As filed with the Securities and Exchange Commission on
July 2, 1997.
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
PENTECH INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
Delaware 23-2259391
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
195 Carter Drive, Edison, NJ 08817
(Address of principal executive offices) (Zip Code)
1995 Stock Option Plan
(Full title of the plan)
Richard S. Kalin, Kalin & Banner
757 Third Avenue, New York, NY 10017
(Name and address of agent for service)
(212) 888-9010
(Telephone number, including area code, of agent for service)
CALCULATION OF REGISTRATION FEE
=================================================================
Proposed Proposed Amount
Title of maximum maximum of regis-
securities Amount offering aggregate tration
to be to be price per offering fee
registered registered(1) share(2) price(2)
Common Stock,
par value $.01
per share..... 700,000 $ 2.50 $1,750,000 $530.25
=================================================================
<PAGE>
(1)The number of shares stated is the aggregate number of shares
of Common Stock to be issued upon the exercise of options
granted or to be granted under the 1995 Stock Option Plan.
(2) Estimated solely for the purpose of calculating the
registration fee and based upon the average of (i) the
exercise price of the options granted under the 1995 Stock
Option Plan and (ii) the average of the bid and asked price of
the Common Stock as reported by the National Association of
Securities Dealers Automated Quotation System ("NASDAQ") on
June 30, 1997 as to options to be granted under the 1995 Stock
Option Plan.
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
Item 1. Plan Information.*
Item 2. Registrant Information and Employee
Plan Annual Information.*
* Information required by Part I to be contained in the
Section 10(a) prospectus is omitted from this Registration
Statement in accordance with Rule 428 under the Securities Act of
1933 and the Note to Part I of Form S-8.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
1. The following documents, which have been filed by the
registrant with the Securities and Exchange Commission (the
"Commission"), File Number 0-15374, pursuant to the Securities
Exchange Act of 1934 (the "Exchange Act"), are incorporated by
reference into this Registration Statement:
(a) The Company's Annual Report on Form 10-K for the
fiscal year ended September 30, 1996;
(b) The Company's Proxy Statement dated February 10,
1997;
(c) The Company's Quarterly Report on Form 10-Q for the
quarters ended December 31, 1996 and March 31,
1997;
(d) The description of the registrant's Common Stock
contained in the registrant's Registration
Statement on Form 8-A dated February 5, 1987; and
2. 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 by reference in this Registration Statement and to be
a part hereof from the respective date of filing of such documents.
Any statement contained in a document incorporated by reference
herein is modified or superseded for all purposes to the extent
that a statement contained in this Registration Statement or in any
other subsequently filed document which is incorporated by
reference modifies or supersedes such statement.
Item 4. Description of Securities.
Not applicable.
II-1
<PAGE>
Item 5.Interests of Named Experts and Counsel.
The legality of the Common Stock offered hereby will be
passed upon for the Company by Kalin & Banner. Mr. Kalin is an
officer and director of the Company and owns 759,839 shares of
Common Stock and options to purchase 50,000 shares of Common Stock.
Item 6. Indemnification of Directors and Officers.
Sections 145 of the General Corporation law of the State
of Delaware provides for the indemnification of officers and
directors under certain circumstances against expenses incurred in
successfully defending against a claim and authorizes Delaware
corporations to indemnify their officers and directors under
certain circumstances against expenses and liabilities incurred in
legal proceedings involving such persons because of their being or
having been an officer or director.
Section 102(b) of the Delaware General Corporation Law
permits a corporation, by so providing in its certificate of
incorporation, to eliminate or limit director's liability to the
corporation and its stockholders for monetary damages arising out
of certain alleged breaches of their fiduciary duty. Section
102(b)(7) provides that no such limitation of liability may affect
a director's liability with respect to any of the following: (i)
breaches of the director's duty of loyalty to the corporation or
its stockholders; (ii) acts or omissions not made in a good faith
or which involve intentional misconduct of knowing violations of
law; (iii) liability for dividends paid or stock repurchased or
redeemed in violation of Section 174 of the Delaware General
Corporation Law; or (iv) transactions from which directors derived
an improper personal benefit. Section 102(b)(7) does not authorize
any limitation on the ability of the corporation or its
stockholders to obtain injunctive relief, specific performance or
other equitable relief against directors.
Article Seventh of the registrant's Certificate of
Incorporation provides that no director of the registrant shall be
personally liable to the registrant or its stockholders for any
monetary damages for breaches of fiduciary duty as a director,
provided that this provision shall not eliminate or limit the
liability of a director (i) for any breach of the director's duty
of loyalty to the registrant or its stockholders; (ii) for acts or
omissions in good faith or which involve intentional misconduct or
a knowing violation of law; (iii) under Section 174 of the General
Corporation Law of the State of Delaware; or (iv) for any
transaction from which the director derived an improper personal
benefit.
II-2
Item 7. Exemption from Registration Claimed.
The Company granted certain of its employees options under the
Plan pursuant to the exemption from registration under the
Securities Act of 1933 provided by Section 4(2) thereof.
Item 8. Exhibits.
Exhibit No. Description
4.1 1995 Stock Option Plan
4.2 Form of Incentive Stock Option
Agreement
4.3 Form of Non-Qualified Stock
Option Agreement
5.1 Opinion of Kalin & Banner
24.1 Consent of Ernst & Young LLP
24.2 Consent of Kalin & Banner
(included in Exhibit 5.1)
25.1 Powers of Attorney (included on
Page II-5 of this Registration
Statement)
Item 9. Undertakings.
(a) 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 (the "Act"), each such
post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(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.
II-3
(b) 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 Exchange Act (and, where
applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Exchange Act) that is incorporated
by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising
under the Act may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing
procedures, 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.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-8 and has duly caused
this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Edison, State of
New Jersey, on July 1, 1997.
PENTECH INTERNATIONAL, INC.
(Registrant)
By: s\ John W. Linster
John W. Linster, President
and Chief Executive Officer
Each person whose individual signature appears below hereby
authorizes each of David Melnick, Norman Melnick and Richard S. Kalin or
any of them as his or her true and lawful attorney-in-fact with full
power of substitution to execute in the name and on behalf of each
person, individually and in each capacity stated below, and to file, any
and all amendments to this Registration Statement, including any and all
post-effective amendments thereto.
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.
Signature Title Date
s\ Norman Melnick Chairman of the Board July 1, 1997
Norman Melnick of Directors
s\John W. Linster President and Chief July 1, 1997
John W. Linster Executive Officer
s\ David Melnick Chief Operating July 1, 1997
David Melnick Officer and
Director
s\ Richard S. Kalin Secretary and July 1, 1997
Richard S. Kalin Director
Executive July , 1997
John F. Kuypers Vice President -
Sales and Director
Director July , 1997
Jerry Della Femina
Director July , 1997
Roy L. Boe
Director July , 1997
Robert K. Semel
s\ William Visone Treasurer and Chief July 1, 1997
William Visone Financial Officer
II-5
ptk/fm-s-8.96
<PAGE>
EXHIBIT INDEX
Exhibit No. Document
4.1 1995 Stock Option Plan
4.2 Form of Incentive Stock Option Agreement
4.3 Form of Non-Qualified Stock Option
Agreement
5.1 Opinion of Kalin & Banner
24.1 Consent of the Ernst & Young LLP
24.2 Consent of Kalin & Banner (included in
Exhibit 5.1)
25.1 Powers of Attorney (included on Page II-5
of this Registration Statement)
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<PAGE>
EXHIBIT 4.1
PENTECH INTERNATIONAL, INC.
1995 STOCK OPTION PLAN
1. Plan; Purpose; General. The purpose of this 1995 Stock
Option Plan (the "Plan") is to advance the interests of Pentech
International, Inc. (the "Company") by enhancing the ability of the
Company to attract and retain selected employees, officers,
consultants, advisors to the Board of Directors and qualified
directors (collectively the "Participants") by creating for such
Participants incentives and rewards for their contributions to the
success of the Company, and by encouraging such Participants to
become owners of shares of the Company's common stock, par value
$.01 per share, as the par value may be amended (the "Shares").
Options granted pursuant to the Plan may be incentive stock
options ("Incentive Options") as defined in the Internal Revenue
Code of 1986, as amended (the "Code") or non-qualified options, or
both. The proceeds received from the sale of shares pursuant to
the Plan shall be used for general corporate purposes.
2. Effective Date of Plan. The Plan will become effective
upon approval by the Board of Directors (the "Board"), and shall be
subject to the approval by the holders of at least a majority of
all Shares present in person and by proxy and entitled to vote
thereon at a meeting of stockholders of the Company prior thereto
or within 12 months thereafter.
3. Administration of Plan. The Plan will be administered by
the Board. The Board will have authority, not inconsistent with
the express provisions of the Plan, to take all action necessary or
appropriate thereunder, to interpret its provisions, and to decide
all questions and resolve all disputes which may arise in
connection therewith. Such determinations of the Board shall be
conclusive and shall bind all parties.
The Board may, in its discretion, delegate its powers with
respect to the Plan to an employee benefit plan committee or any
other committee (the "Committee"), in which event all references to
the Board hereunder, including without limitation the references in
Section 10, shall be deemed to refer to the Committee. The
Committee shall consist of not fewer than three members. Each of
the members must be a "disinterested person" as that term is
defined in Rule 16b-3 adopted pursuant to the Securities Exchange
Act of 1934 (the "Exchange Act"). A majority of the members of the
Committee shall constitute a quorum, and all determinations of the
Committee shall be made by the majority of its members present at
a meeting. Any determination of the Committee under the Plan may
be made by the majority of its members present at a meeting. Any
determination of the Committee under the Plan may be made without
notice or meeting of the Committee by a writing signed by all of
the Committee members.
The Board and the Committee, if any, shall have the authority
to determine eligibility, the number of options granted and the
exercise price of options.
4. Eligibility. The Participants in the Plan shall be all
employees, consultants, advisors to the Board of Directors and
qualified directors of the Company or any of its present or future
subsidiaries (as defined in Section 9) whether or not they are also
officers of the Company. Members of the Committee are eligible
only if they do not exercise any discretion in selecting
Participants who receive grants of options, in determining the
number of shares to be granted to any Participant or in determining
the exercise price of any option, or if counsel to the Company may
otherwise advise the Committee that the taking of any such action
does not impair the status of such eligible Committee members as
"disinterested persons" within the meaning of Exchange Act Rule
16b-3.
5. Grant of Options.
(a) The Board shall grant options to Participants that it, in
its sole discretion, selects. Options shall be granted on such
terms as the Board shall determine except that Incentive Options
shall be granted on terms that comply with the Code and Regulations
thereunder.
(b) All directors on the Board of Directors of the Company
who are not employees of the Company or its subsidiaries shall
automatically receive grants of 10,000 fully-vested non-qualified
options (i) at the time this Plan is adopted by the Board if they
have not received a grant under another Stock Option Plan of the
Company or (ii) upon election or appointment to the Board, if not
a member of the Board at the time this Plan is adopted by the
Board. The exercise price shall be 100% of fair market value on
the date of grant as defined by Section 9.
(c) No options shall be granted after January 4, 2005 but
options previously granted may extend beyond that date.
6. Option Agreements.
(a) Each option under the Plan shall be evidenced by an
option agreement, which shall be signed by an officer of the
Company and by the employee and which shall contain such provisions
as may be approved by the Board.
(b) The option agreement shall constitute binding contracts
between the Company and the optionee and every optionee, upon
acceptance of such option agreement, shall be bound by the terms
and restrictions of this Plan and of the option agreement.
(c) The terms of the option agreement shall be in accordance
with this Plan, but may include additional provisions and
restrictions, provided that the same are not inconsistent with the
Plan.
7. Terms and Conditions of Options.
(a) Exercise Price. Except as provided in Section 5(b) of
this Plan, the purchase price per Share for Shares issuable upon
exercise of options shall be a minimum of 100% of fair market value
on the date of grant and shall be determined by the Board. For
this purpose, "fair market value" will be determined as set forth
in Section 9. Notwithstanding the foregoing, if any person to whom
an option is to be granted owns in excess of ten percent of the
outstanding capital stock of the Company, then no option may be
granted to such person for less than 110% of the fair market value
on the date of grant as determined by the Board.
(b) Annual Limit on Grant and Exercise. Incentive options
shall not be granted to any individual pursuant to this Plan, the
effect of which would be to permit such person to first exercise
options, in any calendar year, for the purchase of shares having a
fair market value in excess of $100,000 (determined at the time of
the grant of the options). An optionee hereunder may exercise
options for the purchase of shares valued in excess of $100,000
(determined at the time of the grant of the options) in a calendar
year, but only if the right to exercise such options shall have
first become available in prior calendar years.
(c) Period of Options. Unless earlier terminated, options
shall terminate and no longer be exercisable five years from the
date of grant.
(d) Payment for Delivery of Shares. Shares which are subject
to options shall be issued only upon receipt by the Company of full
payment of the purchase price for the Shares as to which the option
is exercised. The purchase price shall be payable by the
Participant to the Company either (i) in cash or by check, bank
draft or money order payable to the order of the Company; or (ii)
for non-qualified options, through the delivery of Shares owned by
the Participant for a period of not less than six months and for
which the Participant has good title (free and clear of any liens
and encumbrances) having a fair market value equal to the purchase
price; or (iii) for non-qualified options, by a combination of cash
and Shares as provided in (i) and (ii) above.
The Company shall not be obligated to deliver any Shares
unless and until, in the opinion of the Company's counsel, all
applicable federal and state laws and regulations have been
compiled with, nor, if the outstanding common stock is at the time
listed on any securities exchange, unless and until the Shares to
be delivered have been listed (or authorized to be added to the
list upon official notice of issuance) upon such exchange, nor
unless or until all other legal matters in connection with the
issuance and delivery of Shares have been approved by the Company's
counsel. Without limiting the generality of the foregoing, the
Company may require from the person exercising an option such
investment representation or such agreement, if any, as counsel for
the Company may consider necessary in order to comply with the
Securities Act of 1933, as amended and applicable state securities
laws.
A Participant shall have the rights of a shareholder only as
to Shares actually acquired by him under the Plan.
(e) Vesting. Except for options granted pursuant to Section
5 (b) of this Plan, the Board may impose such vesting restrictions
as it sees fit at the time of grant.
(f) Non-Transferability of Options. Options may not be sold,
assigned or otherwise transferred or disposed of in any manner
whatsoever except as provided in Section 7(h).
(g) Forfeiture of Options upon Termination of Relationship.
All previously unexercised options including options which have not
vested shall terminate and be forfeited automatically upon the
termination for any reasons whatsoever of a Participant's status as
an employee, consultant or advisor to the Board.
(h) Death. If a Participant dies at a time when he is
entitled to exercise an option, then at any time or times within
one year after his death (or such further period as the Board may
allow) such options may be exercised, as to all or any of the
Shares which the Participant was entitled to purchase immediately
prior to his death, by his personal representative or the person or
persons to whom the options are transferred by the will or the
applicable laws of descent and distribution, and except as so
exercised such options will expire at the end of such period.
(i) Loans to Exercise Options. If requested by any
Participant to whom a grant of non-qualified options has been made,
the Company or any subsidiary may loan such person the amount of
money necessary to pay the federal income taxes incurred as a
result of the exercise of any options (or guarantee a bank loan for
such purpose), assuming that the Participant has no deductions
which would reduce the amount of such tax owed. The loan shall be
made on or after April 15th of the year following the year in which
the amount of tax is determined as may be requested by the
Participant and shall be made on such terms as the Company or
lending bank determines.
(j) Withholding Taxes. To the extent that the Company is
required to withhold taxes for federal income tax purposes in
connection with the exercise of any options, the Company shall have
the right to assist the Participant to satisfy such withholding
requirement by (i) the Participant paying the amount of the
required withholding tax to the Company, (ii) the Participant
delivering to the Company Shares of its common stock previously
owned by the Participant or (iii) the Participant having the
Company retain a portion of the Shares covered by the option
exercise. The number of Shares to be delivered to or withheld by
the Company times the fair market value as defined by Section 8 of
this Plan shall equal the cash required to be withheld. To the
extent that the Company elects to allow the Participant either to
deliver or have withheld Shares of the Company's Common Stock, the
Board or the Committee may require him to make such election only
during certain periods of time as may be necessary to comply with
appropriate exemptive procedures regarding the "short-swing" profit
provisions of Section 16(b) of the Exchange Act or to meet certain
Code requirements.
8. Shares Subject to Plan
(a) Number of Shares and Stock to be Delivered. Shares
delivered pursuant to this Plan shall in the discretion of the
Board be authorized but unissued Shares or previously issued Shares
acquired by the Company. Subject to adjustments as described
below, the aggregate number of Shares which may be delivered under
this Plan shall not exceed 700,000 Shares.
(b) Changes in Stock. In the event of a stock dividend,
stock split or combination of Shares, recapitalization, merger in
which the Company is the surviving corporation or other change in
the Company's capital stock, the number and kind of Shares of stock
or securities of the Company to be subject to the Plan and to
options then outstanding or to be granted thereunder, the maximum
number of Shares or securities which may be delivered under the
Plan, the option price and other relevant provisions shall be
appropriately adjusted by the Board, whose determination shall be
binding on all persons. In the event of a consolidation or merger
in which the Company is not the surviving corporation or which
results in the acquisition of substantially all the Company's
assets, all outstanding options shall thereupon terminate.
The Board may also adjust the number of Shares subject to
outstanding options, the exercise price of outstanding options and
the terms of outstanding options to take into consideration
material changes in accounting practices or principles,
consolidations or mergers (except those described in the
immediately preceding paragraph), acquisitions or dispositions of
stock or property or any other event if it is determined by the
Board that such adjustment is appropriate to avoid distortion in
the operation of the Plan.
9. Definitions.
(a) For purposes of the Plan, a subsidiary is any corporation
(i) in which the Company owns, directly or indirectly, stock
possessing 50 percent or more of the total combined voting power of
all classes of stock or (ii) over which the Company has effective
operating control.
(b) The fair market value of the Shares shall be deemed to
be:
(i) the closing price of a Share appearing on a
national securities exchange if the Shares are listed on such
an exchange, or if not listed, the average closing bid price
appearing on the National Association of Securities Dealers
Automated Quotation System ("NASDAQ");
(ii) if the Shares are not listed on NASDAQ, then the
average bid price for a Share as listed in the National Quotation
Bureau's pink sheets;
(iii) if there are no listed bid prices published in
the pink sheets, then the market value shall be based
upon the average closing bid price as determined following a
polling of all dealers making a market in the Shares.
10. Indemnification of Board. In addition to and without
affecting such other rights of indemnification as they may have as
members of the Board or otherwise, each member of the Board shall
be indemnified by the Company to the extent legally possible
against reasonable expenses, including attorney's fees, actually
and reasonably incurred in connection with any action, suit or
proceeding, to which he may be a party by reason of any action
taken or failure to act under or in connection with the Plan, or
any option granted thereunder, and against all judgments, fines and
amounts paid by him in settlement thereof; provided that such
payment of amounts so indemnified is first approved by a majority
of the members of the Board who are not parties to such action,
suit or proceeding, or by independent legal counsel selected by the
Company, in either case on the basis of a determination that such
member acted in good faith and in a manner he reasonably believed
to be in or not opposed to the best interests of the Company; and
except that no indemnification shall be made in relation to matters
as to which it shall be adjudged in such action, suit or proceeding
that such Board member is liable for a breach of the duty of
loyalty, bad faith or intentional misconduct in his duties; and
provided, further that the Board member shall in writing offer the
Company the opportunity, at its own expense, to handle and defend
same.
11. Amendments. The Board may at any time discontinue
granting options under the Plan. The Board may at any time amend
the Plan or amend any outstanding option or options for the purpose
of satisfying the requirements of any changes in applicable laws or
regulations or for any other purpose which may at the time be
permitted by law, provided that (except to the extent explicitly
required or permitted herein above) no such amendment will, without
the approval of the stockholders of the Company, (a) increase the
maximum number of Shares available under the Plan, (b) reduce the
option price of outstanding options or reduce the price at which
options may be granted, (c) extend the time within which options
may be granted, (d) amend the provisions of this Section 11 of the
Plan, (e) extend the period of an outstanding option beyond five
years from the date of grant, (f) adversely affect the rights of
any Participant (without his consent) under any options theretofore
granted or (g) be effective if stockholder approval is required by
applicable statute, rule or regulation.
Date Approved by Board of Directors: March 15, 1995
Date Approved by Shareholders: May 9, 1995
<PAGE>
EXHIBIT 4.2
INCENTIVE STOCK OPTION AGREEMENT
THIS OPTION AGREEMENT is made and entered into this __ day of
_________1995, by and between PENTECH INTERNATIONAL, INC., a
Delaware corporation (the "Corporation"), and _______________ (the
"Optionee").
WHEREAS, the Optionee is a valued employee, director or
consultant of the Corporation; and
WHEREAS, the Corporation considers it desirable and in its
best interests that Optionee be given an opportunity to acquire a
proprietary interest in the Corporation by possessing an incentive
option to purchase shares of common stock of the Corporation, par
value $.01 per share (the "Common Shares"), in accordance with the
provisions of the 1995 Stock Option Plan (the "Plan") of the
Corporation.
NOW, THEREFORE, for good and valuable consideration paid by
Optionee to the Corporation, the adequacy of which is hereby
acknowledged, and the mutual covenants hereinafter set forth, the
parties agree as follows:
1. Grant of Option. The Corporation hereby grants to the
Optionee the right and option (hereinafter the "Incentive Option")
to purchase all or any part of an aggregate of _______ Common
Shares (subject to adjustment as provided in paragraph 6 hereof),
on the terms and conditions herein set forth.
2. Purchase Price. The purchase price of the Common Shares
covered by the Incentive Option shall be $____ per share (subject
to adjustment as provided in paragraph 6 hereof).
3. Terms of the Option. The Incentive Option shall be
exercisable commencing one year from the date hereof. The
Incentive Option granted hereby shall expire _____________ unless
earlier terminated as hereinafter set forth.
4. Method of Exercising Option. If the Optionee elects to
exercise the Incentive Option he may do so in whole or in part at
any time subject to the termination dates specified herein.
The Incentive Option, or any part thereof, may be exercised by
the Optionee in either of the following ways:
(a) If the Optionee decides to exercise all or part of
his Incentive Option and make payment for the Common Shares in
full, he shall give written notice to the Corporation,
specifying therein the number of Common Shares which he then
elects to purchase, accompanied by cash or certified check
payable to the order of the Corporation or other consideration
acceptable to the Corporation, including issued and
outstanding shares of the Corporation and in the amount of the
full option price of the Common Shares being purchased.
(b) If the Optionee decides to exercise all or part of
the Incentive Option and make payment in installments, the
Optionee shall give written notice to the Corporation
specifying therein the number of Common Shares which he then
elects to purchase, accompanied by a promissory note, in form
satisfactory to the Corporation, executed by the Optionee and
evidencing the obligation of the Optionee to pay the option
price to the Corporation in equal annual installments payable
on the annual anniversary date of exercise beginning one year
after the date of such exercise and terminating on the third
annual anniversary of the date of exercise of the Incentive
Option, together with interest at the lowest rate imputed by
the Internal Revenue Service when an interest rate is not
stated in a contract. Notwithstanding, the foregoing, in the
event the Optionee's relationship with the Corporation is
terminated for any reason, (a) then any such promissory note
shall immediately be due and payable, and (b) the Optionee
shall not be eligible to exercise the Incentive Option and
make payment in installments, but shall be required to make
payment by cash or certified check payable to the order of the
Corporation.
As soon as practicable after receipt by the Corporation
of such notice and of payment in full of the Incentive Option
price of all the Common Shares with respect to which the
Incentive Option has been exercised (including interest if
payment is made in installments), a certificate or
certificates representing such Common Shares shall be issued
in the name of the Optionee, or, if the Optionee shall so
request in the notice exercising the Incentive Option, in the
name of the Optionee and another person jointly, with right of
survivorship, and shall be delivered to the Optionee. All
Common Shares shall be issued only upon receipt by the
Corporation of the Optionee's representation that the shares
are purchased for investment and not with a view toward
distribution thereof.
5. Availability of Shares. The Corporation, during the term
of this Incentive Option, at all times shall keep available the
number of shares of common stock required to satisfy the Incentive
Option.
The Corporation shall utilize its best efforts to comply with
the requirements of each regulatory commission or agency having
jurisdiction in order to issue and sell the Common Shares to
satisfy the Incentive Option; provided, however, that the
Corporation shall not be required to register the Common Stock
issuable on exercise of the Incentive Option under the Securities
Act of 1933. Such compliance will be a condition precedent to the
right to exercise the Incentive Option. The inability of the
Corporation to effect such compliance with any such regulatory
commission or agency which counsel for the Corporation deems
necessary for the lawful issuance and sale of the Common Shares to
satisfy this Incentive Option shall relieve the Corporation from
any liability for failure to issue and sell the Common Shares to
satisfy the Incentive Option for such period of time as such
compliance is not effectuated.
6. Adjustments. If prior to the exercise of any option
granted hereunder the Corporation shall have effected one or more
stock split-ups, stock dividends, or other increases or reductions
of the number of shares of its common stock outstanding without
receiving compensation therefor in money, services or property, the
number of Common Shares subject to the option hereby granted shall
(a) if a net increase shall have been effected in the number of
outstanding shares of the Corporation's common stock, be
proportionately increased and the cash consideration payable per
Common Share shall be proportionately reduced; and (b) if a net
reduction shall have been effected in the number of outstanding
shares of the Corporation's common stock, be proportionately
reduced and the cash consideration payable per Common Share be
proportionately increased.
7. Restrictions. The holder of this Incentive Option, by
acceptance hereof, represents and warrants as follows:
(a) This Incentive Option and the right to purchase
common stock hereunder is personal to the holder and shall not
be transferred to any other person, other than by will or the
laws of descent and distribution.
(b) The holder hereof has been advised and understands
that the Incentive Option has been issued in reliance upon
exemptions from registration under the Securities Act and
applicable state statutes; the exercise of the Incentive
Option and resale of the Incentive Option and the Common
Shares have not been registered under the Securities Act or
applicable state statutes and must be held and may not be
sold, transferred, or otherwise disposed of for value unless
they are subsequently registered under the Securities Act or
an exemption from such registration is available; except as
set forth herein, the Corporation is under no obligation to
register the Incentive Option or the Common Shares under the
Securities Act or the applicable state statutes; in the
absence of such registration, the sale of the Incentive Option
or the Common Shares may be practicably impossible; the
Corporation's registrar and transfer agent will maintain stop-
transfer instructions against registration or transfer of the
Incentive Option and the Common Shares and any certificate
issued upon exercise of the Incentive Option representing the
Common Shares will bear on its face a legend in substantially
the following form restricting the sale of the Common Shares:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT") AND ARE
"RESTRICTED SECURITIES" WITHIN THE MEANING OF RULE
144 PROMULGATED UNDER THE SECURITIES ACT. THE
SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND
MAY NOT BE SOLD OR TRANSFERRED WITHOUT COMPLYING
WITH RULE 144 IN THE ABSENCE OF EFFECTIVE
REGISTRATION OR OTHER COMPLIANCE UNDER THE
SECURITIES ACT.
(c) Prior to two years from the date the Incentive
Option has been exercised and the Common Stock fully paid for,
the Corporation may refuse to transfer the Common Stock unless
the holder thereof provides an opinion of legal counsel
reasonably satisfactory to the Corporation or a "no action"
letter or interpretive response from the staff of the
Securities and Exchange Commission to the effect that the
transfer is proper; further, unless such opinion letter or
response states that the Common Shares are free of any
restrictions under the Securities Act, the Company may refuse
to transfer the Common Stock to any transferee who does not
furnish in writing to the Corporation the same representations
and agree to the same conditions with respect to such Common
Shares as are set forth herein. Notwithstanding any of the
foregoing, the Corporation may refuse to transfer the Common
Shares if any circumstances are present reasonably indicating
that the transferee's representations are not accurate.
(d) After two years but prior to three years from the
date the Incentive Option has been exercised and the Common
Shares fully paid for, the Corporation may refuse to transfer
the Common Shares unless the holder either (i) meets the
requirements of subparagraph (b) above; or (ii) sells such
Common Shares in accordance with Rule 144 and furnishes to the
Corporation written assurances of compliance therewith in the
form of a copy of the Notice of Form 144 and appropriate
letters of compliance from the holder of such Common Shares
and the securities broker-dealer to or through which such
Common Shares are being sold. No opinion of counsel for the
holder of the Common Shares shall be required respecting sales
in reliance on Rule 144 pursuant to clause (ii) of this
subparagraph (d).
(e) After three years from the date the Incentive Option
has been exercised and the Common Shares fully paid for, the
Corporation shall, upon the written request of any persons who
have held the Common Shares for three years (excluding any
tolling period provided for by Rule 144) and who is not, and
has not been during the preceding three months, an affiliate
of the Corporation, reissue to such holder in such names and
denominations as the holder shall request, one or more
certificates for the Common Shares without any restriction
whatsoever on their further transfer and cancel any and all
stop transfer instructions regarding such Common Shares on the
books and records of the Corporation.
8. Shareholder's Rights. This Incentive Option is non-
transferable by the Optionee, except in the event of the Optionee's
death as provided in Section 9(d) hereof and during the Optionee's
lifetime is exercisable only by the Optionee. On any attempt to
transfer or otherwise dispose of this Incentive Option other than
pursuant to the terms hereof or the terms of the Plan, this
Incentive Option shall immediately become null and void. The
Optionee shall have no rights as a shareholder with respect to
Incentive Option Shares until payment of the Incentive Option price
and delivery to the Optionee of the Common Shares as provided
herein.
9. Termination of Option. Except as otherwise stated
herein, the Incentive Option to the extent not heretofore exercised
shall terminate upon the first of the following dates to occur:
(a) In the event of the Optionee's death, the Optionee's
executors or administrators may exercise, within twelve (12)
months following the date of the Optionee's death, the
Incentive Option as to all or part of such number of shares
which the Optionee was entitled to purchase at the time of his
death, as determined in accordance with Article 2, not
theretofore exercised during the Optionee's lifetime;
(b) On the date of the termination of the Optionee's
employment for cause or on the date the Optionee voluntarily
quits his employment;
(c) The expiration of three months after the date on
which the Optionee's employment by the Corporation is
terminated not for cause (except if such termination be by
reason of death or permanent and total disability);
(d) The expiration of 12 months after the date on which
the Optionee's employment by the Corporation is terminated, if
such termination be by reason of the Optionee's permanent and
total disability;
(e) ___________________, the fifth anniversary date of
this Agreement.
10. Competition. In consideration for the grant of this
option, the Optionee agrees that, during the term of this option
agreement and for a period of one year thereafter, he shall not in
any manner, engage or become interested in as owner, stockholder,
partner, director, officer, employee, consultant or otherwise, any
business which competes with the business conducted by the
Corporation or any of its affiliates.
11. Validity and Construction. The validity and construction
of this Incentive Option shall be governed by the laws of the State
of New Jersey. Such construction is vested in the board and its
construction shall be final and conclusive.
<PAGE>
IN WITNESS WHEREOF, the Corporation has caused this Option
Agreement to be executed by its proper corporate officers thereunto
duly authorized.
PENTECH INTERNATIONAL, INC.
By:
(Authorized Officer)
Optionee
<PAGE>
EXHIBIT 4.3
NON-QUALIFIED STOCK OPTION AGREEMENT
THIS OPTION AGREEMENT is made and entered into this __ day of
_________1995, by and between PENTECH INTERNATIONAL, INC., a
Delaware corporation (the "Corporation"), and _______________ (the
"Optionee").
WHEREAS, the Optionee is a valued employee, director or
consultant of the Corporation; and
WHEREAS, the Corporation considers it desirable and in its
best interests that Optionee be given an opportunity to acquire a
proprietary interest in the Corporation by possessing a non-
qualified option to purchase shares of common stock of the
Corporation, par value $.01 per share (the "Common Shares"), in
accordance with the provisions of the 1995 Stock Option Plan (the
"Plan") of the Corporation.
NOW, THEREFORE, for good and valuable consideration paid by
Optionee to the Corporation, the adequacy of which is hereby
acknowledged, and the mutual covenants hereinafter set forth, the
parties agree as follows:
1. Grant of Option. The Corporation hereby grants to the
Optionee the right and option (hereinafter the "Option") to
purchase all or any part of an aggregate of _______ Common Shares
(subject to adjustment as provided in paragraph 6 hereof), on the
terms and conditions herein set forth.
2. Purchase Price. The purchase price of the Common Shares
covered by the Option shall be $____ per share (subject to
adjustment as provided in paragraph 6 hereof).
3. Terms of the Option. The Option shall be exercisable
commencing one year from the date hereof. The Option granted
hereby shall expire _____________ unless earlier terminated as
hereinafter set forth.
4. Method of Exercising Option. If the Optionee elects to
exercise the Option he may do so in whole or in part at any time
subject to the termination dates specified herein.
The Option, or any part thereof, may be exercised by the
Optionee in either of the following ways:
(a) If the Optionee decides to exercise all or part of
his Option and make payment for the Common Shares in full, he
shall give written notice to the Corporation, specifying
therein the number of Common Shares which he then elects to
purchase, accompanied by cash or certified check payable to
the order of the Corporation or other consideration acceptable
to the Corporation, including issued and outstanding shares of
the Corporation and in the amount of the full option price of
the Common Shares being purchased.
(b) If the Optionee decides to exercise all or part of
the Option and make payment in installments, the Optionee
shall give written notice to the Corporation specifying
therein the number of Common Shares which he then elects to
purchase, accompanied by a promissory note, in form
satisfactory to the Corporation, executed by the Optionee and
evidencing the obligation of the Optionee to pay the option
price to the Corporation in equal annual installments payable
on the annual anniversary date of exercise beginning one year
after the date of such exercise and terminating on the third
annual anniversary of the date of exercise of the Option,
together with interest at the lowest rate imputed by the
Internal Revenue Service when an interest rate is not stated
in a contract. Notwithstanding, the foregoing, in the event
the Optionee's relationship with the Corporation is terminated
for any reason, (a) then any such promissory note shall
immediately be due and payable, and (b) the Optionee shall not
be eligible to exercise the Option and make payment in
installments, but shall be required to make payment by cash or
certified check payable to the order of the Corporation.
As soon as practicable after receipt by the Corporation
of such notice and of payment in full of the Option price of
all the Common Shares with respect to which the Option has
been exercised (including interest if payment is made in
installments), a certificate or certificates representing such
Common Shares shall be issued in the name of the Optionee, or,
if the Optionee shall so request in the notice exercising the
Option, in the name of the Optionee and another person
jointly, with right of survivorship, and shall be delivered to
the Optionee. All Common Shares shall be issued only upon
receipt by the Corporation of the Optionee's representation
that the shares are purchased for investment and not with a
view toward distribution thereof.
5. Availability of Shares. The Corporation, during the term
of this Option, at all times shall keep available the number of
shares of common stock required to satisfy the Option.
The Corporation shall utilize its best efforts to comply with
the requirements of each regulatory commission or agency having
jurisdiction in order to issue and sell the Common Shares to
satisfy the Option; provided, however, that the Corporation shall
not be required to register the Common Stock issuable on exercise
of the Option under the Securities Act of 1933. Such compliance
will be a condition precedent to the right to exercise the Option.
The inability of the Corporation to effect such compliance with any
such regulatory commission or agency which counsel for the
Corporation deems necessary for the lawful issuance and sale of the
Common Shares to satisfy this Option shall relieve the Corporation
from any liability for failure to issue and sell the Common Shares
to satisfy the Option for such period of time as such compliance is
not effectuated.
6. Adjustments. If prior to the exercise of any option
granted hereunder the Corporation shall have effected one or more
stock split-ups, stock dividends, or other increases or reductions
of the number of shares of its common stock outstanding without
receiving compensation therefor in money, services or property, the
number of Common Shares subject to the option hereby granted shall
(a) if a net increase shall have been effected in the number of
outstanding shares of the Corporation's common stock, be
proportionately increased and the cash consideration payable per
Common Share shall be proportionately reduced; and (b) if a net
reduction shall have been effected in the number of outstanding
shares of the Corporation's common stock, be proportionately
reduced and the cash consideration payable per Common Share be
proportionately increased.
7. Restrictions. The holder of this Option, by acceptance
hereof, represents and warrants as follows:
(a) This Option and the right to purchase common stock
hereunder is personal to the holder and shall not be
transferred to any other person, other than by will or the
laws of descent and distribution.
(b) The holder hereof has been advised and understands
that the Option has been issued in reliance upon exemptions
from registration under the Securities Act and applicable
state statutes; the exercise of the Option and resale of the
Option and the Common Shares have not been registered under
the Securities Act or applicable state statutes and must be
held and may not be sold, transferred, or otherwise disposed
of for value unless they are subsequently registered under the
Securities Act or an exemption from such registration is
available; except as set forth herein, the Corporation is
under no obligation to register the Option or the Common
Shares under the Securities Act or the applicable state
statutes; in the absence of such registration, the sale of the
Option or the Common Shares may be practicably impossible; the
Corporation's registrar and transfer agent will maintain stop-
transfer instructions against registration or transfer of the
Option and the Common Shares and any certificate issued upon
exercise of the Option representing the Common Shares will
bear on its face a legend in substantially the following form
restricting the sale of the Common Shares:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT") AND ARE
"RESTRICTED SECURITIES" WITHIN THE MEANING OF RULE
144 PROMULGATED UNDER THE SECURITIES ACT. THE
SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND
MAY NOT BE SOLD OR TRANSFERRED WITHOUT COMPLYING
WITH RULE 144 IN THE ABSENCE OF EFFECTIVE
REGISTRATION OR OTHER COMPLIANCE UNDER THE
SECURITIES ACT.
(c) Prior to two years from the date the Option has been
exercised and the Common Stock fully paid for, the Corporation
may refuse to transfer the Common Stock unless the holder
thereof provides an opinion of legal counsel reasonably
satisfactory to the Corporation or a "no action" letter or
interpretive response from the staff of the Securities and
Exchange Commission to the effect that the transfer is proper;
further, unless such opinion letter or response states that
the Common Shares are free of any restrictions under the
Securities Act, the Company may refuse to transfer the Common
Stock to any transferee who does not furnish in writing to the
Corporation the same representations and agree to the same
conditions with respect to such Common Shares as are set forth
herein. Notwithstanding any of the foregoing, the Corporation
may refuse to transfer the Common Shares if any circumstances
are present reasonably indicating that the transferee's
representations are not accurate.
(d) After two years but prior to three years from the
date the Option has been exercised and the Common Shares fully
paid for, the Corporation may refuse to transfer the Common
Shares unless the holder either (i) meets the requirements of
subparagraph (b) above; or (ii) sells such Common Shares in
accordance with Rule 144 and furnishes to the Corporation
written assurances of compliance therewith in the form of a
copy of the Notice of Form 144 and appropriate letters of
compliance from the holder of such Common Shares and the
securities broker-dealer to or through which such Common
Shares are being sold. No opinion of counsel for the holder
of the Common Shares shall be required respecting sales in
reliance on Rule 144 pursuant to clause (ii) of this
subparagraph (d).
(e) After three years from the date the Option has been
exercised and the Common Shares fully paid for, the
Corporation shall, upon the written request of any persons who
have held the Common Shares for three years (excluding any
tolling period provided for by Rule 144) and who is not, and
has not been during the preceding three months, an affiliate
of the Corporation, reissue to such holder in such names and
denominations as the holder shall request, one or more
certificates for the Common Shares without any restriction
whatsoever on their further transfer and cancel any and all
stop transfer instructions regarding such Common Shares on the
books and records of the Corporation.
8. Shareholder's Rights. This Option is non-transferable by
the Optionee, except in the event of the Optionee's death as
provided in Section 9(d) hereof and during the Optionee's lifetime
is exercisable only by the Optionee. On any attempt to transfer or
otherwise dispose of this Option other than pursuant to the terms
hereof or the terms of the Plan, this Option shall immediately
become null and void. The Optionee shall have no rights as a
shareholder with respect to Option Shares until payment of the
Option price and delivery to the Optionee of the Common Shares as
provided herein.
9. Termination of Option. Except as otherwise stated
herein, the Option to the extent not heretofore exercised shall
terminate upon the first of the following dates to occur:
(a) In the event of the Optionee's death, the Optionee's
executors or administrators may exercise, within twelve (12)
months following the date of the Optionee's death, the Option
as to all or part of such number of shares which the Optionee
was entitled to purchase at the time of his death, as
determined in accordance with Article 2, not theretofore
exercised during the Optionee's lifetime;
(b) On the date of the termination of the Optionee's
employment for cause or on the date the Optionee voluntarily
quits his employment;
(c) The expiration of three months after the date on
which the Optionee's employment by the Corporation is
terminated not for cause (except if such termination be by
reason of death or permanent and total disability);
(d) The expiration of 12 months after the date on which
the Optionee's employment by the Corporation is terminated, if
such termination be by reason of the Optionee's permanent and
total disability;
(e) ___________________, the fifth anniversary date of
this Agreement.
10. Competition. In consideration for the grant of this
option, the Optionee agrees that, during the term of this option
agreement and for a period of one year thereafter, he shall not in
any manner, engage or become interested in as owner, stockholder,
partner, director, officer, employee, consultant or otherwise, any
business which competes with the business conducted by the
Corporation or any of its affiliates.
11. Validity and Construction. The validity and construction
of this Option shall be governed by the laws of the State of New
Jersey. Such construction is vested in the board and its
construction shall be final and conclusive.
IN WITNESS WHEREOF, the Corporation has caused this Option
Agreement to be executed by its proper corporate officers thereunto
duly authorized.
PENTECH INTERNATIONAL, INC.
By:
(Authorized Officer)
Optionee
ptk\opt-agr.93
<PAGE>
EXHIBIT 5.1
KALIN & BANNER
757 Third Avenue
New York, New York 10017
July 1, 1997
Pentech International, Inc.
195 Carter Drive
Edison, N.J. 08817
Gentlemen:
You have requested our opinion with respect to the offering by
you, Pentech International, Inc., a Delaware corporation (the
"Company"), of up to 700,000 shares (the "Option Shares") of Common
Stock, par value $.01 per share, of the Company (the "Common
Stock"), pursuant to the provisions of the Company's 1995 Stock
Option Plan (the "Plan"). The Option Shares are being offered and
sold pursuant to a Registration Statement (the "Registration
Statement") on Form S-8 under the Securities Act of 1933, as
amended (the "Act").
We have examined a copy of the Certificate of Incorporation
and By-Laws, as amended, of the Company, the minutes of various
meetings of the Company's Board of Directors and Stockholders, the
Registration Statement prepared by the Company and filed with the
Securities and Exchange Commission and the original or certified
copies of such agreements, certificates of public officials,
certificates of officers and representatives of the Company and
others, opinions of counsel, documents, papers, statutes and
authorities as we deemed necessary as a basis for the opinions
hereinafter set forth. In such examinations we have assumed the
genuineness of all signatures and the conformity to original
documents of all copies. As to various questions of fact material
to such opinions, we have relied upon statements and certificates
of officers and representatives of the Company and others.
Based upon the foregoing, we are of the opinion that the
Option Shares have been duly and validly authorized and, when sold,
paid for and issued as contemplated by the Plan and the
Registration Statement, will be duly and validly issued, fully paid
and non-assessable.
Please be advised that the undersigned is an officer and
director of the Company and owns 759,839 shares of Common Stock and
options to purchase 50,000 shares of Common Stock.
<PAGE>
Pentech International, Inc.
July 1, 1997
Page 2
We hereby consent to the use of this opinion as an exhibit to
the Registration Statement, and to the use of our name as your
counsel in connection with the Registration Statement and in the
Prospectus forming a part thereof. In giving this consent, we do
not thereby concede that we come within the categories of persons
whose consent is required by the Act or the General Rules and
Regulations promulgated thereunder.
Very truly yours,
KALIN & BANNER
<PAGE>
EXHIBIT 24.1
Consent of Independent Auditors
We consent to the incorporation by reference in the Form S-8
Registration Statement for the registration of 700,000 shares of
Pentech International, Inc.'s common stock pertaining to its 1995
Stock Option Plan of our report dated January 13, 1997, with
respect to the consolidated financial statements and schedule of
Pentech International, Inc. included in its Annual Report (Form 10-
K) for the year ended September 30, 1996, filed with the Securities
and Exchange Commission.
s/Ernst & Young LLP
Ernst & Young LLP
MetroPark, New Jersey
June 30, 1997
ptk\fm-s-8.96
