As filed with the Securities and Exchange Commission on August __, 1998
Registration Statement No. 333-___________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------------------------
F 0 R M S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-----------------------------------------
THE JUDGE GROUP, INC.
------------------------------------------------------
(Exact Name of Registrant as Specified in its Charter)
Pennsylvania 23-172661
- ------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Two Bala Plaza, Suite 405
Bala Cynwyd, Pennsylvania 19004
(610) 667-7700
---------------------------------------------------
(Address, including zip code, and telephone number,
including area code, of Registrant's principal executive offices)
THE JUDGE GROUP, INC.
1996 Incentive Stock Option and
Non-Qualified Stock Option Plan
For Key Employees and Non-Employee Directors, as amended
Non-Qualified Stock Option Agreement,
dated as of April 17, 1997, between
The Judge Group, Inc. and James C. Hahn
Non-Qualified Stock Option Agreement,
Dated as of April 17, 1997, between
The Judge Group, Inc. and Randolph J. Angermann
(Full title of the plans)
Amy Feldman, General Counsel
The Judge Group, Inc.
Two Bala Plaza, Suite 405
Bala Cynwyd, Pennsylvania 19004
---------------------------------------
(Name and address of agent for service)
(610) 667-7700
-------------------------------------------------------------
(Telephone number, including area code, of agent for service)
Please send copies of all communications to:
F. Douglas Raymond, Esquire
Drinker Biddle & Reath LLP
Suite 300
1000 Westlakes Drive
Berwyn, PA 19312-2409
- 1 -
<PAGE>
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Title of each class Proposed maximum Proposed maximum
of Securities to be Amount to be offering price per aggregate offering Amount of
registered registered (1) share (2) price (2) registration fee
- ------------------- -------------- ------------------ ------------------ ----------------
<S> <C> <C> <C>
Common Stock
($.01 par value) 1,395,750 $7.500 $10,468,125.00 $3,088.10
2,124,250 $3.40625 $ 7,235,726.56 $2,134.54
TOTAL 3,520,000 $17,703,851,56 $5,222.64
</TABLE>
(1) Pursuant to Rule 416(a), this Registration Statement also registers
such indeterminate number of additional shares as may become issuable
under the Plan in connection with share splits, share dividends or
similar transactions.
(2) Estimated pursuant to Rule 457(h) solely for the purpose of calculating
the registration fee. As to shares subject to outstanding but
unexercised options, the price and fee are computed based upon the
highest price at which such options may be exercised. As to the
remaining shares, the price and fee are computed based upon $3.40625,
the average of the high and low prices for the common stock reported on
the NASDAQ National Market System on August 4, 1998.
- 2 -
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
(Not required to be filed as part of this Registration Statement)
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents which have been filed by The Judge Group, Inc.
(the "Registrant" or the "Company") with the Securities and Exchange Commission
(the "Commission") are incorporated by reference into this Registration
Statement:
(a) the Company's Annual Report on Form 10-K for the year ended December
31, 1997, as amended;
(b) the Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1998;
(c) the Company's Current Report on Form 8-K dated March 5, 1998;
(d) the description of the Company's common stock, par value $.01 per
share (the "Common Stock") contained in the Company's Registration Statement
on Form 8-A (File No. 0-0021963) dated January 13, 1997, filed with the
Securities and Exchange Commission, as amended; and
(e) all other reports filed pursuant to Sections 13(a) or 15(d) of the
Securities Exchange Act of 1934 since the end of the Company's most recent
fiscal year.
All reports and other documents filed by the Company pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934 (the
"Exchange Act") after the date hereof and prior to the filing of a
post-effective amendment which indicates that all securities offered pursuant to
this Registration Statement have been sold or which deregisters all securities
then remaining unsold, shall be deemed to be incorporated by reference herein
and to be a part hereof from the date of filing of such documents.
Item 4. Description of Securities.
Not applicable because the Common Stock, which is the class of
securities offered pursuant to this Registration Statement, is registered under
the Exchange Act.
Item 5. Interests of Named Experts and Counsel.
Not applicable.
- 3 -
<PAGE>
Item 6. Indemnification of Directors and Officers.
Section 1712 of the Pennsylvania Business Corporation Law of 1988, as
amended (the "BCL"), sets forth the applicable standard of care for directors
and officers. Section 1712 further provides that, in performing their duties,
directors may rely in good faith on certain information, material and statements
provided by officers of a corporation, certain professionals or experts and
committees of the board upon which the director does not serve and that officers
shall not be liable if they perform their duties in accordance with the
applicable standard of care. Section 1713 of the BCL allows for a corporation's
by-laws to provide that a director shall not be personally liable for any action
taken unless the director has breached the applicable standard of care and such
breach constituted self-dealing, willful misconduct or recklessness.
Section 1741 of the BCL permits a corporation to indemnify its officers
and directors for any expenses, judgments, fines and settlement amounts paid or
incurred in the defense of third-party actions provided such individuals have
met their applicable standard of care. Section 1743 of the BCL requires a
corporation to indemnify its directors and officers for their expenses incurred
in the successful defense of any third-party or derivative action.
The Company's Articles of Incorporation provide that no director or
officer of the Company shall be personally liable for monetary damages except to
the extent that by law a director's or officer's liability for monetary damages
may not be limited. The effect of this provision is to prevent the Company and
its shareholders (through shareholder derivative suits on behalf of the Company)
from recovering monetary damages against a director for breach of certain
fiduciary duties as a director (including breaches resulting from grossly
negligent conduct). This provision does not, however, exonerate the directors
from liability (i) pursuant to any criminal statute, (ii) for the payment of
taxes pursuant to federal, state or local law, or (iii) for self-dealing,
willful misconduct or recklessness.
The By-laws of the Company provide for indemnification of the officers
and directors of the Company to the fullest extent permitted by applicable law.
Applicable law permits indemnification for all matters (including those asserted
in derivative actions) except for those determined by a court to have
constituted willful misconduct or recklessness. The Registrant has obtained
directors' and officers' liability insurance.
Reference is made to Item 9 of this Registration Statement for
additional information regarding indemnification of directors and officers.
Item 7. Exemption from Registration Claimed.
No restricted securities are being reoffered or resold pursuant to this
Registration Statement.
Item 8. Exhibits.
4.1 The Judge Group, Inc. 1996 Stock Option and Non-Qualified Stock Option
Plan For Key Employees and Non-Employee Directors, as amended and
restated effective June 9, 1998.
- 4 -
<PAGE>
4.2 Non-Qualified Stock Option Agreement, dated as of April 17, 1997,
between The Judge Group, Inc. and James C. Hahn (incorporated by
reference from Exhibit 10.11 of the Company's Annual Report on Form
10-k, as amended, for the fiscal year ended December 31, 1997.
4.3 Non-Qualified Stock Option Agreement, dated as of April 17, 1997,
between The Judge Group, Inc. and Randolph J. Angermann (incorporated by
reference from Exhibit 10.12 of the Company's Annual Report on Form
10-k, as amended, for the fiscal year ended December 31, 1997.
5 Opinion of Drinker Biddle & Reath LLP.
23.1 Consent of Rudolph Palitz LLP.
23.2 Consent of Drinker Biddle & Reath LLP (Included in Exhibit 5).
25 Powers of Attorney (See Signature Page).
Item 9. Undertakings
1. Undertakings Required by Regulation S-K Item 512(a)
The undersigned Registrant hereby undertakes as follows:
(1) To file, during any period in which offers or sales are being made
pursuant to this Registration Statement, a post-effective amendment to this
Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of this Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in aggregate, represent
a fundamental change in the information set forth in this Registration
Statement; and
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in this Registration Statement or any
material change to such information in this Registration Statement;
provided, however, that paragraphs (1)(i) and (1)(ii) above do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Registrant pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934 that are incorporated
by reference in this 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
- 5 -
<PAGE>
amendment any of the securities being registered which remain unsold at the
termination of the offering.
2. Undertakings Required by Regulation S-K Item 512(b).
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 that is incorporated by reference in this Registration
Statement shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
3. Undertakings Required by Regulation S-K Item 512(h).
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 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
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.
- 6 -
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Company
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the Town of Bala Cynwyd, Commonwealth of Pennsylvania, on
August 5, 1998.
THE JUDGE GROUP, INC.
By:/s/ Martin E. Judge, Jr.
------------------------------
Martin E. Judge, Jr.
Chairman of the Board, and
Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below hereby constitutes and appoints Martin E. Judge, Jr. and Frank Barrett,
his true and lawful attorney-in-fact and agents, with full power of
substitution and resubstitution for him and in his name, place and stead, in any
and all capacities, to sign any and all amendments (including post-effective
amendments) to this Registration Statement and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite or necessary to be done in and about the premises,
as fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or any of
them, or their or his substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
/s/ Martin E. Judge, Jr. Chairman of the Board, August 5, 1998
- -------------------------- and Chief Executive Officer,
Martin E. Judge, Jr. (Principal Executive Officer)
/s/ Frank Barrett Chief Financial Officer August 5, 1998
- -------------------------- and Treasurer
Frank Barrett (Principal Financial and
Accounting Officer)
/s/ Michael A. Dunn Executive Vice President August 5, 1998
- -------------------------- and Director
Michael A. Dunn
/s/ Richard T. Furlano President and Director August 5, 1998
- --------------------------
Richard T. Furlano
/s/ Randolph J. Angermann Director August 5, 1998
- --------------------------
Randolph J. Angermann
/s/ James C. Hahn Director August 5, 1998
- --------------------------
James C. Hahn
- 7 -
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description Page
- ----------- ----------- ----
<S> <C> <C>
4.1 The Judge Group, Inc. 1996 Stock Option and Non-Qualified Stock
Option Plan For Key Employees and Non-Employee Directors, as
amended and restated effective June 9, 1998.
4.2 Non-Qualified Stock Option Agreement, dated as of April 17, 1997,
between The Judge Group, Inc. and James C. Hahn (incorporated by
reference from Exhibit 10.11 of the Company's Annual Report on Form
10-k, as amended, for the fiscal year ended December 31, 1997.
4.3 Non-Qualified Stock Option Agreement, dated as of April 17, 1997,
between The Judge Group, Inc. and Randolph J. Angermann
(incorporated by reference from Exhibit 10.12 of the Company's
Annual Report on Form 10-k, as amended, for the fiscal year ended
December 31, 1997.
5 Opinion of Drinker Biddle & Reath LLP.
23.1 Consent of Rudolph Palitz LLP.
23.2 Consent of Drinker Biddle & Reath LLP (Included in Exhibit 5).
25 Powers of Attorney (See Signature Page).
</TABLE>
- 8 -
EXHIBIT 4.1
Appendix A
THE JUDGE GROUP, INC.
1996 INCENTIVE STOCK OPTION
AND
NON-QUALIFIED STOCK OPTION PLAN
FOR
KEY EMPLOYEES AND NON-EMPLOYEE DIRECTORS
(As Amended and Restated Effective June 9, 1998)
A-1
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
Page
----
SECTION 1 - Purpose and Definitions.............................................A-3
SECTION 2 - Administration......................................................A-5
SECTION 3 - Eligibility........................................................A-5
SECTION 4 - Stock...............................................................A-5
SECTION 5 - Granting of Options.................................................A-6
SECTION 6 - Annual Limit........................................................A-6
SECTION 7 - Options for Non-Employee Directors..................................A-6
SECTION 8 - Terms and Conditions of Options Granted to Key Employees............A-8
SECTION 9 - Option Agreements - Other Provisions...............................A-11
SECTION 10 - Capital Adjustments...............................................A-12
SECTION 11 - Amendment or Discontinuance of the Plan...........................A-12
SECTION 12 - Termination of Plan...............................................A-13
SECTION 13 - Effective Date....................................................A-13
SECTION 14 - Miscellaneous.....................................................A-13
</TABLE>
<PAGE>
THE JUDGE GROUP, INC.
1996 INCENTIVE STOCK OPTION AND
NON-QUALIFIED STOCK OPTION PLAN
FOR
KEY EMPLOYEES AND NON-EMPLOYEE DIRECTORS
(As Amended and Restated Effective June 9, 1998)
WHEREAS, The Judge Group, Inc. ("Company") adopted The Judge Group,
Inc. 1996 Incentive Stock Option and Non-Qualified Stock Option Plan for Key
Employees and Non-Employee Directors ("Plan") effective September 4, 1996; and
WHEREAS, the Company desires to amend and restate the Plan to (i)
incorporate Amendment No. 1 to the Plan, (ii) increase the number of shares
available for granting under the Plan, (iii) increase the number of shares
subject to options granted annually to non-employee directors, (iv) provide for
the limited transfer of options granted to non-employee directors, and (v)
clarify certain other provisions of the Plan (such as the restriction on
amendments affecting grants to non-employee directors);
NOW, THEREFORE, effective June 9, 1998, and subject to shareholder
approval, the Plan is hereby amended and restated as follows:
SECTION 1 - Purpose and Definitions
(a) Purpose. This, THE JUDGE GROUP, INC. 1996 INCENTIVE STOCK
OPTION AND NON-QUALIFIED STOCK OPTION PLAN FOR KEY EMPLOYEES AND
NON-EMPLOYEE DIRECTORS, is intended to provide a means whereby THE
JUDGE GROUP, INC. may, through the grant of Incentive Stock Options and
Non-Qualified Stock Options to purchase Common Stock of the Company to
Key Employees, attract and retain such Key Employees and motivate such
Key Employees to exercise their best efforts on behalf of the Company
and of any Related Corporation. Moreover, the Company may, through the
grant of Non-Qualified Stock Options to Non-Employee Directors under a
formula, attract and retain Non-Employee Directors and motivate
Non-Employee Directors to exercise their best efforts on behalf of the
Company and any Related Corporation.
(b) Definitions.
(1) Board. The term "Board" shall mean the Board of
Directors of the Company.
(2) Common Stock. The term "Common Stock" shall mean
the common stock of the Company, par value $0.01 per share.
(3) Code. The term "Code" shall mean the Internal
Revenue Code of 1986, as amended.
(4) Committee. The term "Committee" shall mean:
(A) A committee which consists of not fewer
than two (2) directors of the Company who shall be
appointed by, and serve at the pleasure of, the Board
(taking into consideration the rules under Section
16(b) of the Securities Exchange Act of 1934 and the
requirements of section 162(m) of the Code); or
(B) In the event a committee has not been
established in accordance with (A) above, the entire
Board; provided, however, that a member of the Board
shall not participate in a vote approving the grant
of an Option to himself or herself to the extent
provided under the laws of the Commonwealth of
Pennsylvania governing corporate self-dealing.
A-3
<PAGE>
(5) Company. The term "Company" shall mean The Judge
Group, Inc.
(6) Fair Market Value. The term "Fair Market Value"
shall mean the fair market value of the optioned shares of
Common Stock, which shall be arrived at by a good faith
determination of the Committee and shall be:
(A) The quoted closing price, if there is a
market for the Common Stock on a registered
securities exchange or in an over the counter market,
on the date of grant;
(B) The weighted average of the quoted
closing prices on the nearest date before and the
nearest date after the date of grant, if there are no
sales on the date of grant but there are sales on
dates within a reasonable period both before and
after the date of grant;
(C) The mean between the bid and asked
prices, as reported by the National Quotation Bureau
on the date of grant, if actual sales are not
available during a reasonable period beginning before
and ending after the date of grant; or
(D) Such other method of determining fair
market value as shall be authorized by the Code, or
the rules or regulations thereunder, and adopted by
the Committee.
Where the fair market value of the optioned shares of
Common Stock is determined under (B) above, the average of the
quoted closing prices on the nearest date before and the
nearest date after the date of grant is to be weighted
inversely by the respective numbers of trading days between
the selling dates and the date of grant (i.e., the valuation
date), in accordance with Treas. Reg. ss.20.2031-2(b)(1).
(7) Incentive Stock Option. The term "Incentive Stock
Option" ("ISO") shall mean an option which, at the time such
option is granted under the Plan, qualifies as an ISO within
the meaning of section 422 of the Code and is designated as an
ISO in the Option Agreement.
(8) Key Employees. The term "Key Employees" shall
mean officers and other key employees of the Company or a
Related Corporation.
(9) Non-Employee Directors. The term "Non-Employee
Directors" shall mean directors of the Company who are not
employees of the Company or any Related Corporation.
(10) Non-Qualified Stock Option. The term
"Non-Qualified Stock Option" ("NQSO") shall mean an option
which, at the time such option is granted, does not qualify as
an ISO, and/or is designated as an NQSO in the Option
Agreement.
(11) Option Agreement. The term "Option Agreement"
shall mean a written document evidencing the grant of an
Option, as described in Section 9.
(12) Options. The term "Options" shall mean Incentive
Stock Options and Non-Qualified Stock Options.
(13) Plan. The term "Plan" shall mean The Judge
Group, Inc. 1996 Incentive Stock Option and Non-Qualified
Stock Option Plan for Key Employees and Non-Employee
Directors, as set forth herein and as amended from time to
time.
(14) Related Corporation. The term "Related
Corporation" shall mean either a corporate subsidiary of the
Company, as defined in section 424(f) of the Code or the
corporate parent of the Company, as defined in section 424(e)
of the Code.
A-4
<PAGE>
Notwithstanding Sections 1(b)(7) and (10) if the option is not
designated in the Option Agreement as an ISO or NQSO, the option shall
constitute an ISO if it complies with the terms of section 422 of the
Code, and otherwise, it shall constitute an NQSO.
SECTION 2 - Administration
The Plan shall be administered by the Committee. Each member
of the Committee, while serving as such, shall be deemed to be acting in his or
her capacity as a director of the Company.
The Committee shall have full authority, subject to the terms
of the Plan, to select the Key Employees to be granted ISOs and/or NQSOs under
the Plan, to grant Options on behalf of the Company and to set the date of grant
and the other terms of such Options. The Committee may correct any defect,
supply any omission and reconcile any inconsistency in this Plan and in any
Option granted hereunder in the manner and to the extent it shall deem
desirable. The Committee also shall have the authority to establish such rules
and regulations, not inconsistent with the provisions of the Plan, for the
proper administration of the Plan, and to amend, modify or rescind any such
rules and regulations, and to make such determinations and interpretations
under, or in connection with, the Plan, as it deems necessary or advisable. All
such rules, regulations, determinations and interpretations shall be binding and
conclusive upon the Company, its shareholders and all employees, and upon their
respective legal representatives, beneficiaries, successors and assigns and upon
all other persons claiming under or through any of them.
Notwithstanding the foregoing, the terms and conditions of
grants of NQSOs to Non-Employee Directors are intended to be fixed in advance.
Consequently, the grants of NQSOs to Non-Employee Directors shall be as set
forth in Section 7 and neither the Committee nor the Board shall have any
discretionary authority with respect thereto.
No member of the Board or the Committee shall be liable for
any action or determination made in good faith with respect to the Plan or any
Option granted under it.
SECTION 3 - Eligibility
Key Employees shall be eligible to receive Options under the
Plan. Non-Employee Directors shall be eligible to receive NQSOs (but not ISOs)
pursuant to Section 7. More than one Option may be granted to a Key Employee or
Non-Employee Director under the Plan.
SECTION 4 - Stock
Options may be granted under the Plan to purchase up to a
maximum of three million five hundred thousand (3,500,000) shares of Common
Stock, subject to adjustment as hereinafter provided; provided, however, that no
Key Employee shall receive Options for more than one-hundred thousand (100,000)
shares of Common Stock over any one (1) year period. Shares issuable under the
Plan may be authorized but unissued shares or reacquired shares, and the Company
may purchase shares required for this purpose, from time to time, if it deems
such purchase to be advisable.
If any Option granted under the Plan expires or otherwise
terminates for any reason whatever (including, without limitation, the Key
Employee's or Non-Employee Director's surrender thereof) without having been
exercised, the shares subject to the unexercised portion of such Option shall
continue to be available for the granting of Options under the Plan as fully as
if such shares had never been subject to an Option, provided, however, that:
(a) If an Option is cancelled, the cancelled Option is counted
against the maximum number of shares for which Options may be granted
to a Key Employee, and
(b) If the Option price is reduced after the date of grant,
the transaction is treated as a cancellation of an Option and the grant
of a new Option for purposes of counting the maximum number of shares
for which Options may be granted to a Key Employee.
A-5
<PAGE>
SECTION 5 - Granting of Options
From time to time until the expiration or earlier suspension or
discontinuance of the Plan, the Committee may, on behalf of the Company, grant
to Key Employees under the Plan such Options as it determines are warranted;
provided, however, that grants of ISOs and NQSOs shall be separate and not in
tandem. The granting of an Option under the Plan shall not be deemed either to
entitle the Key Employee to, or to disqualify the Key Employee from, any
participation in any other grant of Options under the Plan. In making any
determination as to whether a Key Employee shall be granted an Option and as to
the number of shares to be covered by such Option, the Committee shall take into
account the duties of the Key Employee, his or her present and potential
contributions to the success of the Company or a Related Corporation, and such
other factors as the Committee shall deem relevant in accomplishing the purposes
of the Plan. Moreover, the Committee may provide in a Key Employee's Option that
said Option may be exercised only if certain conditions, as determined by the
Committee, are fulfilled.
The Committee shall grant NQSOs to Non-Employee Directors in accordance
with Section 7.
SECTION 6 - Annual Limit
(a) ISOs. The aggregate fair market value (determined as of
the date the ISO is granted) of the Common Stock with respect to which
ISOs are exercisable for the first time by a Key Employee during any
calendar year (under this Plan and any other ISO plan of the Company or
a Related Corporation) shall not exceed one hundred thousand dollars
($100,000).
(b) NQSOs. The annual limit set forth above for ISOs shall not
apply to NQSOs.
SECTION 7 - Options for Non-Employee Directors
(a) Granting of Options to Non-Employee Directors. Effective
with the Company's annual shareholders' meeting in 1998, and with each
annual shareholders' meeting thereafter, each elected or re-elected
Non-Employee Director shall be granted an NQSO to purchase ten thousand
(10,000) shares of Common Stock. In each case described above, the NQSO
shall be granted as of the first business day immediately following the
Non-Employee Director's election or subsequent re-election(s) to the
Board, as applicable.
(b) Terms and Conditions of Options. Options granted to
Non-Employee Directors shall expressly specify that they are NQSOs. In
addition, such NQSOs shall include expressly or by reference the
following terms and conditions, as well as such other provisions not
inconsistent with the provisions of the Plan:
(1) Number of Shares. A statement of the number of
shares of Common Stock to which the Option pertains.
(2) Price. A statement of the per share Option
exercise price, which shall be 100% of the Fair Market Value
per share of the optioned Common Stock on the date the Option
is granted.
(3) Term. Subject to earlier termination as provided
in Section 7(b)(5), (6) and (7) below and in Section 10
hereof, the term of each Option granted under this Section 7
shall be 10 years from the date of grant.
(4) Exercise. Options granted under this Section 7
shall be exercisable in three equal annual installments
commencing with the first anniversary of the grant date, but
only if the Non-Employee Director has attended at least
seventy-five (75) percent of the Board meetings during the
twelve (12) month period immediately preceding the date the
annual installment first becomes exercisable. In the event the
Non-Employee Director fails to attend at least seventy-five
(75) percent of the Board meetings during the twelve (12)
month period immediately preceding the date the annual
installment first becomes exercisable, the Options otherwise
exercisable in that installment shall not be exercisable but
A-6
<PAGE>
shall be cancelled and shall be available for other grants
under the Plan. Any Common Stock the right to the purchase of
which accrued under an Option may be purchased at any time up
to the expiration or termination of the Option. Exercisable
Options may be exercised, in whole or in part, from time to
time by giving written notice of exercise to the Company at
its principal office, specifying the number of shares to be
purchased and accompanied by payment in full of the aggregate
option exercise price for such shares. Only full shares shall
be issued under the Plan, and any fractional share which might
otherwise be issuable upon the exercise of an Option granted
hereunder shall be forfeited.
The Option price shall be payable:
(A) In cash or its equivalent; or
(B) Unless in the opinion of counsel to the
Company to do so may result in a possible loss of an
exemption from short-swing profit liability, in whole
or in part through the transfer of Common Stock
previously acquired by the Non-Employee Director,
provided the Common Stock so transferred has been
held by the Non-Employee Director for more than 12
months on the date of exercise.
In the event such Option exercise price is paid, in
whole or in part, with Common Stock, the portion of the Option
exercise price so paid shall equal the Fair Market Value of
the Common Stock so surrendered (determined in accordance with
Section 1(b)(6), but on the date of exercise rather than on
the date of grant).
(5) Expiration of Term or Removal as Director. If a
Non-Employee Director's service as a director of the Company
terminates prior to the expiration date fixed for his or her
Option under this Section 7 for any reason (such as, without
limitation, failure to be re-elected by the Company's
shareholders) other than by disability or death, such Option
may be exercised, to the extent of the number of shares of
Common Stock with respect to which he or she could have
exercised it on the date of such termination, by the
Non-Employee Director at any time prior to the earlier of:
(A) The expiration date specified in such
Option; or
(B) Three months after the date of such
termination of service as a director.
(6) Exercise upon Disability of Non-Employee
Director. If a Non-Employee Director shall become disabled
(within the meaning of section 22(e)(3) of the Code) during
his or her term as a director of the Company and, prior to the
expiration date fixed for his or her Option, his or her term
as a director is terminated as a consequence of such
disability, such Option may be exercised, to the extent of the
number of shares of Common Stock with respect to which the
Non-Employee Director could have exercised it on the date of
such termination, by the Non-Employee Director at any time
prior to the earlier of:
(A) The expiration date of such Option; or
(B) One year after the date of such
termination of service as a director.
In the event of the Non-Employee Director's legal
disability, such Option may be so exercised by his or her
legal representative.
(7) Exercise upon Death of Non-Employee Director. If
a Non-Employee Director shall die during his or her term as a
director of the Company and prior to the expiration date fixed
for his or her Option, or if a Non-Employee Director whose
term as a director has been terminated for any reason shall
die following his or her termination as a director, but prior
to the earlier of:
(A) The expiration date fixed for his or
her Option; or
(B) The expiration of the period determined
under Section 7(b)(5) and (6) above;
such Option may be exercised, to the extent of the number of
shares with respect to which the Non-Employee Director could
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have exercised it on the date of his or her death, by the
Non-Employee Director's estate, personal representative or
beneficiary who acquired the right to exercise such Option by
bequest or inheritance or by reason of the death of the
Non-Employee Director, at any time prior to the earlier of:
(i) The expiration date specified in
such Option (which may be the expiration
date determined under Section 7(b)(5) and
(6) above); or
(ii) One year after the date of
death.
(c) Transferability. A Non-Employee Director may transfer an
NQSO granted pursuant to this Section 7 to (1) a member of his or her
immediate family, (2) a partnership of which the only partners are
members of his or her immediate family, or (3) a trust established
solely for the benefit of his or her immediate family members. Except
as provided in the preceding sentence, or by will or the laws of
descent and distribution, NQSOs granted pursuant to this Section 7
shall not be assignable or transferable by the Non-Employee Director,
and during the lifetime of the Non-Employee Director, the NQSO shall be
exercisable only by him or her or by his or her guardian or legal
representative. Any NQSO transferred by a Non-Employee Director shall
not be assignable or transferrable by the transferee. If the
Non-Employee Director is married at the time of exercise and if the
Non-Employee Director so requests at the time of exercise, the
certificate or certificates shall be registered in the name of the
Non-Employee Director and the Non-Employee Director's spouse, jointly,
with right of survivorship.
SECTION 8 - Terms and Conditions of Options Granted to Key Employees
The Options granted to Key Employees pursuant to the Plan shall
expressly specify whether they are ISOs or NQSOs; however, if the Option is not
designated in the Option Agreement as an ISO or NQSO, the Option shall
constitute an ISO if it complies with the terms of section 422 of the Code, and
otherwise, it shall constitute an NQSO. In addition, the Options granted to Key
Employees pursuant to the Plan shall include expressly or by reference the
following terms and conditions, as well as such other provisions not
inconsistent with the provisions of this Plan and, for ISOs granted under this
Plan, the provisions of section 422(b) of the Code, as the Committee shall deem
desirable:
(a) Number of Shares. A statement of the number of shares to
which the Option pertains.
(b) Price. A statement of the Option price which shall be
determined and fixed by the Committee in its discretion but shall not
be less than the higher of one hundred percent (100%) (one hundred ten
percent (110%) in the case of an ISO granted to a more than ten percent
(10%) shareholder as discussed in (i) below) of the per share Fair
Market Value of Common Stock, or the par value thereof, on the date the
Option is granted.
(c) Term.
(1) ISOs. Subject to earlier termination as provided
in Subsections (e), (f) and (g) below and in Section 10
hereof, the term of each ISO shall be not more than ten (10)
years (five (5) years in the case of more than ten percent
(10%) shareholders as discussed in (i) below) from the date of
grant.
(2) NQSOs. Subject to earlier termination as provided
in Subsections (e), (f) and (g) below and in Section 10
hereof, the term of each NQSO shall be not more than ten (10)
years from the date of grant.
(d) Exercise.
(1) General. Options shall be exercisable in such
installments and on such dates, not less than six (6) months
from the date of grant, as the Committee may specify, provided
that:
(A) In the case of new Options granted to a
Key Employee in replacement for options (whether
granted under the Plan or otherwise) held by the Key
Employee, the new Options may be made exercisable, if
so determined by the Committee, in its discretion, at
the earliest date the replaced options were
exercisable, but not earlier than six (6) months from
the date of grant of the new Options; and
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(B) The Committee may accelerate the
exercise date of any outstanding Options (including,
without limitation, the six (6) month exercise date
referred to in (A) above), in its discretion, if it
deems such acceleration to be desirable.
Any Option shares, the right to the purchase of which
has accrued, may be purchased at any time up to the expiration
or termination of the Option. Exercisable Options may be
exercised, in whole or in part, from time to time by giving
written notice of exercise to the Company at its principal
office, specifying the number of shares to be purchased and
accompanied by payment in full of the aggregate Option price
for such shares. Only full shares shall be issued under the
Plan, and any fractional share which might otherwise be
issuable upon exercise of an Option granted hereunder shall be
forfeited.
(2) Manner of Payment. The manner(s) in which the
Option price may be paid shall be determined by the Committee,
in its sole discretion. Such determination shall be made in
the Option Agreement and, in the case of an Option which is
not intended to be an ISO, may be changed at or prior to the
time of exercise in accordance with Section 11. The Committee
may determine that the Option price shall be payable:
(A) In cash or its equivalent;
(B) In whole or in part, in Company Common
Stock previously acquired by the Key Employee,
provided that if such shares of Common Stock were
acquired through the exercise of an ISO and are used
to pay the Option price of an ISO, such shares have
been held by the Key Employee for a period of not
less than the holding period described in section
422(a)(1) of the Code on the date of exercise, or if
such shares of Common Stock were acquired through
exercise of an NQSO or of an option under a similar
plan or through exercise of an ISO and are used to
pay the Option price of an NQSO, such shares have
been held by the Key Employee for a period of more
than six months on the date of exercise;
(C) In whole or in part, in Company Common
Stock newly acquired by the Optionee upon exercise of
such Option (which shall constitute a disqualifying
disposition in the case of an Option which is an
ISO);
(D) In any combination of (A), (B) and (C)
above; or
(E) By permitting the Key Employee to
deliver a properly executed notice of exercise of the
Option to the Company and a broker, with irrevocable
instructions to the broker promptly to deliver to the
Company the amount of sale or loan proceeds necessary
to pay the exercise price of the Option.
In the event such Option price is paid, in whole or
in part, with shares of Common Stock, the portion of the
Option price so paid shall be equal to the Fair Market Value
of the Common Stock so surrendered (determined in accordance
with Section 1(b)(6), but on the date of exercise rather than
on the date of grant).
(e) Termination of Employment. If a Key Employee's employment
by the Company (and Related Corporations) is terminated by either party
prior to the expiration date fixed for his or her Option for any reason
other than death or disability, such Option may be exercised, to the
extent of the number of shares with respect to which the Key Employee
could have exercised it on the date of such termination, or to any
greater extent permitted by the Committee, by the Key Employee at any
time prior to the earlier of:
(1) The expiration date specified in such Option; or
(2) An accelerated termination date determined by the
Committee, in its discretion, except that, subject to Section
10 hereof, such accelerated termination date shall not be
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earlier than the date of the Key Employee's termination of
employment, and in the case of ISOs, such termination date
shall not be later than three (3) months after the date of
such termination of employment.
(f) Exercise upon Disability of Key Employee. If a Key
Employee shall become disabled (within the meaning of section 22(e)(3)
of the Code) during his or her employment and, prior to the expiration
date fixed for his or her Option, his or her employment is terminated
as a consequence of such disability, such Option may be exercised, to
the extent of the number of shares with respect to which the Key
Employee could have exercised it on the date of such termination, or to
any greater extent permitted by the Committee, by the Key Employee at
any time prior to the earlier of:
(1) The expiration date specified in such Option; or
(2) An accelerated termination date determined by the
Committee, in its discretion, except that, subject to Section
10 hereof, such accelerated termination date shall not be
earlier than the date of the Key Employee's termination of
employment by reason of disability, and in the case of ISOs,
such date shall not be later than one (1) year after the date
of such termination of employment. In the event of the Key
Employee's legal disability, such Option may be so exercised
by the Key Employee's legal representative.
(g) Exercise upon Death of Key Employee. If a Key Employee
shall die during his or her employment, and prior to the expiration
date fixed for his or her Option, or if a Key Employee whose employment
is terminated for any reason, shall die following his or her
termination of employment but prior to the earliest of:
(1) The expiration date fixed for his or her Option;
(2) The expiration of the period determined under
Subsections (e) and (f) above; or
(3) In the case of an ISO, three (3) months
following termination of employment;
such Option may be exercised, to the extent of the number of shares
with respect to which the Key Employee could have exercised it on the
date of his or her death, or to any greater extent permitted by the
Committee, by the Key Employee's estate, personal representative or
beneficiary who acquired the right to exercise such Option by bequest
or inheritance or by reason of the death of the Key Employee, at any
time prior to the earlier of:
(A) The expiration date specified in such
Option; or
(B) An accelerated termination date
determined by the Committee, in its discretion except
that, subject to Section 10 hereof, such accelerated
termination date shall not be earlier than one (1)
year, nor later than three (3) years after the date
of death.
(h) Non-Transferability.
(1) ISOs. No ISO shall be assignable or transferable
by the Key Employee otherwise than by will or by the laws of
descent and distribution, and during the lifetime of the Key
Employee, the ISO shall be exercisable only by him or by his
or her guardian or legal representative. If the Key Employee
is married at the time of exercise and if the Key Employee so
requests at the time of exercise, the certificate or
certificates shall be registered in the name of the Key
Employee and the Key Employee's spouse, jointly, with right of
survivorship.
(2) NQSOs. Except as otherwise provided in any Option
Agreement, no NQSO shall be assignable or transferable by the
Key Employee otherwise than by will or by the laws of descent
and distribution, and during the lifetime of the Key Employee,
the NQSO shall be exercisable only by him or by his or her
guardian or legal representative. If a Key Employee's Option
Agreement provides that the NQSO is transferable, such Option
Agreement shall set forth any limitations on the transfer of
the NQSO. If the Key Employee is married at the time of
exercise and if the Key Employee so requests at the time of
exercise, the certificate or certificates shall be registered
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in the name of the Key Employee and the Key Employee's spouse,
jointly, with right of survivorship.
(i) Ten Percent Shareholder. If the Key Employee owns more
than ten percent (10%) of the total combined voting power of all shares
of stock of the Company or of a Related Corporation at the time an ISO
is granted to such Key Employee, the Option price for the ISO shall be
not less than one hundred ten percent (110%) of the Fair Market Value
of the optioned shares of Common Stock on the date the ISO is granted,
and such ISO, by its terms, shall not be exercisable after the
expiration of five (5) years from the date the ISO is granted. The
conditions set forth in this Subsection (i) shall not apply to NQSOs.
(j) Withholding and Use of Shares to Satisfy Tax Obligations.
The obligation of the Company to deliver shares of Common Stock upon
the exercise of any Option shall be subject to applicable federal,
state and local tax withholding requirements.
If the exercise of any Option is subject to the withholding
requirements of applicable federal, state and/or local tax laws, the
Committee, in its discretion (and subject to such withholding rules
("Withholding Rules") as shall be adopted by the Committee), may permit
the Key Employee to satisfy the minimum required federal, state and/or
local withholding tax, in whole or in part, by electing to have the
Company withhold (or by returning to the Company) shares of Common
Stock, which shares shall be valued, for this purpose, at their Fair
Market Value (determined in accordance with Section 1(b)(6), but on the
date of exercise (rather than the date of grant) or if later, the date
on which the Optionee recognizes ordinary income with respect to such
exercise (the "Determination Date")). An election to use shares of
Common Stock to satisfy tax withholding requirements must be made in
compliance with and subject to the Withholding Rules. The Committee may
not withhold shares in excess of the number necessary to satisfy the
minimum federal income tax withholding requirements. In the event
shares of Common Stock acquired under the exercise of an ISO are used
to satisfy such withholding requirement, such shares of Common Stock
must have been held by the Key Employee for a period of not less than
the holding period described in section 422(a)(1) of the Code on the
Determination Date.
SECTION 9 - Option Agreements - Other Provisions
Options granted under the Plan shall be evidenced by Option Agreements
in such form as the Committee shall, from time to time, approve, which Option
Agreements shall contain such provisions, not inconsistent with the provisions
of the Plan for NQSOs granted pursuant to the Plan, and such conditions, not
inconsistent with section 422(b) of the Code or the provisions of the Plan for
ISOs granted pursuant to the Plan, as the Committee shall deem advisable. Each
Key Employee and Non-Employee Director shall enter into, and be bound by, such
Option Agreement.
SECTION 10 - Capital Adjustments
The number of shares which may be issued under the Plan, and the
maximum number of shares with respect to which options may be granted during a
specified period to any Key Employee under the Plan, both as stated in Section 4
hereof, the number of shares with respect to which NQSOs are granted to
Non-Employee Directors under Section 7(a), and the number of shares issuable
upon exercise of outstanding Options under the Plan (as well as the Option price
per share under such outstanding Options), shall, subject to the provisions of
section 424(a) of the Code and as permitted under Rule 16b-3, be adjusted, to
reflect any stock dividend, stock split, share combination, or similar change in
the capitalization of the Company.
In the event of a corporate transaction (as that term is described in
section 424(a) of the Code and the Treasury Regulations issued thereunder as,
for example, a merger, consolidation, acquisition of property or stock,
separation, reorganization, or liquidation), each outstanding Option shall be
assumed by the surviving or successor corporation; provided, however, that, in
the event of a proposed corporate transaction, the Committee may terminate all
or a portion of the outstanding Options granted to Key Employees if it
determines that such termination is in the best interests of the Company. If the
Committee decides to terminate outstanding Options, the Committee shall give
each Key Employee holding an Option to be terminated not less than seven (7)
days' notice prior to any such termination by reason of such a corporate
transaction, and any such Option which is to be so terminated may be exercised
(if and only to the extent that it is then exercisable) up to, and including the
date immediately preceding such termination. Further, as provided in Section
8(d) hereof the Committee, in its discretion, may accelerate, in whole or in
part, the date on which any or all Options become exercisable.
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Notwithstanding the foregoing, in the event of a corporate transaction
(as described above) in which holders of Common Stock are to receive cash,
securities or other property, and provision is not made for the continuance and
assumption of NQSOs granted to Non-Employee Directors, all such outstanding
NQSOs shall terminate as of the last business day immediately preceding the
closing date of such corporate transaction and the Company shall pay to each
Non-Employee Director an amount in cash with respect to each share to which a
terminated NQSO pertains equal to the difference between the Option exercise
price and the value of the consideration to be received by the holders of Common
Stock in connection with such transaction.
The Committee also may, in its discretion, change the terms of any
outstanding Option to reflect any such corporate transaction, provided that, in
the case of ISOs, such change is excluded from the definition of a
"modification" under section 424(h) of the Code.
SECTION 11 - Amendment or Discontinuance of the Plan
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<PAGE>
(a) General. The Board from time to time may suspend or
discontinue the Plan or amend it in any respect whatsoever, and the
Committee may amend any outstanding Option in any respect whatsoever,
except that the following amendments shall require shareholder approval
(given in the manner set forth in Section 11(b) below):
(1) With respect to Options which are ISOs, any
amendment which would:
(A) Change the class of employees eligible
to participate in the Plan;
(B) Except as permitted under Section 10
hereof, increase the maximum number of shares of
Common Stock with respect to which ISOs may be
granted under the Plan; or
(C) Extend the duration of the Plan under
Section 12 hereof with respect to any ISOs granted
hereunder; and
(2) With respect to Options, any amendment which
would require shareholder approval pursuant to Treas. Reg.
ss. 1.162-27(e)(4)(vi) or any successor thereto (to the extent
compliance with section 162(m) of the Code is desired); and
(3) Any amendment for which shareholder approval is
required under the rules of an exchange or market on which
Common Stock is listed.
Notwithstanding the foregoing, no such suspension,
discontinuance or amendment shall materially impair the rights of any
holder of an outstanding Option without the consent of such holder.
(b) Shareholder Approval Requirements. The approval of
shareholders must comply with all applicable provisions of the
corporate charter, bylaws, and applicable state law prescribing the
method and degree of shareholder approval required for the issuance of
corporate stock or options. If the applicable state law does not
prescribe a method and degree of shareholder approval in such case, the
approval of shareholders must be effected:
(1) By a method and in a degree that would be treated
as adequate under applicable state law in the case of an
action requiring shareholder approval (i.e., an action on
which shareholders would be entitled to vote if the action
were taken at a duly held shareholders' meeting); or
(2) By a majority of the votes cast at a duly held
shareholders' meeting at which a quorum representing a
majority of all outstanding voting stock is, either in person
or by proxy, present and voting on the plan.
(c) Amendments Affecting Non-Employee Directors.
Notwithstanding the foregoing, no amendment to any provision of the
Plan that would affect NQSOs to be awarded to Non-Employee Directors
shall be made if such amendment would cause the terms and conditions of
grants made pursuant to Section 7 of the Plan to fail to be fixed in
advance, within the meaning of Securities and Exchange Commission
interpretations under Section 16(b) of the Securities Exchange Act of
1934.
SECTION 12 - Termination of Plan
Unless earlier terminated as provided in the Plan, the Plan and all
authority granted hereunder shall terminate absolutely at 12:00 midnight on
September 3, 2006, which date is within ten (10) years after the date the Plan
was adopted by the Board (or the date the Plan was approved by the shareholders
of the Company, whichever is earlier), and no Options hereunder shall be granted
thereafter. Nothing contained in this Section 12, however, shall terminate or
affect the continued existence of rights created under Options issued hereunder
and outstanding on September 3, 2006, which by their terms extend beyond such
date.
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<PAGE>
SECTION 13 - Effective Date
This Plan became effective on September 4, 1996 (the date the
Plan was adopted by the Board). As amended and restated, this Plan shall become
effective June
9, 1998, subject to shareholder approval in the manner described
in Section 11(b).
SECTION 14 - Miscellaneous
(a) Governing Law. With respect to any ISOs granted pursuant
to the Plan and the Option Agreements thereunder, the Plan, such Option
Agreements and any ISOs granted pursuant thereto shall be governed by
the applicable Code provisions to the maximum extent possible.
Otherwise, the operation of, and the rights of Key Employees and
Non-Employee Directors under, the Plan, the Option Agreements and any
Options granted thereunder shall be governed by applicable federal law
and otherwise by the laws of the Commonwealth of Pennsylvania.
(b) Rights. Neither the adoption of the Plan nor any action of
the Board or the Committee shall be deemed to give any individual any
right to be granted an Option, or any other right hereunder, unless and
until the Committee shall have granted such individual an Option, and
then his or her rights shall be only such as are provided by the Option
Agreement.
Any Option under the Plan shall not entitle the holder thereof
to any rights as a shareholder of the Company prior to the exercise of
such Option and the issuance of the shares pursuant thereto. Further,
notwithstanding any provisions of the Plan or the Option Agreement with
a Key Employee, the Company shall have the right, in its discretion, to
retire a Key Employee at any time pursuant to its retirement rules or
otherwise to terminate his or her employment at any time for any reason
whatsoever.
(c) Indemnification of Board and Committee. Without limiting
any other rights of indemnification which they may have from the
Company and any Related Corporation, the members of the Board and the
members of the Committee shall be indemnified by the Company against
all costs and expenses reasonably incurred by them in connection with
any claim, action, suit, or proceeding to which they or any of them may
be a party by reason of any action taken or failure to act under, or in
connection with, the Plan, or any Option granted thereunder, and
against all amounts paid by them in settlement thereof (provided such
settlement is approved by legal counsel selected by the Company) or
paid by them in satisfaction of a judgment in any such action, suit, or
proceeding, except a judgment based upon a finding of willful
misconduct or recklessness on their part. Upon the making or
institution of any such claim, action, suit, or proceeding, the Board
or Committee member shall notify the Company in writing, giving the
Company an opportunity, at its own expense, to handle and defend the
same before such Board or Committee member undertakes to handle it on
his or her own behalf.
(d) Application of Funds. The proceeds received by the Company
from the sale of Common Stock pursuant to Options granted under the
Plan shall be used for general corporate purposes. Any cash received in
payment for shares upon exercise of an Option to purchase Common Stock
shall be added to the general funds of the Company and shall be used
for its corporate purposes. Any Common Stock received in payment for
shares upon exercise of an Option to purchase Common Stock shall become
treasury stock.
(e) No Obligation to Exercise Option. The granting of an
Option shall impose no obligation upon a Key Employee or Non-Employee
Director to exercise such Option.
(f) Listing and Registration of Shares. Each Option shall be
subject to the requirement that, if at any time the Committee shall
determine, in its discretion, that the listing, registration or
qualification of the shares covered thereby upon any securities
exchange or under any state or federal law, or the consent or approval
of any governmental regulatory body, is necessary or desirable as a
condition of, or in connection with, the granting of such Option or the
purchase of shares thereunder, or that action by the Company, Key
Employee or Non-Employee Director should be taken in order to obtain an
exemption from any such requirement, no such Option may be exercised,
in whole or in part, unless and until such listing, registration,
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<PAGE>
qualification, consent, approval, or action shall have been effected,
obtained, or taken under conditions acceptable to the Committee.
Without limiting the generality of the foregoing, each Key Employee or
Non-Employee Director or his or her legal representative or beneficiary
may also be required to give satisfactory assurance that shares
purchased upon exercise of an Option are being purchased for investment
and not with a view to distribution, and certificates representing such
shares may be legended accordingly.
(g) Rights as a Shareholder. A Key Employee or Non-Employee
Director shall have no rights as a shareholder with respect to any
shares covered by his or her Option until the issuance of a stock
certificate to him or her for such shares.
IN WITNESS WHEREOF, THE JUDGE GROUP, INC. has caused these presents to
be duly executed, under seal, this day of __________, 1998.
ATTEST: THE JUDGE GROUP, INC.
[SEAL]
/s/ Katharine A. Wiercinski By: /s/ Martin E. Judge, Jr.
- ----------------------------------- ----------------------------------
Katharine A. Wiercinski, Secretary Martin E. Judge, Jr., Chairman and
Chief Executive Officer
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EXHIBIT 5
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<PAGE>
LAW OFFICES
DRINKER BIDDLE & REATH LLP
Suite 300
1000 Westlakes Drive
Berwyn, PA 19312-2409
Telephone: (610) 993-2200
Fax: (610) 993-8585
August 5, 1998
The Judge Group, Inc.
Two Bala Plaza
Suite 405
Bala Cynwyd, Pennsylvania 19004
Gentlemen:
We have acted as counsel to The Judge Group, Inc. (the "Company") in
connection with the preparation and filing with the Securities and Exchange
Commission of the Company's Registration Statement on Form S-8 under the
Securities Act of 1933 (the "Registration Statement") relating to 3,515,000
shares of Common Stock of the Company, par value $.01 per share (the "Shares"),
issuable upon the exercise of options granted under the Company's 1996 Incentive
Stock Option and Non-Qualified Stock Option Plan for Key Employees and
Non-Employee Directors, as amended and restated, and under the Non-Qualified
Stock Option Agreements, dated as of April 17, 1997, between the Company and
James C. Hahn and Randolph J. Angermann (collectively, the "Plans").
In that capacity, we have examined the originals or copies, certified or
otherwise identified to our satisfaction, of the Certificate of Incorporation
and the By-laws of the Company as amended through the effective date of the
Registration Statement, resolutions of the Company's Board of Directors, and
such other documents and corporate records relating to the Company and the
issuance and sale of the Shares as we have deemed appropriate.
- 10 -
<PAGE>
This opinion is based exclusively on the Business Corporation Law of the
Commonwealth of Pennsylvania.
In all cases, we have assumed the legal capacity of each natural person
signing any of the documents and corporate records examined by us, the
genuineness of signatures, the authenticity of documents submitted to us as
originals, the conformity to authentic original documents of documents submitted
to us as copies and the accuracy and completeness of all corporate records and
other information made available to us by the Company.
Based upon the foregoing and consideration of such questions of law as
we have deemed relevant, we are of the opinion that the issuance of the Shares
by the Company upon the exercise of stock options properly granted under the
Plans has been duly authorized by the necessary corporate action of the Board of
Directors of the Company, and such Shares, upon exercise of such options and
payment therefor in accordance with the terms of the Plans, will be validly
issued, fully paid and nonassessable by the Company.
We consent to the use of this opinion as an exhibit to the Registration
Statement. In giving this consent, we do not admit that we come within the
categories of persons whose consent is required under Section 7 of the
Securities Act.
Very truly yours,
/s/ DRINKER BIDDLE & REATH LLP
------------------------------
DRINKER BIDDLE & REATH LLP
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EXHIBIT 23.1
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<PAGE>
CONSENT OF INDEPENDENT AUDITORS
Board of Directors
The Judge Group, Inc.
Bala Cynwyd, Pennsylvania
We consent to the incorporation by reference in this Registration
Statement on Form S-8 of The Judge Group, Inc. of our report dated March 20,
1998.
RUDOLPH, PALITZ LLP
Plymouth Meeting, Pennsylvania
August 5, 1998
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