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
1995 Stock Option Plan for Non-Employee Directors
(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 for 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
Title of Maximum Maximum
Securities Amount Offering Aggregate Amount of
to be to be Price Offering Registration
Registered Registered (1) Per Share Price Fee (2)
Common 22,050 shares $12.02 $ 265,041
Stock, par
value $.01 44,100 shares $14.50 $ 639,450
per share
TOTAL 66,150 shares $ 904,491 $ 311.89
(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.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
The Company hereby incorporates by reference the documents listed in
(a) through (c) below. In addition, all documents subsequently filed by the
Company pursuant to Section 13(a), 13(c), 14 and 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 in this Registration Statement and to be a part thereof from the date
of filing of such documents.
(a) The Company's latest annual report filed pursuant to Section 13(a)
or 15(d) of the Securities Exchange Act of 1934 and the Company's latest
prospectus filed pursuant to Rule 424(b) under the Securities Act of 1933, which
contains, either directly or by
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incorporation by reference, audited financial statements for the Company's
latest fiscal year for which such statements have been filed.
(b) All of the reports filed pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934 since the end of the fiscal year covered by the
Prospectus referred to in (a) above.
(c) The description of the Company's Common Stock which is contained in the
Registration Statement on Form S-1 (Registration No. 33-97414) filed by the
Company with the Securities and Exchange Commission on October 18, 1995,
including any amendment or report filed for the purpose of updating such
description.
Item 4. Description of Securities
Inapplicable
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 6. Indemnification of Directors and Officers
Section 67 of Chapter 156B of the General Laws of the Commonwealth of
Massachusetts provides as follows:
"Section 67. 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
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election of directors. Except as the articles of organization or by-laws
otherwise require, indemnification of any persons referred to in the preceding
sentence 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."
Article 7 of the Amended and Restated By-Laws of the Company provides as
follows:
"Section 7.1 Definitions
For purposes of this Article 7:
(a) "Director/officer" means any person who is serving or has served as a
Director, officer, employee or other agent of the Corporation appointed or
elected by the Board of Directors or the stockholders of the Corporation, or who
is serving or has served at the request of the Corporation as a Director,
officer, trustee, principal, partner, employee or other agent of any other
organization.
(b) "Proceeding" means any action, suit or proceeding, civil or criminal,
brought or threatened in or before any court, tribunal, administrative or
legislative body or agency.
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(c) "Expense" means any fine or penalty, and any liability fixed by a
judgment, order, decree or award in a Proceeding and any professional fees and
other disbursements reasonably incurred in connection with a Proceeding.
Section 7.2 Right to Indemnification
Except as limited by law or as provided in Sections 7.3 and 7.4 of this
Article 7, each Director/officer (and his heirs and personal representatives)
shall be indemnified by the Corporation against any Expenses incurred by him in
connection with each Proceeding in which he is involved as a result of his
serving or having served as a Director/officer.
Section 7.3 Indemnification not Available
No indemnification shall be provided to a Director/officer with respect to a
Proceeding as to which it shall have been adjudicated that he did not act in
good faith in the reasonable belief that his action was in the best interests of
the Corporation.
Section 7.4 Compromise or Settlement
In the event that a Proceeding is compromised or settled so as to impose any
liability or obligation on a Director/officer or upon the Corporation, no
indemnification shall be provided as to said Director/officer with respect to
such Proceeding if such Director/officer shall have been adjudicated not to have
acted in good faith in the reasonable belief that his action was in the best
interests of the Corporation.
Section 7.5 Advances
The Corporation shall pay sums on account of indemnification in advance of a
final disposition of a Proceeding upon receipt of an undertaking by the
Director/officer to repay such sums if it is subsequently established that he is
not entitled to indemnification pursuant to Sections 7.3 and 7.4 hereof, which
undertaking may be accepted without reference to the financial ability of such
person to make repayment.
Section 7.6 Not Exclusive
Nothing in this Article 7 shall limit any lawful rights to indemnification
existing independently of this Article 7.
Section 7.7 Insurance
The provisions of this Article 7 shall not limit the power of the Board of
Directors to authorize the purchase and maintenance of insurance on behalf of
any Director/officer against any Expense, whether or not the Corporation would
have the power to indemnify him against such Expense under this Article 7."
<PAGE>
Item 7. Exemption from Registration Claimed
Inapplicable
Item 8. Exhibits
Number Description
4.1 Litchfield Financial Corporation 1995 Stock Option Plan for
Non-Employee Directors
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).
Item 9. Undertakings
The undersigned Registrant hereby undertakes the following:
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act 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 in the
information set forth in the registration statement.
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in
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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.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in 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.
(c) The undersigned registrant hereby undertakes, that, insofar as
indemnification for liabilities arising under the Securities Act of 1933 may be
permitted to directors, officers and controlling persons of the registrant
pursuant to the foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in 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
1995 STOCK OPTION PLAN
FOR NON-EMPLOYEE DIRECTORS
1. PURPOSE
The purpose of this Litchfield Financial Corporation 1995 Stock Option
Plan for Non-Employee Directors (the "Plan") is to attract and retain the
services of experienced and knowledgeable independent directors who are not
employees (sometimes referred to herein collectively as "Participants") of
Litchfield Financial Corporation ("Litchfield") for the benefit of Litchfield
and its stockholders and to provide additional incentive for such Participants
to continue to work in the best interests of Litchfield and its stockholders
through continuing ownership of its Common Stock.
2. SHARES SUBJECT TO THE PLAN
The total number of shares of Common Stock, par value $0.01 per share
("Shares"), of Litchfield for which options may be granted under the Plan shall
not exceed 66,150 in the aggregate, subject to adjustment in accordance with
Section 9 hereof.
3. ELIGIBILITY; GRANT OF OPTION
Each of David J. Ferrari and Gerald Segel, who are two current directors
of Litchfield and who are not otherwise employees of Litchfield or any
subsidiary, and, upon their election to the Board of Directors of Litchfield
(the "Board"), all new non-employee directors duly elected in the five-year
period commencing on the date of the adoption of the Plan, shall be granted an
option to acquire 5,512.5 Shares under the Plan. The date of grant for such
options
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granted to the two current non-employee directors named above shall be the date
of adoption of the Plan by the Board, but such options shall become effective as
of such date of grant only upon stockholder approval of this Plan in accordance
with Section 13 hereof. The options shall be non-qualified options not intended
to meet the requirements of Section 422 of the Internal Revenue Code of 1986, as
amended (the "Code"). The date of grant for each subsequently elected director
shall be the date of election.
4. OPTION AGREEMENT
Each option granted under the Plan shall be evidenced by an option
agreement (the "Agreement") duly executed on behalf of Litchfield and by the
director to whom such option is granted, which Agreements shall (i) comply with
and be subject to the terms and conditions of the Plan and (ii) provide that the
optionee agrees to continue to serve as a director of Litchfield during the term
for which he was elected.
5. OPTION EXERCISE PRICE
Subject to the provisions of Section 9 hereof, the option exercise price
for an option granted under the Plan shall be the fair market value of the
Shares of the Common Stock of Litchfield covered by the option on the date of
grant of the option. For the purposes hereof and Section 6(c), the fair market
value of the Common Stock of Litchfield shall be the mean between the high and
low sales prices of the Common Stock of Litchfield on the Nasdaq Stock Market
(National Market) as reported on the date of grant in the Wall Street Journal
for the immediately preceding business day, provided that if the Common Stock of
Litchfield is not listed on or actually trading on the Nasdaq Stock Market
(National Market), fair market value shall be determined in good faith by the
Board, provided, further that for options granted on
<PAGE>
the date of adoption of the Plan the fair market value shall be the mean between
the high and low sales prices of the Common Stock of Litchfield on the Nasdaq
Stock Market (National Market) as reported on the date of adoption in the Wall
Street Journal for the immediately preceding business day.
6. TIME AND MANNER OF EXERCISE OF OPTION
(a) Options granted under the Plan shall, subject to the provisions of
Section 7, be exercisable as provided in this Section 6(a). The options shall
not be exercisable prior to the first year anniversary date of the date of
grant. Thereafter, the options shall be exercisable as follows:
Percentage of
Shares Becoming Cumulative
Available for Percentage
Exercise Available
On or After First Year
Anniversary Date and Before
Second Anniversary Date 33 1/3% 33 1/3%
Percentage of
Shares Becoming Cumulative
Available for Percentage
Exercise Available
On or After Second Anniversary
Date and Before Third Anniversary
Date 33 1/3% 66 2/3%
On or After Third Anniversary
Date 33 1/3% 100%
(b) To the extent that the right to exercise an option has accrued and
is in effect, the option may be exercised in full at one time or in part from
time to time by giving written
<PAGE>
notice, signed by the person or persons exercising the option, to Litchfield,
stating the number of Shares with respect to which the option is being
exercised, accompanied by payment in full for such Shares, which payment may be
in cash or in whole or in part in Shares of the common stock of Litchfield
already owned for a period of at least six months by the person or persons
exercising the option, valued at fair market value, as determined under Section
5 hereof, on the date of exercise; provided, however, that there shall be no
such exercise at any one time as to fewer than two hundred fifty (250) Shares or
all of the remaining Shares then purchasable by the person or persons exercising
the option, if fewer than two hundred fifty (250) Shares. Upon such exercise,
delivery of a certificate for paid-up non-assessable Shares shall be made at the
principal Vermont office of Litchfield 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 Litchfield, as shall be
designated in such notice, or at such time, place and manner as may be agreed
upon by Litchfield and the person or persons exercising the option.
7. TERM OF OPTIONS
(a) Each option shall expire ten (10) years from the date of the
granting thereof, but shall be subject to earlier termination as herein
provided.
(b) In the event of the death of an optionee, the option granted to such
optionee may be exercised, to the extent the optionee was entitled to do so on
the date of such optionee's death, by the estate of such optionee or by any
person or persons who acquired the right to exercise such option by bequest or
inheritance or otherwise by reason of the death of such optionee. Such option
may be exercised at any time within one (1) year after the date of death
<PAGE>
of such optionee, at which time the option shall terminate, or prior to the date
on which the option otherwise expires by its terms, whichever is earlier.
(c) In the event that an optionee ceases to be a director of Litchfield,
the option granted to such optionee may be exercised by him, but only to the
extent that under Section 6 hereof the right to exercise the option has accrued
and is in effect. Such option may be exercised at any time within one (1) month
after the date such optionee ceases to be a director of Litchfield, at which
time the option shall terminate, but in any event prior to the date on which the
option expires by its terms, whichever is earlier, unless termination as a
director (a) was by Litchfield for cause, in which case the option shall
terminate immediately at the time the optionee ceases to be a director of
Litchfield, (b) was because the optionee has become disabled (within the meaning
of Section 22(e)(3) of the Code), or (c) was by reason of the death of the
optionee. In the case of death, see Section 7(b) of the Plan. In the case of
disability, the option may be exercised, to the extent then exercisable under
Section 6 hereof, at any time within one (1) year after the date of termination
of the optionee's directorship with Litchfield, at which time the option shall
terminate, but in any event prior to the date on which the option otherwise
expires by its terms, whichever is earlier.
8. OPTIONS NOT TRANSFERABLE
The right of any optionee to exercise an option granted to him under the
Plan shall not be assignable or transferable by such optionee otherwise than by
will or the laws of descent and distribution, or pursuant to a qualified
domestic relations order as defined by the Code or Title I of the Employee
Retirement Income Security Act, or the rules thereunder. Any option granted
under the Plan shall be exercisable during the lifetime of such optionee only by
him.
<PAGE>
Any option granted under the Plan shall be null and void and without effect upon
the bankruptcy of the optionee, 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.
9. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION
In the event that the outstanding Shares of the common stock of
Litchfield are changed into or exchanged for a different number or kind of
shares or other securities of Litchfield 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 outstanding options, or portions thereof then unexercised, shall be
exercisable, to the end that the proportionate interest of the optionee shall be
maintained as before the occurrence of such event, and 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.
10. RESTRICTIONS ON ISSUE OF SHARES
Notwithstanding the provisions of Section 6 hereof, Litchfield may delay
the issuance of Shares covered by the exercise of any option and the delivery of
a certificate for such Shares until one of the following conditions shall be
satisfied:
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(i) the Shares with respect to which an option has been
exercised are at the time of the issue of such Shares effectively registered
under applicable Federal and state securities acts now in force or hereafter
amended; or
(ii) counsel for Litchfield shall have given an opinion, which
opinion shall not be unreasonably conditioned or withheld, that such Shares are
exempt from registration under applicable Federal and state securities acts now
in force or hereafter amended.
It is intended that all exercises of options shall be effective.
Accordingly, Litchfield shall use its best efforts to bring about compliance
with the above conditions within a reasonable time, except that Litchfield sh
all be under no obligation to cause a registration statement or a post-effective
amendment to any registration statement to be prepared at its expense solely for
the purpose of covering the issue of Shares in respect of which any option may
be exercised, except as otherwise agreed to by Litchfield in writing.
11. RIGHTS OF HOLDER ON PURCHASE FOR INVESTMENT; 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, Litchfield 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 representation and undertaking
to Litchfield which is satisfactory in form and scope to counsel to Litchfield
and upon which, in the opinion of such counsel, Litchfield may reasonably rely,
that he is acquiring the Shares issued to him pursuant to such exercise of the
option for his own account as an investment and not with a view to, or for sale
in connection with, the
<PAGE>
distribution of any such Shares, and that he 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 Litchfield 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 Litchfield
shall take such action at its own expense and may require from each optionee
such information in writing for use in any registration statement, prospectus,
preliminary prospectus or offering circular as is reasonably necessary for such
purpose and may require reasonable indemnity to Litchfield 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 light of the circumstances under which they were made.
12. LOANS PROHIBITED
Litchfield shall not, directly or indirectly, lend money to an optionee
or to any person or persons entitled to exercise an option by reason of the
death of an optionee for the purpose of assisting him or them in the acquisition
of Shares covered by an option granted under the Plan.
13. APPROVAL OF STOCKHOLDERS
<PAGE>
The Plan shall be subject to approval by the vote of stockholders
holding at least a majority of the voting stock of Litchfield voting in person
or by proxy at a duly held stockholders' meeting, or by written consent of all
of the stockholders, and shall take effect immediately as of its date of
adoption upon such approval.
14. EXPENSES OF THE PLAN
All costs and expenses of the adoption and administration of the Plan
shall be borne by Litchfield, and none of such expenses shall be charged to any
optionee.
15. 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 approved by the
stockholders. The Board may at any time terminate the Plan or make such
modification or amendment thereof as it deems advisable, provided however that,
except as provided in Section 9 hereof, no modification or amendment to the
provisions of the Plan may be made more than once every six (6) months other
than to comport with changes in the Code, the Employee Retirement Income
Security Act, or the rules thereunder, if the effect of such amendment or
modification would be to change (i) the requirements for eligibility under the
Plan, (ii) the timing of the grants of options to be granted under the Plan or
the exercise price or vesting schedule thereof, or (iii) the number of Shares
subject to options to be granted under the Plan either in the aggregate or to
one director. Any amendment to the provisions of the Plan which (i) materially
increases the number of Shares which may be subject to options granted under the
Plan, (ii) materially increases the benefits accruing to Participants under the
Plan, or (iii) materially modifies the
<PAGE>
requirement for eligibility to participate in the Plan, shall be subject to
approval by the stockholders of Litchfield obtained in the manner stated in
Section 13 hereof. Termination or any modification or amendment of the Plan
shall not, without the consent of an optionee, affect his rights under an option
previously granted to him.
16. LIMITATION OF RIGHTS IN THE OPTION SHARES
An optionee shall not be deemed for any purpose to be a stockholder of
Litchfield 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.
17. 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 Litchfield, to its principal place of business,
attention: President, and, if to an optionee, to the address as appearing on the
records of Litchfield.
18. COMPLIANCE WITH RULE 16b-3.
It is the intention of Litchfield that the Plan comply in all respects
with Rule 16b-3 promulgated under Section 16(b) of the Securities Exchange Act
of 1934 (the "Act") and that Participants remain disinterested persons for
purposes of administering other employee benefit plans of Litchfield and having
transactions under such other plans be exempt from Section 16(b) of the Act.
Therefore, if any Plan provision is found not to be in compliance with Rule
16b-3 or if any Plan provisions would disqualify Participants from remaining
disinterested persons, that provisions shall be deemed null and void, and in all
events the Plan shall shall be
<PAGE>
construed in favor of its meeting the requirements of Rule 16b-3.
APPROVED BY THE STOCKHOLDERS:
<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
1995 Stock Option Plan for Non-Employee Directors (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 66,150 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>
EXHIBIT 23.1
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 1995 Stock Option Plan for Non-Employee Directors 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
