As filed with the Securities
and Exchange Commission on
July , 1997 Registration
Number ______________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
THE HARMAT ORGANIZATION, INC.
(Exact name of registrant as specified in its charter)
Delaware 11-2780723
(State or jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
22 Old Country Road
Quogue, New York 11959
(Address of principal executive offices)
1996 JOINT INCENTIVE AND NON-QUALIFIED STOCK OPTION PLAN
and
AN FOR INCENTIVE COMPENSATION OF MATTHEW C. SCHILOWITZ
(Full title of the Plans)
Matthew C. Schilowitz, President
The Harmat Organization, Inc.
22 Old Country Road
Quogue, New York 11959
(516) 653-3303
(Name, address and telephone number, including area code,
of agent for service)
with a copy to:
David W. Sass, Esq.
McLaughlin & Stern, LLP
260 Madison Avenue
New York, New York 10016
(212) 448-1100
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Title of Securities Amount to be Proposed maximum offering Proposed maximum Amount of
to be registered registered price per share aggregate offering price registration fee
Common Stock, par
value $.001 per share 400,000 shares $2.125(1) $765,000(1) $231.82
============================= ===================== ================================= ================================ =========
Common Stock, par
value $.001 per share 500,000 shares $1.125(2) $562,500(2) $170.45
============================= ===================== ================================= ================================ =========
</TABLE>
(1) The proposed maximum offering price and maximum aggregate
offering price is the assumed price of the shares of
common stock available under the 1996 Joint Incentive and
Non-Qualified Stock Option Plan (the "1996 Plan") being
registered hereunder, based upon the price at which the
options may be exercised, in accordance with Rules 457(h)
promulgated under the Securities Act of 1933.
(2) The proposed maximum offering price and maximum aggregate
offering price is the assumed price of the shares of common
stock available under the Plan for Incentive Compensation of
Matthew C. Schilowitz (the "Schilowitz Plan"), being
registered hereunder, based upon the price at which the
options may be exercised, in accordance with Rule 457 (h)
promulgated under the Securities Act of 1933.
The Registration Statement, including all exhibits and
attachments, contains 14 pages. The exhibit index may be found
on page 12 of the consecutively numbered pages of the
Registration Statement.
In addition, pursuant to Rule 416(c) there are also being registered such
indeterminable additional securities as may be issued as a result of the
anti-dilution provisions.
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<PAGE>
PART I. INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
Item 1. Plan Information
(a) General Plan Information:
The documents containing the information specified in this Item will be
sent or given to individuals who have been granted or will be granted
awards under the 1996 Joint Incentive and Non-Qualified Stock Option
Plan (the "1996 Plan") which was adopted by the Board and approved by
the Company's Shareholders in February 1996, and the Plan for Incentive
Compensation of Matthew C. Schilowitz, was adopted and approved by the
Company's Board of Directors on March 1, 1996 and amended August 3,
1996 and June 19, 1997, respectively, (the "Schilowitz Incentive Plan")
and are being filed with, or included in, this Registration Statement
on Form S-8 (the "Registration Statement") in accordance with the rules
and regulations of the Securities and Exchange Commission (the
"Commission").
The name of the Registrant whose securities are to be offered pursuant
to the plans is The Harmat Organization, Inc.
The 1996 Plan
In February 1996, the Board of Directors adopted and the
Company's stockholders approved the 1996 Plan, which provides for the
grant of options which qualify as Incentive stock options ("Incentive
Options") under the Internal Revenue Code of 1986, as amended, to be
issued to officers and employees, as well as options which do not so
qualify ("Non-Qualified Options"). The Company has reserved 400,000
shares of Common Stock for issuance under the 1996 Plan.
Pursuant to its terms, the 1996 Plan is to be administered by
the Board of Directors or a committee established by the Board of
Directors (the "Stock Option Committee"). The Board of Directors or
such committee determines the persons to whom options are granted,
number of shares of stock subject to an option, the period during which
options may be exercised and the exercise price thereof. The Stock
Option Plan places restrictions on the grant of options to persons who
are, at the time of the grant, members of the Stock Option Committee
and, if no such committee is established, on the grant of options to
directors.
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The 1996 Plan places restrictions on the grant of options to
persons who are, at the time of the grant, members of the Stock Option
Committee and, if no such committee is established, on the grant of
options to directors.
The Schilowitz Incentive Plan
Pursuant to the Schilowitz Incentive Plan, Mr. Schilowitz,
President and Chief Executive Officer of the Registrant, has been
granted an option to purchase up to an aggregate of 500,000 shares of
Common Stock (the "Option"). The Option has a duration of ten years.
The Option provides for the grant of:
(1) the right to purchase 250,000 shares of Common Stock such
right to vest and become exercisable upon the Company
realizing annual earnings before taxes equaling or exceeding
$750,000; and
(2) the right to purchase 250,000 shares of Common Stock such
right to vest and become exercisable upon the Company
realizing annual earnings before taxes equaling or exceeding
$1,500,000.
Shares subject to options granted under the Schilowitz
Incentive Plan are subject to adjustment in the event of the Company's
declaration of stock dividends, stock splits, reclassification and the
occurrence of other similar events. The Schilowitz Incentive Plan is
administered by the Registrant's Board of Directors, or by a committee,
established by the Board.
(3) The 1996 Plan and Schilowitz Incentive Plan are not subject to any
provisions of the Employee Retirement Income Security Act of 1974.
(4) To obtain additional information about the plans and its
administrators, please contact Matthew C. Schilowitz, President,
The Harmat Organization, Inc., 22 Old Country Road, Quogue, New
York 11959, (516) 653-3303.
(b) Securities to be Offered
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<PAGE>
(1) The 1996 Plan. The 1996 Plan provides for the grant of options
with respect to, in the aggregate, up to 400,000 shares of
Common Stock, $0.001 par value. To date, 360,000 shares under
the Company's Qualified Stock Option Plan have been granted
under the 1996 Plan.
The Schilowitz Incentive Plan. Under the Schilowitz Incentive
Plan, a ten-year option is granted for the purchase up to an
aggregate of 500,000 shares of the Registrant's Common Stock,
$0.001 par value, at an exercise price of $1.125 per share.
(2) Not applicable
(c) Employees Who May Participate in the Plan
The 1996 Plan. The participants of the 1996 Plan are the
Company's officers, directors, employees and consultants.
Non-employee directors of the Company may participate in the
1996 Plan but may only be granted Non-Qualified Options on a
non-discretionary bases.
The Schilowitz Incentive Plan. Matthew C. Schilowitz is
the sole participant.
(d) Purchase of Securities Pursuant to the Plan and Payment
for Securities Offered
(1) The 1996 Plan. The purchase price of each share for
-------------
which a Non-Qualified Option is granted and number of
shares, is within the Board or Committee's discretion
based upon the value of the optionee's services, the
number of shares outstanding, market price and other
factors, provided that the purchase price is not less
than the par value. The purchase price of each share for
an Incentive Option is not less than the Committee's good
faith determination, constituting 100% of the then Fair
Market Value (110%, in the case of an Incentive Option
granted to an employee who owns more than 10% of total
combined voting power).
The Schilowitz Incentive Plan. The purchase price of
each share for the Schilowitz Incentive Plan is $1.125.
(2) Each Stock Option Agreement shall provide that payment for
shares of Common Stock purchased upon the exercise of an
option (or any portion thereof) granted shall be made in full,
in cash, at the time of such exercise.
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<PAGE>
(3) Not applicable
(4) Not applicable
(5) Not applicable
(6) The securities will be purchased from the Company.
(e) Resale Restrictions
(1) The 1996 Plan. The Option Holder will provide the
--------------
Company with appropriate evidence satisfactory in form
and substance to the Company, that the Shares are
acquired for investment, unless (a) the Company has
received an opinion of counsel satisfactory that the sale
or other disposition may be made without registration, or
(b) the Shares shall be included in a currently effective
registration statement or post-effective amendment. The
certificates may bear an appropriate legend giving notice
of transfer restriction.
The Schilowitz Incentive Plan. Mr. Schilowitz holds the
shares underlying the Schilowitz Incentive Plan for
investment purposes only and not with the view toward
public distribution.
(f) Tax Effects of Plan Participation
Pursuant to ss.421 and ss.422 of the Internal Revenue Code,
where Incentive Stock Options are granted pursuant to a plan:
(1) no income shall result at the time of the transfer of such
share to the individual upon his exercise of the option with
respect to such share; (2) no deduction under ss.162 shall be
allowable at any time to the employer corporation, a parent or
subsidiary corporation, or corporation issuing or assuming a
stop option in a ss.424 transaction; and (3) no amount other
than the price paid under the option shall be considered as
received by any such corporations for share so transferred.
Furthermore, in the case where a share of stock acquired by
the exercise of an option: (a) the basis of such share shall
include so much of the basis of the option as is attributable
to such share; except that the basis of such share shall be
reduced by the excess, if any, of (i) the amount which would
have been includible in gross income under ss.423(c) if the
employee had exercised the option on the date of death and
held the share acquired pursuant to such exercise at time of
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<PAGE>
his death, over (ii) the amount which is includible in gross
income under such section; and (b) the last sentence of
ss.423(c) applies only to the extent that the amount
includible in gross income under such section exceeds so much
of the basis of the option as is attributable to such share.
(g) Investment of Funds
Not applicable
(h) Withdrawal from the Plan; Assignment of Interest
The 1996 Plan. The Option shall terminate for the following
events: three months after the involuntary termination of the
Option Holder's employment other than for cause or death or
permanent disability; voluntary termination for cause; one
year after Option Holder's death while employed; one year
after termination due to permanent disability; or expiration
of ten years. The Option is neither transferable nor
assignable.
The Schilowitz Incentive Plan. Mr. Schilowitz's option
will terminate upon the discontinuation of his employment
contract.
(i) Forfeitures and Penalties
Not applicable
(j) Charges and Deductions and Liens Therefor
Not applicable
Item. 2. Registrant Information and Employee Plan Annual
Information
The documents containing the information specified in this
Item will be sent or given to individuals who have been granted
awards by the Registrant and are not being filed with, or included
in, this Registration Statement in accordance with the rules and
regulations of the Commission.
PART II. INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents filed by The Harmat Organization,
Inc. (the "Registrant") with the Securities and Exchange Commission
6
<PAGE>
(the "Commission") are incorporated by reference in this
Registration Statement:
1. The Company's Registration Statement on Form SB-2, filed
August 21, 1996, No. 333-3501.
2. The Registrant's Annual Report on Form 10-KSB for the transition
period from December 31, 1995 to September 30, 1996.
3. The Registrant's Quarterly Report on Form 10-Q for the
quarter ended March 31, 1997; and
4. The description of the Registrant's common stock, par value $.001
per share (the "Common Stock"), contained in Paragraph 4 of the Registrant's
Certificate of Incorporation filed as Exhibit 3.1 to Registrant's Form 10-KSB
for the transition period from December 31, 1995 to September 30, 1996.
All documents subsequently filed by the Registrant pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the filing of a
post-effective amendment to this Registration Statement 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 respective date of
filing of such documents. Any statement contained in a document incorporated by
reference herein is modified or superseded for all purposes to the extent that a
statement contained in this Registration Statement or in any other subsequently
filed document which is incorporated by reference modifies or replaces such
statement.
Item 4. Description of Securities.
Common Stock
The Company is currently authorized to issue 25,000,000 shares of
Common Stock, having a par value of $.001 per share of which 2,612,500 are
outstanding prior to the offering contemplated hereby. Each share of Common
Stock entitles the holder thereof to one vote on each matter submitted to the
stockholders of the Company for a vote thereon. The holders of Common Stock: (i)
have equal ratable rights to dividends from funds legally available therefor
when, as and if declared by the Board of Directors; (ii) are entitled to share
ratably in all of the assets of the Company available for distribution to
holders of Common Stock upon liquidation, dissolution or winding up of the
affairs of the
7
<PAGE>
Company; (iii) do not have preemptive, subscription or conversion rights, or
redemption or sinking fund provisions applicable thereto; and (iv) as noted
above, are entitled to one non-cumulative vote per share on all matters
submitted to stockholders for a vote at any meeting of stockholders. The Company
has not paid any dividends on its Common Stock to date. The Company anticipates
that, for the foreseeable future, it will retain earnings, if any, to finance
the continuing operations of its business. The payment of dividends will depend
upon, among other things, capital requirements and operating and financial
conditions of the Company.
Preferred Stock
The Certificate of Incorporation of the Company authorizes the issuance
of up to 5,000,000 shares of Preferred Stock, $.001 par value per share. None of
such Preferred Stock has been designated or issued. The Board of Directors is
authorized to issue shares of Preferred stock from time to time in one or more
series and, subject to the limitations contained in the Certificate of
Incorporation and any limitations prescribed by law, to establish and designate
any such series and to fix the number of shares and the relative conversion
rights, voting rights and terms of redemption (including sinking fund
provisions) and liquidation preferences. If shares of Preferred Stock with
voting rights are issued, such issuance could affect the voting rights of the
holders of the Common Stock by increasing the number of outstanding shares
having voting rights, and by the creation of class or series voting rights. If
the Board of Directors authorizes the issuance of shares of Preferred Stock with
conversion rights, the number of shares of Common Stock outstanding could
potentially be increased by up to the authorized amount. Issuance of shares of
Preferred Stock could, under certain circumstances, have the effect of delaying
or preventing a change in control of the Company and may adversely affect the
rights of holders of Common Stock. Also, the Preferred Stock could have
preferences over the Common Stock (and other series of preferred stock) with
respect to dividends and liquidation rights.
Series A Redeemable Common Stock Purchase Warrants
Each Series A Common Stock Purchase Warrant entitles the holder thereof
to purchase one share of Common Stock at an exercise price of $6.00 per share
for a period of four years commencing one year after the Effective Date of the
Registration Statement of which this Prospectus forms a part. The exercise price
and/or the exercise date of each Series A Warrant is subject to adjustment under
certain circumstances including, without limitation, the
8
<PAGE>
following: (i) the Company's issuance of Common Stock for less than its fair
market value; (ii) the Company's issuance of a dividend in Common Stock; (iii)
the subdivision of outstanding shares of Common Stock; (iv) the recapitalization
or reorganization of the Company; (v) the merger or consolidation of the Company
with or into another company; and (vi) the sale of all or substantially all of
the assets of the Company. Each Series A Warrant is redeemable upon 30 days
prior written notice by the Company at a redemption price of $.05 per Series A
Warrant at any time after September 8, 1997, provided that the closing bid price
of the Common Stock, as reported by NASDAQ (or such other principal exchange on
which the Common Stock is then quoted), the NASD OTC Electronic Bulletin Board
or the National Quotation Bureau, Inc., as the case may be, equals or exceeds
$8.00 per share for 20 consecutive trading days ending within five days prior to
the date of the Company's notice of redemption. Pursuant to the terms of the
Series A Warrants, the Company has the right, upon 30 days written notice to all
holders of the Series A Warrants and subject to compliance with Rule 13e-4 under
the Exchange Act (including the filing of Schedule 13E-4), to reduce the
exercise price and/or extend the term of the Series A Warrants.
Series B Warrants
Each Series B Warrant entitles the holder thereof to purchase one share
of Common Stock at an exercise price of $9.00 per share with respect for a
period of four years commencing 90 days after issuance (February, 1996) after
the Effective Date of the Registration Statement of which this Prospectus forms
a part. The exercise price and/or the exercise date of each Series B Warrant is
subject to adjustment under certain circumstances including, without limitation,
the following: (i) the Company's issuance of Common Stock for less than its fair
market value; (ii) the Company's issuance of a dividend in Common Stock; (iii)
the subdivision of outstanding shares of Common Stock; (iv) the recapitalization
or reorganization of the Company; (v) the merger or consolidation of the Company
with or into another company; and (vi) the sale of all or substantially all of
the assets of the Company. Each Series B Warrant is redeemable upon 30 days
prior written notice by the Company at a redemption price of $.05 per Series B
Warrant at any time after September, 1996, provided that the closing bid price
of the Common Stock, as reported by NASDAQ (or such other principal exchange on
which the Common Stock is then quoted), the NASD OTC Electronic Bulletin Board
or the National Quotation Bureau, Inc., as the case may be, equals or exceeds
$10.00 per share for 20 consecutive trading days ending within five days prior
to the date of the Company's notice of redemption.
9
<PAGE>
Pursuant to the terms of the Series B Warrants, the Company has the right, upon
30 days written notice to all holders of the Series B Warrants and subject to
compliance with Rule 13e-4 under the Exchange Act (including the filing of
Schedule 13E-4), to reduce the exercise price and/or extend the term of the
Series B Warrants.
Item 5. Interests of Named Experts and Counsel.
Certain legal matters in connection with the issuance of the
securities being offered by the Company will be passed upon for the
Company by McLaughlin & Stern, LLP, New York, New York, David W. Sass,
a member of such firm is Director of Company.
The Financial Statements of the Company included in the
Company's Registration Statement on Form SB-2 and Annual Report on Form
10-KSB, incorporated by reference, have been reported on by Moore
Stephens, P.C., independent certified public accountants.
Item 6. Indemnification of Directors and Officers.
The Registrant's Certificate of Incorporation provides that the
personal liability of the directors of the Registrant is eliminated to the
fullest extent permitted by paragraph (7) of subsection (b) of Section 242(b) of
the General Corporation Law of the State of Delaware. In addition, the
Certificate of Incorporation of the Registrant provides in substance that, to
the fullest extent permitted by Section 145 of the General Corporation Law of
the State of Delaware, each director and officer shall be indemnified by the
Registrant against reasonable expenses, including attorney's fees, and any
liabilities which he or she may incur in connection with any action to which he
or she may be made a party by reason of his or her being or having been a
director or officer of the Registrant. The indemnification provided by the
Registrant's By-Laws is not deemed exclusive of or in any way limiting of any
other rights to which any person seeking indemnification may be entitled.
Item 7. Exemption from Registration Claimed.
Not applicable.
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Item 8. Exhibits.
Exhibit No. Description
5 Opinion of Counsel
10.1 Copy of the 1996 Joint Incentive and Non-
Qualified Stock Option Plan (the "1996
Plan") of the Registrant, incorporated by
reference.
10.2 Copy of the Matthew C. Schilowitz
Employment Agreement (the Plan for
Incentive Compensation of Matthew
Schilowitz), incorporated by reference.
10.3 Form of Option Agreement, incorporated by
reference.
Item 9. Undertakings.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement;
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or the most recent
effective amendment thereof) which, individually or in the aggregate, represent
a fundamental change in the information set forth in the Registration Statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the Registration Statement or
any material change to such information in the Registration Statement; provided,
however, that paragraphs (1)(I) and (1)(ii) do not apply if the Registration
Statement is on Form S-3 or Form S-8, and 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 in the
Registration Statement.
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<PAGE>
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
(b) For purposes of determining any liability under the Securities Act
of 1933, each filing of the Registrant's annual report pursuant to Section 13(a)
or Section 15(d) of the Securities Exchange Act of 1934 (and where applicable,
each filing of an employee benefit plan's annual report pursuant to Section
15(d) of the Securities Exchange Act of 1934) that is incorporated by reference
in the Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(h) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with the
securities being registered, the Registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Quogue, State of New York, on this 17th day of July,
1997.
The Harmat Organization, Inc.
By:______________________________
Matthew C. Schilowitz
President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Signature Title Date
____________________ President, Chief Executive July , 1997
Matthew C. Schilowitz Officer and Chairman of the
Board of Directors
____________________ Secretary and Director July , 1997
Scott Prizer
____________________ Treasurer and Director July , 1997
Seymour G. Siegel
_____________________ Director July , 1997
David W. Sass
______________________ Director July , 1997
David S. Eiten
</TABLE>
Exhibit 5
July 16, 1997
United States Securities and
Exchange Commission
450 Fifth Street, NW
Washington, D.C. 20549
RE: The Harmat Organization, Inc.
Gentlemen:
Reference is made to the Registration Statement on Form S-8 (the "Registration
Statement"), filed with the Securities and Exchange Commission by The Harmat
Organization, Inc. (the "Company").
We hereby advise you that we have examined originals or copies certified to our
satisfaction of the Certificate of Incorporation and amendments thereto and the
By-Laws of the Company, minutes of the meetings of the Board of Directors and
Shareholders and such other documents and instruments, and we have made such
examination of law as we have deemed appropriate as the basis for the opinions
hereinafter expressed.
Based on the foregoing, we are of the opinion that:
1. The Company has been duly incorporated and is validly existing and in good
standing under the laws of the State of Delaware.
2. The 400,000 shares of Common Stock underlying the "1996 Joint Incentive and
Non-Qualified Stock Option Plan" which are due to be sold pursuant to the
Registration Statement have been duly and validly authorized and, when issued
and paid for, will be validly issued, fully paid, and non-assessable.
3. The 500,000 shares of Common Stock underlying "The Plan for Incentive
Compensation of Matthew C. Schilowitz" which are due to be sold pursuant to the
Registration Statement have been duly and validly authorized and, when issued
and paid for, will be validly issued, fully paid, and non-assessable.
In addition, we hereby consent to the reference to our firm under the caption
"Legal Matters" in the prospectus forming part of such Registration Statement
and to the filing of this opinion as an exhibit to the Registration Statement.
Very truly yours,
McLAUGHLIN & STERN, LLP.
By: David W. Sass
