================================================================================
As filed with the Securities and Exchange Commission on August 16, 1999
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________________
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
__________________________
TECHNITROL, INC.
----------------
(Exact name of registrant as specified in its charter)
Pennsylvania 23-1292472
------------ ----------
(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
1210 Northbrook Drive
Suite 385
Trevose, PA 19053
(215) 355-2900
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(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
TECHNITROL, INC. EMPLOYEE STOCK PURCHASE PLAN
---------------------------------------------
(Full title of the Plan)
Drew A. Moyer
Corporate Controller and Secretary
1210 Northbrook Drive, Suite 385
Trevose, PA 19053
(215) 355-2900
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(Name, address, including zip code, and telephone number,
including area code, of agent for service)
--------------------------
Copies to:
Ann Marie Janus, Esquire
Stradley, Ronon, Stevens & Young, LLP
2600 One Commerce Square
Philadelphia, Pennsylvania 19103-7098
--------------------------
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
CALCULATION OF REGISTRATION FEE
- ----------------------------------------------------------------------------------------------------------------------
Amount to be Proposed maximum Proposed maximum Amount of
Title of securities to be registered registered(1) offering price per aggregate offering registration
Share price (3) fee
- ----------------------------------------- --------------- ------------------- ---- -------------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Common Stock, $.125 par value per share 500,000 $32.9375 (2) $16,468,750 $4,578.32
shares
- ----------------------------------------- --------------- ------------------- ---- -------------------- --------------
<FN>
(1) Such additional, indeterminable number of shares that may be issuable by
reason of the anti-dilution provisions of the Technitrol, Inc. Employee
Stock Purchase Plan (the "Plan") are hereby registered. In addition,
pursuant to Rule 416(c) under the Securities Act of 1933, this registration
statement also covers an indeterminate amount of interests to be offered or
sold pursuant to the Plan.
(2) Pursuant to Rule 457(h)(1) and (c), the average of the high and low prices
per share of the Common Stock reported on the New York Stock Exchange on
August 11, 1999 has been used to determine the registration fee.
(3) Estimated solely for the purpose of determining the registration fee.
</FN>
</TABLE>
<PAGE>
PART II
INFORMATION REQUIRED IN REGISTRATION STATEMENT
As used in this Registration Statement, unless the context
otherwise requires, the terms "Technitrol" and the "Company" mean Technitrol,
Inc. and its subsidiaries and the term the "Plan" shall mean the Technitrol,
Inc. Employee Stock Purchase Plan.
Item 3. Incorporation of Documents by Reference.
----------------------------------------
The following documents, previously filed by the Company with
the U.S. Securities and Exchange Commission (the "Commission") pursuant to the
Securities Exchange Act of 1934, as amended (the "1934 Act"), are hereby
incorporated by reference in this Registration Statement, except as superseded
or modified herein:
(a) the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1998;
(b) all other reports filed by the Company pursuant to Section
13(a) or 15(d) of the 1934 Act since the end of the fiscal
year covered by the annual report referred to above; and
(c) the description of the Company's common stock, par value $.125
per share ("Common Stock"), contained in the Company's
Registration Statement on Form 8-A/A dated April 10, 1998,
including any amendments or reports filed for the purpose of
updating such description.
All documents filed by the Company or the Plan pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the 1934 Act on or after the date of this
Registration Statement and prior to the filing of a post-effective amendment
which indicates that all securities offered have been sold or which deregisters
all securities then remaining unsold, shall be deemed to be incorporated by
reference in this Registration Statement and to be part hereof from the date of
filing of such documents.
Item 4. Description of Securities.
--------------------------
Not Applicable.
Item 5. Interests of Named Experts and Counsel.
---------------------------------------
Not Applicable.
Item 6. Indemnification of Directors and Officers.
------------------------------------------
Article VII of the Company's Bylaws generally provides for the
indemnification of officers, directors and third parties acting on behalf of the
Company if such person acted in good faith and in a manner reasonably believed
to be in and not opposed to the best interest of the Company, and, with respect
to any criminal action or proceeding, the indemnified party had no reasonable
cause to believe his conduct was unlawful.
Section 518 of the Pennsylvania Business Corporation Law
permits a corporation to include in its bylaws, and in agreements between the
corporation and its directors and officers, provisions expanding the scope of
indemnification beyond that specifically provided by the current law; provided;
however, indemnification shall not be permitted in any case where the act giving
rise to the claim for indemnification is determined by a court to have
constituted willful misconduct or recklessness.
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<PAGE>
In addition, the Company maintains directors and officers
insurance under which its directors and officers are insured against certain
liabilities that may be incurred by them in their capacities as such.
Item 7. Exemption from Registration Claimed.
------------------------------------
Not applicable.
Item 8. Exhibits.
---------
(a) Exhibits:
4.1 Technitrol, Inc. Employee Stock Purchase Plan.
5.1 Opinion of Counsel as to Legality of Securities being
registered.
23.1 Consent of Counsel (contained in Exhibit 5.1).
23.2 Consent of Certified Public Accountants.
24.1 Power of Attorney (included in signature page on page
II-4 herein).
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, as amended ("1933 Act");
(ii) To reflect in the prospectus any facts or
events arising after the effective date of the registration statement (or the
most recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in the
registration statement. 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 the registration
statement or any material change to such information in the registration
statement;
Provided, however, That paragraphs (a)(1)(i) and
(a)(1)(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 1934 Act that are incorporated by reference in the
registration statement.
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<PAGE>
(2) That, for the purpose of determining any liability
under the 1933 Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-
effective amendment any of the securities being registered which remain unsold
at the termination of the offering.
(b) The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the 1933 Act, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
1934 Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to section 15(d) of the 1934 Act) that is incorporated by
reference in the registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(c) Insofar as indemnification for liabilities arising under the
1933 Act 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 Commission such indemnification is
against public policy as expressed in the 1933 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 1933 Act and will be governed by the final
adjudication of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the registrant Technitrol, Inc. 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 Trevose, Pennsylvania, on August 16,
1999.
TECHNITROL, INC.
By: /s/ James M. Papada, III
------------------------
James M. Papada, III
Chairman, President 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 dates indicated.
Each person whose signature appears below constitutes and
appoints Drew A. Moyer and James M. Papada, III, jointly and severally, his
attorneys-in-fact, each with the power of substitution, for him in any and all
capacities to sign any amendments to this Registration Statement on Form S-8,
and to file the same, with exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, hereby ratifying and
confirming all that each of said attorneys-in-fact, or his substitute or
substitutes, may do or cause to be done by virtue hereof.
Name Title Date
- ---- ----- ----
/s/ James M. Papada, III Chairman, President and August 16, 1999
- --------------------------- Chief Executive Officer
James M. Papada, III (Principal Executive Officer)
s/ Albert Thorp, III Vice President - Finance August 16, 1999
- --------------------------- and Chief Financial Officer
Albert Thorp, III (Principal Financial Officer)
/s/ Drew A. Moyer Corporate Controller and August 16, 1999
- --------------------------- Secretary
Drew A. Moyer (Principal Accounting Officer)
/s/ Roy E. Hock Director August 16, 1999
- ---------------------------
Roy E. Hock
/s/ J. Barton Harrison Director August 16, 1999
- ---------------------------
J. Barton Harrison
/s/ Graham Humes Director August 16, 1999
Graham Humes
/s/ Edward M. Mazze Director August 16, 1999
- ---------------------------
Edward M. Mazze
/s/ Stanley E. Basara Director August 16, 1999
- ---------------------------
Stanley E. Basara
/s/ John E. Burrows, Jr. Director August 16, 1999
- ---------------------------
John E. Burrows, Jr.
Director August 16, 1999
- ---------------------------
Rajiv L. Gupta
II-4
<PAGE>
Pursuant to the requirements of the Securities Act of 1933,
the trustees (or other persons who administer the employee benefit plan) have
duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in Trevose, Pennsylvania, on
August 16, 1999.
TECHNITROL, INC. EMPLOYEE STOCK PURCHASE PLAN
By: Technitrol, Inc., as Plan Administrator
By: /s/ James M. Papada, III
-----------------------------------
James M. Papada, III
Chairman, President and Chief Executive Officer
EXHIBIT INDEX
Exhibit # Description
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4.1 Technitrol, Inc. Employee Stock Purchase Plan.
5.1 Opinion of Counsel as to Legality of Securities being registered.
23.1 Consent of Counsel (contained in Exhibit 5.1).
23.2 Consent of Certified Public Accountants
24.1 Power of Attorney (included in signature page on page II-4 herein).
II-5
<PAGE>
TECHNITROL, INC.
EMPLOYEE STOCK PURCHASE PLAN
1. PURPOSE.
The purpose of this Plan is to provide an opportunity for Employees of
Technitrol, Inc. (the "Company") and its Designated Subsidiaries to purchase
Common Stock of the Company and thereby to have an additional incentive to
contribute to the prosperity of the Company. It is the intention of the Company
that the Plan qualify as an "Employee Stock Purchase Plan" under Section 423 of
the Internal Revenue Code of 1986, as amended (the "Code"), although the Company
makes no undertaking nor representation to maintain such qualification. In
addition, this Plan authorizes the grant of options and issuance of Common Stock
which do not qualify under Section 423 of the Code pursuant to sub-plans adopted
by the Committee designed to achieve desired tax or other objectives in
particular locations outside the United States.
2. DEFINITIONS.
(a) "Board" shall mean the Board of Directors of Technitrol, Inc..
(b) "Code" shall mean the Internal Revenue Code of 1986, as amended.
(c) "Committee" shall mean the committee appointed by the Board in
accordance with Section 12 of the Plan.
(d) "Common Stock" shall mean the common stock of Technitrol, Inc., par
value $.125 per share, or any stock into which such Common Stock may be
converted.
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(e) "Company" shall mean Technitrol, Inc., a Pennsylvania corporation.
(f) "Designated Subsidiary" shall mean any Subsidiary which has been
designated by the Committee as eligible to participate in the Plan with respect
to its Employees.
(g) "Employee" shall mean an individual classified as an employee by
the Company or a Designated Subsidiary on the payroll records of the Company or
the Designated Subsidiary during the relevant participation period.
(h) "Fair Market Value" shall mean the value of one share of Common
Stock on the relevant date, determined as follows:
(1) If the shares are traded on an exchange (including the NASDAQ
National Market System), the reported "closing price" on the relevant date
(e.g., the Offering Date or Purchase Date) assuming it is a trading day;
otherwise on the next trading day;
(2) If the shares are traded over-the-counter with no reported
closing price, the mean between the lowest bid and the highest asked prices on
said System on the relevant date assuming it is a trading day; otherwise on the
next trading day; and
(3) If neither (1) nor (2) applies, the fair market value as
determined by the Committee in good faith. Such determination shall be
conclusive and binding on all persons.
(i) "Offering Date" shall mean the first business day of each Offering
Period.
(j) "Offering Period" shall mean a period of 24 months duration (or
such other period of time announced by the Committee) commencing on the Offering
Date during which a Participant is granted an option to purchase Common Stock.
(k) "Participant" shall mean a participant in the Plan as described in
Section 4 of the Plan.
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(l) "Pay" shall mean an Employee's base cash pay (excluding variable
cash payments unless otherwise determined by the Committee) paid on account of
personal services rendered by the Employee to the Company or a Designated
Subsidiary, plus pre-tax contributions of the Employee which are part of
deferred pay or benefit plans maintained by the Company or a Designated
Subsidiary, with any modifications determined by the Committee. The Committee
shall have the authority to determine and approve all forms of pay (such as
commissions) to be included in the definition of Pay and may change the
definition on a prospective basis.
(m) "Plan" shall mean this Technitrol, Inc. Employee Stock Purchase
Plan.
(n) "Purchase Date" shall mean the last business day of each Purchase
Period.
(o) "Purchase Period" shall mean a six-month period (or other period as
announced by the Committee) within each Offering Period. However, unless
otherwise announced by the Committee, the first two Purchase Periods in the
initial Offering Period shall be three-month periods. Thereafter, unless
otherwise announced by the Committee, each Purchase Period shall be a six-month
period.
(p) "Shareholder" shall mean a record holder of shares entitled to vote
shares of Common Stock under the Company's bylaws.
(q) "Subsidiary" shall mean any subsidiary corporation (other than the
Company) in an unbroken chain of corporations beginning with the Company, as
described in Section 424(f) of the Code.
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<PAGE>
3. ELIGIBILITY.
3.1. Any Employee regularly employed on other than a part-time basis by
the Company or by any Designated Subsidiary on an Offering Date shall be
eligible to participate in the Plan with respect to the Offering Period
commencing on such Offering Date, provided that the Committee may establish
administrative rules requiring that employment commence some minimum period
(e.g., one month's employment) prior to an Offering Date for the Employee to be
eligible to participate with respect to the Offering Period beginning on that
Offering Date and provided further that (1) the Committee may permit part-time
Employees to be eligible to participate pursuant to criteria and procedures
established by the Committee and (2) the Committee may impose an eligibility
period on participation of up to two years employment with the Company and/or a
Designated Subsidiary with respect to participation on any prospective Offering
Date. The Committee also may determine that a designated group of Employees are
ineligible to participate in the Plan so long as the excluded category fits
within the definition of "highly compensated employee" in Section 414(q) of the
Code. An Employee shall be considered employed on a part-time basis if his or
her customary employment is 20 or fewer hours per week or five months or less
per year.
3.2. No Employee may participate in the Plan if immediately after an
option is granted the Employee owns or is considered to own (within the meaning
of Section 424(d) of the Code), shares of capital stock, including stock which
the Employee may purchase by conversion of convertible securities or under
outstanding options granted by the Company, possessing five percent (5%) or more
of the total combined voting power or value of all classes of stock of the
Company or of any of its Subsidiaries.
3.3. All Employees who participate in the Plan shall have the same
rights and privileges under the Plan except for differences which may be
A-4
<PAGE>
mandated by local law and which are consistent with Section 423(b)(5) of the
Code; provided, however, that Employees participating in a sub-plan adopted
pursuant to Section 13 which is not designed to qualify under Section 423 of the
Code need not have the same rights and privileges as Employees participating in
the Section 423 Plan. The Committee shall impose restrictions on eligibility and
participation of Employees who are officers and directors to facilitate
compliance with federal or state securities laws or foreign laws.
4. PARTICIPATION AND WITHDRAWAL.
4.1. An Employee who is eligible to participate in the Plan in
accordance with Section 3 may become a Participant by filing, on a date
prescribed by the Committee prior to an applicable Offering Date, a completed
payroll deduction authorization and Plan enrollment form provided by the Company
or by following an electronic or other enrollment process as prescribed by the
Committee. An eligible Employee may authorize payroll deductions at the rate of
any whole percentage of the Employee's Pay, not to exceed ten percent (10%) of
the Employee's Pay, or such greater percentage, as specified by the Committee,
for the Purchase Period. The Committee may provide for a separate election (of a
different percentage) for a specified item or items of Pay, including bonus
payments, if any. All payroll deductions may be held by the Company and
commingled with its other corporate funds. No interest shall be paid or credited
to the Participant with respect to such payroll deductions except where required
by local law as determined by the Committee. A separate bookkeeping account for
each Participant shall be maintained by the Company under the Plan and the
amount of each Participant's payroll deductions shall be credited to such
account. A Participant may make additional payments into such account in
accordance with rules and procedures announced by the Committee. Except as
provided in Section 4.4, an Employee may not enroll in or participate in more
than one Offering Period at a time. Unless otherwise specified by the Committee,
payroll deductions and other payments made with respect to employees paid in
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currencies other than U.S. dollars shall be accumulated in local (non-U.S.)
currency and converted to U.S. dollars as of a date within the Purchase Period
as determined by the Committee.
4.2. Unless otherwise determined by the Committee, a Participant may
decrease his or her rate of payroll deductions in accordance with procedures
prescribed by the Committee. A Participant may increase his or her rate of
payroll deductions effective as of the first payroll date following the next
Purchase Date by filing a new payroll deduction authorization and Plan
enrollment form or by following electronic or other procedures prescribed by the
Committee. If a Participant has not followed such procedures to change the rate
of payroll deductions, the rate of payroll deductions shall continue at the
originally elected rate throughout the Purchase Period and future Purchase
Periods (or any lower maximum rate then in effect).
4.3. (a) Under procedures established by the Committee, a Participant
may discontinue participation in the Plan at any time during a Purchase Period
by completing and filing a new payroll deduction authorization and Plan
enrollment form with the Company or by following electronic or other procedures
prescribed by the Committee. If a Participant has not followed such procedures
to discontinue the payroll deductions, the rate of payroll deductions shall
continue at the originally elected rate throughout the Purchase Period and
future Purchase Periods (or any lower maximum rate then in effect).
(b) If a Participant discontinues participation during a Purchase
Period, his or her accumulated payroll deductions will remain in the Plan for
purchase of shares as specified in Section 6 on the following Purchase Date, but
the Participant will not again participate until he or she re-enrolls in the
Plan. Alternatively, a Participant may request a cash distribution, without
interest, of monies accumulated but not yet distributed by following such
procedures, electronic or otherwise, as specified by the Committee. The
Committee may establish rules limiting the frequency with which Participants may
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<PAGE>
discontinue and resume payroll deductions under the Plan and may impose a
waiting period on Participants wishing to resume payroll deductions following
discontinuance. The Committee also may change the rules regarding discontinuance
of participation or changes in participation in the Plan. Unless the Committee
establishes rules to the contrary, a Participant who discontinues participation
during a Purchase Period will not be eligible to again participate until the
first Offering Period beginning after the date he or she discontinues
participation in the Plan. An Employee who discontinues participation in the
Plan may become a Participant again by enrolling in the Plan before a subsequent
Offering Date in accordance with the procedures set forth in Section 4.1.
(c) In the event any Participant terminates employment with the
Company or any Subsidiary for any reason (including death) prior to the
expiration of a Purchase Period, the Participant's participation in the Plan
shall terminate and all accumulated payroll deductions credited to the
Participant's account shall be paid to the Participant or the Participant's
estate without interest (except where required by local law). Whether a
termination of employment has occurred shall be determined by the Committee. The
Committee also may establish rules regarding when leaves of absence or change of
employment status will be considered to be a termination of employment, and the
Committee may establish termination of employment procedures for this Plan which
are independent of similar rules established under other benefit plans of the
Company and its Subsidiaries. In the event of a Participant's death, any
accumulated payroll deductions will be paid, without interest, to the estate or
legal representative of the Participant.
4.4. Unless a Participant discontinues participation in the Plan with
respect to an Offering Period, such participant will automatically participate
in each succeeding Offering Period, but only with respect to Purchase Periods
which begin after the last Purchase Period in the preceding Offering Period.
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<PAGE>
Such Participant is not required to file an additional enrollment form to
continue participation in the Plan. A Participant shall not be permitted to
participate in more than one Purchase Period occurring at the same time with
respect to different Offering Periods.
5. OFFERING.
5.1. The maximum number of shares of Common Stock which may be issued
pursuant to the Plan shall be 500,000 shares.
5.2. The Offering Periods of this Plan shall be of 24 months duration
commencing on September 1 and March 1 of each year and ending on August 31 and
February 28 (or February 29, if a leap year) of each year. Except for the
initial Offering Period, each Offering Period shall consist of four (4)
six-month Purchase Periods. Unless otherwise announced by the Committee, the
initial Offering Period shall consist of two (2) three-month Purchase Periods
and three (3) six-month Purchase Periods. The Committee shall have the power to
change the duration of Offering Periods with respect to offerings without
shareholder approval if such change is announced at least 15 days prior to the
scheduled beginning of the next Offering Period to be affected.
5.3. Enrollment by an eligible Employee in this Plan with respect to an
Offering Period will constitute the grant (as of the Offering Date) by the
Company to the Participant of an option to purchase on an applicable Purchase
Date within the Offering Period up to that number of shares of Common Stock of
the Company determined by dividing the Participant's accumulated payroll
deductions and other amounts credited to the Participant's account during such
Purchase Period by the lower of (i) 85% of the fair market value of a share of
Common Stock on the Offering Date or (ii) 85% of the fair market value of a
share of Common Stock on the Purchase Date; provided, however, that the number
of shares of the Company's Common Stock subject to any option granted pursuant
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to this Plan shall not exceed the lesser of (x) the maximum number of shares
which may be purchased pursuant to Section 5.4 below, with respect to the
applicable Purchase Date or (y) the maximum number of shares set by the
Committee pursuant to Section 5.5 below, with respect to the applicable Purchase
Date.
5.4. With respect to each Purchase Period, no more than 200% of the
number of shares of Common Stock determined by dividing the Participant's
payroll deductions and other payments accumulated in his account during the
Purchase Period by 85% of the fair market value of a share of Common Stock on
the Offering Date may be purchased by a Participant on any single Purchase Date.
5.5. No Participant shall be entitled to purchase more than the Maximum
Share Amount (as defined below) on any single Purchase Date. Not less than 30
days prior to the commencement of any Offering Period, the Committee may, in its
sole discretion, set a maximum number of shares which may be purchased by any
Participant on any single Purchase Date (hereinafter the "Maximum Share
Amount"). Unless otherwise determined by the Committee, there shall be no
Maximum Share Amount. In no event shall the Maximum Share Amount exceed the
amount permitted under Section 5.4 above. If a new Maximum Share Amount is set
by the Committee, all participants must be notified of such Maximum Share Amount
prior to commencement of the next Offering Period. The Maximum Share Amount
shall continue to apply with respect to all succeeding Purchase Dates and
Offering Periods unless revised by the Committee as set forth above.
5.6. If the number of shares to be purchased on Purchase Date by
Participants exceeds the number of shares then available for issuance under the
Plan, the Company will make a pro rata allocation of the remaining shares as
shall be reasonably practicable and as the Committee shall determine to be
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equitable. In such event, the Company shall give written notice of such
reduction of the number of shares to be purchased under a Participant's option
to each Participant affected.
5.7. Notwithstanding any other provision of the Plan to the contrary,
no Employee participating in the Plan shall be granted an option to purchase
Common Stock under the Plan and all employee stock purchase plans of the Company
and its Subsidiaries at a rate which exceeds $25,000 of the Fair Market Value of
such Common Stock (determined at the time such option is granted) for each
calendar year in which such option is outstanding at any time. The foregoing
sentence shall be interpreted so as to comply with Section 423(b)(8) of the
Code.
5.8. Unless otherwise determined by the Committee, the option price
under each option shall be the lower of (i) eighty-five percent (85%) of the
Fair Market Value of the Common Stock on the Offering Date on which an option is
granted, or (ii) eighty-five percent (85%) of the Fair Market Value of the
Common Stock on the Purchase Date. The Committee may change the percentage of
Fair Market Value with respect to the option price for any future Offering
Period, but not below eighty-five percent (85%), and the Committee may determine
with respect to any prospective Offering Period that the option price shall be a
designated percentage of the Fair Market Value of the Common Stock on the
Purchase Date.
6. PURCHASE OF STOCK.
Upon the expiration of each Purchase Period, a Participant's option
shall be exercised automatically for the purchase of that number of whole shares
of Common Stock which the accumulated payroll deductions and other amounts
credited to the Participant's account at that time shall purchase at the
applicable price specified in Section 5.8, subject to the limitations contained
in Section 5. Any remaining amounts in the Participant's account which are less
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than the price of one share shall remain in the account and shall be applied in
the next Purchase Period towards the purchase of shares of Common Stock.
7. PAYMENT AND DELIVERY.
7.1. Upon the exercise of an option on each Purchase Date, the Company
shall deliver (by electronic or other means) to the Participant a record of the
Common Stock purchased, except as specified below. The Committee may permit or
require that shares be deposited directly with a broker designated by the
Committee (or a broker selected by the Committee) or to a designated agent of
the Company, and the Committee may utilize electronic or automated methods of
share transfer. The Committee may require that shares be retained with such
broker or agent for a designated period of time (and may restrict dispositions
during that period) and/or may establish other procedures to permit tracking of
disqualifying dispositions of such shares or to restrict transfer of such
shares. The Committee may require that shares purchased under the Plan shall
automatically participate in a dividend reinvestment plan or program maintained
by the Company. The Company shall retain the amount of payroll deductions and
other payments used to purchase Common Stock as full payment for the Common
Stock and the Common Stock shall then be fully paid and non-assessable. No
Participant shall have any voting, dividend, or other shareholder rights with
respect to shares subject to any option granted under the Plan until the shares
subject to the option have been purchased as provided in this Section 7.1.
7.2. The Committee, in its discretion, may impose restrictions on the
transferability of shares of Common Stock acquired pursuant to this Plan, and
may cause to be placed on all stock certificates or other evidences of
ownership, legends or other indicators setting forth any such restrictions on
transferability. Such restrictions shall apply uniformly to all Participants.
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8. RECAPITALIZATION.
8.1. If after the grant of an option, but prior to the purchase of
Common Stock under the option, there is any increase or decrease in the number
of outstanding shares of Common Stock because of a stock split, stock dividend,
combination or recapitalization of shares subject to options, the number of
shares to be purchased pursuant to an option, the share limit of Sections 5.4
and 5.5 and the maximum number of shares specified in Section 5.1 shall be
proportionately increased or decreased, the terms relating to the purchase price
with respect to the option shall be appropriately adjusted by the Board, and the
Board shall take any further actions which, in the exercise of its discretion,
may be necessary or appropriate under the circumstances.
8.2. The Board, if it so determines in the exercise of its sole
discretion, also may adjust the number of shares specified in Section 5.1, as
well as the price per share of Common Stock covered by each outstanding option
and the maximum number of shares subject to any individual option, in the event
the Company effects one or more reorganizations, recapitalizations, spin-offs,
split-ups, rights offerings or reductions of shares of its outstanding Common
Stock.
8.3. The Board's determinations under this Section 8 shall be
conclusive and binding on all parties.
9. MERGER, LIQUIDATION. OTHER CORPORATION TRANSACTIONS.
9.1. In the event of the proposed liquidation or dissolution of the
Company, the Purchase Period then in progress will terminate immediately prior
to the consummation of such proposed liquidation or dissolution, unless
otherwise provided by the Board in its sole discretion, and all outstanding
options shall automatically terminate and the amounts of all payroll deductions
will be refunded without interest to the Participants.
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9.2. In the event of a proposed sale of all or substantially all of the
assets of the Company, or the merger or consolidation of the Company with or
into another corporation, then in the sole discretion of the Board, (1) each
option shall be assumed or an equivalent option shall be substituted by the
successor corporation or parent or subsidiary of such successor corporation, (2)
a date established by the Board on or before the date of consummation of such
merger, consolidation or sale shall be treated as an exercise date, and all
outstanding options shall be deemed exercisable on such date or (3) all
outstanding options shall terminate and the accumulated payroll deductions shall
be returned to the Participants, without interest.
10. TRANSFERABILITY.
Options granted to Participants may not be voluntarily or involuntarily
assigned, transferred, pledged, or otherwise disposed of in any way other than
by will or the laws of descent and distribution, and any other attempted
assignment, transfer, pledge, or other disposition shall be null and void and
without effect. If a Participant in any manner attempts to transfer, assign or
otherwise encumber his or her rights or interest under the Plan, other than as
permitted by the Code, such act shall be treated as an election by the
Participant to discontinue participation in the Plan pursuant to Section 4.3.
11. AMENDMENT OR TERMINATION OF THE PLAN.
11.1. The Plan shall continue until August 31, 2009, unless previously
terminated in accordance with Section 11.2.
11.2. The Board may, in its sole discretion, insofar as permitted by
law, terminate or suspend the Plan, or revise or amend it in any respect
whatsoever, except that, without approval of the shareholders, no such revision
or amendment shall:
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(a) materially increase the number of shares subject to the Plan,
other than an adjustment under Section 8 of the Plan;
(b) materially modify the requirements as to eligibility for
participation in the Plan, except as otherwise specified in this Plan;
(c) reduce the purchase price specified in Section 5.8, except as
specified in Section 8;
(d) extend the term of the Plan beyond the date specified in
Section 11.1; or
(e) amend this Section 11.2 to defeat its purpose.
12. ADMINISTRATION.
The Board shall appoint a Committee consisting of at least two members
who will serve for such period of time as the Board may specify and who may be
removed by the Board at any time. The Committee will have the authority and
responsibility for the day-to-day administration of the Plan, the authority and
responsibility specifically provided in this Plan and any additional duties,
responsibility and authority delegated to the Committee by the Board, which may
include any of the functions assigned to the Board in this Plan. The Committee
may delegate to one or more individuals the day-to-day administration of the
Plan. The Committee shall have full power and authority to promulgate any rules
and regulations which it deems necessary for the proper administration of the
Plan, to interpret the provisions and supervise the administration of the Plan,
to make factual determinations relevant to Plan entitlements, to adopt sub-plans
applicable to specified Subsidiaries or locations and to take all action in
connection with administration of the Plan as it deems necessary or advisable,
consistent with the delegation from the Board. Decisions of the Board and the
Committee shall be final and binding upon all participants. Any decision reduced
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to writing and signed by a majority of the members of the Committee shall be
fully effective as if it had been made at a meeting of the Committee duly held.
The Company shall pay all expenses incurred in the administration of the Plan.
No Board or Committee member shall be liable for any action or determination
made in good faith with respect to the Plan or any option granted thereunder.
13. COMMITTEE RULES FOR FOREIGN JURISDICTIONS.
13.1. The Committee may adopt rules or procedures relating to the
operation and administration of the Plan to accommodate the specific
requirements of local laws and procedures. Without limiting the generality of
the foregoing, the Committee is specifically authorized to adopt rules and
procedures regarding handling of payroll deductions, payment of interest,
conversion of local currency, payroll tax, withholding procedures and handling
of stock certificates which vary with local requirements.
13.2. The Committee may also adopt sub-plans applicable to particular
Subsidiaries or locations, which sub-plans may be designed to be outside the
scope of Section 423 of the Plan. The rules of such sub-plans may take
precedence over other provisions of this Plan, with the exception of Section
5.1, but unless otherwise superseded by the terms of such sub-plan, the
provisions of this Plan shall govern the operation of such sub-plan.
14. SECURITIES LAWS REQUIREMENTS.
The Company shall not be under any obligation to issue Common Stock
upon the exercise of any option unless and until the Company has determined
that: (i) the Company and the Participant have taken all actions required to
register the Common Stock under the Securities Act of 1933, or to perfect an
exemption from the registration requirements thereof; (ii) any applicable
listing requirement of any stock exchange on which the Common Stock is listed
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has been satisfied; and (iii) all other applicable provisions of state, federal
and applicable foreign law have been satisfied.
15. GOVERNMENTAL REGULATIONS.
This Plan and the Company's obligation to sell and deliver shares of
its stock under the Plan shall be subject to the approval of any governmental
authority required in connection with the Plan or the authorization, issuance,
sale, or delivery of stock hereunder.
16. NO ENLARGEMENT OF EMPLOYEE RIGHTS.
Nothing contained in this Plan shall be deemed to give any Employee the
right to be retained in the employ of the Company or any Designated Subsidiary
or to interfere with the right of the Company or Designated Subsidiary to
discharge any Employee at any time.
17. GOVERNING LAW.
This Plan shall be governed by the laws of the Commonwealth of
Pennsylvania.
18. EFFECTIVE DATE.
This Plan shall be effective September 1, 1999. The Plan shall not
constitute an employee stock purchase plan under Section 423 of the Code unless
it is approved by the shareholders of the Company within 12 months of its
adoption by the Board of Directors.
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[STRADLEY, RONON, STEVENS & YOUNG, LLP LETTERHEAD]
August 16, 1999
Technitrol, Inc.
1210 Northbrook Drive
Suite 385
Trevose, Pennsylvania 19053
RE: Registration Statement on Form S-8 for Employee Stock Purchase Plan
-------------------------------------------------------------------
Ladies and Gentleman:
We have acted as counsel to and for Technitrol, Inc., a Pennsylvania
corporation (the "Company"), in connection with the preparation and filing with
the Securities and Exchange Commission of a registration statement on Form S-8
(the "Registration Statement"), for the purpose of registering under the
Securities Act of 1933, as amended, (i) 500,000 shares (the "Shares") of the
Company's common stock, $.125 par value per share (the "Common Stock"), issuable
upon the exercise of options under the Company's Employee Stock Purchase Plan
(the "Plan"), and (ii) interests in the Plan to be issued to those employees of
the Company and its subsidiaries who participate in the Plan ("Interests").
In our capacity as counsel, we have been requested to render the opinions
set forth in this letter and, in connection therewith, we have reviewed the
following documents: (i) the Registration Statement, (ii) the Plan, certified by
the Secretary of the Company, (iii) the Amended and Restated Articles of
Incorporation of the Company ("Articles of Incorporation"), certified by the
Secretary of the Company, (iv) certain minutes of meetings of the Board of
Directors of the Company, certified as true and correct by the Secretary of the
Company, and (v) Bylaws of the Company, as amended, certified as true and
correct by the Secretary of the Company.
In rendering this opinion, we have assumed and relied upon, without
independent investigation, (i) the authenticity, completeness, truth and due
authorization and execution of all documents submitted to us as originals, (ii)
the genuineness of all signatures on all documents submitted to us as originals,
and (iii) the conformity to the originals of all documents submitted to us as
certified or photostatic copies.
The law covered by the opinion expressed herein is limited to the statutes,
judicial and administrative decisions and rules and regulations of the
governmental agencies of the Commonwealth of Pennsylvania. This opinion letter
is given only with respect to laws and regulations presently in effect. We
assume no obligation to advise you of any changes in law or regulation which may
hereafter occur, whether the same are retroactively or prospectively applied, or
to update or supplement this letter in any fashion to reflect any facts or
circumstances which hereafter come to our attention.
Based upon, and subject to, the foregoing, we are of the opinion that the
Shares, when issued pursuant to and in accordance with the Plan, will be validly
issued, fully paid and nonassessable.
We hereby consent to the use of this opinion as an exhibit to the
Registration Statement and we further consent to the reference to our firm under
the caption "Interests of Named Experts and Counsel" in the Registration
Statement and to any reference to our firm in the Registration Statement as
legal counsel who have passed upon the legality of the securities offered
thereby.
Very truly yours,
STRADLEY, RONON, STEVENS & YOUNG, LLP
By: /s/ Dean M. Schwartz
---------------------------
Dean M. Schwartz, A Partner
[KPMG, LLP LETTERHEAD]
Consent of Independent Auditors
The Board of Directors
Technitrol, Inc.:
We consent to the use of our report included in the Annual Report on Form 10-K
of Technitrol, Inc. for the year ended December 31, 1998 which has been
incorporated by reference in this Registration Statement on Form S-8.
KPMG LLP
Philadelphia, Pennsylvania
August 12, 1999
