Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
First Essex Bancorp, Inc.
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(Exact name of registrant as specified in its charter)
Delaware 04-2943217
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
71 Main Street, Andover, MA 01810
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(Address of principal executive offices) (Zip Code)
First Essex Bancorp, Inc.
1997 Stock Incentive Plan
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(Full title of the plan)
Leonard A. Wilson
First Essex Bancorp, Inc.
71 Main Street
Andover, MA 01810
(508) 475-4313
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(Name and address, including zip code, and
telephone number, including area code, of agent for service)
WITH A COPY TO:
Carol H. Pratt, Esq.
Foley, Hoag & Eliot LLP
One Post Office Square
Boston, Massachusetts 02109
(617) 832-1000
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CALCULATION OF REGISTRATION FEE
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Proposed
Title of Proposed Maximum
Securities Amount Maximum Aggregate Amount of
to be to be Offering Price Offering Registration
Registered Registered Per Share(1) Price(1) Fee
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Common Stock, 800,000
$0.10 par value shares $16.8125 $13,450,000 $4,076
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(1) Estimated pursuant to Rules 457(c) and (h) based on the average of the high
and low prices of the Common Stock as reported on August 29, 1997 on the
Nasdaq National Market.
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PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
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The following documents filed with the Securities and Exchange
Commission (the "Commission") are incorporated in this Registration Statement by
reference:
(a) the Company's Annual Report on Form 10-K for the year ended
December 31, 1996, File No. 000-16143, filed with the Commission on March 28,
1997.
(b) the Company's Current Report on Form 8-K, File No. 000-16143, filed
with the Commission on January 14, 1997, as supplemented by Amendment No. 1 to
the Current Report on Form 8-K, filed with the Commission on February 13, 1997,
and Amendment No. 2 to the Current Report on Form 8-K, filed with the Commission
on February 21, 1997.
(c) the Company's Quarterly Report on Form 10-Q for the Quarter Ended
March 31, 1997, File No. 000-16143, filed with the Commission on May 15, 1997.
(d) the description of the Company's Common Stock contained in the
Registration Statement on Form 8-A filed with the Commission under Section 12 of
the Securities Exchange Act of 1934, 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 Securities Exchange Act of 1934, as amended,
prior to the filing of a post-effective amendment to this Registration Statement
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 this Registration Statement and to be part hereof from the date of
filing of such documents.
Item 4. Description of Securities.
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Not applicable.
Item 5. Interests of Named Experts and Counsel.
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The validity of the securities registered hereby is being passed upon
for the Company by Foley, Hoag & Eliot LLP, Boston, Massachusetts.
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Item 6. Indemnification of Directors and Officers.
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Section 145 of Delaware General Corporation Law provides that a
corporation may indemnify any director or officer made a party to any proceeding
against judgments, penalties, fines, settlements and reasonable expenses, unless
it is established that (i) the act or omission of the director was material to
the matter giving rise to the proceeding, and was committed in bad faith or was
a result of deliberate dishonesty, (ii) the director actually received an
improper personal benefit or (iii) in a criminal proceeding, the director had
reasonable cause to believe the act or omission was unlawful. A director may not
be indemnified in any proceeding charging improper personal benefit, if the
director was adjudged to be liable and, in a derivative action, there shall not
be indemnification if the director has been adjudged liable to the corporation.
A director or officer of a corporation who has been successful in the defense of
any proceeding shall be indemnified against reasonable costs incurred in such
defense. Indemnification may not be made unless authorized pursuant to a
determination that the director has met the requisite standard of conduct.
Article V of the Company's By-Laws provides that any director, officer or
any person serving as a director, officer or agent of another corporation at the
request of the Company's Board of Directors (as evidenced by a vote of the
Company's Board of Directors) (the "Indemnitee") shall be indemnified and held
harmless by the Company to the fullest extent authorized by the Delaware General
Corporation Law, against all expenses, liability and loss reasonably incurred or
suffered by the Indemnitee; provided, however, that, except for actions by such
Indemnitee against the Company to enforce the indemnification provision, the
Company shall indemnify Indemnitee only if the proceeding for which
indemnification is sought was authorized and ratified by the Company's Board of
Directors.
The effect of these provisions would be to permit indemnification by
the Company for liabilities arising out of the Securities Act of 1933, as
amended.
Item 7. Exemption from Registration Claimed.
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Not applicable.
Item 8. Exhibits.
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4.1 Restated Certificate of Incorporation of the Company
(incorporated herein by reference to Exhibit 3.1 to Amendment
No. 1 to the Company's Registration Statement on
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Form S-1, File No. 33-10966, filed with the Securities and
Exchange Commission on April 17, 1987).
4.2 Amended and Restated By-Laws of the Company (incorporated
herein by reference to Exhibit 4.1 of the Company's Current
Report on Form 8-K, filed with the Securities and Exchange
Commission on December 28, 1992).
4.3 First Essex Bancorp, Inc. 1997 Stock Incentive Plan.
5.1 Opinion of Foley, Hoag & Eliot LLP.
23.1 Consent of Arthur Andersen LLP.
23.2 Consent of Shatswell, MacLeod & Company, P.C.
23.3 Consent of Foley, Hoag & Eliot LLP (included in Exhibit 5.1).
24.1 Power of Attorney (contained on the signature page).
Item 9. Undertakings.
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1. The undersigned Registrant hereby undertakes:
(a) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the Registration
Statement;
(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 1(a)(i) and 1(a)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the Registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in this
Registration Statement.
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(b) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered herein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
2. The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in this Registration Statement shall be
deemed to be a new registration statement relating to the securities offered
herein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
3. Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
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 Act and will be governed by the final adjudication of
such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, 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 Chatham, Massachusetts, on this 5th day of September, 1997.
FIRST ESSEX BANCORP, INC.
By: /s/ Leonard A. Wilson
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Leonard A. Wilson
President and
Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL BY THESE PRESENTS that each individual whose signature appears
below hereby constitutes and appoints Leonard A. Wilson and David W. Dailey, and
each of them, his true and lawful attorneys-in-fact and agents with full power
of substitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all amendments (including post-effective amendments)
to this Registration Statement, and to file the same, with all exhibits thereto,
and all 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 which
they, or either of them, may deem necessary or advisable to be done in
connection with this Registration Statement, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents or any of them, or any substitute or
substitutes for either or both of them, 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 dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
/s/ Leonard A. Wilson President, Chief Executive September 5, 1997
- ------------------------ Officer and Director
Leonard A. Wilson (Principal Executive
Officer)
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/s/ David W. Dailey Executive Vice President September 5, 1997
- ------------------------ (Principal Financial
David W. Dailey Officer)
/s/ Thomas P. Coursey Senior Vice President and September 5, 1997
- ------------------------ Controller (Principal
Thomas P. Coursey Accounting Officer)
/s/ Thomas S. Barenboim Director September 5, 1997
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Thomas S. Barenboim
/s/ Augustine J. Fabiani Director September 5, 1997
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Augustine J. Fabiani
/s/ William L. Lane Director September 5, 1997
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William L. Lane
/s/ Frank J. Leone, Jr. Director September 5, 1997
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Frank J. Leone, Jr.
Director
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Robert H. Pangione
/s/ Walter W. Topham Director September 5, 1997
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Walter W. Topham
/s/ Robert H. Watkinson Director September 5, 1997
- ------------------------
Robert H. Watkinson
</TABLE>
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EXHIBIT INDEX
Exhibit
No. Description
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4.1 Restated Certificate of Incorporation of the Company (incorporated
herein by reference to Exhibit 3.1 to Amendment No. 1 to the
Company's Registration Statement on Form S-1, File No. 33-10966,
filed with the Securities and Exchange Commission on April 17,
1987).
4.2 Amended and Restated By-Laws of the Company (incorporated herein by
reference to Exhibit 4.1 of the Company's Current Report on Form
8-K, filed with the Securities and Exchange Commission on December
28, 1992).
4.3 First Essex Bancorp, Inc. 1997 Stock Incentive Plan.
5.1 Opinion of Foley, Hoag & Eliot LLP.
23.1 Consent of Arthur Andersen LLP.
23.2 Consent of Shatswell, MacLeod & Company, P.C.
23.3 Consent of Foley, Hoag & Eliot LLP (included in Exhibit 5.1).
24.1 Power of Attorney (contained on the signature page).
Exhibit 4.3
FIRST ESSEX BANCORP, INC.
1997 STOCK INCENTIVE PLAN
SECTION 1. General Purpose of the Plan; Definitions
The name of the plan is the First Essex Bancorp, Inc. 1997 Stock Incentive
Plan (the "Plan"). The purpose of the Plan is to encourage and enable the
officers, directors and employees of First Essex Bancorp, Inc. (the
"Company") and its Subsidiaries upon whose judgment, initiative and efforts
the Company largely depends for the successful conduct of its business to
acquire a proprietary interest in the Company. It is anticipated that
providing such persons with a direct stake in the Company's welfare will
assure a closer identification of their interests with those of the Company
and its shareholders, thereby stimulating their efforts on the Company's
behalf and strengthening their desire to remain with the Company.
The following terms shall be defined as set forth below:
"Act" means the Securities Exchange Act of 1934, as amended.
"Award" or "Awards", except where referring to a particular category of
grant under the Plan, shall include Incentive Stock Options, Non-Qualified
Stock Options, Conditioned Stock Awards, Unrestricted Stock Awards,
Performance Share Awards and Stock Appreciation Rights.
"Board" means the Board of Directors of the Company.
"Cause" means personal dishonesty, willful misconduct, breach of fiduciary
duty involving personal profit, intentional failure to perform stated duties,
willful violation of any law, rule or regulation (other than traffic
violations or similar offenses) or final cease and desist order.
"Change of Control" shall have the meaning set forth in Section 15.
"Code" means the Internal Revenue Code of 1986, as amended, and any
successor Code, and related rules, regulations and interpretations.
"Committee" shall have the meaning set forth in Section 2.
"Conditioned Stock Award" means an Award granted pursuant to Section 6.
"Disability" means disability as set forth in Section 22(e)(3) of the
Code.
"Effective Date" shall have the meaning set forth in Section 17.
"Eligible Person" shall have the meaning set forth in Section 4.
"Fair Market Value" on any given date means the closing price per share of
the Stock on the trading day immediately preceding such date as reported by
the NASDAQ Stock Market or another nationally recognized stock exchange, or,
if the Stock is not listed on such an exchange, the fair market value of the
Stock as determined by the Committee.
"Incentive Stock Option" means any Stock Option designated and qualified
as an "incentive stock option" as defined in Section 422 of the Code.
"Non-Qualified Stock Option" means any Stock Option that is not an
Incentive Stock Option.
"Normal Retirement" means retirement from active employment with the
Company and its Subsidiaries in accordance with the retirement policies of
the Company and its Subsidiaries then in effect.
"Option" or "Stock Option" means any option to purchase shares of Stock
granted pursuant to Section 5.
"Performance Share Award" means an Award granted pursuant to Section 8.
"Stock" means the Common Stock, $0.10 par value per share, of the Company,
subject to adjustments pursuant to Section 3.
"Stock Appreciation Right" means an Award granted pursuant to Section 9.
"Subsidiary" means a subsidiary as defined in Section 424 of the Code.
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"Unrestricted Stock Award" means Awards granted pursuant to Section 7.
SECTION 2. Administration of Plan; Committee Authority to Select Participants
and Determine Awards.
(a) Committee. The Plan shall be administered by a Stock Incentive Plan
Committee (the "Committee") consisting of all members of the Compensation
Committee of the Company who qualify as Non-Employee Directors. The Committee
shall have at least two (2) members at all times. It is the intention of the
Company that the Plan shall be administered by "Non-Employee Directors"
within the meaning of Rule 16b-3 under the Act, but the authority and
validity of any act taken or not taken by the Committee shall not be affected
if any person administering the Plan is not a "Non-Employee Director." Except
as specifically reserved to the Board under the terms of the Plan, the
Committee shall have full and final authority to operate, manage and
administer the Plan on behalf of the Company. Action by the Committee shall
require the affirmative vote of a majority of all members thereof.
(b) Powers of Committee. The Committee shall have the power and authority
to grant Awards consistent with the terms of the Plan, including the power
and authority:
(i) to select the officers and other employees of the Company and its
Subsidiaries to whom Awards may from time to time be granted;
(ii) to determine the time or times of grant, and the extent, if any, of
Incentive Stock Options, Non-Qualified Stock Options, Conditioned Stock,
Unrestricted Stock, Performance Shares and Stock Appreciation Rights, or
any combination of the foregoing, granted to any one or more participants;
(iii) to determine the number of shares to be covered by any Award;
(iv) to determine and modify the terms and conditions, including
restrictions, not inconsistent with the terms of the Plan, of any Award,
which terms and conditions may differ among individual Awards and
participants, and to approve the form of written instruments evidencing
the Awards; provided, however, that no such action shall adversely affect
rights under any outstanding Award without the participant's consent;
(v) to accelerate the exercisability or vesting of all or any portion of
any Award;
(vi) subject to the provisions of Section 5(a)(ii), to extend the period
in which any outstanding Stock Option or Stock Appreciation Right may be
exercised;
(vii) to determine whether, to what extent, and under what circumstances
Stock and other amounts payable with respect to an Award shall be deferred
either automatically or at the election of the participant and whether and
to what extent the Company shall pay or credit amounts equal to interest
(at rates determined by the Committee) or dividends or deemed dividends on
such deferrals; and
(viii) to adopt, alter and repeal such rules, guidelines and practices
for administration of the Plan and for its own acts and proceedings as it
shall deem advisable; to interpret the terms and provisions of the Plan
and any Award (including related written instruments); to make all
determinations it deems advisable for the administration of the Plan; to
decide all disputes arising in connection with the Plan; and to otherwise
supervise the administration of the Plan.
All decisions and interpretations of the Committee shall be binding on all
persons, including the Company and Plan participants.
SECTION 3. Shares Issuable under the Plan; Mergers; Substitution.
(a) Shares Issuable. The maximum number of shares of Stock with respect to
which Awards (including Stock Appreciation Rights) may be granted under the
Plan shall be eight hundred thousand (800,000). For purposes of this
limitation, the shares of Stock underlying any Awards which are forfeited,
canceled, reacquired by the Company or otherwise terminated (other than by
exercise) shall be added back to the shares of Stock with respect to which
Awards may be granted under the Plan so long as the participants to whom such
Awards had been previously granted received no benefits of ownership of the
underlying shares of Stock to which the Award related. Subject to such
overall limitation, any type or types of Award may be granted with respect to
shares, including Incentive Stock Options. Shares issued under the Plan may
be authorized but unissued shares or shares reacquired by the Company.
(b) Stock Dividends, Mergers, etc. In the event that after approval of the
Plan by the stockholders of the Company in accordance with Section 17, the
Company effects a stock dividend, stock split or similar change in
capitalization affecting the Stock, the Committee shall make appropriate
adjustments in (i) the number and kind
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of shares of stock or securities with respect to which Awards may thereafter
be granted (including without limitation the limitation set forth in Section
3(a) above), (ii) the number and kind of shares remaining subject to
outstanding Awards, and (iii) the option or purchase price in respect of such
shares. In the event of any merger, consolidation, dissolution or liquidation
of the Company, the Committee in its sole discretion may, as to any
outstanding Awards, make such substitution or adjustment in the aggregate
number of shares reserved for issuance under the Plan and in the number and
purchase price (if any) of shares subject to such Awards as it may determine
and as may be permitted by the terms of such transaction, or accelerate,
amend or terminate such Awards upon such terms and conditions as it shall
provide (which, in the case of the termination of the vested portion of any
Award, shall require payment or other consideration which the Committee deems
equitable in the circumstances), subject, however, to the provisions of
Section 15.
(c) Substitute Awards. The Committee may grant Awards under the Plan in
substitution for stock and stock based awards held by employees of another
corporation who concurrently become employees of the Company or a Subsidiary
as the result of a merger or consolidation of the employing corporation with
the Company or a Subsidiary or the acquisition by the Company or a Subsidiary
of property or stock of the employing corporation (collectively, "Merger").
The Committee may direct that the substitute awards be granted on such terms
and conditions as the Committee considers appropriate in the circumstances.
Shares which may be delivered under such substitute awards may be in addition
to the maximum number of shares provided for in Section 3(a).
SECTION 4. Eligibility.
Awards may be granted only to directors, officers or other key employees of
the Company or its Subsidiaries ("Eligible Persons").
SECTION 5. Stock Options.
Any Stock Option granted under the Plan shall be in such form as the
Committee may from time to time approve.
Stock Options granted under the Plan may be either Incentive Stock Options
or Non-Qualified Stock Options. To the extent that any option does not
qualify as an Incentive Stock Option, it shall constitute a Non-Qualified
Stock Option.
No Incentive Stock Option shall be granted under the Plan after the tenth
anniversary of the Effective Date.
(a) Grant of Stock Options. The Committee in its discretion may determine
the effective date of Stock Options, provided, however, that grants of
Incentive Stock Options shall be made only to persons who are, on the
effective date of the grant, employees of the Company or any Subsidiary.
Stock Options granted pursuant to this Section 5(a) shall be subject to the
following terms and conditions and the terms and conditions of Section 13 and
shall contain such additional terms and conditions, not inconsistent with the
terms of the Plan, as the Committee shall deem desirable.
(i) Exercise Price. The exercise price per share for the Stock covered
by a Stock Option granted pursuant to this Section 5(a) shall be
determined by the Committee at the time of grant but shall be, in the case
of Incentive Stock Options, not less than one hundred percent (100%) of
Fair Market Value on the date of grant. If an employee owns or is deemed
to own (by reason of the attribution rules applicable under Section 424(d)
of the Code) more than ten percent (10%) of the combined voting power of
all classes of stock of the Company or any Subsidiary or parent
corporation and an Incentive Stock Option is granted to such employee, the
option price shall be not less than one hundred ten percent (110%) of Fair
Market Value on the grant date.
(ii) Option Term. The term of each Stock Option shall be fixed by the
Committee but no Incentive Stock Option shall be exercisable more than ten
(10) years after the date the option is granted. If an employee owns or is
deemed to own (by reason of the attribution rules of Section 424(d) of the
Code) more than ten percent (10%) of the combined voting power of all
classes of stock of the Company or any Subsidiary or parent corporation
and an Incentive Stock Option is granted to such employee, the term of
such option shall be no more than five (5) years from the date of grant.
(iii) Exercisability; Rights of a Shareholder. Stock Options shall
become vested and exercisable at such time or times, whether or not in
installments, as shall be determined by the Committee at or after the
grant date. The Committee may at any time accelerate the exercisability of
all or any portion of any Stock Option. An optionee shall have the rights
of a shareholder only as to shares acquired upon the exercise of a Stock
Option and not as to unexercised Stock Options.
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(iv) Method of Exercise. Stock Options may be exercised in whole or in
part, by delivering written notice of exercise to the Company, specifying
the number of shares to be purchased. Payment of the purchase price may be
made by one or more of the following methods:
(A) In cash, by certified or bank check or other instrument acceptable
to the Committee;
(B) If permitted by the Committee, in its discretion, in the form of
shares of Stock that are not then subject to restrictions under any
Company plan. Such surrendered shares shall be valued at Fair Market
Value on the exercise date; or
(C) By the optionee delivering to the Company a properly executed
exercise notice together with irrevocable instructions to a broker to
promptly deliver to the Company cash or a check payable and acceptable
to the Company to pay the purchase price; provided that in the event the
optionee chooses to pay the purchase price as so provided, the optionee
and the broker shall comply with such procedures and enter into such
agreements of indemnity and other agreements as the Committee shall
prescribe as a condition of such payment procedure. The Company need not
act upon such exercise notice until the Company receives full payment of
the exercise price; or
(D) 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 Committee) which the Committee determines are consistent with the
purpose of the Plan and with applicable laws and regulations.
The delivery of certificates representing shares of Stock to be purchased
pursuant to the exercise of a Stock Option will be contingent upon receipt
from the Optionee (or a purchaser acting in his stead in accordance with
the provisions of the Stock Option) by the Company of the full purchase
price for such shares and the fulfillment of any other requirements
contained in the Stock Option or applicable provisions of laws.
(v) Non-transferability of Options. No Stock Option shall be
transferable other than by will or by the laws of descent and
distribution, and all Stock Options shall be exercisable, during the
optionee's lifetime, only by the optionee.
(vi) Annual Limit on Incentive Stock Options. To the extent required for
"incentive stock option" treatment under Section 422 of the Code, the
aggregate Fair Market Value (determined as of the time of grant) of the
Stock with respect to which incentive stock options granted under this
Plan and any other plan of the Company or its Subsidiaries become
exercisable for the first time by an optionee during any calendar year
shall not exceed $100,000.
(vii) Form of Settlement. Shares of Stock issued upon exercise of a
Stock Option shall be free of all restrictions under the Plan, except as
otherwise provided in this Plan.
(b) Reload Options. At the discretion of the Committee, Options granted
under Section 5(a) may include a so-called "reload" feature pursuant to which
an optionee exercising an option (the "Original Option") by the delivery of a
number of shares of Stock in accordance with Section 5(a)(iv)(B) hereof would
automatically be granted an additional Option (with an exercise price equal
to the Fair Market Value of the Stock on the date the additional Option is
granted and with the same expiration date as the original Option being
exercised, and with such other terms as the Committee may provide) to
purchase that number of shares of Stock equal to the number delivered to
exercise the Original Option; provided, however, that the grant of such
additional Option shall be subject to the availability of shares of Stock
under the Plan at the time of the exercise of the Original Option.
SECTION 6. Conditioned Stock Awards.
(a) Nature of Conditioned Stock Award. The Committee in its discretion may
grant Conditioned Stock Awards to any Eligible Person. A Conditioned Stock
Award is an Award entitling the recipient to acquire, at no cost or for a
purchase price determined by the Committee, shares of Stock subject to such
restrictions and conditions as the Committee may determine at the time of
grant ("Conditioned Stock"). Conditions may be based on continuing employment
and/or achievement of pre-established performance goals and objectives. In
addition, a Conditioned Stock Award may be granted to an employee by the
Committee in lieu of a cash bonus due to such employee pursuant to any other
plan of the Company.
(b) Acceptance of Award. A participant who is granted a Conditioned Stock
Award shall have no rights with respect to such Award unless the participant
shall have accepted the Award within sixty (60) days (or such shorter date as
the Committee may specify) following the award date by making payment to the
Company, if required,
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by certified or bank check or other instrument or form of payment acceptable
to the Committee in an amount equal to the specified purchase price, if any,
of the shares covered by the Award and by executing and delivering to the
Company a written instrument that sets forth the terms and conditions of the
Conditioned Stock in such form as the Committee shall determine.
(c) Rights as a Shareholder. Upon complying with Section 6(b) above, a
participant shall have all the rights of a shareholder with respect to the
Conditioned Stock, including voting and dividend rights, subject to non-
transferability restrictions and Company repurchase or forfeiture rights
described in this Section 6 and subject to such other conditions contained in
the written instrument evidencing the Conditioned Award. Unless the Committee
shall otherwise determine, certificates evidencing shares of Conditioned
Stock shall remain in the possession of the Company until such shares are
vested as provided in Section 6(e) below.
(d) Restrictions. Shares of Conditioned Stock may not be sold, assigned,
transferred, pledged or otherwise encumbered or disposed of except as
specifically provided herein. In the event of termination of employment by
the Company and its Subsidiaries for any reason (including death, Disability,
Normal Retirement and for Cause), the Company shall have the right, at the
discretion of the Committee, to repurchase shares of Conditioned Stock with
respect to which conditions have not lapsed at their purchase price, or to
require forfeiture of such shares to the Company if acquired at no cost, from
the participant or the participant's legal representative. The Company must
exercise such right of repurchase or forfeiture within ninety (90) days
following such termination of employment (unless otherwise specified, in the
written instrument evidencing the Conditioned Award).
(e) Vesting of Conditioned Stock. The Committee at the time of grant shall
specify the date or dates and/or the attainment of pre-established
performance goals, objectives and other conditions on which the non-
transferability of the Conditioned Stock and the Company's right of
repurchase or forfeiture shall lapse. Subsequent to such date or dates and/or
the attainment of such preestablished performance goals, objectives and other
conditions, the shares on which all restrictions have lapsed shall no longer
be Conditioned Stock and shall be deemed "vested." The Committee at any time
may accelerate such date or dates and otherwise waive or, subject to Section
13, amend any conditions of the Award.
(f) Waiver, Deferral and Reinvestment of Dividends. The written instrument
evidencing the Conditioned Stock Award may require or permit the immediate
payment, waiver, deferral or investment of dividends paid on the Restricted
Stock.
SECTION 7. Unrestricted Stock Awards.
(a) Grant or Sale of Unrestricted Stock. The Committee in its discretion may
grant or sell to any Eligible Person shares of Stock free of any restrictions
under the Plan ("Unrestricted Stock") at a purchase price determined by the
Committee. Shares of Unrestricted Stock may be granted or sold as described
in the preceding sentence in respect of past services or other valid
consideration.
(b) Restrictions on Transfers. The right to receive unrestricted Stock may
not be sold, assigned, transferred, pledged or otherwise encumbered, other
than by will or the laws of descent and distribution.
SECTION 8. Performance Share Awards.
(a) Nature of Performance Shares. A Performance Share Award is an award
entitling the recipient to acquire shares of Stock upon the attainment of
specified performance goals. The Committee may make Performance Share Awards
independent of or in connection with the granting of any other Award under
the Plan. Performance Share Awards may be granted under the Plan to any
Eligible Person including those who qualify for awards under other
performance plans of the Company. The Committee in its discretion shall
determine whether and to whom Performance Share Awards shall be made, the
performance goals applicable under each such Award, the periods during which
performance is to be measured, and all other limitations and conditions
applicable to the awarded Performance Shares; provided, however, that the
Committee may rely on the performance goals and other standards applicable to
other performance-based plans of the Company in setting the standards for
Performance Share Awards under the Plan.
(b) Restrictions on Transfer. Performance Share Awards and all rights with
respect to such Awards may not be sold, assigned, transferred, pledged or
otherwise encumbered.
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(c) Rights as a Shareholder. A participant receiving a Performance Share
Award shall have the rights of a shareholder only as to shares actually
received by the participant under the Plan and not with respect to shares
subject to the Award but not actually received by the participant. A
participant shall be entitled to receive a stock certificate evidencing the
acquisition of shares of Stock under a Performance Share Award only upon
satisfaction of all conditions specified in the written instrument evidencing
the Performance Share Award (or in a performance plan adopted by the
Committee).
(d) Termination. Except as may otherwise be provided by the Committee at
any time prior to termination of employment, a participant's rights in all
Performance Share Awards shall automatically terminate upon the participant's
termination of employment by the Company and its Subsidiaries for any reason
(including death, Disability, Normal Retirement and for Cause).
(e) Acceleration, Waiver, Etc. At any time prior to the participant's
termination of employment, the Committee may in its sole discretion
accelerate, waive or, subject to Section 13, amend any or all of the goals,
restrictions or conditions imposed under any Performance Share Award.
SECTION 9. Stock Appreciation Rights
(a) The Committee in its discretion may grant Stock Appreciation Rights to
any Eligible Person (i) alone, (ii) simultaneously with the grant of a Stock
Option and in conjunction therewith or in the alternative thereto or (iii)
subsequent to the grant of a Non-Qualified Option and in conjunction
therewith or in the alternative thereto.
(b) The exercise price per share of a Stock Appreciation Right granted
alone shall be determined by the Committee. A Stock Appreciation Right
granted simultaneously with or subsequent to the grant of a Stock Option and
in conjunction therewith or in the alternative thereto shall have the same
exercise price as the related Stock Option, shall be transferable only upon
the same terms and conditions as the related Stock Option, and shall be
exercisable only to the same extent as the related Stock Option; provided,
however, that a Stock Appreciation Right, by its terms, shall be exercisable
only when the Fair Market Value per share of Stock exceeds the exercise price
per share thereof.
(c) Upon any exercise of a Stock Appreciation Right which has been issued
in conjunction with a stock option, the number of shares of Stock for which
any related Stock Option shall be exercisable shall be reduced by the number
of shares for which the Stock Appreciation Right shall have been exercised.
The number of shares of Stock with respect to which a Stock Appreciation
Right shall be exercisable shall be reduced upon any exercise of any related
Stock Option by the number of shares for which such Option shall have been
exercised. Any Stock Appreciation Right shall be exercisable upon such
additional terms and conditions as may from time to time be prescribed by the
Committee.
(d) A Stock Appreciation Right shall entitle the participant upon exercise
thereof to receive from the Company, upon written request to the Company at
its principal offices (the "Request"), a number of shares of Stock (with or
without restrictions as to substantial risk of forfeiture and
transferability, as determined by the Committee in its sole discretion), an
amount of cash, or any combination of Stock and cash, as specified in the
Request (but subject to the approval of the Committee in its sole discretion,
at any time up to and including the time of payment, as to the making of any
cash payment), having an aggregate Fair Market Value equal to the product of
(i) the excess of Fair Market Value, on the date of such Request, over the
exercise price per share of Stock specified in such Stock Appreciation Right
or its related Option, multiplied by (ii) the number of shares of Stock for
which such Stock Appreciation Right shall be exercised. Notwithstanding the
foregoing, the Committee may specify at the time of grant of any Stock
Appreciation Right that such Stock Appreciation Right may be exercisable
solely for cash and not for Stock.
(e) Within thirty (30) days of the receipt by the Company of a Request to
receive cash in full or partial settlement of a Stock Appreciation Right or
to exercise such Stock Appreciation Right for cash, the Committee shall, in
its sole discretion, either consent to or disapprove, in whole or in part,
such Request. A Request to receive cash in full or partial settlement of a
Stock Appreciation Right or to exercise a Stock Appreciation Right for cash
may provide that, in the event the Committee shall disapprove such Request,
such Request shall be deemed to be an exercise of such Stock Appreciation
Right for Stock.
(f) If the Committee disapproves in whole or in part any election by a
participant to receive cash in full or partial settlement of a Stock
Appreciation Right or to exercise such Stock Appreciation Right for cash,
such disapproval shall not affect such participant's right to exercise such
Stock Appreciation Right at a later date, to the
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extent that such Stock Appreciation Right shall be otherwise exercisable, or
to elect the form of payment at a later date, provided that an election to
receive cash upon such later exercise shall be subject to the approval of the
Committee. Additionally, such disapproval shall not affect such participant's
right to exercise any related Option.
(g) A Stock Appreciation Right shall be deemed exercised on the last day
of its term, if not otherwise exercised by the holder thereof, provided that
the fair market value of the Stock subject to the Stock Appreciation Right
exceeds the exercise price thereof on such date.
(h) No Stock Appreciation Right shall be transferable other than by will
or by the laws of descent and distribution and all Stock Appreciation Rights
shall be exercisable, during the holder's lifetime, only by the holder.
SECTION 10. Termination of Stock Options and Stock Appreciation Rights.
(a) Incentive Stock Options:
(i) Termination by Death. If any participant's employment by the Company
and its Subsidiaries terminates by reason of death, any Incentive Stock
Option owned by such participant may thereafter be exercised to the extent
exercisable at the date of death, by the legal representative or legatee
of the participant, for a period of one year from the date of death, or
until the expiration of the stated term of the Incentive Stock Option, if
earlier.
(ii) Termination by Reason of Disability or Normal Retirement.
(A) Any Incentive Stock Option held by a participant whose employment
by the Company and its Subsidiaries has terminated by reason of
Disability may thereafter be exercised, to the extent it was exercisable
at the time of such termination, for a period of 180 days from the date
of such termination of employment or until the expiration of the stated
term of the Option, if earlier.
(B) Any Incentive Stock Option held by a participant whose employment
by the Company and its Subsidiaries has terminated by reason of Normal
Retirement may thereafter be exercised, to the extent it was exercisable
at the time of such termination, for a period of three months from the
date of such termination of employment or until the expiration of the
stated term of the Option, if earlier.
(C) The Committee shall have sole authority and discretion to
determine whether a participant's employment has been terminated by
reason of Disability or Normal Retirement.
(D) Except as otherwise provided by the Committee at the time of
grant, the death of a participant during a period provided in this
Section 10(a)(ii) for the exercise of an Incentive Stock Option shall
extend such period for one year from the date of death, subject to
termination on the expiration of the stated term of the Option, if
earlier.
(iii) Termination Voluntarily or for Cause. If any participant's
employment by the Company and its Subsidiaries has been terminated by the
optionee voluntarily or by the Company or any of its Subsidiaries for
Cause, any Incentive Stock Option held by such participant shall
immediately terminate at the end of the last day of the optionee's
employment and shall thereafter be of no further force and effect.
(iv) Termination Without Cause. Unless otherwise determined by the
Committee, if a participant's employment by the Company and its
Subsidiaries is terminated by the Company or any of its Subsidiaries
without cause, any Incentive Stock Option held by such participant may
thereafter be exercised, to the extent it was exercisable on the date of
termination of employment, for three months from the last day of the
optionee's employment (or such longer period as the Committee shall
specify at any time, it being understood that any Incentive Options that
are not exercised by such terminated optionee within three months after
such termination shall thereafter become Nonqualified Options) or until
the expiration of the stated term of the Option, if earlier.
(b) Non-Qualified Stock Options and Stock Appreciation Rights. Any
Non-Qualified Stock Option or Stock Appreciation Right granted under the Plan
shall contain such terms and conditions with respect to its termination as
the Committee, in its discretion, may from time to time determine.
SECTION 11. Tax Withholding.
(a) Payment by Participant. Each participant shall, no later than the date as
of which the value of an Award or of any Stock or other amounts received
thereunder first becomes includable in the gross income of the participant
for Federal income tax purposes, pay to the Company, or make arrangements
satisfactory to the Committee regarding
7
<PAGE>
payment of any Federal, state or local taxes of any kind required by law to
be withheld with respect to such income. The Company and its Subsidiaries
shall, to the extent permitted by law, have the right to deduct any such
taxes from any payment of any kind otherwise due to the participant.
(b) Payment in Shares. A Participant may elect, with the consent of the
Committee, to have such tax withholding obligation satisfied, in whole or in
part, by authorizing the Company to withhold from shares of Stock to be
issued pursuant to an Award a number of shares with an aggregate Fair Market
Value (as of the date the withholding is effected) that would satisfy the
withholding amount due with respect to such Award.
SECTION 12. Transfer, Leave of Absence, Etc.
For purposes of the Plan, the following events shall not be deemed a
termination of employment:
(a) a transfer to the employment of the Company from a Subsidiary or from
the Company to a Subsidiary, or from one Subsidiary to another;
(b) an approved leave of absence for military service or sickness, or for
any other purpose approved by the Company, if the employee's right to
re-employment is guaranteed either by a statute or by contract or under the
policy pursuant to which the leave of absence was granted or if the Committee
otherwise so provides in writing.
SECTION 13. Amendments and Termination.
The Board may at any time amend or discontinue the Plan and the Committee may
at any time amend or cancel any outstanding Award (or provide substitute
Awards at the same or reduced exercise or purchase price or with no exercise
or purchase price, but such price, if any, must satisfy the requirements
which would apply to the substitute or amended Award if it were then
initially granted under this Plan) for the purpose of satisfying changes in
law or for any other lawful purpose, but no such action shall adversely
affect rights under any outstanding Award without the holder's consent.
However, no such amendment, unless approved by the stockholders of the
Company, shall be effective if it would cause the Plan to fail to satisfy the
incentive stock option requirements of the Code, or cause transactions under
the Plan to fail to satisfy the requirements of Rule 16b-3 or any successor
rule under the Act as in effect on the date of such amendment.
SECTION 14. Status of Plan.
With respect to the portion of any Award which has not been exercised and any
payments in cash, Stock or other consideration not received by a participant,
a participant shall have no rights greater than those of a general creditor
of the Company unless the Committee shall otherwise expressly determine in
connection with any Award or Awards. In its sole discretion, the Committee
may authorize the creation of trusts or other arrangements to meet the
Company's obligations to deliver Stock or make payments with respect to
Awards hereunder, provided that the existence of such trusts or other
arrangements is consistent with the provision of the foregoing sentence.
SECTION 15. Change of Control Provisions.
(a) In the event of a Change of Control while unexercised Stock Options,
Conditional Stock Awards, Performance Share Awards or Stock Appreciation
Rights remain outstanding under the Plan, then (i) the time for exercise of
all unexercised and unexpired Awards shall be automatically accelerated,
effective as of the effective time of the Change of Control (or such earlier
date as may be specified by the Committee), and (ii) after the effective time
of such Change of Control, unexercised Stock Options, Conditional Stock
Awards, Performance Share Awards or Stock Appreciation Rights shall remain
outstanding and shall be exercisable for shares of Stock (or consideration
based upon the Fair Market Value of Stock) or, if applicable, for shares of
such securities, cash or property (or consideration based upon shares of such
securities, cash or property) as the holders of shares of Stock received in
connection with such Change of Control.
(b) "Change of Control" shall mean the occurrence of any one of the
following events:
(i) any "person" (as such term is used in Sections 13(d) and 14(d)(2) of
the Act) becomes a "beneficial owner" (as such term is defined in Rule
13d-3 promulgated under the Act) (other than the Company, any trustee or
other fiduciary holding securities under an employee benefit plan of the
Company, or any corporation owned, directly or indirectly, by the
stockholders of the Company in substantially the same proportions as their
ownership of stock of the Company), directly or indirectly, of securities
of the Company representing twenty-five percent (25%) or more of the
combined voting power of the Company's then outstanding securities; or
8
<PAGE>
(ii) persons who, as of January 1, 1997, constituted the Company's Board
(the "Incumbent Board") cease for any reason, including without limitation
as a result of a tender offer, proxy contest, merger or similar
transaction, to constitute at least a majority of the Board, provided that
any person becoming a director of the Company subsequent to January 1,
1997 whose election was approved by, or who was nominated with the
approval of, at least a majority of the directors then comprising the
Incumbent Board shall, for purposes of this Plan, be considered a member
of the Incumbent Board; or
(iii) the stockholders of the Company approve a merger or consolidation
of the Company with any other corporation or other entity, other than a
merger or consolidation which would result in the voting securities of the
Company outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into voting
securities of the surviving entity) more than sixty-five percent (65%) of
the combined voting power of the voting securities of the Company or such
surviving entity outstanding immediately after such merger or
consolidation; or
(iv) the stockholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition by
the Company of all or substantially all of the Company's assets.
SECTION 16. General Provisions.
(a) No Distribution; Compliance with Legal Requirements. The Committee may
require each person acquiring shares pursuant to an Award to represent to and
agree with the Company in writing that such person is acquiring the shares
without a view to distribution thereof.
No shares of Stock shall be issued pursuant to an Award until all
applicable securities laws and other legal and stock exchange requirements
have been satisfied. The Committee may require the placing of such stop
orders and restrictive legends on certificates for Stock and Awards as it
deems appropriate.
(b) Delivery of Stock Certificates. Delivery of stock certificates to
participants under this Plan shall be deemed effected for all purposes when
the Company or a stock transfer agent of the Company shall have delivered
such certificates in the United States mail, addressed to the participant, at
the participant's last known address on file with the Company.
(c) Other Compensation Arrangements; No Employment Rights. Nothing
contained in this Plan shall prevent the Board from adopting other or
additional compensation arrangements, including trusts, subject to
stockholder approval if such approval is required; and such arrangements may
be either generally applicable or applicable only in specific cases. The
adoption of the Plan or any Award under the Plan does not confer upon any
employee any right to continued employment with the Company or any
Subsidiary.
(d) Delegation by Committee. The Committee may delegate to the Chief
Financial Officer or other officer of the Company the authority to make
decisions relating to the exercise of Options or other Awards, including
without limitation the authority to permit the holder of an Award to deliver
Stock in payment of the exercise price and the authority to permit a holder
of an Award to satisfy a tax withholding obligation by authorizing the
Company to withhold shares from the shares of Stock to be issued pursuant to
an Award.
SECTION 17. Effective Date of Plan.
The Effective Date of the Plan shall be the date of its adoption by the Board
of Directors provided that the stockholders of the Company shall have
approved the Plan within twelve months following the adoption of the Plan by
the Board.
SECTION 18. Governing Law.
This Plan shall be governed by, and construed and enforced in accordance
with, the substantive laws of the State of Delaware without regard to its
principles of conflicts of laws.
9
Exhibit 5.1
FOLEY, HOAG & ELIOT LLP
One Post Office Square
Boston, Massachusetts 02109
----------
TELEPHONE 617-832-1000 1615 L STREET, N.W., SUITE 850
FACSIMILE 617-832-7000 WASHINGTON, D.C. 20036
http://www.fhe.com TEL: 202-775-0600
FAX: 202-857-0140
September 4, 1997
First Essex Bancorp, Inc.
71 Main Street
Andover, MA 01810
Ladies and Gentlemen:
We have acted as counsel for First Essex Bancorp, Inc., a Delaware
corporation (the "Company"), in connection with the preparation and filing with
the Securities and Exchange Commission under the Securities Act of 1933, as
amended, of a Registration Statement on Form S-8 (the "Registration Statement")
relating to the offering of up to 800,000 shares (the "Shares") of the Company's
common stock, $0.10 par value, pursuant to the First Essex Bancorp, Inc. 1997
Stock Incentive Plan (the "Plan").
In arriving at the opinions expressed below, we have examined and
relied on the following documents:
(i) the Registration Statement;
(ii) the Plan;
(iii) the Certificate of Incorporation of the Company, as amended,
as of the date hereof;
(iv) the By-Laws of the Company, as amended, as of the date hereof;
and
(v) the records of meetings and consents of the Board of Directors
and stockholders of the Company provided to us by the Company.
In addition, we have examined and relied on the originals or copies certified or
otherwise identified to our satisfaction of all such other records, documents
and instruments of the Company and such other persons, and we have made such
investigations of law, as we have deemed appropriate as a basis for the opinions
expressed below. We have assumed the genuineness of all signatures and the
authenticity of all documents submitted to us as originals and the conformity to
the original documents of all documents submitted to us as certified or
photostatic copies.
<PAGE>
First Essex Bancorp, Inc.
September 4, 1997
Page 2
We express no opinion other than as to the laws of the State of
Delaware.
Based upon the foregoing, we are of the opinion that:
1. The Company has the corporate power necessary for the issuance of
the Shares in the manner set forth in the Registration Statement.
2. The Company has taken all necessary corporate action required to
authorize the issuance and sale of the Shares.
3. When issued against payment of the agreed consideration therefor in
accordance with the respective exercise prices therefor as described in the
options relating thereto and the Plan, the Shares will be validly issued, fully
paid and non-assessable.
We consent to the filing of this opinion as Exhibit 5.1 to the
Registration Statement.
Very truly yours,
FOLEY, HOAG & ELIOT LLP
By: /s/ Carol Hempfling Pratt
--------------------------------------
a Partner
Exhibit 23.1
Arthur Andersen LLP
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
by reference in the First Essex Bancorp, Inc. Form S-8 registration statement to
be filed September 5, 1997 of our reports dated January 13, 1997 included in the
First Essex Bancorp, Inc.'s Form 10-K for the year ended December 31, 1996 and
to all references to our Firm included in this registration statement.
/s/ ARTHUR ANDERSEN LLP
Boston, Massachusetts
September 4, 1997
Exhibit 23.2
SHATSWELL, MacLEOD & COMPANY, P.C.
CERTIFIED PUBLIC ACCOUNTANTS
83 Pine Street
West Peabody, Massachusetts 01960-3635
(508) 535-0206
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
We hereby consent to the incorporation by reference of our report dated
February 9, 1996, except for Note 15, as to which the date is August 2, 1996,
Note 20 as to which the date is August 5, 1996, and Note 17, as to which the
date is September 24, 1996, in this Registration Statement on Form S-8 of First
Essex Bancorp, Inc.
/s/ Shatswell, MacLeod & Company, P.C.
- -------------------------------------
SHATSWELL, MacLEOD & COMPANY, P.C.
West Peabody, Massachusetts
September 5, 1997
Exhibit 23.3
[Included in Exhibit 5.1]
Exhibit 24.1
[Contained on the signature page of Form S-8]
