<PAGE> 1
As filed with the Securities and Exchange Commission on August 1, 1995
Registration No. 33-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
COMMERCIAL INTERTECH CORP.
(Exact name of registrant as specified in its charter)
Ohio 34-0159880
(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification Number)
1775 Logan Avenue, Youngstown, Ohio 44501
(Address of Principal Executive Offices including Zip Code)
Commercial Intertech Corp. Stock Option and Award Plan of 1995
(Full title of plan)
Gilbert M. Manchester
Commercial Intertech Corp.
1775 Logan Avenue, Youngstown, Ohio 44501-0239
(216) 746-8011
(Name, address and telephone number of agent for service)
With a copy to:
Herbert S. Wander, P.C.
Katten Muchin & Zavis
525 West Monroe Street
Suite 1600
Chicago, Illinois 60661
(312) 902-5200
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
===========================================================================================================================
Proposed maximum Proposed maximum
Title of securities Amount to be offering price aggregate offering Amount of
to be registered registered(1) per share(2) price(2) registration fee
---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock ($1.00 par value) 750,000 shares $18.01 $13,507,500 $4,657.76
===========================================================================================================================
</TABLE>
(1) Includes an indeterminate number of shares of Commercial Intertech Corp.
Common Stock that may be issuable by reason of stock splits, stock
dividends or similar transactions.
(2) Pursuant to Rule 457(c) under the Securities Act of 1933, the proposed
maximum offering price per share is the average of the high and low sales
prices of Commercial Intertech Corp. Common Stock as reported on the New
York Stock Exchange on July 25, 1995.
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PART I
INFORMATION REQUIRED IN THE PROSPECTUS
The information called for in Part I of Form S-8 is currently included
in the prospectus for the Commercial Intertech Corp. Stock Option and Award Plan
of 1995 (the "Plan"), and is not being filed with or included in this Form S-8
in accordance with the rules and regulations of the Securities and Exchange
Commission (the "SEC").
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PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents heretofore filed with the SEC by Commercial
Intertech Corp. (the "Company") are incorporated in this Registration Statement
by reference:
1. The Company's Annual Report on Form 10-K for the fiscal year
ended October 31, 1994.
2. The Company's Quarterly Reports on Form 10-Q for the quarters
ended January 31, 1995 and April 30, 1995.
3. The description of the Company's Common Stock, $1.00 par value
(the "Common Stock"), and preferred share purchase rights
contained in the Registration Statement on Form 8-A filed
under the Securities Exchange Act of 1934, as amended (the
"Exchange Act") (filed February 6, 1991 and February 28,
1991), including any amendment or report filed for the purpose
of updating such description.
In addition, all documents filed by the Company pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act, after the date of this
Registration Statement and prior to the filing of a post-effective amendment,
which indicates that all securities offered hereby have been sold or which
deregisters all such securities then remaining unsold, shall be deemed to be
incorporated in this Registration Statement by reference and to be a part
hereof from the date of filing of such documents. 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 Registration Statement
to the extent that a statement contained herein or in any subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement.
ITEM 4. DESCRIPTION OF SECURITIES.
Not Applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Gilbert M. Manchester, whose opinion of counsel is attached hereto as
Exhibit 5, is an officer and employee of the Company.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article V of the Company's Code of Regulations provides that the
Company shall indemnify each director, officer or employee, each former
director, officer or employee, and each person who is serving or has served at
the Company's request as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other organization or
enterprise, against expenses (including attorneys' fees), judgments, decrees,
fines, penalties and amounts paid in settlement (whether with or without court
approval) in connection with the defense of any pending or threatened action,
suit, or proceeding, whether criminal, civil, administrative or investigative,
to which he is or may be made a party by reason of being or having been such
director, officer or employee, or by reason of any action alleged to have been
taken or not taken by him while acting in any such capacity, provided that a
determination is made (a) that he was not and has not been adjudicated to have
been negligent or guilty of misconduct in the performance of his duty to the
corporation, partnership, joint venture, trust or other enterprise of which he
is or was such director, officer or employee, (b) that he acted in good faith
in what he reasonably believed to be in, or not opposed to, the best interests
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<PAGE> 4
of the Company, and (c) that, in any matter the subject of a criminal action,
suit or proceeding, he had no reasonable cause to believe that his conduct was
unlawful. The determination as to (b) and (c) and, in the absence of an
adjudication as to (a) by a court of competent jurisdiction, the determination
as to (a), shall be made (i) by the directors of the Company acting at a
meeting at which a quorum consisting of directors who are not parties to or
threatened with such action, suit or proceeding is present and on which
determination only such directors vote, or (ii) if such a quorum is not
obtainable to vote on such indemnification, or, even if obtainable and a
quorum of directors qualified to vote so directs, by independent legal counsel
in a written opinion.
Reference is made to Section 1701.13(E) of the Ohio Revised Code,
which sets forth provisions which define the extent to which a corporation may
indemnify directors, officers and employees.
Under an existing policy of insurance, the Company is entitled to be
reimbursed for indemnity payments it is required or permitted to make to its
directors and officers, including directors and officers of its subsidiaries.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not Applicable.
ITEM 8. EXHIBITS.
4.1 Commercial Intertech Corp. Stock Option and Award Plan of 1995.
4.2 Form of Option Agreement under the Commercial Intertech Corp.
Stock Option and Award Plan of 1995.
4.3 Articles of Incorporation of the Company (incorporated herein
by reference to Exhibit I to the Company's Annual Report on
Form 10-K for the year ended October 31, 1992).
5 Opinion of Gilbert M. Manchester as to the legality of shares
of Common Stock being offered under the Plan.
23.1 Consent of Ernst & Young LLP, independent certified public
accountants.
23.2 Consent of Gilbert M. Manchester (contained in his opinion
filed as Exhibit 5).
24 Power of Attorney (included on the signature page of this
Registration Statement).
ITEM 9. UNDERTAKINGS.
1. The Company hereby undertakes:
(a) To file, during any period in which offers or sales
are being made, a post-effective amendment to this Registration
Statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
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<PAGE> 5
(ii) To reflect in the prospectus any facts or
events arising after the effective date of the Registration
Statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the
Registration Statement;
(iii) To include any material information with
respect to the plan of distribution not previously disclosed
in the Registration Statement or any material change to such
information in the Registration Statement;
provided, however, that paragraphs (a)(i) and (a)(ii) do not apply if
the information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed with or
furnished to the Securities and Exchange Commission by the Company
pursuant to Section 13 or Section 15(d) of the Exchange Act that are
incorporated by reference in the Registration Statement.
(b) That, for the purpose of determining any liability
under the Securities Act of 1933, each such post-effective amendment
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering
thereof.
(c) To remove from registration by means of a
post-effective amendment any of the securities being registered which
remain unsold at the termination of the offering.
2. The Company hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Company's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the Registration Statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
3. Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Company pursuant to the provisions described in Item 6 above, or
otherwise, the Company has been advised 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 the Company of expenses incurred or paid by a director, officer
or controlling person of the Company in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Company 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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<PAGE> 6
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe 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 Youngstown, State of Ohio, on this 1st day of
August, 1995.
Commercial Intertech Corp.
By: /s/ PAUL J. POWERS
-----------------------------------
Paul J. Powers
Chairman and Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and
appoints Paul J. Powers, Gilbert M. Manchester, and Herbert S. Wander and, each
of them, his true and lawful attorneys-in-fact and agents, with full power of
substitution and revocation, to sign on his behalf, individually and in each
capacity stated below, all amendments and post-effective amendments to this
Registration Statement on Form S-8 and to file the same, with all exhibits
thereto and any other documents in connection therewith, with the Securities
and Exchange Commission under the Securities Act of 1933, granting unto each
such attorney-in-fact and agent full power and authority to do and perform each
and every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as such person might or could do
in person, hereby ratifying and confirming each act that said attorney-in-fact
and agent may lawfully do or cause to be done by virtue thereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated on August 1, 1995.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
-------------------------------------- ----------------------------------------------------- ---------------
<S> <C> <C>
Chairman of the Board, Chief Executive Officer
/s/ PAUL J. POWERS (Principal Executive Officer) August 1, 1995
--------------------------------------
Paul J. Powers
/s/ KIPTON C. KUMLER President, Chief Operating Officer and Director August 1, 1995
--------------------------------------
Kipton C. Kumler
Senior Vice President, Chief Financial Officer and
Director (Principal Financial and Accounting Officer) August 1, 1995
/s/ PHILIP N. WINKELSTERN
--------------------------------------
Philip N. Winkelstern
Vice President - Planning, Assistant Treasurer and
/s/ WILLIAM W. CUSHWA Director August 1, 1995
--------------------------------------
William W. Cushwa
/s/ CHARLES B. CUSHWA, III Director August 1, 1995
--------------------------------------
Charles B. Cushwa, III
Director August __, 1995
--------------------------------------
John M. Galvin
/s/ RICHARD J. HILL Director August 1, 1995
--------------------------------------
Richard J. Hill
Director August __, 1995
--------------------------------------
Neil D. Humphrey
Director August __, 1995
--------------------------------------
Gerald C. McDonough
Director August __, 1995
--------------------------------------
John Nelson
Director August __, 1995
--------------------------------------
George M. Smart
/s/ DON E. TUCKER Director August 1, 1995
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Don E. Tucker
</TABLE>
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EXHIBIT 4.1
COMMERCIAL INTERTECH CORP.
STOCK OPTION AND AWARD PLAN OF 1995
SECTION 1. PURPOSE.
The purpose of the Commercial Intertech Corp. Stock Option and Award
Plan of 1995 (the "Plan") is to assist Commercial Intertech Corp. (the
"Company") in attracting and retaining capable employees and outside directors.
The Plan will provide long and short term incentives to key employees by
encouraging and enabling them to participate in the Company's future prosperity
and growth. The Plan will provide equity ownership opportunities and
appropriate incentives to better match the interests of key employees and
outside directors with those of shareholders.
These objectives will be promoted through the granting to key
employees of equity instruments including (i) options [Incentive Stock Options
("ISOs")] which are intended to qualify under Section 422 of the Internal
Revenue Code of 1986 (the "Code"); (ii) options which are not intended to so
qualify [Nonqualified Stock Options ("NQSOs")]; (ISOs and NQSOs are referred
to together hereinafter as "Stock Options"); (iii) Restricted Stock; (iv)
Performance Shares; and (v) Annual Incentive Awards. All members of the
Company's Board of Directors (the "Board") who are not currently employees of
the Company ("Outside Directors") may receive NQSOs from the Plan only as
provided herein.
SECTION 2. ADMINISTRATION.
The Plan shall be administered by the Compensation Committee (the
"Committee") of the Board which shall have the power and authority to grant to
eligible employees Stock Options, Restricted Stock, Performance Shares, and
Annual Incentive Awards. In particular, the Committee shall have the authority
to: (i) select employees of the Company as recipients of awards; (ii)
determine the number and type of awards to be granted; (iii) determine the
terms and conditions, not inconsistent with the terms hereof, of any award
granted; (iv) adopt, alter and repeal such administrative rules, guidelines and
practices governing the Plan as it shall, from time to time, deem advisable;
(v) interpret the terms and provisions of the Plan and any award granted and
any agreements relating thereto; and (vi) otherwise supervise the
administration of the Plan. All decisions made by the Committee pursuant to
the provisions
<PAGE> 2
hereof shall be made in the Committee's sole discretion and shall be final and
binding on all persons. Members of the Compensation Committee shall meet the
criteria so as to be "outside directors" within the meaning of Code Section
162(m) and "disinterested administrators" within the meaning of Rule 16b-3
under the Securities Exchange Act of 1934.
SECTION 3. ELIGIBILITY.
Key employees of the Company, and any subsidiary of the Company
("Subsidiary"), who are responsible for or contribute to the management, growth
and/or profitability of the business of the Company, are eligible to be granted
awards. The participants under the Plan shall be selected from time to time by
the Committee, in its sole discretion, from among those eligible. In addition,
all Outside Directors are eligible to receive NQSOs as set forth in Section 9.
SECTION 4. STOCK SUBJECT TO PLAN.
The total number of shares of the Company's common stock, $1.00 par
value, ("Stock") reserved and available for distribution pursuant to awards
hereunder shall be 750,000 shares. No more than 375,000 shares shall be
granted in the form of Restricted Stock or Performance Shares. Such shares may
consist, in whole or in part, of authorized and unissued shares or treasury
shares.
If any shares of Stock that have been optioned cease to be subject to
a Stock Option, or if any such shares of Stock that are subject to any
Restricted Stock (including any Annual Incentive Awards paid in Restricted
Stock) or Performance Share award granted hereunder are forfeited by the
holder, or if any such Stock Option or other award otherwise terminates without
a payment being made to the participant in the form of Stock, or if any shares
of Stock (whether or not restricted) previously distributed under the Plan are
returned to the Company in connection with the exercise of an award, such
shares shall again be available for distribution in connection with future
awards under the Plan.
In the event of any stock dividend, stock split, combination or
exchange of shares, recapitalization or other change in the capital structure
of the Company, corporate separation or division (including, but not limited
to, split-up, spin-off, split-off or distribution to Company shareholders other
than a normal cash dividend), sale by the Company of all or a substantial
portion of its assets, rights offering, merger, consolidation, reorganization
or partial or complete liquidation, or any other corporate transaction or event
having an effect similar to any of the foregoing, the aggregate number of
shares reserved
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for issuance under the Plan, the number and option price of shares subject to
outstanding Stock Options, the financial performance goals, if any, of the
Stock contained in a Performance Share award, the number of shares subject to a
Performance Share award agreement or granted by a Restricted Stock award
agreement or Annual Incentive Award agreement, and any other characteristics or
terms of the awards as the Committee shall deem necessary or appropriate to
reflect equitably the effects of such changes to the holders of awards, shall
be appropriately substituted for new shares or adjusted, as determined by the
Committee in its discretion.
SECTION 5. STOCK OPTIONS.
Stock Options may be granted alone or in addition to other awards
granted under the Plan. Any Stock Options granted under the Plan shall be in
such form as the Committee may from time to time approve and the provisions of
Stock Option awards need not be the same with respect to each optionee. Stock
Options granted under the Plan may be either ISOs or NQSOs. The Committee may
grant to any optionee ISOs, NQSOs or both types of Stock Options. During any
five fiscal year period, Stock Options covering no more than 250,000 shares of
Stock shall be granted to any optionee.
Anything in the Plan to the contrary notwithstanding, without the
consent of the optionee(s) affected, no term of this Plan relating to ISOs
shall be interpreted, amended or altered, nor shall any discretion or authority
granted under the Plan be so exercised, so as to disqualify the Plan under
Section 422 of the Code or to disqualify any ISO under such Section 422.
Stock Options granted under the Plan shall be subject to the following
terms and conditions and shall contain such additional terms and conditions not
inconsistent with the terms of the Plan, as the Committee deems appropriate.
Each Stock Option grant shall be evidenced by an agreement executed on behalf
of the Company by an officer designated by the Committee and accepted by the
optionee. Such agreement shall describe the Stock Options and state that such
Stock Options are subject to all the terms and provisions of the Plan and shall
contain such other terms and provisions, consistent with the Plan, as the
Committee may approve.
(a) Exercise Price. The exercise price per share of Stock
purchasable under a Stock Option shall be no less than the Fair Market Value on
the day the Stock Option is granted. Fair Market Value shall mean the closing
price of the Stock on the New York Stock Exchange ("NYSE") or, if no such sale
of Stock occurs on the NYSE on such date, the Fair Market
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Value of the Stock as determined by the Committee in good faith.
(b) Option Term. The term of each Stock Option shall be fixed
by the Committee, but no Stock Option shall be exercisable more than ten years
after the date such Stock Option is granted.
(c) Exercise of Stock Options. Stock Options shall become
exercisable at such time or times and subject to such terms and conditions
(including, without limitation, installment exercise provisions) as shall be
determined by the Committee, provided, however, that, except as provided in
Section 5(f) or (g) (in the case of death or disability, respectively) and
Section 10, unless otherwise determined by the Committee at or after grant, no
Stock Option shall be exercisable prior to six months after the date of the
granting of the Stock Option. If the Committee provides that any Stock Option
is exercisable only in installments, the Committee may waive such installment
exercise provisions at any time in whole or in part based on Company
performance and/or such other factors as the Committee may determine.
(d) Method of Exercise. Options may be exercised in whole or in
part by giving written notice of exercise to the Company specifying the number
of shares to be purchased. Such notice shall be accompanied by payment in full
of the purchase price, or such other instrument as may be permitted in
accordance with rules or procedures adopted by the Committee.
If approved by the Committee, payment in full or in part may also be
made (i) by delivering Common Stock already owned by the optionee having a
total fair market value on the date of such delivery (as determined by the
previous trading day's closing price of the Stock on the NYSE) equal to the
option price; (ii) by authorizing the Company to retain shares of Stock which
would otherwise be issuable upon exercise of the option having a total fair
market value on the date of delivery equal to the option price; (iii) by the
delivery of cash on the extension of credit by a broker-dealer to whom the
optionee has submitted a notice of exercise (in accordance with Part 220,
Chapter II, Title 12 of the Code of Federal Regulations, so-called "cashless"
exercise); or (iv) by any combination of the foregoing.
No shares of Stock shall be transferred until full payment therefor
has been made. An optionee shall generally have the rights of a shareholder
with respect to shares subject to Stock Options only when the optionee has
given written notice of exercise, has paid in full for such shares and, if
requested, given the representation described in Section 13(a).
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(e) Non-Transferability of Stock Options. Except as provided
hereunder, no Stock Option shall be transferable by the optionee other than by
will or by the laws of descent and distribution, and all Stock Options shall be
exercisable, during the optionee's lifetime, only by the optionee. At the
request of an optionee, Stock purchased upon exercise of a Stock Option may be
issued or transferred into the name of the optionee and another person jointly
with rights of survivorship.
(f) Termination by Death. If an optionee's employment by the
Company terminates by reason of death, any Stock Option held by such optionee
may thereafter be exercised, to the extent it was exercisable at the time of
death or on such accelerated basis as the Committee may determine at or after
grant, by the legal representative of the estate or by the legatee of the
optionee under the will of the optionee, for a period of one year (or such
other period up to three years as the Committee may specify) from the date of
death or until the expiration of the stated term of such Stock Option,
whichever period is shorter.
(g) Termination by Reason of Disability or Retirement. If an
optionee's employment by the Company terminates by reason of disability, as
defined under the Company's long-term disability plan, or retirement, any Stock
Option held by such optionee will become exercisable upon approval of the
Committee and may thereafter be exercised by the optionee for a period of three
years (or such shorter period as the Committee may specify) from the date of
such termination of employment or until the expiration of the stated term of
such Stock Option, whichever period is shorter; provided, however, that, if the
optionee dies within such three-year period (or such shorter period), any
unexercised Stock Option held by such optionee shall thereafter be exercisable,
to the extent to which it was exercisable at the time of death, for a period of
one year from the date of such death or until the expiration of the stated term
of such Stock Option, whichever period is shorter. In the event of termination
of employment by reason of disability or retirement, if an ISO is exercised
after the expiration of the exercise periods that apply for purposes of Section
422 of the Code, such ISO shall thereafter be treated as an NQSO.
(h) Other Termination of Employment. Unless otherwise determined
by the Committee at or after grant, if an optionee's employment by the Company
terminates for any reason other than death, disability or retirement, the
optionee will have one month from the date of termination to exercise any and
all Stock Options that are then exercisable, except that, if the termination
was for Cause, any and all Stock Options shall be immediately cancelled. For
the purpose of the Plan, "Cause"
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<PAGE> 6
means a felony conviction of a participant or the failure of a participant to
contest prosecution for a felony, or a participant's willful misconduct or
dishonesty, any of which is directly and materially harmful to the business or
reputation of the Company, as determined by the Committee.
(i) ISO Limitations. To the extent required for "incentive stock
option" status under Section 422 of the Code, the aggregate Fair Market Value
(determined as of the time of grant) of the Stock with respect to which ISOs
are exercisable for the first time by the optionee during any calendar year
under the Plan and any other stock option plan of the Company and its
affiliates, shall not exceed $100,000.
SECTION 6. RESTRICTED STOCK.
The provisions of Restricted Stock awards need not be the same with
respect to each recipient. Restricted Stock awards shall consist of awards of
Company Stock and shall be subject to the following restrictions and
conditions.
(a) Price. The purchase price for shares of Restricted Stock
shall be set by the Committee and may be zero.
(b) Restricted Stock Award Agreement. Awards of Restricted Stock
must be accepted by an employee within a period of 60 days (or such shorter
periods as the Committee may specify at grant) after the award date, by
executing a Restricted Stock Award Agreement and paying whatever price, if any,
is required under Section 6(a).
The prospective recipient of a Restricted Stock award shall not have
any rights with respect to such award, unless and until such recipient has
executed an agreement evidencing the award and has delivered a fully executed
copy thereof to the Company, and has otherwise complied with the applicable
terms and conditions of such award.
(c) Stock Certificate and Legends. Each participant receiving a
Restricted Stock award shall be issued a stock certificate in respect of such
shares of Restricted Stock. Such certificate shall be registered in the name
of such participant, and shall bear an appropriate legend referring to the
terms, conditions and restrictions applicable to such award, substantially in
the following form:
The transferability of this certificate and the shares of stock
represented hereby are subject to the terms and conditions (including
forfeiture) of Commercial Intertech
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Corp.'s Stock Option and Award Plan of 1995 and an Agreement entered
into between the registered owner and Commercial Intertech Corp. Copies
of such Plan and Agreement are on file in the offices of Commercial
Intertech Corp.
The Committee may require that the stock certificates evidencing such
shares be held in custody by the Company until the restrictions thereon shall
have lapsed, and that, as a condition of any Restricted Stock award, the
participant shall have delivered a stock power, endorsed in blank, relating to
the Stock covered by such award.
(d) Stock Restrictions. Subject to the provisions of this Plan
and the applicable Restricted Stock Award Agreement, during a period set by the
Committee commencing with the date of such award and ending not earlier than
the third anniversary of the date of the grant of the award (the "Restriction
Period"), the participant shall not be permitted to sell, transfer, pledge,
assign or otherwise encumber shares of Restricted Stock awarded under the Plan.
(e) Shareholder Rights. Except as provided in this Section 6, the
recipient shall have, with respect to the shares of Restricted Stock covered by
any award, all of the rights of a shareholder of the Company, including the
right to vote the shares, and the right to receive any dividends; provided,
however, that unless otherwise determined by the Committee, any dividends on
such shares shall be automatically deferred and reinvested in additional
Restricted Stock subject to the same restrictions as the underlying award to
the extent shares are available under Section 4.
(f) Termination of Employment. Except as otherwise provided in
this Section 6 and in the applicable Restricted Stock Award Agreement, upon
termination of a participant's employment with the Company if, but only if, the
participant incurs a termination of employment during the Restriction Period
due to the participant's death, disability, retirement, or involuntarily and
without cause, the Committee, at its discretion, may provide for waiver of all
or a portion of the restrictions applicable to unvested Restricted Stock
awards. If termination occurs for any other reason during the Restriction
Period for a given award, all shares still subject to restriction shall be
forfeited by the participant.
(g) Expiration of Restriction Period. If and when the Restriction
Period expires without a prior forfeiture
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of the Restricted Stock subject to such Restriction Period, unrestricted
certificates for such shares shall be delivered to the participant.
(h) Relation to Section 8. Restricted Stock granted in respect of
an Annual Incentive Award under Section 8 shall be regarded as Restricted Stock
granted under this Section 6.
SECTION 7. PERFORMANCE SHARES.
(a) Subject to the terms and conditions described below,
Performance Shares may be granted to participants at any time and from time to
time as determined by the Committee. The Committee shall have complete
discretion in determining the number of Performance Shares granted to each
participant; provided, however, that no participant may earn more than 65,000
Performance Shares with respect to any Performance Period (as defined below).
(b) Price. The purchase price for Performance Shares shall be
zero unless otherwise specified by the Committee.
(c) Performance Share Agreement. Prior to the beginning of the
applicable Performance Period (as defined below), subject to the provisions of
this Plan, all the terms and conditions of an award of Performance Shares shall
be determined by the Committee in its discretion and shall be confirmed by a
Performance Share Award Agreement which shall be executed by the Company and
the recipient.
(d) Performance Periods. Any time period (the "Performance
Period") relating to a Performance Share award shall be at least two years in
length.
(e) Performance Goals. Performance Shares shall be earned based
upon the financial performance of the Company or an operating group of the
Company during a Performance Period. Prior to the beginning of the applicable
Performance Period, the Committee will establish in writing targets for return
on equity of the Company (and/or an operating group of the Company, if
applicable) over the Performance Period ("Performance Goals"), which
Performance Goals, depending on the extent to which they are met, will
determine the number of Performance Shares, if any, that will be earned by the
participants. Return on equity will be calculated from the consolidated
financial statements of the Company and subsidiaries but shall exclude (i) the
effects of changes in federal income tax rates, (ii) the effects of unusual and
extraordinary items as defined by Generally Accepted Accounting Principles
("GAAP"), (iii) the cumulative effect of changes in accounting principles in
accordance with GAAP, and (iv) the effects of acquisitions, mergers, and
significant dispositions
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and sales of assets. The Performance Goals may vary for different Performance
Periods and need not be the same for each participant receiving an award for a
Performance Period. The Committee may, in its discretion, subject to the
limitations of Section 11, vary the terms and conditions of any Performance
Share Award, including, without limitation, the Performance Period and
Performance Goals, without shareholder approval, as applied to any recipient
who is not a "covered employee" with respect to the Company as defined in
Section 162(m) of the Internal Revenue Code of 1986, as amended ("Code"). In
the event applicable tax or securities laws change to permit the Committee
discretion to alter the governing performance measures without obtaining
shareholder approval of such changes, the Committee shall have sole discretion
to make such changes without obtaining shareholder approval.
(f) Earning of Performance Shares. After the applicable
Performance Period shall have ended, the Committee shall certify the extent to
which the established Performance Goals have been achieved. Subsequently, each
recipient of Performance Shares shall be entitled to receive payout on the
number of Performance Shares, if any, earned by the recipient over the
Performance Period, to be determined as a direct function of the extent to
which the Company's Performance Goals have been achieved. A recipient may earn
more or less than the number of Performance Shares originally awarded, or no
Performance Shares at all. Performance Shares shall be paid in the form of
Company Stock. Unrestricted certificates representing such number of shares of
Stock as equals the number of Performance Shares earned under the award shall
be delivered to the participant as soon as practicable after the end of the
applicable Performance Period. Participants shall also be entitled to any
dividends or other distributions that would have been paid or earned in respect
of such shares of Stock had such shares been outstanding during the period from
the initial award date to the final payout on the Performance Shares. Unless
otherwise provided, in its discretion, by the Committee, any such dividends or
other distributions shall not bear interest.
(g) Termination of Employment Due to Death, Disability or
Retirement or at the Request of the Company Without Cause. In the event the
employment of a participant is terminated by reason of death, disability or
retirement or by the Company without Cause during a Performance Period, the
participant shall receive a prorated payout with respect to the Performance
Shares relating to such Performance Period. The prorated payout shall be
determined by the Committee, in its sole discretion, and shall be based upon
the length of time that the participant held the Performance Shares during the
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Performance Period and based upon the achievement of the established
Performance Goals. Distribution of earned Performance Shares shall be made at
the same time payments are made to participants who did not terminate
employment during the applicable Performance Period.
(h) Termination of Employment for Other Reasons. In the event
that a participant's employment terminates for any reason other than those
reasons set forth in paragraph (g) of this Section 7, all Performance Shares
shall be forfeited by the participant to the Company.
(i) Nontransferability. Performance Shares may not be sold,
transferred, pledged, assigned or otherwise alienated or hypothecated, other
than by will or by the laws of descent and distribution. Further, a
participant's rights under the Plan shall be exercisable during the
participant's lifetime only by the participant, the participant's legal
representative or the recipient of the participant's Performance Shares.
SECTION 8. ANNUAL INCENTIVE AWARDS.
(a) Eligibility. Participants designated by the Committee shall
be eligible for an annual incentive award ("Annual Incentive Award"), the
amount of which will be based on the satisfaction of specified bonus targets
("Award Targets"). Prior to the beginning of each of the Company's fiscal
years, the Committee shall establish in writing (i) the Award Targets and (ii)
the Annual Incentive Awards which may be earned by participants, based upon the
extent to which the Award Targets are achieved ("Award Opportunities"). The
Award Targets and Award Opportunities shall be confirmed in agreements between
the Company and the participants. The Award Targets shall be functions of one
or more of the following Company performance measures, as shall be determined
by the Committee: (i) total consolidated net income of the Company and
subsidiaries, (ii) group operating income, (iii) operating group return on
sales, (iv) operating group return on gross assets and (v) corporate and
operating group return on equity. Total net income, group operating income,
operating group return on sales, operating group return on gross assets, and
corporate and operating group return on equity shall be calculated from the
consolidated financial statements of the Company and subsidiaries, but shall
exclude (i) the effects of changes in federal income tax rates, (ii) the
effects of unusual and extraordinary items as defined in GAAP, (iii) the
cumulative effect of changes in accounting principles in accordance with GAAP,
and (iv) the effects of acquisitions, mergers, and significant dispositions and
sales of assets.
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(b) Earning of Annual Incentive Awards. After the applicable
fiscal year shall have ended, the Committee shall certify the extent to which
the established Award Targets have been achieved. Subsequently, the Committee
shall calculate the Annual Incentive Award (if any) for each participant, based
upon the Award Opportunities established by the Committee prior to the
beginning of the applicable year. Each Annual Incentive Award shall be solely
a function of the degree to which the established Award Targets have been
achieved.
(c) Payments and Election. Participants may elect to receive
Annual Incentive payouts in cash or Restricted Stock or a combination of the
two, provided that any election for payment in Restricted Stock is subject to
the approval of the Committee. Payouts with respect to a fiscal year will be
made within 75 days of the end of such year. To elect the payout of a portion
of an Annual Incentive Award in Restricted Stock, a participant must inform the
Committee in writing prior to the start of the fiscal year with respect to
which payout would be made. Unless modified by the Committee before the
beginning of a fiscal year of the Company, terms and conditions of Restricted
Stock payouts shall include the following:
(i) Any portion of an Annual Incentive Award can be elected for
payout in Restricted Stock, either in a dollar amount or as a
percentage of the total Annual Incentive Award.
(ii) Restricted Stock will be issued on the same date that cash
payouts would be made, based on the closing price of the Stock as of
the date of the award ("Closing Price") on the NYSE (or the principal
exchange on which the Stock shall then be listed or quoted).
(iii) The Restricted Stock will be issued pursuant to, and shall be
subject to the terms and conditions contained in Section 6 of this
Plan. The restriction period will be for a period determined by the
Committee of at least three years in duration, after which time the
Stock will be released to the participant.
(iv) The number of shares of Restricted Stock granted to a
participant will equal the product of (A) such number of shares of
Stock as have an aggregate Closing Price equal to the dollar amount of
the Annual Incentive Award elected to be received in the form of
Restricted Stock, multiplied by (B) a factor greater than
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1.00 but less than or equal to 1.30, as determined by the Committee
prior to the beginning of the Company's applicable fiscal year.
(v) If the participant's employment is terminated by reason of
death, disability or retirement or by the Company without Cause, the
Committee, at its discretion, may provide for waiver of all or a
portion of the restrictions applicable to unvested restricted awards.
If the participant's employment is terminated for any other
reason, the shares of Stock will be forfeited.
(d) Amendment of Awards. The Committee has discretion, subject to
Section 11, to vary the terms and conditions of any Annual Incentive Award,
including, without limitation, the Award Targets, without shareholder approval,
as applied to any participant who is not a "covered employee" with respect to
the Company as defined in Section 162(m) of the Code.
(e) Performance Threshold. The Committee shall establish minimum
levels of Company performance which must be achieved during a fiscal year
before any Annual Incentive Awards shall be paid to participants.
(f) Maximum Awards. The Committee may establish guidelines governing
the maximum Annual Incentive Awards that may be earned by participants (either
in the aggregate, by employee class or among individual participants), provided
that no participant may receive an Annual Incentive Award in an amount
(including the value of any Restricted Stock constituting any portion of such
Annual Incentive Award) of greater than $850,000 with respect to any fiscal
year of the Company.
(g) Termination of Employment. In the event a participant's
employment is terminated for any reason, such participant shall not be entitled
to receive any Annual Incentive Award with respect to the fiscal year in which
the termination occurs.
SECTION 9. AWARDS TO BOARD OF DIRECTORS.
(a) Administration. All Outside Directors shall be eligible to
participate in the Plan only as expressly set forth in this Section 9. The
Committee shall have no power to determine which Outside Directors may receive
Stock Options, the amount of such Stock Options, or the terms of such Stock
Options to the extent provided below.
(b) Eligibility and Grant of Options. On the date of each Out-
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side Director's election by shareholders to a new three-year term during the
term of the Plan, each Outside Director shall receive a Stock Option to
purchase 2,250 shares of the Company's Stock; provided, however, that no Stock
Option shall be granted under this Section to an Outside Director to the extent
that it would duplicate an award of Stock Options to the Outside Director under
the Commercial Intertech Corp. Stock Option and Award Plan of 1993 ("1993
Plan"). All awards of Stock Options to Outside Directors shall be made under
the 1993 Plan rather than under this Plan until the earlier of the expiration
of the 1993 Plan or the exhaustion of shares of Stock authorized thereunder.
(c) Terms of Options. All Stock Options granted to Outside
Directors shall be NQSOs and shall be issued at Fair Market Value as defined in
Section 5(a). All other terms applicable to Stock Options, as defined in
Section 5 [with the exception of the provisions of Section 5(c) which apply to
the exercisability of the Stock Options and Section 5(i)] and in other sections
of this Plan are applicable to Outside Director Stock Options.
(d) Exercisability of Stock Options. The Stock Options granted to
Outside Directors shall become exercisable in three equal installments,
commencing on the first anniversary of the date of grant and annually
thereafter. Each Stock Option granted under the Plan shall expire ten years
from the date of the grant, and shall be subject to earlier termination as
hereinafter provided.
SECTION 10. CHANGE IN CONTROL PROVISIONS.
(a) Impact of Event. In the event of:
(x) a "Change in Control" as defined in Section 10(b),
or
(y) a "Potential Change in Control" as defined in Section 10(c),
the Committee may provide that one or more of the following acceleration and
valuation provisions shall apply:
(i) On the date that such Change in Control or Potential Change in
Control is determined to have occurred, any or all Stock Options
awarded under this Plan not previously exercisable and vested shall
become fully exercisable and vested.
(ii) The restrictions applicable to any or all Restricted Stock
(including Restricted Stock issued in payment of Annual Incentive
Awards) and
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Performance Share awards shall lapse and such shares and awards shall
be fully vested.
(b) Definition of "Change in Control." For purposes of Section
10(a), a "Change in Control" shall be deemed to have occurred if:
(i) there shall be consummated (A) any consolidation or merger of
the Company in which the Company is not the continuing or surviving
corporation or pursuant to which shares of the Company's Common Stock
would be converted to cash, securities or other property, other than a
merger of the Company in which the holders of the Company's Common
Stock immediately prior to the merger have substantially the same
proportionate ownership of common stock of the surviving corporation
immediately after the merger, or (B) any sale, lease, exchange or
other transfer (in one transaction or a series of related
transactions) of all or substantially all the assets of the Company,
or
(ii) the shareholders of the Company shall approve any plan or
proposal for the liquidation or dissolution of the Company, or
(iii) any person [as such term is used in Sections 13(d) and
14(d)(2) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act")], other than the Company or a subsidiary or any
employee benefit plan sponsored by the Company or a subsidiary, shall
become the beneficial owner (within the meaning of Rule 13d-3 under
the Exchange Act) of securities of the Company representing 30% or
more of the combined voting power of the Company's then outstanding
securities ordinarily (and apart from rights accruing in special
circumstances) having the right to vote in the election of director,
as a result of a tender or exchange offer, open market purchases,
privately negotiated purchases or otherwise, or
(iv) at any time during a period of two consecutive years,
individuals who at the beginning of such period constituted the Board
of Directors of the Company shall cease for any reason to constitute
at least a majority thereof, unless the election or the nomination for
election by the Company's shareholders of each new director during
such two-year period was approved by a vote
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of at least two-thirds of the directors then still in office who were
directors at the beginning of such two-year period.
For purposes hereof, ownership of voting securities shall take into
account and shall include ownership as determined by applying the provisions of
Rule 13d-3(d)(1)(1)(as in effect on the Approval Date) pursuant to the Exchange
Act.
(c) Definition of "Potential Change in Control." For purposes of
Section 10(a), a "Potential Change in Control" means the happening of any one
of the following:
(i) The entering into an agreement by the Company, the
consummation of which would result in a Change in Control of the
Company as defined in Section 10(b); or
(ii) The acquisition of beneficial ownership, directly or
indirectly, by any entity, person or group (other than the Company or
any Company employee benefit plan, including any trustee of such plan
acting as such trustee) of securities of the Company representing 5%
or more of the combined voting power of the Company's outstanding
securities, and the adoption by the Board of a resolution to the
effect that a "Potential Change in Control" of the Company has
occurred for the purposes of this Plan.
(d) Change in Control Price. For the purposes of this Section 10,
"Change in Control Price" means the highest price per share paid in any
transaction reported on the NYSE (or the principal exchange on which the Stock
is listed or quoted), or paid or offered in any bona fide transaction related
to an actual or Potential Change in Control of the Company, at any time during
the preceding sixty-day period as determined by the Committee.
SECTION 11. AMENDMENTS AND TERMINATION.
The Board may amend, alter or discontinue the Plan, but no amendment,
alteration or discontinuation shall be made which would impair the rights of an
optionee or participant under any award theretofore granted, without the
optionee's or participant's consent, or which, without the approval of the
Company's stockholders, would:
(a) except as expressly provided in the Plan, increase the total
number of shares reserved for purposes of the Plan;
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(b) change the class of employees eligible to participate in
the Plan;
(c) extend the maximum option period under Section 5(b) of the
Plan; or
(d) increase materially the benefits under the Plan.
The Committee may amend the terms of any Stock Option or other Award
theretofore granted, prospectively or retroactively, but no such amendment
shall impair the rights of any holder without the holder's consent, nor shall
any amendment provide for a reduction in the exercise price of a Stock Option
except as permitted under Section 4 (respecting an adjustment due to a stock
dividend, split, combination, etc.), nor shall any amendment to a Restricted
Stock award accelerate vesting other than as permitted in Section 6.
The provisions regarding Stock Options granted to Outside Directors
pursuant to Section 9 above shall not in any case be amended more often than
once in any six-month period other than to comply with changes in the Code or
the Employee Retirement Income Security Act, or the rules thereunder.
Subject to the above provisions, the Board shall have authority to
amend the Plan to take into account changes in applicable tax and securities
laws and accounting rules, as well as other developments.
SECTION 12. UNFUNDED STATUS OF PLAN.
The Plan is intended to constitute an "unfunded" plan for incentive
and deferred compensation. With respect to any payments or deliveries of Stock
not yet made to a participant or optionee by the Company, nothing contained
herein shall give any such participant or optionee any rights that are greater
than those of a general creditor of the Company. The Committee may authorize
the creation of trusts or other arrangements to meet the obligations created
under the Plan to deliver Stock or payments hereunder consistent with the
foregoing.
SECTION 13. GENERAL PROVISIONS.
(a) Share Transfer and Distribution. The Committee may require
each person purchasing shares pursuant to a Stock Option or Restricted Stock
award under the Plan to represent to and agree with the Company in writing that
the optionee or participant is acquiring the shares without a view to the
distribution thereof. The certificates for such shares may include any legend
which the Committee deems appropriate to reflect any restrictions on transfer.
All certificates for shares of Stock or other securities delivered
under the Plan shall be subject to such stock-
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transfer orders and other restrictions as the Committee may deem advisable
under the rules, regulations and other requirements of the Securities and
Exchange Commission, any stock exchange upon which the Stock is then listed and
any applicable federal or state securities law, and the Committee may cause a
legend or legends to be put on any such certificates to make appropriate
reference to such restrictions.
(b) Additional Arrangements. Nothing contained in this Plan shall
prevent the Company from adopting other or additional compensation arrangements
for its employees.
(c) No Right to Employment. The adoption of the Plan shall not
confer upon any employee of the Company any right to continued employment with
the Company nor shall it interfere in any way with the right of the Company to
terminate the employment of any of its employees at any time.
(d) Tax Withholding. It shall be a condition to the performance
of the Company's obligations to issue or transfer Shares upon exercise of a
Stock Option, that the optionee pay or make provision satisfactory to the
Company for the payment of any taxes (other than stock transfer taxes) which
the Company is obligated to collect with respect to the issuance of such Shares
upon such exercise. Subject to limitation by the Committee, optionees may
elect to have the Company withhold Shares otherwise issuable upon the exercise
of a Stock Option to cover federal and state withholding obligations incident
to such exercise and to request that shares be withheld to pay withholding
taxes in excess of the statutory minimum, as long as the amount does not exceed
the participant's estimated total federal, state and local tax obligations
associated with the transaction, including FICA taxes to the extent applicable.
The optionees' elections are subject to the following restrictions:
(1) elections must be made on or prior to the date as of which the
amount of tax to be withheld is determined;
(2) elections are irrevocable; and
(3) elections are subject to the disapproval of the Committee.
Participants subject to Section 16(b) of the Securities Act of 1934
are subject to additional restrictions, as required pursuant to the securities
laws, and the rules and regulations promulgated thereunder.
(e) Beneficiaries. The Committee shall establish such procedures
as it deems appropriate for a
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participant to designate a beneficiary to whom any amounts payable in the event
of the participant's death are to be paid.
(f) Laws Governing. The Plan and all awards made and actions
taken thereunder shall be governed by and construed in accordance with the laws
of the State of Ohio.
SECTION 14. EFFECTIVE DATE OF PLAN.
The Plan shall be effective on the date it is approved by the
stockholders of the Company. Grants made prior to such stockholder approval
shall be contingent on such approval.
SECTION 15. TERM OF PLAN.
No award shall be granted pursuant to the Plan on or after the tenth
anniversary of the effective date of the Plan, but awards granted prior to such
tenth anniversary may extend beyond that date.
SECTION 16. MISCELLANEOUS.
For purposes of this Plan, the term retirement shall mean (1)
termination of employment with a pension under the provisions of any retirement
plan for employees of Commercial Intertech Corp. or a domestic or foreign
subsidiary corporation or (2) termination of employment following attainment of
age 65 regardless of eligibility for pension.
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<PAGE> 1
EXHIBIT 4.2
1995 PLAN
COMMERCIAL INTERTECH CORP.
1775 Logan Avenue
Youngstown, Ohio 44501
NON-QUALIFIED STOCK OPTION
KNOW ALL MEN BY THESE PRESENTS:
WHEREAS, Commercial Intertech Corp., an Ohio corporation (the
"Company"), is largely dependent upon the judgment, initiative and efforts of
selected key employees for the successful conduct of its business; and
WHEREAS, the Company desires to advance its interests by providing a
means whereby key employees may acquire or enlarge their proprietary interest
in the Company, thereby assuring closer identification of their interest with
those of the Company and strengthening their desire to remain with the Company
or its subsidiaries; and
WHEREAS, to accomplish these ends, the Stock Option and Award Plan of
1995 was adopted by the Board of Directors of the Company (the "Board"), and
was approved and authorized by the shareholders at the annual meeting of the
Company held on March 22, 1995; and
WHEREAS, the Stock Option and Award Plan of 1995 (the "Plan") provides
for the granting to key employees of the Company and its subsidiaries of
options to purchase common shares of the Company, and the Compensation
Committee (the "Committee"), to which the Board has delegated the
responsibility of administering the Plan, has acted to grant options to key
employees selected by the Committee; and
WHEREAS, this option is granted pursuant to the purpose, authorization
and action set forth above;
NOW, THEREFORE, in consideration of the mutual promises and
representations herein contained, and other good and valuable considerations,
the Company does hereby grant unto __________________________ (the "Grantee"),
an option to purchase from the Company an aggregate of _____________ of the
authorized but unissued common shares of $1.00 par value of this Company, at
the price of $___ per share, such aggregate number of shares to become
purchasable as follows:
_________________ shares on or after _______________________________
_________________ shares on or after _______________________________
<PAGE> 2
THIS OPTION is subject to the following terms and conditions:
1. Type of Shares
This option shall apply to the Company's authorized but unissued
common shares of $1.00 par value.
2. Administration of the Plan
The Plan shall be administered by the Committee. The Committee shall
have full power to construe and interpret the Plan, to establish such rules as
it deems necessary for the proper administration of the Plan and to make such
determinations and to take such other action in connection with the Plan as it
deems necessary or advisable. Any such construction, interpretation, rule,
determination or other action taken by the Committee pursuant to the Plan shall
be binding upon the Grantee and all other participants in the Plan and their
legal representatives.
3. Exercise of Option
a. To exercise this option, the Grantee shall give written notice
addressed to the Company, to the attention of its Secretary at
1775 Logan Avenue, Youngstown, Ohio, 44501. Such written
notice shall set forth the number of shares to be purchased,
shall contain a representation that such shares are being
purchased by the Grantee for his own account as an investment,
and not with the view to reselling such shares to the public,
and shall be accompanied by payment of the full purchase price
for the shares to be purchased (which is the option price per
share multiplied by the number of shares purchased). Shares
purchased may, at the request of the Grantee, be issued in the
name of the Grantee or in the name of the Grantee and another
jointly, with the right of survivorship. After any
installment becomes purchasable, the option may be exercised
as to the whole or any part of such installment at any time or
from time to time prior to the expiration of this option or
its earlier termination.
b. An exercise of this option shall become effective on the date
written notice of such exercise is received by the Company at
its principal office, accompanied by full payment for the
shares, but in no case earlier than the date on which the
installment becomes purchasable and only upon the terms set
forth herein.
4. Non-transferability of Option
During the Grantee's lifetime, this option may be exercised only by
him. This option shall not be transferred other than by
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will or by the laws of descent and distribution, and shall not be subject to
attachment, execution or other similar process.
5. Term of Option
This option shall expire ten years after the date hereof, unless
terminated earlier as provided in Paragraph 6 below.
6. Termination of Employment
Upon termination of the Grantee's employment, this option will become
void as to all shares which are not then purchasable. If employment terminates
for reasons other than death, disability, retirement or cause, this option will
continue as to shares purchasable on the employment termination date for a
period of three months after the employment termination date.
Upon the retirement of the Grantee, under the Company's Retirement
Plan, his right to acquire shares purchasable by him on the date of such
retirement shall continue for a period of twenty-four months after such
retirement.
Upon the death of the Grantee, his right to acquire shares purchasable
by him on the date of his death may be exercised by his legal representatives
for a period of twelve months after the date of his death.
Upon the termination of the Grantee's employment because of the
Grantee's disability, his right to acquire shares purchasable by him on the
date of such termination may be exercised for a period of twelve months after
such termination.
Upon termination of Grantee's employment for cause, this option will
immediately be void for all purposes.
Notwithstanding the foregoing, under no circumstances will this option
extend beyond ten years from the date hereof.
7. Effect of Change in Stock Subject to the Plan
In the event any dividend payable in shares of the Company is declared
by the Company, or in case of any subdivision or combination of the outstanding
shares, the number of shares allotted under this option shall be increased or
decreased proportionately and the option price per share as stated above shall
be decreased or increased proportionately so that there will be no change in
the aggregate purchase price payable upon the exercising of this option. In
the event of any other recapitalization or any reorganization, merger,
consolidation or any other change in the corporate structure or shares of the
Company, the Board may make such adjustment, if any, as it may deem appropriate
in the number and kind of shares deliverable upon
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subsequent exercising of this option and in the option price under this option.
8. Listing and Registration of Shares
If at any time the Board shall deem listing, registration or
qualification of the shares covered by this option upon any securities exchange
or under any state or federal law or the consent or approval of any
governmental regulatory body to be necessary or desirable as a condition of or
in connection with the purchase of shares under this option, this option may
not be exercised in whole or in part unless and until such listing,
registration, qualification, consent, or approval shall have been effected or
obtained on such terms and conditions as are acceptable to the Board.
9. Agreement to Remain in Employ
This option is granted in consideration of, among other things, the
Grantee's agreement to continue in the employ of the Company or one of its
subsidiary companies for a period of one year from the date of this instrument
if the employing company shall so request. By accepting this option, the
Grantee indicates his agreement to continue in such employ; but nothing herein
contained shall obligate such employing company to continue the Grantee in such
employment.
10. Amendment or Termination
The Board may amend or terminate the Plan at any time provided that
the Board shall not (except as provided in Paragraph 8 hereof) make any change
in this option which will impair the rights of the Grantee herein, without the
consent of the Grantee.
11. Law Governing Option
This option shall be construed under and governed by the laws of the
State of Ohio.
12. Change in Control and Potential Change in Control
In the event of a "Change in Control" or a "Potential Change in
Control" of the Company, as said terms are hereinafter defined, all options
granted herein not yet exercisable shall immediately become exercisable and
vested.
A "Change in Control" shall be deemed to have occurred if:
(i) there shall be consummated (A) any consolidation or merger of
the Company in which the Company is not the continuing or
surviving corporation or pursuant to which shares of the
Company's Common Stock would be converted
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into cash, securities or other property, other than a merger
of the Company in which the holders of the Company's Common
Stock immediately prior to the merger have substantially the
same proportionate ownership of common stock of the
surviving corporation immediately after the merger, or (B) any
sale, lease, exchange or other transfer (in one transaction or
a series of related transactions) of all or substantially all
the assets of the Company, or
(ii) the shareholders of the Company shall approve any plan or
proposal for the liquidation or dissolution of the Company, or
(iii) any person (as such term is used in Sections 13(d) and
14(d)(2) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act")), other than the Company or a Subsidiary
or any employee benefit plan sponsored by the Company or a
Subsidiary, shall become the beneficial owner (within the
meaning of Rule 13d-3 under the Exchange Act) of securities
of the Company representing 30% or more of the combined voting
power of the Company's then outstanding securities ordinarily
(and apart from rights accruing in special circumstances)
having the right to vote in the election of director, as a
result of a tender or exchange offer, open market purchases,
privately negotiated purchases or otherwise, or
(iv) at any time during a period of two consecutive years,
individuals who at the beginning of such period constituted
the Board of Directors of the Company shall cease for any
reason to constitute at least a majority thereof, unless the
election or the nomination for election by the Company's
shareholders of each new director during such two-year period
was approved by a vote of at least two-thirds of the directors
then still in office who were directors at the beginning of
such two-year period.
For purposes hereof, ownership of voting securities shall take into
account and shall include ownership as determined by applying the provisions of
Rule 13d-3(d)(1)(1) (as in effect on the Approval Date) pursuant to the
Exchange Act.
A Potential Change in Control means the happening of any one of the
following:
(i) The entering into an agreement by the Company, the
consummation of which would result in a Change in Control of
the Company as defined above; or
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(ii) The acquisition of beneficial ownership, directly, or
indirectly, by any entity, person or group (other than the
Company or any Company employee benefit plan, including any
trustee of such plan acting as such trustee) of securities of
the Company representing 5% or more of the combined voting
power of the Company's outstanding securities, and the
adoption by the Board of a resolution to the effect that a
"Potential Change in Control" of the Company has occurred for
the purposes of the Stock Option and Award Plan.
IN WITNESS WHEREOF, the Company has caused this instrument to be
executed in duplicate by its proper officers duly authorized and its corporate
seal to be hereto affixed, at Youngstown, Ohio, this _________ day of
______________________, 19__.
COMMERCIAL INTERTECH CORP.
By __________________________________
Attest ______________________________
Secretary
S E A L
ACCEPTANCE
I hereby accept the within option in accordance with the terms and
conditions thereof.
_____________________________
Witness:
___________________________________________
-6-
<PAGE> 1
EXHIBIT 5
[Commercial Intertech Corp. Letterhead]
August 1, 1995
Commercial Intertech Corp.
1775 Logan Avenue
Youngstown, OH 44505
Re: Registration Statement on Form S-8
Ladies and Gentlemen:
I acted as general counsel for Commercial Intertech Corp., an Ohio
corporation (the "Company"), in connection with the preparation and filing of a
Registration Statement on Form S-8 (the "Registration Statement") with the
Securities and Exchange Commission under the Securities Act of 1933, as
amended. The Registration Statement relates to 750,000 shares of the Company's
Common Stock, $1.00 par value per share (the "Common Stock").
In connection with this opinion, I have relied as to matters of fact,
without investigation, upon certificates of public officals and others and upon
affidavits, certificates and written statements of directors, officers and
employees of, and the accountants for, the Company. I have also examined
originals or copies, certified or otherwise identified to my satisfaction, of
such instruments, documents and records as I have deemed relevant and necessary
to examine for the purpose of this opinion, including (a) the Registration
Statement, (b) the Articles of Incorporation, as amended, of the Company, (c)
the Code of Regulations, as amended, of the Company, (d) resolutions adopted by
the Board of Directors of the Company, and (e) the Company's Stock Option and
Award Plan of 1995 (the "Plan").
In connection with this opinion, I have assumed the accuracy and
completeness of all documents and records that I have reviewed, the genuineness
of all signatures, the due authority of the parties signing such documents, the
authenticity of the documents submitted to me as originals and the conformity
to authentic original documents of all documents submitted to me as certified,
conformed or reproduced copies.
Based upon and subject to the foregoing, it is my opinion that the up to
750,000 shares of Common Stock covered by the Registration Statement, to the
extent issued by the Company after the date hereof, when issued and sold by the
Company and paid for in accordance with the provisions of the Plan, will be
validly issued, fully paid and nonassessable shares of Common Stock.
My opinion expressed above is limited to the laws of the State of Ohio,
and I do not express any opinion herein concerning any other laws. This
opinion is solely for the information of the addressee hereof and is not to
be quoted in full or in part or otherwise referred to, nor is it to be filed
with any governmental agency or any other person without my prior written
consent. This opinion is given as of the date hereof and I assume no
obligation to advise you of changes that may hereafter be brought to my
attention.
I hereby consent to the use of this opinion for filing as Exhibit 5 to the
Registration Statement.
Very truly yours,
/s/ GILBERT M. MANCHESTER
Gilbert M. Manchester
General Counsel
<PAGE> 1
EXHIBIT 23.1
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration
Statement (Form S-8 No. 33-00000) pertaining to the Commercial Intertech Corp.
Stock Option and Award Plan of 1995, of our report dated December 9, 1994, with
respect to the consolidated financial statements and schedule of Commercial
Intertech Corp. included in its Annual Report (Form 10-K) for the year ended
October 31, 1994, filed with the Securities and Exchange Commission.
ERNST & YOUNG LLP
Cleveland, Ohio
July 27, 1995
