As filed with the Securities and Exchange Commission on October
31, 1996
Registration No. 333-___________
SECURITIES AND EXCHANGE
COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
DIVERSIFAX, INC.
(Exact name of registrant as specified in its charter)
Delaware 13-
3637458
(State
or other jurisdiction (I.R.S.
employer
of
incorporation or organization)
identification number)
39
Stringham Avenue
Valley Stream, New York
11580
(Address of principal executive offices) (Zip
code)
DiversiFax, Inc. 1996 Stock Option Plan
(Full title of the plan)
Irwin A. Horowitz
Chief Executive Officer
and President
DIVERSIFAX, INC.
39 Stringham Avenue
Valley Stream, New York 11580
(Name and address of agent for service)
(516) 872-0650
(Telephone number, including area code, of agent
for service)
COPY TO:
Gary T. Moomjian, Esq.
Breslow & Walker
875 Third Avenue
New York, New York 10022
(212) 832-1930
<TABLE>
CALCULATION OF REGISTRATION FEE
<CAPTION>
S
<PAGE>
Title of securities
to be registeredC
<PAGE>
Amount to be
registered (1)C
<PAGE>
Proposed maximum
offering price per
shareC
<PAGE>
Proposed maximum
aggregate offering
priceC
<PAGE>
Amount of
registration
fee<PAGE>
Common Stock,
par value $.001
per share<PAGE>
560,000<PAGE>
$3.3438(2)<PAGE>
$1,872,528<PAGE>
$567.43<PAGE>
Common Stock,
par value $.001
per share<PAGE>
20,000(3)<PAGE>
$3.3125<PAGE>
$66,250 <PAGE>
$20.08<PAGE>
Common Stock,
par value $.001
per share<PAGE>
10,000(3)<PAGE>
$3.375 <PAGE>
$33,750 <PAGE>
$10.22<PAGE>
Common Stock,
par value $.001
per share<PAGE>
850,000(4)<PAGE>
$3.25 <PAGE>
$2,762,500<PAGE>
$837.12<PAGE>
Total Registration Fee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,434.85
<FN>
<F1>
(1) In addition to this amount, such additional shares as may be issuable in accordance with the
terms of the Diversifax, Inc. 1996 Stock Option Plan (the "Plan") as stock dividends or in
the event of a stock split, reorganization, merger, recapitalization or similar event affecting
the 1,500,000 shares being registered.
<F2>
(2) Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(h)(1).
Based upon the average of the bid and the asked prices of the Common Stock as quoted on
NASDAQ on October 29, 1996.
<F3>
(3) Represents one five-year incentive stock option granted to an employee of the Registrant.
<F4>
(4) Represents two five-year stock options granted to an executive officer of the Registrant.
</FN>
</TABLE>
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION
10(a) PROSPECTUS
Item 1. Plan Information.
To be distributed to participants in the
Registrant's 1996 Stock Option Plan.
Item 2. Registrant Information and Employee Plan
Annual Information.
To be distributed to participants in the
Registrant's 1996 Stock Option Plan.
<PAGE>
PART II
INFORMATION REQUIRED IN THE
REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents, filed with the
Securities and Exchange Commission (the
"Commission") by DiversiFax, Inc., a Delaware
corporation (the "Registrant"), are incorporated herein
by reference:
(a) The Registrant's Annual Report on
Form 10-KSB for the year ended November
30, 1995, as amended, filed pursuant to the
Securities Exchange Act of 1934 (the
"Exchange Act").
(b) The Registrant's Quarterly Reports
on Form 10-QSB for the quarters ended
February 29, 1996 and May 31, 1996, as
amended, and for the quarter ended August
31, 1996 filed pursuant to the Exchange Act.
(c) The description of the Registrant's
Common Stock, par value $.001 per share
(the "Common Stock"), as set forth in the
Registrant's Registration Statement of
Securities on Form 8-A, dated December 8,
1992.
In addition, all documents filed by the
Registrant with the Commission pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act
subsequent to the date of this Registration Statement
and prior to the filing of a post-effective amendment
which indicates that all the securities offered hereby
have been sold or which deregisters all securities then
remaining unsold shall be deemed to be incorporated
herein by reference and to be a part hereof from the
date of the filing of such documents with the
Commission.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
The validity of the shares of Common Stock
offered hereby is being passed upon for the Registrant
by Breslow & Walker.
The financial statements of the Registrant as
of November 30, 1995 and for each of the years in the
two-year period ended November 30, 1995, have been
incorporated by reference herein in reliance upon the
report of Hoberman, Miller & Co., P.C., independent
certified public accountants, and upon the authority of
said firm as experts in accounting and auditing.
Item 6. Indemnification of Directors and Officers.
Under Section 145 of the Delaware General
Corporation Law, the Registrant may or shall, subject
to various exceptions and limitations, indemnify its
directors or officers and may purchase and maintain
insurance therefor.
Pursuant to Section 102(b)(7) of the
Delaware General Corporation Law, the Registrant has
included in its Certificate of Incorporation a provision
eliminating the personal liability of directors to the
Registrant or its stockholders for damages for breach
of fiduciary duty. The principal effect of this
provision in the Registrant's Certificate of
Incorporation is to eliminate potential monetary
damage actions against any director for breach of such
director's duties as director except (a) for any breach
of the director's duty of loyalty to the Registrant or its
stockholders, (b) for acts or omissions not in good
faith or which involve intentional misconduct or a
knowing violation of law, (c) under Section 174 of the
General Corporation Law, which relates to a willful or
negligent violation of Section 160 (regarding the illegal
purchase or redemption of stock by a corporation) or
Section 173 of the General Corporation Law regarding
a corporation's illegal declaration or payment of
dividends, or (d) for any transaction from which the
director derived an improper personal benefit. This
provision does not affect the liability of any director
for acts or omissions occurring prior to the date of
adoption of this provision. In addition, Section 145 of
the Delaware General Corporation Law empowers a
corporation (a) to grant indemnification to any officer
or director where it is determined that 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, and (b) to advance to an officer or director
the expenses of defending claims upon receipt of his
undertaking to repay any amount to which it is later
determined he is not entitled.
The foregoing statement is subject to the
detailed provisions of Sections 102 and 145 of the
Delaware General Corporation Law.
Item 7. Exemption from registration claimed.
Not applicable.
<TABLE>
<PAGE>
Item 8. Exhibits.
INDEX TO EXHIBITS
<CAPTION>
<C> Sequentially
<S> <C> Numbered Page
Exhibit Description Where Located
4(a) DiversiFax, Inc. 1996 Stock Option Plan 7
4(b) Form of Incentive Stock Option Agreement 18
4(c) Form of Non-Incentive Stock Option Agreement 24
4(d) Restated Certificate of Incorporation* --
4(e) By-laws* --
5 Opinion of Breslow & Walker, LLP, counsel to the 30
Company, as to the legality of the shares being
registered.
23(a) Consent of Hoberman, Miller & Co., P.C. 31
23(b) Consent of Breslow & Walker, LLP (contained in
Exhibit 5). --
<FN>
<F1>
*Incorporated by reference to the Registrant's Registration Statement on Form S-1 (Registration No.
33-46580)
</FN>
</TABLE>
<PAGE>
Item 9. Undertakings.
(a) The Registrant hereby undertakes that it
will:
(1) File, during any period in which it
offers or sells securities, a post-effective
amendment to this Registration Statement to
include any additional or changed material
information on the plan of distribution.
(2) For determining liability under the
Securities Act of 1933, as amended (the
"Securities Act"), treat each post-effective
amendment as a new registration statement
of the securities offered, and the offering of
the securities at that time to be the initial
bona fide offering.
(3) File a post-effective amendment, to
remove from registration any of the
securities that remain unsold at the end of
the offering.
(b) Insofar as indemnification for liabilities
arising under the Securities Act may be permitted to
directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or
otherwise, the Registrant has been advised that in the
opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other
than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of
any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection
with the securities being registered, the Registrant will,
unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as
expressed in the Securities Act and will be governed
by the final adjudication of such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities
Act of 1933, the Registrant certifies that it has
reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly
caused this registration statement to be signed on its
behalf by the undersigned,
thereunto duly authorized, in the City of Valley
Stream, and the State of New York on the 25th day of
October, 1996.
DIVERSIFAX, INC.
By: /s/ Irwn
A. Horowitz
Irwin A.
Horowit
z,
Preside
nt
(Principal
Executive, Financial
and
Accounting Officer)
Pursuant to the requirements of the Securities
Act of 1933, this Registration Statement has been
signed by the following persons in the capacities and
on the dates indicated.
Signature<PAGE>
Title Date
<PAGE>
/s/ Irwin A. Horowitz
Irwin A. Horowitz
<PAGE>
Director<PAGE>
October 25, 1996<PAGE>
/s/ Kenneth Ross Wolfe
Kenneth Ross Wolfe<PAGE>
Director October 25, 1996
/s/ Eugene Bilotti
Eugene Bilotti <PAGE>
Director<PAGE>
October 25, 1996<PAGE>
/s/ Mario DiNatale
Mario DiNatale <PAGE>
Director<PAGE>
October 25, 1996<PAGE>
Exhibit 4(a)
DIVERSIFAX, INC.
1996 STOCK OPTION PLAN
1. Purpose of Plan
The purpose of this 1996 Stock Option Plan
(the "Plan") is to further the growth and development
of DIVERSIFAX, INC. (the "Company") by
encouraging and enabling employees, including
officers, and directors of, and consultants and advisors
to, the Company to obtain a proprietary interest in the
Company through the ownership of stock, thereby
providing such persons with an added incentive to
continue in the employ or service of the Company and
to stimulate their efforts in promoting the growth,
efficiency and profitability of the Company, and
affording the Company a means of attracting to its
service persons of outstanding quality.
2. Shares of Stock Subject to the Plan
Subject to the provisions of Section 12 hereof,
an aggregate of 1,500,000 shares of the common stock,
par value $.001 per share, of the Company ("Common
Stock") shall be reserved for issuance upon the
exercise of options which may be granted from time to
time in accordance with the Plan. Such shares may be,
in whole or in part, as the Board of Directors of the
Company ("Board of Directors") shall from time to
time determine, authorized but unissued shares or
issued shares which have been reacquired by the
Company. If, for any reason, an option shall lapse,
expire or terminate without having been exercised in
full, the unpurchased shares underlying these options
shall (unless the Plan shall have been terminated) again
be available for the purpose of the Plan.
<PAGE>
3. Administration
(a) The Board of
Directors shall administer the Plan and, subject to the
provisions of the Plan, shall have authority in its
discretion to determine and designate from time to time
those persons eligible for a grant of options under the
Plan, those persons to whom options are to be granted,
the purchase price of the shares covered by each
option, the time or times at which options shall be
granted, and the manner in which said options are
exercisable. In making such determination, the Board
of Directors may take into account the nature of the
services rendered by the respective persons, their
present and potential contributions to the Company's
success and such other factors as the Board of
Directors in its sole discretion shall deem relevant.
Subject to the express provisions of the Plan, the Board
of Directors shall also have authority to interpret the
Plan, to prescribe, amend and rescind rules and
regulations relating to it, to determine the terms and
provisions of the instruments by which options shall be
evidenced, which shall not be inconsistent with the
terms of the Plan, and to make all other determinations
necessary or advisable for the administration of the
Plan, all of which determinations shall be final,
binding and conclusive.
(b) The Board of
Directors may, at its discretion, in accordance with the
provisions of Article II, Section 6 of the Company's
By-Laws, by resolution adopted by the affirmative vote
of a majority of the entire Board of Directors, appoint
from among its members a Stock Option Plan
Committee (the "Committee"). Such Committee shall
be composed of two or more directors and shall have
and may exercise any and all of the powers relating to
the administration of the Plan and the grant of options
hereunder as are set forth above in Section 3(a), as the
Board of Directors shall confer and delegate. The
Board of Directors shall have the power at any time to
fill vacancies in, to change the membership of, or to
discharge, such Committee. The Committee shall select
one of its members as its Chairman and shall hold its
meetings at such time and at such places as it shall
deem advisable. A majority of such Committee shall
constitute a quorum and such majority shall determine
its action. The Committee shall keep minutes of its
proceedings and shall report the same to the Board of
Directors at the meeting next succeeding. No director
or member of the Committee shall be liable for any
action or determination made in good faith with respect
to the Plan or any option granted thereunder.
4. Persons To Whom Shares May Be Granted
Options may be granted to persons who are, at
the time of the grant, employees, including officers,
and directors of, or consultants or advisors to, the
Company or any subsidiary corporation (as defined in
Section 425 of the Internal Revenue Code of 1986, as
amended (the "Code"), and herein referred to as
"Subsidiary"), including part-time employees, as the
Board of Directors (or Committee) shall select from
time to time from among those nominated by the Board
of Directors (or Committee). For the purposes of this
Plan, options may only be granted to those consultants
and advisors who shall render bona fide services to the
Company and such services must not be in connection
with the offer or sale of securities in a capital raising
transaction. Subject to the provisions hereinafter set
forth, options granted under the Plan shall be
designated either (i) "Incentive Stock Options" (which
term, as used herein, shall mean options intended to be
"incentive stock options" within the meaning of Section
422 of the Code) or (ii) "Non-Incentive Stock Options"
(which term, as used herein, shall mean options not
intended to be incentive stock options" within the
meaning of Section 422 of the Code). Each option
granted to a person who is solely a director of, or
consultant or advisor to, the Company or a Subsidiary
on the date of the grant shall be designated a
Non-Incentive Stock Option.
The Board of Directors (or Committee) may
grant, at any time, new options to a person who has
previously received options whether such prior options
are still outstanding, have previously been exercised in
whole or in part, have expired, or are cancelled in
connection with the issuance of new options. The
purchase price of the new options may be established
by the Board of Directors (or Committee) without
regard to the existing option price.
5. Option Price
(a) The purchase
price of the Common Stock underlying each option
shall be determined by the Board of Directors (or
Committee), which determination shall be final,
binding and conclusive; provided, however, that in no
event shall the purchase price of Incentive Stock
Options be less than 100% (110% in the case of
optionees who own more than 10% of the total
combined voting power of all classes of stock of the
Company) of the fair market value of the Common
Stock on the date the option is granted. In determining
such fair market value, the Board of Directors (or
Committee) shall consider (i) the closing price of the
Common Stock on the date on which the option is
granted (if such Common Stock is listed on a national
securities exchange); (ii) the closing bid prices as
quoted by the National Quotation Bureau or a
recognized dealer in the Common Stock on the date of
grant (if such Common Stock is not listed on such an
exchange); and (iii) such other factors as the Board of
Directors (or Committee) shall deem appropriate or
which may be relevant under applicable federal tax
laws and Internal Revenue rules and regulations. For
purposes of the Plan, the date of grant of an option
shall be the date on which the Board of Directors (or
Committee) shall by resolution duly authorize such
option.
(b) The aggregate
fair market value (as defined above), determined at the
time the Incentive Stock Options are granted, of the
Common Stock with respect to which Incentive Stock
Options are exercisable for the first time by an
employee during any calendar year shall not exceed
$100,000. Non-Incentive Stock Options shall not be
subject to the limitations of this paragraph 5(b).
6. Exercise of Options
(a) Subject to the
provisions set forth in Sections 9, 10 and 11 hereof, no
option shall be exercisable unless the holder thereof
shall have been an employee, including an officer or
director of the Company and/or a Subsidiary, from the
date of the granting of the option until the date of
exercise.
(b) The number of
shares which are issued pursuant to the exercise of an
option shall be charged against the maximum limi-
tations on shares set forth in Section 2 hereof.
(c) The exercise
of an option shall be made contingent upon receipt by
the Company from the holder thereof of (i) if deemed
necessary by the Company, a written representation
and acknowledgement that at the time of such exercise
it is his then present intention to acquire the option
shares for investment and not with a view to
distribution or resale thereof, that he knows that the
Company is not obligated to register the option shares
and that the option shares may have to be held
indefinitely unless an exemption from the registration
requirements of the Securities Act of 1933, as
amended, is available or the Company has registered
the shares underlying the options, that the Company
may place a legend on the certificate(s) evidencing the
option shares reflecting the fact that they were acquired
for investment and cannot be sold or transferred unless
registered under the Securities Act of 1933, as
amended, or unless counsel for the Company is
satisfied that the circumstances of the proposed transfer
do not require such registration, and (ii) payment in
full of the purchase price of the shares being
purchased. Payment may be made (a) in cash, (b) by
certified check payable to the order of the Company in
the amount of such purchase price, (c) by delivery to
the Company of shares of Common Stock having a fair
market value equal to such purchase price, (d) by
irrevocable instructions to a broker to sell shares of
Common Stock to be issued upon exercise of the
option, provided such shares are registered and
transferable, and to deliver to the Company the amount
of sale proceeds necessary to pay such purchase price
and to deliver the remaining cash proceeds, less
commissions and brokerage fees, to the optionee, or
(e) by any combination of the methods of payment
described in (a) through (d) above.
7. Term of Options
The period during which each option granted
hereunder shall be exercisable shall be determined by
the Board of Directors (or Committee); provided,
however, that no option shall be exercisable for a
period exceeding ten (10) years (five (5) years in the
case of optionees who own more than 10% of the total
combined voting power of all classes of stock of the
Company) from the date the options are granted.
8. Non-Transferability of Options
No option granted pursuant to this Plan shall be
subject to anticipation, sale, assignment, pledge,
encumbrance or charge or otherwise transferable
except by will or the laws of descent and distribution,
or pursuant to a qualified domestic relations order, as
defined by the Code or Title I of the Employee
Retirement Income Security Act or the rules
thereunder, and an option shall be exercisable during
the lifetime of the holder thereof only by such holder.
9. Termination of Services
In the event that an employee, including an
officer, or director to whom an option has been
granted under the Plan shall cease to be an employee,
officer or director of the Company or a Subsidiary, by
reason of a termination of such relationship without
cause and other than by reason of death, disability or
retirement at age 65, such holder may exercise such
option at any time prior to the expiration date of the
option or within three months after the date of
termination, whichever is earlier, but only to the extent
the holder had the right to exercise such option on the
date of termination. In the event that an employee,
officer or director to whom an option has been granted
under the Plan shall cease to be an employee, officer
or director of the Company or a Subsidiary, by reason
of a termination of such relationship for cause and
other than by reason of death, disability or retirement
at age 65, such options shall forthwith automatically
terminate, lapse and expire. So long as the holder of
an option shall continue to be in the employ, or
continue to be a director, of the Company or one or
more of its Subsidiaries, such holder's option shall not
be affected by any change of duties or position.
Absence on leave approved by the employing
corporation shall not be considered an interruption of
employment for any purpose under the Plan. The
granting of an option in any one year shall not give the
holder of the option any rights to similar grants in
future years or any right to be retained in the employ
or service of the Company or any of its Subsidiaries or
interfere in any way with the right of the Company or
any such Subsidiary to terminate such holder's
employment or services at any time. Notwithstanding
the foregoing, no option may be exercised after ten
years from the date of its grant.
10. Retirement or Disability of Holder of Option
If any employee, including an officer or
director to whom an option has been granted under the
Plan shall cease to be an employee, officer or director
of the Company or a Subsidiary, by reason of
disability or retirement at age 65, such holder may
exercise such option at any time prior to the expiration
date of the option or within three months (one year in
the case of termination by reason of disability) after the
date of termination for such reason, whichever is
earlier, but only to the extent the holder had the right
to exercise such option on the date of termination.
Notwithstanding the foregoing, no option may be
exercised after ten years from the date of its grant.
11. Death of Holder of Option
If any employee, including an officer, or
director to whom an option has been granted under the
Plan shall cease to be an employee, officer or director
of the Company or a Subsidiary by reason of death, or
such holder of an option shall die within three months
after termination by reason of retirement at age 65 or
otherwise, or in the case of the death of an advisor or
consultant to whom an option has been granted under
the Plan, the option may be exercised by the person or
persons to whom the optionee's rights under the option
are transferred by will or by the laws of descent and
distribution at any time prior to the expiration date of
the option or, in the case of an employee, officer or
director, within three months from the date of death,
whichever is earlier, but only to the extent the holder
of the option had the right to exercise such option on
the date of such termination. Notwithstanding the
foregoing, no option may be exercised after ten years
from the date of its grant.
12. Adjustments Upon Changes in Capitalization
If the shares of Common Stock outstanding are
changed in number, kind or class by reason of a stock
split, combination, merger, consolidation,
reorganization, reclassification, exchange or any capital
adjustment, including a stock dividend, or if any dis-
tribution is made to shareholders other than a cash
dividend and the Board of Directors (or Committee)
deems it appropriate to make an adjustment, then (i) the
aggregate number and class of shares that may be
issued or transferred pursuant to Section 2, (ii) the
number and class of shares which are issuable under
outstanding options, and (iii) the purchase price to be
paid per share under outstanding options, shall be
adjusted as hereinafter provided.
Adjustments under this Section 12 shall be
made in a proportionate and equitable manner by the
Board of Directors (or Committee), whose
determination as to what adjustments shall be made,
and the extent thereof, shall be final, binding and
conclusive. In the event that a fraction of a share
results from the foregoing adjustment, said fraction
shall be eliminated and the price per share of the
remaining shares subject to the option adjusted
accordingly.
In the event of a liquidation of the Company, or
a merger, reorganization or consolidation of the
Company with any other corporation in which the
Company is not the surviving corporation or the
Company becomes a wholly owned subsidiary of
another corporation, any unexercised options
theretofore granted under the Plan shall be deemed
cancelled unless the surviving corporation in any such
merger, reorganization or consolidation elected to
assume the options under the Plan or to issue substitute
options in place thereof; provided, however, that,
notwithstanding the foregoing, if such options would
otherwise be cancelled in accordance with the
foregoing, the optionee shall have the right, exercisable
during a ten-day period immediately prior to such
liquidation, merger or consolidation, to exercise the
option in whole or in part. The granting of an option
pursuant to this Plan shall not affect in any way the
right or power of the Company to make adjustments,
reorganizations, reclassifications or changes of its
capital or business structure or to merge, consolidate,
dissolve, liquidate or sell or transfer all or any part of
its business or assets.
13. Vesting of Rights Under Options
Nothing contained in this Plan or in any
resolution adopted or to be adopted by the Board of
Directors (or Committee) or the shareholders of the
Company shall constitute the vesting of any rights
under any option. The vesting of such rights shall take
place only when a written agreement shall be duly
executed and delivered by and on behalf of the
Company to the person to whom the option shall be
granted.
14. Rights as a Shareholder
A holder of an option shall have no rights of a
shareholder with respect to any shares covered by his
option until the date of issuance of a stock certificate
to him for such shares.
15. Termination and Amendment
The Board of Directors may, at any time,
terminate or suspend this Plan or make such
modifications or amendments thereto as it shall deem
advisable; provided, however, that no termination,
modification or amendment shall adversely affect the
rights of a holder of an option previously granted
under the Plan.
16. Modification, Extension and Renewal of
Options
Subject to the terms and conditions and within
the limitations of the Plan, the Board of Directors (or
Committee) may modify, extend or renew outstanding
options granted under the Plan, or accept the surrender
of outstanding options (to the extent not theretofore
exercised) and authorize the granting of new options in
substitution therefor. Notwithstanding the foregoing, no
modification of an option shall, without the consent of
the holder thereof, alter or impair any rights or
obligations under any option theretofore granted under
the Plan.
17. Indemnification
In addition to such other rights of
indemnification as they may have as members of the
Board of Directors (or Committee), the members of the
Board of Directors (or Committee) administering the
Plan shall be indemnified by the Company against
reasonable expenses, including attorneys' fees, actually
and necessarily incurred in connection with the defense
of any action, suit or proceeding, or in connection with
any appeal therein, to which they or any of them may
be a party by reason of any action taken or failure to
act under or in connection with the Plan or any option
granted thereunder, and against all amounts paid by
them in settlement thereof (provided such settlement is
approved by independent legal counsel selected by the
Company) or paid by them in satisfaction of a
judgment in any action, suit or proceeding, except in
relation to matters as to which it shall be adjudged in
such action, suit, or proceeding that such member is
liable for negligence or misconduct in the performance
of his duties, provided that within 60 days after
institution of any such action, suit or proceeding, the
member shall in writing offer the Company the
opportunity, at its own expense, to handle and defend
the same.
18. Effective Date
The Plan shall become effective on September
9, 1996 and shall terminate on the close of business on
September 9, 2006 and no option may be granted
under the Plan thereafter, but such termination shall
not affect any option theretofore granted.
<PAGE>
Exhibit 4(b)
DIVERSIFAX, INC.
INCENTIVE STOCK OPTION AGREEMENT
To: __________________
We are pleased to inform you that by the determination
of the Board of Directors of Diversifax, Inc. (the
"Company"), an option to purchase ____ shares of the
Common Stock, par value $.001 per share, of the
Company (the "Common Stock"), at the price of $___ per
share, has this __ day of ________, 199_ been granted to
you.
1. Acceptance of Option Agreement
Your execution of this Option Agreement will
indicate your acceptance of and your willingness to be
bound by its terms; it imposes no obligation upon you to
purchase any of the shares subject to the option. Your
obligation to purchase shares can arise only upon your
exercise of the option in the manner set forth in paragraph
3 hereof.
2. Time of Exercise
[You may exercise your option in whole or in part
as of the date hereof]*; provided, however, that the option
granted you hereunder may not be exercised as to less than
100 shares at any one time. This option expires at the end
of ___ years from the date of grant whether or not it has
been duly exercised, unless sooner terminated as provided
in paragraphs 6, 7 and 8 hereof.
*Insert other vesting period, if appropriate.
3. Method of Exercise
This option shall be exercisable by written notice
signed by you and delivered to the Company at its principal
executive offices, attention of the President of the
Company, signifying your election to exercise the option.
The notice must state the number of shares of Common
Stock as to which your option is being exercised and must
contain, unless indicated to the contrary by the Company,
a representation and acknowledgement by you (in a form
acceptable to the Company) that, among other things, such
shares are being acquired by you for investment and not
with a view to their distribution or resale, that the shares
are not registered under the Securities Act of 1933, as
amended, or unless counsel to the Company is satisfied that
the circumstances of the proposed transfer do not require
such registration. Such notice shall be accompanied by
payment of the full purchase price of the shares being
purchased. Payment may be made (a) in cash, (b) by
certified check payable to the order of the Company in the
amount of such purchase price, (c) by delivery to the
Company of shares of Common Stock having a fair market
value equal to such purchase price, (d) by irrevocable
instructions to a broker to sell shares of Common Stock to
be issued upon exercise of the option, provided such shares
are registered and transferable, and to deliver to the
Company the amount of sale proceeds necessary to pay
such purchase price and to deliver the remaining cash
proceeds, less commissions and brokerage fees to you, or
(e) by any combination of the methods of payment
described in (a) through (d) above. If notice of the
exercise of this option is given by a person or persons
other than you, the Company may require, as a condition
to the exercise of the option, the submission to the
Company of appropriate proof of the right of such person
or persons to exercise the option.
4. Issuance of Certificates Upon Exercise of Option
Certificates representing the shares of Common
Stock for which payment is made upon exercise of this
option shall be issued as soon as practicable. The
Company, however, shall not be required to issue or
deliver a certificate for any shares until it has complied
with all requirements of the Securities Act of 1933, the
Securities Exchange Act of 1934, any stock exchange or
over-the-counter market on which the Company's Common
Stock may then be listed or traded and all applicable state
laws in connection with the issuance or sale of such shares
or the listing or trading of such shares on said exchange or
market. Until the issuance of the certificate for such
shares, you or such other person as may be entitled to
exercise this option, shall have none of the rights of a
stockholder with respect to the shares subject to this option.
5. Nature of Shares Issuable Upon Exercise of Option
In the event the Company chooses not to register the
shares underlying the options, the shares of Common Stock
issuable upon exercise of this option will be unregistered
and must be held indefinitely unless they are subsequently
registered under the Securities Act of 1933 or an exemption
from such registration, such as embodied in Rule 144, is
available. Rule 144 under the Securities Act of 1933
permits, upon compliance with certain conditions, sales in
limited amounts of shares of publicly held companies which
are current in the filing of various required reports with the
Securities and Exchange Commission, which shares have
been beneficially owned and fully paid for at least two
years. The Company has not covenanted to file a
registration statement under the Securities Act of 1933
covering the shares issuable upon exercise of this option
nor to take such action as may be necessary to permit sales
under Rule 144. You are advised to inquire of the
appropriate officer of the Company at any time that you
may wish to sell any shares obtained from the exercise of
this option.
6. Termination of Employment
If your employment with the Company (or a
subsidiary thereof) is terminated without cause you may
exercise this option within three months from the date of
such termination; provided, however, that such exercise
occurs within ____ years from the date of grant of this
option. Any options not so exercised shall forthwith
automatically terminate, lapse and expire. If your
employment with the Company (or a subsidiary thereof) is
terminated with cause for any reason other than by death,
disability or retirement at age 65, such options shall
forthwith automatically terminate, lapse and expire.
<PAGE>
7. Retirement or Disability
If your employment with the Company (or a
subsidiary thereof) is terminated by reason of your
retirement at age 65 or disability, you may exercise this
option within three months from the date of termination
due to retirement or within one year from the date of
termination due to disability to the extent this option was
exercisable on the date of termination; provided, however,
that such exercise occurs within ____ years from the date
of grant of this option.
8. Death
If you die while employed by the Company (or a
subsidiary thereof), or die within three months after
termination of your employment due to retirement at age
65, this option may be exercised by the person or persons
to whom your rights under the option are transferred by
will or by the laws of descent and distribution within three
months from the date of your death to the extent this option
was exercisable on the date of your death, but in no event
later than ____ years from the date of the grant of this
option.
9. Non-Transferability of Option
This option shall not be transferable or assignable
except by will or the laws of descent and distribution or
pursuant to a qualified domestic relations order, as defined
by the Code or Title I of the Employee Retirement Income
Security Act or the rules thereunder, and may be exercised
during your lifetime only by you.
10. Adjustments upon Changes in Capitalization
If the shares of Common Stock outstanding are
changed in number, kind or class by reason of a stock
split, combination, merger, consolidation, reorganization,
reclassification, exchange or any capital adjustment,
including a stock dividend, or if any distribution is made to
shareholders other than a cash dividend and the Board of
Directors (or Committee) deems it appropriate to make an
adjustment, then, (i) the number and class of shares which
are issuable under this option, and (ii) the purchase price
to be paid per share under this option, shall be adjusted as
hereinafter provided.
Adjustments under this Section 10 shall be made in
a proportionate and equitable manner by the Board of
Directors (or Committee), whose determination as to what
adjustments shall be made, and the extent thereof, shall be
final, binding and conclusive. In the event that a fraction of
a share results from the foregoing adjustment, said fraction
shall be eliminated and the price per share of the remaining
shares subject to the option adjusted accordingly.
In the event of a liquidation of the Company, or a
merger, reorganization or consolidation of the Company
with any other corporation in which the Company is not the
surviving corporation or the Company becomes a wholly
owned subsidiary of another corporation, any unexercised
options theretofore granted under the Plan shall be deemed
cancelled unless the surviving corporation in any such
merger, reorganization or consolidation elected to assume
the options under the Plan or to issue substitute options in
place thereof; provided, however, that, notwithstanding the
foregoing, if such options would otherwise be cancelled in
accordance with the foregoing, the optionee shall have the
right, exercisable during a ten-day period prior to such
liquidation, merger or consolidation, to exercise the option
in whole or in part. The granting of an option pursuant to
this Plan shall not affect in any way the right or power of
the Company to make adjustments, reorganizations,
reclassifications or changes of its capital or business
structure or to merge, consolidate, dissolve, liquidate or
sell or transfer all or any part of its business or assets.
DIVERSIFAX, INC.
By:___________________________
President
AGREED TO AND ACCEPTED, as of
the __ day of _________, 199_.
_______________________________
Signature
<PAGE>
Exhibit 4(c)
DIVERSIFAX, INC.
NON-INCENTIVE STOCK OPTION AGREEMENT
To:
We are pleased to inform you that by the
determination of the Board of Directors of Diversifax, Inc.
(the "Company"), an option to purchase _____ shares of
Common Stock, par value $.001 per share, of the
Company (the "Common Stock"), at the price of $______
per share, has this __ day of _______ , 199__ been
granted to you.
1. Acceptance of Option Agreement
Your execution of this Option Agreement
will indicate your acceptance of and your willingness to be
bound by its terms; it imposes no obligation upon you to
purchase any of the shares subject to the option. Your
obligation to purchase shares can arise only upon your
exercise of the option in the manner set forth in paragraph
3 hereof.
2. Time of Exercise
[You may exercise your option in whole or
in part as of the date hereof]*; provided, however, that the
option granted you hereunder may not be exercised as to
less than 100 shares at any one time. This option expires
at the end of _____ years from the date of grant whether or
not it has been duly exercised, unless sooner terminated as
provided in Paragraph 6 hereof.
*Insert other vesting period, if appropriate.
3. Method of Exercise
This option shall be exercisable by written
notice signed by you and delivered to the Company at its
principal executive offices, attention of the President of the
Company, signifying your election to exercise the option.
Such notice shall be accompanied by payment of the full
purchase price of the shares being purchased. Payment
may be made (a) in cash, (b) by certified check payable to
the order of the Company in the amount of such purchase
price, (c) by delivery to the Company of shares of
Common Stock having a fair market value equal to such
purchase price, (d) by irrevocable instructions to a broker
to sell shares of Common Stock to be issued upon exercise
of the option, provided such shares are registered and
transferable, and to deliver to the Company the amount of
sale proceeds necessary to pay such purchase price and to
deliver the remaining cash proceeds, less commissions and
brokerage fees to you, or (e) by any combination of the
methods of payment described in (a) through (d) above.
The notice must state the number of shares of Common
Stock as to which your option is being exercised and must
contain, unless indicated to the contrary by the Company,
a representation and acknowledgement by you (in a form
acceptable to the Company) that, among other things, such
shares are being acquired by you for investment and not
with a view to their distribution or resale, that the shares
are not registered under the Securities Act of 1933, as
amended (the "Securities Act"), that the Company is not
obligated to register the shares, that the shares may have to
be held indefinitely unless an exemption from the
registration requirements is available and that the Company
may place a legend on the certificate evidencing the shares
reflecting the fact that they were acquired for investment
and cannot be sold or transferred unless registered under
the Securities Act as amended, or unless counsel to the
Company is satisfied that the circumstances of the proposed
transfer do not require such registration.
If notice of the exercise of this option is
given by a person or persons other than you, the Company
may require, as a condition to the exercise of the option,
the submission to the Company of appropriate proof of the
right of such person or persons to exercise the option.<PAGE>
4. Issuance of Certificates Upon Exercise of
Option
Certificate representing the shares of the
Common Stock for which payment is made upon exercise
of this option shall be issued as soon a practicable. The
Company, however, shall not be required to issue or
deliver a certificate for any shares until it has complied
with all requirements of the Securities Act, the Securities
Exchange Act of 1934, any stock exchange or over-the-
counter market on which the Company's Common Stock
may then be listed or traded and all applicable state laws in
connection with the issuance or sale of such shares or the
listing of such shares on said exchange or market. Until
the issuance of the certificate for such shares, you or such
other person as may be entitled to exercise this option,
shall have none of the rights of a stockholder with respect
to the shares subject to this option.
5. Nature of Shares Issuable Upon Exercise of
Option
In the event the Company chooses not to
register the shares underlying the options, the shares of
Common Stock issuable upon exercise of this option will be
unregistered and must be held indefinitely unless they are
subsequently registered under the Securities Act or an
exemption from such registration, such as embodied in
Rule 144, is available. Rule 144 under the Securities Act
permits, upon compliance with certain conditions, sales in
limited amounts of shares of publicly held companies which
are current in the filing of various required reports with the
Securities and Exchange Commission, and which shares
have been beneficially owned and fully paid for at least two
years. The Company has not covenanted to file a
registration statement under the Securities Act covering the
shares issuable upon exercise of this option nor to take
such action as may be necessary to permit sales under Rule
144. You are advised to inquire of the appropriate officer
of the Company at any time that you may wish to sell any
shares obtained from the exercise of this option.
6. Termination of Services
If you cease to be a director or an employee
of the Company (or a subsidiary thereof) due to your
removal as such for cause or due to your failure to be
reelected by the stockholders of the Company, this option
shall immediately lapse, terminate and expire. If you cease
to be a director or an employee of the Company (or a
subsidiary thereof) due to death, retirement or disability,
you or the person to whom your rights under this option
are transferred by will or the laws of descent and
distribution, may exercise this option within three months
from the date of termination due to death or retirement, or
within one year from the date of termination due to
disability, to the extent this option was exercisable on the
date of termination; provided, however, that such exercise
occurs within ____ years from the date of grant of this
option. If you cease to be a director or an employee of the
Company (or a subsidiary thereof) due to your termination
without cause and other than by reason of death, disability
or retirement at age 65, you or the person to whom your
rights under this option are transferred by will or the laws
of descent and distribution, may exercise this option within
three months from the date of such termination, to the
extent this option was exercisable on the date of
termination; provided, however, that such exercise occurs
within ____ years from the date of grant of this option.
Any options not so exercised shall forthwith automatically
lapse, terminate, and expire.
7. Non-Transferability of Option
This option shall not be transferable or
assignable except by will or the laws of descent and
distribution, or pursuant to a qualified domestic relations
order, as defined by the Code or Title I of the Employee
Retirement Income Security Act or the rules thereunder,
and may be exercised during your lifetime only by you.
<PAGE>
8. Adjustments upon Changes in Capitalization
If the shares of Common Stock outstanding are
changed in number, kind or class by reason of a stock
split, combination, merger, consolidation, reorganization,
reclassification, exchange or any capital adjustment,
including a stock dividend, or if any distribution is made to
shareholders other than a cash dividend and the Board of
Directors (or Committee) deems it appropriate to make an
adjustment, then (i) the number and class of shares which
are issuable under this option, and (ii) the purchase price
to be paid per share under this option, shall be adjusted as
hereinafter provided.
Adjustments under this Section 8 shall be made in
a proportionate and equitable manner by the Board of
Directors (or Committee), whose determination as to what
adjustments shall be made, and the extent thereof, shall be
final, binding and conclusive. In the event that a fraction of
a share results from the foregoing adjustment, said fraction
shall be eliminated and the price per share of the remaining
shares subject to the option adjusted accordingly.
In the event of a liquidation of the Company, or a
merger, reorganization or consolidation of the Company
with any other corporation in which the Company is not the
surviving corporation or the Company becomes a wholly
owned subsidiary of another corporation, any unexercised
options theretofore granted under the Plan shall be deemed
cancelled unless the surviving corporation in any such
merger, reorganization or consolidation elected to assume
the options under the Plan or to issue substitute options in
place thereof; provided, however, that, notwithstanding the
foregoing, if such options would otherwise be cancelled in
accordance with the foregoing, the optionee shall have the
right, exercisable during a ten-day period prior to such
liquidation, merger or consolidation, to exercise the option
in whole or in part. The granting of an option pursuant to
this Plan shall not affect in any way the right or power of
the Company to make adjustments, reorganizations,
reclassifications or changes of its capital or business
structure or to merge, consolidate, dissolve, liquidate or
sell or transfer all or any part of its business or assets.
DIVERSIFAX, INC.
By:
_________________________
President
AGREED TO AND ACCEPTED, as of
the day of, 199
<PAGE>
October 25, 1996
Board of Directors
DiversiFax, Inc.
39 Stringham Avenue
Valley Stream, New York 11580
Gentlemen:
It is our opinion that the securities being registered
with the Securities and Exchange Commission pursuant to
the Registration Statement of DiversiFax, Inc. on Form S-8
will, when issued, be legally issued, fully paid and
nonassessable.
We consent to the filing of this opinion as an
exhibit to the aforesaid Registration Statement and further
consent to the reference made to us under the caption
"Interests of Named Experts and Counsel" in such
Registration Statement.
Very truly yours,
Breslow & Walker, LLP
<PAGE>
Exhibit 23(a)
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this
Registration Statement of DiversiFax, Inc. and Subsidiaries
on Form S-8 relating to the DiversiFax, Inc. 1996 Stock
Option Plan, of our report dated March 7, 1996, appearing
in the Annual Report on Form 10-KSB of DiversiFax, Inc.
and Subsidiaries for the year ended November 30, 1995,
and the use of our name, and the statements with respect to
us, under the heading "Experts" in the Prospectus.
HOBERMAN,
MILLER & CO., P.C.
October 29, 1996
