SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
under
THE SECURITIES ACT OF 1933
LITCHFIELD FINANCIAL CORPORATION
(Exact name of issuer as specified in its charter)
Massachusetts 04-3023928
(State of Incorporation) (IRS Employer Identification Number)
789 Main Road, Stamford, Vermont 05352
(Address and Zip Code of Principal Executive Offices)
LITCHFIELD FINANCIAL CORPORATION
1990 Stock Option Plan
(Full title of the Plan)
Richard A. Stratton, President
Litchfield Financial Corporation
789 Main Road
Stamford, Vermont 05352
(802) 694-1200
(Name, address and telephone number of agent service)
Copy to:
Mary Ellen O'Mara
Hutchins, Wheeler & Dittmar
A Professional Corporation
101 Federal Street
Boston, Massachusetts 02110
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CALCULATION OF REGISTRATION FEE
Proposed Proposed
Maximum Maximum
Title of Amount Offering Aggregate Amount of
Securities to be Price Offering Registration
to be Registered Registered(1) Per Share Price Fee(2)
Common Stock, 8,682.00 $ 5.76 $ 50,008.32
par value 75,539.25 6.19 467,587.96
$.01 per share 868.00 9.21 7,994.28
15,050.00 9.50 142,975.00
26,461.00 9.98 264,080.78
5,513.00 10.20 56,232.60
5,513.00 10.66 58,768.58
209,475.00 11.11 2,327,267.25
155,624.00 11.23 1,747,657.52
109,755.00 11.55 1,267,670.25
27,563.00 11.56 318,628.28
1,103.00 11.67 12,872.01
500.00 13.13 6,565.00
210.00 13.33 2,799.30
105.00 13.69 1,437.45
105.00 13.81 1,450.05
92,611.00 14.05 1,301,184.55
213,997.75 14.50 3,102,967.38
TOTAL 948,675.00 11,138,146.56 $ 3,840.74
(1) Also registered hereunder are such additional number of shares of
common stock, presently indeterminable, as may be necessary to satisfy
the antidilution provisions of the Plan to which this Registration
Statement relates.
(2) The registration fee has been calculated on the basis of the price at
which the options may be exercised and, in the case where such price is
not known, the average of the high and low prices of $15.00 and $14.00
on the Nasdaq National Market on September 3, 1996.
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NOTE
This Registration Statement is being filed solely for the purpose of
registering 948,675 additional shares of Common Stock of Litchfield Financial
Corporation issuable pursuant to the 1990 Stock Purchase Plan (the "Plan")
originally adopted in 1990. The total number of shares issuable under the Plan
is 1,122,319, of which 173,644 shares were previously registered on Form S-8
(Reg. No. 33-49276). Pursuant to instruction E to Form S-8, the contents of the
Registration Statement on Form S-8 (Registration No. 33-49276) are herein
incorporated by reference.
Item 5. Interests of Named Experts and Counsel
The consolidated financial statements of Litchfield Financial
Corporation incorporated by reference in Litchfield Financial Corporation's
Annual Report (Form 10-K) for the year ended December 31, 1995, have been
audited by Ernst & Young LLP, independent auditors, as set forth in their report
thereon incorporated by reference therein and incorporated herein by reference.
Such financial statements are, and audited financial statements to be included
in subsequently filed documents will be, incorporated herein in reliance upon
the reports of Ernst & Young LLP pertaining to such financial statements (to the
extent covered by consents filed with the Securities and Exchange Commission)
given upon the authority of such firm as experts in accounting and auditing.
The validity of the authorization and issuance of the Common Stock
offered hereby will be passed upon for the Company by Hutchins, Wheeler &
Dittmar, A Professional Corporation, Boston, Massachusetts. Attorneys at
Hutchins, Wheeler & Dittmar, A Professional Corporation, own or have the right
to acquire an aggregate of 7,248 shares of the Company's Common Stock.
Item 8. Exhibits.
Number Description
4.1 Litchfield Financial Corporation 1990 Stock Option Plan, as amended.
5.1 Opinion of Hutchins, Wheeler & Dittmar, A Professional Corporation.
23.1 Consent of Independent Public Accountants
23.2 Consent of Hutchins, Wheeler & Dittmar, A Professional Corporation
(included in Exhibit 5.1).
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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 the Town of Stamford, Vermont on September 4, 1996.
LITCHFIELD FINANCIAL CORPORATION
By: s/ Richard A. Stratton
Richard A. Stratton
President
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.
Title Date
s/ Richard A. Stratton President, Chief September 3, 1996
Richard A. Stratton Executive Officer,
and Director
s/ Heather A. Sica Executive Vice President, September 3, 1996
Heather A. Sica Clerk, Treasurer,
and Director
s/ Ronald E. Rabidou Chief Financial September 3, 1996
Ronald E. Rabidou Officer
s/ Donald R. Dion, Jr. Director September 3, 1996
Donald R. Dion, Jr.
s/ David J. Ferrari Director September 3, 1996
David J. Ferrari
s/ Gerald Segel Director September 3, 1996
Gerald Segel
s/ John A. Costa Director September 3, 1996
John A. Costa
s/ James Westra Director September 3, 1996
James Westra
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EXHIBIT 4.1
LITCHFIELD FINANCIAL CORPORATION
1990 STOCK OPTION PLAN
(As amended 2/18/92, 2/2/92, 3/1/94, 2/15/95 and 5/3/96)
1. Purpose of the Plan.
This stock option plan (the "Plan") is intended to encourage ownership
of the stock of Litchfield Financial Corporation (the "Company") by employees of
the Company and its subsidiaries, to induce qualified personnel to enter and
remain in the employ of the Company or its subsidiaries and otherwise to provide
additional incentive for optionees to promote the success of its business.
2. Stock Subject to the Plan.
(a) The total number of shares of the authorized but unissued or
Treasury shares of the common stock, $.01 par value, of the Company ("Common
Stock") for which options may be granted under the Plan shall not exceed one
million one hundred twenty two thousand three hundred nineteen (1,122,319)
shares, subject to adjustment as provided in Section 12 hereof.
(b) If an option granted or assumed hereunder shall expire or terminate
for any reason without having been exercised in full, the unpurchased shares
subject thereto shall again be available for subsequent option grants under the
Plan.
(c) Stock issuable upon exercise of an option granted under the Plan may
be subject to such restrictions on transfer, repurchase rights or other
restrictions as shall be determined by the Board of Directors.
3. Administration of the Plan.
(a) The Plan shall be administered by the Board of Directors of the
Company. No member of the Board of Directors shall act upon any matter
exclusively affecting any option
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granted or to be granted to himself or herself under the Plan. A majority of the
members of the Board of Directors shall constitute a quorum, and any action may
be taken by a majority of those present and voting at any meeting. The decision
of the Board of Directors as to all questions of interpretation and application
of the Plan shall be final, binding and conclusive on all persons. The Board of
Directors may, in its sole discretion, grant options to purchase shares of the
Company's Common Stock and issue shares upon exercise of such options as
provided in the Plan. The Board shall have authority, subject to the express
provisions of the Plan, to construe the respective option agreements and the
Plan, to prescribe, amend and rescind rules and regulations relating to the
Plan, to determine the terms and provisions of the respective option agreements,
which may but need not be identical, and to make all other determinations in the
judgment of the Board necessary or desirable for the administration of the Plan.
The Board may correct any defect or supply any omission or reconcile any
inconsistency in the Plan or in any option agreement in the manner and to the
extent it shall deem expedient to carry the Plan into effect and shall be the
sole and final judge of such expediency. No director shall be liable for any
action or determination made in good faith. The Board of Directors may, in its
discretion, delegate its power, duties and responsibilities to a committee,
consisting of two or more members of the Board of Directors, all of whom are
"disinterested persons" (as hereinafter defined). If a committee is so
appointed, all references to the Board of Directors herein shall mean and relate
to such committee, unless the context otherwise requires.
(b) With respect to the participation of any director in the Plan,
his or her selection as an optionee and the number of option shares to be
allocated to such director shall be
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determined by, or only in accordance with, the recommendations of a committee of
two or more persons having full authority to act in the matter, of which all
members of such committee shall be disinterested persons. For the purposes of
the Plan, a director or member of such committee shall be deemed to be
"disinterested" only if such person qualifies as a "disinterested person" within
the meaning of Rule 16b-3 promulgated under the Securities and Exchange Act of
1934, as such term is interpreted from time to time. The provisions of this
Section 3(b) shall not apply with respect to any option granted prior to the
date of the first registration of an equity security of the Company under
Section 12 of the Securities and Exchange Act of 1934.
4. Type of Options.
Options granted pursuant to the Plan shall be authorized by action of
the Board of Directors of the Company (or a committee designated by the Board of
Directors) and may be designated as either incentive stock options meeting the
requirements of Section 422A of the Internal Revenue Code of 1986 (the "Code")
or non-qualified options which are not intended to meet the requirements of such
Section 422A of the Code, the designation to be in the sole discretion of the
Board of Directors. Options designated as incentive stock options that fail to
continue to meet the requirements of Section 422A of the Code shall be
redesignated as non-qualified options automatically without further action by
the Board of Directors on the date of such failure to continue to meet the
requirements of Section 422A of the Code.
5. Eligibility.
Options designated as incentive stock options may be granted only to
officers and key employees of the Company or of any subsidiary corporation
(herein called "subsidiary" or
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"subsidiaries"), as defined in Section 425 of the Code and the Treasury
Regulations promulgated thereunder (the "Regulations"). Options designated as
non-qualified options may be granted to officers, key employees, consultants and
non-employee directors of the Company or of any of its subsidiaries.
Directors who are not otherwise employees of the Company or a subsidiary
shall not be eligible to be granted an incentive stock option pursuant to the
Plan.
In determining the eligibility of an individual to be granted an option,
as well as in determining the number of shares to be optioned to any individual,
the Board of Directors shall take into account the position and responsibilities
of the individual being considered, the nature and value to the Company or its
subsidiaries of his or her service and accomplishments, his or her present and
potential contribution to the success of the Company or its subsidiaries, and
such other factors as the Board of Directors may deem relevant.
No option designated as an incentive stock option shall be granted to
any employee of the Company or any subsidiary if such employee owns, immediately
prior to the grant of an option, stock representing more than 10% of the voting
power or more than 10% of the value of all classes of stock of the Company or a
parent or a subsidiary, unless the purchase price for the stock under such
option shall be at least 110% of its fair market value at the time such option
is granted and the option, by its terms, shall not be exercisable more than five
years from the date it is granted. In determining the stock ownership under this
paragraph, the provisions of Section 425(d) of the Code shall be controlling. In
determining the fair market value under this paragraph, the provisions of
Section 7 hereof shall apply.
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6. Option Agreement.
Each option shall be evidenced by an option agreement (the"Agreement")
duly executed on behalf of the Company and by the optionee to whom such option
is granted, which Agreement shall comply with and be subject to the terms and
conditions of the Plan. The Agreement may contain such other terms, provisions
and conditions which are not inconsistent with the Plan as may be determined by
the Board of Directors, provided that options designated as incentive stock
options shall meet all of the conditions for incentive stock options as defined
in Section 422A of the Code. No option shall be granted within the meaning of
the Plan and no purported grant of any option shall be effective until the
Agreement shall have been duly executed on behalf of the Company and the
optionee. More than one option may be granted to an individual.
7. Option Price.
The option price or prices of shares of the Company's Common Stock for
options designated as non-qualified stock options shall be as determined by the
Board of Directors. The option price or prices of shares of the Company's Common
Stock for incentive stock options shall be the fair market value of such Common
Stock at the time the option is granted as determined by the Board of Directors
in accordance with the Regulations promulgated under Section 422A of the Code.
If such shares are then listed on any national securities exchange, the fair
market value shall be the mean between the high and low sales prices, if any, on
the largest such exchange on the date of the grant of the option or, if none,
shall be determined by taking a weighted average of the means between the
highest and lowest sales on the nearest date before and the nearest date after
the date of grant in accordance with Treasury
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Regulations Section 25.2512-2. If the shares are not then listed on any such
exchange, the fair market value of such shares shall be the mean between the
closing "Bid" and the closing "Ask" prices, if any, as reported in the National
Association of Securities Dealers Automated Quotation System ("NASDAQ") for the
date of the grant of the option, or, if none, shall be determined by taking a
weighted average of the means between the highest and lowest sales on the
nearest date before and the nearest date after the date of grant in accordance
with Treasury Regulations Section 25.2512-2. If the shares are not then either
listed on any such exchange or quoted in NASDAQ, the fair market value shall be
the mean between the average of the "Bid" and the average of the "Ask" prices,
if any, as reported in the National Daily Quotation Service for the date of the
grant of the option, or, if none, shall be determined by taking a weighted
average of the means between the highest and lowest sales on the nearest date
before and the nearest date after the date of grant in accordance with Treasury
Regulations Section 25.2512-2. If the fair market value cannot be determined
under the preceding three sentences, it shall be determined in good faith by the
Board of Directors.
8. Manner of Payment; Manner of Exercise.
(a) Options granted under the Plan may provide for the payment of the
exercise price by delivery of (i) cash or a check payable to the order of the
Company in an amount equal to the exercise price of such options, (ii) shares of
Common Stock of the Company owned by the optionee having a fair market value
equal in amount to the exercise price of the options being exercised, or (iii)
any combination of (i) and (ii), provided, however, that payment of the exercise
price by delivery of shares of Common Stock of the Company owned by such
optionee may be made only if such payment does not result in a charge to
earnings for
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financial accounting purposes as determined by the Board of Directors. The fair
market value of any shares of the Company's Common Stock which may be delivered
upon exercise of an option shall be determined by the Board of Directors in
accordance with Section 7 hereof.
(b) To the extent that the right to purchase shares under an option has
accrued and is in effect, options may be exercised in full at one time or in
part from time to time, by giving written notice, signed by the person or
persons exercising the option, to the Company, stating the number of shares with
respect to which the option is being exercised, accompanied by payment in full
for such shares as provided in subparagraph (a) above. Upon such exercise,
delivery of a certificate for paid-up non-assessable shares shall be made at the
principal office of the Company to the person or persons exercising the option
at such time, during ordinary business hours, not more than thirty (30) days
from the date of receipt of the notice by the Company, as shall be designated in
such notice, or at such time, place and manner as may be agreed upon by the
Company and the person or persons exercising the option.
9. Exercise of Options.
Each option granted under the Plan shall, subject to Section 10(b) and
Section 12 hereof, be exercisable at such time or times and during such period
as shall be set forth in the Agreement; provided, however, that no option
granted under the Plan shall have a term in excess of ten (10) years from the
date of grant.
To the extent that an option to purchase shares is not exercised by an
optionee when it becomes initially exercisable, it shall not expire but shall be
carried forward and shall be exercisable, on a cumulative basis, until the
expiration of the exercise period. No partial exercise may be made for less than
fifty (50) full shares of Common Stock.
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10. Term of Options; Exercisability.
(a) Term.
(1) Each option shall expire not more than ten (10) years from
the date of the granting thereof, but shall be subject to earlier termination as
herein provided, except that the Board of Directors may elect to extend the term
of any non-qualified option without regard to the termination provisions set
forth in Sections 10(a)(2) - (5) of the Plan.
(2) Except as otherwise provided in this Section 10, an
option granted to any employee optionee who ceases to be an employee of the
Company or one of its subsidiaries shall terminate on the last day of the
third month after the date such optionee ceases to be an employee of
the Company or one of its subsidiaries, or on the date on which the option
expires by its terms, whichever occurs first.
(3) If such termination of employment is because of dismissal
for cause or because the employee is in breach of any employment agreement, such
option will terminate on the date the optionee ceases to be an employee of the
Company or one of its subsidiaries.
(4) If such termination of employment is because the optionee
has become permanently disabled (within the meaning of Section 105(b)(4) of the
Code), such option shall terminate on the last day of the twelfth month from the
date such optionee ceases to be an employee, or on the date on which the option
expires by its terms, whichever occurs first.
(5) In the event of the death of any optionee, any option
granted to such optionee shall terminate on the last day of the twelfth month
from the date of death, or on the date on which the option expires by its terms,
whichever occurs first.
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(b) Exercisability.
An option granted to an employee optionee who ceases to be an
employee of the Company or one of its subsidiaries shall be exercisable only to
the extent that the right to purchase shares under such option has accrued and
is in effect on the date such optionee ceases to be an employee of the Company
or one of its subsidiaries.
11. Options Not Transferrable.
The right of any optionee to exercise any option granted to him or her
shall not be assignable or transferrable by such optionee otherwise than by will
or the laws of descent and distribution, and any such option shall be
exercisable during the lifetime of such optionee only by him. Any option granted
under the Plan shall be null and void and without effect upon the bankruptcy of
the optionee to whom the option is granted, or upon any attempted assignment or
transfer, except as herein provided, including without limitation any purported
assignment, whether voluntary or by operation of law, pledge, hypothecation or
other disposition, attachment, trustee process or similar process, whether legal
or equitable, upon such option.
12. Recapitalizations, Reorganizations and the Like.
In the event that the outstanding shares of the Common Stock of the
Company are changed into or exchanged for a different number or kind of shares
or other securities of the Company or of another corporation by reason of any
reorganization, merger, consolidation, recapitalization, reclassification, stock
split-up, combination of shares, or dividends payable in capital stock,
appropriate adjustment shall be made in the number and kind of shares as to
which options may be granted under the Plan and as to which outstanding options
or portions thereof then unexercised shall be exercisable, to the end that the
proportionate interest of the
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optionee shall be maintained as before the occurrence of such event; such
adjustment in outstanding options shall be made without change in the total
price applicable to the unexercised portion of such options and with a
corresponding adjustment in the option price per share.
In addition, unless otherwise determined by the Board of Directors in
its sole discretion, in the case of any (i) sale or conveyance to another entity
of all or substantially all of the property and assets of the Company or (ii)
Change in Control (as hereinafter defined) of the Company, the purchaser(s) of
the Company's assets or stock may, in his, her or its discretion, deliver to the
optionee the same kind of consideration that is delivered to the shareholders of
the Company as a result of such sale, conveyance or Change in Control, or the
Board of Directors may cancel all outstanding options in exchange for
consideration in cash or in kind which consideration in both cases shall be
equal in value to the value of those shares of stock or other securities the
optionee would have received had the option been exercised (to the extent then
exercisable) and no disposition of the shares acquired upon such exercise been
made prior to such sale, conveyance or Change in Control, less the option price
therefor. Upon receipt of such consideration by the optionee, his or her option
shall immediately terminate and be of no further force and effect. The value of
the stock or other securities the optionee would have received if the option had
been exercised shall be determined in good faith by the Board of Directors of
the Company, and in the case of shares of the Common Stock of the Company, in
accordance with the provisions of Section 7 hereof. The Board of Directors shall
also have the power and right to accelerate the exercisability of any options,
notwithstanding any limitations in this Plan or in the Agreement upon such a
sale, conveyance
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or Change in Control. Upon such acceleration, any options or portion thereof
originally designated as incentive stock options that no longer qualify as
incentive stock options under Section 422A of the Code as a result of such
acceleration shall be redesignated as non-qualified stock options. A "Change in
Control" shall be deemed to have occurred if any person, or any two or more
persons acting as a group, and all affiliates of such person or persons, who
prior to such time owned less than five percent (5%) of the then outstanding
Common Stock of the Company, shall acquire such additional shares of the
Company's Common Stock in one or more transactions, or series of transactions,
such that following such transaction or transactions, such person or group and
affiliates beneficially own fifty percent (50%) or more of the Company's Common
Stock outstanding.
Upon dissolution or liquidation of the Company, all options granted
under this Plan shall terminate, but each optionee (if at such time in the
employ of or otherwise associated with the Company or any of its subsidiaries)
shall have the right, immediately prior to such dissolution or liquidation, to
exercise his or her option to the extent then exercisable.
If by reason of a corporate merger, consolidation, acquisition of
property or stock, separation, reorganization, or liquidation, the Board of
Directors shall authorize the issuance or assumption of a stock option or stock
options in a transaction to which Section 425(a) of the Code applies, then,
notwithstanding any other provision of the Plan, the Board of Directors may
grant an option or options upon such terms and conditions as it may deem
appropriate for the purpose of assumption of the old option, or substitution of
a new option for the old option, in conformity with the provisions of such
Section 425(a) of the Code and the Regulations
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thereunder, and any such option shall not reduce the number of shares otherwise
available for issuance under the Plan.
No fraction of a share shall be purchasable or deliverable upon the
exercise of any option, but in the event any adjustment hereunder of the number
of shares covered by the option shall cause such number to include a fraction of
a share, such fraction shall be adjusted to the nearest smaller whole number of
shares.
13. No Special Employment Rights.
Nothing contained in the Plan or in any option granted under the Plan
shall confer upon any option holder any right with respect to the continuation
of his or her employment by the Company (or any subsidiary) or interfere in any
way with the right of the Company (or any subsidiary), subject to the terms of
any separate employment agreement to the contrary, at any time to terminate such
employment or to increase or decrease the compensation of the option holder from
the rate in existence at the time of the grant of an option. Whether an
authorized leave of absence, or absence in military or government service, shall
constitute termination of employment shall be determined by the Board of
Directors at the time.
14. Withholding.
The Company's obligation to deliver shares upon the
exercise of any non-qualified option granted under the Plan shall be subject to
the option holder's satisfaction of all applicable Federal, state and local
income and employment tax withholding requirements. The Company and employee may
agree to withhold shares of Common Stock purchased upon exercise of an option to
satisfy the above-mentioned withholding requirements.
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15. Restrictions on Issue of Shares.
(a) Notwithstanding the provisions of Section 8, the Company may delay
the issuance of shares covered by the exercise of an option and the delivery of
a certificate for such shares until one of the following conditions shall be
satisfied:
(i) The shares with respect to which such option has
been exercised are at the time of the issue of such shares effectively
registered or qualified under applicable Federal and state securities acts now
in force or as hereafter amended; or
(ii) Counsel for the Company shall have given an opinion, which
opinion shall not be unreasonably conditioned or withheld, that such shares
are exemptfrom registration and qualification under applicable Federal and
state securities acts now in force or as hereafter amended.
(b) It is intended that all exercises of options shall be effective, and
the Company shall use its best efforts to bring about compliance with the above
conditions within a reasonable time, except that the Company shall be under no
obligation to qualify shares or to cause a registration statement or a
post-effective amendment to any registration statement to be prepared for the
purpose of covering the issue of shares in respect of which any option may be
exercised, except as otherwise agreed to by the Company in writing.
16. Purchase for Investment; Rights of Holder on Subsequent
Registration.
Unless the shares to be issued upon exercise of an option granted under
the Plan have been effectively registered under the Securities Act of 1933, as
now in force or hereafter amended, the Company shall be under no obligation to
issue any shares covered by any option unless the person who exercises such
option, in whole or in part, shall give a written
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representation and undertaking to the Company which is satisfactory in form and
scope to counsel for the Company and upon which, in the opinion of such counsel,
the Company may reasonably rely, that he or she is acquiring the shares issued
pursuant to such exercise of the option for his or her own account as an
investment and not with a view to, or for sale in connection with, the
distribution of any such shares, and that he or she will make no transfer of the
same except in compliance with any rules and regulations in force at the time of
such transfer under the Securities Act of 1933, or any other applicable law, and
that if shares are issued without such registration, a legend to this effect may
be endorsed upon the securities so issued. In the event that the Company shall,
nevertheless, deem it necessary or desirable to register under the Securities
Act of 1933 or other applicable statutes any shares with respect to which an
option shall have been exercised, or to qualify any such shares for exemption
from the Securities Act of 1933 or other applicable statutes, then the Company
may take such action and may require from each optionee such information in
writing for use in any registration statement, supplementary registration
statement, prospectus, preliminary prospectus or offering circular as is
reasonably necessary for such purpose and may require reasonable indemnity to
the Company and its officers and directors from such holder against all losses,
claims, damages and liabilities arising from such use of the information so
furnished and caused by any untrue statement of any material fact therein or
caused by the omission to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in the light of the
circumstances under which they were made.
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17. Loans.
The Company may make loans to optionees to permit them to exercise
options. If loans are made, the requirements of all applicable Federal and state
laws and regulations regarding such loans must be met.
18. Modification of Outstanding Options. The Board of Directors
may authorize the amendment of any outstanding option with the consent of the
optionee when and subject to such conditions as are deemed to be in the best
interests of the Company and in accordance with the purposes of the Plan.
19. Approval of Stockholders.
The Plan shall be subject to approval by the vote of stockholders
holding at least a majority of the voting stock of the Company voting in person
or by proxy at a duly held stockholders' meeting, or by written consent of all
of the stockholders, within twelve (12) months after the adoption of the Plan by
the Board of Directors and shall take effect as of the date of adoption by the
Board upon such approval. The Board of Directors may grant options under the
Plan prior to such approval, but any such option shall become effective as of
the date of grant only upon such approval and, accordingly, no such option may
be exercisable prior to such approval.
20. Termination and Amendment of Plan.
Unless sooner terminated as herein provided, the Plan shall terminate
ten (10) years from the date upon which the Plan was duly adopted by the Board
of Directors of the Company. The Board of Directors may at any time terminate
the Plan or make such modification or amendment thereof as it deems advisable;
provided, however, that except as
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provided in Section 20, the Board of Directors may not, without the approval of
the stockholders of the Company obtained in the manner stated in Section 19,
increase the maximum number of shares for which options may be granted or change
the designation of the class of persons eligible to receive options under the
Plan. Termination or any modification or amendment of the Plan shall not,
without the consent of an optionee, affect his or her rights under an option
theretofore granted to him or her.
21. Reservation of Stock.
The Company shall at all times during the term of the Plan reserve and
keep available such number of shares of stock as will be sufficient to satisfy
the requirements of the Plan and shall pay all fees and expenses necessarily
incurred by the Company in connection therewith.
22. Limitation of Rights in the Option Shares.
An optionee shall not be deemed for any purpose to be a stockholder of
the Company with respect to any of the options except to the extent that the
option shall have been exercised with respect thereto and, in addition, a
certificate shall have been issued theretofore and delivered to the optionee.
23. Notices.
Any communication or notice required or permitted to be given under the
Plan shall be in writing, and mailed by registered or certified mail or
delivered by hand, if to the Company, to its principal place of business,
attention: Richard A. Stratton, President, and, if to an optionee, to the
address as appearing on the records of the Company.
<PAGE>
24. Right of First Refusal.
(a) No shareholder of the Company shall sell, mortgage, encumber or
dispose of all or any shares of Common Stock issued upon exercise of an option
granted hereunder, except in compliance with the terms of this Section 24.
Notwithstanding the foregoing, any such shareholder (a) may transfer all or any
of such shares by way of gift to his spouse or to any of his lineal descendants
or (b) may transfer all or any of such shares by will or the laws of descent and
distribution; provided that any such transferee under this clause shall agree in
writing with the Company to be bound by all of the provisions of the Plan and
any Agreement to the same extent as if such transferee were the shareholder
transferring such shares.
(b) If at any time a shareholder (the "Selling Shareholder") desires to
sell all or any part of the shares of Common Stock issued upon exercise of an
option granted hereunder pursuant to a bona fide offer from a third party (the
"Proposed Transferee"), the Selling Shareholder shall submit a written offer
(the "Offer") by delivering the Offer to the Company to sell such shares (the
"Offered Shares") to the Company on terms and conditions, including price, not
less favorable than those on which the Selling Shareholder proposes to sell such
Offered Shares to the Proposed Transferee. The Offer shall disclose the identity
of the Proposed Transferee, the number of Offered Shares proposed to be sold,
the total number of shares owned by the Selling Shareholder, the terms and other
material facts relating to the proposed sale. The Offer shall further state (i)
that the Company may acquire, in accordance with the provisions of this Section,
all of the Offered Shares for the price and upon the other terms and conditions,
including deferred payment (if applicable), set forth therein and (ii) that
<PAGE>
the Company may not purchase any of such Offered Shares unless the Company
purchases all of such Offered Shares.
(c) If the Company desires to purchase all of such Offered Shares, it
shall communicate in writing its election to purchase to the Selling
Shareholder, within 30 days of the date the Offer was made. Such communication
shall, when taken in conjunction with the Offer, be deemed to constitute a
valid, legally binding and enforceable agreement for the sale and purchase of
such Offered Shares. Sales of such Offered Shares to be sold to the Company
pursuant to this Section shall be made at the offices of the Company within 90
days following the date the Offer was made.
(d) If the Company does not offer to purchase or purchase all of the
Offered Shares, the Offered Shares may be sold by the Selling Shareholder at any
time within 120 days after the date the Offer was made. Any such sale shall be
to the Proposed Transferee, at not less than the price and upon other terms and
conditions, if any, not more favorable to the Proposed Transferee than those
specified in the Offer. Any Offered Shares not sold within such 120-day period
shall continue to be subject to the requirements of a prior offer pursuant to
this Section. If Offered Shares are sold pursuant to this Section to any
purchaser, the Offered Shares so sold shall no longer be subject to any of the
restrictions imposed by the provisions of this Section.
<PAGE>
EXHIBIT 5.1
September 6, 1996
Litchfield Financial Corporation
789 Main Road
Stamford, Vermont 05352
Ladies and Gentlemen:
We are counsel to Litchfield Financial Corporation, a Massachusetts
corporation (the "Company"), and as such counsel we are familiar with the
corporate proceedings taken in connection with the adoption of the Company's
1990 Stock Option Plan (as amended, the "Plan"). We also are familiar with the
Registration Statement on Form S-8 to which a copy of this opinion will be
attached as an Exhibit.
As such counsel, we have examined the corporate records of the Company,
including its Restated Articles of Organization, Amended and Restated By-Laws,
minutes of meetings of its Board of Directors and stockholders and such other
documents as we have deemed necessary as a basis of the opinions herein
expressed.
Based upon the foregoing, and having regard for such legal
considerations as we deem relevant, we are of the opinion that:
1. The issuance of up to 1,122,319 shares of Common Stock upon exercise
of the options granted under the Plan has been duly authorized.
<PAGE>
2. The shares of Common Stock issuable pursuant to the Plan, when issued
in accordance with the terms thereof, will be validly issued, fully paid and
nonassessable.
We hereby consent to the filing of this opinion as an Exhibit to the
Registration Statement on Form S-8 and to the reference to us under the caption
"Interests of Named Experts and Counsel" in the Registration Statement.
Very truly yours,
/s/Hutchins, Wheeler & Dittmar
HUTCHINS, WHEELER & DITTMAR
A Professional Corporation
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the reference to our firm under the caption "Interests of
Named Experts and Counsel" in the Registration Statement (Form S-8 No. 33-00000)
pertaining to the 1990 Stock Option Plan of Litchfield Financial Corporation and
to the incorporation by reference therein of our report dated February 3, 1996,
with respect to the consolidated financial statements of Litchfield Financial
Corporation incorporated by reference in its Annual Report (Form 10-K) for the
year ended December 31, 1995, filed with the Securities and Exchange Commission.
/s/Ernst & Young LLP
ERNST & YOUNG LLP
Boston, Massachusetts
September 6, 1996
