-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Gsg0Ppf6uioLIJRDoVpSFSmhZoPLVtp0aMOKZAIfool2A3WvOgQ5FgumBoPAeMI2 wIbHHW8hhORkf2kQuVavkw== 0000950135-97-002534.txt : 19970529 0000950135-97-002534.hdr.sgml : 19970529 ACCESSION NUMBER: 0000950135-97-002534 CONFORMED SUBMISSION TYPE: S-8 PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 19970528 EFFECTIVENESS DATE: 19970528 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: HILLS STORES CO /DE/ CENTRAL INDEX KEY: 0000786877 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-VARIETY STORES [5331] IRS NUMBER: 311153510 STATE OF INCORPORATION: DE FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: S-8 SEC ACT: 1933 Act SEC FILE NUMBER: 333-27875 FILM NUMBER: 97614769 BUSINESS ADDRESS: STREET 1: 15 DAN RD CITY: CANTON STATE: MA ZIP: 02021 BUSINESS PHONE: 6178211000 MAIL ADDRESS: STREET 1: 15 DAN ROAD CITY: CANTON STATE: MA ZIP: 02021 FORMER COMPANY: FORMER CONFORMED NAME: HILLS STORES CO /NEW/ DATE OF NAME CHANGE: 19931103 FORMER COMPANY: FORMER CONFORMED NAME: HILLS STORES CO /NEW/ DATE OF NAME CHANGE: 19931015 FORMER COMPANY: FORMER CONFORMED NAME: THL HOLDINGS INC DATE OF NAME CHANGE: 19870506 S-8 1 HILLS STORES COMPANY 1 Registration No. 333- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM S-8 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 Hills Stores Company - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Delaware 31-1153510 - -------------------------------------------------------------------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 15 Dan Road, Canton, Massachusetts 02021 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) HILLS STORES COMPANY/HILLS DEPARTMENT STORE COMPANY ASSOCIATE STOCK PURCHASE PLAN (Full title of the plan) William K. Friend Vice President-Secretary and Corporate Counsel Hills Stores Company 15 Dan Road Canton, Massachusetts 02021 (617) 821-1000 - -------------------------------------------------------------------------------- (Name and address, including zip code, and telephone number, including area code, of agent for service) WITH A COPY TO: Barry B. White, Esquire Dean F. Hanley, Esquire Foley, Hoag & Eliot LLP One Post Office Square Boston, Massachusetts 02109 (617) 832-1000 - -------------------------------------------------------------------------------- CALCULATION OF REGISTRATION FEE =========================================================================================
Proposed Title of Proposed Maximum Securities Amount Maximum Aggregate Amount of to be to be Offering Price Offering Registration Registered Registered Per Share (1) Price Fee - ----------------------------------------------------------------------------------------- Common Stock 500,000 $4.6875 $2,343,750 $710.23 (par value $0.01 per share) shares - ----------------------------------------------------------------------------------------- (1) Estimated pursuant to Rule 457 (c) and (h) based on the average of the high and low prices of the Common Stock as reported on the New York Stock Exchange on May 20, 1997.
2 PART II INFORMATION REQUIRED IN THE REGISTRATION STATEMENT ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE. The following documents filed with the Securities and Exchange Commission (the "Commission") are incorporated in this Registration Statement by reference: (a) the Annual Report of Hills Stores Company on Form 10-K for the fiscal year ended February 1, 1997; (b) the definitive proxy materials of Hills Stores Company dated May 5, 1997; and (c) the description of the predecessor to the Common Stock contained in the Registration Statement on Form 8-A filed with the Securities and Exchange Commission on May 4, 1987, as amended by (i) amendments on Form 8 filed with the Securities and Exchange Commission on July 6, 1987 and July 8, 1987, (ii) the description of the Common Stock contained in the Current Report on Form 8-K dated October 4, 1993 and (iii) the description of the Rights to Purchase Series B Participating Cumulative Preferred Stock of Hills Stores Company associated with the Common Stock contained in the Current Report on Form 8-K dated August 23, 1994. All documents subsequently filed by the Registrant pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934, prior to the filing of a post-effective amendment which indicates that all securities offered have been sold or which deregisters all securities then remaining unsold, shall be deemed to be incorporated by reference in this Registration Statement and to be 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. Section 145 of the Delaware General Corporation Law affords a Delaware corporation the power to indemnify its present and former directors and officers under certain conditions. Article Seventh of the Registrant's Amended and Restated Certificate of Incorporation provides that the Registrant shall indemnify each person, who, at any time, is, or shall have been, a director or officer of the Registrant and was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he or she is or was a director or officer of the Registrant, or is or was serving at the request of the Registrant as a director, officer, employee, or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement II-1 3 incurred in connection with any such action, suit or proceeding, to the maximum extent permitted by the General Corporation Law of the State of Delaware, as the same exists or may hereafter be amended. Section 102(b)(7) of the Delaware General Corporation Law gives a Delaware corporation the power to adopt a charter provision eliminating or limiting the personal liability of the directors to the corporation or its stockholders provided that such provision may not eliminate or limit the liability of directors for (i) any breach of the director's duty of loyalty to the corporation or its stockholders, (ii) any acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) any payment of a dividend or approval of a stock purchase that is illegal under Section 174 of the Delaware Corporation Law or (iv) any transaction from which the director derived an improper personal benefit. Article Ninth of the Registrant's Amended and Restated Certificate of Incorporation provides that no director of the Registrant shall be personally liable to the Registrant or to any of its stockholders for monetary damages arising out of such director's breach of fiduciary duty as a director of the Registrant, except to the extent that the elimination or limitation of such liability is not permitted by the General Corporation Law of the State of Delaware, as the same exists or may hereafter be amended. The effect of these provisions would be to permit indemnification by the Registrant for, among other liabilities, liabilities arising out of the Securities Act of 1933, as amended. Section 145 of the Delaware General Corporation Law also affords a Delaware corporation the power to obtain insurance on behalf of its directors and officers against liabilities incurred by them in those capacities. The Registrant has procured a directors' and officers' liability and company reimbursement liability insurance policy that (a) insures directors and officers of the Registrant against losses (above a deductible amount) arising from certain claims made against them by reason of certain acts done or attempted by such directors and officers and (b) insures the Registrant against losses (above a deductible amount) arising from any such claims, but only if the Registrant is required or permitted to indemnify such directors or officers for such losses under statutory or common law or under provisions of the Registrant's Certificate of Incorporation or By-Laws. ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED. Not applicable. ITEM 8. EXHIBITS. 4.1 Hills Associate Stock Purchase Plan, as amended. 5.1 Opinion of Foley, Hoag & Eliot LLP. 23.1 Consent of Deloitte & Touche LLP. 23.2 Consent of Coopers & Lybrand L.L.P. 23.3 Consent of Foley, Hoag & Eliot LLP (included in Exhibit 5.1). 24.1 Power of Attorney (contained on the signature page). II-2 4 ITEM 9. UNDERTAKINGS. 1. The undersigned Registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the Registration Statement shall be deemed to be a new registration statement relating to the securities offered herein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. 2. 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; (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 percent 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 2(a)(1)(i) and 2(a)(1)(ii) do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed by the Registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference herein. (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. 3. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, II-3 5 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. II-4 6 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the Town of Canton, Massachusetts, on this 21st day of May, 1997. HILLS STORES COMPANY By /s/ William K. Friend --------------------------------- William K. Friend Vice President-Secretary and Corporate Counsel POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS that each individual whose signature appears below constitutes and appoints Gregory K. Raven, C. Scott Litten and William K. Friend and each of them, the true and lawful attorneys-in-fact and agents with full power of substitution, for and in the name, place and stead of such individual, in any and all capacities, to sign any and all amendments (including post-effective amendments) to this Registration Statement, and to file the same, with all exhibits thereto, and all documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing which they, or any of them, may deem necessary or advisable to be done in connection with this Registration Statement, as fully to all intents and purposes as the individual might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or any substitute or substitutes for any or all of them, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated. Signature Title Date --------- ----- ---- /s/ Chaim Y. Edelstein Chairman of the Board May 13, 1997 - ------------------------------ Chaim Y. Edelstein /s/ Gregory K. Raven Director, President and Chief May 21, 1997 - ------------------------------ Executive Officer (Principal Gregory K. Raven Executive Officer) /s/ C. Scott Litten Executive Vice President - May 21, 1997 - ------------------------------ Chief Financial Officer C. Scott Litten (Principal Financial Officer) II-5 7 /s/ Brian J. Sheehan Vice President - Controller May 21, 1997 - ---------------------------- (Principal Accounting Officer) Brian J. Sheehan /s/ Stanton J. Bluestone Director May 15, 1997 - ---------------------------- Stanton J. Bluestone /s/ John W. Burden, III Director May 19, 1997 - ---------------------------- John W. Burden, III /s/ Alan S. Cooper Director May 13, 1997 - ---------------------------- Alan S. Cooper /s/ Mark B. Dickstein Director May 13, 1997 - ---------------------------- Mark B. Dickstein /s/ Samuel L. Katz Director May 14, 1997 - ---------------------------- Samuel L. Katz II-6 8 EXHIBIT INDEX Exhibit No. Description Page - ------- ----------- ---- 4.1 Hills Associate Stock Purchase Plan, as amended. 5.1 Opinion of Foley, Hoag & Eliot LLP. 23.1 Consent of Deloitte & Touche LLP. 23.2 Consent of Coopers & Lybrand L.L.P. 23.3 Consent of Foley, Hoag & Eliot LLP (included in Exhibit 5.1). 24.1 Power of Attorney (contained on the signature page). EX-4.1 2 HILLS ASSOCIATE STOCK PLAN, AS AMENDED 1 EXHIBIT 4.1 HILLS STORES COMPANY/HILLS DEPARTMENT STORE COMPANY ASSOCIATE STOCK PURCHASE PLAN 1. PURPOSE. The Hills Stores Company/Hills Department Store Company Associate Stock Purchase Plan (the "Plan") is intended to provide a method whereby associates of Hills Stores Company and Hills Department Store Company (hereinafter jointly referred to as the "Company") will have an opportunity to acquire an ownership interest (or increase an existing ownership interest) in the Company through the purchase of shares of the Common Stock of Hills Stores 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"). The provisions of the Plan shall, accordingly, be construed so as to extend and limit participation in a manner consistent with the requirements of that section of the Code. 2. DEFINITIONS. (a) "Associate" means any person who is customarily employed at least 20 hours per week and more than five months in a calendar year by the Company. (b) "Board" means the Board of Directors of Hills Stores Company. (c) "Committee" means the Compensation Committee of Hills Stores Company. (d) "Common Stock" means the common stock, $.01 par value per share, of Hills Stores Company. (e) "Company" shall also include any Parent or Subsidiary of Hills Stores Company or Hills Department Store Company designated by the Board, unless the context otherwise requires. (f) "Compensation" means, for the purposes of any Offering pursuant to this Plan, the pre-tax base pay in effect as of the Offering Commencement Date (as hereinafter defined). Compensation shall not include any deferred compensation other than contributions by an individual through a salary reduction agreement to a cash or deferred plan pursuant to Section 401(k) of the Code or to a cafeteria plan pursuant to Section 125 of the Code. (g) "Management Committee" means a committee consisting of the Corporate Vice President-Human Resources, Executive Vice President-Chief Financial Officer and Vice President-Secretary (or replacement executives holding similar positions as determined by the Board of Directors). (h) "Parent" shall mean any present or future corporation which is or would constitute a "parent corporation" as that term is defined in Section 424 of the Code. (i) "Subsidiary" shall mean any present or future corporation which is or would constitute a "subsidiary corporation" as that term is defined in Section 424 of the Code. 2 3. ELIGIBILITY. (a) Participation in the Plan is completely voluntary. Participation in any one or more of the offerings under the Plan shall neither limit, nor require, participation in any other offering except as otherwise provided herein. (b) Each Associate shall be eligible to participate in the Plan on the first Offering Commencement Date, as hereafter defined, following the completion of five (5) full calendar months of continuous service with the Company. No Associate shall be granted an option under the Plan: (i) if, immediately after the grant, such Associate would own stock, and/or hold outstanding options to purchase stock, possessing 5% or more of the total combined voting power or value of all classes of stock of Hills Stores Company or any Parent or Subsidiary; for purposes of this Paragraph the rules of Section 424(d) of the Code shall apply in determining stock ownership of any Associate; or (ii) if such Associate's rights to purchase stock under all Code Section 423 employee stock purchase plans of the Company and any Parent or Subsidiary exceed $25,000 of the fair market value of the stock (determined at the time such option is granted) for the calendar year in which such option is outstanding; for purposes of this Paragraph, the rules of Section 423(b) (8) of the Code shall apply. Further, no Associate may invest more than (10%) percent of his or her Compensation in any Offering. 4. OFFERING DATES. The right to purchase stock hereunder shall be made available in a series of six-month offerings (the "Offering" or "Offerings") commencing July 1, 1997 to Associates eligible in accordance with Paragraph 3 hereof. The Committee will, in its discretion, determine the applicable date of commencement ("Offering Commencement Date") and termination date ("Offering Termination Date") for each Offering. 5. PARTICIPATION. Any eligible Associate may become a participant by completing and delivering the payroll deduction authorization form provided by the Company at least ten (10) days prior to an applicable Offering Commencement Date, as determined by the Committee pursuant to Paragraph 4. Participation in any one or more of the Offerings under the Plan shall neither limit, nor require, participation in any other Offering. However, a participant during one Offering will be deemed to have elected to participate in each subsequent Offering, provided he or she is eligible to participate during each such subsequent Offering. Such participant will also be deemed to have authorized the same payroll deductions under Paragraph 6 hereof for each subsequent Offering; provided however, that, during the enrollment period prior to each new Offering, the participant may elect to change his or her payroll deductions by submitting a new payroll deduction authorization form. Except as provided in Paragraphs 6(d) or 10, a participant will be permitted to change his or her payroll deduction only during an enrollment period. 6. PAYROLL DEDUCTIONS. (a) At the time a participant files his or her authorization for a payroll deduction, he or she shall elect to have after-tax deductions made from his or her pay on each payday during any Offering in which he or she is a participant at a specified dollar amount: said dollar amount shall be in whole dollars 2 3 and may be any amount between a minimum of $5.00 and a maximum percentage of ten (10%) percent of a participant's Compensation as determined on the applicable Offering Commencement Date. (b) Payroll deductions for a participant shall commence on the applicable Offering Commencement Date when the authorization for a payroll deduction becomes effective and shall end on the Offering Termination Date of the Offering to which such authorization is applicable unless sooner terminated by the participant as provided in Paragraphs 6(d) or 10. (c) All payroll deductions made for a participant shall be credited to the participant's account under the Plan. A participant may not make any separate cash payment into such account. (d) A participant may discontinue payroll deductions at any time during the applicable Offering period; provided, however, that in the event of a withdrawal of payroll deductions pursuant to Paragraph 10(a), no less than twenty-one (21) days notice of withdrawal must be provided to the Company before the Offering Termination Date. 7. GRANTING OF OPTION. (a) On the Offering Commencement Date of each Offering, a participating associate shall be deemed to have been granted an option to purchase a maximum number of shares of the Common Stock equal to an amount determined as follows: $1.00 shall be divided into an amount equal to the percentage of the Associate's Compensation which he or she has elected to have withheld (but no more than 10%) multiplied by the Associate's Compensation over the Offering period. (b) The option price of the Common Stock purchased with payroll deductions made during each such Offering for a participant therein shall be the lower of: (i) 85% of the closing price per share on the Offering Commencement Date as reported by a nationally recognized stock exchange (the stock is currently listed on the NYSE), or, if the Common Stock is not listed on such an exchange, as reported by the National Association of Securities Dealers Automated Quotation System ("Nasdaq") National Market System; and (ii) 85% of the closing price per share on the Offering Termination Date as reported by a nationally recognized stock exchange, or, if the Common Stock is not listed on such an exchange, as reported by the Nasdaq National Market System. 8. EXERCISE OF OPTION. Unless a participant gives written notice to the Company as provided in Paragraph 10, the option for the purchase of Common Stock with payroll deductions made during any Offering will be deemed to have been exercised automatically on the Offering Termination Date applicable to such Offering for the purchase of the number of full shares of Common Stock and fractional interests which the accumulated payroll deductions in his or her account at the time will purchase at the applicable option price (but not in excess of the number of shares for which options have been granted the employee pursuant to Paragraph 7(a)), and any excess in his or her account at that time, will be returned. 9. ALLOCATION OF PURCHASE. As promptly as possible after the appropriate Offering Termination Date, the shares purchased upon exercise of the options will be allocated to each participant's plan account. The allocation will be 3 4 made in whole shares and in fractional interests calculated to one hundred thousandths of a share (.00000). 10. WITHDRAWAL AND TERMINATION. (a) Prior to the Offering Termination Date for an Offering, any participant may withdraw the payroll deductions credited to his or her account under the Plan for such Offering by giving at least twenty-one (21) days written notice to the Payroll Department of the Company. All of the participant's payroll deductions credited to such account will be paid out after receipt of the notice of withdrawal, without interest, and no further payroll deductions will be made from the participant's pay during such Offering. (b) A participant's election not to participate in, or withdrawal from, any Offering will not have any effect upon his or her eligibility to participate in any succeeding Offering or in any similar plan which may hereinafter be adopted by the Company. (c) Upon termination of the participant's employment for any reason, prior to the Offering Termination Date, including retirement but excluding death, the payroll deductions credited to his or her account will be returned to the participant. Upon any such termination, the former participant shall have the right to elect, by written notice given to the Payroll Department prior to the expiration of a period of 90 days commencing with the date of such termination, either: (i) to withdraw any shares of Common Stock then held by the Plan on behalf of such former participant by (A) causing the Plan to have a certificate representing the whole shares of Common Stock (and cash in lieu of any fractional shares) distributed to the former participant, provided that such former participant shall be solely responsible for any charge incurred by the Plan in connection with the issuance of such certificate or (B) causing, if systems permit, the Plan to have record ownership of such shares electronically transferred to the brokerage account of such former participant; or (ii) to cause the Plan to sell any shares of Common Stock held by the Plan on behalf of such former participant on the next Sale Date (as defined in Paragraph 12) at the then fair market value and remit the proceeds, net of any applicable transaction costs and withholding taxes (if applicable), to such former participant. (d) Upon termination of the participant's employment because of death, the beneficiary (as defined in Paragraph 14) shall have the right to elect, by written notice given to the Company's Payroll Department prior to the expiration of a period ending on the earlier to occur of the date 90 days following with the date of the death of the participant and the next Offering Termination Date, either: (i) to withdraw all of the payroll deductions credited to the participant's account under the Plan; or (ii) to exercise the participant's option for the purchase of stock on the Offering Termination Date next following the date of the participant's death for the purchase of the number of full shares which the accumulated payroll deductions in the participant's account at the date of the participant's death will purchase at the applicable option price (subject to the limitation contained in Paragraph 7(a)), and any excess in such account will be returned to said beneficiary. In the event that no such written notice of election shall be duly received by the office of the Company's Payroll Department, the beneficiary shall automatically be deemed to have elected to withdraw the payroll deductions credited 4 5 to the participant's account at the date of the participant's death and the same will be paid promptly to said beneficiary. 11. INTEREST. In no event will interest be paid or allowed on any money paid into the Plan or credited to the account of any participant. 12. STOCK. (a) The maximum number of shares of Common Stock available for purchase by all participants under the Plan, subject to adjustment upon changes in capitalization of Hills Stores Company as provided in Paragraph 17, shall be 500,000 shares of Common Stock, par value $.01 per share. Shares of Common Stock available for purchase under the Plan may be treasury shares, authorized but unissued shares or shares acquired by or on behalf of the Company in open market purchases. In the event that any option to purchase shares shall not be exercised by any Associate for any reason or if such option shall terminate as provided herein, shares that have not been so purchased hereunder shall again become available for the purposes of the Plan, but such unpurchased shares shall not be deemed to increase the aggregate number of shares specified above to be reserved for purposes of the Plan. If the total number of shares for which options are exercised upon any Offering Termination Date in accordance with Paragraph 8 exceeds the maximum number of shares for the applicable Offering, there will be a pro rata allocation of the shares available for delivery and distribution in an equitable manner, and the balances of payroll deductions credited to the account of each participant under the Plan will be returned to the participant. (b) The participant will have no interest in stock covered by his or her option until such option has been exercised. (c) Any dividends paid with respect to shares of Common Stock held by the Plan on behalf of a participant shall be credited to the account of such participant. (d) Participants and former participants in the Plan may cause the Plan to sell shares of Common Stock held in their account on their behalf as of the fifth or twentieth day of any month, or on the next succeeding business day if any such day is not a business day (each, a "Sale Date"). The participant will be responsible for all fees or commissions in connection with such sale. 13. ADMINISTRATION. The Plan shall be administered by the Committee. The interpretation and construction of any provision of the Plan and adoption of rules and regulations for administering the Plan shall be made by the Committee. Determinations made by the Committee with respect to any matter or provision contained in the Plan shall be final, conclusive and binding upon the Company and upon all participants, their heirs or legal representatives. Any rule or regulation adopted by the Committee shall remain in full force and effect unless and until altered, amended, or repealed by the Committee. The Committee has delegated authority for supervision of the routine administration of the Plan to the Management Committee. All inquiries concerning the administration of the Plan or interpretation of the Plan should be directed to the Vice President-Secretary of the Company. 5 6 14. DESIGNATION OF BENEFICIARY. A participant shall file with the Company, a written designation of a beneficiary who is to receive any Common Stock, fractional interests and/or cash under the Plan in the event of the participant's death. Such designation of beneficiary may be changed by the participant at any time by written notice. Upon the death of a participant and upon receipt by the Company of proof of the identity and existence at the participant's death of a beneficiary validly designated by the participant under the Plan, the Company shall deliver such Common Stock, fractional interests and/or cash to such beneficiary. In the event of the death of a participant and in the absence of a beneficiary validly designated under the Plan who is living at the time of such participant's death, the Company shall deliver such Common Stock, fractional interests and/or cash to the executor or administrator of the estate of the participant. No beneficiary shall, prior to the death of the participant by whom he or she has been designated, acquire any interest in the Common Stock, fractional interests and/or cash credited to the participant under the Plan. 15. TRANSFERABILITY. Neither payroll deductions credited to a participant's account nor any rights with regard to the exercise of an option or the receipt of Common Stock under the Plan may be assigned, transferred, pledged, or otherwise disposed of in any way by the participant other than by will or the laws of descent and distribution. Any such attempted assignment, transfer, pledge or other disposition shall be without effect, except that the Company may treat such act as an election to withdraw funds in accordance with Paragraph 10. 16. USE OF FUNDS. All payroll deductions received under the Plan may be held by the Company with all other corporate funds and may be used by the Company for any proper corporate purpose, until the funds are invested, on the Offering Termination Date. 17. EFFECT OF CHANGES OF COMMON STOCK. If the Company shall subdivide or reclassify the Common Stock which has been or may be subject to options under this Plan, or shall declare thereon any dividend payable in shares of such Common Stock, or shall take any other action of a similar nature affecting such Common Stock, then the number and class of shares of Common Stock which may thereafter be subject to options under the Plan (in the aggregate and to any participant) shall be adjusted accordingly and in the case of each option outstanding at the time of any such action, the number and class of shares which may thereafter be purchased pursuant to such option and the option price per share shall be adjusted to such extent as may be determined by the Committee, to be necessary to preserve the rights of the holder of such option. 18. AMENDMENT OR TERMINATION. The Board may at any time terminate or amend the Plan. No such termination shall affect options previously granted, nor may an amendment make any change in any option theretofore granted which would adversely affect the rights of any participant holding options under the Plan without the consent of such participant. 6 7 19. NOTICES. All notices or other communications by a participant to the Company under or in connection with the Plan shall be deemed to have been duly given when received by the Vice President-Secretary or any other proper party or department so designated by the Vice President-Secretary. 20. MERGER OR CONSOLIDATION. If the Company shall at any time merge into or consolidate with another corporation, the holder of each option then outstanding will thereafter be entitled to receive at the next Offering Termination Date upon the exercise of such option, in lieu of the number of shares of Common Stock as to which such option shall be exercisable, the number and class of shares of stock or other securities or property to which such holder would have been entitled pursuant to the terms of the agreement of merger or consolidation, as if such holder had been the holder of record (as of the last business day prior to the effective date of such merger or consolidation) of a number of shares of Common Stock equal to the number of shares for which such option was exercisable. In accordance with this Paragraph and Paragraph 17, the Committee shall determine the kind and amount of such securities or property which such holder of an option shall be entitled to receive. A sale of all or substantially all of the assets of the Company shall be deemed a merger or consolidation for the foregoing purposes. 21. APPROVAL OF STOCKHOLDERS. The Plan was approved by the stockholders of the Company at the annual meeting of stockholders held on June 23, 1995. 22. GOVERNMENTAL AND OTHER REGULATIONS. The Plan, and the grant and exercise of the rights to purchase shares hereunder, and the Company's obligation to sell and deliver shares upon the exercise of rights to purchase shares, shall be subject to all applicable federal, state and foreign laws, rules and regulations, and to such approvals by any regulatory or governmental agency as may, in the opinion of counsel for the Company, be required. The Plan shall be governed by, and construed and enforced in accordance with, the provisions of Sections 421, 423 and 424 of the Code and any such laws, such provisions of the Code shall govern to the extent necessary to preserve favorable federal income tax treatment afforded employee stock purchase plans under Section 423 of the Code. * * * * * EX-5.1 3 OPINION OF FOLEY, HOAG & ELIOT 1 EXHIBIT 5.1 [LETTERHEAD OF FOLEY, HOAG & ELIOT LLP] May 21, 1997 Hills Stores Company 15 Dan Road Canton, Massachusetts 02021 Ladies and Gentlemen: We are familiar with the Registration Statement on Form S-8 (the "S-8 Registration Statement") proposed to be filed on or about May 23, 1997 by Hills Stores Company, a Delaware corporation (the "Company"), with the Securities and Exchange Commission under the Securities Act of 1933, as amended. The S-8 Registration Statement relates to the proposed offering by the Company of 500,000 shares (the "Shares") of its Common Stock, par value $0.01 per share ("Common Stock"), offered or to be offered by the Company from time to time under the Company's Associate Stock Purchase Plan (the "Plan"). We are familiar with the Company's certificate of incorporation and all amendments thereto, its by-laws and all amendments thereto, and the Plan. We have examined such other records and documents as we deemed necessary or appropriate for purposes of rendering this opinion. Based upon and subject to the foregoing, it is our opinion that the Company has corporate power adequate for the issuance of the Shares in accordance with the S-8 Registration Statement. The Company has taken all necessary corporate action required to authorize the issuance and sale of the Shares. When (following the effective date of the S-8 Registration Statement) certificates for the Shares have been duly executed and countersigned, and delivered against due receipt of consideration therefor as described in the S-8 Registration Statement and the Plan, the Shares will be legally issued, fully paid and non-assessable. 2 Hills Stores Company May 21, 1997 Page 2 We understand that this opinion is to be filed as an exhibit to the S-8 Registration Statement and we hereby consent to such filing. Very truly yours, FOLEY, HOAG & ELIOT LLP By /s/ Dean F. Hanley ------------------------- A Partner EX-23.1 4 CONSENT OF DELOITTE & TOUCHE 1 EXHIBIT 23.1 INDEPENDENT AUDITORS' CONSENT We consent to the incorporation by reference in this Registration Statement of Hills Stores Company on Form S-8 of our reports dated March 11, 1997, appearing in the Annual Report on Form 10-K of Hills Stores Company for the year ended February 1, 1997. DELOITTE & TOUCHE LLP Boston, Massachusetts May 21, 1997 EX-23.2 5 CONSENT OF COOPERS & LYBRAND 1 EXHIBIT 23.2 CONSENT OF INDEPENDENT ACCOUNTANTS We consent to the incorporation by reference in this Registration Statement of Hills Stores Company on Form S-8 of our reports dated March 10, 1995 appearing in the Annual Report on Form 10-K of Hills Stores Company for the year ended February 1, 1997. COOPERS & LYBRAND L.L.P. Boston, Massachusetts May 21, 1997 -----END PRIVACY-ENHANCED MESSAGE-----