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Exhibit 3(i)
TUSCARORA INCORPORATED
RESTATED ARTICLES OF INCORPORATION
1st. The name of the Company is Tuscarora Incorporated.
2nd. The location and post office address of its current registered
office in this Commonwealth is 800 Fifth Avenue, New Brighton, Beaver County,
Pennsylvania 15066.
3rd. The purposes of the Company are to engage in the business of
designing, manufacturing and developing all forms of plastics and other
synthetic materials and encouraging their widespread use, to make available to
its customers all related services, and, in addition, to engage in all other
lawful businesses for which a corporation may be incorporated under the
Pennsylvania Business Corporation Law, being the Act of May 5, 1933, as
amended.
4th. The term of its existence is perpetual.
5th. 5.1. The aggregate number of shares of all classes of capital
stock which the Company shall have the authority to issue is 21,000,000 shares,
divided into two classes, of which 1,000,000 shares shall be Preferred Stock,
par value $.01 per share (the "Preferred Stock"), and 20,000,000 shares shall
be Common Stock, without par value.
5.2. The Board of Directors is hereby expressly authorized, at any time
or from time to time, to divide any or all of the shares of the Preferred Stock
into one or more series, and in the resolution or resolutions establishing a
particular series, before issuance of any of the shares of the particular
series, to fix and determine the number of shares and the designation of such
series, so as to distinguish it from the shares of all other series and
classes, and to fix and determine the preferences, voting rights,
qualifications, privileges, limitations, options, conversion rights,
restrictions and other special or relative rights of the Preferred Stock or of
such series, to the fullest extent now or hereafter permitted by the laws of
the Commonwealth of Pennsylvania, including, but not limited to, variations
between different series in the following respects:
(a) the distinctive designation of such series and the number of shares
which shall constitute such series, which number may be increased or
decreased (but not below the number of shares of such series then
outstanding) from time to time by the Board of Directors;
(b) the annual dividend rate for such series, the dates in each year on
which dividends on such series shall be payable and the date or dates from
which such dividends shall commence to accrue;
(c) the price or prices at which, and the terms and conditions on
which, the shares of such series may be made redeemable;
(d) the purchase or sinking fund provisions, if any, for the purchase
or redemption of shares of such series;
(e) the preferential amount or amounts payable upon shares of such
series in the event of the liquidation, dissolution or winding up of the
Company;
(f) the voting rights, if any, of the holders of shares of such series;
(g) the terms and conditions, if any, upon which shares of such series
may be converted and the class or classes or series of shares of the
Company or other securities into which such shares may be converted;
(h) the relative seniority, parity or junior rank of such series as to
dividends or assets with respect to any other classes or series of stock
then or thereafter to be issued; and
(i) such other terms, qualifications, privileges, limitations, options,
restrictions and special or relative rights and preferences, if any, of
shares of such series as the Board of Directors may, at the time of such
resolution or resolutions, lawfully fix and determine under the laws of
the Commonwealth of Pennsylvania.
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Unless otherwise provided in a resolution or resolutions establishing
any particular series, the aggregate number of authorized shares of the
Preferred Stock may be increased by an amendment of the Restated Articles
approved solely by a majority vote of the outstanding shares of Common Stock
(or solely with a lesser vote of the Common Stock, or solely by action of the
Board of Directors, if permitted by law at the time).
All shares of any one series shall be alike in every particular, except
with respect to the accrual of dividends prior to the date of issuance.
5.3. Except for and subject to those rights expressly granted to the
holders of the Preferred Stock or any series thereof by resolution or
resolutions adopted by the Board of Directors pursuant to Section 5.2 of this
Article 5th and except as may be provided by the laws of the Commonwealth of
Pennsylvania, the holders of the Common Stock shall have exclusively all
other rights of shareholders.
5.4. No holder of Common Stock or of any other class of stock of the
Company shall be entitled as such, as a matter of right, to subscribe for or
purchase any part of any new or additional issue of stock of any class or of
securities convertible into any stock of any class, whether now or hereafter
authorized and whether issued for cash or other consideration or by way of
dividend, and the Company may issue shares, option rights or securities having
option or conversion rights without first offering them to shareholders of any
class.
6th. No Cumulative Voting.
The shareholders of the Company shall not have any right of cumulative
voting in the election of directors.
7th. Definitions; Interpretation.
7.1. Definitions. For the purposes of Articles 7th, 8th, 9th and 10th:
(a) "Person" means any individual, firm, corporation,
partnership, joint venture, trust or other entity. When two or more
persons act as a partnership, syndicate, association or other group for
the purpose of acquiring, holding or disposing of shares of stock, such
partnership, syndicate, association or group shall be deemed a person.
As used herein, the pronouns "which", "that" and "it" in relation to
persons that are individuals shall be construed to mean "who" or
"whom", "he" or "she" and "him" or "her", as appropriate.
(b) "Interested Shareholder" at any particular time means any
person (other than the Company or a Subsidiary, or an employee
benefit plan of the Company or a Subsidiary, or a trustee or fiduciary
of any such plan when acting in such capacity) who or which:
(1) is at such time, or is a member of a group acting
in concert which is at such time, the beneficial owner,
directly or indirectly, of more than 20% of the voting power
of the outstanding Voting Stock;
(2) is at such time a director or Affiliate of the
Company and at any time within the two-year period
immediately prior to such time was the beneficial owner,
directly or indirectly, of more than 20% of the voting power
of the then outstanding Voting Stock; or
(3) is at such time an assignee of or has otherwise
succeeded to the beneficial ownership of any shares of Voting
Stock which were at any time within the two-year period
immediately prior to such time beneficially owned by any
Interested Shareholder, if such assignment or succession shall
have occurred in the course of a transaction or series of
transactions not involving a public offering within the
meaning of the Securities Act of 1933;
With respect to any particular transaction, "Interested Shareholder"
means any Interested Shareholder involved in such transaction, any
Affiliate or Associate of any such Interested Shareholder and any
other member of a group acting in concert with any such Interested
Shareholder.
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(c) A person is a "beneficial owner" of any shares of Voting
Stock:
(1) which such person or any of its Affiliates or
Associates beneficially owns, directly or indirectly;
(2) which such person or any of its Affiliates or
Associates has (A) the right to acquire (whether or not such
right is exercisable immediately) pursuant to any agreement,
arrangement or understanding or upon the exercise of
conversion rights, exchange rights, warrants or options,
revocation of a trust or otherwise or (B) the right to vote,
or to direct the voting of, pursuant to any agreement,
arrangement or understanding; or
(3) which are beneficially owned, directly or
indirectly, by any other person with which such person or any
of its Affiliates or Associates has any agreement, arrangement
or understanding for the purpose of acquiring, holding,
voting or disposing of any shares of Voting Stock.
For the purposes of determining whether a person is an
Interested Shareholder pursuant to definition (b) of this Section 7.1,
the number of shares of Voting Stock deemed to be outstanding shall
include shares deemed owned by an Interested Shareholder through the
application of this definition (c) but shall not include any other
shares of Voting Stock which may be acquired pursuant to any agreement,
arrangement or understanding, or upon the exercise of conversion
rights, exchange rights, warrants or options, revocation of a trust or
otherwise.
(d) "Affiliate" has the meaning ascribed to that term in Rule
12b-2 of the General Rules and Regulations under the Securities
Exchange Act of 1934, as in effect on August 28, 1987 (the term
"registrant" in said Rule 12b-2 meaning in this case the Company).
(e) "Associate" has the meaning ascribed to that term in Rule
12b-2 of the General Rules and Regulations under the Securities
Exchange Act of 1934, as in effect on August 28, 1987 (the term
"registrant" in said Rule 12b-2 meaning in this case the Company).
(f) "Subsidiary" means any corporation of which a majority of
any class of equity security is owned, directly or indirectly, by the
Company, as well as any Affiliate of the Company which is controlled by
the Company; provided, however, that for the purposes of the definition
of Interested Shareholder set forth in definition (b) of this Section
7.1, "Subsidiary" means only a corporation of which a majority of each
class of equity security is owned, directly or indirectly, by the
Company.
(g) "Disinterested Director" means a director of the Company
who is not an Interested Shareholder or an Affiliate, Associate or
representative of an Interested Shareholder and either (1) was a
director of the Company immediately prior to the time the Interested
Shareholder became an Interested Shareholder or (2) is a successor to a
Disinterested Director and is or was recommended or elected to succeed
a Disinterested Director by the affirmative vote of a majority of the
Disinterested Directors then in office. Whenever the holders of any
class or series of stock having a preference over the Common Stock as
to dividends or assets shall have the right, voting separately as a
class or series, to elect one or more directors of the Company, the
term "Disinterested Director" shall not include any director elected
by the holders of such class or series. As used with respect to any
particular transaction in Article 9th or with respect to a
determination or interpretation as to such transaction under definition
(h) of this Section 7.1 or Section 7.2, the term "Disinterested
Director" includes all directors who are Disinterested Directors with
respect to any Interested Shareholder involved in such transaction. In
all other cases, unless the context otherwise clearly requires,
the term "Disinterested Director" means only those directors who are
Disinterested Directors with respect to all persons who are then
Interested Shareholders.
(h) "Fair Market Value" means (1) in the case of stock, the
highest closing sale price during the 30-day period immediately
preceding the date in question of a share of such stock on the
Composite Tape for New York Stock Exchange-Listed Stocks, or, if such
stock is not quoted on the Composite Tape, on the New York Stock
Exchange, or, if such stock is not listed on such
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Exchange, on the principal United States securities exchange
registered under the Securities Exchange Act of 1934, as amended, on
which such stock is listed, or, if such stock is not listed on any such
exchange, the highest closing sale price or, if none, the highest
closing bid quotation with respect to a share of such stock during the
30-day period preceding the date in question on the National
Association of Securities Dealers, Inc. Automated Quotation System or
any similar system then in use, or if no such quotations are available,
the fair market value on the date in question of a share of such stock
as determined in good faith by the affirmative vote of a majority of
the Disinterested Directors then in office; and (2) in the case of
property other than stock or cash, the fair market value of such
property on the date in question as determined in good faith by the
affirmative vote of a majority of the Disinterested Directors then in
office or by a qualified appraiser retained by them for such purpose.
(i) "Voting Stock" means capital stock of the Company entitled
to vote generally in an annual election of directors of the Company.
(j) "Total Assets" means the consolidated total assets of the
Company and its subsidiaries as of the close of the most recent fiscal
quarter ended on or prior to the first public announcement of the
Business Combination in question, as shown on the consolidated balance
sheet published by the Company for such quarter.
7.2. Interpretation. The Disinterested Directors, by the affirmative
vote of a majority of the Disinterested Directors then in office, are
authorized to interpret all the terms and provisions of Articles 7th, 8th, 9th
and 10th and to determine, on the basis of information known to them after
reasonable inquiry, any fact necessary to determine compliance with any such
term or provision, including, without limitation, (a) whether a person is an
Interested Shareholder, (b) the number of shares of Voting Stock beneficially
owned by any person, (c) whether a person is an Affiliate or Associate or
another person, (d) whether any Articles provision required by clause (a) of
Section 9.1 of Article 9th complies with such Section and is valid and
enforceable and (e) whether the assets which are the subject of any Business
Combination have, or the consideration to be received for the issuance
or transfer of securities by the Company or any Subsidiary in any Business
Combination has, an aggregate Fair Market Value equal to 5% or more of Total
Assets. Any such interpretation or determination made in good faith shall be
binding and conclusive for all purposes of these Articles.
8th. Board of Directors.
The business and affairs of the Company shall be managed by or under
the direction of a Board of Directors comprised as follows:
(a) Number. The Board of Directors shall consist of such number
of persons as may from time to time be fixed by the Board pursuant to a
resolution adopted by the affirmative vote of a majority of the
Disinterested Directors then in office, plus such number of additional
directors as the holders of any class or series of stock having a
preference over the Common Stock as to dividends or assets, voting
separately as a class or series, shall have the right from time to time
to elect.
(b) Classes, Election and Terms. The directors elected by the
holders of Voting Stock shall be classified in respect of the time for
which they shall severally hold office by dividing them into three
classes, as nearly equal in number as possible. If such classes of
directors are not equal, the Board of Directors, by the affirmative
vote of a majority of the Disinterested Directors then in office, shall
determine which class shall contain an unequal number of directors. At
the annual meeting of shareholders of the Company in 1987, separate
elections shall be held for the directors of each class, the term of
office of the directors of the first class to expire at the first
annual meeting after their election, the term of office of the
directors of the second class to expire at the second annual meeting
after their election and the term of office of the directors of the
third class to expire at the third annual meeting after their election.
At each succeeding annual meeting of shareholders, the shareholders
shall elect directors of the class whose term then expires, to hold
office until the third succeeding annual meeting. Except as otherwise
expressly provided in these Articles,
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each director shall hold office for the term for which elected
and until his or her successor shall be elected and shall qualify.
(c) Removal of Directors. Any director, any class of directors
or the entire Board of Directors may be removed from office by
shareholder vote at any time, without assigning any cause, but only if
shareholders entitled to cast at least 75% of the votes which all
shareholders would be entitled to cast at an annual election of
directors or of such class of directors shall vote in favor of such
removal; provided, however, that the shareholders shall have such power
of removal without cause only if and so long as the general corporate
law of the Company's state of incorporation specifically mandates such
power. If such power of removal without cause is not mandated by
statute, the shareholders may remove a director or directors from
office at any time only for cause and only if, in addition to any
affirmative vote required by law, these Articles or otherwise, such
removal is approved by the holders of at least a majority of the voting
power of the then outstanding shares of Voting Stock of the Company
which are not beneficially owned by any Interested Shareholder, voting
together as a single class.
(d) Vacancies. Vacancies in the members of the Board of
Directors elected by the holders of Voting Stock, including vacancies
resulting from an increase in the number of directors, shall be filled
only by the affirmative vote of a majority of the Disinterested
Directors then in office, though less than a quorum, except as
otherwise required by law. All directors elected to fill vacancies
shall hold office for a term expiring at the annual meeting of
shareholders at which the term of the class to which they have been
elected expires. No decrease in the number of directors constituting
the Board of Directors shall shorten the term of any incumbent
director.
(e) Nominations of Director Candidates. Nominations for the
election of directors may be made only by the Board of Directors or a
committee appointed by the Board of Directors or by a holder of record
of stock entitled to vote in the election of the directors to be
elected; provided, however, that a nomination may be made by a
shareholder only if written notice of such nomination is received by
the Secretary of the Company not later than (1) with respect to an
election to be held at an annual meeting of shareholders, 90 days prior
to the anniversary date of the immediately preceding annual meeting,
and (2) with respect to an election to be held at a special meeting of
shareholders, the close of business on the 10th day following the date
on which notice of such meeting is first given to shareholders. Each
such notice shall set forth (1) the name and address of the shareholder
who intends to make the nomination and of the person or persons to be
nominated; (2) a representation that the shareholder is a holder of
record of stock of the Company entitled to vote at such meeting and
intends to appear in person or by proxy at the meeting to nominate the
person or persons specified in the notice; (3) a description of all
arrangements or understandings between the shareholder and each nominee
and any other person or persons (naming such person or persons)
pursuant to which the nomination or nominations are to be made by the
shareholder; (4) such other information regarding each nominee proposed
by such shareholder as would be required to be included in a proxy
statement filed pursuant to the proxy rules of the Securities and
Exchange Commission, had the nominee been nominated by the Board of
Directors; and (5) the consent of each nominee to serve as a director
of the Company if so elected. Only candidates who have been nominated
in accordance with this Article 8th shall be eligible for election by
the shareholders as directors of the Company.
(f) Exception for Preferred Stock. Whenever the holders of any
class or series of stock having a preference over the Common Stock as
to dividends or assets shall have the right, voting separately as a
class or series, to elect one or more directors of the Company or to
take any other action, none of the provisions of this Article 8th above
shall apply with respect to the director or directors elected or the
action taken by the holders of such class or series.
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9th. Votes Required For Certain Business Combinations.
9.1. Special Votes for Certain Business Combinations. In addition to
any affirmative vote required by law, these Articles or otherwise, and except
as otherwise expressly provided in Section 9.2 below:
(a) any merger, consolidation or share exchange of the Company
or any Subsidiary with (1) any Interested Shareholder or with (2) any
other person (whether or not itself an Interested Shareholder) which
is, or after such merger, consolidation or share exchange would be, an
Affiliate or Associate of an Interested Shareholder or which does not
include in its Articles the substance of the terms of this Article 9th,
in each case without regard to which person is the surviving person;
(b) any sale, lease, exchange, mortgage, pledge, transfer or
other disposition or security arrangement, investment, loan, advance,
guarantee, agreement to purchase, agreement to pay, extention of
credit, joint venture participation or other arrangement (in one
transaction or a series of transactions) to, with or for the benefit of
any Interested Shareholder or any Affiliate or Associate of any
Interested Shareholder involving any assets, securities or commitments
of the Company or any Subsidiary having an aggregate Fair Market Value
and/or involving aggregate commitments equal to 5% or more of Total
Assets;
(c) the issuance or transfer by the Company or any Subsidiary
(in one transaction or a series of transactions) of any securities of
the Company or any Subsidiary to any Interested Shareholder or any
Affiliate or Associate of any Interested Shareholder in exchange for
cash, securities or other consideration (or a combination thereof)
having an aggregate Fair Market Value equal to 5% or more of Total
Assets;
(d) the adoption of any plan or proposal for the liquidation or
dissolution of the Company proposed by or on behalf of any Interested
Shareholder or any Affiliate or Associate of any Interested
Shareholder;
(e) any reclassification of securities (including any reverse
stock split), or recapitalization of the Company, or any merger or
consolidation of the Company with any Subsidiary or any other
transaction (whether or not with or into or otherwise involving an
Interested Shareholder) which has the effect, directly or indirectly,
of increasing the proportionate share of the outstanding shares of any
class of equity securities or securities convertible into equity
securities of the Company or any Subsidiary which is directly or
indirectly beneficially owned by any Interested Shareholder or any
Affiliate or Associate of any Interested Shareholder; or
(f) any other transaction or series of transactions similar in
purpose or effect to, or any agreement, contract or other arrangement
providing for, any one or more of the transactions specified in the
foregoing clauses (a) through (e);
shall require the affirmative votes of (i) the holders of at least 75% of the
voting power of all then outstanding shares of Voting Stock, voting together as
a single class, and (ii) the holders of at least a majority of the voting power
of the then outstanding shares of Voting Stock which are not beneficially owned
by such Interested Shareholder, voting together as a single class. Such
affirmative votes shall be required notwithstanding the fact that no vote may
be required, or that a lesser percentage may be specified, by law or in any
agreement with any national securities exchange or otherwise.
The term "Business Combination" as used in this Article 9th shall mean
any transaction which is referred to in any one or more of clauses (a) through
(f) above.
9.2. Exception to Special Vote Requirements. The provisions of Section
9.1 shall not be applicable to any Business Combination, and such Business
Combination shall require only such affirmative vote (if any) as is required by
law, any other provision of these Articles, any agreement with any national
securities exchange or otherwise, if the Business Combination is approved by
the affirmative vote of a majority of the Disinterested Directors then in
office.
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9.3. No Effect on Fiduciary Obligations of Interested Shareholders.
Nothing contained in this Article 9th shall be construed to relieve any
Interested Shareholder from any fiduciary obligation imposed by law or equity.
10th. Amendments.
10.1. Amendments to By-Laws. The Board of Directors may adopt, amend
and repeal the By-Laws with respect to those matters which are not, by statute,
reserved exclusively to the shareholders, provided that such power may be
exercised only by the affirmative vote of a majority of the Disinterested
Directors then in office. No By-Law may be adopted, amended or repealed by the
shareholders unless, in addition to any other affirmative vote required by law,
these Articles or otherwise, such action is approved by the affirmative votes
of (a) the holders of at least 75% of the voting power of all then outstanding
shares of Voting Stock, voting together as a single class, and (b) the holders
of at least a majority of the voting power of the then outstanding shares of
Voting Stock which are not beneficially owned by any Interested Shareholder,
voting together as a single class; provided, however, that the additional
affirmative votes required by this Section 10.1 shall not apply to any
shareholder adoption, amendment or repeal of any By-Law provision if such
action is recommended and submitted to the shareholders for their
consideration by the affirmative vote of a majority of the Disinterested
Directors then in office.
10.2. Amendments to Articles. In addition to any affirmative vote
required by law, these Articles or otherwise, any amendment, alteration, change
or repeal of any provision of these Articles, or the adoption of any provision
inconsistent therewith, shall require the affirmative votes of (a) the holders
of at least 75% of the voting power of all then outstanding shares of Voting
Stock, voting together as a single class, and (b) the holders of at least a
majority of the voting power of the then outstanding shares of Voting Stock
which are not beneficially owned by any Interested Shareholder, voting together
as a single class; provided, however, that the additional affirmative votes
required by this Section 10.2 shall not apply to any amendment, alteration,
change, repeal or provision if it is recommended and submitted to the
shareholders for their consideration by the affirmative vote of a majority of
the Disinterested Directors then in office.
11th. Director Liability.
11.1. To the fullest extent that the laws of the Commonwealth of
Pennsylvania, as in effect on January 27, 1987, or as thereafter amended,
permit elimination or limitation of the liability of directors, no director of
the Company shall be personally liable for monetary damages as such for any
action taken, or any failure to take any action, as a director.
11.2. This Article 11th shall not apply to any actions filed prior to
January 27, 1987, nor to any breach of performance of duty or any failure of
performance of duty by any director of the Company occurring prior to January
27, 1987. The provisions of this Article 11th shall be deemed to be a contract
with each director of the Company who serves as such at any time while this
Article 11th is in effect, and each such director shall be deemed to be so
serving in reliance on the provisions of this Article 11th. Any amendment or
repeal of this Article 11th or adoption of any By-Law of this Company or other
provision of the Articles of this Company which has the effect of increasing
director liability shall operate prospectively only and shall not have any
effect with respect to any action taken, or any failure to act, by a director
prior to such amendment, repeal, By-Law or other provision becoming effective.
12th. Indemnification of, and Advancement of Expenses to, Directors,
Officers and Others.
12.1. Right to Indemnification. Except as prohibited by law, every
director and officer of the Company shall be entitled as of right to be
indemnified by the Company against all expenses and liability (as those terms
are defined below in this Section 12.1) incurred by such person in connection
with any actual or threatened claim, action, suit or proceeding, whether civil,
criminal, administrative, investigative or other, or whether brought by or
against such person or by or in the right of the Company or otherwise, in which
such person may be involved in any manner, as a party or otherwise, by reason
of such person being or having been a director or officer of the Company or of
a subsidiary of
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the Company or by reason of the fact that such person is or was serving
at the request of the Company as a director, officer, employee, fiduciary or
other representative of another company, partnership, joint venture, trust,
employee benefit plan or other entity (such claim, action, suit or proceeding
hereinafter being referred to as an "Action"); provided, that no such right to
indemnification shall exist with respect to an Action brought by an indemnitee
(as defined below) against the Company (an "Indemnitee Action") except as
provided in the last sentence of this Section 12.1. Persons who are not
directors or officers of the Company may be similarly indemnified in respect of
service to the Company or a subsidiary of the Company or to another such entity
at the request of the Company to the extent the Board of Directors of the
Company at any time designates any of such persons as entitled to the benefits
of this Article 12th. As used in this Article 12th, "indemnitee" includes each
director and officer of the Company and each other person designated by the
Board of Directors of the Company as entitled to the benefits of this Article
12th; "expenses" means all expenses actually and reasonably incurred, including
fees and expenses of counsel selected by an indemnitee; and "liability" means
all liability incurred, including the amounts of any judgments, excise taxes,
fines or penalties and any amounts paid in settlement. An indemnitee shall be
entitled to be indemnified pursuant to this Section 12.1 against expenses
incurred in connection with an Indemnitee Action if (a) the Indemnitee Action
is instituted under Section 12.3 below and the indemnitee is successful in
whole or in part in such Indemnitee Action, (b) the indemnitee is successful in
whole or in part in another Indemnitee Action for which expenses are claimed or
(c) if the indemnification for expenses is included in a settlement of, or is
awarded by a court in, such other Indemnitee Action.
12.2 Right to Advancement of Expenses. Every indemnitee shall be
entitled as of right to have the expenses of the indemnitee in defending any
Action or in bringing and pursuing an Indemnitee Action under Section 12.3
below paid in advance by the Company prior to final disposition of the Action
or Indemnitee Action, provided that the Company receives a written undertaking
by or on behalf of the indemnitee to repay the amount advanced if it should
ultimately be determined that the indemnitee is not entitled to be indemnified
for the expenses.
12.3 Right of Indemnitee to Initiate Action. If a written claim for
indemnification under Section 12.1 above or for advancement of expenses under
Section 12.2 above is not paid in full by the Company within 30 days after the
claim has been received by the Company, the indemnitee may at any time
thereafter bring an Indemnitee Action to recover the unpaid amount of the
claim, and, if successful in whole or in part, the indemnitee shall also be
entitled to be paid the expense of bringing and pursuing such Indemnitee
Action. The only defense to an Indemnitee Action to recover on a claim for
indemnification under Section 12.1 above shall be that the conduct of the
indemnitee was such that under Pennsylvania law the Company is prohibited from
indemnifying the indemnitee for the amount claimed but the burden of proving
such defense shall be on the Company. Neither the failure of the Company
(including its Board of Directors, independent legal counsel and shareholders)
to have made a determination prior to the commencement of such Indemnitee
Action that indemnification of the indemnitee is proper in the circumstances,
nor an actual determination by the Company (including its Board of Directors,
independent legal counsel or shareholders) that the conduct of the indemnitee
was such that indemnification is prohibited by law, shall be a defense to such
Indemnitee Action or create a presumption that the conduct of the indemnitee
was such that indemnification is prohibited by law. The only defense to an
Indemnitee Action to recover a claim for advancement of expenses under Section
12.2 above shall be the failure by the indemnitee to provide the undertaking
required by Section 12.2 above.
12.4. Funding and Insurance. The Company may create a trust fund, grant
a security interest, cause a letter of credit to be issued or use other means
(whether or not similar to the foregoing) to ensure the payment of all sums
required to be paid by the Company to effect indemnification as provided in
this Article 12th.
12.5. Non-Exclusivity; Nature and Extent of Rights. The rights to
indemnification and advancement of expenses provided for in this Article 12th
shall (a) not be deemed exclusive of any other rights, whether now existing or
hereafter created, to which any indemnitee may be entitled under any agreement,
provision in the Articles or By-Laws of the Company, vote of shareholders or
directors or
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otherwise, (b) be deemed to create contractual rights in favor of each
indemnitee who serves at any time while this Article 12th is in effect (and
each such indemnitee shall be deemed to be so serving in reliance on the
provisions of this Article 12th and (c) continue as to each indemnitee who has
ceased to have the status pursuant to which the indemnitee was entitled or was
designated as entitled to indemnification under this Article 12th and inure to
the benefit of the heirs and legal representatives of each indemnitee. Any
amendment or repeal of this Article 12th or adoption of any By-Law of this
Company or other provision of the Articles of this Company which has the effect
of limiting in any way the rights to indemnification or advancement of expenses
provided for in this Article 12th shall operate prospectively only and shall
not affect any action taken, or failure to act, by an indemnitee prior to such
amendment, repeal, By-Law or other provision becoming effective.
12.6. Partial Indemnity. If an indemnitee is entitled under any
provision of this Article 12th to indemnification by the Company for some or a
portion of the expenses or liability incurred by the indemnitee in the
preparation, investigation, defense, appeal or settlement of any Action or
Indemnitee Action but not, however, for the total amount thereof, the Company
shall indemnify the indemnitee for the portion of such expenses or liability to
which the indemnitee is entitled.
12.7. Applicability of Section. This Article 12th shall apply to every
Action other than an Action filed prior to January 27, 1987, except that it
shall not apply to the extent that Pennsylvania law does not permit its
application to any breach of performance of duty or any failure of performance
of duty by an indemnitee occurring prior to January 27, 1987.
13th. Articles Defined. Henceforth, the Articles as defined in the
Pennsylvania Business Corporation Law shall not include any prior documents.
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