As filed with the Securities and Exchange Commission on March 2, 2000
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
MONARCH SERVICES, INC.
(Exact Name of Registrant as Specified in Its Charter)
Delaware 52-1073628
(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
4517 Harford Road
Baltimore, Maryland 21214
(Address of Principal Executive Offices) (Zip Code)
Monarch Services, Inc. Omnibus Stock Plan
(Full title of the Plan)
A. Eric Dott
Monarch Services, Inc.
4517 Harford Road
Baltimore, Maryland 21214
(Name and address of agent for service)
(410) 254-9200
(Telephone number, including area code, of agent for service)
Copy to:
Michael W. Conron, Esq.
Venable, Baetjer and Howard, LLP
2 Hopkins Plaza, Suite 1800
Baltimore, Maryland 21201
CALCULATION OF REGISTRATION FEE
Title of Amount to Proposed Proposed Amount of
Securities be maximum maximum Registrati
to be registered offering aggregate on fee
registered price per offering
share price *
Common 300,000 $3.58 $1,074,000 $285
Stock Shares
* Calculated solely for the purpose of computing the registration fee
pursuant to Rules 457(c) and (h), based upon the average of the bid and
asked price as of March 1, 2000.
<PAGE>
PART II
Item 3. Incorporation of Documents by Reference.
The following documents which have been filed by the registrant,
Monarch Services, Inc. (the "Company"), with the Securities and Exchange
Commission (the "Commission") are incorporated herein by reference:
(a) Annual Report on Form 10-KSB, for the year ended April 30, 1999;
(b) Proxy Statement on Schedule 14A for the Annual Meeting held
October 15, 1999;
(c) Quarterly Report on Form 10-QSB for the quarter ended July 31,
1999;
(d) Quarterly Report on Form 10-QSB for the quarter ended October 31,
1999; and
(e) Description of Common Stock of the Company contained in a
registration statement filed under the Securities Exchange Act of
1934, as amended (SEC File No. 0-08512), including any amendment
or report filed for the purpose of updating such description.
All documents subsequently filed by the Company with the Commission
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act
of 1934, as amended, prior to the filing of a post-effective amendment which
indicates that all securities offered have been sold or which deregisters all
securities then remaining unsold, shall be deemed to be incorporated by
reference into this Registration Statement and to be a part of the Registration
Statement from the date of filing of such documents.
Item 4. Description of Securities.
Not Applicable.
Item 5. Interests of Named Experts and Counsel.
Not Applicable.
<PAGE>
Item 6. Indemnification of Directors and Officers.
The Company is organized under the laws of the State of Delaware. Our
Bylaws provide that we shall indemnify our directors, officers, employees and
agents, against any and all liabilities and expenses incurred in connection with
their services in those capacities to the maximum extent permitted by Delaware
law.
The Delaware General Corporation Law (the "DGCL") provides that a Delaware
corporation has the power generally to indemnify its current and former
directors, officers, employees and other agents (each, a "Corporate Agent")
against expenses and liabilities (including amounts paid in settlement) in
connection with any proceeding involving such person by reason of his being a
Corporate Agent, other than a proceeding by or in the right of the corporation,
if such person acted in good faith and in a manner he reasonably believed to be
in or not opposed to the best interests of the corporation and, with respect to
any criminal proceeding, such person had no reasonable cause to believe his
conduct was unlawful. In the case of an action brought by or in the right of the
corporation, indemnification of a Corporate Agent is permitted if such person
acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the corporation. However, no indemnification is
permitted in respect of any claim, issue or matter as to which such person shall
have been adjudged to be liable to the corporation, unless and only to the
extent that the court in which such proceeding was brought shall determine upon
application that despite the adjudication of liability, but in view of all the
circumstances of the case, such person is fairly and reasonably entitled to such
indemnification. To the extent that a Corporate Agent has been successful on the
merits or otherwise in the defense of such proceeding, whether or not by or in
the right of the corporation, or in the defense of any claim, issue or matter
therein, the corporation is required to indemnify such person for expenses in
connection therewith. Under the DGCL, the corporation may advance expenses
incurred by a Corporate Agent in connection with a proceeding, provided that the
Corporate Agent undertakes to repay such amount if it shall ultimately be
determined that such person is not entitled to indemnification.
<PAGE>
Our Bylaws require us to advance expenses to any person entitled to
indemnification, provided that such person undertakes to repay the advancement
if it is determined in a final judicial decision from which there is no appeal
that such person is not entitled to indemnification. The power to indemnify and
advance the expenses under the DGCL does not exclude other rights to which a
Corporate Agent may be entitled to under the certificate of incorporation, by
laws, agreement, vote of stockholders or disinterested directors or otherwise.
Our Bylaws permit us to secure insurance on behalf of our directors, officers,
employees and agents for any expense, liability or loss incurred in such
capacities, regardless of whether the Bylaws, Certificate of Incorporation or
Delaware law would permit indemnification against the expense, liability or
loss. The purpose of these provisions is to assist us in retaining qualified
individuals to serve as our directors, officers, employees and agents by
limiting their exposure to personal liability for serving in these capacities.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
4 Monarch Services, Inc. Omnibus Stock Plan
5 Opinion o Venable, Baetjer and Howard LLP
23.1 Consent of Deloitte & Touche LLP
23.2 Consent of Venable, Baetjer and Howard LLP
(included in Exhibit 5)
24 Power of Attorney
__________
Item 9. Undertakings.
The undersigned Company hereby undertakes:
(1) To file, during any period in which it offers or sells
securities, a post-effective amendment to this Registration Statement to include
any additional or changed material information on the plan of distribution.
<PAGE>
(2) That, for determining liability under the Securities Act of 1933,
as amended, to treat each post-effective amendment as a new registration
statement of the securities offered, and the offering of the securities at that
time to be the initial bona fide offering.
(3) To file a post-effective amendment to remove from registration
any of the securities that remain unsold at the end of the offering.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Company
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the city of Baltimore, state of Maryland, on March 2,2000.
MONARCH SERVICES, INC.
By: /s/ A. Eric Dott
A. Eric Dott
Chairman of the Board
Pursuant to the requirements of the Securities Act of 1933, this registration
statement has been signed by the following persons in the capacities and on the
dates indicated.
Signatures Title Date
Chairman and March 2,
/s/ A. ERIC DOTT Director (Principal 2000
A. Eric Dott Executive Officer)
Chief Financial March 2,
/s/ MARSHALL CHADWELL Officer (Principal 2000
Marshall Chadwell Financial Officer
and Principal
Accounting Officer)
The Entire Board of
Directors
A. Eric Dott
Jackson Y. Dott
David F. Gonano
Helen Delich Bentley
By:
/s/ A. ERIC DOTT March 2,
A. Eric Dott 2000
Attorney-in-Fact
<PAGE>
Exhibit Index
Exhibit Number Description Page
4 Monarch Services, Inc. Omnibus
Stock Plan
5 Opinion of Venable, Baetjer
and Howard LLP
23.1 Consent of Deloitte & Touche LLP
23.2 Consent of Venable, Baetjer
and Howard LLP(included in
Exhibit 5)
24 Power of Attorney
<PAGE>
MONARCH SERVICES, INC.
OMNIBUS STOCK PLAN
1. Establishment, Purpose and Types of Awards
Monarch Services, Inc. hereby establishes the MONARCH SERVICES, INC.
OMNIBUS STOCK PLAN (the "Plan"). The purpose of the Plan is to promote the long
term growth and profitability of Monarch Services, Inc. (the "Corporation") by
(i) providing key people with incentives to improve stockholder value and to
contribute to the growth and financial success of the Corporation, and (ii)
enabling the Corporation to attract, retain and reward the best available
persons for positions of substantial responsibility.
The Plan permits the granting of stock options (including nonqualified
stock options and incentive stock options qualifying under Section 422 of the
Code), stock appreciation rights (including free-standing, tandem and limited
stock appreciation rights), restricted or unrestricted share awards, phantom
stock, performance awards, or any combination of the foregoing (collectively,
"Awards").
2. Definitions
Under this Plan, except where the context otherwise indicates, the
following definitions apply:
(a) "Board" shall mean the Board of Directors of the Corporation.
(b) "Change in Control" shall mean: (i) any sale, exchange or other
disposition of substantially all of the Corporation's assets or over 50% of its
Common Stock; or (ii) any merger, share exchange, consolidation or other
reorganization or business combination in which the Corporation is not the
surviving or continuing corporation, or in which the Corporation's stockholders
become entitled to receive cash, securities of the Corporation other than voting
common stock, or securities of another issuer.
(c) "Code" shall mean the Internal Revenue Code of 1986, as amended, and
any regulations issued thereunder.
(d) "Committee" shall mean the Board or committee of Board members
appointed pursuant to Section 3 of the Plan to administer the Plan.
(e) "Common Stock" shall mean shares of the Corporation's common stock.
(f) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
(g) "Fair Market Value" of a share of the Corporation's Common Stock for
any purpose on a particular date shall be determined in a manner such as the
Committee shall in good faith determine to be appropriate.
(h) "Grant Agreement" shall mean a written agreement between the
Corporation and a grantee memorializing the terms and conditions of an Award
granted pursuant to the Plan.
<PAGE>
(i) "Grant Date" shall mean the date on which the Committee formally acts
to grant an Award to a grantee or such other date as the Committee shall so
designate at the time of taking such formal action.
(j) "Parent" shall mean a corporation, whether now or hereafter existing,
within the meaning of the definition of "parent corporation" provided in Section
424(e) of the Code, or any successor thereto of similar import.
(k) "Rule 16b-3" shall mean Rule 16b-3 as in effect under the Exchange Act
on the effective date of the Plan, or any successor provision prescribing
conditions necessary to exempt the issuance of securities under the Plan (and
further transactions in such securities) from Section 16(b) of the Exchange Act.
(l) "Subsidiary" and "subsidiaries" shall mean only a corporation or
corporations, whether now or hereafter existing, within the meaning of the
definition of "subsidiary corporation" provided in Section 424(f) of the Code,
or any successor thereto of similar import.
3. Administration
(a) Procedure. The Plan shall be administered by the Board. In the
alternative, the Board may appoint a Committee consisting of two (2) or more
members of the Board to administer the Plan on behalf of the Board, who are
"outside directors" within the meaning of Section 162(m) of the Code and "non-
employee directors" within the meaning of Rule 16b-3. Once appointed, the
Committee shall continue to serve until otherwise directed by the Board. From
time to time, the Board may increase the size of the Committee and appoint
additional members thereof, remove members (with or without cause) and appoint
new members in substitution therefor, fill vacancies, however caused, and remove
all members of the Committee and, thereafter, directly administer the Plan. In
the event that the Board is the administrator of the Plan in lieu of a
Committee, the term "Committee" as used herein shall be deemed to mean the
Board.
Members of the Board or Committee who are either eligible for Awards
or have been granted Awards may vote on any matters affecting the administration
of the Plan or the grant of Awards pursuant to the Plan, except that no such
member shall act upon the granting of an Award to himself or herself, but any
such member may be counted in determining the existence of a quorum at any
meeting of the Board or the Committee during which action is taken with respect
to the granting of an Award to him or her.
The Committee shall meet at such times and places and upon such notice
as it may determine. A majority of the Committee shall constitute a quorum.
Any acts by the Committee may be taken at any meeting at which a quorum is
present and shall be by majority vote of those members entitled to vote.
Additionally, any acts reduced to writing or approved in writing by all of the
members of the Committee shall be valid acts of the Committee.
<PAGE>
(b) Powers of the Committee. The Committee shall have all the powers
vested in it by the terms of the Plan, such powers to include authority, in its
sole and absolute discretion, to grant Awards under the Plan, prescribe Grant
Agreements evidencing such Awards and establish programs for granting Awards.
The Committee shall have full power and authority to take all other actions
necessary to carry out the purpose and intent of the Plan, including, but not
limited to, the authority to:
(i) determine the eligible persons to whom, and the time or
times at which Awards shall be granted,
(ii) determine the types of Awards to be granted,
(iii) determine the number of shares to be covered by or
used for reference purposes for each Award,
(iv) impose such terms, limitations, restrictions and
conditions upon any such Award as the Committee shall deem
appropriate,
(v) modify, extend or renew outstanding Awards, accept the
surrender of outstanding Awards and substitute new Awards, provided
that no such action shall be taken with respect to any outstanding
Award which would adversely affect the grantee without the grantee's
consent,
(vi) accelerate or otherwise change the time in which an
Award may be exercised or becomes payable and to waive or accelerate
the lapse, in whole or in part, of any restriction or condition with
respect to such Award, including, but not limited to, any restriction
or condition with respect to the vesting or exercisability of an Award
following termination of any grantee's employment, and
(vii) to establish objectives and conditions, if any,
for earning Awards and determining whether Awards will be paid after
the end of a performance period.
The Committee shall have full power and authority to administer and interpret
the Plan and to adopt such rules, regulations, agreements, guidelines and
instruments for the administration of the Plan and for the conduct of its
business as the Committee deems necessary or advisable and to interpret same,
all within the Committee's sole and absolute discretion.
(c) Limited Liability. To the maximum extent permitted by law, no member
of the Board or Committee shall be liable for any action taken or decision made
in good faith relating to the Plan or any Award thereunder.
(d) Indemnification. To the maximum extent permitted by law, the members
of the Board and Committee shall be indemnified by the Corporation in respect of
all their activities under the Plan.
<PAGE>
(e) Effect of Committee's Decision. All actions taken and decisions and
determinations made by the Committee on all matters relating to the Plan
pursuant to the powers vested in it hereunder shall be in the Committee's sole
and absolute discretion and shall be conclusive and binding on all parties
concerned, including the Corporation, its stockholders, any participants in the
Plan and any other employee of the Corporation, and their respective successors
in interest.
4. Shares Available for the Plan; Maximum Awards
Subject to adjustments as provided in Section 12 of the Plan, the shares of
stock that may be delivered or purchased or used for reference purposes (with
respect to stock appreciation rights, phantom stock units or performance awards
payable in cash) with respect to Awards granted under the Plan, including with
respect to incentive stock options intended to qualify under Section 422 of the
Code, shall not exceed an aggregate of One Hundred Eighty Thousand (300,000)
shares of Common Stock of the Corporation. The Corporation shall reserve said
number of shares for Awards under the Plan, subject to adjustments as provided
in Section 12 of the Plan. If any Award, or portion of an Award, under the Plan
expires or terminates unexercised, becomes unexercisable or is forfeited or
otherwise terminated, surrendered or canceled as to any shares without the
delivery of shares of Common Stock or other consideration, the shares subject to
such Award shall thereafter be available for further Awards under the Plan.
The maximum number of shares of Common Stock subject to Awards of any
combination that may be granted during any one calendar year to any one
individual shall be limited to One Hundred Thousand (100,000). To the extent
required by Section 162(m) of the Code and so long as Section 162(m) of the Code
is applicable to persons eligible to participate in the Plan, shares of Common
Stock subject to the foregoing limit with respect to which the related Award is
terminated, surrendered or canceled shall not again be available for grant under
this limit.
5. Participation
Participation in the Plan shall be open to all employees, officers,
directors and consultants of the Corporation, or of any Parent or Subsidiary of
the Corporation, as may be selected by the Committee from time to time.
Notwithstanding the foregoing, participation in the Plan with respect to Awards
of incentive stock options shall be limited to employees of the Corporation or
of any Parent or Subsidiary of the Corporation.
Awards may be granted to such eligible persons and for or with respect to
such number of shares of Common Stock as the Committee shall determine, subject
to the limitations in Section 4 of the Plan. A grant of any type of Award made
in any one year to an eligible person shall neither guarantee nor preclude a
further grant of that or any other type of Award to such person in that year or
subsequent years.
<PAGE>
6. Stock Options
Subject to the other applicable provisions of the Plan, the Committee may
from time to time grant to eligible participants Awards of nonqualified stock
options or incentive stock options as that term is defined in Section 422 of the
Code. The stock option Awards granted shall be subject to the following terms
and conditions.
(a) Grant of Option. The grant of a stock option shall be evidenced by a
Grant Agreement, executed by the Corporation and the grantee, stating the number
of shares of Common Stock subject to the stock option evidenced thereby and the
terms and conditions of such stock option, in such form as the Committee may
from time to time determine.
(b) Price. The price per share payable upon the exercise of each stock
option ("exercise price") shall be determined by the Committee.
(c) Payment. Stock options may be exercised in whole or in part by
payment of the exercise price of the shares to be acquired in accordance with
the provisions of the Grant Agreement, and/or such rules and regulations as the
Committee may have prescribed, and/or such determinations, orders, or decisions
as the Committee may have made. Payment may be made in cash (or cash
equivalents acceptable to the Committee) or, unless otherwise determined by the
Committee, in shares of Common Stock or a combination of cash and shares of
Common Stock, or by such other means as the Committee may prescribe. The Fair
Market Value of shares of Common Stock delivered on exercise of stock options
shall be determined as of the date of exercise. Shares of Common Stock
delivered in payment of the exercise price may be previously owned shares or, if
approved by the Committee, shares acquired upon exercise of the stock option.
Any fractional share will be paid in cash. The Corporation may make or
guarantee loans to grantees to assist grantees in exercising stock options and
satisfying any related withholding tax obligations.
If the Common Stock is registered under Section 12(b) or 12(g) of the
Exchange Act, the Committee, subject to such limitations as it may determine,
may authorize payment of the exercise price, in whole or in part, by delivery of
a properly executed exercise notice, together with irrevocable instructions, to:
(i) a brokerage firm designated by the Corporation to deliver promptly to the
Corporation the aggregate amount of sale or loan proceeds to pay the exercise
price and any withholding tax obligations that may arise in connection with the
exercise, and (ii) the Corporation to deliver the certificates for such
purchased shares directly to such brokerage firm.
(d) Terms of Options. The term during which each stock option may be
exercised shall be determined by the Committee; provided, however, that in no
event shall a stock option be exercisable more than ten years from the date it
is granted. Prior to the exercise of the stock option and delivery of the
shares certificates represented thereby, the grantee shall have none of the
rights of a stockholder with respect to any shares represented by an outstanding
stock option.
<PAGE>
(e) Restrictions on Incentive Stock Options. Incentive stock option
Awards granted under the Plan shall comply in all respects with Code Section 422
and, as such, shall meet the following additional requirements:
(i) Grant Date. An incentive stock option must be granted within 10
years of the earlier of the Plan's adoption by the Board of Directors or
approval by the Corporation's shareholders.
(ii) Exercise Price and Term. The exercise price of an incentive
stock option shall not be less than 100% of the Fair Market Value of the
shares on the date the stock option is granted and the term of the stock
option shall not exceed ten years. Also, the exercise price of any
incentive stock option granted to a grantee who owns (within the meaning of
Section 422(b)(6) of the Code, after the application of the attribution
rules in Section 424(d) of the Code) more than 10% of the total combined
voting power of all classes of shares of the Corporation or its Parent or
Subsidiary corporations (within the meaning of Sections 422 and 424 of the
Code) shall be not less than 110% of the Fair Market Value of the Common
Stock on the grant date and the term of such stock option shall not exceed
five years.
(iii) Maximum Grant. The aggregate Fair Market Value (determined
as of the Grant Date) of shares of Common Stock with respect to which all
incentive stock options first become exercisable by any grantee in any
calendar year under this or any other plan of the Corporation and its
Parent and Subsidiary corporations may not exceed $100,000 or such other
amount as may be permitted from time to time under Section 422 of the Code.
To the extent that such aggregate Fair Market Value shall exceed $100,000,
or other applicable amount, such stock options shall be treated as
nonqualified stock options. In such case, the Corporation may designate
the shares of Common Stock that are to be treated as stock acquired
pursuant to the exercise of an incentive stock option by issuing a separate
certificate for such shares and identifying the certificate as incentive
stock option shares in the stock transfer records of the Corporation.
(iv) Grantee. Incentive stock options shall only be issued to
employees of the Corporation, or of a Parent or Subsidiary of the
Corporation.
(v) Designation. No stock option shall be an incentive stock option
unless so designated by the Committee at the time of grant or in the Grant
Agreement evidencing such stock option.
(vi) Stockholder Approval. No stock option issued under the Plan
shall be an incentive stock option unless the Plan is approved by the
shareholders of the Corporation within 12 months of its adoption by the
Board in accordance with the Bylaws and Articles of the Corporation and
governing law relating to such matters.
(f) Other Terms and Conditions. Stock options may contain such other
provisions, not inconsistent with the provisions of the Plan, as the Committee
shall determine appropriate from time to time.
<PAGE>
7. Stock Appreciation Rights
(a) Award of Stock Appreciation Rights. Subject to the other applicable
provisions of the Plan, the Committee may at any time and from time to time
grant stock appreciation rights ("SARs") to eligible participants, either on a
free-standing basis (without regard to or in addition to the grant of a stock
option) or on a tandem basis (related to the grant of an underlying stock
option), as it determines. SARs granted in tandem with or in addition to a
stock option may be granted either at the same time as the stock option or at a
later time; provided, however, that a tandem SAR shall not be granted with
respect to any outstanding incentive stock option Award without the consent of
the grantee. SARs shall be evidenced by Grant Agreements, executed by the
Corporation and the grantee, stating the number of shares of Common Stock
subject to the SAR evidenced thereby and the terms and conditions of such SAR,
in such form as the Committee may from time to time determine. The term during
which each SAR may be exercised shall be determined by the Committee. In no
event shall a SAR be exercisable more than ten years from the date it is
granted. The grantee shall have none of the rights of a stockholder with
respect to any shares of Common Stock represented by a SAR.
(b) Restrictions of Tandem SARs. No incentive stock option may be
surrendered in connection with the exercise of a tandem SAR unless the Fair
Market Value of the Common Stock subject to the incentive stock option is
greater than the exercise price for such incentive stock option. SARs granted
in tandem with stock options shall be exercisable only to the same extent and
subject to the same conditions as the stock options related thereto are
exercisable. The Committee may, in its discretion, prescribe additional
conditions to the exercise of any such tandem SAR.
(c) Amount of Payment Upon Exercise of SARs. A SAR shall entitle the
grantee to receive, subject to the provisions of the Plan and the Grant
Agreement, a payment having an aggregate value equal to the product of (i) the
excess of (A) the Fair Market Value on the exercise date of one share of Common
Stock over (B) the base price per share specified in the Grant Agreement, times
(ii) the number of shares specified by the SAR, or portion thereof, which is
exercised. In the case of exercise of a tandem SAR, such payment shall be made
in exchange for the surrender of the unexercised related stock option (or any
portion or portions thereof which the grantee from time to time determines to
surrender for this purpose).
(d) Form of Payment Upon Exercise of SARs. Payment by the Corporation of
the amount receivable upon any exercise of a SAR may be made by the delivery of
Common Stock or cash, or any combination of Common Stock and cash, as determined
in the sole discretion of the Committee from time to time. If upon settlement
of the exercise of a SAR a grantee is to receive a portion of such payment in
shares of Common Stock, the number of shares shall be determined by dividing
such portion by the Fair Market Value of a share of Common Stock on the exercise
date. No fractional shares shall be used for such payment and the Committee
shall determine whether cash shall be given in lieu of such fractional shares or
whether such fractional shares shall be eliminated.
<PAGE>
8. Stock Awards (Including Restricted and Unrestricted Shares and Phantom
Stock)
(a) Stock Awards, In General. Subject to the other applicable provisions
of the Plan, the Committee may at any time and from time to time grant stock
Awards to eligible participants in such amounts and for such consideration,
including no consideration or such minimum consideration as may be required by
law, as it determines. A stock Award may be denominated in shares of Common
Stock or stock-equivalent units ("phantom stock"), and may be paid in Common
Stock, in cash, or in a combination of Common Stock and cash, as determined in
the sole discretion of the Committee from time to time.
(b) Restricted Shares. Each stock Award shall specify the applicable
restrictions, if any, on such shares of Common Stock, the duration of such
restrictions, and the time or times at which such restrictions shall lapse with
respect to all or a specified number of shares of Common Stock that are part of
the Award. Notwithstanding the foregoing, the Committee may reduce or shorten
the duration of any restriction applicable to any shares of Common Stock awarded
to any grantee under the Plan. Share certificates with respect to restricted
shares of Common Stock granted pursuant to a stock Award may be issued at the
time of grant of the stock Award, subject to forfeiture if the restrictions do
not lapse, or upon lapse of the restrictions. If share certificates are issued
at the time of grant of the stock Award, the certificates shall bear an
appropriate legend with respect to the restrictions applicable to such stock
Award or, alternatively, the grantee may be required to deposit the certificates
with the Corporation during the period of any restriction thereon and to execute
a blank stock power or other instrument of transfer therefor. Except as
otherwise provided by the Committee, during such period of restriction following
issuance of share certificates, the grantee shall have all of the rights of a
holder of Common Stock, including but not limited to the rights to receive
dividends (or amounts equivalent to dividends) and to vote with respect to the
restricted shares. If share certificates are issued upon lapse of restrictions
on a stock Award, the Committee may provide that the grantee will be entitled to
receive any amounts per share pursuant to any dividend or distribution paid by
the Corporation on its Common Stock to stockholders of record after grant of the
stock Award and prior to the issuance of the share certificates.
(c) Phantom Stock. The grant of phantom stock units shall be evidenced by
a Grant Agreement, executed by the Corporation and the grantee, that
incorporates the terms of the Plan and states the number of phantom stock units
evidenced thereby and the terms and conditions of such phantom stock units in
such form as the Committee may from time to time determine. Phantom stock units
granted to a participant shall be credited to a bookkeeping reserve account
solely for accounting purposes and shall not require a segregation of any of the
Corporation's assets. Phantom stock units may be exercised in whole or in part
by delivery of an appropriate exercise notice to the Committee in accordance
with the provisions of the Grant Agreement, and/or such rules and regulations as
the Committee may prescribe, and/or such determinations, orders, or decisions as
the Committee may make. Except as otherwise provided in the applicable Grant
Agreement, the grantee shall have none of the rights of a stockholder with
respect to any shares of Common Stock represented by a phantom stock unit as a
result of the grant of a phantom stock unit to the grantee. Phantom stock units
may contain such other provisions, not inconsistent with the provisions of the
Plan, as the Committee shall determine appropriate from time to time.
<PAGE>
9. Performance Awards
The Committee may in its discretion grant performance Awards which become
payable on account of attainment of one or more performance goals established by
the Committee. Performance Awards may be paid by the delivery of Common Stock
or cash, or any combination of Common Stock and cash, as determined in the sole
discretion of the Committee from time to time. Performance goals established by
the Committee may be based on the Corporation's operating income or one or more
other business criteria selected by the Committee that apply to an individual or
group of individuals, a business unit, or the Corporation as a whole, over such
performance period as the Committee may designate. The Committee in its
discretion may recommend to the Board of Directors of the Corporation that the
material terms of any Performance Award or program with respect to some or all
eligible participants be submitted for approval by the stockholders.
10. Withholding of Taxes
The Corporation may require, as a condition to the grant of any Award under
the Plan or exercise pursuant to such Award or to the delivery of certificates
for shares issued or payments of cash to a grantee pursuant to the Plan or a
Grant Agreement (hereinafter collectively referred to as a "taxable event"),
that the grantee pay to the Corporation, in cash or, unless otherwise determined
by the Corporation, in shares of Common Stock, including shares acquired upon
grant of the Award or exercise of the Award, valued at Fair Market Value on the
date as of which the withholding tax liability is determined, any federal, state
or local taxes of any kind required by law to be withheld with respect to any
taxable event under the Plan. The Corporation, to the extent permitted or
required by law, shall have the right to deduct from any payment of any kind
(including salary or bonus) otherwise due to a grantee any federal, state or
local taxes of any kind required by law to be withheld with respect to any
taxable event under the Plan, or to retain or sell without notice a sufficient
number of the shares to be issued to such grantee to cover any such taxes.
11. Transferability
No Award granted under the Plan shall be transferable by a grantee
otherwise than by will or the laws of descent and distribution. Unless
otherwise determined by the Committee in accord with the provisions of the
immediately preceding sentence, an Award may be exercised during the lifetime of
the grantee, only by the grantee or, during the period the grantee is under a
legal disability, by the grantee's guardian or legal representative.
12. Adjustments; Business Combinations
In the event of a reclassification, recapitalization, stock split, stock
dividend, combination of shares, or other similar event, the maximum number and
kind of shares reserved for issuance or with respect to which Awards may be
granted under the Plan as provided in Section 4 shall be adjusted to reflect
such event, and the Committee shall make such adjustments as it deems
appropriate and equitable in the number, kind and price of shares covered by
outstanding Awards made under the Plan, and in any other matters which relate to
Awards and which are affected by the changes in the Common Stock referred to
above.
<PAGE>
In the event of any proposed Change in Control, the Committee shall take
such action as it deems appropriate and equitable to effectuate the purposes of
this Plan and to protect the grantees of Awards, which action may include, but
without limitation, any one or more of the following: (i) acceleration or
change of the exercise and/or expiration dates of any Award to require that
exercise be made, if at all, prior to the Change of Control; (ii) cancellation
of any Award upon payment to the holder in cash of the Fair Market Value of the
Common Stock subject to such Award as of the date of (and, to the extent
applicable, as established for purposes of) the Change in Control, less the
aggregate exercise price, if any, of the Award; and (iii) in any case where
equity securities of another entity are proposed to be delivered in exchange for
or with respect to Common Stock of the Corporation, arrangements to have such
other entity replace the Awards granted hereunder with awards with respect to
such other securities, with appropriate adjustments in the number of shares
subject to, and the exercise prices under, the award.
The Committee is authorized to make adjustments in the terms and conditions
of, and the criteria included in, Awards in recognition of unusual or
nonrecurring events (including, without limitation, the events described in the
preceding two paragraphs of this Section 12) affecting the Corporation, or the
financial statements of the Corporation or any Subsidiary, or of changes in
applicable laws, regulations, or accounting principles, whenever the Committee
determines that such adjustments are appropriate in order to prevent dilution or
enlargement of the benefits or potential benefits intended to be made available
under the Plan.
In the event the Corporation dissolves and liquidates (other than pursuant
to a plan of merger or reorganization), then notwithstanding any restrictions on
exercise set forth in this Plan or any Grant Agreement, or other agreement
evidencing a stock option, stock appreciation right or restricted stock Award:
(i) each grantee shall have the right to exercise his stock option or stock
appreciation right, or to require delivery of share certificates representing
any such restricted stock Award, at any time up to ten (10) days prior to the
effective date of such liquidation and dissolution; and (ii) the Committee may
make arrangements with the grantees for the payment of appropriate consideration
to them for the cancellation and surrender of any stock option, stock
appreciation right or restricted stock Award that is so canceled or surrendered
at any time up to ten (10) days prior to the effective date of such liquidation
and dissolution. The Committee may establish a different period (and different
conditions) for such exercise, delivery, cancellation, or surrender to avoid
subjecting the grantee to liability under Section 16(b) of the Exchange Act.
Any stock option or stock appreciation right not so exercised, canceled, or
surrendered shall terminate on the last day for exercise prior to such effective
date; and any restricted stock as to which there has not been such delivery of
share certificates or that has not been so canceled or surrendered, shall be
forfeited on the last day prior to such effective date. The Committee shall
give to each grantee written notice of the commencement of any proceedings for
such liquidation and dissolution of the Corporation and the grantee's rights
with respect to his outstanding Award.
<PAGE>
13. Termination and Modification of the Plan
The Board, without further approval of the stockholders, may modify or
terminate the Plan or any portion thereof at any time, except that no
modification shall become effective without prior approval of the stockholders
of the Corporation to increase the number of shares of Common Stock subject to
the Plan or if stockholder approval is necessary to comply with any tax or
regulatory requirement or rule of any exchange or Nasdaq System upon which the
Common Stock is listed or quoted (including for this purpose stockholder
approval that is required for continued compliance with Rule 16b-3 or
stockholder approval that is required to enable the Committee to grant incentive
stock options pursuant to the Plan).
The Committee shall be authorized to make minor or administrative
modifications to the Plan as well as modifications to the Plan that may be
dictated by requirements of federal or state laws applicable to the Corporation
or that may be authorized or made desirable by such laws. The Committee may
amend or modify the grant of any outstanding Award in any manner to the extent
that the Committee would have had the authority to make such Award as so
modified or amended. No modification may be made that would materially
adversely affect any Award previously made under the Plan without the approval
of the grantee.
14. Non-Guarantee of Employment
Nothing in the Plan or in any Grant Agreement thereunder shall confer any
right on an employee to continue in the employ of the Corporation or shall
interfere in any way with the right of the Corporation to terminate an employee
at any time.
15. Termination of Employment
For purposes of maintaining a grantee's continuous status as an employee
and accrual of rights under any Award, transfer of an employee among the
Corporation and the Corporation's Parent or Subsidiaries shall not be considered
a termination of employment. Nor shall it be considered a termination of
employment for such purposes if an employee is placed on military or sick leave
or such other leave of absence which is considered as continuing intact the
employment relationship; in such a case, the employment relationship shall be
continued until the date when an employee's right to reemployment shall no
longer be guaranteed either by law or contract.
16. Written Agreement
Each Grant Agreement entered into between the Corporation and a grantee
with respect to an Award granted under the Plan shall incorporate the terms of
this Plan and shall contain such provisions, consistent with the provisions of
the Plan, as may be established by the Committee.
<PAGE>
17. Non-Uniform Determinations
The Committee's determinations under the Plan (including without limitation
determinations of the persons to receive Awards, the form, amount and time of
such Awards, the terms and provisions of such Awards and the agreements
evidencing same) need not be uniform and may be made by it selectively among
persons who receive, or are eligible to receive, Awards under the Plan, whether
or not such persons are similarly situated.
18. Limitation on Benefits
With respect to persons subject to Section 16 of the Exchange Act,
transactions under this Plan are intended to comply with all applicable
conditions of Rule 16b-3. To the extent any provision of the Plan or action by
the Committee fails to so comply, it shall be deemed null and void, to the
extent permitted by law and deemed advisable by the Committee.
19. Listing and Registration
If the Corporation determines that the listing, registration or
qualification upon any securities exchange or upon any listing or quotation
system established by the National Association of Securities Dealers, Inc.
("Nasdaq System") or under any law, of shares subject to any Award is necessary
or desirable as a condition of, or in connection with, the granting of same or
the issue or purchase of shares thereunder, no such Award may be exercised in
whole or in part and no restrictions on such Award shall lapse, unless such
listing, registration or qualification is effected free of any conditions not
acceptable to the Corporation.
20. Compliance with Securities Law
The Corporation may require that a grantee, as a condition to exercise of
an Award, and as a condition to the delivery of any share certificate, provide
to the Corporation, at the time of each such exercise and each such delivery, a
written representation that the shares of Common Stock being acquired shall be
acquired by the grantee solely for investment and will not be sold or
transferred without registration or the availability of an exemption from
registration under the Securities Act and applicable state securities laws. The
Corporation may also require that a grantee submit other written representations
which will permit the Corporation to comply with federal and applicable state
securities laws in connection with the issuance of the Common Stock, including
representations as to the knowledge and experience in financial and business
matters of the grantee and the grantee's ability to bear the economic risk of
the grantee's investment. The Corporation may require that the grantee obtain a
"purchaser representative" as that term is defined in applicable federal and
state securities laws. The stock certificates for any shares of Common Stock
issued pursuant to this Plan may bear a legend restricting transferability of
the shares of Common Stock unless such shares are registered or an exemption
from registration is available under the Securities Act and applicable state
securities laws. The Corporation may notify its transfer agent to stop any
transfer of shares of Common Stock not made in compliance with these
restrictions. Common Stock shall not be issued with respect to an Award granted
under the Plan unless the exercise of such Award and the issuance and delivery
of share certificates for such Common Stock pursuant thereto shall comply with
all relevant provisions of law, including, without limitation, the Securities
Act, the Exchange Act, the rules and regulations promulgated thereunder, and the
requirements of any national securities exchange or Nasdaq System upon which the
Common Stock may then be listed or quoted, and shall be further subject to the
approval of counsel for the Corporation with respect to such compliance to the
extent such approval is sought by the Committee.
<PAGE>
21. No Limit on Other Compensation Arrangements
Nothing contained in the Plan shall prevent the Corporation or its Parent
or Subsidiary corporations from adopting or continuing in effect other
compensation arrangements (whether such arrangements be generally applicable or
applicable only in specific cases) as the Committee in its discretion determines
desirable, including without limitation the granting of stock options, stock
awards, stock appreciation rights or phantom stock units otherwise than under
the Plan.
22. No Trust or Fund Created
Neither the Plan nor any Award shall create or be construed to create a
trust or separate fund of any kind or a fiduciary relationship between the
Corporation and a grantee or any other person. To the extent that any grantee
or other person acquires a right to receive payments from the Corporation
pursuant to an Award, such right shall be no greater than the right of any
unsecured general creditor of the Corporation.
23. Governing Law
The validity, construction and effect of the Plan, of Grant Agreements
entered into pursuant to the Plan, and of any rules, regulations, determinations
or decisions made by the Board or Committee relating to the Plan or such Grant
Agreements, and the rights of any and all persons having or claiming to have any
interest therein or thereunder, shall be determined exclusively in accordance
with applicable federal laws and the laws of the State of Maryland, without
regard to its conflict of laws rules and principles.
24. Plan Subject to Charter and By-Laws
This Plan is subject to the Articles and By-Laws of the Corporation, as
they may be amended from time to time.
25. Effective Date; Termination Date
The Plan is effective as of the date on which the Plan was adopted by the
Board; provided that the Plan is approved by the stockholders of the Corporation
twelve (12) months before or after such date. Any Award issued under the Plan
prior to the date of stockholder approval is contingent on such approval being
obtained. No Award shall be granted under the Plan after the close of business
on the day immediately preceding the tenth anniversary of the effective date of
the Plan. Subject to other applicable provisions of the Plan, all Awards made
under the Plan prior to such termination of the Plan shall remain in effect
until such Awards have been satisfied or terminated in accordance with the Plan
and the terms of such Awards.
Date Approved by the Board: January 21, 2000
Date Approved by the Shareholders:___________
<PAGE>
Exhibit 5
Venable, Baetjer and Howard, LLP
Two Hopkins Plaza, Suite 1800
Baltimore, Maryland 21201-2978
February 4, 2000
Monarch Services, Inc.
4517 Harford Road
Baltimore, Maryland 21214
Re: Registration Statement on Form S-8
Ladies and Gentlemen:
We have acted as counsel for Monarch Services, Inc. (the
"Corporation") in connection with a registration statement on Form S-8 of the
Corporation to be filed with the Securities and Exchange Commission (the
"Registration Statement"), pertaining to the registration of 300,000 shares of
common stock (par value $.25 per share) of the Corporation (the "Shares") for
issuance and sale pursuant to the Corporation's Omnibus Stock Plan (the "Plan").
As counsel for the Corporation, we are familiar with its Certificate
of Incorporation and Bylaws. We have examined the prospectus included in its
Registration Statement substantially in the form in which it is to become
effective and the Plan. We have further examined and relied upon a certificate
of the Secretary of State of the State of Delaware to the effect that the
Corporation is duly incorporated and existing under the laws of the State of
Delaware and is in good standing and duly authorized to transact business in
the State of Delaware.
We have also examined and relied upon such corporate records of the
Corporation and other documents and certificates with respect to factual matters
as we have deemed necessary to render the opinion expressed herein. With
respect to the documents we have reviewed, we have assumed, without independent
verification, the genuineness of all signatures, the authenticity of all
documents submitted to us as originals, and the conformity with originals of all
documents submitted to us as copies. As to any facts material to this opinion
that we did not independently establish or verify, we have relied upon
statements and representations of officers and other representatives of the
Corporation and others.
<PAGE>
In rendering this opinion, we have assumed, with your consent, that
the Corporation was duly organized under the Delaware General Corporation Law.
Based upon the foregoing, we are of the opinion that when sold,
issued and paid for as contemplated in the Plan, the Shares will be duly
authorized, validly issued, fully paid and nonassessable.
This letter expresses our opinion with respect to the Delaware
General Corporation Law governing matters such as due organization and the
authorization and issuance of stock. It does not extend to the securities or
"blue sky" laws of Delaware or Maryland, to federal securities laws or to other
laws.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. In giving this consent, we do not thereby admit that we
are within the category of persons whose consent is required under Section 7 of
the Securities Act of 1933, as amended, or the Rules and Regulations of the
Commission thereunder.
Very truly yours,
/s/ VENABLE, BAETJER AND HOWARD, LLP
<PAGE>
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in the Registration Statement of
Monarch Services, Inc. on Form S-8 of our report dated July 22, 1999, appearing
in the Annual report on Form 10-KSB of Monarch Services, Inc. for the year ended
April 30, 1999 and to the reference to us under the heading "Experts" in the
Prospectus which is part of this Registration Statement.
/S/ DELOITTE & TOUCHE LLP
Baltimore, Maryland
March 2, 2000
<PAGE>
Exhibit 24
MONARCH SERVICES, INC.
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned Director(s) and
Executive Officers of Monarch Services, Inc., a Delaware corporation, hereby
constitute and appoint A. Eric Dott, and Jackson Y. Dott, and either of them,
the true and lawful agents and attorney-in-fact of the undersigned with full
power and authority in either said agent and attorney-in-fact, to sign for the
undersigned and in their respective names as Directors and Executive Officers of
Monarch Services, Inc., the Registration Statement on Form S-8, and any and all
further amendments to said Registration Statement, hereby ratifying and
confirming all acts taken by such agent and attorney-in-fact, as herein
authorized.
DATE
/s/ Jackson Y. Dott March 2, 2000
Jackson Y. Dott, Director
(Principal Executive Officer)
/S/ A. ERIC DOTT March 2, 2000
A. Eric Dott, Director
/S/MARSHALL CHADWELL March 2, 2000
Marshall Chadwell, Chief Financial
Officer (Principal Accounting and
Financial Officer)
/S/DAVID F. GONANO March 2, 2000
David F. Gonano, Director
/S/HELEN D. BENTLEY March 2, 2000
Helen D. Bentley, Director
