<PAGE> 1
As filed with the Securities and Exchange Commission on June 15, 1994
Registration No. 33-_________
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
ARBOR DRUGS, INC.
(Exact name of registrant as specified in its charter)
Michigan 38-2054345
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3331 West Big Beaver, Troy, Michigan 48084
(Address of Principal Executive Offices) (Zip Code)
Arbor Drugs, Inc. Employee Stock Purchase Plan
(Full Title of the Plan)
Todd A. Wyett
General Counsel and Secretary
Arbor Drugs, Inc.
3331 West Big Beaver
Troy, MI 48084
(Name and address of agent for service)
(810) 643-9420
(Telephone number, including area code, of agent for service)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed Proposed
Title of maximum maximum
securities Amount offering aggregate Amount of
to be to be price per offering registration
registered registered share (1) price (1) fee
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, 300,000 $19.00 $5,700,000 $1,965.54
$.01 par value
per share (the
"Common Stock") (2)
- --------------------------------------------------------------------------------------
</TABLE>
(1) Calculated pursuant to Rule 457(h) under the Securities Act of 1933, as
amended (the "Securities Act"), solely for the purpose of computing the
registration fee and based on the average of the high and low prices of
the Common Stock, as quoted on the NASDAQ National Market System on
June 14, 1994.
(2) In addition, pursuant to Rule 416(c) under the Securities Act, this
Registration Statement also covers an indeterminate amount of interests to
be offered or sold pursuant to the plan described herein.
PAGE 1 OF 22 PAGES
EXHIBIT INDEX BEGINS ON PAGE 9
<PAGE> 2
PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
ITEM 1. PLAN INFORMATION.*
ITEM 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION.*
* Information required by Part I to be contained in the Section 10(a)
prospectus is omitted from this Registration Statement in accordance with Rule
428 of the Securities Act and the Note to Part I of Form S-8.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The documents listed in (a) through (e) below are incorporated by reference
in this Registration Statement on Form S-8. In addition, all documents
subsequently filed by the Registrant pursuant to Sections 13(a), 13(c), 14 and
15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
prior to the filing of a post-effective amendment that indicates that all
securities have been sold or that deregisters all securities then remaining
unsold, shall be deemed to be incorporated by reference in this Registration
Statement and to be part hereof from the date of filing of such documents:
(a) Registrant's Annual Report on Form 10-K for the fiscal
year ended July 31, 1993;
(b) Registrant's Quarterly Report on Form 10-Q for the quarter
ended October 31, 1993;
(c) Registrant's Quarterly Report on Form 10-Q for the quarter
ended January 31, 1994;
(d) Registrant's Quarterly Report on Form 10-Q for the quarter
ended April 30, 1994; and
(e) The description of Registrant's Common Stock contained in
Registrant's Registration Statement on Form 8-A, filed with the
Securities and Exchange Commission on April 29, 1986, pursuant to
Section 12 of the Exchange Act, including any amendment or
report filed for the purpose of updating such description.
Any statement contained in a document incorporated or deemed to be
incorporated herein by reference shall be deemed to be modified or superseded
for purposes of this Registration Statement to the extent
2
<PAGE> 3
that a statement contained herein by reference modifies or supersedes such
prior statement. Any statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Registration
Statement.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTEREST OF NAMED EXPERTS AND COUNSEL.
The legality of the securities offered hereby has been passed upon by
Todd A. Wyett, General Counsel and Secretary of the Registrant. Mr. Wyett
directly owns 2,000 shares of Common Stock, and beneficially owns 600 shares of
Common Stock pursuant to options granted to him by the Registrant under the
Arbor Drugs, Inc. Amended and Restated Stock Option Plan. Mr. Wyett is the
son-in-law of the Registrant's Chairman of the Board, Chief Executive Officer
and President. Mr. Wyett's wife also owns 246,250 shares of Common Stock, as
to which Mr. Wyett disclaims any beneficial interest.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Under Sections 561-571 of the Michigan Business Corporation Act,
directors and officers of a Michigan corporation may be entitled to
indemnification by the corporation against judgments, expenses, fines and
amounts paid by the director or officer in settlement of claims brought against
them by third persons or by or in the right of the corporation if those
directors and officers acted in good faith and in a manner reasonably believed
to be in, or not opposed to, the best interests of the corporation and its
shareholders.
The Registrant is obligated under its bylaws to indemnify a present or
former director or executive officer of the Registrant, and may indemnify any
other person, to the fullest extent now or hereafter authorized or permitted by
law in connection with any actual or threatened civil, criminal, administrative
or investigative action, suit or proceeding arising out of his or her past or
future service to the Registrant, or to another corporation at the request of
the Registrant. In addition, the Articles of Incorporation of the Registrant
limit certain personal liabilities of directors of the Registrant; provided,
however, that the Articles of Incorporation do not eliminate or limit the
liability of a director for any of the following: (i) a breach of the
director's duty of loyalty to the corporation or its shareholders; (ii) acts or
omissions not in good faith or that involve intentional misconduct or knowing
violation of law; (iii) a violation of Section 551(1) of the Michigan Business
Corporation Act; (iv) a transaction from which the director derived an improper
personal benefit; or (v) an act or omission occurring before the effective date
of the Article.
The Registrant has also obtained Directors' and Officers' liability
insurance in the aggregate amount of $10 million. Subject to conditions and
limitations, the insurance covers amounts required to be
3
<PAGE> 4
paid for a claim or claims made against directors and officers for certain
"wrongful acts" in the discharge of their duties solely in their capacity as
officers or directors of the Registrant. The coverage includes amounts as to
which the Registrant may be required or permitted by law to indemnify the
directors and officers.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
4.1 Arbor Drugs, Inc. Employee Stock Purchase Plan.
4.2 Registrant's Restated Articles of Incorporation (incorporated by
reference to Exhibit 3.1 to Registrant's Annual Report on Form
10-K for the year ended July 31, 1988).
4.3 Registrant's Bylaws (incorporated by reference to Exhibit
3.2 to Registrant's Registration Statement on Form S-1
(Registration No. 33-4378)).
5 Opinion of Todd A. Wyett, General Counsel and Secretary of
the Registrant, as to the legality of the shares of Common Stock
being registered.
23.1 Consent of Coopers & Lybrand.
23.2 Consent of Todd A. Wyett (included in the opinion filed as
Exhibit 5 to this Registration Statement).
24 Power of Attorney (included on the signature page of this
Registration Statement).
ITEM 9. UNDERTAKINGS.
(a) The undersigned 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 this Registration
Statement (or the most recent post-effective amendment
thereof) that, individually or in the aggregate,
represent a fundamental change in the information set
4
<PAGE> 5
forth in this Registration Statement;
(iii) to include any material information with respect
to the plan of distribution not previously disclosed
in this Registration Statement or any material change
to such information in this Registration Statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(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 Registrant pursuant to Section 13
or Section 15(d) of the Exchange Act that are incorporated by
reference in this 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 that
remain unsold at the termination of the offering.
(b) The undersigned 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 that is incorporated by
reference in this 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.
(c) 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
Securities 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
5
<PAGE> 6
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 of
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> 7
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 the City of Troy, State of Michigan, on May 25, 1994.
ARBOR DRUGS, INC.
By: /s/ Eugene Applebaum
Eugene Applebaum, Chairman of the Board,
President, Chief Executive Officer and
Director
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below hereby constitutes and appoints Todd A. Wyett and Gilbert C. Gerhard, or
either of them, his/her true and lawful attorneys-in-fact and agents, each with
full power of substitution for him/her and in his/her name, place and stead, in
any and all capacities, to sign any or all amendments (including without
limitation post-effective amendments) to this Registration Statement, and to
file the same, with all exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto each of
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 to all intents and purposes as he/she might or could do in
person, hereby ratifying and confirming all that any said attorneys-in-fact and
agents, or his/her substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
7
<PAGE> 8
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed by the following persons in the capacities and on the
dates indicated.
/s/ Eugene Applebaum Chairman of the Board, May 25, 1994
- ------------------------ President, Chief Executive
Eugene Applebaum Officer and Director
(Principal Executive Officer)
/s/ Markus M. Ernst Executive Vice President, May 25, 1994
- ----------------------- Chief Operating Officer
Markus M. Ernst and Director
/s/ Gilbert C. Gerhard Senior Vice President - May 25, 1994
- ----------------------- Finance and Administration,
Gilbert C. Gerhard Treasurer and Director
(Principal Financial and
Accounting Officer)
/s/ David B. Hermelin Director May 25, 1994
- -----------------------
David B. Hermelin
/s/ Spencer M. Partrich Director May 25, 1994
- -----------------------
Spencer M. Partrich
/s/ Laurie M. Shahon Director May 25, 1994
- -----------------------
Laurie M. Shahon
/s/ Samuel Valenti III Director May 25, 1994
- -----------------------
Samuel Valenti III
8
<PAGE> 9
INDEX TO EXHIBITS
Exhibit
Number Exhibit Page No.
- ------ ------- --------
4.1 Arbor Drugs Employee Stock Purchase Plan. 10
4.2 Registrant's Restated Articles of Incorporation (incorporated by
reference to Exhibit 4.1 to Registrant's Annual Report on Form
10-K for the year ended July 31, 1988). --
4.3 Registrant's Bylaws (incorporated by reference to Exhibit 3.2 to
Registrant's Registration Statement on Form S-1 (Registration No.
33-4378)). --
5 Opinion of Todd A. Wyett, General Counsel and Secretary of the
Registrant, as to the legality of the shares of Common Stock
being registered. 21
23.1 Consent of Coopers & Lybrand. 22
23.2 Consent of Todd A. Wyett (included in the opinion filed as
Exhibit 5 to this Registration Statement). --
24 Power of Attorney (included on the signature page of this
Registration Statement). --
9
<PAGE> 1
Exhibit 4.1
ARBOR DRUGS, INC.
EMPLOYEE STOCK PURCHASE PLAN
1. PURPOSE.
The Arbor Drugs, Inc. Employee Stock Purchase Plan (the "Plan") is intended
to encourage employee stock ownership by offering employees of Arbor Drugs,
Inc. and its subsidiaries Purchase Rights (as such term is defined in Section 2
hereof) to purchase shares of Common Stock. The Plan is intended to be an
"employee stock purchase plan" as defined in Section 423 of the Internal
Revenue Code of 1986, as amended (the "Code"). The provisions of the Plan
shall, accordingly, be construed so as to extend and limit the participation in
a manner consistent with the requirements of Section 423 of the Code.
2. CERTAIN DEFINITIONS.
"Base Pay" means regular straight-time and overtime earnings received from
the Company, excluding payments for incentive compensation, bonuses and other
special payments.
"Board" means the Board of Directors of the Company.
"Committee" means the Compensation Committee of the Board.
"Common Stock" means the Common Stock, par value $.01 per share, of the
Company.
"Company" means Arbor Drugs, Inc. and each of its majority owned subsidiaries.
"Custodian" means Smith Barney, Inc., whose address is 388 Greenwich Street,
28th Floor, New York, New York 10013, or such other person as the Committee
shall designate from time to time.
"Exercise Date" means the last day of a Purchase Period (as such term is
defined in Section 4(b) hereof), on which date all Participants' outstanding
Purchase Rights will automatically be exercised.
"Fair Market Value" means the closing sale price of a share of Common Stock
reported in the table entitled "NASDAQ National Market Issues" or any successor
table in The Wall Street Journal for such date or, if no shares of Common Stock
were traded on that date, on the next preceding day on which there was such a
trade.
"NASDAQ" means the National Association of Securities Dealers Automated
Quotation System.
<PAGE> 2
"Participant" means an employee of the Company who has enrolled in the Plan
by filing a Participation Form (as such term is defined in Section 5 hereof)
with the Plan Administrator.
"Plan Administrator" means the Vice President - Human Resources of the
Company, or any such other person so designated by the Committee.
"Purchase Right" means a Participant's option to purchase shares of Common
Stock that is deemed to be outstanding during a Purchase Period. A Purchase
Right represents an "option" as such term is used under Section 423 of the
Code.
"Section 16(b) Insider" means those persons subject to the requirements of
Section 16(b) of the Securities Exchange Act of 1934, as amended.
"Trading Day" refers to a day during which the NASDAQ National Market System
is available for trading shares of Common Stock.
3. ELIGIBILITY.
(a) Participation in the Plan is voluntary. All employees of the Company,
including officers and directors who are full-time employees, who are at least
eighteen years old are eligible to participate in the Plan.
(b) Notwithstanding any provision of the Plan to the contrary, no employee
may participate in the Plan:
(i) if following a grant of Purchase Rights under the Plan, the
employee would own, directly or by attribution, stock, Purchase Rights
or other stock options to purchase stock representing 5% or more of the
total combined voting power or value of all classes of the Company's
stock; or
(ii) to the extent a grant of Purchase Rights under the Plan would
permit the employee's rights to purchase stock under all the Company's Code
Section 423 employee stock purchase plans to accrue at a rate exceeding
$25,000.00, based on the Fair Market Value of the stock (at the time of
grant), for each calendar year in which such Purchase Right is
outstanding.
4. SECURITIES SUBJECT TO THE PLAN AND PURCHASE PERIODS.
(a) The Plan covers an aggregate of 300,000 shares of Common Stock (subject
to adjustment as provided in Section 15 hereof), which may be authorized but
unissued shares, reacquired shares or shares bought on the open market. If any
Purchase Right that shall
2
<PAGE> 3
have been granted shall expire or terminate for any reason without having been
exercised in full, the unpurchased shares of Common Stock shall again become
available for purposes of the Plan, unless the Plan shall have been terminated.
(b) Except as discussed below for the first year the Plan is in effect,
there will be four purchase periods (each a "Purchase Period") each calendar
year. There will be only one Purchase Period in calendar 1994, which will
begin on August 1, 1994 and end on December 31, 1994. Thereafter, in each year
that the Plan is in effect, the first Purchase Period will begin on January 1
and end on March 31. The second Purchase Period will begin on April 1 and end
on June 30 of each year that the Plan is in effect. The third Purchase Period
will begin on July 1 and end on September 30 of each year that the Plan is in
effect. The fourth Purchase Period will begin on October 1 and end on December
31 of each year that the Plan is in effect.
5. PARTICIPATION.
Eligible employees become Participants in the Plan by authorizing payroll
deductions for that purpose through a form (the "Participation Form") filed
with the Plan Administrator no later than fifteen (15) days prior to the start
date of a Purchase Period.
6. PAYROLL DEDUCTIONS.
(a) In order to purchase Common Stock an employee must indicate on the
Participation Form the contribution percentage he or she wishes to authorize
the Company to deduct at regular payroll intervals, in integral percentage
amounts ranging from 1% to 25% of such Participant's Base Pay for the
applicable payroll period, with a minimum deduction of $10.00 per payday,
during each Purchase Period. The Participation Form will include authorization
for the Company to make payroll deductions from the Participant's Base Pay.
(b) In order to comply with the Federal tax laws, a Participant may not be
granted Purchase Rights under the Plan or any other Code Section 423 employee
stock purchase plan of the Company with respect to more than $25,000.00 worth
of Common Stock for any calendar year such Purchase Rights to purchase Common
Stock are outstanding pursuant to the terms of the Plan. The $25,000.00 limit
is determined according to the Fair Market Value of the Common Stock on the
first day (grant date) of the Purchase Period. Participants will be notified
if these limitations become applicable to them.
(c) The amounts deducted shall be credited to the Participant's account
under the Plan, but no actual separate
3
<PAGE> 4
account will be established by the Company to hold such amounts. There shall
be no interest paid on the balance outstanding in a Participant's account. The
deducted amounts may be commingled with the general assets of the Company and
may be used for its general corporate purposes.
(d) Payroll deductions begin on the first payday of each Purchase Period,
and end on the last payday of each Purchase Period. Eligible employees may
participate in the Plan and purchase shares only by means of payroll
deductions, except as set forth in the following sentence. A Participant may
not make any separate cash payment into his or her account, except that
employees on an approved leave of absence may continue participating in the
Plan, at the sole discretion of the Plan Administrator, by making cash payments
to the Company on a normal payday equal to the amount of the normal payroll
deduction had a leave of absence not occurred. The right of a Participant on
an approved leave of absence to continue participating in the Plan shall
terminate if such leave of absence exceeds 90 days, unless and so long as the
Participant's right to re-employment by the Company after a longer leave is
guaranteed by statute or contract.
(e) So long as a Participant remains an employee of the Company, payroll
deductions will continue in effect from Purchase Period to Purchase Period,
unless at least fifteen (15) days prior to the first day of the next succeeding
Purchase Period the Participant:
(i) elects a different rate by filing a new Participation Form with
the Plan Administrator; or
(ii) withdraws from the Plan in accordance with Section 9 hereof.
(f) Unless a Participant files with the Plan Administrator a new
Participation Form electing to withdraw prior to 15 days before the beginning
of the next Purchase Period as permitted under the Plan, such Participant's
payroll deductions will continue throughout the next Purchase Period and his or
her Purchase Right to purchase Common Stock will be deemed to be fully and
automatically exercised on the last day of such Purchase Period with respect to
payroll deductions made during that period.
7. PURCHASE PRICE.
(a) On the first day of each Purchase Period, a Participant is deemed to
have been granted a Purchase Right to purchase on the last day of the Purchase
Period as many full shares of Common Stock as such Participant will be able to
purchase with the payroll deductions credited to such Participant's account
during such period.
4
<PAGE> 5
(b) The price at which each Purchase Right to purchase Common Stock may be
exercised is the lower of:
(i) 85% of the Fair Market Value of the Common Stock on the NASDAQ
National Market System on the first Trading Day of a Purchase Period; or
(ii) 85% of the Fair Market Value of the Common Stock on the NASDAQ
National Market System on the last Trading Day of such Purchase Period.
(c) The number of shares purchasable by each Participant per Purchase Period
will be the number of whole shares obtained by dividing the amount collected
from the Participant (through payroll deductions during that Purchase Period)
by the purchase price in effect for that Purchase Period. Any amount remaining
in the Participant's account after such application will be held for the
purchase of Common Stock in the next Purchase Period.
(d) A Participant may not purchase more than 1,000 shares of Common Stock
for any particular Purchase Period. The Committee has the power, exercisable
at any time prior to the start of a Purchase Period, to increase or decrease
the 1,000-share maximum for that Purchase Period. The maximum, as thus
adjusted, will continue in effect from Purchase Period to Purchase Period until
the Committee once again exercises its power to adjust the maximum.
8. EXERCISE OF PURCHASE RIGHT.
(a) Each outstanding Purchase Right will be exercised automatically on the
Exercise Date. The exercise of the Purchase Right is to be effected by
applying the amount credited to each Participant's account as of the Exercise
Date to the purchase on the Exercise Date of whole shares of Common Stock
(subject to the 1,000-share maximum) at the purchase price in effect for the
Purchase Period.
(b) Fractional shares will not be issued under the Plan, and any amount
remaining in the Participant's account after such application will be held for
the purchase of Common Stock in the next Purchase Period.
(c) If a Participant purchases the 1,000-share maximum, any amount not
applied to the purchase of Common Stock for that Purchase Period will be
refunded after the close of the Purchase Period.
(d) If the number of shares for which Purchase Rights are exercised exceeds
the number of shares available in any Purchase Period under the Plan, the
shares available for sale will be allocated by the Plan Administrator pro rata
among the Participants
5
<PAGE> 6
in such Purchase Period in proportion to the relative amounts in their
accounts. Any amounts not thereby applied to the purchase of Common Stock
under the Plan will be refunded to the Participants after the end of the
Purchase Period.
9. WITHDRAWAL AND TERMINATION OF PURCHASE RIGHTS.
(a) A Participant may withdraw from the Plan by providing written notice to
the Plan Administrator at any time prior to 15 days before the end of the
current Purchase Period. Such notice shall be on a form (the "Withdrawal
Form") provided by the Plan Administrator for that purpose. The Withdrawal
Form will permit such a Participant to make the following election:
(i) The Participant may elect to immediately terminate his or her
outstanding Purchase Rights, and such withdrawal will become effective by
the tenth day following the Plan Administrator's receipt of the
Participant's Withdrawal Form, at which time all outstanding Purchase
Rights will be terminated and all accumulated payroll deductions will be
refunded without penalty; or
(ii) The Participant may elect to continue his or her participation in
the Plan through the end of the current Purchase Period, and thus exercise
such Participant's outstanding Purchase Rights on the following Exercise
Date, but terminate his or her participation in the Plan for subsequent
Purchase Periods. Payroll deductions for such a Participant will continue
until the end of the current Purchase Period. After the Exercise Date, no
further Purchase Rights will be granted to the Participant, and no further
payroll deductions will be made.
(b) Any Participant who withdraws from the Plan pursuant to Section 9(a)
will not be eligible to rejoin the Plan for the Purchase Period underway at the
time of withdrawal, and will have to re-enroll in the Plan by completing and
filing a new Participation Form should such individual wish to resume
participation in a subsequent Purchase Period; provided, however, that such
Participant may not re-enroll in the Plan earlier than 90 days from the
effective date of such withdrawal.
(c) In the event a Section 16(b) Insider Participant ceases participation in
the Plan, whether as a result of a withdrawal during a Purchase Period or of
such Participant's decision to discontinue his or her enrollment for subsequent
Purchase Periods, such insider may not re-enroll in the Plan earlier than six
(6) months after the decision to cease participation.
6
<PAGE> 7
(d) If a Participant ceases to be an employee of the Company for any reason
during a Purchase Period, his or her outstanding Purchase Right will
immediately terminate, and all sums previously collected from such Participant
during such Purchase Period under the terminated Purchase Right will be
refunded.
(e) The Committee may, at its option, treat any attempt to borrow by an
employee on the security of his or her accumulated payroll deductions as an
election under Section 9(a)(i) hereof to withdraw such deductions.
10. RIGHTS AS SHAREHOLDER.
(a) A Participant is not a shareholder until the Participant exercises his
or her Purchase Right. Thus, a Participant will not have a right to any
dividend or distribution made prior to the Exercise Date.
(b) The Participant will be entitled to receive, as soon as practicable
after the Exercise Date, a stock certificate for the number of purchased shares
upon a written request made to the Custodian. The Custodian may impose upon,
or pass through to, the Participant a reasonable fee for withdrawal of shares
of Common Stock in the form of stock certificates. It is the responsibility of
each Participant to keep his or her address current with the Company through
the Plan Administrator and with the Custodian.
11. SALE OF COMMON STOCK ACQUIRED UNDER THE PLAN.
(a) Participants may sell the shares of Common Stock they acquire under the
Plan at any time without restriction, provided they are not Section 16(b)
Insiders. Section 16(b) Insiders will be subject to certain restrictions in
connection with their transactions under the Plan.
(b) A Participant shall immediately provide information to the Plan
Administrator if the Participant transfers any shares purchased through the
Plan within two (2) years from the date of grant of the related Purchase Right.
Such transfer shall include disposition by sale, gift or other manner. The
Participant may be requested to disclose the manner of the transfer, the date
of the transfer, the number of shares involved and the transfer price. By
executing the Participation Form, each Participant obligates himself or herself
to provide such information to the Plan Administrator.
(c) The Company is authorized to withhold from any payment to be made to a
Participant, including any payroll and other payments not related to the Plan,
amounts of withholding and other taxes due in connection with any transaction
under the Plan, and a
7
<PAGE> 8
Participant's enrollment in the Plan will be deemed to constitute his or her
consent to such withholding.
12. PLAN ADMINISTRATION.
(a) The Plan shall be administered by the Committee. No member of the Board
will be eligible to participate in the Plan during his or her period of
Committee service.
(b) The Committee shall have the plenary power, subject to and within the
limits of the express provisions of the Plan:
(i) to determine the commencement and termination date of the
offering of Common Stock under the Plan; and
(ii) to interpret the terms of the Plan, establish and revoke rules
for the administration of the Plan and correct or reconcile any defect or
inconsistency in the Plan.
(c) The Committee may delegate all or part of its authority to administer
the Plan to the Plan Administrator, who may in turn delegate the day-to-day
operations of the Plan to the Custodian. The Custodian will establish and
maintain, as agent for the Participants, accounts for the purpose of holding
shares of Common Stock and/or cash contributions as may be necessary or
desirable for the administration of the Plan.
(d) The Board may waive or modify any requirement that a notice or election
be made or filed under the Plan a specified period in advance in an individual
case or by adoption of a rule or regulation under the Plan, without the
necessity of an amendment to the Plan.
13. TRANSFERABILITY.
(a) Any account maintained by the Custodian for the benefit of a Participant
with respect to shares acquired pursuant to the Plan may only be in the name of
the Participant; provided, however, that the Participant may elect to maintain
such account with right of joint ownership with such Participant's spouse.
Such election may only be made on a form (the "Joint Account Form") provided by
the Company.
(b) Neither payroll deductions credited to a Participant's account nor any
Purchase Rights or other rights to acquire Common Stock under the Plan may be
assigned, transferred, pledged or otherwise disposed of by Participants other
than by will or the laws of descent and distribution and, during the lifetime
of a Participant, Purchase Rights may be exercised only by the Participant.
8
<PAGE> 9
14. MERGER OR LIQUIDATION OF THE COMPANY.
In the event the Company merges with another corporation and the Company is
not the surviving entity, or in the event all or substantially all of the stock
or assets of the Company is acquired by another company, or in the event of
certain other similar transactions, the Committee may, in connection with such
transaction, cancel each outstanding Purchase Right and refund all sums
previously collected from Participants under the canceled Purchase Rights, or,
in its discretion, cause each Participant with outstanding Purchase Rights to
have his or her outstanding Purchase Right exercised immediately prior to such
transaction and thereby have the balance of his or her account applied to the
purchase of whole shares of Common Stock (subject to the 1,000-share maximum)
at the purchase price in effect for the Purchase Period, which would be treated
as ending with the effective date of such transaction. The balance of the
account not so applied will be refunded to the Participant. In the event of a
merger in which the Company is the surviving entity, each Participant is
entitled to receive, for each share as to which such Participant's Purchase
Rights are exercised, the securities or property that a holder of one share of
Common Stock was entitled to receive upon the merger.
15. ADJUSTMENT FOR CHANGES IN CAPITALIZATION.
To prevent dilution or enlargement of the rights of Participants under the
Plan, appropriate adjustments may be made in the event any change is made to
the Company's outstanding Common Stock by reason of any stock dividend, stock
split, combination of shares, exchange of shares or other change in the Common
Stock effected without the Company's receipt of consideration. Adjustments may
be made to the maximum number and class of securities issuable under the Plan,
the maximum number and class of securities purchasable per outstanding Purchase
Right and the number and class of securities and price per share in effect
under each outstanding Purchase Right. Any such adjustments will be made by
the Committee in its sole discretion.
16. AMENDMENT AND TERMINATION.
The Committee may terminate or amend the Plan at any time; provided, however,
such termination or amendment may not affect or change Purchase Rights
previously granted under the Plan without the consent of the affected
Participant, and any amendment that materially increases the benefits or number
of shares under the Plan (except for certain allowable adjustments in the event
of changes to the Company's capital structure or for changes authorized by the
Plan to be made by the Committee or the Plan Administrator) or materially
modifies the eligibility requirements
9
<PAGE> 10
of the Plan shall be subject to shareholder approval. If not sooner terminated
by the Committee, the Plan shall terminate at the time Purchase Rights have
been exercised with respect to all shares of Common Stock reserved for grant
under the Plan.
17. SHAREHOLDER APPROVAL.
The Plan is subject to the approval of shareholders of the Company holding a
majority of the shares of the Common Stock.
Purchase Rights may be granted under the Plan for the Purchase Period
beginning on August 1, 1994, but such rights may not be exercised (and
Participants' payroll deductions will be returned to them) if shareholder
approval of the Plan is not obtained prior to December 31, 1994.
18. NO EMPLOYMENT RIGHTS.
Participation in the Plan will not impose any obligations upon the Company to
continue the employment of the Participant for any specific period and will not
affect the right of the Company to terminate such person's employment at any
time, with or without cause.
19. COSTS.
Except as set forth in Section 10(b), costs and expenses incurred in the
administration of the Plan and the maintenance of accounts with the Custodian
will be paid by the Company, to the extent provided in this Section 19. Any
brokerage fees and commissions for the purchase of Common Stock under the Plan
(including shares of Common Stock purchased upon reinvestment of dividends and
distributions) will be paid by the Company, but any brokerage fees and
commission for the sale of shares of Common Stock under the Plan by a
Participant will be borne by such Participant.
20. REPORTS.
After the close of each Purchase Period, each Participant in the Plan will
receive a report from the Custodian indicating the amount of the Participant's
contributions to the Plan during the Purchase Period, the amount of the
contributions applied to the purchase of Common Stock for the Purchase Period,
the purchase price per share in effect for the Purchase Period and the amount
of the contributions (if any) carried over to the next Purchase Period.
10
<PAGE> 11
21. GOVERNING LAW.
The validity, construction and effect of the Plan and any rules and
regulations relating to the Plan will be determined in accordance with laws of
the State of Michigan, without giving effect to principles of conflicts of
laws, and applicable Federal law.
22. COMPLIANCE WITH LEGAL AND OTHER REQUIREMENTS.
The Plan, the granting and exercising of Purchase Rights hereunder, and the
other obligations of the Company, the Plan Administrator and the Custodian
under the Plan will be subject to all applicable federal and state laws, rules,
and regulations, and to such approvals by any regulatory or governmental agency
as may be required. The Company may, in its discretion, postpone the issuance
or delivery of shares of Common Stock upon exercise of Purchase Rights until
completion of such registration or qualification of such shares of Common Stock
or other required action under any federal or state law, rule, or regulation,
listing or other required action with respect to any automated quotation system
or stock exchange upon which the shares of Common Stock or other Company
securities are designated or listed, or compliance with any other contractual
obligation of the Company, as the Company may consider appropriate, and may
require any Participant to make such representations and furnish such
information as it may consider appropriate in connection with the issuance or
delivery of shares of Common Stock in compliance with applicable laws, rules,
and regulations, designation or listing requirements, or other contractual
obligations.
11
<PAGE> 1
EXHIBIT 5
June 15, 1994
Arbor Drugs, Inc.
3331 West Big Beaver Road
Troy, Michigan 48084
Gentlemen:
As General Counsel of Arbor Drugs, Inc., a Michigan corporation (the
"Company"), I have examined the Registration Statement on Form S-8 (the
"Registration Statement") to be filed by the Company with the Securities and
Exchange Commission in connection with the registration of 300,000 shares of
the Common Stock, par value $.01 (the "Common Stock"), of the Company for sale
and issuance pursuant to the Company's 1994 Employee Stock Purchase Plan (the
"Plan"). I have examined the proceedings proposed to be taken in connection
with the Plan and the sale and issuance of the Common Stock pursuant thereto
and such other records, documents and matters as I have deemed necessary or
advisable in order to enable me to render this opinion.
Based upon the above and taking into account such legal considerations as I
have deemed relevant, it is my opinion that upon completion of the proceedings
to be taken prior to the sale and issuance of the Common Stock, as contemplated
under the Plan, including the receipt of the consent of the shareholders of the
Company owning a majority of the shares of the Common Stock with respect to the
approval of the Plan, such Common Stock, when sold and issued in the manner
referred to in the Registration Statement and the Plan, will be legally and
validly issued, fully paid and non-assessable.
I hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
/s/ Todd A. Wyett
Todd A. Wyett
General Counsel
<PAGE> 1
[COOPERS & LYBRAND LETTERHEAD]
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Registration Statement of
Arbor Drugs, Inc. on Form S-8 of our report dated September 24, 1993 (except
for Note 8 for which the date is October 20, 1993) on our audits of the
consolidated financial statements and financial statement schedules of Arbor
Drugs, Inc. and Subsidiaries as of July 31, 1993 and 1992, and for the years
ended July 31, 1993, 1992 and 1991, which report is included in the Annual
Report on Form 10-K of Arbor Drugs, Inc.
/s/ Coopers & Lybrand
Coopers & Lybrand
Detroit, Michigan
June 15, 1993
