1
AGREEMENT AND PLAN OF MERGER
DATED AS OF
JANUARY 21, 2001
AMONG
TUSCARORA INCORPORATED,
SCA PACKAGING INTERNATIONAL B.V.
AND
SCA PACKAGING USA, INC.
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TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS............................................................................... 1
ARTICLE II THE MERGER................................................................................ 5
2.01 The Merger........................................................................... 5
2.02 Organizational Documents............................................................. 6
2.03 Directors and Officers............................................................... 6
ARTICLE III CONVERSION OF SECURITIES AND RELATED MATTERS.............................................. 6
3.01 Conversion of Capital Stock.......................................................... 6
3.02 Exchange of Certificates and Cash.................................................... 7
3.03 Dissenting Shares.................................................................... 8
3.04 Tuscarora Stock Options, Phantom Shares and Tuscarora Common Stock Purchase
Plan................................................................................. 8
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF TUSCARORA............................................... 9
4.01 Corporate Existence and Power........................................................ 9
4.02 Corporate Authorization.............................................................. 9
4.03 Governmental Authorization........................................................... 10
4.04 Non-Contravention.................................................................... 10
4.05 Capitalization....................................................................... 10
4.06 Subsidiaries......................................................................... 11
4.07 Tuscarora SEC Documents.............................................................. 11
4.08 Financial Statements; No Material Undisclosed Liabilities............................ 12
4.09 Proxy Statement...................................................................... 12
4.10 Absence of Certain Changes........................................................... 13
4.11 Litigation........................................................................... 13
4.12 Taxes................................................................................ 13
4.13 Employee Benefits.................................................................... 13
4.14 Compliance with Laws; Licenses, Permits and Registrations............................ 15
4.15 Title to Properties.................................................................. 15
4.16 Intellectual Property................................................................ 16
4.17 Environmental Matters................................................................ 16
4.18 Finders' Fees; Opinions of Financial Advisor......................................... 17
4.19 Required Vote; Board Approval........................................................ 17
4.20 State Takeover Statutes; Rights Agreement............................................ 18
4.21 Labor Matters........................................................................ 18
4.22 Year 2000............................................................................ 18
4.23 Certain Contracts.................................................................... 19
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TABLE OF CONTENTS
(CON'T)
PAGE
ARTICLE V REPRESENTATIONS AND WARRANTIES OF SCA PACKAGING........................................... 19
5.01 Corporate Existence and Power........................................................ 19
5.02 Corporate Authorization.............................................................. 19
5.03 Governmental Authorization........................................................... 19
5.04 Non-Contravention.................................................................... 20
5.05 Litigation........................................................................... 20
5.06 Proxy Statement...................................................................... 20
5.07 Finders' Fees........................................................................ 20
ARTICLE VI COVENANTS OF TUSCARORA.................................................................... 20
6.01 Tuscarora Interim Operations......................................................... 20
6.02 Shareholder Meeting.................................................................. 23
6.03 Acquisition Proposals; Board Recommendation.......................................... 23
ARTICLE VII COVENANTS OF SCA PACKAGING................................................................ 25
7.01 Director and Officer Liability....................................................... 25
7.02 Conduct of SCA Acquisition........................................................... 26
ARTICLE VIII COVENANTS OF SCA PACKAGING AND TUSCARORA.................................................. 26
8.01 Reasonable Best Efforts.............................................................. 26
8.02 Certain Filings; Cooperation in Receipt of Consents.................................. 26
8.03 Public Announcements................................................................. 27
8.04 Access to Information; Notification of Certain Matters............................... 27
8.05 Further Assurances................................................................... 28
8.06 Confidentiality...................................................................... 28
8.07 Legal Opinion........................................................................ 28
8.08 Employment Continuation Agreements................................................... 28
ARTICLE IX CONDITIONS TO THE MERGER.................................................................. 28
9.01 Conditions to the Obligations of Each Party.......................................... 28
9.02 Conditions to the Obligations of Tuscarora........................................... 29
9.03 Conditions to the Obligations of SCA Packaging and SCA Acquisition................... 29
ARTICLE X TERMINATION............................................................................... 30
10.01 Termination.......................................................................... 30
10.02 Effect of Termination................................................................ 31
10.03 Fees and Expenses.................................................................... 31
ARTICLE XI MISCELLANEOUS............................................................................. 32
11.01 Notices.............................................................................. 32
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TABLE OF CONTENTS
(CON'T)
PAGE
11.02 Survival of Representations, Warranties and Covenants after the Effective Time....... 33
11.03 Amendments; No Waivers............................................................... 33
11.04 Successors and Assigns............................................................... 33
11.05 Governing Law........................................................................ 33
11.06 Counterparts; Effectiveness; Third Party Beneficiaries............................... 33
11.07 Waiver of Jury Trial................................................................. 34
11.08 Enforcement.......................................................................... 34
11.09 Entire Agreement..................................................................... 34
EXHIBITS
Exhibit A - Opinion of Xxxx Xxxxx
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER dated as of January 21, 2001 (the
"Agreement"), among TUSCARORA INCORPORATED, a Pennsylvania corporation
("Tuscarora"), SCA PACKAGING INTERNATIONAL B.V., a company organized under the
laws of the kingdom of the Netherlands ("SCA Packaging"), and SCA PACKAGING USA,
INC., a Pennsylvania corporation and an indirect wholly-owned subsidiary of SCA
Packaging's ultimate parent company ("SCA Acquisition").
RECITALS
WHEREAS, the Boards of Directors of Tuscarora and SCA Packaging each
have determined that a business combination between Tuscarora and SCA
Acquisition is advisable and in the best interests of their respective companies
and shareholders, and presents an opportunity for their respective companies to
achieve long-term strategic and financial benefits, and accordingly have agreed
to effect the merger provided for herein upon the terms and subject to the
conditions set forth herein;
WHEREAS, by resolutions duly adopted, the respective Boards of
Directors of Tuscarora, SCA Packaging and SCA Acquisition have approved and
adopted this Agreement and the transactions contemplated hereby.
NOW, THEREFORE, in consideration of the foregoing, and of the
representations, warranties, covenants and agreements contained herein, and
intending to be legally bound, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
(a) As used herein, the following terms have the following meanings:
"Acquisition Proposal" means any offer or proposal for, or indication
of interest in, a merger, consolidation, share exchange, business combination,
reorganization, recapitalization, liquidation, dissolution or other similar
transaction involving, or any direct or indirect purchase of 15% or more of the
assets or any purchase or sale of, or tender offer or exchange offer for, 15% or
more of any class of equity securities of, Tuscarora or any Tuscarora Subsidiary
other than the transactions contemplated by this Agreement.
"Affiliate" means, with respect to any Person, any other Person,
directly or indirectly, controlling, controlled by, or under common control
with, such Person. For purposes of this definition, the term "control"
(including the correlative terms "controlling", "controlled by" and "under
common control with") means the possession, direct or indirect, of the power to
direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, by contract, or otherwise.
"Applicable Law" shall mean all applicable federal, state, local,
municipal, foreign, international, multinational, or other administrative order,
constitution, law, ordinance, principle of common law, regulation, statute or
treaty and in the case of Tuscarora or any Tuscarora Subsidiary any judgment or
decree applicable to Tuscarora or any Tuscarora Subsidiary or any of their
assets or properties.
"Articles Amendment" means the Amendment to the Articles of
Incorporation of Tuscarora, pursuant to which Tuscarora's Restated Articles of
Incorporation will be amended to provide that Subchapter E of Chapter 25 of the
PBCL (Sections 2541 to 2548) will not be applicable to Tuscarora.
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"Business Day" means any day other than a Saturday, Sunday or one on
which banks are authorized by law to close in New York, New York.
"Code" means the Internal Revenue Code of 1986, as amended.
"Employment Agreements" means the employment agreements between
Tuscarora and Xxxx X. X'Xxxxx, Xx., between Tuscarora and Xxxxx X. X'Xxxxx and
between Tuscarora and Xxxxx X. Xxxxxxx, and entered into contemporaneously
herewith and dated January 19, 2001.
"Employment Continuation Agreements" means the employment agreements to
be offered by Tuscarora to certain officers of Tuscarora in substantially the
form included as Exhibit 6.01A to the Tuscarora Disclosure Schedule.
"Environmental Law" means any Applicable Law of any Governmental Entity
relating to human health, safety or protection of the environment or to
emissions, discharges, releases or threatened releases of pollutants,
contaminants or Hazardous Materials in the environment (including, without
limitation, ambient air, surface water, ground water, land surface or subsurface
strata), or otherwise relating to the treatment, storage, disposal, transport or
handling of any pollutant, contaminant or Hazardous Material.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
"Governmental Entity" means any federal, state or local governmental
authority, any transgovernmental authority or any court, administrative or
regulatory agency or commission or other governmental authority or agency,
domestic or foreign.
"Hazardous Material" means (A) any petroleum or petroleum products,
radioactive materials, asbestos in any form that is or could become friable,
urea formaldehyde foam insulation and transformers or other equipment that
contain dielectric fluid containing levels of polychlorinated biphenyls (PCBs);
(B) any chemicals, materials, substances or wastes which are now or hereafter
become defined as or included in the definition of "hazardous substances,"
"hazardous wastes," "hazardous materials," "extremely hazardous wastes,"
"restricted hazardous wastes," "toxic substances," "toxic pollutants" or words
of similar import, under any Environmental Law; and (C) any other chemical,
material, substance or waste, exposure to which is now or hereafter prohibited,
limited or regulated by any Governmental Entity.
"Knowledge" means, with respect to the matter in question, that any of
the executive officers of Tuscarora, SCA Packaging or SCA Acquisition, as the
case may be, has actual knowledge of such matter after due inquiry. For purposes
hereof, the executive officers of Tuscarora shall be Xxxx X. X'Xxxxx, Xx., Xxxxx
X. X'Xxxxx and Xxxxx X. Xxxxxxx and the executive officers of SCA Packaging and
SCA Acquisition shall be Xxxxx Xxxxxxxx, Xxxxxx Xxxxxxx and Xxxxxx Xxxxxxx.
"Lien" means, with respect to any asset, mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset;
provided, however, that the term "Lien" shall not include (i) liens for water
and sewer charges and current taxes not yet due and payable or being contested
in good faith and (ii) mechanics', carriers', workers', repairers',
materialmen's, warehousemen's and other similar liens arising or incurred in the
ordinary course of business with respect to amounts not yet due and payable or
being contested in good faith.
"Material Adverse Effect" means a material adverse effect on the
assets, properties, financial condition, business or results of operations of a
Person and its Subsidiaries, taken as a whole, arising out of any event or
development, but shall exclude any material adverse effect arising out of any
event or development relating to (i) U.S. or global economic or industry
conditions, (ii) changes in U.S. or global financial markets or conditions,
(iii) any generally applicable change in law, rule or regulation or GAAP
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or interpretation of any thereof, and/or (iv) the announcement of this Agreement
or the transactions contemplated hereby. "Tuscarora Material Adverse Effect"
means a Material Adverse Effect in respect of Tuscarora and "SCA Packaging
Material Adverse Effect" means a Material Adverse Effect in respect of SCA
Packaging.
"PBCL" means the Pennsylvania Business Corporation Law of 1988, as
amended.
"Person" means an individual, a corporation, a limited liability
company, a partnership, an association, a trust or any other entity or
organization, including any Governmental Entity.
"Proxy Statement" means the proxy statement relating to the Tuscarora
Shareholder Meeting, together with any amendments or supplements thereto and
including any information incorporated by reference therein.
"Rights" means all rights issued under the Rights Agreement.
"Rights Agreement" means the Rights Agreement dated August 17, 1998,
between Tuscarora and ChaseMellon Shareholder Services, LLC, as amended
effective contemporaneously with the execution and delivery of this Agreement.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
"Significant Subsidiary" means any Subsidiary that constitutes a
"significant subsidiary" of such Person within the meaning of Rule 1-02 of
Regulation S-X of the Exchange Act.
"Subsidiary" means, with respect to any Person, any corporation or
other entity of which securities or other ownership interests having ordinary
voting power to elect a majority of the board of directors or other Persons
performing similar functions are directly or indirectly owned by such Person.
"Superior Proposal" means a bona fide, written Acquisition Proposal for
at least a majority of the outstanding Tuscarora Common Shares that is on terms
that a majority of Tuscarora's Board of Directors determines in good faith
(after consultation with an investment bank of nationally recognized reputation
and Tuscarora's outside counsel): (i) would result in a transaction that is more
favorable to Tuscarora's shareholders (in their capacities as shareholders) from
a financial point of view (taking into account, among other things, all legal,
financial, regulatory and other aspects of the proposal and the identity of the
offeror) than the transactions contemplated hereby (after giving effect to any
revised proposal made by or on behalf of SCA Packaging prior to the end of the
five-Business-Day-period referred to in Section 6.03(d)); and (ii) is reasonably
capable of being completed.
"Tax" or "Taxes" means all federal, state, county, local or foreign
taxes (including, but not limited to, withholding taxes), assessments, fees,
imports, levies and other governmental charges, and any related interest and
penalties of Tuscarora or any of the Tuscarora Subsidiaries.
"Tax Return" means any report, return or other information required to
be supplied to any taxing authority with respect to Taxes, or maintained by
Tuscarora or any of the Tuscarora Subsidiaries.
"Third Party Acquisition Event" means (i) the consummation of an
Acquisition Proposal involving the purchase of a majority of either the equity
securities of Tuscarora or of the consolidated assets of Tuscarora and the
Tuscarora Subsidiaries, taken as a whole, or any such transaction that, if it
had been proposed prior to the termination of this Agreement would have
constituted an Acquisition Proposal or (ii) the entering into by Tuscarora or
any of the Tuscarora Subsidiaries of a definitive agreement with respect to any
such transaction.
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"Tuscarora Balance Sheet" means Tuscarora's consolidated balance sheet
included in the Tuscarora 10-K relating to its fiscal year ended on August 31,
2000.
"Tuscarora Common Share" means one share of common stock, without par
value of Tuscarora, and "Tuscarora Common Shares" means more than one share of
common stock, without par value, of Tuscarora.
"Tuscarora SEC Documents" means (i) the annual reports on Form 10-K of
Tuscarora (the "Tuscarora 10-Ks") for the fiscal years ended August 31, 1998,
August 31, 1999 and August 31, 2000, (ii) the quarterly reports on Form 10-Q of
Tuscarora (the "Tuscarora 10-Qs") for the fiscal quarters ended in November,
February and May of fiscal years 1998, 1999 and 2000, and for the fiscal quarter
ended in November of fiscal year 2001, (iii) Tuscarora's proxy or information
statements relating to meetings of, or actions taken without a meeting by, the
Tuscarora shareholders held since August 31, 1998 and (iv) all other reports,
filings, registration statements and other documents filed by Tuscarora with the
SEC since August 31, 1998.
"Tuscarora Subsidiary" means any Subsidiary of Tuscarora.
(b) Each of the following terms is defined in the Section set forth
opposite such term:
Terms Section
----- -------
Agreement Preamble
Articles of Merger 2.01(b)
Business Restrictions 4.23
Cash Payment 3.04
CERCLA 4.17(d)
Certificates 3.02(a)
Closing 2.01(d)
COBRA 4.13(f)
Computer Equipment 4.22(a)
Department of State 2.01(b)
Deutsche Banc 5.07
Dissenting Shares 3.03(a)
Dissenting Shareholder 3.03(a)
Effective Time 2.01(b)
End Date 10.01(b)(i)
Environmental Laws 4.17(b)
ERISA 4.13(a)
ERISA Affiliate 4.13(a)
Exchange Agent 3.02(a)
Exchange Fund 3.02(a)
GAAP 4.08(a)
HSR Act 4.03
Indemnified Parties 7.01(b)
Indemnifying Party 7.01(b)
Merger 2.01(a)
Merger Consideration 3.01(b)
Multiemployer Plan 4.13(b)
Options 3.04
Order 4.11
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Terms Section
----- -------
Xxxxxx/Hunter 4.18
Phantom Shares 3.04
Reimbursable Expenses 10.03(b)
Release 4.17(b)
Retirement Plan 4.13(b)
Rights Definitions
Rights Agreement Definitions
SCA Acquisition Preamble
SCA Acquisition Common Share 3.01(a)
SCA Packaging Preamble
SCA Packaging Breach Fee 10.03(d)
Surviving Corporation 2.01(a)
Termination Fee 10.03(c)
Third Party Acquisition Event 10.03(c)
Tuscarora Preamble
Tuscarora Breach Fee 10.03(d)
Tuscarora Disclosure Schedule Article IV
Tuscarora Employee Plans 4.13(a)
Tuscarora Intellectual Property 4.16
Tuscarora Material Adverse Effect Definitions
Tuscarora Option 3.04
Tuscarora Permits 4.14(b)
Tuscarora Preferred Stock 4.05
Tuscarora Recommendation 6.02
Tuscarora Returns 4.12
Tuscarora Securities 4.05(b)
Tuscarora Shareholder Approval 4.19(a)
Tuscarora Shareholder Meeting 6.02
Tuscarora Stock Option Plans 3.04
Tuscarora 10-Ks Definitions
Tuscarora 10-Qs Definitions
Y2K 4.22(a)
ARTICLE II
THE MERGER
2.01 THE MERGER.
(a) At the Effective Time, SCA Acquisition shall be merged (the
"Merger") with and into Tuscarora in accordance with the terms and conditions of
this Agreement and of the PBCL, at which time the separate existence of SCA
Acquisition shall cease and Tuscarora shall continue its existence. In its
capacity as the corporation surviving the Merger, this Agreement sometimes
refers to Tuscarora as the "Surviving Corporation".
(b) As soon as practicable after satisfaction or, to the extent
permitted hereby, waiver of all conditions to the Merger set forth herein,
Tuscarora and SCA Acquisition shall file articles of merger (the
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"Articles of Merger") with the Department of State of the Commonwealth of
Pennsylvania (the "Department of State") and make all other filings or
recordings required by the PBCL in connection with the Merger. The "Effective
Time" shall be the date and time that the Articles of Merger are filed with the
Department of State (unless otherwise agreed upon by the parties and specified
in the Articles of Merger, in which case, subject to Section 1928 of the PBCL,
the Effective Time shall be the date and time so specified).
(c) From and after the Effective Time, the Merger shall have the
effects set forth in Section 1929 of the PBCL.
(d) The closing of the Merger (the "Closing") shall be held at the
offices of Xxxxxxxx Chance Xxxxxx & Xxxxx LLP, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000 (or such other place as agreed by the parties), on a date and time to
be specified by the parties, which shall be no later than 10:00 a.m., New York
time, on the first Business Day after satisfaction or, to the extent permitted
hereby, waiver of the conditions set forth in Article IX, unless the parties
hereto agree to another date.
2.02 ORGANIZATIONAL DOCUMENTS. THE ARTICLES OF MERGER SHALL PROVIDE
THAT AT THE EFFECTIVE TIME (i) SCA ACQUISITION'S ARTICLES OF INCORPORATION IN
EFFECT IMMEDIATELY PRIOR TO THE EFFECTIVE TIME SHALL BE THE SURVIVING
CORPORATION'S ARTICLES OF INCORPORATION, PROVIDED THAT THE SURVIVING CORPORATION
SHALL CHANGE ITS NAME TO TUSCARORA INCORPORATED AND (ii) SCA ACQUISITION'S
BYLAWS IN EFFECT IMMEDIATELY PRIOR TO THE EFFECTIVE TIME SHALL BE THE SURVIVING
CORPORATION'S BYLAWS, IN EACH CASE UNTIL AMENDED IN ACCORDANCE WITH APPLICABLE
LAW.
2.03 DIRECTORS AND OFFICERS. From and after the Effective Time (until
duly removed or until successors are duly elected or appointed and qualified),
(i) SCA Acquisition's directors at the Effective Time shall be the Surviving
Corporation's directors and (ii) subject to the Employment Agreements, and to
the extent accepted, the Employment Continuation Agreements, Tuscarora's
officers immediately prior to the Effective Time shall be the Surviving
Corporation's officers.
ARTICLE III
CONVERSION OF SECURITIES AND RELATED MATTERS
3.01 CONVERSION OF CAPITAL STOCK. At the Effective Time, by virtue of
the Merger and without any action on the part of the holder thereof:
(a) EACH SHARE OF COMMON STOCK, WITHOUT PAR VALUE PER SHARE, OF SCA
ACQUISITION (EACH, A "SCA ACQUISITION COMMON SHARE") OUTSTANDING IMMEDIATELY
PRIOR TO THE EFFECTIVE TIME SHALL BE CONVERTED INTO AND BECOME ONE FULLY PAID
AND NONASSESSABLE SHARE OF COMMON STOCK, WITHOUT PAR VALUE PER SHARE, OF THE
SURVIVING CORPORATION.
(b) Subject to Section 3.03, each Tuscarora Common Share and associated
Right outstanding immediately prior to the Effective Time shall be converted
into the right to receive $21.50 per share in cash (the "Merger Consideration")
payable without interest to the holder of such share upon surrender of the
certificates that formerly evidenced such Tuscarora Common Share in the manner
provided in Section 3.02. Each such Tuscarora Common Share at the Effective Time
shall no longer be outstanding and shall automatically be cancelled and retired
and shall cease to exist, and each holder of a certificate representing any such
Tuscarora Common Share shall cease to have any rights with respect thereto,
except the right to receive the Merger Consideration per share, upon surrender
of such certificate in accordance with Section 3.02, without interest.
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(c) Each Tuscarora Common Share held by Tuscarora as treasury stock or
owned by SCA Packaging or any SCA Packaging Subsidiary immediately prior to the
Effective Time shall be canceled and retired and shall cease to exist, and no
payment shall be delivered in exchange thereof.
3.02 EXCHANGE OF CERTIFICATES AND CASH.
(a) Exchange Agent. Prior to the Effective Time, SCA Packaging shall
appoint a bank or trust company reasonably acceptable to Tuscarora as an agent
(the "Exchange Agent") for the benefit of holders of Tuscarora Common Shares for
the purpose of exchanging, pursuant to this Article III, certificates
("Certificates") that immediately prior to the Effective Time represented
outstanding Tuscarora Common Shares which were converted into the right to
receive the Merger Consideration. SCA Packaging will make available to the
Surviving Corporation for deposit with the Exchange Agent, as needed, the Merger
Consideration to be paid in respect of Tuscarora Common Shares pursuant to this
Article III (the "Exchange Fund"), and except as contemplated by Section 3.02(e)
or Section 3.02(f) hereof, the Exchange Fund shall not be used for any other
purpose.
(b) Exchange Procedures. As promptly as practicable after the Effective
Time, SCA Packaging shall cause the Surviving Corporation to send, or will cause
the Exchange Agent to send, to each holder of record of a Certificate or
Certificates a letter of transmittal and instructions (which shall be in
customary form and specify that delivery shall be effected, and risk of loss and
title shall pass, only upon delivery of the Certificates to the Exchange Agent),
for use in the exchange contemplated by this Section 3.02. Upon surrender of a
Certificate to the Exchange Agent, together with a duly executed letter of
transmittal, the holder of such Certificate shall be entitled to receive in
exchange therefor the Merger Consideration as provided in this Article III in
respect of the Tuscarora Common Shares represented by such Certificate (after
giving effect to any required withholding tax). Until surrendered as
contemplated by this Section 3.02, each Certificate shall be deemed at any time
after the Effective Time to represent only the right to receive the Merger
Consideration as provided in this Article III. If any portion of the Merger
Consideration is to be paid to a Person other than the Person in whose name the
Certificate is registered, it shall be a condition to such payment that the
Certificate so surrendered shall be properly endorsed or otherwise be in proper
form for transfer and that the Person requesting such payment shall pay to the
Exchange Agent any transfer or other taxes required as a result of such payment
to a Person other than the registered holder of such Certificate or establish to
the satisfaction of the Exchange Agent that such tax has been paid or is not
payable. If any Certificate shall have been lost, stolen or destroyed, upon the
making of an affidavit of that fact by the Person claiming such Certificate to
be lost, stolen or destroyed and, if required by SCA Packaging or the Surviving
Corporation, the posting by such Person of a bond, in such reasonable amount as
SCA Packaging or the Surviving Corporation may direct, as indemnity against any
claim that may be made against it with respect to such Certificate, the Exchange
Agent will deliver in exchange for such lost, stolen or destroyed Certificate,
the proper amount of the Merger Consideration as contemplated by this Article
III.
(c) No Further Ownership Rights in Tuscarora Common Shares. All cash
paid out upon surrender of Certificates in accordance with the terms hereof
shall be deemed to have been issued in full satisfaction of all rights
pertaining to such Tuscarora Common Shares represented thereby, and, as of the
Effective Time, the stock transfer books of Tuscarora shall be closed and there
shall be no further registration of transfers on Tuscarora's stock transfer
books of Tuscarora Common Shares outstanding immediately prior to the Effective
Time. If, after the Effective Time, Certificates are presented to the Surviving
Corporation for any reason, they shall be canceled and exchanged as provided in
this Section 3.02.
(d) Return of Merger Consideration. Upon demand by SCA Packaging, the
Exchange Agent shall deliver to SCA Packaging or the Surviving Corporation, as
designated by SCA Packaging, any
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portion of the Merger Consideration made available to the Exchange Agent
pursuant to this Section 3.02 that remains undistributed to holders of Tuscarora
Common Shares one hundred and eighty (180) days after the Effective Time.
Holders of Certificates who have not complied with this Section 3.02 prior to
such demand shall thereafter look only to the Surviving Corporation for payment
of any claim to the Merger Consideration.
(e) No Liability. None of SCA Packaging, SCA Acquisition, the Surviving
Corporation or the Exchange Agent shall be liable to any Person in respect of
any Tuscarora Common Shares (or dividends or distributions with respect thereto)
for any amounts paid to a public official pursuant to any applicable abandoned
property, escheat or similar law. Any amounts remaining unclaimed by any holder
of Tuscarora Common Shares immediately prior to such time when such amounts
would otherwise escheat to or become the property of any Governmental Entity,
shall, to the extent permitted by applicable laws, become the property of the
Surviving Corporation, free and clear of all claims or interest of any Person
previously entitled thereto.
(f) Withholding Rights. Each of the Surviving Corporation and SCA
Packaging shall be entitled to deduct and withhold from the Merger
Consideration, otherwise payable hereunder to any Person, such amounts as it is
required to deduct and withhold with respect to the making of such payment under
any provision of federal, state, local or foreign income tax law. To the extent
that the Surviving Corporation or SCA Packaging so withholds those amounts, such
withheld amounts shall be treated for all purposes of this Agreement as having
been paid to the holder of Tuscarora Common Shares in respect of which such
deduction and withholding was made by the Surviving Corporation or SCA
Packaging, as the case may be.
3.03 DISSENTING SHARES.
(a) Notwithstanding any provision of this Agreement to the contrary,
any issued and outstanding Tuscarora Common Shares ("Dissenting Shares") held by
a Dissenting Shareholder (as defined below) shall not be converted into the
Merger Consideration but shall become the right to receive such consideration as
may be determined to be due to such Dissenting Shareholder pursuant to the PBCL;
provided, however, that each Tuscarora Common Share outstanding immediately
prior to the Effective Time and held by a Dissenting Shareholder who, after the
Effective Time, loses or fails to perfect or withdraws his or her right of
appraisal, pursuant to the PBCL, shall be deemed to be converted as of the
Effective Time into the right to receive the Merger Consideration, without any
interest or dividends, if any, thereon. As used in this Agreement, the term
"Dissenting Shareholder" means any record holder or beneficial owner of
Tuscarora Common Shares who complies with all provisions of the PBCL (including
the provisions of Sections 1571 through 1580 of the PBCL) concerning the right
of holders of Tuscarora Common Shares to dissent from the Merger and demand fair
value for their shares in accordance with the PBCL.
(b) Tuscarora shall give SCA Packaging (i) prompt notice of any demands
for appraisal pursuant to the applicable provisions of the PBCL received by
Tuscarora, withdrawals of such demands, and any other instruments served
pursuant to the PBCL and received by Tuscarora and (ii) the opportunity to
participate in all negotiations and proceedings with respect to demands for
appraisal under the PBCL. Tuscarora shall not, except with the prior written
consent of SCA Packaging, make any payment with respect to any such demands for
appraisal or offer to settle or settle any such demands.
3.04 TUSCARORA STOCK OPTIONS, PHANTOM SHARES AND TUSCARORA COMMON STOCK
PURCHASE PLAN. Simultaneously with the execution of this Agreement, the Board of
Directors of Tuscarora (or, if appropriate, any committee thereof) has adopted
appropriate resolutions, and Tuscarora hereby agrees to take all other actions
necessary after the date hereof, if any, to provide (i) that each outstanding
stock
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option (each "Tuscarora Option") heretofore granted under any of Tuscarora's
stock plans, including, but not limited to, the Tuscarora Incorporated 1989
Stock Incentive Plan, as amended, and the Tuscarora Incorporated 1997 Stock
Incentive Plan (collectively, the "Tuscarora Stock Option Plans"), whether or
not then vested or exercisable, shall, at the Effective Time, be canceled, and
each holder thereof shall be entitled to receive a payment in cash equal to the
product of (y) the number of Tuscarora Common Shares subject to such Tuscarora
Option and (z) the excess, if any, of the Merger Consideration for Tuscarora
Common Shares over the exercise price per share subject to such Tuscarora
Option, (ii) that each phantom share unit ("Phantom Share") held for a director
or former director under Tuscarora's Deferred Compensation Plan for Non-Employee
Directors shall, at the Effective Time, be canceled and that each director or
former director be entitled to receive a payment in cash equal to the product of
(y) the number of Phantom Shares held by such owner and (z) the Merger
Consideration, and (iii) that each fractional share of Tuscarora Common Share
held in Tuscarora's Common Stock Purchase Plan shall, at the Effective Time, be
cancelled and that each owner of such fractional share interests shall be
entitled to receive a payment in cash equal to the product of (y) the fractional
shares held and (z) the Merger Consideration (subject in each case ((i), (ii) or
(iii)) to any applicable withholding taxes, the "Cash Payment"). As provided
herein, the Tuscarora Stock Option Plans and any feature of any benefit plan or
other plan, program or arrangement providing for the issuance or grant of any
interest or credit in respect of the capital stock of Tuscarora or any
Subsidiary shall terminate as of the Effective Time. Tuscarora will take all
steps necessary to ensure that none of Tuscarora or any of its Subsidiaries is
or will be bound by any Tuscarora Options, Phantom Shares, other options,
warrants, rights or agreements (collectively, an "Option") which would entitle
any person to acquire any capital stock of the Surviving Corporation or any of
its subsidiaries or to receive any payment in respect thereof (except for Cash
Payments to be made as provided in this Section) and to cause such Options to be
canceled or cause the holders of such Options to agree to such cancellation
thereof as provided herein.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF TUSCARORA
Except as disclosed in the Tuscarora SEC Documents filed with the SEC
by Tuscarora prior to the execution and delivery of this Agreement or in the
Tuscarora Disclosure Schedule delivered to SCA Packaging and SCA Acquisition
prior to the execution and delivery of this Agreement (the "Tuscarora Disclosure
Schedule") (it being understood any such disclosure shall apply to all
applicable representations and warranties, regardless of whether a specific
Section of this Agreement is specified but only to the extent it is reasonably
clear from the content of such disclosure that it relates to such
representations and warranties), Tuscarora represents and warrants to SCA
Packaging that:
4.01 CORPORATE EXISTENCE AND POWER. Tuscarora is a corporation duly
incorporated, validly existing and in good standing under the laws of the
Commonwealth of Pennsylvania, and has all corporate power and authority required
to own, operate and lease its properties and to carry on its business as now
conducted. Tuscarora is duly licensed, qualified or admitted to do business as a
foreign corporation and is in good standing in each jurisdiction where the
character of the property owned or leased by it or the nature of its activities
makes such qualification necessary, except where the failure to be so qualified,
individually or in the aggregate, would not be reasonably likely to have a
Tuscarora Material Adverse Effect. Tuscarora has heretofore made available to
SCA Packaging true and complete copies of Tuscarora's articles of incorporation
and bylaws as currently in effect.
4.02 CORPORATE AUTHORIZATION. The execution, delivery and performance
by Tuscarora of this Agreement and the consummation by Tuscarora of the
transactions contemplated hereby are within Tuscarora's corporate powers and,
except for the Tuscarora Shareholder Approval, have been duly authorized by all
necessary corporate action on the part of Tuscarora and each Tuscarora
Subsidiary. This
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Agreement has been duly and validly executed and delivered by Tuscarora, and
assuming that this Agreement constitutes the valid and binding obligation of SCA
Packaging and SCA Acquisition, this Agreement constitutes a valid and binding
agreement of Tuscarora, enforceable in accordance with its terms, subject to
bankruptcy, insolvency, reorganization, moratorium and similar laws, now or
hereafter in effect, relating to or affecting creditors' rights and remedies and
to general principles of equity.
4.03 GOVERNMENTAL AUTHORIZATION. The execution, delivery and
performance by Tuscarora of this Agreement and the consummation by Tuscarora of
the transactions contemplated hereby require no action by or in respect of, or
filing with, any Governmental Entity other than (a) the filing of Articles of
Merger in accordance with the PBCL; (b) compliance with any applicable
requirements of the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 0000 (xxx
"XXX Xxx"); (c) compliance with any applicable requirements of the Securities
Act and the Exchange Act; (d) such as may be required under any applicable
property transfer laws and the regulations promulgated thereunder listed in the
Tuscarora Disclosure Schedule; and (e) such other consents, approvals, actions,
orders, authorizations, registrations, declarations and filings which, if not
obtained or made, would not, individually or in the aggregate, prevent or
materially impair the ability of Tuscarora to consummate the transactions
contemplated by this Agreement or would not have a Tuscarora Material Adverse
Effect.
4.04 NON-CONTRAVENTION. The execution, delivery and performance by
Tuscarora of this Agreement and the consummation by Tuscarora of the
transactions contemplated hereby do not and will not (a) contravene or conflict
with Tuscarora's articles of incorporation or bylaws, or (b) assuming compliance
with the matters referred to in Section 4.03 and in the Tuscarora Disclosure
Schedule, (i) contravene or conflict with or constitute a violation of any
provision of any Applicable Law binding upon or applicable to Tuscarora or any
Tuscarora Subsidiary, (ii) constitute a default (or an event which with notice
or lapse of time or both would become a default) under or give rise to a right
of termination, cancellation or acceleration of any right or obligation of
Tuscarora or any Tuscarora Subsidiary, or to a loss of any benefit or status to
which Tuscarora or any Tuscarora Subsidiary is entitled under any provision of
any agreement, contract or other instrument binding upon Tuscarora or any
Tuscarora Subsidiary or any license, franchise, permit or other similar
authorization held by Tuscarora or any Tuscarora Subsidiary, or (iii) result in
the creation or imposition of any Lien on any asset of Tuscarora or any
Tuscarora Subsidiary other than, in the case of each of (b)(i), (ii) and (iii),
any such items that would not, individually or in the aggregate (x) have a
Tuscarora Material Adverse Effect or (y) prevent or materially impair the
ability of Tuscarora to consummate the transactions contemplated by this
Agreement.
4.05 CAPITALIZATION.
(a) The authorized capital stock of Tuscarora consists solely of
50,000,000 Tuscarora Common Shares and 2,000,000 shares of Preferred Stock
("Tuscarora Preferred Stock"), without par value (of which 200,000 have been
designated Series A Junior Participating Preferred Stock and reserved for
issuance upon exercise of the Rights). As of December 31, 2000, not including
shares held by Tuscarora or any Tuscarora Subsidiary, there were outstanding (i)
9,306,985 Tuscarora Common Shares, (ii) no shares of Tuscarora Preferred Stock,
(iii) stock options to purchase an aggregate of 1,359,375 Tuscarora Common
Shares, (iv) 19,166.682 Phantom Shares and (v) 319,373 of Tuscarora Common
Shares held in Tuscarora's treasury. All issued and outstanding shares of
capital stock of Tuscarora are, and all shares reserved for issuance will be,
upon issuance in accordance with the terms specified in the instruments or
agreements pursuant to which they are issuable, duly authorized, validly issued,
fully paid and nonassessable.
(b) As of the date hereof, except as set forth in Section 4.05(a), and
for changes since December 31, 2000 resulting from the exercise of stock options
described in Section 4.05(a) or in connection with
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the issuance of Tuscarora Common Shares by Tuscarora pursuant to elections made
prior to the date hereof by employees of Tuscarora or any Tuscarora
Subsidiaries, to purchase shares of Tuscarora Common Shares pursuant to
Tuscarora's Common Stock Purchase Plan or any Phantom Shares acquired pursuant
to Tuscarora's Deferred Compensation Plan for Non-Employee Directors, each in
accordance with the provisions of such plans as in effect on the date hereof,
there are no outstanding (i) shares of capital stock or other voting securities
of Tuscarora, (ii) securities of Tuscarora convertible into or exchangeable for
shares of capital stock or voting securities of Tuscarora, or (iii) options,
warrants or other rights (including "phantom" stock rights) to acquire from
Tuscarora, or any obligations of Tuscarora to issue, any capital stock, voting
securities or securities convertible into or exchangeable for capital stock or
voting securities of Tuscarora (the items in clauses (i), (ii) and (iii) being
referred to collectively as the "Tuscarora Securities"). There are no
outstanding obligations of Tuscarora or any Tuscarora Subsidiary to repurchase,
redeem or otherwise acquire any Tuscarora Securities. There are no voting trusts
or other agreements or understandings to which Tuscarora or any Tuscarora
Subsidiary is a party with respect to the voting of capital stock of Tuscarora.
4.06 SUBSIDIARIES.
(a) Each Tuscarora Subsidiary is a corporation duly incorporated or an
entity duly organized, and is validly existing and in good standing under the
laws of its jurisdiction of incorporation or organization, has all powers and
authority and all material governmental licenses, authorizations, consents and
approvals required to own, operate and lease its properties and to carry on its
business as now conducted and is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction where the character of
the property owned or leased by it or the nature of its activities makes such
qualification necessary, in each case with such exceptions as, individually or
in the aggregate, would not have a Tuscarora Material Adverse Effect. The
Tuscarora Disclosure Schedule sets forth a list of all Subsidiaries of Tuscarora
and their respective jurisdictions of incorporation or organization and
identifies Tuscarora's (direct or indirect) percentage equity ownership interest
therein and identifies which Subsidiaries are Significant Subsidiaries.
(b) All of the outstanding shares of capital stock of, or other
ownership interests in, each Tuscarora Subsidiary has been validly issued and is
fully paid and nonassessable. All of the outstanding capital stock of, or other
ownership interests, which is owned, directly or indirectly, by Tuscarora in,
each of the Tuscarora Subsidiaries is owned free and clear of any Lien and free
of any other limitation or restriction (including any limitation or restriction
on the right to vote, sell or otherwise dispose of such capital stock or other
ownership interests). There are no outstanding (i) securities of Tuscarora or
any of the Tuscarora Subsidiaries convertible into or exchangeable or
exercisable for shares of capital stock or other voting securities or ownership
interests in any of the Tuscarora Subsidiaries, or (ii) options, warrants or
other rights to acquire from Tuscarora or any of the Tuscarora Subsidiaries, and
there is no other obligation of Tuscarora or any of the Tuscarora Subsidiaries
to issue, any capital stock, voting securities or other ownership interests in,
or any securities convertible into or exchangeable or exercisable for any
capital stock, voting securities or ownership interests in, any of the Tuscarora
Subsidiaries, or (iii) obligations of Tuscarora or any of the Tuscarora
Subsidiaries to repurchase, redeem or otherwise acquire any outstanding
securities of any of the Tuscarora Subsidiaries or any capital stock of, or
other ownership interests in, any of the Tuscarora Subsidiaries.
4.07 TUSCARORA SEC DOCUMENTS.
(a) Tuscarora has made available to SCA Packaging the Tuscarora SEC
Documents. Tuscarora has filed all reports, filings, registration statements and
other documents required to be filed by it with the SEC since August 31, 1998.
No Tuscarora Subsidiary is required to file any form, report, registration
statement or prospectus or other document with the SEC.
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(b) As of its filing date, each Tuscarora SEC Document complied or as
to form in all material respects with the applicable requirements of the
Securities Act and/or the Exchange Act, as the case may be.
(c) No Tuscarora SEC Document filed pursuant to the Exchange Act
contained, or will contain, as of its filing date, any untrue statement of a
material fact or omitted to state any material fact necessary in order to make
the statements made therein, in the light of the circumstances under which they
were made, not misleading. No Tuscarora SEC Document, as amended or
supplemented, if applicable, filed pursuant to the Securities Act contained, or
will contain, as of the date such document or amendment became effective, any
untrue statement of a material fact or omitted to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading.
4.08 FINANCIAL STATEMENTS; NO MATERIAL UNDISCLOSED LIABILITIES.
(a) The audited consolidated financial statements and unaudited
consolidated interim financial statements of Tuscarora included in the Tuscarora
10-Ks and the Tuscarora 10-Qs fairly present in all material respects, in
conformity with generally accepted accounting principles applied on a consistent
basis ("GAAP") (except as may be indicated in the notes thereto), the
consolidated financial position of Tuscarora and its consolidated Subsidiaries
as of the dates thereof and their consolidated results of operations and
statements of cash flows for the periods then ended (subject to normal year-end
adjustments in the case of any unaudited interim financial statements).
(b) There are no liabilities of Tuscarora or any Tuscarora Subsidiary
of any kind whatsoever, whether accrued, contingent, absolute, determined,
determinable or otherwise, in each case, that are required by GAAP to be set
forth on a consolidated balance sheet of Tuscarora, other than:
(i) liabilities or obligations disclosed or provided for in
the Tuscarora Balance Sheet or disclosed in the notes thereto;
(ii) liabilities or obligations under this Agreement or
incurred in connection with the transactions contemplated hereby; or
(iii) liabilities or obligations incurred in the ordinary
course of business since the date of the Tuscarora Balance Sheet that
have not and would not, individually or in the aggregate, have a
Tuscarora Material Adverse Effect.
4.09 PROXY STATEMENT.
(a) The information contained or incorporated by reference in the Proxy
Statement (except for information provided by SCA Packaging or SCA Acquisition)
will, at the time of the mailing thereof, and at the time of the Tuscarora
Shareholder Meeting, not contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary in order
to make the statements therein, in light of the circumstances under which they
are made, not misleading. Except as limited in Section 4.09(b), the Proxy
Statement will comply as to form in all material respects with the provisions of
the Exchange Act.
(b) Notwithstanding the foregoing, Tuscarora makes no representation or
warranty with respect to any statements made or incorporated by reference in the
Proxy Statement based on information supplied by SCA Packaging or SCA
Acquisition.
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4.10 ABSENCE OF CERTAIN CHANGES. Since August 31, 2000, except as
otherwise expressly contemplated by this Agreement, Tuscarora and the Tuscarora
Subsidiaries have conducted their business in the ordinary course consistent
with past practice and there has not been (a) any damage, destruction or other
casualty loss (whether or not covered by insurance) affecting the business or
assets of Tuscarora or any Tuscarora Subsidiary that, individually or in the
aggregate, has had or would be reasonably likely to have a Tuscarora Material
Adverse Effect, (b) any action, event, occurrence, development or state of
circumstances or facts that, individually or in the aggregate, has had or would
be reasonably expected to have a Tuscarora Material Adverse Effect, (c) any
declaration, setting aside or payment of any dividend or other distribution with
respect to the capital stock of Tuscarora, other than regular semi-annual
dividends not in excess of $.15 share, or (d) any change by Tuscarora in
accounting principles, practices or methods.
4.11 LITIGATION. There is no action, suit, investigation, arbitration
or proceeding pending against, or to the Knowledge of Tuscarora threatened
against, Tuscarora or any Tuscarora Subsidiary or any of their respective assets
or properties before any arbitrator or Governmental Entity that, individually or
in the aggregate, has had, or if determined adversely to Tuscarora or any
Tuscarora Subsidiary would be reasonably likely to have, a Tuscarora Material
Adverse Effect and to the Knowledge of Tuscarora there are no facts or
circumstances that would be reasonably likely to give rise to any action, suit,
arbitration, or proceeding. Neither Tuscarora nor any Tuscarora Subsidiary is
subject to any judgment, decree, order, writ, permit or licenses (collectively,
an "Order") of any Governmental Entity, which individually or in the aggregate,
is having or would be reasonably likely to have, a Tuscarora Material Adverse
Effect.
4.12 TAXES. (i) All Tax Returns, statements, reports and forms required
to be filed with any taxing authority by, or with respect to, Tuscarora and the
Tuscarora Subsidiaries (collectively, the "Tuscarora Returns") have been filed
on a timely basis and in correct form in accordance with all applicable laws;
(ii) Tuscarora and the Tuscarora Subsidiaries have timely paid all taxes shown
as due and payable on the Tuscarora Returns; (iii) the Tax Returns are true and
correct in all material respects and accurately reflect the Taxes required to
have been paid, except to the extent of those items which may be disputed by
applicable taxing authorities but for which there is substantial authority to
support the position taken by Tuscarora or any of its Subsidiaries; (iv)
Tuscarora and the Tuscarora Subsidiaries have made provision for all Taxes
payable by them for which no Tuscarora Return has yet been filed; (v) the
charges, accruals and reserves for taxes with respect to Tuscarora and its
Subsidiaries reflected on the Tuscarora Balance Sheet are adequate under GAAP to
cover the tax liabilities accruing through the date thereof; (vi) there is no
action, suit, proceeding, audit or claim now pending or, to the Knowledge of
Tuscarora, proposed against or with respect to Tuscarora or any of the Tuscarora
Subsidiaries in respect to any tax where there is a reasonable possibility of a
materially adverse determination; (vii) no extension of time given to Tuscarora
or any of its Subsidiaries for the completion of the audit of any of the Tax
Returns is in effect; (viii) neither Tuscarora nor any of its Subsidiaries is
party to any agreement providing for the allocation or sharing of Taxes; (ix)
neither Tuscarora nor any of the Tuscarora Subsidiaries has been a member of an
affiliated, consolidated, combined or unitary group other than one of which
Tuscarora was the common parent; and (x) neither Tuscarora nor any of its
Subsidiaries has filed a consent pursuant to section 341(f) of the Code or
agreed to have section 341(f)(2) of the Code apply to any disposition of a
Subsection (f) asset (as the term is defined in section 341(f)(4) of the Code)
owned by Tuscarora or any of its Subsidiaries.
4.13 EMPLOYEE BENEFITS.
(a) Section 4.13(a) of the Tuscarora Disclosure Schedule contains a
correct and complete list identifying each material "employee benefit plan", as
defined in Section 3(3) of the Employee Retirement Income Security Act of 1974
("ERISA"), each employment, severance or similar contract, plan,
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arrangement or policy and each other plan or arrangement (written or oral)
providing for compensation, bonuses, profit-sharing, stock option or other stock
related rights or other forms of incentive or deferred compensation, vacation
benefits, insurance coverage (including any self-insured arrangements), health
or medical benefits, disability benefits, workers' compensation, supplemental
unemployment benefits, severance benefits and post-employment or retirement
benefits (including compensation, pension, health, medical or life insurance
benefits) which is maintained, administered or contributed to, or to be offered,
by Tuscarora or any ERISA Affiliate (as defined below) including, without
limitation, all such plans which cover, or will cover if accepted, any employee
or former employee of Tuscarora or any Tuscarora Subsidiary or any ERISA
Affiliate. Copies of such plans (and, if applicable, related trust agreements)
and all amendments thereto and written interpretations thereof have been
furnished to SCA Packaging together with the most recent annual report (Form
5500 including, if applicable, Schedule B thereto) prepared in connection with
any such plan. Such plans are referred to collectively herein as the "Tuscarora
Employee Plans". For purposes of this Section 4.13, "ERISA Affiliate" of any
Person means any other Person which, together with such Person, would be treated
as a single employer under Section 414 of the Code.
(b) SECTION 4.13(b) OF THE TUSCARORA DISCLOSURE SCHEDULE SEPARATELY
IDENTIFIES EACH TUSCARORA EMPLOYEE PLAN THAT CONSTITUTES A "MULTIEMPLOYER PLAN",
AS DEFINED IN SECTION 3(37) OF ERISA (A "MULTIEMPLOYER PLAN"), OR ANY OTHER PLAN
SUBJECT TO TITLE IV OF ERISA (A "RETIREMENT PLAN"). NO "ACCUMULATED FUNDING
DEFICIENCY", AS DEFINED IN SECTION 412 OF THE CODE, HAS BEEN INCURRED WITH
RESPECT TO ANY TUSCARORA EMPLOYEE PLAN WHICH IS A RETIREMENT PLAN, WHETHER OR
NOT WAIVED. ALL CONTRIBUTIONS, PREMIUMS AND OTHER PAYMENTS REQUIRED BY LAW OR
ANY TUSCARORA EMPLOYEE PLAN OR APPLICABLE COLLECTIVE BARGAINING AGREEMENT TO
HAVE BEEN MADE UNDER ANY PLAN (WITHOUT REGARD TO ANY WAIVERS GRANTED UNDER
SECTION 412 OF THE CODE) TO ANY FUND, TRUST OR ACCOUNT ESTABLISHED THEREUNDER OR
IN CONNECTION THEREWITH HAVE BEEN MADE BY THE DUE DATE THEREOF, AND ANY AND ALL
CONTRIBUTIONS, PREMIUMS AND OTHER PAYMENTS WITH RESPECT TO COMPENSATION OR
SERVICE UNDER OR ON ACCOUNT OF EACH TUSCARORA EMPLOYEE PLAN HAVE BEEN PAID OR
HAVE BEEN FULLY RESERVED AND PROVIDED FOR ON THE TUSCARORA BALANCE SHEET. No
condition exists and no event has occurred that would be reasonably likely to
(i) constitute grounds for termination of any Tuscarora Employee Plan which is a
Retirement Plan or, (ii) with respect to any Tuscarora Employee Plan which is a
Multiemployer Plan, presents a material risk of a complete or partial withdrawal
under Title IV of ERISA. Neither Tuscarora nor any of its ERISA Affiliates has
incurred any liability under Title IV of ERISA arising in connection with the
termination of, or complete or partial withdrawal from, any plan covered or
previously covered by Title IV of ERISA that would have a Tuscarora Material
Adverse Effect. Nothing has been done or omitted to be done and no transaction
or holding of any asset under or in connection with any Tuscarora Employee Plan
has occurred that will make Tuscarora or any Tuscarora Subsidiary, or any
officer or director of Tuscarora or any Tuscarora Subsidiary, subject to any
liability under Title I or Title IV of ERISA or liable for any tax pursuant to
Section 4975 of the Code (assuming the taxable period of any such transaction
expired as of the date hereof) that would have a Tuscarora Material Adverse
Effect.
(c) Each Tuscarora Employee Plan which is intended to be qualified
under Section 401(a) of the Code is so qualified and has been so qualified
during the period from its adoption to date, and each trust forming a part
thereof is exempt from tax pursuant to Section 501(a) of the Code. Tuscarora has
furnished to SCA Packaging copies of the most recent Internal Revenue Service
determination letters with respect to each such Tuscarora Employee Plan. Each
Tuscarora Employee Plan has been maintained in substantial compliance with its
terms and with the requirements prescribed by any and all statutes, orders,
rules and regulations, including but not limited to, ERISA and the Code, which
are applicable to such Tuscarora Employee Plan, except where failure to be in
such substantial compliance would not have a Tuscarora Material Adverse Effect.
There are no pending, or to the Knowledge of Tuscarora threatened or anticipated
claims, investigations or suits involving any of the Tuscarora Employee Plans.
None of
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Tuscarora or any Tuscarora Subsidiary is in material default in performing any
of its contractual obligations under any of the Tuscarora Employee Plans.
(d) There is no contract, agreement, plan or arrangement covering any
employee or former employee of Tuscarora that, individually or collectively,
would give rise to the payment of any amount that would not be deductible
pursuant to the terms of Sections 162(m) or 280G of the Code.
(e) Except as disclosed in writing to SCA Packaging prior to the date
hereof, there has been no amendment to, written interpretation or announcement
(whether or not written) relating to, or change in employee participation or
coverage under, any Tuscarora Employee Plan which would increase materially the
expense of maintaining such Tuscarora Employee Plan above the level of the
expense incurred in respect thereof for the fiscal year ended August 31, 2000.
(f) None of Tuscarora nor any Tuscarora Subsidiaries maintains or is
obligated to provide benefits under any life, medical or health plan which
provides benefits to retirees or other terminated employees other than benefit
continuation rights under the Consolidated Omnibus Reconciliation Act of 1985,
as amended ("COBRA").
4.14 COMPLIANCE WITH LAWS; LICENSES, PERMITS AND REGISTRATIONS.
(a) Neither Tuscarora nor any Tuscarora Subsidiary is in violation of,
or has violated, any applicable provisions of any Applicable Laws, except for
any such violations which, individually or in the aggregate, would not have a
Tuscarora Material Adverse Effect.
(b) Each of Tuscarora and the Tuscarora Subsidiaries has all permits,
licenses, approvals, authorizations of and registrations (the "Tuscarora
Permits") with and under all federal, state, local and foreign laws, and from
all Governmental Entities required by Tuscarora and the Tuscarora Subsidiaries
to carry on their respective businesses as currently conducted, except where the
failure to have any such Tuscarora Permits, individually or in the aggregate,
would not have a Tuscarora Material Adverse Effect. No suspension or
cancellation of any of the Tuscarora Permits is pending or, to the Knowledge of
Tuscarora, threatened, and Tuscarora and the Tuscarora Subsidiaries are in
compliance with the terms of the Tuscarora Permits, except where the failure to
so comply, individually or in the aggregate, would not reasonably be expected to
have a Tuscarora Material Adverse Effect.
4.15 TITLE TO PROPERTIES.
(a) Tuscarora and each Tuscarora Subsidiary have good and marketable
title to, or valid leasehold interests in, all their properties and assets
except for such as are no longer used or useful in the conduct of their
businesses or as have been disposed of in the ordinary course of business and
except for defects in title, easements, restrictive covenants and similar Liens,
encumbrances or impediments that, either individually or in the aggregate, do
not materially interfere with the ability of Tuscarora and each Tuscarora
Subsidiary to conduct their business, taken as a whole, as currently conducted
and except as would not have a Tuscarora Material Adverse Effect. All such
assets and properties, other than assets and properties in which Tuscarora or
any Tuscarora Subsidiary has leasehold interests, are free and clear of all
Liens, except for Liens that, either individually or in the aggregate, do not
and will not materially interfere with the ability of Tuscarora and the
Tuscarora Subsidiaries to conduct their business as currently conducted.
(b) Except as would not, individually or in the aggregate, have a
Tuscarora Material Adverse Effect, (i) Tuscarora and each Tuscarora Subsidiary
are in compliance with the terms of all leases to which they are a party and
under which they are in occupancy, and all such leases are in full force and
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effect and (ii) Tuscarora and each Tuscarora Subsidiary enjoy quiet and
undisturbed possession under all such leases.
4.16 INTELLECTUAL PROPERTY. Except as would not have a Tuscarora
Material Adverse Effect, individually or in the aggregate, Tuscarora and the
Tuscarora Subsidiaries own or have a valid license (in each case, free and clear
of any Liens other than rights of licensors) to use each trademark, service
xxxx, trade name, maskwork, invention, patent, trade secret, copyright,
know-how, computer software programs or applications (including any
registrations or applications for registration of any of the foregoing) or any
other similar type of proprietary intellectual property right (collectively, the
"Tuscarora Intellectual Property") necessary to carry on the business of
Tuscarora and the Tuscarora Subsidiaries, taken as a whole, as currently
conducted. To the Knowledge of Tuscarora, its use of the Tuscarora Intellectual
Property does not infringe on or otherwise violate the rights of any Person.
Neither Tuscarora nor any Tuscarora Subsidiary has received any written notice
of infringement of or challenge to, and, to the Knowledge of Tuscarora, there
are no claims pending with respect to the rights of others to the use of, any
Tuscarora Intellectual Property that, in any such case, individually or in the
aggregate, would have a Tuscarora Material Adverse Effect.
4.17 ENVIRONMENTAL MATTERS. Except as would not have, individually or
in the aggregate, a Tuscarora Material Adverse Effect:
(a) Each of Tuscarora and the Tuscarora Subsidiaries has obtained all
licenses, permits, authorizations, approvals and consents from Governmental
Entities which are required in respect of its business, operations, assets or
properties under any applicable Environmental Law (as defined below). Each of
Tuscarora and the Tuscarora Subsidiaries is in compliance with (and has no
liability under) the terms and conditions of all such licenses, permits,
authorizations, approvals and consents and any applicable Environmental Law.
(b) No Order has been issued, no complaint has been filed, no penalty
has been assessed and no investigation or review is pending or, to the Knowledge
of Tuscarora, threatened by any Governmental Entity with respect to any alleged
failure by Tuscarora or any of the Tuscarora Subsidiaries to have any license,
permit, authorization, approval or consent from Governmental Entities required
under any applicable Environmental Law in connection with the conduct of the
business or operations of Tuscarora or any of the Tuscarora Subsidiaries or with
respect to any treatment, storage, recycling, transportation, disposal or
"release" as defined in 42 U.S.C. Section 9601 (22) ("Release"), by Tuscarora or
any of the Tuscarora Subsidiaries of any Hazardous Material, and neither
Tuscarora nor any of the Tuscarora Subsidiaries is aware of any facts or
circumstances which could be reasonably expected to form the basis for any such
Order, complaint, penalty or investigation.
(c) Neither Tuscarora nor any of the Tuscarora Subsidiaries nor, to the
Knowledge of Tuscarora, any prior owner or lessee of any property now or
previously owned or leased by Tuscarora or any of the Tuscarora Subsidiaries has
handled or Released any Hazardous Material on any property now or previously
owned or leased by Tuscarora or any such Subsidiary; and, without limiting the
foregoing, (i) no polychlorinated biphenyl is or has been present, (ii) no
asbestos is or has been present, (iii) there are no underground storage tanks,
active or abandoned and (iv) no Hazardous Material has been Released in a
quantity reportable under, or in violation of, any Environmental Law, at, on or
under any property now or previously owned or leased by Tuscarora or any such
Subsidiary, during any period that Tuscarora or any of the Tuscarora
Subsidiaries owned or leased such property or, to the Knowledge of Tuscarora and
the Tuscarora Subsidiaries, prior thereto.
(d) Neither Tuscarora nor any of the Tuscarora Subsidiaries has
transported or arranged for the transportation of any Hazardous Material to any
location which is the subject of any action, suit,
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arbitration or proceeding that could be reasonably expected to lead to claims
against Tuscarora or any of the Tuscarora Subsidiaries for clean-up costs,
remedial work, damages to natural resources or personal injury claims,
including, but not limited to, claims under the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended, and the rules and
regulations promulgated thereunder ("CERCLA").
(e) No oral or written notification of a Release of a Hazardous
Material has been filed by or on behalf of Tuscarora or any of the Tuscarora
Subsidiaries, and no property now or previously owned or leased by Tuscarora or
any of the Tuscarora Subsidiaries is listed or proposed for listing on the
National Priorities List promulgated pursuant to CERCLA or on any similar state
list of sites requiring investigation or clean-up.
(f) There are no Liens arising under or pursuant to any Environmental
Law on any real property owned or leased by Tuscarora or any of the Tuscarora
Subsidiaries, and no action of any Governmental Entity has been taken or, to the
Knowledge of Tuscarora, is in process which could subject any of such properties
to such Liens, and neither Tuscarora nor any of the Tuscarora Subsidiaries would
be required to place any notice or restriction relating to the presence of
Hazardous Material at any such property owned by it in any deed to such
property.
(g) There have been no environmental investigations, studies, audits,
tests, reviews or other analyses conducted by, or which are in the possession
of, Tuscarora or any of the Tuscarora Subsidiaries in relation to any property
or facility now or previously owned or leased by Tuscarora or any of the
Tuscarora Subsidiaries which have not been delivered to SCA Packaging prior to
the execution of this Agreement.
(h) NEITHER TUSCARORA NOR ANY TUSCARORA SUBSIDIARY HAS SOLD AT ANY TIME
ANY PRODUCTS THAT CONTAIN ASBESTOS.
4.18 FINDERS' FEES; OPINIONS OF FINANCIAL ADVISOR.
(a) Except for Xxxxxx/Hunter Incorporated ("Xxxxxx/Xxxxxx") there is no
investment banker, broker, finder or other intermediary which has been retained
by, or is authorized to act on behalf of, Tuscarora or any Tuscarora Subsidiary
who might be entitled to any fee or commission from SCA Packaging or SCA
Acquisition or any of their Affiliates upon consummation of the transactions
contemplated by this Agreement. All amounts payable to Xxxxxx/Hunter are
disclosed in the engagement letter with Xxxxxx/Xxxxxx dated September 7, 2000, a
copy of which has been provided to SCA Packaging. Such engagement letter has not
been modified or amended. The estimated fees and expenses incurred and to be
incurred by Tuscarora for counsel, accountants, investment bankers, financial
printers, experts and consultants in connection with this Agreement and the
transactions pursuant to this Agreement have been disclosed to SCA Packaging by
Tuscarora prior to the execution of this Agreement.
(b) Tuscarora has received the opinion of Xxxxxx/Hunter, dated as of
the date hereof, to the effect that, as of such date, the Merger Consideration
is fair to the holders of Tuscarora Common Shares (other than SCA Packaging and
any SCA Acquisition) from a financial point of view.
4.19 REQUIRED VOTE; BOARD APPROVAL.
(a) The only vote of the holders of any class or series of capital
stock of Tuscarora required by law, rule or regulation to approve the Articles
Amendment, this Agreement, the Merger and/or any of the other transactions
contemplated hereby is the affirmative vote (the "Tuscarora Shareholder
Approval") of
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a majority of the votes cast by all holders of Tuscarora Common Shares entitled
to vote thereon at a meeting at which a quorum is present.
(b) Tuscarora's Board of Directors has unanimously (i) approved the
Articles Amendment, this Agreement, the Merger, and the transactions
contemplated hereby; (ii) directed that the Articles Amendment, this Agreement
and the Merger be submitted to a vote of the shareholders entitled to vote
thereon at a regular or special meeting of the shareholders; and (iii) resolved
to recommend to such shareholders that they vote in favor of adopting and
approving the Articles Amendment, this Agreement and the Merger in accordance
with the terms hereof.
4.20 STATE TAKEOVER STATUTES; RIGHTS AGREEMENT.
(a) Tuscarora has taken all actions required to be taken by it in order
to exempt SCA Packaging and SCA Acquisition and their Affiliates, this
Agreement, the Merger and the other transactions contemplated hereby from any
provisions of the PBCL which would preclude the consummation of the Merger and
prevent SCA Packaging from receiving full voting control over the Tuscarora
Common Shares, including but not limited to Sections 2535 through 2588,
inclusive of Title 15 of the Pennsylvania Code, except for Subchapter E of
Chapter 25, Control Transactions, PBCL Sections 2541 to 2548, Subchapter I of
Chapter 25, PBCL Sections 2581 to 2583 and Subchapter J of Chapter 25, PBCL
Sections 2585 to 2588 which apply to the transactions contemplated by this
Agreement. No other "business combination" (as defined under Subchapter F of
Chapter 25 of the PBCL), "control-share acquisition" (as defined under
Subchapter G of Chapter 25 of the PBCL), or other anti-takeover laws or
regulations enacted under state or federal laws in the United States or any
charter or by-law provisions apply to this Agreement, the Merger or any of the
transactions contemplated hereby.
(b) Tuscarora has taken all action necessary to (i) render the Rights
inapplicable to the Merger and the other transactions contemplated by this
Agreement without payment of any consideration to the holders of the Rights and
(ii) ensure that (A) neither SCA Packaging, SCA Acquisition nor any of their
Affiliates will become an Acquiring Person (as defined in the Rights Agreement)
as a result of the transactions contemplated hereby and (B) neither a
"Distribution Date" nor a "Share Acquisition Date" (each as defined in the
Rights Agreement) shall occur by reason of the approval or execution of this
Agreement, the announcement or consummation of the Merger or the announcement or
consummation of any of the other transactions contemplated by this Agreement;
including, without limitation, amending the Rights Agreement to exclude the
Merger from the scope of the Rights Agreement. As of the date hereof, each Right
is represented by the certificate representing the associated Tuscarora Common
Share and is not exercisable or transferable apart from the associated Tuscarora
Common Share.
4.21 LABOR MATTERS. Neither Tuscarora nor any Tuscarora Subsidiary is a
party to, or bound by, any collective bargaining agreement, contract or other
agreement or understanding with a labor organization, nor is Tuscarora or any
Tuscarora Subsidiary the subject of any proceeding asserting that it has
committed an unfair labor practice or seeking to compel it to bargain with any
labor organization as to wages and conditions of employment, nor is there any
strike, other labor dispute or organizational effort involving it pending or, to
the Knowledge of Tuscarora, threatened.
4.22 YEAR 2000.
(a) Other than exceptions that would not, individually or in the
aggregate, be reasonably likely to have a Tuscarora Material Adverse Effect, all
of Tuscarora's (A) computer software, computer firmware, computer hardware
(whether general or special purpose) or other similar or related items of
automated, computerized or software systems and (B) equipment containing
embedded microchips (including systems and equipment supplied by others) used or
relied on by Tuscarora ("Computer Equipment") is
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currently operating properly and as intended, and none has been subject to any
problems or has been rendered inoperable or non-functional in any respect by the
change-of-year date from 1999 to 2000 ("Y2K").
(b) Neither Tuscarora nor any Tuscarora Subsidiary now is or has been
involved in any dispute with any third party alleging that the operation of any
Computer Equipment has been interrupted or impaired in any way by the failure of
the Computer Equipment to process information correctly because of Y2K.
4.23 CERTAIN CONTRACTS. As of the date hereof, neither Tuscarora nor
any Tuscarora Subsidiary is a party to or bound by (i) any "material contracts"
(as such term is defined in Item 601(b)(10) of Regulation S-K of the SEC) or
(ii) any material agreement that restricts the ability of Tuscarora or any
Tuscarora Subsidiaries or by its terms, any Affiliate of Tuscarora, to engage in
any business whether by business type or geographic location. All such material
contracts are valid and in full force and effect except to the extent they have
previously expired in accordance with their terms or if the failure to be in
full force and effect, individually or in the aggregate, would not have a
Tuscarora Material Adverse Effect. Neither Tuscarora nor any Tuscarora
Subsidiary has violated any provision of, or committed or failed to perform any
act which with or without notice, lapse of time or both would constitute a
default under the provisions of, any such material contracts, except in each
case for those violations and defaults which, individually or in the aggregate,
would not have in a Tuscarora Material Adverse Effect.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF SCA PACKAGING
SCA Packaging represents and warrants to Tuscarora that:
5.01 CORPORATE EXISTENCE AND POWER. Each of SCA Packaging and SCA
Acquisition is a corporation duly incorporated, validly existing and in good
standing under the laws of its jurisdiction of incorporation and has all
corporate power and authority required to carry on its business as now
conducted.
5.02 CORPORATE AUTHORIZATION. The execution, delivery and performance
by SCA Packaging and SCA Acquisition of this Agreement and the consummation by
SCA Packaging and SCA Acquisition of the transactions contemplated hereby are
within the corporate powers of SCA Packaging and SCA Acquisition and have been
duly authorized by all necessary corporate action. This Agreement has been duly
and validly executed and delivered by SCA Packaging and SCA Acquisition, and,
assuming that this Agreement constitutes the valid and binding obligation of
Tuscarora, this Agreement constitutes a valid and binding agreement of each of
SCA Packaging and SCA Acquisition, enforceable in accordance with its terms,
subject to bankruptcy, insolvency, reorganization, moratorium and similar laws,
now or hereafter in effect, relating to or affecting creditors' rights and
remedies and to general principles of equity.
5.03 GOVERNMENTAL AUTHORIZATION. The execution, delivery and
performance by SCA Packaging and SCA Acquisition of this Agreement and the
consummation by SCA Packaging and SCA Acquisition of the transactions
contemplated hereby require no action by or in respect of, or filing with, any
Governmental Entity other than (a) those set forth in clauses (a) through (e) of
Section 4.03, (b) for the filing of any pre-merger notification reports by SCA
Packaging under the Applicable Laws of the United Kingdom and the Republic of
Ireland, and (c) such other consents, approvals, actions, orders,
authorizations, registrations, declarations and filings which, if not obtained
or made, would not,
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individually or in the aggregate, be reasonably likely to prevent or materially
impair the ability of SCA Packaging and SCA Acquisition to consummate the
transactions contemplated by this Agreement.
5.04 NON-CONTRAVENTION. The execution, delivery and performance by SCA
Packaging and SCA Acquisition of this Agreement and the consummation by SCA
Packaging and SCA Acquisition of the transactions contemplated hereby do not and
will not (a) contravene or conflict with the articles of incorporation or bylaws
of SCA Packaging or the articles of incorporation or bylaws of SCA Acquisition,
(b) assuming compliance with the matters referred to in Section 5.03, contravene
or conflict with any Applicable Law, binding upon or applicable to SCA Packaging
or any SCA Packaging Subsidiary, (c) constitute a default under or give rise to
a right of termination, cancellation or acceleration of any right or obligation
of SCA Packaging or any SCA Packaging Subsidiary or to a loss of any benefit or
status to which SCA Packaging or any SCA Packaging Subsidiary is entitled under
any provision of any agreement, contract or other instrument binding upon SCA
Packaging or any SCA Packaging Subsidiary other than, in the case of each of (b)
and (c), any such items that would not, individually or in the aggregate, (x)
have an SCA Packaging Material Adverse Effect or (y) prevent or materially
impair the ability of SCA Packaging or SCA Acquisition to consummate the
transactions contemplated by this Agreement.
5.05 LITIGATION. There is no action, suit, investigation or proceeding
pending against, or to the Knowledge of SCA Packaging threatened against, SCA
Packaging or any of its Subsidiaries or any of their respective assets or
properties before any arbitrator or any Governmental Entity, which, as of the
date hereof, questions the validity of this Agreement or any action to be taken
by SCA Packaging in connection with the consummation of the transactions
contemplated hereby or could otherwise materially prevent or delay the
consummation of the transactions contemplated by this Agreement.
5.06 PROXY STATEMENT.
(a) The information contained or incorporated by reference in the Proxy
Statement (with respect to information relating solely to SCA Packaging or SCA
Acquisition) will, at the time of the mailing thereof, and at the time of the
Tuscarora Shareholder Meeting, not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they are made, not misleading.
(b) Notwithstanding the foregoing, SCA Packaging makes no
representation or warranty with respect to any statements made or incorporated
by reference in the Proxy Statement based on information supplied by Tuscarora.
5.07 FINDERS' FEES. Except for Deutsche Banc Alex. Xxxxx ("Deutsche
Banc"), whose fees will be paid by SCA Packaging, there is no investment banker,
broker, finder or other intermediary who might be entitled to any fee or
commission from SCA Packaging or any of its Affiliates upon consummation of the
transactions contemplated by this Agreement. All amounts payable to Deutsche
Banc are disclosed in the engagement letter with Deutsche Banc dated January 10,
2001, a copy of which has been provided to Tuscarora. Such engagement letter has
not been modified or amended.
ARTICLE VI
COVENANTS OF TUSCARORA
Tuscarora agrees that:
6.01 TUSCARORA INTERIM OPERATIONS. Except as set forth in Section 6.01
of the Tuscarora Disclosure Schedule or as otherwise expressly contemplated
hereby, without the prior consent of SCA
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Packaging (which consent shall not be unreasonably withheld or delayed), from
the date hereof until the Effective Time, Tuscarora shall, and shall cause each
of the Tuscarora Subsidiaries to, conduct their business in all material
respects in the ordinary course consistent with past practice and shall use
commercially reasonable efforts to (i) preserve intact its present business
organization, (ii) maintain in effect all material foreign, federal, state and
local licenses, approvals and authorizations, including, without limitation, all
material licenses and permits that are required for Tuscarora or any Tuscarora
Subsidiary to carry on its business and (iii) preserve existing relationships
with its material customers, lenders, suppliers and others having material
business relationships with it. Without limiting the generality of the
foregoing, except as set forth in Section 6.01 of the Tuscarora Disclosure
Schedule or as otherwise expressly contemplated by this Agreement, from the date
hereof until the Effective Time, without the prior consent of SCA Packaging
(which consent, other than as to subparagraphs (a), (b), (c), (e) and (f) and
(l) with respect to subparagraphs (a), (b), (c), (e) and (f), shall not be
unreasonably withheld or delayed), Tuscarora shall not, nor shall it permit any
Tuscarora Subsidiary to:
(a) amend its articles of incorporation or by-laws or comparable
governing documents;
(b) split, combine or reclassify any shares of capital stock of
Tuscarora or any less-than-wholly-owned Tuscarora Subsidiary or declare, set
aside or pay any dividend or other distribution (whether in cash, stock or
property or any combination thereof) in respect of its capital stock, or redeem,
repurchase or otherwise acquire or offer to redeem, repurchase, or otherwise
acquire any of its securities or any securities of any Tuscarora Subsidiary,
except (i) for regular semi-annual cash dividends (having customary record and
payment dates, not in excess of $.15 per Tuscarora Common Share, or (ii) for
regular dividends required to be paid in accordance with the provisions of the
Subscription and Shareholder Agreement, dated as of October 10, 2000, between
Hytherm (Ireland) Limited and Tuscarora;
(c) (i) issue, deliver or sell, or authorize the issuance, delivery or
sale of, any shares of its capital stock of any class or any securities
convertible into or exercisable for, or any rights, warrants or options to
acquire, any such capital stock or any such convertible securities, other than
the issuance of Tuscarora Common Shares upon exercise of Tuscarora Options
outstanding on the date of this Agreement and disclosed pursuant to this
Agreement or in connection with the issuance of Tuscarora Common Shares by
Tuscarora pursuant to elections made prior to the date hereof by employees of
Tuscarora or any Tuscarora Subsidiaries to purchase Tuscarora Common Shares
pursuant to Tuscarora's Common Stock Purchase Plan or any Phantom Shares issued
pursuant to Tuscarora's Deferred Compensation Plan for Non-Employee Directors,
each in accordance with the provisions of such plans as in effect on the date
hereof; or (ii) amend any outstanding security of Tuscarora or any Tuscarora
Subsidiary;
(d) other than in connection with transactions permitted by Section
6.01(e), incur any capital expenditures or any obligations or liabilities in
respect thereof, except for those incurred in the ordinary course of business
and consistent with past practice of Tuscarora and the Tuscarora Subsidiaries in
an aggregate amount not exceeding $3,000,000 during each sixty (60) day period
from and after the date hereof (provided that to the extent that such full
$3,000,000 for any sixty (60) day period shall not be incurred, then the
shortfall amount may be carried forward on a rolling basis, to any subsequent
sixty (60) day periods);
(e) acquire any assets of, or any equity interest in, any Person or any
business or division of any Person, in either case in excess of $1,000,000 or
merge or consolidate with any Person;
(f) sell, lease, encumber or otherwise dispose of any assets or
properties, other than (i) sales of inventory in the ordinary course of business
consistent with past practice (ii) sales of equipment and property no longer
used in the operation of Tuscarora's business, (iii) sales of assets related to
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discontinued operations of Tuscarora; provided, that the aggregate book value of
all items sold pursuant to clauses (ii) and (iii) shall not exceed $500,000
during each thirty (30) day period from and after the date hereof (provided that
to the extent such full $500,000 for any thirty (30) day period shall not be
incurred, then the shortfall amount may be carried forward on a rolling basis,
to any subsequent thirty (30) day periods);
(g) incur any indebtedness for borrowed money or guarantee any such
indebtedness or issue or sell any debt securities or warrants or rights to
acquire any debt securities of Tuscarora or any Tuscarora Subsidiary or
guarantee any debt securities of others, or voluntarily purchase, cancel, prepay
or otherwise provide for a complete or partial discharge in advance of a
scheduled repayment date with respect to, or waive any right under, any
indebtedness for borrowed money, other than (i) borrowings under Tuscarora's
existing revolving credit facility for (x) working capital needs in the ordinary
course of business consistent with past practices or for capital expenditures
permitted by Section 6.01(d) hereof or Section 6.01(e) hereof, or (y) to fund
the acquisitions set forth in Section 6.01 of the Tuscarora Disclosure Schedule
and (ii) repayments of such revolving credit facility in the ordinary course of
business consistent with prior practice;
(h) (i) enter into any agreement or arrangement that limits or
otherwise restricts Tuscarora, any Tuscarora Subsidiary or any of their
respective Affiliates or any successor thereto, or that would, after the
Effective Time, limit or restrict Tuscarora, any Tuscarora Subsidiary, the
Surviving Corporation, SCA Packaging, any SCA Packaging Subsidiary or any of
their respective Affiliates, from engaging or competing in any line of business
or in any location, (ii) except in the ordinary course of business, amend,
modify or terminate any material contract, agreement or arrangement of Tuscarora
or any Tuscarora Subsidiary or otherwise waive, release or assign any material
rights, claims or benefits of Tuscarora or any Tuscarora Subsidiary thereunder,
or (iii) except in the ordinary course of business, permit any material change
to any pricing, marketing, purchasing or inventory practice;
(i) (i) except as required by law or an existing agreement, increase
the amount of compensation of any director, officer or employee, except for
normal increases to non-officer employees consistent with past practice or make
any increase in or commitment to increase any employee benefits, (ii) except as
required by law, an agreement existing on the date hereof or Tuscarora severance
policy as of the date hereof, grant any severance or termination pay to any
director, officer or employee of Tuscarora or any Tuscarora Subsidiary, (iii)
adopt any additional employee benefit plan or, except in the ordinary course of
business, make any contribution to any existing such plan or enter into any
employment agreement or (iv) except as may be required by law, amend in any
material respect any Tuscarora Employee Plan;
(j) change Tuscarora's (x) methods of accounting or financial reporting
in effect at August 31, 2000, except as required by changes in GAAP or by
Regulation S-X of the Exchange Act, as concurred to by its independent public
accountants, (y) methods of calculating any bad debt, contingency or other
reserve for accounting, financial reporting or tax purposes or (z) fiscal year;
(k) (i) SETTLE, OR PROPOSE TO SETTLE, ANY LITIGATION, INVESTIGATION,
ARBITRATION, PROCEEDING OR OTHER CLAIM THAT IS MATERIAL TO THE BUSINESS OF
TUSCARORA AND THE TUSCARORA SUBSIDIARIES, TAKEN AS A WHOLE, OR (II) MAKE ANY TAX
ELECTION OR ENTER INTO ANY SETTLEMENT OR COMPROMISE OF ANY TAX LIABILITY THAT IN
EITHER CASE IS MATERIAL TO THE BUSINESS OF TUSCARORA AND THE TUSCARORA
SUBSIDIARIES, TAKEN AS A WHOLE; OR
(l) agree, resolve or commit to do any of the foregoing;
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provided that the limitations set forth in clauses 6.01(a) through 6.01(l) shall
not apply to any action, transaction or event occurring exclusively between
Tuscarora and any wholly-owned Tuscarora Subsidiary or between any wholly-owned
Tuscarora Subsidiaries.
6.02 SHAREHOLDER MEETING. Tuscarora shall cause a special meeting of
its shareholders (the "Tuscarora Shareholder Meeting") to be duly called and
held as soon as reasonably practicable for the purpose of obtaining the
Tuscarora Shareholder Approval. The proposal for the adoption of the Articles
Amendment at the Tuscarora Shareholder Meeting will state that it is expressly
conditioned on adoption of this Agreement and the proposal for the adoption of
this Agreement shall state that it is expressly conditioned on adoption of the
Articles Amendment. Except in the event of a Superior Proposal or unless
otherwise required by its duties as directors under Applicable Law (as
determined in good faith based upon the advice of its outside legal counsel),
(i) Tuscarora's Board of Directors shall recommend approval and adoption by its
shareholders of this Agreement and the Articles Amendment (the "Tuscarora
Recommendation"), (ii) neither Tuscarora's Board of Directors nor any committee
thereof shall amend, modify, withdraw, condition or qualify the Tuscarora
Recommendation in a manner adverse to SCA Packaging or take any action or make
any statement inconsistent with the Tuscarora Recommendation and (iii) Tuscarora
shall take all lawful action to solicit the Tuscarora Shareholder Approval.
6.03 ACQUISITION PROPOSALS; BOARD RECOMMENDATION.
(a) Tuscarora agrees that it shall not, nor shall it permit any
Tuscarora Subsidiary to, nor shall it authorize or permit any officer, director,
employee, investment banker, attorney, accountant, agent or other advisor or
representative of Tuscarora or any Tuscarora Subsidiary, directly or indirectly,
to (i) solicit or initiate, the making or submission of any Acquisition
Proposal, (ii) participate in any discussions or negotiations regarding, or
furnish to any Person any information with respect to any solicitation or
initiation of an Acquisition Proposal, or take any other action knowingly to
solicit or initiate any inquiries or the making of any proposal that
constitutes, or may be reasonably expected to lead to, any Acquisition Proposal,
(iii) grant any waiver or release under any standstill or similar agreement with
respect to any class of Tuscarora's equity securities or amend the Rights
Agreement or take any action with respect to, or make any determination under,
the Rights Agreement, including a redemption of the Rights in order to
facilitate any Acquisition Proposal, (iv) approve or recommend, or propose
publicly to approve or recommend, any Acquisition Proposal, or (v) approve or
recommend, or propose to approve or recommend, or execute or enter into, any
agreement with respect to any Acquisition Proposal, other than in the manner
contemplated by Section 6.03(d); provided, however, that Tuscarora may take any
action(s) described in the foregoing clauses (i), (ii), (iii), (iv), or (v) in
respect of any Person, in response to an unsolicited bona fide written
Acquisition Proposal from a Person reasonably believed to have the financial and
other capability to consummate an Acquisition Proposal if Tuscarora's Board of
Directors determines in good faith either (y) that an Acquisition Proposal could
reasonably result in a Superior Proposal or (z) based upon the advice of its
outside legal counsel that it is otherwise required to take such action(s) in
order to comply with its duties as directors under Applicable Law; provided,
further, that, prior to Tuscarora taking any such action(s) in respect of such
Person, such Person shall have entered into a confidentiality agreement with
Tuscarora on customary terms provided that if such confidentiality agreement
contains provisions that are less restrictive than the comparable provision, or
omits restrictive provisions, contained in the Confidentiality Agreement, then
the Confidentiality Agreement will be deemed to be amended to contain only such
less restrictive provisions or to omit such restrictive provisions, as the case
may be, and Tuscarora shall provide the notice contemplated by Section 6.03(c).
Without limiting the foregoing, it is understood that any violation of the
restrictions set forth in the preceding sentence by any officer, director,
employee, investment banker, attorney, accountant, agent or other advisor or
representative of Tuscarora or any Tuscarora Subsidiary, whether or not such
individual is purporting to act on behalf of Tuscarora or any Tuscarora
Subsidiary or otherwise, shall be deemed to be a breach of this Section 6.03 by
Tuscarora. Subject to Tuscarora's right to consider certain
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unsolicited written Acquisition Proposals made after the date hereof pursuant to
this Section 6.03(a) (including with any person with whom Tuscarora has
previously had negotiations), Tuscarora shall cease and cause to be terminated
immediately all existing negotiations with any Persons conducted heretofore with
respect to, or that could be reasonably expected to lead to, any Acquisition
Proposal.
(b) Unless Tuscarora's Board of Directors has previously withdrawn, or
is concurrently therewith withdrawing, the Tuscarora Recommendation in
accordance with Section 6.02, neither Tuscarora's Board of Directors nor any
committee thereof shall recommend any Acquisition Proposal to Tuscarora
shareholders. Notwithstanding the foregoing, nothing contained in this Section
6.03(b) or elsewhere in this Agreement shall prevent Tuscarora's Board of
Directors from complying with Rule 14e-2 under the 1934 Act with respect to any
Acquisition Proposal or making any disclosure required by Applicable Law.
(c) Tuscarora shall notify SCA Packaging promptly (but in no event
later than one business day) after receipt by Tuscarora or any Tuscarora
Subsidiary (or any of their respective directors, officers, agents or advisors),
of any Acquisition Proposal or any negotiations, discussions or contacts
concerning, or any request for nonpublic information or for access to the
properties, books or records of Tuscarora or any Tuscarora Subsidiary or any
request for a waiver or release under any standstill or similar agreement, by
any Person that has made an Acquisition Proposal. Such notice to SCA Packaging
shall be made orally and in writing and shall indicate the identity of the
offeror and the terms and conditions of such proposal, inquiry, contact or
request. Tuscarora shall keep SCA Packaging informed, on a reasonably current
basis, of the status and details (including amendments or proposed amendments)
of any such Acquisition Proposal or request and the status of any negotiations
or discussions.
(d) Pursuant to the terms of Section 10.01(c)(ii) and Section
10.01(d)(ii) respectively, either SCA Packaging or Tuscarora may terminate this
Agreement at any time prior to the Tuscarora Shareholder Approval if Tuscarora's
Board of Directors shall have determined, (i) to approve or recommend an
Acquisition Proposal after concluding that such Acquisition Proposal (y)
constitutes a Superior Proposal or (z) is one that its duties as directors under
Applicable Law require it to approve or recommend (as determined in good faith
based upon the advice of its outside legal counsel) and (ii) to enter into a
binding agreement concerning such Acquisition Proposal; provided that Tuscarora
may not exercise its right to terminate under this Section 6.03(d) and Section
10.01(c)(ii) (and may not enter into a binding written agreement with respect to
such an Acquisition Proposal) unless (1) Tuscarora shall have provided to SCA
Packaging at least five Business Days' prior written notice that its Board of
Directors has authorized and intends to terminate this Agreement pursuant to
this Section 6.03(d) and Section 10.01(c)(ii), specifying the material terms and
conditions of such Acquisition Proposal and providing the most current version
of the agreement relating thereto, if any, and (2) SCA Packaging does not make,
within five Business Days of receiving such notice, an offer such that a
majority of Tuscarora's Board of Directors determines that (A) the foregoing
Acquisition Proposal no longer constitutes a Superior Proposal or (B) its duties
as directors no longer require it to take such action(s); provided, further,
that SCA Packaging may exercise its right to terminate under this Section
6.03(d) and Section 10.01(d)(ii) at any time after receiving the notice
contemplated by this Section 6.03(d). In connection with the foregoing,
Tuscarora agrees that it will (x) not enter into a binding agreement with
respect to such an Acquisition Proposal until at least the sixth Business Day
after it has provided the notice to SCA Packaging required hereby, (y) negotiate
in good faith with SCA Packaging, and consider in good faith any offer made by
SCA Packaging, during that period and (z) notify SCA Packaging promptly if its
intention to enter into such an agreement shall change at any time after such
notification.
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ARTICLE VII
COVENANTS OF SCA PACKAGING
SCA Packaging agrees that:
7.01 DIRECTOR AND OFFICER LIABILITY.
(a) SCA Packaging and the Surviving Corporation agree that the
indemnification obligations set forth in Tuscarora's Restated Articles of
Incorporation, as amended, and Tuscarora's By-Laws, in each case as of the date
of this Agreement, shall survive the Merger and shall extend to the sixth
anniversary of the Effective Time with respect to claims which may be made
against the individuals who on or prior to the Effective Time were directors,
officers, employees and agents of Tuscarora or the Tuscarora Subsidiaries and
shall not be amended, repealed or otherwise modified during such period in any
manner that would adversely affect the rights thereunder of such individuals.
(b) To the fullest extent permitted under applicable law and regardless
of whether the Merger becomes effective, Tuscarora shall indemnify and hold
harmless, and, after the Effective Time, SCA Packaging shall cause the Surviving
Corporation to (each, an "Indemnifying Party"), until the sixth anniversary of
the Effective Time, indemnify and hold harmless, to the fullest extent permitted
under Applicable Law, each present and former director or officer of Tuscarora
and each Tuscarora Subsidiary and each such person who served at the request of
Tuscarora or any Tuscarora Subsidiary as a director, officer, trustee, partner
or fiduciary of another Person, pension or other employee benefit plan or
enterprise (collectively, the "Indemnified Parties") against all costs and
expenses (including reasonable attorneys' fees), judgments, fines, losses,
claims, damages, liabilities and settlement amounts paid in connection with any
claim, action, suit, proceeding or investigation (whether arising before or
after the Effective Time), whether civil, administrative or investigative,
arising out of or pertaining to any action or omission in their capacity as an
officer, director, trustee, partner or fiduciary in each case occurring before
the Effective Time (including the transactions contemplated by this Agreement).
Without limiting the foregoing, in the event of any such claim, action, suit,
proceeding or investigation, (i) Tuscarora or SCA Packaging and the Surviving
Corporation, as the case may be, shall pay the reasonable fees and expenses of
one counsel selected by each Indemnified Party, which one counsel shall be
reasonably satisfactory to Tuscarora or to SCA Packaging and the Surviving
Corporation, as the case may be, promptly after statements therefor are received
(unless the Surviving Corporation shall elect to defend such action) and (ii)
Tuscarora or SCA Packaging and the Surviving Corporation, as applicable, shall
cooperate in the defense of any such matter; provided, however, that neither
Tuscarora nor SCA Packaging or the Surviving Corporation shall be liable for any
settlement effected without its prior written consent (which consent shall not
be unreasonably withheld). Any Indemnified Party wishing to claim
indemnification under this Section, upon learning of any such claim, action,
suit, proceeding or investigation, shall notify the Indemnifying Parties, but
the failure so to notify an Indemnifying Party shall not relieve it from any
liability which it may have under this paragraph except to the extent such
failure irreparably prejudices such party. The Indemnified Parties as a group
may retain only one law firm to represent them with respect to each such matter
unless there is, under applicable standards of professional conduct, a conflict
on any significant issue between the positions of any two or more Indemnified
Parties.
(c) For six years from the Effective Time, the Surviving Corporation
shall provide to Tuscarora's current directors and officers liability insurance
protection of the same kind and scope as that provided by Tuscarora's directors'
and officers' liability insurance policies as of the date hereof; provided,
however, that in no event shall the Surviving Corporation be required to expend
in any one year an amount in excess of 200% of the annual premiums currently
paid by Tuscarora for such insurance; and, provided, further, that if the annual
premiums of such insurance coverage exceed such amount, the Surviving
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Corporation shall be obligated to obtain a policy with the greatest coverage
available for a cost not exceeding such amount.
(d) If Tuscarora or the Surviving Corporation or any of their
respective successors or assigns (i) consolidates with or merges into any other
person or shall not be the continuing or surviving corporation or entity in such
consolidation or merger or (ii) transfers all or substantially all its
properties and assets to any Person, then, and in each case, proper provision
shall be made so that the successors and assigns of Tuscarora or the Surviving
Corporation, as the case may be, honor the obligations set forth in this Section
7.01.
(e) The obligations of Tuscarora, the Surviving Corporation, and SCA
Packaging under this Section 7.01 shall not be terminated or modified in such a
manner as to adversely affect any director, officer, employee, agent or other
person to whom this Section 7.01 applies without the consent of such affected
director, officer, employees, agents or other persons (it being expressly agreed
that each such director, officer, employee, agent or other person to whom this
Section 7.01 applies shall be third-party beneficiaries of this Section 7.01).
7.02 CONDUCT OF SCA ACQUISITION. SCA Packaging will take all action
necessary to cause SCA Acquisition to perform its obligations under this
Agreement and to consummate the Merger on the terms and conditions set forth in
this Agreement.
ARTICLE VIII
COVENANTS OF SCA PACKAGING AND TUSCARORA
The parties hereto agree that:
8.01 REASONABLE BEST EFFORTS. Subject to the terms and conditions
hereof, each party will use reasonable best efforts to take, or cause to be
taken, all actions and to do, or cause to be done, all things necessary, proper
or advisable under this Agreement and Applicable Laws and regulations to
consummate the Merger and the other transactions contemplated by this Agreement
as promptly as practicable; provided, however, that, for these purposes,
reasonable best efforts of Tuscarora, the Surviving Corporation, SCA Packaging
and/or SCA Acquisition shall not include (i) offering to pay any material
consideration to receive required consents; or (ii) offering to divest to others
and/or hold separate, and divesting or otherwise holding separate (including by
establishing a trust or otherwise) any of their assets or businesses, or taking
any other action (or otherwise agreeing to do any of the foregoing) if doing so
would, individually or in the aggregate, reasonably be expected to result in a
Tuscarora Material Adverse Effect or SCA Packaging Material Adverse Effect, as
the case may be.
8.02 CERTAIN FILINGS; COOPERATION IN RECEIPT OF CONSENTS.
(a) Promptly after the date hereof, Tuscarora shall prepare and file
with the SEC, the Proxy Statement and use its reasonable best efforts to have
the Proxy Statement cleared by the SEC as promptly as practicable after such
filing. Tuscarora agrees to use its reasonable best efforts, after consultation
with SCA Packaging, to respond promptly to all such comments of and requests by
the SEC. The Proxy Statement shall include the recommendation of the Board of
Directors of Tuscarora described in Section 4.19. Tuscarora shall mail the Proxy
Statement to its shareholders as promptly as practicable after the Proxy
Statement is cleared by the SEC and, if necessary, after the Proxy Statement
shall have been so mailed, promptly circulate amended, supplemental or
supplemented proxy material, and, if required in connection therewith, resolicit
proxies.
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(b) No filing of or amendment or supplement to the Proxy Statement will
be made by Tuscarora without the approval of SCA Packaging, which will not be
unreasonably withheld or delayed. Tuscarora will advise SCA Packaging, promptly
after receipt thereof, of any request by the SEC for amendment of the Proxy
Statement or comments thereon and responses thereto or requests by the SEC for
additional information. If at any time prior to the Effective Time, Tuscarora or
SCA Packaging discovers any event or any information relating to either party,
or any of their respective Affiliates, officers or directors, that should be set
forth in an amendment or supplement to the Proxy Statement, so that such
document would not include any misstatement of a material fact or omit to state
any material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, the party that
discovers such information shall promptly notify the other parties hereto and an
appropriate amendment or supplement describing such information shall be
promptly filed with the SEC and, to the extent required by law or regulation,
disseminated to the shareholders of Tuscarora. Tuscarora represents that
Xxxxxx/Xxxxxx has consented to the references to its opinion in the Proxy
Statement.
(c) Tuscarora and SCA Packaging shall cooperate with one another in (i)
determining whether any other action by or in respect of, or filing with, any
Governmental Entity is required, or any actions, consents, approvals or waivers
are required to be obtained from parties to any material contracts, in
connection with the consummation of the transactions contemplated hereby, (ii)
seeking any such other actions, consents, approvals or waivers or making any
such filings, furnishing information required in connection therewith and
seeking promptly to obtain any such actions, consents, approvals or waivers
(including, without limitation, consents to those agreements listed on Section
4.04 of the Tuscarora Disclosure Schedule as requiring consent) and (iii)
setting a mutually acceptable date for the Tuscarora Shareholder Meeting.
8.03 PUBLIC ANNOUNCEMENTS. The parties shall consult with each other
before issuing any press release or making any public statement with respect to
this Agreement, the Merger and/or the other transactions contemplated hereby
and, except as may be required by Applicable Law or any listing agreement with
any national securities exchange or by NASDAQ or any other stock exchange
applicable to SCA Packaging, will not issue any such press release or make any
such public statement prior to such consultation.
8.04 ACCESS TO INFORMATION; NOTIFICATION OF CERTAIN MATTERS.
(a) From the date hereof until the Effective Time and subject to
Applicable Law, Tuscarora shall (i) give to SCA Packaging, its counsel,
financial advisors, auditors and other authorized representatives reasonable
access to the offices, properties, books and records of Tuscarora, (ii) furnish
or make available to SCA Packaging, its counsel, financial advisors, auditors
and other authorized representatives such financial and operating data and other
information as SCA Packaging may reasonably request and (iii) instruct its
employees, counsel, financial advisors, auditors and other authorized
representatives to cooperate with the reasonable requests of SCA Packaging in
its investigation. Any investigation pursuant to this Section 8.04(a) shall be
conducted in such manner as not to interfere unreasonably with the conduct of
the business of Tuscarora. Unless otherwise required by Applicable Law, SCA
Packaging will hold, and will cause its respective officers, employees, counsel,
financial advisors, auditors and other authorized representatives to hold, any
nonpublic information obtained in any such investigation in confidence in
accordance with the Confidentiality Agreement referred to in Section 8.06. No
information or knowledge obtained in any investigation pursuant to this Section
8.04(a) shall affect or be deemed to modify any representation or warranty made
by Tuscarora hereunder.
(b) Each party hereto shall give prompt notice to each other party
hereto of:
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(i) any communication received by such party from, or given by
such party to, any Governmental Entity in connection with any of the
transactions contemplated hereby; and
(ii) any actions, suits, claims, investigations or proceedings
commenced or, to its Knowledge, threatened against, relating to or
involving or otherwise affecting such party or any of its Subsidiaries
that, if pending on the date of this Agreement, would have been
required to have been disclosed pursuant to Article IV or V, as the
case may be, or that relate to the consummation of the transactions
contemplated by this Agreement; provided, however, that the delivery of
any notice pursuant to this Section 8.04(b) shall not limit or
otherwise affect the remedies available hereunder to the party
receiving such notice.
8.05 FURTHER ASSURANCES. At and after the Effective Time, the officers
and directors of the Surviving Corporation will be authorized to execute and
deliver, in the name and on behalf of Tuscarora or SCA Acquisition, any deeds,
bills of sale, assignments or assurances and to take and do, in the name and on
behalf of Tuscarora or SCA Acquisition, any other actions and things to vest,
perfect or confirm of record or otherwise in the Surviving Corporation any and
all right, title and interest in, to and under any of the rights, properties or
assets of Tuscarora acquired or to be acquired by the Surviving Corporation as a
result of, or in connection with, the Merger.
8.06 CONFIDENTIALITY. The Confidentiality Agreement entered into
between SCA Packaging and Tuscarora dated September 6, 2000, shall remain in
full force and effect according to its terms.
8.07 LEGAL OPINION. At Closing, Tuscarora shall deliver to SCA
Packaging the opinion of Xxxx Xxxxx LLP, counsel to Tuscarora, substantially in
the form of Exhibit A.
8.08 EMPLOYMENT CONTINUATION AGREEMENTS. It is understood that the
acceptance by any or all of the officers to be offered the Employment
Continuation Agreements contemplated by Schedule 6.01(a) of the Tuscarora
Disclosure Schedule shall not be a condition to the obligations of Tuscarora,
SCA Packaging and SCA Acquisition to consummate the Merger and the failure of
any or all of such officers to accept such Employment Continuation Agreements
will not be deemed a Tuscarora Material Adverse Effect.
ARTICLE IX
CONDITIONS TO THE MERGER
9.01 CONDITIONS TO THE OBLIGATIONS OF EACH PARTY. The obligations of
Tuscarora, SCA Packaging and SCA Acquisition to consummate the Merger are
subject to the satisfaction or waiver of the following conditions:
(a) the Tuscarora Shareholder Approval shall have been obtained;
(b) (i) any applicable waiting period (and any extension thereof) under
the HSR Act applicable to the Merger shall have expired or been terminated and
(ii) if required by Applicable Law, the parties shall have received approval of
the Merger from the relevant antitrust Governmental Entities in the United
Kingdom and the Republic of Ireland; and
(c) no Governmental Entity of competent authority or jurisdiction shall
have enacted, issued, promulgated, enforced or entered any Applicable Law or
Order (whether temporary, preliminary or permanent), or taken any other action,
which restrains, enjoins or otherwise prohibits the consummation of the Merger
or the other transactions contemplated by this Agreement.
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9.02 CONDITIONS TO THE OBLIGATIONS OF TUSCARORA. The obligations of
Tuscarora to consummate the Merger are subject to the satisfaction or waiver of
the following further conditions:
(a) (i) SCA Packaging and SCA Acquisition each shall have performed in
all material respects all of its obligations hereunder required to be performed
by it at or prior to the Effective Time, (ii) (A) the representations and
warranties of SCA Packaging contained in this Agreement that are qualified by
reference to a Material Adverse Effect shall be true and correct when made and
at and as of the Effective Time, as if made at and as of such time and (B) all
other representations and warranties of SCA Packaging shall be true and correct
when made and at and as of the Effective Time as if made at and as of such time,
except for such inaccuracies as do not and are not reasonably likely,
individually or in the aggregate, to have a Material Adverse Effect, and (iii)
Tuscarora shall have received a certificate signed by the Chief Executive
Officer or Chief Financial Officer of SCA Packaging to the foregoing effect;
(b) The parties shall have obtained or made all consents, approvals,
actions, orders, authorizations, registrations, declarations, announcements and
filings contemplated by Sections 4.03 and 5.03 which if not obtained or made (i)
would render consummation of the Merger illegal or (ii) would have a Material
Adverse Effect with respect to SCA Packaging or Tuscarora; and
(c) The Employment Agreements shall have not been repudiated by SCA
Packaging or SCA Acquisition.
9.03 CONDITIONS TO THE OBLIGATIONS OF SCA PACKAGING AND SCA
ACQUISITION. The obligations of SCA Packaging and SCA Acquisition to consummate
the Merger are subject to the satisfaction of the following further conditions:
(a) (i) Tuscarora shall have performed in all material respects all of
its obligations hereunder required to be performed by it at or prior to the
Effective Time, (ii) (A) the representations and warranties of Tuscarora
contained in this Agreement that are qualified by reference to a Tuscarora
Material Adverse Effect shall be true and correct when made and at and as of the
Effective Time, as if made at and as of such time and (B) all other
representations and warranties of Tuscarora shall be true and correct when made
and at and as of the Effective Time, as if made as of such time, except for such
inaccuracies as do not and are not reasonably likely, individually or in the
aggregate, to have a Tuscarora Material Adverse Effect, and (iii) SCA Packaging
shall have received a certificate signed by the Chief Executive Officer,
President or Chief Financial Officer of Tuscarora to the foregoing effect;
(b) The parties shall have obtained or made all consents, approvals,
actions, orders, authorizations, registrations, declarations, announcements and
filings contemplated by Sections 4.03 and 5.03 which if not obtained or made (i)
would render consummation of the Merger illegal, or (ii) would have a Material
Adverse Effect with respect to SCA Packaging or Tuscarora;
(c) The Employment Agreements shall remain in full force and effect and
shall not have been terminated, repudiated by Tuscarora or by any individual
party thereto, or breached, except in the case of termination due to the death
or disability of the individual party thereto;
(d) The period for execution and perfection of statutory appraisal
rights available in connection with the Merger as described in Section 3.03
shall have expired and such appraisal rights shall not have been exercised and
perfected by the holders of shares of capital stock of any class or series of
Tuscarora holding more than 10% of the outstanding Tuscarora Common Shares; and
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(e) IMMEDIATELY FOLLOWING THE EFFECTIVE TIME, NO PERSON SHALL HAVE ANY
RIGHT UNDER ANY TUSCARORA STOCK OPTION PLAN (OR ANY OPTION GRANTED THEREUNDER)
OR OTHER PLAN, PROGRAM OR ARRANGEMENT TO ACQUIRE ANY EQUITY SECURITIES OF
TUSCARORA.
ARTICLE X
TERMINATION
10.01 TERMINATION. This Agreement may be terminated at any time prior
to the Effective Time, by action taken or authorized by the Board of Directors
of the terminating party or parties, and except as provided below, whether
before or after receipt of the Tuscarora Shareholder Approval:
(a) by mutual written agreement of SCA Packaging and Tuscarora.
(b) by either SCA Packaging or Tuscarora, if
(i) the Effective Time shall not have occurred on or before
July 31, 2001 (the "End Date"); provided, however, that the right to
terminate this Agreement under this Section 10.01(b)(i) shall not be
available to any party whose breach of any provision of this Agreement
has resulted in the failure of the Effective Time to occur on or before
the End Date;
(ii) there shall be any law or regulation that makes
consummation of the Merger illegal or otherwise prohibited or any
judgment, injunction, order or decree of any Governmental Entity having
competent jurisdiction enjoining Tuscarora, SCA Packaging or SCA
Acquisition from consummating the Merger is entered and such judgment,
injunction, order or decree shall have become final and nonappealable
and, prior to such termination, the party seeking to terminate shall
have used reasonable best efforts to resist, resolve or lift, as
applicable, such law, regulation, judgment, injunction, order or
decree; or
(iii) at the Tuscarora Shareholder Meeting (including any
adjournment or postponement thereof), the Tuscarora Shareholder
Approval shall not have been obtained.
(c) by Tuscarora, (i) if a breach of or failure to perform any
representation, warranty, covenant or agreement on the part of SCA Packaging or
SCA Acquisition set forth in this Agreement shall have occurred which would
cause the condition set forth in Section 9.02(a) not to be satisfied, and such
condition shall be incapable of being satisfied by the End Date (or, if capable,
is not satisfied by the End Date); or (ii) as contemplated by Section 6.03(d).
(d) by SCA Packaging, (i) if Tuscarora's Board of Directors shall have
(A) amended, modified, withdrawn, conditioned or qualified the Tuscarora
Recommendation in a manner adverse to SCA Packaging and/or (B) recommended to
Tuscarora's shareholders or approved any Acquisition Proposal; (ii) as
contemplated by Section 6.03(d); or (iii) if a breach of or failure to perform
any representation, warranty, covenant or agreement on the part of Tuscarora set
forth in this Agreement shall have occurred which would cause the condition set
forth in Section 9.03(a) not to be satisfied, and such condition is incapable of
being satisfied by the End Date (or, if capable, is not satisfied by the End
Date).
(e) by SCA Packaging, if shares held by Dissenting Shareholders
represent 10% or more of the total shares of Tuscarora Common Shares issued and
outstanding immediately prior to the Effective Time.
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10.02 EFFECT OF TERMINATION. If this Agreement is terminated pursuant
to Section 10.01 (including any such termination by way of Section 6.03(d)),
this Agreement shall forthwith become null and void and there shall be no
liability or obligation on the part of SCA Packaging, Tuscarora, SCA
Acquisition, or any of their respective officers, directors, shareholders,
agents or Affiliates, except (i) as set forth in Section 10.03, (ii) that the
provisions of Sections 8.06, 10.02, 10.03, 11.01, 11.02, 11.04, 11.05, 11.07,
11.08 and 11.09 of this Agreement shall remain in full force and effect and
survive any termination of this Agreement, and (iii) notwithstanding any
provision of this Agreement to the contrary, none of Tuscarora, SCA Packaging or
SCA Acquisition shall be relieved or released from any liabilities or damages
arising out of its breach of this Agreement prior to such termination.
10.03 FEES AND EXPENSES.
(a) Except as set forth in this Section 10.03, all fees and expenses
incurred in connection herewith and the transactions contemplated hereby shall
be paid by the party incurring such expenses, whether or not the Merger is
consummated.
(b) If this Agreement is terminated pursuant to Sections 10.01(b)(iii),
10.01(c)(ii), Section 10.01(d) or Section 10.01(e), Tuscarora shall reimburse
SCA Packaging for its actual documented reasonable out-of-pocket expenses
incurred to third parties in connection with the transactions contemplated
hereby not to exceed $3 million ("Reimbursable Expenses"). If this Agreement is
terminated pursuant to Section 10.01(c)(i), SCA Packaging shall reimburse
Tuscarora for its Reimbursable Expenses.
(c) If (i) (x) this Agreement is terminated by Tuscarora pursuant to
Section 10.01(c)(ii), (y) this Agreement is terminated by SCA Packaging pursuant
to Section 10.01(d)(i) or 10.01(d)(ii), or (z) any person shall have made an
Acquisition Proposal and thereafter this Agreement is terminated for any reason
(other than the breach of this Agreement by SCA Packaging) and (ii) a Third
Party Acquisition Event occurs within eighteen months after such termination,
then Tuscarora shall pay (but only in the event that the transactions
contemplated by the Third Party Acquisition Event are consummated) to SCA
Packaging a termination fee equal to $15 million (the "Termination Fee") within
one Business Day of the consummation of the transactions contemplated by the
Third Party Acquisition Event. In the event that this Agreement is terminated
under the circumstances set forth above in this Section 10.03(c), then except as
set forth in Section 10.02 and Section 10.03(b), Tuscarora shall not have any
liability pursuant to this Agreement other than to pay the Termination Fee as
provided above in this Section 10.03(c).
(d) If this Agreement is terminated by Tuscarora pursuant to Section
10.01(c)(i), and the failure to satisfy the condition specified in such Section
results from a breach by SCA Packaging or SCA Acquisition (including, without
limitation, SCA Packaging's or SCA Acquisition's failure to consummate the
Merger notwithstanding the satisfaction or waiver of all of the conditions to
its obligation to consummate the Merger), then the SCA Packaging shall pay to
Tuscarora, within five Business Days of such termination, a fee (the "SCA
Packaging Breach Fee") equal to $15 million. If this Agreement is terminated by
SCA Packaging pursuant to Section 10.01(d)(iii) and the failure to satisfy the
condition specified in such Section results from a breach by Tuscarora
(including, without limitation, Tuscarora's failure to consummate the Merger
notwithstanding the satisfaction or waiver of all of the conditions to its
obligation to consummate the Merger), then Tuscarora shall pay to SCA Packaging,
within five Business Days of such termination, a fee (the "Tuscarora Breach
Fee") equal to $15 million. In the event that Tuscarora is required to pay the
Tuscarora Breach Fee and SCA Packaging is also entitled to receive the
Termination Fee in accordance with the terms of Section 10.03(c), then the
Tuscarora Breach Fee shall be reduced to $0 (such that Tuscarora shall not pay
more than $15 million in the aggregate with respect to the Breach Fee and the
Termination Fee). The parties agree that any remedy or amount payable pursuant
to this Section 10.03(d) shall not preclude any other remedy or amount payable
hereunder and shall not be
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an exclusive remedy for any breach of any representation, warranty, covenant or
agreement contained in this Agreement.
(e) Any payment of the Termination Fee, the Tuscarora Breach Fee or SCA
Packaging Breach Fee pursuant to this Section 10.03 shall be made within one
Business Day after termination of this Agreement (or as otherwise expressly set
forth in this Agreement). Any payment of Reimbursable Expenses pursuant to this
Section 10.03 shall be made within five Business Days after written notice to
Tuscarora of SCA Packaging's Reimbursable Expenses or to SCA Packaging of
Tuscarora's Reimbursable Expenses, as the case may be. If Tuscarora fails to pay
to SCA Packaging the Termination Fee, the Tuscarora Breach Fee or Reimbursable
Expenses when due, or if SCA Packaging fails to pay Tuscarora the SCA Packaging
Breach Fee or the Reimbursable Expenses when due, the defaulting party shall pay
the costs and expenses (including reasonable legal fees and expenses) in
connection with any action, including the filing of any lawsuit or other legal
action, taken to collect payment, together with interest on the amount of any
unpaid Termination Fee, Reimbursable Expenses, Tuscarora Breach Fee or SCA
Packaging Breach Fee at the prime rate published in The Wall Street Journal from
the date such amounts were required to be paid to the date they are paid.
ARTICLE XI
MISCELLANEOUS
11.01 NOTICES. Except as otherwise expressly set forth in Section
6.03(c), all notices, requests and other communications to any party hereunder
shall be in writing (including facsimile or similar writing) and shall be given,
if to SCA Packaging or SCA Acquisition, to:
SCA Packaging Business Group
Xxxxxxxxxxxxx 00
X-0000 Xxxxxxxx
Xxxxxxx
Attention: Vice President - Legal Department
Facsimile: + 00-0-000-0000
with a copy to:
Xxxxxxxx Chance Xxxxxx & Xxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxx
Facsimile: (000) 000-0000
if to Tuscarora, to:
Tuscarora Incorporated
000 Xxxxx Xxxxxx
Xxx Xxxxxxxx, XX 00000
Attention: Chairman and Chief Executive Officer
Facsimile: (000) 000-0000
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with a copy to:
Xxxx Xxxxx LLP
000 Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attention: X. Xxxxxxx Linge
Facsimile: (000) 000-0000
or such other address or facsimile number as such party may hereafter specify
for the purpose by notice to the other parties hereto. Each such notice, request
or other communication shall be effective (a) if given by facsimile, when such
facsimile is transmitted to the facsimile number specified in this Section and
the appropriate facsimile confirmation is received or (b) if given by any other
means, when delivered at the address specified in this Section.
11.02 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS AFTER THE
EFFECTIVE TIME. The representations and warranties contained herein and in any
certificate or other writing delivered pursuant hereto shall not survive the
Effective Time or the termination of this Agreement. The covenants contained in
Articles II and III and Sections 7.01, 8.05, 8.06, 10.02, 10.03, 11.01, 11.02,
11.04, 11.05, 11.06, 11.07, 11.08 and 11.09 shall survive the Effective Time.
11.03 AMENDMENTS; NO WAIVERS.
(a) Any provision of this Agreement may be amended or waived prior to
the Effective Time if, and only if, such amendment or waiver is in writing and
signed, in the case of an amendment, by Tuscarora, SCA Packaging and SCA
Acquisition or in the case of a waiver, by the party against whom the waiver is
to be effective; provided that after the Tuscarora Shareholder Approval, no such
amendment or waiver shall, without the further approval of such shareholders, be
made that would require such approval under any Applicable Law.
(b) No failure or delay by any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege.
11.04 SUCCESSORS AND ASSIGNS. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns, provided that no party may assign, delegate or otherwise
transfer any of its rights or obligations under this Agreement without the
consent of the other parties hereto, except that SCA Packaging or SCA
Acquisition may transfer or assign to any wholly owned SCA Packaging Subsidiary
the right to enter into the transactions contemplated by this Agreement,
provided that no such assignment shall be permitted if it would delay or impede
the Merger or any of the other transactions contemplated by this Agreement, and
any such transfer or assignment will not relieve SCA Packaging or SCA
Acquisition of its obligations hereunder. Any purported assignment in violation
hereof shall be null and void.
11.05 GOVERNING LAW. This Agreement shall be construed in accordance
with and governed by the internal laws of the Commonwealth of Pennsylvania.
11.06 COUNTERPARTS; EFFECTIVENESS; THIRD PARTY BENEFICIARIES. This
Agreement may be signed in any number of counterparts, each of which shall be an
original, with the same effect as if the signatures thereto and hereto were upon
the same instrument. This Agreement shall become effective when each party
hereto shall have received counterparts hereof signed by all of the other
parties hereto.
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Except as set forth in 7.01, no provision of this Agreement is intended to
confer upon any Person other than the parties hereto any rights or remedies
hereunder.
11.07 WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.
11.08 ENFORCEMENT. The parties agree that irreparable damage would
occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms. It is accordingly agreed that
the parties shall be entitled to seek specific performance of the terms hereof,
this being in addition to any other remedy to which they are entitled at law or
in equity.
11.09 ENTIRE AGREEMENT. This Agreement (together with the exhibits and
schedules hereto, the Employment Agreements and the Confidentiality Agreement
referred to in Section 8.06) constitutes the entire agreement between the
parties with respect to the subject matter hereof and supersedes all prior
agreements and understandings, both oral and written, between the parties with
respect to the subject matter hereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
TUSCARORA INCORPORATED
By:__________________________________________________
Name: Xxxx X. X'Xxxxx, Xx.
Title: Chairman, President and
Chief Executive Officer
SCA PACKAGING INTERNATIONAL B.V.
By:__________________________________________________
Name:
Title:
By:__________________________________________________
Name:
Title:
SCA PACKAGING USA, INC.
By:__________________________________________________
Name:
Title:
By:__________________________________________________
Name:
Title:
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