<PAGE> 1
Registration No. 333 --
As filed with the Securities and Exchange Commission on February 11, 1998
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8 AND S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
INTERSYSTEMS, INC.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 13-3256265
------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
537 Steamboat Road, Greenwich, CT 06830 (203) 629-1400
------------------------------------------------------------------------
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
INTERSYSTEMS, INC. 1997 EMPLOYEE STOCK OPTION PLAN
INTERSYSTEMS, INC. 1997 NON-PLAN OPTIONS
(Full Title of Plans)
Fred S. Zeidman, President, InterSystems, Inc.
7115 Clinton Drive, Houston, Texas 77020 (713) 622-7710
(Name, address, including zip code, and telephone number, including
area code, of agent for service)
With a copy to:
Clare J. Attura, Esq.,
537 Steamboat Road, Greenwich, CT 06830
(203) 629-1400 FAX (203) 629-1961
Approximate date of commencement of proposed sale to the public: Upon exercise
of the options granted under the plans, but in no event prior to the effective
date of this Registration Statement. If any of the securities being registered
on this form are being offered pursuant to dividend or interest reinvestment
plans, please check the following box. [ ]
If any of the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Act, please check the following box and list the Act
registration statement number of the earlier registration statement for the same
offering. [ ] _______________
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Act, check the following box and list the Act registration statement number
of the earlier effective registration statement for the same
offering. [ ] _______________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
<PAGE> 2
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Title of Each Proposed Proposed
Class of Maximum Maximum
Securities Amount Offering Aggregate Amount of
to be to be Price Offering Registration
Registered Registered(1) Per Unit(2) Price Fee
- ---------- ------------- ----------- ----- ---
<S> <C> <C> <C> <C>
Common Stock 404,000 $ 2.125 $858,500 $260.15
Common Stock 96,000 $ 1.9375 186,000 56.36
Common Stock 115,000 $ 2.125 244,375 74.05
Common Stock 20,000 $ 1.1875 23,750 7.20
</TABLE>
(1) The aggregate number of securities registered hereunder is 635,000
shares of Common Stock which have been authorized and reserved for issuance
under the Company's 1997 Employee Stock Option Plan and 1997 Non-Plan Options.
Pursuant to Rule 416 promulgated under the Securities Act of 1933, as amended
(the "Act"), this Registration Statement covers such additional shares of Common
Stock to be offered or issued to prevent dilution as a result of future stock
splits, stock dividends or similar transactions. In addition, pursuant to Rule
416(c) under the Act, this Registration Statement also covers an indeterminate
amount of interests to be offered or sold pursuant to the employee benefit plans
described herein.
(2) The fee with respect to these shares has been calculated pursuant to
paragraphs (c) and (h) of Rule 457.
<PAGE> 3
EXPLANATORY NOTE
This Registration Statement contains two parts: the first part contains
a Prospectus on Form S-3 (in accordance with Section C of the General
Instructions to Form S-8) which covers reoffers and resales by Selling
Stockholders listed from time to time in the Prospectus of shares of Common
Stock of the Company to be issued pursuant to the Company's 1997 Employee Stock
Plan and upon exercise of 1997 Non-Plan Options.
The second part contains information required in the Registration
Statement pursuant to Part II of Form S-8 and certain information required by
Part II of Form S-3.
Pursuant to Note to Part I of Form S-8, the Plan Information specified
by Part I is not being filed with the Securities and Exchange Commission, as
such information will be sent or given to each employee participant in
accordance with Rule 428 under the Securities Act of 1933, as amended (the
"Act"). This information and the documents incorporated by reference into this
Registration Statement pursuant to Item 3 of Part II of this Registration
Statement, taken together, constitute a prospectus that meets the requirements
of Section 10(a) of the Act.
<PAGE> 4
PROSPECTUS
(Form S-3)
INTERSYSTEMS, INC.
635,000 Shares
Common Stock
($.01 par value per share)
This Prospectus is being used in connection with the offering from time
to time by certain stockholders (the "Selling Stockholders") of InterSystems,
Inc. (the "Company"), of shares of common stock, $.01 par value per share (the
"Common Stock"), 500,000 of which may be acquired upon exercise of options
granted pursuant to the InterSystems, Inc. 1997 Employee Stock Option Plan (the
"Plan") and 135,000 of which may be acquired upon exercise of certain non-plan
option grants (referred to herein as the "1997 Non-Plan Options.")
The securities being registered hereby (the "Securities") may be sold
from time to time by the Selling Stockholders, directly or indirectly, through
agents designated from time to time, in one or more open market transactions,
including block trades, on the American Stock Exchange, in privately negotiated
transactions or in a combination of such methods of sale. Such sales may be made
through dealers or underwriters to be designated, on terms to be determined at
the time of sale, or at prices and at terms then prevailing or at prices related
to the then current market price. In effecting sales, brokers or dealers engaged
by the Selling Stockholders may arrange for other brokers or dealers to
participate. Brokers or dealers will receive commissions or discounts from
Selling Stockholders in amounts to be negotiated immediately prior to the sale.
Such brokers or dealers and any other participating brokers or dealers may be
deemed to be "underwriters" within the meaning of the Securities Act of 1933, as
amended (the "Act") in connection with such sales. To the extent required, the
specific Securities sold, the name of the Selling Stockholders, the purchase
price, public offering price, name of any such agent, dealer or underwriter, and
any applicable discount or commission with respect to a particular offer will be
set forth by supplement to this Prospectus. In addition, any securities covered
by this Prospectus which qualify for sale pursuant to Rule 144 may be sold under
Rule 144 rather than pursuant to this Prospectus. The Company will not receive
any of the proceeds from the sale of these shares, but will receive the
aggregate exercise price of options granted under the Plan (the "Plan Options")
or the upon the exercise of the 1997 Non-Plan Options. The Company's Common
Stock is presently listed on the American Stock Exchange under the symbol "II."
The closing price for the Common Stock on the American Stock Exchange on
February 6, 1998 was $ 1 15/16.
SEE "RISK FACTORS" FOR
CERTAIN MATTERS TO BE CONSIDERED BY PROSPECTIVE INVESTORS.
The date of this Prospectus is February 11, 1998.
<PAGE> 5
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.
-----------------------
No person is authorized in connection with the offering made by this Prospectus
to give any information or to make any representations not contained or
incorporated by reference in this Prospectus, and any information or
representation not contained or incorporated by reference in this Prospectus
must not be relied upon as having been authorized by the Company. This
Prospectus is not an offer to sell, or a solicitation of an offer to buy, by any
person in any jurisdiction in which it is unlawful for that person to make an
offer or solicitation. Neither the delivery of this Prospectus or any sale made
under this Prospectus shall, under any circumstance, create any implication that
the information in this Prospectus is correct as of any time subsequent to the
date of this Prospectus. ------------------------
AVAILABLE INFORMATION
InterSystems, Inc. (the "Company") is subject to the informational requirements
of the Securities Exchange Act of 1934 (the "1934 Act") and, in accordance
therewith, files reports, proxy and information statements and other information
with the Securities and Exchange Commission ( the "Commission"). Such reports,
proxy and information statements and other information can be inspected and
copied at the public reference facilities maintained by the Commission at
Judiciary Plaza, 450 Fifth Street, N.W., Suite 1024, Washington, D.C. 20549; and
at the regional offices of the Commission at: Northwest Atrium Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661 and 7 World Trade Center,
Suite 1300, New York, New York 10001. Copies of such material can be obtained
from the Public Reference Section of the Commission, in Washington, D.C. at
prescribed rates. In addition, such reports and other information may be
electronically accessed at the Commission's site on the World Wide Web located
at http://www.sec.gov. The Common Stock is listed on the American Stock
Exchange, 86 Trinity Place, New York, N.Y. 10006, and reports, proxy and
information statements and other information can be inspected at the offices of
the Exchange.
The Company has filed a Registration Statement on Form S-8 (together with all
amendments thereto referred to herein as the "Registration Statement") under the
Act with the Commission, covering the shares of Common Stock being offered by
this Prospectus. This Prospectus does not contain all the information set forth
or incorporated by reference in the Registration Statement and the exhibits and
schedules relating thereto, certain portions of which have been omitted as
permitted by the rules and regulations of the Commission. For further
information with respect to the Company and the securities offered by this
Prospectus, reference is made to the Registration Statement and the exhibits and
schedules thereto which are on file at the offices of the Commission and may be
obtained upon payment of the fee prescribed by the Commission, or may be
examined without charge at the offices of the Commission. Statements contained
in
<PAGE> 6
this Prospectus as to the contents of any contract or other documents referred
to are not necessarily complete, and are qualified in all respects by such
reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company (Commission File No. 1-9547) incorporates by reference into this
Prospectus the following documents and portions of documents:
1. The Company's Annual Report on Form 10-KSB for the fiscal year ended
December 31, 1996.
2. The Company's Quarterly Reports on Form 10-QSB for the fiscal quarters
ended March 31, 1997, June 30, 1997 and September 30, 1997.
3. The definitive Proxy Statement of the Company date July 15, 1997,
relating to the 1996 Annual Meeting of Stockholders.
4. All other reports filed pursuant to Section 13(a) or Section 15(d) of
the 1934 Act since the date of this Prospectus.
5. A description of the Common Stock as set forth in Registration Statement
Form 8-A filed with the Commission on February 2, 1987.
All other reports filed pursuant to Section 13(a), 13(c), 14 or 15(d) of
the 1934 Act prior to the termination of this offering shall be deemed to be
incorporated by reference in this Prospectus and to be a part of this Prospectus
from the date of filing thereof.
Any statement contained in a document incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this Prospectus to
the extent that a statement contained herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute part of this Prospectus.
The Company will provide without charge to each person to whom this
Prospectus is delivered, upon written or oral request of that person, a copy of
all other documents incorporated by reference into the Registration Statement of
which this Prospectus is a part, other than exhibits to those documents.
Requests should be directed to David S. Lawi, Secretary, InterSystems, Inc., 537
Steamboat Road, Greenwich, CT 06830 (telephone: (203) 629-1400).
<PAGE> 7
THE COMPANY
The Company's two principal lines of business consist of the operations
of its wholly-owned subsidiary, INTERSYSTEMS, INC., a Nebraska corporation
("InterSystems Nebraska"), which designs, manufactures and sells specialized
materials handling equipment, and the custom resin compounding operations
conducted by its wholly-owned subsidiary, CHEMTRUSION, INC. ("Chemtrusion"). For
each of the two years ended December 31, 1996 and 1995, approximately 71% and
75%, respectively, of the Company's revenues were attributable to the business
of InterSystems Nebraska and approximately 29% and 25%, respectively, of the
Company's revenues were attributable to the business of Chemtrusion.
InterSystems, Inc. was organized under the laws of the state of Delaware
in 1984. As used herein, "Company" refers to InterSystems, Inc. and its
subsidiaries, unless the context indicates otherwise. The Company's principal
executive offices are located at 7115 Clinton Drive, Houston, Texas 77020 and
its telephone number at that location is (713) 622-7710.
SPECIAL CONSIDERATIONS
All prospective investors should consider carefully, among other things,
the following factors before purchasing any securities offered hereby:
HISTORICAL OPERATING LOSSES; LIMITED CAPITAL. The Company had revenues
from continuing operations of $20,387,000 and $15,703,000, respectively, for the
years ended December 31, 1996 and 1995. For these same periods, losses from
continuing operations were $399,000 and $478,000, respectively. The total losses
for the years ended December 31, 1996 and 1995 were $2,319,000 and $695,000,
respectively. The loss from discontinued operations was $1,920,000 in 1996 and
$217,000 in 1995 of which $1,440,000 was incurred in 1996 on the disposal of
Tropical Systems, Inc., the Company's Miami-based subsidiary previously engaged
in the sale and distribution of hurricane resistant doors and shutters.
The Company had net income of $645,000 for the first nine months of
1997, as compared to a net loss of $854,000, of which $730,000 is attributable
to discontinued operations, for the comparable period in 1996.
The recent history of losses subjects the Company and its subsidiaries
to a number of risks, including limited access to capital, uncertain markets and
competition. There can be no assurance that the Company's existing capital and
cash flow from operations will be sufficient to meet its working capital needs,
or the working capital needs of its subsidiaries, in the future, nor can there
be any assurance that the Company will be continue to be profitable in the
future.
CONTROL BY HELM CAPITAL GROUP, INC. Helm Capital Group, Inc. ("Helm")
currently owns approximately 17% of the Common Stock. Four officers and
directors of Helm, who are also officers and directors of the Company, in the
aggregate own approximately another 5% of the outstanding Common Stock. Such a
concentration of effective voting power and control
<PAGE> 8
could serve to perpetuate management. The overlap of directors of the both
companies creates inherent conflicts of interests, although the Company does
have one independent director, Mr. William Lurie.
In addition, Helm provides management services to the Company. The
allocated expenses for such management services, based on certain formulas which
management deems to be reasonable, amounted to $102,000 and $52,920 for 1996 and
1995. These expenses have continued during 1997, and are expected to continue in
the future.
RELIANCE ON KEY PERSONNEL. Mr. Scott Owens, President of Chemtrusion, is
integral to the operation of that subsidiary, and at the present time the
company does not have in place an assistant to Mr. Owens who could assume his
responsibilities should Mr. Owens leave the employment of the Company or
otherwise be unable to perform his duties, although the Company recently has
hired supervisors at both the Houston and Indiana facilities of Chemtrusion.
CUSTOMER DEPENDENCE. Two customers of the compounding business, one of
which is Mytex Polymers, Inc., accounted for approximately 36% of total revenues
of the compounding business for the year ended December 31, 1996. Beginning in
1997, Mytex is expected to account for approximately one half of the Company's
total revenues. The Company believes that the loss of Mytex would have a
material adverse effect on its business and revenues.
MARKET FOR THE COMMON STOCK; SHARES ELIGIBLE FOR FUTURE SALE. The Common
Stock is currently traded on the American Stock Exchange. However, there is no
assurance that an active trading market in the Common Stock will continue.
Accordingly, no assurance can be given that a holder of the Common Stock will be
able to sell the Common Stock in the future or as to the price at which the
Common Stock might trade. The liquidity of the market will depend upon the
number of holders thereof, the interest of the securities dealers in making a
market in the Common Stock and other factors beyond the Company's control.
As of February 1, 1998, there were 7,906,376 shares of Common Stock
outstanding. In addition, approximately 525,000 shares of Common Stock and
65,000 warrants (with an exercise price of $3.50) are issuable upon conversion
of outstanding debentures, 2,912,352 shares of Common Stock are issuable upon
exercise of warrants that are outstanding or reserved for issuance at an average
exercise price of $2.26, 635,000 shares of Common Stock are reserved for
issuance under the Plan and pursuant to the 1997 Non-Plan Options (519,000 of
which are subject to currently outstanding options at an exercise price of
$2.125 and 20,000 of which are subject to currently outstanding options at an
exercise price of $1.1875) and 540,000 shares of Common Stock are issuable upon
the exercise of other outstanding options at an average exercise price of $2.25.
The shares of Common Stock and shares issuable upon conversion or exercise of
other outstanding securities of the Company will be eligible for immediate
resale in the public market without restriction. Future sales of substantial
amounts of Common Stock in the public market following this offering could
adversely affect the market price of the Common Stock.
<PAGE> 9
ANTI-TAKEOVER PROVISIONS. The Company's Certificate of Incorporation and
By-Laws include provisions that may have the effect of delaying or preventing a
change in control of the Company. The Company's Certificate of Incorporation
authorizes the issuance of up to 5,000,000 shares of preferred stock. As a
result, the Board of Directors could, without stockholder approval, issue
preferred stock with voting, liquidation preference, dividend and other rights
superior to those of the Common Stock. The issuance of such preferred stock
could adversely affect the voting power of holders of the Common Stock and could
be used to prevent a third party from acquiring control of the Company. In
addition, the Company's Certificate of Incorporation provides for the Board of
Directors to be divided into three classes of directors serving staggered three
year terms, with the number of directors in each class to be as nearly equal as
possible. The vote of two-thirds of the outstanding shares of stock entitled to
vote on the matter is required to remove a director from office. A staggered
board and the supermajority vote required for the removal of directors are
additional factors which could make it more difficult for stockholders to change
control of the Company.
In addition, the by-laws permit special meetings of stockholders to be
called by the Board of Directors, the president or a vice president only,
require fixing a record date for stockholder consent in lieu of meetings and
advance notice of stockholder nominees and proposals, and permit removal of
directors by stockholders only for cause.
DIVIDEND POLICY. The Company has not paid any cash dividends during the
past several years. The Company currently intends to retain all of its earnings
to support the development of its business and does not anticipate paying any
cash dividends for the forseeable future. Furthermore, InterSystems Nebraska is
a party to a credit and security agreement which prohibits the declaration or
payment of cash dividends by InterSystems Nebraska. This prohibition has the
practical effect or restricting the payment of dividends on the Company's common
stock.
USE OF PROCEEDS
The Company will not receive any part of the proceeds from the sale of
the Securities by the Selling Stockholders. The Company may receive, however,
$1,179,750.00 upon exercise of all of the Plan Options and Non-Plan Options
granted to date, all of which must be exercised before the employees may receive
any of the Securities offered hereby.
<PAGE> 10
SELLING STOCKHOLDERS
This Prospectus may be used by employees of the Company, whether or not
they are deemed affiliates of the Company under the Act, for the resale of
Securities issued to them upon exercise of the Plan Options and Non-Plan
Options. The following table, including footnotes thereto, sets forth (1) the
name and relationship to the Company of each Selling Stockholder who may be
deemed an affiliate of the Company, (2) the number of shares of Common Stock and
the percentage of the outstanding Common Stock which each such Selling
Stockholder owned as of February 1, 1998, including shares which may be acquired
within 60 days upon the exercise of outstanding options, warrants and
convertible securities, (3) the number of shares of Common Stock which may be
acquired by each Selling Stockholder upon exercise of the Plan Options and
Non-Plan Options which are offered hereby and (4) the number of shares of Common
Stock and the percentage of the outstanding Common Stock which each such Selling
Stockholder owned after completion of this offering, including shares which may
be acquired within 60 days upon the exercise of outstanding options and
warrants. This Prospectus may also be used by certain other employees who are
not affiliates of the Company and who have received less than 1,000 shares of
Common Stock under the Plan Options and Non-Plan Options, for reoffers and
resales of the shares underlying such options.
All information set forth below has been furnished to the Company by the
Selling Stockholders and other sources which the Company has not verified.
Because the Selling Stockholders may sell all or a part of the Securities they
hold pursuant to this Prospectus, or any supplement thereto, and the fact that
this offering is not being underwritten on a firm commitment basis, no estimate
can be given as to the amount of Securities that will be held by the Selling
Stockholders upon termination of this offering.
<TABLE>
<CAPTION>
SHARES/% PLAN OPTION SHARES
OWNED AS OF AND NON-PLAN OWNED
FEBRUARY 1, OPTIONS SHARES AFTER
AFFILIATES 1998 (1) OFFERED OFFERING
- ---------- -------- ------- --------
<S> <C> <C> <C>
Herbert M. Pearlman(2) 731,549/8.8% 100,000 631,549
Fred S. Zeidman(3) 680,000/8.2% 100,000 580,000
David S. Lawi(4) 504,847/5.9% 50,000 454,847
Scott Owens(5) 75,156/* 50,000 25,156
Kenneth R. Schrader(6) 71,000/* 40,000 31,000
</TABLE>
* less than 1%
(1) Includes shares that may be acquired within 60 days upon exercise of
outstanding options and warrants.
(2) Mr. Pearlman is Chairman of the Board of the Company. His holdings include
236,550 shares issuable upon exercise of various warrants and 157,480 shares
issuable upon conversion of Series A 10% Debentures, and shares issuable upon
exercise of 55,000 Plan Options and 45,000 Non-Plan Options offered hereby.
<PAGE> 11
(3) Mr. Zeidman is the President, Chief Executive Officer and a Director of the
Company. His holdings include 45,000 shares issuable upon exercise of various
warrants, 400,000 shares issuable upon exercise of various options, and shares
issuable upon exercise of 55,000 Plan Options and 45,000 Non-Plan Options
offered hereby.
(4) Mr. Lawi is Secretary and a Director of the Company, as well as Chairman of
the Company's Executive Committee. His holdings include 183,875 shares issuable
upon exercise of various warrants and 157,480 shares issuable upon conversion of
Series A 10% Debentures, and shares issuable upon exercise of 25,000 Plan
Options and 25,000 Non-Plan Options offered hereby.
(5) Mr. Owens is President of Chemtrusion, Inc., a Delaware corporation and
wholly owned subsidiary of the Company. His holdings include 25,000 shares
issuable upon exercise of performance related options and shares issuable upon
exercise of 50,000 Plan Options offered hereby.
(6) Mr. Schrader is President of InterSystems, Inc., a Nebraska corporation and
wholly owned subsidiary of the Company. His holdings include 25,000 shares
issuable upon exercise of performance related options and shares issuable upon
exercise of 40,000 Plan Options offered hereby.
PLAN OF DISTRIBUTION
This Prospectus relates to the offer and sale of shares of Common Stock
underlying 500,000 Plan Options and 135,000 Non-Plan Options (the "Securities").
From time to time, the Company may amend this Prospectus by Prospectus
Supplements or post-effective amendments to the Registration Statement of which
this Prospectus is a part, to offer Securities by certain persons who may, by
virtue of their relationship to the Company, be deemed to be underwriters within
the meaning of the Act.
The Securities may be sold from time to time by the Selling
Stockholders, or by their pledgees, transferees or other successors in interest,
on the American Stock Exchange (or such other exchange on which the Securities
are listed at the time of sale), in the over-the-counter market or otherwise, at
prices and at terms then prevailing or at prices related to the then current
market price, or in privately negotiated transactions. The Securities may be
sold by various methods, including, but not limited to one or more of the
following: (a) directly in a privately negotiated transaction, (b) a block trade
in which the broker or dealer so engaged will attempt to sell Securities as
agent but may position and resell a portion of the block as principal to
facilitate the transaction, (c) purchases by a broker or dealer as principal and
resale by the broker or dealer for its own account pursuant to this Prospectus,
(d) a transaction on the American Stock Exchange in accordance with the rules of
such exchange, and (e) ordinary brokers transactions and transactions in which
the broker solicits the purchasers. In effecting sales, brokers or dealers
engaged by the Selling Stockholders may arrange for other brokers or dealers to
participate. Alternatively, the Selling Stockholder may from time to time offer
the Securities through underwriters, dealers or agents who may receive
compensation in the form of underwriting discounts, concessions, or commissions
from the Selling Stockholders and/or purchasers of Securities for whom they act
as agents.
<PAGE> 12
In addition any of the Securities which qualify for sale pursuant to Rule 144
under the Securities Act of 1933, as amended (the "Act"), or otherwise pursuant
to an applicable exemption under the Act, may be sold other that pursuant to
this Prospectus. The Selling Stockholders may sell some, all or none of the
Securities offered hereby.
The Selling Stockholders and any such underwriters, dealers or agents
that participate in the distribution of Securities may be deemed to be
underwriters, and any profit on the sale of the Securities by them and any
discounts, commissions or concessions received by them may be deemed to be
underwriting discounts and commissions under the Act. The Company will not
receive any of the proceeds of the offering of the Securities hereunder for the
account of the Selling Stockholders. See "Use of Proceeds."
If required by law, at the time a particular offer of Securities is
made, a supplement to this Prospectus will be distributed which will identify
and set forth the aggregate amount of Securities being offered and the terms of
the offering, including the name or names of any underwriters, dealers or
agents, the purchase price paid by any underwriter for Securities purchased from
the Selling Stockholder, any discounts, commissions and other items constituting
compensation from the Selling Stockholder and/or the Company and any discounts,
commissions or concessions allowed or reallowed or paid to dealers, including
the proposed selling price to the public. Such supplement to this Prospectus
and, if necessary, a post-effective amendment to the Registration Statement of
which this Prospectus is a part, will be filed with the Commission to reflect
the disclosure of additional information with respect to the distribution of the
Securities.
The Selling Stockholders have entered into indemnification agreements
with the Company pursuant to which the Company will be indemnified against
failure by the Selling Stockholders to deliver a Prospectus if required, as well
as against certain civil liabilities, including liabilities under the Act or the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), incurred in
connection with any untrue (or alleged untrue) statement of a material fact or
ommission of a material fact in this Registration Statement to the extent such
liability relates to information supplied by the Selling Stockholder for
inclusion in the Registration Statement or Prospectus.
Under applicable rules and regulations under the Exchange Act, any
person engaged in a distribution of the Securities may not simultaneously engage
in market making activities with respect to the Securities for a period of nine
business days prior to the commencement of such distribution. In addition and
without limiting the foregoing, certain of the Selling Stockholders and any
person participating in the distribution of the Securities will be subject to
applicable provisions of the Exchange Act and the rules and regulations
thereunder, including without limitation Regulation M, which provisions may
limit the timing of purchases and sales of the Securities by the Selling
Stockholders. All of the foregoing may affect the marketability of the
Securities.
In order to comply with certain states' securities laws, if applicable,
the Securities will be sold in such jurisdictions only through registered or
licensed brokers or dealers. In certain states the
<PAGE> 13
Securities may not be sold unless the Securities have been registered or qualify
for sale in such state, or unless an exemption from registration or
qualification is available and complied with.
The Company will pay all of the expenses incident to the registration
and certain other expenses related to this offering of the Securities, other
than underwriting commissions and discounts, normal commission expenses and
brokerage fees, applicable transfer taxes and attorneys' fees of Selling
Stockholders' counsel, which will be borne by the Selling Stockholders.
LEGAL MATTERS
Certain legal matters relating to the validity of the Common Stock being
registered hereby have been passed upon for the Company by St. John & Wayne,
L.L.C., 70 East 55th Street, New York, New York 10022.
EXPERTS
The consolidated financial statements of the Company incorporated by
reference in this Prospectus have been audited by BDO Seidman, LLP, independent
certified public accountants, to the extent and for the periods set forth in
their report incorporated herein by reference, and is incorporated herein in
reliance upon such report given upon the authority of said firm as experts in
auditing and accounting.
<PAGE> 14
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3 of S-8: Incorporation of Documents by Reference
The Company incorporates by reference into this Registration Statement the
following documents which have been or will be filed by the Company with the
Securities and Exchange Commission (the "Commission"):
1. The Company's Annual Report on Form 10-KSB for the fiscal year ended
December 31, 1996.
2. The Company's Quarterly Reports on Form 10-QSB for the fiscal quarters
ended March 31, 1997, June 30, 1997 and September 30, 1997.
3. The definitive Proxy Statement of the Company date July 15, 1997,
relating to the 1996 Annual Meeting of Stockholders.
4. All other reports filed pursuant to Section 13(a) or Section 15(d) of
the 1934 Act since the date of this Prospectus.
5. A description of the Common Stock as set forth in Registration Statement
Form 8-A filed with the Commission on February 2, 1987.
In addition, all documents subsequently filed by the Company pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Securites Exchange Act of 1934, prior
to the filing of a post-effective amendment which indicates that all securities
offered have been sold or which deregisters all securities then remaining
unsold, shall be deemed to be incorporated by reference in this registration
statement and to be a part hereof from the date of filing of such documents.
Any statement contained in a document incorporated by reference herein shall be
deemed to be modified or superceded for purposes of this Prospectus to the
extent that a statement contained herein modifies or supersedes such statement.
Any such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute part of this Prospectus.
ITEM 4 of S-8: Description of Securities. Not applicable
ITEM 5 of S-8: Interests of Named Experts and Counsel. Not applicable
ITEM 6 of S-8 and ITEM 15 of S-3: Indemnification of Directors and Officers.
Section 145(a) of the General Corporation Law of the State of Delaware
(the "General Corporation Law") provides, in general, that a corporation shall
have power to indemnify any person who was or is a party or is threatened to be
made a party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative (other than an action
by or in the right of the corporation), by reason of the fact that he is or was
a director or officer of the corporation. Such indemnity may be against expenses
(including attorneys' fees), judgments, fines and amounts paid in
<PAGE> 15
settlement actually and reasonably incurred in connection with such action, suit
or proceeding, if the indemnitee acted in good faith and in a manner reasonably
believed to be in or not opposed to the best interests of the corporation and
with respect to any criminal action or proceeding, the indemnitee must not have
had reasonable cause to believe his conduct was unlawful.
Section 145(b) of the General Corporation Law provides, in general, that
a corporation shall have power to indemnify any person who was or is a party or
is threatened to be made a party to any threatened, pending or completed action
or suit by or in the right of the corporation to procure a judgement in its
favor by reason of the fact that he is or was a director or officer of the
corporation (including attorney's fees) acutally and reasonably incurred by him
in connection with the defense or settlement of such action or suit if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interest of the corporation.
Section 145(g) of the General Corporation Law provides in general that a
corporation shall have power to purchase and maintain insurance on behalf of any
person who is or was a director or officer of the corporation against any
liability asserted against him or incurred by him in any capacity, or arising
out of his status as such, whether or not the corporation would have the power
to indemnify him against such liability under the provisions of the law.
Article Eighth of the Registrant's Certificate of Incorporation and
Section Six of the Registrants's By-Laws give a director or officer the right to
be indemnified by the Registrant to the fullest extent permitted under Delaware
law.
Item 7 of S-8: Exemption From Registration Claimed. Not applicable
Item 8 of S-8 and ITEM 16 of S-3: Exhibits.
4.1 Form of Incentive Stock Option granted under the Plan. *
4.2 Form of Non-qualified Stock Option granted under the Plan. *
4.3 Form of 1997 Non-Plan Option. *
5.1 Opinion of St. John & Wayne, L.L.C., legal counsel to the Company.*
23.1 Consent of BDO Seidman, L.L.P. *
23.3 Consent of St. John & Wayne, L.L.C. (included in Exhibit 5.1). *
24.1 Power of Attorney (included on Signature Page). *
* filed herewith
<PAGE> 16
ITEM 9 of S-8 and ITEM 17 of S-3: Undertakings.
The 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) [Not applicable];
(ii) [Not applicable];
(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.
(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) That for the 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 15(d) of the Securities Exchange Act of 1934 (and where
applicable, each filing of an employee benefit plan's annual report pursuant to
Section 15(d) of the Securities Exchange Act of 1934) 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.
(5) Insofar as indemnification of 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 said 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 a 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 said Act and will be governed by the final adjudication of such
issue.
<PAGE> 17
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 Houston, State of Texas on this 6th day of February
1998.
INTERSYSTEMS, INC.
By:/s/ Fred S. Zeidman
-------------------------------
Fred S. Zeidman, President,
Chief Executive Officer
and Director
(principal executive officer)
By:/s/ Chris Mathers
-------------------------------
Wm. Chris Mathers
Chief Financial and Accounting
Officer
(principal financial officer)
Each person whose signature appears below constitutes and appoints Fred
Z. Zeidman and Wm. Chris Mathers true and lawful attorneys-in-fact and agents,
each acting alone, with full powers of substitution and resubstitution, for him
and in his name, place an 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 attorney-in-fact and agents, each acting alone, full powers and authority
to do and perform each and every act and thing requisite and 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
attorney-in-fact and agents, each acting alone, or his or her 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 by the following persons in the
capacities indicated on February 6, 1998.
<TABLE>
<CAPTION>
Signature Title
- --------- -----
<S> <C>
/s/ Walter M. Craig, Jr. Director
- -------------------------------
Walter M. Craig, Jr.
/s/ David S. Lawi Director
- -------------------------------
David S. Lawi
</TABLE>
<PAGE> 18
<TABLE>
<S> <C>
/s/ William Lurie Director
- -------------------------------
William Lurie
/s/ Daniel T. Murphy Director
- -------------------------------
Daniel T. Murphy
/s/ Herbert M. Pearlman Chairman of the Board of
- ------------------------------- Directors
Herbert M. Pearlman
/s/ John E. Stieglitz Director
- -------------------------------
John E. Stieglitz
/s/ Fred S. Zeidman President, Chief Executive
- ------------------------------- Officer and Director
Fred S. Zeidman
</TABLE>
<PAGE> 19
EXHIBIT INDEX
Exhibit
No. Description
4.1 Form of Incentive Stock Option granted under the Plan. *
4.2 Form of Non-qualified Stock Option granted under the Plan. *
4.3 Form of 1997 Non-Plan Option. *
5.1 Opinion of St. John & Wayne, L.L.C., legal counsel to the
Company.*
23.1 Consent of BDO Seidman, L.L.P. *
23.3 Consent of St. John & Wayne, L.L.C. (included in
Exhibit 5.1). *
24.1 Power of Attorney (included on Signature Page). *
* Filed herewith.
<PAGE> 1
EXHIBIT 4.1
INTERSYSTEMS, INC.
INCENTIVE STOCK OPTION AGREEMENT
INTERSYSTEMS, INC., a Delaware corporation (the "Company"), has granted
to _____________ (the "Optionee"), an option (the "Option") to purchase a total
of [_____] shares (the "Shares") of the Company's common stock ("Common Stock"),
at the price determined as provided herein, and in all respects subject to the
terms, definitions and provisions of the 1997 Stock Option Plan (the "Plan")
adopted by the Company, which is incorporated herein by reference. The terms
defined in the Plan shall have the same defined meanings herein.
1. NATURE OF THE OPTION. This Option is intended to qualify as an Incentive
Stock Option as defined in Section 422 of the Internal Revenue Code of 1986, as
amended (the "Code").
2. EXERCISE PRICE. The exercise price is $____ for each share of Common Stock
subject to this Option, which price is not less than 100% of the fair market
value (110% of the fair market value if the Optionee owns more than 10% of the
Common Stock of the Company) per Share of the Common Stock on the date of grant.
3. EXERCISE OF OPTION. Subject to shareholder approval in accordance with the
terms of the Plan, this Option shall be exercisable during its term in
accordance with the provisions of Section 9 of the Plan as follows:
(a) Right to Exercise.
(i) This option shall be exercisable as follows:
(a) [vesting schedule]
(ii) This Option may not be exercised for a fraction of a
share.
(iii) In the event of Optionee's death, disability or other
termination of employment, the exercisability of the
Option is governed by Section 9 of the Plan.
(b) Method of Exercise. This Option shall be exercisable by written
notice which shall state the election to exercise the Option, the number of
Shares in respect of which the Option is being exercised, and such other
representations and agreements as to the holder's investment intent with respect
to such shares of Common Stock as may be required by the Company pursuant to the
provisions of the Plan. Such written notice shall be signed by the Optionee and
shall be delivered
<PAGE> 2
in person or by certified mail to the Secretary of the Company. The written
notice shall be accompanied by payment of the exercise price. No Shares will be
issued pursuant to the exercise of an Option unless such issuance and such
exercise shall comply with all relevant provisions of law and the requirements
of any stock exchange upon which the Shares may then be listed.
3A. OPTIONEE'S REPRESENTATIONS. In the event the Shares purchasable pursuant to
the exercise of this Option have not been registered under the Securities Act of
1933, as amended (the "Securities Act"), at the time this Option is exercised,
Optionee shall, concurrently with the exercise of all or any portion of this
Option, deliver to the Company his Investment Representation Statement in the
form attached hereto as Exhibit A.
4. METHOD OF PAYMENT. Payment of the exercise price shall be by cash, check or
shares of Common Stock having a fair market value on the date of surrender equal
to the aggregate exercise price of the Shares as to which the Option shall be
exercised, or any combination of such payment methods.
5. RESTRICTIONS ON EXERCISE. This Option may not be exercised if the issuance of
such Shares upon such exercise or the method of payment of consideration for
such shares would constitute a violation of any applicable federal or state
securities or other law or regulation, including any rule under Part 207 of
Title 12 of the Code of Federal Regulations ("Regulation G") as promulgated by
the Federal Reserve Board. As a condition to the exercise of this Option, the
Company may require Optionee to make any representation and warranty to the
Company as may be required by any applicable law or regulation.
6. TERMINATION OF STATUS AS AN EMPLOYEE. If Optionee ceases to serve as an
Employee, he may, but only within thirty (30) days after the date he ceased to
be an Employee of the Company, exercise this Option to the extent that he was
entitled to exercise it at the date of such termination. To the extent that he
was not entitled to exercise this Option at the date of such termination, or if
he does not exercise this Option within the time specified herein, the Option
shall terminate.
7. DISABILITY OF OPTIONEE. Notwithstanding the provisions of Section 6 above, if
Optionee is unable to continue his employment with the Company as a result of
his total and permanent disability (as defined in Section 105(d)(4) of the
Code), he may, but only within twelve (12) months from the date of termination
of employment, exercise his Option to the extent he was entitled to exercise it
at the date of such termination, or if he does not exercise such Option (which
he was entitled to exercise) within the time specified herein, the Option shall
terminate.
8. DEATH OF OPTIONEE. In the event of the death of Optionee:
(a) during the term of this Option and while an Employee of the Company
and having been in Continuous Status as an Employee since the date of grant of
the Option, the Option may be
2
<PAGE> 3
exercised, at any time within twelve (12) months following the date of death, by
Optionee's estate or by a person who acquired the right to exercise the Option
by bequest or inheritance, but only to the extent of the right to exercise that
would have accrued had Optionee continued living one (1) month after the date of
death; or
(b) within thirty (30) days (or such other period of time not exceeding
three (3) months as is determined by the Board) after the termination of
Optionee's Continuous Status as an Employee, the Option may be exercised, at any
time within three (3) months following the date of death, by Optionee's estate
or by a person who acquired the right to exercise the Option by bequest or
inheritance, but only to the extent of the right to exercise that had accrued at
the date of termination.
9. NON-TRANSFERABILITY OF OPTION. This Option may not be transferred in any
manner otherwise than by will or by the laws of descent or distribution and may
be exercised during the lifetime of Optionee only by . The terms of this Option
shall be binding upon the executors, administrators, heirs, successors and
assigns of the Optionee.
10. TERM OF OPTION. This Option may not be exercised more than ________ years
from the date of grant of this Option, and may be exercised during such term
only in accordance with the Plan and the terms of this Option.
11. EARLY DISPOSITION OF STOCK. Optionee understands that if he disposes of any
Shares received under this Option within two (2) years after the date of this
Agreement or within one (1) year after such Shares were transferred to him, he
will be treated for federal income tax purposes as having received ordinary
income at the time of such disposition in an amount equal to the excess of the
fair market value of the Shares at the time such Shares were delivered to him
over the price paid for the Shares. Optionee hereby agrees to notify the Company
in writing within thirty (30) days after the date of any such disposition.
Optionee understands that if he disposes of such Shares at any time after the
expiration of such two-year and one-year holding periods, any gain on such sale
will be taxed at capital gain rates.
DATE OF GRANT: __________________, 199__
INTERSYSTEMS, INC.,
a Delaware corporation
By____________________________
Name:
Title:
3
<PAGE> 4
Optionee acknowledges receipt of a copy of the Plan, a copy of which is
annexed hereto, and represents that he is familiar with the terms and provisions
thereof, and hereby accepts this Option subject to all of the terms and
provisions thereof. Optionee hereby agrees to accept as binding, conclusive and
final all decisions or interpretations of the Board upon any questions arising
under the Plan.
Dated: _________, 199__
________________________________
4
<PAGE> 5
EXHIBIT A
INVESTMENT REPRESENTATION STATEMENT
PURCHASER:
COMPANY: INTERSYSTEMS, INC.
SECURITY: COMMON STOCK
DATE:
In connection with the purchase of the above-listed
Securities, I, the Purchaser, represent to the Seller and to the Company the
following:
(a) I am aware of the Company's business affairs and financial
condition, and have acquired sufficient information about the Company to reach
an informed and knowledgeable decision to acquire the securities. I am
purchasing these securities for my own account for investment purposes only and
not with a view to, or for the resale in connection with, any "distribution"
thereof for purposes of the Securities Act of 1933 ("Securities Act").
(b) I understand that the Securities have not been registered
under the Securities Act in reliance upon a specific exemption therefrom, which
exemption depends upon, among other things, the bona fide nature of my
investment intent as expressed herein. In this connection, I understand that, in
the view of the Securities and Exchange Commission ("SEC"), the statutory basis
for such exemption may be unavailable if my representation was predicated solely
upon a present intention to hold these Securities for the minimum capital gains
period specified under tax statutes, for a deferred sale, for or until an
increase or decrease in the market price of the Securities, or for a period of
one year or any other fixed period in the future.
(c) I further understand that the Securities must be held
indefinitely unless subsequently registered under the Securities Act or unless
an exemption from registration is otherwise available. Moreover, I understand
that the Company is under no obligation to register the Securities. In addition,
I understand that the certificate evidencing the Securities will be imprinted
with a legend which prohibits the transfer of the Securities unless they are
registered or such registration is not required in the opinion of counsel for
the Company.
(d) I am familiar with the provisions of Rule 144, promulgated
under the Securities Act, which, in substance, permits limited public resale of
"restricted securities" acquired, directly or indirectly, from the issuer
thereof (or from an affiliate of such issuer), in a non-public offering subject
to the satisfaction of certain conditions, including, among other things: (1)
the
A-1
<PAGE> 6
availability of certain public information about the Company; (2) the resale
occurring not less than two years after the party has purchased, and made full
payment within the meaning of Rule 144, for the securities to be sold; and, in
the case of an affiliate, or of a non-affiliate who has held the securities less
than three years, (3) the sale being made through a broker in an unsolicited
"broker's transaction" or in transactions directly with a market maker (as said
term is defined under the Securities Exchange Act of 1934) and the amount of
securities being sold during any three-month period not exceeding the specified
limitations stated in Rule 144, if applicable.
(e) I further understand that at the time I wish to sell the
Securities there may be no public market upon which to make such a sale, and
that, even if such a public market then exists, the Company may not be
satisfying the current public information requirements of Rule 144, and that, in
such event, I would be precluded from selling the Securities under Rule 144 even
if the two-year minimum holding period is satisfied.
(f) I further understand that in the event all of the
applicable requirements of Rule 144 are not satisfied, registration under the
Securities Act, compliance with Regulation A, or some other registration
exemption will be required; and that, notwithstanding the fact that Rule 144 is
not exclusive, the Staff of the SEC has expressed its opinion that persons
proposing to sell private placement securities other than in a registered
offering and otherwise than pursuant to rule 144 will have a substantial burden
of proof in establishing that an exemption from registration is available for
such offers or sales, and that such persons and their respective brokers who
participate in such transactions do so at their own risk.
(g) I understand that the certificate evidencing the
Securities will be imprinted with a legend noting the above restrictions on
sale.
Date: , 19
Signature of Purchaser:
__________________________
A-2
<PAGE> 1
EXHIBIT 4.2
INTERSYSTEMS, INC.
NON-QUALIFIED STOCK OPTION AGREEMENT
INTERSYSTEMS, INC., a Delaware corporation (the "Company"),
hereby grants to _______________________ (the "Optionee"), an option to purchase
a total of ________ (_____) shares of the Company's common stock ("Common
Stock"), at the price determined as provided herein (the "Option"), and in all
respects subject to the terms, definitions and provisions of the 1997 Stock
Option Plan (the "Plan") adopted by the Company, which is incorporated herein by
reference. Capitalized terms not defined herein shall have the meanings ascribed
thereto in the Plan.
1. NATURE OF THE OPTION. This Option is intended to be a Non-Qualified Stock
Option.
2. EXERCISE PRICE. The exercise price is $______ for each share of Common Stock
(the Closing bid price of the Common Stock on __________, 199_).
3. EXERCISE OF OPTION. This Option shall be exercisable during its terms in
accordance with the provisions of Section 9 of the Plan as follows:
(a) Right to Exercise
(i) __% of the Option granted hereby shall vest
on the _________ anniversary of the date
hereof; __% shall vest on the ____________
anniversary of the date hereof; and __%
shall vest on the ______________ anniversary
of the date hereof.
(ii) This Option may not be exercised for a
fraction of a share.
(b) Method of Exercise. This Option shall be exercisable by
written notice which shall state the election to exercise the Option, the number
of Shares in respect of which the Option is being exercised, and such other
representations and agreements as to the holder's investment intent with respect
to such shares of Common Stock as may be required by the Company pursuant to the
provisions of the Plan. Such written notice shall be signed by the Optionee and
shall be delivered in person or by certified mail to the Secretary of the
Company. The written notice shall be accompanied by payment of the exercise
price.
No Shares of Common Stock will be issued pursuant to the
exercise of an Option unless such issuance and such exercise shall comply with
all relevant provisions of law and the requirements of any stock exchange upon
which the Shares may then be listed.
<PAGE> 2
4. OPTIONEE'S REPRESENTATIONS. In the event the Shares purchasable pursuant to
the exercise of this Option have not been registered under the Securities Act of
1933, as amended (the "Securities Act"), at the time this Option is exercised,
Optionee shall, concurrently with the exercise of all or any portion of this
Option, deliver to the Company his Investment Representation Statement in the
form attached hereto as Exhibit A.
5. METHOD OF PAYMENT. Payment of the exercise price shall be by cash, check or
shares of Common Stock having a fair market value on the date of surrender equal
to the aggregate exercise price of the Shares as to which the Option shall be
exercised, or any combination of such payment methods.
6. RESTRICTIONS ON EXERCISE. This Option may not be exercised if the issuance of
such Shares upon such exercise or the method of payment of consideration for
such shares would constitute a violation of any applicable federal or state
securities or other law or regulation, including any rule under Part 207 of
Title 12 of the Code of Federal Regulations ("Regulation G") as promulgated by
the Federal Reserve Board. As a condition to the exercise of this Option, the
Company may require Optionee to make any representation and warranty to the
Company as may be required by any applicable law or regulation.
7. TRANSFERABILITY OF OPTION. This Option may be transferred in accordance with
the Plan subject to compliance with the Securities Act, any applicable state
securities or blue sky laws to any of the following: (i) the spouse, children or
grandchildren of the optionee ("Immediately Family Members"), (ii) a trust or
trusts for the exclusive benefit of such Immediate Family Members, or (iii) a
partnership in which such Immediate Family Members are the only partners,
provided that (x) there is no consideration paid for any such transfer and (y)
subsequent transfers shall be prohibited except in accordance with the laws of
descent and distribution, or by will.
8. TERM OF OPTION. This Option may not be exercised more than ____ years from
the date of grant of this Option, and may be exercised during such term only in
accordance with the Plan and the terms of this Option.
2
<PAGE> 3
DATE OF GRANT: _____________, 199__
INTERSYSTEMS, INC.
a Delaware Corporation
By: _______________________________
_____________, Chairman of
the Stock Option Committee
____________________________________
____________________, Optionee
Optionee acknowledges receipt of a copy of the Plan, a copy of
which is annexed hereto, and represents that he is familiar with the terms and
provisions thereof, and hereby accepts this Option subject to all of the terms
and provisions thereof. Optionee hereby agrees to accept as binding, conclusive
and final all decisions or interpretations of the Board upon any questions
arising under the Plan.
Dated: ________________, 199_
____________________________________
____________________, Optionee
3
<PAGE> 4
EXHIBIT A
INVESTMENT REPRESENTATION STATEMENT
PURCHASER:
COMPANY: INTERSYSTEMS, INC.
SECURITY: COMMON STOCK
DATE:
In connection with the purchase of the above-listed
Securities, I, the Purchaser, represent to the Seller and to the Company the
following:
(a) I am aware of the Company's business affairs and financial
condition, and have acquired sufficient information about the Company to reach
an informed and knowledgeable decision to acquire the securities. I am
purchasing these securities for my own account for investment purposes only and
not with a view to, or for the resale in connection with, any "distribution"
thereof for purposes of the Securities Act of 1933 ("Securities Act").
(b) I understand that the Securities have not been registered
under the Securities Act in reliance upon a specific exemption therefrom, which
exemption depends upon, among other things, the bona fide nature of my
investment intent as expressed herein. In this connection, I understand that, in
the view of the Securities and Exchange Commission ("SEC"), the statutory basis
for such exemption may be unavailable if my representation was predicated solely
upon a present intention to hold these Securities for the minimum capital gains
period specified under tax statutes, for a deferred sale, for or until an
increase or decrease in the market price of the Securities, or for a period of
one year or any other fixed period in the future.
(c) I further understand that the Securities must be held
indefinitely unless subsequently registered under the Securities Act or unless
an exemption from registration is otherwise available. Moreover, I understand
that the Company is under no obligation to register the Securities. In addition,
I understand that the certificate evidencing the Securities will be imprinted
with a legend which prohibits the transfer of the Securities unless they are
registered or such registration is not required in the opinion of counsel for
the Company.
(d) I am familiar with the provisions of Rule 144, promulgated
under the Securities Act, which, in substance, permits limited public resale of
"restricted securities" acquired, directly or indirectly, from the issuer
thereof (or from an affiliate of such issuer), in a non-public offering subject
to the satisfaction of certain conditions, including, among other things: (1)
the
A-1
<PAGE> 5
availability of certain public information about the Company; (2) the resale
occurring not less than one year after the party has purchased, and made full
payment within the meaning of Rule 144, for the securities to be sold, and, in
the case of an affiliate, or of a non-affiliate who has held the securities less
than two years, (3) the sale being made through a broker in an unsolicited
"broker's transaction" or in transactions directly with a market maker (as said
term is defined under the Securities Exchange Act of 1934); and (4) the amount
of securities being sold during any three-month period not exceeding the
specified limitations stated in Rule 144, if applicable.
(e) I further understand that at the time I wish to sell the
Securities there may be no public market upon which to make such a sale, and
that, even if such a public market then exists, the Company may not be
satisfying the current public information requirements of Rule 144, and that, in
such event, I would be precluded from selling the Securities under Rule 144 even
if the two-year minimum holding period is satisfied.
(f) I further understand that in the event all of the
applicable requirements of Rule 144 are not satisfied, registration under the
Securities Act, compliance with Regulation A, or some other registration
exemption will be required; and that, notwithstanding the fact that Rule 144 is
not exclusive, the Staff of the SEC has expressed its opinion that persons
proposing to sell private placement securities other than in a registered
offering and otherwise than pursuant to Rule 144 will have a substantial burden
of proof in establishing that an exemption from registration is available for
such offers or sales, and that such persons and their respective brokers who
participate in such transactions do so at their own risk.
(g) I understand that the certificate evidencing the
Securities will be imprinted with a legend noting the above restrictions on
sale.
Date: , 19
Signature of Purchaser:
_______________________
A-2
<PAGE> 1
EXHIBIT 4.3
NON-PLAN OPTION AGREEMENT
AGREEMENT, made as of the 3rd day of September, 1997 between
INTERSYSTEMS, INC. a Delaware corporation ("Company"), and ____ ("Grantee").
WHEREAS, the Board of Directors of the Company (the "Company")
authorized the grant to the Grantee of an option to purchase an aggregate of
____,000 authorized but unissued shares of Common Stock of the Company, $.01 par
value (the "Common Stock"), on the terms and conditions set forth in this
Agreement as set forth below; and
WHEREAS, the Grantee desires to acquire said option on the terms and
conditions set forth in this Agreement;
IT IS AGREED:
1. The Company hereby grants to the Grantee the right and option
to purchase all or any part of an aggregate of ,000 shares of Common Stock on
the terms and conditions set forth herein (the "Option"). Said Option is a
non-qualified stock option not intended to qualify under any section of the
Internal Revenue Code of 1986, as amended.
2. The purchase price of each share of Common Stock subject to
the Option ("Option Shares") shall be $____ per share.
3. (a) No Option shall be exercisable after five years from the
date of grant. The Option shall become exercisable as follows: (i) the Option is
immediately exercisable to the extent of ____ shares; (ii) the Option shall
become exercisable to the extent of an additional ____ shares on September 3,
1998; and (iii) the Option shall become exercisable to the extent of an
additional ____ shares on September 3, 1999.
(b) The death or disability of the Grantee shall not affect
the Grantee's rights under this Agreement.
(c) The Option shall not be assignable or transferable except
in the event of the death of the Grantee, by will or by the laws of descent and
distribution. No transfer of the Option by the Grantee by will or by the laws of
descent and distribution shall be effective to bind the Company unless the
Company shall have been furnished with written notice thereof and a copy of the
will and such other evidence as the Company may deem necessary to establish the
validity of the transfer and the acceptance by the transferee or transferees of
the terms and conditions of the Option. Nothwithstanding the foregoing, the
Grantee may transfer this Option to a joint tenancy of which Grantee is a joint
tenant together with Grantee's spouse, children, grandchildren, or great
grandchildren.
<PAGE> 2
4. The Grantee shall not have any of the rights of a stockholder with
respect to the Option Shares until such shares have been issued after the due
exercise of the Option.
5. In the event of a reorganization, recapitalization, reclassification,
stock split or exchange, stock dividend, combination of shares, or any other
similar change in Common Stock of the Company, the Board of Directors of the
Company may, in its sole discretion, make such equitable, proportionate
adjustment, if any, as it deems appropriate in the number and kind of shares
covered by this Option and in the option price hereunder, in order to preserve
the Grantee's proportionate interest in the Company and to maintain the
aggregate option price; provided, however, that upon the dissolution or
liquidation of the Company, or upon any merger, consolidation or other form of
reorganization in which the Company is not the surviving entity, or upon the
sale of all or substantially all of the Company's assets, the Option may be
terminated by the Company or its successor or be of no further effect provided
that (a) the Company shall have given notice of such intended termination to the
Grantee at least thirty (30) days prior to the date fixed as a record date for
the determination of the stockholders of the Company entitled to participate in
the dividends or other distributions with respect to the Common Stock, or the
exchange or conversion of shares of Common Stock, as the case may be, associated
with any such dissolution, liquidation, merger, consolidation, reorganization or
sale of all or substantially all of the Company's assets, and (b) the date
selected by the Company as the termination date shall not be prior to such
record date.
6. The Company hereby represents and warrants to the Grantee that the
Option Shares, when issued and delivered by the Company to the Grantee in
accordance with the terms and conditions hereof, will be duly and validly issued
and fully paid and nonassessable.
7. The Grantee hereby represents and warrants to the Company that he is
acquiring the Option and shall acquire the Option Shares for his own account and
not with a view to the distribution thereof.
8. Anything in this Agreement to the contrary notwithstanding, the
Grantee hereby agrees that he shall not sell, transfer by any means or otherwise
dispose of the Option Shares acquired by him without registration under the Act,
or in the event that they are not so registered, unless (a) an exemption from
the Securities Act of 1933, as amended, (the "Act"), is available thereunder,
and (b) the Grantee has furnished the Company with notice of such proposed
transfer and the Company's legal counsel, in its reasonable opinion, shall deem
such proposed transfer to be so exempt.
9. The Grantee hereby acknowledges that:
(a) If he exercised the Option, he must bear the economic risk
of the investment in the Option Shares for an indefinite period of time because
the Option Shares will not have been registered under the Act and cannot be sold
by him unless they are registered under the Act or an exemption therefrom is
available thereunder.
<PAGE> 3
(b) In his position as a director of the Company, he has had
both the opportunity to ask questions of and receive answers from the officers
and directors of the Company and all persons acting on its behalf concerning the
terms and conditions of the offer made hereunder and to obtain any additional
information to the extent the Company possesses or may possess such information
or can acquire it without unreasonable effort or expense necessary to verify the
accuracy of the information.
(c) The Company shall place stop transfer orders with its
transfer agent against the transfer of the Option Shares in the absence of
registration under the Act or an exemption therefrom, and the certificate
evidencing the Option Shares shall be legended appropriately.
10. Subject to the terms and conditions of the Agreement, the Option may
be exercised by written notice to the Company at its principal place of
business. Such notice shall state the election to exercise the Option and the
number of Option Shares in respect to which it is being exercised, shall contain
a representation and agreement by the person or persons so exercising the Option
that the Option Shares are being purchased for investment and not with view to
the distribution or resale thereof, and shall be signed by the person or persons
so exercising the Option. Such notice shall be accompanied by payment of the
full purchase price of the Option Shares. Payment of the purchase price shall be
made in cash or by check, bank draft or money order payable to the order of the
Company. The Company shall issued a certificate or certificates evidencing the
Option Shares as soon as practicable after the notice and payment is received.
The certificate or certificates evidencing the Option Shares shall be registered
in the name of the person or persons so exercising the Option.
11. All notices, requests, deliveries, payments, demands and other
communications which are required or permitted to be given under this Agreement
shall be in writing and shall either be delivered personally or sent by
certified mail, return receipt requested, postage prepaid, to the parties at
their respective addresses set forth below, or to such other address as either
shall have specified by notice in the writing to the other, and shall be deemed
duly given hereunder when so delivered or mailed, as the case may be.
12. The waiver by any party hereto of a breach of any provision of this
Agreement shall not operate or be construed as a waiver of any other or
subsequent breach.
13. This Agreement constitutes the entire agreement between the parties
with respect to the subject matter thereof.
<PAGE> 4
14. This Agreement shall inure to the benefit of and be binding upon the
parties hereto and to the extent not prohibited herein, their respective heirs,
successors, assigns and representatives. Nothing in this Agreement, expressed or
implied, is intended to confer on any person other than the parties hereto and
as provided above, their respective heirs, successors, assigns and
representatives, any rights, remedies, obligations or liabilities.
15. This Agreement shall be governed by and construed in accordance with
the laws of the State of Texas.
IN WITNESS WHEREOF, parties hereto have signed this Agreement as of the
3rd day of September, 1997.
INTERSYSTEMS, INC. GRANTEE
By:
- ------------------------------- -------------------------------
Fred S. Zeidman
President
<PAGE> 1
[LETTERHEAD ST. JOHN & WAYNE, L.L.C.]
EXHIBIT 5. 1
February 11, 1998
InterSystems, Inc.
537 Steamboat Road
Greenwich, CT 06830
RE: INTERSYSTEMS, INC.
FORM S-8 REGISTRATION STATEMENT COVERING
635,000 SHARES OF COMMON STOCK
Gentlemen:
We have acted as counsel for InterSystems, Inc., a Delaware corporation
(the "Company"), in connection with the preparation and filing by the Company of
the captioned Registration Statement on Form S-8 filed under the Securities Act
of 1933, as amended (the "Act") (the "Registration Statement"). Terms used
herein and not otherwise defined shall have the meaning ascribed thereto in the
Registration Statement.
In that connection, we have examined the Certificate of Incorporation
and the By-Laws of the Company, the minutes of the various meetings and consents
of the Board of Directors of the Company, and such other documents,
certificates, records, authorizations, proceedings, statutes and judicial
decisions as we have deemed necessary to form the basis of the opinion expressed
below. In such examination, we have assumed the genuineness of all signatures,
the authenticity of all documents submitted to us as originals and the
conformity to originals of all documents submitted to us as copies thereof. As
to various questions of fact material to such opinion, 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:
1. The Company has been duly organized and is validly existing as a
corporation under the laws of the State of Delaware.
2. The outstanding Securities have been duly authorized and are validly
issued, fully paid and non-assessable.
<PAGE> 2
InterSystems, Inc.
February 11, 1998
Page 2
3. The Securities which are not outstanding, when issued in accordance
with the terms of Plan Options and the Non-Plan Options will be validly issued,
fully paid and non-assessable.
We hereby consent to the use of this opinion as an exhibit to the
Registration Statement, and to the reference to our firm under the caption
"Legal Matters" in the Prospectus comprising a part of the Registration
Statement.
By giving the foregoing consent, we do not come within the category of
persons whose consent is required under Section 7 of the Act or are otherwise
within the category of persons described in Section 11(a)(4) of the Act.
Very truly yours,
ST. JOHN & WAYNE
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS
InterSystems, Inc.
Greenwich, CT
We hereby consent to the incorporation by reference in the Prospectus
constituting a part of this Registration Statement of our report dated March 14,
1997, relating to the consolidated financial statements of InterSystems, Inc.
appearing in the Company's Annual Report on Form 10-KSB for the year ended
December 31, 1996.
We also consent to the reference to us under the caption "Experts" in the
Prospectus.
BDO Seidman, LLP
Houston, Texas
February 11, 1998
