AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 11, 1997
REGISTRATION NO. 333-31163
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------
AMENDMENT NO. 1 TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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ENAMELON, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE
(STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATION)
2834
(PRIMARY STANDARD INDUSTRIAL CLASSIFICATION CODE NUMBER)
13-3669775
(I.R.S. EMPLOYER IDENTIFICATION NUMBER)
15 KIMBALL AVENUE, YONKERS, NY 10704(914) 237-1308
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
--------------
DR. STEVEN R. FOX, CHAIRMAN OF THE BOARD, ENAMELON, INC.
15 KIMBALL AVENUE, YONKERS, NY 10704 (914) 237-1308
(NAME, ADDRESS INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
--------------
COPIES TO:
JACK BECKER, ESQ.
SNOW BECKER KRAUSS P.C.
605 THIRD AVENUE
NEW YORK, NEW YORK 10158
TEL: (212) 687-3860
FAX: (212) 949-7052
Approximate Date of Commencement of Proposed Sale to The Public: As
soon as practicable after the Registration Statement becomes effective.
If any of the securities being registered on this form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, check the following box. /X/
If this form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, please check the
following box and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering. / /
<PAGE>
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
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CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
PROPOSED PROPOSED
MAXIMUM MAXIMUM
OFFERING AGGREGATE AMOUNT OF
TITLE OF EACH CLASS OF AMOUNT TO BE PRICE PER OFFERING REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED SHARE(1) PRICE(1) FEE
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.001 par value 1,200,000 shs $15.75(2) $18,900,000 $5,727.27
Total Registration Fee $5,727.27
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457 promulgated under the Securities Act of 1933, as
amended.
(2) The closing bid price of the Common Stock of the Registrant on July 7,
1997, on the NASDAQ National Market.
================================================================================
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the costs and expenses payable by the
Registrant in connection with the issuance and distribution of the securities
being registered hereunder.
All of the amounts shown are estimates (except for the SEC filing fee).
SEC filing fee .................................................... $ 5,727.27
Transfer agent's fee ............ ................................ $ 2,500.00
Printing and engraving expenses ................................... $ 2,500.00
Legal fees and expenses ........................................... $40,000.00
Blue sky filing fees and expenses (including counsel fees) ........ $ 2,000.00
Accounting fees and expenses ...................................... $10,000.00
Miscellaneous expenses ............................................ $ 7,272.73
Total ............................................................. $70,000.00
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Under Section 145 of the Delaware General Corporation Law, the Registrant
has broad powers to indemnify its directors and officers against liabilities
they may incur in such capacities, including liabilities under the Securities
Act of 1933, as amended (the "Securities Act"). The Registrant's Bylaws provide
that the Registrant will indemnify its directors, executive officers, other
officers, employees and agents to the fullest extent permitted by Delaware law.
The Registrant's Certificate of Incorporation provides for the elimination
of liability for monetary damages for breach of the directors' fiduciary duty of
care to the Registrant and its stockholders. These provisions do not eliminate
the directors' duty of care and, in appropriate circumstances, equitable
remedies such as injunctive or other forms of non-monetary relief will remain
available under Delaware law. In addition, each director will continue to be
subject to liability for breach of the director's duty of loyalty to the
Registrant, for acts or omissions not in good faith or involving intentional
misconduct, for knowing violations of law, for any transaction from which the
director derived an improper personal benefit, and for payment of dividends or
approval of stock repurchases or redemptions that are unlawful under Delaware
law. The provision does not affect a director's responsibilities under any other
laws, such as the federal securities laws or state or federal environmental
laws.
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.
Effective November 30, 1992, the Company effectuated a 100-for-one stock
split of its Common Stock. In July 1993, the Company effectuated a
1.19688-for-one stock split of its Common Stock. In September 1994, the Company
effectuated a one-for-1.65068 stock split of its Common Stock. In June 1995, the
Company effectuated a three-for-one stock split of its Common Stock. All of the
following information regarding the issuance of shares of the Company's Common
Stock has been adjusted, where appropriate, to reflect such stock splits. Since
July 1994, the Registrant has sold the following securities without registration
under the Securities Act:
(1) In September 1994, the Registrant sold an aggregate of 118,125 shares
of its Common Stock and Warrants to purchase 59,064 shares of Common Stock at an
exercise price of S1.33 a share to six unaffiliated persons, for an aggregate
consideration of $157,500 ($1.33 per share ascribing no value to the Warrants).
<PAGE>
(2) In May 1995, the Registrant sold an aggregate of 93,750 shares of its
Common Stock and Warrants to purchase 93,750 shares of Common Stock at an
exercise price of S1.33 a share to eight persons, for an aggregate consideration
of $ 125,000 ($1.33 per share ascribing no value to the Warrants). Eric Horodas,
a Director of the Registrant, acquired 9,375 shares of Common Stock and 9,375
Warrants.
(3) In June 1995 the Registrant sold an aggregate of 3,000 shares of its
Common Stock to an unrelated party in consideration for services rendered to the
Registrant, valued at S8,045 ($2.68 per share).
(4) In August through December 1995, the Registrant sold an aggregate of
648,723 shares of its Common Stock to an aggregate of 112 unaffiliated persons,
for an aggregate consideration of $2,594,892 (S4.00 per share).
(5) In connection with the sales in ITEM 15(4) above, the Registrant
authorized the issuance of warrants to purchase an aggregate of 26,276 shares
of Common Stock at an exercise price of $4.00 per share, and 1,562 shares of
Common Stock at an exercise price of $3.60 per share.
(6) In January 1996 the Registrant sold an aggregate of 6,706 shares of its
Common Stock to an unrelated party in consideration for services rendered to the
Registrant, valued at $26,824 (S4.00 per share).
(7) In January 1996, the Registrant sold an aggregate of 500,000 Units to
an aggregate of 19 unaffiliated persons, for an aggregate consideration of
$2,000,000 (S4.00 per Unit). Each Unit consisted of 1.103 shares of 5%
Convertible Preferred Stock and 1 Common Stock Purchase Warrant, exercisable at
$5.75 per share.
(8) In connection with the placement of the offering in ITEM 15(7) above,
the Registrant authorized the issuance of warrants to purchase an aggregate of
100,000 shares of Common Stock at an exercise price of $4.80 per share, and
23,750 shares of Common Stock at an exercise price of $3.60 per share.
(9) In April 1996, the Registrant sold an aggregate of 6,250 Units to an
unrelated party, for an aggregate consideration of S25,000 ($4.00 per Unit).
Each Unit consisted of 1.103 shares of 5% Convertible Preferred Stock and 1
Common Stock Purchase Warrant, exercisable at S5.75 per share.
(10) In April and May of 1997, the Registrant sold an aggregate of 35,375
shares of its Common Stock to an aggregate of four unaffiliated persons for an
aggregate consideration of $100,373.
(11) In May of 1997 the Board of Directors of the Company authorized the
issuance of warrants to purchase 3,055 shares of Common Stock at S3.60 a share
in settlement of certain claims.
(12) In June 1997 the Registrant sold an aggregate of 1,080,000 shares of
Common Stock to 42 unaffiliated persons, for an aggregate consideration of
S14,040,000 ($13.00 per share).
The issuances described in ITEMS 15(1),(3), (5), (6),(8) and (11) above
were made in reliance upon the exemption from the registration requirements of
the Securities Act provided by Section 4(2) of the Securities Act for
transactions by an issuer not involving a public offering. The issuances
described in ITEMS 15 (2), (4), (7), (9) and (12) above were made in reliance
upon the exemption from the registration requirements of the Securities Act for
transactions by an issuer not involving a public offering provided by Section
4(6) of the Securities Act and Regulation D promulgated thereunder. The
recipients of the securities in each of the above transactions represented their
intentions to acquire the securities for investment only and not with a view to
or a sale in connection with any distribution thereof. Allen & Company
Incorporated acted as the placement agent for the issuances described in ITEM
15(7) above and received a fee of 100,000 warrants described in 15(8). Claremont
York Capital acted as a finder in such transaction and received 23,750 warrants
as described in 15(8). No underwriter or underwriting discount or commission was
involved in any other issuance. The issuances described in ITEM 15(10) were made
in reliance upon Section 3(b) of the Securities Act and Rule 701 promulgated
thereunder.
<PAGE>
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) Exhibits
The following Exhibits are filed herewith and made a part hereof.
3.1 Certificate of Incorporation of the Registrant, as amended*
3.2 Amended and Restated By-Laws of the Registrant*
4.1 Specimen Copy of Stock Certificate for shares of Common Stock*
5.1 Securities Opinion of Snow Becker Krauss P.C.
10.1 Restated Patent License Agreement by and between the Registrant and
the American Dental Association Health Foundation dated as of June 24,
1992
10.2 Amendment Agreement by and between the Registrant and the American
Dental Association Health Foundation dated as of June 12, 1995.*
10.3 Restated Foreign Patent License Agreement by and between the
Registrant and the American Dental Health Foundation dated
as of November 18, 1992.*
10.4 Foreign License Amendment Agreement by and between the Registrant and
the American Dental Association Health Foundation dated as of June 14,
1995.*
10.5 The Registrant's 1993 Stock Option Plan.*
10.6 The Registrant's Incentive Compensation Plan.*
10.7 Employment Agreement between the Registrant and Dr. Steven R. Fox, as
amended as of June 15, 1996.**
10.8 Amended and Restated Employment Agreement between the Registrant and
D. Brooks Cole dated as of June 1, 1995.*
10.9 Employment Agreement between the Registrant and Norman Usen and
Nu-Products dated as of May 1, 1995.*
10.10 Amended and Restated Employment Agreement between the Registrant and
Anthony E. Winston dated as of January 17, 1997.**
10.11 Employment Agreement between the Registrant and Edwin Diaz dated as of
July 29, 1996.*
10.12 Lease Agreement with Elaine Fox dated December 19, 1995.*
10.13 Lease Agreement with Unum Life Insurance Company of America dated
December 27, 1993.*
10.14 Lease Agreement with East Brunswick Woods Associates, L.P. dated
November 1995.*
10.15 The Registrant's 1997 Stock Option Plan
23.1 The Consent of Snow Becker Krauss P.C. is included in Exhibit 5.1
23.2 The Consent of BDO Seidman, LLP, independent certified public
accountants, is included in Part 11 of this Registration Statement
24.1 The Power of Attorney is included in the Signature of this
Registration Statement
_____________
* Incorporated by reference to the Company's Form S-1 Registration
Statement effective October 24, 1996.
** Incorporated by reference to the Company's Form 10-KSB for the fiscal
year ended December 31, 1996.
(b) Financial Statement Schedules
All other schedules have been omitted because the information to be set
forth therein is not applicable or is shown in the financial statements or the
notes thereto.
ITEM 17. UNDERTAKINGS.
The Company hereby undertakes:
(1) To file, during any period in which it offers or sells securities, a
post-effective amendment to this registration statement to:
(i) include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) reflect in the prospectus any facts or events which, individually
or together, represent a fundamental change in the information in the
registration statement; and
<PAGE>
(iii) include any additional or changed material information on the
plan of distribution
(2) For determining liability under the Act, to 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) To file a post-effective amendment to remove from registration any of
the securities that remain unsold at the end of the offering.
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
HAS DULY CAUSED THIS REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF YONKERS, STATE OF NEW
YORK, ON THE 11th DAY OF JULY 1997.
ENAMELON, INC.
By: /s/ Dr. Steven R. Fox
(DR. STEVEN R. FOX, CHAIRMAN
OF THE BOARD OF DIRECTORS AND
CHIEF EXECUTIVE OFFICER)
POWER OF ATTORNEY
EACH OF THE UNDERSIGNED HEREBY AUTHORIZES DR. STEVEN R. FOX AS HIS
ATTORNEY-IN-FACT TO EXECUTE IN THE NAME OF EACH SUCH PERSON AND TO FILE SUCH
AMENDMENTS (INCLUDING POST-EFFECTIVE AMENDMENTS) TO THIS REGISTRATION STATEMENT
AS THE REGISTRANT DEEMS APPROPRIATE AND APPOINTS SUCH PERSON AS ATTORNEY-IN-FACT
TO SIGN ON HIS BEHALF INDIVIDUALLY AND IN EACH CAPACITY STATED BELOW AND TO FILE
ALL AMENDMENTS, EXHIBITS, SUPPLEMENTS AND POST-EFFECTIVE AMENDMENTS TO THIS
REGISTRATION STATEMENT.
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 STATED:
SIGNATURE
<TABLE>
<S> <C> <C>
/s/ Dr. Steven R. Fox Chairman of the Board of Directors and
--------------------- Chief Executive Officer (Principal Executive July 11, 1997
DR. STEVEN R. FOX Officer)
/s/ Edwin Diaz Treasurer, Vice President - Finance and
- ----------------------- Chief Financial Officer (Principal Financial July 11, 1997
EDWIN DIAZ Officer)
/s/ Dr. Bert D. Gaster Director July 11, 1997
----------------------
DR. BERT D. GASTER
/s/ Richard A. Gotterer Director July 11, 1997
-----------------------
RICHARD A. GOTTERER
/s/ Eric D. Horodas
- ------------------------
ERIC D. HORODAS Director July 11, 1997
/s/ Dr S.N. Bhaskar
- ------------------------
DR. S.N. BHASKAR Director July 11, 1997
</TABLE>
<PAGE>
INDEX TO EXHIBITS
SEQUENTIALLY NUMBERED
EXHIBIT. PAGE DESCRIPTION
3.1 Certificate of Incorporation of the Registrant, as amended*
3.2 Amended and Restated By-Laws of the Registrant*
4.1 Specimen Copy of Stock Certificate for shares of Common Stock*
5.1 Securities Opinion of Snow Becker Krauss P.C.
10.1 Restated Patent License Agreement by and between the Registrant and
the American Dental Association Health Foundation dated as of June 24,
1992
10.2 Amendment Agreement by and between the Registrant and the American
Dental Association Health Foundation dated as of June 12, 1995.*
10.3 Restated Foreign Patent License Agreement by and between the
Registrant and the American Dental Health Foundation dated as of
November 18, 1992.*
10.4 Foreign License Amendment Agreement by and between the Registrant and
the American Dental Association Health Foundation dated as of June 14,
1995.*
10.5 The Registrant's 1993 Stock Option Plan.*
10.6 The Registrant's Incentive Compensation Plan.*
10.7 Employment Agreement between the Registrant and Dr. Steven R. Fox, as
amended as of June 15, 1996.**
10.8 Amended and Restated Employment Agreement between the Registrant and
D. Brooks Cole dated as of June 1, 1995.*
10.9 Employment Agreement between the Registrant and Norman Usen and
Nu-Products dated as of May 1, 1995.*
10.10 Amended and Restated Employment Agreement between the Registrant and
Anthony E. Winston dated as of January 17, 1997.**
10.11 Employment Agreement between the Registrant and Edwin Diaz dated as of
July 29, 1996.*
10.12 Lease Agreement with Elaine Fox dated December 19, 1995.*
10.13 Lease Agreement with Unum Life Insurance Company of America dated
December 27, 1993.*
10.14 Lease Agreement with East Brunswick Woods Associates, L.P. dated
November 1995.*
10.15 The Registrant's 1997 Stock Option Plan
23.1 The Consent of Snow Becker Krauss P.C. is included in Exhibit 5.1
23.2 The Consent of BDO Seidman, LLP, independent certified public
accountants, is included in Part II of this Registration Statement
24.1 The Power of Attorney is included in the Signature of this
Registration Statement
___________
* Incorporated by reference to the Company's Form S-1 Registration
Statement effective October 24, 1996.
** Incorporated by reference to the Company's Form 10-KSB for the
fiscal year ended December 31, 1996.
<PAGE>
Exhibit 5.1
Opinion of Snow Becker Krauss P.C.
<PAGE>
SNOW BECKER KRAUSS P.C.
Attorneys at Law
605 Third Avenue
New York, New York 10158
(212) 687-3860
July 11, 1997
Board of Directors
Enamelon, inc.
15 Kimball Avenue
Yonkers, New York 10704
Gentlemen:
You have requested our opinion, as counsel for Enamelon, Inc., a Delaware
corporation (the "Company"), in connection with the registration statement on
Form S-1 (No. 333-_) (the "Registration Statement"), under the Securities Act of
1933 (the "Act"), filed by the Company with the Securities and Exchange
Commission.
The Registration Statement relates to an offering of up to 1,200,000 shares
(the "Shares") of common stock, par value $0.001 ("Common Stock"), of the
Company.
We have examined such records and documents and made such examinations of
law as we have deemed relevant in connection with this opinion. It is our
opinion that when there has been compliance with the Act and the applicable
state securities laws the Shares will have been duly authorized and, when
issued, delivered and paid for in the manner described in the Registration
Statement, will be legally issued and the Shares, when so issued, delivered and
paid for will also be fully paid and nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to our firm under the caption "Legal
Matters" in the Registration Statement. In so doing, we do not admit that we are
in the category of persons whose consent is required under Section 7 of the Act
or the rules and regulations of the Securities and Exchange Commission
promulgated thereunder.
Very truly yours,
/s/ Snow Becker Krauss P.C.
SNOW BECKER KRAUSS P.C.
<PAGE>
Exhibit 10.2
Enamelon, Inc. 1997 Stock Option Plan
<PAGE>
ENAMELON, INC.
1997 INCENTIVE STOCK OPTION PLAN
1. Purposes.
The ENAMELON, INC. 1997 INCENTIVE STOCK OPTION PLAN (the "Plan") is
intended to provide the employees, directors, independent contractors and
consultants of Enamelon Corporation (the "Company") and/or any subsidiary or
parent thereof with an added incentive to commence and/or continue their
services to the Company and to induce them to exert their maximum efforts toward
the Company's success. By thus encouraging employees, directors, independent
contractors and consultants and promoting their continued association with the
Company, the Plan may be expected to benefit the Company and its stockholders.
The Plan allows the Company to grant Incentive Stock Options ("ISOs") (as
defined in Section 422(b) of the Internal Revenue Code of 1986, as amended (the
"Code"), Non-Qualified Stock Options ("NQSOs") not intended to qualify under
Section 422(b) of the Code and Stock Appreciation Rights ("SARs") (collectively
the "Options"). The vesting of one or more Options granted hereunder may be
based on the attainment of specified performance goals of the participant or the
performance of the Company, one or more subsidiaries, parent and/or division of
one or more of the above.
2. Shares Subject to the Plan.
The total number of shares of Common Stock of the Company, $.001 par value
per share, that may be subject to Options granted under the Plan shall be seven
hundred fifty thousand (750,000) in the aggregate, subject to adjustment as
provided in Paragraph 8 of the Plan; however, the grant of an ISO to an employee
together with a tandem SAR or any NQSO to an employee together with a tandem SAR
shall only require one share of Common Stock available subject to the Plan to
satisfy such joint Option. The Company shall at all times while the Plan is in
force reserve such number of shares of Common Stock as will be sufficient to
satisfy the requirement of outstanding Options granted under the Plan. In the
event any Option granted under the Plan shall expire or terminate for any reason
without having been exercised in full or shall cease for any reason to be
exercisable in whole or in part, the unpurchased shares subject thereto shall
again be available for granting of Options under the Plan.
3. Eligibility.
All employees of the Company or of a "subsidiary" or "parent" of the
Company, as the quoted terms are defined within Section 424 of the Code are
eligible to receive ISO's or ISO's in tandem with SAR's (provided the SAR meets
the requirements set forth in Temp. Reg. Section 14a.422A-I, A-39 (a) through
(e) inclusive). ISO's or ISO's in tandem with SAR's (provided the SAR meets the
requirements set forth in Temp. Reg. Section 14a.422A-l,A-39 (a) through(e)
inclusive) may be granted from time to time under the Plan to one or more
employees of the Company or of a "subsidiary" or "parent" of the Company, as the
quoted terms are defined within Section 424 of the Code. An Officer is an
employee for the above purposes. However, a director of the Company who is not
otherwise an employee is not deemed an employee for such purposes. NQSOs and
NQSO's in tandem with SARs may be granted from time to time under the Plan to
one or more employees of the Company, Officers, members of the Board of
Directors, independent contractors, consultants and other individuals who are
not employees of, but are involved in the continuing development and success of
the Company and/or of a subsidiary of the Company, including persons who have
previously been granted Options under the Plan.
4. Administration of the Plan.
(a) The Plan shall be administered by the Board of Directors of the Company
as such Board of Directors may be composed from time to time and/or by a Stock
Option Committee or Compensation Committee(the "Committee")which shall be
comprised of solely of at least two Outside Directors (as such term is defined
in regulations promulgated from time to time with respect to Section
162(m)(4)(C)(i) of the Code) appointed by such Board of Directors of the
Company. As and to the extent authorized by the Board of Directors of the
Company, the Committee may exercise the power and authority vested in the Board
of Directors under the Plan. Within the limits of the express provisions of the
Plan, the Board of Directors or Committee shall have the authority, in its
discretion, to determine the individuals to whom, and the time or times at
which, Options shall be granted, the character of such Options (whether ISOs,
NQSOs, and/or SARs in tandem with NQSOs, and/or SARs in tandem with ISOs) and
the number of shares of Common Stock to be subject to each Option, the manner
and form in which the optionee can tender payment upon the exercise of his
Option, and to interpret the Plan, to prescribe, amend and
<PAGE>
rescind rules and regulations relating to the Plan, to determine the terms and
provisions of Option agreements that may be entered into in connection with
Options (which need not be identical), subject to the limitation that agreements
granting ISOs must be consistent with the requirements for the ISOs being
qualified as "incentive stock options" as provided in Section 422 of the Code,
and to make all other determinations and take all other actions necessary or
advisable for the administration of the Plan. In making such determinations, the
Board of Directors and/or the Committee may take into account the nature of the
services rendered by such individuals, their present and potential contributions
to the Company's success, and such other factors as the Board of Directors
and/or the Committee, in its discretion, shall deem relevant The Board of
Directors' and/or the Committee's determinations on the matters referred to in
this Paragraph shall be conclusive.
(b) Notwithstanding anything contained herein to the contrary, at anytime
during the period the Company's Common Stock is registered pursuant to Section
12(g) of the Securities Exchange Act of 1934 (the "1934 Act), the Committee, if
one has been appointed to administer all or part of the Plan, shall have the
exclusive right to grant Options to Covered Employees as defined under Section
162(m)(3) of the Code (generally executive officers subject to Section 16 of the
1934 Act) and set forth the terms and conditions thereof. With respect to
persons subject to Section 16 of the 1934 Act, transactions under the Plan are
intended, to the extent possible, comply with all applicable conditions of Rule
16b-3, as amended from time to time, (and its successor provisions, if any)
under the 1934 Act and Section 162(m)(4)(C)of the Code of 1986, as amended. To
the extent any provision of the Plan or action by the Board of Directors or
Committee fails to so comply, it shall be deemed null and void, to the extent
permitted by law and deemed advisable by the Board of Directors and/or such
Committee.
5. Terms of Options.
Within the limits of the express provisions of the Plan, the Board of
Directors or the Committee may grant either ISOs or NQSOs or SARs in tandem with
NQSOs or SARs in tandem with ISOs. An ISO or an NQSO enables the optionee to
purchase from the Company, at any time during a specified exercise period, a
specified number of shares of Common Stock at a specified price (the "Option
Price"). The optionee, if granted a SAR in tandem with a NQSO or ISO, may
receive from the Company, in lieu of exercising his option to purchase shares
pursuant to his NQSO or ISO, at one of the certain specified times during the
exercise period of the NQSO or ISO as set by the Board of Directors or the
Committee, the excess of the fair market value upon such exercise (as determined
in accordance with subparagraph (b) of this Paragraph 5) of one share of Common
Stock over the Option Price per share specified upon grant of the NQSO or
ISO/SAR multiplied by the number of shares of Common Stock covered by the SAR so
exercised. The character and terms of each Option granted under the Plan shall
be determined by the Board of Directors and/or the Committee consistent with the
provisions of the Plan, including the following:
(a) An Option granted under the Plan must be granted within 10 years from
the date the Plan is adopted, or the date the Plan is approved by the
stockholders of the Company, whichever is earlier.
(b) The Option Price of the shares of Common Stock subject to each ISO and
each SAR issued in tandem with an ISO shall not be less than the fair market
value of such shares of Common Stock at the time such ISO is granted. Such fair
market value shall be determined by the Board of Directors and, if the shares of
Common Stock are listed on a national securities exchange or traded on the
over-the-counter market, the fair market value shall be the closing price on
such exchange, or the mean of the closing bid and asked prices of the shares of
Common Stock on the over-the-counter market, as reported by the Nasdaq Stock
Market, the National Association of Securities Dealers OTC Bulletin Board or the
National Quotation Bureau, Inc., as the case may be, on the day on which the
Option is granted or, if there is no closing price or bid or asked price on that
day, the closing price or mean of the closing bid and asked prices on the most
recent day preceding the day on which the Option is granted for which such
prices are available. If an ISO or SAR in tandem with an ISO is granted to any
individual who, immediately before the ISO is to be granted, owns (directly or
through attribution) more than 10% of the total combined voting power of all
classes of capital stock of the Company or a subsidiary or parent of the
Company, the Option Price of the shares of Common Stock subject to such ISO
shall not be less than 110% of the fair market value per share of the shares of
Common Stock at the time such ISO is granted.
(c) The Option Price of the shares of Common Stock subject to an NQSO or an
SAR in tandem with a NQSO granted pursuant to the Plan shall be determined by
the Board of Directors or the Committee, in its sole discretion, but in no event
less than 85% of the fair market value per share of the shares of Common Stock
at the time of grant.
(d) In no event shall any Option granted under the Plan have an expiration
date later than 10 years from the date of its grant, and all Options granted
under the Plan shall be subject to earlier termination as expressly provided in
Paragraph 6 hereof. If an ISO or an SAR in tandem with an ISO is granted to any
individual who, immediately before the
<PAGE>
ISO is granted, owns (directly or through attribution) more that 10% of the
total combined voting power of all classes of capital stock of the Company or of
a subsidiary or parent of the Company, such ISO shall by its terms expire and
shall not be exercisable after the expiration of five (5) years from the date of
its grant.
(e) An SAR may be exercised at any time during the exercise period of the
ISO or NQSO with which it is granted in tandem and prior to the exercise of such
ISO or NQSO. Notwithstanding the foregoing, the Board of Directors and/or the
Committee shall in their discretion determine from time to time the terms and
conditions of SAR's to be granted, which terms may vary from the afore-described
conditions, and which terms shall be set forth in a written stock option
agreement evidencing the SAR granted in tandem with the ISO or NQSO. The
exercise of an SAR granted in tandem with an ISO or NQSO shall be deemed to
cancel such number of shares subject to the unexercised Option as were subject
to the exercised SAR. The Board of Directors or the Committee has the discretion
to alter the terms of the SARS if necessary to comply with Federal or state
securities law. Amounts to be paid by the Company in connection with an SAR may,
in the Board of Director's or the Committee's discretion, be made in cash,
Common Stock or a combination thereof.
(f) An Option granted under the Plan shall become exercisable, in whole at
any time or in part from time to time, but in no event may an Option (i) be
exercised as to less than one hundred (100) shares of Common Stock at any one
time, or the remaining shares of Common Stock covered by the Option if less than
one hundred (100), and (ii) except with respect to performance based Options,
become fully exercisable more than five years from the date of its grant nor
shall less than 20% of the Option become exercisable in any of the first five
years of the Option, if not terminated as provided in Section 6 hereof. The
Board of Directors or the Committee, if applicable, shall, in the event it so
elects in its sole discretion, set one or more performance standards with
respect to one or more Options upon which vesting is conditioned (which
performance standards may vary among the Options).
(g) An Option granted under the Plan shall be exercised by the delivery by
the holder thereof to the Company at its principal office (to the attention of
the Secretary) of written notice of the number of full shares of Common Stock
with respect to which the Option is being exercised, accompanied by payment in
full, which payment at the option of the optionee shall be in the form of (i)
cash or certified or bank check payable to the order of the Company, of the
Option Price of such shares of Common Stock, or, (ii) if permitted by the
Committee or the Board of Directors, as determined by the Committee or the Board
of Directors in its sole discretion at the time of the grant of the Option with
respect to an ISO and at or prior to the time of exercise with respect to a
NQSO, by the delivery of shares of Common Stock having a fair market value equal
to the Option Price or the delivery of an interest-bearing promissory note
having an original principal balance equal to the Option Price and an interest
rate not below the rate which would result in imputed interest under the Code
(provided, in order to qualify as an ISO, more than one year shall have passed
since the date of grant and one year from the date of exercise), or (iii) at the
option of the Committee or the Board of Directors, determined by the Committee
or the Board of Directors in its sole discretion at the time of the grant of the
Option with respect to an ISO and at or prior to the time of exercise with
respect to a NQSO, by a combination of cash, promissory note and/or such shares
of Common Stock (subject to the restriction above) held by the employee that
have a fair market value together with such cash and principal amount of any
promissory note that shall equal the Option Price, and, in the case of a NQSO,
at the discretion of the Committee or Board of Directors by having the Company
withhold from the shares of Common Stock to be issued upon exercise of the
Option that number of shares having a fair market value equal to the exercise
price and/or the tax withholding amount due, or otherwise provide for
withholding as set forth in Paragraph 9(c) hereof, or in the event an employee
is granted an ISO or NQSO in tandem with an SAR and desires to exercise such
SAR, such written notice shall so state such intention. To the extent allowed by
applicable Federal and state securities laws, the Option Price may also be paid
in full by a broker-dealer to whom the optionee has submitted an exercise notice
consisting of a fully endorsed Option, or through any other medium of payment as
the Board of Directors and/or the Committee, in its discretion, shall authorize.
(h) The holder of an Option shall have none of the rights of a stockholder
with respect to the shares of Common Stock covered by such holder's Option until
such shares of Common Stock shall be issued to such holder upon the exercise of
the Option.
(i) All ISOs or SARs in tandem with ISOs granted under the Plan shall not
be transferable otherwise than by will or the laws of descent and distribution
and may be exercised during the lifetime of the holder thereof only by the
holder. The Board or the Committee, in its sole discretion, shall determine
whether an Option other than an ISO or SAR in tandem with an ISO shall be
transferable. No Option granted under the Plan shall be subject to execution,
attachment other process.
<PAGE>
(j) The aggregate fair market value, determined as of the time any ISO or
SAR in tandem with an ISO is granted and in the manner provided for by
Subparagraph (b) of this Paragraph 5, of the shares of Common Stock with respect
to which ISOs granted under the Plan are exercisable for the first time during
any calendar year and under incentive stock options qualifying as such in
accordance with Section 422 of the Code granted under any other incentive stock
option plan maintained by the Company or its parent or subsidiary corporations,
shall not exceed $100,000. Any grant of Options in excess of such amount shall
be deemed a grant of a NQSO.
(k) Notwithstanding anything contained here into the contrary, an SAR which
was granted in tandem with an ISO shall (i) expire no later than the expiration
of the underlying ISO; (ii) be for no more than 100% of the spread at the time
the SAR is exercised; (iii) shall only be transferable when the underlying ISO
is transferable; (iv) only be exercised when the underlying ISO is eligible to
be exercised; and (v) only be exercisable when there is a positive spread.
(1) In no event shall an employee be granted Options for more
than 150,000 shares of Common Stock during any calendar year period; provided,
however, that the limitation set forth in this Section 5(1) shall be subject to
adjustment as provided in Section 8 herein.
6. Death or Termination of Employment/Consulting Relationship.
(a) Except as provided herein, or otherwise determined by the Board of
Directors or the Committee in its sole discretion, upon termination of
employment with the Company voluntarily by the employee or termination of a
consulting relationship with the Company prior to the termination of the term
thereof, a holder of an Option under the Plan may exercise such Options to the
extent such Options were exercisable as of the date of termination at any time
within thirty (30) days after termination, subject to the provisions of
Subparagraph (d) of this Paragraph 6. Except as provided herein, or otherwise
determined by the Board of Directors or the Committee in its sole discretion, if
such employment or consulting relationship shall terminate for any reason other
than death, voluntary termination by the employee or for cause, then such
Options may be exercised at anytime within three (3) months after such
termination. Notwithstanding anything contained herein to the contrary, unless
otherwise determined by the Board of Directors or the Committee in its sole
discretion, any options granted hereunder to an Optionee and then outstanding
shall immediately terminate in the event the Optionee is terminated for cause,
and the other provisions of this Section 6 shall not be applicable thereto. For
purposes of this Section 6, termination for cause shall be deemed the decision
of the Company, in its sole discretion, that Optionee has not adequately
performed the services for which he/she/it was hired.
(b) If the holder of an Option granted under the Plan dies (i) while
employed by the Company or a subsidiary or parent corporation or while providing
consulting services to the Company or a subsidiary or parent corporation or (ii)
within three (3) months after the termination of such holder's
employment/consulting, such Options may, subject to the provisions of
subparagraph (d) of this Paragraph 6, be exercised by a legatee or legatees of
such Option under such individual's last will or by such individual's personal
representatives distributes at any time within such time as determined by the
Board of Directors or the Committee in its sole discretion, but in no event less
than six months after the individual's death, to the extent such Options were
exercisable as of the date of death or date of termination of employment,
whichever date is earlier.
(c) If the holder of an Option under the Plan becomes disabled within the
definition of section 22(e)(3) of the Code while employed by the Company or a
subsidiary or parent corporation, such Option may, subject to the provisions of
subparagraph (d) of this Paragraph 6, be exercised at any time within six months
less one day after such holder's termination of employment due to the
disability.
(d) Except as otherwise determined by the Board of Directors or the
Committee in its sole discretion, an Option may not be exercised pursuant to
this Paragraph 6 except to the extent that the holder was entitled to exercise
the Option at the time of termination of employment, consulting relationship or
death, and in any event may not be exercised after the original expiration date
of the Option. Notwithstanding anything contained herein which may be to the
contrary, such termination or death prior to vesting shall, unless otherwise
determined by the Board of Directors or Committee, in its sole discretion, be
deemed to occur at a time the holder was not entitled to exercise the Option.
<PAGE>
(e) The Board of Directors or the Committee, in its sole discretion, may at
such time or times as it deems appropriate, if ever, accelerate all or part of
the vesting provisions with respect to one or more outstanding options. The
acceleration of one Option shall not infer that any Option is or to be
accelerated.
7. Leave of Absence.
For the purposes of the Plan, an individual who is on military or sick
leave or other bona fide leave of absence (such as temporary employment by the
Government) shall be considered as remaining in the employ of the Company or of
a subsidiary or parent corporation for ninety (90) days or such longer period as
such individual's right to reemployment is guaranteed either by statute or by
contract.
8. Adjustment Upon Changes in Capitalization.
(a) In the event that the outstanding shares of Common Stock are hereafter
changed by reason of recapitalization, reclassification, stock split-up,
combination or exchange of shares of Common Stock or the like, or by the
issuance of dividends payable in shares of Common Stock, an appropriate
adjustment shall be made by the Board of Directors, as determined by the Board
of Directors and/or the Committee, in the aggregate number of shares of Common
Stock available under the Plan, in the number of shares of Common Stock issuable
upon exercise of outstanding Options, and the Option Price per share. In the
event of any consolidation or merger of the Company with or into another
company, where the Company is not the surviving entity, or the conveyance of all
or substantially all of the assets of the Company to another company for solely
stock and/or securities, each then outstanding Option shall upon exercise
thereafter entitle the holder thereof to such number of shares of Common Stock
or other securities or property to which a holder of shares of Common Stock of
the Company would have been entitled to upon such consolidation, merger or
conveyance; and in any such case appropriate adjustment, as determined by the
Board of Directors of the Company (or successor entity) shall be made as set
forth above with respect to any future changes in the capitalization of the
Company or its successor entity. In the event of the proposed dissolution or
liquidation of the Company, or, except as provided in (b) below, the sale of
substantially all the assets of the Company for other than stock and/or
securities, all outstanding Options under the Plan will automatically terminate,
unless otherwise provided by the Board of Directors of the Company or any
authorized committee thereof.
(b) Any Option granted under the Plan, may, at the discretion of the Board
of Directors of the Company and said other corporation, be exchanged for options
to purchase shares of capital stock of another corporation which the Company,
and/or a subsidiary thereof is merged into, consolidated with, or all or a
substantial portion of the property or stock of which is acquired by said other
corporation or separated or reorganized into. The terms, provisions and benefits
to the optionee of such substitute option(s) shall in all respects be identical
to the terms, provisions and benefits of optionee under his Option(s) prior to
said substitution. To the extent the above may be inconsistent with Sections
424(a)(1) and (2) of the Code, the above shall be deemed interpreted so as to
comply therewith.
(c) Any adjustment in the number of shares of Common Stock shall apply
proportionately to only the unexercised portion of the Options granted
hereunder. If fractions of shares of Common Stock would result from any such
adjustment, the adjustment shall be revised to the next higher whole number of
shares of Common Stock.
9. Further Conditions of Exercise.
(a) Unless the shares of Common Stock issuable upon the exercise of an
Option have been registered with the Securities and Exchange Commission pursuant
to the Securities Act of 1933, as amended, prior to the exercise of the Option,
an optionee must represent in writing to the Company that such shares of Common
Stock are being acquired for investment purposes only and not with a view
towards the further resale or distribution thereof, and must supply to the
Company such other documentation as may be required by the Company, unless in
the opinion of counsel to the Company such representation, agreement or
documentation is not necessary to comply with said Act.
(b) The Company shall not be obligated to deliver any shares of Common
Stock until they have been listed on each securities exchange on which the
shares of Common Stock may then be listed or until there has been qualification
under or compliance with such state or federal laws, rules or regulations as the
Company may deem applicable.
(c) The Board of Directors or Committee may make such provisions and take
such steps as it may deem necessary or appropriate for the withholding of any
taxes that the Company is required by any law or regulation of any governmental
authority, whether federal, state or local, domestic or foreign, to withhold in
connection with the exercise of
<PAGE>
any Option, including, but not limited to, (i) the withholding of payment of all
or any portion of such Option and/or SAR until the holder reimburses the Company
for the amount the Company is required to withhold with respect to such taxes,
or (ii) the canceling of any number of shares of Common Stock issuable upon
exercise of such Option and/or SAR in an amount sufficient to reimburse the
Company for the amount it is required to so withhold, (iii) the selling of any
property contingently credited by the Company for the purpose of exercising such
Option, in order to withhold or reimburse the Company for the amount it is
required to so withhold, or (iv) withholding the amount due from such employee's
wages if the employee is employed by the Company or any subsidiary thereof.
10. Termination, Modification and Amendment.
(a) The Plan (but not Options previously granted under the Plan) shall
terminate ten (10) years from the earliest of the date of its adoption by the
Board of Directors, or the date the Plan is approved by the stockholders of the
Company, or such date of termination, as hereinafter provided, and no Option
shall be granted after termination of the Plan.
(b) The Plan may from time to time be terminated, modified or amended by
the affirmative vote of the holders of a majority of the outstanding shares of
capital stock of the Company entitled to vote thereon.
(c) The Board of Directors of the Company may at any time, prior to ten
(10) years from the earlier of the date of the adoption of the Plan by such
Board of Directors or the date the Plan is approved by the stockholders,
terminate the Plan or from time to time make such modifications or amendments of
the Plan as it may deem advisable; provided, however, that the Board of
Directors shall not, without approval by the affirmative vote of the holders of
a majority of the outstanding shares of capital stock of the Company entitled to
vote thereon, increase (except as provided by Paragraph 8) the maximum number of
shares of Common Stock as to which Options or shares may be granted under the
Plan, or materially change the standards of eligibility under the Plan. Any
amendment to the Plan which, in the opinion of counsel to the Company, will be
deemed to result in the adoption of a new Plan, will not be effective until
approved by the affirmative vote of the holders of a majority of the outstanding
shares of capital stock of the Company entitled to vote thereon.
(d) No termination, modification or amendment of the Plan may adversely
affect the rights under any outstanding Option without the consent of the
individual to whom such Option shall have been previously granted.
11. Effective Date of the Plan.
The Plan shall become effective upon adoption by the Board of Directors of
the Company. The Plan shall be subject to approval by the affirmative vote of
the holders of a majority of the outstanding shares of capital stock of the
Company entitled to vote thereon within one year before or after adoption of the
Plan by the Board of Directors.
12. Not a Contract of Employment.
Nothing contained in the Plan or in any option agreement executed pursuant
hereto shall be deemed to confer upon any individual to whom an Option is or may
be granted hereunder any right to remain in the employ of the Company or of a
subsidiary or parent of the Company or in any way limit the right of the
Company, or of any parent or subsidiary thereof, to terminate the employment of
any employee.
13. Other Compensation Plans.
The adoption of the Plan shall not affect any other stock option plan,
incentive plan or any other compensation plan in effect for the Company, nor
shall the Plan preclude the Company from establishing any other form of stock
option plan, incentive plan or any other compensation plan.
<PAGE>
Exhibit 23.1
Consent of Snow Becker Krauss P.C.
<PAGE>
CONSENT OF COUNSEL
The consent of Snow Becker Krauss P.C. is contained in its Opinion which is
filed as Exhibit 5.1 to this Registration Statement.
<PAGE>
Exhibit 23.2
Consent of BDO Seidman, LLP
<PAGE>
CONSENT OF INDEPENDENT CERTIFIED
PUBLIC ACCOUNTANTS
We hereby consent to the use in the Prospectus constituting a part of this
Registration Statement of our report dated February 11, 1997, relating to the
financial statements of Enamelon, Inc., which is contained in that Prospectus.
We also consent to the reference to us under the caption "Experts" in the
Prospectus.
BDO SEIDMAN, LLP
New York, New York
July 11, 1997
<PAGE>
