Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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U. S. T R U S T C O R P O R A T I O N
(Exact name of registrant as specified in its charter)
New York 13-3818952
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
114 West 47th Street
New York, New York 10036-1532
(Address of Principal Executive Offices) (Zip Code)
U.S. TRUST CORPORATION
EMPLOYEE STOCK PURCHASE PLAN
(Full title of the plan)
CAROL A. STRICKLAND
Secretary
U.S. Trust Corporation
114 West 47th Street
New York, New York 10036-1532
(Name and address of agent for service)
(212) 852-1000
(Telephone number, including area code, of agent for service)
Copy to:
Vincent Monte-Sano
Carter, Ledyard & Milburn
2 Wall Street
New York, New York 10005-2072
<PAGE>
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
==============================================================================================
Proposed Proposed
maximum maximum
Title of secu- offering aggregate Amount of
rities to be Amount to be price per offering registra-
registered registered share price tion fee
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Shares,
par value
$1 per share 350,000 shares $67.875(1) $23,756,250 $6,604.24
Rights to Purchase
Series A
Participating
Cumulative
Preferred Shares 350,000 rights -- (2) -- (2) None
==============================================================================================
</TABLE>
(1) Calculated pursuant to Rule 457(h) and (c) upon the basis of the average of
the high and low prices ($68 1/2 and $67 1/4) of a Common Share as quoted
on the Nasdaq Stock Market on December 7, 1998.
(2) Included in the offering price of the Common Shares being registered
hereby. Until the Distribution Date, as defined in the Rights Agreement
providing for the Rights to Purchase the Registrant's Series A
Participating Cumulative Preferred Shares (the "Rights"), the Rights will
be transferable only with the Common Shares and will be evidenced by the
certificates evidencing the Common Shares.
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This Registration Statement shall become effective immediately upon filing
as provided in Rule 462 under the Securities Act of 1933.
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<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The Registrant hereby incorporates by reference the following documents
into this Registration Statement:
(a) The Registrant's Annual Report on Form 10-K for the fiscal year ended
December 31, 1997.
(b) The Registrant's Quarterly Reports on Form 10-Q for the quarterly
periods ended March 31, 1998, June 30, 1998. and September 30, 1998.
(c) The description of the Common Shares contained in the Registrant's
Registration Statement on Form 10 dated February 9, 1995 (Commission File No.
0-20469), for the registration of the Common Shares pursuant to Section 12(g) of
the Securities Exchange Act of 1934 (the "Exchange Act"), and any amendments or
reports hereafter filed for the purpose of updating such description.
(d) The description of the Rights contained in the Registrant's
Registration Statement on Form 8-A dated September 5, 1995, for the registration
of the Rights pursuant to Section 12(g) of the Exchange Act.
In addition, all documents subsequently filed by the Registrant with the
Securities and Exchange Commission pursuant to Sections 13(a), 13(c), 14 and
15(d) of the Exchange Act, prior to the filing of a post-effective amendment
which indicates that all securities offered hereby 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.
Item 4. Description of Securities.
Not required.
Item 5. Interests of Named Experts and Counsel.
Not applicable.
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<PAGE>
Item 6. Indemnification of Directors and Officers.
Article V of the By-Laws of the Registrant provides as follows:
"The Corporation shall indemnify any person made or threatened to be
made a party to any action or proceeding, whether civil or criminal, and
whether or not by or in the right of the Corporation or of any other
corporation of any type or kind, domestic or foreign, or any partnership,
joint venture, trust, employee benefit plan or other enterprise, by reason
of the fact that such person, his testator or intestate, is or was a
director or officer of the Corporation or served any other corporation of
any type or kind, domestic or foreign, or any partnership, joint venture,
trust, employee benefit plan or other enterprise in any capacity at the
request of the Corporation, against judgments, fines, amounts paid in
settlement and reasonable expenses, including attorneys' fees, actually and
necessarily incurred as a result of such action or proceeding, or any
appeal therein; provided that (a) no indemnification may be made to or on
behalf of any person if a judgment or other final adjudication adverse to
such person establishes that his acts were committed in bad faith or were
the result of active and deliberate dishonesty and were material to the
cause of action so adjudicated, or that he personally gained in fact a
financial profit or other advantage to which he was not legally entitled,
(b) no indemnification shall be required in connection with the settlement
of any pending or threatened action or proceeding, or any other disposition
thereof except a final adjudication, unless the Corporation has consented
to such settlement or other disposition and (c) the Corporation shall not
be obligated to indemnify any person by reason of the adoption of this
Article V if and to the extent such person is entitled to be indemnified
under a policy of insurance as such policy would apply in the absence of
the adoption of this Article V.
"Reasonable expenses, including attorneys' fees, incurred in defending
any action or proceeding, whether threatened or pending, shall be paid or
reimbursed by the Corporation in advance of the final disposition thereof
upon receipt of an undertaking by or on behalf of the person seeking
indemnification to repay such amount to the Corporation to the extent, if
any, such person is ultimately found not to be entitled to indemnification.
"Notwithstanding any other provision hereof, no repeal of this Article
V, or amendment hereof or any other corporate action or agreement which
prohibits or otherwise limits the right of any person to indemnification or
advancement or reimbursement of expenses hereunder, shall be effective as
to any person until the 60th day following notice to such person of such
action, and no such repeal or amendment or other corporate action or
agreement shall deprive any person of any right hereunder arising out of
any alleged or actual act or omission occurring prior to such 60th day.
"The Corporation is hereby authorized, but shall not be required, to
enter into agreements with any of its directors, officers or employees
providing for rights to indemnification and advancement and reimbursement
of reasonable expenses, including
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<PAGE>
attorneys' fees, to the extent permitted by law, but the Corporation's
failure to do so shall not in any manner affect or limit the rights
provided for by this Article V or otherwise.
"For purposes of this Article V, the term 'Corporation' shall include
any legal successor to the Corporation, including any corporation which
acquires all or substantially all of the assets of the Corporation in one
or more transactions. For purposes of this Article V, the Corporation shall
be deemed to have requested a person to serve an employee benefit plan
where the performance by such person of his duties to the Corporation or
any subsidiary thereof also imposes duties on, or otherwise involves
services by, such person to the plan or participants or beneficiaries of
the plan, and excise taxes assessed on a person with respect to an employee
benefit plan pursuant to applicable law shall be considered fines.
"The rights granted pursuant to or provided by the foregoing
provisions of this Article V shall be in addition to and shall not be
exclusive of any other rights to indemnification and expenses to which any
person may otherwise be entitled under any statute, rule, regulation,
certificate of incorporation, bylaw, agreement or otherwise."
Section 721 of the New York Business Corporation Law (the "B.C.L.")
provides that no indemnification may be made to or on behalf of any director or
officer of the Registrant under Article V of its By-Laws if "a judgment or other
final adjudication adverse to the director or officer establishes that his acts
were committed in bad faith or were the result of active and deliberate
dishonesty and were material to the cause of action so adjudicated, or that he
personally gained in fact a financial profit or other advantage to which he was
not legally entitled." Article V of the Registrant's By-Laws includes the
foregoing statutory language.
The rights granted under Article V of the By-Laws are in addition to, and
are not exclusive of, any other rights to indemnification and expenses to which
any director or officer may otherwise be entitled. Under the B.C.L., a New York
corporation may indemnify any director or officer who is made or threatened to
be made a party to an action by or in the right of such corporation against
"amounts paid in settlement and reasonable expenses, including attorneys' fees,"
actually and necessarily incurred by him in connection with the defense or
settlement of such action, or in connection with an appeal therein, if such
director or officer acted, in good faith, for a purpose which he reasonably
believed to be in the best interests of the corporation, except that no
indemnification shall be made in respect of (1) a threatened action, or a
pending action which is settled or otherwise disposed of, or (2) any claim,
issue or matter as to which such director or officer shall have been adjudged
liable to the corporation, unless and only to the extent that a court determines
that the director or officer is fairly and reasonably entitled to indemnity
(B.C.L. Section 722(c)). A corporation may also indemnify directors and officers
who are parties to other actions or proceedings (including actions or
proceedings by or in the right of any other corporation or other enterprise
which the director or officer served at the request of the corporation) against
"judgments, fines, amounts paid in settlement and reasonable expenses, including
attorneys' fees," actually or necessarily incurred as a result of such actions
or proceedings, or any appeal therein, provided the director or officer acted,
in good faith, for a purpose which he reasonably believed to
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<PAGE>
be in the best interests of the corporation (or in the case of service to
another corporation or other enterprise at the request of such corporation, not
opposed to the best interests of such corporation) and, in criminal cases, that
he also had no reasonable cause to believe that his conduct was unlawful (B.C.L.
Section 722(a)). Any indemnification under Section 722 may be made only if
authorized in the specific case by disinterested directors, or by the board of
directors upon the opinion in writing of independent legal counsel that
indemnification is proper, or by the shareholders (B.C.L. Section 723(b)), but
even without such authorization, a court may order indemnification in certain
circumstances (B.C.L. Section 724). Further, any director or officer who is
"successful, on the merits or otherwise," in the defense of an action or
proceeding is entitled to indemnification as a matter of right (B.C.L. Section
723(a)).
A New York corporation may generally purchase insurance, consistent with
the limitations of New York insurance law and regulatory supervision, to
indemnify the corporation for any obligation which it incurs as a result of the
indemnification of directors and officers under the provisions of the B.C.L., so
long as no final adjudication has established that the directors' or officers'
acts of active and deliberate dishonesty were material to the cause of action so
adjudicated or that the directors or officers personally gained in fact a
financial profit or other advantage (B.C.L. Section 726). The Registrant has
purchased insurance covering expenditures by it and its subsidiaries which might
arise in connection with the lawful indemnification of directors and officers
for certain liabilities and expenses and insurance insuring directors and
officers of the Registrant and its subsidiaries against certain other
liabilities and expenses.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
See the Exhibit Index on page 12 of this Registration Statement.
Item 9. Undertakings.
(1) The undersigned Registrant hereby undertakes:
(a) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) to include any prospectus required by section 10(a)(3) of the
Securities Act of 1933, unless the information required to be included
in such post-effective amendment is contained in periodic reports
filed by the Registrant or the Plan pursuant to Section 13 or 15(d) of
the Exchange Act that is incorporated herein by reference;
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<PAGE>
(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 hereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in this Registration Statement, unless the information required to be
included in such post-effective amendment is contained in periodic
reports filed by the Registrant pursuant to Section 13 or 15(d) of the
Exchange Act that is incorporated herein by reference;
(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.
(b) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
herein, and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof.
(c) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(d) 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 that is
incorporated by reference in this Registration Statement shall be deemed to
be a new Registration Statement relating to the securities offered herein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(2) 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 provisions described in Item 6 above, 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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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets 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 New York, State of New York, on December 9, 1998.
U.S. TRUST CORPORATION
By: /s/Richard E. Brinkmann
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Richard E. Brinkmann,
Comptroller and Chief Planning Officer
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes H. Marshall
Schwarz, Jeffrey S. Maurer and Richard E. Brinkmann, and each of them singly,
his true and lawful attorneys-in-fact with full power to execute in the name of
such person, in the capacities stated below, and to file with the Securities and
Exchange Commission, such one or more amendments to this Registration Statement
as the Registrant deems appropriate, and generally to do all such things in the
name and on behalf of such person, in the capacities stated below, to enable the
Registrant to comply with the provisions of the Securities Act of 1933, as
amended, and all requirements of the Securities and Exchange Commission
thereunder, hereby ratifying and confirming the signature of such person as may
be signed by said attorneys-in-fact, or any one of them, to any and all
amendments to this Registration Statement.
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<PAGE>
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed on December 9, 1998, by the following
persons in the capacities indicated:
Signature Title
- --------- -----
/s/H. Marshall Schwarz
- ---------------------- Chairman of the Board and Chief
H. Marshall Schwarz Executive Officer
(Principal Executive Officer)
/s/John L. Kirby
- ---------------- Treasurer and Chief Financial Officer
John L. Kirby (Principal Financial Officer)
/s/ Richard E. Brinkmann
- ------------------------ Comptroller and
Richard E. Brinkmann Chief Planning Officer
(Principal Accounting Officer)
/s/Eleanor Baum
- --------------- Director
Eleanor Baum
/s/Samuel C. Butler
- ------------------- Director
Samuel C. Butler
/s/Peter O. Crisp
- ----------------- Director
Peter O. Crisp
/s/Philippe de Montebello
- ------------------------- Director
Philippe de Montebello
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<PAGE>
Signature Title
- --------- -----
/s/Robert E. Denham
- ------------------- Director
Robert E. Denham
/s/Antonia M. Grumbach
- ---------------------- Director
Antonia M. Grumbach
/s/Frederic C. Hamilton
- ----------------------- Director
Frederic C. Hamilton
/s/Peter L. Malkin
- ------------------ Director
Peter L. Malkin
/s/Jeffrey S. Maurer
- -------------------- Director
Jeffrey S. Maurer
/s/David A. Olsen
- ----------------- Director
David A. Olsen
/s/Maribeth S. Rahe
- ------------------- Director
Maribeth S. Rahe
/s/Philip L. Smith
- ------------------ Director
Philip L. Smith
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Signature Title
- --------- -----
/s/John Hoyt Stookey
- -------------------- Director
John Hoyt Stookey
/s/Frederick B. Taylor
- ---------------------- Director
Frederick B. Taylor
/s/Richard F. Tucker
- -------------------- Director
Richard F. Tucker
/s/Robert N. Wilson
- ------------------- Director
Robert N. Wilson
/s/Ruth A. Wooden
- ----------------- Director
Ruth A. Wooden
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EXHIBIT INDEX
Exhibit No.
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(4)(a)* - Rights Agreement dated as of September 1, 1995, between the Registrant
and First Chicago Trust Company of New York, as Rights Agent, filed on
September 5, 1995, as Exhibit 1 to the Registrant's Registration
Statement on Form 8-A (the "Form 8-A") for the registration under
Section 12(g) of the Exchange Act of Rights to Purchase the
Registrant's Series A Participating Cumulative Preferred Shares.
(4)(b)* - Form of Right Certificate (attached as Exhibit A to the Rights
Agreement listed as Exhibit 1 hereto).
(4)(c)* - Description of the preferences, limitations and relative rights of the
Registrant's Series A Participating Cumulative Preferred Shares, as
set forth in Article FOURTH, Section 6 of the Registrant's Restated
Certificate of Incorporation, filed as Exhibit 3 to the Form 8-A.
(5) - Opinion of Carter, Ledyard & Milburn.
(23)(a) - Consent of PricewaterhouseCoopers LLP
(23)(b) - Consent of Carter, Ledyard & Milburn (included in Exhibit 5).
(24) - Powers of Attorney (included on page 8 of this Registration Statement).
(99) - U.S. Trust Corporation Employee Stock Purchase Plan.
- --------
*Incorporated herein by reference.
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E X H I B I T 5
<PAGE>
CARTER, LEDYARD & MILBURN
Counsellors at Law
2 Wall Street
New York, New York 10005
------------------
(212) 732-3200
Fax (212) 732-3232
December 9, 1998
Securities and Exchange Commission
Judiciary Plaza
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: U.S. Trust Corporation
Ladies and Gentlemen:
We have acted as counsel for U.S. Trust Corporation, a New York corporation
(the "Corporation"), in connection with the adoption of the U.S. Trust
Corporation Employee Stock Purchase Plan (the "Plan"). The Plan provides for the
offer and sale of up to 350,000 shares (the "Shares") of the Corporation's
Common Shares, par value $1 per share (the "Common Shares"), and up to 350,000
Rights (the "Rights") to Purchase Series A Participating Cumulative Preferred
Shares of the Corporation. Section 15 of the Plan provides that the Shares may
be purchased in the open market (on an exchange or in negotiated transactions),
may be previously acquired treasury shares, authorized and unissued shares, or
may be any combination of shares purchased in the open market, previously
acquired treasury shares or authorized and unissued shares. One Right has been
or will be issued in connection with the issuance of each one of the Shares and,
prior to the Distribution Date (as defined in the Rights Agreement providing for
the Rights), will be transferable with and only with, and will be evidenced by
the certificate evidencing, such Share.
We have examined the originals, or copies certified or otherwise identified
to our satisfaction, of such corporate records and such other documents as we
have deemed relevant as a basis for our opinion hereinafter expressed.
<PAGE>
Based on the foregoing, we are of the opinion that the authorized and
unissued Shares and Rights which may be issued by the Corporation under the
Plan, when issued and paid for in accordance with the terms of the Plan, will be
legally issued, and such Shares will be fully paid and non-assessable.
We hereby consent to the filing of this opinion as an exhibit to the
Corporation's Form S-8 Registration Statement relating to the registration of
the Shares and Rights under the Securities Act of 1933.
Very truly yours,
/s/CARTER, LEDYARD & MILBURN
VMS:lrh
E X H I B I T 23(a)
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference, in this Registration
Statement on Form S-8 of U.S. Trust Corporation, pertaining to the U.S. Trust
Corporation Employee Stock Purchase Plan, of our report dated January 21, 1998,
on our audits of the consolidated financial statements of U.S. Trust Corporation
and subsidiaries as of December 31, 1997 and 1996, and for the years ended
December 31, 1997, 1996 and 1995, which report is included in the Annual Report
on Form 10-K of U.S. Trust Corporation for the fiscal year ended December 31,
1997.
/s/PricewaterhouseCoopers LLP
New York, New York
December 9, 1998
E X H I B I T 99
<PAGE>
U.S. TRUST CORPORATION
EMPLOYEE STOCK PURCHASE PLAN
1. Purpose.
The purpose of the United States Trust Corporation Employee Stock Purchase Plan
(the "Plan") is to offer employees of U.S. Trust Company of New York (the
"Company") and Affiliated Companies an incentive to invest in common shares, par
value $1 per share (each, a "Share") of U.S. Trust Corporation (the
"Corporation") by permitting eligible employees to purchase Shares at
below-market prices, and increase employee ownership of the Corporation's
Shares. The Plan is intended to qualify as an "employee stock purchase plan"
within the meaning of Section 423 of the Internal Revenue Code of 1986, as
amended (the "Code").
2. Definitions. Capitalized terms used in this Plan shall have the following
meanings unless defined elsewhere herein.
"Affiliated Company" means the Company and any corporation of which not less
than 50% of the voting shares are held by the Corporation or a subsidiary within
the meaning of Section 424 of the Code, whether or not such corporation now
exists or is hereafter organized or acquired by the Corporation or a subsidiary.
"Board of Directors" means the Board of Directors of U.S. Trust Corporation.
"Change in Control" means that any of the following events has occurred:
a. 20% or more of the Shares has been acquired by any person (as defined
by Section 3(a)(9) of the Securities Exchange Act of 1934) other than
directly from the Corporation;
b. there has been a merger or equivalent combination after which 49% or
more of the voting shares of the surviving corporation is held by
persons other than former shareholders of the Corporation; or
c. 20% or more of the directors elected by shareholders to the Board of
Directors are persons who were not nominated by the Board of Directors
or the Executive Committee of the Board of Directors in the most
recent proxy statement of the Corporation;
provided, however, that notwithstanding anything in the Plan to the contrary, no
Change in Control shall be deemed to have occurred, and no rights arising upon a
Change in Control as provided in Section 18(c) shall exist, to the extent that
the Board of Directors so directs by resolution adopted prior to the Change in
Control, or not later than 45 days after the Change in Control if the percentage
of Shares acquired or directors elected under clause (a) or (c) of the foregoing
definition of Change in Control shall be at least 20% but less than 25%. Any
resolution of the board of Directors adopted in accordance with the provisions
of this definition directing that a Change in Control shall be deemed not to
have occurred for purposes of this Plan
1
<PAGE>
and that Section 18(c) or either of such Sections shall not become effective,
may be rescinded or countermanded at any time with or without retroactive
effect.
"Committee" means the group of individuals administering the Plan, which shall
be the Administrative Committee or any other committee designated or established
by the Compensation and Benefits Committee of the Board of Directors for the
purpose of administering the Plan.
"Compensation" means base salary and shift differential. Compensation shall not
include overtime, incentive compensation, incentive payments or bonuses, expense
reimbursements, long-term disability and workers' compensation payments,
lump-sum payments due to death, termination of employment or layoff, non-taxable
fringe benefits, and payments or discounts under any stock purchase or option
plan.
"Exercise Date" means the last Trading Day of each Offering Period.
"Fair Market Value" means the value of a Share on a given date, determined based
on the closing price for a Share, as reported on the NASDAQ National Market
System or any stock exchange upon which the Shares may be listed ("Exchange"),
or if the Exchange is not open for trading on such date, on the nearest
preceding date on which the Exchange is open for trading.
"Participant" means any individual who is eligible to participate in the Plan
and enrolls in the Plan in the manner set forth in Section 4 hereof.
"Offering Period" means each calendar year during which an option to purchase
Shares is granted and may be exercised. The initial Offering Period under this
Plan shall be the calendar year commencing January 1, 1999.
"Purchase Price" means an amount equal to 85% of the lower of the Fair Market
Value of a Share on the first Trading Day of an Offering Period or on the
Exercise Date, but in no event less than the par value of a Share.
"Trading Day" means any day on which the Exchange is open for trading.
3. Offering Periods. The Plan shall be implemented by consecutive Offering
Periods, with the first Offering Period commencing on January 1, 1999, and each
subsequent Offering Period commencing on January 1 of each calendar year
thereafter, continuing until the Plan is terminated in accordance with Sections
19 or 22 hereof.
4. Eligibility; Participation.
a. Eligible Employees. Any individual who was employed by the Company or an
Affiliated Company on or prior to the August 31 preceding the beginning of
an Offering Period, and whose customary employment with the Company or such
Affiliated Company is at least twenty (20) hours per week shall be eligible
to participate in the Plan. For purposes of the Plan, the employment
relationship shall be treated as continuing intact while the individual is
on medical leave, maternity leave or any other leave of absence approved by
the Company or any Affiliated Company.
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<PAGE>
b. Enrollment. Any Eligible Employee who is eligible to participate in the
Plan may do so by enrolling in the Plan and authorizing payroll deductions
in the manner prescribed by the Committee not later than December 15 prior
to the commencement of any Offering Period. An Eligible Employee who has
elected to enroll in the Plan for an Offering Period and has not suspended
payroll deductions shall automatically continue to participate in the Plan
in each successive Offering Period with the same terms applicable unless
the Eligible Employee makes an election described in Section 5(c).
c. Limitations on Participation. Notwithstanding any provisions of the Plan,
no Participant shall be granted an option under the Plan if immediately
after the grant, (i) such Participant (or any other person whose stock
would be attributed to such Participant pursuant to Section 424(d) of the
Code) would own capital stock of the Corporation and/or hold outstanding
options to purchase any class of capital stock possessing five percent (5%)
or more of the total combined voting power or value of all classes of the
capital stock of the Corporation or any Affiliated Company thereof, or (ii)
the Participant's rights to purchase capital stock under all Section 423
employee stock purchase plans of the Corporation and its affiliates would
accrue at a rate which exceeds Twenty-Five Thousand Dollars ($25,000) worth
of capital stock (determined at the Fair Market Value of such capital stock
at the time such option is granted) for each calendar year in which such
option is outstanding at any time.
5. Payroll Deductions.
a. Amount. At the time a Participant enrolls in the Plan, the Participant
shall elect to have payroll deductions made on each pay day during each
Offering Period in an amount equal to a percentage (not to exceed ten
percent (10%)) of the Compensation which the Participant received on each
such pay day. All payroll deductions shall be withheld in whole percentages
only. All payroll deductions shall be credited to a Trust maintained by the
Company for Participants under the Plan. A Participant may not make any
additional payments into such account.
b. Commencement. Payroll deductions shall commence in the first practicable
payroll period of the Offering Period following the Participant's
enrollment in the Plan and shall end in the last practicable payroll period
of the Offering Period during which the Participant is enrolled in the
Plan, unless suspended by the Participant pursuant to Subsection (c)
hereinbelow or if the Participant ceases to participate in the Plan for any
of the reasons stated in Sections 11 or 12 hereof.
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<PAGE>
c. Adjustments. A Participant may decrease the rate of payroll deductions or
suspend all future payroll deductions during an Offering Period by
notifying the Committee in the manner prescribed by the Committee, and such
change will be effective with the next practicable payroll period. In the
event a Participant suspends all payroll deductions, the Participant shall
not be entitled to renew payroll deductions until a subsequent Offering
Period. The Committee may, in its discretion, limit the number of payroll
deduction rate changes and prescribe the effective dates thereof during any
Offering Period.
Notwithstanding the foregoing, to the extent necessary to comply with
Section 423(b)(8) of the Code and Section 4(c) hereof, the Company may
decrease a Participant's payroll deductions or suspend same at any time
during an Offering Period.
6. Grant of Option. On the first Trading Day of each Offering Period, each
Participant shall be granted an option to purchase, exercisable on each Exercise
Date, that number of Shares determined by dividing the aggregate amount of
payroll deductions and accrued interest accumulated during the Offering Period
and retained for the Participant as of such Exercise Date, by the Purchase
Price; provided however, that such purchase shall be subject to the limitations
set forth in Sections 4(c) and 15 hereof. The option shall expire on the last
Trading Day of the Offering Period.
7. Exercise of Option. On each Exercise Date, each Participant's option to
purchase Shares under the Plan shall be exercised automatically, and the maximum
number of whole and fractional Shares subject to such option shall be purchased
for the Participant at the Purchase Price, with the aggregate amount of payroll
deductions and accrued interest accumulated for the Participant, unless the
Participant has terminated employment as provided for in Sections 11 or 12
hereof.
8. Participant Accounts.
a. Statement. Individual recordkeeping accounts shall be maintained for each
Participant. Shares purchased for the account of each Participant shall be
credited thereto as of the close of business on the Exercise Date. As soon as
practicable following each Offering Period, a statement of account shall be sent
to each Participant, setting forth the amount of payroll deductions, interest
accrued during the Offering Period, the Purchase Price, and the number of Shares
purchased.
b. Participant Shares. Shares purchased for the account of each Participant
shall be held in a trust maintained for the benefit of Participants by the
Company.
c. Voting Rights; Dividends. A Participant shall have all ownership rights with
respect to the Shares credited to the Participant's account, including the right
to direct the vote of such Shares. Any dividends or distributions which may be
declared thereon by the Board of Directors will be reinvested in additional
Shares for the Participant. Such additional shares shall be purchased on the
open market as soon as practicable after the dividend payment is received.
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9. Taxes. At the time an option is exercised, in whole or in part, or at the
time all of a portion of the Shares purchased under the Plan are disposed of,
the Participant must make adequate provision for federal, state, or other tax
withholding obligations, if any, which arise upon the exercise of the option or
the disposition of the Shares. At any time, the Affiliated Company may, but
shall not be obligated to, withhold from the Participant's compensation the
amount necessary for the Affiliated Company to meet applicable withholding
obligations, including any withholding required to make available to the
Affiliated Company any tax deductions or benefits attributable to any sale or
early disposition of Shares by the Participant.
10. Purchase for Investment Purpose. The Plan is intended to provide Shares for
investment and not for resale. A Participant who is an employee of the Company
or an Affiliated Company, must hold Shares purchased under the Plan for five
years from the Exercise Date. A Participant may request that a certificate in
the Participant's name be issued for all or a portion of Shares credited to the
Participant's account for at least five year. A Participant may sell such Shares
at any time thereafter, subject to compliance with any applicable federal or
state securities laws. The Committee shall be entitled to presume that a
Participant has disposed of any Shares for which the Participant has requested a
certificate. All certificates for Shares delivered under the Plan shall be
subject to such stock transfer orders and other restrictions as the Corporation
may deem advisable under all applicable laws, rules, and regulations, and the
Corporation may cause a legend or legends to be put on any such certificates to
make appropriate references to such restrictions.
11. Termination of Plan Participation.
a. Termination of Participation. A Participant may terminate participation in
the Plan by notifying the Committee thereof in the manner prescribed by the
Committee. Following the effective date of such notice, the Participant's
payroll deductions shall cease with the next practicable payroll period.
All payroll deductions, and interest accrued thereon credited for the
Participant during the Offering Period, but not yet used to purchase
Shares, shall be applied to such purchase on the next Exercise date.
b. Renewal of Participation: If a Participant terminates participation in the
Plan, the Participant must re-enroll in the Plan to renew participation.
Termination of participation in the Plan shall not have any effect upon the
Participant's eligibility to participate in any similar plan which may
hereafter be adopted by the Company.
c. Termination of Employment. As soon as practicable after the end of the
quarter following a Participant's termination of employment for any reason,
including retirement, a Participant shall receive (i) certificates for all
of the full Shares and cash in the amount of the Fair Market Value of the
partial Shares credited to the Participant's account and (ii) shall receive
a distribution of all payroll deductions and interest accrued thereon
credited to the Participant's account but not yet used to purchase Shares.
Each Participant agrees, by enrolling in the Plan, to notify the Committee
of any sale or other disposition of Shares held by the Participant which
occurs within one (1) year from the Exercise Date, indicating the number of
such Shares disposed of.
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12. Termination of Eligibility. If a Participant ceases to be eligible to
participate in the Plan for any reason, the Participant's payroll deductions
shall cease as of the effective date of such termination of eligibility. All
payroll deductions, and interest accrued during the Offering Period, if any,
credited for the Participant but not yet used to purchase Shares, shall be
distributed to the Participant as soon as practicable.
13. Transfer. A Participant may not assign, transfer, pledge or otherwise
dispose of (other than by will, the laws of descent and distribution or as
provided in Section 14 hereof) any payroll deductions credited to the account of
the Participant or any right to exercise an option or receive Shares under the
Plan. Any such assignment, transfer, pledge or other disposition shall be
without effect. Each option is exercisable during the lifetime of the
Participant only by such Participant.
14. Participant Beneficiaries.
a. Designation. A Participant may file with the Committee, a written
designation of a beneficiary who is entitled to receive any Shares,
accumulated payroll deductions, interest, or other amounts, if any, held
for the Participant under the Plan, in the event of the Participant's
death. A Participant may change the designation of a beneficiary at any
time by written notice, unless the current designated beneficiary is a
spouse, in which case, spousal consent shall be required.
b. Failure of Designation. If a Participant dies and there is no beneficiary
validly designated under the Plan who is living at the time of the
Participant's death, the first of the following automatic beneficiaries
surviving the Participant shall be entitled to receive any Shares,
accumulated payroll deductions, interest, dividends and other amounts, if
any, held for the Participant: (i) Participant's surviving spouse, or (ii)
the representative of the Participant's estate.
15. Shares. The maximum number of Shares which may be purchased under the Plan
is 350,000, subject to adjustment upon changes in the capitalization of the
Company as set forth in Section 18 hereof. Shares purchased for Participants'
accounts may be purchased in the open market (on an exchange or in negotiated
transactions), may be previously acquired treasury Shares, authorized and
unissued Shares, or any combination of Shares purchased in the open market,
previously acquired treasury Shares or authorized and unissued Shares. If, on a
given Exercise Date, the number of Shares with respect to which options are to
be exercised exceeds the number of Shares then available under the Plan, the
Committee shall make a pro rata allocation of the Shares remaining available for
purchase in as uniform a manner as shall be practicable and as it shall
determine to be equitable.
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16. Administration. The Plan shall be administered by the Committee, which shall
have full and exclusive discretionary authority to construe, interpret and apply
the terms of the Plan, to determine eligibility and to adjudicate all disputed
claims filed under the Plan. The Committee may change the frequency of payroll
deductions, limit the frequency or number of changes in the amount of payroll
deductions to be made during an Offering Period, permit payroll withholding in
excess of the amount designated by a Participant in order to adjust for delays
or mistakes in the Company's processing of properly completed withholding
elections, establish reasonable waiting and adjustment periods and/or accounting
and crediting procedures to ensure that amounts applied toward the purchase of
Shares for each Participant properly correspond with amounts withheld from the
Participant's Compensation, and establish such other limitations or procedures
as the Committee determines in its sole discretion are advisable and consistent
with the Plan.
The Plan is intended to qualify as an "employee stock purchase plan" within
the meaning of Section 423 of the Code. Each Participant shall have the same
rights and privileges as required by Section 423 of the Code. Accordingly, the
provisions of the Plan shall be construed so as to extend and limit
participation in a manner consistent with the requirements of that section of
the Code. Every finding, decision and determination made by the Committee shall,
to the fullest extent permitted by law, be final and binding upon all parties.
17. Trust. A Trust shall be established which shall consist of all payroll
deductions and interest accrued thereon credited to Participant accounts but not
yet used to purchase Shares and all Shares purchased pursuant to the Plan, less
distributions made therefrom. The Trust shall be held in accordance with the
Plan and the Trust Agreement entered into between the Company and the Trustees.
The Trust Agreement may from time to time be amended in the manner therein
provided.
Payroll deductions and interest accrued thereon credited to Participant
accounts but not yet used to purchase Shares shall be invested by the Trustee in
the Excelsior Money Fund.
As of each valuation date, the Trustee shall determine the fair market
value of the assets comprising the Trust. A statement of the costs and fair
market value of the assets comprising the Trust shall be submitted to the
Committee.
After the interest of a Participant or Beneficiary is distributed, neither
the Participant nor any person claiming under or through him or her shall
participate or have any interest in the Trust.
18. Adjustments Upon Changes in Capitalization, Dissolution, Liquidation, Change
in Control.
a. Changes in Capitalization. Subject to any required action by the
shareholders of the Corporation, the number of Shares covered by each
option under the Plan which has not yet been exercised and the number of
Shares which have been authorized for issuance under the Plan but not yet
placed under option, the maximum number of Shares each Participant may
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purchase per Offering Period (pursuant to Section 6) as well as the
Purchase Price, shall be proportionately adjusted for any increase of
decrease in the number of issued Shares resulting form a stock split,
reverse stock split, stock dividend, combination or reclassification of the
Shares, or any other increase or decrease in the number of Shares effected
without receipt of consideration by the Corporation. Such adjustment shall
be made by the Committee, whose determination in that respect shall be
final, binding and conclusive.
b. Dissolution or Liquidation. In the event of the proposed dissolution or
liquidation of the Corporation, any Offering Period then in progress shall
be shortened by setting a new Exercise Date (the "New Exercise Date"), and
any Offering Period then in progress shall end on the New Exercise Date.
The New Exercise Date shall be established by the Committee, and shall be
before the date of the Corporation's proposed dissolution or liquidation.
The Committee shall notify each Participant in writing, at least ten (10)
business days prior to the New Exercise Date, that the Exercise Date for
the Participant's option has been changed to the New Exercise Date and that
the Participant's option shall be exercised automatically on the New
Exercise Date, unless prior to such date the Participant has withdrawn from
the Offering Period as provided for in Sections 11 or 12 hereof.
c. Change in Control. In the event of a Change in Control of the Corporation,
any Offering Period then in progress shall be shortened by setting a new
Exercise Date (the "Change of Control Exercise Date") and any Offering
Period then in progress shall end on the Change of Control Exercise Date.
The Change of Control Exercise Date shall be before the date of the
Corporation's proposed sale or merger. The Committee shall notify each
Participant in writing, at least ten (10) business days prior to the Change
of Control Exercise Date, that the Exercise Date for the Participant's
option has been changed to the Change of Control Exercise Date and that the
Participant's option shall be exercised automatically on the Change of
Control Exercise Date, unless prior to such date the Participant has
withdrawn from the Offering Period, as provided for in Sections 11 or 12
hereof.
19. Amendment or Termination. The Board of Directors may at any time and for any
reason terminate or amend the Plan, and/or delegate authority for any amendments
to the Committee. Except as provided in Section 18 hereof, no such termination
or amendment shall affect options previously granted or adversely affect the
rights of any Participant with respect thereto. Without shareholder consent and
without regard to whether any Participant rights may have been considered to
have been "adversely affected," the Plan may be amended to change the Offering
Periods, increase the Purchase Price or change the percentage of payroll
deductions. To the extent necessary to comply with Section 423 of the Code (or
any successor rule or provision or any other applicable law, regulation or stock
exchange rule), the Corporation shall obtain shareholder approval of any
amendment to the Plan in such a manner and to such a degree as required.
20. Notices. All notices or other communications by a Participant to the
Corporation under or in connection with the Plan shall be deemed to have been
duly given when received in the form specified by the Committee at the location,
or by the person, designated by the Committee for the receipt thereof.
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21. Conditions Upon Issuance of Shares. Shares shall not be issued with respect
to an option unless the exercise of such option and the issuance and delivery of
Shares pursuant thereto shall comply with all applicable provisions of law,
domestic or foreign, including, without limitation, the Securities Act of 1933,
as amended, the Securities Exchange Act of 1934, as amended, the rules and
regulations promulgated thereunder, and the requirements of any stock exchange
upon which the Shares may then be listed.
As a condition to the exercise of an option, the Corporation may require a
Participant to represent and warrant at the time of any such exercise that the
Shares are being purchased only for investment and without any present intention
to sell or distribute such Shares if, in the opinion of counsel for the
Corporation, such a representation is required by any of the aforementioned
applicable provisions of law.
22. Term. The Plan shall become effective upon its adoption by the Board of
Directors subject to the approval by the shareholders of the Corporation which
approval must occur within the 12-month period after the Plan is adopted by the
Board of Directors. It shall continue in effect indefinitely thereafter until
the maximum number of Shares available for sale under the Plan (as provided in
Section 15 hereof) has been purchased, unless sooner terminated pursuant to
Section 19 hereof.
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