As filed with the Securities and Exchange Commission on February 27, 1998
Registration No. 33-93480
Registration No. 333-15529
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
---------------
POST-EFFECTIVE AMENDMENT NO. 1 TO
FORM S-8/S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
ECCS, INC.
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(Exact Name of Company as Specified in Its Charter)
New Jersey
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(State or Other Jurisdiction of Incorporation or Organization)
22-2288911
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(I.R.S. Employer Identification No.)
One Sheila Drive, Tinton Falls, New Jersey 07724
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(Address of Principal Executive Offices) (Zip Code)
December 1994 Warrant
1989 Stock Option Plan, as amended
1995 Employee Stock Purchase Plan
February 1995 Options
1996 Stock Plan
1996 Non-Employee Directors Stock Option Plan
June 1996 Options
December 1996 Options
February 1998 Options
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(Full Title of the Plan)
Gregg M. Azcuy
President and Chief Executive Officer
ECCS, Inc.
One Sheila Drive, Tinton Falls, New Jersey 07724
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(Name and Address of Agent for Service)
(732) 747-6995
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(Telephone Number, Including Area Code, of Agent For Service)
Copy to:
David J. Sorin, Esq.
Buchanan Ingersoll
500 College Road East
Princeton, NJ 08540
(609) 987-6800
Approximate date of commencement of proposed sale to the public: From time
to time after the effective date of this Registration Statement.
<PAGE>
================================================================================
CALCULATION OF REGISTRATION FEE
================================================================================
Proposed Proposed
Title of Amount Maximum Maximum Amount Of
Securities To To Be Offering Price Aggregate Registration
Be Registered Registered(1) Per Share Offering Price Fee
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Common Stock, par
value $.01 per share
Issuable pursuant to
a warrant previously
granted in
December 1994.... 298,848 $1.25(2) $ 373,560(2) $110
Issuable pursuant to
options previously
granted in
June 1996........ 90,000 $2.875(3) $ 258,750(3) $ 76
Issuable pursuant to
options previously
granted in
December 1996.... 10,000 $4.50(4) $ 45,000(4) $ 13
Issuable pursuant to
options previously
granted in
February 1998.... 498,400 $4.00(5) $1,993,600(5) $588
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TOTAL 897,248 $2,670,910 $787
================================================================================
(1) For the sole purpose of calculating the registration fee, the number of
shares to be registered under this registration statement has been divided
among four subtotals.
(2) Pursuant to Rule 457(h), these prices are calculated based on an exercise
price of $1.25 per share covering 298,848 shares subject to the warrant
granted in December 1994.
(3) Pursuant to Rule 457(h), these prices are calculated based on an exercise
price of $2.875 per share covering 90,000 shares subject to stock options
granted in June 1996.
(4) Pursuant to Rule 457(h), these prices are calculated based on an exercise
price of $4.50 per share covering 10,000 shares subject to stock options
granted in December 1996.
(5) Pursuant to Rule 457(h), these prices are calculated based on an exercise
price of $4.00 per share covering 498,400 shares subject to stock options
granted in February 1998.
================================================================================
<PAGE>
EXPLANATORY NOTE
This registration statement contains two parts. The first part contains a
reoffer prospectus which is filed as a part of this Post-Effective Amendment No.
1 to (A) the Registration Statement on Form S-8 (Registration No. 33-93480) (the
"1995 Registration Statement"), pertaining to (i) 900,000 shares of common
stock, par value $.01 per share (the "Common Stock"), issuable under the 1989
Stock Option Plan, as amended (the "Option Plan"); (ii) 150,000 shares of Common
Stock issuable under the 1995 Employee Stock Purchase Plan (the "Purchase
Plan"); and (iii) 306,000 shares issuable under certain options granted outside
the Option Plan in February 1995 (the "1995 Compensatory Contracts") and (B) the
Registration Statement on Form S-8 (Registration No. 333-15529) (the "1996
Registration Statement"), pertaining to (i) 150,000 shares of Common Stock
issuable under the 1996 Non-Employee Directors Stock Option Plan (the
"Non-Employee Plan") and (ii) 600,000 shares of Common Stock issuable under the
1996 Stock Plan (the "Stock Plan"). This reoffer prospectus has been prepared in
accordance with the requirements of Part I of Form S-3 and may be used for
reoffers or resales of certain shares of Common Stock of the Company defined as
"control securities" under General Instruction C to Form S-8 acquired by
"affiliates" (as such term is defined in Rule 405 of the General Rules and
Regulations under the Securities Act of 1933, as amended) pursuant to (i) the
exercise of options under the Company's Stock Plan, Non-Employee Plan and Option
Plan; (ii) the issuance of Common Stock under the Company's Purchase Plan; and
(iii) the exercise of options under the Company's 1995 Compensatory Contracts
(the shares registered pursuant to the 1995 Registration Statement and the 1996
Registration Statement are collectively referred to in this Explanatory Note as
the "Previous Plans").
The 1995 Registration Statement and the 1996 Registration Statement,
relating to the Previous Plans, were filed with the Securities and Exchange
Commission on June 14, 1995 and November 5, 1996, respectively, and each such
registration statement is effective as of the date hereof.
This reoffer prospectus has also been filed to register an aggregate of
897,248 shares of Common Stock as follows: (i) 298,848 shares of Common Stock
issuable upon the exercise of a warrant granted in December 1994; (ii) 90,000
shares of Common Stock issuable upon the exercise of certain options granted
outside the Previous Plans in June 1996; (iii) 10,000 shares of Common Stock
issuable upon the exercise of certain options granted outside the Previous Plans
in December 1996; and (iv) 498,400 shares of Common Stock issuable upon the
exercise of certain options granted outside the Previous Plans in February 1998
(the shares as described in (i), (ii), (iii) and (iv) above are collectively
referred to in this Explanatory Note as the "New Plans"). This reoffer
prospectus may also be used for reoffers or resales of "control securities"
acquired by "affiliates" pursuant to the exercise of options or the exercise of
a warrant under the New Plans.
The second part of this registration statement contains "Information
Required In The Registration Statement" pursuant to Part II of Form S-8 in
connection with the registration of the shares under the New Plans.
(i)
<PAGE>
PROSPECTUS
S-3 Reoffer Prospectus dated February 27, 1998
ECCS, INC
298,848 Shares of Common Stock
Issuable under the December 1994 Warrant
900,000 Shares of Common Stock
Issuable under the 1989 Stock Option Plan, as amended
150,000 Shares of Common Stock
Issuable under the 1995 Employee Stock Purchase Plan
306,000 Shares of Common Stock
Issuable pursuant to February 1995 Option Grants
600,000 Shares of Common Stock
Issuable under the 1996 Stock Plan
150,000 Shares of Common Stock
Issuable under the 1996 Non-Employee Directors Stock Option Plan
90,000 Shares of Common Stock
Issuable pursuant to June 1996 Option Grants
10,000 Shares of Common Stock
Issuable pursuant to December 1996 Option Grants
498,400 Shares of Common Stock
Issuable pursuant to February 1998 Option Grants
This Reoffer Prospectus (this "Prospectus") is being used in connection
with the offering from time to time by certain shareholders (the "Selling
Shareholders") of ECCS, Inc. ("ECCS" or the "Company"), of up to 3,003,248
shares (the "Shares") of common stock, par value $.01 per share (the "Common
Stock"), of the Company which have been or may be acquired upon (i) the exercise
of stock options granted pursuant to (a) the Company's 1989 Stock Option Plan,
as amended, (b) the 1996 Stock Plan or (c) the 1996 Non-Employee Directors Stock
Option Plan (collectively, the "Stock Option Plans"); (ii) the exercise of stock
options granted outside the Stock Option Plans in (a) February 1995 (the "1995
Compensatory Contracts"), (b) June 1996 (the "June 1996 Compensatory
Contracts"), (c) December 1996 (the "December 1996 Compensatory Contract"), and
(d) February 1998 (the "1998 Compensatory Contracts"); (iii) the issuance of
Common Stock pursuant to the Company's 1995 Employee Stock Purchase Plan (the
"Purchase Plan"); and (iv) the exercise of a warrant to purchase Common Stock
held by a director of the Company (the "Warrant"). Options or shares of Common
Stock may be issued under the Stock Option Plans and under the Purchase Plan in
amounts and to persons not presently known by the Company; when known, such
persons, their holdings of Common Stock and certain other information may be
included in a subsequent version of this Prospectus. The Company will receive no
proceeds from the sale of the Shares by the Selling Shareholders. The Stock
Option Plans, the 1995 Compensatory Contracts, the June 1996 Compensatory
Contracts, the December 1996 Compensatory Contract, the 1998 Compensatory
Contracts, the Purchase Plan and the Warrant are referred to collectively herein
as the "Plans".
<PAGE>
The Common Stock issuable (i) upon exercise of the options (a) covered by
the Stock Option Plans, (b) pursuant to the 1995 Compensatory Contracts, (c)
pursuant to the June 1996 Compensatory Contracts, (d) pursuant to the December
1996 Compensatory Contract or (e) pursuant to the 1998 Compensatory Contracts;
(ii) under the Purchase Plan; or (iii) upon exercise of the Warrant may be sold
from time to time by the Selling Shareholders or by pledgees, donees,
transferees or other successors in interest. Such sales may be made on the
Nasdaq SmallCap Market (the "NSCM") at prices and at terms then prevailing or at
prices related to the then current market price, or in negotiated transactions.
See "Plan of Distribution."
The Selling Shareholders and any broker executing selling orders on behalf
of the Selling Shareholders may be deemed to be an "underwriter" within the
meaning of the Securities Act of 1933, as amended (the "Securities Act"), in
which event any commission received by such broker may be deemed to be
underwriting commissions under the Securities Act.
The Shares of the Company are listed on the NSCM under the symbol "ECCS."
The closing price of the Company's Shares as reported on the NSCM on February
26, 1998 was $4.00.
AN INVESTMENT IN THE SECURITIES OFFERED HEREBY INVOLVES A HIGH DEGREE OF
RISK. SEE "RISK FACTORS" BEGINNING ON PAGE 4 HEREOF.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE 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 February 27, 1998.
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy and information statements and other information
with the Securities and Exchange Commission (the "Commission"). Such reports,
proxy and information statements and other information filed by the Company may
be inspected and copied at the public reference facilities maintained by the
Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and its
Regional Offices located at Seven World Trade Center, 13th Floor, New York, New
York 10048; and Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661-2511. Copies of such materials may be obtained from the Public
Reference Section of the Commission at Judiciary Plaza Building, 450 Fifth
Street, N.W., Washington, D.C. 20549, at prescribed rates. The Commission also
maintains a Web site that contains reports, proxy and information statements and
other information regarding issuers that file electronically with the Commission
at http://www.sec.gov.
The Common Stock of the Company is traded on the NSCM under the symbol
"ECCS," and reports, proxy and information statements and other information
concerning the Company can also be inspected at the offices of the Nasdaq Stock
Market, Inc., 1735 K Street, N.W., Washington, D.C. 20006.
In addition, the Company will provide without charge to each person to
whom this Prospectus is delivered, upon either the written or oral request of
any such person, a copy of all documents required to be delivered pursuant to
Rule 428(b) and any and all of the information that has been or may be
incorporated by reference in this Prospectus, other than exhibits to such
documents. Requests for such copies should be directed to Louis J. Altieri, Vice
President, Finance and Administration, ECCS, Inc., One Sheila Drive, Bldg. 6A,
Tinton Falls, New Jersey 07724. The Company's telephone number at such location
is (732) 747-6995.
The Company has filed a Registration Statement on Form S-8 (Registration
No. 33-93480) and a Registration Statement on Form S-8 (Registration No.
333-15529) (collectively, the "Previously Filed Registration Statements"), with
respect to the Stock Option Plans, the Purchase Plan and the 1995 Compensatory
Contracts, with the Commission under the Securities Act. This Prospectus, which
constitutes part of the Previously Filed Registration Statements, does not
contain all of the information set forth in the Previously Filed Registration
Statements, certain items of which are contained in schedules and exhibits to
the Previously Filed Registration Statements as permitted by the rules and
regulations of the Commission. Statements contained in this Prospectus as to the
contents of any agreement, instrument or other documents referred to are not
necessarily complete. With respect to each such agreement, instrument, or other
document filed as an exhibit to the Previously Filed Registration Statements,
reference is made to the exhibit for a more complete description of the matter
involved, and each such statement shall be deemed qualified in its entirety by
such reference.
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TABLE OF CONTENTS
Page
Available Information........................................ 2
Risk Factors................................................. 4
The Company.................................................. 10
Use of Proceeds.............................................. 10
Selling Shareholders......................................... 11
Plan of Distribution......................................... 13
Legal Matters................................................ 14
Experts...................................................... 14
Information Incorporated by Reference........................ 14
Indemnification of Directors and Officers.................... 15
No person is authorized to give any information or to make any
representation, other than as contained herein, in connection with the offering
described in this Prospectus, and any information or representation not
contained herein must not be relied upon as having been authorized by the
Company or the Selling Shareholders. This Prospectus does not constitute an
offer to sell, or a solicitation of an offer to buy, nor shall there be any sale
of these securities by any person in any jurisdiction in which it is unlawful
for such person to make such offer, solicitation or sale. Neither the delivery
of this Prospectus nor any sale made hereunder shall under any circumstances,
create any implication that the information contained herein is correct as of
any time subsequent to the date hereof.
3
<PAGE>
RISK FACTORS
The statements contained in this Prospectus that are not historical facts
are forward-looking statements (as such term is defined in the Private
Securities Litigation Reform Act of 1995). Such forward-looking statements may
be identified by, among other things, the use of forward-looking terminology
such as "believes," "expects," "may," "will," "should" or "anticipates" or the
negative thereof or other variations thereon or comparable terminology, or by
discussions of strategy that involve risks and uncertainties. From time to time,
the Company or its representatives have made or may make forward-looking
statements, orally or in writing. Such forward-looking statements may be
included in various filings made by the Company with the Commission, or press
releases or oral statements made by or with the approval of an authorized
executive officer of the Company. These forward-looking statements, such as
statements regarding anticipated future revenues, capital expenditures, research
and development expenditures and other statements regarding matters that are not
historical facts, involve predictions. The Company's actual results, performance
or achievements could differ materially from the results expressed in, or
implied by, these forward-looking statements. With respect to the mix of the
Company's revenues, there can be no assurances that the Company will have the
resources or personnel required for the development and marketing of proprietary
products. There also can be no assurances that proprietary product sales will
increase sufficiently, if at all, in order to lower product costs of sales.
Finally, there can be no assurances that any increase in the Company's sales of
Synchronix or Synchronection will result in improved gross margins or that other
factors, including but not limited to price pressures, will not negatively
impact gross margins. Potential risks and uncertainties that could affect the
Company's future operating results include, but are not limited to, the factors
set forth below, and economic conditions, including economic conditions related
to the computer industry.
LIMITED HISTORY OF OPERATIONS AS A PROPRIETARY SELLER; HISTORY OF LOSSES;
UNCERTAINTY OF FUTURE FINANCIAL RESULTS
From its founding until 1994, the Company's principal business was the
sale of NCR products to AT&T business units as a value added reseller ("VAR").
During 1994, as a result of AT&T's acquisition of NCR and subsequent change in
its purchasing policies, the Company undertook a product development initiative
to reposition the Company as a provider of proprietary mass storage enhancement
products. Accordingly, the Company has a limited operating history within its
current line of business. The Company incurred net losses of $3,659,000 and
$769,000 for the years ended December 31, 1995 and December 31, 1996,
respectively. Although the Company had unaudited net income of approximately
$1,102,000 for the year ended December 31, 1997, there can be no assurance that
the Company will continue to achieve profitable levels of operations in the
future.
SUBSTANTIAL RELIANCE ON CERTAIN KEY CUSTOMERS
The Company's customer base is highly concentrated, with its top 10
customers in 1995, 1996 and 1997 accounting in the aggregate for approximately
85%, 90% and 85%, respectively, of net sales. Sales to Unisys Corporation
("Unisys") accounted for approximately 30% and 18% of net sales in 1996 and
1997, respectively. Sales to the U. S. Air Force, through a Federal
4
<PAGE>
integrator, accounted for approximately 25% and 44% of net sales in 1996 and
1997, respectively. Sales to Tandem Computers Incorporated ("Tandem") accounted
for approximately 13% of net sales in 1997. The Company believes that a
substantial portion of its net sales and gross profits will continue to be
derived from sales to a concentrated group of customers. In general, there are
no ongoing written commitments by customers to purchase products from the
Company. All product sales by the Company are made on a purchase order basis. A
significant reduction in orders from any of the Company's largest customers
could have a material adverse effect on the Company's results of operations.
There can be no assurance that the Company's largest customers will continue to
place orders with the Company or that orders of its customers will continue at
their previous levels.
RAPID TECHNOLOGICAL CHANGE AND CONTINUED DEMAND FOR COMPANY'S PRODUCTS
The market for the Company's mass storage enhancement products, including
fault tolerant RAID (redundant array of independent disks), is characterized by
innovation and rapid technological advances. Both the needs of potential
customers and the technologies available for meeting those needs can change
significantly within a short period of time. The Company's future success will
depend in part on its ability to enhance continually its current mass storage
products and to develop or acquire new mass storage products that address the
needs of its customers. There can be no assurance that the Company will be
successful in developing such new products that respond to technological
changes. Other companies may succeed in developing products that are better,
more efficient or less costly than any that may be developed by the Company.
Such development or rapid technological development by others may result in the
Company's products becoming obsolete before the Company recovers a significant
portion of the research, development and commercialization expenses incurred
with respect to those products or may adversely affect the Company's competitive
position.
Demand for the Company's services and mass storage enhancement products,
including fault tolerant RAID, depends principally upon the demand for Open
Systems-based networks based on NT, UNIX and LAN operating systems. Although the
Company expects the industry to continue to expand, the Company's business may
be adversely affected by a decline in the sales growth of Open Systems-based
networks targeted by the Company. If the Company fails to anticipate and
properly respond to shifts within the Open Systems marketplace that have or may
have an impact on the demand for Open Systems, the Company's business and
results of operations will be materially adversely effected.
RISK OF MARKET ACCEPTANCE OF NEW PRODUCTS
Since 1995, the Company has focused substantial product development
efforts on its fault tolerant RAID products, and specifically, on the
development of a new product family, Synchronix, ECCS' next generation, high
availability controller and subsystem. There can be no assurance that the
Company will be successful in continuing to commercialize its Synchronix family
of products.
The Company believes that its success depends, in part, on its ability to
enhance existing products and to develop new products that maintain
technological leadership, meet a wide range
5
<PAGE>
of changing customer needs and achieve market acceptance. Lack of market
acceptance for the Company's existing or new products, the Company's failure to
introduce new products in a timely or cost-effective manner, or its failure to
increase functionality of existing products or remain price competitive, would
materially adversely affect the Company's operating results. There can be no
assurance that the Company will be successful in its product development efforts
or, even if successful, whether such products will achieve market acceptance.
The Company designs its RAID products to comply with standards adopted by
the industry and the RAID Advisory Board, which the Company believes are
industry-accepted standards, and the Company works closely with the RAID
Advisory Board to ensure that the Company's RAID standards are compatible with
industry standards. Although the Company knows of no other standard-setting body
currently in existence, there can be no assurance that other standards will not
become industry-accepted standards.
EXPANSION OF SALES AND DISTRIBUTION CHANNELS
The Company sells its products through alternate channel partners,
including OEMs, VARs and distributors, and directly to Federal and commercial
end users. The Company intends to increase both its product sales and
distribution by expanding its direct sales activities, engaging additional
alternate channel partners and developing strategic relationships with OEMs that
serve new vertical markets for the Company. Whether the Company can successfully
generate its own sales leads, introduce new products and enter new markets will
depend on its ability to expand its direct sales and support services, expand
its indirect distribution channel, and increase its relationships and alliances
with other companies. There can be no assurance that the Company will be able to
successfully expand its direct sales and support services force, expand its
indirect distribution channel, or establish or maintain successful third party
relationships. Any failure to do so could have a material adverse effect on the
Company's business, operating results and financial condition.
DEPENDENCE ON CERTAIN SOURCES OF SUPPLY
Manufacturing by the Company consists primarily of light assembly, systems
integration, testing and quality assurance. ECCS relies on outside manufacturers
to manufacture and produce the Company's products for use in the Company's
proprietary systems, as well as for the direct sale to end users, and relies on
outside suppliers to supply subassemblies, component parts and computer systems
for resale. Certain components used in the Company's business are available only
from a limited number of sources. Any delays in obtaining component parts could
adversely affect the Company's results of operations. The Company relies on
independent contractors and outside suppliers to manufacture subassemblies to
the Company's specifications. Each of the Company's products undergoes testing
and quality inspection at the final assembly stage. Although the Company has not
experienced material problems with its proprietary systems manufacturers or its
suppliers of subassemblies, there can be no assurance that material problems
will not arise in the future that could significantly impede or interrupt the
Company's business. Although the Company has not experienced significant
problems with its suppliers in the past, there can be no assurance that such
relationships will continue or that, in the event of a termination of its
relationship with its existing suppliers, it would be able to obtain alternative
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<PAGE>
sources of supply without a material disruption in the Company's ability to
provide products to its customers. Any material disruption in the Company's
supply of products would have a material adverse effect on the Company's results
of operations.
COMPETITION
The Company is engaged in fields within the computer industry
characterized by a high level of competition. Many established computer
manufacturers (such as the Company's own suppliers, which include Unisys),
systems integrators and manufacturers of mass storage enhancement products and
networking products compete with the Company. To the extent that Unisys
manufactures or markets products or services similar to those offered by the
Company, the Company's results of operations would be adversely impacted. Many
of the Company's competitors have financial, technical, manufacturing, sales,
marketing and other resources which are substantially greater than those of the
Company. There can be no assurance that the Company will be able to continue to
compete successfully with existing or new competitors. With respect to mass
storage enhancement products, there are many competitors in each product
category, none of which is dominant in any one product category, but each of
which addresses specific applications and/or markets. With respect to RAID
products and technology, EMC Corp., Data General, Digital Equipment Corporation
and Hyundai's Symbios Logic Division are significant participants in the RAID
market for mainframe computers and have acquired companies which have products
that address the Open Systems market. Most computer systems companies and
companies that offer memory enhancement products also offer RAID, mass storage
and backup products and technologies, or are undertaking development efforts,
which compete or may compete with the Company in the RAID marketplace for Open
Systems-based network computers, including companies considerably larger and
with greater resources than those of the Company. There can be no assurance that
such companies will not enter or expand their presence in the RAID marketplace
for Open Systems-based computers.
In January 1998, Compaq Computer Corp. ("Compaq") announced its
intention to acquire Digital Equipment Corporation, a competitor of the
Company. Presently, it is too early to accurately determine the impact of
Compaq's potential acquisition on the Company's competitive position.
Competitive pricing pressures exist in the data storage market and have
had and may in the future have an adverse effect on the Company's revenues and
earnings. There also has been, and may continue to be, a willingness on the part
of certain competitors to reduce prices in order to preserve or gain market
share. The Company believes that pricing pressures are likely to continue.
INTELLECTUAL PROPERTY AND RISK OF THIRD PARTY CLAIMS OF INFRINGEMENT
The Company's future success depends in part upon its intellectual
property, including patents, trade secrets, know-how and continuing
technological innovation. There can be no assurance that the steps taken by the
Company to protect its intellectual property will be adequate to prevent
misappropriation or that others will not develop competitive technologies or
products. The Company has filed numerous patent applications covering various
aspects of its Synchronix
7
<PAGE>
product family. There can be no assurance that patents will issue from any
application filed by the Company or that, if patents do issue, the claims
allowed will be sufficiently broad to prohibit others from marketing similar
products. In addition, there can be no assurance that any patents issued to the
Company will not be challenged, invalidated or circumvented, or that the rights
thereunder will provide a competitive advantage to the Company. Although the
Company believes that its products and technology do not infringe upon
proprietary rights of others, there can be no assurance that third parties will
not assert infringement claims in the future or that such claims will not be
successful. Although the Company continues to implement protective measures and
intends to defend its proprietary rights, policing unauthorized use of the
Company's technology or products is difficult and there can be no assurance that
these measures will be successful.
FLUCTUATIONS IN QUARTERLY RESULTS
The Company's operating results are affected by seasonal factors,
particularly the spending fluctuations of its largest customers including
Unisys, Tandem and the Federal government. The Company does not expect such
spending fluctuations to be altered in the future. Due to the relatively fixed
nature of certain of the Company's costs, a decline in net sales in any fiscal
quarter typically results in lower profitability in that quarter. A significant
reduction in orders from any of the Company's largest customers could have a
material adverse effect on the Company's results of operations. There can be no
assurance that the Company's largest customers will continue to place orders
with the Company or that orders of its customers will continue at their previous
levels.
DEPENDENCE UPON KEY PERSONNEL
The success of the Company's operations during the foreseeable future will
depend largely upon the continued services of the executive officers of the
Company, none of whom has entered into an employment agreement with the Company.
The Company's success also depends in part on its ability to manage,
attract and retain qualified professional, technical, manufacturing, managerial
and marketing personnel. Competition for such personnel is intense. There can be
no assurance that the Company will be successful in attracting and retaining the
personnel it requires to develop new and enhanced products and to conduct its
operations successfully. The Company's results of operations could be adversely
affected if the Company were unable to attract, hire, assimilate, train and
manage these personnel, or if net sales fail to increase at a rate sufficient to
absorb the resulting increase in expenses.
CONTROL BY EXISTING SHAREHOLDERS
As of the date of this Prospectus, certain officers and directors and
their affiliates will own or control approximately 22.8% of the Company's
outstanding Common Stock. The current shareholders will have the ability to
continue to control the election of all of the members of the Company's Board of
Directors and corporate actions requiring shareholder approval. Although the
Company's certificate of incorporation does not include any super majority
shareholder
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approval provisions, even as to corporate actions in which such super majority
approval may be required by law, such as fundamental corporate transactions
including mergers, the current shareholders will have the ability to continue to
exert significant influence. The Company is not aware of any agreement by or
among any of its shareholders to act in concert.
VOLATILITY OF STOCK PRICE AND IMPACT OF SHARES ELIGIBLE FOR FUTURE SALE
The market price of the Shares may be highly volatile. Factors such as
actual or anticipated quarterly fluctuations in financial results, changes in
recommendations or earnings estimates by securities analysts, announcements of
technological innovations or new commercial products or services and the timing
of announcements of acquisitions by the Company or its competitors, as well as
market conditions generally, may have a significant effect on the market price
of the Common Stock. Furthermore, the stock market historically has experienced
volatility which has particularly affected the market prices of securities of
many technology companies and which sometimes has been unrelated to the
operating performances of such companies.
Future sales of the Common Stock in the public market following this
offering could adversely affect the market price of the Common Stock. Upon
completion of this offering, substantially all outstanding shares of Common
Stock will be freely tradable by "persons", including, without limitation,
"affiliates" of the Company, without restriction, including the Shares and
2,000,000 shares of Common Stock eligible for resale in accordance with the
provisions of Rule 144, including, without limitation, the volume limitations
thereunder. The holders of certain shares also have certain registration rights.
Sales of substantial amounts of the Common Stock in the public market, whether
by purchasers of the Shares or other shareholders of the Company, or the
perception that such sales could occur, may adversely affect the market price of
the Common Stock.
ANTI-TAKEOVER CONSIDERATIONS
The Company presently has an authorized class of 3,000,000 shares of
Preferred Stock which may be issued by the Board of Directors on such terms and
with such rights, preferences and designations as the Board of Directors may
determine. The issuance of additional shares of preferred stock, depending upon
the rights, preferences and designations thereof, may have the effect of
delaying, deterring or preventing a change in control of the Company.
ABSENCE OF DIVIDENDS
The Company does not anticipate paying any dividends on its Common Stock
in the foreseeable future.
9
<PAGE>
THE COMPANY
ECCS provides intelligent solutions to store, protect and access mission
critical information for the Open Systems and related markets. The Company
designs, manufactures and sells high performance, fault tolerant data storage
solutions for a wide range of customer requirements. ECCS' flagship product,
Synchronix, which the Company began selling in 1996, is a full feature RAID
product family designed for use in NT and UNIX clustered environments. The
Company's products are compatible with most Open System computing platforms and
enable customers to store, protect and access data and to centralize data
management functions across an organization's disparate computer environments.
ECCS' core technology provides data-intensive environments with protection
against the loss of critical data and provides performance and reliability
characteristics of a mainframe, at a fraction of the cost. The Company's
products offer users (i) fast data transfer rates by spreading and retrieving
data simultaneously among various disk drives, (ii) fault tolerance through the
use of redundant components that can be "hot swapped" during repair and (iii)
high storage capacity.
From its founding until 1994, the Company's principal business was the
value added resale of NCR products. Sales to AT&T business units made up a large
portion of such business. During 1994, as a result of AT&T's acquisition of NCR
and subsequent change in its purchasing policies, the Company undertook a
product development initiative to reposition the Company as a provider of
proprietary mass storage enhancement products. A number of products have
resulted from these efforts including Synchronix and Synchronection, a fault
tolerant network file server. During 1997 approximately 93% of the Company's
sales were derived from sales of the Company's proprietary products.
The Company was incorporated in New Jersey in February 1980 under the name
The Word Store, Inc. The Company's name was changed to ECCS, Inc. in November
1985. The address of the Company's principal executive offices is One Sheila
Drive, Tinton Falls, New Jersey 07724, and its telephone number is (732)
747-6995.
USE OF PROCEEDS
The Company will not receive any of the proceeds from the sale of the
Shares offered by this Prospectus. While the Company will receive sums upon any
exercise of options or the Warrant by the Selling Shareholders, the Company
currently has no plans for their application, other than for general corporate
purposes. There can be no assurance that any of such options or the Warrant will
be exercised.
10
<PAGE>
SELLING SHAREHOLDERS
The Shares being registered hereunder include shares of Common Stock which
have been or will be issued upon the exercise of options or the Warrant
previously granted by the Company. The Shares may not be sold or otherwise
transferred by the Selling Shareholders unless and until the applicable options
or the Warrant are exercised in accordance with their terms. The following table
sets forth: (i) the name and position of certain of the Selling Shareholders,
whose names are known as of the date of the filing of the registration statement
on Form S-8, as amended (the "Registration Statement") of which this Prospectus
forms a part, under the Plans, who may sell Common Stock pursuant to this
Prospectus; (ii) the number of shares of Common Stock owned (or subject to
options or the Warrant) by each such Selling Shareholder as of the date of this
Prospectus; (iii) the number of shares of Common Stock which may be offered and
are being registered for the account of each such Selling Shareholder by this
Prospectus (some of which may be acquired by such Selling Shareholders pursuant
to the exercise of options or the Warrant); and (iv) the amount and percentage
of Common Stock to be owned by each such Selling Shareholder if such Selling
Shareholder were to sell all of the shares of Common Stock covered by this
Prospectus.
There can be no assurance that any of the Selling Shareholders will offer
for sale or sell any or all of the shares offered by them pursuant to this
Prospectus. Options or shares of Common Stock may be issued under the Stock
Option Plans and the Purchase Plan in amounts and to persons not presently known
by the Company; when known, such persons, their holdings of Common Stock and
certain other information may be included in a subsequent version of this
Prospectus.
Number of Shares Number of
of Common Stock Shares of
both directly held Number of Shares Common Stock
or subject to of Common Owned After
option prior Stock to be Offering/
Name and Position to Offering (1) Offered Percentage (2)
- - ---------------------- ------------------ ---------------- --------------
Michael E. Faherty,
Chairman of the Board
and Director 391,774 391,774 --/--
Gregg M. Azcuy, President
and Chief Executive
Officer and Director 680,762 655,762 25,000/*
Louis J. Altieri,
Vice President,
Finance and
Administration 159,156 159,156 --/--
David J. Boyle, Vice
President, Sales and
Marketing 92,833 92,833 --/--
Priyan Guneratne, Vice
President, Operations 156,990 156,990 --/--
Gale R. Aguilar,
Director 40,000 40,000 --/--
James K. Dutton,
Director 40,000 40,000 --/--
Donald E. Fowler,
Director 40,000 40,000 --/--
Frank R. Triolo,
Director 40,000 40,000 --/--
Thomas I. Unterberg,
Director 1,689,960 40,000 1,649,960/15.1
11
<PAGE>
* Less than one percent.
(1) For purposes of this table, the number of shares of Common Stock owned
prior to this offering includes all shares of Common Stock which would be
owned if all options or the Warrant granted under the Plans were
exercised.
(2) Applicable percentage of ownership is based on 10,918,188 shares of Common
Stock outstanding on February 26, 1998.
12
<PAGE>
PLAN OF DISTRIBUTION
The Selling Shareholders have not advised the Company of any specific plan
for distribution of the Shares offered hereby, but it is anticipated that the
Shares will be sold from time to time by the Selling Shareholders or by
pledgees, donees, transferees or other successors in interest. Such sales may be
made over-the-counter on the NSCM at prices and at terms then prevailing or at
prices related to the then current market price, or in negotiated transactions.
The Shares may be sold by one or more of the following: (i) a block trade in
which the broker or dealer so engaged will attempt to sell the Shares as agent
but may position and resell a portion of the block as principal to facilitate
the transaction; (ii) purchases by a broker or dealer for its account pursuant
to this Prospectus; or (iii) ordinary brokerage transactions and transactions in
which the broker solicits purchases. In effecting sales, brokers or dealers
engaged by the Selling Shareholders may arrange for other brokers or dealers to
participate. Brokers or dealers will receive commissions or discounts from
Selling Shareholders in amounts to be negotiated immediately prior to the sale.
Such brokers or dealers and any other participating brokers or dealers may be
deemed to be "underwriters" within the meaning of the Securities Act in
connection with such sales, and any commissions received by them and any profit
realized by them on the resale of Shares as principals may be deemed
underwriting compensation under the Securities Act. The expenses of preparing
this Prospectus and the related Registration Statement with the Commission will
be paid by the Company. Shares of Common Stock covered by this Prospectus also
may qualify to be sold pursuant to Rule 144 under the Securities Act, rather
than pursuant to this Prospectus. The Selling Shareholders have been advised
that they are subject to the applicable provisions of the Exchange Act,
including without limitation, Rules 10b-5, 10b-6 and 10b-7 thereunder.
C. E. Unterberg, Towbin ("Unterberg Towbin"), an investment banking firm,
may act as a broker or dealer in connection with the sale of the Shares. Thomas
I. Unterberg is Managing Director of Unterberg Towbin. Mr. Unterberg is also a
member of the Board of Directors of the Company. Unterberg Harris, the
predecessor firm to Unterberg Towbin, was the sole underwriter in the Company's
follow-on public offering in August 1997 (the "1997 Offering"). Unterberg Harris
was also the managing underwriter in the Company's initial public offering in
1993. In May 1995, Unterberg Harris acted as placement agent in connection with
the private placement of 1,600,000 shares of 6% Cumulative Redeemable
Convertible Preferred Stock, Series B of the Company, which shares converted
into 1,770,590 shares of Common Stock upon the closing of the 1997 Offering. As
compensation for its services in such private placement, the Company paid to
Unterberg Harris $100,000. In May 1996, Unterberg Harris acted as placement
agent in connection with the private placement of 500,000 shares of Cumulative
Convertible Preferred Stock, Series C of the Company, which shares converted
into 2,000,000 shares of Common Stock upon the closing of the 1997 Offering. As
compensation for its services in such private placement, the Company paid to
Unterberg Harris $150,000. As of the date of this Prospectus, Mr. Unterberg
beneficially owns approximately 15.4% of the Company's outstanding Common Stock.
The Shares being registered hereunder include shares of Common Stock issuable
upon the exercise of options granted to Mr. Unterberg under the Company's
Non-Employee Plan and pursuant to the June 1996 Compensatory Contracts. As of
the date of this Prospectus, the Company has granted Mr. Unterberg 10,000
options to purchase shares of the
13
<PAGE>
Company's Common Stock under the Non-Employee Plan and 30,000 options to
purchase shares of the Company's Common Stock pursuant to the June 1996
Compensatory Contracts.
Neither the Company nor the Selling Shareholders can estimate at the
present time the amount of commissions or discounts, if any, that will be paid
by the Selling Shareholders on account of their sales of the Shares from time to
time.
LEGAL MATTERS
The validity of the Shares will be passed upon for the Company by Buchanan
Ingersoll, 500 College Road East, Princeton, New Jersey 08540.
EXPERTS
The consolidated financial statements for the year ended December 31, 1996
appearing in ECCS' Annual Report on Form 10-K/A and in its Prospectus filed on
August 20, 1997, pursuant to Rule 424 (b) under the Securities Act, have been
audited by Ernst & Young LLP, independent auditors, as set forth in their report
thereon included therein and incorporated herein by reference in reliance upon
such report given upon the authority of such firm as experts in accounting and
auditing.
INFORMATION INCORPORATED BY REFERENCE
There are hereby incorporated by reference in this Prospectus the
following documents and information heretofore filed with the Commission:
(1) The Company's Annual Report on Form 10-K/A for the year ended
December 31, 1996 filed pursuant to Section 13(a) or 15(d) of the Exchange Act;
(2) All other reports filed pursuant to Section 13(a) or 15(d) of
the Exchange Act since December 31, 1996;
(3) The description of the Company's Common Stock, $.01 par value,
which is contained in the Company's Registration Statement on Form 8-A filed
pursuant to Section 12(g) of the Exchange Act in the form declared effective by
the Commission on or about June 14, 1993, including any subsequent amendments or
reports filed for the purpose of updating such description; and
(4) The Company's latest Prospectus filed on August 20, 1997
pursuant to Rule 424(b) under the Securities Act.
All documents subsequently filed by the Company pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act, prior to the filing of a
post-effective amendment which indicates that all securities offered hereby have
been sold or which deregisters all securities then remaining unsold, shall be
deemed to be incorporated by reference and to be a part hereof from the date of
the filing of such documents.
14
<PAGE>
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 14A:3-5 of the New Jersey Business Corporation Act permits each
New Jersey business corporation to indemnify its directors, officers, employees
and agents against expenses and liabilities in connection with any proceeding
involving such persons by reason of his serving or having served in such
capacities or for each such person's acts taken in his or her capacity as a
director, officer, employee or agent of the corporation if such actions were
taken in good faith and in a manner which he or she reasonably believed to be in
or not opposed to the best interests of the corporation, and with respect to any
criminal proceeding, if he had no reasonable cause to believe his conduct was
unlawful, provided that any such proceeding is not by or in the right of the
corporation.
Section 14A:2-7(3) of the New Jersey Business Corporation Act enables a
corporation in its certificate of incorporation to limit the liability of
directors and officers of the corporation to the corporation or its
shareholders. Specifically, the certificate of incorporation may provide that
directors and officers of the corporation will not be personally liable for
money damages for breach of a duty as a director or an officer, except for
liability (i) for any breach of the director's or officer's duty of loyalty to
the corporation or its shareholders, (ii) for acts or omissions not in good
faith or which involve a knowing violation of law, (iii) as to directors only,
under Section 14A:6-12(1) of the New Jersey Business Corporation Act, which
relates to unlawful declarations of dividends or other distributions of assets
to shareholders or the unlawful purchase of shares of the corporation or (iv)
for any transaction from which the director or officer derived an improper
personal benefit.
The Company's Amended and Restated Certificate of Incorporation limits the
liability of its directors and officers as authorized by Section 14A:2-7(3).
Article 11 of the Company's Amended and Restated By-laws specifies that
the Company shall indemnify its directors, officers, employees and agents to the
extent such parties are a party to any action because he was a director,
officer, employee or agent of the Company. The Company has agreed to indemnify
such parties for their actual and reasonable expenses if such party acted in
good faith and in a manner he reasonably believed to be in the best interests of
the Company and such party had no reasonable cause to believe his conduct was
unlawful. This provision of the By-laws is deemed to be a contract between the
Company and each director and officer who serves in such capacity at any time
while such provision and the relevant provisions of the New Jersey Business
Corporation Act are in effect, and any repeal or modification thereof shall not
offset any action, suit or proceeding theretofore or thereafter brought or
threatened based in whole or in part upon any such state of facts.
The Company has executed indemnification agreements with each of its
Directors pursuant to which the Company has agreed to indemnify such parties to
the full extent permitted by law, subject to certain exceptions, if such party
becomes subject to an action because such party is a director, officer,
employee, agent or fiduciary of the Company.
The Company has obtained liability insurance for the benefit of its
directors and officers which provides coverage for losses of directors and
officers for liabilities arising out of claims
15
<PAGE>
against such persons acting as directors or officers of the Company (or any
subsidiary thereof) due to any breach of duty, neglect, error, misstatement,
misleading statement, omission or act done by such directors and officers,
except as prohibited by law.
At present, there is no pending litigation or proceeding involving a
Director or officer of the Company as to which indemnification is being sought
nor is the Company aware of any threatened litigation that may result in claims
for indemnification by any Director or officer.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers or controlling persons of the
Company pursuant to the foregoing provisions, or otherwise, the Company has been
informed that in the opinion of the Commission such indemnification is against
public policy as expressed in the Securities Act and is, therefore,
unenforceable.
16
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents which have been or will be filed with the
Commission are incorporated herein by reference:
(a) The Company's latest Prospectus filed on August 20, 1997
pursuant to Rule 424(b) under the Securities Act.
(b) All reports filed pursuant to Section 13(a) or 15(d) of
the Exchange Act since December 31, 1996.
(c) The description of the Company's Common Stock, $.01 par
value, which is contained in the Company's registration statement on Form 8-A
filed pursuant to Section 12(g) of the Exchange Act in the form declared
effective by the Commission on or about June 14, 1993, including any subsequent
amendments or reports filed for the purpose of updating such description.
All documents subsequently filed by the Company pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the filing of a
post-effective amendment which indicates that all 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.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 14A:3-5 of the New Jersey Business Corporation Act permits each
New Jersey business corporation to indemnify its directors, officers, employees
and agents against expenses and liabilities in connection with any proceeding
involving such persons by reason of his serving or having served in such
capacities or for each such person's acts taken in his or her capacity as a
director, officer, employee or agent of the corporation if such actions were
taken in good faith and in a manner which he or she reasonably believed to be in
or not opposed to the best interests of the corporation, and with respect to any
criminal proceeding, if he had no reasonable cause to believe his conduct was
unlawful, provided that any such proceeding is not by or in the right of the
corporation.
II-1
<PAGE>
Section 14A:2-7(3) of the New Jersey Business Corporation Act enables a
corporation in its certificate of incorporation to limit the liability of
directors and officers of the corporation to the corporation or its
shareholders. Specifically, the certificate of incorporation may provide that
directors and officers of the corporation will not be personally liable for
money damages for breach of a duty as a director or an officer, except for
liability (i) for any breach of the director's or officer's duty of loyalty to
the corporation or its shareholders, (ii) for acts or omissions not in good
faith or which involve a knowing violation of law, (iii) as to directors only,
under Section 14A:6-12(1) of the New Jersey Business Corporation Act, which
relates to unlawful declarations of dividends or other distributions of assets
to shareholders or the unlawful purchase of shares of the corporation or (iv)
for any transaction from which the director or officer derived an improper
personal benefit.
The Company's Amended and Restated Certificate of Incorporation limits the
liability of its directors and officers as authorized by Section 14A:2-7(3).
Article 11 of the Company's Amended and Restated By-laws specifies that
the Company shall indemnify its directors, officers, employees and agents to the
extent such parties are a party to any action because he was a director,
officer, employee or agent of the Company. The Company has agreed to indemnify
such parties for their actual and reasonable expenses if such party acted in
good faith and in a manner he reasonably believed to be in the best interests of
the Company and such party had no reasonable cause to believe his conduct was
unlawful. This provision of the By-laws is deemed to be a contract between the
Company and each director and officer who serves in such capacity at any time
while such provision and the relevant provisions of the New Jersey Business
Corporation Act are in effect, and any repeal or modification thereof shall not
offset any action, suit or proceeding theretofore or thereafter brought or
threatened based in whole or in part upon any such state of facts.
The Company has executed indemnification agreements with each of its
Directors pursuant to which the Company has agreed to indemnify such parties to
the full extent permitted by law, subject to certain exceptions, if such party
becomes subject to an action because such party is a director, officer,
employee, agent or fiduciary of the Company.
The Company has obtained liability insurance for the benefit of its
directors and officers which provides coverage for losses of directors and
officers for liabilities arising out of claims against such persons acting as
directors or officers of the Company (or any subsidiary thereof) due to any
breach of duty, neglect, error, misstatement, misleading statement, omission or
act done by such directors and officers, except as prohibited by law.
At present, there is no pending litigation or proceeding involving a
Director or officer of the Company as to which indemnification is being sought
nor is the Company aware of any threatened litigation that may result in claims
for indemnification by any Director or officer.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
II-2
<PAGE>
ITEM 8. EXHIBITS.
Exhibit
Number Description
------ -----------
4.1 Form of Option Agreement, pursuant to which the Company granted
90,000 non-qualified stock options to certain non-employee
directors of the Company in June 1996. (Incorporated by reference
to the Company's Quarterly Report on Form 10-Q for the quarterly
period ended March 31, 1995 filed on May 15, 1995).
4.2 Form of Option Agreement, pursuant to which the Company granted
10,000 non-qualified stock options to an employee of the Company
in December 1996. (Incorporated by reference to the Company's
Quarterly Report on Form 10-Q for the quarterly period ended
March 31, 1995 filed on May 15, 1995).
4.3 Form of Option Agreement, pursuant to which the Company granted
498,400 non-qualified stock options to certain officers and
employees of the Company in February 1998. (Incorporated by
reference to the Company's Quarterly Report on Form 10-Q for the
quarterly period ended March 31, 1995 filed on May 15, 1995).
4.4 Warrant issued to Michael E. Faherty to purchase 266,601 shares
of Common Stock of the Company. (Incorporated by reference to the
Company's Quarterly Report on Form 10-Q for the quarterly period
ended March 31, 1995 filed on May 15, 1995).
5 Opinion of Buchanan Ingersoll.
23.1 Consent of Ernst & Young LLP.
23.2 Consent of Buchanan Ingersoll (contained in the opinion filed as
Exhibit 5).
24 Power of Attorney (see "Power of Attorney" below).
ITEM 9. UNDERTAKINGS.
The undersigned 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 this Registration Statement or any material change to such
information in this Registration Statement;
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof; and
II-3
<PAGE>
(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.
The undersigned hereby undertakes that, for purposes of determining any
liability under the Securities Act, each filing of the Company's annual report
pursuant to Section 13 or 15(d) of the Exchange Act that is incorporated by
reference in the Registration Statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Company pursuant to the foregoing provisions, or otherwise, the Company has been
advised that in the opinion of the 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 Company of expenses incurred or paid
by a director, officer or controlling person of the Company in the successful
defense of any action, suit or proceeding) is asserted by such director, officer
or controlling person in connection with the securities being registered, the
Company will, unless in the opinion of its counsel the matter has been settled
by controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Company 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 Tinton Falls, State of New Jersey, on this 27th
day of February, 1998.
ECCS, INC.
By: /s/Gregg M. Azcuy
-----------------
Gregg M. Azcuy
President and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature
appears below constitutes and appoints Gregg M. Azcuy and Louis J. Altieri, and
each of them, his true and lawful attorneys-in-fact and agents with full power
of substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any and all amendments (including post-effective
amendments) to this Registration Statement, and to file the same with all
exhibits thereto, and all documents in connection therewith, with the
Commission, granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents or any of them, or their
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
II-5
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, as amended
this Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
Signature Title Date
/s/Gregg M. Azcuy President, Chief Executive February 27, 1998
- - ----------------------- Officer and Director
Gregg M. Azcuy (Principal Executive Officer)
/s/Louis J. Altieri Vice President, Finance and February 27, 1998
- - ----------------------- Administration (Principal
Louis J. Altieri Financial and Accounting
Officer)
/s/Michael E. Faherty Chairman of the Board and February 27, 1998
- - ----------------------- Director
Michael E. Faherty
/s/Gale R. Aguilar Director February 27, 1998
- - -----------------------
Gale R. Aguilar
/s/James K. Dutton Director February 27, 1998
- - -----------------------
James K. Dutton
/s/Donald E. Fowler Director February 27, 1998
- - -----------------------
Donald E. Fowler
/s/Frank R. Triolo Director February 27, 1998
- - -----------------------
Frank R. Triolo
/s/Thomas I. Unterberg Director February 27, 1998
- - -----------------------
Thomas I. Unterberg
II-6
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description
------ -----------
4.1 Form of Option Agreement, pursuant to which the Company granted
90,000 non-qualified stock options to certain non-employee
directors of the Company in June 1996. (Incorporated by
reference to the Company's Quarterly Report on Form 10-Q for the
quarterly period ended March 31, 1995 filed on May 15, 1995).
4.2 Form of Option Agreement, pursuant to which the Company granted
10,000 non-qualified stock options to an employee of the Company
in December 1996. (Incorporated by reference to the Company's
Quarterly Report on Form 10-Q for the quarterly period ended
March 31, 1995 filed on May 15, 1995).
4.3 Form of Option Agreement, pursuant to which the Company granted
498,400 non-qualified stock options to certain officers and
employees of the Company in February 1998. (Incorporated by
reference to the Company's Quarterly Report on Form 10-Q for the
quarterly period ended March 31, 1995 filed on May 15, 1995).
4.4 Warrant issued to Michael E. Faherty to purchase 266,601 shares
of Common Stock of the Company. (Incorporated by reference to
the Company's Quarterly Report on Form 10-Q for the quarterly
period ended March 31, 1995 filed on May 15, 1995).
5 Opinion of Buchanan Ingersoll.
23.1 Consent of Ernst & Young LLP.
23.2 Consent of Buchanan Ingersoll (contained in the opinion filed
as Exhibit 5).
24 Power of Attorney (included on signature page).
EXHIBIT 5
<PAGE>
Buchanan Ingersoll
Attorneys
500 College Road East
Princeton, New Jersey 08540
February 27, 1998
ECCS, Inc.
One Sheila Drive
Tinton Falls, New Jersey 07724
Gentlemen:
We have acted as counsel to ECCS, Inc., a New Jersey corporation (the
"Company"), in connection with the filing by the Company of a registration
statement on Form S-8, as amended (the "Registration Statement"), under the
Securities Act of 1933, as amended, relating to the registration of an aggregate
of 3,003,248 shares (the "Shares") of the Company's common stock, $.01 par
value, of which: (i) 900,000 are to be offered by the Company to its employees,
officers, directors and consultants under the Company's 1989 Stock Option Plan,
as amended (the "Option Plan"); (ii) 150,000 are to be offered by the Company to
its employees under the Company's 1995 Employee Stock Purchase Plan (the
"Purchase Plan"); (iii) 306,000 underlie certain options granted outside the
Option Plan in February 1995 (the "1995 Compensatory Contracts"); (iv) 90,000
underlie certain options granted outside the Option Plan in June 1996 (the "June
1996 Compensatory Contracts"); (v) 10,000 underlie certain options granted
outside the Option Plan in December 1996 (the "December 1996 Compensatory
Contract"); (vi) 150,000 are to be offered by the Company to its non-employee
directors under the Company's 1996 Non-Employee Directors Stock Option Plan (the
"Non-Employee Plan"); (vii) 600,000 are to be offered by the Company to its
employees, non-employee directors and consultants under the Company's 1996 Stock
Plan (the "Stock Plan"); (viii) 498,400 underlie certain options granted outside
the Option Plan, the Non-Employee Plan and the Stock Plan in February 1998 (the
"1998 Compensatory Contracts"); and (ix) 298,848 are to be offered by the
Company to a director under a warrant granted in December 1994 (the "Warrant").
The Option Plan, the Purchase Plan, the 1995 Compensatory Contracts, the June
1996 Compensatory Contracts, the December 1996 Compensatory Contract, the
Non-Employee Plan, the Stock Plan, the 1998 Compensatory Contracts and the
Warrant are referred to collectively herein as the "Plans."
In connection with the Registration Statement, we have examined such
corporate records and documents, other documents, and such questions of law
as we have deemed necessary or appropriate for purposes of this opinion. On
the basis of such examination, it is our opinion that:
1. The issuance of the Shares has been duly and validly authorized;
and
2. The Shares underlying the Plans, when issued, delivered and sold in
accordance with the terms of the respective Plans or other
instruments authorized by such Plans, granted or to be granted
thereunder, will be legally issued, fully paid and non-assessable.
We hereby consent to the filing of this opinion as Exhibit 5 to the
Registration Statement.
Very truly yours,
/s/BUCHANAN INGERSOLL
EXHIBIT 23.1
<PAGE>
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement on Form S-8 dated February 27, 1998, for the registration
of an aggregate of 3,003,248 shares of ECCS, Inc.'s Common Stock. We also
consent to the incorporation by reference therein of our report dated February
25, 1997, with respect to the consolidated financial statements and schedule of
ECCS, Inc. included in its Annual Report (Form 10-K/A) for the year ended
December 31, 1996, filed on March 28, 1997 with the Securities and Exchange
Commission. Additionally, we consent to the incorporation by reference of such
report, with respect to the consolidated financial statements of ECCS, Inc.,
included in the Rule 424(b) Prospectus, related to its Registration Statement on
Form S-2 (No. 333-32931), filed on August 20, 1997 with the Securities and
Exchange Commission.
ERNST & YOUNG LLP
Princeton, New Jersey
February 25, 1998
