<PAGE>
As filed with the Securities and Exchange Commission on February 3, 1998.
Registration No.
----------
- ----------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
GRADCO SYSTEMS, INC.
-----------------------------------------------
(Exact name of Issuer as specified in Charter)
Nevada 95-3342977
------------------------ -------------------------
(State of Incorporation) (IRS Employer I.D. Number)
3753 Howard Hughes Parkway, Suite 200
Las Vegas, Nevada 89109 (702) 892-3714
------------------------------------------------- ----------------
(Address of Issuer's Principal Executive Offices) (Telephone No.)
1997 Stock Option Plan
----------------------
(Full Title of Plan)
Martin E. Tash
Gradco Systems, Inc.
3753 Howard Hughes Parkway
Suite 200
Las Vegas, Nevada 89109
(702) 892-3714
---------------------------------------------------
(Address and Telephone Number of Agent for Service)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Title of Proposed Maximum Proposed Maximum
Securities Amount to Offering Aggregate Amount of
to be Registered be Registered Price per Share(1) Offering Price(1) Registration Fee
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock 400,000 shares $2.00 $800,000 $236
no par value
- ----------------------------------------------------------------------------------------
</TABLE>
(1) The price stated is estimated solely for purposes of calculating the
registration fee and is equal to the exercise price applicable to options for
the purchase of 312,000 shares which the Company has issued under the 1997
Stock Option Plan.
<PAGE>
REOFFER PROSPECTUS
GRADCO SYSTEMS, INC.
COMMON STOCK
NO PAR VALUE
This Prospectus is applicable to the resale from time to time by Affiliates
(as defined below) of Gradco Systems, Inc. (the "Company") of shares of
Common Stock, no par value, issued by the Company upon exercise of options
allocated or to be allocated to eligible employees, officers, directors and
consultants of the Company under the Company's 1997 Stock Option Plan (the
"1997 Plan"). As used herein, the term "Affiliates" means shareholders or
their respective legatees, heirs or legal representatives who may be deemed
"affiliates" of the Company, as defined under the Securities Act of 1933 (the
"Securities Act").
AN INVESTMENT IN THE SHARES OFFERED HEREBY INVOLVES CERTAIN RISKS.
PROSPECTIVE INVESTORS SHOULD REVIEW AND CAREFULLY CONSIDER THE DISCUSSION
UNDER "RISK FACTORS" PRIOR TO MAKING AN INVESTMENT.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
It is expected that sales made pursuant to this Prospectus will be effected
in transactions on the over-the-counter market at prices obtainable at the
time of sale. The Company will not receive any of the proceeds from the sale
of these shares.
GRADCO SYSTEMS, INC.
3753 Howard Hughes Parkway
Suite 200
Las Vegas, Nevada 89109
(702) 892-3714
The date of this Prospectus is February 3, 1998.
<PAGE>
TABLE OF CONTENTS
AVAILABLE INFORMATION............................................... 1
INCORPORATION BY REFERENCE.......................................... 3
RISK FACTORS........................................................ 3
SELLING SECURITY HOLDERS .......................................... 8
EXPERTS............................................................. 8
COUNSEL............................................................. 8
INDEMNIFICATION OF OFFICERS AND DIRECTORS........................... 8
APPENDIX A: SELLING SHAREHOLDERS................................... 10
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of Section
13(a) of the Securities Exchange Act of 1934 (the "Exchange Act") and in
accordance therewith files reports and other information with the Securities
and Exchange Commission (the "Commission"). All reports, proxy statements
and other information statements filed by the Company may be inspected and
copied at the public reference facilities maintained by the Commission in
Washington, D.C. located at Room 1024, 450 Fifth Street, N.W., Washington,
D.C. 20549 and at the Commission's regional offices at Room 3190, Kluczynski
Federal Building, 230 South Dearborn Street, Chicago, Illinois 60604 and 75
Park Place, New York, New York 10007. Copies of all such material can be
obtained from the Public Reference Section of the Securities and Exchange
Commission, Washington, D.C. 20549 at prescribed rates. The Commission
maintains a Web Site that contains reports, proxy and information statements
and other information regarding the Company and other registrants that file
electronically with the Commission. The address of such site is
http://www.sec.gov.
The Company's common stock is listed on the Nasdaq National Market
System. Reports and other information concerning the Company can be inspected
at such exchange.
No dealer, salesperson or any other person has been authorized to give
any information or to make any representation not 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. This Prospectus
does not constitute an offer to sell or the solicitation of an offer to buy
any security other than the registered securities to which it relates nor
does it constitute an offer to sell or the solicitation of an offer to buy
the securities by anyone in any jurisdiction in which said offer or
solicitation is not authorized, or in which the person making such offer or
solicitation is not qualified to do so, or to any person to whom it is
unlawful to make such offer or solicitation. Neither the
1
<PAGE>
delivery of this Prospectus nor any sale made hereunder shall, under any
circumstances, imply that there has been no change in the affairs of the
Company or that the information herein is correct as of any time subsequent
to the date of this Prospectus. However, in the event of any material
change, this Prospectus will be amended or supplemented accordingly.
2
<PAGE>
INCORPORATION BY REFERENCE
The latest financial statements of the Company, as well as other
information regarding the Company, the Common Stock and the 1997 Plan, may be
found in other documents the Company has filed or will file with the
Commission. The following documents are incorporated herein by reference:
(a) The Company's Annual Report on Form 10-K for the fiscal
year ended March 31, 1997;
(b) The description of the Common Stock set forth under the caption
"Description of Registrant's Securities to be Registered" in the
Company's Registration Statement on Form 8-A dated September 19,
1984.
Until the Company files a post-effective amendment to this Prospectus
indicating that all securities hereunder have been sold, or deregistering all
such securities which remain unsold, all documents subsequently filed by the
Company pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act
shall be deemed incorporated herein by reference and shall become a part
hereof from the date such documents are filed.
The Company undertakes to provide without charge to each person,
including any beneficial owner, to whom this Prospectus is delivered, upon
written or oral request of such person a copy of any and all information that
has been incorporated by reference herewith. Such requests should be made to
Bernard Bressler, Secretary, Gradco Systems, Inc., 3753 Howard Hughes
Parkway, Suite 200, Las Vegas, Nevada 89109, telephone: (702) 892-3714.
RISK FACTORS
In making comparisons with other investments or in considering the
success of other investments, one should bear in mind that the success of any
investment depends upon many factors including opportunity, general economic
conditions, experience and competence of management. There is no
representation that the same positive factors are present in this Company
which have been present in like ventures that have been successful.
3
<PAGE>
1. COMPETITION. The Company is a holding company, which, through
its subsidiaries, operates primarily in one industry segment, the design,
development, production and marketing of intelligent paper handling devices
for the office automation market. Sales of sorter products to the
convenience copier market by the Company's majority-owned Japanese
subsidiary, Gradco (Japan) Ltd. ("GJ"), and the Company's wholly-owned
domestic subsidiary, Gradco (USA) Inc., currently account for most of the
Company's consolidated sales. GJ sells its products domestically and
internationally primarily to original equipment manufacturers and marketers
("OEMs"). GJ has also licensed certain OEMs to manufacture and sell certain
products for use in conjunction with the OEMs' copiers marketed to other
companies. Such OEM licensees are GJ's primary competition. GJ also
experiences competition, to a more limited extent, from other OEMs, and from
other manufacturers of sorters using different technology. In addition,
certain copiers may, in the future, no longer require sorters of the type
manufactured by the Company. Such copiers may instead function in a manner
which utilizes printer products of the type manufactured by the Company. In
its marketing of printer products to the copier market and otherwise, the
Company competes with copier manufacturers as well as other manufacturers of
paper handling equipment.
2. DEPENDENCE ON FEW CUSTOMERS. In the Company's fiscal year ended
March 31, 1997, 65% of the Company's consolidated revenue was derived from
four customers, one of which accounted for 26% of such revenue. A loss of
any of these principal customers could have a negative impact on the
Company's consolidated operations taken as a whole, and there is no guarantee
that GJ or Gradco (USA) Inc. could establish relationships with other OEMs to
compensate for the loss of any of such customers.
3. PATENTS. The Company believes that the issued patents of GJ are
material to the consolidated operations of the Company and subsidiaries taken
as
4
<PAGE>
a whole. While GJ holds numerous United States and foreign patents and
pending patent applications relating to the sorters, and holds patents and
pending patent applications related to the paper feeding devices for use with
its printer products, there can be no assurance that GJ's patents will not be
challenged or infringed. In addition, there can be no assurance that other
parties will not develop new technology which does not violate such patents
but which is competitive with certain GJ products and patentable by such
other parties. Finally, certain key patents held by the Company will expire
within the next several years.
4. DEPENDENCE ON PRESENT MANAGEMENT. The success of the Company is
dependent to a great extent upon the success of GJ and the services of GJ's
current management. There is no assurance that GJ will be able to locate and
retain qualified persons to replace any member of management who leaves GJ.
The prolonged unavailability of any current member of senior management of GJ
could have an adverse effect upon the business of the Company.
5. LITIGATION. HAMMA V. GRADCO SYSTEMS, INC., ET AL; DUBOIS V. GRADCO
SYSTEMS, INC. ET AL.
The Company and its (now former) president, Keith Stewart, were sued
in an action filed in March 1988 in the United States District Court in
Bridgeport, Connecticut, by John C. Hamma ("Hamma"), an ex-employee. The
complaint primarily alleges misrepresentation and fraudulent concealment by
the Company and Mr. Stewart in connection with an agreement entered into
effective as of August 1979 pursuant to which Hamma assigned to the Company
his co-inventor's interest in patent rights for improvements in certain
products of the Company. The complaint, which has been amended a number of
times, sought unspecified damages, and other relief.
In a separate but related action (which was consolidated with the Hamma
action for certain pretrial purposes), the Company and Mr. Stewart were sued in
5
<PAGE>
August 1989 in the United States District Court in Bridgeport, Connecticut by
R. Clark DuBois ("DuBois"), also an ex-employee of the Company. The
complaint primarily alleges misrepresentation and fraudulent concealment by
the Company and Mr. Stewart in connection with an agreement entered into in
March 1983 which terminated and released the Company from royalty obligations
under a royalty agreement entered into effective as of August 1979 pursuant
to which DuBois assigned to the Company his co-inventor's interest in patent
rights for improvements in certain products of the Company. The complaint,
which has been amended a number of times, seeks unspecified damages, and
other relief. The case has not yet been scheduled for trial.
In March 1992, each of the plaintiffs filed an Application for
Prejudgment Remedy against the Company and GJ seeking to attach $10,000,000
of assets of each of these two defendants. This Application was dismissed
with respect to GJ. In November 1992, the Company and the plaintiffs agreed
in principle to a Consent Order instead of proceeding with a hearing on the
Application. If during the pendency of the lawsuits the Company desires to
sell, transfer or take any other action which would affect its ownership of
stock in GJ, it has agreed to give 30 days prior notice to the plaintiffs,
who will then be permitted, if they so request, to renew the Application
within the notice period. Should plaintiffs do so, the Company has agreed to
forbear from proceeding with any such transaction for a limited period. The
Company would vigorously oppose a renewed Application. Management believes
that the Consent Order is in the Company's best interests because it
precludes any attachment of the Company's assets until such time as a
proposed transaction which would affect its ownership of stock in GJ may
arise, and it avoids the legal expenses which would have resulted from a
current hearing on the Application.
In June 1995, a jury found the Company to have liability in the
lawsuit filed by Hamma. The Company filed a motion in August 1995 to reverse
the
6
<PAGE>
verdict. After a determination by the Court on the Company's motion, a
separate proceeding to determine the amount of damages will be required, with
respect to such portion of the verdict, if any, as remains in effect. An
award of damages of the magnitude sought by Hamma could have a material
adverse effect on the Company's financial position and might threaten its
existence as an ongoing enterprise. The Company believes that as a matter of
law the damages claimed by Hamma are excessive to a substantial extent.
In July, 1995, the plaintiffs filed a new Application for a
Prejudgment Remedy ("July PJR Application") seeking to attach the Company's
assets. The July PJR Application sets forth various theories of damages
including a theory calling for treble damages under Connecticut law in the
amount of $70,500,000. The July PJR Application asserts that there is
probable cause that a verdict in an amount greater than $70,500,000 will be
rendered in the damages part of the case after trial on those issues. It is
the Company's belief that damages based on applicable law would result in a
significantly smaller damages award even if the motion by the Company for
judgment as a matter of law is denied. The Court has determined that it will
rule on the July PJR Application only after ruling on the August 1995 motion
for judgment as a matter of law.
In November 1995, the Court ordered the plaintiffs to submit a
memorandum regarding the legal theories on which they based their damages
claims and for the defendants to respond. This issue is also under
consideration by the Court. If the Company's view prevails, the magnitude of
damages, even should the August 1995 motion prove unavailing, will be reduced
substantially from the amount sought in the July PJR Application.
The Company is presently unable to determine the amount of damages
which are likely to be awarded, but the amount of damages sought by the
plaintiffs, including punitive damages, could have a material adverse effect
on the Company's financial position and might threaten the Company's
existence as an ongoing
7
<PAGE>
enterprise. The Company's subsidiaries, GJ, Gradco (USA) Inc. and Venture
Engineering, Inc. are not parties to the lawsuit and any judgment awarded
will not affect their operations, since those operations are independent of
the Company's.
There are substantial differences between the Hamma and DuBois cases.
Although the DuBois case will also be tried before a jury so that there are
substantial elements of uncertainty, the Company believes that the DuBois
case alone will not have a material adverse effect on its consolidated
financial position, or on its results of operations or liquidity.
SELLING SECURITY HOLDERS
Appendix A, attached hereto and incorporated by this reference,
contains certain information regarding, among other things, selling security
holders.
EXPERTS
The financial statements incorporated in this Prospectus by reference
to the Annual Report on Form 10-K of the Company for the year ended March 31,
1997 have been so incorporated in reliance upon the report of Price
Waterhouse LLP, independent accountants, given on the authority of said firm
as experts in accounting and auditing.
COUNSEL
Bressler, Amery & Ross, P.C., 17 State Street, New York, New York
10004, counsel to the Company, has passed upon the validity of the shares to
be issued upon exercise of options granted pursuant to the Plan. Bressler,
Amery & Ross, P.C. holds no interest in the Common Stock. Bernard Bressler,
of Bressler, Amery & Ross, P.C., owns an aggregate of 15,000 shares of the
Company's Common Stock.
INDEMNIFICATION OF OFFICERS AND DIRECTORS
Section 78.751 of the General Corporation Law of the State of Nevada
authorizes a corporation to provide indemnification to a director, employee
or agent of the corporation, including attorneys' fees, judgments, fines and
amounts
8
<PAGE>
paid in settlement, actually and reasonably incurred by him in connection
with any threatened, pending or completed action, suit or proceeding, by
reason of the fact he is or was a director, employee or agent of the
corporation, if such party 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 any criminal action or proceeding, had no reasonable
cause to believe his conduct was unlawful as determined in accordance with
the statute. Section 78.751 further provides that indemnification shall be
provided if the party in question is successful on the merits.
Insofar as indemnification for liabilities arising under the
Securities Act 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 Commission such indemnification is
against public policy as expressed in the Securities Act and is therefore
unenforceable.
9
<PAGE>
APPENDIX A
TO REOFFER PROSPECTUS DATED FEBRUARY 3, 1998
SELLING SHAREHOLDERS
The following table sets forth, as of January 29, 1998, certain information
regarding shares of Common Stock beneficially owned by each selling
shareholder who is an Affiliate.
<TABLE>
<CAPTION>
Maximum Percentage of
Selling Securities Owned Amount Securities Owned Class Held After
Shareholder Position Before Offering(1) Offered(2) After Offering Offering (3)
- ------------ -------- ------------------ ---------- -------------- ----------------
<S> <C> <C> <C> <C> <C>
Martin E. Tash President, 1,313,672(4) 100,000 1,213,672 15.2%
CEO and
Chairman
Masakazu (Mark) Director 78,000(5) 60,000 18,000 .2%
Takeuchi
</TABLE>
(1) Includes the maximum number of shares (vested and unvested) as of
February 3, 1998 that may be acquired pursuant to stock options
granted to each of the named holders pursuant to the 1997 Plan.
(2) Represents the maximum number of shares (vested and unvested) as of
February 3, 1998 that may be acquired pursuant to stock options
granted to each of the named holders pursuant to the 1997 Plan.
(3) Assumes all options granted to the above Selling Shareholders pursuant
to the 1997 Plan are exercised and each such Selling Shareholder sells
all shares acquired upon exercise of those options.
(4) Of the 1,313,672 shares shown, 30,820 shares are owned by Mr. Tash
individually, 170,000 shares are jointly owned by Mr. Tash with his
wife, and 49,852 shares are owned by a private profit sharing plan of
which Mr. Tash is sole beneficiary. Mr. Tash is also the owner of
options issued under the Company's 1988 Stock Option Plan for the
purchase of 50,000 shares. Plenum Publishing Corporation ("Plenum"), of
which Mr. Tash is CEO and Chairman, owns the balance of 913,000 shares
of the Company's stock. As set forth in their joint statement on
Schedule 13D dated December 1, 1989, and amendments thereto through
January 3, 1991, Plenum, Mr. Tash and his wife constitute a "group" as
defined in Rule 13d-5(b)(1) under the Exchange Act, since Plenum, on the
one hand, and Mr. and Mrs. Tash, on the other hand, have agreed to act
together for the purpose of voting the securities of the Company held by
them, and in general to act together for the purpose of acquiring and
disposing of such securities (although it is understood that, at any
given time, a purchase or sale may be effected by one such party without
the effectuation of a purchase
10
<PAGE>
or sale by the other party). Pursuant to said Rule, the Group is
therefore deemed the beneficial owner of the shares held by each of
its members. Plenum has disclaimed beneficial ownership of the shares
owned by Mr. and Mrs. Tash, they have disclaimed beneficial ownership
of the shares owned by Plenum, and Mrs. Tash has disclaimed beneficial
ownership of the shares owned solely by Mr. Tash.
(5) Of the 78,000 shares shown, 18,000 shares consist of shares which may be
acquired upon the exercise of options issued to Mr. Takeuchi under the
Company's 1988 Stock Option Plan.
11
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Company
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 Boca Raton and the State of Florida on the 29th
day of January, 1998.
GRADCO SYSTEMS, INC.
By:/s/ Martin E. Tash
---------------------------------------
Martin E. Tash, Chief Executive
Officer, President
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons in the
capacities indicated on January 29, 1998. Each person whose signature
appears below hereby authorizes Martin E. Tash and Bernard Bressler, or
either of them acting singly, to execute in the name of such person, and to
file, any amendment to this Registration Statement that the Company deems
appropriate, and appoints each such agent as attorney-in-fact to sign on his
behalf individually and in each capacity stated below and to file all
amendments and post-effective amendments to this Registration Statement.
Name Title
---- -----
/s/ MARTIN E. TASH
- ------------------------ Chairman of the Board of Directors, Chief
Martin E. Tash Executive Officer and President
/s/ HARLAND L. MISCHLER
- ------------------------ Executive Vice President, Chief Financial
Harland L. Mischler Officer and Director
/s/ BERNARD BRESSLER
- ------------------------ Secretary, Treasurer and Director
Bernard Bressler
/s/ ROBERT J. STILLWELL
- ------------------------ Director
Robert J. Stillwell
/s/ MASAKAZU TAKEUCHI
- ------------------------ Director
Masakazu (Mark) Takeuchi
/s/ THOMAS J. BURGER
- ------------------------ Director
Thomas J. Burger
12
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
Gradco Systems, Inc. (the "Company") incorporates herein by reference
the following documents filed with the Securities and Exchange Commission
(the "SEC").
(a) the Company's Annual Report on Form 10-K for the fiscal year
ended March 31, 1997;
(b) the Company's Quarterly Report on Form 10-Q for the quarter
ended June 30, 1997;
(c) the Company's Quarterly Report on Form 10-Q for the quarter
ended September 30, 1997;
(d) all other reports filed by the Company pursuant to Section
13(a) or 15(d) of the Securities Exchange Act of 1934 (the "Exchange Act")
since March 31, 1997; and
(e) the description of the Company's Common Stock contained in
its Registration Statement on form 8-A dated September 19, 1984.
All documents subsequently filed by the Company pursuant to Sections
13(a), 13(c), 14 and 15(d) of 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 herein by reference and to be a part hereof from
the date of filing of such documents.
Item 4. DESCRIPTION OF SECURITIES.
Not applicable.
Item 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Bressler, Amery & Ross, P.C., counsel to the Company, has passed upon
the validity of the shares registered pursuant to this Registration
Statement.
<PAGE>
Bressler, Amery & Ross, P.C. holds no interest in the Common Stock. The
individual shareholders of Bressler, Amery & Ross, P.C. own an aggregate of
15,000 shares of the Company's Common Stock.
Item 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company's By-laws provide that it shall indemnify certain persons
to the fullest extent permitted by the Nevada General Corporation Law.
Section 78.751 of the General Corporation Law of the State of Nevada
authorizes a corporation to provide indemnification to a director, employee
or agent of the corporation, including attorneys' fees, judgments, fines and
amounts paid in settlement, actually and reasonably incurred by him in
connection with any threatened, pending or completed action, suit or
proceeding by reason of the fact he is or was a director, employee or agent
of the corporation, if such party 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 any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful as determined in
accordance with the statute. Section 78.751 further provides that
indemnification shall be provided if the party in question is successful on
the merits. All current officers and directors of the Company are entitled
to indemnification under this provision. In addition, James P. Owens, who
served as an officer of the Company from 1989 until April 1992, is entitled
to indemnification under such provisions based on his activities in such
capacity. Mr. Owens is currently Vice President of Finance and
Administration of Gradco (USA) Inc., a wholly-owned subsidiary of the Company.
Item 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
Item 8. EXHIBITS.
4 1997 Stock Option Plan
<PAGE>
5 Opinion of Bressler, Amery & Ross, P.C.
23 Consent of Price Waterhouse LLP, independent certified
public accountants
Item 9. UNDERTAKINGS.
The Company hereby undertakes:
(a) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement:
(1) To include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933 (the "Securities Act");
(2) To reflect in the prospectus any facts or events which,
individually or together, represent a fundamental change in the information
set forth in the registration statement;
(3) To include any additional or changed material
information to the plan of distribution. Provided, however, that paragraphs
(a)(1) and (a)(2) shall not apply if the information required to be included
in a post-effective amendment by these paragraphs is incorporated by
reference from periodic reports filed with or furnished to the SEC by the
Company pursuant to Section 13 or Section 15(d) of the Exchange Act.
(b) That, for the purpose of determining any liability under the
Securities 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.
(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.
(d) That, for purposes of determining liability under the
Securities Act, each filing of the Company's annual report pursuant to
section
<PAGE>
13(a) or 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 this Registration
Statement shall be deemed to be a new registration statement relating to the
securities offered herein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling
persons of the Company pursuant to the provisions of the General Corporation
Law of the State of Nevada, or otherwise, the Company has been advised that
in the opinion of the SEC 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 Company of expenses incurred or paid by a director,
officer or controlling person of the Company 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
Company 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 Securities Act and will be governed by the
final adjudication of such issue.
<PAGE>
INDEX TO EXHIBITS
4 1997 Stock Option Plan
5 Opinion of Bressler, Amery & Ross, P.C.
23 Consent of Price Waterhouse LLP, independent certified public
accountants
<PAGE>
1997 STOCK OPTION PLAN OF
GRADCO SYSTEMS, INC.
ADOPTED BY THE BOARD OF DIRECTORS
ON SEPTEMBER 11, 1997
THIS DOCUMENT CONSTITUTES PART OF A PROSPECTUS COVERING
SECURITIES BEING REGISTERED UNDER THE SECURITIES ACT OF 1933
1. PURPOSE.
The purpose of this 1997 Stock Option Plan (the "Plan") is to
reward certain officers, directors, key employees and consultants (jointly,
the "Employees") for their best efforts on behalf of Gradco Systems, Inc. and
its subsidiaries (jointly, the "Company"), to induce the Employees to remain
in the employ of the Company, to attract talented individuals to join the
Company, to motivate the Employees to exert their best efforts on behalf of
the Company, and to encourage the Employees to secure or increase their stock
ownership in the Company.
As used in the Plan, the options are NOT intended to qualify as
"incentive stock options" within the meaning of section 422(a) of the
Internal Revenue Code of 1986, but are instead nonqualified stock options.
2. STOCK SUBJECT TO THE PLAN.
The stock to be issued upon exercise of options granted under the
Plan shall consist of authorized but unissued shares (or of reacquired
shares) of the Common Stock, no par value, of the Company. The maximum
number of shares for which options may be granted under the Plan is 400,000
shares, subject to adjustment as provided in Section 6.
If any options granted under the Plan expire or terminate for any
reason without having been exercised in full, the unpurchased shares shall
become available for further options pursuant to the Plan.
3. ELIGIBILITY OF OPTIONEES.
Options may be granted only to officers, key employees, directors
or consultants of the Company or any subsidiary (and all references in this
Plan to officers, key employees, directors or consultants of the Company
shall also refer to and include officers, key employees, directors or
consultants of the Company or any subsidiary of the Company). For purposes
of this Plan, an individual shall be deemed to be a consultant if the
individual performs services for the Company in a capacity other than as an
employee or director. More than one option may be granted to any optionee.
<PAGE>
4. ADMINISTRATION.
The Plan shall be administered by the Board of Directors of Gradco
Systems, Inc. (the "Board").
Subject to the express provisions of this Plan, the Board shall
have full authority: (a) to determine, in its discretion, the individuals to
whom, and the times at which, options shall be granted, the number of shares
subject to each option, the price or prices at which such shares may be
purchased from the Company, and the provisions of the respective option
agreements (which need not be identical), including, but not limited to,
provisions concerning the time or times, when, and the extent to which, the
options may be exercised, the conditions of exercise (including
non-competition with the Company after termination of employment) and the
effect of approved leaves of absence on continuity of service; (b) to
prescribe, amend and rescind rules and regulations relating to the Plan; (c)
to interpret the Plan and the respective option agreements; and (d) to make
all other determinations necessary or advisable for administering the Plan.
All determinations and interpretations by the Board shall be binding and
conclusive upon all parties.
5. CERTAIN TERMS AND CONDITIONS OF OPTIONS.
Subject to the following provisions, all options granted under this
Plan shall be in such form and upon such terms and conditions as the Board,
in its discretion, may from time to time determine:
(a) EXERCISE. An option shall be exercised by written notice of
such exercise, in the form prescribed by the Board, to the Secretary or
Treasurer of the Company, at its principal office. The notice shall specify
the number of shares for which the option is being exercised (which number,
if less than all of the shares then subject to exercise, shall be 50 or a
multiple thereof) and shall be accompanied by payment in full of the purchase
price of such shares. No shares shall be delivered upon exercise of any
option until all laws, rules and regulations which the Board may deem
applicable have been complied with. If a registration statement under the
Securities Act of 1933 is not then in effect with respect to the shares
issuable upon such exercise, it shall be a condition precedent that the
person exercising the option give to the Company a written representation and
undertaking, satisfactory in form and substance to the Board, that he is
acquiring the shares for his own account for investment and not with a view
to the distribution thereof.
(b) PAYMENT. Payment for shares purchased upon exercise of an
option shall be made either in full or installments, as shall be determined
by the Board and provided in the applicable instrument or instruments
evidencing such option.
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<PAGE>
(c) The person exercising an option shall not be considered a
record holder of the stock so purchased for any purpose until the date on
which he is actually recorded as the holder of such stock upon the stock
records of the Company.
(d) The Company shall pay all original issue and transfer taxes
with respect to the issue and transfer of shares of Common Stock of the
Company pursuant hereto and all other fees and expenses necessarily incurred
by the Company in connection therewith.
(e) No holder of any option under the Plan shall, by virtue of
holding such option, be entitled to any rights of a stockholder in the
Company.
6. ANTI-DILUTION PROVISIONS.
(a) If there is any stock dividend, stock split, or combination of
shares of Common Stock of the Company, the number and amount of shares then
subject to options hereunder shall be proportionately and appropriately
adjusted. No change shall be made in the aggregate purchase price to be paid
for all shares subject to options, but the aggregate purchase price shall be
allocated among all shares subject to options after giving effect to the
adjustment.
(b) If there is any other change in the Common Stock of the
Company, including recapitalization, reorganization, sale or exchange of
assets, exchange of shares, offering of subscription rights, or a merger or
consolidation in which the Company is the surviving corporation, an
adjustment, if any, shall be made in the shares then subject to options as
the Board may deem equitable.
(c) If the Company is merged into or consolidated with any other
corporation, or if it sells all or substantially all of its assets to any
other corporation, then either (i) the Company shall cause provisions to be
made for the continuance of all options granted hereunder after such event,
or for the substitution for the options granted hereunder of options covering
the number and class of securities which each optionee would have been
entitled to receive in such merger or consolidation by virtue of such sale if
the optionee had been the holder of record of a number of shares of Common
Stock of the Company equal to the number of shares covered by the then
unexercised portion of the option, or (ii) the Company shall give to each
optionee written notice of its election not to cause such provision to be
made and such options shall become exercis able in full (or, at the election
of each optionee, in part) at any time during a period of 20 days, to be
designated by the Company, ending not more than 10 days prior to the
effective date of the merger, consolidation or sale, in which case the
options shall not be exercisable to any extent after the expiration of such
20 day period. In no event, however, shall any option hereunder be
exercisable after the termination date set forth in the particular option
agreement.
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<PAGE>
7. TERM OF PLAN.
The Board of Directors may terminate this Plan at any time.
Termination of the Plan will not affect rights and obligations theretofore
granted and then in effect. No options may be granted later than ten years
from the date listed on page one hereof as the date of the Plan's adoption by
the Board.
8. TRANSFERABILITY.
Options granted under this Plan shall not be transferable.
9. AMENDMENT AND REVOCATION.
The Board alone shall have the right to alter, amend or revoke the
Plan or any part thereof at any time and from time to time, provided,
however, that without the consent of the optionees, no change may be made
in any option theretofore granted which will impair the rights of existing
optionees.
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<PAGE>
January 30, 1998
Gradco Systems, Inc.
3753 Howard Hughes Parkway
Suite 200
Las Vegas, Nevada 89109
Gentlemen:
We have acted as counsel for Gradco Systems, Inc., a Nevada corporation
(the "Company"), in connection with the registration statement on Form S-8
(the "Registration Statement") filed by the Company under the Securities Act
of 1933 covering an aggregate of 400,000 shares of Common Stock of the
Company (the "Shares") issued and issuable pursuant to the Company's 1997
Stock Option Plan (the "Plan").
In connection with the Registration Statement, we have examined such
records and documents and such questions of law as we have deemed necessary
or appropriate for purposes of this opinion, including but not limited to the
following:
(a) Articles of Incorporation, as amended to date, of the Company
certified by the Nevada Secretary of State;
(b) By-Laws of the Company;
(c) Minutes, resolutions and documentary evidence of other actions
taken by the shareholders and Board of Directors of the Company
through January 30, 1998;
(d) Specimens of the certificates for the Company's Common Stock;
and
(e) The Plan.
Additionally, we have consulted with officers and directors of the
Company and have obtained such representations from such persons with respect
to matters of fact as we deem necessary or advisable.
Based on the foregoing and on all other instruments, documents and
matters examined and necessary for the rendering of this opinion, we are of
the opinion that the 400,000 shares of Common Stock registered by the
Registration Statement have been legally issued, are fully-paid and
non-assessable, except that those which have not yet been issued will be,
when issued pursuant to the terms of the Plan and for not less than the par
value thereof, legally issued, fully-paid and non-assessable.
We hereby consent to the filing of this opinion as an Exhibit to the
Registration Statement and the reference to this firm under
<PAGE>
the caption "Interests of Named Experts and Counsel" in the prospectus which
constitutes a part thereof.
Very truly yours,
BRESSLER, AMERY & ROSS, P.C.
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
----------------------------------
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-8 of our report
dated June 5, 1997, which appears on page S-1 of the Gradco Systems, Inc.
Annual Report on Form 10-K for the year ended March 31, 1997. We also
consent to the reference to us under the headings "Experts" in such
Prospectus.
PRICE WATERHOUSE LLP
Costa Mesa, California
January 30, 1998
