<PAGE> 1
Registration No.
Securities and Exchange Commission
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
PSYCHEMEDICS CORPORATION
(Exact name of issuer as specified
in its charter)
DELAWARE 58-1701987
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
1280 Massachusetts Avenue, Cambridge, Massachusetts 02138
(Address of principal executive offices)
PSYCHEMEDICS CORPORATION
1989 EMPLOYEE STOCK OPTION PLAN
1989 NON-QUALIFIED STOCK OPTION PLAN
(Full title of the plans)
Raymond C. Kubacki, Jr.
PSYCHEMEDICS CORPORATION.
1280 Massachusetts Avenue
Cambridge, Massachusetts 02138
(617) 868-7455
Copies to:
Patrick J. Kinney, Jr., Esq.
Lynch, Brewer, Hoffman & Sands, LLP
101 Federal Street
Boston, Massachusetts 02110
(617) 951-0800
(Name, address and telephone number of agent for service)
Approximate date of Commencement of Sale pursuant to the plans: Upon
issuance and exercise of options.
<PAGE> 2
<TABLE>
CALCULATION OF REGISTRATION FEE
===========================================================================================
<CAPTION>
Title of Proposed Proposed
securities Amount maximum maximum Amount of
of to be to be offering price aggregate offer- registra-
registered registered(1) per share(2) ing price tion fee
---------- ------------- -------------- ---------------- ---------
<S> <C> <C> <C> <C>
Common Stock,
$.005 par
value 1,133,000 $7.00 $7,931,000 $2,734.83
<FN>
(1) The registration statement also includes an indeterminable number of
additional shares that may become issuable as a result of terminated,
expired or surrendered options or pursuant to the antidilution
provisions of the Plan.
(2) Computed on the basis of the closing sales price of securities of the
same class, as reported on the American Stock Exchange on September 18,
1996.
</TABLE>
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<PAGE> 3
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
Certain important information is set forth in certain reports or
statements filed by Psychemedics Corporation (the "Company") with the Securities
and Exchange Commission. The reports or documents listed below are incorporated
herein by reference:
(a) the Company's Annual Report on Form 10-KSB for the year ended
December 31, 1995 (which incorporates by reference certain portions of the
Company's Proxy Statement for the Company's 1996 Annual Meeting of Stockholders
held on May 7, 1996);
(b) the Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1996;
(c) the Company's Quarterly Report on Form 10-Q for the quarter ended
June 30, 1996;
(d) all reports filed by the Company pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934 for periods since June 30, 1996;
(e) the information set forth under "Description of Registrant's
Securities to be Registered" in the Company's Registration Statement on Form 8-A
dated April 14, 1995 (File No. 1-13738); and
(f) the Company's Registration Statements on Form S-8 (Registration
Numbers 33-41787, 33-50712, and 33-66942).
All documents filed by the Company pursuant to Sections 13(a), 13(c),
14 and 15(d) of the Securities Exchange Act of 1934, prior to the filing of a
post-effective amendment which indicates that all securities offered have been
sold or which deregisters all securities then remaining unsold, shall be deemed
to be incorporated by reference and to be a part hereof from the date of filing
such reports and documents.
Item 4. DESCRIPTION OF SECURITIES.
Not applicable.
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<PAGE> 4
Item 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Lynch, Brewer, Hoffman & Sands, LLP, 101 Federal Street, Boston,
Massachusetts 02110, has rendered its opinion to the Company that the shares
included in this offering will, when sold in accordance with the terms of the
Plan, be legally issued, fully paid and non-assessable. Edward S. Brewer, Jr., a
partner of Lynch, Brewer, Hoffman & Sands, LLP, is Secretary of the Company.
Item 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company's charter provides that the Company will indemnify all persons
whom it shall have power to indemnify to the full extent permitted by state law.
Under Delaware law, a director, officer, employee or agent who has been
successful on the merits or otherwise in defense of any action, suit or
proceeding or in defense of any claim, issue or matter therein shall be
indemnified against expenses (including attorney's fees) actually and reasonably
incurred. In other circumstances, a director, officer, employee or agent of the
Company may be indemnified against expenses (including attorney's fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
if he/she acted in good faith and in a manner reasonably believed to be in or
not opposed to the best interest of the Company, except that in an action or
suit by or in the right of the Company, such person shall not be indemnified if
he/she has been adjudged to be liable to the Company unless otherwise determined
by the Court of Chancery. The Company's charter further provides that directors
are not liable for monetary damages for certain violations of their duty of
care. A determination that indemnification of a director, officer, employee or
agent is proper shall be made by a disinterested majority of directors, by
independent legal counsel or by the stockholders of the Company.
Item 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not Applicable
Item 8. EXHIBITS.
The Exhibit Index immediately preceding the exhibits is incorporated herein
by reference.
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<PAGE> 5
Item 9. UNDERTAKINGS.
A. The Company hereby undertakes:
(1) To file during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the registration
statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the
registration statement, or any material change to such
information in the registration statement; PROVIDED, HOWEVER,
that paragraphs (A)(1)(i) and (A)(1)(ii) do not apply if the
information required to be in a post-effective amendment by
those paragraphs is contained in periodic reports filed by the
Company pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by
reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the Plan.
B. The Company hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Company's annual report pursuant to Section 13(a) or Section 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.
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<PAGE> 6
C. Insofar as indemnification for liabilities under the
Securities Act of 1933 may be permitted to directors, officers, and controlling
persons of the Company pursuant to the foregoing provisions or otherwise, the
Company has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act of 1933 and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Company of expenses incurred or paid by a director, officer or controlling
person of the Company in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Company will, unless in the
opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act of 1933 and will be governed by the final adjudication of such issue.
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<PAGE> 7
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Company
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and had duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of Cambridge, Massachusetts, on this 20th day of
September, 1996.
PSYCHEMEDICS CORPORATION
By /s/ Raymond C. Kubacki, Jr.
--------------------------------
Raymond C. Kubacki, Jr., President
and Chief Executive Officer
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<PAGE> 8
POWER OF ATTORNEY
-----------------
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. By so signing, each of the undersigned,
in his capacity as a director or officer or both, as the case may be, does
hereby appoint Raymond C. Kubacki, Jr. and Edward S. Brewer, Jr. and Patrick J.
Kinney, Jr., and each of them singly, his lawful attorney to execute in his
name, place and stead, any and all amendments and supplements to this
Registration Statement and all instruments necessary or incidental in connection
therewith, and to file the same with the Securities and Exchange Commission or
any applicable state securities administrator. Said attorney shall have the full
powers and authority to do and perform in the name and on behalf of each of the
undersigned, in any and all capacities, every act whatsoever requisite or
necessary to be done in the premises as fully, and to all intents and purposes,
as each of the undersigned might do in person, hereby ratifying and approving
the acts of such attorney.
<TABLE>
Executed under seal as of the date(s) set forth below.
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ Raymond C. Kubacki, Jr. President, Chief September 20, 1996
- ----------------------------- Executive Officer,
Raymond C. Kubacki, Jr. Director (principal
executive officer)
/s/ Bruce M. Stillwell Vice President and September 20, 1996
- ----------------------------- Treasurer (principal
Bruce M. Stillwell financial officer)
/s/ Werner A. Baumgartner Director September 20, 1996
- -----------------------------
Werner A. Baumgartner
/s/ A. Clinton Allen Director September 20, 1996
- -----------------------------
A. Clinton Allen
/s/ Donald F. Flynn Director September 20, 1996
- -----------------------------
Donald F. Flynn
/s/ John J. Melk Director September 20, 1996
- -----------------------------
John J. Melk
/s/ Fred J. Weinert Director September 20, 1996
- -----------------------------
Fred J. Weinert
</TABLE>
-8-
<PAGE> 9
EXHIBIT INDEX
Exhibit Sequentially
Number Description Numbered Page
- ------ ----------- -------------
4.1 Certificate of Incorporation of the N/A
Company, as amended on October 29,
1986 [incorporated herein by
reference to the Company's Registration
Statement on Form S-18 (File No. 33-
10186 LA)]
4.2 Certificate of Amendment to Certificate of N/A
Incorporation of the Company [incorporated
herein by reference to the Company's Annual
Report on Form 10-K for the fiscal year ended
June 30, 1989 (File No. 0-15999)]
4.3 Certificate of Amendment to Certificate of N/A
Incorporation of the Company [incorporated
herein by reference to the Company's
Registration Statement on Form S-8 (File No. 33-
41787)]
4.4 By-laws of the Company [incorporated N/A
herein by reference to the Company's
Registration Statement on Form S-18
(File No. 33-10186 LA)]
4.5 Specimen Stock Certificate [incorporated N/A
by reference to the Company's
Registration Statement on Form S-l8
(File No. 33-10186 LA)].
4.6 1989 Employee Stock Option Plan, as N/A
amended. (incorporated by reference
to the Company's 1996 Proxy Statement)
4.7 Form of Incentive Stock Option Agreement Page 11
under the 1989 Employee Stock Option Plan
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<PAGE> 10
4.8 1989 Non-Qualified Stock Option Plan, as N/A
amended (incorporated by reference
to the Company's 1996 Proxy Statement)
4.9 Form of Annual Option under the 1989 Non- Page 16
Non-Qualified Stock Option Plan
5 Opinion of Lynch, Brewer, Hoffman & Page 21
Sands, LLP
23.1 Consent of Lynch, Brewer, Hoffman N/A
& Sands, LLP (included in Exhibit 5)
23.2 Consent of Arthur Andersen LLP Page 22
24 Power of Attorney Page 8
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<PAGE> 1
Exhibit 4.7
INCENTIVE STOCK OPTION AGREEMENT
--------------------------------
INCENTIVE STOCK OPTION AGREEMENT made this ___ day of _________, 19__
between PSYCHEMEDICS CORPORATION, a Delaware corporation (hereinafter called the
Corporation), and ______________ (hereinafter called the Employee).
The Corporation desires, by affording the Employee an opportunity to
purchase _______ shares of its Common Stock, $.005 par value (hereinafter called
the Common Stock), as hereinafter provided, to carry out the purpose of the
Corporation's 1989 Employee Stock Option Plan adopted September 22, 1989, as
amended.
NOW, THEREFORE, in consideration of the mutual covenants hereinafter
set forth and for other good and valuable consideration, the parties hereto have
agreed, and do hereby agree as follows:
1. GRANT OF OPTION. The Corporation hereby irrevocably grants to the
Employee the right and option (hereinafter called the Option) to purchase all or
any part of an aggregate of _________ shares of the Common Stock (such number
being subject to adjustment as provided in paragraph 7 hereof) on the terms and
conditions herein set forth. The Option is intended by the parties hereto to be,
and shall be treated as, an incentive stock option (as such term is defined
under Section 422 of the Internal Revenue Code of 1986).
2. PURCHASE PRICE. The purchase price of the shares of the Common Stock
covered by the Option shall be $_____ per share.
3. TERM OF OPTION. The term of the Option shall be for a period of ten
years from the date hereof, subject to earlier termination as provided in
paragraphs 5 and 6 hereof. The Option shall become exercisable with respect to
25% of the total number of shares subject to the Option twelve months after the
date hereof and with respect to an additional 25% of such total number of shares
at the end of each twelve-month period thereafter during the succeeding three
years provided however, that the Corporation may, at any time during the period
in which the Option is not then exercisable in full, accelerate the
exercisability of the Option subject to such terms as the Company deems
necessary and appropriate. The purchase price of the shares as to which the
Option shall be exercised shall be paid at the time of exercise except as
otherwise provided in paragraph 8 hereof. Except
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<PAGE> 2
as provided in paragraphs 5 and 6 hereof, the Option may not be exercised at any
time unless the Employee shall have been in the continuous employ of the
Corporation or one or more of its subsidiaries, from the date hereof to the date
of the exercise of the Option.
The Corporation may, in its discretion, require as conditions to the
right to exercise this Option that (a) a Registration Statement under the
Securities Act of 1933, as amended, shall be in effect and current with respect
to the shares issuable upon exercise of this Option, or (b) the Employee (and
any other person in whose name, as joint tenant with the Employee, are
registered the certificate or certificates representing the shares being
purchased on exercise hereof) has given to the Corporation prior to the purchase
of any shares pursuant hereto, assurances satisfactory to it that such shares
are being purchased for the purpose of investment and not with a view to or for
sale in connection with any distribution thereof, including without limitation,
a written agreement of the Employee (and any other person in whose name, as
joint tenant with the Employee, are registered the certificate or certificates
representing the shares being purchased on exercise hereof) that the shares will
not be transferred unless registered under the Securities Act of 1933, as
amended, or unless counsel for the Corporation gives a written opinion that such
transfer is permissible under Federal and State law without registration.
Nothing herein contained shall be deemed to require the Corporation to
register, under federal or any state law, this Option or any shares issued
hereunder.
4. NON-TRANSFERABILITY. The Option shall not be transferable otherwise
than by will or the laws of descent and distribution, and the Option may be
exercised, during the lifetime of the Employee, only by him. More particularly
(but without limiting the generality of the foregoing), the Option may not be
assigned, transferred (except as provided above), pledged, or hypothecated in
any way, shall not be assignable by operation of law and shall not be subject to
execution, attachment, or similar process. Any attempted assignment, transfer,
pledge, hypothecation, or other disposition of the Option contrary to the
provisions hereof, and the levy of any execution, attachment, or similar process
upon the Option shall be null and void and without effect.
5. TERMINATION OF EMPLOYMENT. In the event that the employment of the
Employee shall be terminated on account of retirement (at the age 65 or earlier
as may be permitted by the Corporation), or in the event that the employment of
the Employee shall be terminated on account of permanent and total disability as
such term is defined in Section 22 (e)(3) of the Internal
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<PAGE> 3
Revenue Code of 1986 or any successor thereto, the Option may be exercised (to
the extent that the Employee shall have been entitled to do so at the
termination of his employment) at any time within one year after such
termination, but not more than ten years after the date of grant thereof. So
long as the Employee shall continue to be an employee of the Corporation or one
or more of its subsidiaries, the Option shall not be affected by any change of
duties or position. Nothing in this Option Agreement shall confer upon the
Employee any right to continue in the employ of the Corporation or of any of its
subsidiaries or interfere in any way with the right of the Corporation or any
such subsidiary to terminate his employment at any time.
6. DEATH OF EMPLOYEE. If the Employee shall die while he shall be
employed by the Corporation or one or more of its subsidiaries or within three
months after the termination of his employment, the Option may be exercised (to
the extent that the Employee shall have been entitled to do so at the date of
his death) by a legatee or legatees of the Employee under his last will, or by
his personal representatives or distributees, at any time within one year after
his death, but not more than ten years after the date hereof.
7. CHANGES IN CAPITAL STRUCTURE. The number of shares subject to the
Option shall be adjusted as follows: (a) in the event that the number of
outstanding shares of Common Stock of the Corporation is changed by any stock
dividend, stock split or combination of shares, the number of shares then
subject to the Option shall be proportionately adjusted; (b) in the event of any
merger, consolidation or reorganization of the Corporation with any other
corporation or corporations, there shall be substituted, on an equitable basis
as determined by the Board of Directors of the Corporation or the Stock Option
Committee (the "Committee") provided for in the Corporation's l989 Employee
Stock Option Plan for each share of Common Stock then subject to the Option, the
number and kind of shares of Stock or other securities to which the holders of
shares of Common Stock of the Corporation will be entitled pursuant to the
transaction; and (c) in the event of any other relevant change in the
capitalization of the Corporation, the Corporation shall provide for an
equitable adjustment in the number of shares of Common Stock then subject to the
Option. In the event of any such adjustment, the purchase price per share shall
be proportionately adjusted so that the person or persons exercising the Option
shall receive, for the aggregate price paid upon such exercise, the aggregate
number and class of shares which, if shares of Common Stock (as authorized at
the date hereof) had been purchased at the date hereof for the same aggregate
price (on the basis of the price per share set forth in paragraph 2 hereof) and
had not been disposed of, such person or persons would be holding, at the time
of such exercise, as a result of such purchase and all such stock dividends,
stock splits, combinations of shares,
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<PAGE> 4
mergers, consolidations, reorganizations, or other changes in capitalization;
provided, however, that no fractional share shall be issued upon any such
exercise, and the aggregate price paid shall be appropriately reduced on account
of any fractional share not issued; and provided further, that in accordance
with the provisions of subsection (a) of Section 424 of the Internal Revenue
Code a new option may be substituted for the Option granted hereunder or such
Option may be assumed by an employer corporation, or a parent or subsidiary of
such corporation, in connection with any transaction to which such subsection
(a) is applicable. Upon the dissolution or liquidation of the Corporation other
than in connection with a transaction to which such subsection (a) is
applicable, the Option granted hereunder shall terminate and become null and
void, but the Employee shall have the right immediately prior to such
dissolution or liquidation to exercise the Option granted hereunder to the full
extent not before exercised.
8. METHOD OF EXERCISING OPTION. Subject to the terms and conditions of
this Option Agreement, the Option may be exercised by written notice to the
Corporation at its principal business address attention of the Secretary. Such
notice shall state the election to exercise the Option and the number of shares
in respect of which it is being exercised, and shall be signed by the person or
persons so exercising the Option. At that time, this Option Agreement shall be
turned in to the Corporation for action by the Corporation to reduce the number
of shares to which it applies. Such notice shall be accompanied by payment in
cash or by check or by shares of the Common Stock or by a combination of these
methods of payment. Payment may also be made by delivery (including delivery by
facsimile transmission) to the Company or its designated agent of an executed
irrevocable option exercise form together with irrevocable instructions to a
broker-dealer to sell a sufficient portion of the shares and deliver the sale
proceeds directly to the Company to pay for the exercise price. In the event
that payment is made in shares of the Common Stock, the per share value of the
Common Stock shall be the fair market value of such stock on the date of
exercise. The certificate or certificates for the shares as to which the Option
shall have been so exercised shall be registered in the name of the person or
persons so exercising the Option, (or, if the Option shall be exercised by the
Employee and if the Employee shall so request in the notice exercising the
Option, the certificate or certificates shall be registered in the name of the
Employee and another person jointly, with the right of survivorship) and shall
be delivered as provided above to or upon the written order of the person or
persons exercising the Option. In the event the Option shall be exercised,
pursuant to paragraph 6 hereof, by any person or persons other than the
Employee, such notice shall be accompanied by appropriate proof of the right of
such person or persons to exercise the Option.
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<PAGE> 5
9. GENERAL. The Corporation shall at all times during the term of the
Option reserve and keep available such number of shares of Common Stock as will
be sufficient to satisfy the requirements of this Option Agreement, shall pay
all original issue taxes with respect to the issue of shares pursuant hereto and
all other fees and expenses necessarily incurred by the Corporation in
connection therewith, and will from time to time use its best efforts to comply
with all laws and regulations which, in the opinion of counsel for the
Corporation, shall be applicable thereto. The Corporation makes no
representation or warranty that this Option or shares issued pursuant hereto
qualify under any Federal or State law for any special tax treatment. The terms
of this Option Agreement shall be construed to conform with, and shall be
governed by the provisions of the Corporation's l989 Employee Stock Option Plan
and in the event of any inconsistency between the provisions of this Option
Agreement and such Plan the provisions of such Plan shall control.
10. SUBSIDIARY. As used herein, the term "subsidiary" shall mean any
present or future corporation which would be a "subsidiary corporation" of the
Corporation, as the term is defined in Section 424 of the Internal Revenue Code
of 1986.
IN WITNESS WHEREOF, the Corporation has caused this Incentive Stock
Option Agreement to be duly executed by its officer thereunto duly authorized,
and the Employee has hereunto set his hand and seal all on the day and year
first above written.
PSYCHEMEDICS CORPORATION
By:
-------------------------------------
----------------------------------------
[Employee]
----------------------------------------
Address
----------------------------------------
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<PAGE> 1
Exhibit 4.9
NON-QUALIFIED STOCK OPTION AGREEMENT
NON-QUALIFIED STOCK OPTION AGREEMENT made as of the 15th day of March,
19__ between PSYCHEMEDICS CORPORATION, a Delaware Corporation (hereinafter
called the Corporation), and ________________, a non-employee director of the
Corporation (hereinafter called the "Optionee").
The Corporation desires, by affording the Optionee an opportunity to
purchase 20,600 shares of its Common Stock, $.005 par value (hereinafter called
the Common Stock), as hereinafter provided, to carry out the purpose of the 1989
Non-Qualified Stock Option Plan of the Corporation, adopted October 30, 1989, as
amended.
NOW, THEREFORE, in consideration of the mutual covenants hereinafter
set forth and for other good and valuable consideration, the parties hereto have
agreed, and do hereby agree as follows:
1. GRANT OF OPTION. The Corporation hereby irrevocably grants to the
Optionee the right and option (hereinafter called the "Option") to purchase all
or any part of an aggregate of 20,600 shares of the Common Stock (such number
being subject to adjustment as provided in paragraph 7 hereof) on the terms and
conditions herein set forth.
2. PURCHASE PRICE. The exercise price of each of the shares of the
Common Stock covered by the Option shall be $__________ representing the fair
market value as of the date hereof.
3. TERM OF OPTION; CONDITIONS TO ISSUANCE AND EXERCISE OF OPTION. The
term of the Option shall be for a period of ten (10) years from the date hereof,
subject to earlier termination as provided in paragraph 5 hereof. The option
shall become exercisable in full on the date which is twelve (12) months from
the date hereof. The purchase price of the shares as to which the Option shall
be exercised shall be paid at the time of exercise as provided in paragraph 7
hereof. Except as provided in paragraph 5 hereof, the Option may not be
exercised at any time unless the Optionee shall have continued to serve as a
director of the Corporation, or one or more of its subsidiaries, from the date
hereof to the date of the exercise of the Option.
This Option is issued subject to the condition, and every holder hereof
by accepting the same agrees with the Corporation, that this Option has
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<PAGE> 2
been acquired for the purpose of investment and not with a view to or for sale
in connection with any distribution thereof.
The Board of Directors of the Corporation may, in its discretion,
require as conditions to the right to exercise this Option that (a) a
Registration Statement under the Securities Act of 1933, as amended, shall be in
effect and current with respect to the shares issuable upon exercise of this
Option, or (b) the Optionee has given to the Corporation prior to the purchase
of any shares pursuant hereto, assurances satisfactory to it that such shares
are being purchased for the purpose of investment and not with a view to or for
sale in connection with any distribution thereof, including without limitation,
a written agreement of the Optionee that the shares will not be transferred
unless registered under the Securities Act of 1933, as amended, or unless
counsel for the Corporation gives a written opinion that such transfer is
permissible under federal and state law without registration. Each certificate
representing the shares shall be restrictively endorsed with a legend calling
attention to the foregoing restrictions on transferability of such shares,
stating in substance:
"THE SHARES EVIDENCED BY THIS CERTIFICATE MAY NOT BE TRANSFERRED UNLESS
AND UNTIL THERE SHALL BE A REGISTRATION STATEMENT UNDER THE SECURITIES
ACT OF 1933 IN EFFECT WITH RESPECT THERETO OR THERE SHALL BE IN EFFECT
AN OPINION OF COUNSEL OF THE COMPANY THAT SUCH TRANSFER MAY BE MADE
WITHOUT SUCH REGISTRATION STATEMENT."
Nothing herein contained shall be deemed to require the Corporation to
register, under federal or any state law, this Option or any shares issued
hereunder.
4. NON-TRANSFERABILITY. The Option shall not be transferable otherwise
than by will or the laws of descent and distribution, and the Option may be
exercised, during the lifetime of the Optionee, only by him. More particularly
(but without limiting the generality of the foregoing), the Option may not be
assigned, transferred (except as provided above), pledged, or hypothecated in
any way, shall not be assignable by operation of law and shall not be subject to
execution, attachment, or similar process. Any attempted assignment, transfer,
pledge, hypothecation, or other disposition of the Option contrary to the
provisions hereof, and the levy of any execution, attachment, or similar process
upon the Option shall be null and void and without effect.
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<PAGE> 3
5. TERMINATION OF RELATIONSHIP-EXERCISE THEREAFTER. In the event that
the Optionee's service on the Board of Directors is terminated for any reason
other than death or permanent disability, the Option shall cease to further vest
and all rights to purchase shares which have accrued pursuant thereto shall
terminate within ten (10) days of such termination of service on said Board.
In the event of termination of said relationship because of death or
permanent disability (as that term is defined in Section 22(e)(3) of the
Internal Revenue Code, as now in effect or as subsequently amended), the Option
may be exercised to the extent the Option was exercisable at the date of such
death or permanent disability by the Optionee or, if he is not living, by his
heirs, legatees, or legal representative, as the case may be, for a period of
one (1) year after the date of death or permanent disability, but in any event
not later than ten (10) years after the date the Option was granted.
6. CHANGES IN CAPITAL STRUCTURE. The number of shares subject to the
Option shall be adjusted as follows: (a) in the event that the number of
outstanding shares of Common Stock of the Corporation is changed by any stock
dividend, stock split or combination of shares, the number of shares then
subject to the Option shall be proportionately adjusted; (b) in the event of any
merger, consolidation or reorganization of the Corporation with any other
corporation or corporations, this Option shall fully vest unless the Board of
Directors of the Corporation shall determine otherwise that there shall be
substituted, on an equitable basis for each share of Common Stock then subject
to the Option, the number and kind of shares of Stock or other securities to
which the holders of shares of Common Stock of the Corporation will be entitled
pursuant to the transaction; and (c) in the event of any other relevant change
in the capitalization of the Corporation, the Board of Directors of the
Corporation shall provide for an equitable adjustment in the number of shares of
Common Stock then subject to the Option. In the event of any such adjustment,
the purchase price per share shall be proportionately adjusted.
7. METHOD OF EXERCISING OPTION. Subject to the terms and conditions of
this Option Agreement, the Option may be exercised by written notice to the
Corporation at its principal business address attention of the Secretary. Such
notice shall state the election to exercise the Option and the number of shares
in respect of which it is being exercised, and shall be signed by the person or
persons so exercising the Option. At that time, this Option Agreement shall be
turned in to the Corporation for action by the Corporation to reduce the number
of shares to which it applies. Such notice
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shall be accompanied by payment in cash or by check or by shares of the Common
Stock or by a combination of these methods of payment. In the event that payment
is made in shares of the Common Stock, the per share value of the Common Stock
shall be the fair market value of such stock on the date of exercise. The
certificate or certificates for the shares as to which the Option shall have
been so exercised shall be registered in the name of the person or persons so
exercising the Option and shall be delivered as provided above to or upon the
written order of the person or persons exercising the Option. In the event the
Option shall be exercised, pursuant to paragraph 5 hereof, by any person or
persons other than the Optionee, such notice shall be accompanied by appropriate
proof of the right of such person or persons to exercise the Option.
8. GENERAL. The Corporation shall at all times during the term of the
Option reserve and keep available such number of shares of Common Stock as will
be sufficient to satisfy the requirements of this Option Agreement, shall pay
all original issue taxes with respect to the issue of shares pursuant hereto and
all other fees and expenses necessarily incurred by the Corporation in
connection therewith, and will from time to time use its best efforts to comply
with all laws and regulations which, in the opinion of counsel for the
Corporation, shall be applicable thereto. The Corporation makes no
representation or warranty that this Option or shares issued pursuant hereto
qualify under any federal or state law for any special tax treatment. The terms
of this Option Agreement shall be construed to conform with, and shall be
governed by the provisions of the Corporation's 1989 Non-Qualified Stock Option
Plan and in the event of any inconsistency between the provisions of this Option
Agreement and such Plan the provisions of such Plan shall control.
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IN WITNESS WHEREOF, the Corporation has caused this Option Agreement to
be duly executed by its officer thereunto duly authorized, and the Optionee has
hereunto set his hand and seal all on the day and year first above written.
PSYCHEMEDICS CORPORATION
By:
---------------------------------
President
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Address
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Exhibit 23.1
September 20, 1996
Securities and Exchange Commission
450 Fifth Street N.W.
Washington, D.C. 20549
RE: Registration of 1,133,000 shares of Common Stock of
Psychemedics Corporation on SEC Form S-8 Registration
Statement
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Gentlemen:
Our opinion, as counsel for Psychemedics Corporation (the "Company"),
has been solicited in connection with the registration under the Securities Act
of 1933 of an additional 1,133,000 shares of Common Stock, $.005 par value
("Common Stock"), to be issued by the Company pursuant to the Company's 1989
Employee Stock Option Plan and the Company's 1989 Non-Qualified Stock Option
Plan (collectively the "Option Plans") as more particularly set forth in the
Registration Statement on Form S-8 to be filed with the Securities and Exchange
Commission on or about September 20, 1996.
We have examined the Certificate of Incorporation of the Company, the
By-laws and minute books of the Company, the Option Plans, and the pertinent
statutes of the State of Delaware.
Based upon the foregoing, we are of the opinion that the shares of
Common Stock being offered by the Company pursuant to said Registration
Statement will be, when issued and paid for in accordance with the terms of the
Option Plans, legally issued, fully paid and non-assessable.
We consent to the filing of this opinion as an Exhibit to the
Registration Statement.
Very truly yours,
LYNCH, BREWER,
HOFFMAN & SANDS, LLP
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Exhibit 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
-----------------------------------------
The Board of Directors
Psychemedics Corporation
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated February 20, 1996
included in Psychemedics Corporation's Form 10-KSB for the year ended December
31, 1995 and to all references to our firm included in this registration
statement.
ARTHUR ANDERSEN LLP
Boston, Massachusetts
September 20, 1996
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