shall be determined as if the shares as to which he has
dissented and his other shares were registered in the names of different
shareholders.
(B) BENEFICIAL OWNERS OF SHARES. - A beneficial owner of shares of a
business corporation who is not the record holder may assert dissenters rights
with respect to shares held on his behalf and shall be treated as a dissenting
shareholder under the terms of this subchapter if he submits to the corporation
not later than the time of the assertion of dissenters rights a written consent
of the record holder. A beneficial owner may not dissent with respect to some
but less than all shares of the same class or series owned by the owner,
whether or not the shares so owned by him are registered in his name.
SECTION 1574. NOTICE OF INTENTION TO DISSENT.
If the proposed corporate action is submitted to a vote at a meeting of
shareholders of a business corporation, any person who wishes to dissent and
obtain payment of the fair value of his shares must file with the corporation,
prior to the vote, a written notice of intention to demand that he be paid the
fair value for his shares if the proposed action is effectuated, must effect no
change in the beneficial ownership of his shares from the date of such filing
continuously through the effective date of the proposed action and must refrain
from voting his shares in approval of such action. A dissenter who fails in
any respect shall not acquire any right to payment of the fair value of his
shares under this subchapter. Neither a proxy nor a vote against the proposed
corporate action shall constitute the written notice required by this section.
SECTION 1575. NOTICE TO DEMAND PAYMENT.
(A) GENERAL RULE. - If the proposed corporate action is approved by the
required vote at a meeting of shareholders of a business corporation, the
corporation shall mail a further notice to all dissenters who gave due notice
of intention to demand payment of the fair value of their shares and who
refrained from voting in favor of the proposed action. If the proposed
corporate action is to be taken without a vote of shareholders, the corporation
shall send to all shareholders who are entitled to
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dissent and demand payment of the fair value of their shares a notice of the
adoption of the plan or other corporate action. In either case, the notice
shall:
(1) State where and when a demand for payment must be sent and certificates
for certificated shares must be deposited in order to obtain payment.
(2) Inform holders of uncertificated shares to what extent transfer of
shares will be restricted from the time that demand for payment is received.
(3) Supply a form for demanding payment that includes a request for
certification of the date on which the shareholder, or the person on whose
behalf the shareholder dissents, acquired beneficial ownership of the shares.
(4) Be accompanied by a copy of this subchapter.
(B) TIME FOR RECEIPT OF DEMAND FOR PAYMENT. - The time set for receipt of
the demand and deposit of certificated shares shall be not less than 30 days
from the mailing of the notice.
SECTION 1576. FAILURE TO COMPLY WITH NOTICE TO DEMAND PAYMENT, ETC.
(A) EFFECT OF FAILURE OF SHAREHOLDER TO ACT. - A shareholder who fails to
timely demand payment, or fails (in the case of certificated shares) to timely
deposit certificates, as required by a notice pursuant to section 1575
(relating to notice to demand payment) shall not have any right under this
subchapter to receive payment of the fair value of his shares.
(B) RESTRICTION ON UNCERTIFICATED SHARES. - If the shares are not
represented by certificates, the business corporation may restrict their
transfer from the time of receipt of demand for payment until effectuation of
the proposed corporate action or the release of restrictions under the terms of
section 1577(a) (relating to failure to effectuate corporate action).
(C) RIGHTS RETAINED BY SHAREHOLDER. - The dissenter shall retain all other
rights of a shareholder until those rights are modified by effectuation of the
proposed corporate action.
SECTION 1577. RELEASE OF RESTRICTIONS OR PAYMENT FOR SHARES.
(A) FAILURE TO EFFECTUATE CORPORATE ACTION. - Within 60 days after the date
set for demanding payment and depositing certificates, if the business
corporation has not effectuated the
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<PAGE> 22
proposed corporate action, it shall return any certificates that have been
deposited and release uncertificated shares from any transfer restrictions
imposed by reason of the demand for payment.
(B) RENEWAL OF NOTICE TO DEMAND PAYMENT. - When uncertificated shares have
been released from transfer restrictions and deposited certificates have been
returned, the corporation may at any later time send a new notice conforming to
the requirements of section 1575 (relating to notice to demand payment), with
like effect.
(C) PAYMENT OF FAIR VALUE OF SHARES. - Promptly after effectuation of the
proposed corporate action, or upon timely receipt of demand for payment if the
corporate action has already been effectuated, the corporation shall either
remit to dissenters who have made demand and (if their shares are certificated)
have deposited their certificates the amount that the corporation estimates to
be the fair value of the shares, or give written notice that no remittance
under this section will be made. The remittance or notice shall be accompanied
by:
(1) The closing balance sheet and statement of income of the issuer of the
shares held or owned by the dissenter for a fiscal year ending not more than
16 months before the date of remittance or notice together with the latest
available interim financial statements.
(2) A statement of the corporation's estimate of the fair value of the
shares.
(3) A notice of the right of the dissenter to demand payment or
supplemental payment, as the case may be, accompanied by a copy of this
subchapter.
(D) FAILURE TO MAKE PAYMENT. - If the corporation does not remit the amount
of its estimate of the fair value of the shares as provided by subsection (c),
it shall return any certificates that have been deposited and release
uncertificated shares from any transfer restrictions imposed by reason of the
demand for payment. The corporation may make a notation on any such
certificate or on the records of the corporation relating to any such
uncertificated shares that such demand has been made. If shares with respect
to which notation has been so made shall be transferred, each new certificate
issued therefor or the records relating to any transferred uncertificated
shares shall bear a similar notation, together with the name of the original
dissenting holder or owner of such shares. A transferee of such shares shall
not acquire by such transfer any rights in the corporation other than those
that the original dissenter had after making demand for payment of their fair
value.
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SECTION 1578. ESTIMATE BY DISSENTER OF FAIR VALUE OF SHARES.
(A) GENERAL RULE. - If the business corporation gives notice of its estimate
of the fair value of the shares, without remitting such amount, or remits
payment of its estimate of the fair value of a dissenter's shares as permitted
by section 1577(c) (relating to payment of fair value of shares) and the
dissenter believes that the amount stated or remitted is less than the fair
value of his shares, he may send to the corporation his own estimate of the
fair value of the shares, which shall be deemed a demand for payment of the
amount or the deficiency.
(B) EFFECT OF FAILURE TO FILE ESTIMATE. - Where the dissenter does not file
his own estimate under subsection (a) within 30 days after the mailing by the
corporation of its remittance or notice, the dissenter shall be entitled to no
more than the amount stated in the notice or remitted to him by the
corporation.
SECTION 1579. VALUATION PROCEEDINGS GENERALLY.
(A) GENERAL RULE. - Within 60 days after the latest of:
(1) effectuation of the proposed corporate action;
(2) timely receipt of any demands for payment under section 1575 (relating
to notice to demand payment); or
(3) timely receipt of any estimates pursuant to section 1578 (relating to
estimate by dissenter of fair value of shares);
if any demands for payment remain unsettled, the business corporation may file
in court an application for relief requesting that the fair value of the shares
be determined by the court.
(B) MANDATORY JOINDER OF DISSENTERS. - All dissenters, wherever residing,
whose demands have not been settled shall be made parties to the proceeding as
in an action against their shares. A copy of the application shall be served
on each such dissenter. If a dissenter is a nonresident, the copy may be
served on him in the manner provided or prescribed by or pursuant to 42 Pa.C.S.
Ch. 53 (relating to bases of jurisdiction and interstate and international
procedure).
(C) JURISDICTION OF THE COURT. - The jurisdiction of the court shall be
plenary and exclusive. The court may appoint an appraiser to receive evidence
and recommend a decision on the issue of fair value. The appraiser shall have
such power and authority
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<PAGE> 24
as may be specified in the order of appointment or in any amendment thereof.
(D) MEASURE OF RECOVER. - Each dissenter who is made a party shall be
entitled to recover the amount by which the fair value of his shares is found
to exceed the amount, if any, previously remitted, plus interest.
(E) EFFECT OF CORPORATION'S FAILURE TO FILE APPLICATION. - If the
corporation fails to file an application as provided in subsection (a), any
dissenter who made a demand and who has not already settled his claim against
the corporation may do so in the name of the corporation at any time within 30
days after the expiration of the 60-day period. If a dissenter does not file
an application within the 30-day period, each dissenter entitled to file an
application shall be paid the corporation's estimate of the fair value of the
shares and no more, and may bring an action to recover any amount not
previously remitted.
SECTION 1580. COSTS AND EXPENSES OF VALUATION PROCEEDINGS.
(A) GENERAL RULE. - The costs and expenses of any proceeding under section
1579 (relating to valuation proceedings generally), including the reasonable
compensation and expenses of the appraiser appointed by the court, shall be
determined by the court and assessed against the business corporation except
that any part of the costs and expenses may be apportioned and assessed as the
court deems appropriate against all or some of the dissenters who are parties
and whose action in demanding supplemental payment under section 1578 (relating
to estimate by dissenter of fair value of shares) the court find to be
dilatory, obdurate, arbitrary, vexatious or in bad faith.
(B) ASSESSMENT OF COUNSEL FEES AND EXPERT FEES WHERE LACK OF GOOD FAITH
APPEARS. - Fees and expenses of counsel and of experts for the respective
parties may be assessed as the court deems appropriate against the corporation
and in favor of any or all dissenters if the corporation failed to comply
substantially with the requirements of this subchapter and may be assessed
against either the corporation or a dissenter, in favor of any other party, if
the court finds that the party against whom the fees and expenses are assessed
acted in bad faith or in a dilatory, obdurate, arbitrary or vexatious manner in
respect to the rights provided by this subchapter.
(C) AWARD OF FEES FOR BENEFITS TO OTHER DISSENTERS. - If the court finds
that the services of counsel for any dissenter were of substantial benefit to
other dissenters similarly situated and should not be assessed against the
corporation, it may award to
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those counsel reasonable fees to be paid out of the amounts awarded to the
dissenters who were benefited.
9
<PAGE> 26
ANNEX C
THIS FORM IS TO BE USED ONLY BY PDG REMEDIATION SHAREHOLDERS WHO WANT TO
EXERCISE THEIR DISSENTERS RIGHTS. SHAREHOLDERS WHO WANT TO SURRENDER THEIR
CERTIFICATES FOR SHARES OF PDG REMEDIATION, INC. FOR CERTIFICATES REPRESENTING
AN EQUAL NUMBER OF SHARES OF ICHOR CORPORATION AS PROVIDED IN THE MERGER
AGREEMENT DESCRIBED IN THE ACCOMPANYING INFORMATION STATEMENT SHOULD NOT
COMPLETE THIS FORM.
To: ICHOR Corporation
300 Oxford Drive
Monroeville, Pennsylvania 15146
ATTN: Corporate Secretary
The undersigned hereby demands payment, pursuant to Chapter 15, Subchapter D
(Dissenters Rights) of the Pennsylvania Business Corporation Law of 1988, with
respect to the number of shares of stock of PDG Remediation, Inc. ("Shares")
described below:
Total Number
of Shares Date of Acquisition of
Certificate Represented by Shares Represented
Number(s) Certificate(s) by Certificate(s)
- ----------- -------------- ---------------------
The undersigned dissenting shareholder hereby certifies that the date(s) on
which the undersigned dissenting shareholder, or the person on whose behalf the
undersigned dissenting shareholder dissents, acquired beneficial ownership of
the Shares described above, correspond(s) with the date(s) appearing under
"Date of Acquisition of Shares Represented by Certificate(s)."
The undersigned dissenting shareholder understands that in order to exercise
dissenters rights, certificates representing the Shares must be deposited with
ICHOR Corporation at the above address, on or before ______________, 1996.
___________________________________
Signature of Dissenting Shareholder
Dated: _________________ Name: _____________________________
Address: __________________________
__________________________
