As filed with the Securities and Exchange Commission on July 21, 1999
Registration No. 333-_____________
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
PILGRIM CAPITAL CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 86-0670679
(State of Incorporation) (I.R.S. Employer
Identification No.)
40 NORTH CENTRAL, SUITE 1200
PHOENIX, ARIZONA 85004
(Address of Principal Executive Offices)
PILGRIM CAPITAL CORPORATION
1998 DIRECTORS' STOCK OPTION PLAN
(Full Title of Plan)
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JAMES M. HENNESSY
EXECUTIVE VICE PRESIDENT
PILGRIM CAPITAL CORPORATION
40 NORTH CENTRAL, SUITE 1200
PHOENIX, ARIZONA 85004
(Name and Address of Agent for Service)
(602) 417-8100
(Telephone Number, Including Area Code of Agent for Service)
Copy to:
Joseph P. Richardson, Esq.
Bryan Cave LLP
Two North Central Avenue, Suite 2200
Phoenix, Arizona 85004
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
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Title of Proposed Maximum Proposed Maximum
Securities to Amount to be Offering Price Aggregate Amount of
be Registered Registered (1) Per Share (2) Offering Price (2) Registration Fee
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock 250,000 shares $24.00 $6,000,000 $1,668
=======================================================================================
</TABLE>
(1) Plus such additional indeterminate number of shares as may be issuable
pursuant to the anti-dilution provisions of the Plan.
(2) Estimated solely for the purpose of calculating the registration fee.
Pursuant to Rule 457(c) and Rule 457(h) under the Securities Act of 1933,
as amended, the proposed maximum offering price per share and the proposed
maximum aggregate offering price have been determined on the basis of the
average of the high and low prices of the Common Stock on the New York
Stock Exchange on July 16, 1999.
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<PAGE>
PART I
ITEM 1. PLAN INFORMATION.
The documents containing the information specified in Part I of this
Registration Statement will be sent or given to eligible employees as specified
by Rule 428 (b)(1) of the Securities Act of 1933, as amended (the "Securities
Act"). Such documents are not required to be and are not filed with the
Securities and Exchange Commission (the "Commission") either as part of this
Registration Statement or as prospectuses or prospectus supplements pursuant to
Rule 424. These documents and the documents incorporated by reference in this
Registration Statement pursuant to Item 3 of Part II of the Form S-8, taken
together, constitute a prospectus that meets the requirements of Section 10(a)
of the Securities Act.
ITEM 2. REGISTRATION INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION.
Upon written or oral request, any of the documents incorporated by
reference in Item 3 of Part II of this Registration Statement (which documents
are incorporated by reference in this Section 10(a) Prospectus), other documents
required to be delivered to eligible employees pursuant to Rule 428(b) or
Program are available without charge by contacting:
Secretary
Pilgrim Capital Corporation
40 North Central, Suite 1200
Phoenix, Arizona 85004
(602) 417-8100
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
This Registration Statement relates to 250,000 shares of Common Stock, par
value $.01, of Pilgrim Capital Corporation (formerly named Pilgrim America
Capital Corporation ("Registrant" or "Company") being registered for use under
the Registrant's 1998 Directors' Stock Option Plan (the "Plan").
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents which have been filed by the Company with the
Securities and Exchange Commission (the "Commission") pursuant to the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), are incorporated by
reference herein and shall be deemed to be a part hereof:
(a) The Annual Report on Form 10-K, as amended, for the fiscal year ended
September 30, 1998;
(b) Quarterly Report on Form 10-Q for the fiscal quarters ended December
31, 1998; and March 31, 1999, and
(c) The description of the Company's Common Stock contained in the
Company's Registration Statement on Form S-1 (Registration No. 33-58754), filed
with the Commission on February 24, 1993, and any amendment thereto updating
such description.
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All other documents filed by the Company with the Commission pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act subsequent to the date
of this Registration Statement and prior to the filing of a post-effective
amendment to this Registration Statement which indicates that all securities
offered have been sold or which deregisters all securities then remaining
unsold, shall be deemed to be incorporated by reference in this Registration
Statement and to be a part hereof from the date of filing of such documents
(such documents, and the documents enumerated above, being hereinafter referred
to collectively as the "Incorporated Documents").
Any statement contained in an Incorporated Document shall be deemed to be
modified or superseded for purposes of this Registration Statement to the extent
that a statement contained herein or in any other subsequently filed
Incorporated Document 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.
ITEM 5. INTEREST OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article 8 and 9 of the Company's Amended and Restated Certificate of
Incorporation provides for the indemnification of the Company's directors and
officers under certain circumstances and are incorporated herein by reference.
The Company has entered into an indemnity agreement with each member of its
Board of Directors and its officers. The agreements provide the persons party
thereto with specific contractual assurances that they will be indemnified to
the fullest extent permitted by law and with certain procedural protections in
the event that they are sued in their capacities as directors, officers,
employees or agents, including provisions for advancement of expenses incurred
in connection with an indemnifiable event.
Section 145 of the General Corporation Law of the State of Delaware
empowers a Delaware corporation to indemnify any person who is, or is threatened
to be made, a party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative (other than
an action by or in the right of such corporation) by reason of the fact that
such person is or was an officer or director of such corporation, or is or was
serving at the request of such corporation as a director, officer, employee or
agent of another corporation or enterprise. The indemnity may include expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement and
reasonably incurred by such person in connection with such action, suit or
proceeding, provided that he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interest of the corporation, and,
with respect to any criminal action or proceeding, had no reasonable cause to
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believe his conduct was unlawful. A Delaware corporation may indemnify officers
and directors in an action by or in the right of the corporation under the same
conditions, except that no indemnification is permitted without judicial
approval if the officer or director is adjudged to be liable for negligence or
misconduct in the performance of his duty to the corporation. Where an officer
or director is successful on the merits or otherwise in the defense of any
action referred to above, the corporation must indemnify him against the
expenses which he actually and reasonably incurred in connection therewith. The
indemnification provided is not deemed to be exclusive of any other rights to
which an officer or director may be entitled under a corporation's by-laws, by
agreement, vote, or otherwise.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
The Exhibits to this registration statement are listed in the Index to
Exhibits on page 8.
ITEM 9. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) to file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) to reflect in the prospectus any facts or events arising after the
effective date of this Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set
forth in this Registration Statement. Notwithstanding the foregoing,
any increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that which
was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and price represent no more
than a 20% change in the maximum aggregate offering price set forth
in the "Calculation of Registration Fee" table in the effective
Registration Statement;
(iii) to include any material information with respect to the plan of
distribution not previously disclosed in this Registration Statement
or any material change to such information in this Registration
Statement:
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provided however, that paragraphs (a)(l)(i) and (a)(l)(ii) of this Section do
not apply if the registration statement is on Form S-3, Form S-8 or Form F-3,
and the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed with or furnished to the
Commission by the Registrant pursuant to Section 13 or Section 15(d) of the
Exchange Act 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; and
(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
Exchange Act (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.
(h) 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 of 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 Securities Act of 1933 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 City of Phoenix, State of Arizona, on the 21st day of July,
1999.
PILGRIM CAPITAL CORPORATION
By: /s/ Robert W. Stallings
----------------------------------
Robert W. Stallings
Chairman and Chief Executive Officer
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. Each person whose individual signature
appears below hereby authorizes Robert W. Stallings and James R. Reis, or either
one of them, to execute in the name of each such person and to file any
amendment to this Registration Statement and appoints Robert W. Stallings and
James R. Reis, or either one of them, as attorney-in-fact to sign on his behalf
individually and in each capacity stated below and to file any amendments to
this Registration Statement, including any and all post-effective amendments.
Signature Title Date
--------- ----- ----
/s/ John C. Cotton Director July 21, 1999
- -----------------------------
John C. Cotton
/s/ Roy A. Herberger, Jr. Director July 21, 1999
- -----------------------------
Roy A. Herberger, Jr.
/s/ John M. Holliman, III Director July 21, 1999
- -----------------------------
John M. Holliman, III
/s/ Stephen A McConnell Director July 21, 1999
- -----------------------------
Stephen A McConnell
/s/ James R. Reis Vice-Chairman and
- ----------------------------- Chief Financial Officer, July 21, 1999
James R. Reis (Principal Accounting Officer)
/s/ Paul J. Renze Director July 21, 1999
- -----------------------------
Paul J. Renze
/s/ Robert W. Stallings Chairman of the Board July 21, 1999
- ----------------------------- of Directors and Chief
Robert W. Stallings Executive Officer
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Exhibit Index
Exhibit
Number Description
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4 Registrant's 1998 Directors' Stock Option Plan
5 Opinion of Bryan Cave LLP
23.1 Consent of KPMG LLP
23.2 Consent of Bryan Cave LLP (included in Exhibit 5)
24 Power of Attorney (included on signature pages of this
Registration Statement)
Exhibit 4
PILGRIM AMERICA CAPITAL CORPORATION
1998 DIRECTORS' STOCK OPTION PLAN
1. DEFINITIONS.
As used in this Plan, the following terms have the meanings indicated:
"Board of Directors" means the board of directors of the Corporation.
"Code" means the Internal Revenue Code of 1986, as amended.
"Common Stock" means the shares of the common stock (including treasury
stock), par value $0.01 per share, of the Corporation.
"Corporation" means Pilgrim America Capital Corporation, a Delaware
corporation, and any successor thereto.
"Disability" means inability of a Participant to perform his or her duties
as an Outside Director by reason of any medically determinable physical or
mental impairment which can be expected to result in death or which has lasted
or can be expected to last for a continuous period of not less than 12 months.
"Fair Market Value" means the value of a share of Common Stock on a
particular day determined as follows:
(i) if the shares of Common Stock are listed or admitted to trading on
any securities exchange, the fair market value shall be the closing sales
price on such day on the New York Stock Exchange or, if the shares are not
then listed or admitted to trading on the New York Stock Exchange, on such
other securities exchange on which such stock is then listed or admitted to
trading or, if no sale takes place on such day on any such exchange, on the
next preceding day on which sales occur;
(ii) if the shares of Common Stock are not then listed or admitted to
trading on any securities exchange, the fair market value shall be the
closing sales price on such day or, if no sale takes place on such day, on
the next preceding day on which sales occur in the over-the-counter market
as furnished by the Nasdaq Stock Market, or if the Nasdaq Stock Market at
the time is not engaged in the business of reporting such prices, as
furnished by any similar firm then engaged in such business and selected by
the Board of Directors; or
(iii) if the shares of Common Stock are not then listed or admitted to
trading on a securities exchange or in the over-the-counter market, the
fair market value shall be the amount determined by the Board of Directors
in a manner consistent with Treasury Regulation ss. 20.2031-2 promulgated
under the Code or such other manner prescribed by the Secretary of the
Treasury or the Internal Revenue Service.
<PAGE>
"Outside Director" means a person who is a member of the Board of Directors
but is not an employee of the Corporation or any subsidiary of the Corporation.
"Participant" means an Outside Director, or other person or entity
specified in Section 5(f), who is granted a stock option hereunder, together
with such Outside Director's, or such other person's or entity's transferees,
assigns, and successors.
"Plan" means this Pilgrim America Capital Corporation 1998 Directors' Stock
Option Plan.
"Rule 16b-3" means Rule 16b-3 promulgated by the Securities and Exchange
Commission under the Securities Exchange Act of 1934, as amended, and any
amendment or successor provision thereto.
2. PURPOSE OF PLAN.
(a) GENERAL PURPOSE. The purpose of this Plan is to further the interests
of the Corporation and its stockholders by providing an incentive based form of
compensation to motivate and reward its Outside Directors and promote the best
interests and long-term performance of the Corporation by offering such Outside
Directors a proprietary interest in its business and an increased personal
interest in the continued success and progress of the Corporation.
(b) TYPES OF AWARDS. The Plan provides for the grant by the Corporation of
options to purchase shares of the Corporation's Common Stock. None of the
options granted pursuant to this Plan will qualify as Incentive Stock Options,
as defined in Section 422 of the Code. It is also intended that grants under
this Plan not constitute "Discretionary Transactions" under the requirements of
Rule 16b-3. and that any Outside Directors participating hereunder will not be
disqualified, because of this Plan, as a "Non-Employee Director" under Rule
16b-3; any provision of this Plan deemed not to be in compliance with the
requirements of Rule 16b-3 shall be deemed null and void. This Plan is not
intended to preclude the use of Common Stock for other compensation purposes in
line with the needs and objectives of the Corporation.
3. STOCK AND MAXIMUM NUMBER OF SHARES SUBJECT TO PLAN.
(a) DESCRIPTION OF STOCK AND MAXIMUM SHARES ALLOCATED. The stock subject to
the provisions of this Plan and issuable upon exercise of options under the Plan
are shares of the Corporation's Common Stock, which may be either unissued or
treasury shares, as the Board of Directors from time to time may determine.
Subject to adjustment as provided in Section 6, the aggregate number of shares
of Common Stock covered by the Plan and issuable upon exercise of all options
granted hereunder shall be 250,000 shares.
(b) RESTORATION OF UNPURCHASED Shares. If an option expires or is
terminated or surrendered without having been fully exercised, the unpurchased
shares of Common Stock subject to the option shall again be available for other
options awarded under this Plan.
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4. ELIGIBILITY. Except as otherwise provided in Section 5(f), stock options may
be granted under the Plan only to Outside Directors.
5. STOCK OPTIONS.
(a) GRANT OF STOCK OPTIONS. On October 1, 1998, each Outside Director then
serving shall be granted an option to purchase 15,000 shares of Common Stock and
on each October 1 thereafter throughout the term of this Plan, each Outside
Director then serving shall be granted an option to purchase 5,000 shares of
Common Stock. An Outside Director first elected after October 1, 1998 shall,
upon such election, be granted an option to purchase 15,000 shares of Common
Stock. In the event insufficient shares are available under this Plan to grant
the options specified above to all Outside Directors then serving, the number of
shares subject to the granted options shall be adjusted downward such that each
Outside Director shall receive an option to purchase the same number of shares
as the others without exceeding the number of shares available under this Plan.
In the event no shares are available for issuance of options, or if an
insufficient number of shares are available for each Outside Director to receive
an option for the same number of shares as the others, no options shall be
granted at such time. Unless otherwise determined by the Board of Directors, the
right to purchase shares pursuant to options granted hereunder shall vest
annually in equal portions over a period of three years, and such vesting shall
occur on the anniversary of the relevant date of grant of the option.
Notwithstanding the terms and conditions of any options granted under this Plan,
including without limitation the terms and conditions of an individual agreement
executed pursuant to Section 5(d), the earliest time at which the right to
purchase shares under any option granted may vest is at the time of approval of
this Plan by the stockholders of the Corporation. By accepting an option granted
under this Plan, each Participant acknowledges and agrees to the terms,
conditions, restrictions and limitations contained in this Plan, including
without limitation those contained in the preceding sentence.
(b) OPTION PRICE. The purchase price of the Common Stock under each option
granted hereunder shall be one dollar ($1.00) in excess of the Fair Market Value
of the Common Stock on the day of the grant of the option.
(c) CONTINGENCY OF GRANTS. All grants of options pursuant to Section 5(a)
prior to approval of this Plan by the stockholders of the Corporation are
subject to such approval as provided in Sections 5(a) and 10.
(d) INDIVIDUAL AGREEMENTS; REQUIRED PROVISIONS. Options granted under this
Plan shall be evidenced by agreements in such form as the Board of Directors
from time to time approves, which agreements shall substantially comply with and
be subject to the terms of the Plan, including the conditions of this Section 5.
Each individual agreement shall include, in addition to other terms and
conditions as determined by the Board of Directors, the following: (i) the total
number of shares subject to the option; (ii) the exercise price for the shares
covered by the option; (iii) the time at which the option becomes exerciseable;
(iv) the scheduled expiration date of the option; (v) the vesting period(s) for
such options; and (vi) the timing and conditions of issuance of any stock
received upon exercise.
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(e) PERIOD. No option granted under the Plan shall be exerciseable for a
period in excess of ten years from the date of its grant, subject to earlier
termination as provided in this Plan and as may be set forth in the individual
agreements evidencing the option. An option may be exercised in full or in part
at any time or from time to time during the term thereof, or may provide for its
exercise in stated installments at stated times during such term.
(f) NON-TRANSFERABILITY OF OPTIONS. Each option granted under the Plan
shall by its terms be non-transferable by the Participant other than by will or
the laws of descent and distribution. An option may be exercised, during the
lifetime of the Participant, only by the Participant. Notwithstanding the
foregoing, the Board of Directors may permit a Participant to transfer an option
or cause the Corporation to grant an option that would otherwise be granted to a
Participant, to any one or more of the following: a Participant's descendant,
spouse, descendant of a spouse, spouse of any of the foregoing, a trust
established primarily for the benefit of any of the foregoing, or of such
Participant, or to an entity which is a corporation, partnership, or limited
liability company (or any other similar entity) the owners of which are
primarily the aforementioned persons or trusts. Any such option so transferred
or granted directly to the aforementioned persons, trust or entities in respect
of a Participant shall be subject to the provisions of Section 5(g) concerning
the exercisability during and after the Participant's service on the Board of
Directors.
(g) TERMINATION OF SERVICE. Except as otherwise provided herein, if a
Participant voluntarily or involuntarily terminates service as an Outside
Director, the Participant may, to the extent the option has vested on the date
of termination, exercise any option held by such Participant, at any time within
three (3) months after the date of such termination, but not after the
expiration of the option. Any option not so exercised shall expire.
Notwithstanding the foregoing:
(i) if a Participant retires as an Outside Director on or after
reaching age 65, the options shall vest upon such retirement and the
Participant (or the personal representative of the Participant if the
Participant has died) may exercise any or all of the Participant's
unexercised, unexpired options, provided such exercise is within twelve
(12) months after the date of the Participant's retirement but not after
the expiration of the option;
(ii) if a Participant's service as an Outside Director is terminated
by reason of death, the options shall vest upon death and the personal
representative of the Participant may exercise any or all of the
Participant's unexercised, unexpired options, provided such exercise occurs
within twelve (12) months of the date of the Participant's death but not
after the expiration of the option; and
(iii) if a Participant's service as an Outside Director is terminated
by reason of Disability, the options shall vest upon such termination and
the Participant (or the personal representative of the Participant if the
Participant has died) may exercise any or all of the Participant's
unexercised, unexpired options, provided such exercise is within twelve
(12) months of the date of the Participant's termination of service but not
after the expiration of the option.
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Notwithstanding the forgoing, if the services of any Participant shall be
terminated because of the Participant's conviction of or plea bargain to a
felony involving fraud, theft, embezzlement or the like, all unexercised options
of such Participant shall lapse immediately and be unexerciseable on and after
the date of termination of the Participant's service
(h) NO FRACTIONAL SHARES. Options shall be granted and exerciseable only
for whole shares; no fractional shares will be issuable upon exercise of any
option granted under the Plan.
(i) METHOD OF EXERCISING OPTION. Options be exercised by written notice to
the Corporation, addressed to the Corporation at its principal place of
business. Such notice shall state the election to exercise the option and the
NUMBER of shares with respect to which it is being exercised, and shall be
signed by the person exercising the option. Such notice shall be accompanied by
payment in full of the exercise price for the number of shares being purchased.
The exercise price is to be paid in full upon exercise of an option in one of
the following manners:
(1) Payment in cash;
(2) Payment in shares of Common Stock having a Fair Market Value equal
to the cash exercise price of the option being exercised; or
(3) Payment by a combination of cash and shares of Common Stock such
that the sum of the cash paid and the Fair Market Value of the shares of
Common Stock equals the cash exercise price of the option being exercised.
Any shares of Common Stock tendered in payment must be either shares owned by
the Participant and registered in the Participant's name and may not include
shares of Common Stock acquired by the Participant through exercise of an option
granted less than six months prior to the date of exercise of the option being
exercised.
(j) PROCEEDS FROM EXERCISE. The consideration received by the Corporation
upon exercise of an option, if cash, is to be added to the general funds of the
Corporation or, if shares of Common Stock, is to be added to the shares of the
Common Stock held in treasury and used for the corporate purposes of the
Corporation as the Board of Directors shall determine.
(k) NO RIGHTS OF A STOCKHOLDER. A Participant shall have no rights as a
stockholder with respect to shares covered by an option. No adjustment will be
made for dividends with respect to an option for which the record date is prior
to the date a stock certificate is issued upon exercise of an option. Upon
exercise of an option, the holder of the shares of Common Stock so received
shall have all rights of a stockholder of the Corporation as of the date of
issuance.
(l) COMPLIANCE WITH LAW. No shares of Corporation Common Stock shall be
issued or transferred upon the exercise of any option unless and until the
following occurs;
(i) All legal requirements applicable to the issuance or transfer of
such shares have been complied with; and
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(ii) All requirements of any national securities exchange or
association upon which the shares are listed, traded or quoted have been
met, in each case to the satisfaction of the Board of Directors and free of
any conditions unacceptable to the Board of Directors. The Board of
Directors shall have the right to condition the issuance of any shares made
to any Participant hereunder on such Participant's undertaking in writing
(whether prior to or after the grant of the options) to comply with such
restrictions on his or her subsequent disposition of such shares as the
Board of Directors shall deem necessary or advisable as a result of any
applicable law, regulation or official interpretation thereof, and a legend
may be placed on the certificates representing such shares to reflect any
such restriction.
6. CERTAIN ADJUSTMENTS.
(a) CAPITAL ADJUSTMENTS. Except as limited by Section 422 of the Code, the
aggregate number of shares of Common Stock subject to the Plan, the number of
shares covered by outstanding options, and the price per share stated in such
options shall be proportionately adjusted for any increase or decrease in the
number of outstanding shares of Common Stock of the Corporation resulting from a
subdivision or consolidation of shares or any other capital adjustment or the
payment of a stock dividend or any other increase or decrease in the number of
such shares effected without receipt by the Corporation of consideration
therefor in money, services or property.
(b) MERGERS, ETC. Except as limited by the provisions of Section 422 of the
Code, if the Corporation is the surviving corporation in any merger or
consolidation, any option granted under the Plan shall pertain to and apply to
the securities to which a holder of the number of shares of Common Stock subject
to the option would have been entitled. A dissolution or liquidation of the
Corporation shall cause every option outstanding hereunder to vest and be fully
exercisable on the date that the Corporation first announces publicly an intent
or a plan (whichever is earlier announced) of dissolution or liquidation. A
merger, consolidation or similar reorganization in which the Corporation is not
the surviving corporation shall cause every option outstanding hereunder to
terminate, unless specifically provided otherwise by the Board of Directors, but
each holder shall have the right, for a period of not less than the 30 days
immediately prior to a merger or consolidation in which the Corporation is not
the surviving corporation, to exercise such option in whole or in part without
regard to any vesting requirements or installment provisions contained in the
option agreement.
7. CHANGE OF CONTROL ACCELERATION OF VESTING.
In the event of a Change of Control (herein defined) shall occur, all
options outstanding under this Plan shall thereupon become immediately
exercisable in full, notwithstanding any other provision to the contrary herein,
for each option's then remaining term.
For purposes of this Plan, a "Change of Control" of the Corporation shall
be deemed to occur if either: (A) after September 1, 1998, any person or entity,
or any group of persons or entities becomes the "beneficial owner" (as defined
in the Securities Exchange Act of 1934, as amended from time to time), directly
or indirectly, of 35% or more of combined voting power of the Corporation's then
outstanding securities; or (B) the occurrence within any thirty six month period
during the term of this Plan and thereafter while any options granted under this
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Plan have not vested, of a change in the Board of Directors with the result that
the Incumbent Members do not constitute a majority of the Board of Directors.
"Incumbent Members" in respect of any thirty six-month period shall mean the
members of the Board of Directors on the date immediately preceding the
commencement of such thirty six-month period, provided that any person becoming
a Director during such period whose election or nomination for election was
supported by a majority of the Directors who, on the date of such election or
nomination for election, comprised the Incumbent Members shall be considered one
of the Incumbent Members in respect of such thirty six-month period.
8. DELIVERY OF STOCK; LEGENDS; REPRESENTATIONS.
(a) LEGEND ON CERTIFICATES. SUBJECT to Section 7(c), all certificates
representing shares of Common Stock issued upon exercise of options granted
under the Plan shall be endorsed with a legend reading as follows:
THE SHARES OF COMMON STOCK EVIDENCED BY THIS CERTIFICATE HAVE BEEN ISSUED
TO THE REGISTERED OWNER IN RELIANCE UPON WRITTEN REPRESENTATIONS THAT THESE
SHARES HAVE BEEN PURCHASED SOLELY FOR INVESTMENT. THESE SHARES MAY NOT BE
SOLD, TRANSFERRED OR ASSIGNED UNLESS IN THE OPINION OF THE CORPORATION AND
ITS LEGAL COUNSEL SUCH SALE, TRANSFER OR ASSIGNMENT WILL NOT BE IN
VIOLATION OF THE SECURITIES ACT OF 1933, AS AMENDED, AND THE RULES AND
REGULATIONS THEREUNDER.
(b) PRIVATE OFFERING FOR INVESTMENT ONLY. The options are and shall be made
available only to Outside Directors who have knowledge of the Corporation's
financial condition, management and its affairs. The Plan is not intended to
provide additional capital for the Corporation, but to encourage stock ownership
among the Outside Directors. By the act of accepting an option, each Participant
agrees (i) that, if he or his successors exercise his option, he or his
successors will purchase the subject shares solely for investment and not with
any intention at such time to resell or redistribute those shares, and (ii) that
he or his successors will confirm such intention by an appropriate certificate
at the time the option is exercised. However, the neglect or failure to execute
such a certificate shall not limit or negate the foregoing agreement.
(c) REGISTRATION STATEMENT. If a Registration Statement covering the shares
of Common Stock issuable upon exercise of options granted under the Plan is
filed under the Securities Act of 1933, as amended, and is declared effective by
the Securities and Exchange Commission, the provisions of Section 7(a) relating
to endorsement of a restrictive legend and the provisions of Sections 7(b)
relating to investment covenants shall terminate during the period that the
Registration Statement, as periodically amended, remains effective.
9. TERM OF PLAN; EFFECT OF AMENDMENT OR TERMINATION.
(a) TERM. This Plan shall continue in effect for a term of ten (10) years
unless sooner terminated by the Board of Directors
7
<PAGE>
(b) EFFECT OF TERMINATION. Any option, outstanding at the termination of
this Plan, shall continue in full force and effect in accordance with its terms
and shall not be affected by the termination of THE Plan.
(c) AMENDMENTS TO PLAN. The Board of Directors of the Corporation may, at
any time prior to that date, terminate this Plan or make such modifications of
the Plan as it may deem advisable; provided, however, that, if approval by
stockholders of the Corporation of any amendment is required to comply with Rule
16b-3 or other applicable requirement, such amendment shall be subject to
stockholder approval. Notwithstanding the foregoing, the Plan may not be amended
more than once every six (6) months, other than to comply with changes in the
Code, the Employee Retirement Income Security Act of 1974, as amended, or the
rules thereunder; provided that the Board of Directors may not, without consent
of the option holder, take any action which affects or impairs the rights of the
holder of any option outstanding under the Plan, and further provided that,
except as provided in Section 6, the Board of Directors may not, without the
approval of the Corporation's stockholders, take any of the following actions:
(i) increase the aggregate number of shares of Common Stock subject to the Plan;
(ii) change the class of persons eligible to receive options; (iii) modify the
period within which options may be granted; (iv) modify the period within which
options may be exercised, the exercise price or the terms upon which options may
be exercised; or (v) increase the material benefits accruing to participants
under the Plan to the extent that stockholder approval is required by applicable
law or regulation.
10. WITHHOLDING. The Corporation, at the time any distribution is made under
this Plan, whether in cash or in shares of stock, may withhold from such payment
any amount necessary to satisfy any federal and state income tax withholding
requirements with respect to such distribution. Such withholding may be in cash
or in shares of stock.
11. EFFECTIVENESS OF THE PLAN. This Plan will be effective upon adoption by the
Board of Directors of the Corporation, subject, however, to its approval by the
stockholders of the Corporation given within 12 months after the date the Plan
is adopted by the Board of Directors, at a regular meeting of the stockholders
or at a special meeting of the stockholders duly called and held for such
purpose, or by written consent of the stockholders. Grants of options made prior
to stockholder approval shall be subject to the obtaining of such approval and
if such approval is not obtained as aforesaid, such grants shall not be
effective for any purpose.
12. GOVERNING LAW. THIS PLAN AND ANY AND ALL STOCK OPTION AGREEMENTS EXECUTED IN
CONNECTION WITH THIS PLAN SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF DELAWARE, WITHOUT REGARD TO CONFLICT OF LAWS
PRINCIPLES.
8
EXHIBIT 5
[BRYAN CAVE LLP LETTERHEAD]
July 21, 1999
Pilgrim Capital Corporation
40 North Central, Suite 1200
Phoenix, Arizona 85004
Re: Pilgrim Capital Corporation: Registration Statement on Form S-8
Ladies and Gentlemen:
We have acted as counsel to Pilgrim Capital Corporation, a Delaware
corporation f/k/a/ Pilgrim America Capital Corporation (the "Company"), in
connection with the registration under the Securities Act of 1933, as amended
(the "Securities Act"), of 250,000 shares (the "Shares") of the Company's common
stock, $.01 par value (the "Common Stock"), which may be issued from time to
time upon the exercise of stock options granted pursuant to the Company's 1998
Directors' Stock Option Plan (the "Plan"). The Shares are being registered
pursuant to a registration statement on Form S-8 (the "Registration Statement")
filed with the Securities and Exchange Commission (the "Commission").
In arriving at the opinion expressed below, we have examined the
Registration Statement and such other documents, including the Certificate of
Incorporation and Bylaws of the Company, each as amended to date, as we have
deemed necessary to enable us to express the opinion set forth herein. In
addition, we have examined and relied on the originals or copies, certified or
otherwise identified to our satisfaction as conforming to the originals thereof,
of such other documents and corporate records of the Company and such other
instruments and certificates of public officials and other persons as we have
deemed appropriate. We have assumed the authenticity of all documents submitted
to us as originals, the conformity to the original documents of all documents
submitted to us as copies, and the genuineness of all signatures on all
documents reviewed by us.
Based on the foregoing and subject to the limitations and qualifications
set forth herein, we are of the opinion that:
The Shares of Common Stock to be issued by the Company pursuant to the
Registration Statement have been duly authorized, and upon issuance and delivery
in accordance with the terms of the Plan will be duly and validly issued and
fully paid and nonassessable.
This opinion is limited to the Delaware General Corporation Law and the
present federal laws of the United States and to the facts as they presently
exist. We hereby consent to references to our firm under the caption "Legal
Matters" in any prospectus included by incorporation by reference into the
Registration Statement. In giving this consent, we do not hereby admit that we
come within the category of persons whose consent is required under Section 7 of
the Securities Act, or the rules and regulations of the Commission thereunder.
Very truly yours,
BRYAN CAVE LLP
Consent Of Independent Auditors
The Board of Directors
Pilgrim Capital Corporation:
We consent to incorporation by reference in the Registration Statement on Form
S-8 of Pilgrim Capital Corporation of our report dated October 7, 1998, except
as to notes 1(b), 12 and 15 to the consolidated financial statements, which are
as of November 16, 1998, relating to the consolidated balance sheets of Pilgrim
America Capital Corporation (subsequently renamed Pilgrim Capital Corporation)
as of September 30, 1998 and 1997, and the related consolidated statements of
earnings, stockholders' equity and cash flows for each of the years in the
three-year period ended December 31, 1998, and our report dated December 14,
1998 on all related schedules, which reports appear in the September 30, 1998
annual report on Form 10-K/A of Pilgrim America Capital Corporation.
/s/ KPMG LLP
Los Angeles, California
July 21, 1999
