PROSPECTUS
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SUMMIT BANCORP.
DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN
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(SHARES OF COMMON STOCK, PAR VALUE $1.20 PER SHARE)
The Dividend Reinvestment and Stock Purchase Plan (the "Plan") of Summit
Bancorp. ("Summit") provides shareholders with a simple and convenient method of
purchasing additional shares of the common stock of Summit (the "Common Stock").
Any holder of record of Common Stock is eligible to join the Plan. Holders of
Common Stock who do not participate in the Plan will receive cash dividends, as
declared, in the usual manner.
PARTICIPANTS IN THE PLAN MAY:
* have cash dividends on their shares of Common Stock automatically
reinvested in additional whole and fractional shares of Common Stock, and
* purchase additional whole and fractional shares of Common Stock with
optional cash payments of up to $25,000 per quarter.
Purchases of Common Stock may be made directly from Summit or on the open
market, at the discretion of Summit. AS OF THE DATE OF THIS PROSPECTUS PURCHASES
BY THE PLAN ARE BEING MADE ON THE OPEN MARKET.
* When Common Stock is purchased directly from Summit: (i) the price is 100%
of the average of the high and low sale prices of a share of Common Stock
reported on the New York Stock Exchange--Composite Transactions Tape for
the period of five consecutive trading days ending on and including the
investment date, (ii) the investment date for reinvested dividends is the
dividend payment date; and (iii) the investment date for optional cash
payments is the first trading day of the month.
* When Common Stock is purchased on the open market: (i) purchases may occur
over one or more trading days and the price is the weighted average
purchase price, including brokerage commissions, of all shares purchased by
the Plan Administrator during the investment period, (ii) the investment
period for reinvested dividends commences on the dividend payment date, and
(iii) the investment period for optional cash payments commences on the
first trading day of the month. See Questions 11 and 12 for details.
The closing price of Summit Common Stock reported on October 31, 1996 was
$40 7/8.
This Prospectus relates to 785,585 shares of Common Stock which may be (i)
authorized and unissued shares of Common Stock reserved for issuance under the
Plan, or (ii) shares of Common Stock purchased by the Plan in the open market
under circumstances requiring that such shares be registered under the
Securities Act of 1933, as amended. PLEASE RETAIN THIS PROSPECTUS FOR FUTURE
REFERENCE.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
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THE SECURITIES OFFERED HEREBY ARE NOT SAVINGS ACCOUNTS, DEPOSITS OR OTHER
OBLIGATIONS OF A BANK OR SAVINGS ASSOCIATION AND ARE NOT INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY.
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THE DATE OF THIS PROSPECTUS IS OCTOBER 31, 1996.
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AVAILABLE INFORMATION
Summit is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission") relating to its
businesses, financial statements and other matters. The reports, proxy
statements and other information filed by Summit may be inspected and copied at
the public reference facilities maintained by the Commission at 450 Fifth
Street, N.W., Room 1024, Washington, D.C. 20549, and at the following regional
offices of the Commission: Chicago Regional Office, 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661-2511 and New York Regional Office, 7 World
Trade Center, Suite 1300, New York, New York 10048. Copies of such materials may
also be obtained from the Public Reference Section of the Commission, 450 Fifth
Street, N.W., Washington, D.C. 20549, at prescribed rates. The Commission
maintains an internet site on the World Wide Web containing reports, proxy and
information statements and other information filed electronically by Summit with
the Commission. The address of the World Wide Web site maintained by the
Commission is: http://www.sec.gov. The Common Stock of Summit is listed on the
New York Stock Exchange, Inc. (the "NYSE"), and reports, proxy statements and
other information concerning Summit are available for inspection at the offices
of the NYSE, 20 Broad Street, New York, New York 10005.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
There are hereby incorporated by reference into this Prospectus and made a
part hereof the following documents filed by Summit with the Commission pursuant
to the Exchange Act: (1) the Annual Report on Form 10-K for the fiscal year
ended December 31, 1995, (2) the Quarterly Reports on Form 10-Q for the quarters
ended March 31, 1996 and June 30, 1996, (3) the Current Reports on Form 8-K
dated March 1, 1996 (as amended by Form 8-K/A), March 31, 1996, April 11, 1996,
May 22, 1996, July 16, 1996, August 28, 1996 and October 16, 1996, and (4) the
description of the Common Stock contained in Summit's Registration Statement on
Form 10 filed pursuant to Section 12(b) of the Exchange Act, dated August 31,
1970, and the description of the preferred stock purchase rights appurtenant to
the Common Stock contained in Summit's Registration Statement on Form 8-A filed
pursuant to Section 12(b) of the Exchange Act, dated August 28, 1989, including
any amendment thereto or report filed under the Exchange Act for the purpose of
updating such description. All documents filed by Summit pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this Prospectus
shall be deemed to be incorporated by reference into this Prospectus and to be a
part hereof as of their respective dates. Such incorporation by reference will
not be deemed to specifically incorporate by reference the information referred
to in Item 402(a) (8) of Regulation S-K. Any statement contained in a document
incorporated or deemed to be incorporated by reference herein shall be deemed to
be modified or superseded for purposes of this Prospectus to the extent that a
statement contained herein, or in any other subsequently filed document that is
also incorporated or deemed incorporated by reference herein, modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
ANY PERSON TO WHOM A COPY OF THIS PROSPECTUS IS DELIVERED MAY OBTAIN
WITHOUT CHARGE, UPON WRITTEN OR ORAL REQUEST, A COPY OF ANY OF THE DOCUMENTS
INCORPORATED BY REFERENCE HEREIN, EXCEPT FOR THE EXHIBITS TO SUCH DOCUMENTS,
UNLESS SUCH EXHIBITS ARE SPECIFICALLY INCORPORATED BY REFERENCE HEREIN. REQUESTS
SHOULD BE DIRECTED TO: SECRETARY, SUMMIT
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BANCORP., 301 CARNEGIE CENTER, P.O. BOX 2066, PRINCETON, NEW JERSEY 08543-2066
(TELEPHONE: (609) 987-3442).
NO PERSON HAS BEEN AUTHORIZED BY SUMMIT TO GIVE ANY INFORMATION OR TO MAKE
ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS AND, IF MADE, SUCH
INFORMATION SHOULD NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED. THIS PROSPECTUS
DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF ANY OFFER TO
PURCHASE, THE SECURITIES OFFERED BY THIS PROSPECTUS TO OR FROM ANY PERSON, IN
ANY JURISDICTION WHERE IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
NEITHER DELIVERY OF THIS PROSPECTUS NOR ANY DISTRIBUTION OF THE SECURITIES MADE
UNDER THIS PROSPECTUS SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT
THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF SUMMIT SINCE THE DATE OF THIS
PROSPECTUS.
THE COMPANY
The principal executive offices of Summit are located at 301 Carnegie
Center, P.O. Box 2066, Princeton, New Jersey 08543-2066 and the telephone number
is (609) 987-3200.
THE PLAN
The following, in a question and answer format are the provisions of the
Plan.
PURPOSE
1. WHAT IS THE PURPOSE OF THE PLAN?
The purpose of the Plan is to give holders of record of Common Stock the
opportunity to have dividends on their Common Stock automatically and fully
reinvested in additional shares of Common Stock and the opportunity to make
optional cash purchases of additional shares of Common Stock. At the discretion
of Summit, the Plan may purchase shares of Common Stock from Summit or in the
open market. See Question 10 below. To the extent shares are purchased by the
Plan from Summit, Summit will use the proceeds of such sale for general
corporate purposes.
The Plan is intended to facilitate investment in Common Stock by long-term
investors and is not intended to provide any person, organization or other
entity with a means to engage in transactional profit activities. Summit
accordingly reserves the right to modify, limit, condition, suspend, or
terminate participation in the Plan or the optional cash purchase feature of the
Plan by any shareholder who Summit, in its sole discretion, decides may be using
the Plan for purposes which may be inconsistent with the intended purpose of the
Plan, which determination may, without limitation, be based on activities such
as frequent withdrawals of shares from accounts, the establishment of a series
of apparently related accounts which would allow avoidance of the optional cash
purchase limit, or excessive joining and terminations.
ADVANTAGES
2. WHAT ARE THE ADVANTAGES OF THE PLAN?
o Full investment of funds, whether through dividend reinvestment or
optional cash purchases, is possible because the Plan credits fractional as well
as whole shares to a participant's Plan account. Fractional shares earn
dividends just like whole shares when held in a Plan account.
o Additional shares of Common Stock may be purchased each month with
optional cash payments ranging from a minimum of $10 to a maximum of $25,000 per
quarter. Optional cash
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purchases may be made on a transaction-by-transaction basis by check or money
order or on an automatic basis each month by means of preauthorized electronic
fund transfers from a U.S. financial institution.
o Shares purchased by the Plan are held in safekeeping by the Plan
Administrator. This releases participants from the need to keep track of
multiple share certificates. Regular statements of account provide simplified
record keeping.
o The Plan Administrator also accepts for safekeeping shares of Common
Stock held by a participant in certificate form. Shares represented by the
certificates are deposited in the participant's Plan account and ownership is
indicated on the periodic account statements sent to the participant.
PLAN ADMINISTRATOR
3. WHO ADMINISTERS THE PLAN FOR PARTICIPANTS?
First Chicago Trust Company of New York (sometimes referred to as the Plan
Administrator), a wholly-owned subsidiary of First Chicago NBD Corporation, acts
as agent for participants. The Plan Administrator keeps records, sends
statements of account to participants and performs other administrative duties
relating to the Plan. Once a participant has joined the Plan, all correspondence
concerning the Plan should be directed to:
FIRST CHICAGO TRUST COMPANY OF NEW YORK
P.O. BOX 2598
JERSEY CITY, NEW JERSEY 07303-2598
TELEPHONE NUMBER: 800-519-3111
Be sure to include a reference to Summit Bancorp. in your correspondence.
Normal business hours for the automated voice response system are 8:00 a.m.
to 10:00 p.m., Eastern Time, Monday through Friday (except legal holidays) and
8:00 a.m. to 3:30 p.m., Eastern Time, on Saturdays. Customer Service
Representatives are available 9:00 a.m. to 6:00 p.m., Eastern Time, Monday
through Friday (except legal holidays). A TDD (telecommunication device for the
hearing impaired) is available at 201-222-4955.
The Plan Administrator may resign on ninety (90) days notice to Summit, in
which event Summit will appoint another Plan Administrator. Summit reserves the
right to change the Plan Administrator and may name itself as Plan
Administrator. Summit will give all participants written notice of any change in
the Plan Administrator.
PARTICIPATION
4. WHO IS ELIGIBLE TO PARTICIPATE?
All shareholders of record of Common Stock (except residents of Canada) are
eligible to participate in the Plan.
If you are the beneficial owner of shares of Common Stock registered in the
name of a broker, a bank or other nominee and you wish to participate in the
Plan with respect to all or a portion of such shares, you must first arrange
with the broker, bank or other nominee to have those shares reregistered in your
name. This is done by requesting of the broker, bank or other nominee that a
certificate representing such shares be sent to you.
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A broker, bank or other nominee who wishes to participate in the Plan may
do so but only with respect to all shares of Common Stock held by the broker,
bank or nominee. If a broker, bank or other nominee elects to participate in the
Plan, it must execute an Authorization Form.
5. HOW DOES AN ELIGIBLE SHAREHOLDER BECOME A PARTICIPANT IN THE PLAN?
An eligible shareholder may become a participant in the Plan by completing
and signing an Authorization Form and returning it to the Plan Administrator at
the address given at Question 3 above.
An Authorization Form may be obtained at any time by writing First Chicago
Trust Company of New York at the address given at Question 3, by calling the
Plan Administrator at the telephone number given at Question 3, by writing to
the Corporate Secretary of Summit at the address of the principal executive
offices of Summit given on page 2 or by calling Summit at (609) 987-3442.
The Authorization Form directs Summit to pay to the Plan Administrator the
cash dividends on ALL shares of Common Stock registered in the name of the
shareholder who signs the Authorization Form, whether held in certificate form
or, after participation in the Plan commences, held in a Plan account. The
Authorization Form also authorizes the Plan Administrator to act as agent for
the shareholder in using cash dividends and optional cash payments to purchase
whole and fractional shares of Common Stock in accordance with the terms and
conditions of the Plan.
If a shareholder owns Common Stock under more than one form of
registration, a separate Authorization Form must be completed for each form of
registration if the shareholder wishes dividends on all such differently
registered shares to be reinvested. Should a shareholder wish to consolidate
shares held in several forms of registration into a single form of registration
to simplify participation in the Plan, the shareholder should contact the Plan
Administrator for instructions.
6. MAY I REINVEST DIVIDENDS ON ONLY PART OF THE SHARES REGISTERED IN MY
NAME?
No. The Authorization Form directs Summit to pay to the Plan Administrator
all cash dividends on all shares of Common Stock registered in the name of the
shareholder who signs the Authorization Form, whether held by the shareholder in
certificate form or held in the shareholder's Plan account. See Question 5
above. Dividends on shares of Common Stock beneficially owned by a participant
or other shareholder which are held in the name of a broker, bank or other
nominee cannot be reinvested in additional shares of Common Stock unless the
broker, bank or other nominee participates in the Plan or unless the participant
requests that the broker, bank or other nominee cause the shares to become
reregistered in the participant's name. See Question 4 above.
7. WHEN MAY AN ELIGIBLE SHAREHOLDER JOIN THE PLAN?
At any time. However, in order to have a particular dividend reinvested in
additional shares of Common Stock under the Plan, an Authorization Form must be
sent in sufficient time that it is received by the Plan Administrator on or
before the record date declared for that particular dividend. Dividend payment
dates have customarily fallen on the first business day of each February, May,
August and November and record dates have customarily fallen within the first
seven days of the month preceding each of these months. (Notwithstanding past
practices the Board of Directors of Summit reserves the right to set dividend
payment dates and record dates in its discretion). Therefore, as an example, in
order to have had the dividend paid November 1, 1996 reinvested in additional
Common Stock under the Plan, a shareholder would have had to have ensured that
an Authorization Form was received by the Plan Administrator on or before
October 10, 1996, which was the record date for that dividend.
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An optional cash payment in the form of a check or money order may be sent
to the Plan Administrator with the Authorization Form when joining the Plan.
Checks and money orders should be made payable to "First Chicago--Summit Plan".
An Automatic Monthly Deduction Form authorizing automatic monthly optional cash
payments by electronic funds transfer may also be sent to the Plan Administrator
with an Authorization Form when joining the Plan. The Automatic Monthly
Deduction Form should be requested from the Plan Administrator at the same time
as the Authorization Form. Optional cash purchases will be made in accordance
with the procedures described at Questions 11, 12 and 13.
8. MAY A PARTICIPANT SEND HIS OR HER SHARE CERTIFICATES TO THE PLAN
ADMINISTRATORFOR SAFEKEEPING?
Yes.
A participant may deposit any or all share certificates representing Common
Stock with the Plan Administrator. The participant may do so at the time the
Authorization Form is sent to the Plan Administrator or at any time thereafter.
The Plan Administrator recommends that any share certificates sent to it be
accompanied by written instructions and be sent by registered mail, return
receipt requested, and insured in an amount equal to the premium for a
replacement bond (currently 2% of the market value of the certificates mailed)
if your certificate is lost. Contact the Plan Administrator if you would like
assistance in calculating the premium for the replacement bond. Certificates
should not be endorsed. The Plan Administrator will cancel share certificates so
received, reregister the shares represented thereby in the name of the Plan
Administrator or its nominee and credit the participant's Plan account with the
appropriate number of shares. The participant may thereafter request
certificates for any number of whole shares in the Plan account in accordance
with the procedures described at Question 19.
COSTS
9. WHAT ARE THE COSTS TO A PARTICIPANT IN THE PLAN?
No fees are charged to a participant for joining the Plan.
With respect to purchases of additional shares of Common Stock under the
Plan with both reinvested dividends and optional cash payments: (i) when the
Plan purchases Common Stock directly from Summit, no brokerage commission or
service fee is assessed; and (ii) when the Plan purchases Common Stock in the
open market, the brokerage commission incurred by the Plan is passed on to the
participant but no service fee is assessed. At the date of this Prospectus, the
Plan incurs brokerage charges of $.03 per share purchased.
When some or all of the Common Stock in a participant's Plan account is
sold by the Plan Administrator at the request of the Plan participant, the
brokerage commission incurred by the Plan in the sale is passed on to the
participant, a service fee is assessed and any applicable taxes are collected.
When only the fractional share in a participant's Plan account is sold by the
Plan Administrator in connection with the termination of a Plan account or a
termination of the Plan, the nominal brokerage commission incurred by the Plan
in the sale is passed on to the participant and any applicable taxes are
collected but no service fee is assessed. See Question 22 for details.
Participants making optional cash purchases through electronic fund
transfers are charged a $1.00 service fee by the Plan Administrator for each
electronic fund transfer processed. Participants will also be charged the Plan
Administrator's prevailing fees for dishonored checks and failed
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electronic fund transfers due to insufficient funds and for requests for account
statements two or more years old.
PURCHASES
10. WHAT IS THE SOURCE OF SHARES PURCHASED UNDER THE PLAN?
Common Stock for the Plan is purchased either directly from Summit or in
the open market. The decision with respect to the source of Common Stock
purchased by the Plan will be made by Summit in its sole discretion and will be
based on factors considered relevant at the time by Summit. Shares purchased
directly from Summit are issued by Summit out of its legally authorized but
unissued shares of Common Stock, shares of issued Common Stock held in Summit's
treasury, if any, or both.
11. WHAT IS THE PRICE OF COMMON STOCK PURCHASED THROUGH THE PLAN?
The purchase price for shares of Common Stock purchased through the Plan
directly from Summit is 100% of the average of the high and low sale prices of
Common Stock as reported on the NYSE--Composite Transactions Tape, or other
authoritative sources, for the period of five consecutive trading days ending on
the investment date, as that term is defined at Question 12. A "trading day" for
purposes of this Plan is a day on which the trade of at least one share of
Common Stock is reported on the NYSE--Composite Transactions Tape. If during the
ten days immediately preceding and ending on the investment date that the
securities markets are open for trading there occur fewer than five "trading
days", then the purchase price shall be determined by Summit senior management
on the basis of such information as it considers best reflects market value.
The purchase price for shares of Common Stock acquired by the Plan on the
open market is the weighted average purchase price, including brokerage
commissions, of all shares purchased for the Plan during the relevant investment
period, as that term is defined at Question 12.
12. WHEN DO PLAN PURCHASES OF COMMON STOCK OCCUR?
Purchases of Common Stock directly from Summit with reinvested dividends
occur on the payment date of the particular dividend if that date is a trading
day, or on the first trading day following the dividend payment date if the
dividend payment date is not a trading day.
Purchases of Common Stock directly from Summit with optional cash payments
occur on the first trading day of each month. All optional cash payments in the
form of checks or money orders received by the Plan Administrator on or before
that day (and subsequent to the first trading day of the previous month) are
used to purchase additional Common Stock. All optional cash payments received by
the Plan Administrator in the form of electronic fund transfers pursuant to
Automatic Monthly Deduction Forms are also used to purchase additional Common
Stock on the first trading day of each month, although the actual transfer to
the Plan Administrator of such funds occurs three business days prior to the
first trading day of the month (such transfer date being referred to herein as
the "electronic transfer date"). The first electronic fund transfer authorized
by an Automatic Monthly Deduction Form occurs on the first electronic transfer
date which follows by at least three business days the Plan Administrator's
receipt of a properly completed Automatic Monthly Deduction Form. See Questions
14 and 15.
Dates on which Common Stock is purchased directly from Summit, whether with
reinvested dividends or optional cash payments, are referred to in this
Prospectus as "investment dates".
Purchases of Common Stock on the open market may be made in one or more
trades over one or more trading days but will always commence, in the case of
reinvested dividends, on the dividend
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payment date or, if the dividend payment date is not a trading day, on the first
trading day following the dividend payment date and, in the case of optional
cash payments, on the first trading day of a particular month. The periods
during which Common Stock is purchased on the open market, whether with
reinvested dividends or optional cash payments, are referred to in this
Prospectus as "investment periods". Optional cash payments in the form of checks
or money orders received by the Plan Administrator on or before the first day of
a particular investment period (and subsequent to the first day of the
immediately preceeding investment period) will be used to purchase additional
Common Stock during that investment period. All optional cash payments received
by the Plan Administrator pursuant to Automatic Monthly Deduction Forms are also
used to purchase additional Common Stock during the relevant investment period,
although the actual transfer to the Plan Administrator of such funds occurs
three business days prior to the first day of the investment period (such
transfer day also being referred to herein as the "electronic transfer date").
Investment periods will not extend more than 30 days beyond the first day
of the investment period, except where a longer period is made advisable or
necessary by applicable securities laws. Purchases may be made on any securities
exchange where Common Stock is traded, in the over-the-counter market, or by
negotiated transaction and may be subject to such price, delivery or other terms
as the Plan Administrator may agree to. Neither Summit nor any participant shall
have any authority or power to direct the time or price at which Common Stock is
purchased, the selection of the broker or dealer or from whom purchases are
made, or any other terms of purchases.
13. HOW IS THE NUMBER OF SHARES PURCHASED FOR A PARTICIPANT DETERMINED?
Each participant's account will be credited with that number of shares,
including fractional shares, computed to three decimal places, equal to the
total amount to be invested on behalf of the participant divided by the purchase
price per share (determined as set forth at Question 11).
OPTIONAL CASH PAYMENTS
14. HOW CAN I PURCHASE COMMON STOCK WITH OPTIONAL CASH PAYMENTS?
An optional cash payment is cash sent by check, money order or electronic
fund transfer to the Plan Administrator by or on behalf of a participant for the
purpose of purchasing additional Common Stock under the Plan. A check or money
order for an optional cash purchase may be sent to the Plan Administrator at any
time after participation in the Plan commences, or, if so desired, when joining
the Plan by including either with the Authorization Form. Likewise, an Automatic
Monthly Deduction Form may be submitted to the Plan Administrator at any time
after participation in the Plan commences or when joining the Plan by including
it with the Authorization Form, but fund transfers pursuant to an Automatic
Monthly Deduction Form do not commence until the electronic transfer date which
first follows by at least three business days the Plan Administrator's receipt
of the properly completed Automatic Monthly Deduction Form. As discussed at
Question 12, an "electronic transfer date" is the date three business days prior
to either an investment date (when Plan purchases of Common Stock are being made
directly from Summit) or the first day of an investment period (when Plan
purchases of Common Stock are being made on the open market), and represents the
date on which electronic fund transfers authorized by Automatic Monthly
Deduction Forms are received by the Plan Administrator on behalf of
participants.
An Automatic Monthly Deduction Form permits Plan participants to make
optional cash purchases of Common Stock on a monthly basis without the need to
write a check or money order for
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each purchase. On the Automatic Monthly Deduction Form a participant can
authorize a U.S. financial institution holding funds of the participant to
transfer a designated amount each month from the participant's account at the
financial institution to the Plan Administrator for use in purchasing additional
Common Stock. To initiate optional cash purchases through electronic fund
transfer a participant must send to the Plan Administrator, at the address given
at Question 3, a properly completed Automatic Monthly Deduction Form and include
as an attachment thereto a voided blank check for the account the funds are to
be transferred from. Automatic fund transfers authorized by an Automatic Monthly
Deduction Form will continue until changed or terminated. An Automatic Monthly
Deduction Form may be modified or terminated only by submitting a new Automatic
Monthly Deduction Form to the Plan Administrator. Changes effected by a new
Automatic Monthly Deduction Form will not take effect until the electronic
transfer date which first follows by at least three business days the Plan
Administrator's receipt of the properly completed new Automatic Monthly
Deduction Form.
An Automatic Monthly Deduction Form may be obtained by any one of the means
set forth at Question 5 for obtaining an Authorization Form.
Participants are assessed a service charge of $1.00 for each electronic
fund transfer processed by the Plan Administrator for an optional cash purchase.
The $1.00 is deducted from the amount transferred to the Plan Administrator
prior to the optional cash purchase. The financial institution designated by a
participant on an Automatic Monthly Deduction Form may charge an additional fee
for participating in the electronic fund transfer. Participants are encouraged
to consult with their financial institution prior to sending an Automatic
Monthly Deduction Form to the Plan Administrator.
No optional cash purchases will be made with amounts of less than $10. Any
Automatic Monthly Deduction Form received by the Plan Administrator which does
not authorize monthly fund transfers of at least $10.00 will not be processed by
the Plan Administrator. Checks or money orders submitted on behalf of a
participant which do not, as of a relevant investment date or the first day of a
relevant investment period, as appropriate, aggregate at least $10.00 will be
returned to the participant.
No optional cash purchases aggregating more than $25,000 will be made on
behalf of any participant in any quarter. Any Automatic Monthly Deduction Form
received by the Plan Administrator which authorizes monthly fund transfers
aggregating more than $25,000 per quarter will not be processed by the Plan
Administrator. In the event amounts received on behalf of a Plan participant by
check, money order and electronic fund transfer for optional cash purchases
exceed $25,000 for a particular quarter, the Plan Administrator will make
optional cash purchases of up to $25,000 on behalf of the participant and return
amounts in excess of $25,000 per quarter to the participant in a manner deemed
appropriate by the Plan Administrator in its sole discretion.
A "quarter", as used in this Prospectus, is the three-month period which
commences on the first day of each of February, May, August, and November. In
the event dividend payment dates cease to be the first business day of each of
these months, a "quarter" for purposes of this Prospectus may be redefined.
Checks and money orders for optional cash purchases should be accompanied by an
Authorization Form, if you are joining the Plan, or, if you already participate
in the Plan, by a letter of instruction or the cash payment form which is
attached to each Dividend Reinvestment and Stock Purchase Plan account
statement. Summit reserves the right in its sole discretion to suspend without
prior notice the purchase of additional Common Stock with optional cash payments
and to refund optional cash payments to participants.
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Checks and money orders for optional cash purchases should be made payable
to "First Chicago--Summit Plan". Please write your Plan account number on the
check or money order. Your Plan account number appears on your Plan account
statements. Unless mailed with an Authorization Form, checks, money orders and
Automatic Monthly Deduction Forms for optional cash purchases should be mailed
to: First Chicago Trust Company of New York, Dividend Reinvestment Plans, P.O.
Box 13531, Newark, New Jersey 07188-0001.
15. WHEN MAY OPTIONAL CASH PAYMENTS BE MADE?
Checks and money orders for optional cash purchases may be sent to the Plan
Administrator at any time. When Common Stock is being purchased by the Plan
directly from Summit, the Plan Administrator makes an optional cash purchase on
a particular investment date using all checks and money orders received on or
before that investment date (and subsequent to the immediately preceeding
investment date). When Common Stock is being purchased by the Plan on the open
market, the Plan Administrator makes an optional cash purchase on the first day
of a particular investment period using all checks and money orders received by
the Plan Administrator on or before the first day of that investment period (and
subsequent to the first day of the immediately preceeding investment period).
Automatic Monthly Deduction Forms may also be sent to the Plan
Administrator at any time. However, electronic fund transfers authorized by
Automatic Monthly Deduction Forms are not made until the date which is three
business days prior to either a particular investment date (when Plan purchases
of Common Stock are being made directly from Summit) or the first day of a
particular investment period (when Plan purchases of Common Stock are being made
on the open market). As discussed previously, the date on which electronic fund
transfers occur is referred to as the "electronic transfer date".
Notwithstanding the foregoing, no electronic fund transfer occurs pursuant to an
Automatic Monthly Deduction Form, whether an initial Automatic Monthly Deduction
Form or a revised Automatic Monthly Deduction Form, until the electronic
transfer date which follows by at least three business days the Plan
Administrator's receipt of such Automatic Monthly Deduction Form. Likewise, an
Automatic Monthly Deduction Form authorizing the termination of monthly fund
transfers will not take effect until the electronic transfer date which follows
by at least three business days the Plan Administrator's receipt of such
Automatic Monthly Deduction Form.
An optional cash payment sent to the Plan Administrator in the form of a
check or money order will be refunded if a written request for such refund is
received by the Plan Administrator at least two business days before either the
next investment date or the commencement of the next investment period, as the
case may be.
NO INTEREST WILL BE PAID ON ANY OPTIONAL CASH PAYMENTS HELD FOR INVESTMENT.
16. DOES THE PLAN REQUIRE PARTICIPANTS TO MAKE OPTIONAL CASH PURCHASES?
No. While the optional cash payment feature offers participants the
opportunity to increasetheir ownership of Common Stock, participants are not
required to make optional cash purchases.
REPORTS TO PARTICIPANTS
17. ARE REPORTS SENT TO PARTICIPANTS IN THE PLAN?
Yes. Participants generally receive a statement of account within two weeks
after each investment for their Plan account. Statements of account should be
retained for income tax purposes.
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In addition, the Plan Administrator will distribute to each participant a copy
of materials sent to Summit's shareholders of record, including the Annual
Report to Shareholders, Notice of Annual Meeting and Proxy Statement.
DIVIDENDS
18. ARE PARTICIPANTS CREDITED WITH DIVIDENDS ON SHARES HELD IN THEIR
ACCOUNTS UNDER THE PLAN?
Yes. Summit pays dividends, as declared, to all record holders of its
Common Stock. The Plan Administrator, as the record holder of Common Stock held
in participants' accounts, receives the dividends paid on such Common Stock and
allocates to each participant account dividends equal to the number of whole and
fractional shares in the account times the dividend rate paid. The Plan
Administrator then reinvests such dividends in additional shares of Common Stock
computed to three decimal places and credits such shares to the respective
participants' Plan accounts.
Common Stock purchased by the Plan in the open market with optional cash
payments in the month of a dividend record date may not always become entitled
to receive the dividend paid with respect to that particular record date. No
dividend will become payable on Common Stock purchased with optional cash
payments if the investment period during which the Common Stock is purchased
does not end before the "ex-dividend date" for that dividend. (The "ex-dividend
date" is the date as of which a stock trades on the stock exchanges without the
right to receive that stock's most recently declared dividend, assuming the
normal three day settlement period). No dividend will become payable because
record ownership for the Common Stock purchased during an investment period is
not transferred to the Plan until all purchases occurring during the investment
period on behalf of the Plan have settled. Consequently, unless the last
purchase of an investment period occurs before an "ex-dividend date", that last
purchase of the investment period will not settle, and the Plan will not become
the record owner of the stock purchased during the investment period, until
after the dividend record date.
As an example of the foregoing, if an investment period for optional cash
purchases were to extend from January 2 through January 5 of a particular year
while the record date for the next dividend were January 6 (assuming these five
days were trading days), the Plan (and optional cash purchasers that month)
would not receive the January 6 dividend on Common Stock purchased during that
investment period because the last purchase of the investment period would not
settle (and the Plan would not become the record owner of the stock purchased
during this investment period) until after the January 6 dividend record date.
January 3 would be the ex-dividend date for the January 6 dividend and all
purchases would have had to have been made on or before January 2.
At the date of this Prospectus, it is expected that Summit will continue to
pay dividends, but the Board of Directors of Summit has sole discretion in
setting the amount of (including none), record date and payment date for any
dividend.
CERTIFICATES FOR SHARES
19. WILL CERTIFICATES BE ISSUED FOR SHARES PURCHASED UNDER THE PLAN?
Normally, shares purchased under the Plan are registered in the name of the
Plan Administrator or its nominee and individual share certificates are not
issued to participants. This service protects against the loss, theft or
destruction of the stock certificates representing Plan shares. However, the
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Plan Administrator will issue certificates for part or all of the whole shares
which are credited to a participant's account under the Plan upon that
participant's written request for such certificates. This request should be
mailed to the Plan Administrator at the address indicated at Question 3. Even
after the Plan Administrator has issued certificates to a participant for some
or all of the whole shares held in the participant's Plan account, dividends on
all shares registered in a participant's name will continue to be reinvested in
additional Common Stock pursuant to the Plan. Of course, if a participant
withdraws from the Plan the automatic reinvestment of dividends will stop. If a
participant causes certificated shares to be reregistered in another name,
because of a sale, gift or other transfer of these shares, dividends on the
reregistered shares will not be reinvested in additional Common Stock under the
Plan unless an Authorization Form with respect to such shares is received by the
Plan Administrator.
Shares held by the Plan Administrator in the account of a participant may
not be pledged or assigned. A participant who wishes to pledge or assign such
shares must first request that the Plan Administrator issue certificates for
such shares.
A certificate for a fractional share will not be issued under any
circumstances.
20. IN WHOSE NAME WILL CERTIFICATES BE REGISTERED WHEN ISSUED?
Accounts under the Plan are registered in the name or names in which the
Common Stock certificates of a shareholder were registered at the time the
shareholder joined the Plan. Consequently, certificates for whole shares will be
similarly registered when issued.
WITHDRAWALS
21. WHEN MAY A PARTICIPANT WITHDRAW FROM THE PLAN?
A participant may request to withdraw from the Plan at any time. If a
request to withdraw is received by the Plan Administrator after the payment date
for one dividend but before the record date of the next dividend payment, then
the request to withdraw will be processed by the Plan Administrator as soon as
practicable after receipt and all dividends paid after the date of such receipt
will be paid to the individual in cash, unless the individual rejoins the Plan.
If a request to withdraw is received by the Plan Administrator on the
record date for a particular dividend, or after the record date for a particular
dividend but three or more business days before the payment date for that
dividend, the Plan Administrator will process the request to withdraw as soon as
practicable after its receipt and pay the relevant dividend in cash.
If a request to withdraw is received by the Plan Administrator less than
three business days before the payment date for a particular dividend, the Plan
Administrator will either pay the relevant dividend in cash or reinvest the
relevant dividend in additional Common Stock for the participant's Plan account
(in accordance with the response to Question 12). In the event the dividend is
reinvested, the Plan Administrator may sell in the open market as soon
thereafter as practicable the shares so purchased and send to the participant a
check representing the proceeds of the sale minus the nominal brokerage
commission incurred by the Plan Administrator, a service fee (currently $10, but
subject to change) and any taxes incurred or required to be collected by the
Plan Administrator.
Any optional cash payment received from a participant by the Plan
Administrator prior to the receipt of a request to withdraw from that same
participant will be invested for the participant unless return of the optional
cash payment is specifically requested in the request to withdraw and such
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request is received by the Plan Administrator at least two business days before
either the next investment date or the commencement of the next investment
period, as the case may be. Where a participant fails to request the return of
an optional cash payment in the circumstances just described at least two
business days before either the next investment date or the commencement of the
next investment period, the investment of the optional cash payment in
additional Common Stock which occurs as a consequence of this failure will
result in that participant's reenrollment in the Plan.
22. HOW DOES A PARTICIPANT WITHDRAW FROM THE PLAN?
By sending a signed, written request to withdraw to the Plan Administrator.
Upon electing to withdraw from the Plan, a participant must choose between the
following two payment methods:
1. PAYMENT METHOD ONE. The Plan Administrator will send to the participant
a certificate representing the whole shares of Common Stock held in the
participant's Plan account and a check representing the proceeds of a sale on
the open market of any fractional share in the Plan account minus the nominal
brokerage commission incurred by the Plan Administrator, any taxes incurred or
required to be collected by the Plan Administrator and any service fee
(currently none, but subject to change).
2. PAYMENT METHOD TWO. The participant may, upon a withdrawal from the
Plan, request that all shares credited to the participant's account in the Plan
be sold by the Plan Administrator. If a participant requests such sale, the Plan
Administrator will arrange for the sale of all of the participant's shares in
the open market as soon as practicable thereafter. Following the sale, the Plan
Administrator will send the participant a check representing the proceeds of the
sale minus the brokerage commission incurred by the Plan Administrator, a
service fee (currently $10 but subject to change) and any taxes incurred or
required to be collected by the Plan Administrator.
If you send a request to withdraw to the Plan Administrator but fail to
select a payment method, Payment Method One will be followed.
A participant need not withdraw from the Plan in order to have the Plan
Administrator sell Common Stock in the participant's account into the open
market. A participant is able to instruct the Plan Administrator to sell only a
portion of the Common Stock held in the participant's Plan account. Any such
instructions may be given by writing to the Plan Administrator at the address
given at Question 3 or by calling the Plan Administrator at the phone number
given at Question 3. The Plan Administrator will make every effort to process a
sale order on the day the order is received, provided that the instructions are
received before 1:00 p.m. Eastern Time on a day both the Plan Administrator and
the relevant securities market are open. As soon as practicable following the
sale, the Plan Administrator will send the participant a check representing the
proceeds of the sale minus the brokerage commission incurred by the Plan
Administrator, a service fee (currently $10 but subject to change) and any taxes
incurred or required to be collected by the Plan Administrator.
Whenever a participant is not the owner of at least ten shares (either in
certificate form or through the participant's Plan account), the Plan
Administrator may, if instructed by Summit, terminate the Plan account, sell the
shares and send the participant the proceeds of the sale (determined as set
forth below). Such shares may be sold, in the discretion of Summit, on the open
market or to other Plan participants. If the sale is made to Plan participants,
the sale will occur on the first investment date following the termination of
the Plan account and the price per share to be paid by the Plan Administrator,
and the price per share to be received by the terminated participant, will be
based on the five-day average share price calculated in accordance with the
procedures described at
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Question 11. If the sale is made on the open market, the amount to be paid to
the terminated participant for such shares will be equal to the proceeds of such
sale minus the brokerage commission incurred by the Plan Administrator, a
service fee (currently $10 but subject to change) and any taxes incurred or
required to be collected by the Plan Administrator.
Participation in the Plan will terminate when the Plan Administrator
receives proper notice of the death of the holder of a Plan account which is
registered solely to that holder. Because the requirements for such notice vary
greatly, depending on the state of residence of the participant and form of
registration of the participant's Plan account, the Plan Administrator should be
contacted at the address or phone number listed in the response to Question 3 in
the event of such death.
23. WHAT IS THE EFFECT ON A PARTICIPANT'S PLAN ACCOUNT IF THE PARTICIPANT
SELLS OR TRANSFERS ALL COMMON STOCK HELD IN CERTIFICATE FORM REGISTERED
IDENTICALLY TO THE PLAN ACCOUNT?
If a participant sells or otherwise transfers all certificated Common Stock
registered identically to the participant's Plan account, dividends on
uncertificated shares held by the Plan Administrator in the participant's Plan
account will continue to be reinvested in additional Common Stock unless a
request to withdraw from the Plan is received by the Plan Administrator.
24. WHEN MAY A SHAREHOLDER REJOIN THE PLAN?
Generally, an eligible shareholder may rejoin the Plan at any time.
However, Summit and the Plan Administrator, reserve the right to reject any
Authorization Form from a previous participant on grounds of excessive joining
and withdrawal activity.
RIGHTS OFFERINGS, STOCK DIVIDENDS AND STOCK SPLITS
25. IF SUMMIT HAS A COMMON STOCK RIGHTS OFFERING, HOW WILL THE RIGHTS
OFFERED WITH RESPECT TO SHARES HELD IN PLAN ACCOUNTS BE HANDLED?
Warrants representing rights offered with respect to the whole shares of
Common Stock credited to the Plan account of a participant (as well as the
warrants relating to shares held in certificate form by such participant) will
be mailed directly to the participant in the same manner as warrants are mailed
to shareholders of record who do not participate in the Plan.
26. WHAT HAPPENS IF SUMMIT ISSUES A STOCK DIVIDEND OR DECLARES A STOCK
SPLIT?
Whole and fractional shares of Common Stock distributable to Plan
participants in a stock dividend or stock split on shares held in Plan accounts
will be distributed by Summit to the Plan Administrator who will then allocate
such shares to participants' Plan accounts. If a Plan participant also holds
Common Stock in certificate form, the Plan Administrator will issue and mail to
the participant certificates representing the whole shares of Common Stock
distributable on such shares held in certificate form, and a check in lieu of
any related fractional share.
VOTING RIGHTS
27. HOW WILL A PARTICIPANT'S PLAN SHARES BE VOTED AT ANNUAL OR SPECIAL
MEETINGS OF SHAREHOLDERS?
If a participant holds shares of Common Stock in certificate form as well
as shares in a Plan account, the participant will receive a single proxy card
covering the shares held in certificate form
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and the whole shares held in the participant's Plan account. If the participant
holds no shares in certificate form, the participant will receive a proxy card
for the whole shares held in his or her Plan account.
If a properly signed proxy card is returned, the participant's whole
shares, whether held in certificate form or held in a Plan account, will be
voted as directed on the proxy card. If a properly signed proxy card is returned
without direction with respect to any item thereon, all of a participant's
shares -those held in certificate form, if any, and whole shares held in the
participant's Plan account -- will be voted in accordance with the
recommendations of Summit's Board of Directors. If the proxy card is not
returned or if it is returned unsigned, none of the participant's whole shares,
whether held in certificate form or held in a Plan account, will be voted unless
the participant attends the shareholder meeting and votes his or her shares in
person.
FEDERAL INCOME TAX CONSEQUENCES
28. WHAT ARE THE FEDERAL INCOME TAX CONSEQUENCES OF PARTICIPATION IN THE
PLAN?
Reinvested Dividends. When purchases of Common Stock with reinvested
dividends are made directly from Summit, a participant should include in gross
income a dividend equal to the number of shares (including fractional shares) of
Common Stock so purchased multiplied by the fair market value (as defined below)
of a share of Common Stock on the investment date. A participant's basis in such
shares will also equal the fair market value of the shares on the investment
date.
For purposes of this Question 28, the "fair market value" of a share of
Common Stock on the investment date must be determined under the Internal
Revenue Code of 1986, as amended (the "Code"), and applicable Internal Revenue
Service regulations. Under those regulations, if the Common Stock trades on the
investment date, the fair market value of a share of Common Stock is the average
of the high and low sales prices of a share of Common Stock as reported on the
NYSE--Composite Transactions Tape for that date. If the Common Stock does not
trade on that date, the fair market value of a share of Common Stock is the
weighted average of the mean of the high and low sales prices of a share of
Common Stock on the nearest trading date before and after the investment date.
By contrast, the purchase price per share of Common Stock paid by the Plan
Administrator for Common Stock purchased from Summit is determined by averaging
the high and low sale prices of a share of Common Stock over the five
consecutive trading day period ending on and including the relevant investment
date. As a result, it is possible that the fair market value of a share of
Common Stock (as determined under the Code and applicable regulations) could
exceed the per share price actually paid by the Plan Administrator (as
determined during the five day averaging period). If this occurs, the amount of
dividend includible in a participant's gross income and reported to the Internal
Revenue Service for federal income tax purposes would exceed the amount of
dividend actually paid and reinvested on behalf of the participant pursuant to
the Plan.
When the Plan Administrator purchases shares of Common Stock on the open
market with reinvested dividends, a participant should include in gross income
an amount equal to the dividend reinvested. A participant's basis in shares
acquired in the open market also will be the amount of the dividend reinvested.
Optional Cash Payments. When purchases of Common Stock with optional cash
payments are made directly from Summit, a participant should include in gross
income a dividend equal to the excess, if any, of the fair market value (as
defined above) of such shares on the investment date over
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the amount of the optional cash payment. A participant's basis in such shares
will also equal the fair market value of the shares on the investment date.
Alternatively, when the Plan Administrator purchases shares of Common Stock
on the open market with optional cash payments, a participant should recognize
no income, gain or loss. A participant's basis in shares acquired in the open
market will be the amount of the optional cash payment invested.
The dividends-received deduction applicable to corporations generally
equals 70% of the dividends received. Corporate shareholders should be aware
that the Code contains rules limiting the availability of the dividends-received
deduction including, but not limited to, rules applicable to indebtedness
directly attributable to the investment in the stock and rules relating to
shareholder's holding period for the stock.
A participant will not recognize income, gain or loss when receiving
certificates for whole shares credited to his or her Plan account, either upon a
request for such certificates or upon withdrawal from or termination of the
Plan. However, if a participant, upon withdrawal from or termination of the
Plan, requests that the Plan Administrator sell any shares (including any
fractional share) of Common Stock, the participant will recognize gain (or loss)
in an amount equal to the difference between the net proceeds of the sale and
the participant's basis in the shares sold. Such gain or loss will be capital in
character if such shares are a capital asset in the hands of the participant.
The holding period for all shares of Common Stock purchased through
participation in the Plan commences on the day following the relevant investment
date.
Statements of account will be received by a participant following each
purchase of Common Stock for a Plan account. The statements of account will show
for all such purchases the per share price paid by the Plan Administrator for
the Common Stock (which will include brokerage commissions in the case of Common
Stock purchased in the open market). In the case of Common Stock purchased
directly from Summit with reinvested dividends, the statements of account will
additionally show the fair market value of the Common Stock so purchased. IRS
Form 1099-DIV (or an IRS successor form) mailed to participants following
year-end will report dividend income based on the fair market value of Common
Stock, as determined for federal income tax purposes.
The discussion set forth above is included for general purposes only. Each
participant is urged to consult his or her own tax advisor as to the
consequences to him or her of participating in the Plan under federal and
applicable state, local and foreign tax laws.
29. HOW ARE THE UNITED STATES INCOME TAX WITHHOLDING PROVISIONS APPLIED TO
FOREIGN SHAREHOLDERS?
In the case of those foreign shareholders whose Common Stock dividends are
subject to United States federal income tax withholding, the amount of tax
required to be withheld will be deducted from the dividend received for the Plan
account of the foreign shareholder and the amount remaining will be reinvested
in additional shares of Common Stock.
RESPONSIBILITY OF THE PLAN ADMINISTRATOR
30. WHAT ARE THE RESPONSIBILITIES OF THE PLAN ADMINISTRATOR?
The Plan Administrator takes receipt of dividends payable to Plan
participants and of optional cash payments sent by participants and invests such
amounts in additional shares of Common Stock.
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The Plan Administrator also maintains continuing records of each participant's
Plan account, holds in nominee name all shares purchased for Plan participants
and advises Plan participants of all transactions in and the status of their
Plan accounts. The Plan Administrator acts in the capacity of agent for Plan
participants.
All notices from the Plan Administrator to a Plan participant will be
addressed to the participant's last address of record with the Plan
Administrator. The mailing of a notice to a participant's last address of record
will satisfy the Plan Administrator's duty of giving notice to such participant.
NOTICES OF CHANGE OF ADDRESS SHOULD BE SENT TO THE PLAN ADMINISTRATOR AT THE
ADDRESS AT QUESTION 3.
The Plan Administrator, its nominee or nominees, and Summit shall not have
any responsibility beyond the exercise of ordinary care for any reasonable and
prudent actions taken or omitted pursuant to the Plan including, without
limitation, any claim or liability arising out of failure to terminate a
participant's account upon such participant's death prior to receipt of notice
in writing of such death, nor shall they have any duties, responsibilities or
liabilities except as are expressly set forth in the Plan.
The Plan Administrator has no responsibility with respect to the
preparation and contents of this Prospectus, the prices at which shares are
purchased or sold for participants' accounts, the times when purchases or sales
are made or fluctuations in the market value of Common Stock.
SUSPENSION OR TERMINATION OF THE PLAN
31. MAY THE PLAN BE CHANGED OR DISCONTINUED?
While Summit hopes to continue the Plan indefinitely, Summit reserves the
right to suspend or terminate the Plan, any feature of the Plan, such as
optional cash payments, or any participant's Plan account at any time. Summit
also reserves the right to interpret and make modifications to the Plan. Any
such suspension, termination or modification will be announced to affected
participants.
OTHER INFORMATION
32. WHAT LIMITATIONS ARE IMPOSED ON A PARTICIPANT WITH RESPECT TO ASSETS
HELD UNDER THE PLAN?
A participant has no right to draw checks or drafts against his or her Plan
account and he or she has no right to give instructions to the Plan
Administrator with respect to any Common Stock held in or cash held for a Plan
account except instructions expressly provided for in this Prospectus. In
addition, a participant may not pledge or assign Common Stock held in a Plan
account as collateral without first requesting and obtaining issuance of a
certificate for the whole shares to be pledged as provided in the response to
Question 19.
33. WHO BEARS THE RISK OF FLUCTUATIONS IN THE MARKET PRICE OF SUMMIT'S
COMMON STOCK?
A participant's investment in Summit Common Stock held in a Plan account is
no different with regard to market risk than an investment in Common Stock held
in certificate form. A participant bears the risk of loss (and receives any
benefit of gain) occurring by reason of fluctuations in the market price of
Common Stock held in a Plan account.
NEITHER SUMMIT NOR THE PLAN ADMINISTRATOR CAN ASSURE YOU OF A PROFIT OR
PROTECT YOU AGAINST A LOSS ON ANY SHARES PURCHASED UNDER THE PLAN.
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EMPLOYEES
34. IF I AM AN EMPLOYEE OF SUMMIT OR ONE OF ITS AFFILIATED COMPANIES, MAY I
PARTICIPATE IN THE PLAN?
Yes. Employees who wish to have their dividends reinvested and also to have
optional cash payments made by means of payroll deductions may participate in
the Plan whether or not they already hold Common Stock registered in their own
name. The minimum deduction per pay period is $5.00 ($10.00 per month) and the
maximum deduction per pay period is $500.00 ($1,000.00 per month). Employees who
wish to enroll in the payroll deduction program should contact their Employee
Benefits representative to obtain the appropriate Authorization Form. Employees
who wish to participate in the Plan but not through payroll deductions may do so
in the manner provided for shareholders of record, as long as they are the
record holder of at least one whole share of Common Stock. See Questions 4 and
5.
Any benefit plan maintained at any time by Summit for its directors,
officers, employees, agents or representatives, and the participants in such
benefit plans, may, directly or through a plan administrator, participate in the
Plan under the terms of the particular benefit plan whether or not the benefit
plan or the participants, as the case may be, already own Common Stock
registered in its or their own name.
35. ARE EMPLOYEES RESTRICTED IN ANY WAY FROM RESELLING SHARES OF COMMON
STOCK ACQUIRED UNDER THE PLAN?
Some employees are so restricted. Employees who are "affiliates" of Summit,
as that term is defined in Rule 405 promulgated by the Securities and Exchange
Commission (the "Commission") under the Securities Act of 1933, as amended, may
not publicly reoffer shares acquired under the Plan except pursuant to Rule 144
of the Commission or pursuant to an effective Registration Statement. Rule 405
defines an "affiliate" as a person who directly, or indirectly through one or
more intermediaries, controls, is controlled by or is under common control with
Summit. Directors and executive officers of Summit are deemed to be "affiliates"
of Summit under this definition. Summit has no present intention of filing a
Registration Statement which would permit Summit "affiliates" to reoffer,
outside of Rule 144, Common Stock acquired under the Plan.
Employees who are not affiliates of Summit are free to sell at any time any
Common Stock acquired under the Plan.
Executive officers and directors participating in the Plan are subject to
the reporting obligations of Section 16(a) and the short-swing profit recovery
provisions of Section 16(b) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), with respect to purchases of Common Stock made under the
Plan with optional cash payments. While executive officers and directors are not
subject to the short-swing profit recovery provisions of Section 16(b) of the
Exchange Act with respect to purchases of Common Stock made under the Plan with
reinvested dividends, such purchases must be disclosed on reports filed pursuant
to Section 16(a) of the Exchange Act.
LEGAL MATTERS
The legality of the Common Stock offered hereby has been passed upon for
Summit Bancorp. by Richard F. Ober, Jr., Esq., Executive Vice President, General
Counsel and Secretary of Summit. On
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October 31, 1996, Mr. Ober owned 23,945 shares of Common Stock and options to
purchase 74,152 shares of Common Stock at a weighted average exercise price of
$20.73 per share.
EXPERTS
The consolidated financial statements of Summit Bancorp. and subsidiaries
as of December 31, 1995 and 1994 and for each of the years in the three-year
period ended December 31, 1995, included in Summit's Annual Report on Form 10-K,
incorporated by reference herein and in the Registration Statement, have been
incorporated by reference herein and in the Registration Statement in reliance
upon the report of KPMG Peat Marwick LLP, independent certified public
accountants, incorporated by reference herein, and upon the authority of said
firm as experts in accounting and auditing.
The report of KPMG Peat Marwick LLP with respect to Summit Bancorp. and
subsidiaries for the year ended December 31, 1995 refers to a change in the
method of accounting for certain investments in debt and equity securities and
post employment benefits in 1994 and to a change in the method of accounting for
income taxes in 1993.
INDEMNIFICATION
Article IX, Section 5 of the By-Laws of Summit provides, in effect, that to
the extent and under circumstances permitted by the New Jersey Business
Corporation Act, Summit shall indemnify its directors, officers and employees.
In addition, Summit has purchased insurance policies which provide coverage for
its directors, officers and employees in certain situations.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers or persons controlling Summit
pursuant to the foregoing provisions, Summit has been informed that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act of 1933, and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by Summit of expenses incurred or paid
by a director, officer or controlling person of Summit in the successful defense
of any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the shares offered hereby, Summit will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.
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TABLE OF CONTENTS
Page
----
AVAILABLE INFORMATION ......................... 1
INCORPORATION OF CERTAIN
DOCUMENTS BY REFERENCE ....................... 1
THE COMPANY ................................... 2
THE PLAN ...................................... 2
Purpose ..................................... 2
Advantages .................................. 2
Plan Administrator .......................... 3
Participation ............................... 3
Costs ....................................... 5
Purchases ................................... 6
Optional Cash Payments ...................... 7
Reports to Participants ..................... 9
Dividends ................................... 10
Certificates for Shares ..................... 10
Withdrawals ................................. 11
Rights Offerings, Stock Dividends
and Stock Splits ........................... 13
Voting Rights ............................... 13
Federal Income Tax Consequences ............. 14
Responsibility of the Plan Administrator .... 15
Suspension or Termination of the Plan ....... 16
Other Information ........................... 16
Employees ................................... 17
LEGAL MATTERS ................................. 17
EXPERTS ....................................... 18
INDEMNIFICATION ............................... 18
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SHARES
OF
COMMON STOCK
[LOGO]
SUMMIT BANCORP.
DIVIDEND REINVESTMENT AND
STOCK PURCHASE PLAN
OCTOBER 31, 1996
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