-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, J1tojnOJDJ71c1S5pvz67qEEL/F1iUUIeb1MUH7WJ+2k2UhHnVKAd43GBV14hwJt g4UzE+fxC9A+aVUkgWb/wQ== 0000896058-96-000118.txt : 19960805 0000896058-96-000118.hdr.sgml : 19960805 ACCESSION NUMBER: 0000896058-96-000118 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 7 CONFORMED PERIOD OF REPORT: 19960722 ITEM INFORMATION: Other events FILED AS OF DATE: 19960802 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: SILGAN HOLDINGS INC CENTRAL INDEX KEY: 0000849869 STANDARD INDUSTRIAL CLASSIFICATION: FABRICATED STRUCTURAL METAL PRODUCTS [3440] IRS NUMBER: 061269834 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 033-28409 FILM NUMBER: 96602947 BUSINESS ADDRESS: STREET 1: 4 LANDMARK SQ CITY: STAMFORD STATE: CT ZIP: 06901 BUSINESS PHONE: 2039757110 8-K 1 FORM 8-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ------------ FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): July 22, 1996 SILGAN HOLDINGS INC. --------------------------------------------------- (Exact name of registrant as specified in its charter) Delaware 33-28409 06-1269834 - -------------------- ----------------------- ------------------------ (State or other (Commission File Number) (IRS Employer jurisdiction of Identification No.) incorporation) 4 Landmark Square, Stamford, Connecticut 06901 --------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (203) 975-7110 Item 5: Other Events. General. On July 22, 1996, Silgan Holdings Inc. (the "Company") issued and sold 50,000 shares (the "Shares") of its 13 1/4% Cumulative Exchangeable Preferred Stock (the "Preferred Stock") to "Qualified Institutional Buyers" in a private placement in reliance on Rule 144A promulgated under the Securities Act of 1933, as amended (the "Securities Act"). A portion of the net proceeds ($35.7 million) from the sale of the Shares were used by the Company to purchase, on July 22, 1996, 250,000 shares of its Class B Common Stock (the "Class B Stock") held by Mellon Bank, N.A., as trustee for First Plaza Group Trust ("Mellon"), which Class B Stock was canceled on such purchase date. The remaining net proceeds from the sale of the Shares ($12 million) will be used to redeem an equal principal amount of the Company's 13 1/4% Senior Discount Debentures due 2002 (the "Discount Debentures") on August 26, 1996. Upon completion of this redemption, the Company will have outstanding approximately $59 million principal amount of Discount Debentures, and will have redeemed and repurchased an aggregate of approximately $216 million principal amount at maturity of Discount Debentures since 1995 with borrowings under the Company's and its subsidiaries' lower cost bank credit facility and with proceeds from the sale of the Shares. As a result, the Company has lowered its average cost of indebtedness, will realize $11.5 million of annual cash interest savings, and will realize $19.5 million of current cash tax savings as a result of the deduction by the Company of the accreted interest on the retired Discount Debentures. In addition, the use of a portion of the net proceeds from the sale of the Shares to purchase the Class B Stock held by Mellon enabled the Company to purchase such stock at a lower cost than in the future. The Company may consider refinancing all or a portion of the remaining Discount Debentures through debt and/or equity financings. Any such financings will depend upon the market conditions existing at the time and will have to be effected in compliance with the Company's agreements governing its indebtedness. Terms of Preferred Stock. The following is a summary of the terms of the Preferred Stock. The Preferred Stock has a liquidation preference of $1,000 per share and ranks senior to all outstanding capital stock of the Company. The Company is required to redeem the Preferred Stock at its liquidation preference of $1,000 per share, plus accrued and unpaid dividends, on July 15, 2006. Dividends on the Preferred Stock are cumulative from the date of issuance at 13-1/4% per annum on the liquidation preference thereof, and are payable quarterly in cash or, on or prior to July 15, 2000 at the sole option of the Company, in additional shares of Preferred Stock, on January 15, April 15, -2- July 15 and October 15, commencing October 15, 1996. If by July 22, 1997 the Preferred Stock has not been exchanged for the Company's Subordinated Debentures due 2006 (the "Exchange Debentures"), the dividend rate on the Preferred Stock will increase by 0.5% per annum to 13-3/4% per annum of the liquidation preference thereof until such exchange occurs. The Preferred Stock is exchangeable into Exchange Debentures at any time at the option of the Company, in whole but not in part, subject to (i) such exchange being permitted under the Company's and its subsidiaries' instruments and agreements governing their indebtedness, including the Company's and its subsidiaries' credit agreement and the Discount Debentures, and (ii) the conditions therefor described in the Certificate of Designation being satisfied. On or after July 15, 2000, the Preferred Stock is redeemable, at the option of the Company, in whole or in part, at the rate of 109.938% (declining ratably to 100% by July 15, 2003) of the liquidation preference thereof, plus accrued and unpaid dividends to the redemption date. In addition, at any time, or from time to time, on or prior to July 15, 2000, the Company may, at its option, redeem all (but not less than all) of the outstanding shares of Preferred Stock at a redemption price equal to 110% of the liquidation preference thereof, plus accrued and unpaid dividends to the redemption date, with the proceeds of one or more sales of common stock of the Company. Upon a Change of Control (as defined in the Certificate of Designation), the Company is required to make an offer to purchase all shares of Preferred Stock at a purchase price equal to 101% of their liquidation preference, plus accrued and unpaid dividends to the date of purchase. Holders of the Preferred Stock have no voting rights except as provided by law and as provided in the Company's Restated Certificate of Incorporation, as amended (the "Certificate of Incorporation"), or in the Certificate of Designation of the Company for the Preferred Stock (the "Certificate of Designation"). In the event that dividends are not paid for four consecutive quarters or upon certain other events as described in the Certificate of Designation (including failure to comply with covenants under the Certificate of Designation and failure to pay the mandatory redemption price on the Preferred Stock when due), then the number of directors constituting the Company's Board of Directors will be adjusted to permit the holders of the majority of the then outstanding Preferred Stock, voting separately as a class, to elect the number of directors that is equal to the greater of (i) one and (ii) the whole number obtained (rounding down to the nearest whole number) by (a) multiplying 1/6 by the number of directors then in office and (b) adding one. The Certificate of Incorporation provides that, until the occurrence of certain events, even if a majority of the directors of the Company vote -3- in favor of an action, the directors elected by either of the Company's Class A Common Stock or Class B Common Stock could block such action. The Certificate of Designation contains certain covenants which, among other things, restricts the ability of the Company and its subsidiaries to incur additional indebtedness and issue preferred stock; pay dividends or make distributions in respect of their capital stock; purchase, redeem or otherwise acquire for value shares of capital stock; make any voluntary or optional principal payments or voluntary or optional redemption, repurchase, defeasance or other acquisition or retirement for value of any securities ranking junior to the Preferred Stock; make investments in any affiliate or unrestricted subsidiary; enter into transactions with shareholders or affiliates; create restrictions on the ability of the Company's subsidiaries to make certain payments; issue or sell stock of the Company's subsidiaries; engage in sales of assets; and engage in mergers or consolidations. Generally, these covenants are no more restrictive, and in some cases are less restrictive, than the covenants for the Discount Debentures. The Company is obligated to consummate an exchange offer (the "Preferred Stock Exchange Offer") pursuant to an effective registration statement or cause the Preferred Stock to be registered under the Securities Act pursuant to a shelf registration statement and, if the Preferred Stock Exchange Offer is not consummated and such shelf registration statement is not declared effective on or prior to December 22, 1996, the per annum dividend rate on the Preferred Stock will be increased by 0.5%, payable in additional shares of Preferred Stock on each dividend payment date, until the Preferred Stock Exchange Offer is consummated or such shelf registration statement is declared effective. Terms of Exchange Debentures. The following is a summary of the terms of the Exchange Debentures. If issued, the aggregate principal amount of the Exchange Debentures will be equal to the aggregate liquidation preference of, and accrued but unpaid dividends on, the Preferred Stock outstanding on the date that the Preferred Stock is exchanged for the Exchange Debentures (the "Exchange Date"). The Exchange Debentures will mature on July 15, 2006. The Exchange Debentures will be subordinated indebtedness of the Company, subordinated to the prior payment when due of the principal of, and premium, if any, and accrued and unpaid interest on, all existing and future "Senior Indebtedness" (as such term will be defined in the indenture relating to the Exchange Debentures (the "Exchange Debenture Indenture") to be executed by the Company and the trustee therefor) of the Company (including indebtedness under the Company's and its subsidiaries credit agreement and the Discount -4- Debentures). In addition, the Exchange Debentures will be effectively subordinated to all liabilities (including trade payables) of the Company's subsidiaries. Each Exchange Debenture will bear interest at the dividend rate in effect with respect to the Preferred Stock on the date the Exchange Debentures are issued from the Exchange Date or from the most recent interest payment date to which interest has been paid or provided for. Interest will be payable on January 15 and July 15 of each year, commencing with the first of such dates to occur after the Exchange Date. On or prior to July 15, 2000, the Company will be permitted to pay interest on the Exchange Debentures by issuing additional Exchange Debentures. On or after July 15, 2000, the Exchange Debentures will be redeemably, at the option of the Company, in whole or in part, at the rate of 109.938% of the principal amount thereof (declining ratable to 100% by July 15, 2003), plus accrued and unpaid interest to the redemption date. In addition, at any time, or from time to time, on or prior to July 15, 2000, the Company will be able, at its option, to redeem all (but not less than all) outstanding Exchange Debentures at a redemption price equal to 110% of the principal amount thereof, plus accrued and unpaid interest to the redemption date, with the proceeds of one or more sales of common stock of the Company. Upon a Change of Control, the Company will be required to make an offer to purchase all of the Exchange Debentures at a purchase price equal to 101% of their principal amount on the date of purchase, plus accrued and unpaid interest to the date of purchase. The Exchange Debenture Indenture will contain certain covenants which, among other things, will restrict the ability of the Company and its subsidiaries to incur additional indebtedness; pay dividends or make distributions in respect of their capital stock; purchase, redeem, or otherwise acquire for value shares of their capital stock; make any voluntary or optional principal payments or voluntary or optional redemption, repurchase, defeasance or other acquisition or retirement for value of any indebtedness subordinated to the Exchange Debentures; make investments in any affiliate or unrestricted subsidiary of the Company; enter into transactions with shareholders or affiliates; create restrictions on the ability of the Company's subsidiaries to make certain payments; issue or sell stock of the Company's subsidiaries; engage in sales of assets; and engage in mergers or consolidations. Generally, these covenants will be no more restrictive than the covenants contained in the Certificate of Designation for the Preferred Stock. -5- Item 7: Exhibits (c) Exhibits (1) Restated Certificate of Incorporation of the Company, dated December 20, 1993. (2) Certificate of Amendment to the Restated Certificate of Incorporation of the Company, dated July 19, 1996. (3) Silgan Holdings Inc. Certificate of Designation of the Powers, Preferences and Relative, Participating, Optional and Other Special Rights of 13 1/4% Cumulative Exchangeable Redeemable Preferred Stock and Qualifications, Limitations and Restrictions Thereof (4) Form of the Company's 13 1/4% Cumulative Exchangeable Redeemable Preferred Stock Certificate (5) Registration Rights Agreement, dated July 22, 1996, between the Company and Morgan Stanley & Co. Incorporated (6) Placement Agreement between the Company and Morgan Stanley & Co. Incorporated, dated July 17, 1996. -6- SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. SILGAN HOLDINGS INC. By:/s/ Harley Rankin, Jr. ----------------------- Harley Rankin, Jr. Executive Vice President, Chief Financial Officer and Treasurer Date: August 2, 1996 -7- EX-99.1 2 RESTATED CERTIFICATE OF INCORPORATION Exhibit 1 RESTATED CERTIFICATE OF INCORPORATION OF SILGAN HOLDINGS INC. PURSUANT TO SECTIONS 242 AND 245 OF THE GENERAL CORPORATION LAW OF THE STATE OF DELAWARE SILGAN HOLDINGS INC., a Delaware corporation, the original Certificate of Incorporation of which was filed with the Secretary of State of the State of Delaware on April 6, 1989, HEREBY CERTIFIES that this Restated Certificate of Incorporation, restating, integrating and amending its Certificate of Incorporation, was duly proposed by its Board of Directors and adopted by its stockholders in accordance with Sections 242 and 245 of the General Corporation Law of the State of Delaware, and that the capital of the Corporation is not being reduced under or by reason of any amendment in this Restated Certificate of Incorporation. FIRST: The name of this corporation (the"Corporation") is: SILGAN HOLDINGS INC. SECOND: The address of the registered office of the Corporation in the State of Delaware is Corporation Trust Center, 1209 Orange Street, in the City of Wilmington, County of New Castle. The name of its registered agent at such address is The Corporation Trust Company. THIRD: The purpose of the Corporation is to engage in any lawful act or activity for which a corporation may be organized under the General Corporation Law of the State of Delaware (the "GCL"). FOURTH: The name and mailing address of the Sole Incorporator of the Corporation is as follows: Ronald R. Adee, Esq. Willkie Farr & Gallagher One Citicorp Center 153 East 53rd Street New York, New York 10022 FIFTH: Prior to the occurrence of a Change of Control (as defined in Article TENTH), the number of directors of the Corporation shall be six, and from and after a Change of Control, the number of directors of the Corporation shall be increased to eight, as provided in Article SEVENTH. At each -1- annual meeting of stockholders, three Class A Directors (as defined in Article SEVENTH) of the Corporation shall be elected by the vote of the holders of a majority of the outstanding shares of the Class A Stock (as defined in Article SEVENTH), and three Class B Directors (as defined in Article SEVENTH) shall be elected by the vote of the holders of a majority of the outstanding shares of the Class B Stock (as defined in Article SEVENTH). A. When and after a Change of Control occurs, the number of Class B Directors shall be increased to five, and the holders of a majority of the outstanding shares of Class B Stock shall be entitled to nominate and elect a total of five Class B Directors. B. In the event that a vacancy among the Class A Directors or the Class B Directors shall occur at any time prior to the election of directors at the next scheduled annual meeting of stockholders, the vacancy shall be filled, in the case of the Class A Directors, by either (i) the vote of the holders of a majority of the outstanding shares of Class A Stock, at a special meeting of stockholders, or (ii) by written consent of the holders of a majority of the outstanding shares of Class A Stock, and, in the case of the Class B Directors, by either (i) the vote of the holders of a majority of the outstanding shares of Class B Stock at a special meeting of stockholders, or (ii) by written consent of the holders of a majority of the outstanding shares of Class B Stock. C. (i) Prior to a Change of Control (but not thereafter), at all meetings of the Board of Directors, two Class A Directors and two Class B Directors shall be required to constitute a quorum ("Quorum") for the transaction of business. Prior to a Change of Control (but not thereafter), the approval of the majority of the entire Board of Directors, voting together as a single class, such majority to include at least one Class A Director and one Class B Director ("Required Majority"), at a meeting at which there is a Quorum, shall be required to approve the actions set forth in Article SIXTH hereof and, except as set forth in Article EIGHTH hereof, all other matters submitted to the Board of Directors; provided, however, that prior to a Change of Control (but not thereafter), the Class A Directors shall have the sole right to appoint any Class A Director to any committee of the Board of Directors, the Class B Directors shall have the sole right to appoint any Class B Director to any committee of the Board of Directors, and the approval of a majority of the members of any such committee, voting together as a single class, shall be required to approve all matters submitted to such committee. (ii) When and after a Change of Control occurs, at all meetings of the Board of Directors, a majority of the entire Board of Directors (regardless of class) shall be sufficient to constitute a quorum for the transaction of business and, except as set forth in Article EIGHTH hereof, -2- the act of a majority of the directors (regardless of class) present at any meeting at which there is a quorum present shall be sufficient to constitute the act of the Board of Directors. D. There shall be an Audit Committee consisting of two or more of the directors of the Corporation, which shall include at least one Class A Director and one Class B Director who shall perform such functions as shall be established by the Board of Directors; provided, however, that prior to a Change of Control (but not thereafter) if a majority of the Class B Directors so determine at any time, such committee shall consist of one Class A Director and two Class B Directors. From and after a Change of Control, such committee shall consist of such number of directors of such classes as shall be determined by a majority of the Board of Directors. E. There shall be an Investment Opportunity Committee, which shall have sole authority to consider and approve of any investment opportunity that is submitted to the Board of Directors by a holder of Class A Stock who, under the terms of any agreement then in effect among one or more of the stockholders and the Corporation, is required to first offer such opportunity to the Corporation. Prior to a Change of Control (but not thereafter), such committee shall consist of one Class A Director and two Class B Directors. From and after a Change of Control, such committee shall consist of such number of directors of such classes as shall be determined by a majority of the Board of Directors. F. (i) In the event that, prior to a Change of Control, and while the Initial Investors (as defined below) are parties to an Organization Agreement among themselves, Bankers Trust New York Corporation, First Plaza and the Corporation, the Board of Directors shall be unable to reach agreement upon any particular matter submitted to it (an "Open Matter"), The Morgan Stanley Leveraged Equity Fund II, L.P., a Delaware limited partnership ("MS Equity"), R. Philip Silver ("Silver") and D. Greg Horrigan ("Horrigan"), and their respective Affiliates (collectively, the "Initial Investors"), acting through either Silver or Horrigan and through a designee of MS Equity, have agreed to hold one or more informal meetings promptly in an effort to discuss and resolve such Open Matter. The Initial Investors have agreed to seek to cause any conclusions arrived at during such meetings to be implemented, where necessary, by action of the Required Majority of the Board of Directors. (ii) If the procedure specified in paragraph (i) has not led to a satisfactory resolution regarding an Open Matter within 30 days of any Initial Investor seeking such an informal meeting with respect to such Open Matter, then, upon a finding by any two directors (regardless of class) that failure to resolve the Open Matter threatens the continued existence of, or will result in irreparable injury to, the Corporation, the Open Matter shall be -3- submitted for determination in the following manner; provided, however, that (a) of the items set forth in subparagraphs one through twenty of Article SIXTH, only item number five may be so submitted and (b) any Open Matter not involving an item set forth in subparagraphs one through twenty of Article SIXTH may be submitted to arbitration only if the Initial Investors have agreed that such item shall be so submitted. The directors in favor of the Open Matter as a group and the directors opposed to the Open Matter as a group shall, within ten days of such request, each appoint an independent person as arbitrator to resolve the Open Matter. The arbitrators so chosen promptly shall agree upon and appoint an independent person as an additional arbitrator. The arbitrators promptly shall determine whether the Open Matter meets the standard set forth in this paragraph as to matters which are to be submitted to arbitration by the Initial Investors, and, if so, promptly shall seek to resolve the Open Matter. The decision of the arbitrators shall be final and binding upon the Corporation and the stockholders. The Board of Directors or, if the Board of Directors shall not have done so within five days of the arbitrators' decision, the stockholders, shall take any and all action necessary to implement such decision. If, pursuant to the preceding sentence, the resolution of an Open Matter is submitted to the stockholders for authorization, the Initial Investor which is in favor of such resolution shall be entitled to vote all of the shares of Class A Stock and Class B Stock held by any other Initial Investors in favor of such resolution, and the action of a majority of the holders of outstanding Class A Stock and Class B Stock, voting as a single class, shall be sufficient to approve such resolution. (iii) If the arbitrators chosen by the directors are unable to agree upon and appoint an additional arbitrator, the Open Matter shall be resolved by three arbitrators appointed by the American Arbitration Association (the "AAA") in accordance with the then prevailing Commercial Arbitration Rules thereof (the "Rules"). The AAA shall be required to endeavor to appoint experts in a discipline relevant to the Open Matter and, if the same issue or an issue similar to the Open Matter has been submitted to arbitration by the Initial Investors before, to appoint one or more of the same arbitrators to determine the Open Matter and each such same (or similar) issue, but the failure to do any of the foregoing shall not be a basis for avoiding, setting aside or altering the arbitral award. (iv) Any arbitration referred to in subparagraph F(iii) of Article FIFTH shall be conducted under the Rules in the City of Wilmington, Delaware unless the Initial Investors mutually agree to have the arbitration held elsewhere, and the award made therein shall be entered in the applicable State Courts of Delaware or, as the case may be, the United States District Court for Delaware. SIXTH: The business and affairs of the Corporation shall -4- be managed by or under the direction of the Board of Directors, provided that the Corporation may retain such qualified persons (as determined by the Board of Directors) to provide the Corporation with general management, supervision and administrative services relating to the operations of the Corporation. Approval of the following actions shall not be delegated to any officer, employee or agent of the Corporation: 1. Amendment of the Certificate of Incorporation or By-Laws of the Corporation or any of its subsidiaries. 2. Issuance, sale, purchase or redemption of any capital stock, warrants, options or other securities of the Corporation or any of its subsidiaries (other than, in the case of any issuance or sale, to the Corporation or any direct or indirect wholly owned subsidiary of the Corporation) except as may be otherwise provided in this Restated Certificate of Incorporation. 3. Sale of assets other than inventory to or from the Corporation or any of its subsidiaries in excess of $2 million (i) in one or a series of related transactions (regardless of the period of time in which such transaction or series of related transactions take place) or (ii) in any number of transactions within a six-month period. 4. Merger, consolidation, dissolution or liquidation of the Corporation or any of its subsidiaries. 5. Filing of any petition by or on behalf of the Corporation seeking relief under the federal bankruptcy act or similar relief under any law or statute of the United States or any state thereof. 6. Setting aside, declaration or making of any payment or distribution by way of dividend or otherwise to the Corporation's stockholders (or setting dividend policy). 7. Incurrence (other than in the ordinary course of business) of new indebtedness (including capitalized leases, but excluding indebtedness incurred pursuant to debt instruments of the Corporation in existence on the Closing Date (as defined in Article TENTH) and excluding indebtedness incurred under the Bank Financing pursuant to commitments approved by the Board of Directors) or any fixed or contingent liabilities in excess of $2 million. 8. Creation or incurrence of a lien or encumbrance on the property of the Corporation or any of its subsidiaries, except for liens relating to the Bank Financing (as defined in Article TENTH) or other minor liens, including liens for taxes or those arising by operation of law, permitted to exist under the terms of the Bank Financing. -5- 9. Guarantees in excess of $1 million of payment by or performance of obligations of third parties other than in the ordinary course of business. 10. The Corporation's institution of, termination or settlement of litigation not in the ordinary course of the Corporation's business (in each case where such litigation represents a case or controversy in excess of $2 million). 11. Surrendering or abandoning any property, tangible or intangible, or any rights having a book value in excess of $1 million. 12. Except as set forth in subsection 16 below with respect to leases which are not capitalized, any commitment of the Corporation (other than in the ordinary course of its business) which creates a liability or commitment in excess of $2 million. 13. Capital expenditures in excess of the amounts permitted under the Bank Financing. 14. Donations of money or property in excess of $100,000 in a single year. 15. Any investment of the Corporation or any of its subsidiaries in another corporation, partnership or joint venture in excess of $2 million (in one or a series or related transactions or in any number of transactions within six months). 16. Entering into any lease (other than a capitalized lease which shall be subject to the limitation set forth in subsection 12 above) of any assets of the Corporation located in any one place having a book value in excess of $4 million, or in excess of $1 million if the lease has a term of more than five years. 17. Entering into agreements or material transactions between the Corporation and a director or officer of any of the following companies or their Affiliates (as defined in Article TENTH): the Corporation and MS Equity. 18. Replacement of independent accountants for the Corporation or any of its subsidiaries. 19. Modification of significant accounting methods, practices, procedures and policies. 20. Removal of officers. SEVENTH: The total number of shares of capital stock which the Corporation shall have authority to issue is 3,167,500 shares, consisting of 500,000 shares of Class A common stock, par value $.01 per share (the "Class A Stock"), 667,500 shares of -6- Class B common stock, par value $.01 per share (the "Class B Stock"), 1,000,000 shares of Class C common stock, par value $.01 per share (the "Class C Stock") (the Class A Stock, Class B Stock and Class C Stock being sometimes referred to herein collectively as the "Common Stock"), and 1,000,000 shares of preferred stock, par value $.01 per share (the "Preferred Stock"). A. Except as set forth below, the rights, privileges and powers, including the voting powers, of the Class A Stock and the Class B Stock shall be identical, with each share of each class being entitled to one vote on all matters to come before the stockholders of the Corporation. (i) Until the occurrence of a Change of Control, but not thereafter, the affirmative vote of the holders of not less than a majority of the outstanding shares of Class A Stock and Class B Stock, voting as separate classes, shall be required for the approval of any matter to come before the stockholders of the Corporation, except as follows: (a) The holders of a majority of the outstanding shares of Class A Stock, voting as a separate class, shall have the sole right to vote for and elect three directors (such directors being referred to herein as "Class A Directors") and to remove any Class A Director with or without cause. (b) The holders of a majority of the outstanding shares of Class B Stock, voting as a separate class, shall have the sole right to vote for and elect (i) prior to a Change of Control, three directors other than the Class A Directors (the directors elected by the holders of Class B Stock being referred to herein as "Class B Directors"), and (ii) from and after a Change of Control, five Class B Directors, and to remove any Class B Director with or without cause. (c) The vote of the holders of not less than a majority of the outstanding shares of Class B Stock shall be required (x) to determine whether a product is similar to such products as are manufactured or sold or proposed to be manufactured or sold in North America by the Corporation or its subsidiaries or is otherwise directly competitive with products produced by the Corporation and its subsidiaries and (y) to authorize any action necessary to be taken by the stockholders to implement the decision of an arbitrator as provided in paragraph F of Article FIFTH. (ii) From and after a Change of Control, the affirmative vote of the holders of not less than a majority of the outstanding shares of Class A Stock and Class B Stock, voting together as a single class, shall be required for the approval of any matter to come before the stockholders of the Corporation, except that the provisions of subparagraphs A(i)(a) and A(i)(b) of this Article SEVENTH shall continue to apply from and after a Change of Control -7- and except as otherwise provided in Article ELEVENTH. B. The holders of Class C Stock will not have any voting rights except as provided by applicable law and except that such holders shall be entitled to vote as a separate class on certain amendments to this Restated Certificate of Incorporation as provided in Article ELEVENTH. C. The Board of Directors of the Corporation may cause dividends to be paid to the holders of shares of Common Stock out of funds legally available for the payment of dividends by declaring an amount per share as a dividend. When and as dividends are declared, other than dividends declared with respect to the Preferred Stock, whether payable in cash, in property or in shares of stock of the Corporation, other than shares of Class A Stock, Class B Stock or Class C Stock, the holders of Class A Stock, the holders of Class B Stock and the holders of Class C Stock shall be entitled to share equally, share for share, in such dividends. No dividends shall be declared or paid in shares of Class A Stock, Class B Stock or Class C Stock or options, warrants, or rights to acquire such stock or securities convertible into or exchangeable for shares of such stock, except dividends payable ratably in shares of, or securities convertible into or exchangeable for, Class A Stock to holders of that class of stock, and in shares of, or securities convertible into or exchangeable for, Class B Stock to holders of that class of stock, and in shares of, or securities convertible into or exchangeable for, Class C Stock to holders of that class of stock. If, in connection with any (i) reorganization, reclassification or change of shares of Common Stock of the Corporation (other than a change in par value, or from par value to no par value as a result of a subdivision or combination), or (ii) consolidation of the Corporation with one or more other corporations or a merger of the Corporation with another corporation (other than a consolidation or merger in which the Corporation is the continuing corporation and which does not result in any reclassification or change of outstanding shares of Common Stock), or (iii) sale, lease or other disposition to another corporation (other than a wholly owned subsidiary of the Corporation) of all or substantially all the assets of the Corporation (any such transaction set forth in clause (i), (ii) or (iii) is hereinafter referred to as a "Reorganization Transaction"), the holders of any class of Common Stock receive shares of any class of common stock of the resulting or surviving corporation, effective provision shall be made in the certificate of incorporation of the resulting or surviving corporation or otherwise for the protection of the rights afforded by this paragraph C. D. (i) Any Regulated Stockholder (as defined below) shall be required to convert all of the shares of Class A Stock or Class B Stock held by such stockholder into the same number of shares of Class C Stock in accordance with the provisions of paragraph D(ii) below. The term "Regulated -8- Stockholder" shall mean (a) any stockholder that is subject to the provisions of Regulation Y of the Board of Governors of the Federal Reserve System (12 C.F.R. Part 225) or any successor to such regulation ("Regulation Y") that holds shares of Common Stock originally issued to such stockholder or acquired by such stockholder pursuant to a right of first refusal granted to the stockholder under the terms of an agreement among one or more of the stockholders and the Corporation, (b) any Affiliate of any such Regulated Stockholder that is a transferee of any shares of Common Stock, so long as such Affiliate shall hold, and only with respect to, such shares of Common Stock and (c) any Person (x) to which such Regulated Stockholder or any of its Affiliates has transferred such shares, so long as such transferee shall hold, and only with respect to, any shares of Common Stock transferred by such stockholder or Affiliate and (y) which is, or any Affiliate of which is, subject to the provisions of Regulation Y. (ii) In the event the Corporation effects a Public Offering (as defined below), upon compliance with the provisions of paragraph D(iii) below, any Regulated Stockholder shall be entitled to convert, at any time and from time to time, any and all shares of Class C Stock held by such stockholder into the same number of shares of Class B Stock (or, to the extent such Class C Stock was issued upon the conversion of Class A Stock, into the same number of shares of Class A Stock); provided, however, that no holder of any shares of Class C Stock shall be entitled to convert any such shares into shares of Class A Stock or Class B Stock if, as a result of such conversion, (i) such holder and its Affiliates, directly or indirectly, would own, control or have the power to vote a greater number of shares of Common Stock or other securities of any kind issued by the Corporation than such holder and its Affiliates shall be permitted to own, control or have the power to vote under any law, regulation, rule or other requirement of any governmental authority at the time applicable to such holder or its Affiliates, or (ii) the rights, activities or business of the Corporation would become limited in any respect as a result of the application of Regulation Y. (iii) (a) Each conversion of shares of Common Stock of the Corporation into shares of another class of Common Stock shall be effected by the surrender of the certificate or certificates evidencing the shares of the class of stock to be converted (the "Converting Shares") at the principal office of the Corporation (or such other office or agency of the Corporation as the Corporation may designate by notice in writing to the holders of Common Stock), at any time during its usual business hours, together with written notice by the holder of such Converting Shares, (1) stating that the holder desires to convert the Converting Shares evidenced by such certificate or certificates into an equal number of shares of the class into which such shares may be converted (the "Converted Shares"), and (2) giving the name or names -9- (with addresses) and denominations in which the certificate or certificates evidencing the Converted Shares shall be issued, and instructions for the delivery thereof. The Corporation shall promptly notify each Regulated Stockholder of record of its receipt of such notice. Upon receipt of the notice described in the first sentence of this paragraph D(iii)(a), together with the certificate or certificates evidencing the Converting Shares, the Corporation shall be obligated to, and shall, issue and deliver in accordance with such instructions the certificate or certificates evidencing the Converted Shares issuable upon such conversion and a certificate (which shall contain such legends, if any, as were set forth on the surrendered certificate or certificates) representing any shares which were represented by the certificate or certificates surrendered to the Corporation in connection with such conversion but which were not Converting Shares and, therefore, were not converted. Such conversion, to the extent permitted by law, shall be deemed to have been effected as of the close of business on the date on which such certificate or certificates shall have been surrendered and such written notice shall have been received by the Corporation, and at such time the rights of the holder of such Conversion Shares as such holder shall cease, and the person or persons in whose name or names any certificates evidencing the Converted Shares are to be issued upon such conversion shall be deemed to have become the holder or holders of record of the Converted Shares. The Corporation shall be entitled to rely conclusively as to the truth of the statements made in such written notice, and the Corporation shall not be liable to any person with respect to any action taken or omitted to be taken by it in connection with such conversion in reliance on the statements made in such written notice. (b) Notwithstanding any provision of paragraph D(iii)(a) to the contrary, the Corporation shall not be required to record the conversion of, and no holder of shares shall be entitled to convert, shares of Class C Stock into shares of Class A Stock or Class B Stock, as the case may be, unless such conversion is permitted under applicable law and this Restated Certificate of Incorporation; provided, however, that the Corporation shall be entitled to rely without independent verification upon the representation of any holder, that the conversion of shares by such holder is permitted under applicable law, and in no event shall the Corporation be liable to any such holder or any third party arising from any such conversion whether or not permitted by applicable law. (c) Upon the issuance of the Converted Shares in accordance with this paragraph D, such shares shall be deemed to be duly authorized, validly issued, fully paid and non-assessable. (d) The Corporation shall not directly, or indirectly redeem, purchase or otherwise acquire any shares of Class A or B Stock or take any other action affecting the voting rights of such shares, if such action will increase -10- the percentage of outstanding voting securities known by the Corporation to be owned or controlled by any Regulated Stockholder unless the Corporation gives written notice (the "First Notice") of such action to each such Regulated Stockholder. The Corporation will defer making any conversion, redemption, purchase or other acquisition or taking any such other action for a period of 30 days (the "Deferral Period") after giving the First Notice in order to allow each such Regulated Stockholder to determine whether it wishes to convert or take any other action with respect to the Common Stock it owns, controls or has the power to vote, and if any such Regulated Stockholder then elects to convert any shares of Common Stock, it shall notify the Corporation in writing within 20 days of the issuance of the First Notice, in which case the Corporation (x) shall defer taking the pending action until the end of the Deferral Period, (y) shall promptly notify each other Regulated Stockholder holding shares of which it has knowledge of each proposed conversion and the proposed transactions, and (z) effect the conversion requested by all Regulated Stockholders in response to the notices issued pursuant to this paragraph D(iii)(d) at the end of the Deferral Period or as soon thereafter as is reasonably practicable. (e) The issue of certificates evidencing shares of any class of Common Stock upon conversion of shares of any other class of Common Stock pursuant to this Article SEVENTH shall be made without charge to the holders of such shares for any issue tax in respect thereof or other cost incurred by the Corporation in connection with such conversion; provided, however, the Corporation shall not be required to pay any tax that may be payable in respect of any transfer involved in the issuance and delivery of any certificate in a name other than that of the holder of the Common Stock converted. (iv) If the Corporation shall in any manner subdivide (by stock split, stock dividend or otherwise) or combine (by reverse stock split or otherwise) the outstanding shares of any class of Common Stock, the outstanding shares of the other classes of Common Stock shall be proportionately subdivided or combined, as the case may be, and effective provision shall be made for the protection of all conversion rights, if any, hereunder. In case of any Reorganization Transaction, each holder of a share of Common Stock, irrespective of class, shall have the right at any time thereafter, so long as the conversion right hereunder with respect to such shares of Common Stock would exist had such event not occurred, to convert such share into the kind and amount of shares of stock and other securities and property receivable upon such Reorganization Transaction by a holder of the number of shares of the class of Common Stock into which such shares of Common Stock might have been converted immediately prior to such Reorganization Transaction. If, in connection with such Reorganization Transaction, the holders of Class C Stock receive shares of any class of non-voting common stock of the -11- resulting or surviving corporation, effective provision shall be made in the certificate of incorporation of the resulting or surviving corporation or otherwise for the protection of the conversion rights of the shares of Class C Stock that shall be applicable, as nearly as reasonably may be, to any such other shares of stock and other securities and property deliverable upon conversion of shares of Class C Stock into which such Class C Stock might have been converted immediately prior to such event. In connection with a Reorganization Transaction, effective provision shall be made in the agreement relating to such Reorganization Transaction for the receipt by holders of Class C Stock of the equivalent amount per share and form of consideration as the holders of Class B Stock are entitled to receive pursuant to such Reorganization Transaction; provided, however, notwithstanding the foregoing, to the extent holders of Class B Stock receive voting equity securities of the resulting or surviving corporation in a Reorganization Transaction, holders of Class C Stock shall be entitled to receive only non-voting equity securities of the resulting or surviving corporation with the protections afforded by this subparagraph D(iv). (v) In the event the Corporation effects a Public Offering (as defined below), the following shall occur on the first day shares are sold to the public: (a) The distinction between Class A Stock and Class B Stock and all special rights and limitations and quorum and required vote provisions applicable to such classification shall terminate. Following a Public Offering, the rights, privileges and powers, including the voting powers, of the Class A Stock and Class B Stock shall be identical, with each share of each such class being entitled to one vote on all matters to come before the stockholders of the Corporation, and all quorum and required vote provisions applicable to the Class A Stock and Class B Stock voting as a single class shall be as provided by applicable Delaware law as then in effect. (b) The distinction between the Class A Directors and Class B Directors and all rights and voting and quorum requirements applicable thereto shall be abolished and the quorum and required vote provisions applicable to action by the Board of Directors shall be as provided by applicable Delaware law as then in effect. The holders of a majority of the outstanding shares of the Class A Stock and Class B Stock voting as a single class shall elect all of the directors of the Corporation. (c) "Public Offering" shall mean the sale of shares of Common Stock to the public, pursuant to an effective registration statement, registered under the Securities Act of 1933, as amended. E. Shares of Preferred Stock of the Corporation may be issued from time to time in one or more classes or series, each of which -12- class or series shall have such distinctive designation or title as shall be fixed by the Board of Directors of the Corporation prior to the issuance of any shares thereof. Each such class or series of Preferred Stock shall have such voting powers, full or limited, or no voting powers, and such preferences and relative, participating, optional or other special rights and such qualifications, limitations or restrictions thereof, as shall be stated in such resolution providing for the issue of such class or series of Preferred Stock as may be adopted from time to time by the Board of Directors prior to the issuance of any shares thereof pursuant to the authority hereby expressly vested in it, all in accordance with the laws of the State of Delaware. EIGHTH: A. Prior to a Change of Control, the Executive Officers shall be the Chairman of the Board of Directors who shall preside at all meetings of the stockholders and of the Board of Directors and the President. All officers of the Corporation shall serve until voluntary resignation or retirement, or removal by the Board of Directors in accordance with the provisions set forth herein. Any number of offices may be held by the same person, unless otherwise prohibited by law, this Restated Certificate of Incorporation or the By-Laws. The officers of the Corporation need not be stockholders of the Corporation nor, except in the case of the Chairman of the Board of Directors, need such officers be directors of the Corporation. B. Prior to a Change of Control, the officers of the Corporation shall be nominated and elected to their positions by the Class A Directors and may be removed by the Required Majority (as defined in Article FIFTH) of the Board of Directors present at a meeting at which a quorum shall be present throughout. Prior to a Change of Control, any vacancy occurring in any office of the Corporation shall be filled by vote of the Class A Directors. C. From and after a Change of Control, all of the officers of the Corporation shall be nominated and elected to their positions by the Class B Directors and may be removed by the Class B Directors and any vacancy occurring in any office of the Corporation shall be filled by vote of the Class B Directors. D. All officers of the Corporation shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the Board of Directors; and all officers of the Corporation shall hold office until their successors are chosen and qualified, or until their earlier resignation or removal. The salaries of all officers of the Corporation shall be fixed by the Board of Directors. NINTH: In furtherance and not in limitation of the powers conferred by statute, the By-Laws of the Corporation may be altered, amended or repealed in whole or in part, or new By- Laws may be adopted by approval of the -13- Required Majority present at a meeting of the Board of Directors at which a Quorum is present and acting throughout, until a Change of Control occurs, and thereafter by a majority of the Board of Directors voting at a meeting at which a quorum is present and acting throughout. TENTH: As used in this Restated Certificate of Incorporation, the following terms shall have the meanings indicated below: 1. "Affiliate" shall mean with respect to any Person, any other Person directly or indirectly controlling, controlled by or under common control with such Person. For the purpose of this definition, the term "control" (including with correlative meanings, the terms "controlling", "controlled by" and "under common control with"), as used with respect to any person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of management and policies of such Person, whether through the ownership of voting securities or by contract or otherwise. 2. "Bank Financing" shall mean the Amended and Restated Credit Agreement, dated as of August 31, 1987, amended and restated as of March 1, 1989 and amended and restated as of July 13, 1990 and further amended and restated as of June 18, 1992 (the "Credit Agreement"), among Silgan Corporation, Silgan Containers Corporation, Silgan Plastics Corporation, the financial institutions parties thereto and Bankers Trust Company, as agent, as in effect from time to time, and any refinancings, renewals, amendments or extensions thereof or additional borrowings thereunder. 3. "Closing Date" shall mean the date and time at which the merger of Silgan Acquisition Inc., a wholly owned subsidiary of the Corporation, with and into Silgan Corporation was effective in accordance with the GCL. 4. "Change of Control" shall mean the occurrence of any of the following events: (i) Silver and Horrigan shall collectively own, directly or indirectly, less than one-half of the aggregate number of outstanding shares of Class A Stock owned by them directly or indirectly on the Closing Date on a common stock equivalent basis and as adjusted for stock splits, recapitalizations and the like, or (ii) the acceleration of the Bank Financing or the Senior Discount Debentures, by the trustee under the indenture relating thereto, as a result of the occurrence of an event of default under the terms of the Bank Financing or the Senior Discount Debentures, as the case may be, relating to a payment default or financial covenant default. 5. "Senior Discount Debentures" shall mean the 13-1/4% Senior Discount Debentures due 2002 of the Corporation, and any refinancings or amendments thereof. -14- ELEVENTH: The Corporation reserves the right to amend, alter, change or repeal any provision contained in this Restated Certificate of Incorporation in the manner now or hereafter prescribed by law, provided that (i) the resolution approving such amendment, alteration, change or repeal be adopted by the Board of Directors by approval of the Required Majority present at a meeting at which the quorum is present and acting throughout, until a Change of Control occurs, and thereafter by a majority of the members of the Board of Directors voting together as a single class present at a meeting at which a quorum is present and acting throughout and (ii) the proposed amendment, alteration, change or repeal be approved by a majority of the outstanding shares of Class A Stock and Class B Stock, each voting as a separate class, until a Change of Control occurs and thereafter by a majority of the outstanding shares of Class A Stock and Class B Stock, voting together as a single class; provided, however, that from and after a Change of Control, any amendment, alteration, change or repeal of subparagraph A(i)(a) of Article SEVENTH or of this sentence shall also be approved by a majority of the outstanding shares of Class A Stock, voting as a separate class, and any amendment, alteration, change or repeal of subparagraph A(i)(b) and paragraph D of Article SEVENTH or paragraph C of Article EIGHTH or of this sentence shall also be approved by a majority of the outstanding shares of Class B Stock, voting as a separate class. With respect to any amendment, alteration, change or repeal of paragraph B, C or D of Article SEVENTH or of this sentence which would adversely affect the rights of the holders of the Class C Stock, such amendment shall require, in addition to the approval of the holders of the Class A Stock and the Class B Stock as provided in the first sentence of this Article ELEVENTH, approval by a majority of the outstanding shares of Class C Stock, voting as a separate class. TWELFTH: A. The Corporation shall indemnify to the full extent authorized or permitted by law (as now or hereafter in effect) any person made, or threatened to be made, a defendant or witness to any action, suit or proceeding (whether civil or criminal or otherwise) by reason of the fact that he, his testator or intestate, is or was a director or officer of the Corporation or by reason of the fact that such director or officer, at the request of the Corporation, is or was serving any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise, in any capacity. Nothing contained herein shall effect any rights to indemnification to which employees other than directors and officers may be entitled to by law. No amendment or repeal of this paragraph A of Article TWELFTH shall apply to or have any effect on any right to indemnification provided hereunder with respect to any acts or omissions occurring prior to such amendment or repeal. B. No director of the Corporation shall be personally liable to the Corporation or its stockholders for monetary damages for any breach of fiduciary duty by such a director as a director. Notwithstanding the -15- foregoing sentence, a director shall be liable to the extent provided by applicable law (i) for any breach of the director's duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) pursuant to Section 174 of the GCL, or (iv) for any transaction from which such director derived an improper personal benefit. No amendment to or repeal of this paragraph B of Article TWELFTH shall apply to or have any effect on the liability or alleged liability of any director of the Corporation for or with respect to any acts or omissions of such director occurring prior to such amendment or repeal. C. In furtherance and not in limitation of the powers conferred by statute: (i) the Corporation may purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the Corporation, or is serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise against any liability asserted against him and incurred by him in any such capacity, or arising out of his status as such, whether or not the Corporation would have the power to indemnify him against such liability under the provisions of law; and (ii) the Corporation may create a trust fund, grant a security interest and/or use other means (including, without limitation, letters of credit, surety bonds and/or other similar arrangements), as well as enter into contracts providing indemnification to the full extent authorized or permitted by law and including as part thereof provisions with respect to any or all of the foregoing to ensure the payment of such amounts as may become necessary to effect indemnification as provided therein, or elsewhere. THIRTEENTH: Meetings of stockholders may be held within or without the State of Delaware, as the By-Laws of the Corporation may provide. The books of the Corporation may be kept (subject to any provision contained in the GCL) outside the State of Delaware at such place or places as may be designated from time to time by the Board of Directors or in the By-Laws of the Corporation. -16- IN WITNESS WHEREOF, SILGAN HOLDINGS INC. has caused this Restated Certificate of Incorporation to be executed in its corporate name by its President and attested by its Assistant Secretary on the 20th day of December, 1993. SILGAN HOLDINGS INC. /s/ R. Philip Silver -------------------- R. Philip Silver President Attest: By: /s/ Sharon E. Budds ------------------- Sharon E. Budds Assistant Secretary -17- EX-99.2 3 CERTIFICATE OF AMENDMENT Exhibit 2 CERTIFICATE OF AMENDMENT OF THE RESTATED CERTIFICATE OF INCORPORATION OF SILGAN HOLDINGS INC. Silgan Holdings Inc., a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware (the "Corporation"), does hereby certify as follows: FIRST: That the Board of Directors of the Corporation has duly and unanimously adopted the following resolutions setting forth proposed amendments to the Restated Certificate of Incorporation of the Corporation (the "Certificate of Incorporation"): RESOLVED, that the Certificate of Incorporation be, and it hereby is, amended pursuant to Section 242 of the Delaware General Corporation Law by adding the following sentence at the end of the first paragraph of Article FIFTH: "Upon the occurrence and during the continuation of a Voting Rights Triggering Event (as defined in the Certificate of Designation of the Powers, Preferences and Relative, Participating, Optional and Other Special Rights of 13 1/4% Cumulative Exchangeable Redeemable Preferred Stock and Qualifications, Limitations and Restrictions Thereof (the "Certificate of Designation"), the number of directors of the Corporation shall be increased as provided in the Certificate of Designation and the holders of a majority of the then outstanding shares of the Corporation's 13 1/4% Cumulative Exchangeable Redeemable Preferred Stock (the "Preferred Stock") issued pursuant to the Certificate of Designation, voting as a separate class, shall be entitled to elect that number of directors of the Corporation as provided in the Certificate of Designation." ; and be it further RESOLVED, that the Certificate of Incorporation be, and it hereby is, amended pursuant to Section 242 of the Delaware General Corporation Law by deleting the last sentence of paragraph D(v)(b) of Article SEVENTH in its entirety and replacing it with the following: The holders of a majority of the outstanding shares of the Class A Stock and Class B Stock voting as a single class shall elect all of the directors of the Corporation, subject to the rights of the holders of Preferred Stock set forth in the Certificate of Designation. SECOND: That pursuant to a written consent of the holders of all of the outstanding shares of Class A Common Stock, par value $.01 per share (the "Class A Common Stock"), of the Corporation and the holder of a majority of the outstanding shares of Class B Common Stock, par value $.01 per share (the "Class B Common Stock"), of the Corporation, voting separately as a class (the Class A Common Stock and the Class B Common Stock being the only voting stock of the Corporation), dated as of July 19, 1996, given in accordance with the provisions of Section 228 of the General Corporation Law of the State of Delaware, the holders of all of the outstanding shares of Class A Common Stock and the holder of a majority of the outstanding shares of Class B Common Stock, voting as separate classes, approved the adoption of the aforesaid resolutions and amendments and, as provided in Section 228 of the General Corporation Law of the State of Delaware, written notice thereof has been given to those holders of the Class B Common Stock of the Corporation who had not consented in writing as provided in Section 228 of the General Corporation Law of the State of Delaware. THIRD: That the foregoing amendments to the Certificate of Incorporation have been duly adopted in accordance with the provisions of Section 242 of the General Corporation Law of the State of Delaware. -2- IN WITNESS WHEREOF, said Corporation has caused this Certificate of Amendment of the Restated Certificate of Incorporation to be signed by its Executive Vice President and attested by its Assistant Secretary as of this 19th day of July, 1996. SILGAN HOLDINGS INC. By/s/Harley Rankin, Jr. _________________________ Harley Rankin, Jr. Executive Vice President Attest: By/s/Sharon Budds ___________________________ Sharon Budds Assistant Secretary -3- EX-99.3 4 CERTIFICATE OF DESIGNATION Exhibit 3 SILGAN HOLDINGS INC. CERTIFICATE OF DESIGNATION OF THE POWERS, PREFERENCES AND RELATIVE, PARTICIPATING, OPTIONAL AND OTHER SPECIAL RIGHTS OF 13 1/4% CUMULATIVE EXCHANGEABLE REDEEMABLE PREFERRED STOCK AND QUALIFICATIONS, LIMITATIONS AND RESTRICTIONS THEREOF ----------------------------------------- Pursuant to Section 151 of the General Corporation Law of the State of Delaware ----------------------------------------- Silgan Holdings Inc., a corporation organized and existing under the General Corporation Law of the State of Delaware (the "Company"), does hereby certify that, pursuant to authority conferred upon the board of directors of the Company (or any committee of such board of directors, the "Board of Directors") by its Restated Certificate of Incorporation, as amended (hereinafter referred to as the "Certificate of Incorporation"), and pursuant to the provisions of Section 151 of the General Corporation Law of the State of Delaware, said Board of Directors with full power and authority to act on behalf of the Board of Directors, by unanimous written consent dated July 8, 1996, duly approved and adopted the following resolution (the "Resolution"): RESOLVED, that, pursuant to the authority vested in the Board of Directors by its Certificate of Incorporation, the Board of Directors does hereby create, authorize and provide for the issue of 13 1/4% Cumulative Exchangeable Redeemable Preferred Stock, par value $0.01 per share, with a liquidation preference of $1,000 per share, consisting of 90,000 shares, having the designations, preferences, relative, participating, optional and other special rights and the qualifications, limitations and restrictions thereof that are set forth in the Certificate of Incorporation and in this Resolution as follows (the terms used herein, unless otherwise defined herein, are used herein as defined in paragraph (n) hereof): (a) Designation. There is hereby created out of the authorized and unissued shares of preferred stock of the Company a series of preferred stock designated as the "13 1/4% Cumulative Exchangeable Redeemable Preferred Stock" (the "Redeemable Preferred Stock"). The number of shares constituting such series shall be 90,000 shares of Redeemable Preferred Stock, consisting of an initial issuance of 50,000 shares of Redeemable Preferred Stock plus additional shares of Redeemable Preferred Stock which may be issued to pay dividends on the Redeemable Preferred Stock if the Company elects to pay dividends in additional shares of Redeemable Preferred Stock. The liquidation preference of the Redeemable Preferred Stock shall be $1,000 per share. (b) Rank. The Redeemable Preferred Stock shall, with respect to dividend distributions and distributions upon the liquidation, winding-up and dissolution of the Company, rank senior to all classes of common stock of the Company and to each other class of capital stock or series of preferred stock hereafter created by the Board of Directors, the terms of which do not expressly provide that it ranks senior to or on a parity with the Redeemable Preferred Stock as to dividend distributions and distributions upon the liquidation, winding-up and dissolution of the Company (collectively referred to herein, together with all classes of common stock of the Company, as the "Junior Securities"). The Redeemable Preferred Stock will, with respect to dividend distributions and distributions upon the liquidation, winding-up and dissolution of the Company, rank on a parity with any class of capital stock or series of preferred stock hereafter created by the Board of Directors, the terms of which have been approved by the Holders of the Redeemable Preferred Stock in accordance with subparagraph (f)(ii)(A) hereof and which expressly provide that it ranks on a parity with the Redeemable Preferred Stock as to dividend distributions and distributions upon the liquidation, winding-up and dissolution of the Company (collectively referred to herein as the "Parity Securities"). The Redeemable Preferred Stock shall, with respect to dividend distributions and distributions upon the liquidation, winding-up and dissolution of the Company, rank junior to each class of capital stock or series of preferred stock hereafter created by the Board of Directors, the terms of which have been approved by the Holders of the Redeemable Preferred Stock in accordance with subparagraph (f)(ii)(B) hereof and which expressly provide that it ranks senior to the Redeemable Preferred Stock as to dividend distributions and distributions upon the liquidation, winding-up and dissolution of the Company (collectively referred to herein as the "Senior Securities"). (c) Dividends. (i) Beginning on the Preferred Stock Issuance Date, the Holders of the outstanding shares of Redeemable Preferred Stock shall be entitled to receive, when, as and if declared by the Board of Directors, out of funds legally available therefor, dividends on each share of Redeemable Preferred Stock, at a rate per annum equal to 13 1/4% of the liquidation preference per share of the Redeemable Preferred Stock, payable quarterly. All dividends shall be cumulative, whether or not earned or declared, on a daily basis from the Preferred Stock Issuance Date, and shall be payable quarterly in arrears on each Dividend Payment Date, commencing on the first Dividend Payment Date after the Preferred Stock Issuance Date. On and before July 15, 2000, the Company may pay dividends, at its option, in cash or in additional fully paid and non-assessable shares of Redeemable Preferred Stock having an aggregate liquidation preference equal to the amount of such dividends. After July 15, -2- 2000, dividends shall be paid only in cash. If any dividend (or portion thereof) payable on any Dividend Payment Date after July 15, 2000 is not declared or paid in full in cash on such Dividend Payment Date, the amount of such dividend that is payable and that is not paid in cash on such date shall increase at the rate of 0.5% per annum (or 1.0% or 0.5% per annum, as the case may be, if the conditions described in subparagraphs (c)(ii)(A) and/or (c)(ii)(B) hereof are not satisfied) from such Dividend Payment Date until declared and paid in full. Each distribution in the form of a dividend (whether in cash or in additional shares of Redeemable Preferred Stock) shall be payable to Holders of record as they appear on the stock books of the Company on such record date, not less than 10 nor more than 60 days preceding the relevant Dividend Payment Date, as shall be fixed by the Board of Directors. Dividends shall cease to accumulate in respect of shares of the Redeemable Preferred Stock on the Mandatory Exchange Date (as defined in paragraph (g)(i)(A) hereof) or on the date of their earlier redemption unless the Company shall have failed to issue the appropriate aggregate principal amount of Exchange Debentures (as defined in paragraph (g)(i)(A) hereof) in respect of the Redeemable Preferred Stock on the Mandatory Exchange Date or shall have failed to pay the relevant redemption price on the date fixed for redemption. (ii) Notwithstanding anything else provided herein, (A) if by one year after the Preferred Stock Issuance Date, the Redeemable Preferred Stock has not been exchanged for Exchange Debentures, the dividend rate on the Redeemable Preferred Stock will increase by 0.5% per annum to 13 3/4% per annum of the liquidation preference per share of Redeemable Preferred Stock until the Mandatory Exchange Date; and (B) if the Company fails to file and cause to become effective a registration statement with respect to a registered offer to exchange the Redeemable Preferred Stock for Exchange Preferred Stock and a shelf registration statement with respect to the Redeemable Preferred Stock is not declared effective on or prior to five months after the Preferred Stock Issuance Date, the dividend rate on the Redeemable Preferred Stock will increase 0.5% per annum to 13 3/4% per annum of the liquidation preference per share of Redeemable Preferred Stock from January 1, 1997, payable in additional shares of Preferred Stock quarterly in arrears on each Dividend Payment Date, commencing April 15, 1997 until such Preferred Stock Exchange Offer is consummated or such shelf registration statement is declared effective. (iii) All dividends paid with respect to shares of the Redeemable Preferred Stock pursuant to paragraph (c)(i) hereof shall be paid pro rata to the Holders entitled thereto. (iv) Nothing herein contained shall in any way or under any circumstances be construed or deemed to require the Board of Directors to declare, or the Company to pay or set apart for payment, any dividends on shares of the Redeemable Preferred Stock at any time. -3- (v) Dividends on account of arrears for any past Dividend Period and dividends in connection with any optional redemption pursuant to paragraph (e)(i) hereof may be declared and paid at any time, without reference to any regular Dividend Payment Date, to Holders of record on such date, not more than 45 days prior to the payment thereof, as may be fixed by the Board of Directors. (vi) No full dividends shall be declared by the Board of Directors or paid or funds set apart for payment of dividends by the Company on any Parity Securities for any period unless full cumulative dividends shall have been or contemporaneously are declared and paid in full, or declared and (in the case of dividends payable in cash) a sum in cash set apart sufficient for such payment on the Redeemable Preferred Stock for all Dividend Periods terminating on or prior to the date of payment of such full dividends on such Parity Securities. If any dividends are not paid in full, as aforesaid, upon the shares of the Redeemable Preferred Stock and any other Parity Securities, all dividends declared upon shares of the Redeemable Preferred Stock and any other Parity Securities shall be declared pro rata so that the amount of dividends declared per share on the Redeemable Preferred Stock and such Parity Securities shall in all cases bear to each other the same ratio that accrued dividends per share on the Redeemable Preferred Stock and such Parity Securities bear to each other. (vii) (A) Holders of shares of Redeemable Preferred Stock shall be entitled to receive the dividends provided for in paragraph (c)(i) hereof in preference to and in priority over any dividends upon any of the Junior Securities. (B) So long as any shares of Redeemable Preferred Stock are outstanding, the Company shall not declare, pay or set apart for payment any dividend on any of the Junior Securities or make any payment on account of, or set apart for payment money for a sinking or other similar fund for, the purchase, redemption or other retirement of any of the Junior Securities or any warrants, rights, calls or options exercisable for or convertible into any of the Junior Securities (other than the repurchase, redemption or other acquisition or retirement for value of Junior Securities (and any warrants, rights, calls or options exercisable for or convertible into such Junior Securities) held by certain employees of or consultants or advisors to the Company or any of its Subsidiaries, which repurchase, redemption or other acquisition or retirement shall have been approved by a majority of the Board of Directors, provided that such Junior Securities may only be repurchased, redeemed or otherwise acquired or retired either in exchange for Junior Securities or upon the termination, retirement, death or disability of such employee, consultant or advisor), or make any distribution in respect thereof, either directly or indirectly, and whether in cash, obligations or shares of the Company or other property (other than distributions or dividends in Junior -4- Securities to the holders of Junior Securities) and shall not permit any corporation or other entity directly or indirectly controlled by the Company to purchase or redeem any of the Junior Securities or any such warrants, rights, calls or options, unless full cumulative dividends determined in accordance herewith have been paid in full on the Redeemable Preferred Stock. (C) So long as any shares of the Redeemable Preferred Stock are outstanding, the Company shall not make any payment on account of, or set apart for payment money for a sinking or other similar fund for, the purchase, redemption or other retirement of any of the Parity Securities or any warrants, rights, calls or options exercisable for or convertible into any of the Parity Securities, and shall not permit any corporation or other entity directly or indirectly controlled by the Company to purchase or redeem any of the Parity Securities or any such warrants, rights, calls or options, unless the dividends determined in accordance herewith on the Redeemable Preferred Stock have been paid in full. (viii) Dividends payable on shares of the Redeemable Preferred Stock for any period less than a year shall be computed on the basis of a 360-day year of 12 30-day months and the actual number of days elapsed in the period for which dividends are payable. If any Dividend Payment Date occurs on a day that is not a Business Day, any accrued dividends otherwise payable on such Dividend Payment Date shall be paid on the next succeeding Business Day. (d) Liquidation Preference. (i) Upon any voluntary or involuntary liquidation, dissolution or winding-up of the affairs of the Company, the Holders of shares of Redeemable Preferred Stock then outstanding shall be entitled to be paid, out of the assets of the Company available for distribution to its stockholders, $1,000 per share of Redeemable Preferred Stock, plus an amount in cash equal to accumulated and unpaid dividends thereon to the date fixed for liquidation, dissolution or winding-up (including an amount equal to a prorated dividend for the period from the last Dividend Payment Date to the date fixed for liquidation, dissolution or winding-up), before any payment shall be made or any assets distributed to the holders of any of the Junior Securities, including, without limitation, common stock of the Company. Except as provided in the preceding sentence, Holders of shares of Redeemable Preferred Stock shall not be entitled to any distribution in the event of liquidation, dissolution or winding-up of the affairs of the Company. If the assets of the Company are not sufficient to pay in full the liquidation payments payable to the Holders of outstanding shares of the Redeemable Preferred Stock and holders of all outstanding shares of all Parity Securities, then the Holders of all such Redeemable Preferred Stock and the holders of all such Parity Securities shall share equally and ratably in such distribution of assets of the Company in accordance with the amounts which would be payable on -5- such distribution if the amount to which the Holders of outstanding shares of Redeemable Preferred Stock and the holders of outstanding shares of all Parity Securities are entitled were paid in full. (ii) For the purposes of paragraph (d)(i), neither the sale, conveyance, exchange or transfer (for cash, shares of stock, securities or other consideration) of all or substantially all of the property or assets of the Company nor the consolidation or merger of the Company with or into one or more corporations shall be deemed to be a liquidation, dissolution or winding-up of the affairs of the Company (unless such sale, conveyance, exchange or transfer is in connection with a dissolution or winding-up of the business of the Company). (e) Redemption. (i) Optional Redemption. (A) The Company may (subject to contractual and other restrictions with respect thereto and the legal availability of funds therefor), at the option of the Board of Directors, redeem at any time on or after July 15, 2000, from any source of funds legally available therefor, in whole or in part, in the manner provided in paragraph (e)(iii), any or all of the shares of the Redeemable Preferred Stock, at the redemption prices (expressed as a percentage of the liquidation preference thereof) set forth below, plus, without duplication, an amount in cash equal to all accumulated and unpaid dividends per share (including an amount in cash equal to a prorated dividend for the period from the Dividend Payment Date immediately prior to the Redemption Date to the Redemption Date) (the "Optional Redemption Price"), if redeemed during the 12-month period beginning on July 15 of each of the years indicated below: 2000...................................109.938% 2001. .................................106.625% 2002...................................103.313% 2003 and thereafter ...................100.000%; provided that no optional redemption pursuant to this subparagraph (e)(i)(A) shall be authorized or made (i) unless prior thereto full unpaid cumulative dividends for all Dividend Periods terminating on or prior to the Redemption Date, and for an amount equal to a prorated dividend on the Redeemable Preferred Stock to be redeemed for the period from the Dividend Payment Date immediately prior to the Redemption Date to the Redemption Date, shall have been, or immediately prior to the Redemption Date are, declared and paid in cash or declared and a sum set apart sufficient for such cash payment on the Redemption Date on such Redeemable Preferred Stock or (ii) at less than 101% of the liquidation preference of the Redeemable Preferred Stock at any time when the Company is making or purchasing shares of Redeemable Preferred Stock under a Change of Control Offer in accordance with the provisions of paragraph (h) hereof or an Excess Proceeds Offer in accordance with the provisions of paragraph (m)(vi) hereof. -6- (B) In addition, on or prior to July 15, 2000, in the manner provided in paragraph (e)(iii) hereof, the Company or a Successor Corporation may redeem all (but not less than all) outstanding shares of Redeemable Preferred Stock, at a redemption price equal to 110% of the liquidation preference, plus, without duplication, an amount in cash equal to all accumulated and unpaid dividends per share (including an amount equal to a prorated dividend for the period from the Dividend Payment Date immediately prior to the Redemption Date to the Redemption Date, subject to the right of Holders of Redeemable Preferred Stock on relevant record dates to receive dividends due on relevant Dividend Payment Dates (the "Contingent Redemption Price"), with the proceeds of any sale of its common stock; provided that such redemption occurs within 180 days after consummation of such sale, and provided further that no optional redemption pursuant to this subparagraph (e)(i)(B) shall be authorized or made unless prior thereto full unpaid cumulative dividends for all Dividend Periods terminating on or prior to the Redemption Date and for an amount equal to a prorated dividend for the period from the Dividend Payment Date immediately prior to the Redemption Date to the Redemption Date shall have been, or immediately prior to the Redemption Notice are, declared and paid in full in cash or declared and a sum set apart sufficient for such payment in full in cash on the Redemption Date on the outstanding shares of the Redeemable Preferred Stock. (C) In the event of a redemption pursuant to paragraph (e)(i) hereof of only a portion of the then outstanding shares of the Redeemable Preferred Stock, the Company shall effect such redemption as it determines, pro rata according to the number of shares held by each Holder of Redeemable Preferred Stock, provided that the Company may redeem such shares held by any Holder of fewer than 100 shares of Redeemable Preferred Stock without regard to such pro rata redemption requirement, or by lot, in each case, as may be determined by the Company in its sole discretion. (ii) Mandatory Redemption. On July 15, 2006 (the "Mandatory Redemption Date"), the Company shall redeem from any source of funds legally available therefor, in the manner provided in paragraph (e)(iii) hereof, all of the shares of the Redeemable Preferred Stock then outstanding at a redemption price equal to 100% of the liquidation preference per share, plus, without duplication, an amount in cash equal to all accumulated and unpaid dividends per share (including an amount equal to a prorated dividend for the period from the Dividend Payment Date immediately prior to the Redemption Date to the Redemption Date) (the "Mandatory Redemption Price"). (iii) Procedures for Redemption. (A) At least 30 days and not more than 60 days prior to the date fixed for any redemption of the Redeemable Preferred Stock, written notice (the "Redemption Notice") shall be given by first-class mail, postage prepaid, to each Holder of record on the record date -7- fixed for such redemption of the Redeemable Preferred Stock at such Holder's address as the same appears on the stock register of the Company, provided that no failure to give such notice nor any deficiency therein shall affect the validity of the procedure for the redemption of any shares of Redeemable Preferred Stock to be redeemed except as to the Holder or Holders to whom the Company has failed to give said notice or except as to the Holder or Holders whose notice was defective. The Redemption Notice shall state: (1) whether the redemption is pursuant to subparagraph (e)(i)(A), (e)(i)(B) or (e)(ii) hereof; (2) the Optional Redemption Price, the Contingent Redemption Price or the Mandatory Redemption Price, as the case may be; (3) whether all or less than all the outstanding shares of the Redeemable Preferred Stock are to be redeemed and the total number of shares of the Redeemable Preferred Stock being redeemed; (4) the number of shares of Redeemable Preferred Stock held, as of the appropriate record date, by the Holder that the Company intends to redeem; (5) the date fixed for redemption; (6) that the Holder is to surrender to the Company, at the place or places where certificates for shares of Redeemable Preferred Stock are to be surrendered for redemption, in the manner and at the price designated, his certificate or certificates representing the shares of Redeemable Preferred Stock to be redeemed; and (7) that dividends on the shares of the Redeemable Preferred Stock to be redeemed shall cease to accrue on such Redemption Date unless the Company defaults in the payment of the Optional Redemption Price, the Contingent Redemption Price or the Mandatory Redemption Price, as the case may be. (B) Each Holder of Redeemable Preferred Stock shall surrender the certificate or certificates representing such shares of Redeemable Preferred Stock to the Company, duly endorsed, in the manner and at the place designated in the Redemption Notice and on the Redemption Date. The full Optional Redemption Price, the Contingent Redemption Price or the Mandatory Redemption Price, as the case may be, for such shares of Redeemable Preferred Stock shall be payable in cash to the Person whose name appears on such certificate or certificates as the owner thereof, and each surrendered certificate shall be canceled and retired. In the event that less than all of the shares represented by any such certificate are redeemed, a new certificate shall be issued representing the unredeemed shares. -8- (C) Unless the Company defaults in the payment in full of the applicable redemption price, dividends on the Redeemable Preferred Stock called for redemption shall cease to accumulate on the Redemption Date, and the Holders of such redeemed shares shall cease to have any further rights with respect thereto from and after the Redemption Date, other than the right to receive the Optional Redemption Price, the Contingent Redemption Price or the Mandatory Redemption Price, as the case may be, without interest. (f) Voting Rights. (i) The Holders of shares of the Redeemable Preferred Stock, except as otherwise required under Delaware law or as set forth in paragraphs (f)(ii), (f)(iii) and (f)(iv) hereof, shall not be entitled or permitted to vote on any matter required or permitted to be voted upon by the stockholders of the Company. (ii) (A) So long as any shares of Redeemable Preferred Stock are outstanding, the Company shall not authorize any class of Parity Securities without the affirmative vote or consent of Holders of at least a majority of the outstanding shares of Redeemable Preferred Stock, voting or consenting, as the case may be, separately as one class, given in person or by proxy, either in writing or by resolution adopted at an annual or special meeting, except that, without the approval of Holders of the Redeemable Preferred Stock, the Company may issue shares of Parity Securities in exchange for, or the proceeds of which are used to redeem or repurchase, any or all shares of Redeemable Preferred Stock or indebtedness of the Company then outstanding, provided that, in the case of Parity Securities issued in exchange for, or the proceeds of which are used to redeem or repurchase, less than all shares of Redeemable Preferred Stock then outstanding, (1) the aggregate liquidation preference of such Parity Securities shall not exceed the aggregate liquidation preference of, premium and accrued and unpaid dividends on, and expenses in connection with the refinancing of, the Redeemable Preferred Stock so exchanged, redeemed or repurchased, (2) such Parity Securities shall not be Redeemable Stock and (3) such Parity Securities shall not be entitled to the payment of cash dividends prior to July 15, 2000. (B) So long as any shares of the Redeemable Preferred Stock are outstanding, the Company shall not authorize any class of Senior Securities without the affirmative vote or consent of Holders of at least a majority of the outstanding shares of Redeemable Preferred Stock, voting or consenting, as the case may be, separately as one class, given in person or by proxy, either in writing or by resolution adopted at an annual or special meeting. (C) So long as any shares of the Redeemable Preferred Stock are outstanding, the Company shall not amend this Certificate of Designation so as to affect adversely the specified rights, preferences, privileges or voting -9- rights of Holders of shares of Redeemable Preferred Stock, or to authorize the issuance of any additional shares of Redeemable Preferred Stock, without the affirmative vote or consent of Holders of at least a majority of the outstanding shares of Redeemable Preferred Stock, voting or consenting, as the case may be, separately as one class, given in person or by proxy, either in writing or by resolution adopted at an annual or special meeting. The Holders of at least a majority of the outstanding shares of Redeemable Preferred Stock, voting or consenting, as the case may be, separately as one class, whether voting in person or by proxy, either in writing or by resolution adopted at an annual or special meeting, may waive compliance with any provision of this Certificate of Designation. (D) Prior to the exchange of Redeemable Preferred Stock for Exchange Debentures, the Company shall not amend or modify, after originally executed and delivered, the indenture for the Exchange Debentures (the "Exchange Indenture") (except as expressly provided therein in respect of amendments without the consent of holders of Exchange Debentures) without the affirmative vote or consent of Holders of a majority of the outstanding shares of Redeemable Preferred Stock, voting or consenting, as the case may be, separately as one class, given in person or by proxy, either in writing or by resolution adopted at an annual or special meeting. (E) Except as set forth in subparagraphs (f)(ii)(A) and (f)(ii)(B) hereof, (1) the creation, authorization or issuance of any shares of any Junior Securities, Parity Securities or Senior Securities, or (2) the increase or decrease in the amount of authorized capital stock of any class, including any preferred stock, shall not require the consent of Holders of Redeemable Preferred Stock and shall not, unless not complying with subparagraphs (f)(ii)(A) and (f)(ii)(B) hereof, be deemed to affect adversely the rights, preferences, privileges or voting rights of Holders of shares of Redeemable Preferred Stock. (iii) (A) If (1) dividends on the Redeemable Preferred Stock are in arrears and unpaid (and if, after July 15, 2000, such dividends are not paid in cash) for four consecutive quarterly periods (each, a "Dividend Default"); or (2) the Company fails to discharge any redemption obligation with respect to the Redeemable Preferred Stock (each, a "Redemption Default"); or (3) the Company fails to make an offer to purchase (and to complete such purchase) all of the outstanding shares of Redeemable Preferred Stock following a Change of Control, if such offer to purchase is required to be made pursuant to paragraph (h) hereof (each, a "Change of Control Default"); or (4) the Company breaches or violates one of the provisions set forth in paragraph (m) hereof and the breach or violation continues for a period of 30 consecutive days or more after notice thereof to the Company by Holders of 25% or more of the liquidation preference of the Redeemable Preferred Stock then outstanding (each, a -10- "Restriction Default"); or (5) there occurs with respect to any issue or issues of Indebtedness of the Company and/or any Significant Subsidiary having, individually or in the aggregate, an outstanding principal amount of $20 million or more for all such issues of the Company and/or any Significant Subsidiary, whether such Indebtedness exists on the Preferred Stock Issuance Date or is incurred thereafter, (I) an event of default that has caused the holder thereof to declare such Indebtedness to be due and payable prior to its Stated Maturity and such Indebtedness has not been discharged in full or such acceleration has not been rescinded or annulled within 30 days of such acceleration and/or (II) the failure to make a principal payment at the final (but not any interim) fixed maturity and such defaulted payment shall not have been made, waived or extended within 30 days of such payment default (each, a "Cross/Payment Default"), then the number of directors constituting the Board of Directors shall be adjusted as set forth in the Certificate of Incorporation to permit the Holders of the majority of the then outstanding Redeemable Preferred Stock, voting separately as one class, to elect the Maximum Redeemable Preferred Stock Directors. Holders of a majority of the issued and outstanding shares of the Redeemable Preferred Stock, voting separately as one class, shall have the exclusive right to elect the Maximum Redeemable Preferred Stock Directors (as defined in subparagraph (f)(iii)(E) hereof) at a meeting therefor called upon occurrence of any one or more of a Dividend Default, Redemption Default, Change of Control Default, Restriction Default or Cross/Payment Default, as the case may be, and at every subsequent meeting at which the terms of office of the directors so elected by the Holders of Redeemable Preferred Stock expire (other than as described in subparagraph (f)(iii)(B) hereof). Each event described in clauses (1), (2), (3), (4) and (5) of this subparagraph (f)(iii)(A) is a "Voting Rights Triggering Event." Within 15 days of the time the Company becomes aware of the occurrence of any default referred to in clause (4) or (5) of this subparagraph (f)(iii)(A), the Company shall give written notice thereof to the Holders. (B) The right of the Holders of Redeemable Preferred Stock voting separately as one class to elect the Maximum Redeemable Preferred Stock Directors shall continue until such time as (1) in the event such right arises due to a Dividend Default, all accumulated dividends that are in arrears on the Redeemable Preferred Stock and that gave rise to such Dividend Default are paid in full (and, in the case of dividends payable after July 15, 2000, paid in cash); and (2) in the event such right arises due to a Redemption Default, a Change of Control Default, a Restriction Default or a Cross/Payment Default, the Company remedies any such failure, breach or default, at which time the term of any directors elected pursuant to subparagraph (f)(iii)(A) hereof shall terminate, subject always to the same provisions for the renewal and divestment of such special voting rights in the case of any future Voting Rights Triggering Event. At any time after voting power to elect directors shall have become -11- vested and be continuing in the Holders of shares of the Redeemable Preferred Stock pursuant to subparagraph (f)(iii)(A) hereof, or if vacancies shall exist in the offices of directors elected by the Holders of shares of the Redeemable Preferred Stock, a proper officer of the Company may, and upon the written request of the Holders of record of at least 25% of the shares of Redeemable Preferred Stock then outstanding addressed to the Secretary of the Company shall, call a special meeting of the Holders of Redeemable Preferred Stock, for the purpose of electing the directors which such Holders are entitled to elect. If such meeting shall not be called by the proper officer of the Company within 30 days after personal service of said written request upon the Secretary of the Company, or within 30 days after mailing the same within the United States by certified mail, addressed to the Secretary of the Company at its principal executive offices, then the Holders of record of at least 25% of the outstanding shares of the Redeemable Preferred Stock may designate in writing one of their number to call such meeting at the expense of the Company, and such meeting may be called by the Person so designated upon the notice required for the annual meetings of stockholders of the Company and shall be held at the place for holding the annual meetings of stockholders or such other place in the United States as shall be designated in such notice. Notwithstanding the provisions of this subparagraph (f)(iii)(B), no such special meeting shall be called if any such request is received less than 40 days before the date fixed for the next ensuing annual or special meeting of stockholders of the Company. Any Holder of shares of the Redeemable Preferred Stock so designated shall have, and the Company shall provide, access to the lists of Holders of shares of the Redeemable Preferred Stock for purposes of calling a meeting pursuant to the provisions of this subparagraph (f)(iii)(B). (C) At any meeting held for the purpose of electing directors at which the Holders of Redeemable Preferred Stock shall have the right, voting separately as one class, to elect directors as aforesaid, the presence in person or by proxy of the Holders of at least a majority of the outstanding Redeemable Preferred Stock shall be required to constitute a quorum of such Redeemable Preferred Stock. (D) Any vacancy occurring in the office of a director elected by the Holders of shares of the Redeemable Preferred Stock may be filled by the remaining directors, if any, elected by the Holders of shares of the Redeemable Preferred Stock unless and until such vacancy shall be filled by the Holders of shares of the Redeemable Preferred Stock. (E) "Maximum Redeemable Preferred Stock Directors" means the maximum number of directors of the Company that the Holders of Redeemable Preferred Stock are entitled to elect equal to the greater of (x) one and (y) the whole number (including zero) obtained (rounding down to the nearest whole number) by (1) multiplying 1/6 by the number of members of the Board of -12- Directors in office immediately prior to the occurrence of a Voting Rights Triggering Event and (2) adding one. (iv) In any case in which the Holders of shares of the Redeemable Preferred Stock shall be entitled to vote pursuant to this paragraph (f) or pursuant to Delaware law, each Holder of shares of the Redeemable Preferred Stock shall be entitled to one vote for each share of Redeemable Preferred Stock held. (g) Exchange. (i) Requirements. (A) The Company may exchange all, but not less than all, of the then outstanding shares of Redeemable Preferred Stock for the Company's Subordinated Notes due 2006 (the "Exchange Debentures") at any time. In order to effect such exchange, the Company shall (1) if necessary to satisfy the condition set forth in clause (II) of this subparagraph (g)(i)(A), based upon the written advice of counsel to the Company, file a registration statement with the Securities and Exchange Commission (the "SEC") relating to such exchange, (2) if a registration statement is filed with the SEC pursuant to clause (1) above, use its best efforts to cause such registration statement to be declared effective as soon as practicable by the SEC and (3) if a registration statement is not filed with the SEC pursuant to clause (1) above, qualify, to the extent required, the Exchange Indenture and the trustee thereunder (the "Trustee") under the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"). In order to effectuate such exchange, the Company shall send a written notice (the "Exchange Notice") of exchange by mail to each Holder of record of shares of Redeemable Preferred Stock, which notice shall state: (v) that the Company is exchanging the Redeemable Preferred Stock into Exchange Debentures pursuant to this Certificate of Designation; (w) the date fixed for exchange (the "Mandatory Exchange Date"), which date shall not be less than 15 days nor more than 60 days following the date on which the Exchange Notice is mailed (except as provided in the last sentence of this subparagraph (g)(i)(A)); (x) that the Holder is to surrender to the Company, at the place or places where certificates for shares of Redeemable Preferred Stock are to be surrendered for exchange, in the manner designated in the Exchange Notice, such Holder's certificate or certificates representing the shares of Redeemable Preferred Stock to be exchanged; (y) that dividends on the shares of Redeemable Preferred Stock to be exchanged shall cease to accrue on the Mandatory Exchange Date whether or not certificates for shares of Redeemable Preferred Stock are surrendered for exchange on the Mandatory Exchange Date unless the Company shall default in the delivery of Exchange Debentures; and (z) that interest on the Exchange Debentures shall accrue from the Mandatory Exchange Date whether or not certificates for shares of Redeemable Preferred Stock are surrendered for exchange on the Mandatory Exchange Date. On the Mandatory Exchange Date, if the conditions set forth in clauses (I) through (VI) of this subparagraph (g)(i)(A) are satisfied, the Company shall issue Exchange Debentures in exchange for the -13- Redeemable Preferred Stock as provided in subparagraph (g)(ii)(A), provided that on the Mandatory Exchange Date: (I) there shall be legally available funds sufficient therefor (including, without limitation, legally available funds sufficient therefor under Sections 160 and 170 (or any successor provisions) of the Delaware General Corporation Law); (II) either (x) a registration statement relating to the Exchange Debentures shall have been declared effective under the Securities Act of 1933, as amended (the "Securities Act"), prior to such exchange and shall continue to be in effect on the Mandatory Exchange Date or (y) (i) the Company shall have obtained a written opinion of counsel that an exemption from the registration requirements of the Securities Act is available for such exchange and that upon receipt of such Exchange Debentures pursuant to such exchange made in accordance with such exemption, each Holder that is not an Affiliate of the Company will not be subject to any restrictions imposed by the Securities Act upon the resale thereof and (ii) such exemption is relied upon by the Company for such exchange; (III) the Exchange Indenture shall have been duly executed by the Company and the Trustee with irrevocable instructions to authenticate the Exchange Debentures necessary for such exchange, (IV) the Exchange Indenture and the Trustee shall have been qualified under the Trust Indenture Act; (V) immediately after giving effect to such exchange, no Default or Event of Default (each as defined in the Exchange Indenture) would exist under the Exchange Indenture; and (VI) the Company shall have delivered to the Trustee a written opinion of counsel, dated the date of the exchange, regarding the satisfaction of the conditions set forth in clauses (I), (II), (III) and (IV). In the event that the issuance of the Exchange Debentures is not permitted on the Mandatory Exchange Date or any of the conditions set forth in clauses (I) through (VI) of the preceding sentence are not satisfied on the Mandatory Exchange Date, the Company shall use its best efforts to satisfy such conditions and effect such exchange as soon as practicable. (B) Upon any exchange pursuant to subparagraph (g)(i)(A) hereof, Holders of outstanding shares of Redeemable Preferred Stock shall be entitled to receive a principal amount of Exchange Debentures for shares of Redeemable Preferred Stock, the liquidation preference of which, plus the amount of accumulated and unpaid dividends (including a prorated dividend for the period from the immediately preceding Dividend Payment Date to the Mandatory Exchange Date) with respect to which, equals such amount; provided that the Company at its option may pay cash for any or all accrued and unpaid dividends on the Redeemable Preferred Stock in lieu of issuing an Exchange Debenture in respect of such dividends. (ii) Procedure for Exchange. (A) On or before the Mandatory Exchange Date, each Holder of Redeemable Preferred Stock shall surrender the certificate or certificates representing such shares of Redeemable Preferred Stock, in the manner and at the place designated in the Exchange Notice. The Company shall cause the Exchange Debentures to be executed on the -14- Mandatory Exchange Date and, upon surrender in accordance with the Exchange Notice of the certificates for any shares of Redeemable Preferred Stock so exchanged (properly endorsed or assigned for transfer, if the notice shall so state), such shares shall be exchanged by the Company into Exchange Debentures. The Company shall pay interest on the Exchange Debentures at the rate and on the dates specified therein from the Mandatory Exchange Date. (B) If notice has been mailed as aforesaid, and if before the Mandatory Exchange Date (1) the Exchange Indenture shall have been duly executed and delivered by the Company and the Trustee and (2) all Exchange Debentures necessary for such exchange shall have been duly executed by the Company and delivered to the Trustee with irrevocable instructions to authenticate the Exchange Debentures necessary for such exchange, then dividends will cease to accrue on the Redeemable Preferred Stock on and after the Mandatory Exchange Date and the rights of the Holders of shares of the Redeemable Preferred Stock as stockholders of the Company shall cease on and after the Mandatory Exchange Date (except the right to receive Exchange Debentures), and the Person or Persons entitled to receive the Exchange Debentures issuable upon exchange shall be treated for all purposes as the registered Holder or Holders of such Exchange Debentures as of the Mandatory Exchange Date. (h) Change of Control. (i) Subject to paragraph (h)(v) hereof, upon the occurrence of a Change of Control, the Company shall make an offer (a "Change of Control Offer") to each Holder of shares of Redeemable Preferred Stock to repurchase all or any part of such Holder's shares of Redeemable Preferred Stock at a cash purchase price equal to 101% of the liquidation preference thereof plus, without duplication, an amount in cash equal to all accumulated and unpaid dividends per share (including an amount in cash equal to a prorated dividend for the period from the Dividend Payment Date immediately prior to the Change of Control Payment Date (as defined in subparagraph (h)(ii)(B) hereof) to the Change of Control Payment Date) (the "Change of Control Payment"). (ii) Within 30 days following any Change of Control, the Company shall mail a notice to such Holder stating: (A) that the Change of Control Offer is being made pursuant to this Certificate of Designation and that, to the extent lawful, all shares of Redeemable Preferred Stock tendered will be accepted for payment; (B) the purchase price and the purchase date, which shall be no earlier than 30 days nor later than 40 days from the date such notice is mailed (the "Change of Control Payment Date"); (C) that any shares of Redeemable Preferred Stock not tendered will continue to accrue dividends in accordance with the terms of this Certificate of Designation; (D) that, unless the Company defaults in the payment of the Change of Control Payment, all shares of Redeemable Preferred Stock accepted for payment pursuant to the Change of -15- Control Offer shall cease to accrue dividends on and after the Change of Control Payment Date and all rights of the Holders of such Redeemable Preferred Stock shall terminate on and after the Change of Control Date; and (E) a description of the procedures to be followed by such Holder in order to have its shares of Redeemable Preferred Stock repurchased. (iii) On the Change of Control Payment Date, (A) the Company shall, to the extent lawful, (1) accept for payment shares of Redeemable Preferred Stock tendered pursuant to the Change of Control Offer and (2) promptly mail to each Holder of shares of Redeemable Preferred Stock so accepted payment in an amount equal to the Change of Control Payment for such shares and (B) unless the Company defaults in the payment for the shares of Redeemable Preferred Stock tendered pursuant to the Change of Control Offer, dividends will cease to accrue with respect to the shares of Redeemable Preferred Stock tendered and all rights of Holders of such tendered shares will terminate, except for the right to receive payment therefor, on the Change of Control Payment Date. The Company shall publicly announce the results of the Change of Control Offer on or as soon as practicable after the Change of Control Payment Date. (iv) The Company shall comply with Rule 14e-1 under the Exchange Act and any securities laws and regulations to the extent such laws and regulations are applicable to the repurchase of shares of the Redeemable Preferred Stock in connection with a Change of Control. (v) Notwithstanding the foregoing, the Company shall not make (or be required to make) a Change of Control Offer if any Indebtedness outstanding upon the occurrence of a Change of Control is (or may be) required to be repaid, redeemed or repurchased in full pursuant to the terms thereof (or if any such Change of Control constitutes a default under such Indebtedness) until such Indebtedness is repaid, redeemed or repurchased in full, in which case the date on which all indebtedness is so repaid, redeemed or repurchased for purposes of this paragraph (h) shall be deemed to be the date on which such Change of Control shall have occurred. In no event will the Company be required to commence a Change of Control offer until all Indebtedness under the Silgan Credit Agreement is paid in full or the Company obtains the requisite consent of the lenders thereunder. (i) Conversion or Exchange. The Holders of shares of Redeemable Preferred Stock shall not have any rights hereunder to convert such shares into or exchange such shares for shares of any other class or classes or of any other series of any class or classes of Capital Stock of the Company. (j) Preemptive Rights. No shares of Redeemable Preferred Stock shall have any rights of preemption whatsoever as to any securities of the -16- Company, or any warrants, rights or options issued or granted with respect thereto, regardless of how such securities or such warrants, rights or options may be designated, issued or granted. (k) Reissuance of Redeemable Preferred Stock. Shares of Redeemable Preferred Stock that have been issued and reacquired in any manner, including shares purchased or redeemed or exchanged, shall (upon compliance with any applicable provisions of the laws of Delaware) have the status of authorized but unissued shares of preferred stock of the Company undesignated as to series and may be designated or redesignated and issued or reissued, as the case may be, as part of any series of preferred stock of the Company, provided that any issuance of such shares as Redeemable Preferred Stock must be in compliance with the terms hereof. (l) Business Day. If any payment, redemption or exchange shall be required by the terms hereof to be made on a day that is not a Business Day, such payment, redemption or exchange shall be made on the immediately succeeding Business Day. (m) Certain Additional Provisions. (i) Limitation on Indebtedness. (A) The Company shall not, and shall not permit any Subsidiary (other than Silgan and its Subsidiaries) to, Incur any Indebtedness (other than the Discount Debentures, the Exchange Debentures and Indebtedness existing on the Preferred Stock Issuance Date) or issue any Redeemable Stock unless, after giving effect to the Incurrence of such Indebtedness or issuance of Redeemable Stock and the receipt and application of the proceeds therefrom, the Interest Coverage Ratio of the Company would be greater than 1.75:1. Notwithstanding the foregoing, the Company and its Subsidiaries (other than Silgan and its Subsidiaries) may Incur each and all of the following: (1) Indebtedness in an aggregate principal amount not to exceed $100 million outstanding at any time; (2) Indebtedness to the Company or any Restricted Subsidiary; (3) Indebtedness or Redeemable Stock issued in exchange for, or the net proceeds of which are used to exchange, refinance or refund, outstanding Indebtedness or Redeemable Stock, other than Indebtedness Incurred under clauses (1) and (8) of this subparagraph (m)(i)(A) and any refinancings thereof, in an amount (or, if such new Indebtedness provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration thereof, with an original issue price) not to exceed the amount exchanged, refinanced or refunded (plus premiums, accrued interest, fees and expenses); provided that Indebtedness or Redeemable Stock the proceeds of which are used to exchange, refinance or refund Redeemable Stock, determined as of the date of Incurrence of such new Indebtedness or issuance of such Redeemable Stock, does not mature prior to the Stated Maturity or have a mandatory redemption date prior to the Redeemable Stock to be exchanged, refinanced or refunded, and the Average Life of such Indebtedness or Redeemable Stock is at least equal to the remaining Average -17- Life of the Redeemable Preferred Stock to be exchanged, refinanced or refunded; (4) Indebtedness issued in exchange for, or the net proceeds of which are used to exchange, refinance or refund, Silgan Indebtedness; provided that (I) the principal amount (or, if such Indebtedness provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration thereof, the original issue price) of such new Indebtedness shall not exceed the principal amount of Silgan Indebtedness exchanged, refinanced or refunded (plus premiums, if any, accrued interest, fees and expenses) and (II) the Average Life of such new Indebtedness, determined as of the date of Incurrence of such new Indebtedness, is at least equal to the remaining Average Life of the Silgan Indebtedness being exchanged, refinanced or refunded; (5) Indebtedness Incurred in connection with the purchase, redemption, acquisition, cancellation or other retirement for value of shares of Capital Stock of the Company, Silgan or any other Restricted Subsidiary, options on any such shares or related stock appreciation rights or similar securities held by officers or employees or former officers or employees (or their estates or beneficiaries under their estates) and which were issued pursuant to any Stock Based Plan, upon death, disability, retirement or termination of employment or pursuant to the terms of such Stock Based Plan or any other agreement under which such shares of Capital Stock, options, related rights or similar securities were issued; provided that (I) such Indebtedness (other than any Shareholder Subordinated Notes, which must be pari passu with, or subordinated in right of payment to, the Exchange Debentures), by its terms or by the terms of any agreement or instrument pursuant to which such Indebtedness is issued, is expressly made subordinate in right of payment to the Exchange Debentures at least to the extent that the Exchange Debentures would be subordinated in right of payment to Senior Indebtedness, (II) such Indebtedness, by its terms or by the terms of any agreement or instrument pursuant to which such Indebtedness is issued, provides that no payments of principal of such Indebtedness by way of sinking fund, mandatory redemption or otherwise (including defeasance) may be made by the Company (including, without limitation, at the option of the holder thereof, other than an option given to a holder pursuant to a "change of control" or an "asset sale" provision that is no more favorable to the holders of such Indebtedness than the provisions contained in paragraphs (h) and (m)(vi) hereof), and such Indebtedness specifically provides that the Company will not repurchase or redeem such Indebtedness pursuant to such provisions prior to the Company's repurchase of the Redeemable Preferred Stock required to be repurchased by the Company under paragraphs (h) and (m)(vi) hereof) at any time prior to the Mandatory Redemption Date of the Redeemable Preferred Stock and (III) the scheduled maturity of all principal of such Indebtedness is beyond the Mandatory Redemption Date of the Redeemable Preferred Stock; (6) Guarantees of Indebtedness of Silgan and other Restricted Subsidiaries under the Silgan Credit Agreement; (7) Indebtedness (I) in respect of performance bonds, bankers' -18- acceptances and surety or appeal bonds provided in the ordinary course of business, (II) under (or in respect of) Currency Agreements and Interest Rate Agreements; provided that, in the case of Currency Agreements that relate to other Indebtedness, such Currency Agreements do not increase the Indebtedness of the Company and its Subsidiaries outstanding at any time other than as a result of fluctuations in foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunder and (III) arising from agreements providing for indemnification, adjustment of purchase price or similar options, or from Guarantees or letters of credit, surety bonds or performance bonds securing any obligations of the Company or any of its Subsidiaries pursuant to such agreements, in any case Incurred in connection with the disposition of any business, assets or Subsidiary of the Company, other than Guarantees of Indebtedness Incurred by any Person acquiring all or any portion of such business, assets or Subsidiary of the Company for the purpose of financing such acquisition; and (8) unsecured Indebtedness of the Company; provided that such Indebtedness (I) determined as of the date of Incurrence of such Indebtedness, does not mature prior to the Mandatory Redemption Date of the Redeemable Preferred Stock, and the Average Life of such Indebtedness is greater than the remaining Average Life of the Redeemable Preferred Stock, (II) by its terms or by the terms of any agreement or instrument pursuant to which such Indebtedness is issued, provides that no payments of principal of such Indebtedness by way of sinking fund, mandatory redemption or otherwise (including defeasance) may be made by the Company (including, without limitation, at the option of the holder thereof other than an option given to a holder pursuant to a "change of control" or an "asset sale" provision that is no more favorable to the holders of such Indebtedness than the provisions contained in paragraphs (h) and (m)(vi) hereof) and such Indebtedness specifically provides that the Company will not repurchase or redeem such Indebtedness pursuant to such provisions prior to the Company's repurchase of the Redeemable Preferred Stock required to be repurchased by the Company under paragraphs (h) and (m)(vi) hereof) at any time prior to the Mandatory Redemption Date of the Redeemable Preferred Stock and (III) by its terms or the terms of any agreement or instrument pursuant to which such Indebtedness is issued, is not scheduled to pay interest in cash prior to the first date on which dividends on the Redeemable Preferred Stock are required to be paid in cash. (B) The Company shall not permit Silgan or any Subsidiary of Silgan to Incur any Indebtedness or issue any Redeemable Stock unless (1) after giving effect to the Incurrence of such Indebtedness or issuance of Redeemable Stock and the receipt and application of the proceeds therefrom, the Interest Coverage Ratio of Silgan would be greater than 1.75:l or (2) such Indebtedness so Incurred by Silgan or such Subsidiary of Silgan constitutes Silgan Indebtedness; provided, however, that any Indebtedness or Redeemable Preferred Stock so Incurred or issued pursuant to clause (1) or (2) of this subparagraph -19- (m)(i)(B) may not prohibit the payment of dividends to the Company (but any such Indebtedness may condition such payments on the absence of any defaults or events of defaults thereunder and on compliance with financial tests) in amounts sufficient to make mandatory interest and principal payments due on the Exchange Debentures at the times and in the amount due and payable; and provided further, however, that, in the event the Redeemable Preferred Stock is changed or exchanged into securities of a Successor Corporation, nothing in this subparagraph (m)(i)(B) shall prohibit the Successor Corporation from assuming or otherwise becoming liable for existing Indebtedness of the Company or its Subsidiaries. (C) Notwithstanding any other provision of this paragraph (m)(i), (1) the maximum amount of Indebtedness that the Company, Silgan or any of their respective Subsidiaries may Incur pursuant to this paragraph (m)(i) shall not be deemed to be exceeded due solely to the result of fluctuations in the exchange rates of currencies and (2) for purposes of calculating the amount of Indebtedness outstanding at any time under clause (1) of subparagraph (m)(i)(A) hereof, no amount of Indebtedness of the Company, Silgan or any of their respective Subsidiaries outstanding on the Preferred Stock Issuance Date shall be considered to be outstanding. (D) For purposes of determining any particular amount of Indebtedness under this paragraph (m)(i), Guarantees of, or obligations with respect to letters of credit supporting, Indebtedness otherwise included in the determination of such particular amount shall not be included. For purposes of determining compliance with this paragraph (m)(i), (1) in the event that an item of Indebtedness meets the criteria of more than one of the types of Indebtedness described in the above clauses, the Company, in its sole discretion, shall classify such item of Indebtedness and only be required to include the amount and type of such Indebtedness in one of such clauses and (2) the amount of Indebtedness issued at a price that is less than the principal amount thereof shall be equal to the amount of the liability in respect thereof determined in conformity with GAAP. (E) Notwithstanding any of the foregoing, nothing in this paragraph (m)(i) shall prohibit the occurrence of (1) a Company Merger, (2) the sale of all or substantially all of the property and assets of Silgan or its successors to the Company and the assumption by the Company of all or substantially all of the liabilities of Silgan or its successors, or (3) the change or exchange of the Redeemable Preferred Stock into preferred stock of Silgan having the same rights and privileges as the Redeemable Preferred Stock. Immediately upon the occurrence of an event specified in clause (1), (2) or (3) of this subparagraph (m)(i)(E), (1) paragraphs (m)(i)(A) and (E) (other than clause (1) hereof) shall be of no further force and effect and (2) all references to Silgan in subparagraph (m)(i)(B) hereof shall refer to the Successor Corporation. -20- (ii) Limitation on Restricted Payments. (A) The Company shall not, and shall not permit any Restricted Subsidiary to, directly or indirectly, (1) declare or pay any dividend or make any distribution on its Junior Securities (other than dividends or distributions payable solely in shares of its Junior Securities or such Restricted Subsidiary's Capital Stock (other than Redeemable Stock) of the same class held by such holders or in options, warrants or other rights to acquire such shares of Junior Securities or Capital Stock) held by Persons other than the Company or another Restricted Subsidiary (other than in respect of the repurchase or redemption of the Company Class B Stock with the proceeds of the Redeemable Preferred Stock), (2) purchase, redeem, retire or otherwise acquire for value any Junior Securities (other than in respect of the repurchase or redemption of the Company Class B Stock with the proceeds of the Redeemable Preferred Stock) or any shares of Capital Stock of any Restricted Subsidiary or any Unrestricted Subsidiary (including options, warrants or other rights to acquire such shares of Junior Securities or Capital Stock) held by Persons other than the Company or another Restricted Subsidiary or (3) make any investment in any Affiliate (other than the Company or a Restricted Subsidiary) or Unrestricted Subsidiary (such payments or any other actions described in clauses (1) through (3) hereof being, collectively, "Restricted Payments") if at the time of and after giving effect to the proposed Restricted Payment: (I) a Voting Rights Triggering Event shall have occurred and be continuing, (II) the Company (in the case the Company or its Restricted Subsidiaries will make the Restricted Payment) could not Incur at least $1.00 of Indebtedness under subparagraph (m)(i)(A) hereof or Silgan (in the case Silgan or its Restricted Subsidiaries will make the Restricted Payment) could not Incur at least $1.00 of Indebtedness under subparagraph (m)(i)(B) hereof, (III) the aggregate amount expended for all Restricted Payments (the amount so expended, if other than in cash, to be determined in good faith by the Board of Directors, whose determination shall be conclusive and evidenced by a Board Resolution) after the Preferred Stock Issuance Date (other than any Restricted Payments under clauses (2) or (4) of subparagraph (m)(ii)(B) hereof) shall exceed the sum of (w) 50% of the aggregate amount of Adjusted Consolidated Net Income (or, if Adjusted Consolidated Net Income is a loss, minus 100% of such amount) of the Company (determined by excluding income resulting from the transfers of assets received by the Company or a Restricted Subsidiary from an Unrestricted Subsidiary) accrued on a cumulative basis during the period (taken as one accounting period) beginning on the first day of the month immediately following the Preferred Stock Issuance Date and ending on the last day of the last fiscal quarter preceding the Transaction Date plus (x) the aggregate net cash proceeds received by the Company from the issuance and sale of Junior Securities of the Company (other than Redeemable Stock) to any Person other than a Subsidiary of the Company, including an issuance or sale permitted by this Certificate of Designation for cash or other property upon the conversion of any Indebtedness -21- of the Company subsequent to the Preferred Stock Issuance Date, or from the issuance of any options, warrants or other rights to acquire Junior Securities of the Company (in each case, exclusive of any Redeemable Stock or any options, warrants or other rights that are redeemable at the option of the holder, or are required to be redeemed, prior to the Mandatory Redemption Date of the Redeemable Preferred Stock) plus (y) an amount equal to the net reduction in Investments in Unrestricted Subsidiaries resulting from payments of interest on Indebtedness, dividends, repayments of loans or advances, or other transfers of assets, in each case to the Company or any Restricted Subsidiary from Unrestricted Subsidiaries, or from redesignations of Unrestricted Subsidiaries as Restricted Subsidiaries (valued in each case as provided in the definition of "Investments" set forth in paragraph (n) hereof), not to exceed in the case of any Unrestricted Subsidiary the amount of Investments previously made by the Company or any Restricted Subsidiary in such Unrestricted Subsidiary plus (z) $25 million, or (IV) all dividends in respect of the Redeemable Preferred Stock shall not have been declared and paid in full as provided in this Certificate of Designation. (B) The foregoing provision shall not be violated by reason of: (1) the payment of any dividend within 60 days after the date of declaration thereof if, at the date of declaration, such payment would comply with subparagraph (m)(ii)(A) hereof; (2) the making of Investments in Unrestricted Subsidiaries in an aggregate amount not to exceed $75 million outstanding at any time; (3) the declaration and payment of dividends on the Common Stock of the Company or Silgan, following an initial public offering of the Common Stock of the Company or Silgan, as the case may be, of up to 6% per annum of the net proceeds received by the Company or Silgan, as the case may be, in such initial public offering; (4) the repurchase, redemption, refinancing or other payment or prepayment of Junior Securities with the proceeds of Indebtedness incurred under clauses (1), (3) or (8) of subparagraph (m)(i)(A) hereof; (5) the purchase, redemption, acquisition, cancellation or other retirement for value of Junior Securities of the Company, Silgan or any other Restricted Subsidiary, options on any such shares or related stock appreciation rights or similar securities held by officers or employees or former officers or employees (or their estates or beneficiaries under their estates) and which were issued pursuant to any Stock Based Plan, upon death, disability, retirement or termination of employment or pursuant to the terms of such Stock Based Plan or any other agreement under which such Junior Securities, options, related rights or similar securities were issued; provided that the aggregate cash consideration paid for such purchase, redemption, acquisition, cancellation or other retirement for value of such shares of Junior Securities, options, related rights or similar securities after the Preferred Stock Issuance Date does not exceed $25 million and that any additional consideration in excess of such $25 million is in the form of Indebtedness that would be permitted to be Incurred under clause (5) of subparagraph (m)(i)(A) hereof; (6) the repurchase of Junior Securities of the -22- Company or Capital Stock of Silgan followed immediately by the reissuance thereof for consideration in an amount at least equal to the consideration paid to acquire such stock, or the redemption, repurchase or other acquisition for value of Common Stock of the Company or Capital Stock of any Subsidiary of the Company in exchange for, or with the proceeds of a substantially concurrent offering of, other Common Stock or shares of the Capital Stock, as the case may be, of such entity (other than Redeemable Stock); and (7) payments or distributions pursuant to or in connection with a consolidation, merger or transfer of assets that complies with the provisions of the Exchange Indenture applicable to mergers, consolidations and transfers of all or substantially all of the property and assets of the Company; provided that, in the case of clauses (2), (3), (4), (5) and (7) of this subparagraph (m)(ii)(B), no Voting Rights Triggering Event shall have occurred and be continuing or shall occur as a consequence thereof. (iii) Limitation on Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries. (A) The Company shall not, and shall not permit any Restricted Subsidiary to, create or otherwise cause or suffer to exist or become effective any consensual encumbrance or restriction of any kind on the ability of any Restricted Subsidiary to (1) pay dividends or make any other distributions permitted by applicable law on any Capital Stock of such Restricted Subsidiary owned by the Company or any other Restricted Subsidiary, (2) pay any Indebtedness owed to the Company or any other Restricted Subsidiary, (3) make loans or advances to the Company or any other Restricted Subsidiary or (4) transfer, subject to certain exceptions, any of its property or assets to the Company or any other Restricted Subsidiary. (B) Notwithstanding anything else provided herein, subparagraph (m)(iii)(A) hereof shall not restrict or prohibit any encumbrances or restrictions existing: (I) in the Silgan Credit Agreement, the Silgan Notes, the Discount Debentures (including any agreement pursuant to which the Silgan Notes or the Discount Debentures were issued), or any other agreements in effect on the Preferred Stock Issuance Date, including extensions, refinancings, renewals or replacements thereof, provided that the encumbrances and restrictions in any such extensions, refinancings, renewals or replacements are no less favorable in any material respect to the holders thereof than those encumbrances or restrictions that are then in effect and that are being extended, refinanced, renewed or replaced; (II) under or by reason of applicable law, rule or regulation (including, without limitation, applicable currency control laws and applicable state corporate statutes restricting the payment of dividends in certain circumstances); (III) with respect to any Person or the property or assets of such Person acquired by the Company or any Restricted Subsidiary and existing at the time of such acquisition, which encumbrances or restrictions are not applicable to any Person or the property or assets of any Person other than such Person or the property or assets of such Person so -23- acquired; (IV) in the case of clause (4) of subparagraph (m)(iii)(A) hereof, (x) that restrict in a customary manner the subletting, assignment or transfer of any property or asset that is a lease, license, conveyance or contract or similar property or asset, (y) by virtue of any transfer of, agreement to transfer, option or right with respect to, or Lien on, any property or assets of the Company or any Restricted Subsidiary not otherwise prohibited by this Certificate of Designation, or (z) arising or agreed to in the ordinary course of business and that do not, individually or in the aggregate, detract from the value of the property or assets of the Company or any Restricted Subsidiary in any manner material to the Company or such Restricted Subsidiary, or (V) with respect to any Restricted Subsidiary and imposed pursuant to an agreement that has been entered into for the sale or disposition of all or substantially all of the Capital Stock of, or property and assets of, such Restricted Subsidiary. (C) Nothing contained in this paragraph (m)(iii) shall prevent the Company or any Restricted Subsidiary from restricting the sale or other disposition of property or assets of the Company or any of its Subsidiaries that secure Indebtedness of the Company or any of its Subsidiaries. (iv) Limitation on Transactions with Shareholders and Affiliates. (A) The Company shall not, and shall not permit any Subsidiary of the Company to, directly or indirectly, enter into, renew or extend any transaction (including, without limitation, the purchase, sale, lease or exchange of property or assets, or the rendering of any service) with any holder (or any Affiliate of such holder) of 5% or more of any class of Capital Stock of the Company (other than the Bank Agent or any of its Affiliates) or any Subsidiary of the Company or with any Affiliate of the Company or any Subsidiary of the Company, except upon fair and reasonable terms no less favorable to the Company or such Subsidiary of the Company than could be obtained in a comparable arm's-length transaction with a Person that is not such a holder or an Affiliate. (B) The foregoing limitation does not limit, and shall not apply to: (1) any transaction between the Company and any Subsidiary of the Company or between Subsidiaries of the Company; (2) transactions (A) for which the Company or any Subsidiary of the Company delivers to the Transfer Agent a written opinion of a nationally recognized investment banking firm stating that the transaction is fair to the Company or such Subsidiary of the Company from a financial point of view or (B) approved by a majority of the disinterested members of the Board of Directors; (3) the payment of fees pursuant to the Management Agreements or pursuant to any similar management contracts entered into by the Company or any Subsidiary of the Company; (4) the payment of reasonable and customary regular fees to directors of the Company or any Subsidiary of the Company who are not employees of the Company or such Subsidiary of the Company; (5) any payments or other transactions pursuant to -24- any tax-sharing agreement between the Company and Silgan or any other Person with which the Company is required or permitted to file a consolidated tax return or with which the Company is or could be part of a consolidated group for tax purposes; (6) any Restricted Payments not prohibited by paragraph (m)(ii); (7) the payment of fees to Morgan Stanley, S&H or their respective Affiliates for financial, advisory, consulting or investment banking services that the Board of Directors deems to be advisable or appropriate for the Company or any Subsidiary of the Company to obtain (including the payment to Morgan Stanley of any underwriting discounts or commissions or placement agency fees) in connection with the issuance and sale of any securities by the Company or any Subsidiary of the Company; or (8) any transaction contemplated by any of the Stock Based Plans. (C) Notwithstanding any of the foregoing, nothing in this paragraph (m)(iv) shall prohibit the occurrence of (1) a Company Merger, (2) the sale of all or substantially all of the property and assets of Silgan or its successors to the Company and the assumption by the Company of all or substantially all of the liabilities of Silgan or its successors, or (3) the issuance by Silgan or its successors of preferred stock in exchange for or in replacement of the Redeemable Preferred Stock having the same rights and privileges as the Redeemable Preferred Stock. Immediately upon the occurrence of an event specified in clause (1), (2) or (3) of the preceding sentence, all references to the Company in this paragraph (m)(iv) shall refer to the Successor Corporation. (v) Limitation on the Issuance of Capital Stock of Restricted Subsidiaries. (A) The Company shall not permit any Restricted Subsidiary to, directly or indirectly, issue or sell any shares of its Capital Stock (including options, warrants or other rights to purchase shares of such Capital Stock), except (1) to the Company or another Restricted Subsidiary that is a Wholly Owned Subsidiary of the Company, (2) pursuant to options on such Capital Stock granted to officers and directors of such Restricted Subsidiary, (3) if, immediately after giving effect to such issuance or sale, such Restricted Subsidiary would no longer constitute a Restricted Subsidiary or (4) in connection with an initial public offering of the Common Stock of such Restricted Subsidiary; provided that, within 12 months after the date the Net Cash Proceeds of an initial public offering are received by such Restricted Subsidiary, such Restricted Subsidiary shall (I) apply an amount equal to such Net Cash Proceeds to repay Indebtedness or Senior Securities of the Company or Indebtedness of a Restricted Subsidiary, in each case owing to a Person other than the Company or any of its Subsidiaries, (II) apply an amount equal to such Net Cash Proceeds to the repurchase of Indebtedness or Senior Securities pursuant to mandatory repurchase or repayment provisions applicable to such Indebtedness or Senior Securities or (III) invest an equal amount, or the amount not so applied pursuant to clause (I) or (II) of this paragraph (m)(v)(A) (or -25- enter into a definitive agreement committing to so invest within 12 months of the date of such agreement), in property or assets that (as determined in good faith by the Board of Directors, whose determination shall be conclusive and evidenced by a Board Resolution) are of a nature or type or are used in a business (or in a company having property and assets of a nature or type, or engaged in a business) similar or related to the nature or type of the property and assets of, or the business of, any Restricted Subsidiary and its Subsidiaries existing on the date thereof. (B) Notwithstanding any of the foregoing, nothing in paragraph (m)(v) hereof shall prohibit the occurrence of (1) a Company Merger, (2) the sale of all or substantially all of the property and assets of Silgan or its successors to the Company, and the assumption by the Company of all or substantially all of the liabilities of Silgan or its successors, or (3) the issuance by Silgan or its successors of preferred stock having the same rights and privileges as the Redeemable Preferred Stock in exchange or replacement for the Redeemable Preferred Stock. Immediately upon the occurrence of an event specified in clause (1), (2) or (3) of the preceding sentence, all references to the Company in this paragraph (m)(v) shall refer to the Successor Corporation. (vi) Limitation on Asset Sales. (A) In the event and to the extent that the Net Cash Proceeds received by the Company or any Restricted Subsidiary from one or more Asset Sales occurring on or after the Preferred Stock Issuance Date in any period of 12 consecutive months (other than Asset Sales by the Company or any Restricted Subsidiary to the Company or another Restricted Subsidiary) exceed 15% of Consolidated Net Tangible Assets in any one fiscal year (determined as of the date closest to the commencement of such 12-month period for which a consolidated balance sheet of the Company and its Subsidiaries has been prepared), then the Company shall, or shall cause such Restricted Subsidiary to, (1) within 12 months after the date the Net Cash Proceeds so received exceed 15% of Consolidated Net Tangible Assets in any one fiscal year (determined as of the date closest to the commencement of such 12-month period for which a consolidated balance sheet of the Company and its Subsidiaries has been prepared), (I) apply an amount equal to such excess Net Cash Proceeds to repay Indebtedness or Senior Securities of the Company or Indebtedness of a Restricted Subsidiary, in each case owing to a Person other than the Company or any of its Subsidiaries or (II) invest an equal amount, or the amount not so applied pursuant to clause (I) of this subparagraph (m)(vi)(A) (or enter into a definitive agreement committing to so invest within 12 months of the date of such agreement), in property or assets that (as determined in good faith by the Board of Directors, whose determination shall be conclusive and evidenced by a Board Resolution) are of a nature or type or are used in a business (or in a company having property and assets of a nature or type, or engaged in a business) similar or related to the nature or type of the property -26- and assets of, or the business of, the Company and its Subsidiaries existing on the date thereof and (2) apply such excess Net Cash Proceeds (to the extent not applied pursuant to clause (1) of this subparagraph (m)(vi)(A)) as provided in the following subparagraphs of this paragraph (m)(vi). The amount of such excess Net Cash Proceeds required to be applied (or to be committed to be applied) during such 12-month period as set forth in clause (I) or (II) of the preceding sentence of this subparagraph (m)(vi)(A) and not applied as so required by the end of such period shall constitute "Excess Proceeds." (B) If, as of the first day of any calendar month, the aggregate amount of Excess Proceeds not theretofore subject to an Excess Proceeds Offer (as defined below) totals at least $10 million, the Company must, not later than the 15th Business Day of such month, make an offer (each, an "Excess Proceeds Offer") to purchase from the Holders on a pro rata basis an aggregate liquidation value of shares of Redeemable Preferred Stock equal to the Excess Proceeds on such date, at a redemption price equal to 101% of the liquidation preference thereof, plus accrued and unpaid dividends to the date of redemption (the "Excess Proceeds Payment"); provided, however, that no Excess Proceeds Offer shall be required to be commenced with respect to the Redeemable Preferred Stock until the Business Day following the dates that payments are made pursuant to similar offers that are made to holders of Indebtedness and need not be commenced if the Excess Proceeds remaining after application to Indebtedness purchased in the offers made to the holders of Indebtedness are less than $10 million; provided further, however, that no Redeemable Preferred Stock may be purchased under this subparagraph (m)(vi)(B) unless the Company shall have purchased all Indebtedness tendered pursuant to the offers applicable thereto and shall have obtained the consent required under the Silgan Credit Agreement to make such an Excess Proceeds Offer. (C) The Company shall commence an Excess Proceeds Offer by mailing a notice to the Transfer Agent and each Holder stating: (1) that the Excess Proceeds Offer is being made pursuant to subparagraph (m)(vi)(B) hereof and that all Redeemable Preferred Stock validly tendered will be accepted for payment on a pro rata basis; (2) the redemption price and the date of redemption or purchase (which shall be a Business Day no earlier than 30 days nor later than 60 days from the date such notice is mailed) (the "Excess Proceeds Payment Date"); (3) that any share of Redeemable Preferred Stock not tendered will continue to accumulate and pay dividends pursuant to its terms; (4) that, unless the Company defaults in the payment of the Excess Proceeds Payment, any share of Redeemable Preferred Stock accepted for payment pursuant to the Excess Proceeds Offer shall cease to accumulate dividends on and after the Excess Proceeds Payment Date and all rights of the Holders of such Redeemable Preferred Stock shall terminate on and after the Change of Control Date; (5) that Holders electing to have any share of Redeemable Preferred Stock purchased pursuant to -27- the Excess Proceeds Offer will be required to surrender such Redeemable Preferred Stock, together with the form entitled "Option of the Holder to Elect Purchase" on the reverse side of the share of Redeemable Preferred Stock completed, to the Paying Agent at the address specified in the notice prior to the close of business on the Business Day immediately preceding the Excess Proceeds Payment Date; (6) that Holders will be entitled to withdraw their election if the Paying Agent receives, not later than the close of business on the third Business Day immediately preceding the Excess Proceeds Payment Date, a telegram, telex, facsimile transmission or letter, setting forth the name of such Holder, the liquidation preference of the shares of Redeemable Preferred Stock delivered for redemption and a statement that such Holder is withdrawing his election to have such Redeemable Preferred Stock redeemed; and (7) that Holders whose Redeemable Preferred Stock is being redeemed or being purchased only in part will be issued new shares of Redeemable Preferred Stock equal in liquidation preference to the unredeemed Redeemable Preferred Stock surrendered. (D) On the Excess Proceeds Payment Date, the Company shall: (1) accept for payment on a pro rata basis Redeemable Preferred Stock or portions thereof tendered pursuant to the Excess Proceeds Offer; (2) deposit with the Transfer Agent money sufficient to pay the redemption price of all Redeemable Preferred Stock or portions thereof so accepted; and (3) deliver, or cause to be delivered, to the Transfer Agent all Redeemable Preferred Stock or portions thereof so accepted, together with an Officer's Certificate specifying the shares of Redeemable Preferred Stock or portions thereof accepted for payment by the Company. The Transfer Agent shall promptly mail to the Holders of Redeemable Preferred Stock so accepted payment in an amount equal to the redemption price, and the Trustee shall promptly authenticate and mail to such Holders new shares of Redeemable Preferred Stock equal in liquidation preference to any unredeemed portion of the Redeemable Preferred Stock surrendered. The Company will publicly announce the results of the Excess Proceeds Offer as soon as practicable after the Excess Proceeds Payment Date. For purposes of this paragraph (m)(vi), the Transfer Agent shall act as the Paying Agent. (E) The Company will comply with Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder, to the extent such laws and regulations are applicable, in the event that such Excess Proceeds are received by the Company under this paragraph (m)(vi) and the Company is required to redeem Redeemable Preferred Stock as described above. (F) Notwithstanding the foregoing, nothing in this paragraph (m)(vi) shall prohibit the occurrence of (1) a Company Merger or (2) the sale of all or substantially all of the property and assets of Silgan or its successors to the Company and the assumption by the Company of all or substantially all of the liabilities of Silgan or its successors. Immediately upon -28- the occurrence of an event specified in clause (1) or (2) of the preceding sentence, all references to the Company in this paragraph (m)(vi) shall refer to the Successor Corporation. (vii) Consolidation, Merger and Sale of Assets. The Company shall not consolidate with, merge with or into, or sell, convey, transfer, lease or otherwise dispose of all or substantially all of its property and assets (as an entirety or substantially as an entirety in one transaction or a series of related transactions) to, any Person (other than a Restricted Subsidiary that is a Wholly Owned Subsidiary of the Company; provided that, in connection with any merger of the Company with any Restricted Subsidiary that is a Wholly Owned Subsidiary of the Company, no consideration (other than common stock in the surviving Person or the Company) shall be issued or distributed to the stockholders of the Company) or permit any Person to merge with or into the Company, unless: (A) the Company shall be the continuing Person, or the Person (if other than the Company) formed by such consolidation or into which the Company is merged or that acquired or leased such property and assets of the Company shall be a corporation organized and validly existing under the laws of the United States of America or any jurisdiction thereof and the Redeemable Preferred Stock shall be converted or exchanged for and shall become shares of such successor company having in respect of the successor company the same rights and privileges that the Redeemable Preferred Stock had immediately prior to such transaction; (B) immediately after giving effect to such transaction, no Voting Rights Triggering Event, and no event that after the giving of notice or lapse of time or both would become a Voting Rights Triggering Event, shall have occurred and be continuing; (C) immediately after giving effect to such transaction on a pro forma basis, the Interest Coverage Ratio of the Company (or any Person becoming the successor issuer of the Redeemable Preferred Stock) is at least 1:1; provided that, if the Interest Coverage Ratio of the Company before giving effect to such transaction is within the range set forth in column (A) below, then the Interest Coverage Ratio of the Company (or any Person becoming the successor issuer of the Redeemable Preferred Stock) shall be at least equal to the lesser of (I) the ratio determined by multiplying the percentage set forth in column (B) below by the Interest Coverage Ratio of the Company prior to such transaction and (II) the ratio set forth in column (C) below: (A) (B) (C) 1.11:1 to 1.99:1......... 90% 1.5:1 2.00:1 to 2.99:1......... 80% 2.1:1 3.00:1 to 3.99:1......... 70% 2.4:1 4.00:1 or more........... 60% 2.5:1 and provided further that, if the Interest Coverage Ratio of the Company (or any Person becoming the successor issuer of the Redeemable Preferred Stock) is 3:1 -29- or more, the calculation in the preceding proviso shall be inapplicable and such transaction shall be deemed to have complied with the requirements of this clause (C) of this paragraph (m)(vii); (D) immediately after giving effect to such transaction on a pro forma basis, the Company (or any Person that becomes the successor issuer of the Redeemable Preferred Stock) shall have a Consolidated Net Worth equal to or greater than the Consolidated Net Worth of the Company immediately prior to such transaction; and (E) the Company delivers to the Registrar an Officer's Certificate (attaching the arithmetic computations to demonstrate compliance with clauses (C) and (D) of this paragraph (m)(vii)) and an Opinion of Counsel, in each case stating that such consolidation, merger or transfer comply with this provision and that all conditions precedent provided for herein relating to such transaction have been complied with; provided, however, that clause (D) of this paragraph (m)(vii) does not apply to, and the Interest Coverage Ratio required by clause (C) of this paragraph (m)(vii) (1) shall be 1.75:1 with respect to, (I) a Company Merger, (II) the sale of all or substantially all of the property and assets of Silgan or its successors to the Company, and the assumption by the Company of all or substantially all of the liabilities of Silgan or its successors or (III) the issuance by Silgan or its successors of preferred stock complying with clause (A) of this paragraph (m)(vii) and (2) does not apply if, in the good faith determination of the Board of Directors, whose determination shall be evidenced by a Board Resolution, the principal purpose of such transaction is to change the state of incorporation of the Company; and provided further, however, that any such transaction shall not have as one of its purposes the evasion of the limitations of this paragraph (m)(vii). (viii) Reports. So long as any shares of Redeemable Preferred Stock are outstanding, the Company shall file with the SEC and send to the Holders of the Redeemable Preferred Stock the annual reports, quarterly reports and the information, documents and other reports required to be filed by the Company with the SEC pursuant to Section 13 or 15 of the Exchange Act, whether or not the Company has or is required to have a class of securities registered under the Exchange Act, at the time it is or would be required to file the same with the SEC and, within 15 days after the Company is or would be required to file such reports, information or documents with the SEC. (n) Definitions. As used in this Certificate of Designation, the following terms shall have the following meanings (with terms defined in the singular having comparable meanings when used in the plural and vice versa), unless the context otherwise requires: "Adjusted Consolidated Net Income" means, for any period, the aggregate net income (or loss) of any Person and its consolidated Subsidiaries for such period determined in conformity with GAAP; provided that the following items shall be excluded in computing Adjusted Consolidated Net Income (without -30- duplication): (i) the net income (or loss) of such Person (other than a Subsidiary of such Person) in which any other Person (other than such Person or any of its Subsidiaries) has a joint interest, except to the extent of the amount of dividends or other distributions actually paid to such Person or any of its Subsidiaries by such other Person during such period; (ii) solely for the purposes of calculating the amount of Restricted Payments that may be made pursuant to clause (III) of subparagraph (m)(ii)(A) hereof (and, in such case, except to the extent includible pursuant to clause (i) above), the net income (or loss) of such Person accrued prior to the date it becomes a Subsidiary of any other Person or is merged into or consolidated with such other Person or any of its Subsidiaries or all or substantially all of the property and assets of such Person are acquired by such other Person or any of its Subsidiaries; (iii) the net income (or loss) of any Subsidiary of any Person to the extent that the declaration or payment of dividends or similar distributions by such Subsidiary of such net income is not at the time permitted by the operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to such Subsidiary; (iv) any gains or losses (on an after-tax basis) attributable to Asset Sales; (v) any amounts paid or accrued as dividends on preferred stock of such Person or preferred stock of any Subsidiary of such Person; and (vi) all extraordinary gains and extraordinary losses; provided that, solely for the purposes of calculating the Interest Coverage Ratio (and in such case, except to the extent includible pursuant to clause (i) above), "Adjusted Consolidated Net Income" of the Company shall include the amount of all cash dividends received by the Company or any Subsidiary of the Company from an Unrestricted Subsidiary. "Affiliate" is defined to mean, as applied to any Person, any other Person directly or indirectly controlling, controlled by or under direct or indirect common control with such Person. For the purposes of this definition, "control" (including, with correlative meanings, the terms "controlling," "controlled by" and "under common control with"), as applied to any Person, is defined to mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise. For purposes of this definition, neither the Bank Agent nor any Bank nor any affiliate of any of them shall be deemed to be an Affiliate of the Company or any Subsidiary of the Company. "Asset Acquisition" means (i) an investment by the Company or any of its Subsidiaries in any other Person pursuant to which such Person shall become a Subsidiary of the Company or any of its Subsidiaries or shall be merged into or consolidated with the Company or any of its Subsidiaries or (ii) an acquisition by the Company or any of its Subsidiaries of the property and assets -31- of any Person other than the Company or any of its Subsidiaries that constitute substantially all of an operating unit or business of such Person. "Asset Disposition" means the sale or other disposition by the Company or any of its Subsidiaries (other than to the Company or another Subsidiary of the Company) of (i) all or substantially all of the Capital Stock of any Subsidiary of the Company or (ii) all or substantially all of the property and assets that constitute an operating unit or business of the Company or any of its Subsidiaries. "Asset Sale" means, with respect to any Person, any sale, transfer or other disposition (including by way of merger, consolidation or sale-leaseback transaction) in one transaction or a series of related transactions by such Person or any of its Subsidiaries to any Person other than the Company or any of its Subsidiaries of (i) all or any of the Capital Stock of any Subsidiary of such Person, (ii) all or substantially all of the property and assets of an operating unit or business of such Person or any of its Subsidiaries or (iii) any other property and assets of such Person or any of its Subsidiaries outside the ordinary course of business of such Person or such Subsidiary and, in each case, that is not governed by paragraph (m)(vi) hereof; provided that sales or other dispositions of inventory, receivables and other current assets shall not be included within the meaning of such term. "Average Life" means, at any date of determination with respect to any debt security, the quotient obtained by dividing (i) the sum of the product of (a) the number of years from such date of determination to the dates of each successive scheduled principal payment of such debt security and (b) the amount of such principal payment by (ii) the sum of all such principal payments. "Bank Agent" means Bankers Trust Company, as co-arranger and administrative agent for the Banks pursuant to the Silgan Credit Agreement, and any successor or successors thereto. "Banks" means the lenders which are from time to time parties to the Silgan Credit Agreement. "Board Resolution" means, with respect to any person, a copy of a resolution, certified by the Secretary or Assistant Secretary of such person to have been duly adopted by the Board of Directors of such person and to be in full force and effect on the date of such certification. "Business Day" means any day except a Saturday or Sunday or other day on which commercial banks in The City of New York or in the city of the Corporate Trust Office of the Trustee are required or authorized by law or other governmental action to be closed. -32- "Capital Stock" means, with respect to any Person, any and all shares, interests, participations or other equivalents (however designated, whether voting or nonvoting) of capital stock of such Person, including, without limitation, all Common Stock and Preferred Stock. "Capitalized Lease" means, as applied to any Person, any lease of any property (whether real, personal or mixed) of which the discounted present value of the rental obligations of such Person as lessee, in conformity with GAAP, is required to be capitalized on the balance sheet of such Person; and "Capitalized Lease Obligation" means the rental obligations, as aforesaid, under such lease. "Change of Control" means such time as (i) (a) a "person" or "group" (within the meaning of Sections 13(d) and 14(d)(2) of the Exchange Act), other than MSLEF II, Mr. Horrigan, Mr. Silver and their respective Affiliates, becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act) of more than 40% of the total voting power of the then outstanding Voting Stock of the Company and (b) MSLEF II, Mr. Horrigan, Mr. Silver and their respective Affiliates beneficially own, directly or indirectly, less than 25% of the total voting power of the then outstanding Voting Stock of the Company; (ii) individuals who at the beginning of any period of two consecutive calendar years constituted the Board of Directors (together with any new directors whose election by the Board of Directors or whose nomination for election by the Company's shareholders was approved by a vote of at least two-thirds of the members of the Board of Directors then still in office who either were members of the Board of Directors at the beginning of such period or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of the members of the Board of Directors then in office; or (iii) the Company shall not beneficially own, directly or indirectly, at least a majority of the issued and outstanding Voting Stock of Silgan other than as a result of the Company Merger. "Common Stock" means, with respect to any Person, any and all shares, interests, participations and other equivalents (however designated, whether voting or nonvoting) of common stock of such Person, including, without limitation, all series and classes of such common stock. "Company Merger" means the merger or consolidation of the Company and Silgan or either of their successors. "Consolidated EBITDA" means, with respect to any Person for any period, the sum of the amounts for such period of (i) Adjusted Consolidated Net Income, (ii) Consolidated Interest Expense, (iii) income taxes (other than income taxes (either positive or negative) attributable to extraordinary and nonrecurring gains or losses or sales of assets), (iv) depreciation expense, (v) -33- amortization expense and (vi) all other noncash items reducing Adjusted Consolidated Net Income, less all noncash items increasing Adjusted Consolidated Net Income, all as determined on a consolidated basis for such Person and its Subsidiaries in conformity with GAAP; provided that, if a Person has any Subsidiary that is not a Wholly Owned Subsidiary of such Person, Consolidated EBITDA of such Person shall be reduced by an amount equal to (a) the Adjusted Consolidated Net Income of such Subsidiary multiplied by (b) the quotient of (1) the number of shares of outstanding Common Stock of such Subsidiary not owned on the last day of such period by such Person or any Subsidiary of such Person divided by (2) the total number of shares of outstanding Common Stock of such Subsidiary on the last day of such period. "Consolidated Interest Expense" means, with respect to any Person for any period, the aggregate amount of interest in respect of Indebtedness (including amortization of original issue discount on any Indebtedness and the interest portion of any deferred payment obligation, calculated in accordance with the interest method of accounting; all commissions, discounts and other fees and charges owed with respect to letters of credit and bankers' acceptance financing; and the net costs associated with Interest Rate Agreements) and all but the principal component of rentals in respect of Capitalized Lease Obligations paid, accrued or scheduled to be paid or accrued by such Person during such period; excluding, however, (i) any amount of such interest of any Subsidiary of such Person if the net income (or loss) of such Subsidiary is excluded in the calculation of Adjusted Consolidated Net Income for such Person pursuant to clause (iii) of the definition thereof (but only in the same proportion as the net income (or loss) of such Subsidiary is excluded from the calculation of Adjusted Consolidated Net Income for such Person pursuant to clause (iii) of the definition thereof), (ii) any premiums, fees and expenses (and any amortization thereof) payable in connection with the Refinancing and (iii) amortization of any other deferred financing costs, all as determined on a consolidated basis in conformity with GAAP. For purposes of this Certificate of Designation, Consolidated Interest Expense shall include all amounts paid or accrued as dividends on Preferred Stock of any Person or any Subsidiary of such Person. "Consolidated Net Tangible Assets" means the total amount of assets of the Company and its Subsidiaries (less applicable depreciation, amortization and other valuation reserves), except to the extent resulting from write-ups of capital assets (excluding write-ups in connection with accounting for acquisitions in conformity with GAAP), after deducting therefrom (i) all current liabilities of the Company and its consolidated Subsidiaries (excluding intercompany items) and (ii) all goodwill, trade names, trademarks, patents, unamortized debt discount and expense and other like intangibles, all as set forth on the most recently available consolidated balance sheet of the Company and its consolidated Subsidiaries prepared in conformity with GAAP. -34- "Consolidated Net Worth" means, at any date of determination, stockholders' equity as set forth on the most recently available consolidated balance sheet of the Company and its consolidated Subsidiaries (which shall be as of a date not more than 60 days prior to the date of such computation), less any amounts attributable to Redeemable Stock or any equity security convertible into or exchangeable for Indebtedness, the cost of treasury stock and the principal amount of any promissory notes receivable from the sale of Capital Stock of the Company or any of its Subsidiaries, each item to be determined in conformity with GAAP (excluding the effects of foreign currency exchange adjustments under Financial Accounting Standards Board Statement of Financial Accounting Standards No. 52). "Containers" means Silgan Containers Corporation, a Delaware corporation. "Currency Agreement" means any foreign exchange contract, currency swap agreement or other similar agreement or arrangement designed to protect the Company or any of its Subsidiaries against fluctuations in currency values to or under which the Company or any of its Subsidiaries is a party or a beneficiary on the date of the Exchange Indenture or to which the Company or any of its Subsidiaries becomes a party or a beneficiary thereafter. "Discount Debentures" means the 13 1/4% Senior Discount Debentures due 2002 of the Company. "Dividend Payment Date" means January 15, April 15, July 15 and October 15 of each year. "Dividend Period" means the Initial Dividend Period and, thereafter, each Quarterly Dividend Period. "Exchange Preferred Stock" means any issue of preferred stock of the Company with terms identical to the Redeemable Preferred Stock issued by the Company in connection with a registered offer to exchange the Redeemable Preferred Stock. "GAAP" means generally accepted accounting principles in the United States of America as in effect as of the Preferred Stock Issuance Date applied on a basis consistent with the principles, methods, procedures and practices employed in the preparation of the Company's audited financial statements, including, without limitation, those set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as approved by a significant segment of the accounting profession. All ratios and computations based on GAAP contained in this Certificate of Designation shall be computed in conformity with GAAP, except that calculations made for purposes of -35- determining compliance with the provisions hereof shall be made without giving effect to (i) the amortization of any expenses incurred in connection with the Refinancing, and (ii) except as otherwise provided, the amortization of any amounts required or permitted by Accounting Principles Board Opinion Nos. 16 and 17. "Guarantee" means any obligation, contingent or otherwise, of any Person directly or indirectly guaranteeing any Indebtedness or other obligation of any other Person and, without limiting the generality of the foregoing, any obligation, direct or indirect, contingent or otherwise, of such Person (i) to purchase or pay or advance or supply funds for the purchase or payment of such Indebtedness or other obligation of such other Person (whether arising by virtue of partnership arrangements, or by agreement to keep well, to purchase assets, goods, securities or services, to take-or-pay, or to maintain financial statement conditions or otherwise) or (ii) entered into for purposes of assuring in any other manner the obligee of such Indebtedness or other obligation of the payment thereof or to protect such obligee against loss in respect thereof (in whole or in part); provided that the term "Guarantee" shall not include endorsements for collection or deposit in the ordinary course of business. The term "Guarantee" used as a verb has a corresponding meaning. "Holder" means a holder of shares of Redeemable Preferred Stock. "Incur" means, with respect to any Indebtedness, to incur, create, issue, assume, Guarantee or otherwise become liable for or with respect to, or become responsible for, the payment of, contingently or otherwise, such Indebtedness; provided that neither the accrual of interest (whether such interest is payable in cash or kind) nor the accretion of original issue discount shall be considered an Incurrence of Indebtedness. "Indebtedness" means, with respect to any Person at any date of determination (without duplication), (i) all indebtedness of such Person for borrowed money, (ii) all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments, (iii) all obligations of such Person in respect of letters of credit or other similar instruments (including reimbursement obligations with respect thereto), (iv) all obligations of such Person to pay the deferred and unpaid purchase price of property or services, which purchase price is due more than six months after the date of placing such property in service or taking delivery and title thereto or the completion of such services, except Trade Payables, (v) all obligations of such Person as lessee under Capitalized Leases, (vi) all Indebtedness of other Persons secured by a Lien on any asset of such Person, whether or not such Indebtedness is assumed by such Person; provided that the amount of such Indebtedness shall be the lesser of (a) the fair market value of such asset at such date of -36- determination and (b) the amount of such Indebtedness, (vii) all Indebtedness of other Persons Guaranteed by such Person to the extent such Indebtedness is Guaranteed by such Person, (viii) all obligations of such Person in respect of borrowed money under the Silgan Credit Agreement, the Silgan Notes, the Discount Debentures and any Guarantees thereof and (ix) to the extent not otherwise included in this definition, all obligations of such Person under Currency Agreements and Interest Rate Agreements. The amount of Indebtedness of any Person at any date shall be the outstanding balance at such date of all unconditional obligations as described above and the maximum liability, upon the occurrence of the contingency giving rise to the obligation, of any contingent obligations at such date; provided that the amount outstanding at any time of any Indebtedness issued with original issue discount is the face amount of such Indebtedness less the remaining unamortized portion of the original issue discount of such Indebtedness at such time as determined in conformity with GAAP and, in clarification of this definition, any unused commitment under the Silgan Credit Agreement or any other agreement relating to Indebtedness shall not be treated as outstanding. "Initial Dividend Period" means the dividend period commencing on the Preferred Stock Issuance Date and ending on the day before the first Dividend Payment Date to occur thereafter. "Interest Coverage Ratio" means, with respect to any Person on any Transaction Date, the ratio of (i) the aggregate amount of Consolidated EBITDA of such Person for the four fiscal quarters for which financial information in respect thereof is available immediately prior to such Transaction Date to (ii) the aggregate Consolidated Interest Expense of such Person during such four fiscal quarters. In making the foregoing calculation, (a) pro forma effect shall be given to (1) any Indebtedness Incurred subsequent to the end of the four-fiscal-quarter period referred to in clause (i) and prior to the Transaction Date (other than Indebtedness incurred under a revolving credit or similar arrangement) to the extent of the commitment thereunder (or under any predecessor revolving credit or similar arrangement on the last day of such period), (2) any Indebtedness Incurred during such period to the extent such Indebtedness is outstanding at the Transaction Date and (3) any Indebtedness to be Incurred on the Transaction Date, in each case as if such Indebtedness had been incurred on the first day of such four-fiscal-quarter period and after giving effect to the application of the proceeds thereof; (b) Consolidated Interest Expense attributable to interest on any Indebtedness (whether existing or being Incurred) computed on a pro forma basis and bearing a floating interest rate shall be computed as if the rate in effect on the date of computation (taking into account any Interest Rate Agreement applicable to such Indebtedness if such Interest Rate Agreement has a remaining term in excess of 12 months) had been the applicable rate for the entire period; (c) there shall be excluded from Consolidated Interest Expense any Consolidated Interest Expense -37- related to any amount of Indebtedness that was outstanding during such four-fiscal-quarter period or thereafter but which is not outstanding or which is to be repaid on the Transaction Date, except for Consolidated Interest Expense accrued (as adjusted pursuant to clause (b)) during such four-fiscal-quarter period under a revolving credit or similar arrangement to the extent of the commitment thereunder (or under any successor revolving credit or similar arrangement) on the Transaction Date; (d) pro forma effect shall be given to Asset Dispositions and Asset Acquisitions that occur during such four-fiscal-quarter period or thereafter and prior to the Transaction Date (including any Asset Acquisition to be made with the Indebtedness Incurred pursuant to clause (i) above) as if they had occurred on the first day of such four-fiscal-quarter period; (e) with respect to any such four-fiscal-quarter period commencing prior to the Refinancing, the Refinancing shall be deemed to have taken place on the first day of such period; and (f) pro forma effect shall be given to asset dispositions and asset acquisitions that have been made by any Person that has become a Subsidiary of the Company or has been merged with or into the Company or any Subsidiary of the Company during the four-fiscal-quarter period referred to above or subsequent to such period and prior to the Transaction Date and that would have been Asset Dispositions or Asset Acquisitions had such transactions occurred when such Person was a Subsidiary of the Company as if such asset dispositions or asset acquisitions were Asset Dispositions or Asset Acquisitions that occurred on the first day of such period. "Interest Rate Agreement" means any interest rate protection agreement, interest rate future agreement, interest rate option agreement, interest rate swap agreement, interest rate cap agreement, interest rate collar agreement, interest rate hedge agreement or other similar agreement or arrangement designed to protect the Company or any of its Subsidiaries against fluctuations in interest rates to or under which the Company or any of its Subsidiaries is a party or a beneficiary or becomes a Party or a beneficiary thereafter. "Investment" means any direct or indirect advance, loan (other than advances to customers in the ordinary course of business that are recorded as accounts receivable on the balance sheet of any Person or its Subsidiaries) or other extension of credit or capital contribution to (by means of any transfer of cash or other property to others or any payment for property or services for the account or use of others) or any purchase or acquisition of Capital Stock, bonds, notes, debentures or other similar instruments issued by, any other Person. For purposes of the definition of "Unrestricted Subsidiary" and paragraph (m)(ii) hereof, (i) "Investment" shall include the fair market value of the net assets of any Subsidiary of the Company at the time that such Subsidiary of the Company is designated an Unrestricted Subsidiary and shall exclude the fair market value of the net assets of any Unrestricted Subsidiary at the time that such Unrestricted Subsidiary is designated a Subsidiary of the -38- Company and (ii) any property transferred to or from an Unrestricted Subsidiary shall be valued at its fair market value at the time of such transfer, in each case as determined by the Board of Directors in good faith. "Lien" means any mortgage, pledge, security interest, encumbrance, lien or charge of any kind (including, without limitation, any conditional sale or other title retention agreement or lease in the nature thereof, any sale with recourse against the seller or any Affiliate of the seller, or any agreement to give any security interest). "Morgan Stanley" means Morgan Stanley & Co. Incorporated or its affiliates. "MSLEF II" means The Morgan Stanley Leveraged Equity Fund II, L.P. "Net Cash Proceeds" means, with respect to any Asset Sale, the proceeds of such Asset Sale in the form of cash or cash equivalents, including payments in respect of deferred payment obligations (to the extent corresponding to the principal, but not interest, component thereof) when received in the form of cash or cash equivalents (except to the extent such obligations are financed or sold with recourse to the Company or any Subsidiary of the Company) and proceeds from the conversion of other property received when converted to cash or cash equivalents, net of (i) brokerage commissions and other fees and expenses (including fees and expenses of counsel and investment bankers) related to such Asset Sale, (ii) provisions for all taxes (whether or not such taxes will actually be paid or are payable) as a result of such Asset Sale computed without regard to the consolidated results of operations of the Company and its Subsidiaries, taken as a whole, (iii) payments made to repay Indebtedness or any other obligation outstanding at the time of such Asset Sale that either (a) is secured by a Lien on the property or assets sold or (b) is required to be paid as a result of such sale and (iv) appropriate amounts to be provided by the Company or any Subsidiary of the Company as a reserve against any liabilities associated with such Asset Sale, including, without limitation, pension and other post-employment benefit liabilities, liabilities related to environmental matters and liabilities under any indemnification obligations associated with such Asset Sale, all as determined in conformity with GAAP. "Organization Agreement" means the Amended and Restated Organization Agreement, dated as of December 21, 1993, among the Company and the other parties thereto. "Person" means an individual, a corporation, a partnership, an association, a trust or any other entity or organization, including a government or political subdivision or an agency or instrumentality thereof. -39- "Plastics" means Silgan Plastics Corporation, a Delaware corporation. "preferred stock" means, with respect to any Person, any and all shares, interests, participations or other equivalents (however designated, whether voting or non-voting) of preferred or preference stock of such Person, including, without limitation, the Preferred Stock. "Preferred Stock Issuance Date" means the date on which 50,000 shares of Redeemable Preferred Stock are originally issued by the Company under this Certificate of Designation. "Preferred Stock Exchange Offer" means each registered offer to exchange the Redeemable Preferred Stock for Exchange Preferred Stock. "Quarterly Dividend Period" means the quarterly dividend period commencing on each January 15, April 15, July 15 and October 15 and ending on the day before the following Dividend Payment Date. "Redeemable Stock" means any class or series of Capital Stock of any Person that by its terms or otherwise is (i) required to be redeemed prior to the Stated Maturity of the Exchange Debentures or the mandatory redemption date of the Preferred Stock, as the case may be, (ii) redeemable at the option of the holder of such class or series of Capital Stock at any time prior to the Stated Maturity of the Exchange Debentures or the mandatory redemption date of the Preferred Stock, as the case may be, or (iii) convertible into or exchangeable for Capital Stock referred to in clause (i) or (ii) above or Indebtedness having a scheduled maturity prior to the Stated Maturity of the Exchange Debentures or the mandatory redemption date of the Preferred Stock, as the case may be; provided that any Capital Stock that would not constitute Redeemable Stock but for provisions thereof giving holders thereof the right to require the Company to repurchase or redeem such Capital Stock upon the occurrence of an "asset sale" or a "change of control" occurring prior to the Stated Maturity of the Exchange Debentures or the mandatory redemption date of the Preferred Stock, as the case may be, shall not constitute Redeemable Stock if the "change of control" or "asset sale" provision applicable to such Capital Stock is no more favorable to the holders of such Capital Stock than the provisions contained in paragraphs (h) and (m)(vi) hereof and such Capital Stock specifically provides that the Company will not repurchase or redeem any such Capital Stock pursuant to such provisions prior to the Company' repurchase of Exchange Debentures or Preferred Stock required to be repurchased by the Company under paragraphs (h) and (m)(vi). "Redemption Date", with respect to any shares of Redeemable Preferred Stock, means the date on which such shares of Redeemable Preferred Stock are redeemed by the Company. -40- "Restricted Subsidiary" means any Subsidiary of the Company other than an Unrestricted Subsidiary. "S&H" means S&H, Inc., a Connecticut corporation wholly owned by R. Philip Silver and D. Greg Horrigan. "Senior Indebtedness" is defined to mean the following obligations of the Company or a Successor Corporation: (i) all Indebtedness and other monetary obligations of the Company or a Successor Corporation under (or in respect of) the Silgan Credit Agreement, the Discount Debentures and, in the event of a Company Merger or similar transaction, the Silgan Notes (including any agreement pursuant to which the Silgan Notes or the Discount Debentures were issued), any Interest Rate Agreement or any Currency Agreement, (ii) all other Indebtedness of Holdings or a Successor Corporation (other than Indebtedness evidenced by the Exchange Debentures), including principal and interest on such Indebtedness, unless such Indebtedness, by its terms or by the terms of any agreement or instrument pursuant to which such Indebtedness is issued, is pari passu with, or subordinated in right of payment to, the Exchange Debentures and (iii) all fees, expenses and indemnities payable in connection with the Silgan Credit Agreement, the Silgan Notes (including any agreement pursuant to which the Silgan Notes are issued) and, if applicable, Currency Agreements and Interest Rate Agreements; provided that the term "Senior Indebtedness" shall not include (a) any Indebtedness of the Company or a Successor Corporation that, when Incurred and without respect to any election under Section 1111(b) of the United States Bankruptcy Code, was without recourse to the Company or a Successor Corporation, (b) any Indebtedness of the Company or a Successor Corporation to a Subsidiary of the Company or a Successor Corporation or to a joint venture in which the Company or a Successor Corporation has an interest, (c) any Indebtedness of the Company or a Successor Corporation (other than such Indebtedness already described in clause (i) above) of the type described in clause (ii) above and not permitted by paragraph (m)(i), (d) any repurchase, redemption or other obligation in respect of Redeemable Stock, (e) any Indebtedness to any employee or officer of the Company or a Successor Corporation or any of its Subsidiaries, (f) any liability for federal, state, local or other taxes owed or owing by the Company or a Successor Corporation or (g) any Trade Payables. "Senior Indebtedness" will also include interest accruing subsequent to events of bankruptcy of Holdings or a Successor Corporation and its Subsidiaries at the rate provided for in the document governing such Indebtedness, whether or not such interest is an allowed claim enforceable against the debtor in a bankruptcy case under federal bankruptcy law. "Shareholder Subordinated Notes" shall have the same meaning given such term in the Silgan Credit Agreement (including the exhibits thereto) as in effect on the Preferred Stock Issuance Date. -41- "Significant Subsidiary" means, at any date of determination, any Subsidiary of the Company that, together with its Subsidiaries, (i) for the most recent fiscal year of the Company, accounted for more than 10% of the consolidated revenues of the Company or (ii) as of the end of such fiscal year, was the owner of more than 10% of the consolidated assets of the Company, all as set forth on the most recently available consolidated financial statements of the Company and its consolidated Subsidiaries for such fiscal year prepared in conformity with GAAP. "Silgan" means Silgan Corporation, a Delaware corporation. "Silgan Notes" means the 11 3/4% Senior Subordinated Notes due 2002 of Silgan. "Silgan Credit Agreement" means the Credit Agreement, dated as of August 1, 1995, as amended, among Silgan, Containers, Plastics, the Banks party thereto and the Bank Agent and Bank of America Illinois, as co-arranger and as documentation agent, together with the related documents thereof (including without limitation any Guarantees and security documents), in each case as such agreements may be amended (including any amendment and restatement thereof), supplemented, replaced or otherwise modified from time to time, including any agreement extending the maturity of, refinancing or otherwise restructuring (including, but not limited to, the inclusion of additional borrowers thereunder that are Subsidiaries of Silgan whose obligations are Guaranteed by Silgan thereunder and who are included as additional borrowers thereunder) all or any portion of the Indebtedness under such agreement or any successor agreement. "Silgan Indebtedness" means any of the following Indebtedness of Silgan and/or any of its Subsidiaries: (i) Indebtedness outstanding at any time in an aggregate principal amount not to exceed the sum of (a) the aggregate outstanding Indebtedness and unutilized commitments on the Preferred Stock Issuance Date under the Silgan Credit Agreement plus (b) an aggregate amount not to exceed $200 million outstanding at any time; (ii) Indebtedness issued in exchange for or the net proceeds of which are used directly or indirectly to refinance, redeem or repurchase all (but not less than all) of the outstanding Preferred Stock or Exchange Debentures; (iii) $150 million outstanding at any time of Capitalized Lease Obligations; (iv) Indebtedness in respect of letters of credit (other than letters of credit issued pursuant to the Silgan Credit Agreement) in an aggregate amount not to exceed $30 million outstanding at any time; (v) Indebtedness in an aggregate amount not to exceed $50 million outstanding at any time; provided that such Indebtedness (a) by its terms or by the terms of any agreement or instrument pursuant to which such Indebtedness is issued, is expressly made subordinate in right of payment to the Exchange Debentures at least to the extent that the Exchange Debentures -42- are subordinated to Senior Indebtedness, (b) does permit or require payments of interest in cash prior to July 15, 2000, (c) does not mature prior to July 15, 2006, (d) the Average Life of such Indebtedness (determined as of the date of Incurrence of such Indebtedness) is greater than the remaining Average Life of the Redeemable Preferred Stock or Exchange Debentures, as the case may be, and (e) by its terms or by the terms of any agreement or instrument pursuant to which such Indebtedness is issued, provides that no payments of principal of such Indebtedness by way of sinking fund, mandatory redemption or otherwise (including defeasance) may be made by Silgan (including, without limitation, at the option of the holder thereof other than an option given to a holder pursuant to a "change of control" or "asset sale" provision that is no more favorable to the holders of such Indebtedness than the provisions contained in the paragraphs (h) and (m)(vi) and such Indebtedness specifically provides that Silgan will not repurchase or redeem such Indebtedness pursuant to such provisions prior to Silgan's repurchase of the Redeemable Preferred Stock or Exchange Debentures required to be repurchased by Silgan under paragraphs (h) and (m)(vi)) at any time prior to July 15, 2006; and (vi) any Indebtedness of Silgan or any of its Subsidiaries that is permitted to be Incurred under the Silgan Note Indenture as in effect on the date hereof (other than under clauses (i), (ix) and (x) of the second paragraph of part (a) of Section 4.03 of the Silgan Note Indenture (which clauses are similar to clauses (i), (iv) and (v) above other than the dollar amounts)). "Silgan Note Indenture" means the indenture, dated as of June 29, 1992, between Silgan and Shawmut Bank, N.A., as trustee, relating to the Silgan Notes, as it may be amended or supplemented from time to time by one or more indentures supplemental thereto entered into pursuant to the applicable provisions thereof. "Stated Maturity" means, with respect to any debt security or any installment of interest thereon, the date specified in such debt security as the fixed date on which any principal of such debt security or any such installment of interest is due and payable. "Stock Based Plan" means any stock option plan, stock appreciation rights plan or other similar plan or agreement of the Company or any Subsidiary of the Company relating to Capital Stock of the Company or any Subsidiary of the Company established and in effect from time to time, including, without limitation, the Company's Organization Agreement or any stock option plan, stock appreciation rights plan or other similar plan or agreement for the benefit of employees of the Company and its Subsidiaries. "Subsidiary" means, with respect to any Person, any corporation, association or other business entity of which more than 50% of the outstanding Voting Stock is owned, directly or indirectly, by the Company or by -43- one or more other Subsidiaries of the Company, or by such Person and one or more other Subsidiaries of such Person; provided that, except as the term "Subsidiary" is used in the definition of "Unrestricted Subsidiary" described below, an Unrestricted Subsidiary shall not be deemed to be a Subsidiary of the Company. "Successor Corporation" is defined to mean (i) the surviving entity of any Company Merger, (ii) Silgan, upon the assumption by Silgan of the liabilities of the Company represented by the Exchange Debentures or (iii) any successor corporation to Silgan that becomes the successor obligor on the Exchange Debentures, whether by merger, consolidation, sale of assets, assumption of liabilities or otherwise. "Trade Payables" means, with respect to any Person, any accounts payable or any other indebtedness or monetary obligation to trade creditors created, assumed or Guaranteed by such Person or any of its Subsidiaries arising in the ordinary course of business in connection with the acquisition of goods or services. "Transaction Date" means, with respect to the Incurrence of any Indebtedness or the issuance of Redeemable Stock by the Company or any of its Subsidiaries, the date such Indebtedness is to be Incurred or such Redeemable Stock is to be issued and, with respect to any Restricted Payment, the date such Restricted Payment is to be made. "Unrestricted Subsidiary" means (i) any Subsidiary of the Company that at the time of determination shall be designated an Unrestricted Subsidiary by the Board of Directors in the manner provided below and (ii) any Subsidiary of an Unrestricted Subsidiary. The Board of Directors may designate any Subsidiary of the Company (including any newly acquired or newly formed Subsidiary of the Company) to be an Unrestricted Subsidiary unless such Subsidiary owns any Capital Stock of, or owns or holds any Lien on any property of, the Company or any other Subsidiary of the Company that is not a Subsidiary of the Subsidiary to be so designated; provided that either (a) the Subsidiary to be so designated has total assets of $1,000 or less or (b) if such Subsidiary has assets greater than $1,000, such designation would be permitted under paragraph (m)(ii) hereof. The Board of Directors may designate any Unrestricted Subsidiary to be a Subsidiary of the Company; provided that immediately after giving effect to such designation (1) the Company could Incur $1.00 of additional Indebtedness under subparagraph (m)(i)(A) hereof and (2) no Event of Default, or event or condition that through the giving of notice or the lapse of time or both would become an Event of Default, shall have occurred and be continuing. Any such designation by the Board of Directors shall be evidenced to the Trustee by filing promptly with the Trustee a copy of the Board Resolution giving effect to such designation and an Officer's Certificate certifying that such designation complied with the foregoing provisions. -44- "Voting Stock" means, with respect to any Person, Capital Stock of any class or kind ordinarily having the power to vote for the election of directors of such Person. "Wholly Owned Subsidiary" means (i) with respect to Silgan and the Company, Plastics and Containers, and (ii) with respect to any Person, any Subsidiary of such Person if all of the Common Stock or other similar equity ownership interests (but not including Preferred Stock) in such Subsidiary (other than any director's qualifying shares or Investments by foreign nationals mandated by applicable law) is owned directly or indirectly by such Person. -45- IN WITNESS WHEREOF, Silgan Holdings Inc. has caused this Certificate to be executed in its corporate name by Harley Rankin, Jr., its Executive Vice President and Chief Financial Officer and attested by Sharon E. Budds, its Assistant Secretary, this 18th day of July, 1996. SILGAN HOLDINGS INC. By: /s/ Harley Rankin, Jr. -------------------------- Harley Rankin, Jr. Executive Vice President and Chief Financial Officer Attest: By: /s/ Sharon E. Budds --------------------- Sharon E. Budds Assistant Secretary [corporate seal] -46- EX-99.4 5 FORM OF THE COMPANY'S STOCK CERTIFICATE Exhibit 4 NUMBER SHARES Cusip No. 827048208 See Reverse for Certain Definitions COUNTERSIGNED AND REGISTERED FLEET NATIONAL BANK, AS TRANSFER AGENT BY ___________________________________ AUTHORIZED OFFICER INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE SILGAN HOLDINGS INC. (see legend on reverse side) This Certifies that [SPECIMEN] is the owner of __________________ _____________________________________________________________________ fully paid and non-assessable Shares of Exchangeable Preferred Stock, par value $.01 per share, of the above named Corporation transferable only on the books of the Corporation by the holder hereof in person or by duly authorized Attorney upon surrender of this Certificate properly endorsed. In Witness Whereof, the said Corporation has caused this Certificate to be signed by its duly authorized officers and its Corporate Seal to be hereunto affixed this _______________ day of______________________ A.D. 19___. ____________________ ____________________ The following abbreviations, when used in the inscription on the face of this certificate, shall be construed as though they were written out in full according to applicable laws or regulations: TEN COM - as tenants in common TEN ENT - as tenants by the entireties JT TEN - as joint tenants with right of survivorship and not as tenants in common UNIF GIFT MIN ACT - ............. Custodian .................... (Cust) (Minor) under Uniform Gifts to Minors Act ................... (State) Additional abbreviations may also be used though not in the above list For value received ________ hereby sell, assign and transfer unto ________________________________________________________________________________ (PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE) ________________________________________________________________________________ (PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF ASSIGNEE) ________________________________________________________________________________ ________________________________________________________________________________ Shares represented by the within Certificate, and do hereby irrevocably constitute and appoint ____________________________________ Attorney to transfer the said Shares on the books of the within named Corporation with full power of substitution in the premises. Dated_________________________, 19____ In presence of __________________________________________ ______________________________________ NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR WITHOUT ALTERNATIVE OR ENLARGEMENT OR ANY CHANGE WHATEVER. THIS PREFERRED STOCK HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT), (B) IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS PREFERRED STOCK IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT, OR (C) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(a)(1), (2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT) (AN "INSTITUTIONAL ACCREDITED INVESTOR"), (2) AGREES THAT IT WILL NOT, WITHIN THE TIME PERIOD REFERRED TO UNDER RULE 144(k) UNDER THE SECURITIES ACT AS IN EFFECT ON THE DATE OF THE TRANSFER OF THIS PREFERRED STOCK, RESELL OR OTHERWISE TRANSFER THIS PREFERRED STOCK EXCEPT (A) TO SILGAN HOLDINGS INC. OR ANY SUBSIDIARY THEREOF, (B) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT, (D) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE), (E) INSIDE THE UNITED STATES TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE TRANSFER AGENT A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THIS PREFERRED STOCK (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM THE TRANSFER AGENT) OR (F) AFTER REGISTRATION UNDER THE SECURITIES ACT AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS PREFERRED STOCK IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF THIS PREFERRED STOCK WITHIN THE TIME PERIOD REFERRED TO ABOVE, THE HOLDER MUST EXECUTE A LETTER (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM THE TRANSFER AGENT) RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT THIS CERTIFICATE TO THE TRANSFER AGENT. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT. THE CERTIFICATE OF DESIGNATION CONTAINS A PROVISION REQUIRING THE TRANSFER AGENT TO REFUSE TO REGISTER ANY TRANSFER OF THIS PREFERRED STOCK IN VIOLATION OF THE FOREGOING RESTRICTIONS. UNLESS THIS PREFERRED STOCK IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO SILGAN HOLDINGS INC. OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY PREFERRED STOCK ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY OR SUCH OTHER REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE CERTIFICATE OF INCORPORATION OF SILGAN HOLDINGS INC. EX-99.5 6 REGISTRATION RIGHTS AGREEMENT Exhibit 5 REGISTRATION RIGHTS AGREEMENT Dated July 22, 1996 between SILGAN HOLDINGS INC. and MORGAN STANLEY & CO. INCORPORATED - -------------------------------------------------------------------------------- REGISTRATION RIGHTS AGREEMENT THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made and entered into July 22, 1996, between SILGAN HOLDINGS INC., a Delaware corporation (the "Company"), and MORGAN STANLEY & CO. INCORPORATED (the "Placement Agent"). This Agreement is made pursuant to the Placement Agreement dated July 17, 1996, between the Company and the Placement Agent (the "Placement Agreement"), which provides for the sale by the Company to the Placement Agent of 50,000 shares of the Company's 13 1/4% Exchangeable Preferred Stock, which will be mandatorily redeemable 2006 (the "Shares"), as set forth in the Certificate of Designation relating to the Shares (the "Certificate of Designation"), and will be exchangeable, at the option of the Company, in whole but not in part, into Subordinated Debentures due 2006 (the "Exchange Debentures") to be issued, if applicable, pursuant to an Indenture to be dated as of the date of such exchange (the "Exchange Indenture"). In order to induce the Placement Agent to enter into the Placement Agreement, the Company has agreed to provide to the Placement Agent and its direct and indirect transferees the registration rights with respect to the Shares and the PIK Shares (as defined herein) set forth in this Agreement. The execution of this Agreement is a condition to the closing under the Placement Agreement. In consideration of the foregoing, the parties hereto agree as follows: 1. Definitions. As used in this Agreement, the following capitalized defined terms shall have the following meanings: "1933 Act" shall mean the Securities Act of 1933, as amended from time to time. "1934 Act" shall mean the Securities Exchange Act of 1934, as amended from time to time. "Certificate of Designation" shall have the meaning set forth in the preamble. "Closing Date" shall mean the Closing Date as defined in the Placement Agreement. "Company" shall have the meaning set forth in the preamble and shall also include the Company's successors. "Exchange Debentures" shall have the meaning set forth in the preamble. "Exchange Indenture" shall have the meaning set forth in the preamble. "Exchange Offer" shall mean the exchange offer by the Company of Exchange Shares for Registrable Shares pursuant to Section 2(a) hereof. "Exchange Offer Registration" shall mean a registration under the 1933 Act effected pursuant to Section 2(a) hereof. "Exchange Offer Registration Statement" shall mean an exchange offer registration statement on Form S-4 (or, if applicable, on another appropriate form) and all amendments and supplements to such registration statement, in each case including the Prospectus contained therein, all exhibits thereto and all material incorporated by reference therein. "Exchange Shares" shall mean securities issued by the Company containing terms identical to the Shares and the PIK Shares (except that such Exchange Shares shall bear no legend and shall be free from restrictions on transfers), to be offered to Holders of Shares and PIK Shares in exchange for Shares and PIK Shares pursuant to the Exchange Offer. "Holder" shall mean the Placement Agent, for so long as it owns any Registrable Shares, and each of its successors, assigns and direct and indirect transferees who become registered owners of Registrable Shares under the Certificate of Designation; provided that for purposes of Sections 4 and 5 of this Agreement, the term "Holder" shall include Participating Broker-Dealers (as defined in Section 4(a)). "Majority Holders" shall mean the Holders of a majority of the aggregate liquidation preference of outstanding Registrable Shares; provided that whenever the consent or approval of Holders of a specified percentage of Registrable Shares is required hereunder, Registrable Shares held by the Company or any of its affiliates (as such term is defined in Rule 405 under the 1933 Act) (other than the Placement Agent or subsequent holders of Registrable Shares if such subsequent holders are deemed to be such affiliates solely by reason of their holding of such Registrable Shares) shall not be counted in determining whether such consent or approval was given by the Holders of such required percentage or amount. "Person" shall mean an individual, partnership, corporation, trust or unincorporated organization, or a government or agency or political subdivision thereof. "PIK Shares" shall mean any shares of the Company's 13 1/4% Exchangeable Preferred Stock which is mandatorily redeemable 2006 issued as payment in kind dividends to any holder of shares of the -2- Company's 13 1/4% Exchangeable Preferred Stock which is mandatorily redeemable 2006. "Placement Agent" shall have the meaning set forth in the preamble. "Placement Agreement" shall have the meaning set forth in the preamble. "Prospectus" shall mean the prospectus included in a Registration Statement, including any preliminary prospectus, and any such prospectus as amended or supplemented by any prospectus supplement, including a prospectus supplement with respect to the terms of the offering of any portion of the Registrable Shares covered by a Shelf Registration Statement, and by all other amendments and supplements to such prospectus, and in each case including all material incorporated by reference therein. "Registrable Shares" shall mean the Shares and the PIK Shares; provided, however, that the Shares and the PIK Shares shall cease to be Registrable Shares (i) when a Registration Statement with respect to such Shares and such PIK Shares shall have been declared effective under the 1933 Act and such Shares and such PIK Shares shall have been disposed of pursuant to such Registration Statement, (ii) when such Shares and such PIK Shares have been sold to the public pursuant to Rule 144(k) (or any similar provision then in force, but not Rule 144A) under the 1933 Act or (iii) when such Shares and such PIK Shares shall have ceased to be outstanding. "Registration Expenses" shall mean any and all expenses incident to performance of or compliance by the Company with this Agreement, including without limitation: (i) all SEC, stock exchange or National Association of Securities Dealers, Inc. registration and filing fees, (ii) all fees and expenses incurred in connection with compliance with state securities or blue sky laws (including reasonable fees and disbursements of counsel for any Underwriters or Holders in connection with blue sky qualification of any of the Exchange Shares or Registrable Shares), (iii) all expenses of any Persons in preparing or assisting in preparing, word processing, printing and distributing any Registration Statement, any Prospectus, any amendments or supplements thereto, any underwriting agreements, securities sales agreements and other documents relating to the performance of and compliance with this Agreement, (iv) all rating agency fees, if any, (v) the fees and disbursements of counsel for the Company and, in the case of a Shelf Registration Statement, the fees and disbursements of one counsel for the Holders (which counsel shall be selected by the Majority Holders and which counsel may also be counsel for the Placement Agent) and (vi) the fees and disbursements of the independent public accountants of -3- the Company, including the expenses of any special audits or "cold comfort" letters required by or incident to such performance and compliance, but excluding fees and expenses of counsel to the Underwriters (other than fees and expenses set forth in clause (ii) above) or the Holders and underwriting discounts and commissions and transfer taxes, if any, relating to the sale or disposition of Registrable Shares by a Holder. "Registration Statement" shall mean any registration statement of the Company that covers any of the Exchange Shares or Registrable Shares pursuant to the provisions of this Agreement and all amendments and supplements to any such Registration Statement, including post-effective amendments, in each case including the Prospectus contained therein, all exhibits thereto and all material incorporated by reference therein. "SEC" shall mean the Securities and Exchange Commission. "Shelf Registration" shall mean a registration effected pursuant to Section 2(b) hereof. "Shelf Registration Statement" shall mean a "shelf" registration statement of the Company pursuant to the provisions of Section 2(b) of this Agreement which covers all of the Registrable Shares on an appropriate form under Rule 415 under the 1933 Act, or any similar rule that may be adopted by the SEC, and all amendments and supplements to such registration statement, including post-effective amendments, in each case including the Prospectus contained therein, all exhibits thereto and all material incorporated by reference therein. "Transfer Agent" shall mean Fleet National Bank. "Trustee" shall mean the trustee with respect to the Exchange Debentures under the Exchange Indenture. "Underwriters" shall have the meaning set forth in Section 3 hereof. "Underwritten Registration" or "Underwritten Offering" shall mean a registered offering in which Registrable Shares are sold to an Underwriter for reoffering to the public. -4- 2. Registration Under the 1933 Act. (a) To the extent not prohibited by any applicable law or applicable interpretation of the Staff of the SEC, the Company shall cause to be filed an Exchange Offer Registration Statement covering the offer by the Company to the Holders to exchange all of the Registrable Shares for Exchange Shares and to use its best efforts to have such Registration Statement declared effective by the SEC and remain effective until the closing of the Exchange Offer and to consummate the Exchange Offer on or prior to December 22, 1996. The Company shall commence the Exchange Offer promptly after the Exchange Offer Registration Statement has been declared effective by the SEC and use its best efforts to have the Exchange Offer consummated on or prior to December 22, 1996. The Company shall commence the Exchange Offer by mailing the related exchange offer Prospectus and accompanying documents to each Holder stating, in addition to such other disclosures as are required by applicable law: (i) that the Exchange Offer is being made pursuant to this Agreement and that all Registrable Shares validly tendered will be accepted for exchange; (ii) the dates of acceptance for exchange (which shall be a period of at least 30 days from the date such notice is mailed) (the "Exchange Dates"); (iii) that any Registrable Shares not tendered will remain outstanding and shall accumulate dividends at the initial rate borne by the Registrable Shares and, other than Registrable Shares referred to in Section 2(b)(iii) below, will not retain any rights under this Agreement; (iv) that Holders electing to have Registrable Shares exchanged pursuant to the Exchange Offer will be required to surrender such Registrable Shares, together with the enclosed letters of transmittal, to the institution and at the address (located in the Borough of Manhattan, The City of New York) specified in the notice prior to the close of business on the last Exchange Date; and (v) that Holders will be entitled to withdraw its election, not later than the close of business on the last Exchange Date, by sending to the institution and at the address (located in the Borough of Manhattan, The City of New York) specified in the notice a telegram, telex, facsimile transmission or letter setting forth the name of such Holder, the principal amount of Registrable Shares delivered for exchange and a statement that such Holder is withdrawing his election to have such Registrable Shares exchanged. -5- As soon as practicable after the last Exchange Date, the Company shall: (i) accept for exchange Registrable Shares or portions thereof tendered and not validly withdrawn pursuant to the Exchange Offer; and (ii) deliver, or cause to be delivered, to the Transfer Agent for cancellation all Registrable Shares or portions thereof so accepted for exchange by the Company and issue, and cause the Transfer Agent promptly to countersign and register, and mail to each Holder, an Exchange Share with an aggregate liquidation preference equal to the aggregate liquidation preference of the Registrable Shares surrendered by such Holder. The Company shall use its best efforts to complete the Exchange Offer as provided above and shall comply with the applicable requirements of the 1933 Act, the 1934 Act and other applicable laws and regulations in connection with the Exchange Offer. The Exchange Offer shall not be subject to any conditions, other than that the Exchange Offer does not violate applicable law or any applicable interpretation of the Staff of the SEC. The Company shall inform the Placement Agent of the names and addresses of the Holders to whom the Exchange Offer is made, and the Placement Agent shall have the right, subject to applicable law, to contact such Holders and otherwise facilitate the tender of Registrable Shares in the Exchange Offer. (b) In the event that (i) the Company determines that the Exchange Offer Registration provided for in Section 2(a) above is not available or may not be consummated as soon as practicable after the last Exchange Date because it would violate applicable law or the applicable interpretations of the Staff of the SEC, (ii) the Exchange Offer is not for any other reason consummated on or prior to December 22, 1996 or (iii) in the opinion of counsel for the Placement Agent a Registration Statement must be filed and a Prospectus must be delivered by the Placement Agent in connection with any offering or sale of Registrable Shares, the Company shall use its best efforts to cause to be filed as soon as practicable after such determination, date or notice of such opinion of counsel is given to the Company, a Shelf Registration Statement providing for the sale by the Holders of all of the Registrable Shares and to have such Shelf Registration Statement declared effective by the SEC. In the event the Company is required to file a Shelf Registration Statement solely as a result of the matters referred to in clause (iii) of the preceding sentence, the Company shall file and have declared effective by the SEC both an Exchange Offer Registration Statement pursuant to Section 2(a) with respect to all Registrable Shares and a Shelf Registration Statement (which may be a combined Registration Statement with the Exchange Offer Registration Statement) with respect to offers -6- and sales of Registrable Shares held by the Placement Agent after completion of the Exchange Offer. The Company agrees to use its best efforts to keep the Shelf Registration Statement continuously effective for the period referred to in Rule 144(k) or until all of the Registrable Shares covered by the Shelf Registration Statement have been sold pursuant to the Shelf Registration Statement. The Company further agrees to supplement or amend the Shelf Registration Statement if required by the rules, regulations or instructions applicable to the registration form used by the Company for such Shelf Registration Statement or by the 1933 Act or by any other rules and regulations thereunder for shelf registration or if reasonably requested by a Holder with respect to information relating to such Holder, and to use its best efforts to cause any such amendment to become effective and such Shelf Registration Statement to become usable as soon as practicable thereafter. The Company agrees to furnish to the Holders of Registrable Shares copies of any such supplement or amendment promptly after its being used or filed with the SEC. (c) The Company shall pay all Registration Expenses in connection with the registration pursuant to Section 2(a) or Section 2(b). Each Holder shall pay all underwriting discounts and commissions and transfer taxes, if any, relating to the sale or disposition of such Holder's Registrable Shares pursuant to the Shelf Registration Statement. (d) An Exchange Offer Registration Statement pursuant to Section 2(a) hereof or a Shelf Registration Statement pursuant to Section 2(b) hereof will not be deemed to have become effective unless it has been declared effective by the SEC; provided, however, that if, after it has been declared effective, the offering of Registrable Shares pursuant to a Shelf Registration Statement is interfered with by any stop order, injunction or other order or requirement of the SEC or any other governmental agency or court, such Registration Statement will be deemed not to have become effective during the period of such interference until the offering of Registrable Shares pursuant to such Registration Statement may legally resume. As provided for in the Certificate of Designation, in the event the Exchange Offer is not consummated and, if a Shelf Registration Statement is required hereby, the Shelf Registration Statement is not declared effective, on or prior to December 22, 1996, the dividend rate on the Shares and the PIK Shares will increase 0.5% per annum to 13 3/4% per annum of the liquidation preference thereof from January 1, 1997, payable in additional Shares quarterly in arrears on each December 15, March 15, June 15 and September 15, commencing April 15, 1997 until such Exchange Offer is consummated or such Shelf Registration Statement is declared effective; provided that if a Shelf Registration Statement is required solely as a result of the matters referred to in clause (iii) of the first sentence of Section 2(b), such increase in dividends shall be payable only to the Placement Agent, with respect to Shares held by it, and only with respect to any period (after December 22, 1996) during which such Shelf Registration Statement is not -7- effective; provided further that if, after any such dividend rate increase, the Exchange Offer is consummated or the Shelf Registration Statement is declared effective, the dividend rate on the Exchange Shares and/or the Shares, as the case may be, and the PIK Shares will reduce to the original dividend rate on the date of such consummation or declaration of effectiveness. (e) Without limiting the remedies available to the Placement Agent and the Holders, the Company acknowledges that any failure by the Company to comply with its obligations under Section 2(a) and Section 2(b) hereof may result in material irreparable injury to the Placement Agent or the Holders for which there is no adequate remedy at law, that it will not be possible to measure damages for such injuries precisely and that, in the event of any such failure, the Placement Agent or any Holder may obtain such relief as may be required to specifically enforce the Company's obligations under Section 2(a) and Section 2(b) hereof. 3. Registration Procedures. In connection with the obligations of the Company with respect to the Registration Statements pursuant to Sections 2(a) and Section 2(b) hereof, the Company shall as expeditiously as possible: (a) prepare and file with the SEC a Registration Statement on the appropriate form under the 1933 Act, which form (x) shall be selected by the Company and (y) shall, in the case of a Shelf Registration, be available for the sale of the Registrable Shares by the selling Holders thereof and (z) shall comply as to form in all material respects with the requirements of the applicable form and include all financial statements required by the SEC to be filed therewith, and use its best efforts to cause such Registration Statement to become effective and remain effective in accordance with Section 2 hereof; (b) prepare and file with the SEC such amendments and post-effective amendments to each Registration Statement as may be necessary to keep such Registration Statement effective for the applicable period and cause each Prospectus to be supplemented by any required prospectus supplement and, as so supplemented, to be filed pursuant to Rule 424 under the 1933 Act; to keep each Prospectus current during the period described under Section 4(3) and Rule 174 under the 1933 Act that is applicable to transactions by brokers or dealers with respect to the Registrable Shares or Exchange Shares; (c) in the case of a Shelf Registration, furnish to each Holder of Registrable Shares, to counsel for the Placement Agent, to counsel for the Holders and to each Underwriter of an Underwritten -8- Offering of Registrable Shares, if any, without charge, as many copies of each Prospectus, including each preliminary Prospectus, and any amendment or supplement thereto and such other documents as such Holder or Underwriter may reasonably request, in order to facilitate the public sale or other disposition of the Registrable Shares; and the Company consents to the use of such Prospectus and any amendment or supplement thereto in accordance with applicable law by each of the selling Holders of Registrable Shares and any such Underwriters in connection with the offering and sale of the Registrable Shares covered by and in the manner described in such Prospectus or any amendment or supplement thereto in accordance with applicable law; (d) use its best efforts to register or qualify, by the time the applicable Registration Statement is declared effective by the SEC, the Registrable Shares under all applicable state securities or "blue sky" laws of such jurisdictions as any Holder of Registrable Shares covered by a Registration Statement shall reasonably request in writing, to cooperate with such Holder in connection with any filings required to be made with the National Association of Securities Dealers, Inc. and do any and all other acts and things which may be reasonably necessary or advisable to enable such Holder to consummate the disposition in each such jurisdiction of such Registrable Shares owned by such Holder; provided, however, that the Company shall not be required to (i) qualify as a foreign corporation or as a dealer in securities in any jurisdiction where it would not otherwise be required to qualify but for this Section 3(d), (ii) file any general consent to service of process or (iii) subject itself to taxation in any such jurisdiction if it is not otherwise so subject; (e) in the case of a Shelf Registration, notify each Holder of Registrable Shares, counsel for the Holders and counsel for the Placement Agent promptly and, if requested by any such Holder or counsel, confirm such advice in writing (i) when a Registration Statement has become effective and when any post-effective amendment thereto has been filed and becomes effective, (ii) of any request by the SEC or any state securities authority for amendments and supplements to a Registration Statement and Prospectus or for additional information after the Registration Statement has become effective, (iii) of the issuance by the SEC or any state securities authority of any stop order suspending the effectiveness of a Registration Statement or the initiation of any proceedings for that purpose, (iv) if, between the effective date of a Registration Statement and the closing of any sale of Registrable Shares covered thereby, the representations and warranties of the Company contained in any underwriting agreement, securities sales agreement or other similar -9- agreement, if any, relating to the offering cease to be true and correct in all material respects or if the Company receives any notification with respect to the suspension of the qualification of the Registrable Shares for sale in any jurisdiction or the initiation of any proceeding for such purpose, (v) of the happening of any event during the period a Shelf Registration Statement is effective which makes any statement made in such Shelf Registration Statement or the related Prospectus untrue in any material respect or which requires the making of any changes in such Shelf Registration Statement or Prospectus in order to make the statements therein not misleading and (vi) of any determination by the Company that a post-effective amendment to a Registration Statement would be appropriate; (f) make every reasonable effort to obtain the withdrawal of any order suspending the effectiveness of a Registration Statement at the earliest possible moment and provide immediate notice to each Holder of the withdrawal of any such order; (g) in the case of a Shelf Registration, furnish to each Holder of Registrable Shares, without charge, at least one conformed copy of each Registration Statement and any post-effective amendment thereto (without documents incorporated therein by reference or exhibits thereto, unless requested); (h) in the case of a Shelf Registration, cooperate with the selling Holders of Registrable Shares to facilitate the timely preparation and delivery of certificates representing Registrable Shares to be sold and not bearing any restrictive legends and enable such Registrable Shares to be in such denominations (consistent with the provisions of the Certificate of Designation) and registered in such names as the selling Holders may reasonably request at least two business days prior to the closing of any sale of Registrable Shares; (i) in the case of a Shelf Registration, upon the occurrence of any event contemplated by Section 3(e)(v) hereof, use its best efforts to prepare a supplement or post-effective amendment to a Registration Statement or the related Prospectus or any document incorporated therein by reference or file any other required document so that, as thereafter delivered to the purchasers of the Registrable Shares, such Prospectus will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. The Company agrees to notify the Holders to suspend use of the Prospectus as promptly as practicable after the occurrence of such an event, and the Holders hereby agree to suspend -10- use of the Prospectus until the Company has amended or supplemented the Prospectus to correct such misstatement or omission; (j) within a reasonable time prior to the filing of any Registration Statement, any Prospectus, any amendment to a Registration Statement or amendment or supplement to a Prospectus or any document which is to be incorporated by reference into a Registration Statement or a Prospectus after initial filing of a Registration Statement, provide copies of such document to the Placement Agent and its counsel (and, in the case of a Shelf Registration Statement, the Holders and its counsel) and make such representatives of the Company as shall be reasonably requested by the Placement Agent or its counsel (and, in the case of a Shelf Registration Statement, the Holders or its counsel) available for discussion of such document, and shall not at any time file or make any amendment to the Registration Statement, any Prospectus or any amendment of or supplement to a Registration Statement or a Prospectus or any document which is to be incorporated by reference into a Registration Statement or a Prospectus, of which the Placement Agent and its counsel (and, in the case of a Shelf Registration Statement, the Holders and its counsel) shall not have previously been advised and furnished a copy or to which the Placement Agent or its counsel (and, in the case of a Shelf Registration Statement, the Holders or its counsel) shall reasonably object, except for any amendment or supplement or document (a copy of which has been previously furnished to the Placement Agent and its counsel (and, in the case of a Shelf Registration Statement, the Holders and its counsel)) which counsel to the Company shall advise the Company, in the form of a written legal opinion, is required in order to comply with applicable law; the Placement Agent agrees that, if it receives timely notice and drafts under this clause (j), it will not take actions or make objections pursuant to this clause (j) such that the Company is unable to comply with its obligations under Section 2(a); (k) obtain a CUSIP number and, if applicable, a CINS number, for all Exchange Shares or Registrable Shares, as the case may be, not later than the first effective date of a Registration Statement; (l) cause the Exchange Indenture to be qualified under the Trust Indenture Act of 1939, as amended (the "TIA"), in connection with the registration of the Exchange Shares or Registrable Shares, as the case may be, cooperate with the Trustee and the Holders to effect such changes to the Exchange Indenture as may be required for the Exchange Indenture to be so qualified in accordance with the terms of the TIA and execute, and use its best efforts to cause the Trustee to execute, all documents as may be required to effect such changes and all other -11- forms and documents required to be filed with the SEC to enable the Exchange Indenture to be so qualified in a timely manner; (m) in the case of a Shelf Registration, make available for inspection by a representative of the Holders of the Registrable Shares, any Underwriter participating in any disposition pursuant to such Shelf Registration Statement, and attorneys and accountants designated by the Holders, at reasonable times and in a reasonable manner, all financial and other records, pertinent documents and properties of the Company, and cause the officers, directors and employees of the Company to supply all information reasonably requested by any such representative, Underwriter, attorney or accountant in connection with a Shelf Registration Statement; (n) in the case of a Shelf Registration, use its best efforts to cause all Registrable Shares to be listed on any securities exchange or any automated quotation system on which similar securities issued by the Company are then listed if requested by the Majority Holders, to the extent such Registrable Shares satisfy applicable listing requirements; (o) use its best efforts to cause the Exchange Shares or Registrable Shares, as the case may be, to be rated by two nationally recognized statistical rating organizations (as such term is defined in Rule 436(g)(2) under the 1933 Act); (p) if reasonably requested by any Holder of Registrable Shares covered by a Registration Statement, (i) promptly incorporate in a Prospectus supplement or post-effective amendment such information with respect to such Holder as such Holder reasonably requests to be included therein and (ii) make all required filings of such Prospectus supplement or such post-effective amendment as soon as the Company has received notification of the matters to be incorporated in such filing; and (q) in the case of a Shelf Registration, enter into such customary agreements and take all such other actions in connection therewith (including those requested by the Holders of a majority of the Registrable Shares being sold) in order to expedite or facilitate the disposition of such Registrable Shares including, but not limited to, an Underwritten Offering and in such connection, (i) to the extent possible, make such representations and warranties to the Holders and any Underwriters of such Registrable Shares with respect to the business of the Company and its subsidiaries, the Registration Statement, Prospectus and documents incorporated by reference or deemed incorporated by reference, if any, in each case, in form, substance and scope as are customarily made by issuers to underwriters in -12- underwritten offerings and confirm the same if and when requested, (ii) obtain opinions of counsel to the Company (which counsel and opinions, in form, scope and substance, shall be reasonably satisfactory to the Holders and such Underwriters and its counsel) addressed to each selling Holder and Underwriter of Registrable Shares, covering the matters customarily covered in opinions requested in underwritten offerings, (iii) obtain "cold comfort" letters from the independent certified public accountants of the Company (and, if applicable, any other certified public accountant of any business acquired by the Company for which financial statements and financial data are or are required to be included in the Registration Statement) addressed to each selling Holder and Underwriter of Registrable Shares, such letters to be in customary form and covering matters of the type customarily covered in "cold comfort" letters in connection with underwritten offerings, and (iv) deliver such documents and certificates as may be reasonably requested by the Holders of a majority in principal amount of the Registrable Shares being sold or the Underwriters, and which are customarily delivered in underwritten offerings, to evidence the continued validity of the representations and warranties of the Company made pursuant to clause (i) above and to evidence compliance with any customary conditions contained in an underwriting agreement. In the case of a Shelf Registration Statement, the Company may require each Holder of Registrable Shares to furnish to the Company such information regarding the Holder and the proposed distribution by such Holder of such Registrable Shares as the Company may from time to time reasonably request in writing. In the case of a Shelf Registration Statement, each Holder agrees that, upon receipt of any notice from the Company of the happening of any event of the kind described in Section 3(e)(v) hereof, such Holder will forthwith discontinue disposition of Registrable Shares pursuant to a Registration Statement until such Holder's receipt of the copies of the supplemented or amended Prospectus contemplated by Section 3(i) hereof, and, if so directed by the Company, such Holder will deliver to the Company (at its expense) all copies in its possession, other than permanent file copies then in such Holder's possession, of the Prospectus covering such Registrable Shares current at the time of receipt of such notice. If the Company shall give any such notice to suspend the disposition of Registrable Shares pursuant to a Registration Statement, the Company shall extend the period during which the Registration Statement shall be maintained effective pursuant to this Agreement by the number of days during the period from and including the date of the giving of such notice to and including the date when the Holders shall have -13- received copies of the supplemented or amended Prospectus necessary to resume such dispositions. The Holders of Registrable Shares covered by a Shelf Registration Statement who desire to do so may sell such Registrable Shares in an Underwritten Offering. In any such Underwritten Offering, the investment banker or investment bankers and manager or managers (the "Underwriters") that will administer the offering will be selected by the Majority Holders of the Registrable Shares included in such offering. 4. Participation of Broker-Dealers in Exchange Offer. (a) The Staff of the SEC has taken the position that any broker-dealer that receives Exchange Shares for its own account in the Exchange Offer in exchange for Shares or PIK Shares that were acquired by such broker-dealer as a result of market-making or other trading activities (a "Participating Broker-Dealer"), may be deemed to be an "underwriter" within the meaning of the 1933 Act and must deliver a prospectus meeting the requirements of the 1933 Act in connection with any resale of such Exchange Shares. The Company understands that it is the Staff's position that if the Prospectus contained in the Exchange Offer Registration Statement includes a plan of distribution containing a statement to the above effect and the means by which Participating Broker-Dealers may resell the Exchange Shares, without naming the Participating Broker-Dealers or specifying the amount of Exchange Shares owned by them, such Prospectus may be delivered by Participating Broker-Dealers to satisfy their prospectus delivery obligation under the 1933 Act in connection with resales of Exchange Shares for their own accounts, so long as the Prospectus otherwise meets the requirements of the 1933 Act. (b) In light of the above, notwithstanding the other provisions of this Agreement, the Company agrees that the provisions of this Agreement as they relate to a Shelf Registration shall also apply to an Exchange Offer Registration to the extent, and with such reasonable modifications thereto as may be, reasonably requested by the Placement Agent or by one or more Participating Broker-Dealers, in each case as provided in clause (ii) below, in order to expedite or facilitate the disposition of any Exchange Shares by Participating Broker-Dealers consistent with the positions of the Staff recited in Section 4(a) above; provided that: (i) the Company shall not be required to amend or supplement the Prospectus contained in the Exchange Offer Registration Statement, as would otherwise be contemplated by Section 3(i) of this Agreement, for a period exceeding 60 days after the last Exchange Date (as such period may be extended pursuant to the penultimate paragraph of Section -14- 3 of this Agreement) and Participating Broker-Dealers shall not be authorized by the Company to deliver and shall not deliver such Prospectus after such period in connection with the resales contemplated by this Section 4; and (ii) the application of the Shelf Registration procedures set forth in Section 3 of this Agreement to an Exchange Offer Registration, to the extent not required by the positions of the Staff of the SEC or the 1933 Act and the rules and regulations thereunder, will be in conformity with the reasonable request to the Company by the Placement Agent or with the reasonable request in writing to the Company by one or more broker-dealers who certify to the Placement Agent and the Company in writing that they anticipate that they will be Participating Broker-Dealers; and provided further that, in connection with such application of the Shelf Registration procedures set forth in Section 3 of this Agreement to an Exchange Offer Registration, the Company shall be obligated (x) to deal only with one entity representing the Participating Broker-Dealers, which shall be the Placement Agent unless it elects not to act as such representative, (y) to pay the fees and expenses of only one counsel representing the Participating Broker-Dealers, which shall be counsel to the Placement Agent unless such counsel elects not to so act and (z) to cause to be delivered only one, if any, "cold comfort" letter with respect to the Prospectus in the form existing on the last Exchange Date and with respect to each subsequent amendment or supplement, if any, effected during the period specified in clause (i) above. (c) The Placement Agent shall have no liability to the Company or any Holder with respect to any request that it may make pursuant to Section 4(b) above. 5. Indemnification and Contribution. (a) The Company agrees to indemnify and hold harmless the Placement Agent, each Holder and each Person, if any, who controls the Placement Agent or any Holder within the meaning of either Section 15 of the 1933 Act or Section 20 of the 1934 Act, or is under common control with, or is controlled by, the Placement Agent or any Holder, from and against all losses, claims, damages and liabilities (including, without limitation, any legal or other expenses reasonably incurred by the Placement Agent, any Holder or any such controlling or affiliated Person in connection with defending or investigating any such action or claim) caused by any untrue statement or alleged untrue statement of a material fact contained in any Registration Statement (or any amendment thereto) pursuant to which Exchange Shares or Registrable Shares were registered under the 1933 Act, including all documents incorporated therein by reference, or caused by any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements -15- therein not misleading, or caused by any untrue statement or alleged untrue statement of a material fact contained in any Prospectus (as amended or supplemented if the Company shall have furnished any amendments or supplements thereto), or caused by any omission or alleged omission to state therein a material fact necessary to make the statements therein in light of the circumstances under which they were made not misleading, except insofar as such losses, claims, damages or liabilities are caused by any such untrue statement or omission or alleged untrue statement or omission based upon information relating to the Placement Agent or any Holder furnished to the Company in writing by the Placement Agent or any selling Holder expressly for use therein. In connection with any Underwritten Offering permitted by Section 3 of this Agreement, the Company will also indemnify the Underwriters, if any, selling brokers, dealers and similar securities industry professionals participating in the distribution, their officers and directors and each Person who controls such Persons (within the meaning of the 1933 Act and the 1934 Act) to the same extent as provided above with respect to the indemnification of the Holders, if requested in connection with any Registration Statement. (b) Each Holder agrees, severally and not jointly, to indemnify and hold harmless the Company, the Placement Agent and the other selling Holders, and each of their directors, officers who sign the Registration Statement and each Person, if any, who controls the Company, the Placement Agent and any other selling Holder within the meaning of either Section 15 of the 1933 Act or Section 20 of the 1934 Act, to the same extent as the foregoing indemnity from the Company to the Placement Agent and the Holders, but only with reference to information relating to such Holder furnished to the Company in writing by such Holder expressly for use in any Registration Statement (or any amendment thereto) or any Prospectus (or any amendment or supplement thereto). (c) In case any proceeding (including any governmental investigation) shall be instituted involving any Person in respect of which indemnity may be sought pursuant to either paragraph (a) or paragraph (b) above, such Person (the "indemnified party") shall promptly notify the Person against whom such indemnity may be sought (the "indemnifying party") in writing and the indemnifying party, upon request of the indemnified party, shall retain counsel reasonably satisfactory to the indemnified party to represent the indemnified party and any others the indemnifying party may designate in such proceeding and shall pay the fees and disbursements of such counsel related to such proceeding. In any such proceeding, any indemnified party shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such indemnified party unless (i) the indemnifying party and the indemnified party shall have mutually agreed to the retention of such counsel or (ii) the named parties to any such proceeding (including any impleaded parties) include -16- both the indemnifying party and the indemnified party and representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them. It is understood that the indemnifying party shall not, in connection with any proceeding or related proceedings in the same jurisdiction, be liable for (a) the fees and expenses of more than one separate firm (in addition to any local counsel) for the Placement Agent and all Persons, if any, who control the Placement Agent within the meaning of either Section 15 of the 1933 Act or Section 20 of the 1934 Act, (b) the fees and expenses of more than one separate firm (in addition to any local counsel) for the Company, its directors, its officers who sign the Registration Statement and each Person, if any, who controls the Company within the meaning of either such Section and (c) the fees and expenses of more than one separate firm (in addition to any local counsel) for all Holders and all Persons, if any, who control any Holders within the meaning of either such Section, and that all such reasonable fees and expenses shall be reimbursed as they are incurred. In such case involving the Placement Agent and Persons who control the Placement Agent, such firm shall be designated in writing by the Placement Agent. In such case involving the Holders and such Persons who control Holders, such firm shall be designated in writing by the Majority Holders. In all other cases, such firm shall be designated by the Company. The indemnifying party shall not be liable for any settlement of any proceeding effected without its written consent but, if settled with such consent or if there be a final judgment for the plaintiff, the indemnifying party agrees to indemnify the indemnified party from and against any loss or liability by reason of such settlement or judgment. Notwithstanding the foregoing sentence, if at any time an indemnified party shall have requested an indemnifying party to reimburse the indemnified party for fees and expenses of counsel as contemplated by the second and third sentences of this paragraph, the indemnifying party agrees that it shall be liable for any settlement of any proceeding effected without its written consent if (i) such settlement is entered into more than 30 days after receipt by such indemnifying party of the aforesaid request and (ii) such indemnifying party shall not have reimbursed the indemnified party for such fees and expenses of counsel in accordance with such request prior to the date of such settlement. No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement of any pending or threatened proceeding in respect of which such indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party, unless such settlement includes an unconditional release of such indemnified party from all liability on claims that are the subject matter of such proceeding. (d) If the indemnification provided for in paragraph (a) or paragraph (b) of this Section 4 is unavailable to an indemnified party or insufficient in respect of any losses, claims, damages or liabilities, then each indemnifying party under such paragraph, in lieu of indemnifying such -17- indemnified party thereunder, shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities in such proportion as is appropriate to reflect the relative fault of the indemnifying party or parties on the one hand and of the indemnified party or parties on the other hand in connection with the statements or omissions that resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations. The relative fault of the Company and the Holders shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company or by the Holders and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Holders' obligations to contribute pursuant to this Section 5(d) are several in proportion to the principal amount of Registrable Shares of such Holder that were registered pursuant to a Registration Statement. (e) The Company and each Holder agree that it would not be just or equitable if contribution pursuant to this Section 5 were determined by pro rata allocation or by any other method of allocation that does not take account of the equitable considerations referred to in paragraph (d) above. The amount paid or payable by an indemnified party as a result of the losses, claims, damages and liabilities referred to in paragraph (d) above shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 5, no Holder shall be required to contribute any amount in excess of the amount by which the total price at which Registrable Shares were sold by such Holder exceeds the amount of any damages that such Holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation. The remedies provided for in this Section 5 are not exclusive and shall not limit any rights or remedies which may otherwise be available to any indemnified party at law or in equity. (f) Survival. The indemnity and contribution provisions contained in this Section 5 shall remain operative and in full force and effect regardless of (i) any termination of this Agreement, (ii) any investigation made by or on behalf of the Placement Agent, any Holder or any person controlling the Placement Agent or any Holder, or by or on behalf of the Company, its officers or directors or any Person controlling the Company, (iii) acceptance of any of the Exchange Shares and (iv) any sale of Registrable Shares pursuant to a Shelf Registration Statement. -18- 6. Miscellaneous. (a) No Inconsistent Agreements. The Company has not entered into, and on or after the date of this Agreement will not enter into, any agreement which is inconsistent with the rights granted to the Holders of Registrable Shares in this Agreement or otherwise conflicts with the provisions hereof. The rights granted to the Holders hereunder do not in any way conflict with and are not inconsistent with the rights granted to the holders of the Company's other issued and outstanding securities under any such agreements. (b) Amendments and Waivers. The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given unless the Company has obtained the written consent of Holders of at least a majority in aggregate liquidation preference of the outstanding Registrable Shares affected by such amendment, modification, supplement, waiver or consent; provided, however, that no amendment, modification, supplement, waiver or consents to any departure from the provisions of Section 5 hereof shall be effective as against any Holder of Registrable Shares unless consented to in writing by such Holder. (c) Notices. All notices and other communications provided for or permitted hereunder shall be made in writing by hand-delivery, registered first-class mail, telex, telecopier, or any courier guaranteeing overnight delivery (i) if to a Holder, at the most current address given by such Holder to the Company by means of a notice given in accordance with the provisions of this Section 6(c), which address initially is, with respect to the Placement Agent, the address set forth in the Placement Agreement; (ii) if to the Company, initially at 4 Landmark Square, Stamford, Connecticut 06901, Attention: H. Rankin, Jr., and thereafter at such other address, notice of which is given in accordance with the provisions of this Section 6(c), with a copy to Winthrop Stimson Putnam & Roberts, Financial Centre, 695 Main Street, Stamford, Connecticut 06904-6760, Attention: Frank W. Hogan, III, Esq. All such notices and communications shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; five business days after being deposited in the mail, postage prepaid, if mailed; when answered back, if telexed; when receipt is acknowledged, if telecopied; and on the next business day if timely delivered to an air courier guaranteeing overnight delivery. Copies of all such notices, demands, or other communications shall be concurrently delivered by the person giving the same to the Transfer Agent, at Fleet National Bank, RI/MO/0199, 111 Westminster Street, Providence, RI 02903, Attention: Rosemarie Pavao. -19- (d) Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors, assigns and transferees of each of the parties, including, without limitation and without the need for an express assignment, subsequent Holders; provided that nothing herein shall be deemed to permit any assignment, transfer or other disposition of Registrable Shares in violation of the terms of the Placement Agreement. If any transferee of any Holder shall acquire Registrable Shares, in any manner, whether by operation of law or otherwise, such Registrable Shares shall be held subject to all of the terms of this Agreement, and by taking and holding such Registrable Shares such person shall be conclusively deemed to have agreed to be bound by and to perform all of the terms and provisions of this Agreement and such person shall be entitled to receive the benefits hereof. The Placement Agent (solely in its capacity as Placement Agent) shall have no liability or obligation to the Company with respect to any failure by a Holder to comply with, or any breach by any Holder of, any of the obligations of such Holder under this Agreement. (e) Third Party Beneficiary. The Holders shall be third party beneficiaries to the agreements made hereunder between the Company, on the one hand, and the Placement Agent, on the other hand, and each Holder shall have the right to enforce such agreements directly to the extent it deems such enforcement necessary or advisable to protect its rights or the rights of Holders hereunder. (f) Counterparts. This Agreement may be executed manually or by telecopier in any number of counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. (g) Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof. (h) Governing Law. The laws of the State of New York applicable to contracts to be performed entirely in that state shall govern this Agreement. (i) Severability. In the event that any one or more of the provisions contained herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions contained herein shall not be affected or impaired thereby. -20- IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above. SILGAN HOLDINGS INC. By /s/ Harley Rankin, Jr. ---------------------------- Harley Rankin, Jr. Executive Vice President and Chief Financial Officer Confirmed and accepted as of the date first above written: MORGAN STANLEY & CO. INCORPORATED By /s/ Katina J. Dorton -------------------- Katina J. Dorton Vice President -21- EX-99.6 7 PLACEMENT AGREEMENT Exhibit 6 SILGAN HOLDINGS INC. PLACEMENT AGREEMENT July 17, 1996 Morgan Stanley & Co. Incorporated 1585 Broadway New York, New York 10036-8293 Dear Sirs: Silgan Holdings Inc., a Delaware corporation (the "Company"), proposes to issue and sell to you (the "Placement Agent") 50,000 shares of the Company's Exchangeable Preferred Stock, par value $.01 per share, which will be mandatorily redeemable on July 15, 2006 (the "Preferred Stock"), as set forth in the Certificate of Designation of the Company relating to the Preferred Stock (the "Certificate of Designation"), and will be exchangeable, at the option of the Company, in whole but not in part, into Subordinated Debentures due 2006 (the "Exchange Debentures" and, together with the Preferred Stock and the Additional Preferred Stock (as defined below), the "Securities") to be issued, if applicable, pursuant to an Indenture to be dated as of the date of such exchange (the "Exchange Indenture"). The Securities will be offered without being registered under the Securities Act of 1933, as amended (the "Securities Act"), in reliance on exemptions therefrom. The Placement Agent and its direct and indirect transferees will be entitled to the benefits of a Registration Rights Agreement, to be dated the Closing Date (as defined below) and to be substantially in the form attached hereto as Exhibit A. In connection with the sale of the Securities, the Company has prepared a preliminary offering memorandum (the "Preliminary Memorandum") and will prepare a final offering memorandum (the "Final Memorandum" and, with the Preliminary Memorandum, each a "Memorandum") setting forth or including a description of the terms of the Securities, the terms of the offering and a description of the Company and its business. As used herein, the term "Memorandum" shall include in each case the documents incorporated by reference therein. The terms "supplement," "amendment" and "amend" as used herein shall include all documents deemed to be incorporated by reference in the Preliminary Memorandum or Final Memorandum that are filed subsequent to the date of such Memorandum with the Securities and Exchange Commission (the "Commission") pursuant to the Securities Exchange Act of 1934, as amended (the "Exchange Act"). 1. Representations and Warranties. The Company represents and warrants to, and agrees with, you that as of the date hereof: (a) (i) Each document, if any, filed or to be filed pursuant to the Exchange Act and incorporated by reference in either Memorandum complied or will comply when so filed in all material respects with the Exchange Act and the applicable rules and regulations thereunder and (ii) the Preliminary Memorandum does not contain and the Final Memorandum, in the form used by the Placement Agent to confirm sales and on the Closing Date (as defined below), will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, except that the representations and warranties set forth in this Section 1(a) do not apply to statements or omissions in either Memorandum based upon information relating to the Placement Agent furnished to the Company in writing by the Placement Agent through you expressly for use therein. (b) The Company has been duly incorporated, is validly existing as a corporation in good standing under the laws of the jurisdiction of its incorporation, has the corporate power and authority to own its property and to conduct its business as described in each Memorandum and is duly qualified to transact business and is in good standing in each jurisdiction in which the conduct of its business or its ownership or leasing of property requires such qualification, except to the extent that the failure to be so qualified or be in good standing would not have a material adverse effect on the Company and its subsidiaries, taken as a whole. (c) Each subsidiary of the Company set forth on Schedule I hereto has been duly incorporated, is validly existing as a corporation in good standing under the laws of the jurisdiction of its incorporation, has the corporate power and authority to own its property and to conduct its business as described in each Memorandum and is duly qualified to transact business and is in good standing in each jurisdiction in which the conduct of its business or its ownership or leasing of property requires such qualification, except to the extent that the failure to be so qualified or be in good standing would not have a material adverse effect on the Company and its subsidiaries, taken as a whole. (d) This Agreement has been duly authorized, executed and delivered by the Company. (e) The Preferred Stock has been duly authorized by the Company and, when executed and delivered to and paid for -2- by the Placement Agent in accordance with the terms of this Agreement, will be validly issued, fully paid and non-assessable and will not be subject to any preemptive or similar rights. (f) The additional shares of Preferred Stock of the Company, $.01 par value per share (the "Additional Preferred Stock"), that may be issued in payment of dividends in respect of the Preferred Stock, have been duly authorized and reserved by the Company and, when executed and delivered in accordance with the terms of the Certificate of Designation, will be validly issued, fully paid and non-assessable and will not be subject to any preemptive or similar rights. (g) The Exchange Debentures, when issued, will have substantially the terms set forth in the Final Memorandum and will have been duly authorized by the Company and, when executed, authenticated and delivered upon exchange of all, but not less than all, of the then outstanding Preferred Stock in accordance with the terms of the Exchange Indenture and the Certificate of Designation, (x) will be valid and binding obligations of the Company enforceable against the Company in accordance with their terms, except as (A) the enforceability thereof may be limited by bankruptcy, insolvency or similar laws affecting creditors' rights generally and (B) rights of acceleration, if applicable, and the availability of equitable remedies may be limited by equitable principles of general applicability and (y) will be entitled to the benefits of the Exchange Indenture. (h) The Certificate of Designation creating the Preferred Stock and the Additional Preferred Stock, the proposed form of which has been furnished to you, will have been duly filed with the Secretary of State of the State of Delaware and with all other offices where such filing is required, on or before the Closing Date. (i) The Registration Rights Agreement has been duly authorized, executed and delivered by, and is a valid and binding agreement of, the Company, enforceable against the Company in accordance with its terms except as (x) the enforceability thereof may be limited by bankruptcy, insolvency, reorganization, receivership, moratorium and other similar laws affecting the rights and remedies of creditors, (y) remedies may be limited by general principles of equity, whether applied by a court of law or equity and (z) any right to indemnity and contribution may be limited by federal and state securities laws and public policy considerations. (j) Upon the issuance of the Exchange Debentures, the Exchange Indenture will have substantially the terms set forth in the Final -3- Memorandum and will have been authorized and, when executed and delivered by the Company, will be a valid and binding agreement of the Company, enforceable against the Company in accordance with its terms except as (x) the enforceability thereof may be limited by bankruptcy, insolvency or similar laws affecting creditors' rights generally and (y) rights of acceleration, if applicable, and the availability of equitable remedies may be limited by equitable principles of general applicability. (k) The execution and delivery by the Company of, and the performance by the Company of its obligations under, this Agreement, the Certificate of Designation, the Exchange Indenture (upon execution and delivery thereof), the Registration Rights Agreement and the Securities will not contravene any provision of applicable law or the certificate of incorporation or by-laws of the Company or any agreement or other instrument (except that the Silgan Credit Agreement, the Discount Debentures Indenture and the 11 3/4% Notes Indenture (each as defined in the Final Memorandum) contain certain restrictions on the payment of dividends as disclosed in the Final Memorandum) binding upon the Company or any of its subsidiaries that is material to the Company and its subsidiaries, taken as a whole, or any judgment, order or decree of any governmental body, agency or court having jurisdiction over the Company or any subsidiary, and no consent, approval, authorization or order of, or qualification with, any governmental body or agency is required for the performance by the Company of its obligations under this Agreement, the Certificate of Designation, the Exchange Indenture (upon execution and delivery thereof), the Registration Rights Agreement or the Securities, except such as may be required by the securities or Blue Sky laws of the various states in connection with the offer and sale of the Securities. (l) There has not occurred any material adverse change, or any development reasonably likely to result in a material adverse change, in the condition, financial or otherwise, or in the earnings, business or operations of the Company and its subsidiaries, taken as a whole, from that set forth in the Preliminary Memorandum. (m) There are no legal or governmental proceedings pending or, to the knowledge of the Company, threatened to which the Company or any of its subsidiaries is a party or to which any of the properties of the Company or any of its subsidiaries is subject, other than proceedings accurately described in all material respects in each Memorandum and proceedings that would not have a material adverse effect on the Company and its subsidiaries, taken as a whole, or on the power or ability of the Company to perform its obligations under this Agreement, the Certificate of Designation, the Exchange Indenture, the -4- Registration Rights Agreement or the Securities or to consummate the transactions contemplated by the Final Memorandum. (n) Each of the Company and its subsidiaries has all necessary consents, authorizations, approval, orders, certificates and permits of and from, and has made all declarations and filings with, all federal, state, local and other governmental authorities, all self-regulatory organizations and all courts and other tribunals, to own, lease, license and use its properties and assets and to conduct its business in the manner described in each Memorandum, except to the extent where the failure to obtain or make a filing would not have a material adverse effect on the Company and its subsidiaries, taken as a whole. (o) Neither the Company nor any affiliate (as defined in Rule 501(b) of Regulation D under the Securities Act, an "Affiliate") of the Company has, to the knowledge of the Company, directly, or through any agent, (i) sold, offered for sale, solicited offers to buy or otherwise negotiated in respect of, any security (as defined in the Securities Act) which is or will be integrated with the sale of the Securities in a manner that would require the registration under the Securities Act of the Securities or (ii) engaged in any form of general solicitation or general advertising in connection with the offering of the Securities (as those terms are used in Regulation D under the Securities Act) or in any manner involving a public offering within the meaning of Section 4(2) of the Securities Act. (p) The Company is not an "investment company" or an entity "controlled" by an "investment company," as such terms are defined in the Investment Company Act of 1940, as amended (the "Investment Company Act"), assuming Morgan Stanley Leveraged Equity Fund II, L.P. ("MSLEF") is not an "investment company" and is not "controlled" by an "investment company." (q) It is not necessary in connection with the offer, sale and delivery of the Preferred Stock to the Placement Agent in the manner contemplated by this Agreement to register the Preferred Stock under the Securities Act or to qualify the Exchange Indenture under the Trust Indenture Act of 1939, as amended. (r) Except as described in each Memorandum, the Company and its subsidiaries (i) are in compliance with any and all applicable foreign, federal, state and local laws and regulations relating to the protection of human health and safety, the environment or hazardous or toxic substances or wastes, pollutants or contaminants ("Environmental Laws"), (ii) have received all permits, licenses or other approvals required of them under applicable Environmental Laws to conduct their -5- respective businesses and (iii) are in compliance with all terms and conditions of any such permit, license or approval, except where such noncompliance with Environmental Laws, failure to receive required permits, licenses or other approvals or failure to comply with the terms and conditions of such permits, licenses or approvals would not, singly or in the aggregate, have a material adverse effect on the Company and its subsidiaries, taken as a whole. (s) In the ordinary course of its business, the Company conducts a periodic review of the effect of Environmental Laws on the business, operations and properties of the Company and its subsidiaries, in the course of which it identifies and evaluates associated costs and liabilities (including, without limitation, any material capital or operating expenditures required for clean-up, closure of properties or compliance with Environmental Laws or any material permit, license or approval, any related constraints on operating activities material to the Company and its subsidiaries, taken as a whole, and any potential material liabilities to third parties). On the basis of such review, the Company has reasonably concluded that such associated costs and liabilities would not, singly or in the aggregate, have a material adverse effect on the Company and its subsidiaries, taken as a whole. (t) The Company has complied with all provisions of Section 517.075, Florida Statutes (Chapter 92-198, Laws of Florida). (u) None of the Company, its Affiliates or any person acting on its or their behalf (other than (i) the Placement Agent, (ii) MSLEF, (iii) any entity which controls MSLEF, (iv) any entity under common control with any such entity and (v) any subsidiary of any such entity other than any subsidiary of MSLEF) has engaged in any directed selling efforts (as that term is defined in Regulation S under the Securities Act ("Regulation S")) with respect to the Preferred Stock and the Company and its Affiliates and any person acting on its or their behalf (other than the Placement Agent, (ii) MSLEF, (iii) any entity which controls MSLEF, (iv) any entity under common control with any such entity and (v) any subsidiary of any such entity other than any subsidiary of MSLEF) has complied with the offering restrictions requirement of Regulation S. To the knowledge of the Company, none of (i) MSLEF, (ii) any entity which controls MSLEF, (iii) any entity under common control with any such entity and (iv) any subsidiary of any such entity other than any subsidiary of MSLEF (other than the Placement Agent) has engaged in any directed selling efforts (as that term is defined in Regulation S under the Securities Act ("Regulation S")) with respect to the Preferred Stock and, to the knowledge of the Company, (i) MSLEF, (ii) any entity which controls MSLEF, (iii) any entity under -6- common control with any such entity and (iv) any subsidiary of any such entity other than any subsidiary of MSLEF (other than the Placement Agent) has complied with the offering restrictions requirement of Regulation S. (v) As of March 31, 1996 and on the date hereof, each of 827599 Ontario Inc., a Canadian corporation and an indirect wholly-owned subsidiary of the Company ("Ontario Inc."), and Express Plastics Containers Limited, a Canadian corporation and an indirect wholly-owned subsidiary of the Company ("Express Plastics"), did not own assets in an aggregate amount in excess of 1.5% of the consolidated assets of the Company and its subsidiaries and for the three months ended March 31, 1996, Ontario Inc. and Express Plastics did not have revenues in an aggregate amount in excess of 1.5% of the consolidated revenues of the Company and its subsidiaries for such period. 2. Offering. You have advised the Company that you will make an offering of the Preferred Stock purchased by you hereunder on the terms set forth in the Final Memorandum as soon as practicable after this Agreement is entered into as in your judgment is advisable. 3. Purchase and Delivery. Upon the basis of the representations, warranties and agreements herein contained, but subject to the conditions hereinafter stated, the Company hereby agrees to sell to you and you agree to purchase from the Company, the Preferred Stock at a purchase price of $965.00 per share. Payment for the Preferred Stock shall be made against delivery of the Preferred Stock at a closing (the "Closing") to be held at the office of Shearman & Sterling, 599 Lexington Avenue, New York, New York, at 10:00 A.M., local time, on July 22, 1996, or at such other time on the same or such other date, not later than July 31, 1996, as shall be designated in writing by you (the "Closing Date"). The time and date of such payment are herein referred to as the Closing Date. Payment for the Preferred Stock shall be made by wire transfer to accounts specified by the Company in writing. Certificates for the Preferred Stock shall be in definitive form and registered in such names and in such denominations as you shall request in writing not less than two full business days prior to the Closing Date. The certificates evidencing the Preferred Stock shall be delivered to you on the Closing Date, with any transfer taxes payable in connection with the transfer of the Preferred Stock to the Placement Agent duly paid, against payment of the purchase price therefor. 4. Conditions to Closing. The several obligations of the Placement Agent under this Agreement to purchase the Preferred Stock will be subject to the following conditions: -7- (a) Subsequent to the date of this Agreement and prior to the Closing Date, (i) there shall not have occurred any downgrading, nor shall any notice have been given of any intended or potential downgrading or of any review for a possible change that does not indicate the direction of the possible change, in the rating accorded any of the Company's securities by any "nationally recognized statistical rating organization," as such term is defined for purposes of Rule 436(g)(2) under the Securities Act; and (ii) there shall not have occurred any change, or any development involving a prospective change, in the condition, financial or otherwise, or in the earnings, business or operations, of the Company and its subsidiaries, taken as a whole, from that set forth in the Preliminary Memorandum that, in your judgment, is material and adverse and that makes it, in your judgment, impracticable to market the Securities on the terms and in the manner contemplated in the Final Memorandum. (b) Concurrently with the Closing, (i) the Company shall give an irrevocable written notice to Mellon Bank, N.A., as trustee (the "Class B Holder") for First Plaza Group Trust in accordance with Section 6.2 of the Amended and Restated Organization Agreement, dated as of December 21, 1993, as amended (the "Organization Agreement") and (ii) the Company shall pay the Call Purchase Price (as defined in the Organization Agreement) in accordance with Section 6.3 thereof to the Class B Holder, whereupon all the shares of Class B Stock of the Company, $.01 par value per share, held of record and beneficially by the Class B Holder (the "Class B Stock") shall be purchased by the Company and the Class B Stock shall no longer be outstanding. (c) You shall have received on the Closing Date a certificate, dated the Closing Date and signed by an executive officer of the Company, to the effect set forth in clause (a)(i) above and to the effect that the representations and warranties of the Company contained in this Agreement are true and correct as of the Closing Date and that the Company has complied with all of the agreements and satisfied all of the conditions on its part to be performed or satisfied pursuant to this Agreement on or before the Closing Date. The officer signing and delivering such certificate may rely upon the best of his knowledge as to proceedings threatened. -8- (d) You shall have received on the Closing Date an opinion of Winthrop, Stimson, Putnam & Roberts, independent counsel for the Company, dated the Closing Date, to the effect set forth in Exhibit B. (e) You shall have received on the Closing Date opinions of McKenna & Cuneo, independent counsel for the Company, dated the Closing Date, to the effect set forth in Exhibits C-1 and C-2. (f) You shall have received on the Closing Date an opinion of Proskauer Rose Goetz & Mendelsohn LLP, independent counsel for the Company, dated the Closing Date, to the effect set forth in Exhibit D. (g) You shall have received on the Closing Date an opinion of Shearman & Sterling, counsel for the Placement Agent, dated the Closing Date, in form and substance satisfactory to you. (h) You shall have received on each of the date hereof and the Closing Date (i) a letter, dated the date hereof or the Closing Date, as the case may be, in form and substance satisfactory to you, from Ernst & Young LLP, the Company's independent public accountants, containing statements and information of the type ordinarily included in accountants' "comfort letters" to underwriters with respect to the financial statements and certain financial information contained in or incorporated by reference into the Final Memorandum and (ii) a letter, dated the date hereof or the Closing Date, as the case may be, in form and substance satisfactory to you, from Price Waterhouse L.L.P., American National Can Company's independent public accountants, containing statements and information of the type ordinarily included in accountants' "comfort letters" to underwriters with respect to the financial statements and certain financial information contained in or incorporated by reference into the Final Memorandum. 5. Covenants of the Company. In further consideration of the agreements of the Placement Agent contained in this Agreement, the Company covenants as follows: (a) To furnish to you, without charge, during the period mentioned in paragraph (c) below, as many copies of the Final Memorandum, any documents incorporated by reference therein and any supplements and amendments thereto as you may reasonably request and to use its best efforts to deliver such copies to you by 5 P.M. (New York time) on the business day next following the execution of this Agreement. (b) Before amending or supplementing either Memorandum, to furnish to you a copy of each such proposed amendment or supplement and -9- not to use any such proposed amendment or supplement to which you reasonably object. (c) If, during such period after the date hereof and prior to the date on which all of the Preferred Stock shall have been sold by the Placement Agent, any event shall occur or condition exist as a result of which it is necessary in your judgment to amend or supplement the Final Memorandum in order to make the statements therein, in the light of the circumstances when such Memorandum is delivered to a purchaser, not misleading, or if, with the opinion of counsel to the Placement Agent it is necessary to amend or supplement such Memorandum to comply with applicable law, forthwith to prepare and furnish, at its own expense, to the Placement Agent, either amendments or supplements to such Memorandum so that the statements in such Memorandum as so amended or supplemented will not, in the light of the circumstances when such Memorandum is delivered to a purchaser, be misleading or so that such Memorandum, as so amended or supplemented, will comply with applicable law. (d) To endeavor to qualify the Securities for offer and sale under the securities or Blue Sky laws of such jurisdictions as you shall reasonably request. (e) Whether or not any sale of the Preferred Stock is consummated, to pay all expenses incident to the performance of its obligations under this Agreement, including: (i) the preparation of each Memorandum and all amendments and supplements thereto, (ii) the preparation, issuance and delivery of the Securities, (iii) the fees and disbursements of the Company's counsel and accountants, the transfer agent for the Preferred Stock and the trustee under the Exchange Indenture, (iv) the qualification of such Securities under securities or Blue Sky laws in accordance with the provisions of Section 5(d), including filing fees and the fees and disbursements of counsel for the Placement Agent in connection therewith and in connection with the preparation of any Blue Sky or legal investment memoranda, (v) the printing and delivery to the Placement Agent in quantities as hereinabove stated of copies of each Memorandum and any amendments or supplements thereto, (vi) any fees charged by rating agencies for the rating of such Securities, (vii) all document production charges and expenses of counsel to the Placement Agent (but not including its fees for professional services) in connection with the preparation of this Agreement, (viii) the fees and expenses, if any, incurred in connection with the admission of such Securities for trading in PORTAL or any other appropriate market system, (ix) the costs and expenses of the Company relating to investor presentations on any "road show" undertaken in connection with the marketing of the Preferred Stock, including, without limitation, expenses associated with the production of road show slides and graphics, fees and expenses -10- of any consultants engaged in connection with the road show presentations with the prior approval of the Company, travel and lodging expense of the representatives and officers of the Company and any such consultants, and the cost of any aircraft chartered in connection with the road show, and (x) all other costs and expenses incident to the performance of the obligations of the Company hereunder for which provision is not otherwise made in this Section. (f) Neither the Company nor any Affiliate will sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined in the Securities Act) which could be integrated with the sale of the Preferred Stock in a manner which would require the registration under the Securities Act of such Securities. (g) Not to solicit any offer to buy or offer or sell the Preferred Stock by means of any form of general solicitation or general advertising (as those terms are used in Regulation D under the Securities Act) or in any manner involving a public offering within the meaning of Section 4(2) of the Securities Act. (h) While any of the Securities remain outstanding, to make available, upon request, to any seller of such Securities the information specified in Rule 144A(d)(4) under the Securities Act, unless the Company is then subject to Section 13 or 15(d) of the Exchange Act. (i) None of the Company, its Affiliates or any person acting on its or their behalf (other than the Placement Agent) will engage in any directed selling efforts (as that term is defined in Regulation S) with respect to the Preferred Stock, and the Company and its Affiliates and each person acting on its or their behalf (other than the Placement Agent) will comply with the offering restrictions of Regulation S. (j) To use its best efforts to permit the Securities to be designated PORTAL securities in accordance with the rules and regulations adopted by the National Association of Securities Dealers, Inc. relating to trading in the PORTAL Market; unless so requested by you, the Company will not take any action to permit the Securities to be designated PORTAL securities without your prior consent, which shall not be unreasonably withheld. 6. Offering of Securities; Restrictions on Transfer. (a) The Placement Agent represents and warrants that it is a qualified institutional buyer as defined in Rule 144A under the Securities Act (a "QIB"). The Placement Agent agrees with the Company that (i) it will not solicit offers for, or offer or sell, such Preferred Stock by any form of -11- general solicitation or general advertising (as those terms are used in Regulation D under the Securities Act) or in any manner involving a public offering within the meaning of Section 4(2) of the Securities Act and (ii) it will solicit offers for such Preferred Stock only from, and will offer such Preferred Stock only to, persons that it reasonably believes to be (A) in the case of offers inside the United States, (x) QIBs or (y) other institutional accredited investors (as defined in Rule 501(a) (1), (2), (3) or (7) under the Securities Act) ("institutional accredited investors") that, prior to their purchase of the Preferred Stock, deliver to the Placement Agent a letter containing the representations and agreements set forth in Appendix A to the Memorandum and (B) in the case of offers outside the United States in compliance with Regulation S under the Securities Act, to persons other than U.S. persons ("foreign purchasers," which term shall include dealers or other professional fiduciaries in the United States acting on a discretionary basis for foreign beneficial owners (other than an estate or trust)) that, in each case, in purchasing such Preferred Stock are deemed to have represented and agreed as provided in the Final Memorandum under the caption "Transfer Restrictions." (b) The Placement Agent represents, warrants, and agrees with respect to offers and sales outside the United States that: (i) it understands that no action has been or will be taken in any jurisdiction by the Company that would permit a public offering of the Preferred Stock, or possession or distribution of either Memorandum or any other offering or publicity material relating to the Preferred Stock, in any country or jurisdiction where action for that purpose is required; (ii) the Placement Agent will comply with all applicable laws and regulations in each jurisdiction in which it acquires, offers, sells or delivers Preferred Stock or has in its possession or distributes either Memorandum or any such other material, in all cases at its own expense; (iii) the Preferred Stock have not been and will not be registered under the Securities Act and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons except in accordance with Regulation S under the Securities Act or pursuant to an exemption from the registration requirements of the Securities Act; (iv) the Placement Agent has offered the Preferred Stock and will offer and sell the Preferred Stock (A) as part of their distribution at any time and (B) otherwise until 40 days after the later of the commencement of the offering of the Preferred Stock and -12- the Closing Date, only in accordance with Rule 903 of Regulation S or another exemption from the registration requirements of the Securities Act. Accordingly, neither the Placement Agent, its Affiliates nor any persons acting on its or their behalf have engaged or will engage in any directed selling efforts (within the meaning of Regulation S) with respect to the Preferred Stock, and the Placement Agent, its Affiliates and any such persons have complied and will comply with the offering restrictions requirements of Regulation S; (v) the Placement Agent has (A) not offered or sold and will not offer or sell any Preferred Stock to persons in the United Kingdom except to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their businesses or otherwise in circumstances which have not resulted and will not result in an offer to the public in the United Kingdom within the meaning of the Public Offers of Securities Regulations 1995 (the "Regulations"); (B) complied and will comply with all applicable provisions of the Financial Services Act 1986 and the Regulations with respect to anything done by it in relation to the Preferred Stock in, from or otherwise involving the United Kingdom; and (C) only issued or passed on and will only issue or pass on to any person in the United Kingdom any document received by it in connection with the issue of the Preferred Stock if that person is of a kind described in Article 11(3) of the Financial Services Act 1986 (Investment Advertisements) (Exemptions) Order 1995 or is a person to whom such document may otherwise lawfully be issued or passed on; (vi) the Placement Agent understands that the Preferred Stock have not been and will not be registered under the Securities and Exchange Law of Japan, and represents that it has not offered or sold, and agrees that it will not offer or sell, any Preferred Stock, directly or indirectly in Japan or to any resident of Japan except (A) pursuant to an exemption from the registration requirements of the Securities and Exchange Law of Japan and (B) in compliance with any other applicable requirements of Japanese law; and (vii) the Placement Agent agrees that, at or prior to confirmation of sales of the Preferred Stock, it will have sent to each distributor, dealer or person receiving a selling concession, fee or other remuneration that purchases any Preferred Stock from it during the restricted period a confirmation or notice to substantially the following effect: -13- "The Preferred Stock covered hereby have not been registered under the U.S. Securities Act of 1933, as amended (the "Securities Act"), and may not be offered and sold within the United States or to, or for the account or benefit of, U.S. persons (i) as part of their distribution at any time or (ii) otherwise until 40 days after the Closing Date, except in either case in accordance with Regulation S (or Rule 144A) under the Securities Act. Terms used above have the meaning given to them by Regulation S." Terms used in this Section 6 have the meanings given to them by Regulation S. 7. Indemnification and Contribution. (a) The Company agrees to indemnify and hold harmless the Placement Agent, and each person, if any, who controls such Placement Agent within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act, or is under common control with, or is controlled by, the Placement Agent, from and against any and all losses, claims, damages and liabilities (including, without limitation, any legal or other expenses reasonably incurred by the Placement Agent or any such controlling of affiliated person in connection with defending or investigating any such action or claim) caused by any untrue statement or alleged untrue statement of a material fact contained in either Memorandum (as amended or supplemented if the Company shall have furnished any amendments or supplements thereto), or caused by any omission or alleged omission to state therein a material fact necessary to make the statements therein in light of the circumstances under which they were made not misleading, except insofar as such losses, claims, damages or liabilities are caused by any such untrue statement or omission or alleged untrue statement or omission based upon information relating to the Placement Agent furnished to the Company in writing by such Placement Agent through you expressly for use therein. (b) The Placement Agent agrees to indemnify and hold harmless the Company, its directors, its officers and each person, if any, who controls, or is under common control with or is controlled by the Company within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act to the same extent as the foregoing indemnity from the Company to the Placement Agent, but only with reference to information relating to the Placement Agent furnished to the Company in writing by the Placement Agent through you expressly for use in either Memorandum or any amendments or supplements thereto. (c) In case any proceeding (including any governmental investigation) shall be instituted involving any person in respect of which indemnity may be sought pursuant to either paragraph (a) or (b) above, such person (the "indemnified party") shall promptly notify the person against whom such indemnity may be sought (the "indemnifying party") in writing and the -14- indemnifying party, upon request of the indemnified party, shall retain counsel reasonably satisfactory to the indemnified party to represent the indemnified party and any others the indemnifying party may designate in such proceeding and shall pay the reasonable fees and disbursements of such counsel related to such proceeding. In any such proceeding, any indemnified party shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such indemnified party unless (i) the indemnifying party and the indemnified party shall have mutually agreed to the retention of such counsel or (ii) the named parties to any such proceeding (including any impleaded parties) include both the indemnifying party and the indemnified party and representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them. It is understood that the indemnifying party shall not, in connection with any proceeding or related proceedings in the same jurisdiction, be liable for the fees and expenses of more than one separate firm (in addition to any local counsel) for all such indemnified parties and that all such reasonable fees and expenses shall be reimbursed as they are incurred. Such firm shall be designated in writing by Morgan Stanley & Co. Incorporated in the case of parties indemnified pursuant to paragraph (a) above and by the Company in the case of parties indemnified pursuant to paragraph (b) above. The indemnifying party shall not be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent or if there be a final judgment for the plaintiff, the indemnifying party agrees to indemnify the indemnified party from and against any loss or liability by reason of such settlement or judgment. Notwithstanding the foregoing sentence, if at any time an indemnified party shall have requested an indemnifying party to reimburse the indemnified party for fees and expenses of counsel as contemplated by the second and third sentences of this paragraph, the indemnifying party agrees that it shall be liable for any settlement of any proceeding effected without its written consent if (i) such settlement is entered into more than 30 days after receipt by such indemnifying party of the aforesaid request and (ii) such indemnifying party shall not have reimbursed the indemnified party in accordance with such request prior to the date of such settlement. No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement of any pending or threatened proceeding in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party, unless such settlement includes an unconditional release of such indemnified party from all liability on claims that are the subject matter of such proceeding. (d) To the extent the indemnification provided for in paragraph (a) or (b) of this Section 7 is unavailable to an indemnified party or insufficient in respect of any losses, claims, damages or liabilities, then each -15- indemnifying party under such paragraph, in lieu of indemnifying such indemnified party thereunder, shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (i) in such proportion as is appropriate to reflect the relative benefits received by the Company, on the one hand, and the Placement Agent, on the other hand, from the offering of such Preferred Stock or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company on the one hand and the Placement Agent on the other hand in connection with the statements or omissions that resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and the Placement Agent on the other hand in connection with the offering of such Preferred Stock shall be deemed to be in the same respective proportions as the net proceeds from the offering of such Preferred Stock (before deducting expenses) received by the Company and the total discounts and commissions received by the Placement Agent in respect thereof bear to the aggregate offering price of such Preferred Stock. The relative fault of the Company on the one hand and of the Placement Agent on the other hand shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company or by the Placement Agent and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. (e) The Company and the Placement Agent agree that it would not be just or equitable if contribution pursuant to this Section 7 were determined by pro rata allocation or by any other method of allocation that does not take account of the equitable considerations referred to in paragraph (d) above. The amount paid or payable by an indemnified party as a result of the losses, claims, damages and liabilities referred to in paragraph (d) above shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 7, the Placement Agent shall not be required to contribute any amount in excess of the amount by which the total price at which the Preferred Stock resold by it in the initial placement of such Preferred Stock were offered to investors exceeds the amount of any damages that the Placement Agent has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. -16- (f) The indemnity and contribution provisions contained in this Section 7 and the representations and warranties of the Company contained in this Agreement shall remain operative and in full force and effect regardless of (i) any termination of this Agreement, (ii) any investigation made by or on behalf of the Placement Agent or any person controlling the Placement Agent or by or on behalf of the Company, its officers or directors or any person controlling the Company and (iii) acceptance of and payment for any of the Preferred Stock. The remedies provided for in this Section 7 are not exclusive and shall not limit any rights or remedies which may otherwise be available to any indemnified party at law or in equity. 8. Termination. This Agreement shall be subject to termination by notice given by you to the Company, if (a) after the execution and delivery of this Agreement and prior to the Closing Date (i) trading generally shall have been suspended or materially limited on or by, as the case may be, any of the New York Stock Exchange, the American Stock Exchange, the National Association of Securities Dealers, Inc., the Chicago Board of Options Exchange, the Chicago Mercantile Exchange or the Chicago Board of Trade, (ii) trading of any securities of the Company shall have been suspended on any exchange or in any over-the-counter market, (iii) a general moratorium on commercial banking activities in New York shall have been declared by either Federal or New York State authorities or (iv) there shall have occurred any outbreak or escalation of hostilities or any change in financial markets or any calamity or crisis that, in your judgment, is material and adverse and (b) in the case of any of the events specified in clauses (a)(i) through (iv), such event singly or together with any other such event makes it, in your judgment, impracticable to market the Preferred Stock on the terms and in the manner contemplated in the Final Memorandum. 9. Miscellaneous. 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. If this Agreement shall be terminated by the Placement Agent because of any failure or refusal on the part of the Company to comply with the terms or to fulfill any of the conditions of this Agreement, or if for any reason the Company shall be unable to perform its obligations under this Agreement, the Company will reimburse the Placement Agent for all out-of-pocket expenses (including the fees and disbursements of their counsel) reasonably incurred by the Placement Agent in connection with this Agreement or the offering contemplated hereunder. This Agreement shall be governed by and construed in accordance with the internal laws of the State of New York. -17- The headings of the sections of this Agreement have been inserted for convenience of reference only and shall not be deemed a part of this Agreement. -18- Please confirm your agreement to the foregoing by signing in the space provided below for that purpose and returning to us a copy hereof, whereupon this Agreement shall constitute a binding agreement between us. Very truly yours, SILGAN HOLDINGS INC. By/s/ Harley Rankin, Jr. ---------------------- Agreed, July 17, 1996 Morgan Stanley & Co. Incorporated By/s/ Katina J. Dorton -------------------- -19- SCHEDULE I Significant Subsidiaries Silgan Corporation Silgan Plastics Corporation Silgan Containers Corporation California - Washington Can Corporation SCCW Can Corporation -----END PRIVACY-ENHANCED MESSAGE-----