As filed with the Securities and Exchange Commission on June 6, 1997
Registration No. 333-_________
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------------------------
BENTLEY PHARMACEUTICALS, INC.
(Exact Name of Registrant as Specified in its Charter)
<TABLE>
<S> <C>
Florida 59-1513162
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation Identification No.)
or Organization)
Mr. James R. Murphy
Bentley Pharmaceuticals, Inc.
One Urban Centre One Urban Centre
Suite 548 Suite 548
4830 West Kennedy Blvd. 4830 West Kennedy Blvd.
Tampa, Florida 33609 Tampa, Florida 33609
(813) 286-4401 (813) 286-4401
(Address, Including Zip Code, and Telephone Number (Name, Address, Including Zip Code, and Telephone Number,
Including Area Code, of Registrant's Principal Executive Offices) Including Area Code, of Agent For Service)
----------------------------
Copy to:
Mark S. Hirsch, Esq.
Jordan A. Horvath, Esq.
Parker Chapin Flattau & Klimpl, LLP
1211 Avenue of the Americas
New York, New York 10036
-----------------------------
Approximate date of commencement of proposed sale to the public: From time
to time after this Registration Statement becomes effective, as determined by
market conditions.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box.
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. X
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. _____________________
If this Form is a post-effective amendment filed pursuant to rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering.
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box.
CALCULATION OF REGISTRATION FEE
============================================================================================================
Proposed Proposed
Maximum Maximum Amount Of
Title of Shares Amount To Aggregate Price Aggregate Registration
To Be Registered Be Registered Per Share (1) Offering Price (1) Fee
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Common Stock, $.02 par value 2,103,150 shares $3.4063 $7,163,854.70 $2,171
per share
============================================================================================================
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457, based on the average of the high and low reported
sales prices on the American Stock Exchange on June 3, 1997.
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until this Registration Statement shall become
effective on such date as the Commission, acting pursuant to Section 8(a), may
determine.
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Subject to Completion, Dated June 6, 1997
PROSPECTUS
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2,103,150 Shares
BENTLEY PHARMACEUTICALS, INC.
Common Stock
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This Prospectus relates to up to 2,103,150 shares (the "Shares") of
Common Stock, par value $.02 per share (the "Common Stock"), of Bentley
Pharmaceuticals, Inc. (the "Company"). The Shares may be offered by certain
stockholders of the Company (the "Selling Stockholders") in transactions on the
American Stock Exchange, the Pacific Exchange, Inc., in negotiated transactions,
or in a combination of such methods of sale, at fixed prices which may be
changed, at market prices prevailing at the time of sale, at prices related to
such prevailing market prices or at negotiated prices. The Selling Stockholders
may effect such transactions to or through broker-dealers and such
broker-dealers may receive compensation in the form of discounts, concessions or
commissions from the Selling Stockholders and/or the purchasers of such
securities for whom such broker-dealers may act as agent or to whom they may
sell as principals, or both (see "Plan of Distribution" and "Selling
Stockholders" below). The Company will not receive any of the proceeds from the
sale of the Shares (see "Use of Proceeds," "Selling Stockholders" and "Plan of
Distribution" below). The Company has agreed to bear all expenses in connection
with the registration of the Shares.
The Company's Common Stock is traded on the American Stock Exchange
and the Pacific Exchange, Inc. under the symbol "BNT". The last reported sale
price of the Company's Common Stock on the American Stock Exchange on June 3,
1997 was $3.375 per share. The Company's executive offices are located at One
Urban Centre, Suite 548, 4830 West Kennedy Boule vard, Tampa, Florida 33609, and
its telephone number is (813) 286-4401.
------------------------------------
THE SECURITIES OFFERED HEREBY INVOLVE A HIGH DEGREE OF RISK AND
PROSPECTIVE PURCHASERS SHOULD CAREFULLY CONSIDER THE
FACTORS SPECIFIED UNDER THE CAPTION "RISK FACTORS"
LOCATED ON PAGE 6 OF THIS PROSPECTUS.
------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION NOR HAS THE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
------------------------------------
The date of this Prospectus is June __, 1997.
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AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "1934 Act"), and, in accordance
therewith, files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information filed by the Company can be inspected and
copied at the public reference facilities maintained by the Commission at 450
Fifth Street, N.W., Washington, D.C. 20549, and at the following Regional
Offices of the Commission: New York Regional Office, 7 World Trade Center, Suite
1300, New York, New York 10048; and Chicago Regional Office, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661. Copies of such material may be
obtained from the Public Reference Section of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549, at prescribed rates. Such reports, proxy
statements and other information can also be inspected at the offices of the
American Stock Exchange, 86 Trinity Place, New York, New York 10006, on which
the Company's Common Stock is listed.
This Prospectus does not contain all the information set forth in
the Form S-3 Registration Statement (No.333-_____) (the "Registration
Statement") of which this Prospectus is a part, including exhibits relating
thereto, which has been filed with the Commission in Washington, D.C. Copies of
the Registration Statement and the exhibits thereto may be obtained, upon
payment of the fee prescribed by the Commission, or may be examined without
charge, at the office of the Commission. This Registration Statement has been
filed electronically through the Electronic Data Gathering, Analysis and
Retrieval System (EDGAR) and is publicly available through the Commission's web
site (http://www.sec.gov).
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1996; the Company's Proxy Statement for the 1997 Annual Meeting of
Stockholders; the Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1997; the description of the Company's Common Stock contained in the
Company's Registration Statement on Form 8-A filed on July 20, 1990, all as
filed pursuant to the 1934 Act, including any amendment or report filed for the
purpose of updating such descriptions, are hereby incorporated by reference.
Each document filed subsequent to the date of this Prospectus
pursuant to Section 13(a), 13(c), 14 or 15(d) of the 1934 Act prior to the
termination of this offering shall be deemed to be incorporated by reference in
this Prospectus and to be a part hereof from the date of the filing of such
documents. Any statement contained in a document incorporated or deemed to be
incorporated herein by reference shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any other subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement.
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<PAGE>
The Company will provide without charge to each person, including
any beneficial owner, to whom a copy of this Prospectus is delivered, upon the
written or oral request of any such person, a copy of any document incorporated
by reference in this Prospectus (other than exhibits unless such exhibits are
expressly incorporated by reference in such documents). Requests should be
directed to Bentley Pharmaceuticals, Inc., One Urban Centre, Suite 548, 4830
West Kennedy Boulevard, Tampa, Florida 33609, (813) 286-4401, Attention: Michael
D. Price, Chief Financial Officer.
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<PAGE>
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more
detailed information appearing elsewhere in this Prospectus.
The Offering
Common Stock Offered by Selling Stockholders............ 2,103,150 shares
Common Stock Outstanding Prior to the Offering.......... 3,378,186 shares
Common Stock to be Outstanding After
the Offering (1)...................................... 5,444,936 shares
American Stock Exchange Symbol of
the Common Stock...................................... BNT
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(1) Excludes (i) an aggregate of 14,193,000 shares of Common Stock reserved
for issuance upon conversion or exercise of the securities issuable in
the Company's 1996 public offering (the "Public Offering") consisting of
2,760,000 shares issuable upon conversion of the debentures issued in the
Public Offering (the "Debentures"), 228,000 shares of Common Stock
reserved for issuance upon conversion of the Debentures included in the
units which were issued in the Public Offering (the "Units") upon
exercise of the underwriter warrants (the "Underwriter Warrants") which
were issued in the Public Offering, 6,900,000 shares of Common Stock
issuable upon the exercise of the Class A Warrants issued in the Public
Offering, 3,450,000 shares of Common Stock issuable upon the exercise of
the Class B Warrants which may be issued pursuant to the exercise of the
Class A Warrants issued in the Public Offering, 570,000 shares of Common
Stock issuable upon exercise of the Class A Warrants included in the
Units issuable upon the exercise of the Underwriter Warrants and 285,000
shares of Common Stock issuable upon exercise of the Class B Warrants
issuable upon the exercise of the Class A Warrants which are included in
the Units issuable pursuant to the Underwriter Warrants; (ii) 318,847
shares of Common Stock reserved for issuance upon exercise of outstanding
stock purchase warrants which were issued in various transactions not
related to the Public Offering; (iii) 57,100 shares of Common Stock
reserved for issuance upon exercise of stock options; (iv) 14,960 shares
of Common Stock reserved for issuance upon conversion of the Series A
Preferred Stock or upon conversion of 9% Convertible Debentures due 2016
into which the Series A Preferred Stock is exchangeable; and (v) 2,183
shares of Common Stock reserved for issuance to current members of the
Board of Directors of the Company as compensation.
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<PAGE>
RISK FACTORS
The securities offered hereby are speculative and involve a substantial
degree of risk. Prospective investors should give careful consideration to,
among other items, the following factors prior to making an investment decision.
Certain statements in this Prospectus that are not historical facts
constitute "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. Such forward-looking statements
involve known and unknown risks, uncertainties and other factors which may cause
the actual results of the Company to be materially different from the historical
results or from any results, expressed or implied by such forward-looking
statements. Such risks, uncertainties and other factors include, but are not
limited to, the following risks.
Financial Risks
History of Operating Losses; Accumulated Deficit; Uncertainty of Future
Financial Results. As of March 31, 1997, the Company had a cumulative deficit of
approximately $67,993,000. The Company has realized significant losses in the
past and could have quarterly and annual losses in the future. The Company has
not generated any profits from operations. The Company has realized quarter to
quarter fluctuations in its results in the past and, although such fluctuations
have been minimal in recent quarters, they may be significant in the future.
Consequently, the Company may continue to operate at a loss for the foreseeable
future and there can be no assurance that the Company's business will operate on
a profitable basis.
Negative Cash Flow From Operating Activities. The Company is experiencing
negative cash flow from operations resulting in the need to fund ongoing
operations from financing activities. In October 1995 the Company completed two
private placements resulting in net proceeds to the Company of approximately
$1,590,000, all of which was used for working capital purposes. The Public
Offering resulted in proceeds to the Company of approximately $5,700,000. A
substantial portion of the proceeds of the Public Offering has been used to
repay the debt incurred in the private placements. The future existence and
profitability of the Company is dependent upon its ability to obtain additional
funds to finance operations and expand operations in an effort to achieve
profitability from operations. No assurance can be given that the Company's
business will ultimately generate sufficient revenue to fund the Company's
operations on a continuing basis.
Limited Revenues. Although the Company was founded in 1974, it has only
generated revenue from product-related sales since August 1991. The Company has
used cash from financing activities to fund its operations. The Company has made
progress toward commercialization of specific products and has commenced
commercialization of others. The Company is now generating revenues from sales
of products of its subsidiaries, Laboratorios Belmac, S.A., a pharmaceutical
manufacturer located in Spain ("Laboratorios Belmac") and Chimos/LBF, S.A., a
company based in France which distributes specialty pharmaceutical products and
chemicals in France ("Chimos"). Chimos and Laboratorios Belmac were acquired by
the Company in August 1991 and February 1992, respectively. See "Negotiations to
Sell Chimos." Substantial amounts of time and financial and other resources will
be required to complete the development and clinical testing of the Company's
products
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<PAGE>
currently under development. Due to its limited cash resources, the Company has
suspended most of its research and development activities pending the selection
of strategic partners for development and marketing. There is no assurance that
the Company will receive additional funding necessary to continue research and
development activities or that it will otherwise succeed in developing any
additional products with commercially valuable applications.
Additional Financing Requirements. The Company believes that its emphasis
on product distribution in France and Spain, strategic alliances and product
acquisitions together with careful management of its research and development
activities and the net proceeds from the Public Offering, should provide
sufficient liquidity to enable it to conduct its existing operations into 1998,
of which there can be no assurance. However, the Company's pharmaceutical
products being developed and which may be developed will require the investment
of substantial additional time as well as financial and other resources in order
to become commercially successful. Following the development period, the
Company's products will generally be required to go through lengthy governmental
approval processes, including extensive clinical testing, followed by market
development. The Company's operating revenues and cash resources may not be
sufficient over the next several years for the commercialization by itself of
any of the products currently in development. Consequently, the Company may
require additional licensees or partners and/or additional financing. There can
be no assurance, however, that the Company can conclude such commercial
arrangements or obtain additional capital when needed on acceptable terms, if at
all.
Possible Restriction on Ability to Utilize Net Operating Loss Carry
Forwards Resulting from Change in Equity Ownership and Change in Tax Year. At
December 31, 1996, the Company has net operating loss (the "NOLs") carryforwards
of approximately $38,000,000 available to offset future U.S. taxable income. The
Company calculates that its use of the NOLs will be limited to approximately
$3,000,000 each year as a result of stock, option and warrant issuances during
prior fiscal years which resulted in an ownership change of more than 50% of the
Company's outstanding equity. Additionally, approximately $1,800,000 of the NOLs
generated in 1995 available to offset future U.S. taxable income will be limited
to approximately $300,000 per year over the next six years due to the change in
tax year end during 1995. If not offset against future taxable income, the NOL
carryforwards will expire in tax years 1997 through 2011. The Company's
subsidiaries in France and Spain have NOL carry forwards of approximately
$13,300,000 and $2,700,000, respectively. These will expire in various years
ending in 2001.
Business Risks
No Assurance of Successful and Timely Development of New Products. Although
the Company has a limited number of products in various stages of development,
including pre-clinical testing and clinical trials, the Company has not yet
substantially marketed any of these products other than Biolid(R) (the Company's
macrolide antibiotic) in France, the marketing of which has since been
suspended. During a periodic review of the dossier of Biolid by France's
Ministry of Health in 1993 which was completed shortly after the Company had
negotiated the sale of its rights to the sachet formulation of Biolid in France,
the Ministry required the suspension of marketing of Biolid pending provision by
the Company of additional clinical data regarding the mechanisms for the
comparatively enhanced absorption of the Biolid sachet. The suspension was
unrelated to safety or efficacy issues,
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<PAGE>
but has not been lifted since the Company has not had sufficient resources to
conduct the study required. See "Risks Inherent in Pharmaceutical Development;
Dependency on Regulatory Approvals" below. There can be no assurance that the
Company will be able to develop large scale production of any particular product
for clinical trials or eventual commercial production. The marketing of certain
of the Company's products could be adversely affected by delays in developing
large-scale production processes, developing or acquiring production facilities
or obtaining regulatory approval for such processes or facilities.
Risks Inherent in Pharmaceutical Development; Dependence on Regulatory
Approvals. The process of creating, scaling-up, manufacturing and marketing any
new human pharmaceutical product is inherently risky. There can be no assurance
that any drug under development will be safe and effective. Moreover,
pharmaceutical products are subject to significant regulation. Any human
pharmaceutical product developed by the Company would require clearance by
Spain's Ministry of Health for sales in Spain, France's Ministry of Health for
sales in France, the U.S. Food and Drug Administration ("FDA") for sales in the
United States and similar agencies in other countries. The process of obtaining
these approvals is costly and time-consuming, and there can be no assurance that
such approvals will be granted. In general, only a small percentage of new
pharmaceutical products achieve commercial success. Such governmental regulation
may prevent or substantially delay the marketing of the Company's products and
may cause the Company to undertake costly procedures with respect to its
research and development and clinical testing operations which may furnish a
competitive advantage to more substantially capitalized companies which compete
with the Company. In addition, the Company is required, in connection with its
activities, to comply with good manufacturing practices (GMPs) and local, state
and federal regulations. Non-compliance with these regulations could have a
material adverse effect on the Company and/or prevent the commercialization of
the Company's products.
Dependency on Others; Discontinuation of Certain Marketing Activities. The
Company relies on outside contractors for manufacturing of the products it
distributes in France. Until the distribution agreement between Genzyme
Corporation and Chimos expired on March 31, 1996, the Company relied on sales of
Ceredase, a drug used in the treatment of Gaucher's Disease and other products
by Chimos to Pharmacie Centrale des Hopitaux. Sales to Pharmacie Centrale des
Hopitaux accounted for approximately 10%, 23% and 30% of the Company's sales for
the years ended December 31, 1996, 1995 and 1994, respectively. Consequently,
the Company's sales in France declined significantly beginning in the second
quarter of 1996 as a result of the expiration of the distribution agreement.
Notwithstanding the relative significance of its sales volume, the Ceredase
gross margins as a percentage of sales were minimal, therefore the impact on
operating profits was not material. The Company is exploring alternative uses
for its working capital that has historically supported the Ceredase
distribution arrangement. Chimos, as one of the authorized distributors of
Orphan Drugs in France, is occasionally contacted by manufacturers of such
products outside of France to act as their distributor. In addition, the Company
from time to time supplies Chimos with a list of Orphan Drugs approved by the
FDA in the United States and Chimos contacts their manufacturers to seek
becoming their distributor in France. See "Negotiations to Sell Chimos."
Negotiations to Sell Chimos. The Company is currently engaged in
negotiations with a subsidiary of a large European conglomerate to sell Chimos.
The transaction is expected to be
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finalized in the second quarter of 1997. As no definitive agreement has been
signed, there can be no assurance that such sale will be consummated. Since the
expiration of the Ceredase distribution agreement, Chimos has been generating
revenues at the rate of approximately $5.5 million per annum. See "Dependency on
Others; Discontinuation of Certain Marketing Activities."
Uncertainty of Pharmaceutical Pricing, Profitability and Related Matters.
The levels of revenues and profitability of pharmaceutical companies may be
affected by the continuing efforts of governmental and third party payers to
contain or reduce the costs of health care through various means. For example,
in certain foreign markets, including Spain and France, pricing or profitability
of prescription pharmaceuticals is subject to government control. In the United
States, there have been, and the Company expects that there will continue to be,
a number of federal and state proposals to implement similar government control.
While the Company cannot predict whether any such legislative or regulatory
proposals will be adopted, the adoption of such proposals could have a material
adverse effect on the Company's business, financial condition and profitability.
In addition, sales of prescription pharmaceuticals are dependent in part on the
availability of reimbursement to the consumer from third party payers, such as
government and private insurance plans. Third party payers are increasingly
challenging the prices charged for medical products and services. If the Company
succeeds in bringing one or more products to the market, there can be no
assurance that these products will be considered cost effective and that
reimbursement to the consumer will be available or will be sufficient to allow
the Company to sell its products on a competitive basis.
Unpredictability of Patent Protection; Proprietary Technology. The Company
has filed numerous patent applications and has been granted a number of patents.
However, there can be no assurance that its pending applications will be issued
as patents or that any of its issued patents will afford adequate protection to
the Company or its licensees. Other private and public entities have also filed
applications for, or have been issued, patents and are expected to obtain
patents and other proprietary rights to technology which may be harmful to the
commercialization of the Company's products. The ultimate scope and validity of
patents which are now owned by or may be granted to third parties in the future,
the extent to which the Company may wish or be required to acquire rights under
such patents, and the cost or availability of such rights cannot be determined
by the Company at this time. In addition, the Company also relies on unpatented
proprietary technology in the development and commercialization of its products.
There is no assurance that others may not independently develop the same or
similar technology or obtain access to the Company's proprietary technology.
The Company also relies upon trade secrets, unpatented proprietary know-how
and continuing technological innovations to develop its competitive position.
All of the Company's employees with access to the Company's proprietary
information have entered into confidentiality agreements and have agreed to
assign to the Company any inventions relating to the Company's business made by
them while in the Company's employ. However, there can be no assurance that
others may not acquire or independently develop similar technology or, if
patents in all major countries are not issued with respect to the Company's
products, that the Company will be able to maintain information pertinent to
such research as proprietary technology or trade secrets.
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Rapid Technological Change. The pharmaceutical industry has undergone rapid
and significant technological change. The Company expects the technology to
continue to develop rapidly, and the Company's success will depend significantly
on its ability to maintain a competitive position. The Company has recently
shifted its strategic focus so that it does not rely on research and development
of pharmaceuticals from concept through marketing. Instead, it seeks to acquire
late-stage development compounds that can be marketed within approximately one
year and currently-marketed products. Rapid technological development may result
in actual and proposed products or processes becoming obsolete before the
Company recoups a significant portion of related research and development,
acquisition and commercialization costs.
Competition. The Company is in competition with other pharmaceutical
companies, biotechnology firms and chemical companies, many of which have
substantially greater financial, marketing and human resources than those of the
Company (including, in some cases, substantially greater experience in clinical
testing, production and marketing of pharmaceutical products). The Company also
experiences competition in the development of its products and processes from
individual scientists, hospitals, universities and other research institutions
and, in some instances, competes with others in acquiring technology from these
sources.
Uncertainty of Orphan Drug Designation. An Orphan Drug is a product or
products used to treat a rare disease or condition, which, as defined under
United States law, is a disease or condition that affects populations of less
than 200,000 individuals or, if victims of a disease number more than 200,000,
the sponsor establishes that it does not realistically anticipate its product
sales will be sufficient to recover its costs. If a product is designated an
Orphan Drug, then the sponsor is entitled to receive certain incentives to
undertake the development and marketing of the product. In Spain, Orphan Drugs
are given a preference in the pharmaceutical review process by Spain's Ministry
of Health if it can be shown that the product is an important therapeutic agent
and there is unequivocal data supporting its efficacy. The Ministry of Health
has the authority to require pharmaceutical manufacturers to continue to produce
products which are Orphan Drugs regardless of their commercial potential. As
required by the Ministry of Health, Laboratorios Belmac currently manufactures
and distributes one Orphan Drug, Anacalcit, which is used in the treatment of
nephrolithiasis. In France, Orphan Drug status is granted by France's Ministry
of Health. Chimos does not currently own in its portfolio any Orphan Drugs, but
does act as a distributor for other companies who have Orphan Drug status in
France. The Company does not currently market any Orphan Drugs in the United
States.
Attraction and Retention of Key Personnel. The Company believes that it has
been able to attract skilled and experienced management and scientific
personnel. There can be no assurance, however, that the Company will continue to
attract and retain personnel of high caliber. Since 1992, five individuals have
served as the Company's chief executive officer. This instability in the
Company's management in the past has hampered the Company's growth. While the
Company believes that it has assembled an effective management team, the loss of
several individuals who are considered key management or scientific personnel of
the Company could have an adverse impact on the Company. Although all
discoveries and research of each employee made during employment remain the
property of the Company, the Company has not entered into noncompetition
agreements with its key employees and such employees would therefore be able to
leave and compete with the Company.
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Risk of Product Liability. The Company faces an inherent business risk of
exposure to product liability claims in the event that the use of its technology
or prospective products is alleged to have resulted in adverse effects. While
the Company has taken, and will continue to take, what it believes are
appropriate precautions, there can be no assurance that it will avoid
significant liability exposure. The Company maintains product liability
insurance in the amount of $5 million. However, there is no assurance that this
coverage will be adequate in terms and scope to protect the Company in the event
of a product liability claim. In connection with the Company's clinical testing
activities, the Company may, in the ordinary course of business, be subject to
substantial claims by, and liability to, subjects who participate in its
studies.
Risk of Doing Business Outside the United States. Nearly all of the
Company's revenues during 1995 and 1996 have been generated outside the United
States, from the Company's subsidiaries in France and Spain. There are risks in
operation outside the United States, including, among others, the difficulty of
administering businesses abroad, exposure to foreign currency fluctuations and
devaluations or restrictions on money supplies, foreign and domestic export law
and regulations, taxation, tariffs, import quotas and restrictions and other
political and economic events beyond the Company's control. The Company has not
experienced any material effects of these risks as of yet, however there can be
no assurance that they will not have such an effect in the future.
Certain Florida Legislation. The State of Florida has enacted legislation
that may deter or frustrate takeovers of Florida corporations. The Florida
Control Share Act generally provides that shares acquired in excess of certain
specified thresholds will not possess any voting rights unless such voting
rights are approved by a majority vote of a corporation's disinterested
stockholders. The Florida Affiliated Transactions Act generally requires
supermajority approval by disinterested stockholders of certain specified
transactions between a public corporation and holders of more than 10% of the
outstanding voting shares of the corporation (or their affiliates). Florida law
also authorizes the Company to indemnify the Company's directors, officers,
employees and agents. The Company has adopted a by-law with such an indemnity.
Market Risks
Volatility of Share Price. The market price of the Company's shares since
its initial public offering in February 1988 has been volatile. In July 1995 the
Company effected a one-for-ten reverse stock split. As recently as the first
quarter of 1993, the market price of the Company's Common Stock was $63.75
(giving retroactive effect to the reverse stock split). Factors such as
announcements of technological innovations or new commercial products by the
Company or its competitors, the results of clinical testing, patent or
proprietary rights, developments or other matters may have a significant impact
on the market price of the Common Stock.
Authorization of Preferred Stock. The Company's Articles of Incorporation
authorize the issuance of 2,000,000 shares of "blank check" preferred stock (the
"Preferred Stock") with such designations, rights and preferences as may be
determined from time to time by the Board of Directors. Accordingly, the Board
of Directors is empowered, without stockholder approval, to issue Preferred
Stock with dividend, liquidation, conversion or other rights which could
adversely affect the voting power or other rights of the holders of the Common
Stock. In the event of issuance, the
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Preferred Stock could be utilized, under certain circumstances, as a method of
discouraging, delaying or preventing a change of control of the Company. There
are currently 60,000 shares of Series A Convertible Exchangeable Preferred Stock
outstanding.
Underwriter Warrants and Outstanding Convertible Securities. The Company
sold to the Underwriter, for nominal consideration, warrants to purchase up to
570 Units exercisable for a period of four years, commencing one year from the
date of sale, at an exercise price of $1,200 per Unit. In addition to warrants
issued in the Public Offering, the Company currently has outstanding 2,542,697
options and warrants to purchase Common Stock at exercise prices ranging from
$2.50 to $177.50. The holders of the Underwriter Warrants and of the warrants
and options are likely to exercise or convert them at a time when the Company
would be able to obtain additional equity capital on terms more favorable than
those provided by such warrants, options and Underwriter Warrants. The
Underwriter Warrants and certain other warrants and options also grant to the
holders certain demand registration rights and "piggy back" registration rights.
These obligations may hi
nder the Company's ability to obtain future financing.
Lack of Dividends; Inability to Fund Dividend Payments. The Company has not
paid dividends on its Common Stock since its inception and does not intend to
pay any dividends on its Common Stock in the foreseeable future. The holders of
the Company's outstanding Series A Preferred Stock have been entitled to receive
cumulative dividends, payable annually on October 15, since 1992, out of funds
legally available therefor at the rate of $2.25 per year on each share of Series
A Preferred Stock. As of December 31, 1996 and 1995, 230,000 out of the 290,000
Series A Preferred Stock had been converted into 51,200 shares of Common Stock
and all 340,000 shares of the Series B Preferred Stock had been converted into
56,100 shares of Common Stock. The Company exercised its right to adjust the
conversion rate of the Series A Preferred Stock in lieu of paying annual
dividend payments due commencing October 15, 1992. The conversion rate was
adjusted by the Company from an initial conversion rate of approximately .21739
shares of Common Stock for each share of Series A Preferred Stock to a
conversion rate of .3088. The Company also adjusted the conversion rate for the
Series B Preferred Stock from an initial conversion rate of .15625 shares of
Common Stock for each share of Series B Preferred Stock to a conversion rate of
.1703. The arrearages on the payment of dividends have the effect of limiting
the payment of cash dividends to holders of Common Stock and giving the Series A
Preferred Stockholders, as a class, the right to designate two directors. As of
the date hereof, the holders of the Series A Preferred Stock have not exercised
their right to elect such directors. There can be no assurance that cash flow
from the future operations of the Company will be sufficient to meet these
obligations. Under the terms of the Indenture, the Company is restricted from
paying cash dividends on its capital stock.
-12-
<PAGE>
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of the Selling
Stockholders' Shares.
SELLING STOCKHOLDERS AND PLAN OF DISTRIBUTION
The Company has issued or may issue an aggregate of 2,103,150 shares of
Common Stock to the Selling Stockholders that are being offered pursuant to this
Prospectus. The Selling Stockholders have advised the Company that sales of the
shares of Common Stock may be effected from time to time by themselves, their
pledgees and/or their donees, in transactions (which may include block
transactions) on the American Stock Exchange, the Pacific Exchange, Inc., on the
over-the-counter market, in negotiated transactions, through the writing of
options on the Common Stock or a combination of such methods of sale, at fixed
prices that may be changed, at market prices prevailing at the time of sale, or
at negotiated prices. The Selling Stockholders, their pledgees and/or their
donees, may effect such transactions by selling Common Stock directly to
purchasers or through broker-dealers that may act as agents or principals. Such
broker-dealers may receive compensation in the form of discounts, concessions or
commission from the Selling Stockholders and/or the purchasers of shares of
Common Stock for whom such broker-dealers may act as agents or to whom they sell
as principals, or both (which compensation as to a particular broker-dealer
might be in excess of customary commissions). The Company has agreed to bear all
expenses in connection with the registration of the Shares.
The Selling Stockholders, their pledgees and/or their donees, and any
broker-dealers that act in connection with the sale of the shares of Common
Stock as principals may be deemed to be "underwriters" within the meaning of
Section 2(11) of the Securities Act and any commissions received by them and any
profit on the resale of the shares of Common Stock as principals might be deemed
to be underwriting discounts and commissions under the Securities Act. The
Selling Stockholders, their pledgees and/or their donees, may agree to indemnify
any agent, dealer or broker-dealer that participates in transactions involving
sales of the shares of Common Stock against certain liabilities, including
liabilities arising under the Securities Act.
The following table sets forth certain information with respect to persons
for whom the Company is registering the Selling Stockholders' Shares for resale
to the public. Beneficial ownership of the Selling Stockholders' Shares by such
Selling Stockholders after the offering will depend on the number of Selling
Stockholders' Shares sold by each Selling Stockholder.
-13-
<PAGE>
<TABLE>
Beneficial
Beneficial Ownership
Ownership After Offering if
Prior to Offering Maximum Maximum is Sold
----------------- Amount to ---------------
Selling Stockholder Amount Percent be Sold Amount Percent
- ------------------- ------ ------- ------- ------ -------
<S> <C> <C> <C> <C> <C>
James R. Murphy (1) 661,787 16.52 653,000 8,787 *
Robert M. Stote (2) 591,800 15.02 572,500 19,300 *
Michael D. Price (3) 434,803 11.49 432,500 2,303 *
Walter Light (4) 550,594 14.89 350,000 200,594 5.42
Plexus Ventures, Inc. (5) 30,000 * 30,000 0 0
Ranald Stewart, Jr. (6) 40,400 1.19 40,000 400 *
Jeffery Harris (7) 6,400 * 6,400 0 0
Ronald Trahan Associates, Inc. (8) 18,750 * 18,750 0 0
- ----------------------
* Less than one percent
</TABLE>
(1) Mr. Murphy's shares include 653,000 shares of Common Stock which Mr.
Murphy has the right to acquire pursuant to stock options; 3,000 shares
of Common Stock which Mr. Murphy has the right to acquire pursuant to
stock purchase warrants; and 1,200 shares of Common Stock which Mr.
Murphy has the right to acquire upon the conversion of 12% Convertible
Debentures. Mr. Murphy is the Chairman of the Board, President and Chief
Executive Officer and a Director of the Company.
(2) Dr. Stote's shares include 572,500 shares of Common Stock which Dr. Stote
has the right to acquire pursuant to stock options; 15,000 shares of
Common Stock which Dr. Stote has the right to acquire pursuant to stock
purchase warrants; and 4,000 shares of Common Stock which Dr. Stote has
the right to acquire upon the conversion of 12% Convertible Debentures.
Dr. Stote is the Senior Vice President, Chief Science Officer and a
Director of the Company.
(3) Mr. Price's shares include 432,500 shares of Common Stock which Mr. Price
has the right to acquire pursuant to stock options; 1,500 shares of
Common Stock which Mr. Price has the right to acquire pursuant to stock
purchase warrants; and 400 shares of Common Stock which Mr. Price has the
right to acquire upon the conversion of 12% Convertible Debentures. Mr.
Price is the Vice President, Chief Financial Officer, Secretary,
Treasurer and a Director of the Company.
(4) Mr. Light's shares include 350,000 shares of Common Stock which Mr. Light
has the right to acquire pursuant to stock purchase warrants.
(5) The shares of Plexus Ventures, Inc. represent shares earned by Plexus
Ventures, Inc. as compensation for consulting services rendered to the
Company.
(6) Mr. Stewart's shares include 40,000 shares of Common Stock which Mr.
Stewart has the right to acquire pursuant to stock options. Mr. Stewart
was a former Officer and Director of the Company.
(7) Mr. Harris' shares represent shares of Common Stock which Mr. Harris
received from Mr. Stewart in partial settlement of a judgment against Mr.
Stewart.
(8) The shares of Ronald Trahan Associates, Inc. represent shares of Common
Stock which Ronald Trahan Associates, Inc. has the right to acquire
pursuant to stock purchase warrants earned as compensation for consulting
services rendered to the Company.
-14-
<PAGE>
DESCRIPTION OF SECURITIES
Common Stock
The Company is authorized to issue 35,000,000 shares of Common Stock, par
value $.02 per share. The holders of Common Stock are entitled to cast one vote
for each share held at all stockholder meetings for all purposes, including the
election of directors, and to share equally on a per share basis in such
dividends as may be declared by the Board of Directors out of funds legally
available therefor. Upon liquidation or dissolution, each outstanding share of
Common Stock will be entitled to share equally in the assets of the Company
legally available for distribution to stockholders, after the payment of all
debts and other liabilities and any payments due to holders of shares of
Preferred Stock.
No holder of Common Stock has a preemptive or preferential right to
purchase or subscribe for any unissued or additional authorized stock or any
securities of the Company convertible into shares of its Common Stock.
The Common Stock does not have cumulative voting rights which means that
the holders of more than 50% of the Common Stock voting for the election of
directors can elect 100% of the directors of the Company if they choose to do
so. The By-Laws of the Company require that a majority of the issued and
outstanding shares of the Company be represented to constitute a quorum and
transact business at a stockholders' meeting.
In accordance with the Amended and Restated Articles of Incorporation of
the Company, as amended, the Board of Directors of the Company is divided into
three classes, with the classes as nearly equal in number as possible. The term
of each class of directors is three years, with the term of one class expiring
each year in rotation. The consent of the holders of 66 2/3% of all outstanding
shares is required to fill a vacancy on the Board of Directors created by death
or resignation or to remove a director, and then only for cause. These
provisions are designed to provide continuity of directors. In addition, a vote
of 66 2/3% of all outstanding shares is required to approve a merger, a sale of
substantially all of the Company's assets and similar transactions, or to amend
any provision of the Amended and Restated Articles of Incorporation relating to
officers and directors.
Transfer Agent, Registrar and Warrant Agent
The Transfer Agent and Registrar for the Common Stock is American Stock
Transfer & Trust Company, 40 Wall Street, New York, New York 10005.
-15-
<PAGE>
LEGAL MATTERS
Parker Chapin Flattau & Klimpl, LLP, New York, New York, is acting as
counsel to the Company and is passing on the validity of the shares of Common
Stock offered hereby.
EXPERTS
The consolidated financial statements and the related financial statement
schedule of the Company incorporated in this Prospectus by reference from the
Company's Annual Report on Form 10-K for the year ended December 31, 1996, have
been audited by Deloitte & Touche LLP, independent auditors, as stated in their
reports which are incorporated herein by reference and have been so incorporated
in reliance upon the reports of such firm, given upon their authority as experts
in accounting and auditing.
-16-
<PAGE>
- -------------------------------------------- ---------------------
No dealer, salesperson or any other person 2,103,150 Shares
has been authorized to give any information
or to make any representation not contained BENTLEY
in this Prospectus and, if given or made, PHARMACEUTICALS, INC.
such information or representation must not
be relied upon as having been authorized by Common Stock
the company, by the Selling Stockholder or
by any other person. This Prospectus does
not constitute an offer to sell or a
solicitation of an offer to buy the
securities offered hereby to any person or
by anyone in any jurisdiction in which such
offer or solicitation may not lawfully be
made. Neither the delivery of this
Prospectus nor any sale made hereunder
shall, under any circumstances, create any
implication that there has been no change in
the affairs of the Company since the date
hereof.
-----------------
TABLE OF CONTENTS
Page ----------
---- PROSPECTUS
----------
Available Information......................3
Incorporation of Certain Documents
by Reference..........................3
Prospectus Summary.........................5
Risk Factors...............................6
Use of Proceeds...........................13
Selling Stockholders and Plan of
Distribution.........................13
Description of Securities.................15
Legal Matters.............................16
Experts...................................16
June __, 1997
- -------------------------------------------- ---------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
--------------------------------------------
It is estimated that the following expenses will be incurred in connection
with the proposed offering filed hereby. All of such expenses will be borne by
the Company.
Registration fee - Securities
and Exchange Commission.............. $ 2,171.00
Legal fees and expenses ........................... 7,500.00
Accounting fees and expenses........................ 2,500.00
Printing expenses................................... 100.00
Miscellaneous....................................... 229.00
Total................................ $12,500.00
===========
Item 15. Indemnification of Directors and Officers.
------------------------------------------
Section 607.0850 of the Florida 1989 Business Corporation Act is set forth
below:
ss.607.0850 INDEMNIFICATION OF OFFICERS, DIRECTORS, EMPLOYEES, AND AGENTS. (1) A
corporation shall have the power to indemnify any person who was or is a party
to any proceeding (other than an action by, or in the right of, the
corporation), 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 liability
incurred in connection with such proceeding, including any appeal thereof, 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, had no reasonable cause to believe his conduct
was unlawful. The termination of any proceeding by judgment, order, settlement,
or conviction or upon a plea of nolo contendere or its equivalent shall not, of
itself, create a presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in, or not opposed to, the best
interests of the corporation or, with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was unlawful.
(2) A corporation shall have power to indemnify any person, who was or is a
party to any proceeding by or in the right of the corporation to procure a
judgment in its favor 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 and amounts paid in settlement not exceeding, in the judgment of the
board of directors, the estimated expense of litigating the pro ceeding to
conclusion, actually and reasonably incurred in connection with the defense or
settlement of such proceeding, including any appeal thereof. Such
indemnification shall be authorized if such
II-1
<PAGE>
person acted in good faith and in a manner he reasonably believed to be in, or
not opposed to, the best interests of the corporation, except that no
indemnification shall be made under this subsection in respect of any claim,
issue, or matter as to which such person shall have been adjudged to be liable
unless, and only to the extent that, the court in which such proceeding was
brought, or any other court of competent jurisdiction, shall determine upon
application that, despite the adjudication of liability but in view of all
circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which such court shall deem proper.
(3) 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
proceeding referred to in subsection (1) or subsection (2), or in defense of any
claim, issue, or matter therein, he shall be indemnified against expenses
actually and reasonably incurred by him in connection therewith.
(4) Any indemnification under subsection (1) or subsection (2), unless
pursuant to a determination by a court, shall be made by the corporation only as
authorized in the specific case upon a determination that indemnification of the
director, officer, employee, or agent is proper in the circumstances because he
has met the applicable standard of conduct set forth in subsection (1) or
subsection (2). Such determination shall be made:
(a) By the board of directors by a majority vote of a quorum
consisting of directors who were not parties to such proceeding;
(b) If such a quorum is not obtainable or, even if obtainable, by
majority vote of a committee duly designated by the board of directors (in which
directors who are parties may participate) consisting solely of two or more
directors not at the time parties to the proceeding;
(c) By independent legal counsel:
1. Selected by the board of directors prescribed in paragraph (a)
or the committee prescribed in paragraph (b); or
2. If a quorum of the directors cannot be obtained for paragraph
(a) and the committee cannot be designated under paragraph (b), selected by
majority vote of the full board of directors (in which directors who are parties
may participate); or
(d) By the stockholders by a majority vote of a quorum consisting of
stockholders who were not parties to such proceeding or, if no such quorum is
obtainable, by a majority vote of stockholders who were not parties to such
proceeding.
(5) Evaluation of the reasonableness of expenses and authorization of
indemnification shall be made in the same manner as the determination that
indemnification is permissible. However, if the determination of permissibility
is made by independent legal counsel, persons specified by paragraph (4)(c)
shall evaluate the reasonableness of expenses and may authorize indemnification.
II-2
<PAGE>
(6) Expenses incurred by an officer or director in defending a civil or
criminal proceeding may be paid by the corporation in advance of the final
disposition of such proceeding upon receipt of an undertaking by or on behalf of
such director or officer to repay such amount if he is ultimately found not to
be entitled to indemnification by the corporation pursuant to this section.
Expenses incurred by other employees and agents may be paid in advance upon such
terms or conditions that the board of directors deems appropriate.
(7) The indemnification and advancement of expenses provided pursuant to
this section are not exclusive, and a corporation may make any other or further
indemnification or advancement of expenses of any of its directors, officers,
employees, or agents, under any bylaw, agreement, vote of stockholders or
disinterested directors, or otherwise, both as to action in his official
capacity and as to action in another capacity while holding such office.
However, indemnification or advancement of expenses shall not be made to or on
behalf of any director, officer, employee, or agent if a judg ment or other
final adjudication establishes that his actions, or omissions to act, were
material to the cause of action so adjudicated and constitute:
(a) A violation of the criminal law, unless the director, officer,
employee, or agent had reasonable cause to believe his conduct was lawful or had
no reasonable cause to believe his conduct was unlawful;
(b) A transaction from which the director, officer, employee, or agent
derived an improper personal benefit;
(c) In the case of a director, a circumstance under which the
liability provisions of s. 607.0834 are applicable; or
(d) Willful misconduct or a conscious disregard for the best interests
of the corporation in a proceeding by or in the right of the corporation to
procure a judgment in its favor or in a proceeding by or in the right of a
stockholder.
(8) Indemnification and advancement of expenses as provided in this section
shall continue as, unless otherwise provided when authorized or ratified, to a
person who has ceased to be a director, officer, employee, or agent and shall
inure to the benefit of the heirs, executors, and administrators of such a
person, unless otherwise provided when authorized or ratified.
(9) Unless the corporation's articles of incorporation provide otherwise,
notwithstanding the failure of a corporation to provide indemnification, and
despite any contrary determination of the board or of the stockholders in the
specific case, a director, officer, employee, or agent of the corporation who is
or was a party to a proceeding may apply for indemnification or advancement of
expenses, or both, to the court conducting the proceeding, to the circuit court,
or to another court of competent jurisdiction. On receipt of an application, the
court, after giving any notice that it considers necessary, may order
indemnification and advancement of expenses, including expenses incurred in
seeking court-ordered indemnification or advancement of expenses, if it
determines that:
II-3
<PAGE>
(a) The director, officer, employee, or agent is entitled to mandatory
indemnification under subsection (3), in which case the court shall also order
the corporation to pay the director reasonable expenses incurred in obtaining
court-ordered indemnification or advancement of expenses;
(b) The director, officer, employee, or agent is entitled to
indemnification or advancement of expenses, or both, by virtue of the exercise
by the corporation of its power pursuant to subsection (7); or
(c) The director, officer, employee, or agent is fairly and reasonably
entitled to indemnification or advancement of expenses, or both, in view of all
the relevant circumstances, regardless of whether such person met the standard
of conduct set forth in subsection (1), subsection (2), or subsection (7).
(10) For purposes of this section, the term "corporation" includes, in
addition to the resulting corporation, any constituent corporation (including
any constituent of a constituent) absorbed in a consolidation or merger, so that
any person who is or was a director, officer, employee, or agent of a
constituent corporation, or is or was serving at the request of a constituent
corporation as a director, officer, employee, or agent of another corporation,
partnership, joint venture, trust, or other enterprise, is in the same position
under this section with respect to the resulting or surviving corporation as he
would have with respect to such constituent corporation if its separate
existence had continued.
(11) For purposes of this section:
(a) The term "other enterprises" includes employee benefit plans;
(b) The term "expenses" includes counsel fees, including those for
appeal;
(c) The term "liability" includes obligations to pay a judgment,
settlement, penalty, fine (including an excise tax assessed with respect to any
employee benefit plan), and expenses actually and reasonably incurred with
respect to a proceeding;
(d) The term "proceeding" includes any threatened, pending, or
completed action, suit, or other type of proceeding, whether civil, criminal,
administrative, or investigative and whether formal or informal;
(e) The term "agent" includes a volunteer;
(f) The term "serving at the request of the corporation" includes any
service as a director, officer, employee, or agent of the corporation that
imposes duties on such persons, including duties relating to an employee benefit
plan and its participants or beneficiaries; and
II-4
<PAGE>
(g) The term "not opposed to the best interest of the corporation"
describes the actions of a person who acts in good faith and in a manner he
reasonably believes to be in the best interests of the participants and
beneficiaries of an employee benefit plan.
(12) A corporation shall have power to purchase and maintain insurance on
behalf of any person who 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 any liability asserted against him
and incurred by him in any such capacity or arising out of his status as such,
whether or not the corporation would have the power to indemnify him against
such liability under the provisions of this section.
* * * * *
Article IV of the Company's By-laws contains provisions for the
indemnification of officers, directors, employees and agents to the fullest
extent permitted by Section 607.0850.
There is in effect a directors and officers liability insurance policy with
Lexington Insurance Company. The policy insures the directors and officers of
the Company against loss arising from certain claim or claims made against such
directors or officers by reason of certain wrongful acts. The policy provides
combined limit of liability of $2,000,000 per policy year for both directors'
and officers' liability coverage at an annual premium of $117,600.
Item 16. Exhibits.
---------
Exhibit
Number Description
- ------ -----------
3.1 Articles of Incorporation of the Registrant, as amended and restated.
(Reference is made to Exhibit 3.1 to the Registrant's Amendment No. 1
on Form S-3 to Form S-1 Registration Statement, Commission File No.
33-65125, which exhibit is incorporated herein by reference.)
3.2 By-Laws of the Registrant, as amended and restated. (Reference is made
to Exhibit 3.2 to the Registrant's Form 10-K for the period ended June
30, 1989, Commission File No. 1-10581, which exhibit is incorporated
herein by reference.)
3.3 Amendment to By-Laws of the Registrant. (Reference is made to Exhibit
3.2(a) to the Company's Amendment No. 1 on Form S-3 to Form S-1
Registration Statement, Commission File No. 33-35941, which exhibit is
incorporated herein by reference.)
4.1 Registrant's 1991 Stock Option Plan. (Reference is made to Exhibit 4.6
to the Registrant's Form 8-K filed October 17, 1991, Commission File
No. 1-10581, which exhibit is incorporated herein by reference.)
II-5
<PAGE>
4.2 Amendment to Registrant's 1991 Stock Option Plan. (Reference is made
to Exhibit 4.17 to the Registrant's Form 10-K for the Transition
Period Ended December 31, 1992, Commission File No. 1-10581, which
exhibit is incorporated herein by reference.)
4.3 Amendment to Registrant's 1991 Stock Option Plan as approved by the
stockholders on June 9, 1994. (Reference is made to Exhibit 4.16 to
the Registrant's Form 10-K for the year ended December 31, 1994,
Commission File No. 1-10581, which exhibit is incorporated herein by
reference.)
4.4 Form of Non-qualified Stock Option Agreement under the Registrant's
1991 Stock Option Plan. (Reference is made to Exhibit 4.25 to the
Registrant's Form 10-K dated June 30, 1992, Commission File No.
1-10581, which exhibit is incorporated herein by reference.)
4.5(1) Form of Nonqualified Performance Vesting Stock Option Contract between
the Registrant and certain Executive Officers.
4.6(1) Form of Warrant Agreement between the Registrant and Walter Light
dated August 27, 1996.
4.7(1) Consulting Agreement between the Registrant and Plexus Ventures, Inc.
dated October 15, 1996.
4.8(1) Warrant Agreement between the Registrant and Ranald Stewart, Jr. dated
June 9, 1995.
4.9(1) Consulting Agreement between the Registrant and Ronald Trahan
Associates, Inc. dated May 13, 1996.
5.1(1) Opinion of Parker Chapin Flattau & Klimpl, LLP.
23.1(1) Consent of Deloitte & Touche LLP.
23.2(1) Consent of Parker Chapin Flattau & Klimpl, LLP (included in Exhibit
5.1 hereto).
24.1(1) Power of Attorney (see page II-8 of this Registration Statement).
- --------------------
(1) Filed herewith.
II-6
<PAGE>
Item 17. Undertakings.
-------------
The undersigned 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 to include any material
information with respect to the plan of distribution not previously disclosed in
the registration statement or any material change to such information in the
registration statement;
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof;
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering; and
(4) That, for purposes of determining any liability under the Securities
Act of 1933, each filing of the registrant's annual report pursuant to section
13(a) or section 15(d) of the Securities Exchange Act of 1934 (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 this 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.
II-7
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Tampa, State of Florida, on the 30th day of May,
1997.
Bentley Pharmaceuticals, Inc.
By /s/ James R. Murphy
-------------------
James R. Murphy
Chairman of the Board, President and
Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints each of James R. Murphy, Robert M. Stote
and Michael D. Price and each of them with power of substitution, as his or her
attorney-in-fact, in all capacities, to sign any amendments to this registration
statement (including post-effective amendments) 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
said attorney-in-facts or their substitutes may do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
Signature Title Date
--------- ----- ----
/s/ James R. Murphy Chairman of the Board, May 30, 1997
- ------------------- President, Chief Executive
James R. Murphy Officer and Director
/s/ Robert M. Stote Senior Vice-President, Chief May 30, 1997
- ------------------- Science Officer and Director
Robert M. Stote
II-8
<PAGE>
/s/ Michael D. Price Vice-President, Chief May 30, 1997
- -------------------- Financial Officer, Secretary,
Michael D. Price Treasurer and Director
(principal financial and
accounting officer)
/s/ Randolph W. Arnegger Director May 30, 1997
- ------------------------
Randolph W. Arnegger
/s/ Charles L. Bolling Director May 30, 1997
- ----------------------
Charles L. Bolling
/s/ Doris E. Wardell Director May 30, 1997
- --------------------
Doris E. Wardell
II-9
<PAGE>
Exhibit
Number Description
- ------ -----------
3.1 Articles of Incorporation of the Registrant, as amended and
restated. (Reference is made to Exhibit 3.1 to the Registrant's
Amendment No. 1 on Form S-3 to Form S-1 Registration Statement,
Commission File No. 33-65125, which exhibit is incorporated herein
by reference.)
3.2 By-Laws of the Registrant, as amended and restated. (Reference is
made to Exhibit 3.2 to the Registrant's Form 10-K for the period
ended June 30, 1989, Commission File No. 1-10581, which exhibit is
incorporated herein by reference.)
3.3 Amendment to By-Laws of the Registrant. (Reference is made to
Exhibit 3.2(a) to the Company's Amendment No. 1 on Form S-3 to Form
S-1 Registration Statement, Commission File No. 33-35941, which
exhibit is incorporated herein by reference.)
4.1 Registrant's 1991 Stock Option Plan. (Reference is made to Exhibit
4.6 to the Registrant's Form 8-K filed October 17, 1991, Commission
File No. 1-10581, which exhibit is incorporated herein by
reference.)
4.2 Amendment to Registrant's 1991 Stock Option Plan. (Reference is made
to Exhibit 4.17 to the Registrant's Form 10-K for the Transition
Period Ended December 31, 1992, Commission File No. 1-10581, which
exhibit is incorporated herein by reference.)
4.3 Amendment to Registrant's 1991 Stock Option Plan as approved by the
stockholders on June 9, 1994. (Reference is made to Exhibit 4.16 to
the Registrant's Form 10-K for the year ended December 31, 1994,
Commission File No. 1-10581, which exhibit is incorporated herein by
reference.)
4.4 Form of Non-qualified Stock Option Agreement under the Registrant's
1991 Stock Option Plan. (Reference is made to Exhibit 4.25 to the
Registrant's Form 10-K dated June 30, 1992, Commission File No.
1-10581, which exhibit is incorporated herein by reference.)
4.5(1) Form of Nonqualified Performance Vesting Stock Option Contract
between the Registrant and certain Executive Officers.
II-10
<PAGE>
4.6(1) Form of Warrant Agreement between the Registrant and Walter Light
dated August 27, 1996.
4.7(1) Consulting Agreement between the Registrant and Plexus Ventures,
Inc. dated October 23, 1996.
4.8(1) Warrant Agreement between the Registrant and Ranald Stewart, Jr.
dated June 9, 1995.
4.9(1) Consulting Agreement between the Registrant and Ronald Trahan
Associates, Inc. dated May 13, 1996.
5.1(1) Opinion of Parker Chapin Flattau & Klimpl, LLP.
23.1(1) Consent of Deloitte & Touche LLP.
23.2(1) Consent of Parker Chapin Flattau & Klimpl, LLP (included in Exhibit
5.1 hereto).
24.1(1) Power of Attorney (see page II-8 of this Registration Statement).
- --------------------
(1) Filed herewith.
II-11
Exhibit 4.5
-----------
BENTLEY PHARMACEUTICALS, INC.
NONQUALIFIED PERFORMANCE VESTING STOCK OPTION CONTRACT
------------------------------------------------------
THIS NONQUALIFIED PERFORMANCE VESTING STOCK OPTION CONTRACT entered into on
this 19TH day of April, 1996, between BENTLEY PHARMACEUTICALS, INC., a Florida
corporation (the "Company"), and ____________________ (the "Optionee").
W I T N E S S E T H :
- - - - - - - - - -
1. The Company grants, as of the date hereof, to the Optionee options to
purchase an aggregate of Six Hundred Thousand (600,000) shares of the Common
Stock, $.02 par value per share, of the Company (the "Common Stock") with
one-third of such options vesting and becoming exercisable when the closing
price of the Company's Common Stock on the American Stock Exchange equals or
exceeds the exercise price of $2.89 (being 110% of the fair market value of such
shares of Common Stock on the date hereof) for twenty consecutive trading days;
one-third when the closing price equals or exceeds the exercise price of $3.68
(being 140% of the fair market value of such shares of Common Stock on the date
hereof) for twenty consecutive trading days; and one-third when the closing
price equals or exceeds the exercise price of $4.73 (being 180% of the fair
market value of such shares of Common Stock on the date hereof) for twenty
consecutive trading days. These options shall not be treated as "incentive stock
options" under Section 422 of the Internal Revenue Code. The Company intends
that such options constitute Non-Qualified Stock Options and not be considered
options issued under its existing Stock Option Plans.
2. The term of these options shall be 10 years from the date hereof. The
right to purchase shares of Common Stock under these options shall be
cumulative, so that if the full number of shares purchasable in a period shall
not be purchased, the balance may be purchased at any time or from time to time
thereafter, but not after the expiration of the options. Notwithstanding the
foregoing, the options may not be exercised at any time in an amount less than
100 shares (or the remaining shares then covered by and purchasable under the
options if less than 100) and in no event may a fraction of a share of Common
Stock be purchased under these options.
3. These options shall be exercised by giving written notice to the Company
at its principal office, presently One Urban Centre, Suite 548, 4830 West
Kennedy Boulevard, Tampa, Florida 33609, Attn: Corporate Secretary, stating that
the Optionee is exercising these nonqualified stock options, specifying the
number of shares being purchased and accompanied by payment in full of the
aggregate purchase price therefor (a) in cash, by check, or by any other form of
consideration permitted by law, (b) with previously acquired shares of Common
Stock, or (c) a combination of the foregoing.
4. The Company shall at all times during the term of these options reserve
and keep available for issuance or delivery such number of shares of Common
Stock as will be sufficient to satisfy the requirements of these options, shall
pay all original issue taxes or transfer taxes
-1-
<PAGE>
with respect to the issuance or delivery of shares pursuant to the exercise of
such options and all other fees and expenses necessarily incurred by the Company
in connection therewith, except for required income tax or other withholding
amounts. As long as these options shall be outstanding, the Company shall use
its reasonable best efforts to cause all shares issuable upon the exercise of
these options to be listed (subject to official notice of issuance) on all
securities exchanges on which the shares of the Company's Common Stock may then
be listed and/or quoted on NASDAQ. The Company agrees to include the underlying
shares of Common Stock issuable upon exercise of these options in a Registration
Statement(s) to be filed by the Company with the Securities and Exchange
Commission as soon as is practicable and will use its best efforts to keep such
Registration Statement(s) effective for the entire time that these options are
in effect. The Company shall pay all filing fees, related accountants' and
counsels' fees and all other registration expenses incurred by the Company in
complying with this requirement.
5. In the event that the number of outstanding shares of Common Stock is
increased or decreased or changed into a different number or kind of shares or
securities by reason of any merger, share exchange, consolidation,
reorganization, recapitalization, reclassification, stock split, combination of
shares, exchange of shares, stock dividend or other distribution payable in
capital stock, or other increase or decrease in such shares effected without
receipt of consideration by the Company, an adjustment will be made to the
remaining outstanding options so that the proportional interest of the Optionee
after such an event will be, to the extent practicable, the same as before the
event.
6. Notwithstanding the foregoing, the Optionee acknowledges that the Common
Stock to be received by him upon the exercise of these options may not be resold
unless (a) a registration statement under the Securities Act of 1933, as amended
(the "Securities Act") with respect to the shares of Common Stock to be received
upon the exercise of the options shall be effective and current at the time or
(b) there is an exemption from registration under the Securities Act for the
issuance of the shares of Common Stock. At the request of the Company, the
Optionee shall execute and deliver to the Company his representation and
warranty, in form and substance satisfactory to the Company, that the shares of
Common Stock to be issued upon the exercise of the options are being acquired by
the Optionee for his own account, for investment only and not with a view to the
resale or distribution thereof. In addition, the Company may require the
Optionee to represent and warrant to the Company in writing that any subsequent
resale or distribution of shares of Common Stock by him will be made only
pursuant to (i) a Registration Statement under the Securities Act which is
effective and current with respect to the Shares of Common Stock being sold, or
(ii) a specific exemption from the registration requirements of the Securities
Act, but in claiming such exemption, the Optionee shall prior to any offer of
sale or sale of such shares of Common Stock provide the Company with a favorable
written opinion of counsel, in form and substance satisfactory to the Company,
as to the applicability of such exemption to the proposed sale or distribution.
7. The Company may affix appropriate legends upon the certificates for
shares of Common Stock issued upon exercise of these options and may issue such
"stop transfer" instructions to its transfer agent in respect of such shares as
it determines, in its discretion, to
-2-
<PAGE>
be necessary or appropriate under the registration requirements of the
Securities Act.
8. The Company may withhold cash and/or shares of Common Stock in the
amount necessary to satisfy its obligation to withhold taxes or require the
Optionee to pay the Company such amount in cash promptly upon demand.
9. In the event that the employment with the Company shall be terminated
for any reason (other than by reason of death or disability), these options may
be exercised (to the extent that the Optionee was entitled to do so at the
termination of his employment) at any time until the expiration of these
options; provided, however, that if the Company terminates the Optionee's
employment after a change in control of the Company, all options shall vest
immediately and be exercisable in accordance with the terms of the Optionee's
employment agreement. In the event that the employment of the Optionee shall be
terminated by disability, the remaining unexercised portion of the options may
be exercised by the Optionee (notwithstanding that the options had not yet
become exercisable with respect to all or part of such shares at the date of
termination) at any time until the expiration of these options. If the Optionee
shall die while he is employed by the Company or during the period following
termination of employment in which the Optionee had a right to exercise the
options, such options may by exercised, as to all or any part of the remaining
unexercised portion of the options (notwithstanding that the options had not yet
become exercisable with respect to all or a part of such shares at the date of
death) by a legatee or legatees of such options under the Optionee's last will,
or by his personal representatives or distributees, at any time within twelve
months after his death, but not thereafter and in no event after the date on
which, except for such death, the options would otherwise expire.
10. The Optionee represents and agrees that he will comply with all
applicable laws relating to the grant and exercise of these options and the
disposition of the shares of Common Stock acquired upon exercise of the options,
including without limitation, federal and state securities and "blue sky" laws.
11. These options are not transferable otherwise than by will or the laws
of descent and distribution and may be exercised, during the lifetime of the
Optionee, only by him or his legal representatives.
12. This Contract shall be binding upon and inure to the benefit of any
successor or assign of the Company and to any heir, distributee, executor,
administrator or legal representative entitled by law to the Optionee's rights
hereunder.
13. This Contract shall be governed by and construed in accordance with the
laws of the State of Florida.
14. The invalidity or illegality of any provision herein shall not affect
the validity of any other provision.
-3-
<PAGE>
15. Any notice to be given hereunder shall be in writing addressed to the
Company at One Urban Centre, Suite 548, 4830 West Kennedy Boulevard, Tampa,
Florida 33609, Attention: Corporate Secretary, and any notice to Optionee shall
be addressed to 4 John Stark Lane, Hampton, New Hampshire 03482 or at such other
address as either party may hereafter designate in writing to the other. Any
such notice shall be deemed to have been duly given if and when enclosed in a
properly sealed envelope or wrapper, addressed as aforesaid, registered, with
return receipt requested, and deposited, first class postage and registry fees
prepaid, in a post office or branch post office regularly maintained by the
United States Government.
16. This Agreement embodies the entire agreement and understanding between
the Company and the Optionee and supersedes all prior agreements and
understandings relating to the subject matter hereof (with the exception of the
Optionee's Employment Agreement which governs in the event of termination as a
result of a change of ownership), but does not replace or have any effect on
other options issued to the Optionee by the Company, and this Agreement may not
be modified or amended or any term or provision hereof waived or discharged
except in writing, signed by the party against whom such amendment,
modification, waiver or discharge is sought to be enforced.
IN WITNESS WHEREOF, the parties hereto have executed this Contract on the
day and year first above written.
BENTLEY PHARMACEUTICALS, INC.
By: _________________________
_________________________
Optionee
-4-
Exhibit 4.6
-----------
WARRANT A August 27, 1996
BENTLEY PHARMACEUTICALS, INC.
The Transferability of this Warrant is
Restricted as Provided in Article 3
In consideration of $.001 per Warrant and other good and valuable
consideration, the receipt of which is hereby acknowledged by BENTLEY
PHARMACEUTICALS, INC., One Urban Centre, Suite 550, 4830 West Kennedy Boulevard,
Tampa, Florida 33609, a Florida corporation ("the Company"), Walter Light is
hereby granted the right to purchase, at the initial exercise price of $2.50 per
share, at any time until 5:00 P.M., New York time, on August 27, 2001, 50,000
(fifty thousand) shares of the Company's Common Stock, $.02 par value per share
("Shares").
This Warrant initially is exercisable at a price of $2.50 per Share payable
in cash or by certified or official bank check in New York Clearing House funds,
subject to adjustment as provided in Article 6 hereof. Upon surrender of this
Warrant, with the annexed Subscription Form duly executed, together with payment
of the Purchase Price (as hereinafter defined) for the Shares purchased, at the
offices of the Company, the registered holder of this Warrant ("Holder" or
"Holders") shall be entitled to receive a certificate or certificates for the
Shares so purchased.
1. Exercise of Warrant.
--------------------
The purchase rights represented by this Warrant are
<PAGE>
exercisable at the option of the Holder hereof, in whole or in part (but not as
to fractional Shares underlying this Warrant), during any period in which this
Warrant may be exercised as set forth above. In the case of the purchase of less
than all the Shares purchasable under this Warrant, the Company shall cancel
this Warrant upon the surrender hereof and shall execute and deliver a new
Warrant of like tenor for the balance of the Shares purchasable hereunder.
2. Issuance of Certificates.
-------------------------
Upon the exercise of this Warrant, the issuance of certificates for Shares
underlying this Warrant shall be made forthwith (and in any event within five
business days thereafter) without charge to the Holder hereof including, without
limitation, any tax which may be payable in respect of the issuance thereof, and
such certificates shall (subject to the provisions of Articles 3 hereof) be
issued in the name of, or in such names as may be directed by, the Holder
hereof; provided, however, that the Company shall not be required to pay any tax
which may be payable in respect of any transfer involved in the issuance and
delivery of any such certificates in a name other than that of the Holder and
the Company shall not be required to issue or deliver such certificates unless
or until the person or persons requesting the issuance thereof shall have paid
to the Company the amount of such tax or shall have established to the
satisfaction of the Company
-2-
<PAGE>
that such tax has been paid. The certificates representing the Shares underlying
this Warrant shall be executed on behalf of the Company by the manual or
facsimile signature of one of the present or any future Chairman or President of
the Company and any present or future Vice President or Secretary of the
Company.
3. Restriction on Transfer of Warrant.
-----------------------------------
The Holder of this Warrant, by its acceptance hereof, covenants and agrees
that this Warrant is being acquired as an investment and not with a view to the
distribution hereof, and that it may not be exercised, sold, transferred,
assigned, hypothecated or otherwise disposed of, in whole or in part unless in
the opinion of counsel concurred in by the Company's counsel such transfer is in
compliance with all applicable securities laws.
4. Price.
------
4.1 Initial and Adjusted Purchase Price. The initial purchase price shall
be $2.50 per Share. The adjusted purchase price shall be the price which shall
result from time to time from any and all adjustments of the initial purchase
price in accordance with the provisions of Article 5 hereof.
4.2 Purchase Price. The term "Purchase Price" herein shall mean the initial
purchase price or the adjusted purchase price, depending upon the context.
-3-
<PAGE>
5. Adjustments of Purchase Price and Number of Shares.
---------------------------------------------------
5.1 Subdivision and Combination. In case the Company shall at any time
subdivide or combine the outstanding Shares, the Purchase Price shall forthwith
be proportionately decreased in the case of subdivision or increased in the case
of combination.
5.2 Adjustment in Number of Shares. Upon each adjustment of the Purchase
Price pursuant to the provisions of this Article 5, the number of Shares
issuable upon the exercise of this Warrant shall be adjusted to the nearest full
Share by multiplying a number equal to the Purchase Price in effect immediately
prior to such adjustment by the number of Shares issuable upon exercise of this
Warrant immediately prior to such adjustment and dividing the product so
obtained by the adjusted Purchase Price.
5.3 Reclassification, Consolidation, Merger, etc. In case of any
reclassification or change of the outstanding Shares (other than a change in par
value to no par value, or from no par value to par value, or as a result of a
subdivision or combination), or in the case of any consolidation of the Company
with, or merger of the Company into, another corporation (other than a
consolidation or merger in which the Company is the surviving corporation and
which does not result in any reclassification or change of the outstanding
Shares, except a change as a result of a subdivision or combination of such
shares or a change in par value, as aforesaid), or in the case of a sale or
conveyance to another corporation of the property of the Company as an entirety,
the Holder of this
-4-
<PAGE>
Warrant shall thereafter have the right to purchase upon the exercise of this
Warrant the kind and number of shares of stock and other securities and property
receivable upon such reclassification, change, consolidation, merger, sale or
conveyance as if the Holder were the owner of the Shares underlying this Warrant
immediately prior to any such events at the Purchase Price in effect immediately
prior to the record date for such reclassification, change, consolidation,
merger, sale or conveyance as if such Holder had exercised this Warrant.
6. Registration Rights.
--------------------
The Company hereby agrees, for one time only, to include the Shares in any
one Registration Statement (other than a Registration Statement on Form S-4 or
S-8 or similar or successor forms) filed by the Company with the Securities and
Exchange Commission between the date hereof and the expiration date of this
Warrant. The Company shall pay all filing fees, related accountants' and
counsels' fees and all other registration expenses incurred by the Company in
complying with this Section 6; provided, however, that all underwriting
discounts and selling commissions applicable to the Shares shall be borne by the
seller or sellers thereof.
7. Exchange and Replacement of Warrant.
------------------------------------
This Warrant is exchangeable without expense, upon the
-5-
<PAGE>
surrender hereof by the registered Holder at the principal executive office of
the Company for a new Warrant of like tenor and date representing in the
aggregate the right to purchase the same number of Shares as are purchasable
hereunder in such denominations as shall be designated by the Holder hereof at
the time of such surrender.
Upon receipt by the Company of evidence reasonably satisfactory to it of
the loss, theft, destruction or mutilation of this Warrant, and, in case of
loss, theft or destruction, of indemnity or security reasonably satisfactory to
it, and reimbursement to the Company of all reasonable expenses incidental
thereto, and upon surrender and cancellation of this Warrant, if mutilated, the
Company will make and deliver a new Warrant of like tenor, in lieu of this
Warrant.
8. Elimination of Fractional Interests.
------------------------------------
The Company shall not be required to issue certificates representing
fractions of Shares on the exercise of this Warrant, nor shall it be required to
issue scrip or pay cash in lieu of fractional interests, it being the intent of
the parties that all fractional interests shall be eliminated pursuant to
Section 5.2.
9. Reservation and Listing of Securities.
--------------------------------------
The Company shall at all times reserve and keep available out
-6-
<PAGE>
of its authorized Shares, solely for the purpose of issuance upon the exercise
of this Warrant, such number of Shares as shall be issuable upon the exercise
hereof and thereof. The Company covenants and agrees that, upon exercise of this
Warrant and payment of the Purchase Price therefor, all Shares issuable upon
such exercise shall be duly and validly issued, fully paid and non- assessable.
As long as this Warrant shall be outstanding, the Company shall use its
reasonable best efforts to cause all Shares issuable upon the exercise of this
Warrant to be listed (subject to official notice of issuance) on all securities
exchanges on which the Shares of the Company's Common Stock may then be listed
and/or quoted on NASDAQ.
10. Notices.
--------
All notices, requests, consents and other communications hereunder shall be
in writing and shall be deemed to have been duly given when delivered, or mailed
by registered or certified mail, return receipt requested:
(a) If to the registered Holder of this Warrant, to the address of such
Holder as shown on the books of the Company; or
(b) If to the Company, to the address set forth on the first page of this
Warrant or to such other address as the Company may designate by notice to
the Holders.
-7-
<PAGE>
11. Successors.
-----------
All the covenants, agreements, representations and warranties contained in
this Warrant shall bind the parties hereto and their respective heirs,
executors, administrators, distributees, successors and assigns.
12. Headings.
---------
The Article and Section headings in this Warrant are inserted for purposes
of convenience only and shall have no substantive effect.
13. Law Governing.
--------------
This Warrant shall be construed and enforced in accordance with, and
governed by, the laws of the State of Florida.
-8-
<PAGE>
WITNESS the seal of the Company and the signature of its duly authorized
officers.
BENTLEY PHARMACEUTICALS, INC.
[SEAL]
By /s/ James R. Murphy
-------------------
James R. Murphy
President & CEO
Attest:
/s/ Michael D. Price
- --------------------
Michael D. Price, Secretary
-9-
<PAGE>
SUBSCRIPTION FORM
(To be Executed by the Registered Holder
in order to Exercise the Warrant)
The undersigned hereby irrevocably elects to exercise the right to purchase
____________ Shares by this Warrant according to the conditions hereof and
herewith makes payment of the Purchase Price of such Shares in full.
____________________________
Signature
____________________________
Address
Dated:_________________, 19___. _______________________
Social Security No. or
Taxpayer's I. D. No.
-10-
Exhibit 4.7
-----------
Plexus Ventures, Inc.
October 15, 1996
Mr. James R. Murphy
Chief Executive Officer
Bentley Pharmaceuticals, Inc.
One Urban Centre, Suite 550
West Kennedy Boulevard
Tampa, FL 33609
Dear Jim:
Following our recent discussions, we are pleased to present a collaboration
concept for your consideration. Our objective in what follows is to structure a
relationship between Bentley Pharmaceuticals and Plexus Ventures which would be
simple, flexible and effective for both parties and affordable to Bentley.
Mission
Our mission will be to work with Bentley over a period of twelve months to
identify appropriate new acquisition opportunities for Bentley. We will work
with you and your staff to define the characteristics of the properties we will
help you to acquire. In general terms, Plexus Ventures will search out products
and companies which can contribute to Bentley sales and profits in the U.S. and
targeted European markets. Plexus Ventures will further assist you in designing
realistic deal structures, including financing strategy for deals, and in
negotiating and closing acquisitions.
Bentley and Plexus envision the term of this agreement to extend for twelve
(12) months from the date of acceptance by Bentley; however, both parties agree
to a review of the relationship after six (6) months time, at which point either
party may terminate the agreement.
Compensation
Typically, Plexus Ventures receives compensation in the form of a monthly
retainer plus success fees paid on completion of assignment. Retainers range
from $5,000.00 per month and small amounts of equity to $15,000.00 per month, no
equity.
For this project, we propose that Bentley grants Plexus Ventures 30,000
common shares which we will earn at the rate of 2,500 shares per month during
<PAGE>
a 12-month commitment by a 12-month commitment by Bentley. At the current value
of the stock, this would be equivalent to a retainer of some $8,000/month.
Success Fees
We propose that at this point we merely agree that a success fee of the
Lehman type (5% on the initial tranche of value, 4% on the next higher tranche,
etc.) will be paid to Plexus Ventures on each completed deal. Since any
contemplated deal will likely require non-conventional financing, it is
difficult to suggest a universal formula a priori. We are more attracted to the
idea of agreeing on a structure, deal by deal, as soon as we can perceive the
outlines of the transaction.
Plexus Ventures would like to have the option to take success fees in
equity or in cash.
Expenses
We propose to bill Bentley $9,000 each six months for recovery of general
overheads. In addition, project related out-of-pocket expenses will be
separately recovered from Bentley under prior-approval guidelines set by
Bentley.
*******
We hope you will agree that this approach is simple, flexible and
affordable. If you are interested in proceeding, we will develop a formal
agreement for you.
We are enthusiastic about the prospects of working for Bentley
Pharmaceuticals; we have supplied a description of our initial target to Bob
Stote.
Sincerely, Accepted for Bentley Pharmaceuticals:
/s/ John F. Chappell /s/ James R. Murphy
John F. Chappell James R. Murphy
President Chief Executive Officer
Date: 23 Oct. 1996
-2-
Exhibit 4.8
-----------
BELMAC CORPORATION
NONQUALIFIED STOCK OPTION CONTRACT
----------------------------------
THIS NONQUALIFIED STOCK OPTION CONTRACT entered into on this 9th day of
June, 1995, between BELMAC CORPORATION, a Florida corporation (the "Company"),
and RANALD STEWART, JR. (the "Optionee").
W I T N E S S E T H :
- - - - - - - - - -
1. The Company hereby grants, as of the date hereof, to the Optionee, subject to
the terms and conditions of the 1991 Stock Option Plan (the "Plan") attached
hereto, but not granted pursuant to such Plan, options (the "Options") to
purchase an aggregate of 40,000 post-split shares of the Common Stock of the
Company, par value $.02 per share (the "Common Stock"). Options to purchase
20,000 post-split shares of Common Stock shall be exercisable at a price equal
to $5.625 per share and shall expire on December 29, 2004; Options to purchase
the remaining 20,000 post- split shares of Common Stock shall be exercisable at
a price equal to $20.00 per share and shall expire on June 9, 2004. These
Options shall not be treated as "incentive stock options" under Section 422 of
the Internal Revenue Code.
2. The Options granted hereby are subject to the acknowledgment and agreement by
the Optionee that the options granted by the Company to the Optionee pursuant to
stock option contracts dated December 29, 1994 and August 5, 1993 to purchase an
aggregate of 400,000 pre-split shares of Common Stock have expired unexercised.
Such acknowledgment and agreement shall be evidenced by the execution of this
Contract by the Optionee.
3. The term of these Options shall be as stated in the first paragraph hereof,
subject to earlier termination as provided in the Plan. These Options shall be
immediately exercisable. Notwithstanding the foregoing, the Options may not be
exercised at any time in an amount less than 100 shares of Common Stock (or the
remaining shares of Common Stock then covered by and purchasable under the
Options if less than 100) and in no event may a fraction of a share of Common
Stock be purchased under these Options.
4. These Options shall be exercised by giving written notice to the Company at
its principal office, presently 4830 West Kennedy Boulevard, One Urban Centre,
Suite 548, Tampa, Florida 33609, Attn: Secretary, stating that the Optionee is
exercising these Options, specifying the number of shares of Common Stock being
purchased and accompanied by payment in full of the aggregate purchase price
therefor (a) in cash or by certified check, (b) with previously acquired shares
of Common Stock or (c) a combination of the foregoing.
5. Notwithstanding the foregoing, these Options shall not be exercisable by the
Optionee unless (a) a registration statement under the Securities Act of 1933,
as amended (the "Securities Act") with respect to the shares of Common Stock to
be received upon the exercise of the Options
<PAGE>
shall be effective and current at the time of exercise or (b) there is an
exemption from registration under the Securities Act for the issuance of the
shares of Common Stock upon exercise. At the request of the Stock Option
Committee (the "Committee"), the Optionee shall execute and deliver to the
Company his representation and warranty, in form and substance satisfactory to
the Committee, that the shares of Common Stock to be issued upon the exercise of
the Options are being acquired by the Optionee for his own account, for
investment only and not with a view to the resale or distribution thereof. In
addition, the Committee may require the Optionee to represent and warrant to the
Company in writing that any subsequent resale or distribution of shares of
Common Stock by him will be made only pursuant to (i) a Registration Statement
under the Securities Act which is effective and current with respect to the
shares of Common Stock being sold, or (ii) a specific exemption from the
registration requirements of the Securities Act, but in claiming such exemption,
the Optionee shall prior to any offer of sale or sale of such shares of Common
Stock provide the Company with a favorable written opinion of counsel, in form
and substance satisfactory to the Company, as to the applicability of such
exemption to the proposed sale or distribution.
6. Notwithstanding anything herein to the contrary, if at any time the Committee
shall determine in its discretion that the listing or qualification of the
shares of Common Stock subject to these Options on any securities exchange or
under any applicable law, or the consent or approval of any governmental
regulatory body, is necessary or desirable as a condition of, or in connection
with, the granting of an option, or the issue of shares of Common Stock
thereunder, these Options may not be exercised in whole or in part unless such
listing, qualification, consent or approval shall have been effected or obtained
free of any conditions not acceptable to the Committee.
7. The Company may affix appropriate legends upon the certificates for shares of
Common Stock issued upon exercise of these Options and may issue such "stop
transfer" instructions to its transfer agent in respect of such shares of Common
Stock as it determines, in its discretion, to be necessary or appropriate to (a)
comply with the registration requirements of the Securities Act, or (b)
implement the provisions of the Plan or any agreement between the Company and
the Optionee with respect to such shares of Common Stock.
8. As provided in the Plan, the Company may withhold cash and/or shares of
Common Stock in the amount necessary to satisfy its obligation to withhold taxes
or require the Optionee to pay the Company such amount in cash promptly upon
demand.
9. The Company and the Optionee agree that they will both be subject to and
bound by all the terms and conditions of the Plan, a copy of which is attached
hereto and made a part hereof, provided, however, that the provisions contained
in the Plan respecting exercisability in the event of the Optionee's death,
disability or retirement (as defined in the Plan), shall not be applicable and
the Options shall remain exercisable for the duration of their term.
10. The Optionee represents and agrees that he will comply with all applicable
laws relating to the Plan and the grant and exercise of the Options and the
disposition of the shares of Common
-2-
<PAGE>
Stock acquired upon exercise of the Options, including without limitation,
federal and state securities and "blue sky" laws.
11. These Options are not transferable otherwise than by will or the laws of
descent and distribution and may be exercised, during the lifetime of the
Optionee, only by him or his legal representatives.
12. This Contract shall be binding upon and inure to the benefit of any
successor or assign of the Company and to any heir, distributee, executor,
administrator or legal representative entitled by law to the Optionee's rights
hereunder.
13. This Contract shall be governed by and construed in accordance with the laws
of the State of Florida.
14. The invalidity or illegality of any provision herein shall not affect the
validity of any other provision.
IN WITNESS WHEREOF, the parties hereto have executed this Contract on the
day and year first above written.
BELMAC CORPORATION
By: /s/ Michael D. Price
--------------------
Michael D. Price, Vice President
and Chief Financial Officer
ACKNOWLEDGED AND AGREED:
/s/ Ranald Stewart
- ------------------
Ranald Stewart, Jr.
-3-
RONALD TRAHAN ASSOCIATES, INC.
PUBLIC RELATIONS COUNSEL
EXHIBIT 4.9
-----------
May 13, 1996
Mr. James R. Murphy
Chief Executive Officer
Bentley Pharmaceuticals, Inc.
One Urban Centre, Suite 550
4830 West Kennedy Boulevard
Tampa, FL 33609-2517
Dear Jim:
This "letter of agreement," effective May 16, 1996, outlines the terms and
conditions under which my firm ("RTA") would be most pleased to serve as
investor relations/public relations counsel to Bentley Pharmaceuticals Inc.
("BTN").
o Length of agreement: 12 months, renewable on May 1, 1997, unless terminated
earlier under termination clause contained herein;
o Scope of services: RTA will provide a wide range of services as necessary,
including counsel, written materials, presentation and interview coaching, and
media and investor relations;
o Payment Terms: An invoice for services rendered and expenses incurred will be
issued to Bentley Pharmaceuticals on the first business day of each month of
service. BTN agrees to pay each invoice, in full, and deliver the payment to RTA
no later than the last business day of the month in which the invoice is due and
payable; the first invoice under this agreement will be delivered to Bentley
Pharmaceuticals on May 16, for the period May 16-May 31, which will be
considered "full" work month for purposes of this agreement; RTA will expect the
first payment under this agreement to be delivered no later than May 31, which
is the last business day of the month;
o Monthly retainer/Stock options: Bentley Pharmaceuticals agrees to pay RTA
$4,000 each month for the length of this contract, which commences on May 16,
1996. Additionally, Bentley Pharmaceuticals agrees to give Ronald C. Trahan the
option to purchase 25,000 shares of the company's stock, at a "locked in" price
per share as of the close of business of May 16; these options will vest
quarterly, at the rate of 6,250 shares;
o Reimbursement: Bentley Pharmaceuticals agrees to reimburse RTA for any and all
reasonable out-of-pocket expenditures -- such as telephone, travel, photocopying
and postage expenses -- that RTA may incur in the role of investor/public
relations counsel for BTN. Sizable production-related expenditures will not be
incurred without the company's prior approval;
One Apple Hill o Suite 316 o Natick, MA o 01760
Phone (508) 651-1180 o Fax: (508) 651-1556
<PAGE>
LETTER OF AGREEMENT/2
o Indemnification: Bentley Pharmaceuticals agrees to indemnify and hold RTA
harmless from and against any and all losses, claims, damages, expenses or
liabilities that RTA incurs as the result of any information, representations,
reports or data furnished by, prepared by or approved by Bentley Pharmaceuticals
for use by RTA;
o Termination: This agreement will commence on May 16, 1996. Either you or I
have the right to end our relationship by providing 60 days advanced written
notice of the intent to terminate. All indemnification provisions for events
occurring prior to termination will survive any such termination.
Jim, please indicate your acceptance on behalf of Bentley Pharmaceuticals of the
terms and conditions of this agreement by signing and returning it to me at your
earliest convenience.
Thank you very much for your business! I look forward to a long and mutually
beneficial relationship.
Sincerely,
/s/ Ronald C. Trahan
- --------------------
Ronald C. Rahan
President
Ronald Trahan Associates Inc.
Accepted by:
/s/ Michael D. Price
- --------------------
Michael D. Price
VP, CFO
Bentley Pharmaceuticals, Inc.
-2-
June 2, 1997
Bentley Pharmaceuticals, Inc.
4830 West Kennedy Boulevard
One Urban Centre, Suite 548
Tampa, Florida 33609
Re: Bentley Pharmaceuticals, Inc.
-----------------------------
Dear Sir or Madam:
We have acted as counsel to Bentley Pharmaceuticals, Inc. (the
"Company") in connection with its filing of a registration statement on Form S-3
(the "Registration Statement") relating to an aggregate of 2,103,150 shares of
Common Stock, par value $.02 per share, of the Company, to be sold by certain
selling stockholders (the "Selling Stockholder Shares"), all as more
particularly described in the Registration Statement.
In our capacity as counsel to the Company, we have examined the
Company's Amended and Restated Articles of Incorporation and By-laws, as amended
to date, and the minutes and other corporate proceedings of the Company, the
Registration Statement and the exhibits thereto.
With respect to factual matters, we have relied upon statements and
certificates of officers of the Company. We have also reviewed such other
matters of law and examined and relied upon such other documents, records and
certificates as we have deemed relevant hereto. In all such examinations we have
assumed conformity with the original documents of all documents submitted to us
as conformed or photostatic copies, the authenticity of all documents submitted
to us as originals and the genuineness of all signatures on all documents
submitted to us.
<PAGE>
Bentley Pharmaceuticals, Inc.
June 2, 1997
Page -2-
On the basis of the foregoing, we are of the opinion that the
Selling Stockholder Shares have been validly authorized and legally issued and
are fully-paid and non-assessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference made to us under the caption "Legal
Matters" in the prospectus constituting part of the Registration Statement.
Very truly yours,
/s/ Parker Chapin Flattau & Klimpl, LLP
PARKER CHAPIN FLATTAU & KLIMPL, LLP
Exhibit 23.1
------------
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
Bentley Pharmaceuticals, Inc. on Form S-3 of our reports dated March 27, 1997
appearing in the Annual Report on Form 10-K of the Company for the year ended
December 31, 1996 and to the reference to us under the heading "Experts" in the
Prospectus, which is part of such Registration Statement.
/s/ Deloitte & Touche LLP
DELOITTE & TOUCHE LLP
Tampa, Florida
June 2, 1997
