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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. __)
DIPLOMAT CORPORATION
(Name of Issuer)
Common Stock, $.0001 Par Value
(Title of Class of Securities)
254551-10-4
Jonathan Rosenberg, President, 25 Kay Fries Dr., Stony Point, NY 10980
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
October 16, 1996
(Date of Event Which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box: / /
Check the following box if a fee is being paid with the statement: / /
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CUSIP No. SCHEDULE 13D
1. Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
Jay M. Kaplowitz, Wesley C. Fredericks, Jr., Arthur S. Marcus
2. Check the Appropriate Box if a Member of a Group (a) /X/
(b) / /
3. SEC Use Only
4. Source of Funds
00
5. Check Box if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(d) or 2(e) / /
6. Citizenship or Place of Organization
All U.S. Citizens
7. Sole Voting Power
500,000
Number of Shares
8. Shared Voting Power
Beneficially
Owned by Each
9. Sole Dispositive Power
Reporting Person
500,000
With
10. Shared Dispositive Power
11. Aggregate Amount Beneficially Owned by Each Reporting Person
500,000
12. Check Box if the Aggregate Amount in Row 11
Excludes Certain Shares / /
13. Percent of Class Represented by Amount in Row 11
9.3%
14. Type of Reporting Person
IN
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Item 1. Security and Issuer
This statement on Schedule 13D (the "Statement") relates to
the common stock, par value $.0001 per share (the "Common Stock") of Diplomat
Corporation, a Delaware corporation (the "Company"), with its principal
executive offices at 25 Kay Fries Drive, Stony Point, NY 10980.
Item 2. Identity and Background
(a)-(f) This Statement is being filed by Jay M. Kaplowitz,
Wesley C. Fredericks, Jr., and Arthur S. Marcus (the "Group").
The members of the Group are all partners of the law firm,
Gersten, Savage, Kaplowitz & Curtin, LLP, 575 Lexington Avenue, New York, New
York 10022.
The principal business address for the Group is c/o Gersten,
Savage, Kaplowitz & Curtin, LLP, 575 Lexington Avenue, 27th Floor, New York,
New York 10022.
During the last five years none of the members of the Group
have: (i) been convicted in a criminal proceeding (excluding traffic violations
or similar misdemeanors) or (ii) been a party to a civil proceeding of a
judicial or administrative body of competent jurisdiction, and therefore none
of such members of the Group were or are subject to a judgment, decree or final
order enjoining future violations of, or prohibiting or mandating activities
subject to, Federal or State securities laws or finding any violation with
respect to such laws.
All members of the Group are United States citizens.
Item 3. Source and Amount of Funds or Other Consideration
No funds have been expended by the Group with respect to the
acquisition of 350,000 shares of Common Stock, or 150,000 options to purchase
shares of Common Stock of the Company (the "Options"). The Common Stock and the
Options were issued to the Group, October 16, 1996 and September 9, 1996,
respectively, in consideration for legal services rendered by the Group. The
Options were issued to each member of the Group pursuant to the provisions
contained in the three separate option agreements, attached as Exhibits, dated
as of September 9, 1996, between the Company and each member of the Group
individually (the "Option Agreements").
Item 4. Purpose of Transaction
See Item 3 above.
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Item 5. Interest in Securities of the Issuer
a) The Group beneficially owns, in the aggregate 500,000
shares of Common Stock or 9.3% of the outstanding shares of Common Stock as of
November 18, 1996, including 150,000 shares of Common Stock which may become
outstanding upon the exercise of currently exercisable options at an exercise
price of $2.00 per share. Such options are exercisable through September 9,
2001. The aggregate amount of 150,000 Options became fully vested on September
9, 1996 pursuant to the terms of the Option Agreement.
Of the 500,000 shares of Common Stock, including 150,000
Options, 157,500 shares of Common Stock and 67,500 Options, which represents
4.2% of the outstanding shares of Common Stock, are beneficially owned by Jay
M. Kaplowitz, 157,500 shares of Common Stock and 67,500 Options, which
represents 4.2% of the outstanding shares of Common Stock, are beneficially
owned by Wesley C. Fredericks, Jr., and 35,000 shares of Common Stock and
15,000 Options, which represents 0.9% of the outstanding shares of Common
Stock, are beneficially owned by Arthur S. Marcus.
b) i) Of the 225,000 shares of Common Stock beneficially
owned by Mr. Kaplowitz, Mr. Kaplowitz possesses the sole power to vote or
direct the vote of all of the shares and the sole power to dispose of or direct
the disposition of all shares.
ii) Of the 225,000 shares of Common Stock beneficially owned
by Mr. Fredericks, Mr. Fredericks possesses the sole power to vote or direct
the vote of all of the shares and the sole power to dispose of or direct the
disposition of all shares.
iii) Of the 50,000 shares of Common Stock beneficially owned
by Mr. Marcus, Mr. Marcus possesses the sole power to vote or direct the vote
of all of the shares and the sole power to dispose of or direct the disposition
of all shares.
c) i) On October 16, 1996 the Company issued 157,500 shares
of Common Stock, and on September 9, 1996 granted 67,500 stock options to Jay
M. Kaplowitz.
ii) On October 16, 1996 the Company issued 157,500 shares of
Common Stock, and on September 9, 1996 granted 67,500 stock options to Wesley
C. Fredericks, Jr.
iii) On October 16, 1996 the Company issued 35,000 shares of
Common Stock, and on September 9, 1996 granted 15,000 stock options to
Arthur S. Marcus.
d) No other person has the right to receive or the power to
direct the receipt of dividends from, or the proceeds from the sale of the
Common Stock or the Options described above.
e) Not applicable.
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Item 6. Contracts, Arrangements, Understandings or Relationships
with Respect to Securities of the Issuer.
Other than the information set forth in response to Item 3,
Item 5 and the attached Exhibits, which are incorporated herein by reference,
there are no contracts, arrangements, understandings or relationships (legal or
otherwise) between the members of the Group and any other person with respect
to any securities of the Company.
Item 7. Material to be Filed as Exhibits.
Exhibit 1: Option Agreement, dated as of September 9, 1996 between
Diplomat Corporation and Jay M. Kaplowitz.
Exhibit 2: Option Agreement, dated as of September 9, 1996 between
Diplomat Corporation and Wesley C. Fredericks, Jr.
Exhibit 3: Option Agreement, dated as of September 9, 1996 between
Diplomat Corporation and Arthur S. Marcus.
Exhibit 4: Agreement to file Joint Schedule 13D.
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement is true,
complete and correct.
Date: November 21, 1996
-----------------
/s/ Jay M. Kaplowitz
-----------------------------
Jay M. Kaplowitz
/s/ Wesley C. Fredericks, Jr.
-----------------------------
Wesley C. Fredericks, Jr.
/s/ Arthur S. Marcus
-----------------------------
Arthur S. Marcus
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EXHIBIT INDEX
Exhibit 1: Option Agreement dated September 9, 1996 between Jay M.
Kaplowitz and Diplomat Corporation.
Exhibit 2: Option Agreement dated September 9, 1996 between Wesley C.
Fredericks and Diplomat Corporation.
Exhibit 3: Option Agreement dated September 9, 1996 between Arthur S.
Marcus and Diplomat Corporation.
Exhibit 4: Agreement to file Joint Schedule 13D.
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OPTION AGREEMENT
OPTION AGREEMENT, dated September 9, 1996, between Diplomat
Corporation, a Delaware corporation (the "Corporation") and Jay M. Kaplowitz
(the "Grantee").
WHEREAS, The Corporation desires to grant to the Grantee the
right and option to purchase shares (the "Option Shares") of Common Stock,
$.0001 par value per share (the "Common Stock"), of the Corporation, on the
terms and subject to the conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the receipt of $1.00 and
other good and valuable consideration, the receipt of which is hereby
acknowledged, the parties hereby agree as follows:
SECTION 1. Option to Purchase Common Stock.
a. Subject to Section 12 hereof, the Corporation
hereby grants to the Grantee an option (the "Option") to purchase from the
Corporation 67,500 Option Shares, at a purchase price of $2.00 per Option Share
(the "Option Price"). The Grantee's right and option to purchase the Option
Shares shall vest commencing on the date hereof and expiring five years from
the date hereof.
b. The Option may be exercised by the Grantee by
delivery to the Corporation, at any time commencing after the date hereof, of a
written notice (the "Option Notice"), which Option Notice shall state the
Grantee's intention to exercise the Option, the date on which the Grantee
proposes to purchase the Option Shares (the "Closing Date") and the number of
Option Shares to be purchased on the Closing Date, which Closing Date shall be
no later than 30 days nor earlier than 10 days following the date of the Option
Notice. Upon receipt by the Corporation of an Option Notice from the Grantee,
the Grantee shall be obligated to purchase that number of Option Shares to be
purchased on the Closing Date set forth in the Option Notice.
c. The purchase and sale of Option Shares acquired
pursuant to the terms of this Option Agreement shall be made on the Closing
Date at the offices of the Corporation. Delivery of the stock certificate or
other instrument registered in the name of the Grantee, evidencing the Option
Shares being purchased on the Closing Date, shall be made by the Corporation to
the Grantee on the Closing Date against the delivery to the Corporation of a
certified or bank check in the full amount of the aggregate purchase price
therefor.
SECTION 2. Representations and Warranties of The Holder. The
Grantee hereby represents and warrants to the Corporation that in the event the
Grantee acquires any Option Shares, such Option Shares will be acquired for his
own account,
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for investment and not with a view to the distribution thereof. The Grantee
understands that except as set forth in Section 6 hereof, the Option Shares
will not be registered under the Securities Act of 1933, as amended (the
"Securities Act"), and that they must be held indefinitely unless a subsequent
disposition thereof is registered under the Securities Act or the transaction
is exempt from registration. The certificate or certificates representing any
Option Shares shall bear the following restrictive legend:
"THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
AND MAY NOT BE SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR
OTHERWISE DISPOSED OF IN THE ABSENCE OF (i) AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933; OR
(ii) TO THE EXTENT APPLICABLE, RULE 144 UNDER SUCH ACT (OR
SIMILAR RULE UNDER THE SECURITIES ACT RELATING TO THE
DISPOSITION OF SECURITIES), OR (iii) AN OPINION OF COUNSEL,
IF SUCH OPINION SHALL BE REASONABLY SATISFACTORY TO COUNSEL
FOR THE ISSUER, THAN AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT IS AVAILABLE."
SECTION 3. Reorganization; Mergers; Sales; Etc. If, at any
time during the Option Period, there shall be any capital reorganization,
reclassification of Common Stock (other than a change in par value or from par
value to no par value or from no par value to par value or as a result of a
stock dividend or subdivision, split-up or combination of shares), the
consolidation or merger of the Corporation with or into another corporation or
of the sale of all or substantially all the properties and assets of the
Corporation as an entirety to any other corporation or person, the unexercised
and fully vested portion of this Option shall, after such reorganization,
reclassification, consolidation, merger or sale, be exercisable for the kind
and number of shares of stock or other securities or property of the
Corporation or of the corporation resulting from such consolidation or
surviving such merger or to which such properties and assets shall have been
sold to which the Grantee would have been entitled if the Grantee had held
shares of Common Stock issuable upon the exercise hereof immediately prior to
such reorganization, reclassification, consolidation, merger or sale. The
provisions of this Section 3 shall similarly apply to successive
reorganizations, reclassifications, consolidations, mergers and sales.
SECTION 4. Adjustment of Option Shares and Option Price.
a. The number of Option Shares subject to this
Option during the Option Period shall be cumulative as to all prior dates of
calculation and shall be adjusted for any stock dividend, subdivision, split-up
or combination of Common Stock.
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b. The Option Price shall be subject to adjustment
from time to time as follows:
If, at any time during the Option Period, the number of
shares of Common Stock outstanding is altered by a stock dividend payable in
shares of Common Stock or by a subdivision or split-up or combination of shares
of Common Stock, then, immediately following the record date fixed for the
determination of holders of shares of Common Stock, entitled to receive such
subdivision or split-up or combination, the Option Price shall be appropriately
increased or decreased and the number of shares of Common Stock issuable upon
the exercise hereof shall be increased or decreased, pursuant to the formula
set forth in Section 4.c.
c. Upon each adjustment of the Option Price pursuant
to the provisions of this Section 4, the number of shares of Common Stock
issuable upon the exercise hereof shall be adjusted to the nearest full share
of Common Stock by multiplying a number equal to the Option Price in effect
immediately prior to such adjustment by the number of shares of Common Stock
issuable immediately prior to such adjustment and dividing the product so
obtained by the adjusted Option Price.
SECTION 5. Termination of the Options.
a. Termination of Options in General. Subject to
subsection (b) of this Section, the Option granted hereby shall terminate and
the Option shall no longer be exercisable after five years from the date
hereof.
b. Death of the Optionee. In the event that an
Grantee shall die prior to his complete exercise of the Option, the Option may
be exercised in whole or in part only: (i) by the Grantee's estate or on behalf
of such person or persons to whom the Grantee's rights pass under his Will or
by the laws of descent and distribution, (ii) to the extent that the Grantee
was entitled to exercise the Option at the date of his death, and (iii) prior
to the expiration of the term of the Option, or within one year after the date
of death, whichever is earlier.
SECTION 6. Piggyback Registration. (a) If, at any time
commencing on the date hereof, the Corporation proposes to register any of its
securities under the Securities Act (other than in connection with a merger) it
will give written notice by registered mail, at least thirty (30) days prior to
the filing of each such registration statement, to the Grantee of its intention
to do so. If the Grantee notifies the Corporation within twenty (20) days after
receipt of any such notice of his desire to include any Option Shares, owned by
him (whether such Option Shares have fully vested or not) in such proposed
registration statement, the Corporation shall afford the Grantee the
opportunity to have any of his Option Shares registered under such registration
statement;
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provided that (i) such inclusion does not pose any significant legal problem
and (ii) if such registration statement is filed pursuant to an underwritten
public offering, the underwriter approves such inclusion.
(b) Notwithstanding the provisions of this Section
6, the Corporation shall have the right at any time after it shall have given
written notice pursuant to this Section 6 (irrespective of whether a written
request for inclusion of any Option Shares shall have been made) to elect not
to file any such proposed registration statement, or to withdraw the same after
the filing but prior to the effective date thereof.
(c) Grantee will cooperate with the Corporation in
all respects in connection with this Agreement, including, timely supplying all
information reasonably requested by the Corporation and executing and returning
all documents reasonably requested in connection with the registration and sale
of the Option Shares. In addition, Grantee will comply with all applicable
provisions of state and federal securities laws, including rule 10b-6
promulgated under the Securities Exchange Act of 1934 and will not, during the
course of a distribution, purchase any of the securities being distributed.
(d) All expenses incurred in any registration of the
Option Shares under this Agreement shall be paid by the Corporation, including,
without limitation, printing expenses, fees and disbursements of counsel for
the Corporation, expenses of any audits to which the Corporation shall agree to
have performed or which shall be necessary to comply with governmental
requirements in connection with any such registration, all registration and
filing fees for the Option Shares under federal and state securities laws, and
expenses of complying with the securities or blue sky laws of any
jurisdictions; provided, however, the Corporation shall not be liable for (a)
any discounts or commissions to any underwriter; (b) any stock transfer taxes
incurred with respect to Option Shares sold in such offering or (c) the fees
and expenses of counsel for Grantee, provided that the Corporation will pay the
costs and expenses of counsel when the Corporation's counsel is representing
all selling security holders.
SECTION 7. Transfer of Option; Successors And Assigns.
This Agreement (including the Option) and all rights
hereunder shall not be transferable at any time without the prior written
consent of the Corporation. This Agreement and all the rights hereunder shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors, approved assigns and approved transferees.
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SECTION 8. Notices. All notices or other communications which
are required or permitted hereunder shall be in writing and sufficient if
delivered personally or sent by registered or certified mail, postage prepaid,
return receipt requested, addressed as follows:
If the Corporation, to:
Diplomat Corporation
25 Kay Fries Drive
Stony Point, New York 10980
Attention: Sheldon R. Rose, Chairman
to the Employee, to:
Jay M. Kaplowitz
c/o Gersten, Savage, Kaplowitz & Curtin
575 Lexington Avenue
New York, NY 10022
or to such other address as the party to whom notice is to be given may have
furnished to the other party in writing in accordance herewith. If mailed as
aforesaid, any such communication shall be deemed to have been given on the
third business day following the day on which the piece of mail containing such
communication is posted.
SECTION 9. Governing Law. This Agreement shall be governed
by, and construed in accordance with the laws of the State of New York.
SECTION 10. Entire Agreement. This Agreement contains the
entire agreement between the parties hereto with respect to the transactions
contemplated herein and supersedes all previously written or oral negotiations,
commitments, representations and agreement.
SECTION 11. Amendments and Modifications. This Agreement, or
any provision hereof, may not be amended, changed or modified without the prior
written consent of each of the parties hereto.
SECTION 12. Termination. In addition to the termination
provisions set forth in Section 1 hereof, the Option shall terminate and the
Option shall no longer be exercisable after five years from the date hereof.
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IN WITNESS WHEREOF, the parties hereto have caused this
Option Agreement to be executed and delivered as of the date first above
written.
DIPLOMAT CORPORATION
By: /s/ Sheldon R. Rose
----------------------
Sheldon R. Rose
President
By: /s/ Jay M. Kaplowitz
----------------------
Jay M. Kaplowitz
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OPTION AGREEMENT
OPTION AGREEMENT, dated September 9, 1996, between Diplomat
Corporation, a Delaware corporation (the "Corporation") and Wesley C.
Fredericks, Jr. (the "Grantee").
WHEREAS, The Corporation desires to grant to the Grantee the
right and option to purchase shares (the "Option Shares") of Common Stock,
$.0001 par value per share (the "Common Stock"), of the Corporation, on the
terms and subject to the conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the receipt of $1.00 and
other good and valuable consideration, the receipt of which is hereby
acknowledged, the parties hereby agree as follows:
SECTION 1. Option to Purchase Common Stock.
a. Subject to Section 12 hereof, the Corporation
hereby grants to the Grantee an option (the "Option") to purchase from the
Corporation 67,500 Option Shares, at a purchase price of $2.00 per Option Share
(the "Option Price"). The Grantee's right and option to purchase the Option
Shares shall vest commencing on the date hereof and expiring five years from
the date hereof.
b. The Option may be exercised by the Grantee by
delivery to the Corporation, at any time commencing after the date hereof, of a
written notice (the "Option Notice"), which Option Notice shall state the
Grantee's intention to exercise the Option, the date on which the Grantee
proposes to purchase the Option Shares (the "Closing Date") and the number of
Option Shares to be purchased on the Closing Date, which Closing Date shall be
no later than 30 days nor earlier than 10 days following the date of the Option
Notice. Upon receipt by the Corporation of an Option Notice from the Grantee,
the Grantee shall be obligated to purchase that number of Option Shares to be
purchased on the Closing Date set forth in the Option Notice.
c. The purchase and sale of Option Shares acquired
pursuant to the terms of this Option Agreement shall be made on the Closing
Date at the offices of the Corporation. Delivery of the stock certificate or
other instrument registered in the name of the Grantee, evidencing the Option
Shares being purchased on the Closing Date, shall be made by the Corporation to
the Grantee on the Closing Date against the delivery to the Corporation of a
certified or bank check in the full amount of the aggregate purchase price
therefor.
SECTION 2. Representations and Warranties of The Holder. The
Grantee hereby represents and warrants to the Corporation that in the event the
Grantee acquires any Option Shares, such Option Shares will be acquired for his
own account,
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for investment and not with a view to the distribution thereof. The Grantee
understands that except as set forth in Section 6 hereof, the Option Shares
will not be registered under the Securities Act of 1933, as amended (the
"Securities Act"), and that they must be held indefinitely unless a subsequent
disposition thereof is registered under the Securities Act or the transaction
is exempt from registration. The certificate or certificates representing any
Option Shares shall bear the following restrictive legend:
"THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
AND MAY NOT BE SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR
OTHERWISE DISPOSED OF IN THE ABSENCE OF (i) AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933; OR
(ii) TO THE EXTENT APPLICABLE, RULE 144 UNDER SUCH ACT (OR
SIMILAR RULE UNDER THE SECURITIES ACT RELATING TO THE
DISPOSITION OF SECURITIES), OR (iii) AN OPINION OF COUNSEL,
IF SUCH OPINION SHALL BE REASONABLY SATISFACTORY TO COUNSEL
FOR THE ISSUER, THAN AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT IS AVAILABLE."
SECTION 3. Reorganization; Mergers; Sales; Etc. If, at any
time during the Option Period, there shall be any capital reorganization,
reclassification of Common Stock (other than a change in par value or from par
value to no par value or from no par value to par value or as a result of a
stock dividend or subdivision, split-up or combination of shares), the
consolidation or merger of the Corporation with or into another corporation or
of the sale of all or substantially all the properties and assets of the
Corporation as an entirety to any other corporation or person, the unexercised
and fully vested portion of this Option shall, after such reorganization,
reclassification, consolidation, merger or sale, be exercisable for the kind
and number of shares of stock or other securities or property of the
Corporation or of the corporation resulting from such consolidation or
surviving such merger or to which such properties and assets shall have been
sold to which the Grantee would have been entitled if the Grantee had held
shares of Common Stock issuable upon the exercise hereof immediately prior to
such reorganization, reclassification, consolidation, merger or sale. The
provisions of this Section 3 shall similarly apply to successive
reorganizations, reclassifications, consolidations, mergers and sales.
SECTION 4. Adjustment of Option Shares and Option Price.
a. The number of Option Shares subject to this
Option during the Option Period shall be cumulative as to all prior dates of
calculation and shall be adjusted for any stock dividend, subdivision, split-up
or combination of Common Stock.
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b. The Option Price shall be subject to adjustment
from time to time as follows:
If, at any time during the Option Period, the number of
shares of Common Stock outstanding is altered by a stock dividend payable in
shares of Common Stock or by a subdivision or split-up or combination of shares
of Common Stock, then, immediately following the record date fixed for the
determination of holders of shares of Common Stock, entitled to receive such
subdivision or split-up or combination, the Option Price shall be appropriately
increased or decreased and the number of shares of Common Stock issuable upon
the exercise hereof shall be increased or decreased, pursuant to the formula
set forth in Section 4.c.
c. Upon each adjustment of the Option Price pursuant
to the provisions of this Section 4, the number of shares of Common Stock
issuable upon the exercise hereof shall be adjusted to the nearest full share
of Common Stock by multiplying a number equal to the Option Price in effect
immediately prior to such adjustment by the number of shares of Common Stock
issuable immediately prior to such adjustment and dividing the product so
obtained by the adjusted Option Price.
SECTION 5. Termination of the Options.
a. Termination of Options in General. Subject to
subsection (b) of this Section, the Option granted hereby shall terminate and
the Option shall no longer be exercisable after five years from the date
hereof.
b. Death of the Optionee. In the event that an
Grantee shall die prior to his complete exercise of the Option, the Option may
be exercised in whole or in part only: (i) by the Grantee's estate or on behalf
of such person or persons to whom the Grantee's rights pass under his Will or
by the laws of descent and distribution, (ii) to the extent that the Grantee
was entitled to exercise the Option at the date of his death, and (iii) prior
to the expiration of the term of the Option, or within one year after the date
of death, whichever is earlier.
SECTION 6. Piggyback Registration. (a) If, at any time
commencing on the date hereof, the Corporation proposes to register any of its
securities under the Securities Act (other than in connection with a merger) it
will give written notice by registered mail, at least thirty (30) days prior to
the filing of each such registration statement, to the Grantee of its intention
to do so. If the Grantee notifies the Corporation within twenty (20) days after
receipt of any such notice of his desire to include any Option Shares, owned by
him (whether such Option Shares have fully vested or not) in such proposed
registration statement, the Corporation shall afford the Grantee the
opportunity to have any of his Option Shares registered under such registration
statement;
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provided that (i) such inclusion does not pose any significant legal problem
and (ii) if such registration statement is filed pursuant to an underwritten
public offering, the underwriter approves such inclusion.
(b) Notwithstanding the provisions of this Section
6, the Corporation shall have the right at any time after it shall have given
written notice pursuant to this Section 6 (irrespective of whether a written
request for inclusion of any Option Shares shall have been made) to elect not
to file any such proposed registration statement, or to withdraw the same after
the filing but prior to the effective date thereof.
(c) Grantee will cooperate with the Corporation in
all respects in connection with this Agreement, including, timely supplying all
information reasonably requested by the Corporation and executing and returning
all documents reasonably requested in connection with the registration and sale
of the Option Shares. In addition, Grantee will comply with all applicable
provisions of state and federal securities laws, including rule 10b-6
promulgated under the Securities Exchange Act of 1934 and will not, during the
course of a distribution, purchase any of the securities being distributed.
(d) All expenses incurred in any registration of the
Option Shares under this Agreement shall be paid by the Corporation, including,
without limitation, printing expenses, fees and disbursements of counsel for
the Corporation, expenses of any audits to which the Corporation shall agree to
have performed or which shall be necessary to comply with governmental
requirements in connection with any such registration, all registration and
filing fees for the Option Shares under federal and state securities laws, and
expenses of complying with the securities or blue sky laws of any
jurisdictions; provided, however, the Corporation shall not be liable for (a)
any discounts or commissions to any underwriter; (b) any stock transfer taxes
incurred with respect to Option Shares sold in such offering or (c) the fees
and expenses of counsel for Grantee, provided that the Corporation will pay the
costs and expenses of counsel when the Corporation's counsel is representing
all selling security holders.
SECTION 7. Transfer of Option; Successors And Assigns.
This Agreement (including the Option) and all rights
hereunder shall not be transferable at any time without the prior written
consent of the Corporation. This Agreement and all the rights hereunder shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors, approved assigns and approved transferees.
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SECTION 8. Notices. All notices or other communications which
are required or permitted hereunder shall be in writing and sufficient if
delivered personally or sent by registered or certified mail, postage prepaid,
return receipt requested, addressed as follows:
If the Corporation, to:
Diplomat Corporation
25 Kay Fries Drive
Stony Point, New York 10980
Attention: Sheldon R. Rose, Chairman
to the Employee, to:
Wesley C. Fredericks, Jr.
c/o Gersten, Savage, Kaplowitz & Curtin
575 Lexington Avenue
New York, NY 10022
or to such other address as the party to whom notice is to be given may have
furnished to the other party in writing in accordance herewith. If mailed as
aforesaid, any such communication shall be deemed to have been given on the
third business day following the day on which the piece of mail containing such
communication is posted.
SECTION 9. Governing Law. This Agreement shall be governed
by, and construed in accordance with the laws of the State of New York.
SECTION 10. Entire Agreement. This Agreement contains the
entire agreement between the parties hereto with respect to the transactions
contemplated herein and supersedes all previously written or oral negotiations,
commitments, representations and agreement.
SECTION 11. Amendments and Modifications. This Agreement, or
any provision hereof, may not be amended, changed or modified without the prior
written consent of each of the parties hereto.
SECTION 12. Termination. In addition to the termination
provisions set forth in Section 1 hereof, the Option shall terminate and the
Option shall no longer be exercisable after five years from the date hereof.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Option Agreement to be executed and delivered as of the date first above
written.
DIPLOMAT CORPORATION
By: /s/ Sheldon R. Rose
---------------------------------
Sheldon R. Rose
President
By: /s/ Wesley C. Fredericks, Jr.
---------------------------------
Wesley C. Fredericks, Jr.
6
<PAGE>
OPTION AGREEMENT
OPTION AGREEMENT, dated September 9, 1996, between Diplomat
Corporation, a Delaware corporation (the "Corporation") and Arthur S. Marcus
(the "Grantee").
WHEREAS, The Corporation desires to grant to the Grantee the
right and option to purchase shares (the "Option Shares") of Common Stock,
$.0001 par value per share (the "Common Stock"), of the Corporation, on the
terms and subject to the conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the receipt of $1.00 and
other good and valuable consideration, the receipt of which is hereby
acknowledged, the parties hereby agree as follows:
SECTION 1. Option to Purchase Common Stock.
a. Subject to Section 12 hereof, the Corporation
hereby grants to the Grantee an option (the "Option") to purchase from the
Corporation 15,000 Option Shares, at a purchase price of $2.00 per Option Share
(the "Option Price"). The Grantee's right and option to purchase the Option
Shares shall vest commencing on the date hereof and expiring five years from
the date hereof.
b. The Option may be exercised by the Grantee by
delivery to the Corporation, at any time commencing after the date hereof, of a
written notice (the "Option Notice"), which Option Notice shall state the
Grantee's intention to exercise the Option, the date on which the Grantee
proposes to purchase the Option Shares (the "Closing Date") and the number of
Option Shares to be purchased on the Closing Date, which Closing Date shall be
no later than 30 days nor earlier than 10 days following the date of the Option
Notice. Upon receipt by the Corporation of an Option Notice from the Grantee,
the Grantee shall be obligated to purchase that number of Option Shares to be
purchased on the Closing Date set forth in the Option Notice.
c. The purchase and sale of Option Shares acquired
pursuant to the terms of this Option Agreement shall be made on the Closing
Date at the offices of the Corporation. Delivery of the stock certificate or
other instrument registered in the name of the Grantee, evidencing the Option
Shares being purchased on the Closing Date, shall be made by the Corporation to
the Grantee on the Closing Date against the delivery to the Corporation of a
certified or bank check in the full amount of the aggregate purchase price
therefor.
SECTION 2. Representations and Warranties of The Holder. The
Grantee hereby represents and warrants to the Corporation that in the event the
Grantee acquires any Option Shares, such Option Shares will be acquired for his
own account,
<PAGE>
for investment and not with a view to the distribution thereof. The Grantee
understands that except as set forth in Section 6 hereof, the Option Shares
will not be registered under the Securities Act of 1933, as amended (the
"Securities Act"), and that they must be held indefinitely unless a subsequent
disposition thereof is registered under the Securities Act or the transaction
is exempt from registration. The certificate or certificates representing any
Option Shares shall bear the following restrictive legend:
"THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
AND MAY NOT BE SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR
OTHERWISE DISPOSED OF IN THE ABSENCE OF (i) AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933; OR
(ii) TO THE EXTENT APPLICABLE, RULE 144 UNDER SUCH ACT (OR
SIMILAR RULE UNDER THE SECURITIES ACT RELATING TO THE
DISPOSITION OF SECURITIES), OR (iii) AN OPINION OF COUNSEL,
IF SUCH OPINION SHALL BE REASONABLY SATISFACTORY TO COUNSEL
FOR THE ISSUER, THAN AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT IS AVAILABLE."
SECTION 3. Reorganization; Mergers; Sales; Etc. If, at any
time during the Option Period, there shall be any capital reorganization,
reclassification of Common Stock (other than a change in par value or from par
value to no par value or from no par value to par value or as a result of a
stock dividend or subdivision, split-up or combination of shares), the
consolidation or merger of the Corporation with or into another corporation or
of the sale of all or substantially all the properties and assets of the
Corporation as an entirety to any other corporation or person, the unexercised
and fully vested portion of this Option shall, after such reorganization,
reclassification, consolidation, merger or sale, be exercisable for the kind
and number of shares of stock or other securities or property of the
Corporation or of the corporation resulting from such consolidation or
surviving such merger or to which such properties and assets shall have been
sold to which the Grantee would have been entitled if the Grantee had held
shares of Common Stock issuable upon the exercise hereof immediately prior to
such reorganization, reclassification, consolidation, merger or sale. The
provisions of this Section 3 shall similarly apply to successive
reorganizations, reclassifications, consolidations, mergers and sales.
SECTION 4. Adjustment of Option Shares and Option Price.
a. The number of Option Shares subject to this
Option during the Option Period shall be cumulative as to all prior dates of
calculation and shall be adjusted for any stock dividend, subdivision, split-up
or combination of Common Stock.
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<PAGE>
b. The Option Price shall be subject to adjustment
from time to time as follows:
If, at any time during the Option Period, the number of
shares of Common Stock outstanding is altered by a stock dividend payable in
shares of Common Stock or by a subdivision or split-up or combination of shares
of Common Stock, then, immediately following the record date fixed for the
determination of holders of shares of Common Stock, entitled to receive such
subdivision or split-up or combination, the Option Price shall be appropriately
increased or decreased and the number of shares of Common Stock issuable upon
the exercise hereof shall be increased or decreased, pursuant to the formula
set forth in Section 4.c.
c. Upon each adjustment of the Option Price pursuant
to the provisions of this Section 4, the number of shares of Common Stock
issuable upon the exercise hereof shall be adjusted to the nearest full share
of Common Stock by multiplying a number equal to the Option Price in effect
immediately prior to such adjustment by the number of shares of Common Stock
issuable immediately prior to such adjustment and dividing the product so
obtained by the adjusted Option Price.
SECTION 5. Termination of the Options.
a. Termination of Options in General. Subject to
subsection (b) of this Section, the Option granted hereby shall terminate and
the Option shall no longer be exercisable after five years from the date
hereof.
b. Death of the Optionee. In the event that an
Grantee shall die prior to his complete exercise of the Option, the Option may
be exercised in whole or in part only: (i) by the Grantee's estate or on behalf
of such person or persons to whom the Grantee's rights pass under his Will or
by the laws of descent and distribution, (ii) to the extent that the Grantee
was entitled to exercise the Option at the date of his death, and (iii) prior
to the expiration of the term of the Option, or within one year after the date
of death, whichever is earlier.
SECTION 6. Piggyback Registration. (a) If, at any time
commencing on the date hereof, the Corporation proposes to register any of its
securities under the Securities Act (other than in connection with a merger) it
will give written notice by registered mail, at least thirty (30) days prior to
the filing of each such registration statement, to the Grantee of its intention
to do so. If the Grantee notifies the Corporation within twenty (20) days after
receipt of any such notice of his desire to include any Option Shares, owned by
him (whether such Option Shares have fully vested or not) in such proposed
registration statement, the Corporation shall afford the Grantee the
opportunity to have any of his Option Shares registered under such registration
statement;
3
<PAGE>
provided that (i) such inclusion does not pose any significant legal problem
and (ii) if such registration statement is filed pursuant to an underwritten
public offering, the underwriter approves such inclusion.
(b) Notwithstanding the provisions of this Section
6, the Corporation shall have the right at any time after it shall have given
written notice pursuant to this Section 6 (irrespective of whether a written
request for inclusion of any Option Shares shall have been made) to elect not
to file any such proposed registration statement, or to withdraw the same after
the filing but prior to the effective date thereof.
(c) Grantee will cooperate with the Corporation in
all respects in connection with this Agreement, including, timely supplying all
information reasonably requested by the Corporation and executing and returning
all documents reasonably requested in connection with the registration and sale
of the Option Shares. In addition, Grantee will comply with all applicable
provisions of state and federal securities laws, including rule 10b-6
promulgated under the Securities Exchange Act of 1934 and will not, during the
course of a distribution, purchase any of the securities being distributed.
(d) All expenses incurred in any registration of the
Option Shares under this Agreement shall be paid by the Corporation, including,
without limitation, printing expenses, fees and disbursements of counsel for
the Corporation, expenses of any audits to which the Corporation shall agree to
have performed or which shall be necessary to comply with governmental
requirements in connection with any such registration, all registration and
filing fees for the Option Shares under federal and state securities laws, and
expenses of complying with the securities or blue sky laws of any
jurisdictions; provided, however, the Corporation shall not be liable for (a)
any discounts or commissions to any underwriter; (b) any stock transfer taxes
incurred with respect to Option Shares sold in such offering or (c) the fees
and expenses of counsel for Grantee, provided that the Corporation will pay the
costs and expenses of counsel when the Corporation's counsel is representing
all selling security holders.
SECTION 7. Transfer of Option; Successors And Assigns.
This Agreement (including the Option) and all rights
hereunder shall not be transferable at any time without the prior written
consent of the Corporation. This Agreement and all the rights hereunder shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors, approved assigns and approved transferees.
4
<PAGE>
SECTION 8. Notices. All notices or other communications which
are required or permitted hereunder shall be in writing and sufficient if
delivered personally or sent by registered or certified mail, postage prepaid,
return receipt requested, addressed as follows:
If the Corporation, to:
Diplomat Corporation
25 Kay Fries Drive
Stony Point, New York 10980
Attention: Sheldon R. Rose, Chairman
to the Employee, to:
Arthur S. Marcus
c/o Gersten, Savage, Kaplowitz & Curtin
575 Lexington Avenue
New York, NY 10022
or to such other address as the party to whom notice is to be given may have
furnished to the other party in writing in accordance herewith. If mailed as
aforesaid, any such communication shall be deemed to have been given on the
third business day following the day on which the piece of mail containing such
communication is posted.
SECTION 9. Governing Law. This Agreement shall be governed
by, and construed in accordance with the laws of the State of New York.
SECTION 10. Entire Agreement. This Agreement contains the
entire agreement between the parties hereto with respect to the transactions
contemplated herein and supersedes all previously written or oral negotiations,
commitments, representations and agreement.
SECTION 11. Amendments and Modifications. This Agreement, or
any provision hereof, may not be amended, changed or modified without the prior
written consent of each of the parties hereto.
SECTION 12. Termination. In addition to the termination
provisions set forth in Section 1 hereof, the Option shall terminate and the
Option shall no longer be exercisable after five years from the date hereof.
5
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Option Agreement to be executed and delivered as of the date first above
written.
DIPLOMAT CORPORATION
By: /s/ Sheldon R. Rose
------------------------
Sheldon R. Rose
President
By: /s/ Arthur S. Marcus
------------------------
Arthur S. Marcus
6
<PAGE>
Exhibit 4. Agreement to File Joint Schedule 13D
The undersigned, hereby agree to the filing of a joint Schedule 13D,
with respect to 350,000 shares of common stock and 150,000 options to purchase
common stock of Diplomat Corporation, on behalf of Jay M. Kaplowitz (157,500
shares of common stock and 67,500 options), Wesley C. Fredericks, Jr. (157,500
shares of common stock and 67,500 options) , and Arthur S. Marcus (35,000
shares of common stock and 15,000 options).
Dated: November 15, 1996 /s/ Jay M. Kaplowitz
-----------------------------
Jay M. Kaplowitz
/s/ Wesley C. Fredericks, Jr.
-----------------------------
Wesley C. Fredericks, Jr.
/s/ Arthur S. Marcus
----------------------------
Arthur S. Marcus
