<PAGE>
As filed with the Securities and Exchange Commission on September 30, 1998
File No. 333-___________
----------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------------
FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
----------------------
CHANCELLOR CORPORATION
(Exact name of registrant as specified in its charter)
Massachusetts 04-2626079
(State or Other Jurisdiction of (IRS Employer Identification No.)
Incorporation or Organization)
210 South Street
Boston, Massachusetts 02111
(Address of principal executive offices)
1994 DIRECTORS' STOCK OPTION PLAN
1997 STOCK OPTION PLAN
(Full title of the plan)
Peter J. Mullen
Chancellor Corporation
210 South Street
Boston, Massachusetts 02111
(Name and address of agent for service)
617-368-2700
(Telephone number, including area code, of agent for service)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Title of Securities Amount Proposed Maximum Proposed Maximum Amount
to be to be Offering Price Aggregate Offering of
Registered Registered per Share (1) Price Registration Fee
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.01 par 5,435,000 shares $ .68 $ 3,695,800 $ 1090.26
value per share
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The proposed maximum offering price has been estimated pursuant to Rule
457(h) solely for the purpose of calculating the registration fee. It is not
known how many shares will be purchased under the Plan or at what price such
shares will be purchased. The estimate of the proposed maximum aggregate
offering price has been calculated based on the offering of 5,435,000 shares,
being the aggregate number of shares of Common Stock available for issuance upon
exercise of options to be granted under the Plans, at an exercise price of $.68
per share, which is the average of the high and low prices of the Corporation's
Common Stock as listed on the National Association of Securities Dealers
Automated Quotation ("Nasdaq") OTC Bulletin Board on September 28, 1998.
<PAGE>
PART I: INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
The information required by Part I is included in documents sent or
given by Chancellor Corporation (the "Corporation") to the participants in the
Corporation's 1994 Directors' Stock Option Plan and the 1997 Stock Option Plan,
as amended (collectively, the "Plans").
PART II: INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
The following documents filed by the Corporation with the Securities
and Exchange Commission (the "Commission") are incorporated herein by reference:
(a) the Annual Report on Form 10-KSB of the Corporation, filed pursuant to
Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), for the fiscal year ended December 31, 1997; (b) all other
reports of the Corporation filed pursuant to Section 13(a) or 15(d) of the
Exchange Act since the end of the fiscal year covered by the annual report
referenced in (a) above; and (c) the description of 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 filed after the date of this Registration Statement by
the Corporation pursuant to Section 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
securities offered have been sold or which deregisters all securities then
remaining unsold, shall be deemed to be incorporated by reference in the
Registration Statement and to be part thereof from the date of filing of such
documents.
Item 4. Description Of Securities
Not applicable.
Item 5. Interests of Named Experts and Counsel
Not applicable.
Item 6. Indemnification of Directors and Officers
Section 67 of the Massachusetts Business Corporation Law provides a
statutory framework covering indemnification of directors, officers and
employees against liabilities and expenses arising out of legal proceedings
brought against them by reason of their status or service as directors or
officers.
Article 6 of the Corporation's Articles of Organization provides that
no director of the Corporation shall be liable for monetary damages for any
breach of fiduciary duty, except to the extent that the Massachusetts Business
Corporation Law prohibits the elimination or limitation of liability of
directors for breach of fiduciary duty.
Article V, Section 9 of the Corporation's By Laws provides that the
Corporation will indemnify each person who is or was or has agreed to be a
director or officer of the Corporation against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement to the maximum extent
permitted from time to time under the Massachusetts Business Corporation Law.
<PAGE>
Item 7. Exemption from Registration Claimed
Not applicable.
Item 8. Exhibits
The following exhibits are filed as part of this Registration
Statement:
4.1 Restated Articles of Organization of the Company (incorporated
by reference from Exhibit 3A to the Company's Registration
Statement on Form S-1, filed with the Securities and Exchange
Commission on July 22, 1983), as amended by Articles of
Amendment filed with the Massachusetts Secretary of State on
May 18, 1990 (incorporated by reference from Exhibit 3(a) to
the Company's Annual Report, Form 10-K, for the year ended
December 31, 1991) and by Articles of Amendment filed with the
Massachusetts Secretary of State on January 26, 1995
(incorporated by reference from Exhibit 3(a) to the Company's
Annual Report, Form 10-K, for the year ended December 31,
1994)
4.2 By-laws of the Company, as amended to date (incorporated by
reference from Exhibit 3(b) to the Company's Annual Report,
Form 10-K, for the year ended December 31, 1994)
4.3 Chancellor Corporation 1994 Directors' Stock Option Plan,
adopted by the Board of Directors of the Company on August 12,
1994 and approved by the Stockholders of the Company on
January 20, 1995 (incorporated by reference from Appendix III
to the Company's Proxy Statement dated December 9, 1994).
4.4 Chancellor Corporation 1997 Stock Option Plan, as amended.
5 Opinion of Bingham Dana L.L.P. as to the legality of the
securities to be issued.
23.1 Consent of Bingham Dana L.L.P. (included in Exhibit 5).
23.2 Consent of Reznick Fedder & Silverman
24 Power of attorney (included in the signature page to the
Registration Statement).
Item 9. Undertakings
The undersigned Corporation 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 of
1933, as amended ("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. 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 percent change in
<PAGE>
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 not previously disclosed in the Registration Statement or
any material change to such information in the Registration Statement;
provided, however, that (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 Corporation 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.
(4) That, for purposes of determining any liability under the Securities
Act, each filing of the Corporation'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.
(5) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of
the Corporation pursuant to the foregoing provisions, or otherwise, the
Corporation has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Corporation of expenses incurred or paid by a director, officer or
controlling person of the Corporation 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 Corporation 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.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Corporation certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Boston, Commonwealth of Massachusetts, on this
29th day of September, 1998.
CHANCELLOR CORPORATION
By: /s/ Brian M. Adley
-----------------------------------
Brian M. Adley
Chairman of the Board and Director
<PAGE>
POWER OF ATTORNEY
We, the undersigned officers and directors of the Corporation, hereby
severally constitute and appoint Brian M. Adley and Jonathan Ezrin and each of
them, his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution in each of them, for him and in his name, place
and stead, and in any and all capacities, to sign any and all amendments
(including post-effective amendments) to this Registration Statement on Form S-8
of Chancellor Corporation and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite or necessary to be done in and about the premises, hereby ratifying
and confirming all that said attorneys-in-fact and agents or any of them or
their or his substitutes or substitute, may lawfully do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Brian M. Adley Chairman of the Board and Director
- --------------------------- (Principal Executive Officer and September 29, 1998
Brian M. Adley Principal Financial Officer)
/s/ Rudolph Peselman Director September 29, 1998
- ---------------------------
Rudolph Peselman
/s/ Michael J. Marchese Director September 29, 1998
- ---------------------------
Michael J. Marchese
/s/ Jonathan Ezrin Corporate Controller (Principal
- --------------------------- Accounting Officer) September 29, 1998
Jonathan Ezrin
</TABLE>
<PAGE>
Exhibit Index
4.1 Restated Articles of Organization of the Company (incorporated by
reference from Exhibit 3A to the Company's Registration Statement on
Form S-1, filed with the Securities and Exchange Commission on July 22,
1983), as amended by Articles of Amendment filed with the Massachusetts
Secretary of State on May 18, 1990 (incorporated by reference from
Exhibit 3(a) to the Company's Annual Report, Form 10-K, for the year
ended December 31, 1991) and by Articles of Amendment filed with the
Massachusetts Secretary of State on January 26, 1995 (incorporated by
reference from Exhibit 3(a) to the Company's Annual Report, Form 10-K,
for the year ended December 31, 1994)
4.2 By-laws of the Company, as amended to date (incorporated by reference
from Exhibit 3(b) to the Company's Annual Report, Form 10-K, for the
year ended December 31, 1994)
4.3 Chancellor Corporation 1994 Directors' Stock Option Plan, adopted by
the Board of Directors of the Company on August 12, 1994 and approved
by the Stockholders of the Company on January 20, 1995 (incorporated by
reference from Appendix III to the Company's Proxy Statement dated
December 9, 1994).
4.4 Chancellor Corporation 1997 Stock Option Plan, as amended.
5 Opinion of Bingham Dana L.L.P. as to the legality of the securities to
be issued.
23.1 Consent of Bingham Dana L.L.P. (included in Exhibit 5).
23.2 Consent of Reznick Fedder & Silverman
24 Power of attorney (included in the signature page to the Registration
Statement).
<PAGE>
Exhibit 4.4
CHANCELLOR CORPORATION
AMENDED 1997 STOCK OPTION PLAN
May 15, 1998
1. Purpose.
The purpose of this plan (the "Plan") is to secure for Chancellor
Corporation (the "Company") shareholders the benefits arising from capital stock
ownership by employees, officers and directors of, and consultants or advisors
to, the Company and its parent and subsidiary corporations who are expected to
contribute to the Company's future growth and success. Except where the context
otherwise requires, the term "Company" shall include the parent and all present
and future subsidiaries of the Company as defined in Sections 424(e) and 424(f)
of the Internal Revenue Code of 1986, as amended or replaced from time to time
(the "Code"). Those provisions of the Plan which make express reference to
Section 422 shall apply only to Incentive Stock Options (as that term is defined
in the Plan).
2. Type of Options and Administration.
(a) Types of Options. Options granted pursuant to the Plan may be
either incentive stock options ("Incentive Stock Options") meeting the
requirements of Section 422 of the Code or Non-Statutory Options which are not
intended to meet the requirements of Section 422 of the Code ("Non-Statutory
Options").
(b) Administration.
(i) The Plan will be administered by the Board of Directors of
the Company, whose construction and interpretation of the terms and provisions
of the Plan shall be final and conclusive. The Board of Directors may in its
sole discretion grant options to purchase shares of the Company's Common Stock
("Common Stock") and issue shares upon exercise of such options as provided in
the Plan. The Board shall have authority, subject to the express provisions of
the Plan, to construe the respective option agreements and the Plan, to
prescribe, amend and rescind rules and regulations relating to the Plan, to
determine the terms and provisions of the respective option agreements, which
need not be identical, and to make all other determinations which are, in the
judgment the Board of Directors, necessary or desirable for the administration
of the Plan. The Board of Directors may correct any defect, supply any omission
or reconcile any inconsistency in the Plan or in any option agreement in the
manner and to the extent it shall deem expedient to carry the Plan into effect
and it shall be the sole and final judge of such expediency. No director or
person acting pursuant to authority delegated by the Board of Directors shall be
liable for any action or determination under the Plan made in good faith.
(ii) The Board of Directors may, to the full extent permitted
by or consistent with applicable laws or regulations and Section 3(b) of this
Plan delegate any or all of its powers under the Plan to a committee (the
"Committee") appointed by the Board of Directors, and if the Committee is so
appointed all references to the Board of Directors in the Plan shall mean and
relate to such Committee.
<PAGE>
(c) Applicability of Rule 16b-3. Those provisions of the Plan which
make express reference to Rule 16b-3 promulgated under the Securities Exchange
Act of 1934 (the "Exchange Act"), or any successor rule ("Rule 16b-3"), or which
are required in order for certain option transactions to qualify for exemptions
under Rule 16b-3, shall apply only to such persons as are required to file
reports under Section 16(a) of the Exchange Act (a "Reporting Person").
3. Eligibility.
(a) General. Options may be granted to persons who are, at the time of
grant, employees, officers [or directors of, or consultants or advisors to, the
Company]; provided, that the class of employees to whom Incentive Stock Options
may be granted shall be limited to all employees of the Company. A person who
has been granted an option may, if he or she is otherwise eligible, be granted
additional options if the Board of Directors shall so determine. Subject to
adjustment as provided in Section 15 below, the maximum number of shares with
respect to which options may be granted to any employee under the Plan shall not
exceed 4,000,000 shares of common stock during the ten-year term of the Plan.
For the purpose of calculating such maximum number, (a) an option shall continue
to be treated as outstanding notwithstanding its repricing, cancellation or
expiration and (b) the repricing of an outstanding option or the issuance of a
new option in substitution for a cancelled option shall be deemed to constitute
the grant of a new additional option separate from the original grant of the
option that is repriced or cancelled.
(b) Grant of Options to Directors and Officers. From and after the
registration of the Common Stock of the Company under the Exchange Act, the
selection of a director or an officer (as the terms "director" and "officer" are
defined for purposes of Rule 16b-3) as a recipient of an option, the timing of
the option grant, the exercise price of the option and the number of shares
subject to the option shall be determined either (i) by the Board of Directors,
of which all members shall be "disinterested persons" (as hereinafter defined),
or (ii) by two or more directors having full authority to act in the matter,
each of whom shall be a "disinterested person." For the purposes of the Plan, a
director shall be deemed to be a "disinterested person" only if such person
qualifies as a "disinterested person" within the meaning of Rule 16b-3, as such
term is interpreted from time to time.
4. Stock Subject to Plan.
Subject to adjustment as provided in Section 15 below, the maximum
number of shares of Common Stock which may be issued and sold under the Plan is
4,000,000 shares. If an option granted under the Plan shall expire or terminate
for any reason without having been exercised in full, the unpurchased shares
subject to such option shall again be available for subsequent option grants
under the Plan. If shares issued upon exercise of an option under the Plan are
tendered to the Company in payment of the exercise price of an option granted
under the Plan, such tendered shares shall again be available for subsequent
option grants under the Plan; provided, that in no event shall such shares be
made available for issuance to Reporting Persons or pursuant to exercise of
Incentive Stock Options.
5. Forms of Option Agreements.
As a condition to the grant of an option under the Plan, each recipient
of an option shall execute an option agreement in such form not inconsistent
with the Plan as may be approved by the Board of Directors. Such option
agreements may differ among recipients.
<PAGE>
6. Purchase Price.
(a) General. Subject to Section 3(b), the purchase price per share of
stock deliverable upon the exercise of an option shall be determined by the
Board of Directors, provided, however, that in the case of an Incentive Stock
Option, the exercise price shall not be less than 100% of the fair market value
of such stock, as determined by the Board of Directors, at the time of grant of
such option, or less than 110% of such fair market value in the case of options
described in Section 11(b).
(b) Payment of Purchase Price. Options granted under the Plan may
provide for the payment of the exercise price by delivery of cash or a check to
the order of the Company in an amount equal to the exercise price of such
options, or, to the extent provided in the applicable option agreement, (i) by
delivery to the Company of shares of Common Stock of the Company already owned
by the optionee having a fair market value equal in amount to the exercise price
of the options being exercised or (ii) by any other means (including, without
limitation, by delivery of a promissory note of the optionee payable on such
terms as are specified by the Board of Directors) which the Board of Directors
determines are consistent with the purpose of the Plan and with applicable laws
and regulations (including, without limitation, the provisions of Regulation T
promulgated by the Federal Reserve Board). The fair market value of any shares
of the Company's Common Stock or other non-cash consideration which may be
delivered upon exercise of an option shall be determined by the Board of
Directors.
7. Option Period.
Each option and all rights thereunder shall expire on such date as
shall be set forth in the applicable option agreement, except that, in the case
of an Incentive Stock Option, such date shall not be later than ten years after
the date on which the option is granted and, in all cases, shall be subject to
earlier termination as provided in the Plan.
8. Exercise of Options.
Each option granted under the Plan shall be exercisable either in full
or in installments at such time or times and during such period as shall be set
forth in the agreement evidencing such option, subject to the provisions of the
Plan.
9. Nontransferability of Options.
Options shall not be assignable or transferable by the person to whom
they are granted, either voluntarily or by operation of law, except by will or
the laws of descent and distribution, and, during the life of the optionee,
shall be exercisable only by the optionee; provided, however, that Non-Statutory
Options may be transferred pursuant to a qualified domestic relations order (as
defined in Rule 16b-3).
10. Effect of Termination of Employment or Other Relationship.
Except as provided in Section 11(d) with respect to Incentive Stock
options, and subject to the provisions of the Plan, the Board of Directors shall
determine the period of time during which an optionee may exercise an option
following (i) the termination of the optionee's employment or other relationship
with the Company or (ii) the death or disability of the optionee. Such periods
shall be set forth in the agreement evidencing such option.
<PAGE>
11. Incentive Stock Options.
Options granted under the Plan which are intended to be Incentive Stock
Options shall be subject to the following additional terms and conditions:
(a) Express Designation. All Incentive Stock Options granted under the
Plan shall, at the time of grant, be specifically designated as such in the
option agreement covering such Incentive Stock Options.
(b) 10% Shareholder. If any employee to whom an Incentive Stock Option
is to be granted under the Plan is, at the time of the grant of such option, the
owner of stock possessing more than 10% of the total combined voting power of
all classes of stock of the Company (after taking into account the attribution
of stock ownership rules of Section 424(d) of the Code), then the following
special provisions shall be applicable to the Incentive Stock Option granted to
such individual:
(i) The purchase price per share of the Common Stock subject
to such Incentive Stock Option shall not be less than 110% of the fair
market value of one share of Common Stock at the time of grant; and
(ii) the option exercise period shall not exceed five years
from the date of grant.
(c) Dollar Limitation. For so long as the Code shall so provide,
options granted to any employee under the Plan (and any other incentive stock
option plans of the Company) which are intended to constitute Incentive Stock
Options shall not constitute Incentive Stock Options to the extent that such
options, in the aggregate, become exercisable for the first time in any one
calendar year for shares of Common Stock with an aggregate fair market value
(determined as of the respective date or dates of grant) of more than $100,000.
(d) Termination of Employment, Death or Disability. No Incentive Stock
option may be exercised unless, at the time of such exercise, the optionee is,
and has been continuously since the date of grant or his or her option, employed
by the Company, except that:
(i) an Incentive Stock Option may be exercised within the
period of three months after the date the optionee ceases to be an
employee of the Company (or within such lesser period as may be
specified in the applicable option agreement), provided that the
agreement with respect to such option may designate a longer exercise
period and that the exercise after such three-month period shall be
treated as the exercise of a non-statutory option under the Plan:
(ii) if the optionee dies while in the employ of the Company,
or within three months after the optionee ceases to be such an
employee, the Incentive Stock Option may be exercised by the person to
whom it is transferred by will or the laws of descent and distribution
within the period of one year after the date of death (or within such
lesser period as may be specified in the applicable option agreement);
and
(iii) if the optionee becomes disabled (within the meaning of
Section 22(e)(3) of the Code or any successor provision thereto) while
in the employ of the Company, the Incentive Stock Option may be
exercised within the period of one year after the date the optionee
ceases to be such an employee because of such disability (or within
such lesser period as may be specified in the applicable option
agreement).
<PAGE>
For all purposes of the Plan and any option granted hereunder, "employment"
shall be defined in accordance with the provisions of Section 1.421-7(h) of the
Income Tax Regulations (or any successor regulations). Notwithstanding the
foregoing provisions, no Incentive Stock Option may be exercised after its
expiration date.
12. Additional Provisions.
(a) Additional Option Provisions. The Board of Directors may, in its
sole discretion, include additional provisions in option agreements covering
options granted under the Plan, including without limitation restrictions on
transfer, repurchase rights, commitments to pay cash bonuses, to make, arrange
for or guaranty loans or to transfer other property to optionees upon exercise
of options, or such other provisions as shall be determined by the Board of
Directors; provided that such additional provisions shall not be inconsistent
with any other term or condition of the Plan and such additional provisions
shall not cause any Incentive Stock option granted under the Plan to fail to
qualify as an Incentive Stock Option within the meaning of Section 422 of the
Code.
(b) Acceleration, Extension, Etc. The Board of Directors may, in its
sole discretion, (i) accelerate the date or dates on which all or any particular
option or options granted under the Plan may be exercised or (ii) extend the
dates during which all, or any particular, option or options granted under the
Plan may be exercised.
13. General Restrictions.
(a) Investment Representations. The Company may require any person to
whom an option is granted, as a condition of exercising such option, to give
written assurances in substance and form satisfactory to the Company to the
effect that such person is acquiring the Common Stock subject to the option for
his or her own account for investment and not with any present intention of
selling or otherwise distributing the same, and to such other effects as the
Company deems necessary or appropriate in order to comply with federal and
applicable state securities laws, or with covenants or representations made by
the Company in connection with any public offering of its Common Stock.
(b) Compliance With Securities Laws. Each option shall be subject to
the requirement that if, at any time, counsel to the Company shall determine
that the listing, registration or qualification of the shares subject to such
option upon any securities exchange or under any state or federal law, or the
consent or approval of any governmental or regulatory body, or that the
disclosure of non-public information or the satisfaction of any other condition
is necessary as a condition of, or in connection with, the issuance or purchase
of shares thereunder, such option may not be exercised, in whole or in part,
unless such listing, registration, qualification, consent or approval, or
satisfaction of such condition shall have been effected or obtained on
conditions acceptable to the Board of Directors. Nothing herein shall be deemed
to require the Company to apply for or to obtain such listing, registration or
qualification, or to satisfy such condition.
14. Rights as a Shareholder.
The holder of an option shall have no rights as a shareholder with
respect to any shares covered by the option (including, without limitation, any
rights to receive dividends or non-cash distributions with respect to such
shares) until the date of issue of a stock certificate to him or her for such
shares. No adjustment shall be made for dividends or other rights for which the
record date is prior to the date such stock certificate is issued.
<PAGE>
15. Adjustment Provisions for Recapitalization and Related Transactions.
(a) General. If, through or as result of any merger, consolidation,
sale of all or substantially all of the assets of the Company, reorganization,
recapitalization, reclassification, stock dividend, stock split, reverse stock
split or other similar transaction, (i) the outstanding shares of Common Stock
are increased, decreased or exchanged for a different number of kind of shares
or other securities of the Company, or (ii) additional shares or new or
different shares or other securities of the Company or other non-cash assets are
distributed with respect to such shares of Common Stock or other securities, an
appropriate and proportionate adjustment may be made in (x) the maximum number
and kind of shares reserved for issuance under the Plan, (y) the number and kind
of shares or other securities to any then outstanding options under the Plan,
and (z) the price for each share subject to any then outstanding options under
the Plan, without changing the aggregate purchase price as to which such options
remain exercisable. Notwithstanding the foregoing, no adjustment shall be made
pursuant to this Section 15 if such adjustment would cause the Plan to fail to
comply with Section 422 of the Code.
(b) Board Authority to Make Adjustments. Any adjustments under this
Section 15 will be made by the Board of Directors, whose determination as to
what adjustments, if any, will be made and the extent thereof will be final,
binding and conclusive. No fractional shares will be issued under the Plan on
account of any such adjustments.
16. Merger, Consolidation, Asset Sale, Liquidation, etc.
(a) General. In the event of a consolidation or merger or sale of all
or substantially all of the assets of the Company in which outstanding shares of
Common Stock are exchanged for securities, cash or other property of any other
corporation or business entity or in the event of a liquidation of the Company,
the Board of Directors of the Company, or the board of directors of any
corporation assuming the obligations of the Company, may, in its discretion,
take any one or more of the following actions, as to outstanding options: (i)
provide that such options shall be assumed, or equivalent options shall be
substituted, by the acquiring or succeeding corporation (or an affiliate
thereof), provided that any such options substituted for Incentive Stock options
shall meet the requirements of Section 424(a) of the Code, (ii) upon written
notice to the optionees, provide that all unexercised options will terminate
immediately prior to the consummation of such transaction unless exercised by
the optionee within a specified period following the date of such notice, (iii)
in the event of a merger under the terms of which holders of the Common Stock of
the Company will receive upon consummation thereof a cash payment for each share
surrendered in the merger (the "Merger Price"), make or provide for a cash
payment to the optionees equal to the difference between (A) the Merger Price
times the number of shares of Common Stock subject to such outstanding options
(to the extent then exercisable at prices not in excess of the Merger Price) and
(B) the aggregate exercise price of all such outstanding options in exchange for
the termination of such options, and (iv) provide that all or any outstanding
options shall become exercisable in full immediately prior to such event.
(b) Substitute Options. The Company may grant options under the Plan in
substitution for options held by employees of another corporation who become
employees of the Company, or a subsidiary of the Company, as the result of a
merger or consolidation of the employing corporation with the Company or a
subsidiary of the Company, or as a result of the acquisition by the Company, or
one of its subsidiaries, of property or stock of the employing corporation. The
Company may direct that substitute options be granted on such terms and
conditions as the Board of Directors considers appropriate in the circumstances.
<PAGE>
17. No Special Employment.
Nothing contained in the Plan or in any option shall confer upon any
optionee any right with respect to the continuation of his or her employment by
the Company or interfere in any way with the right of the Company at any time to
terminate such employment or to increase or decrease the compensation of the
optionee.
18. Other Employee Benefits.
Except as to plans which by their terms include such amounts as
compensation, the amount of any compensation deemed to be received by an
employee as a result of the exercise of an option or the sale of shares received
upon such exercise will not constitute compensation with respect to which any
other employee benefits of such employee are determined, including, without
limitation, benefits under any bonus, pension, profit-sharing, life insurance or
salary continuation plan, except as otherwise specifically determined by the
Board of Directors.
19. Amendment of the Plan.
(a) The Board of Directors may at any time, and from time to time,
modify or amend the Plan in any respect, except that if at any time the approval
of the shareholders of the Company is required under Section 422 of the Code or
any successor provision with respect to Incentive Stock Options, or under Rule
16b-3, the Board of Directors may not effect such modification or amendment
without such approval.
(b) The termination or any modification or amendment of the Plan shall
not, without the consent of an optionee, affect his or her rights under an
option previously granted to him or her. With the consent of the optionee
affected, the Board of Directors may amend outstanding option agreements in a
manner not inconsistent with the Plan. The Board of Directors shall have the
right to amend or modify (i) the terms and provisions of the Plan and of any
outstanding Incentive Stock Options granted under the Plan to the extent
necessary to qualify any or all such options for such favorable federal income
tax treatment (including deferral of taxation upon exercise) as may be afforded
incentive stock options under Section 422 of the Code and (ii) the terms and
provisions of the Plan and of any outstanding option to the extent necessary to
ensure the qualification of the Plan under Rule 16b-3.
20. Withholding.
(a) The Company shall have the right to deduct from payments of any
kind otherwise due to the optionee any federal, state or local taxes of any kind
required by law to be withheld with respect to any shares issued upon exercise
of options under the Plan. Subject to the prior approval of the Company, which
may be withheld by the Company in its sole discretion, the optionee may elect to
satisfy such obligations, in whole or in part, (i) by causing the Company to
withhold shares of Common Stock otherwise issuable pursuant to the exercise of
an option or (ii) by delivering to the Company shares of Common Stock already
owned by the optionee. The shares so delivered or withheld shall have a fair
market value equal to such withholding obligation. The fair market value of
shares used to satisfy such withholding obligation shall be determined by the
Company as of the date that the amount of tax to be withheld is to be
determined. An optionee who has made an election pursuant to this Section 20(a)
may only satisfy his or her withholding obligation with shares of Common Stock
which are not subject to any repurchase, forfeiture, unfulfilled vesting or
other similar requirements.
<PAGE>
(b) Notwithstanding the foregoing, in the case of a Reporting Person,
no election to use shares for the payment of withholding taxes shall be
effective unless made in compliance with any applicable requirements of Rule
16b-3 (unless it is intended that the transaction not qualify for exemption
under Rule 16b-3).
21. Cancellation and New Grant of Options, Etc.
The Board of Directors shall have the authority to effect, at any time
and from time to time, with the consent of the affected optionees, (i) the
cancellation of any or all outstanding options under the Plan and the grant in
substitution therefor of new options under the Plan covering the same or
different numbers of shares of Common Stock and having an option exercise price
per share which may be lower or higher than the exercise price per share of the
cancelled options or (ii) the amendment of the terms of any and all outstanding
options under the Plan to provide an option exercise price per share which is
higher or lower than the then-current exercise price per share of such
outstanding options.
22. Effective Date and Duration of the Plan.
(a) Effective Date. The Plan shall become effective when adopted by the
Board of Directors, but no option granted under the Plan shall become
exercisable unless and until the Plan shall have been approved by the Company's
shareholders. If such shareholder approval is not obtained within twelve months
after the date of the Board's adoption of the Plan, options previously granted
under the Plan shall not vest and shall terminate and no options shall be
granted thereafter. Amendments to the Plan not requiring shareholder approval
shall become effective when adopted by the Board of Directors; amendments
requiring shareholder approval (as provided in Section 19) shall become
effective when adopted by the Board of Directors, but no option granted after
the date of such amendment shall become exercisable (to the extent that such
amendment to the Plan was required to enable the Company to grant such option to
a particular person) unless and until such amendment shall have been approved by
the Company's shareholders. If such shareholder approval is not obtained within
twelve months of the Board's adoption of such amendment, any options granted on
or after the date of such amendment shall terminate to the extent that such
amendment was required to enable the Company to grant such option to a
particular optionee. Subject to this limitation, options may be granted under
the Plan at any time after the effective date and before the date fixed for
termination of the Plan.
(b) Termination. Unless sooner terminated in accordance with Section
16, the Plan shall terminate upon the close of business on the day next
preceding the tenth anniversary of the date of its adoption by the Board of
Directors. Options outstanding on such date shall continue to have force and
effect in accordance with the provisions of the instruments evidencing such
options.
23. Provision for Foreign Participants.
The Board of Directors may, without amending the Plan, modify awards or
options granted to participants who are foreign nationals or employed outside
the United States to recognize differences in laws, rules, regulations or
customers of such foreign jurisdictions with respect to tax, securities,
currency, employee benefit or other matters.
Adopted, as Amended, by the Board of Directors and the Stockholders
May 15, 1998
<PAGE>
Exhibit 5
Bingham Dana LLP
150 Federal Street
Boston, MA 02110
September 29, 1998
Chancellor Corporation
210 South Street
Boston, MA 02111
Dear Sir or Madam:
We are acting as counsel to Chancellor Corporation, a Massachusetts
corporation (the "Corporation"), in connection with the Registration Statement
on Form S-8 (the "Registration Statement") filed by the Corporation under the
Securities Act of 1933, as amended, and the rules and regulations promulgated
thereunder, relating to the registration of 5,435,000 shares (the "Shares") of
Common Stock, par value $.01 per share, of the Corporation. The Shares are to be
issued by the Corporation pursuant to the 1994 Directors' Stock Option Plan and
1997 Stock Option Plan, as amended (collectively, the "Plans").
For purposes of rendering the opinions set forth herein, we have
reviewed the corporate proceedings and records of the Corporation with respect
to the authorization of the Plans and the issuance of the Shares thereunder. We
have also examined and relied upon originals or copies of such agreements,
instruments, corporate records, certificates and other documents as we have
deemed necessary or appropriate as a basis for the opinions hereinafter
expressed. In our examination, we have assumed the genuineness of all
signatures, the conformity to the originals of all documents reviewed by us as
copies, the authenticity and completeness of all original documents reviewed by
us in original or copy form, and the legal competence of each individual
executing any document.
As to all factual matters (including factual conclusions and
characterizations and descriptions of purpose, intention or other state of
mind), we have relied upon representations made to us by the Corporation set
forth in the aforesaid certificates, and have assumed, without independent
inquiry, the accuracy of such representations.
We further assume that (i) all options granted or to be granted
pursuant to the Plans will be granted in accordance with all requisite corporate
action by the Corporation and in accordance with the terms of such Plans, (ii)
all Shares issued upon exercise of options granted or to be granted pursuant to
the Plans will be issued in accordance with the terms of such Plans and the
terms of the related options, and (iii) the respective purchase prices will be
greater than or equal to the par value per share of the Shares.
<PAGE>
Subject to the limitations set forth below, we have made such
examination of law as we have deemed necessary for the purposes of this opinion.
This opinion is limited solely to the Massachusetts Business Corporation Law as
applied by courts located in the Commonwealth of Massachusetts.
Based upon and subject to the foregoing, we are of the opinion that the
Shares when issued and delivered upon the exercise of options duly granted
pursuant to the Plans and against the payment of the respective purchase prices
therefor, will be validly issued, fully paid, and non-assessable.
We hereby consent to the filing of this opinion as Exhibit 5 to the
Registration Statement. In giving the foregoing consent, we do not admit that we
are in the category of persons whose consent is required under Section 7 of the
Securities Act of 1933, as amended, or the rules and regulations of the
Securities and Exchange Commission promulgated thereunder. The opinions
expressed herein are given as of the date hereof, and we undertake no
obligations hereby and disclaim any obligation to advise your of any changes in
law or fact after the date hereof pertaining to any matter referred to herein.
Very truly yours,
/s/ Bingham Dana LLP
BINGHAM DANA LLP
<PAGE>
Exhibit 23.2
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors and Shareholders
Chancellor Corporation
We consent to incorporation by reference in the Registration State
dated September 30, 1998, on Form S-8 and related prospectus of Chancellor
Corporation of our report dated March 18, 1998 except for Note V which is as of
March 27, 1998, relating to the consolidated financial statements of Chancellor
Corporation and Subsidiaries as of December 31, 1997, which report appears in
the December 31, 1997 Annual Report on Form 10-KSB of Chancellor Corporation.
/s/ Reznick Fedder & Silverman
--------------------------------
Reznick Fedder & Silverman
Boston, MA
September 30, 1998
