As filed with the
Securities and Exchange Commission
on May 16, 1997 Registration No. 33-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
NESTOR, INC.
(Exact name of Registrant as specified in its charter)
Delaware 13-3163744
(State or other jurisdiction (I.R.S. Employer
of Identification No.)
incorporation or
organization)
One Richmond Square 02906
Providence, Rhode Island (Zip Code)
(Address of Principal
Executive Offices)
1997 INCENTIVE STOCK OPTION PLAN
(Full title of the Plan)
Herbert S. Meeker, Esq.
Baer Marks & Upham LLP
805 Third Avenue
New York, New York 10022
(Name and address of agent for service)
(212) 702-5700
(Telephone number, including area code, of agent for service)
Copies to: Herbert S. Meeker, Esq.
Baer Marks & Upham LLP
805 Third Avenue
New York, New York 10022
(212) 702-5700
CALCULATION OF REGISTRATION FEE
Title of Amount to be Proposed Proposed Amount of
Securities Registered(1) Maximum Maximum Registration
to be Offering Aggregate Fee
Registered Price Per Offering
Share(2) Price(2)
Common 1,000,000 $2.00 $2,000,000 $606.00
Shares, $.01 shares
par value
per share
(1) Pursuant to Rule 416, this Registration Statement also
covers such additional securities as may become issuable to
prevent dilution resulting from stock splits, stock
dividends and similar events.
(2) Estimated solely for the purpose of calculating the
registration fee pursuant to Rule 457(h) and (c) on the
basis of the average of the high and low sale prices of the
Registrant's Common Shares on the Nasdaq National Market on
April 3, 1997.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents, which have been filed by Nestor,
Inc., a corporation formed under the laws of the State of
Delaware (the "Registrant"), with the Securities and Exchange
Commission (the "Commission"), are incorporated herein by
reference:
(a) The Registrant's Annual Report on Form 10-K for its
fiscal year ended 12/31/96 under the Securities Exchange Act of
1934 ("Exchange Act"), that contains audited financial statements
for the Registrant's latest fiscal year for which such statement
has been filed.
(b) The Registrant's Proxy Statement relating to the annual
meeting of Shareholders held on May 6, 1997 pursuant to which the
1997 Incentive Stock Option Plan was described and approved.
(c) The description of the Registrant's shares of Common
Stock $.01 par value which is contained in the Registrant's
Registration Statement filed with the Commission on Form 8-A
under Section 12 of the Exchange Act including any amendment or
report filed for the purpose of updating such description.
(d) Form 8-K filed under the Exchange Act on 4/8/97,
4/10/97, 4/30/97 and 5/7/97.
(e) The Registrant's Quarterly Report on Form 10Q for the
three month period ended March 31, 1997.
In addition, all documents filed subsequent to the date of
this Registration Statement by the Registrant pursuant to Section
13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934,
as amended, prior to the filing of a post-effective amendment to
this Registration Statement 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 the filing of such documents. Any statement contained in
a document incorporated or deemed to be incorporated herein by
reference shall be deemed to be modified or superseded for
purposes of this Registration Statement 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.
Item 4. Description of Securities.
Not Applicable.
Item 5. Interests of Named Experts and Counsel.
Not Applicable.
Item 6. Indemnification of Directors and Officers.
The Registrant shall indemnify and advance expenses to the
fullest extent permitted by Section 145 of the General
Corporation Law of Delaware ("GCL"), as amended from time to
time, each person who is or was a director or officer of the
Registrant and the heirs, executors and administrators of such a
person. Any expenses (including attorneys' fees) incurred by
each person who is or was a director or officer of the
Registrant, and the heirs, executors and administrators of such a
person in connection with defending any such proceeding in
advance of its final disposition shall be paid by the Registrant;
provided, however, that if the GCL requires, an advancement of
expenses incurred by an indemnitee in his capacity as a director
or officer (and not in any other capacity in which service was or
is rendered by such indemnitee, including, without limitation,
service to an employee benefit plan) shall be made only upon
delivery to the Registrant of an undertaking by or on behalf of
such indemnitee, to repay all amounts so advanced, if it shall
ultimately be determined that such indemnitee is not entitled to
be indemnified for such expenses under this Article or otherwise.
Item 7. Exemption from Registration Claimed.
Not Applicable.
Item 8. Exhibits.
Exhibit
Number
4.1 1997 Incentive Stock Option Plan of Nestor, Inc.
(incorporated by reference to Exhibit 10.34 to the
Registrant's Report on Form 8-K filed with the Commission
on May 9, 1997 and approved by the Stockholders of the
Registrant on May 6, 1997 with respect to 1,000,000
shares of Common Stock of the Registrant.)
*5.1 Opinion of Baer Marks & Upham LLP.
*23.1 Consent of Ernst & Young LLP.
*23.2 Consent of Baer Marks & Upham LLP (contained in
Exhibit 5.1).
*23.3 Consent of Gassman, Rebhun & Co., P.C.
*24.1 Powers of Attorney (included on signature page
of this Registration Statement).
_____________________
*Filed herewith.
Item 9. Undertakings.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration
statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental change
in the information set forth in the registration statement;
(iii) To include any material information with respect
to the plan of distribution not previously disclosed in the
registration statement or any material change to such information
in the registration statement;
provided, however, that paragraphs (a)(1)(i) and (ii) do not
apply if the registration statement is on Form S-3 or S-8 and the
information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed by the
Registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by
reference in the registration statement.
(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.
(4) 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.
(5) 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.
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
Providence, Rhode Island, on the 6th day of May, 1997.
Nestor, Inc.
By: /s/David Fox
David Fox
President and Chief Executive Officer
KNOW ALL MEN BY THESE PRESENTS, that each person whose
signature appears below constitutes and appoints David Fox and
Herber S. Meeker his true and lawful attorneys-in-fact and
agents, with full power of substitution and resubstitution, for
him and in his name, place and stead, in any and all capacities,
to sign any and all amendments (including post-effective
amendments) to this Registration Statement, and to file the same,
with all exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, granting
unto said attorneys-in-fact and agents, full power and authority
to do and perform each and every act and thing requisite or
necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and
agents or his substitute or substitutes, may lawfully do or cause
to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed below by the
following persons in the capacities and on the dates indicated.
Signature Title Date
/s/David Fox Chief Executive Officer May 6, 1997
David Fox (principal executive
officer) and Director
/s/Nigel Hebbron Chief Financial Officer May 6, 1997
Nigel Hebbron (principal financial
officer and principal
accounting officer)
/s/Herbert S. Meeker Director May 6, 1997
Herbert S. Meeker
/s/Jeffrey B. Harvey Director May 6, 1997
Jeffrey B. Harvey
/s/Thomas F. Hill Director May 6, 1997
Thomas F. Hill
/s/Charles Elbaum Director May 6, 1997
Charles Elbaum
/s/Leon N. Cooper Director May 6, 1997
Leon N. Cooper
/s/Sam Albert Director May 6, 1997
Sam Albert
/s/Bruce W. Schnitzer Director May 6, 1997
Bruce W. Schnitzer
Section 10(a)
PROSPECTUS
NESTOR, INC.
This Section 10(a) Prospectus (the "Prospectus") is being
furnished by Nestor, Inc. (the "Company") to all persons
("Optionees") selected by the Company to participate in the
Company's 1997 Incentive Stock Option Plan (the "1997 Option
Plan").
The information contained herein relating to the Plan is being
provided to Optionees in accordance with Rule 428 of the General
Rules and Regulations under the Securities Act of 1933, as
amended (the "Securities Act"). Such information is qualified in
its entirety by the specific provisions of the option agreement
that each Optionee has executed or will execute in connection
with the grant of options to such Optionee.
THIS DOCUMENT CONSTITUTES PART OF A
PROSPECTUS COVERING SECURITIES THAT HAVE
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933.
The date of this Prospectus is May 16, 1997.
General
The Company's stockholders approved on May 6, 1997 the 1997
Stock Option Plan (the "1997 Option Plan"). The 1997 Option Plan
is intended to help the Company to attract, retain and motivate
key employees (including officers) of the Company.
The 1997 Option Plan provides for the grant of options
("Options") to purchase Common Stock that are intended to qualify
as incentive stock options ("Incentive Options") under Section
422 of the Internal Revenue Code of 1986, as amended (the "Code")
as well as options that do not so qualify ("Non-Qualified
Options").
Description of the 1997 Option Plan
The following is a summary of the principal features of the
1997 Option Plan. This summary is qualified in its entirety by
reference to the specific provisions of the plan, the full text
of which is available to all persons granted options under the
1997 Option Plan in the offices of the Corporation.
Administration of the 1997 Option Plan
The 1997 Option Plan will be administered by the Board of
Directors or by a committee (the "Committee") which is appointed
by the Board of Directors. The Committee will consist of two non-
employee members of the Company's Board of Directors, neither of
whom is eligible at any time for the grant of Incentive Options
under the 1997 Option Plan and each of whom is a "non-employee
director" within the meaning of Rule 16b-3 promulgated under the
Exchange Act and an "outside director" within the meaning of
Treasury Regulation Section 1.162-27(e)(3). The Company's Board
of Directors or the Committee is authorized to interpret the 1997
Option Plan, adopt and amend rules and regulations relating to
the 1997 Option Plan, and determine the recipients, form, and
terms of Options granted under the 1997 Option Plan. All Options
must be evidenced by a written agreement.
Shares Available
Under the 1997 Option Plan, the maximum number of shares of
Common Stock that may be subject to Options may not exceed at
this time an aggregate of 1,000,000 shares. The maximum number
of shares will be adjusted in certain events, such as a stock
split, reorganization or recapitalization.
Eligibility
Employees (including officers and directors who are employees)
of the Company or its subsidiaries are eligible for the grant of
Incentive Options under the 1997 Option Plan. Directors who are
not employees or officers are not eligible to participate. In
the event of Incentive Options, the aggregate fair market value
(determined at the time the Option is granted) of the Common
Stock with respect to which Incentive Options become exercisable
for the first time by the Option holder (i.e., vest) during any
calendar year cannot exceed $100,000. This limit does not apply
to Non-Qualified Options. To the extent an Option that otherwise
would be an Incentive Option exceeds this $100,000 threshold, it
will be treated as a Non-Qualified Option.
Exercise Price of Options
The Company will receive no monetary consideration for the
grant of Options under the 1997 Option Plan. In case of an
Incentive Option, the exercise price cannot be less than the fair
market value (as defined in the 1997 Option Plan) of the shares
on the date the Option is granted, and if an optionee is a
shareholder who beneficially owns 10% or more of the outstanding
Common Stock, the exercise price of Incentive Options cannot be
less than 110% of such fair market value. The exercise price of
Non-Qualified Options shall be determined by the Company's Board
of Directors or the Committee. The exercise price of Options
will be adjusted in certain events, such as a stock split,
reorganization or recapitalization.
Payment upon Exercise of Options
Payment for shares purchased by exercising an Option is to be
made by cash or check, or by any other means which the Board of
Directors determines are consistent with the purposes of the 1997
Option Plan and with applicable laws and regulations.
Term of Options
The term of an Option cannot exceed ten years, and in the case
of an optionee who owns 10% or more of the outstanding Common
Stock, cannot exceed five years.
Termination of Employment
Individual option agreements generally will provide that the
Options will expire upon termination of employment except that
(i) in the case of termination that is not for cause or otherwise
attributable to a breach by the optionee of an employment or
confidentiality or non-disclosure agreement, the Option will be
exercisable for three months after termination to the same extent
that it was exercisable prior to termination, (ii) in the case of
termination due to disability, the Option will be exercisable for
one year after termination (or within such lesser period as may
be specified in the applicable option agreement) to the same
extent that it was exercisable prior to termination and (iii) in
the case of death while in the employ of the Company or, within
the three month period referred to in (i), the Option will be
exercisable for one year after death (or within such lesser
period as may be specified in the applicable option agreement).
After the death of an optionee, the Option is exercisable by the
legal representative of the optionee or by the person that
acquired the Option by reason of the death of the Optionee.
Non-Transferability of Options
Options are not transferable by the optionee except by will or
by the laws of descent and distribution. The disposition of
shares acquired pursuant to the exercise of an Option will be
subject to any applicable restrictions on transferability imposed
by the Commission's regulations.
Effective Date
The 1997 Option Plan became effective when adopted by the
Company's shareholders on May 6, 1997.
Duration of the 1997 Option Plan
The 1997 Option Plan will terminate automatically and no
Options may be granted after ten years have elapsed from the date
the 1997 Option Plan was approved by the Company's shareholders.
The 1997 Option Plan may be terminated at any prior time by the
Board of Directors. Termination of the 1997 Option Plan will not
affect Options that were granted prior to the termination date.
Amendments or Modifications
The 1997 Option Plan may be amended or modified from time to
time by the Company's Board of Directors. However, if at any
time the approval of the shareholders of the Company is required
under Section 422 of the Code or Rule 16b-3, the Board of
Directors may not effect such modification or amendment without
such approval.
Certain Federal Income Tax Consequences
The following summary outlines certain federal income tax
consequences of the 1997 Option Plan to the Company and
participants under present law.
Incentive Options
A participant will not recognize income for federal income tax
purposes upon the grant of an Incentive Option. A participant
also will not be taxed on the exercise of an Incentive Option,
provided that the Common Stock acquired upon exercise of the
Incentive Option is not sold by the participant within two years
after the Option was granted and one year after the Option is
exercised (the "required holding period").
However, for alternative minimum tax ("AMT") purposes, the
difference between the exercise price of the Incentive Option and
the fair market value of the Common Stock acquired upon exercise
is an item of tax preference in the year the Incentive Option is
exercised. The participant is required to include such amount in
AMT income in such year and to compute the tax basis of the
shares so acquired in the same manner as if a Non-Qualified
Option had been exercised, including the availability of a
Section 83 election (discussed below). Whether a participant
will be liable for AMT in the year the Incentive Option is
exercised will depend on the participant's particular tax
circumstances. AMT paid in such year will be allowed as a credit
to the extent regular tax exceeds AMT in subsequent years.
On a sale, after the required holding period, of Common Stock
that was acquired by exercising an Incentive Option, the
difference between the participant's tax basis in the Common
Stock and the amount received in the sale is taxed as long-term
capital gain or loss.
If Common Stock acquired upon the exercise of an Incentive
Option is disposed of by the participant during the required
holding period (a "disqualifying disposition"), the excess, if
any, of (i) the amount realized on such disposition (up to the
fair market value of the Common Stock on the exercise date) over
(ii) the exercise price, will be taxed to the participant as
ordinary income. If a participant pays the exercise price of an
Incentive Option by delivering Common Stock that was previously
acquired by exercising an Incentive Option and such delivery
occurs before the end of the required holding period of such
Common Stock, the participant is treated as making a disqualified
disposition of the Common Stock so delivered.
The Code puts a $100,000 limit on the value of stock subject
to Incentive Options that first become exercisable in any one
year, based on the fair market value of the underlying Common
Stock on the date of grant. To the extent Options exceed this
limit, they are taxed as Non-Qualified Options.
Non-Qualified Options
A participant who receives a Non-Qualified Option does not
recognize taxable income on the grant of the Option. Upon
exercise of a Non-Qualified Option, a participant generally has
ordinary income in an amount equal to the excess of the fair
market value of the shares at the time of exercise over the
exercise price paid for the shares.
However, if the participant (i) is an officer or director of
the Company or the beneficial owner of more than 10% of the
Company's equity securities (in each case, within the meaning of
Section 16 of the Exchange Act -- as so defined, an "Insider"),
(ii) does not make a Section 83 election and (iii) receives
shares upon the exercise of a Non-Qualified Option, the
recognition of income (and the determination of the amount of
income) is deferred until the earlier of (a) six months after the
shares are acquired or (b) the earliest date on which the Insider
could sell the shares at a profit without being subject to
liability under Section 16(b) of the Exchange Act (six months
after the Non-Qualified Option is granted, in the case of an
"in-the-money" Option). If the participant makes a Section 83
election, income is not deferred. Rather, income is recognized
on the date of exercise of the Non-Qualified Option in an amount
equal to the excess of the fair market value of the shares
acquired upon exercise over the exercise price. A Section 83
election must be filed with the Internal Revenue Service within
thirty (30) days after an Option is exercised.
A participant's tax basis in shares received upon exercise of
a Non-Qualified Option is equal to the amount of ordinary income
recognized on the receipt of the shares plus the amount of cash,
if any, paid upon exercise. The holding period for the shares
begins on the day after the shares are received or, in the case
of an Insider that has not made a Section 83 election, on the day
after the date on which income is recognized by the Insider on
account of the receipt of the shares.
If a participant exercises a Non-Qualified Option by
delivering previously held shares in payment of the exercise
price, the participant does not recognize gain or loss on the
delivered shares, even if their fair market value is different
from the participant's tax basis in the shares. The exercise of
the Non-Qualified Option is taxed however, and the Company
generally is entitled to a deduction, in the same amount and at
the same time as if the participant had paid the exercise price
in cash. Provided the participant receives a separate
identifiable stock certificate therefor, his tax basis in the
number of shares received that is equal to the number of shares
surrendered on exercise will be the same as his tax basis in the
shares surrendered. His holding period for such number of shares
will include his holding period for the shares surrendered. The
participant's tax basis and holding period for the additional
shares received upon exercise will be the same as it would if the
participant had paid the exercise price in cash.
If a participant receives shares upon the exercise of a
Non-Qualified Option and thereafter disposes of the shares in a
taxable transaction, the difference between the amount realized
on the disposition and the participant's tax basis in the shares
is taxed as capital gain or loss (provided the shares are held as
a capital asset on the date of disposition), which is long-term
or short-term depending on the participant's holding period for
the shares.
Deduction by the Company
The Company is not allowed a federal income tax deduction on
the grant or exercise of an Incentive Option or the disposition,
after the required holding period, of shares acquired by
exercising an Incentive Option. On a disqualifying disposition
of such shares, the Company is allowed a federal income tax
deduction in an amount equal to the ordinary income recognized by
the participant as a result of the disqualifying disposition,
provided that such amount constitutes an ordinary and necessary
business expense of the Company, is reasonable in amount and is
not disallowed by Section 162(m) of the Code (discussed above).
The ordinary income recognized by an employee of the Company
on account of the exercise of a Non-Qualified Option is subject
to both wage withholding and employment taxes. A deduction for
federal income tax purposes is allowed to the Company in an
amount equal to the amount of ordinary income taxable to the
participant, provided that such amount constitutes an ordinary
and necessary business expense of the Company, that such amount
is reasonable, and that the Company satisfies any tax reporting
obligation that it has with respect to such income.
AVAILABLE INFORMATION
The Company is subject to certain of the informational
requirements of the Securities and Exchange Act (the "Exchange
Act"), and in accordance therewith files certain reports and
information statements and other information with the Securities
and Exchange Commission (the "Commission"). Such reports and
other information can be inspected and copied at the public
reference facilities maintained by the Commission at Room 1024,
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549,
and at the following Regional Offices of the Commission: 500
West Madison Street, Suite 1400, Chicago, IL 60661 and 7 World
Trade Center, 13th Floor, New York, NY 10048. Copies of such
material can also be obtained from the Public Reference Section
of the Commission at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents have been filed with the Commission
and are incorporated herein by reference:
(a) The Company's Annual Report on Form 10-K for its fiscal
year ended 12/31/96 under the Securities Exchange Act of 1934
("Exchange Act"), that contains audited financial statements for
the Company's latest fiscal year for which such statements have
been filed.
(b) The Company's Quarterly Report on Form 10-Q for the three
month period ended March 31, 1997.
(c) The description of the Company's Common Shares, .01 par
value per share, which is contained in the Company's Registration
Statement on Form 8-A filed under Section 12 of the Securities
Exchange Act of 1934, as amended, including any amendment or
report filed for the purpose of updating such description.
(d) Form 8-K filed under the Exchange Act on 4/8/97, 4/10/97,
4/30/97 and 5/17/97.
(e) The Registrant's Proxy Statement relating to the annual
meeting of Shareholders held on May 6, 1997 pursuant to which the
1997 Incentive Stock Option Plan was described and approved.
In addition, all other 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 by the Company of a post-
effective amendment to the Company's Registration Statement (of
which this Prospectus forms a part) which indicates that all
securities under the 1997 Option Plan and each Option Agreement
have been sold or which deregisters all securities under such
plans and agreements remaining unsold, are also deemed to be
incorporated by reference herein.
The Company will provide without charge to each person to whom
a copy of this Prospectus is delivered, upon the written or oral
request of such person, a copy of any or all of the documents
referred to above which have been or may be incorporated by
reference herein (other than exhibits to such documents unless
such exhibits are specifically incorporated by reference in such
documents), as well as any other documents (including all
documents sent to the Company's stockholders generally) required
to be delivered to such persons pursuant to Rule 428(b)
promulgated under the Exchange Act. Requests for any such
documents should be directed to Herbert S. Meeker, Secretary of
the Company.
EXHIBIT 5.1
Baer Marks & Upham LLP
805 Third Avenue
New York, N.Y. 10022-7513
May 9, 1997
Nestor, Inc.
One Richmond Square
Providence, Rhode Island 02906
Gentlemen:
We have acted as counsel to Nestor, Inc., a corporation
formed under the laws of the State of Delaware (the
"Registrant"), in connection with a Registration Statement on
Form S-8 (the "Registration Statement") being filed with the
Securities and Exchange Commission under the Securities Act of
1933, as amended, relating to the offering of 1,000,000 common
shares (the "Shares"), $.01 par value per Share, issuable upon
the exercise of options granted or to be granted to certain
employees and others of the Registrant pursuant to the
Registrant's 1997 Incentive Stock Option Plan (the "Employee
Plan").
In connection with the foregoing, we have examined originals
or copies, satisfactory to us, of all such corporate records and
of all such agreements, certificates and other documents as we
have deemed relevant and necessary as a basis for the opinion
hereinafter expressed. In such examination, we have assumed the
genuineness of all signatures, the authenticity of all documents
submitted to us as originals and the conformity with the original
documents of all documents submitted to us as copies. As to any
facts material to such opinion, we have, to the extent that
relevant facts were not independently established by us, relied
on certificates of public officials and certificates of officers
or other representatives of the Registrant.
Based upon and subject to the foregoing, we are of the opinion
that, when issued and paid for in accordance with the Employee
Plan the Shares will be validly issued, fully paid and non-
assessable.
We hereby consent to the use of our opinion as herein set
forth as an exhibit to the Registration Statement. In giving
such consent, we do not thereby concede that we are in the
category of persons whose consent is required under Section 7 of
the Securities Act of 1933, as amended, or the rules and
regulations thereunder.
Very truly yours,
Baer Marks & Upham LLP
by Herbert S. Meeker
EXHIBIT 23.1
Accountant's consent
Ernst & Young LLP
Consent of Independent Auditors
We consent to the incorporation by reference in the
Registration Statement (Form S-8) pertaining to the 1997
Incentive Stock Option Plan of Nestor, Inc. of our report dated
March 14, 1997, with respect to the consolidated financial
statements and schedule of Nestor, Inc. included in its Annual
Report (Form 10-K/T) for the six months ended December 31, 1996
filed with the Securities and Exchange Commission.
ERNST & YOUNG LLP
Providence, Rhode Island
May 16, 1997
EXHIBIT 23.3
Consent of Gassman, Rebhun & Co., P.C., Independent Auditors
We consent to the incorporation by reference in this
Registration Statement (Form S-8) of our report dated September
6, 1996 on our audits of the financial statements of Nestor, Inc.
as of June 30, 1996 and 1995 and for each of the three years in
the period ended June 30, 1996, which report is included in the
Company's Annual Report on Form 10-K for the year ended June 30,
1996.
Gassman, Rebhun & Co., P.C.
New York, New York
May 16, 1997
