As filed with the
Securities and Exchange Commission
on August 26, 1997
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
WINSTON RESOURCES, INC.
(Exact name of registrant as specified in its charter)
Delaware 535 Fifth Avenue, New York, New York 10017 13-3134278
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(State or other (Address of Principal Executive Offices) (I.R.S. Employer
jurisdiction of Identification
incorporation or No.)
organization)
Winston Resources, Inc.
1996 Stock Plan
(Full title of the plan)
Seymour Kugler
Chief Executive Officer
Winston Resources, Inc.
535 Fifth Avenue
New York, New York 10017
(212) 557-5000
(Name, address and telephone number of agent for service)
Copy to:
Joel A. Klarreich, Esq.
Newman Tannenbaum Helpern Syracuse & Hirschtritt LLP
900 Third Avenue
New York, New York 10022
(212) 508-6700
CALCULATION OF REGISTRATION FEE
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Proposed
maximum
Title of securities Shares Proposed aggregate Amount of
to be to be maximum offering offering Registration
registered registered price per share price fee
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Common Stock
($.01 par value) 400,000 $4.3125(1) $1,725,000.00(1) $522.73
================================================================================
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(1) Estimated in accordance with Rule 457(h) under the Securities Act of 1933
solely for the purpose of calculation the total registration fee. Computation
based upon the average of the bid and ask prices of the Common Stock as reported
on the American Stock Exchange on August 22, 1997 because the price at which the
options to be granted in the future may be exercised is not currently
determinable.
Page 1 of ___
Exhibit Index appears on page 9
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PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
Pursuant to Rule 428(b)(1), the information required by Item 1 and Item 2
of Part I is included in documents sent or given to each participant in the
Winston Resources, Inc. 1996 Stock Plan (the "Plan").
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Certain Documents by Reference.
The following documents filed by Winston Resources, Inc. (the
"Registrant") with the Securities and Exchange Commission are hereby
incorporated by reference:
(a) The Registrant's latest annual report on Form 10-KSB for the fiscal
year ended December 31, 1996.
(b) All other reports filed by the Registrant pursuant to Sections 13(a)
or 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), since the end of the fiscal year covered by the annual report referred to
in (a) above, including the Registrant's reports on Form 10-Q for the periods
ended March 31, 1997 and June 30, 1997.
(c) The description of the Common Stock of the Registrant contained under
the caption, "Description of Registrant's Securities," in Item 9 of the
Registrant's Registration Statement No. 1-9629 on Form 10 (the "Exchange Act
Registration Statement"), which incorporates by reference the description of the
Common Stock of the Registrant contained under the caption, "Description of
Capital Stock," in the Prospectus included in the Registrant's Registration
Statement No. 33-14913 on Form S-1 (the "Securities Act Registration
Statement").
All documents subsequently filed by the Registrant pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the filing of a
post-effective amendment to this Registration Statement which indicates that all
securities registered hereunder 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.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
Not Applicable.
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Item 6. Indemnification of Directors and Officers.
1. Section 145 of the General Corporation Law of Delaware permits a
corporation 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, by reason
of the fact that he is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in, or not opposed
to, the best interests of the corporation and, with respect to any criminal
action or proceeding, if he had no reasonable cause to believe his conduct was
unlawful. In the case of an action or suit by or in the right of the corporation
to procure a judgment in its favor, (i) such indemnification is limited to
expenses (including attorneys' fees) actually and reasonably incurred by such
person in the settlement of such action or suit, and (ii) no indemnification may
be made in respect of any claim, issue or matter as to which such person shall
have been adjudged to be liable to the corporation unless, and only to the
extent that, the Delaware Court of Chancery or the court in which such action or
suit is brought shall determine upon application that, despite the adjudication
of liability but in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses which the Court of
Chancery or such other court shall deem proper.
To the extent that a director, officer, employee or agent of a corporation
has been successful on the merits or otherwise in defense of any action, suit or
proceeding referred to above, or in defense of any claim, issue or matter
therein, Section 145 of the General Corporation Law entitles him to be
indemnified against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection therewith. Expenses incurred by an officer or
director in defending a civil or criminal action, suit or proceeding may be paid
by the corporation in advance of the final disposition of such action, suit or
proceeding upon receipt of an undertaking by or on behalf of such director or
officer to repay such amount if it is ultimately determined that he is not
entitled to be indemnified by the corporation.
The indemnification and advancement of expenses permitted or required by
Section 145 of the General Corporation Law are not exclusive of other rights to
which directors and officers of a corporation may be entitled under any by-law,
agreement, vote of stockholders or disinterested directors or otherwise. Section
145 gives a corporation power to purchase and maintain insurance on behalf of
any person who may be indemnified by a corporation against any liability
asserted against him in any of the capacities referred to above, or arising out
of his status as such, whether or not the corporation would have the power to
indemnify him against such liability under Section 145.
2. Article VI of the By-Laws of the Registrant requires it to indemnify
and advance expenses to any director, and permits it to indemnify and advance
expenses to any other person whom the Registrant may indemnify under Section 145
of the General Corporation Law under the circumstances and to the fullest extent
permitted by such Section.
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3. The Registrant presently maintains policies of insurance under which
the directors and officers of Registrant are insured, within the limits and
subject to the limitations of the policies, against certain expenses in
connection with the defense of actions, suits or proceedings, and certain
liabilities which might be imposed as a result of such actions, suits or
proceedings, to which they are parties by reason of being, or having been, such
directors or officers.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
Number Document
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3.1.1 Restated Certificate of Incorporation of the Registrant, as filed
with the Secretary of State of Delaware on April 6, 1987
(Incorporated by reference to Registrant's Registration Statement
No. 33-14913, Exhibit 3.1)
3.1.2 Agreement and Plan of Merger dated as of April 15, 1987,
between Winston Resources, Inc. (New York) and the Registrant,
as filed with the Secretary of State of Delaware on April 20,
1987 (Incorporated by reference to Registrant's Registration
Statement No. 33-14913, Exhibit 3.2)
3.1.3 Certificate of Amendment of Restated Certificate of
Incorporation of the Registrant, as filed with the Secretary
of State of Delaware on June 11, 1993 (Incorporated by
reference to Registrant's Form 10-KSB for the year ended
December 31, 1993)
3.1.4 Composite Copy of Restated Certificate of Incorporation of the
Registrant, as amended (Incorporated by reference to
Registrant's Form 10-K for the year ended December 31, 1987,
Exhibit 3.3)
3.2 By-laws of the Registrant, as amended June 11, 1993 (Incorporated
by reference to Registrant's Form 10-KSB for the year ended
December 31, 1993)
4 Registrant's 1996 Stock Plan
5.1 Opinion of Counsel as to Legality of Securities Being Registered
23.1 Consent of Ernst & Young LLP
23.2 Consent of Richard A. Eisner & Company LLP
23.3 Consent of Counsel (contained in Exhibit 5.1 hereto)
24 Power of Attorney (see signature page)
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Item 9. Undertakings.
A. 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 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, as amended (the "Securities Act"), each such
post-effective amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof; and
(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.
B. The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the Registration Statement shall be deemed to be a
new registration statement relating to the securities offered herein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
C. Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the provisions of the Registrant's By-Laws and Section
145 of the General Corporation Law of Delaware or otherwise, the Registrant has
been advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
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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 New York, State of New York, on the 14th day of
August 1997.
WINSTON RESOURCES, INC.
By: /s/ Seymour Kugler
----------------------------------------
Seymour Kugler,
Chairman of the Board and President
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SIGNATURES
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Seymour Kugler and Jesse Ulezalka jointly
and severally, his attorneys-in-fact, each with full power of substitution, for
him in any and all capacities, to sign any amendments to this Registration
Statement on Form S-8, and to file the same, with exhibits thereto and other
documents in connection therewith, with the Securities and Exchange commission,
hereby ratifying and confirming all that each of said attorneys-in-fact, or his
substitute or substitutes, may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement or amendment thereto has been signed by the following
persons in the capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
/s/ Seymour Kugler August 14, 1997
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Seymour Kugler Chairman of the Board,
President, Principal
Executive Officer and
Director
/s/ Jesse Ulezalka August 14, 1997
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Jesse Ulezalka Chief Financial Officer
/s/ Reuben W. Abrams
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Reuben W. Abrams Director August 14, 1997
/s/ Martin Fischer August 14, 1997
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Martin Fischer Director
/s/ Alan E. Wolf
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Alan E. Wolf Vice President and Director August 14, 1997
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/s/ Martin Wolfson
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Martin Wolfson Director August 14, 1997
/s/ Gregg Kugler
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Gregg Kugler Vice President and Director August 14, 1997
/s/ Martin J. Simon
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Martin J. Simon Director August 14, 1997
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EXHIBIT INDEX
Exhibit Page
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Number Exhibit Number
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3.1.1 Restated Certificate of Incorporation of the Registrant, as --
filed with the Secretary of State of Delaware on April 6,
1987 (Incorporated by reference to Registrant's
Registration Statement No. 33-14913, Exhibit 3.1)
3.1.2 Agreement and Plan of Merger dated as of April 15, 1987, --
between Winston Resources, Inc. (New York) and the
Registrant, as filed with the Secretary of State of
Delaware on April 20, 1987 (Incorporated by reference to
Registrant's Registration Statement No. 33-14913, Exhibit
3.2)
3.1.3 Certificate of Amendment of Restated Certificate of --
Incorporation of the Registrant, as filed with the
Secretary of State of Delaware on June 11, 1993
(Incorporated by reference to Registrant's Form 10- KSB for
the year ended December 31, 1993)
3.1.4 Composite Copy of Restated Certificate of Incorporation of --
the Registrant, as amended (Incorporated by reference to
Registrant's Form 10-K for the year ended December 31,
1987, Exhibit 3.3)
3.2 By-laws of the Registrant, as amended June 11, 1993 --
(Incorporated by reference to Registrant's Form 10-KSB for
the year ended December 31, 1993)
4 Registrant's 1996 Stock Plan 10
5.1 Opinion of Counsel as to Legality of Securities Being
Registered 22
23.1 Consent of Ernst & Young LLP 24
23.2 Consent of Richard A. Eisner & Company LLP 26
23.3 Consent of Counsel (contained in Exhibit 5.1 hereto) *
24 Power of Attorney (see signature page) **
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* Contained in Exhibit 5.1 of this Registration Statement.
** See Page 7 of this Registration Statement.
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Exhibit 4
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<PAGE>
WINSTON RESOURCES, INC.
1996 STOCK PLAN
1. Purpose. The purpose of the Winston Resources, Inc. 1996 Stock Plan
(the "Plan") is to encourage key employees of Winston Resources, Inc. (the
"Company") and of any present or future parent or subsidiary of the Company
(collectively, "Related Corporations") and other individuals who render services
to the Company or a Related Corporation, by providing opportunities to
participate in the ownership of the Company and its future growth through (a)
the grant of options which qualify as "incentive stock options" ("ISOs") under
Section 422(b) of the Internal Revenue Code of 1986, as amended (the "Code");
(b) the grant of options which do not qualify as ISOs ("Non-Qualified Options");
(c) awards of stock in the Company ("Awards"); and (d) opportunities to make
direct purchases of stock in the Company ("Purchases"). Both ISOs and
Non-Qualified Options are referred to hereafter individually as an "Option" and
collectively as "Options." Options, Awards and authorizations to make Purchases
are referred to hereafter collectively as "Stock Rights." As used herein, the
terms "parent" and "subsidiary" mean "parent corporation" and "subsidiary
corporation," respectively, as those terms are defined in Section 424 of the
Code.
2. Administration of the Plan.
(a) Board or Committee Administration. The Plan shall be administered by a
committee (the "Committee") of the Board of Directors of the Company (the
"Board"). The Committee, to the extent required by applicable regulations under
Section 162(m) of the Code, shall be comprised of two or more "outside
directors" (as defined in applicable regulations thereunder) who, to the extent
required by Rule 16b-3 promulgated under the Securities Exchange Act of 1934, as
amended, or any successor provision ("Rule 16b-3"), shall be disinterested
administrators within the meaning of Rule 16b-3. All references in this Plan to
the "Committee" shall mean the Board if no Committee has been appointed. Subject
to ratification of the grant or authorization of each Stock Right by the Board
(if so required by applicable state law), and subject to the terms of the Plan,
the Committee shall have the authority to (i) determine to whom (from among the
class of employees eligible under paragraph 3 to receive ISOs) ISOs shall be
granted, and to whom (from among the class of individuals and entities eligible
under paragraph 3 to receive Non-Qualified Options and Awards and to make
Purchases) Non-Qualified Options, Awards and authorizations to make Purchases
may be granted; (ii) determine the time or times at which Options or Awards
shall be granted or Purchases made; (iii) determine the purchase price of shares
subject to each Option or Purchase, which prices shall not be less than the
Minimum Price specified in paragraph 6; (iv) determine whether each Option
granted shall be an ISO or a Non-Qualified Option; (v) determine (subject to
paragraph 7) the time or times when each Option shall become exercisable and the
duration of the exercise period; (vi) extend the period during which outstanding
Options may be exercised; (vii) determine whether restrictions are to be imposed
on shares subject to Options, Awards and Purchases and the nature of such
restrictions, if any, and (viii) interpret the Plan and prescribe and rescind
rules and
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regulations relating to it. If the Committee determines to issue a Non-Qualified
Option, it shall take whatever actions it deems necessary, under Section 422 of
the Code and the regulations promulgated thereunder, to ensure that such Option
is not treated as an ISO. The interpretation and construction by the Committee
of any provisions of the Plan or of any Stock Right granted under it shall be
final unless otherwise determined by the Board. The Committee may from time to
time adopt such rules and regulations for carrying out the Plan as it may deem
advisable. No member of the Board or the Committee shall be liable for any
action or determination made in good faith with respect to the Plan or any Stock
Right granted under it.
(b) Committee Actions. The Committee may select one of its members as its
chairman, and shall hold meetings at such time and places as it may determine. A
majority of the Committee shall constitute a quorum and acts of a majority of
the members of the Committee at a meeting at which a quorum is present, or acts
reduced to or approved in writing by all the members of the Committee (if
consistent with applicable state law), shall be the valid acts of the Committee.
From time to time the Board may increase the size of the Committee and appoint
additional members thereof, remove members (with or without cause) and appoint
new members in substitution therefor, fill vacancies however caused, or remove
all members of the Committee and thereafter directly administer the Plan.
(c) Grant of Stock Rights to Board Members. Subject to the provisions of
paragraph 3 below, if applicable, Stock Rights may be granted to members of the
Board. All grants of Stock Rights to members of the Board shall in all other
respects be made in accordance with the provisions of this Plan applicable to
other eligible persons. Consistent with the provisions of paragraph 3 below,
members of the Board who either (i) are eligible to receive grants of Stock
Rights pursuant to the Plan or (ii) have been granted Stock Rights may vote on
any matters affecting the administration of the Plan or the grant of any Stock
Rights pursuant to the Plan, except that no such member shall act upon the
granting to himself or herself of Stock Rights, but any such member may be
counted in determining the existence of a quorum at any meeting of the Board
during which action is taken with respect to the granting to such member of
Stock Rights.
(d) Exculpation. No member of the Board shall be personally liable for
monetary damages for any action taken or any failure to take any action in
connection with the administration of the Plan or the granting of Stock Rights
under the Plan, provided that this subparagraph 2(d) shall not apply to (i) any
breach of such member's duty of loyalty to the Company or its stockholders, (ii)
acts or omissions not in good faith or involving intentional misconduct or a
knowing violation of law, (iii) acts or omissions that would result in liability
under Section 174 of the General Corporation Law of the State of Delaware, as
amended, and (iv) any transaction from which the member derived an improper
personal benefit.
(e) Indemnification. Service on the Committee shall constitute service as
a member of the Board. Each member of the Committee shall be entitled without
further act on his or her part to indemnity from the Company to the fullest
extent provided by applicable
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law and the Company's Certificate of Incorporation and/or By-laws in connection
with or arising out of any action, suit or proceeding with respect to the
administration of the Plan or the granting of Stock Rights thereunder in which
he or she may be involved by reason of his or her being or having been a member
of the Committee, whether or not he or she continues to be a member of the
Committee at the time of the action, suit or proceeding.
3. Eligible Employees and Others. ISOs may be granted only to employees of
the Company or any Related Corporation. Non-Qualified Options, Awards and
authorizations to make Purchases may be granted to any employee, officer or
director (whether or not also an employee) or consultant of the Company or any
Related Corporation. The Committee may take into consideration a recipient's
individual circumstances in determining whether to grant a Stock Right. The
granting of any Stock Right to any individual or entity shall neither entitle
that individual or entity to, nor disqualify such individual or entity from,
participation in any other grant of Stock Rights.
4. Stock Rights.
(a) Number of Shares Subject to Rights. The stock subject to Stock Rights
shall be authorized but unissued shares of Common Stock of the Company, par
value $.01 per share (the "Common Stock"), or shares of Common Stock reacquired
by the Company in any manner. The aggregate number of shares which may be issued
pursuant to the Plan is 400,000, subject to adjustment as provided in paragraph
13. If any Stock Right granted under the Plan shall expire or terminate for any
reason without having been exercised in full or shall cease for any reason to be
exercisable in whole or in part, the shares of Common Stock subject to such
Stock Right shall again be available for grants of Stock Rights under the Plan.
(b) Nature of Awards. In addition to ISOs and Non-Qualified Options, the
Committee may grant or award other Stock Rights, as follows: (i) Purchases.
Participants may be granted the right to purchase Common Stock, subject to such
restrictions as may be specified by the Committee ("Restricted Shares"). Such
restrictions may include, but are not limited to, the requirement of continued
employment with the Company or a Related Corporation and achievement of
performance objectives. The Committee shall determine the purchase price of the
Restricted Shares, the nature of the restrictions and the performance
objectives, all of which shall be set forth in the agreement relating to each
right awarded to purchase Restricted Shares. The performance objectives shall
consist of (A) one or more in business criteria and (B) a target level or levels
of performance with respect to such criteria. The performance objectives shall
be objective and shall otherwise meet the requirements of Section 162(m)(4)(C)
of the Code. (ii) Awards. Awards of Common Stock may be made to participants as
a bonus or as additional compensation, as may be determined by the Committee.
5. Granting of Stock Rights. Stock Rights may be granted under the Plan at
any time on or after March 28, 1996 and prior to March 27, 2006. The date of
grant of a
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Stock Right under the Plan will be the date specified by the Committee at the
time it grants the Stock Right; provided, however, that such date shall not be
prior to the date on which the Committee acts to approve the grant. Options
granted under the Plan are intended to qualify as performance based compensation
to the extent required under proposed Treasury Regulation Section 1.162-27.
6. Minimum Option Price; ISO Limitations.
(a) Price for Non-Qualified Options, Awards and Purchases. The exercise
price per share specified in the agreement relating to each Non-Qualified Option
granted, and the purchase price per share of stock granted in any Award or
authorized as a Purchase, under the Plan shall in no event be less than the
minimum legal consideration required therefor under the laws of any jurisdiction
in which the Company or its successors in interest may be organized.
Non-Qualified Options granted under the Plan, with an exercise price less than
the fair market value per share of Common Stock on the date of grant, are
intended to qualify as performance-based compensation under Section 1652(m) of
the Code and any applicable regulations thereunder. Any such Non-Qualified
Options granted under the Plan shall be exercisable only upon the attainment of
a pre-established, objective performance goal established by the Committee.
(b) Price for ISOs. The exercise price per share specified in the
agreement relating to each ISO granted under the Plan shall not be less than the
fair market value per share of Common Stock on the date of such grant. In the
case of an ISO to be granted to an employee owning stock possessing more than
ten percent (10%) of the total combined voting power of all classes of stock of
the Company or any Related Corporation, the price per share specified in the
agreement relating to such ISO shall not be less than one hundred ten percent
(110%) of the fair market value per share of Common Stock on the date of grant.
For purposes of determining stock ownership under this paragraph, the rules of
Section 424(d) of the Code shall apply.
(c) $100,000 Annual Limitation on ISO Vesting. Each eligible employee may
be granted Options treated as ISOs only to the extent that, in the aggregate
under this Plan and all incentive stock option plans of the company and any
related Corporation, ISOs do not become exercisable for the first time by such
employee during any calendar year with respect to stock having a fair market
value (determined at the time the ISOs were granted) in excess of $100,000. The
Company intends to designate any Options granted in excess of such limitation as
Non-Qualified Options.
(d) Determination of Fair Market Value. If, at the time an Option is
granted under the Plan, the Company's Common Stock is publicly traded, "fair
market value" shall be determined as of the date of grant or, if the prices or
quotes discussed in this sentence are unavailable for such date, the last
business day for which such prices or quotes are available prior to the date of
grant and shall mean (i) the average (on that date) of the high and low prices
of the Common Stock on the principal national securities exchange on which the
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Common Stock is traded, if the Common Stock is then traded on a national
securities exchange; or (ii) the last reported sale price (on that date) of the
Common Stock on The American Stock Exchange, if the Common Stock is not then
traded on a national securities exchange; or (iii) the closing bid price (or
average of bid prices) last quoted (on that date) by an established quotation
service for over-the-counter securities, if the Common Stock is not reported on
The American Stock Exchange. If the Common Stock is not publicly traded at the
time an Option is granted under the Plan, "fair market value" shall mean the
fair value of the Common Stock as determined by the Committee after taking into
consideration all factors which it deems appropriate, including, without
limitation, recent sale and offer prices of the Common Stock in private
transactions negotiated at arm's length.
7. Option Duration. Subject to earlier termination as provided in
paragraphs 9 and 10 or in the agreement relating to such Option, each Option
shall expire on the date specified by the Committee, but not more than (i) ten
years from the date of grant in the case of Options generally and (ii) five
years from the date of grant in the case of ISOs granted to an employee owning
stock possessing more than ten percent (10%) of the total combined voting power
of all classes of stock of the Company or any Related Corporation, as determined
under paragraph 6(b). Subject to earlier termination as provided in paragraphs 9
and 10, the term of each ISO shall be the term set forth in the original
instrument granting such ISO.
8. Exercise of Option. Subject to the provisions of paragraphs 9 through
12, each Option granted under the Plan shall be exercisable as follows:
(a) Vesting. The Option shall either be fully exercisable on the date of
grant or shall become exercisable thereafter in such installments as the
Committee may specify.
(b) Full Vesting of Installments. Once an installment becomes exercisable,
it shall remain exercisable until expiration or termination of the Option,
unless otherwise specified by the Committee.
(c) Partial Exercise. Each Option or installment may be exercised at any
time or from time to time, in whole or in part, for up to the total number of
shares with respect to which it is then exercisable.
(d) Acceleration of Vesting. The Committee shall have the right to
accelerate the date that any installment of any Option becomes exercisable;
provided that the Committee shall not, without the consent of an optionee,
accelerate the permitted exercise date of any installment of any Option granted
to any employee as an ISO if such acceleration would violate the annual vesting
limitation contained in Section 422(d) of the Code, as described in paragraph
6(c).
9. Termination of Employment. Unless otherwise specified in the agreements
relating to such ISOs, if an ISO optionee ceases to be employed by the Company
and all
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Related Corporations other than by reason of death or disability or as otherwise
specified in paragraph 10, no further installments of his or her ISOs shall
become exercisable, and his or her ISOs shall terminate on the earlier of (a)
ninety (90) days after the date of termination of his or her employment, or (b)
their specified expiration dates. For purposes of this paragraph 9, employment
shall be considered as continuing uninterrupted during any bona fide leave of
absence (such as those attributable to illness, military obligations or
governmental service) provided that the period of such leave does no exceed 90
days or, if longer, any period during which such optionee's right to
reemployment is guaranteed by statute. A bona fide leave of absence with the
written approval of the Committee shall not be considered an interruption of
employment under this paragraph 9, provided that such written approval
contractually obligates the Company or any Related Corporation to continue the
employment of the optionee after the approved period of absence. ISOs granted
under the Plan shall not be affected by an change of employment within or among
the Company and Related Corporations, so long as the optionee continues to be an
employee of the Company or any Related Corporation. Nothing in the Plan shall be
deemed to give any grantee of any Stock Right the right to be retained in
employment or other service by the Company or any Related Corporation for any
period of time.
10. Death; Disability; Voluntary Termination; Breach.
(a) Death. If an ISO optionee ceases to be employed by the Company and all
Related Corporations by reason of his or her death, any ISO owned by such
optionee may be exercised, to the extent otherwise exercisable on the date of
death, by the estate, personal representative or beneficiary who has acquired
the ISO by will or by the laws of descent and distribution, until the earlier of
(i) the specified expiration date of the ISO or (ii) one (1) year from the date
of the optionee's death.
(b) Disability. If an ISO optionee ceases to be employed by the Company
and all Related Corporations by reason of his or her disability, such optionee
shall have the right to exercise any ISO held by him or her on the date of
termination of employment, for the number of shares for which he or she could
have exercised it on that date, until the earlier of (i) the specified
expiration date of the ISO or (ii) one (1) year from the date of the termination
of the optionee's employment. For the purposes of the Plan, the term
"disability" shall mean "permanent and total disability" as defined in Section
22(e)(3) of the Code or any successor statute.
(c) Voluntary Termination; Breach. If an ISO optionee voluntarily leaves
the employ of the Company and all Related Corporations or ceases to be employed
by the Company and all Related Corporations by reason of a finding by the
Committee, after full consideration of the facts presented on behalf of both the
Company and the Optionee, that the ISO optionee has breached his or her
employment or service contract with the Company or any Related Corporation, or
has been engaged in disloyalty to the Company or any Relate Corporation, then,
in either such event, in addition to immediate termination of the Option, the
ISO optionee shall automatically forfeit all shares for which the Company has
not yet
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<PAGE>
delivered share certificates upon refund by the Company of the exercise price of
such Option. Notwithstanding anything herein to the contrary, the Company may
withhold delivery of share certificates pending the resolution of any inquiry
that could lead to a finding resulting in a forfeiture.
11. Assignability. No Stock Right shall be assignable or transferable by
the grantee except by will, by the laws of descent and distribution or, in the
case of Non- Qualified Options only, pursuant to a valid domestic relations
order. Except as set forth in the previous sentence, during the lifetime of a
grantee each Stock Right shall be exercisable only by such grantee.
12. Terms and Conditions of Options. Options shall be evidenced by
instruments (which need not be identical) in such forms as the Committee may
from time to time approve. Such instruments shall conform to the terms and
conditions set forth in paragraphs 6 through 11 hereof and may contain such
other provisions as the Committee deems advisable which are not inconsistent
with the Plan, including restrictions applicable to shares of Common Stock
issuable upon exercise of Options. The Committee may specify that any
Non-Qualified Option shall be subject to the restrictions set forth herein with
respect to ISOs, or to such other termination and cancellation provisions as the
Committee may determine. The Committee may from time to time confer authority
and responsibility on one or more of its own members and/or one or more officers
of the Company to execute and deliver such instruments. The proper officers of
the Company are authorized and directed to take any and all action necessary or
advisable from time to time to carry out the terms of such instruments.
13. Adjustments. Upon the occurrence of any of the following events, an
optionee's rights with respect to Options granted to such optionee hereunder
shall be adjusted as hereinafter provided, unless otherwise specifically
provided in the written agreement between the optionee and the Company related
to such Option:
(a) Stock Dividends and Stock Splits. If the shares of Common Stock shall
be subdivided or combined into a greater or smaller number of shares or if the
Company shall issue any shares of Common Stock as a stock dividend on its
outstanding Common Stock, the number of shares of Common Stock deliverable upon
the exercise of Options shall be appropriately increased or decreased
proportionately, and appropriate adjustments shall be made in the purchase price
per share to reflect such subdivision, combination or stock dividend.
(b) Consolidations or Mergers. If the Company is to be consolidated with
or acquired by another entity in a merger, sale of all or substantially all of
the Company's assets or otherwise (an "Acquisition"), the Committee or the board
of directors of any entity assuming the obligations of the Company hereunder
(the "Successor Board"), shall, as to outstanding Options, either (i) make
appropriate provision for the continuation of such Options by substituting on a
equitable basis for the shares then subject to such Options either
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<PAGE>
(A) the consideration payable with respect to the outstanding shares of Common
Stock in connection with the Acquisition, (B) shares of stock of the surviving
corporation or (C) such other securities as the Successor Board deems
appropriate, the fair market value of which shall approximate the fair market
value of the shares of Common Stock subject to such Options immediately
preceding the Acquisition; or (ii) upon written notice to the optionees, provide
that all Options must be exercised, to the extent then exercisable, within a
specified number of days of the date of such notice, at the end of which period
the Options shall terminate; or (iii) terminate all Options in exchange for a
cash payment equal to the excess of the fair market value of the shares subject
to such Options (to the extent then exercisable) over the exercise price
thereof.
(c) Recapitalization or Reorganization. In the event of a recapitalization
or reorganization of the Company (other than a transaction described in
subparagraph (b) above) pursuant to which securities of the Company or of
another corporation are issued with respect to the outstanding shares of Common
Stock, an optionee upon exercising an Option shall be entitled to receive for
the purchase price paid upon such exercise the securities he or she would have
received if he or she had exercised such Option prior to such recapitalization
or reorganization.
(d) Modification of ISO's. Notwithstanding the foregoing, any adjustments
made pursuant to subparagraphs (a), (b) or (c) with respect to ISOs shall be
made only after the Committee, after consulting with counsel for the Company,
determines whether such adjustments would constitute a "modification" of such
ISOs (as that term is defined in Section 424 of the Code) or would cause any
adverse tax consequences for the holders of such ISOs. If the Committee
determines that such adjustments made with respect to ISOs would constitute a
modification of such ISOs or would cause adverse tax consequences to the
holders, it may refrain from making such adjustments.
(e) Dissolution or Liquidation. In the event of the proposed dissolution
or liquidation of the Company, each Option will terminate immediately prior to
the consummation of such proposed action or at such other time and subject to
such other conditions as shall be determined by the Committee.
(f) Issuances of Securities. Except as expressly provided herein, no
issuance by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall affect, and no adjustment
by reason thereof shall be made with respect to, the number or price of shares
subject to Options. No adjustments shall be made for dividends paid in cash or
in property other than securities of the Company.
(g) Fractional Shares. No fractional shares shall be issued under the Plan
and the optionee shall receive from the Company cash in lieu of such fractional
shares.
(h) Adjustments. Upon the happening of any of the events described in
subparagraphs (a), (b) or (c) above, the class and aggregate number of shares
set forth in
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<PAGE>
paragraph 4 hereof that are subject to Stock Rights which previously have been
or subsequently may be granted under the Plan shall also be appropriately
adjusted to reflect the events described in such subparagraphs. The Committee or
the Successor Board shall determine the specific adjustments to be made under
this paragraph 13 and, subject to paragraph 2, its determination shall be
conclusive.
14. Means of Exercising Options. An Option (or any part or installment
thereof) shall be exercised by giving written notice to the Company at its
principal office address, or to such transfer agent as the Company shall
designate. Such notice shall identify the Option being exercised and specify the
number of shares as to which such Option is being exercised, accompanied by full
payment of the purchase price thereof either (a) in United States dollars in
cash or by check, (b) at the discretion of the Committee, through delivery of
shares of Common Stock having a fair market value equal as of the date of the
exercise to the cash exercise price of the Option, (c) at the discretion of the
Committee, by delivery of the grantee's personal recourse note bearing interest
payable not less than annually at no less than 100% of the lowest applicable
Federal rate, as define din Section 1274(d) of the Code, (d) at the discretion
of the Committee and consistent with applicable law, through the delivery of an
assignment to the Company of a sufficient amount of the proceeds from the sale
of the Common Stock acquired upon exercise of the Option and an authorization to
the broker or selling agent to pay that amount to the Company, which sale shall
be at the participant's direction at the time of exercise, or (e) at the
discretion of the Committee, by any combination of (a), (b), (c) and (d) above.
If the Committee exercises its discretion to permit payment of the exercise
price of an ISO by means of the methods set forth in clauses (b), (c), (d) or
(e) of the preceding sentence, such discretion shall be exercised in writing at
the time of the grant of the ISO in question. The holder of an Option shall not
have the rights of a shareholder with respect to the shares covered by such
Option until the date of issuance of a stock certificate to such holder for such
shares. Except as expressly provided above in paragraph 13 with respect to
changes in capitalization and stock dividends, no adjustment shall be made for
dividends or similar rights for which the record date is before the date such
stock certificate is issued.
15. Term and Amendment of Plan. This Plan was adopted by the Board on
March 28, 1996, subject, with respect to the validation of ISOs granted under
the Plan, to approval of the Plan by the stockholders of the Company at the next
Meeting of Stockholders, or in lieu thereof, by written consent. If the approval
of stockholders is not obtained on or prior to May 30, 1996, any grants of ISOs
under the Plan made prior to that date will be rescinded. The Plan shall expire
at the end of the day on May 30, 2006, (except as to Options outstanding on that
date). Subject to the provisions of paragraph 5 above, Options may be granted
under the Plan prior to the date of stockholder approval of the Plan. The Board
may terminate or amend the Plain in any respect at any time, except that,
without the approval of the stockholders obtained within 12 months before or
after the Board adopts a resolution authorizing any of the following actions:
(a) the total number of shares that may be issued under the Plan may not be
increased (except by adjustment pursuant to paragraph 13); (b) the benefits
accruing to participants under the Plan may not be materially increased;
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(c) the requirements as to eligibility for participation in the Plan may not be
materially modified; (d) the provisions of paragraph 3 regarding eligibility for
grants of ISOs may not be modified; (e) the provisions of paragraph 6(b)
regarding the exercise price at which shares may be offered pursuant to ISOs may
not be modified (except by adjustment pursuant to paragraph 13); (f) the
expiration date of the Plan may not be extended; and (g) the Board may not take
any action which would cause the Plan to fail to comply with Rule 16b-3. Except
as otherwise provided in this paragraph 15, in no event may action of the Board
or stockholders alter or impair the rights of a grantee, without such grantee's
consent, under any Option previously granted to such grantee.
16. Application of Funds. The proceeds received by the Company from the
sale of shares pursuant to Options granted and Purchases authorized under the
Plan shall be used for general corporate purposes.
17. Notice to Company of Disqualifying Disposition. By accepting an ISO
granted under the Plan, each optionee agrees to notify the Company in writing
immediately after such optionee makes a Disqualifying Disposition (as described
in Sections 421, 422 and 424 of the Code and regulations thereunder) of any
stock acquired pursuant to the exercise of ISOs granted under the Plan. A
Disqualifying Disposition is generally any disposition occurring on or before
the later of (a) the date two years following the date the ISO was granted or
(b) the date one year following the date the ISO was exercised.
18. Withholding of Additional Income Taxes. Upon the exercise of a Non-
Qualified Option, the grant of an Award, the making of a Purchase of Common
Stock for less than its fair market value, the making of a Disqualifying
Disposition (as defined in paragraph 17), the vesting or transfer of restricted
stock or securities acquired on the exercise of an Option hereunder, or the
making of a distribution or other payment with respect to such stock or
securities, the Company may withhold taxes in respect of amounts that constitute
compensation includible in gross income. The Committee in its discretion may
condition (i) the exercise of an Option, (ii) the grant of an Award, (iii) the
making of a Purchase of Common Stock for less than its fair market value, or
(iv) the vesting or transferability of restricted stock or securities acquired
by exercising an Option, on the grantee's making satisfactory arrangement for
such withholding. Such arrangement may include payment by the grantee in cash or
by check of the amount of the withholding taxes or, at the discretion of the
Committee, by the grantee's delivery of previously held shares of Common Stock
or the withholding from the shares of Common Stock otherwise deliverable upon
exercise of a Option shares having an aggregate fair market value equal to the
amount of such withholding taxes.
19. Governmental Regulation. The Company's obligation to sell and deliver
shares of the Common Stock under this Plan is subject to the approval of any
governmental authority required in connection with the authorization, issuance
or sale of such shares.
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<PAGE>
Government regulations may impose reporting or other obligations on the
Company with respect to the Plan. For example, the Company may be required to
send tax information statements to employees and former employees that exercise
ISOs under the Plan, and the Company may be required to file tax information
returns reporting the income received by grantees of Options in connection with
the Plan.
20. Governing Law. The validity and construction of the Plan and the
instruments evidencing Stock Rights shall be governed by the laws of Delaware.
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Exhibit 5.1
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August 25, 1997
Winston Resources, Inc.
535 Fifth Avenue
New York, New York 10017
Re: Registration Statement on Form S-8
Gentlemen:
We have examined the Registration Statement to be filed by you with the
Securities and Exchange Commission on or about August 26, 1997 (the
"Registration Statement") in connection with the registration under the
Securities Act of 1933, as amended, of a total of 400,000 shares of your Common
Stock issuable upon exercise of options issued under the Winston Resources, Inc.
1996 Stock Plan (the "Plan"). As counsel for Winston Resources, Inc., we have
examined the proceedings taken and are familiar with the proceedings proposed to
be taken by you in connection with the sale and issuance of the Shares under the
Plan.
It is our opinion that, when issued and sold in the manner referred to in
the Plan, the Shares will be legally and validly issued, fully paid and non
assessable.
We consent to the Registration Statement and further consent to the use of
our name wherever it appears in the Registration Statement and any amendments to
it.
Very truly yours,
NEWMAN TANNENBAUM HELPERN
SYRACUSE & HIRSCHTRITT LLP
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Exhibit 23.1
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CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement
(Form S-8) pertaining to the 1996 Stock Plan of Winston Resources, Inc. of our
report dated March 6, 1997, with respect to the consolidated financial
statements of Winston Resources, Inc. included in its Annual Report (Form
10-KSB) for the year ended December 31, 1996 filed with the Securities and
Exchange Commission.
ERNST & YOUNG LLP
New York, New York
August 18, 1997
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Exhibit 23.2
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<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the Registration Statement
on Form S-8 of Winston Resources, Inc. (the "Company") to be filed on or about
August 21, 1997 with respect to shares of Common Stock of the Company issuable
pursuant to its Incentive Program, of our report dated March 11, 1996 on the
financial statements for the year ended December 31, 1995 (which report
indicates that we did not audit the presentation of pro forma net loss, pro
forma net loss per share and information relating to the fair value of stock
options, as presented in Note 9 to the financial statements) included in the
Annual Report on Form 10-KSB of the Company for the year ended December 31,
1996.
Richard A. Eisner & Company, LLP
_____________________________
New York, New York
August 21, 1997
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