<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 5, 1997
REGISTRATION NO. 333-
================================================================================
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 44505
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES INCLUDING ZIP CODE)
COMMERCIAL INTERTECH CORP. NON-EMPLOYEE DIRECTORS' PERFORMANCE SHARE PLAN
(FULL TITLE OF PLAN)
GILBERT M. MANCHESTER
COMMERCIAL INTERTECH CORP.
1775 LOGAN AVENUE
YOUNGSTOWN, OHIO 44505
(330) 740-8304
(NAME, ADDRESS AND TELEPHONE NUMBER OF AGENT FOR SERVICE)
COPIES TO:
MARK D. WOOD
KATTEN MUCHIN & ZAVIS
525 WEST MONROE STREET
SUITE 1600
CHICAGO, ILLINOIS 60661
(312) 902-5200
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
==================================================================================================================================
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF SECURITIES AMOUNT TO BE OFFERING PRICE AGGREGATE OFFERING AMOUNT OF
TO BE REGISTERED REGISTERED(2) PER SHARE(3) PRICE(3) REGISTRATION FEE
- ----------------------------------------------------------------------------------------------------------------------------------
Common Stock
<S> <C> <C> <C> <C>
($1.00 par value)(1)............. 150,000 shares $17.875 $2,681,250 $813
==================================================================================================================================
<FN>
(1) Including preferred share purchase rights.
(2) Includes an indeterminate number of shares of Common Stock that may be
issuable by reason of stock splits, stock dividends or similar
transactions.
(3) The amounts are based upon the average of the high and low sales prices of
the Common Stock as reported on the New York Stock Exchange on December 2,
1997 and are used solely for the purpose of calculating the registration
fee pursuant to Rule 457(c) under the Securities Act of 1933.
</TABLE>
================================================================================
<PAGE> 2
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
The information called for in Part I of Form S-8 is currently included
in the prospectus for the Commercial Intertech Corp. Non-Employee Directors'
Performance Share Plan (the "Plan"), and is not being filed with or included in
this registration statement on Form S-8 in accordance with the rules and
regulations of the Securities and Exchange Commission (the "SEC").
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents 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, 1996.
2. The Company's quarterly reports on Form 10-Q for the fiscal
quarters ended January 31, 1997, April 30, 1997 and July 31,
1997.
3. The Company's Current Report on Form 8-K dated November 18,
1996.
4. The description of the Company's common stock, $1.00 par value
per share ("Common Stock"), and preferred share purchase
rights contained in the Registration Statement on Form 8-A
filed under Section 12 of 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.
The Company hereby undertakes to provide without charge to each person
who has received a copy of the prospectus to which this registration statement
relates, upon the written or oral request of any such person, a copy of any or
all the documents that have been or may be incorporated by reference into this
registration statement, other than exhibits to such documents (unless such
exhibits are incorporated therein by reference). Written or telephone requests
for such copies should be directed to the Company's principal executive office:
Commercial Intertech Corp., 1775 Logan Avenue, Youngstown, Ohio 44505.
Attention: Gilbert M. Manchester (telephone: 330-740-8304).
II-2
<PAGE> 3
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 interest 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.
II-3
<PAGE> 4
ITEM 8. EXHIBITS.
4.1 The Commercial Intertech Corp. Non-Employee Directors'
Performance Share Plan.
4.2 Articles of Incorporation of the Company filed as of April 17,
1992 (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 the
shares of Common Stock being offered under the Plan.
23.1 Consent of Ernst & Young LLP, independent auditors.
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;
(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. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar
value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form
of prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume and price
represent no more than 20% change in the maximum aggregate
offering price set forth in the "Calculation of Registration
Fee" table in the effective Registration Statement.
(iii) To include any material information with
respect to the plan of distribution required to be but 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 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
II-4
<PAGE> 5
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 the purpose 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
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 informed that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Act 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 Act and will
be governed by the final adjudication of such issue.
II-5
<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 3rd day of
December, 1997.
COMMERCIAL INTERTECH CORP.
By: /s/ Paul J. Powers
----------------------------------------
Paul J. Powers
Chairman, President and Chief Executive Officer
Each person whose signature appears below hereby constitutes and
appoints Bruce C. Wheatley, Gilbert M. Manchester and Mark D. Wood, and each of
them, his true and lawful attorneys-in-fact and agents, with full power of
substitution, 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 said
attorneys-in-fact and agents 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 and to all intents and purposes as each might or could do in
person, hereby ratifying and confirming each act that said attorneys-in-fact and
agents 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 December 3, 1997.
SIGNATURE TITLE
- ---------------------------- -------------------------------------------------
/s/ Paul J. Powers CHAIRMAN OF THE BOARD, PRESIDENT, CHIEF EXECUTIVE
- ---------------------------- OFFICER AND DIRECTOR (PRINCIPAL EXECUTIVE
PAUL J. POWERS OFFICER)
/s/ Steven J. Hewitt SENIOR VICE PRESIDENT AND CHIEF FINANCIAL OFFICER
- ---------------------------- (PRINCIPAL FINANCIAL AND ACCOUNTING OFFICER)
STEVEN J. HEWITT
/s/ William J. Bresnahan DIRECTOR
- ----------------------------
WILLIAM J. BRESNAHAN
/s/ William W. Cushwa DIRECTOR
- ----------------------------
WILLIAM W. CUSHWA
/s/ Charles B. Cushwa, III DIRECTOR
- ----------------------------
CHARLES B. CUSHWA, III
/s/ Richard J. Hill DIRECTOR
- ----------------------------
RICHARD J. HILL
/s/ Don E. Tucker DIRECTOR
- ----------------------------
DON E. TUCKER
/s/ George M. Smart DIRECTOR
- ----------------------------
GEORGE M. SMART
II-6
<PAGE> 7
EXHIBIT INDEX
SEQUENTIAL
EXHIBIT PAGE
NUMBER DESCRIPTION NUMBER
- ---------- ------------------------------------------------------ ----------
4.1 The Commercial Intertech Corp. Non-Employee Directors'
Performance Share Plan.
5 Opinion of Gilbert M. Manchester as to the legality of
the shares of Common Stock being offered under the Plan.
23.1 Consent of Ernst & Young LLP, independent auditors.
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).
<PAGE> 1
Exhibit 4.1
COMMERCIAL INTERTECH CORP.
NON-EMPLOYEE DIRECTORS' PERFORMANCE SHARE PLAN
EFFECTIVE DECEMBER 1, 1997
<PAGE> 2
COMMERCIAL INTERTECH CORP.
NON-EMPLOYEE DIRECTORS' PERFORMANCE SHARE PLAN
TABLE OF CONTENTS
-----------------
PAGE
----
ARTICLE I
- ---------
ESTABLISHMENT............................................................... 1
1.1 PURPOSE....................................................... 1
ARTICLE II
- ----------
DEFINITIONS................................................................. 1
2.1 "AFFILIATE"................................................... 1
2.2 "AGREEMENT" or "AWARD AGREEMENT".............................. 1
2.3 "AWARD"....................................................... 1
2.4 "BENEFICIARY"................................................. 1
2.5 "BOARD OF DIRECTORS" or "BOARD"............................... 1
2.6 "CHANGE IN CONTROL" and "POTENTIAL CHANGE IN CONTROL"......... 2
2.7 "CODE" or "INTERNAL REVENUE CODE"............................. 2
2.8 "COMMISSION".................................................. 2
2.9 "COMMITTEE"................................................... 2
2.10 "COMMON STOCK"................................................ 2
2.11 "COMPANY"..................................................... 2
2.12 "DIRECTOR".................................................... 2
2.13 "DISABILITY".................................................. 2
2.14 "EFFECTIVE DATE".............................................. 2
2.15 "EXCHANGE ACT"................................................ 2
2.16 "FAIR MARKET VALUE"........................................... 2
2.17 "PARTICIPANT"................................................. 3
2.18 "PERFORMANCE SHARE"........................................... 3
2.19 "PLAN"........................................................ 3
2.20 "REPRESENTATIVE".............................................. 3
2.21 "RULE 16b-3" ................................................. 3
2.22 "SECURITIES ACT".............................................. 3
ARTICLE III
- -----------
ADMINISTRATION.............................................................. 4
3.1 COMMITTEE STRUCTURE AND AUTHORITY............................. 4
ARTICLE IV
- ----------
i
<PAGE> 3
PAGE
----
COMMON STOCK SUBJECT TO PLAN................................................ 5
4.1 NUMBER OF SHARES.............................................. 5
4.2 RELEASE OF SHARES............................................. 5
4.3 RESTRICTIONS ON SHARES........................................ 5
4.4 PERFORMANCE SHAREHOLDERS RIGHTS............................... 5
4.5 REASONABLE EFFORTS TO REGISTER................................ 6
4.6 ADJUSTMENTS................................................... 6
4.7 LIMITED TRANSFER DURING OFFERING.............................. 6
ARTICLE V
- ---------
PERFORMANCE SHARES.......................................................... 7
5.1 PERFORMANCE SHARE AWARDS...................................... 7
5.2 PERFORMANCE CONDITIONS........................................ 7
5.3 PERFORMANCE GOALS GENERALLY................................... 7
5.4 WRITTEN DETERMINATIONS........................................ 8
5.5 TERMINATION OF DIRECTORSHIP DUE TO DEATH, DISABILITY OR
RETIREMENT.................................................... 8
ARTICLE VI
- ----------
CHANGE IN CONTROL .......................................................... 8
6.1 SPECIAL PROVISIONS REGARDING A CHANGE IN CONTROL.............. 8
6.2 DEFINITION OF "CHANGE IN CONTROL"............................. 9
6.3 CHANGE IN CONTROL PRICE....................................... 10
ARTICLE VII
- -----------
MISCELLANEOUS............................................................... 10
7.1 AMENDMENTS AND TERMINATION.................................... 10
7.2 GENERAL PROVISIONS............................................ 10
7.3 AWARDS IN SUBSTITUTION FOR AWARDS GRANTED BY OTHER
CORPORATIONS.................................................. 12
7.4 DELAY......................................................... 12
7.5 HEADINGS...................................................... 12
7.6 SEVERABILITY.................................................. 12
7.7 SUCCESSORS AND ASSIGNS........................................ 12
7.8 ENTIRE AGREEMENT.............................................. 12
ii
<PAGE> 4
COMMERCIAL INTERTECH CORP.
NON-EMPLOYEE DIRECTORS' PERFORMANCE SHARE PLAN
ARTICLE I
---------
ESTABLISHMENT
-------------
1.1 PURPOSE. The Commercial Intertech Corp. Non-Employee Directors'
Performance Share Plan ("Plan") is hereby established by Commercial Intertech
Corp. ("Company"). The purpose of the Plan is to promote the overall financial
objectives of the Company and its stockholders by motivating directors of the
Company who are not employees to further align their interests with those of the
stockholders of the Company and to achieve long-term growth and performance of
the Company. The Plan is adopted effective as of December 1, 1997 ("Effective
Date").
ARTICLE II
----------
DEFINITIONS
-----------
For purposes of the Plan, the following terms are defined as set forth
below:
2.1 "AFFILIATE" means any individual, corporation, partnership, limited
liability company, association, joint-stock company, trust, unincorporated
association or other entity (other than the Company) that directly, or
indirectly through one or more intermediaries, controls, is controlled by, or is
under common control with, the Company, including, without limitation, any
member of an affiliated group of which the Company is a common parent
corporation as provided in Section 1504 of the Code.
2.2 "AGREEMENT" or "AWARD AGREEMENT" means, individually or collectively,
any agreement entered into pursuant to this Plan pursuant to which an Award is
granted to a Participant.
2.3 "AWARD" means any Performance Share granted pursuant to the Plan.
2.4 "BENEFICIARY" means the person or trust which has been designated by a
Participant in his or her most recent written beneficiary designation filed with
the Committee to receive the benefit specified under the Plan to the extent
permitted. If there is no designated beneficiary, then the term means the person
or persons, trust or trusts entitled by will or the laws of descent and
distribution to receive such benefits.
2.5 "BOARD OF DIRECTORS" or "BOARD" means the Board of Directors of the
Company.
<PAGE> 5
2.6 "CHANGE IN CONTROL" and "POTENTIAL CHANGE IN CONTROL" shall have the
meanings set forth in Article VI.
2.7 "CODE" or "INTERNAL REVENUE CODE" means the Internal Revenue Code of
1986, as amended, Treasury Regulations (including proposed regulations)
thereunder and any subsequent Internal Revenue Code.
2.8 "COMMISSION" means the Securities and Exchange Commission or any
successor agency.
2.9 "COMMITTEE" means the person or persons appointed by the Board of
Directors to administer the Plan, as further described in the Plan.
2.10 "COMMON STOCK" means the shares of the common stock, par value $1.00
per share, of the Company, whether presently or hereafter issued, and any other
stock or security resulting from adjustment thereof as described hereinafter or
the common stock of any successor to the Company which is designated for the
purpose of the Plan.
2.11 "COMPANY" means Commercial Intertech Corp., an Ohio corporation, and
includes any successor or assignee entity into which the Company may be merged,
changed or consolidated; any entity for whose securities all or substantially
all of the securities of the Company shall be exchanged; and any assignee of or
successor to substantially all of the assets of the Company.
2.12 "DIRECTOR" means each and any director who serves on the Board and who
is not an officer or employee of the Company or any of its Affiliates.
2.13 "DISABILITY" means a mental or physical illness that renders a
Participant totally and permanently incapable of performing the Participant's
duties for the Company or an Affiliate. Notwithstanding the foregoing, a
Disability shall not qualify under the Plan if it is the result of (i) a
willfully self-inflicted injury or willfully self-induced sickness; or (ii) an
injury or disease contracted, suffered, or incurred while participating in a
criminal offense. The determination of Disability shall be made by the
Committee. The determination of Disability for purposes of the Plan shall not be
construed to be an admission of disability for any other purpose.
2.14 "EFFECTIVE DATE" means December 1, 1997.
2.15 "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
2.16 "FAIR MARKET VALUE" means the value determined on the basis of the
good faith determination of the Committee or under procedures established by the
Committee. Unless otherwise determined by the Committee, the Fair Market Value
as of any date shall be the closing price of the Common Stock on a consolidated
basis for stock listed on the principal exchange or market on which the Common
Stock may be traded on the date as of which such value is being determined or,
if there is no sale on that date, then on the last previous day on which a sale
was reported.
2
<PAGE> 6
2.17 "PARTICIPANT" means a Director to whom an Award has been granted under
the Plan, and in the event a Representative is appointed for a Participant or
another person becomes a Representative, then the term "Participant" shall mean
such appointed Representative. The term shall also include a trust for the
benefit of the Participant, the Participant's parents, spouse or descendants; a
partnership the interests in which are for the benefit of the Participant, the
Participant's parents, spouse or descendants; or a custodian under a uniform
gifts to minors act or similar statute for the benefit of the Participant's
descendants, to the extent permitted by the Committee and not inconsistent with
an application of Rule 16b-3. Notwithstanding the foregoing, the term
"Termination of Directorship" shall mean the Termination of Directorship of the
Director.
2.18 "PERFORMANCE SHARE" means the Common Stock or other cash or property
earned under an Award.
2.19 "PLAN" means the Commercial Intertech Corp. Non-Employee Directors'
Performance Share Plan, as herein set forth and as may be amended from time to
time.
2.20 "REPRESENTATIVE" means (a) the person or entity acting as the executor
or administrator of a Participant's estate pursuant to the last will and
testament of a Participant or pursuant to the laws of the jurisdiction in which
the Participant had the Participant's primary residence at the date of the
Participant's death; (b) the person or entity acting as the guardian or
temporary guardian of a Participant; (c) the person or entity which is the
Beneficiary of the Participant upon or following the Participant's death; or (d)
any person to whom an Award has been permissibly transferred by the Committee or
by operation of law; provided that only one of the foregoing shall be the
Representative at any point in time as determined under applicable law and
recognized by the Committee.
2.21 "RULE 16b-3" means Rule 16b-3 as promulgated under the Exchange Act,
as amended from time to time, or any successor thereto, in effect and applicable
to the Plan and Participants.
2.22 "SECURITIES ACT" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
In addition, certain other terms used herein have definitions given to them
in the first place in which they are used.
3
<PAGE> 7
ARTICLE III
-----------
ADMINISTRATION
--------------
3.1 COMMITTEE STRUCTURE AND AUTHORITY. The Plan shall be administered by
the Committee which, except as provided herein, shall be comprised of one or
more persons. The Committee shall be the Management Evaluation and Compensation
Committee of the Board of Directors, unless such committee does not exist or the
Board establishes another committee whose purpose is the administration of the
Plan. In the absence of an appointment, the Board shall be the Committee;
provided that only those members of the Board who participate in the decision
under the Plan shall be deemed to be part of the "Committee" for purposes of the
Plan. A majority of the Committee shall constitute a quorum at any meeting
thereof (including telephone conference) and the acts of a majority of the
members present, or acts approved in writing by a majority of the entire
Committee without a meeting, shall be the acts of the Committee for purposes of
the Plan.
The Committee may authorize any one or more of its members or an officer of
the Company to execute and deliver documents on behalf of the Committee. A
member of the Committee shall not exercise any discretion respecting himself or
herself under the Plan. The Board shall have the authority to remove, replace or
fill any vacancy of any member of the Committee upon notice to the Committee and
the affected member. Any member of the Committee may resign upon notice to the
Board. The Committee may allocate among one or more of its members, or may
delegate to one or more of its agents, such duties and responsibilities as it
determines.
The Committee shall have the authority, subject to the terms of the Plan to
adopt, alter and repeal such administrative rules, guidelines and practices
governing the Plan as it shall, from time to time, deem advisable, to interpret
the terms and provisions of the Plan and any Award issued under the Plan and to
otherwise supervise the administration of the Plan. The Committee's policies and
procedures may differ with respect to Awards granted at different times or to
different Participants. Any determination made by the Committee pursuant to the
provisions of the Plan shall be made in its sole discretion. All decisions made
by the Committee pursuant to the provisions of the Plan shall be final and
binding on all persons, including the Company and Participants. Any
determination shall not be subject to DE NOVO review if challenged in court.
4
<PAGE> 8
ARTICLE IV
----------
COMMON STOCK SUBJECT TO PLAN
----------------------------
4.1 NUMBER OF SHARES. Subject to adjustment under Section 4.6, the total
number of shares of Common Stock reserved and available for issuance pursuant to
Awards under the Plan shall be 150,000 shares authorized for issuance on the
Effective Date. Such shares shall consist, in their entirety, of shares held in
treasury by the Company.
4.2 RELEASE OF SHARES. Subject to Section 4.1, the Committee shall have
full authority to determine the number of shares of Common Stock available for
Awards and in its discretion may include (without limitation) as available for
distribution any shares of Common Stock that have ceased to be subject to
Awards, any shares of Common Stock subject to any Awards that are forfeited, any
Awards that otherwise terminate without issuance of shares of Common Stock being
made to the Participant, or any shares of Common Stock that are received by the
Company in connection with an Award, including the satisfaction of any tax
liability or the satisfaction of a tax withholding obligation. If any shares
could not again be available for Awards to a particular Participant under
applicable law, such shares shall be available exclusively for Awards to
Participants who are not subject to such limitations.
4.3 RESTRICTIONS ON SHARES. Shares of Common Stock issued upon exercise of
an Award shall be subject to the terms and conditions specified herein and to
such other terms, conditions and restrictions as the Committee in its discretion
may determine or provide in the Agreement. The Company shall not be required to
issue or deliver any certificates for shares of Common Stock, cash or other
property prior to (i) the listing of such shares on any stock exchange or other
public market on which the Common Stock may then be listed (or regularly
traded), as the Committee determines to be necessary or advisable, (ii) the
completion of any registration or qualification of such shares under federal or
state law, or under any ruling or regulation of any government body, which the
Committee determines to be necessary or advisable, and (iii) the satisfaction of
any applicable withholding obligation in order for the Company or an Affiliate
to obtain a deduction with respect to an Award. The Company may cause any
certificate for any share of Common Stock to be delivered to be properly marked
with a legend or other notation reflecting the limitations on transfer of such
Common Stock as provided in the Plan or as the Committee may otherwise require.
The Committee may require any person receiving Common Stock to make such
representations and furnish such information as it may consider appropriate in
connection with the issuance or delivery of the shares of Common Stock in
compliance with applicable law or otherwise. Fractional shares shall not be
delivered, but shall be rounded to the next lower whole number of shares.
4.4 PERFORMANCE SHAREHOLDERS RIGHTS. No person shall have any rights of a
stockholder as to shares of Common Stock subject to an Award until, after proper
exercise of the Award or other action required, such shares shall have been
recorded on the Company's official stockholder records as having been issued and
transferred. Upon exercise or other required action with respect to the Award or
any portion thereof, the Company will have a reasonable time in which to issue
the shares, and the Participant will not be treated as a stockholder for any
purpose whatsoever prior to such issuance. No adjustment shall be made for cash
dividends or other rights for which the record date is prior to the date
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such shares are recorded as issued and transferred in the Company's official
stockholder records, except as provided herein or in an Agreement.
4.5 REASONABLE EFFORTS TO REGISTER. The Company will use its best efforts
to file a registration statement under the Securities Act relating to the Common
Stock delivered or deliverable pursuant to Awards on Commission Form S-8 if
available to the Company for this purpose (or any successor or alternate form
that is substantially similar to that form to the extent available to effect
such registration), in accordance with the rules and regulations governing such
Form, as soon as practicable after the Committee determines that the filing of
such registration statement is necessary or advisable. The Company will use its
reasonable efforts to cause the registration statement to become effective as
soon thereafter as possible and will file such supplements and amendments to the
registration statement as may be necessary to keep the registration statement in
effect until the earliest of (a) one year following the expiration of the
relevant period of the last Award outstanding, (b) the date the Company is no
longer a reporting company under the Exchange Act and (c) the date all
Participants have disposed of all shares delivered pursuant to any Award. The
Company may delay any of the foregoing obligations if the Committee reasonably
determines that any such registration would materially and adversely affect the
Company's interests or would be of no material benefit to Participants.
4.6 ADJUSTMENTS. In the event of a stock dividend, stock split, combination
or exchange of shares, recapitalization or other change in the capital structure
of the Company, corporate separation or division of the Company (including, but
not limited to, a split-up, spin-off, split-off or distribution to Company
stockholders other than a normal cash dividend), sale by the Company of all or a
substantial portion of its assets (measured on either a stand-alone or
consolidated basis), reorganization, rights offering, a partial or complete
liquidation, or any other corporate transaction, Company stock offering or event
involving the Company and having an effect similar to any of the foregoing, then
the Committee may adjust or substitute, as the case may be, the number of shares
of Common Stock available for Awards under the Plan, the number of shares of
Common Stock covered by outstanding Awards and any other characteristics or
terms of the Awards as the Committee may deem necessary or appropriate to
reflect equitably the effects of such changes to the Participants; provided,
however, that any fractional shares resulting from such adjustment shall be
eliminated by rounding to the next lower whole number of shares with appropriate
payment for such fractional shares as shall reasonably be determined by the
Committee.
4.7 LIMITED TRANSFER DURING OFFERING. In the event there is an effective
registration statement under the Securities Act pursuant to which shares of
Common Stock shall be offered for sale in an underwritten offering, a
Participant shall not, during the period requested by the underwriters managing
the registered public offering, effect any public sale or distribution of shares
received directly or indirectly pursuant to an Award.
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ARTICLE V
---------
PERFORMANCE SHARES
------------------
5.1 PERFORMANCE SHARE AWARDS. Each Participant shall be granted an Award of
1,500 Performance Shares under the terms and conditions specified in the
Agreement commencing with the fiscal year of the Company including the Effective
Date and every second year thereafter each Participant shall be granted an Award
of 2,000 Performance Shares or, if a Participant first becomes a Director after
the Effective Date, commencing with the first such Award date following the date
the Director is first elected or appointed as such, such Participant shall be
granted an Award of 1,500 Performance Shares and every second anniversary
thereof, shall be granted an Award of 2,000 Performance Shares. In addition, the
Committee may grant additional Performance Shares in its sole discretion;
provided, however, no Director may earn more than 5,000 Performance Shares in
any calendar year.
5.2 PERFORMANCE CONDITIONS. The right of a Participant to exercise or
receive a grant or settlement of any Award, and its timing, may be subject to
performance conditions specified by the Committee. The Committee may use
business criteria and other measures of performance it deems appropriate in
establishing any performance conditions, and may exercise its discretion to
reduce or increase the amounts payable under any Award subject to performance
conditions.
5.3 PERFORMANCE GOALS GENERALLY. The performance goals for such Performance
Awards shall consist of one or more business criteria and a targeted level or
levels of performance with respect to such criteria, as specified by the
Committee consistent with this Section 5.3. The Committee may determine that
more than one performance goal must be achieved as a condition to settlement of
such Performance Awards. Performance goals may differ for Performance Awards
granted to any one Participant or to different Participants.
(a) BUSINESS CRITERIA. One or more of the following business
criteria for the Company, on a consolidated basis, and/or for specified
subsidiaries or business units of the Company (except with respect to the
total stockholder return and earnings per share criteria), shall be used
exclusively by the Committee in establishing performance goals for such
Performance Awards: (1) total stockholder return; (2) such total
stockholder return as compared to total return (on a comparable basis) of a
publicly available index such as, but not limited to, the DJID or NYSE
Index; (3) net income; (4) operating income; (5) EBITDA; (6) pre-tax
operating earnings after interest expense and before bonuses, service fees,
and extraordinary or special items; (7) operating margin; (8) earnings per
share; (9) return on equity; (10) return on capital; (11) return on
investment; and (12) working capital.
(b) PERFORMANCE PERIOD: TIMING FOR ESTABLISHING PERFORMANCE GOALS.
Achievement of performance goals in respect of such Performance Awards
shall be measured over such periods as may be specified by the Committee.
(c) SETTLEMENT OF PERFORMANCE AWARDS; OTHER TERMS. Settlement of
Performance Awards shall be in Common Stock or other Awards, in the
discretion of the Committee. The Committee may, in its discretion, reduce
the amount of a settlement otherwise to be made in connection with
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such Performance Awards, but may not exercise discretion to increase any
such amount payable in respect of a Performance Award subject to this
Section 5.3. The Committee shall specify the circumstances in which such
Performance Awards shall be forfeited or paid in the event of a Termination
of Employment or a Change in Control prior to the end of a performance
period or settlement of Performance Awards, and other terms relating to
such Performance Awards.
5.4 WRITTEN DETERMINATIONS. All determinations by the Committee as to the
establishment of performance goals and the potential Performance Awards related
to such performance goals and as to the achievement of performance goals
relating to such Awards, shall be made in writing. The Committee may not
delegate any responsibility relating to such Performance Awards.
5.5 TERMINATION OF DIRECTORSHIP DUE TO DEATH, DISABILITY OR RETIREMENT. In
the event a Participant ceases to be a Director by reason of death, disability
or retirement during a period when Performance Conditions have not been
satisfied in their entirety, the Participant shall receive a prorated payout
with respect to the Performance Shares relating to such 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 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 remained Directors during
the applicable period.
ARTICLE VI
----------
CHANGE IN CONTROL
-----------------
6.1 SPECIAL PROVISIONS REGARDING A CHANGE IN CONTROL.
Notwithstanding any other provision of the Plan to the contrary, unless
otherwise provided in an Agreement to the contrary, in the event of a Change in
Control, any restrictions or deferrals applicable to Performance Share Awards
shall lapse, such Awards shall become free of all restrictions and become fully
vested and transferable to the full extent of the original grants, any
performance conditions established in accordance with Section 5.2 with respect
to any Performance Share shall be deemed to have been met, and any Performance
Goals established in accordance with Section 5.3 shall be deemed to have been
attained.
In addition, the Committee shall have full discretion, notwithstanding
anything herein or in an Agreement to the contrary, to do any or all of the
following with respect to an outstanding Award:
(a) To cause any Award to be cancelled, provided notice of at
least 15 days thereof is provided before the date of cancellation;
(b) To provide that the securities of another entity be
substituted hereunder for the Performance Share and to make equitable
adjustment with respect thereto;
(c) To grant each Participant the right, by giving notice during a
pre-set period, to surrender all or part of an Award to the Company and to
receive cash in an amount equal to the "Change in Control Price" (as
defined in Section 6.4) per Performance Share on the date of such election
multiplied by the number of Performance Shares subject to the Award;
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(d) To require the assumption of the obligations of the Company
under the Plan, subject to appropriate adjustment; and
(e) To take any other action the Committee determines to take.
6.2 DEFINITION OF "CHANGE IN CONTROL". For purposes of this Article VI, a
"Change in Control" shall be deemed to have occurred if:
(a) There shall be consummated (i) 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
(ii) 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
(b) The shareholders of the Company shall approve any plan or
proposal for the liquidation or dissolution of the Company, or
(c) 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, shall become the beneficial
owner (within the meaning of Rule 13d-3 under the Exchange Act) of
securities of the Company representing 20% 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
(d) 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 nominating 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.
6.3 CHANGE IN CONTROL PRICE. For the purposes of this Article VI, "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.
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ARTICLE VII
-----------
MISCELLANEOUS
-------------
7.1 AMENDMENTS AND TERMINATION. The Board may amend, alter or discontinue
the Plan at any time, but no amendment, alteration or discontinuation shall be
made which would impair the rights of a Participant under an Award theretofore
granted without the Participant's consent, except such an amendment (a) made to
avoid an expense charge to the Company or an Affiliate, (b) made to cause the
Plan to qualify for the exemption provided by Rule 16b-3, or (c) made to permit
the Company or an Affiliate a deduction under the Code. In addition, no such
amendment shall be made without the approval of the Company's stockholders to
the extent such approval is required by law or agreement.
The Board may amend, alter or discontinue the Plan or an Award at any time
on the same conditions and limitations (and exceptions to limitations) as
applies to the Board's authority to amend the Plan and further subject to any
approval or limitations the Board may impose.
The Board shall have authority to amend the Plan to take into account
changes in law and tax and accounting rules, as well as other developments, and
to grant Awards which qualify for beneficial treatment under such rules without
stockholder approval. Notwithstanding anything in the Plan or an Agreement to
the contrary, if any right under this Plan or an Agreement would cause a
transaction to be ineligible for pooling of interests accounting that would, but
for the right hereunder, be eligible for such accounting treatment, the Board or
the Committee may modify or adjust the right so that pooling of interests
accounting is available.
7.2 GENERAL PROVISIONS.
(a) REPRESENTATION. The Committee may require each person
purchasing or receiving shares pursuant to an Award to represent to and
agree with the Company in writing that such person is acquiring the shares
without a view to the distribution thereof in violation of the Securities
Act. The certificates for such shares may include any legend which the
Committee deems appropriate to reflect any restrictions on transfer.
(b) WITHHOLDING. If determined to be required to protect the
Company, no later than the date as of which an amount first becomes
includable in the gross income of the Participant for Federal income tax
purposes with respect to any Award, the Participant shall pay to the
Company (or other entity identified by the Committee), or make arrangements
satisfactory to the Company or other entity identified by the Committee
regarding the payment of, any Federal, state, local or foreign taxes of any
kind required by law to be withheld with respect to such amount. Unless
otherwise determined by the Committee, withholding obligations may be
settled with Performance Shares, including Performance Shares that are part
of the Award that gives rise to the withholding requirement, provided that
any applicable requirements under Section 16 of the Exchange Act are
satisfied. The obligations of the Company under the Plan shall be
conditional on such payment or arrangements, and the Company and its
Affiliates shall, to the extent permitted by law, have the right to deduct
any such taxes from any payment otherwise due to the Participant.
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(c) CONTROLLING LAW. 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 (other than its law respecting choice of law).
The Plan shall be construed to comply with all applicable law and to avoid
liability to the Company, an Affiliate or a Participant, including, without
limitation, liability under Section 16(b) of the Exchange Act.
(d) OFFSET. Any amounts owed to the Company or an Affiliate by the
Participant of whatever nature may be offset by the Company from the value
of any Performance Shares, cash or other thing of value under the Plan or
an Agreement to be transferred to the Participant, and no Performance
Shares, cash or other thing of value under the Plan or an Agreement shall
be transferred unless and until all disputes between the Company and the
Participant have been fully and finally resolved and the Participant has
waived all claims to such against the Company or an Affiliate.
(e) FAIL-SAFE. 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 or Rule 16a-1(c)(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. Moreover, in the event the Plan does not
include a provision required by Rule 16b- 3 or Rule 16a-1(c)(3) to be
stated therein, such provision shall be deemed to be incorporated by
reference into the Plan with respect to Participants subject to Section 16.
(f) RIGHT TO CAPITALIZE. The grant of an Award shall in no way
affect the right of the Company to adjust, reclassify, reorganize or
otherwise change its capital or business structure or to merge,
consolidate, dissolve, liquidate or sell or transfer all or any part of its
business or assets.
7.3 AWARDS IN SUBSTITUTION FOR AWARDS GRANTED BY OTHER CORPORATIONS. Awards
may be granted under this Plan from time to time in substitution for awards held
by Directors in respect of other plans of other entities. The terms and
conditions of the Awards so granted may vary from the terms and conditions set
forth in this Plan at the time of such grant as the majority of the members of
the Committee may deem appropriate to conform, in whole or in part, to the
provisions of the awards in substitution for which they are granted.
7.4 DELAY. If at the time, the Participant is subject to "short-swing"
liability under Section 16 of the Exchange Act, any time period provided for
under the Plan, to the extent necessary to avoid the imposition of liability,
shall be suspended and delayed during the period the Participant would be
subject to such liability.
7.5 HEADINGS. The headings contained in the Plan are for reference purposes
only and shall not affect the meaning or interpretation of the Plan.
7.6 SEVERABILITY. If any provision of the Plan shall for any reason be held
to be invalid or unenforceable, such invalidity or unenforceability shall not
effect any other provision hereby, and the Plan shall be construed as if such
invalid or unenforceable provision were omitted.
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7.7 SUCCESSORS AND ASSIGNS. The Plan shall inure to the benefit of and be
binding upon each successor and assign of the Company. All obligations imposed
upon a Participant, and all rights granted to the Company hereunder, shall be
binding upon the Participant's heirs, legal representatives and successors.
7.8 ENTIRE AGREEMENT. The Plan and the Agreement constitute the entire
agreement with respect to the subject matter hereof and thereof, provided that
in the event of any inconsistency between the Plan and the Agreement, the terms
and conditions of the Plan shall control.
Executed as of December 1, 1997.
COMMERCIAL INTERTECH CORP.
By:
------------------------------------------------
Name:
--------------------------------------------
Title:
-------------------------------------------
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Exhibit 5
[Commercial Intertech Corp. Letterhead]
December 1, 1997
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 150,000 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 officials 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 Non-Employee
Directors' Performance Share Plan (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
150,000 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.
<PAGE> 2
Commercial Intertech Corp.
December 1, 1997
Page -14-
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
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Exhibit 23.1
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement (Form
S-8) pertaining to the Commercial Intertech Corp. Non-Employee Directors'
Performance Share Plan of our report dated December 9, 1996, 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, 1996,
filed with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
Cleveland, Ohio
December 2, 1997
15
