As filed with the Securities and Exchange Commission on December 3, 1996
File No. 333-_______
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
_____________
T/F PURIFINER, INC.
(Exact name of issuer as specified in its charter)
Delaware 14-1708544
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
3020 High Ridge Road, Suite 100
Boynton Beach, Florida 33426 33426
(Address of principal executive offices) (Zip Code)
_____________
T/F PURIFINER, INC., 1996 STOCK OPTION PLAN
(Full title of the plan)
_____________
RICHARD C. FORD
3020 High Ridge Road, Suite 100
Boynton Beach, Florida 33426
(561) 547-9499
(Name, and address and telephone number, including area code,
of agent for service)
Copy to:
Gayle Coleman, Esq.
Atlas, Pearlman, Trop & Borkson, P.A.
200 East Las Olas Boulevard, Suite 1900
Fort Lauderdale, Florida 33301
(305) 763-1200
_____________
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CALCULATION OF REGISTRATION FEE
================================================================================
Proposed Proposed
maximum maximum
offering aggregate Amount of
Title of securities Amount to be price per offering registration
to be registered registered(1) share(1) price(1) fee (1)
================================================================================
Common Stock
(.001 par value) 650,000 shares $6.50 $4,225,000 $1,225.25
================================================================================
(1) Pursuant to Rule 457(h), the maximum offering price was calculated based
upon the weighted average of the exercise price which ranged from $5.00
per share to $15.00 per share.
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T/F Purifiner, INC.
CROSS REFERENCE SHEET REQUIRED BY ITEM 501(b) OF REGULATION S-K
Form S-8 Item Number
and Caption Caption in Prospectus
-------------------- ---------------------
1. Forepart of Registration State- Facing Page of Registration
ment and Outside Front Cover Statement and Cover Page of
Page of Prospectus Prospectus
2. Inside Front and Outside Back Inside Cover Page of Pro-
Cover Pages of Prospectus spectus and Outside Cover
Page of Prospectus
3. Summary Information, Risk Fac- Not Applicable
tors and Ratio of Earnings to
Fixed Charges
4. Use of Proceeds Not Applicable
5. Determination of Offering Price Not Applicable
6. Dilution Not Applicable
7. Plan of Distribution Cover Page of Prospectus
8. Description of Securities to be Description of Securities;
Registered T/F Purifiner, Inc. 1996
Stock Option Plan
9. Interests of Named Experts and Legal Matters
Counsel
10. Material Changes Not Applicable
11. Incorporation of Certain Infor- Incorporation of Certain
mation by Reference Documents by Reference
12. Disclosure of Commission Posi- Indemnification
tion on Indemnification for
Securities Act Liabilities
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PROSPECTUS
T/F PURIFINER, INC.
650,000 Shares of Common Stock
(.001 par value)
Issued Pursuant to the
T/F Purifiner, Inc. 1996 Stock Option Plan
This Prospectus is part of a Registration Statement which registers an
aggregate of 650,000 shares of Common Stock, $.001 par value (such shares being
collectively referred to as the "Shares") of T/F Purifiner, Inc. (the "Company"
or "T/F Purifiner") which may be issued, as set forth herein, to officers,
directors, employees, advisory board members, and consultants of the Company
pursuant to the exercise of non-qualified or incentive stock options to purchase
up to 650,000 shares of Common Stock under and in accordance with the T/F
Purifiner, Inc. 1996 Stock Option Plan (the "Plan"). All of the Options were or
will be granted to such officers, directors, employees, advisory board members,
and consultants pursuant to individual written options or employment agreements.
Such selling shareholders may sometimes hereafter be collectively referred to as
the "Selling Security Holders." The Company has been advised by the Selling
Security Holders that they may sell all or a portion of the Shares from time to
time in the over-the-counter market, in negotiated transactions, directly or
through brokers or otherwise, and that such shares will be sold at market prices
prevailing at the time of such sales or at negotiated prices, and the Company
will not receive any proceeds from such sales except upon exercise of the
Options.
No person has been authorized by the Company to give any information or to
make any representation other than as contained in this Prospectus, and if given
or made, such information or representation must not be relied upon as having
been authorized by the Company. Neither the delivery of this Prospectus nor any
distribution of the Shares issuable upon exercise of the Options or under the
terms of the Agreements shall, under any circumstances, create any implication
that there has been no change in the affairs of the Company since the date
hereof.
_____________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED ON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
_____________
This Prospectus does not constitute an offer to sell securities in any
state to any person to whom it is unlawful to make such offer in such state.
The date of this Prospectus is December 3, 1996.
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AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Reports, proxy statements
and other information filed with the Commission can be inspected and copied at
the public reference facilities of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549. Copies of this material can also be obtained at
prescribed rates from the Public Reference Section of the Commission at its
principal office at 450 Fifth Street, N.W., Washington, D.C. 20549. The
Commission also maintains a Web site that contains reports, proxy and
information statements and other information regarding registrants that file
electronically with the Commission at http://www.sec.gov. The Company's Common
Stock is traded on the OTC Bulletin Board under the symbol "TFPU."
The Company has filed with the Commission a Registration Statement on Form
S-8 (the "Registration Statement") under the Securities Act of 1933, as amended
(the "Act"), with respect to an aggregate of 650,000 shares of the Company's
Common Stock, issued or underlying options granted to officers, directors, key
employees or consultants to the Company under the Plan. This Prospectus, which
is Part I of the Registration Statement, omits certain information contained in
the Registration Statement. For further information with respect to the Company
and the shares of the Common Stock offered by this Prospectus, reference is made
to the Registration Statement, including the exhibits thereto. Statements in
this Prospectus as to any document are not necessarily complete, and where any
such document is an exhibit to the Registration Statement or is incorporated by
reference herein, each such statement is qualified in all respects by the
provisions of such exhibit or other document, to which reference is hereby made,
for a full statement of the provisions thereof. A copy of the Registration
Statement, with exhibits, may be obtained from the Commission's office in
Washington, D.C. (at the above address) upon payment of the fees prescribed by
the rules and regulations of the Commission, or examined there without charge.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Securities and
Exchange Commission are incorporated herein by reference and made a part hereof:
(a) The Company's Registration Statement on Form 10-SB, as amended,
effective September 28, 1996.
(b) The Company's Quarterly Report on Form 10-QSB for the quarter ended
September 30, 1996.
All reports and documents filed by the Company pursuant to Section 13, 14
or 15(d) of the Exchange Act, prior to the filing of a post-effective amendment
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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 herein and to be a part hereof from the respective
date of filing of such documents. Any statement incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this Prospectus to
the extent that a statement contained herein or in any other subsequently filed
document, which also is or is deemed to be incorporated by reference herein,
modifies or supersedes such statement. Any statement modified or superseded
shall not be deemed, except as so modified or superseded, to constitute part of
this Prospectus.
The Company hereby undertakes to provide without charge to each person,
including any beneficial owner, to whom a copy of the Prospectus has been
delivered, on the written request of any such person, a copy of any or all of
the documents referred to above which have been or may be incorporated by
reference in this Prospectus, other than exhibits to such documents. Written
requests for such copies should be directed to Corporate Secretary, T/F
Purifiner, Inc., 3020 High Ridge Road, Suite 100, Boynton Beach, Florida 33426,
Telephone (561) 547-9499.
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THE COMPANY
The Company owns the rights to manufacture, market and distribute
worldwide the Purifiner(TM), a bypass oil purification system that is compatible
for use with substantially all internal combustion engines, generators and other
types of equipment which use oil for their lubrication needs. The Purifiner(TM)
is a bypass ultra filtration system which cleans oil by continuously removing
solid and liquid contaminants from the oil through a filtration and evaporation
process. The Purifiner(TM) has been used successfully to substantially extend
oil drain intervals and the time between engine overhauls to up to three times
longer than historical overhaul intervals. The Company also manufactures (with
one exception) and sells the disposable replacement filter elements for the
Purifiner(TM).
By continually cleaning the oil, which enables greatly extended drain
intervals, the Purifiner(TM) has had a demonstrable effect on extending engine
life, reducing oil purchase, disposal and maintenance costs and service time,
while significantly reducing the necessity for the disposal and storage of new
and used oil, thereby enabling users to overcome environmental liabilities
associated with such disposal and storage. Additionally, based upon customer
statements, extensive testing done by Southwest Research Institute, an
independent third party testing laboratory, on an improved heavy duty engine oil
that supports improved fuel efficiency from the use of this new oil, and the
general recognition that operating an engine with cleaner oil will decrease
engine energy losses due to friction, wear, and oil viscosity fluctuations, the
Company believes that end users shall experience improved fuel economy.
Since the Purifiner(TM) has had limited acceptability in the marketplace,
the Company's strategy has been to obtain product credibility by overcoming long
held beliefs that oil needs to be regularly changed in accordance with
recommended guidelines. As the Company was striving to obtain credibility for
the Purifiner(TM), the concept of extended oil replacement intervals was
becoming more readily accepted. The Company believes that this acceptance was
due, in part, to the introduction of longer life oils and the realization by
consumers, as well as vehicle and engine manufacturers and oil companies, of the
cost, warranty, environmental and other benefits of such extensions.
The Company has expanded its distribution network and direct marketing
activities, primarily focused in the heavy duty truck marketplace, and
internationally. To date the Company has approximately 135 U.S. and Canadian
distributors, of which approximately 80 are active distributors, and
approximately 17 international distributors. The Company also formed a foreign
joint venture effective January 1, 1996 to market the Purifiner((TM)) through
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Europe, the Middle East, the former Soviet Union, Egypt, and South Africa.
Additionally, the Company recently entered into a written Memorandum of
Understanding with a private company in India to distribute the Company's
products in India, Nepal, Sri- Lanka and Burma and to manufacture such products
for these markets and for export.
The Company plans on continuing to expand its distribution channels
throughout the world, as well as the number of market segments on which it
focuses. The Company also plans to employ additional direct sales personnel to
establish additional distributors and to market its products to certain national
and other accounts in conjunction with its distributors. The Company also plans
to enter into additional joint ventures in various parts of the world that would
manufacture and/or market its products.
The Company has entered into discussions with two major oil companies to
form strategic alliances for the purpose of marketing the Purifiner(TM) with
certain of their products. The Company also plans to target original equipment
manufacturers ("OEM") for original placement of the Purifiner(TM) on OEM
products.
The Company's administrative office is located at 3020 High Ridge Road,
Suite 100, Boynton Beach, Florida 33426; Telephone No. (561) 547-9499. The
Company's fiscal year end is December 31.
T/F PURIFINER, INC. 1996 STOCK OPTION PLAN
INTRODUCTION
The following descriptions summarize certain provisions of the Plan and
the form of agreements to be entered into by recipients of options thereunder.
Such summaries do not purport to be complete and are qualified by reference to
the full text of the Plan and form of agreement. A copy of the Plan is on file
as an exhibit to the Registration Statement of which this Prospectus is a part.
Each person receiving an option under the Plan should read the Plan and related
option agreement in its entirety.
The Company's 1996 Stock Option Plan was adopted by the Board of Directors
on July 31, 1996, effective as of that date and ratified by the Company's
shareholders on August 28, 1996. Under the Plan, the Company has reserved an
aggregate of 650,000 shares of Common Stock for issuance pursuant to options
granted under the Plan ("Plan Options"). The purpose of the Plan is to encourage
stock ownership by officers, directors, employees, advisory board members, and
consultants of the Company, and to give such persons a greater personal interest
in the success of the Company's business and an added incentive to continue to
advance and contribute to the Company. The Compensation Committee of the Board
of Directors (the "Committee") or the Board of Directors of the Company
administers the Plan including, without limitation, the selection of the persons
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who will be granted Plan Options under the Plan, the type of Plan Options to be
granted, the number of shares subject to each Plan Option and the Plan Option
price.
Plan Options granted under the Plan may either be options qualifying as
incentive stock options ("Incentive Options") under Section 422 of the Internal
Revenue Code of 1986, as amended, or options that do not so qualify
("Non-Qualified Options"). In addition, the Plan also allows for the inclusion
of a reload option provision ("Reload Option"), which permits an eligible person
to pay the exercise price of the Plan Option with shares of Common Stock owned
by the eligible person and receive a new Plan Option to purchase shares of
Common Stock equal in number to the tendered shares. As discussed hereafter, any
Incentive Option granted under the Plan must provide for an exercise price of
not less than 100% of the fair market value of the underlying shares on the date
of such grant, but the exercise price of any Incentive Option granted to an
eligible employee owning more than 10% of the outstanding Common Stock of the
Company must not be less than 110% of such fair market value as determined on
the date of the grant. The term of each Plan Option and the manner in which it
may be exercised is determined by the Board of Directors or the Committee,
provided that no Plan Option may be exercisable more than 10 years after the
date of its grant and, in the case of an Incentive Option granted to an eligible
employee owning more than 10% of the Common Stock, no more than five years after
the date of the grant.
ELIGIBILITY
Officers, directors, employees, advisory board members, and consultants of
the Company and its subsidiaries are eligible to receive Non-Qualified Options
under the T/F Purifiner, Inc. 1996 Stock Option Plan. Only officers and
employees of the Company who are employed by the Company or by any subsidiary
thereof are eligible to receive Incentive Options.
ADMINISTRATION
The Plan is administered by the Company's Compensation Committee of the
Board of Directors or the Board of Directors itself. The Committee or the Board
of Directors determines from time to time those officers, directors, employees,
advisory board members, and consultants of the Company or any of its
subsidiaries to whom Plan Options are to be granted, the terms and provisions of
the respective option agreements, the time or times at which such Plan Options
shall be granted, the type of Plan Options to be granted, the dates such Plan
Options become exercisable, the number of shares subject to each Plan Option,
the purchase price of such shares and the form of payment of such purchase
price. All other questions relating to the administration of the Plan, and the
interpretation of the provisions thereof and of the related option agreements,
are resolved by the Committee or the Board of Directors.
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SHARES SUBJECT TO AWARDs
The Company has reserved 650,000 of its authorized but unissued shares of
Common Stock or shares maintained in the treasury of the Company for issuance
under the Plan, and a maximum of 650,000 shares may be issued thereunder. In
connection with the adoption and approval of the Plan, the Company's Board of
Directors resolved that the aggregate number of total shares of the Company's
Common Stock issuable under the Plan may not exceed 650,000 shares (subject to
adjustment in the event of certain changes in the Company's capitalization)
without further action by the Company's Board of Directors and shareholders, as
required. Except for such limitation on the aggregate number of shares issuable
under the Plan, there is no maximum or minimum number of shares of Common Stock
as to which a Plan Option may be granted to any person. Shares used for Plan
Options may be authorized and unissued shares or shares reacquired by the
Company, including shares purchased in the open market. Shares covered by Plan
Options which terminate unexercised will again become available for additional
Plan Options, without decreasing and maximum number of shares issuable under the
Plan, although such shares may also be used by the Company for other purposes.
The Plan provides that, if the Company's outstanding shares are increased,
decreased, exchanged or otherwise adjusted due to a share dividend, forward or
reverse share split, recapitalization, reorganization, merger, consolidation,
combination or exchange of shares, an appropriate and proportionate adjustment
shall be made in the number or kind of shares subject to the Plan or subject to
unexercised Plan Options and in the purchase price per share under such Plan
Options. Any adjustment, however, does not change the total purchase price
payable for the shares subject to outstanding Plan Options. The Board of
Directors are required by the Plan to accelerate the exercise provisions of any
outstanding Plan Option in the event of a tender offer for the Company's shares,
the adoption of a plan of merger under which all the shares of the Company would
be eliminated, a sale of substantially all of the Company's assets or business
or the liquidation or dissolution of the Company.
TERMS OF EXERCISE
The Plan provides that the Plan Options granted thereunder shall be
exercisable from time to time in whole or in part, unless otherwise specified in
the agreement representing the Plan Options or by the Committee or by the Board
of Directors. Each Plan Option may be exercised in whole or in part at any time
during the period from the date the Plan Option becomes exercisable until the
end of the period covered by the Plan Option period.
The Plan provides that, with respect to Incentive Stock Options, the
aggregate fair market value (determined as of the time the option is granted)
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of the shares of Common Stock, with respect to which Incentive Stock Options are
first exercisable by any option holder during any calendar year (including all
incentive stock option plans of the Company, any parent or any subsidiaries
which are qualified under Section 422 of the Internal Revenue Code of 1986)
shall not exceed $100,000.
EXERCISE PRICE
The purchase price for shares subject to Incentive Stock Options must be
at least 100% of the fair market value of the Company's Common Stock on the date
the option is granted, except that the purchase price must be at least 110% of
the fair market value in the case of an Incentive Stock Option granted to a
person who is a "10% stockholder." A "10% stockholder" is a person who owns
(within the meaning of Section 422(b)(6) of the Internal Revenue Code of 1986)
at the time the Incentive Stock Option is granted, shares possessing more than
10% of the total combined voting power of all classes of the outstanding shares
of the Company, any parent or any subsidiaries. The Plan provides that fair
market value shall be determined by the Board or the Committee in accordance
with procedures which it may from time to time establish. If the purchase price
is paid with consideration other than cash, the Board or the Committee shall
determine the fair value of such consideration to the Company in monetary terms.
The exercise price of Non-Qualified Options shall be determined by the
Board of Directors or the Committee and will not be less than 75% of the fair
market value (but in no event less than par value).
The per share purchase price of shares subject to Plan Options granted
under the Plan may be adjusted in the event of certain changes in the Company's
capitalization, but any such adjustment shall not change the total purchase
price payable upon the exercise in full of Plan Options granted under the Plan.
MANNER OF EXERCISE
Plan Options are exercisable under the Plan by delivery of written notice
to the Company stating the number of shares with respect to which the Plan
Option is being exercised, together with full payment of the purchase price
therefor. Payment shall be in cash, checks, certified or bank cashier's checks,
shares of Common Stock or in such other form or combination of forms which shall
be acceptable to the Board of Directors or the Committee, provided that any loan
or guarantee by the Company of the purchase price may only be made upon
resolution of the Board or Committee that such loan or guarantee is reasonably
expected to benefit the Company.
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OPTION PERIOD
All Incentive Stock Options shall expire on or before the tenth (10th)
anniversary of the date the Option is granted except for Incentive Options
granted to 10% stockholders. Non-Qualified Options shall expire ten (10) years
and one (1) day from the date of grant unless otherwise provided under the terms
of the option grant.
TERMINATION
All Plan Options are nonassignable and nontransferable, except by will or
by the laws of descent and distribution, and during the lifetime of the
optionee, may be exercised only by such optionee. If an optionee's employment is
terminated for any reason, other than his death or disability or termination for
cause, or if an optionee is not an employee of the Company but is a member of
the Company's Board of Directors, Advisory Board Members and consultants, and
his service as a director, advisory board member, or consultant, is terminated
for any reason, other than death or disability, the exercisable Plan Option
granted to him shall lapse to the extent unexercised on the earlier of the
expiration date or 30 days following the date of termination. If the optionee
dies during the term of his employment, the exercisable Plan Option granted to
him shall lapse to the extent unexercised on the earlier of the expiration date
of the Plan Option or the date one year following the date of the optionee's
death. If the optionee is permanently and totally disabled within the meaning of
Section 22(c)(3) of the Internal Revenue Code of 1986, the exercisable Plan
Option granted to him lapses to the extent unexercised on the earlier of the
expiration date of the option or one year following the date of such disability.
MODIFICATION AND TERMINATION OF PLANS
The Board of Directors may amend, suspend or terminate the Plan at any
time, except that no amendment shall be made which (i) increases the total
number of shares subject to the Plan or changes the minimum purchase price
therefor (except in either case in the event of adjustments due to changes in
the Company's capitalization), or (ii) affects outstanding Plan Options or any
exercise right thereunder. Unless the Plan shall theretofore have been suspended
or terminated by the Board of Directors, the Plan shall terminate on July 31,
2006. Any such termination of the Plan shall not affect the validity of any Plan
Options previously granted thereunder.
FEDERAL INCOME TAX EFFECTS
The following discussion applies to the T/F Purifiner, Inc. 1996 Stock
Option Plan and is based on federal income tax laws and regulations in effect on
December 31, 1995. It does not purport to be a complete description of the
federal income tax consequences of the Plan, nor does it describe the
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consequences of state, local or foreign tax laws which may be applicable.
Accordingly, any person receiving a grant under the Plan should consult with his
own tax adviser.
The Plan is not subject to the provisions of the Employee Retirement
Income Security Act of 1974 and is not qualified under Section 401(a) of the
Internal Revenue Code of 1986, as amended (the "Code").
An employee granted an Incentive Stock Option does not recognize taxable
income either at the date of grant or at the date of its timely exercise.
However, the excess of the fair market value of Common Stock received upon
exercise of the Incentive Stock Option over the Option exercise price is an item
of tax preference under Section 57(a)(3) of the Code and may be subject to the
alternative minimum tax imposed by Section 55 of the Code. Upon disposition of
stock acquired on exercise of an Incentive Stock Option, long-term capital gain
or loss is recognized in an amount equal to the difference between the sales
price and the Incentive Stock Option exercise price, provided that the option
holder has not disposed of the stock within two years from the date of grant and
within one year from the date of exercise. If the Incentive Stock Option holder
disposes of the acquired stock (including the transfer of acquired stock in
payment of the exercise price of an Incentive Stock Option) without complying
with both of these holding period requirements ("Disqualifying Disposition"),
the option holder will recognize ordinary income at the time of such
Disqualifying Disposition to the extent of the difference between the exercise
price and the lesser of the fair market value of the stock on the date the
Incentive Stock Option is exercised (the value six months after the date of
exercise may govern in the case of an employee whose sale of stock at a profit
could subject him to suit under Section 16(b) of the Securities Exchange Act of
1934) or the amount realized on such Disqualifying Disposition. Any remaining
gain or loss is treated as a short-term or long-term capital gain or loss,
depending on how long the shares are held. In the event of a Disqualifying
Disposition, the Incentive Stock Option tax preference described above may not
apply (although, where the Disqualifying Disposition occurs subsequent to the
year the Incentive Stock Option is exercised, it may be necessary for the
employee to amend his return to eliminate the tax preference item previously
reported). The Company and its subsidiary are not entitled to a tax deduction
upon either exercise of an Incentive Stock Option or disposition of stock
acquired pursuant to such an exercise, except to the extent that the Option
holder recognized ordinary income in a Disqualifying Disposition.
If the holder of an Incentive Stock Option pays the exercise price, in
full or in part, with shares of previously acquired Common Stock, the exchange
should not affect the Incentive Stock Option tax treatment of the exercise. No
gain or loss should be recognized on the exchange, and the shares received by
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the employee, equal in number to the previously acquired shares exchanged
therefor, will have the same basis and holding period for long-term capital gain
purposes as the previously acquired shares. The employee will not, however, be
able to utilize the old holding period for the purpose of satisfying the
Incentive Stock Option statutory holding period requirements. Shares received in
excess of the number of previously acquired shares will have a basis of zero and
a holding period which commences as of the date the Common Stock is issued to
the employee upon exercise of the Incentive Stock Option. If an exercise is
effected using shares previously acquired through the exercise of an Incentive
Stock Option, the exchange of the previously acquired shares will be considered
a disposition of such shares for the purpose of determining whether a
Disqualifying Disposition has occurred.
In respect to the holder of Non-Qualified Options, the option holder does
not recognize taxable income on the date of the grant of the Non-Qualified
Option, but recognizes ordinary income generally at the date of exercise in the
amount of the difference between the option exercise price and the fair market
value of the Common Stock on the date of exercise. However, if the holder of
Non-Qualified Options is subject to the restrictions on resale of Common Stock
under Section 16 of the Securities Exchange Act of 1944, such person generally
recognizes ordinary income at the end of the six-month period following the date
of exercise in the amount of the difference between the option exercise price
and the fair market value of the Common Stock at the end of the six-month
period. Nevertheless, such holder may elect within 30 days after the date of
exercise to recognize ordinary income as of the date of exercise. The amount of
ordinary income recognized by the option holder is deductible by the Company in
the year that income is recognized.
RESTRICTIONS UNDER SECURITIES LAWS
The sale of the Shares must be made in compliance with federal and state
securities laws. Officers, directors and 10% or greater shareholders of the
Company, as well as certain other persons or parties who may be deemed to be
"affiliates" of the Company under the Federal Securities Laws, should be aware
that resales by affiliates can only be made pursuant to an effective
Registration Statement, Rule 144 or any other applicable exemption. Officers,
directors and 10% and greater shareholders are also subject to the "short swing"
profit rule of Section 16(b) of the Securities Exchange Act of 1934.
DESCRIPTION OF SECURITIES
The Company is authorized to issue up to 20,000,000 shares of Common Stock,
$.001 per value, per Share. The Company is also authorized to issue up to
500,000 shares of Preferred Stock, par value $.001 per Share, no shares of which
have previously been issued.
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Common Stock
- ------------
The Company is authorized to issue up to 20,000,000 shares of Common
Stock, $.001 par value per Share. Subject to the dividend rights of the holders
of any outstanding shares of Preferred Stock, holders of shares of Common Stock
are entitled to share, on a ratable basis, such dividends as may be declared by
the Board of Directors out of funds legally available therefor. Upon
liquidation, dissolution or winding up of the Company, after payment to
creditors and holders of any outstanding shares of Preferred Stock, the assets
of the Company will be divided pro rata on a per Share basis among the holders
of the Common Stock.
Each share of Common Stock entitles the holders thereof, to one vote.
Holders of Common Stock do not have cumulative voting rights which means that
the holders of more than 50% of shares voting for the election of Directors can
elect all of the Directors if they choose to do so, and in such event, the
holders of the remaining shares will not be able to elect any Directors. The
Company's management or their affiliates own or have the right to vote 1,184,823
shares or approximately 77.9% of the outstanding Common Stock of the Company at
September 15, 1996. The By-Laws of the Company require that only a majority of
the issued and outstanding shares of Common Stock of the Company need be
represented to constitute a quorum and to transact business at a stockholders'
meeting. The Common Stock has no preemptive, subscription or conversion rights
and is not redeemable by the Company.
Preferred Stock
- ---------------
The Company is authorized to issue 500,000 shares of Preferred Stock, par
value $.001 per Share, issuable in such series and bearing such voting,
dividend, conversion, liquidation and other rights and preferences as the Board
of Directors may determine. As of the date hereof, no shares have been issued or
are outstanding. The Preferred Stock is so-called "Blank Check" Preferred Stock,
which means that the Board of Directors of the Company, in its sole discretion,
will be able to issue the shares of Preferred Stock in one or more series of
classes having such terms, designations and preferences as determined by the
Board of Directors and without authorization or confirmation by the stockholders
of the Company.
Options and Warrants
- --------------------
There are currently no outstanding warrants to purchase shares of Common
Stock of the Company. However, warrants to purchase shares of Common Stock may
be expected to be provided to key employees, members of management, directors,
board of advisors, and consultants to the Company in the future.
As of September 15, 1996, the Company granted incentive Plan Options to
purchase an aggregate of 159,650 shares of Common Stock and non-qualified Plan
15
<PAGE>
Options to purchase an aggregate of 490,350 shares of Common Stock. Of the
incentive Plan Options granted, options to purchase an aggregate of (i) 35,000
shares at $5.50 per Share through August 2, 2001 were granted, 17,500 of which
vested on August 2, 1996, 8,750 of which vest on August 2, 1997, and 8,750 of
which vest on August 2, 1998; (ii) options to purchase 81,750 at $5.00 per Share
through August 2, 2006 were granted, 40,375 of which vest on August 2, 1996,
20,438 of which vest on August 2, 1997, 20,437 of which vest on August 2, 1998,
250 of which vest on August 2, 1999 and 250 of which vest on August 2, 2000;
(iii) options to purchase an aggregate of 12,500 Shares at $5.00 per Share
through August 2, 2006, of which 3,125 vest on August 5, 1997, 3,125 vest on
August 5, 1998, 3,125 vest on August 5, 1999 and 3,125 vest on August 5, 2000;
(iv) options to purchase an aggregate of 30,000 Shares at $15.00 per Share
through August 2, 2006, 7,500 of which vest on August 5, 1997, 7,500 of which
vest on August 5, 1998, 7,500 of which vest on August 5, 1999 and 7,500 of which
vest on August 5, 2000; and (v) options to purchase an aggregate of 400 Shares
at $5.00 per Share through September 9, 2006, 100 of which vest on September 9,
1997, 100 of which vest on September 9, 1998, 100 of which vest on September 9,
1999, and 100 of which vest on September 9, 2000.
As of August 31, 1996, non-qualified options to purchase an aggregate of
490,350 shares were issued as follows: (i) options to purchase an aggregate of
25,000 Shares at $5.00 per Share through August 2, 2006 were granted to members
of the Company's Board of Advisors of which an aggregate of 8,335 of which
vested as of August 2, 1996, 8,335 of which shall vest on August 2, 1997 and
8,330 shall vest as of August 2, 1998; (ii) options to purchase an aggregate of
317,850 Shares were granted to consultants of the Company at $5.00 per Share
through August 2, 1997; 108,500 of which vested on August 2, 1996, 9,350 of
which vest on November 2, 1996, and 200,000 of which vest on January 1, 1997
(iii) options to purchase an aggregate of 67,500 Shares were issued to
consultants of the Company at $15.00 per Share through August 2, 1997; 67,500 of
which vest on August 2, 1996, and (iv) options to purchase an aggregate of
80,000 Shares were issued to Richard C. Ford, the Company's Chief Executive
Officer, President, Chairman and a Director at $5.00 per Share, 40,000 of which
vested as of August 2, 1996, 20,000 of which shall vest on August 2, 1997, and
20,000 of which shall vest on August 2, 1998.
OVER-THE-COUNTER MARKET
The Company's Common Stock is traded on the OTC Bulletin Board under the
symbol "TFPU."
TRANSFER AGENT
The transfer agent for the Company's Common Stock is Florida Atlantic
Stock Transfer, Inc., 5701 N. Pine Island Road, Tamarac, Florida 33321.
16
<PAGE>
LEGAL MATTERS
Certain legal matters in connection with the securities being offered
hereby will be passed upon for the Company by Atlas, Pearlman, Trop & Borkson,
P.A., 200 East Las Olas Boulevard, Suite 1900, Fort Lauderdale, Florida 33301.
Atlas, Pearlman, Trop & Borkson, P.A. and members of the firm collectively own
5,000 shares of Common Stock of the Company.
EXPERTS
The financial statements of T/F Purifiner, Inc. for the year ended
December 31, 1995, included in the Company's Registration Statement on Form
10-SB, as amended, have been audited by Richard A. Eisner & Company, LLP,
independent certified public accountants, as set forth in their report thereon
included therein and incorporated herein by reference. Such financial statements
are incorporated herein by reference in reliance upon such report given upon the
authority of such firm as experts in accounting and auditing.
INDEMNIFICATION
Article X of the Company's Amended and Restated Certificate of
Incorporation provide for indemnification of officers and directors. The
specific provision of the Amended and Restated Certificate of Amendment related
to such indemnification is as follows:
A. PERSONS. The Corporation shall indemnify, to the extent provided in
paragraphs B, D or F:
(1) any person who is or was a director, officer,
employee, or agent of the Corporation; and
(2) any person who serves or served at the Corporation's request
as a director, officer, employee, agent, partner or trustee of
another corporation, partnership, joint venture, trust or
other enterprise.
B. EXTENT -- DERIVATIVE SUITS. In case of a threatened, pending or
completed action or suit by or in the right of the Corporation against a person
named in paragraph A by reason of his holding a position named in paragraph A,
the Corporation shall indemnify him if he satisfied the standard in paragraph C,
for expenses (including attorneys' fees but excluding amounts paid in
settlement) actually and reasonably incurred by him in connection with the
defense or settlement of the action or suit.
C. STANDARD -- DERIVATIVE SUITS. In case of a threatened, pending or
completed action or suit by or in the right of the Corporation, a person named
17
<PAGE>
named in paragraph A shall be indemnified only if:
(1) he is successful on the merits or otherwise; or
(2) he acted in good faith in the transaction which is the subject
of the suit or action, and in a manner he reasonably believed
to be in, or not opposed to, the best interests of the
Corporation, including, but not limited to, the taking of any
and all actions in connection with the Corporation's response
to any tender offer or any offer or proposal of another party
to engage in a Business Combination and approved by the Board
of Directors. However, he shall not be indemnified in respect
of any claim, issue or matter as to which he has been adjudged
liable to the Corporation unless (and only to the extent that)
the court in which the suit was brought shall determine, upon
application, that despite the adjudication but in view of all
the circumstances, he is fairly and reasonably entitled to
indemnity for such expenses a the court shall deem proper.
D. EXTENT -- NONDERIVATIVE SUITS. In case of a threatened, pending or
completed suit, action or proceeding (whether civil, criminal, administrative or
investigative), other than a suit by or in the right of the Corporation,
together hereafter referred to as a Nonderivative suit, against a person named
in paragraph A by reason of his holding a position named in paragraph A, the
Corporation shall indemnify him if he satisfied the standard in paragraph E, for
amounts actually and reasonably incurred by him in connection with the defense
or settlement of the nonderivative suit, including, but not limited to (i)
expenses (including attorneys' fees), (ii) amounts paid in settlement, (iii)
judgments, and (iv) fines.
E. STANDARD -- NONDERIVATIVE SUITS. In case of a nonderivative suit, a
person named in paragraph A shall be indemnified only if:
(1) he is successful on the merits or otherwise; or
(2) he acted in good faith in the transaction which is the subject
of the nonderivative suit and in a manner he reasonably
believed to be in, or not opposed to, the best interests of
the Corporation, including, but not limited to, the taking of
any and all actions in connection with the Corporation's
response to any tender offer or any offer or proposal of
another party to engage in a Business Combination not approved
by the Board of Directors and, with respect to any criminal
18
<PAGE>
actions or proceeding, he had no reasonable cause to believe
his conduct was unlawful. The termination of a nonderivative
suit by judgment, order, settlement, conviction, or upon a
plea of no lo contendere or its equivalent shall not, in
itself, create a presumption that the person failed to satisfy
the standard of this subparagraph E(2).
F. DETERMINATION THAT STANDARD HAS BEEN MET. A determination that the
standard of paragraph C or E has been satisfied may be made by a court, or,
except as stated in subpara- graph C(2) (second sentence), the determination may
be made by:
(1) the Board of Directors by a majority vote of a quorum
consisting of directors of the Corporation who were not
parties to the action, suit or proceeding; or
(2) independent legal counsel (appointed by a majority of the dis-
interested directors of the Corporation, whether or not a
quorum) in a written opinion; or
(3) the stockholders of the Corporation.
G. PRORATION. Anyone making a determination under paragraph F may
determine that a person has met the standard as to some matters but not as to
others, and may reasonably prorate amounts to be indemnified.
H. ADVANCE PAYMENT. The Corporation shall pay in advance any expenses
(including attorneys' fees) which may become subject to indemnification under
paragraphs A through G if:
(1) the Board of Directors authorizes the specific payment; and
(2) the person receiving the payment undertakes in writing to
repay the same if it is ultimately determined that he is not
entitled to indemnification by the Corporation under
paragraphs A through G.
I. NONEXCLUSIVE. The indemnification and advance payment of expenses
provided by paragraphs A through H shall not be exclusive of any other rights to
which a person may be entitled by law, bylaw, agreement, vote of stockholders or
disinterested directors, or otherwise.
J. CONTINUATION. The indemnification provided by this Article X shall
be deemed to be a contract between the Corporation and the persons entitled to
indemnification thereunder, and any repeal or modification of this Article X
shall not affect any rights or obligations then existing with respect to any
19
<PAGE>
state of facts then or theretofore existing or any action, suit or proceeding
theretofore or thereafter brought based in whole or in part upon any such state
of facts. The indemnification and advance payment provided by paragraphs A
through H shall continue as to a person who has ceased to hold a position named
in paragraph A and shall inure to his heirs, executors and administrators.
K. INSURANCE. The Corporation may purchase and maintain insurance on
behalf of any person who holds or who has held any position named in paragraph
A, against any liability incurred by him in any such position, or arising out of
his status as such, whether or not the Corporation would have power to indemnify
him against such liability under paragraphs A through H.
L. INTENTION AND SAVINGS CLAUSE. It is the intention of this Article X
to provide for indemnification to the fullest extent permitted by the General
Corporation Law of the State of Delaware, and this Article X shall be
interpreted accordingly. If this Article X or any portion hereof shall be
invalidated on any ground by any court of competent jurisdiction, then the
Corporation shall nevertheless indemnify each director, officer, employee, and
agent of the Corporation as to costs, charges, and expenses (including
attorneys' fees), judgments, fines, and amounts paid in settle with respect to
any action, suit, or proceeding, whether civil, criminal, administrative, or
investigative, including an action by or in the right of the Corporation to the
full extent permitted by any applicable portion of this Article X that shall not
have been invalidated and to the full extent permitted by applicable law. If the
General Corporation Law of the State of Delaware is amended, or other Delaware
law is enacted, to permit further or additional indemnification of the persons
defined in this Article X A, then the indemnification of such persons shall be
to the fullest extent permitted by the General Corporation Law of the State of
Delaware, as so amended, or such other Delaware law.
Article XI of the Company's Amended and Restated Article of Incorporation
sets forth the limitations on directors" liability as follows:
A director of the Corporation shall not be personally liable to the
Corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director, except: (i) for any breach of the
director's duty of loyalty to the Corporation or its stockholders,
(ii) for acts or omissions that are not in good faith or that
involve intentional misconduct or a knowing violation of law, (iii)
under Section 174 of the General Corporation Law of the State of
Delaware, or (iv) for any transaction from which the director
derived any improper personal benefit. If the General Corporation
Law of the State of Delaware or other Delaware law is amended or
enacted after the date of filing of this Certificate to further
20
<PAGE>
eliminate or limit the personal liability of directors, then the
liability of a director of the Corporation shall be eliminated or
limited to the fullest extent permitted by the General Corporation
Law of the State of Delaware, as amended, or such other Delaware
law. Any repeal or modification of the foregoing paragraph by the
stockholders of the Corporation shall not adversely affect any right
or protection of a director of the Corporation existing at the time
of such repeal or modification.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer 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.
21
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
- ------ ---------------------------------------
The documents listed in (a) through (b) below are incorporated by
reference in the Registration Statement. All documents subsequently filed by the
Registrant pursuant to Section 13(a), 13(c), 14 and 15(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), 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 the Registration Statement and to be part
thereof from the date of filing of such documents.
(a) All reports filed pursuant to Section 13(a) or 15(d) of the
Exchange Act since the end of the fiscal year covered by the Registrant's
document referred to above; and
(b) The description of the Common Stock of the Company which is
contained in a Registration Statement filed under the Exchange Act (Form 10-SB),
including any amendment or report filed for the purpose of updating such
description.
Item 4. Description of Securities
- ------ -------------------------
The class of securities to be offered hereby is registered under Section
12 of the Securities Exchange Act of 1934, as amended. A description of the
Registrant's securities is set forth in the Prospectus included as a part of
this Registration Statement.
Item 5. Interests of Named Experts and Counsel
- ------ --------------------------------------
Not Applicable.
Item 6. Indemnification of Directors and Officers
- ------ -----------------------------------------
Article X of the Company's Amended and Restated Certificate of
Incorporation provide for indemnification of officers and directors. The
specific provision of the Amended and Restated Certificate of Amendment related
to such indemnification is as follows:
M. PERSONS. The Corporation shall indemnify, to the extent provided in
paragraphs B, D or F:
(1) any person who is or was a director, officer, employee, or
agent of the Corporation; and
i
<PAGE>
(2) any person who serves or served at the Corporation's request
as a director, officer, employee, agent, partner or trustee of
another corporation, partnership, joint venture, trust or
other enterprise.
N. EXTENT -- DERIVATIVE SUITS. In case of a threatened, pending or
completed action or suit by or in the right of the Corporation against a person
named in paragraph A by reason of his holding a position named in paragraph A,
the Corporation shall indemnify him if he satisfied the standard in paragraph C,
for expenses (including attorneys' fees but excluding amounts paid in
settlement) actually and reasonably incurred by him in connection with the
defense or settlement of the action or suit.
O. STANDARD -- DERIVATIVE SUITS. In case of a threatened, pending or
completed action or suit by or in the right of the Corporation, a person named
in paragraph A shall be indemnified only if:
(1) he is successful on the merits or otherwise; or
(2) he acted in good faith in the transaction which is the subject
of the suit or action, and in a manner he reasonably believed
to be in, or not opposed to, the best interests of the
Corporation, including, but not limited to, the taking of any
and all actions in connection with the Corporation's response
to any tender offer or any offer or proposal of another party
to engage in a Business Combination and approved by the Board
of Directors. However, he shall not be indemnified in respect
of any claim, issue or matter as to which he has been adjudged
liable to the Corporation unless (and only to the extent that)
the court in which the suit was brought shall determine, upon
application, that despite the adjudication but in view of all
the circumstances, he is fairly and reasonably entitled to
indemnity for such expenses a the court shall deem proper.
P. EXTENT -- NONDERIVATIVE SUITS. In case of a threatened, pending or
completed suit, action or proceeding (whether civil, criminal, administrative or
investigative), other than a suit by or in the right of the Corporation,
together hereafter referred to as a Nonderivative suit, against a person named
in paragraph A by reason of his holding a position named in paragraph A, the
Corporation shall indemnify him if he satisfied the standard in paragraph E, for
amounts actually and reasonably incurred by him in connection with the defense
or settlement of the nonderivative suit, including, but not limited to (i)
expenses (including attorneys' fees), (ii) amounts paid in settlement, (iii)
judgments, and (iv) fines.
ii
<PAGE>
Q. STANDARD -- NONDERIVATIVE SUITS. In case of a nonderivative suit, a
person named in paragraph A shall be indemnified only if:
(1) he is successful on the merits or otherwise; or
(2) he acted in good faith in the transaction which is the subject
of the nonderivative suit and in a manner he reasonably
believed to be in, or not opposed to, the best interests of
the Corporation, including, but not limited to, the taking of
any and all actions in connection with the Corporation's
response to any tender offer or any offer or proposal of
another party to engage in a Business Combination not approved
by the Board of Directors and, with respect to any criminal
actions or proceeding, he had no reasonable cause to believe
his conduct was unlawful. The termination of a nonderivative
suit by judgment, order, settlement, conviction, or upon a
plea of no lo contendere or its equivalent shall not, in
itself, create a presumption that the person failed to satisfy
the standard of this subparagraph E(2).
R. DETERMINATION THAT STANDARD HAS BEEN MET. A determination that the
standard of paragraph C or E has been satisfied may be made by a court, or,
except as stated in subpara- graph C(2) (second sentence), the determination may
be made by:
(1) the Board of Directors by a majority vote of a quorum
consisting of directors of the Corporation who were not
parties to the action, suit or proceeding; or
(2) independent legal counsel (appointed by a majority of the dis-
interested directors of the Corporation, whether or not a
quorum) in a written opinion; or
(3) the stockholders of the Corporation.
S. PRORATION. Anyone making a determination under paragraph F may
determine that a person has met the standard as to some matters but not as to
others, and may reasonably prorate amounts to be indemnified.
T. ADVANCE PAYMENT. The Corporation shall pay in advance any expenses
(including attorneys' fees) which may become subject to indemnification under
paragraphs A through G if:
(1) the Board of Directors authorizes the specific payment; and
iii
<PAGE>
(2) the person receiving the payment undertakes in writing to
repay the same if it is ultimately determined that he is not
entitled to indemnification by the Corporation under
paragraphs A through G.
U. NONEXCLUSIVE. The indemnification and advance payment of expenses
provided by paragraphs A through H shall not be exclusive of any other rights to
which a person may be entitled by law, bylaw, agreement, vote of stockholders or
disinterested directors, or otherwise.
V. CONTINUATION. The indemnification provided by this Article X shall
be deemed to be a contract between the Corporation and the persons entitled to
indemnification thereunder, and any repeal or modification of this Article X
shall not affect any rights or obligations then existing with respect to any
state of facts then or theretofore existing or any action, suit or proceeding
theretofore or thereafter brought based in whole or in part upon any such state
of facts. The indemnification and advance payment provided by paragraphs A
through H shall continue as to a person who has ceased to hold a position named
in paragraph A and shall inure to his heirs, executors and administrators.
W. INSURANCE. The Corporation may purchase and maintain insurance on
behalf of any person who holds or who has held any position named in paragraph
A, against any liability incurred by him in any such position, or arising out of
his status as such, whether or not the Corporation would have power to indemnify
him against such liability under paragraphs A through H.
X. INTENTION AND SAVINGS CLAUSE. It is the intention of this Article X
to provide for indemnification to the fullest extent permitted by the General
Corporation Law of the State of Delaware, and this Article X shall be
interpreted accordingly. If this Article X or any portion hereof shall be
invalidated on any ground by any court of competent jurisdiction, then the
Corporation shall nevertheless indemnify each director, officer, employee, and
agent of the Corporation as to costs, charges, and expenses (including
attorneys' fees), judgments, fines, and amounts paid in settle with respect to
any action, suit, or proceeding, whether civil, criminal, administrative, or
investigative, including an action by or in the right of the Corporation to the
full extent permitted by any applicable portion of this Article X that shall not
have been invalidated and to the full extent permitted by applicable law. If the
General Corporation Law of the State of Delaware is amended, or other Delaware
law is enacted, to permit further or additional indemnification of the persons
defined in this Article X A, then the indemnification of such persons shall be
to the fullest extent permitted by the General Corporation Law of the State of
Delaware, as so amended, or such other Delaware law.
iv
<PAGE>
Article XI of the Company's Amended and Restated Article of Incorporation
sets forth the limitations on directors" liability as follows:
A director of the Corporation shall not be personally liable to the
Corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director, except: (i) for any breach of the
director's duty of loyalty to the Corporation or its stockholders,
(ii) for acts or omissions that are not in good faith or that
involve intentional misconduct or a knowing violation of law, (iii)
under Section 174 of the General Corporation Law of the State of
Delaware, or (iv) for any transaction from which the director
derived any improper personal benefit. If the General Corporation
Law of the State of Delaware or other Delaware law is amended or
enacted after the date of filing of this Certificate to further
eliminate or limit the personal liability of directors, then the
liability of a director of the Corporation shall be eliminated or
limited to the fullest extent permitted by the General Corporation
Law of the State of Delaware, as amended, or such other Delaware
law. Any repeal or modification of the foregoing paragraph by the
stockholders of the Corporation shall not adversely affect any right
or protection of a director of the Corporation existing at the time
of such repeal or modification.
The above indemnification provisions notwithstanding, the Company is aware
that insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers or persons controlling the
Company pursuant to the foregoing provisions, the Company has been informed that
in the opinion of the Securities and Exchange Commission, such indemnification
is against public policy as express in the act and is therefore unenforceable.
Item 8. Exhibits
- ------ --------
Exhibit Description
- ------- -----------
4(a) T/F Purifiner, Inc. 1996 Stock Option Plan
4(b) Form of Stock Option Agreements issued pursuant to the 1996 Stock
Option Plan
(5) Opinion of Atlas, Pearlman, Trop & Borkson, P.A. relating to the
issuance of shares of Common Stock pursuant to the above Plan
(23.1) Consent of Atlas, Pearlman, Trop & Borkson, P.A. included in the
opinion filed as exhibit (5) hereto
v
<PAGE>
(23.2) Consent of independent auditors, Richard A. Eisner & Company, LLP.
Item 9. Undertakings
- ------ ------------
(1) The undersigned Registrant hereby undertakes:
(a) To file, during any period in which offerings or sales are being
made, a post-effective amendment to this Registration Statement 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;
(b) That, for the purposes of determining any liability under the
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; and
(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.
(2) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Act, each filing of the Registrant's annual
report pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and,
where applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Exchange 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.
(3) Insofar as indemnification for liabilities arising under the 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 Securities and Exchange Commission, such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a Director, officer of 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.
vi
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
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 Boynton Beach, State of Florida, on the 3rd day
of December, 1996.
T/F PURIFINER, INC.
By:/s/Richard C. Ford
-----------------------------
Richard C. Ford, Chairman
of the Board, President and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
Chairman of the Board,
President, Principal
/s/Richard C. Ford Executive Officer, and December 3, 1996
- ----------------------- Principal Financial Officer
Richard C. Ford
/s/Richard J. Ford
- -----------------------
Richard J. Ford Director December 3, 1996
/s/Byron Lefebvre
- -----------------------
Byron Lefebvre Director December 3, 1996
vii
<PAGE>
************************
EXHIBITS OF T/F PURIFINER, INC.
FILE WITH
FORM S-8 REGISTRATION STATEMENT
FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION
*************************
<PAGE>
EXHIBIT INDEX
T/F PURIFINER, INC.
Exhibit
Number Description
- ------ -----------
4(a) T/F Purifiner, Inc. 1996 Stock Option Plan
4(b) Form of Stock Option Agreements issued pursuant to the 1996 Stock
Option Plan
(5) Opinion of Atlas, Pearlman, Trop & Borkson, P.A. relating to the
issuance of shares of Common Stock pursuant to the above Plan
(23.1) Consent of Atlas, Pearlman, Trop & Borkson, P.A. included in the
opinion filed as exhibit (5) hereto
(23.2) Consent of independent auditors, Richard A. Eisner & Company, LLP.
T/F PURIFINER, INC.
1996 STOCK OPTION PLAN
1. GRANT OF OPTIONS; GENERALLY. In accordance with the provisions
hereinafter set forth in this stock option plan, the name of which is the T/F
PURIFINER, INC. 1996 STOCK OPTION PLAN (the "Plan"), the Board of Directors (the
"Board") or, the Compensation Committee (the "Stock Option Committee") of T/F
Purifiner, Inc. (the "Corporation") is hereby authorized to issue from time to
time on the Corporation's behalf to any one or more Eligible Persons, as
hereinafter defined, options to acquire shares of the Corporation's $.001 par
value common stock (the "Stock").
2. TYPE OF OPTIONS. The Board or the Stock Option Committee is authorized
to issue options which meet the requirements of Section ss.422 of the Internal
Revenue Code of 1986, as amended (the "Code"), which options are hereinafter
referred to collectively as ISOs, or singularly as an ISO. The Board or the
Stock Option Committee is also, in its discretion, authorized to issue options
which are not ISOs, which options are hereinafter referred to collectively as
NSOs, or singularly as an NSO. The Board or the Stock Option Committee is also
authorized to issue "Reload Options" in accordance with Paragraph 8 herein,
which options are hereinafter referred to collectively as Reload Options, or
singularly as a Reload Option. Except where the context indicates to the
contrary, the term "Option" or "Options" means ISOs, NSOs and Reload Options.
3. AMOUNT OF STOCK. The aggregate number of shares of Stock which may be
purchased pursuant to the exercise of Options shall be 650,000 shares. Of this
amount, the Board or the Stock Option Committee shall have the power and
authority to designate whether any Options so issued shall be ISOs or NSOs,
subject to the restrictions on ISOs contained elsewhere herein. If an Option
ceases to be exercisable, in whole or in part, the shares of Stock underlying
such Option shall continue to be available under this Plan. Further, if shares
of Stock are delivered to the Corporation as payment for shares of Stock
purchased by the exercise of an Option granted under this Plan, such shares of
Stock shall also be available under this Plan. If there is any change in the
number of shares of Stock on account of the declaration of stock dividends,
recapitalization resulting in stock split-ups, or combinations or exchanges of
shares of Stock, or otherwise, the number of shares of Stock available for
purchase upon the exercise of Options, the shares of Stock subject to any Option
and the exercise price of any outstanding Option shall be appropriately adjusted
by the Board or the Stock Option Committee. The Board or the Stock Option
Committee shall give notice of any adjustments to each Eligible Person granted
an Option under this Plan, and such adjustments shall be effective and binding
on all Eligible Persons. If because of one or more recapitalizations,
reorganizations or other corporate events, the holders of outstanding Stock
receive something other than shares of Stock then, upon exercise of an Option,
the Eligible Person will receive what the holder would have owned if the holder
had exercised the Option immediately before the first such corporate event and
not disposed of anything the holder received as a result of the corporate event.
<PAGE>
4. ELIGIBLE PERSONS.
(a) With respect to ISOs, an Eligible Person means any individual
who is employed by the Corporation or by any subsidiary of the Corporation.
(b) With respect to NSOs, an Eligible Person means (i) any
individual who has been employed by the Corporation or by any subsidiary of the
Corporation, (ii) any director of the Corporation or any subsidiary of the
Corporation, (iii) any member of the Corporation's advisory board member or of
any of the Corporation's subsidiar(ies), or (iv) any consultant of the
Corporation or by any subsidiary of the Corporation.
5. GRANT OF OPTIONS. The Board or the Stock Option Committee has the
right to issue the Options established by this Plan to Eligible Persons. The
Board or the Stock Option Committee shall follow the procedures prescribed for
it elsewhere in this Plan. A grant of Options shall be set forth in a writing
signed on behalf of the Corporation or by a majority of the members of the Stock
Option Committee. The writing shall identify whether the Option being granted is
an ISO or an NSO and shall set forth the terms which govern the Option. The
terms shall be determined by the Board or the Stock Option Committee, and may
include, among other terms, the number of shares of Stock that may be acquired
pursuant to the exercise of the Options, when the Options may be exercised, the
period for which the Option is granted and including the expiration date, the
effect on the Options if the Eligible Person terminates employment and whether
the Eligible Person may deliver shares of Stock to pay for the shares of Stock
to be purchased by the exercise of the Option. However, no term shall be set
forth in the writing which is inconsistent with any of the terms of this Plan.
The terms of an Option granted to an Eligible Person may differ from the terms
of an Option granted to another Eligible Person, and may differ from the terms
of an earlier Option granted to the same Eligible Person.
6. OPTION PRICE. The option price per share shall be determined by the
Board or the Stock Option Committee at the time any Option is granted, and shall
be not less than (i) in the case of an ISO, the fair market value, (ii) in the
case of an ISO granted to a ten percent or greater stockholder, 110% of the fair
market value, or (iii) in the case of an NSO, not less than 75% of the fair
market value (but in no event less than the par value) of one share of Stock on
the date the Option is granted, as determined by the Board or the Stock Option
Committee. Fair market value as used herein shall be:
(a) If shares of Stock shall be traded on an exchange or
over-the-counter market, the closing price or the closing bid price of such
Stock on such exchange or over-the-counter market on which such shares shall be
traded on that date, or if such exchange or over-the-counter market is closed or
if no shares shall have traded on such date, on the last preceding date on which
such shares shall have traded.
(b) If shares of Stock shall not be traded on an exchange or
over-the-counter market, the value as determined by the Board of Directors or
the Stock Option Committee of the Corporation.
2
<PAGE>
7. PURCHASE OF SHARES. An Option shall be exercised by the tender to the
Corporation of the full purchase price of the Stock with respect to which the
Option is exercised and written notice of the exercise. The purchase price of
the Stock shall be in United States dollars, payable in cash or by check, or in
property or Corporation stock, if so permitted by the Board or the Stock Option
Committee in accordance with the discretion granted in Paragraph 5 hereof,
having a value equal to such purchase price. The Corporation shall not be
required to issue or deliver any certificates for shares of Stock purchased upon
the exercise of an Option prior to (i) if requested by the Corporation, the
filing with the Corporation by the Eligible Person of a representation in
writing that it is the Eligible Person's then present intention to acquire the
Stock being purchased for investment and not for resale, and/or (ii) the
completion of any registration or other qualification of such shares under any
government regulatory body, which the Corporation shall determine to be
necessary or advisable.
8. GRANT OF RELOAD OPTIONS. In granting an Option under this Plan, the
Board or the Stock Option Committee may include a Reload Option provision
therein, subject to the provisions set forth in Paragraphs 20 and 21 herein. A
Reload Option provision provides that if the Eligible Person pays the exercise
price of shares of Stock to be purchased by the exercise of an ISO, NSO or
another Reload Option (the "Original Option") by delivering to the Corporation
shares of Stock already owned by the Eligible Person (the "Tendered Shares"),
the Eligible Person shall receive a Reload Option which shall be a new Option to
purchase shares of Stock equal in number to the tendered shares. The terms of
any Reload Option shall be determined by the Board or the Stock Option Committee
consistent with the provisions of this Plan.
9. STOCK OPTION COMMITTEE. The Stock Option Committee may be appointed
from time to time by the Corporation's Board of Directors. The Board may from
time to time remove members from or add members to the Stock Option Committee.
The Stock Option Committee shall be constituted so as to permit the Plan to
comply in all respects with the provisions set forth in Paragraph 20 herein. The
members of the Stock Option Committee may elect one of its members as its
chairman. The Stock Option Committee shall hold its meetings at such times and
places as its chairman shall determine. A majority of the Stock Option
Committee's members present in person shall constitute a quorum for the
transaction of business. All determinations of the Stock Option Committee will
be made by the majority vote of the members constituting the quorum. The members
may participate in a meeting of the Stock Option Committee by conference
telephone or similar communications equipment by means of which all members
participating in the meeting can hear each other. Participation in a meeting in
that manner will constitute presence in person at the meeting. Any decision or
determination reduced to writing and signed by all members of the Stock Option
Committee will be effective as if it had been made by a majority vote of all
members of the Stock Option Committee at a meeting which is duly called and
held.
10. ADMINISTRATION OF PLAN. In addition to granting Options and to ex-
ercising the authority granted to it elsewhere in this Plan, the Board or the
Stock Option Committee is granted the full right and authority to interpret and
3
<PAGE>
construe the provisions of this Plan, promulgate, amend and rescind rules and
procedures relating to the implementation of the Plan and to make all other
determinations necessary or advisable for the administration of the Plan,
consistent, however, with the intent of the Corporation that Options granted or
awarded pursuant to the Plan comply with the provisions of Paragraph 20 and 21
herein. All determinations made by the Board or the Stock Option Committee shall
be final, binding and conclusive on all persons including the Eligible Person,
the Corporation and its stockholders, employees, officers and directors and
consultants. No member of the Board or the Stock Option Committee will be liable
for any act or omission in connection with the administration of this Plan
unless it is attributable to that member's willful misconduct.
11. PROVISIONS APPLICABLE TO ISOS. The following provisions shall apply
to all ISOs granted by the Board or the Stock Option Committee and are
incorporated by reference into any writing granting an ISO:
(a) An ISO may only be granted within ten (10) years from July 31,
1996, the date that this Plan was originally adopted by the Corporation's Board
of Directors.
(b) An ISO may not be exercised after the expiration of ten (10)
years from the date the ISO is granted.
(c) The option price may not be less than the fair market value of
the Stock at the time the ISO is granted.
(d) An ISO is not transferrable by the Eligible Person to whom it is
granted except by will, or the laws of descent and distribution, and is
exercisable during his or her lifetime only by the Eligible Person.
(e) If the Eligible Person receiving the ISO owns at the time of the
grant stock possessing more than ten (10%) percent of the total combined voting
power of all classes of stock of the employer corporation or of its parent or
subsidiary corporation (as those terms are defined in the Code), then the option
price shall be at least 110% of the fair market value of the Stock, and the ISO
shall not be exercisable after the expiration of five (5) years from the date
the ISO is granted.
(f) The aggregate fair market value (determined at the time the ISO
is granted) of the Stock with respect to which the ISO is first exercisable by
the Eligible Person during any calendar year (under this Plan and any other
incentive stock option plan of the Corporation) shall not exceed $100,000.
(g) Even if the shares of Stock which are issued upon exercise of an
ISO are sold within one year following the exercise of such ISO so that the sale
constitutes a disqualifying disposition for ISO treatment under the Code, no
provision of this Plan shall be construed as prohibiting such a sale.
4
<PAGE>
(h) This Plan was adopted by the Corporation on July 31, 1996, by
virtue of its approval by the Corporation's Board of Directors. Approval by a
majority of the stockholders of the Corporation occurred on July 31, 1996 and
was ratified at the Company's 1995 Annual Meeting on August 28, 1996.
12. DETERMINATION OF FAIR MARKET VALUE. In granting ISOs under this Plan,
the Board or the Stock Option Committee shall make a good faith determination as
to the fair market value of the Stock at the time of granting the ISO.
13. RESTRICTIONS ON ISSUANCE OF STOCK. The Corporation shall not be
obligated to sell or issue any shares of Stock pursuant to the exercise of an
Option unless the Stock with respect to which the Option is being exercised is
at that time effectively registered or exempt from registration under the
Securities Act of 1933, as amended, and any other applicable laws, rules and
regulations. The Corporation may condition the exercise of an Option granted in
accordance herewith upon receipt from the Eligible Person, or any other
purchaser thereof, of a written representation that at the time of such exercise
it is his or her then present intention to acquire the shares of Stock for
investment and not with a view to, or for sale in connection with, any
distribution thereof; except that, in the case of a legal representative of an
Eligible Person, "distribution" shall be defined to exclude distribution by will
or under the laws of descent and distribution. Prior to issuing any shares of
Stock pursuant to the exercise of an Option, the Corporation shall take such
steps as it deems necessary to satisfy any withholding tax obligations imposed
upon it by any level of government.
14. EXERCISE IN THE EVENT OF DEATH OF TERMINATION OR EMPLOYMENT.
(a) If an optionee shall die (i) while an employee of the
Corporation or a Subsidiary or (ii) within three months after termination of his
employment with the Corporation or a Subsidiary because of his disability, or
retirement or otherwise, his Options may be exercised, to the extent that the
optionee shall have been entitled to do so on the date of his death or such
termination of employment, by the person or persons to whom the optionee's right
under the Option pass by will or applicable law, or if no such person has such
right, by his executors or administrators, at any time, or from time to time. In
the event of termination of employment because of his death while an employee or
because of disability, his Options may be exercised not later than the
expiration date specified in Paragraph 5 or one year after the optionee's death,
whichever date is earlier, or in the event of termination of employment because
of retirement or otherwise, not later than the expiration date specified in
Paragraph 5 hereof or one year after the optionee's death, whichever date is
earlier.
(b) If an optionee's employment by the Corporation or a Subsidiary
shall terminate because of his disability and such optionee has not died within
the following three months, he may exercise his Options, to the extent that he
shall have been entitled to do so at the date of the termination of his
employment, at any time, or from time to time, but not later than the expiration
date specified in Paragraph 5 hereof or one year after termination of
employment, whichever date is earlier.
<PAGE>
(c) If an optionee's employment shall terminate by reason of his
retirement in accordance with the terms of the Corporation's tax-qualified
retirement plans or with the consent of the Board or the Stock Option Committee
or involuntarily other than by termination for cause, and such optionee has not
died within the following three months, he may exercise his Option to the extent
he shall have been entitled to do so at the date of the termination of his
employment, at any time and from to time, but not later than the expiration date
specified in Paragraph 5 hereof or thirty (30) days after termination of
employment, whichever date is earlier. For purposes of this Paragraph 14,
termination for cause shall mean termination of employment by reason of the
optionee's commission of a felony, fraud or willful misconduct which has
resulted, or is likely to result, in substantial and material damage to the
Corporation or a Subsidiary, all as the Board or the Stock Option Committee in
its sole discretion may determine.
(d) If an optionee's employment shall terminate for any reason other
than death, disability, retirement or otherwise, all right to exercise his
Option shall terminate at the date of such termination of employment.
15. CORPORATE EVENTS. In the event of the proposed dissolution or
liquidation of the Corporation, a proposed sale of all or substantially all of
the assets of the Corporation, a merger or tender for the Corporation's shares
of Common Stock the Board of Directors shall declare that each Option granted
under this Plan shall terminate as of a date to be fixed by the Board of
Directors; provided that not less than thirty (30) days written notice of the
date so fixed shall be given to each Eligible Person holding an Option, and each
such Eligible Person shall have the right, during the period of thirty (30) days
preceding such termination, to exercise his Option as to all or any part of the
shares of Stock covered thereby, including shares of Stock as to which such
Option would not otherwise be exercisable. Nothing set forth herein shall extend
the term set for purchasing the shares of Stock set forth in the Option.
16. NO GUARANTEE OF EMPLOYMENT. Nothing in this Plan or in any writing
granting an Option will confer upon any Eligible Person the right to continue in
the employ of the Eligible Person's employer, or will interfere with or restrict
in any way the right of the Eligible Person's employer to discharge such
Eligible Person at any time for any reason whatsoever, with or without cause.
17. NONTRANSFERABILITY. No Option granted under the Plan shall be trans-
ferable other than by will or by the laws of descent and distribution. During
the lifetime of the optionee, an Option shall be exercisable only by him.
18. NO RIGHTS AS STOCKHOLDER. No optionee shall have any rights as a
stockholder with respect to any shares subject to his Option prior to the date
of issuance to him of a certificate or certificates for such shares.
19. AMENDMENT AND DISCONTINUANCE OF PLAN. The Corporation's Board of
Directors may amend, suspend or discontinue this Plan at any time. However, no
such action may prejudice the rights of any Eligible Person who has prior
6
<PAGE>
thereto been granted Options under this Plan. Further, no amendment to this Plan
which has the effect of (a) increasing the aggregate number of shares of Stock
subject to this Plan (except for adjustments pursuant to Paragraph 3 herein), or
(b) changing the definition of Eligible Person under this Plan, may be effective
unless and until approval of the stockholders of the Corporation is obtained in
the same manner as approval of this Plan is required. The Corporation's Board of
Directors is authorized to seek the approval of the Corporation's stockholders
for any other changes it proposes to make to this Plan which require such
approval, however, the Board of Directors may modify the Plan, as necessary, to
effectuate the intent of the Plan as a result of any changes in the tax,
accounting or securities laws treatment of Eligible Persons and the Plan,
subject to the provisions set forth in this Paragraph 19, and Paragraphs 20 and
21.
20. COMPLIANCE WITH RULE 16B-3. This Plan is intended to comply in all
respects with Rule 16b-3 ("Rule 16b-3") promulgated by the Securities and
Exchange Commission under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), with respect to participants who are subject to Section 16 of
the Exchange Act, and any provision(s) herein that is/are contrary to Rule 16b-3
shall be deemed null and void to the extent appropriate by either the Stock
Option Committee or the Corporation's Board of Directors.
21. COMPLIANCE WITH CODE. The aspects of this Plan on ISOs is intended to
comply in every respect with Section 422 of the Code and the regulations
promulgated thereunder. In the event any future statute or regulation shall
modify the existing statute, the aspects of this Plan on ISOs shall be deemed to
incorporate by reference such modification. Any stock option agreement relating
to any Option granted pursuant to this Plan outstanding and unexercised at the
time any modifying statute or regulation becomes effective shall also be deemed
to incorporate by reference such modification and no notice of such modification
need be given to optionee.
If any provision of the aspects of this Plan on ISOs is determined
to disqualify the shares purchasable pursuant to the Options granted under this
Plan from the special tax treatment provided by Code Section 422, such provision
shall be deemed null and void and to incorporate by reference the modification
required to qualify the shares for said tax treatment.
22. COMPLIANCE WITH OTHER LAWS AND REGULATIONS. The Plan, the grant and
exercise of Options thereunder, and the obligation of the Corporation to sell
and deliver Stock under such options, shall be subject to all applicable federal
and state laws, rules, and regulations and to such approvals by any government
or regulatory agency as may be required. The Corporation shall not be required
to issue or deliver any certificates for shares of Stock prior to (a) the
listing of such shares on any stock exchange or over-the-counter market on which
the Stock may then be listed and (b) the completion of any registration or
qualification of such shares under any federal or state law, or any ruling or
regulation of any government body which the Corporation shall, in its sole
discretion, determine to be necessary or advisable. Moreover, no Option may be
exercised if its exercise or the receipt of Stock pursuant thereto would be
contrary to applicable laws.
7
<PAGE>
23. DISPOSITION OF SHARES. In the event any share of Stock acquired by an
exercise of an Option granted under the Plan shall be transferable other than by
will or by the laws of descent and distribution within two years of the date
such Option was granted or within one year after the transfer of such Stock
pursuant to such exercise, the optionee shall give prompt written notice thereof
to the Corporation or the Stock Option Committee.
24. NAME. The Plan shall be known as the "T/F Purifiner 1996 Stock Option
Plan."
25. NOTICES. Any notice hereunder shall be in writing and sent by
certified mail, return receipt requested or by facsimile transmission (with
electronic or written confirmation of receipt) and when addressed to the
Corporation shall be sent to it at its office, 3020 High Ridge Road, Suite 100,
Boynton Beach, Florida 33426 and when addressed to the Committee shall be sent
to it 3020 High Ridge Road, Suite 100, Boynton Beach, Florida 33426, subject to
the right of either party to designate at any time hereafter in writing some
other address, facsimile number or person to whose attention such notice shall
be sent.
26. HEADINGS. The headings preceding the text of Sections and subpara-
graphs hereof are inserted solely for convenience of reference, and shall not
constitute a part of this Plan nor shall they affect its meaning, construction
or effect.
27. EFFECTIVE DATE. This Plan, the T/F Purifiner, Inc. 1996 Stock Option
Plan, was adopted by the Board of Directors of the Corporation on July 31, 1996.
The effective date of the Plan shall be the same date.
Dated as of July 31, 1996.
T/F PURIFINER, INC.
By: Richard C. Ford
Its: President
8
[NSO GRANT FORM]
T/F PURIFINER, INC.
3020 High Ridge Road, Suite 100
Boynton Beach, Florida 33426
Date: __________
___________
___________
___________
Dear __________:
The Board of Directors of T/F Purifiner, Inc.(the "Corporation") is
pleased to award you an Option pursuant to the provisions of the 1996 Stock
Option Plan (the "Plan"). This letter will describe the Option granted to you.
Attached to this letter is a copy of the Plan. The terms of the Plan also set
forth provisions governing the Option granted to you. Therefore, in addition to
reading this letter you should also read the Plan. Your signature on this letter
is an acknowledgement to us that you have read and under-stand the Plan and that
you agree to abide by its terms. All terms not defined in this letter shall have
the same meaning as in the Plan.
1. TYPE OF OPTION. You are granted an NSO. Please see in particular
Section 11 of the Plan.
2. RIGHTS AND PRIVILEGES. Subject to the conditions hereinafter set
forth, we grant you the right to purchase __________ shares of Stock at
$__________ per share, the current fair market value of a share of Stock. The
right to purchase the shares of Stock accrues in __________ installments over
the time periods described below:
The right to acquire __________ shares accrues on __________.
The right to acquire __________ shares accrues on __________.
3. TIME OF EXERCISE. The Option may be exercised at any time and from
time to time beginning when the right to purchase the shares of Stock accrues
and ending when they terminate as provided in Section 5 of this letter.
4. METHOD OF EXERCISE. The Options shall be exercised by written notice
to the Chairman of the Board of Directors at the Corporation's principal place
of business. The notice shall set forth the number of shares of Stock to be
<PAGE>
acquired and shall contain a check payable to the Corporation in full payment
for the Stock or that number of already owned shares of Stock equal in value to
the total Exercise Price of the Option. We shall make delivery of the shares of
Stock subject to the conditions described in Section 13 of the Plan.
5. TERMINATION OF OPTION. To the extent not exercised, the Option shall
terminate upon the first to occur of the following dates:
(a) __________, 199_, being __________ years from the date of grant
pursuant to the provisions of Section 2 of this Agreement; or
(b) The expiration of three months following the date your
employment terminates with the Corporation and any of its subsidiaries included
in the Plan for any reason, other than by reason of death or permanent
disability. As used herein, "permanent disability" means your inability to
engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to result in
death or which has lasted or can be expected to last for a continuous period of
not less than 12 months; or
(c) The expiration of 12 months following the date your employment
terminates with the Corporation and any of its subsidiaries included in the
Plan, if such employment termination occurs by reason of your death or by reason
of your permanent disability (as defined above).
6. SECURITIES LAWS.
The Option and the shares of Stock underlying the Option have not
been registered under the Securities Act of 1933, as amended (the "Act"). The
Corporation has no obligations to ever register the Option or the shares of
Stock underlying the Option. All shares of Stock acquired upon the exercise of
the Option shall be "restricted securities" as that term is defined in Rule 144
promulgated under the Act. The certificate representing the shares shall bear an
appropriate legend restricting their transfer. Such shares cannot be sold,
transferred, assigned or otherwise hypothecated without registration under the
Act or unless a valid exemption from registration is then available under
applicable federal and state securities laws and the Corporation has been
furnished with an opinion of counsel satisfactory in form and substance to the
Corporation that such registration is not required.
7. BINDING EFFECT. The rights and obligations described in this letter
shall inure to the benefit of and be binding upon both of us, and our respective
heirs, personal representatives, successors and assigns.
<PAGE>
8. DATE OF GRANT. The Option shall be treated as having been granted to
you on the date of this letter even though you may sign it at a later date.
Very truly yours,
By:_______________________________
President
AGREED AND ACCEPTED:
_________________________
<PAGE>
Date: ________________
T/F PURIFINER, INC.
3020 High Ridge Road, Suite 100
Boynton Beach, Florida 33426
_______________
_______________
_______________
Dear _______________:
The Board of Directors of T/F Purifiner, Inc.(the "Corporation") is
pleased to award you an Option pursuant to the provisions of the 1996 Stock
Option Plan (the "Plan"). This letter will describe the Option granted to you.
Attached to this letter is a copy of the Plan. The terms of the Plan also set
forth provisions governing the Option granted to you. Therefore, in addition to
reading this letter you should also read the Plan. Your signature on this letter
is an acknowledgement to us that you have read and under-stand the Plan and that
you agree to abide by its terms. All terms not defined in this letter shall have
the same meaning as in the Plan.
1. TYPE OF OPTION. You are granted an ISO. Please see in particular
Section 11 of the Plan.
2. RIGHTS AND PRIVILEGES. Subject to the conditions hereinafter set
forth, we grant you the right to purchase __________ shares of Stock at
$__________ per share, the current fair market value of a share of Stock. The
right to purchase the shares of Stock accrues in __________ installments over
the time periods described below:
The right to acquire __________ shares accrues on __________.
The right to acquire __________ shares accrues on __________.
The right to acquire __________ shares accrues on __________.
The right to acquire __________ shares accrues on __________.
The right to acquire __________ shares accrues on __________.
The right to acquire __________ shares accrues on __________.
3. TIME OF EXERCISE. The Option may be exercised at any time and from
time to time beginning when the right to purchase the shares of Stock accrues
and ending when they terminate as provided in Section 5 of this letter.
<PAGE>
4. METHOD OF EXERCISE. The Options shall be exercised by written notice
to the Chairman of the Board of Directors at the Corporation's principal place
of business. The notice shall set forth the number of shares of Stock to be
acquired and shall contain a check payable to the Corporation in full payment
for the Stock or that number of already owned shares of Stock equal in value to
the total Exercise Price of the Option. We shall make delivery of the shares of
Stock subject to the conditions described in Section 13 of the Plan.
5. TERMINATION OF OPTION. To the extent not exercised, the Option shall
terminate upon the first to occur of the following dates:
(a) _____________, 199___, being __________ years from the date of
grant pursuant to the provisions of Section 2 of this Agreement; or
(b) The expiration of thirty (30) days following the date your
employment terminates with the Corporation and any of its subsidiaries included
in the Plan for any reason, other than by reason of death or permanent
disability. As used herein, "permanent disability" means your inability to
engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to result in
death or which has lasted or can be expected to last for a continuous period of
not less than 12 months; or
(c) The expiration of 12 months following the date your employment
terminates with the Corporation and any of its subsidiaries included in the
Plan, if such employment termination occurs by reason of your death or by reason
of your permanent disability (as defined above).
6. SECURITIES LAWS.
The Option and the shares of Stock underlying the Option have not
been registered under the Securities Act of 1933, as amended (the "Act"). The
Corporation has no obligations to ever register the Option or the shares of
Stock underlying the Option. All shares of Stock acquired upon the exercise of
the Option shall be "restricted securities" as that term is defined in Rule 144
promulgated under the Act. The certificate representing the shares shall bear an
appropriate legend restricting their transfer. Such shares cannot be sold,
transferred, assigned or otherwise hypothecated without registration under the
Act or unless a valid exemption from registration is then available under
applicable federal and state securities laws and the Corporation has been
furnished with an opinion of counsel satisfactory in form and substance to the
Corporation that such registration is not required.
2
<PAGE>
7. BINDING EFFECT. The rights and obligations described in this letter
shall inure to the benefit of and be binding upon both of us, and our respective
heirs, personal representatives, successors and assigns.
8. DATE OF GRANT. The Option shall be treated as having been granted
to you on the date of this letter even though you may sign it at a later date.
Very truly yours,
By:_______________________________
President
AGREED AND ACCEPTED:
_________________________
3
<PAGE>
[NSO GRANT FORM
WITH RELOAD OPTIONS]
T/F PURIFINER, INC.
3020 High Ridge Road, Suite 100
Boynton Beach, Florida 33426
Date: __________
__________
__________
__________
Dear __________:
The Board of Directors of T/F Purifiner, Inc. (the "Corporation") is
pleased to award you an Option pursuant to the provisions of the 1996 Stock
Option Plan (the "Plan"). This letter will describe the Option granted to you.
Attached to this letter is a copy of the Plan. The terms of the Plan also set
forth provisions governing the Option granted to you. Therefore, in addition to
reading this letter you should also read the Plan. Your signature on this letter
is an acknowledgement to us that you have read and understand the Plan and that
you agree to abide by its terms. All terms not defined in this letter shall have
the same meaning as in the Plan.
1. TYPE OF OPTION. You are granted an NSO. Please see in particular
Section 11 of the Plan.
2. RIGHTS AND PRIVILEGES.
(a) Subject to the conditions hereinafter set forth, we grant you
the right to purchase __________ shares of Stock at $__________ per share, the
current fair market value of a share of Stock. The right to purchase the shares
of Stock accrues in __________ installments over the time periods described
below:
The right to acquire __________ shares accrues on __________.
The right to acquire __________ shares accrues on __________.
(b) In addition to the Option granted hereby (the "Underlying
Option"), the Corporation will grant you a reload option (the "Reload Option")
as hereinafter provided. A Reload Option is hereby granted to you if you acquire
shares of Stock pursuant to the exercise of the Underlying Option and pay for
such shares of Stock with shares of Common Stock already owned by you (the
"Tendered Shares"). The Reload Option grants you the right to purchase shares of
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Stock equal in number to the number of Tendered Shares. The date on which the
Tendered Shares are tendered to the Corporation in full or partial payment of
the purchase price for the shares of Stock acquired pursuant to the exercise of
the Underlying Option is the Reload Grant Date. The exercise price of the Reload
Option is the fair market value of the Tendered Shares on the Reload Grant Date.
The fair market value of the Tendered Shares shall be the low bid price per
share of the Corporation's Common Stock on the Reload Grant Date. The Reload
Option shall vest equally over a period of __________ (___) years, commencing on
the first anniversary of the Reload Grant Date, and on each anniversary of the
Reload Grant Date thereafter; however, no Reload Option shall vest in any
calendar year if it would allow you to purchase for the first time in that
calendar year shares of Stock with a fair market value in excess of $100,000,
taking into account ISOs previously granted to you. The Reload Option shall
expire on the earlier of (i) __________ (___) years from the Reload Grant Date,
or (ii) in accordance with Paragraph 5(b), or (iii) in accordance with Paragraph
5(c) as set forth herein. If vesting of the Reload Option is deferred, then the
Reload Option shall vest in the next calendar year, subject, however, to the
deferral of vesting previously provided. Except as provided herein the Reload
Option is subject to all of the other terms and provisions of this Agreement
governing Options.
3. TIME OF EXERCISE. The Option may be exercised at any time and from
time to time beginning when the right to purchase the shares of Stock accrues
and ending when they terminate as provided in Section 5 of this letter.
4. METHOD OF EXERCISE. The Options shall be exercised by written notice
to the Chairman of the Board of Directors at the Corporation's principal place
of business. The notice shall set forth the number of shares of Stock to be
acquired and shall contain a check payable to the Corporation in full payment
for the Stock or that number of already owned shares of Stock equal in value to
the total Exercise Price of the Option. We shall make delivery of the shares of
Stock subject to the conditions described in Section 13 of the Plan.
5. TERMINATION OF OPTION. To the extent not exercised, the Option shall
terminate upon the first to occur of the following dates:
(a) __________, 199_, being __________ years from the date of grant
pursuant to the provisions of Section 2 of this Agreement; or
(b) The expiration of three months following the date your
employment terminates with the Corporation and any of its subsidiaries included
in the Plan for any reason, other than by reason of death or permanent
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disability. As used herein, "permanent disability" means your inability to
engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to result in
death or which has lasted or can be expected to last for a continuous period of
not less than 12 months; or
(c) The expiration of 12 months following the date your employment
terminates with the Corporation and any of its subsidiaries included in the
Plan, if such employment termination occurs by reason of your death or by reason
of your permanent disability (as defined above).
6. SECURITIES LAWS.
The Option and the shares of Stock underlying the Option have not
been registered under the Securities Act of 1933, as amended (the "Act"). The
Corporation has no obligations to ever register the Option or the shares of
Stock underlying the Option. All shares of Stock acquired upon the exercise of
the Option shall be "restricted securities" as that term is defined in Rule 144
promulgated under the Act. The certificate representing the shares shall bear an
appropriate legend restricting their transfer. Such shares cannot be sold,
transferred, assigned or otherwise hypothecated without registration under the
Act or unless a valid exemption from registration is then available under
applicable federal and state securities laws and the Corporation has been
furnished with an opinion of counsel satisfactory in form and substance to the
Corporation that such registration is not required.
7. BINDING EFFECT. The rights and obligations described in this letter
shall inure to the benefit of and be binding upon both of us, and our respective
heirs, personal representatives, successors and assigns.
8. DATE OF GRANT. The Option shall be treated as having been granted
to you on the date of this letter even though you may sign it at a later date.
Very truly yours,
By:_______________________________
President
AGREED AND ACCEPTED:
_________________________
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ATLAS, PEARLMAN, TROP & BORKSON, P.A.
Direct Line: (954) 766-7858
December 3, 1996
T/F Purifiner, Inc.
3020 High Ridge Road, Suite 100
Boynton Beach, Florida 33426
Re: Registration Statement on Form S-8
Gentlemen:
This opinion is submitted pursuant to the applicable rules of the
Securities and Exchange Commission with respect to the registration by T/F
Purifiner, Inc. (the "Company") of up to 650,000 shares of Common Stock, par
value $.001 per share (the "Common Stock") to be issued pursuant to the
Company's 1996 Stock Option Plan (the "Plan").
In our capacity as counsel to the Company, we have examined the original,
certified, conformed, photostat or other copies of the Option Agreement, the
Company's Articles of Incorporation, By-Laws and corporate resolutions provided
to us by the Company. In all such examinations, we have assumed the genuineness
of all signatures on original documents, and the conformity to originals or
certified documents of all copies submitted to us as conformed, photostat or
other copies. In passing upon certain corporate records and documents of the
Company, we have necessarily assumed the correctness and completeness of the
statements made or included therein by the Company and we express no opinion
thereon.
Based upon and in reliance of the foregoing, we are of the opinion that
the Common Stock, when issued in accordance with the terms of the Plan will be
validly issued, fully paid and non-assessable.
We hereby consent to the use of this opinion in the Registration Statement
on Form S-8 to be filed with the Commission.
Very truly yours,
Atlas, Pearlman, Trop & Borkson, P.A.
ATLAS, PEARLMAN, TROP & BORKSON, P.A.
Exhibit 23.2
CONSENT OF INDEPENDENT AUDITORS
T/F Purifiner, Inc.
Boynton Beach, Florida
We consent to the incorporation by reference in the Registration Statement
on Form S-8 of our report dated May 24, 1996 (with respect to Note 5, July 1,
1996) on the financial statements of T/F Purifiner, Inc., (the "Company") as
at December 31, 1995 and for each of the years in the two-year period then
ended, included in the Company's Registration Statement on Form 10-SB (including
Amendment No. 1 thereto) effective September 28, 1996, and to the reference to
us under the caption "Experts" included in the Prospectus.
Richard A. Eisner & Company, LLP
New York, New York
December 2, 1996
