<PAGE>
As filed with the Securities and Exchange Commission
on May 17, 1996
Registration No. 333-_____
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
LIFELINE SYSTEMS, INC.
(Exact name of issuer as specified in its charter)
MASSACHUSETTS 04-2537528
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
640 MEMORIAL DRIVE, CAMBRIDGE, MASSACHUSETTS 02139
(Address of Principal Executive Offices) (Zip Code)
NON-STATUTORY STOCK OPTION
(Full title of the plan)
RONALD FEINSTEIN, PRESIDENT
LIFELINE SYSTEMS, INC.
640 MEMORIAL DRIVE
CAMBRIDGE, MASSACHUSETTS 02139
(Name and address of agent for service)
(617) 679-1000
(Telephone number, including area code, of agent for service)
APPROXIMATE DATE OF PROPOSED SALE TO PUBLIC:
From time to time beginning upon the effectiveness
of this Registration Statement
================================================================================
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed Proposed
Title of maximum maximum
securities Amount offering aggregate Amount of
to be to be price offering registration
registered registered per share price fee
- ---------- ---------- --------- --------- ------------
<S> <C> <C> <C> <C>
Common Stock, 102,000 $14.0625(1) $1,434,375.00(1) $495.00
$.02 shares
par value
</TABLE>
____________________________________________________________________
(1) Estimated solely for the purpose of calculating the registration fee, and
based upon the average of the high and low prices of the Common Stock on
the Nasdaq National Market on May 13, 1996 in accordance with Rules 457(c)
and 457(h) of the Securities Act of 1933.
================================================================================
<PAGE>
PART I. INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
The information required by Part I of Form S-3 relating to the 102,000
restricted securities registered hereunder for resale pursuant to General
Instruction C of Form S-8 is included in the Reoffer Prospectus filed together
with this Registration Statement.
PART II. INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Certain Documents by Reference.
-----------------------------------------------
The following documents, which are filed with the Securities and
Exchange Commission (the "Commission"), are incorporated in this Registration
Statement by reference:
(1) Lifeline Systems, Inc.'s (the "Registrant") latest annual report
filed pursuant to Sections 13(a) or 15(d) of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), or the latest prospectus filed
pursuant to Rule 424(b) under the Securities Act of 1933, as amended (the
"Securities Act") that contains audited financial statements for the
registrant's latest fiscal year for which such statements have been filed.
(2) All other reports filed pursuant to Sections 13(a) or 15(d) of
the Exchange Act since the end of the fiscal year covered by the annual
report or the prospectus referred to in (1) above.
(3) The description of the common stock of the Registrant, $.02 par
value per share (the "Common Stock"), contained in a Registration Statement
filed under the Exchange Act, including any amendment or report filed for
the purpose of updating such description.
All documents subsequently filed by the Registrant pursuant to
Sections 13(a), 13(c), 14, and 15(d) of the Exchange Act, prior to the filing of
a post-effective amendment which indicates that all shares of Common Stock
offered hereby have been sold or which deregisters all shares of Common Stock
then remaining unsold, shall be deemed to be incorporated by reference herein
and to be part hereof from the date of the filing of such documents.
Item 4. Description of Securities.
-------------------------
Not applicable.
Item 5. Interests of Named Experts and Counsel.
--------------------------------------
Norman B. Asher, a senior partner of the law firm of Hale and Dorr,
counsel to the Company, is the Clerk of the Company.
-2-
<PAGE>
Item 6. Indemnification
---------------
Article 6 of the Company's Articles of Organization provides that a
director of the Company shall not be personally liable to either the Company or
the Company's stockholders for monetary damages resulting from a breach of
fiduciary duty as a director, to the fullest extent permitted by Chapter 156B of
the General Laws of Massachusetts (the "Massachusetts Business Corporation
Law"). The Massachusetts Business Corporation Law prohibits the elimination or
limitation of directors' liability for any of the following:
(a) Breaches of the director's duty of loyalty to the Company or its
stockholders;
(b) Acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law;
(c) Acts covered by Sections 61 or 62 of the Massachusetts Business
Corporation Law (which relate generally to the liability of directors for
authorizing distributions to stockholders at a time when the Company is
insolvent or bankrupt and the liability of directors for approving loans to
officers or directors of the Company which are not repaid and which were
not approved or ratified by a majority of disinterested directors or
stockholders); and
(d) Transactions from which the director derived an improper personal
benefit.
The Massachusetts Business Corporation Law authorizes Massachusetts
corporations to indemnify directors and officers for actions taken in good faith
and in a manner such person reasonably believed to be in the best interests of
the corporation.
Under Article 5 of the By-Laws of the Company, the Company will
indemnify, to the fullest extent permitted by the Massachusetts Business
Corporation Law, each person who serves or has served as an officer or director
of the Company or in any capacity with respect to any employee benefit plan of
the Company against all liabilities and expenses (including judgments, fines,
penalties, amounts paid in settlement and reasonable attorney's fees) arising
out of the defense or disposition of any threatened or actual action, suit or
proceedings, whether civil or criminal, in which he may be a defendant or
otherwise may be involved by reason of his service as a director or officer of
the Company or as a fiduciary of any such employee benefit plan. However, the
Company shall provide no indemnification if the person seeking indemnification
has been adjudicated not to have acted in good faith in the reasonable belief
that his action was in the best interest of the Company or, if applicable, the
best interests of the participants in or beneficiaries of the Company's employee
benefit plans.
-3-
<PAGE>
The indemnification provisions of the By-Laws permit the Company to
indemnify directors and officers against claims resulting from suits against
such persons by or in the right of the Company (hereinafter referred to as
"derivative actions"), provided that such person is determined to have acted in
good faith in the reasonable belief that his action was in the best interest of
the Company. It is possible that a court will determine that the provision
relating to the indemnification for amounts paid on account of derivative
actions is against public policy and is therefore unenforceable.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised 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 Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
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 Registrant 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 and will be governed by the final
adjudication of such issue.
The Company maintains on behalf of its directors and officers
insurance protection against certain liabilities arising out of the discharge of
their duties. The Company also maintains insurance covering the Company against
indemnification payments to its directors and officers for certain liabilities.
However, to the extent such coverage is inadequate to cover claims against
directors or officers, the Company may be required pursuant to the By-Laws to
reimburse the directors or officers for the uninsured portion of such claims.
In such an event, the Company's indemnification obligations to its directors and
officers could have a material negative impact on the Company's financial
condition and on stockholder equity.
Item 7. Exemption from Registration Claimed
-----------------------------------
All of the shares of Common Stock of the Registrant covered by this
Registration Statement are being offered for resale by an affiliate of the
Registrant. These shares were issued to said affiliate by the Registrant upon
the exercise of the non-statutory stock option granted to the affiliate by the
Registrant in reliance on Section 4(2) of the Securities Act relating to sales
by an issuer not involving a public offering. The affiliate held a position with
the Registrant that would afford him access
-4-
<PAGE>
to or disclosure of the same type of information about the Registrant that a
registration statement would disclose.
Item 8. Exhibits.
--------
The Exhibit Index immediately preceding the exhibits is incorporated
herein by reference.
Item 9. Undertakings.
------------
1. The Registrant hereby undertakes:
(1) 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;
(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; and
(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 (i) and (ii) do not apply if the
-------- -------
Registration Statement is on Form S-3 or Form S-8, and the information
required to be included in a post-effective amendment by those paragraphs
is contained in periodic reports filed by the Registrant pursuant to
Section 13 or Section 15(d) of the Exchange Act that are incorporated by
reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, 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.
(3) 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 Registrant hereby undertakes that, for purposes of determining any
liability under the Securities Act, each filing of the Registrant's annual
report pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and,
where applicable, each filing of an
-5-
<PAGE>
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
in the initial bona fide offering thereof.
3. Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised 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 Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant 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 Registrant 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 and will be governed by the final
adjudication of such issue.
-6-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in Cambridge, Massachusetts on the 15th day of May, 1996.
LIFELINE SYSTEMS, INC.
By:/s/ Ronald Feinstein
--------------------
Ronald Feinstein
President and
Chief Executive Officer
POWER OF ATTORNEY
We, the undersigned officers and directors of Lifeline Systems, Inc. hereby
severally constitute Ronald Feinstein, Dennis M. Hurley, Norman B. Asher and
Jeffrey A. Stein, and each of them singly, our true and lawful attorneys with
full power to them, and each of them singly, to sign for us and in our names in
the capacities indicated below, the Registration Statement on Form S-8 filed
herewith and any and all subsequent amendments to said Registration Statement,
and generally to do all such things in our names and behalf in our capacities as
officers and directors to enable Lifeline Systems, Inc. to comply with all
requirements of the Securities and Exchange Commission, hereby ratifying and
confirming our signatures as they may be signed by said attorneys, or any of
them, to said Registration Statement and any and all amendments thereto.
-7-
<PAGE>
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed below by the following persons in the capacities and
on the dates indicated.
Signature Title Date
--------- ----- ----
/s/ Ronald Feinstein President, Chief )
- ----------------------- Executive Officer and )
Ronald Feinstein Director (Principal )
Executive Officer) )
)
)
)
/s/ Dennis M. Hurley Vice President, Finance )
- ----------------------- and Chief Financial )
Dennis M. Hurley Officer (Principal )
Financial and Accounting )
Officer) )
)
)
)
/s/ Everett N. Baldwin Director )
- ----------------------- )
Everett N. Baldwin )
)
)
/s/ Carolyn C. Roberts Director )
- ----------------------- )
Carolyn C. Roberts )
)
)
)
/s/ Joseph E. Kasputys Director ) May 15, 1996
- ----------------------- )
Joseph E. Kasputys, Ph.D. )
)
)
/s/ L. Dennis Shapiro Director )
- ----------------------- )
L. Dennis Shapiro )
)
)
/s/ Steven M. Tritman Director )
- ----------------------- )
Steven M. Tritman )
)
)
/s/ Gordon C. Vineyard Director )
- ----------------------- )
Gordon C. Vineyard, M.D. )
-8-
<PAGE>
EXHIBIT INDEX
-------------
Exhibit
Number Description Page
- ------- ----------- ----
4.1 (1) Articles of Organization of the Registrant,
as amended -
4.2 (2) By-Laws of the Registrant, as amended -
5.1 Opinion of Hale and Dorr 10
23.1 Consent of Hale and Dorr (included in Exhibit 5.1) -
23.2 Consent of Coopers & Lybrand L.L.P. 11
24.1 Power of Attorney (included on the signature page of
this Registration Statement) -
____________________
(1) Incorporated herein by reference from the Registrant's Registration
Statement on Form S-1, filed May 27, 1983 (Registration No. 2-84060), as
amended as set forth in the Registrant's Proxy Statement filed May 1, 1987
and incorporated herein by reference.
(2) Incorporated by reference from the Registrant's Form 10-K, filed April 1,
1991.
<PAGE>
Exhibit 5.1
-----------
HALE AND DORR
Counsellors at Law
60 State Street
Boston, Massachusetts 02109
May 15, 1996
Lifeline Systems, Inc.
640 Memorial Drive
Cambridge, Massachusetts 02139
Re: Non-Statutory Stock Option
--------------------------
Ladies and Gentlemen:
We have assisted in the preparation of a Registration Statement on Form S-8
(the "Registration Statement") to be filed with the Securities and Exchange
Commission relating to 102,000 shares (the "Shares") of Common Stock, $.02 par
value per share, of Lifeline Systems, Inc., a Massachusetts corporation (the
"Company"), issued to L. Dennis Shapiro on February 24, 1996, pursuant to a
written option agreement dated January 3, 1990.
We have examined the Articles of Organization of the Company, as amended,
the By-laws of the Company, as amended, and originals, or copies certified to
our satisfaction, of all pertinent records of the meetings of the directors and
stockholders of the Company, the Registration Statement and such other documents
relating to the Company as we have deemed material for the purposes of this
opinion.
In examination of the foregoing documents, we have assumed the genuineness
of all signatures and the authenticity of all documents submitted to us as
originals, the conformity to original documents of all documents submitted to us
as certified, photostatic or facsimile copies, and the authenticity of the
originals of any such documents.
Based on the foregoing, we are of the opinion that the Shares were duly
authorized and legally issued and are fully paid and nonassessable.
We hereby consent to the filing of this opinion with the Securities and
Exchange Commission in connection with the Registration Statement.
Very truly yours,
HALE AND DORR
<PAGE>
Exhibit 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration statement on
Form S-8 of our reports dated February 13, 1996 on our audits of the
consolidated financial statements and financial statement schedule of Lifeline
Systems, Inc.
/S/ Coopers & Lybrand L.L.P.
COOPERS & LYBRAND L.L.P
Boston, Massachusetts
May 15, 1996
<PAGE>
REOFFER
PROSPECTUS
- ----------
LIFELINE SYSTEMS, INC.
640 Memorial Drive
Cambridge, Massachusetts 02139
Telephone: (617) 679-1000
102,000 SHARES OF COMMON STOCK
($.02 par value per share)
NON-STATUTORY STOCK OPTION
-----------------------------------
The shares of common stock, $.02 par value per share (the "Common Stock"),
of Lifeline Systems Inc. (the "Company") covered by this Prospectus are issued
and outstanding shares which may be offered and sold, from time to time, for the
account of a certain stockholder of the Company (the "Selling Stockholder"). The
shares of Common Stock covered by this Prospectus (the "Shares") were issued by
the Company to said Selling Stockholder, an affiliate of the Company, in a
private placement made in connection with the exercise of a non-statutory stock
option granted by the Company. This Prospectus also covers such additional
shares that may be issuable with respect to the Shares in the event of any stock
dividend, split-up of shares, recapitalization or other similar change in the
Common Stock. The Company will not receive any of the proceeds from the sale of
the Shares by the Selling Stockholder.
-----------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED
BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
-----------------------------------
The Selling Stockholder has advised the Company that he proposes to offer,
from time to time, all or part of the shares of Common Stock on the Nasdaq
National Market in ordinary brokerage transactions, in negotiated transactions,
or otherwise, at such prices and on such terms as may be obtainable and
satisfactory to the Selling Stockholder. No underwriting discounts or
commissions will be paid other than normal brokerage commissions and fees which
will be payable by the Selling Stockholder. No sales or distributions other
than as described herein will be effected until this Prospectus shall have been
appropriately amended or supplemented. See "PLAN OF DISTRIBUTION."
-----------------------------------
The date of this Prospectus is May 17, 1996.
-1-
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "1934 Act"), and in accordance therewith
files periodic reports and other information with the Securities and Exchange
Commission (the "Commission"). Reports, proxy statements and other information
concerning the Company may be inspected and copies obtained (at prescribed
rates) at the Commission's Public Reference Room, 450 Fifth Street, N.W.,
Judiciary Plaza, Washington, D.C., 20549, as well as the following regional
offices: 7 World Trade Center, Suite 1300, New York, New York 10048; and
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661-
2511. The Common Stock of the Company is traded on the Nasdaq National Market
under the symbol "LIFE". Reports and other information may be inspected and
copied at the National Association of Securities Dealers, Inc., 1735 K Street,
N.W., Washington, D.C. 20006.
The Company has filed with the Commission a Registration Statement on Form
S-8 under the Securities Act with respect to the shares of Common Stock offered
hereby. This Prospectus does not contain all the information set forth in the
Registration Statement and the exhibits and schedules thereto, as certain items
are omitted in accordance with the rules and regulations of the Commission.
Statements contained in this Prospectus concerning the contents of any agreement
or other document referred to are not necessarily complete. Where such
agreement or other document is an exhibit to the Registration Statement
registering the shares offered under the Plan, each such statement is qualified
in all respects by the provisions of such exhibit, to which reference is hereby
made for a full statement of the provisions thereof. For further information
pertaining to the Company and the shares of Common Stock offered hereby,
reference is made to such Registration Statement and the exhibits thereto, which
may be inspected without charge at the office of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549, and copies of which may be obtained from
the Commission at prescribed rates.
-2-
<PAGE>
The Company will provide, upon written or oral request of any person
(including any beneficial owner) to whom a copy of this Prospectus is delivered,
without charge, a copy of the information incorporated by reference in this
Prospectus (not including exhibits unless such exhibits are specifically
incorporated by reference into the information included herein). Requests for
such information should be addressed to Corporate Secretary, Lifeline Systems,
Inc., 640 Memorial Drive, Cambridge, Massachusetts 02139, telephone
(617) 679-1000.
NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS IN CONNECTION WITH THE OFFERING
DESCRIBED HEREIN, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR BY ANY OTHER
PERSON DEEMED TO BE AN UNDERWRITER. NEITHER DELIVERY OF THIS PROSPECTUS NOR ANY
SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT
THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR
THE DATES AS OF WHICH INFORMATION IS SET FORTH HEREIN. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY THE SHARES
COVERED BY THIS PROSPECTUS BY ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR
SOLICITATION IS NOT AUTHORIZED, OR IN WHICH THE PERSON MAKING SUCH OFFER OR
SOLICITATION IS NOT QUALIFIED TO DO SO, OR TO ANYONE TO WHOM IT IS UNLAWFUL TO
MAKE SUCH OFFER OR SOLICITATION.
-3-
<PAGE>
THE COMPANY
Lifeline Systems, Inc., a Massachusetts corporation (the "Company"), is the
issuer of the shares of Common Stock covered by this Prospectus. Its principal
executive offices are located at 640 Memorial Drive, Cambridge, Massachusetts
02139 and its telephone number is (617) 679-1000.
USE OF PROCEEDS
The Company will not realize any of the proceeds from the sale of the
Shares by the Selling Stockholder.
SELLING STOCKHOLDER
L. Dennis Shapiro, the Selling Stockholder, is the Chairman of the Board of
Directors of the Company (the "Board") and serves on the Audit and Compensation
Committees of the Board. As of May 1, 1996, Mr. Shapiro owned 756,833 shares of
Common Stock of the Company (including options for 16,500 shares which are
exercisable within 60 days of May 1, 1996), constituting 13.4% of the
outstanding Common Stock of the Company. Upon the sale of the Shares, Mr.
Shapiro will own 11.5% of the outstanding Common Stock of the Company.
PLAN OF DISTRIBUTION
The Shares may be offered and sold from time to time by the Selling
Stockholder. The Selling Stockholder will act independently of the Company in
making decisions with respect to the timing, manner and size of each sale. The
Selling Stockholder has advised the Company that he proposes to offer and sell,
from time to time, all or part of the Shares on the Nasdaq National Market in
ordinary brokerage transactions, in negotiated transactions, or otherwise, at
such prices and on such other terms as may be obtainable and satisfactory to the
Selling Stockholder. No underwriting discounts or commissions will be paid
other than normal brokerage commission and fees which will be payable by the
Selling Stockholder. No sales or distributions other than as described herein
will be effected until this Prospectus shall have been appropriately amended or
supplemented. The Common Stock is traded on the Nasdaq National Market. The
Company has been advised by the Selling Stockholder that he has not, as of the
date hereof, made any arrangements relating to the distribution of the Shares.
LEGAL MATTERS
The legality of the Common Stock offered hereby will be passed upon for the
Company by Hale and Dorr, counsel to the Company, 60 State Street, Boston,
Massachusetts 02109. Norman B. Asher, a senior partner of Hale and Dorr, is the
Clerk of the Company.
-4-
<PAGE>
INDEMNIFICATION
Article 6 of the Company's Articles of Organization provides that a
director of the Company shall not be personally liable to either the Company or
the Company's stockholders for monetary damages resulting from a breach of
fiduciary duty as a director, to the fullest extent permitted by Chapter 156B of
the General Laws of Massachusetts (the "Massachusetts Business Corporation
Law"). The Massachusetts Business Corporation Law prohibits the elimination or
limitation of directors' liability for any of the following:
(a) Breaches of the director's duty of loyalty to the Company or its
stockholders;
(b) Acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law;
(c) Acts covered by Sections 61 or 62 of the Massachusetts Business
Corporation Law (which relate generally to the liability of directors for
authorizing distributions to stockholders at a time when the Company is
insolvent or bankrupt and the liability of directors for approving loans to
officers or directors of the Company which are not repaid and which were
not approved or ratified by a majority of disinterested directors or
stockholders); and
(d) Transactions from which the director derived an improper personal
benefit.
The Massachusetts Business Corporation Law authorizes Massachusetts
corporations to indemnify directors and officers for actions taken in good faith
and in a manner such person reasonably believed to be in the best interests of
the corporation.
Under Article 5 of the By-Laws of the Company, the Company will
indemnify, to the fullest extent permitted by the Massachusetts Business
Corporation Law, each person who serves or has served as an officer or director
of the Company or in any capacity with respect to any employee benefit plan of
the Company against all liabilities and expenses (including judgments, fines,
penalties, amounts paid in settlement and reasonable attorney's fees) arising
out of the defense or disposition of any threatened or actual action, suit or
proceedings, whether civil or criminal, in which he may be a defendant or
otherwise may be involved by reason of his service as a director or officer of
the Company or as a fiduciary of any such employee benefit plan. However, the
Company shall provide no indemnification if the person seeking indemnification
has been adjudicated not to have acted in good faith in the reasonable belief
that his action was in the best interest of the Company or, if applicable, the
best interests of the participants in or beneficiaries of the Company's employee
benefit plans.
-5-
<PAGE>
The indemnification provisions of the By-Laws permit the Company to
indemnify directors and officers against claims resulting from suits against
such persons by or in the right of the Company (hereinafter referred to as
"derivative actions"), provided that such person is determined to have acted in
good faith in the reasonable belief that his action was in the best interest of
the Company. It is possible that a court will determine that the provision
relating to the indemnification for amounts paid on account of derivative
actions is against public policy and is therefore unenforceable.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised 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 Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
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 Registrant 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 and will be governed by the final
adjudication of such issue.
The Company maintains on behalf of its directors and officers
insurance protection against certain liabilities arising out of the discharge of
their duties. The Company also maintains insurance covering the Company against
indemnification payments to its directors and officers for certain liabilities.
However, to the extent such coverage is inadequate to cover claims against
directors or officers, the Company may be required pursuant to the By-Laws to
reimburse the directors or officers for the uninsured portion of such claims.
In such an event, the Company's indemnification obligations to its directors and
officers could have a material negative impact on the Company's financial
condition and on stockholder equity.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company is subject to the informational and reporting requirements
of Sections 13, 14 and 15(d) of the 1934 Act and in accordance therewith files
reports, proxy statements and other information with the Commission. The
following documents, which are on file with the Commission, are incorporated in
this Prospectus by reference:
-6-
<PAGE>
(1) The Company's latest annual report filed pursuant to Section 13(a)
or 15(d) of the 1934 Act or the latest prospectus filed pursuant to Rule
424(b) under the Securities Act that contains, either directly or by
incorporation by reference, audited financial statements for the Company's
latest fiscal year for which such statements have been filed.
(2) All other reports filed pursuant to Section 13(a) or 15(d) of the
1934 Act since the end of the fiscal year covered by the annual reports or
the prospectus referred to in (1) above.
(3) The description of the Company's Common Stock which is contained
in a registration statement filed under the 1934 Act, including any
amendment or report filed for the purpose of updating such description.
All documents subsequently filed by the Company pursuant to Sections
13(a), 13(c), 14 and 15(d) of the 1934 Act, prior to the filing of a post-
effective amendment which indicates that all shares of Common Stock offered
hereby have been sold or which deregisters all shares of Common Stock then
remaining unsold, shall be deemed to be incorporated by reference herein and to
be part hereof from the date of the 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
Prospectus to the extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus.
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