<PAGE>
As filed with the Securities and Exchange Commission on May 10, 1996
Registration No. 33-91304
===============================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------
AMENDMENT NO. 1
TO
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
ESMOR CORRECTIONAL SERVICES, INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 11-3182580
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
1819 MAIN STREET, SUITE 1000
SARASOTA, FLORIDA 34236
(Address of principal executive offices)
ESMOR CORRECTIONAL SERVICES, INC. - STOCK OPTION PLAN
CONTROL SECURITIES ISSUED OR TO BE ISSUED UPON THE EXERCISE OF OPTIONS
GRANTED UNDER THE ESMOR CORRECTIONAL SERVICES, INC. STOCK OPTION PLAN AND
1994 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
(Full title of the plan)
JAMES F. SLATTERY
PRESIDENT
ESMOR CORRECTIONAL SERVICES, INC.
1819 Main Street, Suite 1000
Sarasota, Florida 34236
(941) 953-9199
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copy to:
RAYMOND S. EVANS, ESQ.
Ruskin, Moscou, Evans & Faltischek, P.C.
170 Old Country Road
Mineola, New York 11501
(516) 663-6500
(516) 663-6641 (facsimile)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
=================================================================================================================================
Number of shares Proposed maximum Proposed maximum
Title of each class of to be offering price aggregate offering Amount of
securities to be registered registered per share (1) price (1) registration fee (1)
- - ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.01 par value(2).... 524,376 $12.25 $6,423,606 $2,215
=================================================================================================================================
</TABLE>
(1) Estimated solely for the purposes of calculating the registration fee and
based (a) as to the 286,876 shares purchasable upon the exercise of outstanding
options, upon the average price at which such options may be exercised and (b)
as to the remaining 237,500 shares issuable upon exercise of options reserved
for issuance, on the average of the high and low prices for the Company's Common
Stock as quoted on the Nasdaq National Market on May 6, 1996.
(2) Pursuant to Rule 416, there are also being registered additional shares of
Common Stock as may become issuable pursuant to the anti-dilution provisions of
the stock option plan being registered.
===============================================================================
<PAGE>
PART I
EXPLANATORY NOTE
The contents of the Registrant's earlier registration
statement on Form S-8, Registration No. 33-91304, are incorporated by reference.
This Registration Statement relates (i) to the amendment of the Esmor
Correctional Services, Inc. (the "Company") Stock Option Plan which was amended
to increase the number of shares of Common Stock authorized to be issued under
the Stock Option Plan from 262,500 to 500,000 and (ii) the reoffer and/or resale
of shares of the Company's Common Stock acquired or to be acquired by affiliates
of the Company upon the exercise of options granted under the Company's Stock
Option Plan and 1994 Non-Employee Director Stock Option Plan. The Prospectus
filed herewith has been prepared in accordance with the requirements of Form
S-3.
I-2
<PAGE>
PROSPECTUS
ESMOR CORRECTIONAL SERVICES, INC.
286,876 Shares of Common Stock
--------------------
This Prospectus relates to an offering by certain directors and officers
of the Company as selling stockholders ("Selling Stockholders") of up to an
aggregate of 286,876 shares of Common Stock, par value $.01 per share (the
"Shares"), of Esmor Correctional Services, Inc. (the "Company") issued or to be
issued upon exercise of options granted under the Company's Stock Option Plan
and 1994 Non-Employee Director Stock Option Plan. The Shares may be sold by the
Selling Stockholders from time to time in transactions on the Nasdaq National
Market at prices then prevailing, or in negotiated transactions at negotiated
prices, or a combination thereof. See "Selling Stockholders" and "Plan of
Distribution." The Company will not receive any proceeds from the shares sold by
the Selling Stockholders.
The Common Stock is traded in the over-the-counter market and quoted on
the Nasdaq National Market under the symbol "ESMR." On May 6, 1996, the closing
price of the Common Stock, as reported by Nasdaq, was $17.00 per share.
--------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION
OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
--------------------
The date of this Prospectus is May 10, 1996
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the information requirements of the Securities
Exchange Act of 1934 (the "Exchange Act"), and in accordance therewith, files
reports, proxy statements and other information with the Securities and Exchange
Commission (the "Commission"). Such reports, proxy statements and other
information can be inspected and copied at the public reference facilities
maintained by the Commission at Room 1024, 450 Fifth Street, N.W., Washington,
D.C. 20549 and at the Commission's regional offices located at Seven World Trade
Center, 13th Floor, New York, New York 10048 and Northwestern Atrium Center, 500
West Madison Street, Chicago, Illinois 60661. Copies of such material can be
obtained at prescribed rates from the Public Reference Section of the
Commission, 450 Fifth Street, NW, Washington, D.C. 20549. The Company's Common
Stock is quoted on the Nasdaq Stock Market and reports, proxy statements and
other information concerning the Company may also be inspected and copied at the
offices of the Nasdaq Stock Market, Inc., 1735 K Street, NW, Washington, D.C.
20006.
DOCUMENTS INCORPORATED BY REFERENCE
The following documents previously filed by the Company with the
Commission are hereby incorporated by reference in this Registration Statement:
(1) The Company's Annual Report on Form 10-KSB for the year ended
December 31, 1995;
(2) The Company's Proxy Statement dated April 22, 1996; and
(3) The description of the Company's Common Stock contained in the
Company's Registration Statement on Form 8-A (No. 0-23038), as
filed with the Commission on December 10, 1993.
All documents subsequently filed by the Company pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this
Registration Statement and prior to the filing of a post-effective amendment
which indicates that all securities offered have been sold or which removes from
registration all securities then remaining unsold, shall be deemed to be
incorporated by reference into this Registration Statement and to be a part
hereof from the date of filing of such documents. Any statement contained in a
document incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Registration Statement
to the extent that a statement contained herein or in any other subsequently
filed document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Registration Statement.
The Company undertakes to provide without charge to each person to whom a
Prospectus is delivered, upon oral or written request of such person, a copy of
any document that has been incorporated in this Prospectus by reference.
Requests for such documents should be directed to the Company at its offices
located at 1819 Main Street, Suite 1000, Sarasota, Florida 34236 (telephone
Number (941) 953-9199), Attention: Executive Vice President - Finance.
2
<PAGE>
SELLING STOCKHOLDERS
The following table sets forth certain information with respect to the
shares of the Company's Common Stock beneficially owned by them as of May 6,
1996 and being offered hereby by the Selling Stockholders:
<TABLE>
<CAPTION>
Shares of Common Stock Beneficially Shares of Common Stock Beneficially
Owned Prior to Offering(1) Owned After Offering
----------------------------------- -----------------------------------
Name of Selling Stockholder and Percent Shares to
Position with Company Number(2) of Class be Sold(3) Number Percent of Class
- - --------------------- ------ ---------- ---------- ------ ----------------
<S> <C> <C> <C> <C> <C>
Esther Horn....................... 868,434 17.5% 18,125 859,375
Director
James F. Slattery................. 788,125 15.9% 18,125 772,500
President, Chief Executive
Officer and Director
Aaron Speisman.................... 843,639(4) 17.0% 18,125 828,014(4)
Executive Vice President,
Secretary and Director
Richard P. Staley................. 44,206 * 63,750 - *
Senior Vice President
and Director
Diane McClure..................... 38,813 * 66,563 - *
Senior Vice President - Business
Development and Director
Raymond S. Evans.................. 24,044 * 18,125 8,419 *
Director
William J. Barrett................ 144,443(5) 2.9% 18,125 128,818(5)
Director
Lee Levinson...................... 18,064(6) * 24,063 5,251(6) *
Chief Financial Officer
Stuart Gerson..................... 19,475(7) * 18,125 3,850(7) *
Director
Melvin T. Stith................... 8,750 * 17,500 - *
Director
Michael Garretson................. 6,250 * 6,250 - *
Executive Vice President and
Chief Operating Officer
</TABLE>
(1) A person is deemed to be the beneficial owner of securities that can be
acquired by such person within 60 days from the date hereof upon the
exercise of options.
(2) Includes shares underlying options exercisable at May 6, 1996 or
within 60 days thereof.
(3) Includes all shares underlying options whether or not exercisable
within the time period referenced in note (2) above.
3
<PAGE>
(4) Includes 98,438 shares of Common Stock owned by the Jennifer Anna
Speisman 1992 Trust and 98,438 shares of Common Stock owned by the
Joshua Israel Speisman 1992 Trust, as to which Mr. Speisman disclaims
beneficial ownership. Also includes a Series A Warrant to purchase
7,700 shares of Common Stock.
(5) Includes 8,325 shares of Common Stock owned by his wife, as to which he
disclaims beneficial ownership. Also includes an underwriter's option
to purchase 22,423 shares of Common Stock, an agents warrant to
purchase 9,921 shares of Common Stock, a Series A Warrant to purchase
38,500 shares of Common Stock, and a Series A Warrant to purchase 7,700
shares of Common Stock owned by his wife as to which he disclaims
beneficial ownership.
(6) Includes 3,282 shares of Common Stock owned by wife and 1,969 shares of
Common Stock owned by his minor child as to which he disclaims
beneficial ownership.
(7) Includes a Series A Warrant to purchase 3,850 shares of Common Stock.
Each Selling Stockholder has acquired or will acquire the shares listed
under the caption "Shares to be Sold" through the exercise of options granted
either pursuant to the Company's Stock Option Plan or 1994 Non-Employee Director
Stock Option Plan.
PLAN OF DISTRIBUTION
The Selling Stockholders may sell the Shares from time to time through
dealers or brokers in transactions on the Nasdaq National Market at prices then
prevailing, or directly to one or more purchasers in negotiated transactions at
negotiated prices, or in a combination thereof. The Selling Stockholders and any
dealers or brokers that participate in such distribution may be deemed
"underwriters" within the meaning of the Securities Act and any commissions or
discounts received by any such dealer or broker may be deemed "underwriting
compensation."
The Selling Stockholders have been advised that they are subject to the
applicable provisions of the Exchange Act including, without limitation, Rules
10b-5, 10b-6 and 10b-7.
EXPERTS
The financial statements incorporated in this Prospectus by reference
from the Company's Annual Report on Form 10-KSB for the year ended December 31,
1995 have been audited by Grant Thornton LLP, independent auditors, as stated in
their report, which is incorporated herein by reference, and has been so
incorporated in reliance upon the report of such firm given upon their authority
as experts in accounting and auditing.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the General Corporation Law of the State of Delaware
provides for the indemnification of officers and directors under certain
circumstances against expenses incurred in successfully defending against a
claim and authorizes Delaware corporations to indemnify their officers and
directors under certain circumstances against expenses and liabilities incurred
in legal proceedings involving such persons because of their being or having
been an officer or director.
4
<PAGE>
Section 102(b) of the Delaware General Corporation Law permits a
corporation, by so providing in its certificate of incorporation, to eliminate
or limit director's liability to the corporation and its stockholders for
monetary damages arising out of certain alleged breaches of their fiduciary
duty. Section 102(b)(7) provides that no such limitation of liability may affect
a director's liability with respect to any of the following: (i) breaches of the
director's duty of loyalty to the corporation or its stockholders; (ii) acts or
omissions not made in good faith or which involve intentional misconduct of
knowing violations of law; (iii) liability for dividends paid or stock
repurchased or redeemed in violation of the Delaware General Corporation Law; or
(iv) any transaction from which the director derived an improper personal
benefit. Section 102(b)(7) does not authorize any limitation on the ability of
the corporation or its stockholders to obtain injunctive relief, specific
performance or other equitable relief against directors.
Article Ninth of the Company's Certificate of Incorporation provides
that all persons who the Company is empowered to indemnify pursuant to the
provisions of Section 145 of the General Corporation Law of the State of
Delaware (or any similar provision or provisions of applicable law at the time
in effect), shall be indemnified by the Company to the full extent permitted
thereby. The foregoing right of indemnification shall not be deemed to be
exclusive of any other rights to which those seeking indemnification may be
entitled under any by-law, agreement, vote of stockholders or disinterested
directors or otherwise.
Article Tenth of the Company's Certificate of Incorporation provides
that a director shall not be personally liable to the Company or its
stockholders for monetary damages for breach of fiduciary duty as a director,
except: (i) for any breach of the duty of loyalty; (ii) for acts or omissions
not in good faith or which involve intentional misconduct or knowing violations
of law; (iii) for liability under Section 174 of the Delaware General
Corporation Law (relating to certain unlawful dividends, stock repurchases or
stock redemptions); or (iv) for any transaction from which the director derived
any improper personal benefit. The effect of this provision in the Certificate
is to eliminate the rights of the Company and its stockholders (through
stockholders' derivative suits on behalf of the Company) to recover monetary
damages against a director for breach of the fiduciary duty of care as a
director (including breaches resulting from negligent or grossly negligent
behavior) except in certain limited situations. This provision does not limit or
eliminate the rights of the Company or any stockholder to seek non-monetary
relief such as an injunction or rescission in the event of a breach of a
director's duty of care. These provisions will not alter the liability of
directors under federal securities laws.
The Company's By-Laws (the "By-Laws") provide that the Company shall
indemnify each director and such of the Company's officers, employees and agents
as the Board of Directors shall determine from time to time to the fullest
extent provided by the laws of the State of Delaware.
The Company currently maintains directors' and officers' liability
insurance coverage for all directors and officers and has entered into
indemnification agreements with its directors and officers.
Insofar as indemnification for liabilities arising under the Act may be
permitted to directors, officers and controlling persons of the Company pursuant
to the foregoing provision or otherwise, the Company has been advised that in
the opinion of the Securities and Exchange Commission, such indemnification is
against public policy as expressed in the Act and is therefore unenforceable.
5
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents previously filed by the Registrant with the
Commission are hereby incorporated by reference in this Registration Statement:
(1) The Registrant's Annual Report on Form 10-KSB for the year ended
December 31, 1995;
(2) The Registrant's Proxy Statement dated April 22, 1996; and
(3) The description of the Registrant's Common Stock contained in the
Registrant's Registration Statement on Form 8-A (No. 0-23038), as
filed with the Commission on December 10, 1993.
All documents subsequently filed by the Registrant pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 (the "Exchange
Act") after the date of this Registration Statement and prior to the filing of a
post-effective amendment which indicates that all securities offered have been
sold or which removes from registration all securities then remaining unsold,
shall be deemed to be incorporated by reference into this Registration Statement
and to be a part hereof from the date of filing of such documents.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Registration Statement to the extent that a statement
contained herein or in any other subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Registration
Statement.
ITEM 4. DESCRIPTION OF SECURITIES
Not Applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
The validity of the Common Stock offered hereby will be passed upon for
the Registrant by the law firm of Ruskin, Moscou, Evans & Faltischek, P.C.
Raymond S. Evans, a partner of such firm, is a director of the Registrant and
owns 8,419 shares of the Registrant's Common Stock and an options to purchase
18,125 shares of Common Stock.
II-1
<PAGE>
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the General Corporation Law of the State of Delaware
provides for the indemnification of officers and directors under certain
circumstances against expenses incurred in successfully defending against a
claim and authorizes Delaware corporations to indemnify their officers and
directors under certain circumstances against expenses and liabilities incurred
in legal proceedings involving such persons because of their being or having
been an officer or director.
Section 102(b) of the Delaware General Corporation Law permits a
corporation, by so providing in its certificate of incorporation, to eliminate
or limit director's liability to the corporation and its stockholders for
monetary damages arising out of certain alleged breaches of their fiduciary
duty. Section 102(b)(7) provides that no such limitation of liability may affect
a director's liability with respect to any of the following: (i) breaches of the
director's duty of loyalty to the corporation or its stockholders; (ii) acts or
omissions not made in good faith or which involve intentional misconduct of
knowing violations of law; (iii) liability for dividends paid or stock
repurchased or redeemed in violation of the Delaware General Corporation Law; or
(iv) any transaction from which the director derived an improper personal
benefit. Section 102(b)(7) does not authorize any limitation on the ability of
the corporation or its stockholders to obtain injunctive relief, specific
performance or other equitable relief against directors.
Article Ninth of the registrant's Certificate of Incorporation provides
that all persons who the registrant is empowered to indemnify pursuant to the
provisions of Section 145 of the General Corporation Law of the State of
Delaware (or any similar provision or provisions of applicable law at the time
in effect), shall be indemnified by the registrant to the full extent permitted
thereby. The foregoing right of indemnification shall not be deemed to be
exclusive of any other rights to which those seeking indemnification may be
entitled under any by-law, agreement, vote of stockholders or disinterested
directors or otherwise.
Article Tenth of the registrant's Certificate of Incorporation provides
that a director shall not be personally liable to the Registrant or its
stockholders for monetary damages for breach of fiduciary duty as a director,
except: (i) for any breach of the duty of loyalty; (ii) for acts or omissions
not in good faith or which involve intentional misconduct or knowing violations
of law; (iii) for liability under Section 174 of the Delaware General
Corporation Law (relating to certain unlawful dividends, stock repurchases or
stock redemptions); or (iv) for any transaction from which the director derived
any improper personal benefit. The effect of this provision in the Certificate
is to eliminate the rights of the Registrant and its stockholders (through
stockholders' derivative suits on behalf of the Registrant) to recover monetary
damages against a director for breach of the fiduciary duty of care as a
director (including breaches resulting from negligent or grossly negligent
behavior) except in certain limited situations. This provision does not limit or
eliminate the rights of the Registrant or any stockholder to seek non-monetary
relief such as an injunction or rescission in the event of a breach of a
director's duty of care. These provisions will not alter the liability of
directors under federal securities laws.
The Registrant's By-Laws (the "By-Laws") provide that the Registrant
shall indemnify each director and such of the Registrant's officers, employees
and agents as the Board of Directors shall determine from time to time to the
fullest extent provided by the laws of the State of Delaware.
II-2
<PAGE>
The registrant currently maintains directors' and officers' liability
insurance coverage for all directors and officers and has entered into
indemnification agreements with its directors and officers.
Insofar as indemnification for liabilities arising under the Act may be
permitted to directors, officers and controlling persons of the Registrant
pursuant to the foregoing provision or otherwise, the Registrant has been
advised that in the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in the Act and is
therefore unenforceable.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not Applicable.
ITEM 8. EXHIBITS
4.1 Esmor Correctional Services, Inc. Stock Option Plan., as amended
5.1 Opinion of Ruskin, Moscou, Evans & Faltischek, P.C.
23.1 Consent of Grant Thornton LLP.
23.2 Consent of Ruskin, Moscou, Evans & Faltischek, P.C.
(contained in Exhibit 5.1 hereof).
ITEM 9. UNDERTAKINGS
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or any
material change to such information in the Registration Statement;
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Act, each filing of the registrant's annual
report pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and,
where applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference
in the registration statement shall be deemed to be a new registration
II-3
<PAGE>
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(c) Insofar as indemnification for liabilities arising under the Act may
be permitted to directors, officers and controlling persons of the registrant
pursuant to the foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification is
against public policy against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in Sarasota, Florida on the 9th day of May, 1996.
ESMOR CORRECTIONAL SERVICES, INC.
By: \s\ James F. Slattery
------------------------------
James F. Slattery, President
In accordance with the requirements of the Securities Act of 1933, this
Registration Statement was signed by the following persons in the capacities and
on the dates indicated. Each person whose signature appears below hereby
authorized each of James F. Slattery and Aaron Speisman with full power of
substitution to execute in the name of such person and to file any amendment or
post-effective amendment to this Registration Statement making such changes in
this Registration Statement as the Registrant deems appropriate and appoints
each of James F. Slattery and Aaron Speisman with full power of substitution,
attorney-in-fact to sign and to file any amendment and post-effective amendment
to this Registration Statement.
<TABLE>
<CAPTION>
Signature Title Date
--------- ------ ----
<S> <C> <C>
\s\James F. Slattery President, Chief Executive Officer May 9, 1996
- - ------------------------------- (Principal Executive Officer) and
James F. Slattery Director
\s\Esther Horn Director May 9, 1996
- - -------------------------------
Esther Horn
\s\Aaron Speisman Vice President, Secretary and May 9, 1996
- - ------------------------------- Director
Aaron Speisman
\s\Lee Levinson Chief Financial Officer (Principal May 9, 1996
- - ------------------------------- Financial Officer)
Lee Levinson
\s\Raymond S. Evans Director May 9, 1996
- - ----------------------------
Raymond S. Evans
\s\William S. Barrett Director May 9, 1996
- - -------------------------------
William J. Barrett
\s\Stuart Gerson Director May 9, 1996
- - --------------------------------
Stuart Gerson
\s\Melvin Stith Director May 9, 1996
- - ---------------------------------
Melvin Stith
\s\Diane McClure Vice President and Director May 9, 1996
- - ------------------------------
Diane McClure
\s\Richard Staley Vice President and Director May 9, 1996
- - --------------------------------
Richard Staley
</TABLE>
II-5
<PAGE>
Exhibit Index
4.1 Esmor Correctional Services, Inc. Stock Option Plan., as amended
5.1 Opinion of Ruskin, Moscou, Evans & Faltischek, P.C.
23.1 Consent of Grant Thornton LLP.
23.2 Consent of Ruskin, Moscou, Evans & Faltischek, P.C.
(contained in Exhibit 5.1 hereof).
<PAGE>
Exhibit 4.1
ESMOR CORRECTIONAL SERVICES, INC.
STOCK OPTION PLAN
1. Plan; Purpose; General. The purpose of this Stock Option Plan (the
"Plan") is to advance the interests of Esmor Correctional Services, Inc. (the
"Company") by enhancing the ability of the Company to attract and retain
selected employees, consultants, advisors to the Board of Directors and
qualified directors (collectively the "Participants") by creating for such
Participants incentives and rewards for their contributions to the success of
the Company, and by encouraging such Participants to become owners of shares of
the Company's Common Stock, par value $0.01 per share, as the title or par value
may be amended (the "Shares").
Options granted pursuant to the Plan may be incentive stock options
("Incentive Options") as defined in the Internal Revenue Code of 1986, as
amended (the "Code") or non-qualified options, or both. The proceeds received
from the sale of Shares pursuant to the Plan shall be used for general corporate
purposes.
2. Effective Date of Plan. The Plan will become effective upon approval
by the Board of Directors (the "Board"), and shall be subject to the approval by
the holders of at least a majority of all Shares present in person and by proxy
and entitled to vote thereon at a meeting of stockholders of the Company within
12 months after the Company has a class of equity securities registered under
the Securities Act of 1933, as amended (the "Act").
3. Administration of the Plan. The Plan will be administered by the Board
of the Company. The Board will have authority, not inconsistent with the express
provisions of the Plan, to take all action necessary or appropriate thereunder,
to interpret its provisions, and to decide all questions and resolve all
disputes which may arise in connection therewith. Such determinations of the
Board shall be conclusive and shall bind all parties.
<PAGE>
The Board may, in its discretion, delegate its powers with respect to the
Plan to an employee benefit plan committee or any other committee (the
"Committee"), in which event all references to the Board hereunder, including
without limitation the references in Section 9, shall be deemed to refer to the
Committee. The Committee shall consist of not fewer than three members. Each of
the members must be a "disinterested person" as that term is defined in Rule
16b-3 adopted pursuant to the Securities Exchange Act of 1934 (the "Exchange
Act"). A majority of the members of the Committee shall constitute a quorum, and
all determinations of the Committee shall be made by the majority of its members
present at a meeting. Any determination of the Committee under the Plan may be
made without notice or meeting of the Committee by a writing signed by all of
the Committee members.
The Board and the Committee, if any, shall have the authority to
determine eligibility, the number of options granted and the exercise price of
options.
4. Eligibility. The Participants in the Plan shall be all employees,
consultants, advisors to the Board of Directors and qualified directors of the
Company or any of its present or future subsidiaries (as defined in Section 8)
whether or not they are also officers of the Company. Members of the Committee
are eligible only if they do not exercise any discretion in selecting
Participants who receive grants of options, in determining the number of shares
to be granted to any Participant or in determining the exercise price of any
options, or if counsel to the Company may otherwise advise the Committee that
the taking of any such action does not impair the status of such eligible
Committee members as "disinterested persons" within the meaning of Exchange Act
Rule 16b-3.
5. Grant of Options.
(a) The Board shall grant options to Participants that it, in its sole
discretion, selects. Options shall be granted on such terms as the Board shall
determine except that Incentive Options shall be granted on terms that comply
with the Code and Regulations thereunder.
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(b) No options shall be granted after October 28, 2003 but options
previously granted may extend beyond that date.
6. Terms and Conditions of Options
(a) Exercise Price. Except as provided in Section 5(b) of this Plan,
the purchase price per Share for Shares issuable upon exercise of options shall
be a minimum of 100% of fair market value on the date of grant and shall be
determined by the Board. For this purpose, "fair market value" will be
determined as set forth in Section 8. Notwithstanding the foregoing, if any
person to whom an option is to be granted owns in excess of ten percent of the
outstanding capital stock of the Company, then no option may be granted to such
person for less than 110% of the fair market value on the date of grant as
determined by the Board.
(b) Period of Options. Unless earlier terminated, options shall
terminate and no longer be exercisable five years from the date of grant.
(c) Payment for Delivery of Shares. Shares which are subject to options
shall be issued only upon receipt by the Company of full payment of the purchase
price for the Shares as to which the option is exercised. The purchase price
shall be payable by the Participant to the Company either (i) in cash or by
check, bank draft or money order payable to the order of the Company; or (ii)
for Incentive Options, through the delivery of Shares owned by the Participant
for a period of not less than six months and for which the Participant has good
title (free and clear of any liens and encumbrances) having a fair market value
equal to the purchase price; or (iii) for non-qualified options, by a
combination of cash and Shares as provided in (i) and (ii) above.
The Company shall not be obligated to deliver any Shares unless and
until, in the opinion of the Company's counsel, all applicable federal and state
laws and regulations have been complied with, nor, if the outstanding common
stock is at the time listed on any securities exchange, unless and until the
Shares to be delivered have been listed (or authorized to be added to the list
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upon official notice of issuance) upon such exchange, nor unless or until all
other legal matters in connection with the issuance and delivery of Shares have
been approved by the Company's counsel. Without limiting the generality of the
foregoing, the Company may require from the person exercising an option such
investment representation or such agreement, if any, as counsel for the Company
may consider necessary in order to comply with the Act and applicable state
securities laws.
A Participant shall have the rights of a shareholder only as to Shares
actually acquired by him under the Plan.
(d) Vesting. Except for options granted pursuant to Section 5(b) of
this Plan, the Board may impose such vesting restrictions as it sees fit at the
time of grant.
(e) Non-Transferability of Options. Options may not be sold, assigned
or otherwise transferred or disposed of in any manner whatsoever except as
provided in Section 6(g).
(f) Forfeiture of Options upon Termination of Relationship. All
previously unexercised options including options which have not vested shall
terminate and be forfeited automatically upon the termination for any reasons
whatsoever of a Participant's status as an employee, consultant on advisor to
the Board. Except as provided in Section 6(g) below, unexercised options granted
to directors shall not terminate or be forfeited in the event such person is no
longer a director of the Company.
(g) Death. If a Participant dies at a time when he is entitled to
exercise an option, then at any time or times within one year after his death
(or such further period as the Board may allow) such options may be exercised,
as to all or any of the Shares which the Participant was entitled to purchase
immediately prior to his death, by his personal representative or the person or
persons to whom the options are transferred by the will or the applicable laws
of descent and distribution, and except as so exercised such options will expire
at the end of such period.
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(h) Loans to Exercise Option. If requested by any Participant to whom a
grant of non-qualified options has been made, the Company or any subsidiary may
loan such person the amount of money necessary to pay the federal income taxes
incurred as a result of the exercise of any options (or guarantee a bank loan
for such purpose), assuming that the Participant is in the maximum federal
income tax bracket six months from the time of exercise and assuming that the
Participant has no deductions which would reduce the amount of such tax owed.
The loan shall be made on or after April 15th of the year following the year in
which the amount of tax is determined as may be requested by the Participant and
shall be made on such terms as the Company or lending bank determines.
(i) Withholding Taxes. To the extent that the Company is required to
withhold taxes for federal income tax purposes in connection with the exercise
of any options, the Company shall have the right to assist the Participant to
satisfy such withholding requirement by (i) the Participant paying the amount of
the required withholding tax to the Company, (ii) the Participant delivering to
the Company Shares of its common stock previously owned by the Participant or
(iii) the Participant having the Company retain a portion of the Shares covered
by the option exercise. The number of Shares to be delivered to or withheld by
the Company times the fair market value as defined by Section 9 of this Plan
shall equal the cash required to be withheld. To the extent that the Company
elects to allow the Participant either to deliver or have withheld Shares of the
Company's common stock, the Board or the Committee may require him to make such
election only during certain periods of time as may be necessary to comply with
appropriate exemptive procedures regarding the "short-swing" profit provisions
of Section 16(b) of the Exchange Act or to meet certain Code requirements.
7. Shares Subject to Plan.
(a) Number of Shares and Stock to be Delivered. Shares delivered
pursuant to this Plan shall in the discretion of the Board be authorized but
unissued Shares of common stock or previously issued Shares acquired by the
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Company. Subject to adjustments as described below, the aggregate number of
Shares which may be delivered under this Plan shall not exceed 500,000 Shares of
common stock of the Company.
(b) Changes in Stock. In the event of a stock dividend, stock split or
combination of Shares, recapitalization, merger in which the Company is the
surviving corporation or other change in the Company's capital stock, the number
and kind of Shares of stock or securities of the Company to be subject to the
Plan and to options then outstanding or to be granted thereunder, the maximum
number of Shares or securities which may be delivered under the Plan, the option
price and other relevant provisions shall be appropriately adjusted by the
Board, whose determination shall be binding on all persons. In the event of a
consolidation or merger in which the Company is not the surviving corporation or
which results in the acquisition of substantially all the Company's outstanding
stock by a single person or entity, or in the event of the sale or transfer of
substantially all the Company's assets, all outstanding options shall thereupon
terminate.
The Board may also adjust the number of Shares subject to outstanding
options, the exercise price of outstanding options and the terms of outstanding
options to take into consideration material changes in accounting practices or
principles, consolidations or mergers (except those described in the immediately
preceding paragraph), acquisitions or dispositions of stock or property or any
other event if it is determined by the Board that such adjustment is appropriate
to avoid distortion in the operation of the Plan.
8. Definitions.
(a) For purposes of the Plan, a subsidiary is any corporation (i) in
which the Company owns, directly or indirectly, stock possessing 50 percent or
more of the total combined voting power of all classes of stock or (ii) over
which the Company has effective operating control.
(b) The fair market value of the common stock shall be deemed to be:
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(i) the closing price of the Company's common stock appearing on a
national securities exchange if the Company's common stock is listed on such an
exchange, or if not listed, the average closing bid price appearing on the
National Association of Securities Dealers Automated Quotation System
("NASDAQ");
(ii) if the Shares are not listed on NASDAQ, then the average bid
price for the Company's stock as listed in the National Quotation Bureau's pink
sheets;
(iii) if there are no listed bid prices published in the pink sheets,
then the market value shall be based upon the average closing bid price as
determined following a polling of all dealers making a market in the Company's
Shares.
9. Indemnification of Board. In addition to and without affecting such
other rights of indemnification as they may have as members of the Board or
otherwise, each member of the Board shall be indemnified by the Company to the
extent legally possible against reasonable expenses, including attorney's fees,
actually and reasonably incurred in connection with any appeal therein, to which
he may be a party by reason of any action taken or failure to act under or in
connection with the Plan, or any option granted thereunder, and against all
judgments, fines and amounts paid by his in settlement thereof; provided that
such payment of amounts so indemnified is first approved by a majority of the
members of the Board who are not parties to such action, suit or proceedings, or
by independent legal counsel selected by the Company, in either case on the
basis of a determination that such member acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Company; and except that no indemnification shall be made in relation to matters
as to which it shall be adjudged in such action, suit or proceeding that such
Board member is liable for a breach of the duty of loyalty, bad faith or
intentional misconduct in his duties; and provide, further that the Board member
shall in writing offer the Company the opportunity, at its own expense, to
handle and defend same.
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10. Amendments. The Board may at any time discontinue granting options
under the Plan. The Board may at any time of times amend the Plan or amend any
outstanding option or options for the purpose of satisfying the requirements of
any changes in applicable laws or regulations or for any other purpose which may
at the time be permitted by law, provided that (except to the extent explicitly
required or permitted herein above) no such amendment will, without the approval
of the stockholders of the Company, (a) increase the maximum number of Shares
available under the Plan, (b) reduce the option price of outstanding options or
reduce the price at which options may be granted, (c) extend the time within
which options may be granted, (d) amend the provisions of this Section 10 of the
Plan, (e) extend the period of an outstanding option beyond five years from the
date of grant, (f) adversely affect the rights of any Participant (without his
consent) under any options theretofore granted or (g) be effective if
stockholder approval is required by applicable statute, rule or regulation.
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Exhibit 5.1
Ruskin, Moscou, Evans & Faltischek, P.C.
170 Old Country Road
Mineola, New York 11501
(516) 663-6600
May 9, 1996
Esmor Correctional Services, Inc.
1819 Main Street, Suite 1000
Sarasota, Florida 34236
Gentlemen:
In connection with the registration under the Securities Act of 1933 (the
"Act") of 524,376 shares of Common Stock (the "Shares") of Esmor Correctional
Services, Inc., a Delaware corporation (the "Corporation"), to be sold pursuant
to the Corporation's Stock Option Plan and 1994 Non-Employee Director Stock
Option Plan (the "Plans") we have examined such corporate records, certificates
and documents as we deemed necessary for the purpose of this opinion. Based on
our examination, we advise you that, in our opinion, the Shares to be issued and
sold by the Corporation pursuant to the Plans have been duly and validly
authorized and, when issued and paid for in accordance with the terms set forth
in the Plans, will be legally issued, fully paid and non-assessable.
We hereby consent to the filing of this opinion as an exhibit to the
registration statement covering the Shares.
Very truly yours,
/s/ Ruskin, Moscou, Evans & Faltischek, P.C.
RUSKIN, MOSCOU, EVANS
& FALTISCHEK, P.C.
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Exhibit 23.2
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We have issued our report dated March 1, 1996, accompanying the consolidated
financial statements included in the Annual Report of Esmor Correctional
Services, Inc. and subsidiaries on Form 10-KSB for the year ended December 31,
1995. We hereby consent to the incorporation by reference of said report in
Amendment No. 1 to the Registration Statement on Form S-8 of Esmor Correctional
Services, Inc. and subsidiaries. (File No. 33-91304).
GRANT THORNTON LLP
New York, New York
May 9, 1996
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