<PAGE> 1
As filed with the Securites and Exchange Commission on June 11, 1998
File No. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------------
WARREN BANCORP, INC.
(Exact name of issuer as specified in its charter)
MASSACHUSETTS 04-3024165
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
10 MAIN STREET, PEABODY
MASSACHUSETTS 01960
(Address of Principal Executive Offices)
WARREN BANCORP, INC.
1998 INCENTIVE AND NONQUALIFIED STOCK OPTION PLAN
(Full title of the Plan)
--------------------
PAUL M. PEDUTO
TREASURER
WARREN BANCORP, INC.
10 MAIN STREET
PEABODY, MASSACHUSETTS 01960
(Name and address of agent of service)
(978) 531-7400
(Telephone number, including area code, of agent for service)
--------------------
Copies to:
JOHN O. NEWELL, ESQ.
GOODWIN, PROCTER & HOAR
EXCHANGE PLACE
BOSTON, MA 02109
(617) 570-1000
--------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
=========================================================================================================================
Title of Each Class of Amount to be Proposed Maximum Proposed Maximum Amount of
Securities Being Registered Registered(1) Offering Price Per Share Aggregate Offering Price Registration Fee
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock (2) 600,000 shares $12.0625 $7,237,500 $2,135
=========================================================================================================================
</TABLE>
(1) Plus such additional number of shares as may be required pursuant to the
1998 Incentive and Nonqualified Stock Option Plan in the event of a stock
dividend, reverse stock split, split-up, recapitalization or other similar
event.
(2) This Registration Statement also relates to the rights (the "Rights") to
purchase shares of Series A Junior Participating Cumulative Preferred Stock
of the Registrant which are attached to all shares of Common Stock
outstanding as of, and issued subsequent to, May 10, 1995, pursuant to the
terms of the Registrant's Amended and Restated Shareholders Rights
Agreement, dated as of May 10, 1998.
(3) This estimate is made pursuant to Rule 457(c) and (h) under the Securities
Act, solely for purposes of determining the registration fee.
================================================================================
<PAGE> 2
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
There are hereby incorporated by reference: (i) the Registrant's
Annual Report on Form 10-K for the fiscal year ended December 31, 1997, as
amended and restated on Form 10-K/A filed on May 29, 1998; (ii) the Registrant's
Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 1998 and
the Registrant's Current Report on Form 8-K filed with the Securities and
Exchange Commission on June 9, 1998; and (iii) the description of the
Registrant's common stock, par value $.10 per share, contained in the
Registrant's Registration Statement on Form 8-B dated May 10, 1995, as amended.
All documents filed by the Registrant or the Plan pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 prior to the
filing of a post-effective amendment which indicates that all securities offered
have been sold or which deregisters all securities then remaining unsold shall
be deemed to be incorporated by reference herein and to be a part hereof from
the date of filing of documents. Any statement contained in a document
incorporated or deemed to be incorporated by reference herein shall be deemed to
be modified or superseded for purposes hereof to the extent that a statement
contained herein or in any other subsequently filed document which also is
incorporated or deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such 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. See instructions to Item 4.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Article VI (B) of the Registrant's Articles of Organization provides
as follows:
A. No Director of the Corporation shall be personally liable to the
Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a Director notwithstanding any provision of law imposing such liability;
provided, however, that this Article shall not eliminate or limit any liability
of a Director (i) for any breach of the Director's duty of loyalty to the
Corporation or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) under
Sections 61 or 62 of Chapter 156B of the General Laws of the Commonwealth of
Massachusetts, or (iv) with respect to any transaction from which the Director
derived an improper personal benefit.
B. No amendment or repeal of this Article shall adversely affect the
rights and protection afforded to a Director of this Corporation under this
Article for acts or omissions occurring prior to such amendment or repeal. If
the Massachusetts Business Corporation Law is hereafter amended to further
eliminate or limit the personal liability of Directors or to authorize corporate
action to further eliminate or limit such liability, then the liability of the
Directors of this Corporation shall be eliminated or limited to the fullest
extent permitted by the Massachusetts Business Corporation Law as so amended.
Article V of the Registrant's By-laws provides as follows:
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<PAGE> 3
1. ACTIONS, SUITS AND PROCEEDINGS. The Corporation shall indemnify
each person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit, proceeding or investigation,
whether civil, criminal, administrative or investigative, by reason of the fact
that he is or was, or has agreed to become, a Director or officer of the
Corporation, or is or was serving, or has agreed to serve, at the request of the
Corporation, as a Director or officer of, or in a similar capacity with, another
organization or in any capacity with respect to any employee benefit plan of the
Corporation or any subsidiary of the Corporation (all such persons being
referred to hereafter as an "Indemnitee"), or by reason of any action alleged to
have been taken or omitted to be taken in such capacity, against all expenses
(including reasonable attorneys' fees), judgments and fines incurred by him or
on his behalf in connection with such action, suit, proceeding or investigation,
and any appeal therefrom, unless the Indemnitee shall be finally adjudicated in
such action, suit, proceeding or investigation, not to have acted in good faith
in the reasonable belief that his action was in the best interests of the
Corporation or, to the extent such matter relates to service with respect to an
employee benefit plan, in the best interests of the participants or
beneficiaries of such employee benefit plan. Notwithstanding anything to the
contrary in this Article V, except as set forth in Section 7 of this Article V,
the Corporation shall not indemnify an Indemnitee seeking indemnification in
connection with an action, suit, proceeding or investigation (or part thereof)
initiated by the Indemnitee unless the initiation thereof was approved by the
Board of Directors of the Corporation.
2. EMPLOYEES AND AGENTS. The Corporation may, at the discretion of
the Board of Directors, indemnify employees and agents of the Corporation as if
they were included in Section 1 of this Article V.
3. SETTLEMENTS. The right to indemnification conferred in this
Article V shall include the right to be paid by the Corporation for amounts paid
in settlement of any such action, suit, proceeding or investigation and any
appeal therefrom, and all expenses (including reasonable attorneys' fees)
incurred in connection with such settlement, pursuant to a consent decree or
otherwise, unless and to the extent it is determined pursuant to Section 6 of
this Article V that the Indemnitee did not act in good faith in the reasonable
belief that his or her action was in the best interests of the Corporation or,
to the extent such matter relates to service with respect to an employee benefit
plan, in the best interests of the participants or beneficiaries of such
employee benefit plan.
4. NOTIFICATION AND DEFENSE OF CLAIM. As a condition precedent to
his or her right to be indemnified, the Indemnitee must notify the Corporation
in writing as soon as practicable of any action, suit, proceeding or
investigation involving such Indemnitee or with respect to which indemnity will
or could be sought. With respect to any action, suit, proceeding or
investigation of which the Corporation is so notified, the Corporation will be
entitled to participate therein at its own expense and/or to assume the defense
thereof at its own expense, with legal counsel reasonably acceptable to the
Indemnitee. After notice from the Corporation to the Indemnitee of its election
so to assume such defense, the Corporation shall not be liable to the Indemnitee
for any legal or other expenses subsequently incurred by the Indemnitee in
connection with such claim, other than as provided below in this Section 4 of
this Article V. The Indemnitee shall have the right to employ his or her own
counsel in connection with such claim, but the fees and expenses of such counsel
incurred after notice from the Corporation of its assumption of the defense
thereof shall be at the expense of the Indemnitee unless (i) the employment of
counsel by the Indemnitee has been authorized by the Corporation, (ii) counsel
to the Indemnitee shall have reasonably concluded that there may be a conflict
of interest or position on any significant issue between the Corporation and the
Indemnitee in the conduct of the defense of such action or (iii) the Corporation
shall not in fact have employed counsel to assume the defense of such action, in
each of which cases the fees and expenses of counsel for the Indemnitee shall be
at the expense of the Corporation, except as otherwise expressly provided by
this Article V. The Corporation shall not be entitled, without the consent of
the Indemnitee, to assume the defense of any claim brought by or in the right of
the Corporation or as to which counsel for the Indemnitee shall have reasonably
made the conclusion provided for in clause (ii) above.
5. ADVANCE OF EXPENSES. Subject to the provisions of Section 6 of
this Article V, in the event that the Corporation does not assume the defense,
or unless and until the Corporation assumes the defense, pursuant to
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<PAGE> 4
Section 4 of this Article V of any action, suit, proceeding or investigation of
which the Corporation receives notice under this Article V, any expenses
(including reasonable attorneys' fees) incurred by an Indemnitee in defending a
civil or criminal action, suit, proceeding or investigation or any appeal
therefrom shall be paid by the Corporation in advance of the final disposition
of such matter, PROVIDED, HOWEVER, that the payment of such expenses incurred by
an Indemnitee in advance of the final disposition of such matter shall be made
only upon receipt of an undertaking by or on behalf of the Indemnitee to repay
all amounts so advanced in the event that it shall ultimately be determined that
the Indemnitee is not entitled to be indemnified by the Corporation as
authorized in this Article V. Such undertaking may be accepted without reference
to the financial ability of the Indemnitee to make such repayment.
6. PROCEDURE FOR INDEMNIFICATION. In order to obtain indemnification
or advancement of expenses pursuant to Sections 1, 3 or 5 of this Article V, the
Indemnitee shall submit to the Corporation a written request, including in such
request such documentation and information as is reasonably available to the
Indemnitee and is reasonably necessary to determine whether and to what extent
the Indemnitee is entitled to indemnification or advancement of expenses. Any
such indemnification pursuant to Section 1 of this Article V shall be made
promptly, and in any event within 60 days after receipt by the Corporation of
the written request of the Indemnitee, unless a court of competent jurisdiction
finally adjudicates that the Indemnitee did not meet the applicable standard of
conduct set forth in Section 1 of this Article V. Any such indemnification
pursuant to Section 3 of this Article V or advancement of expenses pursuant to
Section 5 of this Article V shall be made promptly, and in any event within 60
days after receipt by the Corporation of the written request of the Indemnitee,
unless the Corporation determines, by clear and convincing evidence, within such
60-day period that the Indemnitee did not meet the applicable standard of
conduct set forth in Sections 1 or 3 of this Article V, as the case may be. Such
determination by the Corporation shall be made in each instance by (a) a
majority vote of a quorum of the Directors of the Corporation, (b) a majority
vote of a quorum of the outstanding shares of stock of all classes entitled to
vote for Directors, voting as a single class, which quorum shall consist of
stockholders who are not at that time parties to the action, suit, proceeding or
investigation in question, or (c) independent legal counsel (who may be regular
legal counsel to the Corporation).
7. REMEDIES. The right to indemnification or advances as granted by
this Article V shall be enforceable by the Indemnitee in any court of competent
jurisdiction if the Corporation denies such request, in whole or in part, or if
no disposition thereof is made within the 60-day period referred to above in
Section 6 of this Article V. Unless otherwise provided by law, the Corporation
shall have the burden of proving that the Indemnitee is not entitled to
indemnification or advancement of expenses under this Article V. Neither the
failure of the Corporation to have made a determination prior to the
commencement of any such action by the Indemnitee that indemnification is proper
in the circumstances because the Indemnitee has met the applicable standard of
conduct, nor an actual determination by the Corporation pursuant to Section 6 of
this Article V that the Indemnitee has not met such applicable standard of
conduct, shall be a defense to the action or create a presumption that the
Indemnitee has not met the applicable standard of conduct. The Indemnitee's
expenses (including attorneys' fees) incurred in connection with successfully
establishing his right to indemnification, in whole or in part, in any such
proceeding shall also be indemnified by the Corporation.
8. SUBSEQUENT AMENDMENT. No amendment, termination or repeal of this
Article V or of the relevant provisions of Chapter 156B of the Massachusetts
General Laws or any other applicable laws shall affect or diminish in any way
the rights of any Indemnitee to indemnification under the provisions hereof with
respect to any action, suit, proceeding or investigation arising out of or
relating to any actions, transactions or facts occurring prior to the final
adoption of such amendment, termination or repeal.
9. OTHER RIGHTS. The indemnification and advancement of expenses
provided by this Article V shall not be deemed exclusive of any other rights to
which an Indemnitee seeking indemnification or advancement of expenses may be
entitled under any law (common or statutory), agreement or vote of stockholders
or Directors or otherwise, both as to action in his or her official capacity and
as to action in any other capacity while holding office for the Corporation, and
shall continue as to an Indemnitee who has ceased to be a Director or officer,
and shall
II-3
<PAGE> 5
inure to the benefit of the estate, heirs, executors, personal representatives
and administrators of the Indemnitee. Nothing contained in this Article V shall
be deemed to prohibit, and the Corporation is specifically authorized to enter
into, agreements with officers and Directors providing indemnification rights
and procedures different from those set forth in this Article V. In addition,
the Corporation may, to the extent authorized from time to time by its Board of
Directors pursuant to Section 2 of this Article V or otherwise, grant
indemnification rights to other employees or agents of the Corporation or other
persons serving the Corporation and such rights may be equivalent to, or greater
or less than, those set forth in this Article V.
10. PARTIAL INDEMNIFICATION. If an Indemnitee is entitled under any
provision of this Article V to indemnification by the Corporation for some or a
portion of the expenses (including attorneys' fees), judgments, fines or amounts
paid in settlement actually and reasonably incurred by such Indemnitee or on
such Indemnitee's behalf in connection with any action, suit, proceeding or
investigation and any appeal therefrom but not, however, for the total amount
thereof, the Corporation shall nevertheless indemnify the Indemnitee for the
portion of such expenses (including reasonable attorneys' fees), judgments,
fines or amounts paid in settlement to which such Indemnitee is entitled.
11. INSURANCE. The Corporation may purchase and maintain insurance,
at its expense, to protect itself and any Director, officer, employee or agent
of the Corporation, any subsidiary, another organization or employee benefit
plan against any expense, liability or loss incurred by him of her in any such
capacity, or arising out of his of her status as such, whether or not the
Corporation would have the power to indemnify such person against such expense,
liability or loss under Chapter 156B of the Massachusetts General Laws.
12. MERGER OR CONSOLIDATION. If the Corporation is merged into or
consolidated with another corporation and the Corporation is not the surviving
corporation, the surviving Corporation shall assume the obligations of the
Corporation under this Article V with respect to any action, suit, proceeding or
investigation arising out of or relating to any actions, transactions or facts
occurring at or prior to the date of such merger or consolidation.
13. SAVINGS CLAUSE. If this Article V or any portion hereof shall be
invalidated on any ground by any court of competent jurisdiction, then the
Corporation shall nevertheless indemnify each Indemnitee as to any expenses
(including reasonable attorneys' fees), judgments, fines and amounts paid in
settlement in connection with any action, suit, proceeding or investigation,
whether civil, criminal or administrative, including an action by or in the
right of the Corporation, to the fullest extent permitted by any applicable
portion of this Article V that shall not have been invalidated and to the
fullest extent permitted by applicable law.
14. SUBSEQUENT LEGISLATION. If the Massachusetts General Laws are
amended after adoption of this Article V to expand further the indemnification
permitted to Indemnitees, then the Corporation shall indemnify such persons to
the fullest extent permitted by the Massachusetts General Laws, as so amended.
The pertinent statutory provision relating to indemnification, Chapter
156B, Section 67 of the General Laws of the Commonwealth of Massachusetts,
provides as follows:
INDEMNIFICATION OF OFFICERS AND DIRECTORS
Indemnification of directors, officers, employees and other agents of
a corporation, and persons who serve at its request as directors, officers,
employees or other agents of another organization, or who serve at its request
in any capacity with respect to any employee benefit plan, may be provided by it
to whatever extent shall be specified in or authorized by (i) the articles of
organization or (ii) a by-law adopted by the stockholders or (iii) a vote
adopted by the holders of a majority of the shares of stock entitled to vote on
the election of directors. Except as the articles of organization or by-laws
otherwise require, indemnification of any persons referred to in the preceding
sentence
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<PAGE> 6
who are not directors of the corporation may be provided by it to the extent
authorized by the directors. Such indemnification may include payment by the
corporation of expenses incurred in defending a civil or criminal action or
proceeding in advance of the final disposition of such action or proceeding,
upon receipt of an undertaking by the person indemnified to repay such payment
if he shall be adjudicated to be not entitled to indemnification under this
section which undertaking may be accepted without reference to the financial
ability of such person to make repayment. Any such indemnification may be
provided although the person to be indemnified is no longer an officer,
director, employee or agent of the corporation or of such other organization or
no longer serves with respect to any such employee benefit plan.
No indemnification shall be provided for any person with respect to
any matter as to which he shall have been adjudicated in any proceeding not to
have acted in good faith in the reasonable belief that his action was in the
best interest of the corporation or to the extent that such matter relates to
service with respect to an employee benefit plan, in the best interests of the
participants or beneficiaries of such employee benefit plan.
The absence of any express provision for indemnification shall not
limit any right of indemnification existing independently of this section.
A corporation shall have power to purchase and maintain insurance on
behalf of any person who is or was a director, officer, employee or other agent
of the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or other agent of another organization or with
respect to any employee benefit plan, against any liability incurred by him in
any such capacity, or arising out of his status as such, whether or not the
corporation would have the power to indemnify him against such liability.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not applicable.
II-5
<PAGE> 7
ITEM 8. EXHIBITS
EXHIBITS
Exhibit
Number Exhibit
------- -------
4.1 Articles of Organization of Warren Bancorp, Inc., as amended (1)
4.2 By-laws of Warren Bancorp, Inc., as amended (1)
5.1* Opinion of Goodwin, Procter & Hoar LLP regarding the legality of
securities being offered
23.1 Consent of Goodwin, Procter & Hoar LLP (included in Exhibit 5)
23.2* Consent of Arthur Andersen LLP
23.3* Consent of KPMG Peat Marwick LLP
24.1 Power of Attorney (see page II-9)
99.1* Warren Bancorp, Inc. 1998 Incentive and Nonqualified Stock Option
Plan
- ----------
(1) Previously filed as an Exhibit to the Registrant's Current Report on Form
8-K filed with the Securities and Exchange Commission on May 10, 1995 and
incorporated herein by reference.
* Filed herewith.
ITEM 9. UNDERTAKINGS
The Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act 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;
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<PAGE> 8
Provided, however, that paragraphs (1)(i) and (1)(ii) above do not
apply if the Registration Statement is on Form S-3 or Form S-8 and the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Registrant pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the Registration Statement.
(2) 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 therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
The 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 Section 15(d) of the Securities
Exchange Act of 1934 (and each filing of the annual report of the Plan pursuant
to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by
reference in the Registration Statement shall be deemed to be a new Registration
Statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
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.
II-7
<PAGE> 9
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 a Registration Statement 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 Peabody, Commonwealth of
Massachusetts, on May 29, 1998.
WARREN BANCORP, INC.
By: /s/ Paul M. Peduto
------------------------------
Paul M. Peduto
Treasurer
II-8
<PAGE> 10
We, the undersigned officers and Directors of Warren Bancorp, Inc.,
hereby severally constitute John R. Putney and Paul M. Peduto, and each of them
singly, our true and lawful attorneys with full power to them, and each of them
singly, to sign for us and in our names in the capacities indicated below, this
Registration Statement and any and all pre-effective and post-effective
amendments to said Registration Statement, and generally to do all such things
in our names in our capacities as officers and Directors to enable Warren
Bancorp, Inc. to comply with the provisions of the Securities Act of 1933, and
all requirements of the Securities and Exchange Commission, hereby ratifying and
confirming our signatures as they may be signed by our said attorneys, or any of
them, to said Registration Statement and any and all amendments thereto.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the date indicated.
SIGNATURES
NAME TITLE DATE
/s/ John R. Putney President and Chief May 29, 1998
- ----------------------------- Executive Officer;
John R. Putney Director (Principal
Executive Officer)
/s/ Paul M. Peduto Treasurer; Director May 29, 1998
- ----------------------------- (Principal Accounting
Paul M. Peduto and Financial Officer)
/s/ Peter V. Bent Director May 29, 1998
- -----------------------------
Peter V. Bent
/s/ Stephen J. Connolly IV Director May 29, 1998
- -----------------------------
Stephen J. Connolly IV
/s/ Francis L. Conway Director May 29, 1998
- -----------------------------
Francis L. Conway
Director
- -----------------------------
Paul J. Curtin
/s/ Robert R. Fanning, Jr. Director May 29, 1998
- -----------------------------
Robert R. Fanning, Jr.
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<PAGE> 11
NAME TITLE DATE
/s/ Arthur E. Holden, Jr. Director May 29, 1998
- --------------------------------
Arthur E. Holden, Jr.
/s/ Stephen R. Howe Director May 29, 1998
- --------------------------------
Stephen R. Howe
/s/ John C. Jeffers Director May 29, 1998
- --------------------------------
John C. Jeffers
/s/ Stephen G. Kasnet Director May 29, 1998
- --------------------------------
Stephen G. Kasnet
/s/ Linda Lerner Director May 29, 1998
- --------------------------------
Linda Lerner
/s/ Arthur E. McCarthy Director May 29, 1998
- --------------------------------
Arthur E. McCarthy
/s/ Arthur J. Pappathanasi Director May 29, 1998
- --------------------------------
Arthur J. Pappathanasi
/s/ George W. Phillips Director May 29, 1998
- --------------------------------
George W. Phillips
/s/ John D. Smidt Director May 29, 1998
- --------------------------------
John D. Smidt
/s/ John H. Womack Director May 29, 1998
- --------------------------------
John H. Womack
II-10
<PAGE> 12
INDEX OF EXHIBITS
Exhibit
Number Exhibit
- ------ -------
4.1 Articles of
Organization of
Warren Bancorp, Inc.,
as amended.(1)
4.2 By-laws of Warren Bancorp,
Inc., as amended (1)
5.1* Opinion of Goodwin,
Procter & Hoar LLP regarding
the legality of securities
being offered
23.1 Consent of Goodwin,
Procter & Hoar LLP (included
in Exhibit 5)
23.2* Consent of Arthur Andersen LLP
23.3* Consent of KPMG Peat Marwick LLP
24.1 Power of Attorney (see page II-9)
99.1* Warren Bancorp, Inc. 1998 Incentive and Nonqualified
Stock Option Plan
- ----------
(1) Previously filed as an Exhibit to the Registrant's Current Report on Form
8-K filed with the Securities and Exchange Commission on May 10, 1995 and
incorporated herein by reference.
* Filed herewith.
II-11
<PAGE> 1
Exhibit 5.1
June 9, 1998
Warren Bancorp, Inc.
10 Main Street
Peabody, MA 01960
Ladies and Gentlemen:
This opinion is furnished in connection with the registration, pursuant
to the Securities Act of 1933, as amended (the "Securities Act"), of 600,000
shares (the "Shares") of common stock, par value $.10 per share ("Common
Stock"), of Warren Bancorp, Inc., a Massachusetts corporation (the "Company"),
pursuant to the Company's 1998 Incentive and Nonqualified Stock Option Plan (the
"Plan").
In connection with rendering this opinion, we have examined the
Articles of Organization and the Bylaws of the Company, each as amended; such
records of the corporate proceedings of the Company as we deemed material; a
registration statement on Form S-8 under the Securities Act relating to the
Shares (the "Registration Statement"), the Plan, and such other certificates,
receipts, records and documents as we considered necessary for the purposes of
this opinion.
We are attorneys admitted to practice in the Commonwealth of
Massachusetts. We express no opinion concerning the laws of any jurisdictions
other than the laws of the United States of America and the Commonwealth of
Massachusetts.
Based upon the foregoing, we are of the opinion that, when the Shares
have been issued and paid for in accordance with the terms of the Plan, the
Shares will be legally issued, fully paid and nonassessable shares of the
Company's Common Stock.
The foregoing assumes that all requisite steps will be taken to comply
with the requirements of the Securities Act and applicable requirements of state
laws regulating the offer and sale of securities.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
GOODWIN, PROCTER & HOAR LLP
<PAGE> 1
Exhibit 23.2
Consent of Independent Public Accountants
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated January 20, 1998
included in Warren Bancorp, Inc.'s Form 10-K/A for the year ended December 31,
1997.
/s/ ARTHUR ANDERSEN LLP
Boston, Massachusetts
June 3, 1998
<PAGE> 1
Exhibit 23.3
Consent of Independent Auditors
We consent to the incorporation by reference in Warren Bancorp, Inc.'s
registration statement on Form S-8 of our report dated January 23, 1997,
relating to the consolidated balance sheet of Warren Bancorp, Inc. and
subsidiaries as of December 31, 1996, and the related consolidated statements of
operation, changes in stockholders' equity and cash flows for each of the years
in the two year period ended December 31, 1996, which report appears in the
December 31, 1997 annual report on Form 10-K/A of Warren Bancorp, Inc.
/s/ KPMG Peat Marwick LLP
------------------------------------
KPMG Peat Marwick LLP
Boston, Massachusetts
June 8, 1998
<PAGE> 1
EXHIBIT 99.1
WARREN BANCORP, INC.
1998 INCENTIVE AND NONQUALIFIED STOCK OPTION PLAN
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SECTION 1. GENERAL PURPOSE OF THE PLAN; DEFINITIONS
The name of the plan is the Warren Bancorp, Inc. 1998 Incentive and
Nonqualified Stock Option Plan (the "Plan"). The purpose of this Plan is to
encourage and enable the officers, employees, Independent Directors and other
key persons (including consultants) of Warren Bancorp, Inc. (the "Corporation")
and its Subsidiaries upon whose judgment, initiative and efforts the Corporation
largely depends for the successful conduct of its business to acquire a
proprietary interest in the Corporation. It is anticipated that providing such
persons with a direct stake in the Corporation's welfare will assure a closer
identification of their interests with those of the Corporation, thereby
stimulating their efforts on the Corporation's behalf and strengthening their
desire to remain with the Corporation.
The following terms shall be defined as set forth below:
"Act" means the Securities Exchange Act of 1934, as amended.
"Administrator" is defined in Section 2(a).
"Board" means the Board of Directors of the Corporation.
"Change of Control" is defined in Section 10.
"Code" means the Internal Revenue Code of 1986, as amended, and any
successor Code, and related rules, regulations and interpretations.
"Committee" means the Committee of the Board referred to in Section 2.
"Effective Date" means the date on which the Plan is approved by the
stockholders as set forth in Section 12.
"Fair Market Value" of the Stock on any given date means the fair
market value of the Stock determined in good faith by the Administrator;
provided, however, that (i) if the Stock is admitted to quotation on the
National Association of Securities Dealers Automated Quotation System
("NASDAQ"), the Fair Market Value on any given date shall not be less than the
average of the highest bid and lowest asked prices of the Stock reported for
such date or, if no bid and asked prices were reported for such date, for the
last day preceding such date for which such prices were reported, or (ii) if the
Stock is admitted to trading on a national securities exchange or the NASDAQ
National Market System, the Fair Market Value on any date shall not be less than
the closing price reported for the Stock on such exchange or system for such
date or, if no sales were reported for such date, for the last date preceding
the date for such a sale was reported.
"Incentive Stock Option" means any Stock Option designated and
qualified as an "incentive stock option" as defined in Section 422 of the Code.
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"Independent Director" means a member of the Board who is not also an
employee of the Corporation or any Subsidiary.
"Nonqualified Stock Option" means any Stock Option that is not an
Incentive Stock Option.
"Option" or "Stock Option" means any option to purchase shares of Stock
granted pursuant to Section 5.
"Stock" means the Common Stock, par value $.10 per share, of the
Corporation, subject to adjustments pursuant to Section 3.
"Subsidiary" means any corporation or other entity (other than the
Corporation) in any unbroken chain of corporations or other entities beginning
with the Corporation if each of the corporations or entities (other than the
last corporation or entity in the unbroken chain) owns stock or other interests
possessing 50% or more of the economic interest or the total combined voting
power of all classes of stock or other interests in one of the other
corporations or entities in the chain.
SECTION 2. ADMINISTRATION OF THE PLAN; ADMINISTRATOR AUTHORITY TO SELECT
PARTICIPANTS AND DETERMINE AWARDS
(a) COMMITTEE. The Plan shall be administered either by the Board
or a committee of not less than two Independent Directors (in either case, the
"Administrator"). Each member of the Committee shall be an "outside director"
within the meaning of Section 162(m) of the Code and the regulations promulgated
thereunder and a "non-employee director" within the meaning of Rule
16b-3(b)(3)(i) promulgated under the Act, or any successor definition under said
rule.
(b) POWERS OF ADMINISTRATOR. The Administrator shall have the
power and authority to grant Stock Options consistent with the terms of the
Plan, including the power and authority:
(i) to select the individuals to whom Stock Options 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 and Nonqualified Stock
Options, or any combination of the foregoing, granted to any one or
more participants;
(iii) to determine the number of shares of Stock to be
covered by any Stock Option;
(iv) to determine and modify from time to time the terms
and conditions, including restrictions, not inconsistent with the terms
of the Plan, of any Stock Option, which terms and conditions may differ
among individual Stock Options and participants, and to approve the
form of written instruments evidencing the Stock Options;
(v) to accelerate at any time the exercisability or
vesting of all or any portion of any Stock Option:
(vi) subject to the provisions of Section 5(a)(ii), to
extend at any time the period in which Stock Options may be exercised:
(vii) to determine at any time whether, to what extent, and
under what circumstances distribution or the receipt of Stock and other
amounts payable with respect to a Stock Option shall be deferred either
automatically or at the election of the participant and whether and to
what extent the Corporation shall pay or credit amounts constituting
interest (at rates determined by the Administrator) or dividends or
deemed dividends on such deferrals; and
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(viii) at any time 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 Stock Option (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 Administrator shall be binding
on all persons, including the Corporation and Plan participants.
SECTION 3. STOCK ISSUABLE UNDER THE PLAN; MERGERS; SUBSTITUTION
(a) STOCK ISSUABLE. The maximum number of shares of Stock reserved
and available for issuance under the Plan shall be 600,000 shares. For purposes
of this limitation, the shares of Stock underlying any Stock Options which are
forfeited, canceled, reacquired by the Corporation, satisfied without the
issuance of Stock or otherwise terminated (other than by exercise) shall be
added back to the shares of Stock available for issuance under the Plan. Subject
to such overall limitation, shares of Stock may be issued up to such maximum
number pursuant to any Stock Options; provided, however, that Stock Options with
respect to no more than 100,000 shares of stock may be granted to any one
individual participant during any calendar year period. The shares available for
issuance under the Plan may be authorized but unissued shares of Stock or shares
of Stock reacquired by the Corporation and held in its treasury.
(b) CHANGES IN STOCK. If, as a result of any reorganization,
recapitalization, reclassification, stock dividend, stock split, reverse stock
split or other similar change in the Corporation's capital stock, the
outstanding shares of Stock are increased or decreased or are exchanged for a
different number or kind of shares or other securities of the Corporation, or
additional shares or new or different shares or other securities of the
Corporation or other non-cash assets are distributed with respect to such shares
of Stock or other securities, the Administrator shall make an appropriate or
proportionate adjustment in (i) the maximum number of shares reserved for
issuance under the Plan, (ii) the number of Stock Options that can be granted to
any one individual participant, (iii) the number and kind of shares or other
securities subject to any then outstanding Stock Options under the Plan, and
(iv) the price for each share subject to any then outstanding Stock Options
under the Plan, without changing the aggregate exercise price (i.e., the
exercise price multiplied by the number of Stock Options as to which such Stock
Options remain exercisable). The adjustment by the Administrator shall be final,
binding and conclusive. No fractional shares of Stock shall be issued under the
Plan resulting from any such adjustment, but the Administrator in its discretion
may make a cash payment in lieu of fractional shares.
The Administrator may also adjust the number of shares subject to
outstanding Stock Options and the exercise price and the terms of outstanding
Stock Options to take into consideration material changes in accounting
practices or principles, extraordinary dividends, acquisitions or dispositions
of stock or property or any other event if it is determined by the Administrator
that such adjustment is appropriate to avoid distortion in the operation of the
Plan, provided that no such adjustment shall be made in the case of an Incentive
Stock Option, without the consent of the participant, if it would constitute a
modification, extension or renewal of the Option within the meaning of Section
424(h) of the Code.
(c) MERGERS. In contemplation of and subject to the consummation
of a consolidation or merger or sale of all or substantially all of the assets
of the Corporation in which outstanding shares of Stock are exchanged for
securities, cash or other property of an unrelated corporation or business
entity or in the event of a liquidation of the Corporation (in each case, a
"Transaction"), the Board, or the board of directors of any corporation assuming
the obligations of the Corporation, may, in its discretion, take any one or more
of the following actions, as to outstanding Stock Options: (i) provide that such
Stock Options shall be assumed or equivalent awards shall be substituted, by the
acquiring or succeeding corporation (or an affiliate thereof), and/or (ii) upon
written notice to the participants, provide that all Stock Options will
terminate immediately prior to the consummation of the Transaction. In the event
that,
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pursuant to clause (ii) above, Stock Options will terminate immediately prior to
the consummation of the Transaction, all vested Stock Options shall be fully
settled, in cash or in kind, in an amount equal to the difference between (A)
the Merger Price times the number of shares of Stock subject to such outstanding
Stock Options and (to the extent then exercisable at prices not in excess of the
Merger Price) and (B) the aggregate exercise price of all such outstanding Stock
Options; provided, however, that each participant shall be permitted, within a
specified period determined by the Administrator prior to the consummation of
the Transaction, to exercise all outstanding Stock Options and, including those
that are not then exercisable, subject to the consummation of the Transaction.
(d) SUBSTITUTE STOCK OPTIONS. The Administrator may grant Stock
Options under the Plan in substitution for stock and stock based awards held by
employees of another corporation who become employees of the Corporation or a
Subsidiary as the result of a merger or consolidation of the employing
corporation with the Corporation or a subsidiary or the acquisition by the
Corporation or a Subsidiary of property or stock of the employing corporation.
The Administrator may direct that the substitute awards be granted on such terms
and conditions as the Administrator considers appropriate in the circumstances.
SECTION 4. ELIGIBILITY
Participants in the Plan will be such full or part-time officers and
other employees, Independent Directors and key persons of the Corporation and
its Subsidiaries who are responsible for or contribute to the management, growth
or profitability of the Corporation and its Subsidiaries as are selected from
time to time by the Administrator in its sole discretion.
SECTION 5. STOCK OPTIONS
Any Stock Option granted under the Plan shall be in such form as the
Administrator may from time to time approve.
Stock Options granted under the Plan may be either Incentive Stock
Options or Nonqualified Stock Options. Incentive Stock Options may be granted
only to employees of the Corporation or any Subsidiary that is a "subsidiary
corporation" within the meaning of Section 424(f) of the Code. To the extent
that any Option does not qualify as an Incentive Stock Option, it shall be
deemed a Nonqualified Stock Option.
No Incentive Stock Option shall be granted under the Plan after May 6,
2008.
(a) STOCK OPTIONS GRANTED TO EMPLOYEES AND KEY PERSONS. The
Administrator in its discretion may grant Stock Options to eligible employees
and key persons of the Corporation or any Subsidiary. Stock Options granted
pursuant to this Section 5(a) shall be subject to the following terms and
conditions and shall contain such additional terms and conditions, not
inconsistent with the terms of the Plan, as the Administrator shall deem
desirable. If the Administrator so determines, Stock Options may be granted in
lieu of cash compensation at the participant's election, subject to such terms
and conditions as the Administrator may establish, as well as in addition to
other compensation.
(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 Administrator at the time of grant but shall
not be less than 100% of the Fair Market Value on the date of grant. If
an employee owns or is deemed to own (by reason of the attribution
rules of Section 424(d) of the Code) more than 10% of the combined
voting power of all classes of stock of the Corporation or any parent
or subsidiary corporation and an Incentive Stock Option is granted to
such employee, the option price of such Incentive Stock Option shall be
not less than 110% of the Fair Market Value on the grant date.
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<PAGE> 5
(ii) OPTION TERM. The term of each Stock Option shall be
fixed by the Administrator, but no Incentive Stock Option shall be
exercisable more than ten 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 10% of the combined
voting power of all classes of stock of the Corporation or any parent
or subsidiary corporation and an Incentive Stock Option is granted to
such employee, the term of such option shall be no more than five years
from the date of grant.
(iii) EXERCISABILITY; RIGHTS OF A STOCKHOLDER. Stock
Options shall become exercisable at such time or times, whether or not
in installments, as shall be determined by the Administrator at or
after the grant date; provided, however, that Stock Options granted in
lieu of compensation shall be exercisable in full as of the grant date.
The Administrator may at any time accelerate the exercisability of all
or any portion of any Stock Option. An optionee shall have the rights
of a stockholder only as to shares acquired upon the exercise of a
Stock Option and not as to unexercised Stock Options.
(iv) METHOD OF EXERCISE. Stock Options may be exercised in
whole or in part by giving written notice of exercise to the
Corporation, specifying the number of shares to be purchased. Payment
of the purchase price may be made by one or more of the following
methods to the extent provided in the Option agreement:
(A) In cash, by certified or bank check or other
instrument acceptable to the Administrator;
(B) Through the delivery (or attestation to the
ownership) of shares of Stock that have been purchased by the
optionee on the open market or that are not then subject to
restrictions under any Corporation plan and that have been
beneficially owned by the optionee for at least six months, if
permitted by the Administrator in its discretion. Such
surrendered shares shall be valued at Fair Market Value on the
exercise date; or
(C) By the optionee delivering to the
Corporation a properly executed exercise notice together with
irrevocable instructions to a broker to promptly deliver to
the Corporation cash or a check payable and acceptable to the
Corporation for 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 Administrator shall prescribe as a condition
of such payment procedure.
Payment instruments will be received subject to collection. The
delivery of certificates representing the 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 Corporation 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. In the event an optionee chooses
to pay the purchase price by previously-owned shares of Stock through the
attestation method, the shares of Stock transferred to the optionee upon the
exercise of the Stock Option shall be net of the number of shares attested to.
(v) 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 shares of Stock with respect to which Incentive
Stock Options granted under this Plan and any other plan of the
Corporation or its parent and subsidiary corporations become
exercisable for the first time by any optionee during any calendar year
shall not exceed $100,000. To the extent that any Stock Option exceeds
this limit, it shall constitute a Nonqualified Stock Option.
(b) STOCK OPTIONS GRANTED TO INDEPENDENT DIRECTORS.
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(i) GRANT OF OPTIONS.
(A) The Administrator, in its discretion, may
grant Nonqualified Stock Options to Independent Directors. Any
such grant may vary among individual Independent Directors.
(B) The exercise price per share for the Stock
covered by a Stock Option granted under this Section 5(b)
shall be equal to the Fair Market Value of the Stock on the
date the Stock Option is granted.
(ii) EXERCISE; TERMINATION.
(A) An Option issued under this Section 5(b)
shall not be exercisable after the expiration of ten years
from the date of grant.
(B) Options granted under this Section 5(b) may
be exercised only by written notice to the Corporation
specifying the number of shares to be purchased. Payment of
the full purchase price of the shares to be purchased may be
made by one or more of the methods specified in Section
5(a)(iv). An optionee shall have the rights of a stockholder
only as to shares acquired upon the exercise of a Stock Option
and not as to unexercised Stock Options.
(c) NON-TRANSFERABILITY OF OPTIONS. No Stock Options shall be
transferable by the optionee otherwise 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. Notwithstanding the foregoing, the
Administrator, in its sole discretion, may provide in the Stock Option agreement
regarding a given Option that the optionee may transfer, without consideration
for the transfer, his Nonqualified Stock Options to members of his immediate
family, to trusts for the benefit of such family members, or to partnerships in
which such family members are the only partners, provided that the transferee
agrees in writing with the Corporation to be bound by all of the terms and
conditions of this Plan and the applicable Option.
(d) TERMINATION. Except as may otherwise be provided below in this
Section 5(d) or by the Administrator either in the Stock Option Agreement or
subject to Section 10 below, in writing after the Stock Option agreement is
issued, an optionee's rights in all Stock Options shall automatically terminate
upon the participant's termination of employment (or cessation of business
relationship) with the Corporation and its Subsidiaries for any reason, in
accordance with the following provisions:
(i) if the optionee's employment shall have been
terminated by the Corporation or a subsidiary, at any time,
involuntarily for cause, the option shall immediately terminate and may
no longer be exercised; and
(ii) if the optionee's employment by the Corporation and
its subsidiaries shall have been terminated for any reason other than
for cause, the optionee may, at any time within a period of two (2)
years after such termination of employment, exercise the option to the
extent that it was exercisable on the date of termination of the
optionee's employment, provided, however that no option may be
exercised to any extent by anyone after the date of expiration of the
option.
Each Director option shall, to the extent it was exercisable on the date on
which the director ceases to perform services for Bancorp or a subsidiary,
terminate on the date two (2) years after such date.
Notwithstanding the above, however, no option may be exercised to any extent by
anyone after the date of expiration of the option.
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SECTION 6. TAX WITHHOLDING
(a) PAYMENT BY PARTICIPANT. Each participant shall, no later than
the date as of which the value of a Stock Option 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 Corporation, or make
arrangements satisfactory to the Administrator regarding payment of, any
Federal, state, or local taxes of any kind required by law to be withheld with
respect to such income. The Corporation 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. The Corporation's
obligation to deliver stock certificates to any participant is subject to and
conditioned on tax obligations being satisfied by the participant.
(b) PAYMENT IN STOCK. Subject to approval by the Administrator, a
participant may elect to have such tax withholding obligation satisfied, in
whole or in part, by (i) authorizing the Corporation to withhold from shares of
Stock to be issued pursuant to any Stock Option 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, or (ii) transferring to the
Corporation shares of Stock owned by the participant with an aggregate Fair
Market Value (as of the date the withholding is effected) that would satisfy the
withholding amount due.
SECTION 7. 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 Corporation from a
Subsidiary or from the Corporation to a Subsidiary, or from one Subsidiary to
another; or
(b) an approved leave of absence for military service or sickness,
or for any other purpose approved by the Corporation, 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
Administrator otherwise so provides in writing.
SECTION 8. AMENDMENTS AND TERMINATION
The Board may, at any time, amend or discontinue the Plan and the
Administrator may, at any time, amend or cancel any outstanding Stock Option 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 Stock Option
without the holder's consent. In addition the Administrator may amend any
outstanding Stock Option to reduce the exercise price in order to fulfill a
legitimate corporate purpose (e.g., to retain a key employee) or to maintain the
value of such outstanding Stock Option under circumstances beyond the control of
the Corporation's management, but in no event shall such amendments be made to
outstanding Stock Options representing greater than 10% of the total number of
shares of Stock authorized for issuance pursuant to the Plan. If and to the
extent determined by the Administrator to be required by the Code to ensure that
Incentive Stock Options granted under the Plan are qualified under Section 422
of the Code or to ensure that compensation earned under Stock Options qualifies
as performance-based compensation under Section 162(m) of the Code, if and to
the extent intended to so qualify, Plan amendments shall be subject to approval
by the Corporation stockholders entitled to vote at a meeting of stockholders.
Nothing in this Section 8 shall limit the Board's authority to take any action
permitted pursuant to Section 3(c).
SECTION 9. STATUS OF PLAN
With respect to the portion of any Stock Option that 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
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creditor of the Corporation unless the Administrator shall otherwise expressly
determine in connection with any Stock Option or Stock Options.
SECTION 10. CHANGE OF CONTROL PROVISIONS
Upon the occurrence of a Change of Control as defined in this Section
10:
(a) Except as otherwise provided in the applicable Stock Option
agreement, each outstanding Stock Option shall automatically become fully
exercisable.
(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) of the Act (other than the Corporation, any of its
Subsidiaries, or any trustee, fiduciary or other person or entity
holding securities under any employee benefit plan or trust of the
Corporation or any of its Subsidiaries), together with all "affiliates"
and "associates" (as such terms are defined in Rule 12b-2 under the
Act) of such person, shall become the "beneficial owner" (as such term
is defined in Rule 13d-3 under the Act), directly or indirectly, of
securities of the Corporation representing 25% or more of the combined
voting power of the Corporation's then outstanding securities having
the right to vote in an election of the Corporation's Board of
Directors ("Voting Securities") (in such case other than as a result of
an acquisition of securities directly from the Corporation); or
(ii) persons who, as of the Effective Date, constitute the
Corporation's Board of Directors (the "Incumbent Directors") 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 Corporation subsequent to the Effective Date shall be
considered an Incumbent Director if such person's election was approved
by or such person was nominated for election by either (A) a vote of at
least a majority of the Incumbent Directors or (B) a vote of at least a
majority of the Incumbent Directors who are members of a nominating
committee comprised, in the majority, of Incumbent Directors; or
(iii) the stockholders of the Corporation shall approve (A)
any consolidation or merger of the Corporation where the stockholders
of the Corporation, immediately prior to the consolidation or merger,
would not, immediately after the consolidation or merger, beneficially
own (as such term is defined in Rule 13d-3 under the Act), directly or
indirectly, shares representing in the aggregate 50% or more of the
voting shares of the corporation issuing cash or securities in the
consolidation or merger (or of its ultimate parent corporation, if
any), (B) any sale, lease, exchange or other transfer (in one
transaction or a series of transactions contemplated or arranged by any
party as a single plan) of all or substantially all of the assets of
the Corporation or (C) any plan or proposal for the liquidation or
dissolution of the Corporation.
Notwithstanding the foregoing, a "Change of Control" shall not be
deemed to have occurred for purposes of the foregoing clause (i) solely as the
result of an acquisition of securities by the Corporation which, by reducing the
number of shares of Voting Securities outstanding, increases the proportionate
number of shares of Voting Securities beneficially owned by any person to 25% or
more of the combined voting power of all then outstanding Voting Securities;
PROVIDED, HOWEVER, that if any person referred to in this sentence shall
thereafter become the beneficial owner of any additional shares of Voting
Securities (other than pursuant to a stock split, stock dividend, or similar
transaction or as a result of an acquisition of securities directly from the
Corporation), then a "Change of Control" shall be deemed to have occurred for
purposes of the foregoing clause (i).
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SECTION 11. GENERAL PROVISIONS
(a) NO DISTRIBUTION; COMPLIANCE WITH LEGAL REQUIREMENTS. The
Administrator may require each person acquiring Stock pursuant to a Stock Option
to represent to and agree with the Corporation in writing that such person is
acquiring the shares without a view to distribution thereof.
No shares of Stock shall be issued pursuant to a Stock Option until all
applicable securities law and other legal and stock exchange or similar
requirements have been satisfied. The Administrator may require the placing of
such stoporders and restrictive legends on certificates for Stock and Stock
Options as it deems appropriate.
(b) DELIVERY OF STOCK CERTIFICATES. Stock certificates to
participants under this Plan shall be deemed delivered for all purposes when the
Corporation or a stock transfer agent of the Corporation shall have mailed such
certificates in the United States mail, addressed to the participant, at the
participant's last known address on file with the Corporation.
(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, and such arrangements may be either
generally applicable or applicable only in specific cases. The adoption of this
Plan and the grant of Stock Options do not confer upon any employee any right to
continued employment with the Corporation or any Subsidiary.
(d) TRADING POLICY RESTRICTIONS. The Board of Directors or the
Administrator may establish insider-trading-policy-related restrictions, terms
and conditions, or other related policies, and may change these from time to
time, and all Stock Option shall be subject to these restrictions, terms,
conditions or other related policies.
SECTION 12. EFFECTIVE DATE OF PLAN
This Plan shall become effective upon approval by the holders of a
majority of the votes cast at a meeting of stockholders at which a quorum is
present. Subject to such approval by the stockholders and to the requirement
that no Stock may be issued hereunder prior to such approval, Stock Options may
be granted hereunder on and after adoption of this Plan by the Board.
SECTION 13. GOVERNING LAW
This Plan and all Stock Options and actions taken thereunder shall be
governed by, and construed in accordance with, the laws of the Commonwealth of
Massachusetts, applied without regard to conflict of law principles.
DATE APPROVED BY THE BOARD OF DIRECTORS: MARCH 18, 1998
DATE APPROVED BY THE STOCKHOLDERS: MAY 6, 1998
9
