<PAGE>
As filed with the Securities and Exchange Commission on October 23, 1998.
Registration No. ________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
BIOSPHERICS INCORPORATED
------------------------------------------------------
(Exact name of Registrant as specified in its charter)
Delaware 52-0849320
- ------------------------ -------------------
(State or other juris- (I.R.S. Employer
diction of incorporation Identification No.)
or organization)
12051 Indian Creek Court, Beltsville, Maryland 20705
- -----------------------------------------------------------------------
(Address of Registrant's Principal Executive Offices) (Zip Code)
BIOSPHERICS INCORPORATED
1997 STOCK OPTION PLAN
----------------------
(Full title of the plan)
Name, address and telephone Please send copies
number of agent for service: of all communications to:
Dr. Gilbert V. Levin James E. Baker, Jr., Esq.
President and Chief Baxter, Baker, Sidle & Conn, P.A.
Executive Officer 120 E. Baltimore Street, Suite 2100
Biospherics Incorporated Baltimore, Maryland 21202-1643
12051 Indian Creek Court (410) 385-8122
Beltsville, Maryland 20705
(301) 419-3900
<PAGE>
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed
Title of Proposed Maximum
Securities Amount Maximum Aggregate Amount of
to be to be Offering Price Offering Registration
Registered Registered Per Share (1) Price (1) Fee (1)
- ---------- ---------- -------------- --------- -------
<S> <C> <C> <C> <C>
Common Stock, 400,000 $4.03125 $1,612,500 $476.00
par value shares
$.005 per share
</TABLE>
(1) Estimated solely for the purpose of calculating the amount of the
registration fee pursuant to Rule 457 under the Securities Act based on a price
of $4.03125 per share, the last sales price of the Common Stock of Registrant on
October 19, 1998, as reported on the NASDAQ National Market System.
Item 3. Incorporation of Documents by Reference
The following documents are hereby incorporated by reference in this
Registration Statement and made a part hereof:
(1) The Company's Annual Report on Form 10-KSB for the fiscal year
ended December 31, 1997, filed with the Securities and Exchange Commission
pursuant to Section 13 of the Securities Exchange Act of 1934.
(2) All other reports filed by the Company pursuant to Section 13(a) or
15(d) of the Securities Exchange Act of 1934 since the end of the fiscal year
covered by the annual report referred to in (1) above.
(3) The description of the Company's Common Stock contained in the
registration statement filed by the Company under the Securities Exchange Act of
1934.
(4) All documents subsequently filed by the Company pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934,
prior to the filing of a post-effective amendment which indicates that all
securities offered have been sold or which deregisters all securities then
remaining unsold, shall be deemed to be incorporated by reference in this
Registration Statement and to be a part hereof from the date of filing of such
documents.
2
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Item 4. Description of Securities
The Common Stock to be offered has been registered under Section 12 of
the Exchange Act.
Item 5. Interests of Named Experts and Counsel
Not Applicable.
Item 6. Indemnification of Directors and Officers
The Company's charter and by-laws provide that each director and each
officer of the Company shall be indemnified by the Company to the fullest extent
permitted by applicable law against all liability and loss suffered and expenses
reasonably incurred by such person in connection with the defense of any action,
suit or proceeding (including any appeal therein) in which they or any of them
are made parties or a party by reason of being or having been directors or
officers.
Under the laws of the State of Delaware a corporation may indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than action by or in right of
the corporation), by reason of the fact that he is or was a director, officer,
employee or agent of the corporation or is or was serving another corporation at
the request of the corporation, against expenses (including attorneys' fees),
judgments, fines, and amounts paid in settlement, actually and reasonably
incurred by him if he acted in good faith and in a manner he reasonably believed
to be in or not opposed to the best interests of the corporation and, with
respect to a criminal action or proceeding, had no reasonable cause to believe
his conduct was unlawful. The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a nolo contendere plea, does
not, of itself, create a presumption that the person did not act in good faith
and in a manner which he reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was lawful.
Indemnification of expenses (including attorneys' fees) is allowed in derivative
actions except no indemnification is permitted in respect of any claim, issue or
matter as to which any such person has been adjudged to be liable unless the
trial court decides that indemnification is proper. To the extent any such
person succeeds on the merits or otherwise, he shall be indemnified against
expenses (including attorneys' fees). A determination that the person to be
indemnified met the applicable standard of
3
<PAGE>
conduct is made by the board of directors by majority vote of a quorum
consisting of directors not a party to such action, suit or proceeding or, if a
quorum is not obtainable or a disinterested quorum so directs, by independent
legal counsel or by the stockholders. Expenses, including attorneys' fees, may
be paid in advance upon receipt of undertakings to repay by the director or
officer if it is ultimately determined that he is not entitled to be indemnified
by the corporation. The right of indemnification and advancement of expenses
continues as to any person who has ceased to be a director, officer or agent
unless otherwise provided in the authorization.
Item 7. Exemption from Registration Claimed
Affiliates of the Company may not use this Registration Statement for
reoffers or resales of shares of Common Stock acquired under the plan. Such
affiliates may offer or resell their shares of Common Stock only in compliance
with Rule 144 of the Securities Act of 1933 (the "1933 Act"), pursuant to a
separate prospectus or pursuant to an exemption from registration under the 1933
Act.
Item 8. Exhibits
Exhibit No. Description of Exhibits
- ----------- -----------------------
4 Biospherics Incorporated 1997 Stock Option Plan
(incorporated by reference from the Registrant's Annual
Proxy Statement for its May 15, 1998 Annual Meeting, File
No. 0-5576)
5 Opinion of Baxter, Baker, Sidle & Conn, P.A.
23.1 Consent of Baxter, Baker, Sidle & Conn, P.A. (contained
in Exhibit 5)
23.2 Consent of PricewaterhouseCoopers, L.L.P.
The Biospherics Incorporated 1997 Stock Option Plan is not subject to
compliance with ERISA.
4
<PAGE>
Item 9. Undertakings
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement 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.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new Registration Statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in this
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.
Insofar as indemnification for liabilities arising under the Securities
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 Securities 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
5
<PAGE>
against public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the Town of Beltsville, State of Maryland, on October 22, 1998.
BIOSPHERICS INCORPORATED
By: /s/ Gilbert V. Levin
-------------------------------------
Dr. Gilbert V. Levin
Chairman of the Board, President, and
Treasurer
(Principal Executive Officer)
6
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ Director, Vice October 22, 1998
- --------------------------- President for
M. Karen Levin Communications,
Secretary
/s/
- --------------------------- Director October 22, 1998
Lionel V. Baldwin
/s/ Director October 22, 1998
- ---------------------------
David A. Blake
/s/ Director October 22, 1998
- ---------------------------
A. Bruce Cleveland
/s/ Director October 22, 1998
- ---------------------------
George S. Jenkins
/s/ Director October 22, 1998
- ---------------------------
Anne S. MacLeod
</TABLE>
7
<PAGE>
EXHIBIT 4
BIOSPHERICS INCORPORATED
1997 STOCK OPTION PLAN
ARTICLE 1
Establishment, Purpose and Duration
1.1 Establishment of the Plan. Biospherics Incorporated hereby
establishes a stock option plan to be known as the "1997 Stock Option Plan" as
set forth in this document. Unless otherwise defined herein, all capitalized
terms shall have the meanings set forth in Section 2.1 herein. The Plan permits
the grant of Incentive Stock Options and Non-Qualified Stock Options. The Plan
was adopted by the Board of Directors on, and shall become effective, as of
November 17, 1997 (the "Effective Date"), subject to the approval of the
stockholders of the Company in accordance with applicable laws. Awards may be
granted prior to stockholder approval of the Plan, but each such Award shall be
subject to the approval of the Plan by the stockholders.
1.2 Purpose of the Plan. The purpose of the Plan is to promote the
success of the Company and its Subsidiaries by providing incentives to Select
Employees that will promote the identification of their personal interest with
the long-term financial success of the Company and with growth in stockholder
value. The Plan is designed to provide flexibility to the Company in its ability
to motivate, attract and retain the services of Select Employees upon whose
judgment, interest and special effort the successful conduct of its operation is
largely dependent.
1.3 Duration of the Plan. The Plan shall commence on the Effective
Date, as described in Section 1.1 herein, and shall remain in effect, subject to
the right of the Board of Directors to terminate the Plan at any time pursuant
to Article 13 herein, until December 31, 2007 (the "Term"), at which time it
shall terminate, except with respect to Awards made prior to, and outstanding
on, that date which shall remain valid in accordance with their terms.
ARTICLE 2
Definitions
2.1 Definitions. Except as otherwise defined in the Plan, the following
terms shall have the meanings set forth below:
(a) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 under the Securities Exchange Act
of 1934, as amended (the "Exchange Act").
(b) "Agreement" means a written agreement implementing the
grant of each Award signed by an authorized officer of the Company and by the
Participant.
(c) "Award" means, individually or collectively, a grant under
this Plan of Incentive Stock Options or Non-Qualified Stock Options.
(d) "Award Date" or "Grant Date" means the date on which an
Award is made by the committee under this Plan.
(e) "Beneficial Owner" shall have the meaning ascribed to such
term in Rule 13d-3 under the Exchange Act.
8
<PAGE>
(f) "Board" or "Board of Directors" means the Board of Directors of
the Company.
(g) "Change in Control" shall be deemed to have occurred if the
conditions set forth in any one of the following paragraphs shall have been
satisfied:
(1) The acquisition by any individual, entity or group (within
the meaning of Section 13(d) (3) or 14 (d) (2) of the Exchange Act (a
"Person") of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of 20% or more of either (A) the
then outstanding shares of common stock of the Company (the
"Outstanding Common Stock") or (B) the combined voting power of the
then outstanding voting securities of the Company entitled to vote
generally in the election of directors (the "Outstanding Voting
Securities") . Notwithstanding the foregoing, the following
acquisitions shall not constitute a Change in Control: (A) any
acquisition directly from the Company, (B) any acquisition by the
Company, (C) any acquisition by, or benefit distribution from, any
employee benefit plan (or related trust) sponsored or maintained by
the Company or any corporation controlled by the Company, (D) any
acquisition pursuant to any compensatory stock option or stock
purchase plan for employees, (E) any acquisition or ownership by
Gilbert V. Levin or M. Karen Levin, or (F) any acquisition pursuant
to a reorganization, merger or consolidation, if, following such
reorganization, merger or consolidation, the conditions described in
clauses (A), (B), and (C) of subsection (3) of this Section 2.1(g)
are satisfied; or
(2) Individuals who, as of the Effective Date hereof, constitute
the Board (the "Incumbent Board") cease for any reason to constitute
at least a majority of the Board; provided, however, that any
individual becoming a director subsequent to the Effective Date whose
election or nomination for election was approved by a vote of at
least a majority of the directors then comprising the Incumbent Board
shall be considered as though such individual were a member of the
Incumbent Board (with his predecessor thereafter ceasing to be a
member); or
(3) Approval by the stockholders of the Company of the
reorganization, mergers or consolidation of the Company unless,
following such reorganization, merger, or consolidation, (A) more
than 60% of the then outstanding shares of common stock and the then
outstanding voting securities of the resulting corporation is then
beneficially owned by all or substantially all of the beneficial
owners, respectively, of the Outstanding Common Stock and Outstanding
Securities immediately prior to such reorganization, merger, or
consolidation, (B) no Person (excluding (I) the Company, (II) any
employee benefit plan (or related trust) of the Company or such
corporation resulting from such reorganization, merger, or
consolidation, and (III) any Person beneficially owning, immediately
prior to such reorganization, merger, or consolidation, 20% or more
of the Outstanding Common Stock or Outstanding Voting Securities, as
the case may be) beneficially owns 20% or more of the then
outstanding shares of common stock or the combined voting power of
the then outstanding voting securities of the resulting corporation,
and (C) at least a majority of the members of the board of directors
of the resulting corporation were members of the Incumbent Board at
the time of the execution of the initial agreement providing for such
reorganization, merger, or consolidation; or
(4) Approval by the stockholders of the company of (A) a complete
liquidation or dissolution of the Company, or (B) the sale or other
disposition of all or substantially all of the assets of the Company
other than to a corporation with respect to which following such
9
<PAGE>
sale or other disposition, (I) more than 60% of the outstanding
shares of common stock and the then outstanding voting securities of
such corporation is beneficially owned by all or substantially all of
the beneficial owners, respectively, of the Outstanding Common Stock
and Outstanding Voting Securities immediately prior to such sale or
disposition; (II) no Person (excluding (x) the Company, (y) any
employee benefit plan (or related trust) of the Company or such
corporation and (z) any Person beneficially owning, immediately prior
to such sale or other disposition, 20% or more of the Outstanding
Common Stock or Outstanding Voting Securities, as the case may be)
beneficially owns 20% or more of the then outstanding shares of
common stock or the combined voting power of the then outstanding
voting securities of such corporation, and (III) at least a majority
of the members of the board of directors of such corporation were
members of the Incumbent Board at the time of the execution of the
initial agreement providing for such sale or other disposition of the
assets of the corporation.
(h) "Code" means the Internal Revenue Code of 1986, as amended from
time to time.
(i) "Committee" means the Compensation Committee of the Board as long
as such Compensation committee is composed solely of at least two (2)
non-employee directors; in the event the Compensation Committee does not have
the above-described composition, Board of Directors shall select a separate
stock option committee which shall be composed solely of at least two (2)
non-employee directors and such stock option committee shall constitute the
"committee" hereunder.
(j) "Company" means Biospherics Incorporated, or any successor thereto
as provided in Article 12 herein.
(k) "Fair Market Value" of a Share means the closing sales price of the
Stock on the relevant date if it is a trading date, or if not, on the most
recent date on which the Stock was traded prior to such date, as reported by
NASDAQ, or if, in the opinion of the Committee, this method is inapplicable or
inappropriate for any reason, the fair market value as determined pursuant to a
reasonable method adopted by the Committee in good faith for such purpose.
(l) "Incentive Stock Option" or "ISO" means an option to purchase
Stock, granted under Article 6 herein, which is designated as an incentive stock
option and is intended to meet the requirements of Section 422 of the Code.
(m) "Non-Qualified Stock Option" or "NQSO" means an option to purchase
Stock, granted under Article 6 herein, which is not an Incentive Stock Option.
(n) "Option" means an Incentive Stock Option or a Non-Qualified Stock
Option.
(o) "Participant" means a Select Employee who receives an Award under
the Plan.
(p) "Person" shall have the meaning ascribed to such term in section 3
(a) (9) of the Exchange Act and used in Sections 13 (d) and 14 (d) thereof,
including a "group" as defined in Section 13(d).
(q) "Plan" means the 1997 Stock Option Plan, as described herein and as
hereafter from time to time amended.
10
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(r) "Select Employee" means an officer or other employee of the Company
or its Subsidiaries, who, in the opinion of the Committee, can contribute
significantly to the growth and profitability of, or perform services of major
importance to, the Company and its Subsidiaries.
(s) "Stock" or "Shares" means the Common Stock of the Company.
(t) "Subsidiary" shall mean a corporation at least 50% of the total
combined voting power of all classes of capital stock of which is owned by the
Company, either directly or through one or more of its Subsidiaries.
ARTICLE 3
Administration
3.1 The Committee. Subject to the Board's right to retain
administration of the Plan, the Plan shall be administered by the Committee
which shall have all powers necessary or desirable for such administration. The
express grant in this Plan of any specific power to the Committee shall not be
construed as limiting any power or authority of the Committee. In addition to
any other powers and, subject to the provisions of the Plan, the Committee shall
have the following specific powers: (i) to determine the terms and conditions
upon which the Awards may be made and exercised; (ii) to determine all terms and
provisions of each Agreement, which need not be identical; (iii) to construe and
interpret the Agreements and the Plan; (iv) to establish, amend or waive rules
or regulations for the Plan's administration; (v) to accelerate the
exercisability of any Award; and (vi) to make all other determinations and take
all other actions necessary or advisable for the administration of the Plan.
3.2 Delegation of Certain Duties. The Committee may in its sole
discretion delegate all or part of its duties and obligations to designated
officer(s) to administer the Plan with respect to Awards to Select Employees.
3.3 Selection of Select Employees. The Committee shall have the
authority to grant Awards under the Plan, from time to time, to such Select
Employees as may be selected by it. Each Award shall be evidenced by an
Agreement.
3.4 Decisions Binding. All determinations and decisions made by the
aboard or the Committee pursuant to the provisions of the Plan shall be final,
conclusive and binding.
3.5 Indemnification. In addition to such other rights of
indemnification as they may have as directors or as members of the Committee,
the members of the Committee shall be indemnified by the Company against
reasonable expenses, including attorneys' fees, actually and reasonably
incurred in connection with the defense of any action, suit or proceeding, or in
connection with any appeal therein, to which they or any of them may be a party
by reason of any action taken or failure to act under or in connection with the
Plan or any Award granted or made hereunder, and against all amounts reasonably
paid by them in settlement thereof or paid by them in satisfaction of a judgment
in any such action, suit or proceeding, if such members acted in good faith and
in a manner which they believed to be in, and not opposed to, the best interests
of the Company and its Subsidiaries.
ARTICLE 4
Stock Subject to the Plan
4.1 Number of Shares. Subject to adjustment as provided in Section 4.4
herein, the maximum aggregate number of Shares that may be issued pursuant to
Awards made under the Plan shall not exceed
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400,000. Except as provided in Sections 4.2 and 4.3 herein, the issuance of
Shares in connection with the exercise of, or as other payment for Awards, under
the Plan shall reduce the number of Shares available for future Awards under the
Plan.
4.2 Lapsed Awards or Forfeited Shares. If any Award granted under this
Plan (for which no material benefits of ownership have been received, including
dividends) terminates, expires, or lapses for any reason other than by virtue of
exercise of the Award, any Stock subject to such Award again shall be available
for the grant of an Award under the Plan.
4.3 Delivery of shares as Payment. In the event a Participant pays the
Option price for Shares pursuant to the exercise of an Option with previously
acquired Shares, the number of Shares available for future Awards under the Plan
shall be reduced only by the net number of new Shares issued upon the exercise
of the Option.
4.4 Capital Adjustments. The number and class of Shares subject to each
outstanding Award, the option price and the aggregate number and class of Shares
for which Awards thereafter may be made shall be subject to such adjustment, if
any, as the Committee in its sole discretion deems appropriate to reflect such
events as stock dividends, stock splits, recapitalizations, mergers,
consolidations or reorganizations of or by the Company.
ARTICLE 5
Eligibility
Persons eligible to participate in the Plan include all employees of
the Company and its Subsidiaries who, in the opinion of the Committee, are
Select Employees.
ARTICLE 6
Stock Options
6.1 Grant of options. Subject to the terms and provisions of the Plan,
Options may be granted to Select Employees at any time and from time to time as
shall be determined by the Committee. The Committee shall have complete
discretion in determining the number of Shares subject to Options granted to
each Select Employee; provided, however, that the aggregate Fair Market Value
(determined at the time the Award is made) of Shares with respect to which any
Select Employee may first exercise ISOs granted under the Plan during any
calendar year may not exceed $100,000 or such amount as shall be specified in
Section 422 of the Code and rules and regulations thereunder.
6.2 Option Agreement. Each Option grant shall be evidenced by an
Agreement that shall specify the type of Option granted, the option price, the
duration of the option, the number of Shares to which the Option pertains, any
conditions imposed upon the exercisability of options in the event of
retirement, death, disability or other termination of employment, and such other
provisions as the Committee shall determine. The Agreement shall specify whether
the option is intended to be an ISO within the meaning of Section 422 of the
Code, or a Non-Qualified Stock Option not intended to be within the provisions
of Section 422 of the Code.
6.3 Option Price. The exercise price per share of Stock covered by an
Option shall be determined by the Committee subject to the following
limitations. The Option price shall not be less than 50% of the Fair Market
Value of such Stock on the Grant Date; provided, however, that the Option price
shall not be less than 100% of the Fair Market Value of such Stock on the Grant
Date for all Incentive Stock Options. In addition, an ISO granted to an employee
who, at the time of grant, owns (within the meaning of Section 425(d) of the
Code)
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Stock possessing more than 10% of the total combined voting power of all classes
of Stock of the Company, shall have an Option price which is at least equal to
110% of the Fair Market Value of the Stock.
6.4 Duration of Options. Each Option shall expire at such time as the
Committee shall determine at the time of grant; provided, however, that (i) no
ISO shall be exercisable later than the tenth (10th) anniversary date of its
Award Date and (ii) no ISO granted to an employee who, at the time of grant,
owns (within the meaning of Section 425(d) of the code) Stock possessing more
than 10% of the total combined voting power of all classes of Stock of the
company, shall be exercisable later than the fifth (5th) anniversary date of its
Award Date.
6.5 Exercisability. Options granted under the Plan shall be exercisable
at such times and be subject to such restrictions and conditions as the
Committee shall determine, which need not be the same for all Select Employees.
6.6 Method of Exercise. An Option shall be exercised by the delivery of
a written notice to the Company in the form prescribed by the Committee setting
forth the number of Shares with respect to which the option is to be exercised,
accompanied by full payment for the Shares which shall be deemed to include
arrangements approved by the Committee for the delivery to the company of the
proceeds of a sale or margin loan in the case of a "cashless" exercise. The
Option price shall be payable to the Company in full either in cash (including
the proceeds of a cashless exercise in the Committee's discretion) , by delivery
of Shares of Stock valued at Fair Market Value at the time of exercise, delivery
of a promissory note (in the Committee's discretion) or by a combination of the
foregoing. As soon as practicable after receipt of written notice and payment,
the Company shall deliver to the Participant stock certificates in an
appropriate amount based upon the number of Options exercised, issued in the
Participant's name. No Participant who is awarded Options shall have rights as a
stockholder until the date of exercise of the Options.
6.7 Restrictions on Stock Transferability. The Committee shall impose
such restrictions on any Shares acquired pursuant to the exercise of an Option
under the Plan as it may deem advisable.
6.8 Transferability of Options. The Committee may, in its discretion,
authorize all or a portion of the Options granted to a Participant to be
on terms which permit transfer by such Participant to (i) the spouse, children
or grandchildren of the Participant ("Immediate Family Members"), (ii) a trust
or trusts for the exclusive benefit of such Immediate Family Members, (iii) a
partnership in which such Immediate Family Members are the only partners, or
(iv) other persons or entities permitted by the Committee; provided that (x) the
agreement pursuant to which such Options are transferred must be approved by the
Committee, and must expressly provide for transferability in a manner consistent
with this Section, and (y) subsequent transfers of transferred Options shall be
prohibited except those occasioned by will or the laws of descent and
distribution. Following transfer, any such Options shall continue to be subject
to the same terms and conditions as were applicable immediately prior to
transfer. The events of termination of employment shall continue to be applied
with respect to the original Participant, following which the Options shall be
exercisable by the transferee only to the extent, and for the periods specified
herein.
ARTICLE 7
Change in Control
The Committee, as constituted before a Change in Control, in its sole
discretion may, as to any outstanding Award, either at the time the Award is
made or any time thereafter, take any one or more of the following actions with
respect to a Change in Control: (i) provide for the acceleration of any time
periods relating to the exercise or realization of any such Award so that such
Award may be exercised or realized in full on or before a date initially fixed
by the Committee; (ii) provide for the purchase or settlement of any such
13
<PAGE>
Award by the Company, upon a Participant's request, for an amount of cash equal
to the amount which could have been obtained upon the exercise of such Award or
realization of such Participant's rights had such Award been currently
exercisable or payable; (iii) make such adjustment to any such Award then
outstanding as the Committee deems appropriate to reflect such Change in
control; or (iv) cause any such Award then outstanding to be assumed, or new
rights substituted therefor, by the acquiring or surviving corporation in such
Change in Control.
ARTICLE 8
Modification, Extension and Renewals of Awards
Subject to the terms and conditions and within the limitations of the
Plan, the Committee may modify, extend or renew outstanding Awards, or, if
authorized by the Board, accept the surrender of outstanding Awards (to the
extent not yet exercised) granted under the Plan and authorize the granting of
new Awards pursuant to the Plan in substitution therefor, and the substituted
Awards may specify a longer term than the surrendered Awards or may contain any
other provisions that are authorized by the Plan; provided, however, that the
substituted Awards may not specify a lower exercise price than the surrendered
Awards. The Committee may also modify the terms of any outstanding Agreement.
Notwithstanding the foregoing, however, no modification of an Award shall,
without the consent of the Participant, adversely affect the rights or
obligations of the Participant.
ARTICLE 9
Amendment, Modification and Termination of the Plan
9.1 Amendment, Modification and Termination. At any time and from time
to time, the Board may terminate, amend, or modify the Plan. Such amendment or
modification may be without stockholder approval except to the extent that such
approval is required by the Code, by NASDAQ or any other exchange or system on
which the Stock is then listed or reported, by any regulatory body having
jurisdiction with respect thereto or under any other applicable laws, rules or
regulations.
9.2 Awards Previously Granted. No termination, amendment or
modification of the Plan other than pursuant to Section 4.4 herein shall in any
manner adversely affect any Award theretofore granted under the Plan, without
the written consent of the Participant.
ARTICLE 10
Withholding
10.1 Tax Withholding. The Company shall have the power and the right to
deduct or withhold, or require a Participant to remit to the Company, an amount
sufficient to satisfy Federal, State and local taxes (including the
Participant's FICA obligation) required by law to be withheld with respect to
any grant, exercise, or payment made under or as a result of this Plan.
10.2 Stock Withholding. With respect to withholding required upon the
exercise of Non-Qualified Stock Options, or upon the occurrence of any other
similar taxable event, participants may elect, subject to the approval of the
Committee, to satisfy the withholding requirement, in whole or in part, by
having the Company withhold Shares of Stock having a Fair Market Value equal to
the amount required to be withheld. The value of the Shares to be withheld shall
be based on Fair Market Value of the Shares on the date that the amount of tax
to be withheld is to be determined. All elections shall be irrevocable and be
made in writing, signed by the Participant on forms approved by the Committee in
advance of the day that the transaction becomes taxable.
14
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ARTICLE 11
Successors
All obligations of the Company under the Plan, with respect to Awards
granted hereunder, shall be binding on any successor to the Company, whether the
existence of such successor is the result of a direct or indirect purchase,
merger, consolidation or otherwise, of all or substantially all of the business
and/or assets of the Company.
ARTICLE 12
General
12.1 Requirements of Law. The granting of Awards and the issuance of
Shares of Stock under this Plan shall be subject to all applicable laws, rules
and regulations, and to such approvals by any governmental agencies as may be
required.
12.2 Effect of Plan. The establishment of the Plan shall not confer
upon any Select Employee any legal or equitable right against the Company, a
Subsidiary, or the Committee, except as expressly provided in the Plan. The Plan
does not constitute an inducement or consideration for the employment of any
Select Employee, nor is it a contract between the Company or any of its
Subsidiaries and any Select Employee, Participation in the Plan shall not give
any Select Employee any right to be retained in the service of the Company or
any of its Subsidiaries.
12.3 Creditors. The interests of any Participant under the Plan or any
Agreement are not subject to the claims of creditors and may not, in any way, be
assigned, alienated or encumbered.
12.4 Governing Law. The Plan, and all Agreements hereunder, shall be
governed, construed and administered in accordance with and governed by the laws
of the State of Delaware and the intention of the Company is that ISOs granted
under the Plan qualify as such under Section 422 of the Code.
12.5 Severability. In the event any provision of the Plan shall be held
illegal or invalid for any reason, the illegality or invalidity shall not affect
the remaining parts of the Plan, and the Plan shall be construed and enforced as
if the illegal or invalid provision had not been included.
Approved by Biospherics Board of Directors November 17, 1997.
/s/ Gilbert V. Levin
-----------------------------
Gilbert V. Levin, Chair
/s/ Lionel V. Baldwin
-----------------------------
Lionel V. Baldwin, Chair
Compensation Committee
ATTEST:
/s/ M. Karen Levin (SEAL)
- ----------------------------------------
M. Karen Levin, Secretary
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EXHIBIT 5
[TYPED ON LETTERHEAD OF
BAXTER, BAKER, SIDLE & CONN, P.A.]
October 21, 1998
Biospherics Incorporated
12051 Indian Creek Court
Beltsville, Maryland 20705
Ladies and Gentlemen:
We have acted as counsel to Biospherics Incorporated, a Delaware
corporation (the "Company"), in connection with the registration under the
Securities Act of 1933 of 400,000 shares of Common Stock of the Company, $0.005
par value per share, pursuant to a Registration Statement on Form S-8 to be
filed with the Securities and Exchange Commission (the "Registration
Statement").
In rendering the opinions contained herein, we have examined originals
or photostatic or certified copies of all certificates, documents, agreements
and other instruments as we have deemed appropriate.
Based upon the foregoing, we are of the opinion that each of the
400,000 shares of the Common Stock of the Company covered by the Registration
Statement, when issued by the Company in accordance with the Biospherics
Incorporated 1997 Stock Option Plan, and for not less than the par value
thereof, will be duly authorized, validly issued, fully paid and nonassessable.
This opinion is furnished by us solely for the benefit of the Company
in connection with the filing of the Registration Statement. We consent to the
use of this opinion as an exhibit to the Registration Statement.
Very truly yours,
Baxter, Baker, Sidle & Conn, P.A.
By: /s/
--------------------------------------
James E. Baker, Jr., Vice President
JEB/wlb
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS
We consent to the incorporation by reference in this registration statement of
Biospherics Incorporated on Form S-b of our reported dated February 20, 1998, on
our audits of the financial statements of Biospherics Incorporated as of
December 31, 1997, and for each of the two years in the period ended December
31, 1997, which report is included in the Biospherics Incorporated Annual Report
on Form 10-KSB for the year ended December 31, 1997.
PricewaterhouseCoopers, LLP
Baltimore, Maryland
October 23, 1998
