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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-KSB
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1999
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______ to _______
Commission file number 0-24623
New Generation Plastic, Inc.
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(Exact name of registrant as specified in its charter)
Delaware 13-4056896
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(State or other jurisdiction of (IRS employer identification
incorporation) no.)
245 Park Avenue, 39th Floor; New York, New York 10167
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(Address of principal executive offices) (Zip Code)
Issuer's telephone number: (212) 792-4104
Securities registered pursuant to Section 12(b) of the Exchange Act:
Title of each class Name of each exchange on which registered
None None
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Securities registered pursuant to Section 12(g) of the Act:
Common Stock, par value $.001 per share
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Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements for the past
90 days. [x] Yes [ ] No
Check if there is no disclosure of delinquent filers pursuant to Item 405
of Regulation S-B is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any amendment to
this Form 10-KSB. [ ]
The issuer's revenues for its most recent fiscal year were $0.
The aggregate value of the common stock of the Company held by
non-affiliates is $14,897,369 based on the price at which the common stock was
sold on February 1, 2000.
Transitional Small Business Disclosure Format YES [ ] NO [x]
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PART I
FORWARD-LOOKING STATEMENTS
When used in this Form 10-KSB, in filings by the Company with the
Securities and Exchange Commission (the "SEC"), in the Company's press releases
or other public or stockholder communications, or in oral statements made with
the approval of an authorized executive officer of the Company, the words or
phrases "would be," "will allow," "intends to," "will likely result," "are
expected to," "will continue," "is anticipated," "estimate," "project," or
similar expressions are intended to identify "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of 1995.
The Company cautions readers not to place undue reliance on any forward
looking statements, which speak only as of the date made, are based on certain
assumptions and expectations which may or may not be valid or actually occur,
and which involve various risks and uncertainties. The Company's actual results
for future periods could differ materially from those anticipated or projected.
Unless otherwise required by applicable law, the Company does not
undertake, and specifically disclaims any obligation, to update any
forward-looking statements to reflect occurrences, developments, unanticipated
events or circumstances after the date of such statement.
ITEM 1. DESCRIPTION OF BUSINESS.
New Generation Plastic, Inc. ("We" or the "Company") was incorporated
in the State of Delaware on April 15, 1999. We were the surviving entity in a
merger which took place on June 10, 1999 with SW Ventures, Inc., a Nevada
corporation organized on May 7, 1996. Since the merger, our business purpose has
focused on the commercial development of our patented plastic processing
technology. On January 25, 2000, the Board announced our intention to enter into
an additional business involving the establishment of a European Internet
Incubator network
From its inception in May of 1996 until the date of our merger, SW
Ventures, Inc. business involved seeking out and investing in various oil and
gas opportunities in the Western United States. SW Ventures participation in the
oil and gas business ceased on June 10, 1999 when it contributed all of its
assets and liabilities relating to the oil and gas business to a wholly owned
Nevada subsidiary, SW Oil and Gas Company. Immediately thereafter all of the
stock of SW Oil and Gas Company was sold to Guido Cloetens, the former majority
shareholder of SW Ventures, Inc., in exchange for a Promissory Note with a
principal amount of $90,000 and the assumption of certain liabilities of SW
Ventures, Inc. by Mr. Cloetens and SW Oil and Gas Company.
On June 8, 1999, at a special meeting of the shareholders of SW
Ventures, Inc., the following actions were approved: (a) the reverse split of
the common stock of SW Ventures, Inc. (15 for 1), (b) the disposition of all of
the assets and liabilities of SW Ventures, Inc. relating to its oil and gas
operations to SW Oil and Gas Company, (c) the merger of SW Ventures, Inc. and
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New Generation Plastic, Inc. with New Generation Plastic, Inc. as the surviving
entity and (d) the issuance of 11,580,000 post split shares of common stock of
New Generation Plastic, Inc. to Bachkine & Meyer Industries, S.A., a British
Virgin Islands corporation, pursuant to an exemption from the registration
requirements of Section 5 of the Securities Act of 1933, as amended under
Regulation S, in exchange for all of the assets and liabilities relating to our
patented technology pursuant to the terms of the Asset Contribution Agreement by
and between Bachkine & Meyer Industries, S.A. and SW Ventures, Inc. and Guido
Cloetens dated as of April 14, 1999.
Proposed Restructuring
On March 10, 2000, we announced a proposed restructuring which we
believe will allow us to more effectively pursue our Internet strategy. As part
of this restructuring, we recently formed a wholly owned subsidiary, New
Generation Partners, Inc., in the State of Delaware.
We expect that this recently formed subsidiary will develop and
physically host a number of Internet companies primarily in Europe. We
anticipate that we will develop a collaborative network of companies involved in
B2B e-commerce and ventures oriented towards new emerging Internet
infrastructure and wireless Internet applications.
Subject to stockholder approval, we intend to transfer all of our
assets and liabilities relating to our plastic business to another recently
formed wholly owned Delaware subsidiary, NG Plastic, Inc. As part of the
restructuring, we anticipate changing our name from "New Generation Plastic,
Inc." to "New Generation Holdings, Inc." subject to stockholder approval and
changing the name of "NG Plastic, Inc." to "New Generation Plastic, Inc.". We
anticipate that the transfer of our assets and liabilities relating to our
plastic business and the change of our corporate name, among other things, will
be presented for a vote of our stockholders at our annual meeting which is
expected to be held in April, 2000.
Plastic Business
Our plastic blending technology enables the production of homogeneous,
commercially usable polymers from a varied stream of otherwise immiscible waste
plastic or virgin feedstock. To date we have not generated any revenue from our
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technology and have devoted our efforts to developing the technology to a
commercially viable stage. We believe that our technology is unique in its
ability to combine mixed plastic, including blending different polymers which
are normally incompatible, into homogenous compounds (the "NGP Compounds")
through a mechanical process. The NGP Compounds are created without the use of
costly additives, known as compatibilizers, which link non-compatible resins. We
believe that NGP Compounds can be customized to meet desired physical
specifications. Moreover, our technology can utilize consumer and industrial
plastic waste, as well as virgin materials. In this regard, we believe that our
technology provides a solution for the processing of mixed plastic waste.
Therefore, we expect that initial commercialization efforts will be focused on
the recycling market.
The core component of our technology is an integrated ultra high
shearing chamber that creates in situ compatibilization of otherwise
non-compatible resins and deeply microhomogenizes different polymers into a
continuous amalgam. The chamber is a cylindrical structure within which a rotor
with impellers turns at very high speed (peripheral tip speed ranges between 40
and 65 m/sec during final processing). The speed and timing of the motor is
programmed according to the materials being processed and the nature of the
compounds to be created. The mixed plastic, as a result of the friction between
the plastic particles, rotor blades and chamber wall, are melted into a
homogeneous blend. A sharp increase of the torque indicates that the molten
mixture has reached the predetermined "gelification" level and is ready to be
discharged from the chamber.
All processing steps are computer controlled by software. Parameters
for programming include temperature, rotor speed, torque variation and time.
Depending on the type of mixture processed, the cycle time should last between
20 and 60 seconds and temperatures of the expulsed hot compound melt range
between 180(Degree)C and 280(Degree)C.
We believe that the finished product is significantly more processable
than otherwise compatibilized or compacted mixed plastic and offers economic
advantages over current plastic recycling. For example, the finished product is
normally pelletized allowing it to be used in conventional plastic injection and
extrusion equipment.
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We are currently operating a bench top prototype with a capacity of
approximately 30 kg/hour, have finalized the plans for the creation of a 150
kg/hour pilot unit and have plans for a full commercial size unit with a
capacity of 1,000 kg/hour (the "NGP Unit"). We expect that all of the above will
be made available to the master licensee (See "Management's Plan of Operation -
Plastic Business"). Our technology is protected by a patent that is issued or
pending in 62 jurisdictions worldwide.
We estimate that Newplast, NV and its affiliates (together,
"Newplast"), the prior owner of our technology, spent in excess of $12,000,000
from 1991 to 1996 in their effort to find a commercial application for our
technology. Seven prototypes were produced and tested, with the last and largest
unit having a standard capacity of 350kg/hour. Newplast was forced into
liquidation by their creditors in 1996. In 1998, Bachkine & Meyer Industries,
S.A. bought the patent rights covering the plastic blending technology from a
secured creditor and hired Bernard Dubrulle d'Ohrcel, the chief engineer in
charge of the development of the prototypes for Newplast.
The thermoplastic end product created by our technology from mixed
plastic waste is expected to have physical and chemical properties that are
comparable to certain virgin resins. In our opinion, current recycled mixed
plastic products have poor physical and chemical properties that have limited
their commercial acceptance. We expect that products using our technology will
be able to produce a series of NGP Compounds with specified characteristics by
controlling the mix of the recycled plastic feedstock without the use of
compatibilizers. Additionally, NGP Compounds can be created from mixed virgin
resins that are currently immiscible.
Historically, virgin resins were not mixed due to the costs of chemical
processes, limited miscibility of polymers and limited markets due to higher end
product costs. However, over the past 10 years, polymer blends have garnered as
much as a 30% market share of polymer consumption. We believe that our
technology is well suited for the development of additional polymer blends and
may offer an economical process for recycling those blended products.
NGP Compounds can be pelletized and easily used in standard plastic
manufacturing techniques, such as injection, extrusion, extrusion/calendar, blow
molding and compression molding. These pellets can then be used in a range of
applications such as building materials, highway construction and sign posts,
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agriculture, transportation, household products, office equipment, consumer
electronics, etc. The raw material costs of NGP Compounds utilizing plastic
waste are expected to be approximately half of the cost of using commodity
virgin resins (depending on geographic variables such as electric and labor
costs, percentage content/volume/costs of the plastic waste stream and the
specific resin the NGP Compounds are being compared to).
Our Technology - Recycling Application
For a plastic recycling application, our technology must be integrated
into a three zone system. Generally, a 25,000 square foot facility is necessary
for operations. The activities within each zone are as follows:
Zone One - Cleaning and Size Reduction. Within the first zone, waste plastic
materials are shred, separated, washed, dried and ground to specification for
the process feedstock. Material is then conveyed to silos for composition
analysis and short-term storage. If necessary, the mixture can be supplemented
with mono-materials and/or additives for specific applications/technical
specifications.
Zone Two - NGP Unit. Within the second zone, material is transported into the
ultra high shearing processing chamber. Depending on the type of mixture
processed, the cycle time should last between 35 and 120 seconds. Peripheral tip
speed ranges between 40 to 65 m/sec and temperatures of the expulsed hot
compound melt ranges between 180(Degree)C and 280(Degree)C during final
processing. The Company believes that within 20 - 60 seconds a phase change
occurs, causing molecular grafting or linking (re-arranging of the various
polymers) of various polymer chains, creating a homogeneous amalgam. The amalgam
is then extracted by centrifugal force from the inner chamber and is forced into
the reception area of a specially designed first phase extruder for temperature
control and extrusion. At the end of the first stage extruder is a special
filtration unit combined with an extrusion die designed to discharge the hot
melt in a spaghetti-like state into the degassing chamber. The filtered and
degassed hot melt is then introduced to the mouth of the second stage extruder
for pelletization or direct extrusion/compression of end products.
Zone Three - Packaging. Within the third zone, the pellets are conditioned and
transferred into 25 kg or larger containers to be shipped to production
equipment either on site or at an off-site manufacturing facility.
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For the waste management market, our technology requires a feedstock or
raw material which has been collected, transported and sorted with a maximum 30%
non-plastic content (water, paper, dirt, glass, metal, etc.). The mixed plastics
are typically generated from the collection of municipal solid waste, industrial
(computer, electronics, automotive) waste and agricultural (film, packaging,
etc.) waste.
The integrated NGP Unit located within Zone Two can be sold to
customers that already have cleaning and packaging equipment or customers that
will not be using dirty plastic waste. We hope to enter into a venture or
ventures with one or more partners for the purpose of commercially producing
identified streams of plastic. We anticipate that such an arrangement may result
in the payment of royalties to us equal to a fixed amount per kilo of
production.
Competition
We believe that current plastic or rubber processing equipment
manufacturers could compete with us through the use of new or existing
technology. There are more established and better funded waste processing
equipment companies that currently manufacture waste processing equipment that
will compete with equipment utilizing our technology. We anticipate that one or
more of those companies will be the exclusive or nonexclusive manufacturers for
our NGP Units.
While there are numerous companies involved in plastic recycling, most
of these firms are focused on collection and processing rather than technology
development.
With regard to the mechanical recycling of mixed plastic there are
several techniques currently being utilized by companies in the recycling
industry, including:
Intrusion - This technique involves the use of a specially
designed extruder, in which, the low melting point polymers melt
from the main body of material as they are extruded through
round or square profiles. The unmelted polymer flakes are used
as filler. This technique involves some pre-sorting, but the
commercial use of the end product is limited due to physical and
chemical characteristics. Companies that utilize this process
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include ART (Belgium), Remaplan (Germany), Testa (France) and
Hammer Plastic (United States).
Cyrogenefication (micronisation) - This process utilizes
very low temperatures to create the micronisation of the
feedstock into a fine powder. The fine powder is then extruded
with standard plastic processing equipment. The resulting end
product has better surface aspects and a more homogeneous core
than the end products from intrusion. The powder can also be
transformed into end products by compression molding and be used
as filler with a skin made of virgin polymers. The mechanical
properties of the end product utilizing this technique are
generally poor, though better than intrusion. This process is
also costly.
There has been recent development work of other chemical processes in
Germany and France on the treatment of plastic waste, but costs associated with
these processes significantly limit market applications. Additionally, the costs
of incineration and landfill disposal (the largest waste management use for
plastic waste) are high and will continue to meet public resistance. New waste
management processes such as thermolization and pyrolization that are attempting
to take market share away from incineration (providing no toxic gas emissions)
are costly which has limited their market appeal. Pyrolisis has been developed
by large chemical companies to take polymers back to their original state via
high temperature and high pressure causing the materials to convert to the state
of synthetic oil; however, this technique is extremely costly (the end product
costs between 6 to 10 times more than the price of crude oil).
Sources and Availability of Equipment/Raw Materials
We believe that the reclaimed plastic waste utilized as a raw material
in our technology is readily available worldwide at little or no cost. In some
circumstances, we believe that we may receive payment to remove the plastic
waste materials we utilize.
Most of the equipment that makes up the NGP Unit is available from
various manufacturers worldwide. The processing chamber is a unique design, but
we believe that it can be manufactured by any of a number of the major plastic
machinery manufacturers.
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Patents and Trademarks
Our plastic blending technology currently utilizes our U.S. Patent
Number 5,891,955 issued on April 6, 1999, entitled Process for Transforming a
Starting Material Containing At Least Two Different Thermoplastic Materials Into
A New Homogenous Thermoplastic Material. This patent has been filed or is
pending in 62 jurisdictions worldwide. The European Patent No. 92907183.5-2307
issued on September 16, 1998 was opposed by an application filed by Solvay, SA.
We have retained counsel in Munich, Germany to handle the opposition and we
believe that the patent will be upheld in substantially the form it was issued.
A decision on Solvay's opposition to our European patent is not expected until
the fourth quarter of 2000. If the challenge to our European patent is
successful, it could result in a material adverse effect on our business and our
financial condition.
We have filed for the registration of the following three (3)
trademarks with the United States Patent and Trademark Office:
A) Mark: New Generation Plastic
App. No.: 75/628132
App. Date: January 27, 1999
Status: Filed
B) Mark: NewGen Plastic
App. No.: 75/628971
App. Date: January 27, 1999
Status: Filed
C) Mark: NGP
App. No.: Not yet assigned
App. Date: January 27, 1999
Status: Filed
Each application covers the following goods and services: (a) Machinery for the
Production of Plastic Material, (b) Computer Software Used for the Production of
Plastic Material, (c) Plastic Material Used for Manufacturing and (d)
Manufacture of Plastic Products for Others, Recycling of Mixed Waste Plastic
Products for Others.
To date none of the trademarks has been issued; however, we are
diligently pursuing the applications.
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Research and Development
We have been engaged in internal and external research and development
efforts aimed at bringing our technology to a commercially viable stage. A
research agreement was entered into with an independent polymer research and
testing organization called Pole Europeen de Plasturgie ("PEP") located in
Oyonnax, France to further analyze our technology and the NGP Compounds it
produces. In addition, some of the materials produced by the our bench type
prototype are being tested by Polymer Diagnostics, Inc. ("PDI") an independent
testing group based in Lake Avon, Ohio. PEP and PDI were commissioned to
accelerate the development and commercialization of our technology. Their
objectives were to: 1) show the improved technology performance relative to
conventional blending equipment, 2) show the commercial potential by processing
several readily available mixed plastic waste streams and some innovative blends
from virgin materials, and 3) gain process understanding to predict material
properties and develop quality control software in commercial machines. In 1999,
approximately $62,000 was spent on research and development with PEP and PDI.
We expect that the research agreement with PEP will be terminated in
the near future. We anticipate that the master licensee will be responsible for
future research and development costs (See "Management's Plan of Operation -
Plastic Business").
Number of Employees
We have 6 employees as of the date hereof. We anticipate that 5 of the
6 employees will become employees of our Internet subsidiary.
Internet Business
We formed New Generation Partners, Inc., a wholly owned Delaware
subsidiary in February of 2000 for the purpose of establishing an Internet
Incubation Network throughout Europe. We anticipate that our Internet subsidiary
will enable us to develop and physically host a number of Internet companies,
which we refer to as Network Companies. We expect that by creating such an
Incubation Network, we can use the collective knowledge and resources of the
Network Companies and our management team to create synergies and promote growth
among Network Companies.
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The Internet Market
The Internet has created a significant and abrupt shift in the way in
which many companies do business. The Internet provides global connectivity and
unprecedented breadth of information accessible at rapid speed and minimal cost.
This low cost interconnectivity has changed how many companies communicate
internally, transact business with vendors and customers and compete with firms
around the world. These factors coupled with the relatively low costs associated
with establishing an Internet company have led to a boom in new Internet
companies.
Nevertheless, we believe that there will be significant opportunities
for new Internet companies due to the expected rise in Internet users worldwide
(both individual and commercial), particularly in Europe. Currently, we estimate
that the United States accounts for over 40% of worldwide Internet usage.
Estimates indicate that Europe will surpass the United States in number of
Internet subscribers by the end of 2001 and will account for approximately 50%
of worldwide Internet usage by 2005. Combined revenues for Internet access in
Europe are projected to grow from a recent estimate of $2.5 billion to almost
$12 billion in 2001. It is expected that revenues generated from European
e-commerce will grow from approximately $39 billion in 2000 to over $430 billion
in 2003. We estimate that while there are approximately 400+ U.S. Internet
related public companies, there are only 100+ such companies in Europe.
Incubation Network
We expect our Internet subsidiary to develop and physically host a
number of Internet related companies primarily in Europe. We expect that
specific areas of focus will include B2B e-commerce and ventures oriented
towards new emerging Internet infrastructure and wireless Internet applications.
We anticipate that initial Incubation facilities will be located in London,
Paris and Munich. By providing initial funding, administration, accounting and
legal assistance, consulting services, marketing, technology and contacts for
additional funding, we hope to enable Internet start-up companies to focus on
their core business while keeping operational expenses and other distractions
normally associated with start-up businesses to a minimum. We believe that
Internet entrepreneurs and companies requiring funding will actively seek out
our Internet subsidiary. We also expect that our Internet subsidiary will make
significant investments in non-Network Companies.
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Our Process
Through our Internet subsidiary, we intend to identify opportunities at
a very early stage and incubate these ideas into successful businesses. We
expect that as to each prospective incubation candidate, our Internet subsidiary
will analyze the markets, core business concepts, the entrepreneur's
capabilities and the nature and size of the equity stake that the Internet
subsidiary will receive as an "incubation fee." If the Internet subsidiary
agrees to admit the Network Company to Phase I incubation, our incubator
facilities will provide infrastructure for the Network Company to develop their
ideas into a business plan over an initial 30-90 day period. The infrastructure
will include a senior local executive who will act as a partner to the
entrepreneurs and organize support in hardware, software, design, marketing
assessment, financial planning and administration. We will provide our local
executives with an Incubation rule book which the executive will use to guide
him or her as to the criteria for admitting companies to our Incubation Network,
how to develop these companies and how to network within our Internet
subsidiary's entire Incubation Network. We expect that our Internet subsidiary
will receive an equity stake of no less than 25% in the Network Company for this
first stage of incubation.
After the production of the business plan, our Internet subsidiary and
the Network Company will agree whether to continue collaboration. If agreed, we
will begin the process of verifying and refining the business plan over an
additional 30-90 day period. During this period, we expect that the Internet
subsidiary will provide seed capital financing to the Network Company in an
amount up to $500,000. We anticipate that our Internet subsidiary will identify,
contract with and pay for the services of various advisors in an effort to
verify the business plan. We expect that this portion of Phase 1 incubation will
yield us additional equity, the amount of which will be determined on a case by
case basis.
In the event that the business plan developed in Phase 1 is deemed
viable after verification, we anticipate that we will assist the Network Company
in the further development and financing of the business in what we refer to as
Phase 2. A Phase 2 Network Company will be expected to obtain its own space and
will no longer be physically based by our incubation facility. We anticipate
that we will assist the Phase 2 Network Company in preparing for and obtaining
an initial round of third party financing. We expect that we will participate in
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that financing in return for additional equity. We anticipate that we will
continue to assist in the management of the Phase 2 Network Company and we
expect that we will have representation on the Board of Directors.
Our Investment Policy
We expect that our Internet subsidiary will follow a defined investment
policy. At the present time, we anticipate that the policy will provide that 20%
of available funds will be used in very early stage or Phase 1 Incubation
ventures with seed investments up to $500,000 per company. We anticipate that
35% of funds will be allocated to the development of Network Companies coming
out of Phase 1 incubation and slightly more mature European and North American
ventures that are not Network Companies or Phase 2 ventures. We expect that the
average investment in Phase 2 ventures will be $2,000,000. We anticipate that
remaining funds may be invested in discrete investments in more mature
businesses with higher capital requirements or Phase 3 companies. We expect that
we will make a significant number of the Phase 2 and Phase 3 investments in
Network Companies coming out of Phase 1. We hope to obtain active control of the
companies in which we invest through shareholdings of 25% or more.
Strategic Alliances
We are entering into agreements with Double Impact Inc. and eMarketer
an affiliate of e-land, Inc. which we believe will greatly enhance our ability
to provide Incubation services to Network Companies. Double Impact is a highly
regarded Internet venture catalyst, providing Internet companies and
entrepreneurs with a range of business development, investment and advisory
services. The company targets entrepreneurial companies, corporations and
investors and in assists them in formulating Internet strategy, forging
partnerships, competing effectively, expanding globally and maximizing upside
potential. We believe the agreement with Double Impact will provide us with a
range of Internet experience and expertise, incubation development skills and
analysis services which will assist us in developing protocols regarding
industries and companies to invest in.
eMarketer is a worldwide authority on online business. As a new media
publisher, the company has numerous products and services. eMarketer's
award-winning web site has been visited by hundreds of thousand of e-marketers,
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entrepreneurs, business analysts and industry experts from over 105 countries.
We believe the agreement with eMarketer will provide us with significant real
time research and market trend data.
Competition
The past few years have seen the emergence of several public companies
in the United States that invest broadly in promising pre-IPO Internet-related
start-up companies. These publicly traded incubator companies are a blend
between venture capital firms and corporate parents, assisting startups in a
myriad of financial, marketing and management areas. We expect that these
companies will be our chief competitors; however, there may be other entrants
into the Internet incubation market that will compete with us. Two of them, CMGI
and ICGE are discussed below. However, we believe that none of these U.S.
companies have a specific focus on European Internet investments and incubation
activities, such as we have.
More specifically, some of our potential competitors in Europe are
currently in dialogue with us to become either consultants or partners. Some of
these European companies are based in Sweden. One of the reasons we are
approaching these firms is due to the fact that a significant portion of the
cross Atlantic Internet traffic goes through Stockholm on the European side.
Additionally, Sweden has been on the cutting edge of Internet start-ups and
technology.
The following are some of the public companies already involved in
pre-IPO Internet funding.
CMG Information Services, Inc. (CMGI) - Andover, Massachusetts
Since 1995, CMGI invests, develops, acquires and operates various
Internet companies. The company provides incubating services for
Internet-related start-up businesses and provides capital resources. These
companies, as they grow within the CMGI network, are both public and private.
Numerous investment banks are covering CMGI with a "buy" rating. As of
mid December, CMGI's publicly traded assets totaled approximately $5 billion.
Many analysts believe the company's valuation over the next 18-month period will
rise to over $20 billion.
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CMGI has several business units. First, the Company has majority stakes
in a range of Internet-related businesses including, technology, ISP and
marketing companies at various stages of development, including AltaVista,
iCAST, MyWay.com, NaviNet, Adsmart, Activerse, Engage, et al. Further, CMGI is
directly involved in fulfillment services (the market segment which offers
integrated Web-based product fulfillment including turnkey outsourcing,
telemarketing and sales/lead inquiry management) through its investment in
SalesLinkCorp, which in turn has purchased major competitors.
CMGI also has an affiliated venture capital group formed in 1995 that
makes the early-stage venture transactions through three Venture funds. The
synergy amongst the start-up investments with the more mature companies allows a
network of relationships, experiences and management to feed off of each other
and improve all of the company's future business prospects. The company offers
its affiliates and network of holdings access to corporate resources, facilities
collaboration, development of strategic alliances and technical access to
corporate resources, technological innovation. Strategic investors include
Microsoft, Intel, Sumitomo and Compaq.
Investment Capital Group (ICGE) - Wayne, Pennsylvania
ICGE is an Internet holding company actively engaged in
business-to-business e-commerce through a network of Partner Companies. It
provides operational assistance, capital support, industry expertise, and a
strategic network of business relationships intended to maximize the long-term
market potential of more than 45 business-to-business e-commerce partner
companies. The company has or had stakes in VerticalNet Inc., MatchLogic,
WiseWire, and Breakaway Solutions Inc. ICGE focuses on investments in online
companies that provide Internet-commerce services for businesses and suppliers.
Its investors include Safeguard Scientifics Inc., General Electric Co. and
Comcast Corp.
Leveraging off of an initial $45 million start up in 1996, the company
has had a series of equity and debt moneys raised to fund their investments in
Internet companies. A public offering in August and a tag on private placement
with IBM this summer created a pool of approximately $225 million to make
additional Internet investments.
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Other parties in the marketplace include:
SafeGuard Scientific - Wayne, Pennsylvania
Safeguard is an Internet-centric holding company that identifies,
acquires, operates and manages business-to-business companies and has interests
in several private equity funds. Safeguard currently focuses on companies
engaged in e-commerce, e-communication, and e-business services. Safeguard
Scientifics, Inc. develops and operates entrepreneurial, rapidly growing,
information technology companies with an emphasis on E-Commerce, E-Business
Software and Services, and E-Communications.
Other significant companies in the incubation market are:
SOFTBANK, Inc. - Tokyo, Japan;
Rare Medium - New York;
eCompanies - Santa Monica, California;
i-Hatch Ventures - New York;
KPE - London, New York and Los Angeles'
Protege - UK and California;
Ci4net - Jersey (UK);
Dawnay Day Lander - London;
Europ@web - France;
Antfactory - London;
GorillaPark - Amsterdam;
Cell Ventures - Sweden;
Icon Medialab International - Sweden; and
Framfab - Sweden.
Employees
Our Internet subsidiary currently has no employees. We anticipate that
the number of employees will grow to 25 by the end of 2000.
ITEM 2. DESCRIPTION OF PROPERTIES.
LOCATION AND DESCRIPTION OF PROPERTIES
We currently have a short term lease agreement for use of office space
and conference facilities with Regus Business Center Corp. at 245 Park Avenue,
39th Floor; New York, New York 10167. The agreement is on a month to month basis
at a rate of $225, plus expenses. This arrangement is sufficient to conduct the
day to day operations of its business. In addition, we have a month to month
arrangement with Bachkine & Meyer Industries, S.A. to utilize space in their
16
<PAGE>
representative office at Rue de la Rotisserie 29, Geneva, Switzerland.
Currently, there is no rental paid to Bachkine & Meyer Industries, S.A. for the
use of the space.
ITEM 3. LEGAL PROCEEDINGS.
We are not a party to any pending legal proceedings and, to the best of
our knowledge, no such action by or against us has been threatened. None of our
officers, directors, or beneficial owners of 5% or more of our outstanding
securities is a party to proceedings adverse to the us nor do any of the
foregoing individuals have a material interest adverse to us.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of the Company's stockholders
during the fourth quarter of fiscal 1999.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
MARKET INFORMATION
Our common stock is traded on the OTC Bulletin Board under the symbol
"NGPX". The following table sets forth for the periods indicated the high and
low bid quotations for our common stock as reported on the OTC Bulletin Board,
for all periods subsequent to our merger with SW Venture, Inc. These quotations
reflect inter-dealer prices, without retail mark-up, markdown or commission, and
may not necessarily represent actual transactions.
-------------------------------------- ---------- ------------
High Low
-------------------------------------- ---------- ------------
4th Quarter 1999, ended 12/31/99 $8.5 $6.25
-------------------------------------- ---------- ------------
3rd Quarter 1999, ended 9/30/99 $8.5 $4.125
-------------------------------------- ---------- ------------
6/11/99 through 6/30/99 $8.25 $7.25
-------------------------------------- ---------- ------------
17
<PAGE>
DIVIDEND POLICY
No dividends have been paid by the Company since its inception. We do
not anticipate paying dividends on our common stock in the foreseeable future
but plan to retain earnings, if any, for the operation and expansion of our
business.
HOLDERS
There are 76 shareholders of record of the Company's common stock as of
December 31, 1999.
RECENT SALES OF UNREGISTERED SECURITIES
There have been no recent sales of unregistered securities other than
those previously reported in the Company's Quarterly Report on Form 10QSB for
its quarter ended June 30, 1999.
18
<PAGE>
ITEM 6. MANAGEMENT'S PLAN OF OPERATION
You should read the following plan of operation in conjunction with the
financial statements and notes thereto contained elsewhere in this prospectus.
The following information contains forward-looking statements which are subject
to risks and uncertainties. If one or more of these risks and uncertainties
materialize, actual results may differ from those expressed or implied by the
forward-looking statements.
Overview
We are a development stage company that has not yet generated any
revenue. We have decided to restructure our existing plastic business and enter
into a new business involving incubation of primarily European Internet
businesses. These two businesses will be carried out in two of our subsidiaries
formed for those purposes. After the completion of the transactions, we will
become a holding company with no operations aside from the ownership of the
subsidiary corporations' stock.
Plastic Business
Over the course of the next twelve months, we anticipate that we will
engage in the following activities:
1. We expect that upon receipt of stockholder approval, we will
complete the transfer of all assets and liabilities relative to the
plastic business to a wholly owned subsidiary.
2. We expect to identify a master licensee and enter into an
exclusive master license agreement for use of our plastic technology.
We anticipate that our plastic subsidiary will receive royalty
payments on a per kilogram basis.
3. We expect to maintain patent and trademark filings.
4. We expect to provide any necessary administrative or technical
assistance to master licensee with regard to our plastic technology.
The foregoing activities reflect the fact that we will no longer be
directly responsible for continuing research and development costs and capital
expenditures with regard to the commercialization of selected applications for
19
<PAGE>
the plastic technology. We expect that the master licensee will be responsible
for all such costs.
Internet Business
Over the course of the next twelve months, we anticipate that we will
engage in the following activities:
1. We expect to identify and establish strategic partnerships with
firms that provide expertise that will benefit Network Companies.
2. We expect to establish an initial incubator site in London and
additional sites in Paris and Munich.
3. We anticipate hiring a Chief Investment Officer and Internet
Analyst.
4. We expect to identify candidates for incubation and direct
investment. It is expected that these candidates will be involved primarily in
B2B e-commerce, wireless Internet, or Internet infrastructure.
5. We anticipate entering into the initial phase of incubation with
approximately 45 Network Companies.
6. We expect that we will provide seed capital investments of up to
$500,000 to approximately 18 of the initial 45 Network Companies.
7. We anticipate that we will invest an average of $2,000,000 in 6 of
the 18 Network Companies that we provide seed capital.
8. We expect to provide seed capital of up to $500,000 each to 3
non-Network Companies (companies which are not part of our incubation program).
9. We anticipate that we will invest an average of $2,000,000 in the
initial round of third party financing of 4 non-Network Companies. We expect
that this will represent approximately 30% of such initial financing for each of
these non-Network Companies.
10. We expect that we will make investments in 3 pre-initial public
offering non-Network Companies with more mature Internet businesses. We expect
20
<PAGE>
that the average investment in each of these companies will be $5,000,000 which
will represent approximately one-third of the funds raised by these companies.
Liquidity and Capital Resources
As of the date of this registration statement, we have yet to generate
any revenue from our business operations. Consequently, we have been solely
dependent upon shareholder advances from Bachkine & Meyer Industries, S.A. to
fund our cash requirements.
Plastic Business
As of December 31, 1999, we had assets of $607,191 and liabilities of
$3,337,984. For the next twelve months, we anticipate that we will require
$150,000 in additional capital. We anticipate that these funds will either be
provided by additional loans from Bachkine & Meyer Industries, S.A. or from the
proceeds of a private placement of our equity securities. We do not plan to
purchase any significant equipment in the next twelve months.
Internet Business
Our Internet business is in its initial stage of development. This
business has not generated any revenues to date and we do not expect any revenue
to be generated in the next twelve months. In order to operate this business in
accordance with our current business plan, we intend to raise approximately
$60,000,000 in the next twelve months. We anticipate that in the next 90 days,
we will raise approximately $2,000,000 to $5,000,000. We further anticipate
raising an additional $55,000,000 to $60,000,000 in equity financing (private
and/or public) in the next 12 months.
We cannot guarantee that any new capital will be available to us or
that adequate funds for operations will be available as or when needed, or on
terms satisfactory to us. Our failure to obtain adequate additional financing
may require us to delay, curtail or scale back some or all of our proposed
activities and potentially to cease operations in both the plastic and Internet
businesses.
We expect that the Internet subsidiary will commit an aggregate of up
to approximately $50,000,000 to investments in Network and non-Network
Companies. In addition, we expect that we will incur approximately $3,200,000 of
corporate overhead expenditures for salaries, rent, expenses, and legal and
21
<PAGE>
accounting expenses. The anticipated expenses for establishing and operating the
initial network of incubation sites will be $9,200,000. Finally, we expect that
we will expend approximately $500,000 in legal, accounting and other expenses
directly related to investments in non-Network Companies.
YEAR 2000
Management believes that the Company's accounting and operational
systems are year 2000 compliant. The Company received verification from GE/Fanuc
that the process control software for the NGP Technology was year 2000
compliant. The Company has not yet experienced any material year 2000 operating
problems and does not expect to encounter any such problems.
ITEM 7. FINANCIAL STATEMENTS
The following financial statements are included herewith. The Company's
audited Financial Statements for the period from April 15, 1999 through December
31, 1999 are set forth at the pages indicated at Item 13(a).
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINACIAL DISCLOSURE
We dismissed Randy Simpson, CPA as our independent accountant as a
result of the change in control on June 10, 1999. The Board of Directors
selected KPMG LLP as the new independent accountants. We are not aware of any
dispute or disagreement with Mr. Simpson with regard to the financial statements
or accounting principles and practices. The decision to hire KPMG was made
because we expected that our accounting needs would be significantly expanded
and we desired a firm with an international reputation.
22
<PAGE>
PART III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
COMPLIANCE WITH SECTION 16(a)
MANAGEMENT
The following table sets forth the names, ages and positions of our
executive officers and directors:
Name Age Position and Offices with the Company
---- --- -------------------------------------
Jacques Mot 42 Chairman of the Board of Directors
Paul Hokfelt 46 President, Chief Executive Officer
Elliot Levine 47 Interim Chief Financial Officer
Marc Engel 40 Executive Vice President
Thomas Marshall 42 Executive Vice President, Secretary and
General Counsel and Director
Marcel Rokegem 50 Director
Jacques Mot has served as the Chairman of the Board since April of 1999
and he served as President and Chief Executive Officer from April 1999 to
January 24, 2000. Mr. Mot is a founder of Bachkine & Meyer Industries, S.A.
("BMI"). Prior to the start up of BMI, Mr. Mot was an independent consultant to
Unilabs Group (listed on the Nasdaq and Swiss Stock Exchanges). Mr. Mot's
activities have primarily been securities related matters and investor
relations.
Mr. Mot was also a Director of Argenta & Magnum Management Company Ltd.
- - Gilbratar, a company that created and marketed offshore entities. From 1987 to
1992, Mr. Mot was the General Manager and Director of Iesa Investissements S.A.,
a portfolio management and investment company, where he handled portfolio and
investment management on a confidential basis. Mr. Mot attended the University
of Lausanne, Switzerland studying economics from 1976-1979.
23
<PAGE>
Paul Hokfelt has served as our President and Chief Executive Officer
since January 25, 2000. Paul is a Swedish national who has been active
internationally and gained senior management experience in several European
countries and the United States with service providers in the medical field.
Prior to joining us, Paul was most recently a director and CEO of UCT
International, a contract research organization. Additionally, he was
instrumental in his role as managing director and COO in the rapid growth of
Unilabs, S.A., a company he joined from its start-up and led through its trading
on the Swiss Stock Exchange in April 1997. Unilabs, S.A. is a European leader in
the field of medical diagnostics.
Prior to these appointments, Paul was a senior officer with several
Scandinavian financial institutions for over ten years, amongst them SEB, which
specializes in the structuring of complex financing solutions. He holds a degree
in Business Administration from the Stockholm School of Economics (1976).
Elliot Levine has served as our Interim Chief Financial Officer since
April of 1999. Mr. Levine is a founding member of the accounting firm of Levine
& Seltzer, LLP, Certified Public Accountants. He became a member of the American
Institute of Certified Public Accountants in February of 1975. Mr. Levine's work
experience includes five years at Arthur Young, ten years as partner and
Director of Taxes of Leslie Sufrin & Co., P.C., CPAs and seven years as senior
member of Levine & Seltzer, LLP.
Mr. Levine is a graduate of Queens College, City University of New
York. During Mr. Levine's 24 years as a CPA, he has given numerous speeches and
has chaired several conferences on the topic of Mergers and Acquisitions.
Marc R. Engel has served as our Executive Vice President in charge of
Business Development since April of 1999. Prior to these activities Mr. Engel
was the founder and principal of 21ST Century Capital Advisors, Inc. a financial
advisory firm specializing in environmental and technology company financings
and business development.
Mr. Engel was a senior advisor and vice president at Hambro Resource
Development, the Hambros Bank subsidiary in New York, specializing in corporate
and project finance. He has also held various national marketing and sales
24
<PAGE>
management positions within the construction and direct marketing industries.
Marc received his B.A. from Boston College in 1980.
Thomas R. Marshall has served as General Counsel, Executive Vice
President and Secretary since August of 1999. He has also been a member of our
Board of Directors since April of 1999. Prior to joining us, Mr. Marshall was
counsel to the New York office of the law firm of Schnader Harrison Segal &
Lewis LLP (from 1996 to 1999) where he concentrated in Taxation and Corporate
and Securities law. From 1993 to 1996, he was associated with the law firm of
Keck, Mahin & Cate where he performed similar duties.
Mr. Marshall holds a BS in Business Administration from the University
of Rhode Island, a JD from St. John's University School of Law and he was
awarded an LLM in Taxation from the New York University School of Law.
Marcel Rokegem has served as a Director since April, 1999. Mr. Rokegem
is currently a consultant to Van Moer Santerre Group, a brokerage firm with
offices in Brussels, Luxemburg and Monaco. From 1987 to 1992 he was a
co-founding Partner and Director of Euro Suisse Limited London, a member of the
London Stock Exchange. Mr. Rokegem was a Partner of Jessup and Lamont
International Limited of London, an affiliate of Jessup and Lamont Securities
Co., Inc., a member of the New York Stock Exchange from 1982 to 1987. Prior to
that Mr. Rokegem served as the Partner in Charge of International Equity trading
for BIARD, Hombergen, Pringiers & Co. Mr. Rokegem began his career in 1970 with
Kredietbank, NV of Brussels where he was responsible for domestic and
international equity trading, as well as Eurobond sales until 1980.
Mr. Rokegem has a degree in Applied Economic Sciences for Antwerpen
Jesuit University, as well as a diploma from the International Securities
Marketing Association. Mr. Rokegem is fluent in Dutch, French, English and
German.
25
<PAGE>
ITEM 10. EXECUTIVE COMPENSATION
The following table sets forth information regarding compensation paid by us to
our former Chief Executive Officer. None of our other officers received salary
and bonus payments in excess of $100,000 during the period beginning April 15,
1999 and ended December 31, 1999.
<TABLE>
<CAPTION>
Summary of Compensation Table
- -----------------------------------------------------------------------------------------------------------------------------------
Long Term Compensation
- ----------------------------- ------------------------------------------- ---------------------------------------------------------
Annual Compensation Awards Payouts
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Securities
Name and Other Restricted Underlying LTIP
Principal Salary Bonus Annual Stock Options/SARs Payout All Other
Position Year ($) ($) Comp. Award (#) ($) Comp.
-------- ---- --- --- ----- ------- --- --- -----
Jacques Mot, CEO 1999 0(1) 0 0 0 0 0 0
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- -------------
(1) During 1999 we made an advance of $100,000 to induce Mr. Hokfelt to join
our company as CEO. He did not begin his employment until January 25, 2000.
This payment is currently being offset against salary payments owed to Mr.
Hokfelt commencing on January 25, 2000. Mr. Hokfelt's current annual salary
is 240,000CHF.
Employment Agreements
We have an employment agreement with Paul Hokfelt, our President and
Chief Executive Officer pursuant to which we pay him commencing January 25, 2000
an annual salary of 240,000 CHF (approximately $145,000). We also pay for all
expenses relating to the lease and maintenance of Mr. Hokfelt's car including
insurance and gas. We anticipate that we will adopt bonus and stock option plans
in the near future and that Mr. Hokfelt will participate in these programs. The
agreement is for an initial term of three years and renews automatically for
additional one year terms unless either party provides written notice of
termination.
In the event that we terminate Mr. Hokfelt's employment without cause,
he is entitled to receive his base salary and fringe benefits for the remainder
of the then current term and his pro-rated bonus. The agreement also contains a
non-competition covenant.
Compensation of Directors
Currently members of our Board of Directors do not receive any
compensation for service on our Board. We expect that a compensation plan for
Directors may be adopted in the future.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The following table sets forth, certain information, as of March 27, 2000,
regarding beneficial ownership of our common stock by
- each stockholder known by us to be the beneficial owner of
more than five percent (5%) of the outstanding shares of
common stock;
26
<PAGE>
- each of our directors;
- each of the named executive officers; and
- all of our current executive officers and directors as a
group.
<TABLE>
<CAPTION>
Name of Number of Shares
Beneficial Owner Beneficially Owned(1) Percent of Class (1)
- ---------------- --------------------- --------------------
<S> <C> <C>
Bachkine & Meyer Industries, S.A. 6,320,374 53.39
Paul Hokfelt 0 0
Jauques Mot 0 0
Marcel Rokegem 0 0
Thomas R. Marshall 0 0
Marc R. Engel 0 0
Elliot H. Levine 0 0
All executive officers and directors 0 0
as a group
</TABLE>
(1) Shares of common stock subject to warrants currently exercisable or
exercisable within 60 days of the date hereof are deemed outstanding for
computing the number of shares beneficially owned and the percentage of
outstanding shares of the class held by a person holding such warrants, but
are not deemed outstanding for computing the percentage of any other
person. Except as indicated by footnote, and subject to community property
laws where applicable, the persons named in the table have sole voting and
investment power with respect to all shares of common stock shown as
beneficially owned by them.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Bachkine & Meyer Industries, S.A, our majority shareholder, has been
advancing us funds pursuant to the terms of a Line of Credit Agreement dated as
of April 15, 1999. The balance of such advances as of December 31, 1999 is
$2,175,186. Bachkine & Meyer did not charge interest on advances until July 1,
1999 at which time it began charging interest at the prime rate currently 8%.
Bachkine & Meyer has indicated it wishes to convert all the amounts advanced
under the Line of Credit Agreement into equity. The fairness of the conversion
price will be determined by an independent committee of the Board of Directors
established for that purpose.
In addition to the Line of Credit Agreement discussed above, B.A.M.I.
Consulting, S. A., a British Virgin Islands corporation, and an affiliate of
Bachkine & Meyer is entitled to receive a monthly management consulting fee of
$75,000 pursuant to the terms of a Consulting Agreement dated as of April 15,
1999. As of December 31, 1999, we owe B.A.M.I. $675,000 which we have accrued as
a general and administrative expense, but have not yet paid. B.A.M.I. has
indicated it wishes to convert all the amounts due under the consulting
agreement into equity. The fairness of the conversion price will be determined
by an independent committee of the Board of Directors established for that
purpose.
ITEM 13. EXHIBITS, LIST AND REPORTS of FORM 8-K.
(a) The following documents are filed as part of this Form:
1. Financial Statements. See index of Financial Statements on
page F-1 at the beginning of the attached Financial
Statements.
27
<PAGE>
(b) Exhibits
*(3) (i) Amended and Restated Certificate of Incorporation
* (ii) By-Laws
*(4) (i) Specimen Certificate for Common Stock
* (ii) Form of Warrant at $6.00 expiring 2 years after
Commencement Date
* (iii) Form of Warrant at $12.00 expiring March 5, 2004
* (iv) Form of Warrant at $12.00 expiring February 24, 2004
*(10) (i) Employment Agreement of Paul Hokfelt dated
January 25, 2000
+ (ii) Line of Credit Agreement dated as of April 15, 1999
+ (iii) Consulting Agreement dated as of April 15, 1999
*(21) Subsidiaries of the Registrant
*(27) Financial Data Schedule -- FDS
- --------------
* Filed herewith
+ Incorporated by reference to the Company's Form 10-QSB for the period ending
June 30, 1999 filed on August 23, 1999.
(2) Reports on Form 8-K
No reports on Form 8-K were filed during the fourth quarter of fiscal 1999.
28
<PAGE>
INDEX TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
Page
----
- --------------------------------------------------------------------------------
Independent Auditors' Report F-2
- --------------------------------------------------------------------------------
Balance Sheet F-3
- --------------------------------------------------------------------------------
Statement of Operations F-4
- --------------------------------------------------------------------------------
Statement of Stockholders' Equity F-5
- --------------------------------------------------------------------------------
Statement of Cash Flows F-6
- --------------------------------------------------------------------------------
Notes to Financial Statements F-7
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
F-1
<PAGE>
Independent Auditors' Report
The Board of Directors and Stockholders
New Generation Plastic, Inc.:
We have audited the accompanying balance sheet of New Generation Plastic, Inc.
(a development stage company) (the "Company") as of December 31, 1999, and the
related statements of operations, stockholders' equity (deficit), and cash flows
for the period from April 15, 1999 (inception) through December 31, 1999. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of New Generation Plastic, Inc. (a
development stage company) as of December 31, 1999, and the results of its
operations and its cash flows for the period from April 15, 1999 (inception)
through December 31, 1999, in conformity with generally accepted accounting
principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in note 7 to the
financial statements, the Company has suffered recurring losses from operations
and has a net capital deficiency that raise substantial doubt about its ability
to continue as a going concern. Management's plans in regard to these matters
are also described in note 7. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
KPMG LLP
McLean, VA
March 3, 2000
F-2
<PAGE>
NEW GENERATION PLASTIC, INC.
(A Development Stage Company)
Balance Sheet
<TABLE>
<CAPTION>
December 31,
Assets 1999
------------
<S> <C>
Current assets:
Cash $ 3,708
Prepaid expenses 159,554
-----------
Total current assets 163,262
Intangible assets, net 443,929
-----------
Total assets $ 607,191
===========
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 487,798
Accrued consulting expense 675,000
Due to shareholder 2,175,186
-----------
Total liabilities 3,337,984
-----------
Stockholders' equity (deficit):
Common stock, $0.001 par value; 50,000,000 shares authorized,
11,842,761 shares issued and outstanding 11,843
Preferred stock, $0.001 par value; 1,000,000 shares authorized,
none issued or outstanding --
Additional paid-in capital 804,690
Deficit accumulated during the development stage (3,547,326)
-----------
Total stockholders' equity (deficit) (2,730,793)
-----------
Commitments and contingencies
Total liabilities and stockholders' equity (deficit) $ 607,191
===========
</TABLE>
See accompanying notes to financial statements.
F-3
<PAGE>
NEW GENERATION PLASTIC, INC.
(A Development Stage Company)
Statement of Operations
Period from
April 15, 1999
(inception)
through
December 31,
1999
--------------
Operating expenses:
General and administrative $ 2,046,982
Product development 1,426,236
------------
Loss from operations (3,473,218)
Interest expense (74,108)
------------
Loss before income taxes (3,547,326)
Income taxes --
------------
Net loss $ (3,547,326)
============
Basic and diluted net loss per common share $ (0.30)
Shares used to compute basic and diluted net loss per
common share 11,842,761
See accompanying notes to financial statements
F-4
<PAGE>
<TABLE>
NEW GENERATION PLASTIC, INC.
(A Development Stage Company)
Statement of Stockholders' Equity (Deficit)
<CAPTION>
Common Stock
------------------------- Additional
Number of paid-in Accumulated
Shares Amount Capital Deficit Total
--------- ------ ------- ----------- -----
<S> <C> <C> <C> <C> <C>
Balance at April 15, 1999 (inception) -- $ -- -- -- --
Issuance of common stock to Bachkine &
Meyer Industries, S.A. 11,580,000 11,580 804,953 -- 816,533
Issuance of common stock in conjunction with
merger with SW Ventures, Inc. 262,761 263 (263) -- --
Net loss -- -- -- (3,547,326) (3,547,326)
---------- ---------- ---------- ---------- ----------
Balance at December 31, 1999 11,842,761 $ 11,843 804,690 (3,547,326) (2,730,793)
========== ========== ========== ========== ==========
</TABLE>
See accompanying notes to financial statements.
F-5
<PAGE>
<TABLE>
NEW GENERATION PLASTIC, INC.
(A Development Stage Company)
Statement of Cash Flows
<CAPTION>
Period from
April 15, 1999
(inception)
through
December 31,
1999
--------------
<S> <C>
Cash flows from operating activities:
Net loss $(3,547,326)
Adjustments to reconcile net loss to net cash used in
operating activities:
Amortization 73,270
Changes in operating assets and liabilities:
Increase in prepaid expenses (159,554)
Increase in accounts payable 487,798
Increase in accrued consulting expense 675,000
-----------
Net cash used in operating activities (2,470,812)
-----------
Cash flows provided by financing activities:
Cash received from shareholder loans 2,175,186
Issuance of common stock 816,533
-----------
Net cash provided by financing activities 2,991,719
-----------
Cash flows used in investing activities:
Purchase of patents (517,199)
-----------
Net cash used in investing activities (517,199)
-----------
Net increase in cash and cash equivalents 3,708
Cash and cash equivalents at the beginning of period --
-----------
Cash and cash equivalents at the end of period $ 3,708
===========
</TABLE>
See accompanying notes to financial statements
F-6
<PAGE>
NEW GENERATION PLASTIC, INC.
(A Development Stage Company)
Notes to Financial Statements
December 31, 1999
(1) Organization
New Generation Plastic, Inc. (the "Company") was organized on April 15,
1999 under the laws of the State of Delaware. During June 1999, the
Company exchanged 262,761 shares of its common stock for all of the
issued and outstanding common stock of SW Ventures, Inc. (SWV).
Concurrently, SWV changed its name to New Generation Plastic, Inc. As of
the date of the merger, the net assets of the Company and SWV were
determined to have nominal value. Accordingly, the transaction has been
recorded at the par value of the stock exchanged.
(2) Summary of Significant Accounting Policies
(a) Development Stage Enterprise
During the period from April 15, 1999 (inception) through December
31, 1999, New Generation Plastic, Inc. devoted substantially all
of its efforts to develop and market the patented technology
designed to process two or more discrete plastic polymers ("NGP
Process"). The Company believes the NGP Process is capable of
producing commercially usable plastic polymers from a mixed stream
of discrete virgin polymers or waste plastic. Its planned
principal operations have not commenced.
(b) Cash and Cash Equivalents
The Company considers all highly liquid investments with
maturities of three months or less from the date of purchase to be
cash equivalents.
(c) Intangible Assets
Intangible assets consist of the costs associated with the
purchase of the patents. Such patents are being amortized over
their estimated useful life of five years. As of December 31,
1999, the related accumulated amortization was $73,270.
(d) Product Development Costs
Product development costs include expenses incurred by the Company
for research, design and development of the Company's proprietary
technology. Product development costs are expensed as incurred.
(e) Income Taxes
The Company uses the asset and liability method of accounting for
income taxes. Under the asset and liability method, deferred tax
assets and liabilities are recognized for future tax consequences
attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their
respective tax bases. Deferred tax assets and liabilities are
measured using enacted tax rates expected to apply to taxable
(Continued)
F-7
<PAGE>
NEW GENERATION PLASTIC, INC.
(A Development Stage Company)
Notes to Financial Statements
December 31, 1999
income in the years in which those temporary differences are
expected to be recovered or settled. The effect on deferred tax
assets and liabilities of a change in tax rates is recognized in
income in the period that includes the enactment date.
(f) Net Income (Loss) Per Share
The Company computes net income (loss) per share in accordance
with Statement of Financial Accounting Standard ("SFAS") No. 128,
Earnings Per Share. Under the provisions of SFAS 128, basic net
income (loss) per share is computed by dividing the net income
(loss) for the period by the weighted average number of common
shares outstanding during the period. Diluted net income (loss)
per share is computed by dividing the net income (loss) for the
period by the weighted average number of common and dilutive
potential common shares outstanding during the period. As the
Company had a net loss during the period presented, basic and
diluted net income (loss) per share are the same.
(g) Use of Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amount of
assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting
period. Actual results may differ from those estimates.
(3) Related Party Transaction
Bachkine & Meyer Industries, S.A. ("BMI"), the holder of a majority of
the outstanding common stock of the Company, has been advancing funds to
the Company pursuant to a line of credit agreement dated April 15, 1999.
As of December 31, 1999, $2,175,186 had been advanced to the Company
under the terms of this agreement. Under the terms of the agreement,
principal payments are due on demand after July 15, 2000. Interest is due
quarterly in arrears and is based upon the prime rate; 8.0 percent as of
December 31, 1999.
In addition to the line of credit agreement discussed above, B.A.M.I.
Consulting, S.A. ("BAMI"), a British Virgin Islands corporation and an
affiliate of BMI, is entitled to receive a monthly management consulting
fee of $75,000 in exchange for engineering expertise in the development
and commercialization of the NGP Process. For the period ended December
31, 1999, $675,000 (nine months' fees) of such fee has been accrued as
general and administrative expense, but has not yet been paid.
(4) Income Taxes
No provision for federal or state income taxes has been recorded as the
Company has incurred a net operating loss since inception. As of December
31, 1999, the Company has a net operating loss carryforward available to
offset future taxable income of approximately $1,426,000, which expires
in 2019. The actual income tax benefit differed from the income tax
benefit which would be computed based upon the statutory federal tax
rates as a result of recording a valuation allowance. The valuation
(Continued)
F-8
<PAGE>
NEW GENERATION PLASTIC, INC.
(A Development Stage Company)
Notes to Financial Statements
December 31, 1999
allowance was recorded as it is not more likely than not that the
deferred tax assets will be recoverable.
Temporary differences that give rise to deferred tax assets and
liabilities at December 31, 1999 are as follows:
Deferred tax assets/liabilities:
Net operating loss carryforwards $ 584,757
Start-up costs 839,263
Other 30,384
----------
Total deferred tax assets 1,454,404
Less: valuation allowance (1,454,404)
----------
Net deferred tax assets $ --
==========
(5) Warrants
The Company declared a pro-rata distribution to each holder of its common
stock of record on October 14, 1999 consisting of a warrant to purchase
one share of the Company's common stock at an exercise price of $6.00 per
share for each four shares of common stock owned by the stockholder.
These warrants are not exercisable until the shares purchasable upon
exercise of the warrants have been registered under the Securities Act of
1933 and expire two years after the date upon which they first become
exercisable. As a result of this declaration, 2,960,706 warrants were
issued.
(6) Basic and Diluted Net Loss Per Share
The Company computes net income (loss) per share in accordance SFAS 128,
Earnings Per Share, which requires certain disclosures relating to the
calculation of income (loss) per common share, as follows.
Period from
April 15, 1999
(inception) through
December 31, 1999
--------------------
Net loss $ (3,547,326)
============
Weighted average shares of common stock
outstanding $ 11,842,761
============
Basic and diluted net loss
per common share $ (0.30)
============
(7) Financial Results and Liquidity
The Company incurred a net loss of $3,547,326 during the period from
April 15, 1999 (inception) through December 31, 1999. Significant amounts
of additional cash will be needed to continue the development of the NGP
Process and to fund losses until the Company can achieve profitability.
Based on management's proposed plan as of December 31, 1999, the Company
estimates that at least $3.5 million would be required to fund the
Company's operations through December 31, 2000 and that additional
amounts could be required thereafter.
(Continued)
F-9
<PAGE>
NEW GENERATION PLASTIC, INC.
(A Development Stage Company)
Notes to Financial Statements
December 31, 1999
While there is no assurance that funding will be available to execute the
plan, the Company is continuing to seek financing to support its
development efforts and is exploring a number of alternatives in this
regard.
(8) Commitments and Contingencies
In conjunction with the incorporation of the Company, the Company entered
into consulting agreements with several third parties. Under those
agreements the Company is contractually obligated to issue, upon the
adoption of a stock option plan, options to purchase an aggregate of
50,000 shares of the Company's common stock at exercise prices ranging
from $7.50 to $9.50.
One of the Company's European patents related to the plastic technology
has been opposed by a third party. While the Company believes its patent
will be upheld in substantially the form it was issued, the Company can
provide no assurances that it will be successful in its patent defense.
An adverse determination with respect to the enforceability of the
Company's European patent could have a material adverse effect on the
Company's business and financial condition.
(9) Subsequent Events
Effective January 25, 2000, the Board of Directors approved a change in
the business model of the Company to include the incubation of
Internet-related companies primarily located in Europe. As part of this
restructuring, the Company formed a wholly owned subsidiary, New
Generation Partners, Inc., in the State of Delaware. Through this
subsidiary, the Company anticipates developing a collaborative network of
Internet companies involved in business-to-business (B2B) e-commerce and
ventures oriented towards new emerging Internet infrastructure and
wireless Internet applications.
Also as part of the restructuring, the Company formed another wholly
owned Delaware subsidiary, NG Plastic, Inc. Subject to stockholder
approval, the Company intends to transfers all the assets and liabilities
relating to its plastic business to NG Plastic, Inc.
On February 21, 2000, the Company authorized the issuance of warrants to
purchase 165,000 shares of the Company's common stock at $12.00 per share
on a one-for-one basis. 90,000 of these warrants expire on March 5, 2004
and 75,000 of these warrants expire on February 24, 2000. Concurrently,
the Company issued 60,000 of the warrants with expiration date of March
5, 2000 to 2 shareholders. These warrants are not exercisable until the
shares purchasable upon exercise of the warrants have been registered
under the Securities Act of 1933.
F-10
<PAGE>
Signatures
In accordance with Section 13 or 15(d) of the Exchange Act, the Company
has caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
New Generation Plastic, Inc.
(Registrant)
/s/ Paul Hokfelt
-------------------------------------
Paul Hokfelt
President and Chief Executive Officer
(Chief Presiding Officer)
In accordance with the Exchange Act, this report has been signed below
on March 27, 2000 by the following persons in the capacities indicated:
/s/ Paul Hokfelt
-------------------------------------
Paul Hokfelt
President, Chief Executive Officer
and Director (Principal Executive
Officer)
/s/ Elliot Levine
-------------------------------------
Elliot Levine
Interim Chief Financial Officer
(Principal Financial and Accounting
Officer)
/s/ Thomas Marshall
-------------------------------------
Thomas Marshall
Director and Secretary
/s/ Jacques Mot
-------------------------------------
Jacques Mot
Director and Chairman
<PAGE>
New Generation Plastic, Inc.
List of Exhibits
*(3) (i) Amended and Restated Certificate of Incorporation
* (ii) By-Laws
*(4) (i) Specimen Certificate for Common Stock
* (ii) Form of Warrant at $6.00 expiring 2 years after Commencement Date
* (iii) Form of Warrant at $12.00 expiring March 5, 2004
* (iv) Form of Warrant at $12.00 expiring February 24, 2004
*(10) (i) Employment Agreement of Paul Hokfelt dated January 25, 2000
+ (ii) Line of Credit Agreement by and between dated as of April 15, 1999
+ (iii) Consulting Agreement by and between dated as of April 15, 1999
*(21) Subsidiaries of the Registrant
*(27) Financial Data Schedule -- FDS
- --------------
* Filed herewith
+ Incorporated by reference to the Form 10-QSB for the period ending June 30,
1999 filed on August 23, 1999.
Exhibit 3.(i)
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
NEW GENERATION PLASTIC, INC.
New Generation Plastic, Inc. (the "Corporation"), a corporation
organized and existing under the General Corporation Law of the State of
Delaware (the "DGCL"), does hereby certify as follows:
1. The present name of the Corporation is New Generation Plastic, Inc.
and its original certificate of incorporation was filed with the office of the
Secretary of State of the State of Delaware on April 15, 1999.
2. This Amended and Restated Certificate of Incorporation was duly
adopted by the Board of Directors of the Corporation (the "Board") and by the
sole stockholder of the Corporation in accordance with Sections 228, 242, and
245 of the DGCL.
3. This Amended and Restated Certificate of Incorporation restates and
integrates and further amends the certificate of incorporation of the
Corporation, as heretofore amended (the "Certificate of Incorporation").
4. The text of the Certificate of Incorporation is amended and restated
in its entirety as follows:
ARTICLE I
The name of the corporation is New Generation Plastic, Inc.
ARTICLE II
The address of the registered office of the Corporation in the State of
Delaware is 1013 Centre Road, Wilmington, Delaware 19805, County of New Castle.
The name of its registered agent at such address is Corporation Service Company.
ARTICLE III
The nature of the business of the Corporation, or the purposes to be
conducted or promoted by the Corporation, is to engage in any lawful act or
activity for which corporations may be organized under the General Corporation
Law of Delaware.
ARTICLE IV
The aggregate number of shares which the Corporation shall have the
authority to issue is Fifty-One Million (51,000,000) of which Fifty Million
(50,000,000) shall be Common Stock, par value $.001 per share, and One Million
(1,000,000) shall be Preferred Stock, $.001 per share.
<PAGE>
The Board of Directors of the Corporation (the "Board") is authorized,
subject to limitations prescribed by law and the provisions of this Article IV,
to provide for the issuance of the shares of Preferred Stock in series, and by
filing a certificate pursuant to the applicable law of the State of Delaware, to
establish from time to time the number of shares to be included in each such
series, and to fix the designation, powers, preferences and rights of the shares
of each such series and the qualifications, limitations or restrictions thereof.
The authority of the Board with respect to each series shall include,
but is not limited to, determination of the following:
(a) The number of shares constituting that series and the distinctive
designation of that series;
(b) The dividend rate on the shares of that series, whether dividends
shall be cumulative and, if so, from which date or dates, and the relative
rights of priority, if any, of payment of dividends on shares of that series;
(c) Whether that series shall have voting rights, in addition to the
voting rights provided by law and, if so, the terms of such voting rights;
(d) Whether that series shall have conversion privileges and, if so,
the terms and conditions of such conversion, including provision for adjustment
of the conversion rate in such events as the Board shall determine;
(e) Whether or not the shares of that series shall be redeemable and,
if so, the terms and conditions of such redemption, including the date or dates
upon or after which they shall be redeemable, and the amount per share payable
in case of redemption, which amount may vary under different conditions and at
different redemption dates;
(f) Whether that series shall have a sinking fund for the redemption or
purchase of shares of that series and, if so, the terms and amount of such
sinking fund;
(g) The rights of the shares in the event of voluntary or involuntary
liquidation, dissolution or winding up of the Corporation, and the relative
rights of priority, if any, of payment of shares of that series;
(h) any other relative rights, preferences and limitations of that
series.
ARTICLE V
In furtherance and not in limitation of the powers conferred by the
laws of the State of Delaware, the Board is expressly authorized to make, alter
or repeal the Bylaws of the Corporation, subject to the power of the
stockholders of the Corporation to alter or repeal any Bylaws made by the Board.
-2-
<PAGE>
ARTICLE VI
Unless, and except to the extent that, the Bylaws of the Corporation
shall so require, the election of Directors of the Corporation need not be by
written ballot.
ARTICLE VII
[RESERVED]
ARTICLE VIII
A Director of the Corporation shall not be personally liable to the
Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director except to the extent such exemption from liability or
limitation thereof is not permitted under the General Corporation Law of the
State of Delaware as the same exists or may hereafter be amended.
Any repeal or modification of the foregoing paragraph shall not
adversely affect any right or protection of a Director of the Corporation
existing hereunder with respect to any act or omission occurring prior to such
repeal or modification.
ARTICLE IX
The Corporation shall indemnify its officers, directors, employees and
agents to the extent permitted by the General Corporation Law of Delaware.
ARTICLE X
The Corporation reserves the right at any time, and from time to time,
to amend, alter, change or repeal any provision contained in this Certificate of
Incorporation, and other provisions authorized by the laws of the State of
Delaware at this time in force may be added or inserted, in the manner now or
hereafter prescribed by law; and all rights, preferences and privileges of
whatsoever nature conferred upon stockholders, directors or any other persons
whomever by and pursuant to this Certificate of Incorporation in its present
form or as hereafter amended are granted subject to the rights reserved in this
article.
ARTICLE X
No action required to be taken or which may be taken at any annual or
special meeting of stockholders of the Corporation may be taken without a
meeting and the power of the stockholders to consent in writing, without a
meeting, to the taking of any action is specifically denied, unless such action
has been approved by the Board prior to such action being taken.
-3-
<PAGE>
IN WITNESS WHEREOF, the Corporation has caused this Amended and
Restated Certificate of Incorporation to be duly executed this 7th day of June,
1995.
NEW GENERATION PLASTIC, INC.
By: /s/ Thomas R. Marshall
--------------------------------
Name: Thomas R. Marshall
Title: Secretary
-4-
Exhibit 3.(ii)
BY-LAWS
OF
NEW GENERATION PLASTIC, INC.
April 15, 1999
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
ARTICLE I
OFFICES..................................................................................................1
Section 1. Registered Office.............................................................1
Section 2. Other Offices.................................................................1
ARTICLE II
MEETINGS OF STOCKHOLDERS.................................................................................1
Section 1. Place of Meetings.............................................................1
Section 2. Annual Meetings...............................................................1
Section 3. Special Meetings..............................................................1
Section 4. Quorum........................................................................2
Section 5. Voting........................................................................2
Section 6. List of Stockholders Entitled to Vote.........................................2
Section 7. Consent of Stockholders in Lieu of Meeting....................................2
Section 8. Stock Ledger..................................................................3
Section 9. Inspectors of Election........................................................3
ARTICLE III
DIRECTORS................................................................................................3
Section 1. Number and Election of Directors..............................................3
Section 2. Vacancies.....................................................................4
Section 3. Duties and Powers.............................................................4
Section 4. Meetings......................................................................5
Section 5. Quorum........................................................................5
Section 6. Meetings by Means of Conference Telephone.....................................5
Section 7. Action by Written Consent.....................................................5
Section 8. Compensation..................................................................5
Section 9. Interested Directors..........................................................5
ARTICLE IV
COMMITTEES...............................................................................................6
Section 1. Constitution and Powers.......................................................6
Section 2. Executive Committee...........................................................6
Section 3. Compensation Committee........................................................6
Section 4. Audit Committee...............................................................7
Section 5. Pension Committee.............................................................7
Section 6. Organization..................................................................7
Section 7. Meetings......................................................................7
Section 8. Quorum and Manner of Acting...................................................7
Section 9. General.......................................................................7
</TABLE>
i
<PAGE>
<TABLE>
<S> <C>
ARTICLE V
OFFICERS.................................................................................................7
Section 1. General.......................................................................7
Section 2. Election......................................................................8
Section 3. Voting Securities Owned by the Corporation....................................8
Section 4. Chairman of the Board of Directors............................................8
Section 5. Chief Executive Officer.......................................................8
Section 6. Chief Operating Officer.......................................................9
Section 7. President.....................................................................9
Section 8. Executive Vice Presidents.....................................................9
Section 9. Chief Financial Officer......................................................10
Section 10. Senior Vice Presidents.......................................................10
Section 11. Vice Presidents..............................................................10
Section 12. Secretary....................................................................11
Section 13. Treasurer....................................................................11
Section 14. Assistant Secretaries........................................................11
Section 15. Assistant Treasurers.........................................................11
Section 16. Other Officers...............................................................12
ARTICLE VI
STOCK...................................................................................................12
Section 1. Form of Certificates.........................................................12
Section 2. Signatures...................................................................12
Section 3. Lost, Destroyed, Stolen or Mutilated Certificates............................12
Section 4. Transfers....................................................................13
Section 5. Limitations on Transfer......................................................13
Section 6. Record Date..................................................................13
Section 7. Beneficial Owners............................................................13
ARTICLE VII
NOTICES.................................................................................................14
Section 1. Notices......................................................................14
Section 2. Waivers of Notice............................................................14
ARTICLE VIII
GENERAL PROVISIONS......................................................................................14
Section 1. Dividends....................................................................14
Section 2. Disbursements................................................................14
Section 3. Fiscal Year..................................................................14
Section 4. Corporate Seal...............................................................15
</TABLE>
ii
<PAGE>
<TABLE>
<S> <C>
ARTICLE IX
INDEMNIFICATION.........................................................................................15
Section 1. Power to Indemnify in Actions, Suits or Proceedings other Than
Those by or in the Right of the Corporation..................................15
Section 2. Power to Indemnify in Actions, Suits or Proceedings by or in the
Right of the Corporation.....................................................15
Section 3. Authorization of Indemnification.............................................16
Section 4. Good Faith Defined...........................................................16
Section 5. Indemnification by a Court...................................................16
Section 6. Expenses Payable in Advance..................................................17
Section 7. Nonexclusivity of Indemnification and Advancement of Expenses................17
Section 8. Insurance....................................................................17
Section 9. Certain Definitions..........................................................17
Section 10. Survival of Indemnification and Advancement of Expenses......................18
Section 11. Limitation on Indemnification................................................18
Section 12. Indemnification of Employees and Agents......................................18
ARTICLE X
AMENDMENTS OF BY-LAWS...................................................................................18
Section 1. Amendments of By-Laws........................................................18
Section 2. Entire Board of Directors....................................................18
</TABLE>
iii
<PAGE>
BY-LAWS
OF
NEW GENERATION PLASTIC, INC.
(hereinafter called the "Corporation")
ARTICLE I
OFFICES
Section 1. Registered Office. The registered office of the Corporation
shall be located in the City of Wilmington, County of New Castle, State of
Delaware.
Section 2. Other Offices. The Corporation may also have offices at such
other places both within and without the State of Delaware as the board of
directors of the Corporation (the "Board of Directors") may from time to time
determine or the business of the Corporation may require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 1. Place of Meetings. All meetings of stockholders for the
election of directors or for any other purpose shall be held either within or
without the State of Delaware, at such time and place as shall be designated
from time to time by the Board of Directors and stated in the notice of the
meeting or in a duly executed waiver of notice thereof.
Section 2. Annual Meetings. The annual meeting of stockholders (the
"Annual Meeting of Stockholders") shall be held on such date and at such time as
shall be designated from time to time by the Board of Directors and stated in
the notice of the meeting, at which meetings the stockholders shall elect a
Board of Directors by a majority of all the shares entitled to vote at the
meeting, and transact such other business as may properly be brought before the
meeting. Written notice of the Annual Meeting of Stockholders stating the place,
date and hour of the meeting shall be given to each stockholder of record
entitled to vote at such meeting not less than ten (10) nor more than sixty (60)
days before the date of the meeting, either personally or by mail.
Section 3. Special Meetings. Unless otherwise prescribed by law or by
the certificate of incorporation of the Corporation (as amended and/or restated
from time to time, the "Certificate of Incorporation"), special meetings of
stockholders (the "Special Meetings of Stockholders"), for any purpose or
purposes, may be called by either (i) the Chief Executive Officer, (ii) the
Chief Operating Officer or (iii) the Board of Directors. The holders of not less
than a majority of all the shares entitled to vote at the meeting may also
request that the Chairman of the Board of Directors call a Special Meeting of
Stockholders, provided, that such request shall state the purpose or purposes of
the proposed meeting. Written notice of a Special Meeting of Stockholders
stating the place, date and hour of the meeting and the purpose or purposes for
which the meeting is called shall be given not less than ten (10) nor more than
sixty (60) days before the date of the meeting to each stockholder entitled to
<PAGE>
vote at such meeting. At a Special Meeting of Stockholders, only such business
as shall be specified in the notice of meeting (or any supplement thereto) shall
be conducted.
Section 4. Quorum. Except as otherwise provided by law or by the
Certificate of Incorporation, the holders of a majority in total number of votes
of the capital stock issued and outstanding and entitled to vote thereat,
present in person or represented by proxy, shall constitute a quorum at all
meetings of the stockholders for the transaction of business. A quorum, once
established, shall not be broken by the withdrawal of enough votes to leave less
than a quorum. If, however, such quorum shall not be present or represented at
any meeting of the stockholders, the officer of the Corporation presiding at the
meeting of stockholders or the holders of a majority in number of votes of the
capital stock entitled to vote thereat, present in person or represented by
proxy, shall have power to adjourn the meeting from time to time, without notice
other than announcement at the meeting of the time and place of the adjourned
meeting, until a quorum shall be present or represented. At such adjourned
meeting at which a quorum shall be present or represented, any business may be
transacted which might have been transacted at the meeting as originally
noticed. If the adjournment is for more than thirty (30) days, or if after the
adjournment a new record date is fixed for the adjourned meeting, a written
notice of the adjourned meeting shall be given to each stockholder entitled to
vote at the meeting not less than ten (10) nor more than sixty (60) days before
the date of the meeting.
Section 5. Voting. Unless otherwise required by law, the Certificate of
Incorporation or these By-Laws, any question brought before any meeting of
stockholders shall be decided by the affirmative vote of the holders of a
majority of the total number of votes of the capital stock present, in person or
represented by proxy, and entitled to vote thereat. Such votes may be cast in
person or by proxy but no proxy shall be voted on or after three (3) years from
its date, unless such proxy provides for a longer period. The Board of
Directors, in its discretion, or the officer of the Corporation presiding at a
meeting of stockholders, in his discretion, may require that any votes cast at
such meeting shall be cast by written ballot.
Section 6. List of Stockholders Entitled to Vote. The officer of the
Corporation who has charge of the stock ledger of the Corporation shall prepare
and make, at least ten (10) days before every meeting of stockholders, a
complete list of the stockholders entitled to vote at the meeting, arranged in
alphabetical order, and showing the address of each stockholder and the number
of shares registered in the name of each stockholder. Such list shall be open to
the examination of any stockholder, for any purpose germane to the meeting,
during ordinary business hours, for a period of at least ten (10) days prior to
the meeting, either at a place within the city where the meeting is to be held,
which place shall be specified in the notice of the meeting, or, if not so
specified, at the place where the meeting is to be held. The list shall also be
produced and kept at the time and place of the meeting during the whole time
thereof, and may be inspected by any stockholder of the Corporation who is
present.
Section 7. Consent of Stockholders in Lieu of Meeting. Unless otherwise
provided in the Certificate of Incorporation, any action required or permitted
to be taken at any Annual or Special Meeting of Stockholders of the Corporation,
may be taken without a meeting, without prior notice and without a vote, if a
consent or consents in writing, setting forth the action so taken, shall be
signed by the holders of outstanding stock having not less than the minimum
number of votes that would be necessary to authorize or take such action at a
2
<PAGE>
meeting at which all shares entitled to vote thereon were present and voted.
Prompt notice of the taking of the corporate action without a meeting by less
than unanimous written consent shall be given to those stockholders who have not
consented in writing and who, if the action had been taken at a meeting, would
have been entitled to notice of the meeting if the record date for such meeting
had been the date that written consents signed by a sufficient number of
stockholders to take the action were delivered to the Corporation as provided in
this Section 7. In the event that the action which is consented to is such as
would have required the filing of a certificate under the General Corporation
Law of the State of Delaware (the "DGCL") if such action had been voted on by
stockholders at a meeting thereof, the certificate filed shall state, in lieu of
any statement concerning any vote of stockholders, that written consent has been
given in accordance with this Section 7.
Section 8. Stock Ledger. The stock ledger of the Corporation shall be
the only evidence as to who are the stockholders entitled to examine the stock
ledger, the list required by Section 6 of this Article II or the books of the
Corporation, or to vote in person or by proxy at any meeting of stockholders.
Section 9. Inspectors of Election. In advance of any meeting of
stockholders, the Board of Directors by resolution may appoint one or more
inspectors of election to act at the meeting and make a written report thereof.
One or more other persons may be designated as alternate inspectors to replace
any inspector who fails to act. If no inspector or alternate is present, ready
and willing to act at a meeting of stockholders, the officer of the Corporation
presiding at the meeting of stockholders shall appoint one or more inspectors to
act at the meeting. Unless otherwise required by law, inspectors may be
officers, employees or agents of the Corporation. Each inspector, before
entering upon the discharge of his or her duties, shall take and sign an oath
faithfully to execute the duties of inspector with strict impartiality and
according to the best of his or her ability. The inspector shall have the duties
prescribed by law and shall take charge of the polls and, when the vote is
completed, shall make a certificate of the result of the vote taken and of such
other facts as may be required by law.
ARTICLE III
DIRECTORS
Section 1. Number and Election of Directors. The Board of Directors
shall consist of not less than one (1) nor more than twenty (20) members, the
exact number of which shall be fixed from time to time by the affirmative vote
of directors constituting at least a majority of the entire Board of Directors.
For the purposes of the preceding sentence, "entire Board of Directors" refers
to the total number of directors which the Corporation would have if there were
no vacancies. Except as provided in Section 2 of this Article III, directors
shall be elected by a majority of all the shares entitled to vote at the Annual
Meetings of Stockholders, and each director so elected shall hold office until
the next Annual Meeting and until his successor is duly elected and qualified,
or until his death, or until his earlier resignation or removal. Any director
may resign at any time upon notice to the Corporation. Directors shall be at
least eighteen (18) years of age and need not be residents of the State of
Delaware. Any or all of the directors may be removed, with or without cause, at
3
<PAGE>
any time by a majority of the votes cast by the stockholders then entitled to
vote generally in the election of directors, voting together as a single class,
at a special meeting called for that purpose. Any director may be removed for
cause by the action of the directors at a special meeting called for that
purpose. For the purposes of this Section 1 of Article III, "cause" shall mean
the failure of a director to substantially perform such director's duties to the
Corporation (other than any such failure resulting from incapacity due to
physical or mental illness) or the wilful engaging by a director in gross
misconduct injurious to the Corporation.
Section 2. Vacancies. Except as otherwise required by law, any vacancy
in the Board of Directors for any reason and any newly created directorship
resulting by reason of any increase in the number of directors may be filled
only by the Board of Directors, by resolution adopted by the affirmative vote of
a majority of the remaining directors then in office, even though less than a
quorum (or by a sole remaining director); provided, however, that if not so
filled, any such vacancy shall be filled by a majority of the voting power of
the capital stock at the next annual meeting or at a special meeting called for
that purpose. Any director so appointed shall hold office until the next meeting
of stockholders at which directors of the class for which such director has been
chosen are to be elected and until his or her successor is elected and
qualified.
Section 3. Duties and Powers. The business and affairs of the
Corporation shall be managed by or under the direction of the Board of Directors
selected as provided by law and the Certificate of Incorporation and these
By-Laws. In furtherance, and not in limitation, of the powers conferred by the
laws of the State of Delaware, the Board of Directors is expressly authorized
to:
(1) adopt, amend, alter, change or repeal By-Laws of the
Corporation; provided, however, that no By-Law hereafter adopted shall
invalidate any prior act of the Corporation that would have been valid if such
new By-Laws had not been adopted.
(2) subject to the By-Laws as from time to time in effect,
determine the rules and procedures for the conduct of the business of the Board
of Directors and the management and direction by the Board of Directors of the
business and affairs of the Corporation, including the power to designate and
empower committees of the Board of Directors, to elect, or designate and empower
officers and other agents of the Corporation, and to determine the time and
place of, the notice requirements for, and the manner of conducting, Board of
Directors meetings, as well as other notice requirements for, and the manner of
taking, Board of Directors action.
In addition to the powers and authority hereinbefore or by
statute expressly conferred upon them, the directors are hereby empowered to
exercise all such powers and do all such acts and things as may be exercised or
done by the Corporation, subject, nevertheless, to the provisions of the DGCL,
the Certificate of Incorporation and these By-Laws; provided, however, that no
amendments to these By-Laws hereafter adopted by the stockholders shall
invalidate any prior act of the directors which would have been valid if such
amendments had not been adopted.
Section 4. Meetings. The Board of Directors of the Corporation may hold
meetings, both regular and special, either within or without the State of
Delaware. Regular meetings of the Board of Directors may be held at such time
and at such place as may from time to time be determined by the Board of
Directors and, unless required by resolution of the Board of Directors, without
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notice. Special meetings of the Board of Directors may be called by the Chairman
of the Board of Directors, the Chief Executive Officer, the Chief Operating
Officer, the President, or by a majority of directors then in office. Notice
thereof stating the place, date and hour of the meeting shall be given to each
director either by mail not less than forty-eight hours before the date of the
meeting; by telephone, telecopy, or telegram on twenty-four (24) hours notice;
or on such shorter notice as the person or persons calling such meeting may deem
necessary or appropriate under the circumstances.
Section 5. Quorum. Except as may be otherwise specifically provided by
law, the Certificate of Incorporation or these By-Laws, at all meetings of the
Board of Directors, a majority of the entire Board of Directors shall constitute
a quorum for the transaction of business and the act of a majority of the
directors present at any meeting at which there is a quorum shall be the act of
the Board of Directors. If a quorum shall not be present at any meeting of the
Board of Directors, the directors present thereat may adjourn the meeting from
time to time, without notice other than announcement at the meeting of the time
and place of the adjourned meeting, until a quorum shall be present.
Section 6. Meetings by Means of Conference Telephone. Unless otherwise
provided by the Certificate of Incorporation or these By-Laws, members of the
Board of Directors of the Corporation, or any committee designated by the Board
of Directors, may participate in a meeting of the Board of Directors or such
committee by means of a conference telephone or similar communications equipment
by means of which all persons participating in the meeting can hear each other,
and participation in a meeting pursuant to this Section 6 shall constitute
presence in person at such meeting.
Section 7. Action by Written Consent. Unless otherwise provided by the
Certificate of Incorporation or these By-Laws, any action required or permitted
to be taken at any meeting of the Board of Directors or of any committee thereof
may be taken without a meeting, if all the members of the Board of Directors or
committee, as the case may be, consent thereto in writing, and the writing or
writings are filed with the minutes of proceedings of the Board of Directors or
committee.
Section 8. Compensation. The directors may be paid their expenses, if
any, of attendance at each meeting of the Board of Directors or any committee
thereof. Directors who do not receive compensation as officers or employees may
be paid a fixed retainer fee and fees for attendance at each meeting of the
Board of Directors or any committee thereof. No such payment shall preclude any
director from serving the Corporation in any other capacity and receiving
compensation therefor.
Section 9. Interested Directors. No contract or transaction between the
Corporation and one or more of its directors or officers, or between the
Corporation and any other corporation, partnership, association, or other
organization in which one or more of its directors or officers are directors or
officers, or have a financial interest, shall be void or voidable solely for
this reason, or solely because the director or officer is present at or
participates in the meeting of the Board of Directors or committee thereof which
authorizes the contract or transaction, or solely because his or their votes are
counted for such purpose if (i) the material facts as to his or their
relationship or interest and as to the contract or transaction are disclosed or
are known to the Board of Directors or the committee, and the Board of Directors
or committee in good faith authorizes the contract or transaction by the
affirmative votes of a majority of the disinterested directors, even though the
disinterested directors be less than a quorum; or (ii) the material facts as to
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his or their relationship or interest and as to the contract or transaction are
disclosed or are known to the stockholders entitled to vote thereon, and the
contract or transaction is specifically approved in good faith by vote of the
stockholders; or (iii) the contract or transaction is fair as to the Corporation
as of the time it is authorized, approved or ratified, by the Board of
Directors, a committee thereof or the stockholders. Common or interested
directors may be counted in determining the presence of a quorum at a meeting of
the Board of Directors or of a committee which authorizes the contract or
transaction.
ARTICLE IV
COMMITTEES
Section 1. Constitution and Powers. A majority of a quorum of the Board
of Directors may designate one or more committees, each committee to consist of
one or more of the directors of the Corporation, except as otherwise provided in
these By-Laws. The Board of Directors may designate one or more directors as
alternate members of any committee who may replace any absent or disqualified
member at any meeting of any such committee. In the absence or disqualification
of a member of a committee, and in the absence of a designation by the Board of
Directors of an alternate member to replace the absent or disqualified member,
the member or members thereof present at any meeting and not disqualified from
voting, whether or not they constitute a quorum, may unanimously appoint another
member of the Board of Directors to act in the place of any absent or
disqualified member. Each committee, to the extent permitted by law, shall have
and may exercise all the powers and authority of the Board of Directors in the
management of the business and affairs of the Corporation as provided in the
resolution establishing such committee.
Section 2. Executive Committee. The Board of Directors may designate an
Executive Committee, to consist of not less than two members of the Board of
Directors, which shall have and may exercise, to the extent permitted by law,
all of the powers of the Board of Directors in the management of the business
and affairs of the Corporation.
Section 3. Compensation Committee. The Board of Directors may designate
a Compensation Committee, to consist of one or more of the members of the Board
of Directors, which shall have the responsibility of reviewing the performance
of the executive officers of the Corporation and recommending to the Board of
Directors of the Corporation annual salary and bonus amounts for all officers of
the Corporation. The Compensation Committee must consist of at least one
director who is an "outside director" within the meaning of Section 162(m) of
the Internal Revenue Code of 1986, as amended.
Section 4. Audit Committee. The Board of Directors may designate an
Audit Committee, to consist of one or more of the members of the Board of
Directors, which shall have the responsibility of reviewing and supervising the
financial controls of the Corporation. The Audit Committee's responsibilities
will include (i) making recommendations to the Board of Directors of the
Corporation with respect to the Corporation's financial statements and the
appointment of independent auditors, (ii) reviewing significant audit and
accounting policies and practices of the Corporation, (iii) meeting with the
Corporation's independent public accountants concerning, among other things, the
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scope of audits and reports and (iv) reviewing the performance of overall
accounting and financial controls of the Corporation. The Audit Committee will
consist of at least one director who is neither an officer nor employee of the
Corporation.
Section 5. Pension Committee. The Board of Directors may designate a
Pension Committee, to consist of one or more of the members of the Board of
Directors, which shall have the responsibility for overseeing the administration
of the Corporation's benefit plans.
Section 6. Organization. The Board of Directors or each such committee
may choose its Chairman and Secretary, and shall keep and record all its acts
and proceedings and report the same from time to time to the Board of Directors.
Section 7. Meetings. Regular meetings of any such committee, of which
no notice shall be necessary, shall be held at such times and in such places as
shall be fixed by the committee or by the Board of Directors. Special meetings
of any such committee shall be held at the request of any member of the
committee.
Section 8. Quorum and Manner of Acting. A majority of the members of
any such committee shall constitute a quorum for the transaction of business,
and the act of a majority of those present at any meeting at which a quorum is
present shall be the act of the committee.
Section 9. General. The Board of Directors shall have the power at any
time to change the members of, fill vacancies in, and discharge or disband any
such committee, either with or without cause.
ARTICLE V
OFFICERS
Section 1. General. The officers of the Corporation shall be appointed
by the Board of Directors and shall be a Chief Executive Officer, a Chief
Operating Officer, a President, Executive Vice Presidents, Senior Vice
Presidents, Vice Presidents, a Secretary and a Treasurer. The Board of
Directors, in its discretion, may also choose a Chairman of the Board of
Directors (who must be a director) and one or more Assistant Secretaries,
Assistant Treasurers and other officers. Any number of offices may be held by
the same person, unless otherwise prohibited by law, the Certificate of
Incorporation or these By-Laws. The officers of the Corporation need not be
stockholders of the Corporation nor, except in the case of the Chairman of the
Board of Directors, need such officers be directors of the Corporation.
Section 2. Election. The Board of Directors at its first meeting held
after each Annual Meeting of Stockholders may elect the officers of the
Corporation who shall hold their offices for such terms and shall exercise such
powers and perform such duties as shall be determined from time to time by the
Board of Directors; and all officers of the Corporation shall hold office until
their successors are chosen and qualified, or until their earlier resignation or
removal. Any officer elected by the Board of Directors may be removed at any
time by the affirmative vote of a majority of the Board of Directors. Any
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vacancy occurring in any office of the Corporation shall be filled by the Board
of Directors. The salaries of all officers of the Corporation shall be fixed by
the Board of Directors.
Section 3. Voting Securities Owned by the Corporation. Powers of
attorney, proxies, waivers of notice of meeting, consents and other instruments
relating to securities owned by the Corporation may be executed in the name of
and on behalf of the Corporation by any officer of the Corporation and any such
officer may, in the name of and on behalf of the Corporation, take all such
action as any such person may deem advisable to vote in person or by proxy at
any meeting of security holders of any corporation in which the Corporation may
own securities and at any such meeting shall possess and may exercise any and
all rights and power incident to the ownership of such securities and which, as
the owner thereof, the Corporation might have exercised and possessed if
present. The Board of Directors may, by resolution, from time to time confer
like powers upon any other person or persons.
Section 4. Chairman of the Board of Directors. The Chairman of the
Board of Directors, shall preside at all meetings of the stockholders and of the
Board of Directors. The Chairman of the Board of Directors may enter into and
execute in the name of the Corporation deeds, mortgages, bonds, guarantees,
contracts and other instruments (collectively, "Contracts"), including all
Contracts requiring a seal, under the seal of the Corporation, except in cases
where the making and execution thereof shall be expressly restricted or
delegated by the Board of Directors or by a duly authorized committee of
directors, or by these By-Laws to some other officer or agent of the
Corporation, or shall be required by law otherwise to be made or executed by
some other officer or agent of the Corporation. During the absence or disability
of the Chief Executive Officer, the Chief Operating Officer and/or the
President, the Chairman of the Board of Directors shall exercise all the powers
and discharge all the duties of such officers. The Chairman of the Board of
Directors shall also perform such other duties and may exercise such other
powers as from time to time may be assigned to them by these By-Laws or by the
Board of Directors.
Section 5. Chief Executive Officer. The Chief Executive Officer shall
be responsible to the Board of Directors and the Executive Committee for the
formulation and presentation to the Board of Directors of the financial and
business policies of the Corporation. The Chief Executive Officer shall, in the
absence of the Chairman of the Board, preside at all meetings of the
stockholders and of the Board of Directors. The Chief Executive Officer may
enter into and execute in the name of the Corporation any Contracts, including
all Contracts requiring a seal, under the seal of the Corporation, except in
cases where the making and execution thereof shall be expressly restricted or
delegated by the Board of Directors or by a duly authorized committee of
directors, or by these By-Laws to some other officer or agent of the
Corporation, or shall be required by law otherwise to be made or executed by
some other officer or agent of the Corporation. The Chief Executive Officer
shall also perform such other duties and may exercise such other powers as from
time to time may be assigned to him by these By-Laws or by the Board of
Directors.
Section 6. Chief Operating Officer. The Chief Operating Officer shall
be responsible to the Board of Directors, the Executive Committee for the
formulation and implementation of the financial and business policies of the
Corporation approved by the Board of Directors or the Executive Committee. The
Chief Operating Officer shall, in the absence of the Chairman of the Board and
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the Chief Executive Officer, preside at all meetings of the stockholders and of
the Board of Directors. The Chief Operating Officer may enter into and execute
in the name of the Corporation any Contracts, including all Contracts requiring
a seal, under the seal of the Corporation, except in cases where the making and
execution thereof shall be expressly restricted or delegated by the Board of
Directors or by a duly authorized committee of directors, or by these By-Laws to
some other officer or agent of the Corporation, or shall be required by law
otherwise to be made or executed by some other officer or agent of the
Corporation. The Chief Operating Officer shall also perform such other duties
and may exercise such other powers as from time to time may be assigned to him
by these By-Laws or by the Board of Directors or the Executive Committee.
Section 7. President. The President shall, subject to the control of
the Board of Directors, the Executive Committee, the Chairman of the Board of
Directors, the Chief Executive Officer and the Chief Operating Officer have
general supervision of the business of the Corporation and shall see that all
orders and resolutions of the Board of Directors or the Executive Committee are
carried into effect. The President may enter into and execute Contracts in the
name and on behalf of the Corporation, including all Contracts requiring a seal,
under the seal of the Corporation, except in cases where the making and
execution thereof shall be expressly restricted or delegated by the Board of
Directors or by a duly authorized committee of directors, by the Chairman of the
Board of Directors or by these By-Laws to some other officer or agent of the
Corporation, or shall be required by law otherwise to be made or executed by
some other officer or agent of the Corporation. In the absence or disability of
the Chairman of the Board of Directors, the Chief Executive Officer and the
Chief Operating Officer, the President shall preside at all meetings of the
stockholders and the Board of Directors. The President shall also perform such
other duties and may exercise such other powers as from time to time may be
assigned to him by these By-Laws or by the Board of Directors.
Section 8. Executive Vice Presidents. The Executive Vice Presidents,
subject to the control of the Board of Directors, the Executive Committee, the
Chairman of the Board of Directors, the Chief Executive Officer, the Chief
Operating Officer and the President shall be responsible for the direction and
management of the respective departments of the Corporation they shall be
assigned. At the request of the President or in his absence or in the event of
his inability or refusal to act the Executive Vice Presidents or the Executive
Vice Presidents, if there is more than one (in the order designated by the Board
of Directors), shall perform the duties of the President, and when so acting,
shall have all the powers of and be subject to all the restrictions upon the
President. Each Executive Vice President may enter into and execute Contracts in
the name of the Corporation, including all Contracts requiring a seal, under the
seal of the Corporation, except in cases where the making and execution thereof
shall be expressly restricted or otherwise delegated by these By-Laws or by the
Board of Directors, a duly authorized committee of directors, the Chairman of
the Board of Directors, the Chief Executive Officer, the Chief Operating
Officer, the President or any other officer to whom they report, or shall be
required by law otherwise to be made or executed by some other officer or agent
of the Corporation. Each Executive Vice President shall perform such other
duties and have such other powers as the Board of Directors from time to time
may prescribe.
Section 9. Chief Financial Officer. The Chief Financial Officer shall,
subject to the control of the Board of Directors, the Executive Committee, the
Chairman of the Board of Directors, the Chief Executive Officer and the Chief
Operating Officer, managing and directing the financial affairs of the
Corporation, including, without limitation, the maintenance of adequate cash
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reserves of cash, short or long term credit facilities, monitoring compliance
with financial covenants, formulation of financial plans and projections. The
Chief Financial Officer may enter into and execute in the name of the
Corporation any Contracts, including all Contracts requiring a seal, under the
seal of the Corporation, except in cases where the making and execution thereof
shall be expressly restricted or delegated by the Board of Directors or by a
duly authorized committee of directors, or by these ByLaws to some other officer
or agent of the corporation, or shall be required by law otherwise to be made or
executed by some other officer or agent of the Corporation. The Chief Financial
Officer shall also be responsible for (i) overseeing the preparation and
maintenance of reasonable and adequate books of account and other accounting
records of the assets, liabilities and transactions of the Corporation in
accordance with generally accepted accounting principles and procedures, (ii)
seeing that reasonable and adequate audits thereof are regularly made and that
reasonable and adequate systems of financial control are maintained, (iii)
overseeing the examination and certification of the financial accounts and
reports of the Corporation, (iv) overseeing the preparation and filing of all
income, franchise, sales and excise tax filings of the Corporation and its
subsidiaries, (v) overseeing the preparation and filing of all filings required
to be made by the corporation pursuant to any federal, state or other securities
laws and (vi) overseeing the preparation of such budgets and other financial
reports as the Board of Directors, the Chairman of the Board of Directors, the
chief Executive Officer, the Chief Operating Officer, the President or any other
officer to whom the Chief Financial Officer reports may require. Chief Financial
Officer shall perform such other duties and have such other powers as the Board
of Directors from time to time may prescribe.
Section 10. Senior Vice Presidents. The Senior Vice Presidents shall,
subject to the control of the Executive Vice Presidents participate in the
direction and management of the respective departments of the Corporation they
shall be assigned. Each Senior Vice President shall perform such other duties
and have such other powers as the Board of Directors from time to time may
prescribe. The Senior Vice Presidents shall report to the Executive Vice
President for their assigned department.
Section 11. Vice Presidents. The Vice Presidents shall, subject to the
control of the Executive Vice Presidents and the Senior Vice Presidents direct
the operation of the respective departments of the Corporation they shall be
assigned. Each Vice President shall perform such other duties and have such
other powers as the Board of Directors from time to time may prescribe. The Vice
Presidents shall report to the Senior Vice President for their assigned
department.
Section 12. Secretary. The Secretary shall attend all meetings of the
Board of Directors and all meetings of stockholders and record all the
proceedings thereat in a book or books to be kept for that purpose; the
Secretary shall also perform like duties for the standing committees when
required. The Secretary shall give, or cause to be given, notice of all meetings
of the stockholders and special meetings of the Board of Directors, and shall
perform such other duties as may be prescribed by the Board of Directors or
President, under whose supervision he shall be. If the Secretary shall be unable
or shall refuse to cause to be given notice of all meetings of the stockholders
and special meetings of the Board of Directors, and if there be no Assistant
Secretary, then either the Board of Directors or the President may choose
another officer to cause such notice to be given. The Secretary shall have
custody of the seal of the Corporation and the Secretary or any Assistant
Secretary, if there be one, shall have authority to affix the same to any
instrument requiring it and when so affixed, it may be attested by the signature
of the Secretary or by the signature of any such Assistant Secretary. The Board
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of Directors may give general authority to any other officer to affix the seal
of the Corporation and to attest the affixing by his signature. The Secretary
shall see that all books, reports, statements, certificates and other documents
and records required by law to be kept or filed are properly kept or filed, as
the case may be.
Section 13. Treasurer. The Treasurer shall have the custody of the
corporate funds and securities and shall keep full and accurate accounts of
receipts and disbursements in books belonging to the Corporation and shall
deposit all moneys and other valuable effects in the name and to the credit of
the Corporation in such depositories as may be designated by the Board of
Directors. The Treasurer shall disburse the funds of the Corporation as may be
ordered by the Board of Directors, taking proper vouchers for such
disbursements, and shall render to the President and the Board of Directors, at
its regular meetings, or when the Board of Directors so requires, an account of
all his transactions as Treasurer and of the financial condition of the
Corporation. If required by the Board of Directors, the Treasurer shall give the
Corporation a bond in such sum and with such surety or sureties as shall be
satisfactory to the Board of Directors for the faithful performance of the
duties of his office and for the restoration to the Corporation, in case of his
death, resignation, retirement or removal from office, of all books, papers,
vouchers, money and other property of whatever kind in his possession or under
his control belonging to the Corporation.
Section 14. Assistant Secretaries. Except as may be otherwise provided
in these By-Laws, Assistant Secretaries, if there be any, shall perform such
duties and have such powers as from time to time may be assigned to them by the
Board of Directors, the President, any Vice President, if there be one, or the
Secretary, and in the absence of the Secretary or in the event of his disability
or refusal to act, shall perform the duties of the Secretary, and when so
acting, shall have all the powers of and be subject to all the restrictions upon
the Secretary.
Section 15. Assistant Treasurers. Assistant Treasurers, if there be
any, shall perform such duties and have such powers as from time to time may be
assigned to them by the Board of Directors, the President, any Vice President,
if there be one, or the Treasurer, and in the absence of the Treasurer or in the
event of his disability or refusal to act, shall perform the duties of the
Treasurer, and when so acting, shall have all the powers of and be subject to
all the restrictions upon the Treasurer. If required by the Board of Directors,
an Assistant Treasurer shall give the Corporation a bond in such sum and with
such surety or sureties as shall be satisfactory to the Board of Directors for
the faithful performance of the duties of his office and for the restoration to
the Corporation, in case of his death, resignation, retirement or removal from
office, of all books, papers, vouchers, money and other property of whatever
kind in his possession or under his control belonging to the Corporation.
Section 16. Other Officers. Such other officers as the Board of
Directors may choose shall perform such duties and have such powers as from time
to time may be assigned to them by the Board of Directors. The Board of
Directors may delegate to any other officer of the Corporation the power to
choose such other officers and to prescribe their respective duties and powers.
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ARTICLE VI
STOCK
Section 1. Form of Certificates. (a) Every holder of stock in the
Corporation shall be entitled to have a certificate signed, in the name of the
Corporation (i) by the Chairman of the Board of Directors, the Chief Executive
Officer, the Chief Operating Officer, the President or an Executive Vice
President and (ii) by the Treasurer or an Assistant Treasurer, or the Secretary
or an Assistant Secretary of the Corporation, certifying the number of shares
owned by him in the Corporation.
(b) If the Corporation shall be authorized to issue more than
one class of stock or more than one series of any class, the powers,
designations, preferences and relative, participating, optional or other special
rights of each class of stock or series thereof and the qualifications,
limitations or restrictions of such preferences and/or rights shall be set forth
in full or summarized on the face or back of the certificate which the
Corporation shall issue to represent such class or series of stock, provided
that, except as otherwise required by Section 202 of the DGCL, in lieu of the
foregoing requirements, there may be set forth on the face or back of the
certificate which the Corporation shall issue to represent such class or series
of stock, a statement that the Corporation will furnish without charge to each
stockholder who so requests the powers, designations, preferences and relative,
participating, optional or other special rights of each class of stock or series
thereof and the qualifications, limitations or restrictions of such preferences
and/or rights.
Section 2. Signatures. Any or all of the signatures on a certificate
may be a facsimile. In case any officer, transfer agent or registrar who has
signed or whose facsimile signature has been placed upon a certificate shall
have ceased to be such officer, transfer agent or registrar before such
certificate is issued, it may be issued by the Corporation with the same effect
as if he were such officer, transfer agent or registrar at the date of issue.
Section 3. Lost, Destroyed, Stolen or Mutilated Certificates. The Board
of Directors may direct a new certificate to be issued in place of any
certificate theretofore issued by the Corporation alleged to have been lost,
stolen or destroyed, upon the making of an affidavit of that fact by the person
claiming the certificate of stock to be lost, stolen or destroyed. When
authorizing such issue of a new certificate, the Board of Directors may, in its
discretion and as a condition precedent to the issuance thereof, require the
owner of such lost, stolen or destroyed certificate, or his legal
representative, to advertise the same in such manner as the Board of Directors
shall require and/or to give the Corporation a bond in such sum as it may direct
as indemnity against any claim that may be made against the Corporation and its
transfer agents with respect to the certificate alleged to have been lost,
stolen or destroyed or the issuance of such new certificate.
Section 4. Transfers. Subject to the restrictions contained in the
Certificate of Incorporation, the common stock of the Corporation shall be
transferable in the manner prescribed by law and in these By-Laws. Transfers of
stock shall be made on the books of the Corporation only by the person named in
the certificate or by his attorney lawfully constituted in writing and upon the
surrender of the certificate therefor, which shall be canceled before a new
certificate shall be issued.
Section 5. Limitations on Transfer. A written restriction on the
transfer or registration of transfer of a security of the Corporation, if
permitted by Section 202 of the DGCL and noted conspicuously on the certificate
representing the security or, in the case of uncertificated shares, contained
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in the notice sent pursuant to Section 151(f) of the DGCL, may be enforced
against the holder of the restricted security or any successor or transferee of
the holder including an executor, administrator, trustee, guardian or other
fiduciary entrusted with like responsibility for the person or estate of the
holder. Unless noted conspicuously on the certificate representing the security
or, in the case of uncertificated shares, contained in the notice sent pursuant
to Section 151(f) of the DGCL, a restriction, even though permitted by Section
202 of the DGCL, is ineffective except against a person with actual knowledge of
the restriction. A restriction on the transfer or registration of transfer of
securities of the Corporation may be imposed either by the Certificate of
Incorporation or by these By-Laws or by an agreement among any number of
security holders or among such holders and the Corporation. No restriction so
imposed shall be binding with respect to securities issued prior to the adoption
of the restriction unless the holders of the securities are parties to an
agreement or voted in favor of the restriction.
Section 6. Record Date. In order that the Corporation may determine the
stockholders entitled to notice of or to vote at any meeting of stockholders or
any adjournment thereof, or entitled to express consent to corporate action in
writing without a meeting, or entitled to receive payment of any dividend or
other distribution or allotment of any rights, or entitled to exercise any
rights in respect of any change, conversion or exchange of stock, or for the
purpose of any other lawful action, the Board of Directors may fix, in advance,
a record date, which shall not be more than sixty (60) days nor less than ten
(10) days before the date of such meeting, nor more than sixty (60) days prior
to any other action. A determination of stockholders of record entitled to
notice of or to vote at a meeting of stockholders shall apply to any adjournment
of the meeting; provided, however, that the Board of Directors may fix a new
record date for the adjourned meeting.
Section 7. Beneficial Owners. The Corporation shall be entitled to
recognize the exclusive right of a person registered on its books as the owner
of shares to receive dividends, and to vote as such owner, and to hold liable
for calls and assessments a person registered on its books as the owner of
shares, and shall not be bound to recognize any equitable or other claim to or
interest in such share or shares on the part of any other person, whether or not
it shall have express or other notice thereof, except as otherwise provided by
law.
ARTICLE VII
NOTICES
Section 1. Notices. Whenever written notice is required by law, the
Certificate of Incorporation or these By-Laws, to be given to any director,
member of a committee or stockholder, such notice may be given by mail,
addressed to such director, member of a committee or stockholder, at his address
as it appears on the records of the Corporation, with postage thereon prepaid,
and such notice shall be deemed to be given at the time when the same shall be
deposited in the United States mail. Written notice may also be given personally
or by courier service, facsimile transmission, telegram, telex or cable.
Section 2. Waivers of Notice. Whenever any notice is required by law,
the Certificate of Incorporation or these By-Laws, to be given to any director,
member of a committee or stockholder, a waiver thereof in writing, signed, by
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the person or persons entitled to said notice, whether before or after the time
stated therein, shall be deemed equivalent thereto. Attendance of a person at a
meeting, present by person or represented by proxy, shall constitute a waiver of
notice of such meeting, except where the person attends the meeting for the
express purpose of objecting at the beginning of the meeting to the transaction
of any business because the meeting is not lawfully called or convened. Neither
the business to be transacted at, nor the purpose of, any regular or special
meeting of the stockholders, directors or members of a committee of directors
need be specified in any written waiver of notice.
ARTICLE VIII
GENERAL PROVISIONS
Section 1. Dividends. Dividends upon the capital stock of the
Corporation, subject to the provisions of the Certificate of Incorporation, if
any, may be declared by the Board of Directors at any regular or special
meeting, and may be paid in cash, in property, or in shares of the capital
stock. Before payment of any dividend, there may be set aside out of any funds
of the Corporation available for dividends such sum or sums as the Board of
Directors from time to time, in its absolute discretion, deems proper as a
reserve or reserves to meet contingencies, or for equalizing dividends, or for
repairing or maintaining any property of the Corporation, or for any proper
purpose, and the Board of Directors may modify or abolish any such reserve.
Section 2. Disbursements. All checks or demands for money and notes of
the Corporation shall be signed by such officer or officers or such other person
or persons as the Board of Directors may from time to time designate.
Section 3. Fiscal Year. The fiscal year of the Corporation shall be
fixed by resolution of the Board of Directors.
Section 4. Corporate Seal. The corporate seal shall have inscribed
thereon the name of the Corporation, the year of its organization and the words
"Corporate Seal, Delaware". The seal may be used by causing it or a facsimile
thereof to be impressed or affixed or reproduced or otherwise.
ARTICLE IX
INDEMNIFICATION
Section 1. Power to Indemnify in Actions, Suits or Proceedings other
Than Those by or in the Right of the Corporation. Subject to Section 3 of this
Article IX, the Corporation shall indemnify any person who was or is a party or
is threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the Corporation) by reason of the
fact that he is or was a director or officer of the Corporation, or is or was a
director or officer of the Corporation serving at the request of the Corporation
as a director or officer, employee or agent of another corporation, partnership,
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joint venture, trust, employee benefit plan or other entity or enterprise,
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of any
action, suit or proceeding by judgment, order, settlement, conviction, or upon a
plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the
Corporation, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that his conduct was unlawful.
Section 2. Power to Indemnify in Actions, Suits or Proceedings by or in
the Right of the Corporation. Subject to Section 3 of this Article IX, the
Corporation shall indemnify any person who was or is a party or is threatened to
be made a party to any threatened, pending or completed action or suit by or in
the right of the Corporation to procure a judgment in its favor by reason of the
fact that he is or was a director or officer of the Corporation, or is or was a
director or officer of the Corporation serving at the request of the Corporation
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust, employee benefit plan or other entity or enterprise
against expenses (including attorneys' fees) actually and reasonably incurred by
him in connection with the defense or settlement of such action or suit if he
acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Corporation; except that no indemnification
shall be made in respect of any claim, issue or matter as to which such person
shall have been adjudged to be liable to the Corporation unless and only to the
extent that the Court of Chancery or the court in which such action or suit was
brought shall determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses which the Court of
Chancery or such other court shall deem proper.
Section 3. Authorization of Indemnification. Any indemnification under
this Article IX (unless ordered by a court) shall be made by the Corporation
only as authorized in the specific case upon a determination that
indemnification of the director or officer is proper in the circumstances
because he has met the applicable standard of conduct set forth in Section 1 or
Section 2, and in each case Section 11, of this Article IX, as the case may be.
Such determination shall be made (i) by a majority vote of the directors who are
not parties to such action, suit or proceeding, even though less than a quorum,
or (ii) if there are no such directors, or if such directors so direct, by
independent legal counsel in a written opinion, or (iii) by the stockholders. To
the extent, however, that a director or officer of the Corporation has been
successful on the merits or otherwise in defense of any action, suit or
proceeding described above, or in defense of any claim, issue or matter therein,
he shall be indemnified against expenses (including attorneys' fees) actually
and reasonably incurred by him in connection therewith, without the necessity of
authorization in the specific case.
Section 4. Good Faith Defined. For purposes of any determination under
Section 3 of this Article IX, a person shall be deemed to have acted in good
faith and in a manner he reasonably believed to be in or not opposed to the best
interests of the Corporation, or, with respect to any criminal action or
proceeding, to have had no reasonable cause to believe his conduct was unlawful,
if his action is based on the records or books of account of the Corporation or
15
<PAGE>
another enterprise, or on information supplied to him by the officers of the
Corporation or another enterprise in the course of their duties, or on the
advice of legal counsel for the Corporation or another enterprise or on
information or records given or reports made to the Corporation or another
enterprise by an independent certified public accountant or by an appraiser or
other expert selected with reasonable care by the Corporation or another
enterprise. The term "another enterprise" as used in this Section 4 shall mean
any other corporation or any partnership, joint venture, trust, employee benefit
plan or other entity or enterprise of which such person is or was serving at the
request of the Corporation as a director, officer, employee or agent. The
provisions of this Section 4 shall not be deemed to be exclusive or to limit in
any way the circumstances in which a person may be deemed to have met the
applicable standard of conduct set forth in Sections 1 or 2, and in each case
Section 11, of this Article IX, as the case may be.
Section 5. Indemnification by a Court. Notwithstanding any contrary
determination in the specific case under Section 3 of this Article IX, and
notwithstanding the absence of any determination thereunder, any director or
officer may apply to any court of competent jurisdiction in the State of
Delaware for indemnification to the extent otherwise permissible under Sections
1 and 2, and in each case Section 11, of this Article IX. The basis of such
indemnification by a court shall be a determination by such court that
indemnification of the director or officer is proper in the circumstances
because he has met the applicable standards of conduct set forth in Sections 1
or 2, and in each case Section 11, of this Article IX, as the case may be.
Neither a contrary determination in the specific case under Section 3 of this
Article IX nor the absence of any determination thereunder shall be a defense to
such application or create a presumption that the director or officer seeking
indemnification has not met any applicable standard of conduct. Notice of any
application for indemnification pursuant to this Section 5 shall be given to the
Corporation promptly upon the filing of such application. If successful, in
whole or in part, the director or officer seeking indemnification shall also be
entitled to be paid the expense of prosecuting such application.
Section 6. Expenses Payable in Advance. Expenses (including attorneys'
fees) incurred by a director or officer in defending or investigating a
threatened or pending action, suit or proceeding shall be paid by the
Corporation in advance of the final disposition of such action, suit or
proceeding upon receipt of an undertaking by or on behalf of such director or
officer to repay such amount if it shall ultimately be determined that he is not
entitled to be indemnified by the Corporation as authorized in this Article IX.
Section 7. Nonexclusivity of Indemnification and Advancement of
Expenses. The indemnification and advancement of expenses provided by or granted
pursuant to this Article IX shall not be deemed exclusive of any other rights to
which those seeking indemnification or advancement of expenses may be entitled
under the Certificate of Incorporation or any By-Law, agreement, contract, vote
of stockholders or disinterested directors or pursuant to the direction
(howsoever embodied) of any court of competent jurisdiction or otherwise, both
as to action in his official capacity and as to action in another capacity while
holding such office, it being the policy of the Corporation that indemnification
of the persons specified in Sections 1 and 2 of this Article IX shall be made to
the fullest extent permitted by law. The provisions of this Article IX shall not
be deemed to preclude the indemnification of any person who is not specified in
Sections 1 or 2 of this Article IX but whom the Corporation has the power or
obligation to indemnify under the provisions of the DGCL or otherwise.
16
<PAGE>
Section 8. Insurance. The Corporation may purchase and maintain
insurance on behalf of any person who is or was a director or officer of the
Corporation, or is or was a director or officer of the Corporation serving at
the request of the Corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust, employee benefit plan or
other entity or enterprise against any liability asserted against him and
incurred by him in any such capacity, or arising out of his status as such,
whether or not the Corporation would have the power or the obligation to
indemnify him against such liability under the provisions of this Article IX.
Section 9. Certain Definitions. For purposes of this Article IX,
references to "the Corporation" shall include, in addition to the resulting
corporation, any constituent corporation (including any constituent of a
constituent) absorbed in a consolidation or merger which, if its separate
existence had continued, would have had power and authority to indemnify its
directors or officers, so that any person who is or was a director or officer of
such constituent corporation, or is or was a director or officer of such
constituent corporation serving at the request of such constituent corporation
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust, employee benefit plan or other entity or enterprise, shall
stand in the same position under the provisions of this Article IX with respect
to the resulting or surviving corporation as he would have with respect to such
constituent corporation if its separate existence had continued. For purposes of
this Article IX, references to "fines" shall include any excise taxes assessed
on a person with respect to an employee benefit plan; and references to "serving
at the request of the Corporation" shall include any service as a director,
officer, employee or agent of the Corporation which imposes duties on, or
involves services by, such director or officer with respect to an employee
benefit plan, its participants or beneficiaries; and a person who acted in good
faith and in a manner he reasonably believed to be in the interest of the
participants and beneficiaries of an employee benefit plan shall be deemed to
have acted in a manner "not opposed to the best interests of the Corporation" as
referred to in this Article IX.
Section 10. Survival of Indemnification and Advancement of Expenses.
The indemnification and advancement of expenses provided by, or granted pursuant
to, this Article IX shall, unless otherwise provided when authorized or
ratified, continue as to a person who has ceased to be a director or officer and
shall inure to the benefit of the heirs, executors and administrators of such a
person.
Section 11. Limitation on Indemnification. Notwithstanding anything
contained in this Article IX to the contrary, except for proceedings to enforce
rights to indemnification (which shall be governed by Section 5 hereof), the
Corporation shall not be obligated to indemnify any director or officer in
connection with a proceeding (or part thereof) initiated by such person unless
such proceeding (or part thereof) was authorized or consented to by the Board of
Directors of the Corporation.
Section 12. Indemnification of Employees and Agents. The Corporation
may, to the extent authorized from time to time by the Board of Directors,
provide rights to indemnification and to the advancement of expenses to
employees and agents of the Corporation similar to those conferred in this
Article IX to directors and officers of the Corporation.
17
<PAGE>
ARTICLE X
AMENDMENTS OF BY-LAWS
Section 1. Amendments of By-Laws. These By-Laws may be altered, amended
or repealed, in whole or in part, or new By-Laws may be adopted, by the
stockholders or by the Board of Directors; provided, however, that notice of
such alteration, amendment, repeal or adoption of new By-Laws be contained in
the notice of such meeting of stockholders or Board of Directors as the case may
be. All such amendments must be approved by either the affirmative vote of the
holders of not less than a majority of the voting power of all of the
outstanding capital stock of the Corporation then entitled to vote thereon,
voting as a single class, or by a majority of the entire Board of Directors then
in office (notwithstanding the fact that approval by a lesser percentage may be
permitted by the DGCL).
Section 2. Entire Board of Directors. As used in this Article X and in
these By-Laws generally, the term "entire Board of Directors" means the total
number of directors which the Corporation would have if there were no vacancies.
18
Exhbit 4.(i)
Exhibit 4(i) Specimen Certificate of Common Stock
Number SHARES
INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE
NEW GENERATION PLASTIC, INC.
TOTAL AUTHORIZED ISSUE
50,000,000 SHARES PAR VALUE $.001 EACH
COMMON STOCK
See Reverse for
Certain definitions
and transfer
restrictions
This is to Certify that ________________________________________ is the owner of
___________________________________________________________ fully paid and
non-assesable shares of the above Corporation transferable only on the books of
the Corporation by the holder hereof in person or by duly authorized Attorney
upon surrender of the Certificate properly endorsed.
Witness, the seal of the Corporation and the signatures of its duly authorized
officers.
Dated _______________
/s/ Thomas R. Marshall Seal /s/ Jacques Mot
- ---------------------------- ---------------------------
Thomas R. Marshall Secretary Jacques Mot Chairman
<PAGE>
The following abbreviations, when used in the inscription on the face
of this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM -as tenants in common UNIF GIFT MIN ACT- ____
TEN ENT -as tenants by the entireties Custodian ________ under Uniform
JT TEN -as joint tenants with right of Gifts to Minor Act______________
Additional abbreviations may also be used though not in the above list.
For value received _____ hereby sell, assign and transfer and transfer unto
Please insert social security or other
Identifying number of assignee
________________________________________________________________________________
________________________________________________________________________________
__________________________________________________________________________Shares
represented by the within Certificate, and do hereby irrevocably constitute and
appoint ______________________________________________________________ Attorney
to transfer the said Shares on the books of the within named Corporation with
full power of substitution in the premises.
Dated ______________________ __________
______________________________________
_____________________________________
Exhibit 4.(ii)
NEITHER THIS WARRANT NOR THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF
THE WARRANT ("WARRANT SHARES") HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933 (THE "ACT") NOR UNDER ANY STATE SECURITIES LAW AND MAY NOT BE PLEDGED,
SOLD, ASSIGNED, EXERCISED OR OTHERWISE TRANSFERRED UNTIL (1) A REGISTRATION
STATEMENT UNDER THE ACT AND ANY APPLICABLE STATE SECURITIES LAW HAS BECOME
EFFECTIVE WITH RESPECT THERETO OR (2) RECEIPT BY THE COMPANY OF AN OPINION OF
COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION IS NOT REQUIRED UNDER THE
ACT OR APPLICABLE STATE SECURITIES LAW.
W- No. of Shares-
WARRANT TO PURCHASE COMMON STOCK
OF
NEW GENERATION PLASTIC, INC.
This is to Certify that, FOR VALUE RECEIVED, __________________________
_____________________________________________________________________("Holder"),
is entitled to purchase, subject to the provisions of this Warrant, from New
Generation Plastic, Inc., a Delaware corporation ("Company"), ______________
_______________________________fully paid, validly issued and nonassessable
shares of Common Stock, par value $0.001 per share, of the Company ("Common
Stock") at a price of $6.00 per share at any time or from time to time during
the period beginning on the date that this Warrant first becomes exercisable
(the "Commencement Date"), and ending at 5:00 p.m. New York time on the date
that is twenty four (24) months after the Commencement Date (the "Expiration
Date"). The shares of Common Stock issuable upon such exercise are hereinafter
sometimes referred to as "Warrant Shares" and the exercise price of a share of
Common Stock is hereinafter sometimes referred to as the "Exercise Price." This
Warrant shall not be exercisable until the Warrant Shares have been registered
under the Securities Act of 1933.
1. EXERCISE OF WARRANT. This Warrant may be exercised in whole or in
part at any time or from time to time on or after the Commencement Date and
until 5:00 p.m. New York time on the Expiration Date; provided, however, that if
such day is a day on which banking institutions in the State of New York are
authorized by law to close, then on the next succeeding day which shall not be
such a day. This Warrant may be exercised by presentation and surrender of the
original Warrant to the Company at its principal office, or at the office of its
stock transfer agent, if any, with the Purchase Form annexed hereto duly
executed and accompanied by payment, in the form of a certified or cashier's
check, of the Exercise Price for the number of Warrant Shares being purchased,
as specified in such form. As soon as practicable after each such exercise of
this Warrant, but not later than seven (7) days from the date of such exercise,
-1-
<PAGE>
the Company shall issue and deliver to the Holder a certificate or certificate
for the Warrant Shares issuable upon such exercise, registered in the name of
the Holder. If this Warrant should be exercised in part only, the Company shall,
upon surrender of this Warrant for cancellation, execute and deliver a new
Warrant evidencing the rights of the Holder thereof to purchase the balance of
the Warrant Shares purchasable thereunder.
2. RESERVATION OF SHARES. The Company shall at all times reserve for
issuance and delivery upon exercise of this Warrant such number of shares of its
Common Stock as shall be required for issuance and delivery upon exercise in
full of the Warrants.
3. TRANSFER, ASSIGNMENT OR LOSS OF WARRANT. Upon surrender of this
Warrant to the Company at its principal office or at the office of its stock
transfer agent, if any, with the Assignment Form annexed hereto duly executed
and funds sufficient to pay any transfer tax, the Company shall, without charge,
execute and deliver a new Warrant in the name of the assignee named in such
instrument of assignment and this Warrant shall promptly be canceled. The
Company may deem and treat the registered Holder of this Warrant at any time as
the absolute owner hereof for all purposes and shall not be affected by any
notice to the contrary. This Warrant may be divided or combined with other
warrants which carry the same rights upon presentation hereof at the principal
office of the Company or at the office of its stock transfer agent, if any,
together with a written notice specifying the names and denominations in which
new Warrants are to be issued and signed by the Holder hereof. Upon receipt by
the Company of evidence satisfactory to it of the loss, theft, destruction or
mutilation of this Warrant, and (in the case of loss, theft or destruction) of
reasonably satisfactory indemnification, and upon surrender and cancellation of
this Warrant, if mutilated, the Company will execute and deliver a new Warrant
of like tenor and date. Any such new Warrant executed and delivered shall
constitute an additional contractual obligation on the part of the Company,
whether or not this Warrant so lost, stolen, destroyed, or mutilated shall be at
any time enforceable by anyone.
4. RIGHTS OF THE HOLDER. No Holder of this Warrant, as such, shall be
entitled to vote, receive dividends, receive notice in respect of meetings of
stockholders or any other matter whatsoever as a stockholder of the Company or
be deemed to be a stockholder of the Company for any purpose, and the rights of
the Holder are limited to those expressed in this Warrant and are not
enforceable against the Company except to the extent set forth herein.
5. ADJUSTMENT OF WARRANT PRICE AND NUMBER OF WARRANT SHARES. The
Warrant Price and the number of Warrant Shares shall be subject to adjustment
from time to time in accordance with the following provisions:
(a) In case the Company shall at any time subdivide the outstanding
shares of its Common Stock, the Exercise Price in effect immediately prior to
such subdivision shall be proportionately decreased, and in case the Company
shall at any time combine the outstanding shares of its Common Stock, the
Exercise Price in effect immediately prior to such combination shall be
proportionately increased, effective from and after the record date of such
subdivision or combination, as the case may be. Upon any adjustment in the
Exercise Price per share pursuant to this subparagraph (a), the Holder of this
Warrant shall thereafter be entitled to purchase, at the adjusted Exercise
-2-
<PAGE>
Price, the number of shares of Common Stock, calculated to the nearest full
share obtained by (X) multiplying the number of shares of Common Stock
purchasable hereunder immediately prior to such adjustment by the Exercise Price
in effect immediately prior to such adjustment, and (y) by dividing the product
thereof by the Exercise Price resulting from such adjustment.
(b) In the event of the issuance of additional shares of Common
Stock of the Company as a dividend on the Common Stock, from and after the day
that is the record day for the determination of stockholders entitled to such
dividend the Holder of this Warrant shall (until another adjustment) be entitled
to purchase the number of shares of Common Stock, calculated to the nearest full
share, obtained by multiplying the number of shares of Common Stock purchasable
hereunder immediately prior to said record date by the percentage which the
number of additional shares constituting any such dividend is of the total
number of shares of Common Stock outstanding immediately prior to said record
date plus the number of shares of Common Stock issuable upon conversion of the
outstanding convertible securities or upon exercise of any outstanding warrants,
options or rights (including those with respect to convertible securities) and
adding the result so obtained to the number of shares of Common Stock
purchasable hereunder immediately prior to said record date. Upon each
adjustment pursuant to this subparagraph (b), the Exercise Price in effect
immediately prior to such adjustment shall be reduced to an amount determined by
dividing (X) the product obtained by multiplying such Exercise Price by the
number of shares of Common Stock purchasable hereunder immediately prior to such
adjustment by (Y) the number of shares of Common Stock purchasable hereunder
immediately following such adjustment.
6. Reorganization, Reclassification, Consolidation or Merger. If at any
time while this Warrant is outstanding there shall be any reorganization or
reclassification of the Common Stock of the Company (other than a subdivision or
combination of shares provided for in paragraph 5 above) or any consolidation or
merger of the Company with another corporation effected in such a way that
holders of Common Stock shall be entitled to receive stock, securities or
property with respect to or in exchange for Common Stock, the Holder of this
Warrant shall thereafter be entitled to receive, during the term hereof and upon
payment of the Exercise Price, the number of shares of stock or other securities
or property of the Company or of the successor corporation resulting from such
consolidation or merger, as the case may be, to which a holder of the Common
Stock of the Company deliverable upon the exercise of this Warrant, would have
been entitled upon such reorganization, reclassification, consolidation or
merger if this Warrant had been exercised immediately prior to such
reorganization, reclassification, consolidation or merger; and in any such case,
appropriate adjustment (as determined in good faith by the Board of Directors of
the Company) shall be made in the application of the provisions herein set forth
with respect to the rights and interest thereafter of the Holder of this Warrant
to the end that the provisions set forth herein (including the adjustment of the
Exercise Price and the number of shares issuable upon the exercise of this
Warrant) shall thereafter be applicable, as near as reasonably may be, in
relation to any shares or other property thereafter deliverable upon the
exercise hereof.
7. Charges, Taxes and Expenses. The issuance of certificates for shares
of Common Stock upon any exercise of this Warrant shall be made without charge
to the Holder hereof for any tax or other expense in respect to the issuance of
such certificates, all of which taxes and expenses shall be paid by the Company,
and such certificates shall be issued in the name of, or in such name or names
-3-
<PAGE>
as may be directed by, the Holder of this Warrant; provided, however, that in
the event that certificates for shares of Common Stock are to be issued in a
name other than the name of the Holder of this Warrant, this Warrant when
surrendered for exercise shall be accompanied by an instrument of transfer in
form satisfactory to the Company, duly executed by the Holder hereof in person
or by an attorney duly authorized in writing and the Holder shall pay all stock
transfer taxes payable upon issuance of such stock certificate.
8. MISCELLANEOUS.
(a) The terms of this Warrant shall be binding upon and shall inure
to the benefit of any successors or assigns of the Company and of the Holder or
Holders hereof.
(b) Notwithstanding any provision herein to the contrary, the Holder
hereof may not sell, transfer or otherwise assign this Warrant unless the
Company is provided with an opinion of counsel satisfactory in form and
substance to the Company, to the effect that such sale, transfer or assignment
does not violate the Securities Act of 1933 or any applicable state securities
laws.
(c) This Warrant contains the entire agreement between the Holder
hereof and the Company with respect to the purchase of shares of Common Stock of
the Company and supersedes all prior arrangements or understandings with respect
thereto.
(d) This Warrant shall be governed by and construed in accordance
with the laws of the State of Delaware.
(e) Any term or provision of this Warrant may be waived at any time
by the party which is entitled to the benefits thereof and any term or
provisions of this Warrant may be amended or supplemented at any time by
agreement of the Holder of this Warrant and the Company, except that any waiver
of any term or condition, or any amendment or supplementation, of this Warrant
must be in writing. A waiver of any breach of failure to enforce any of the
terms or conditions of this Warrant shall not in any way affect, limit or waive
a party's rights hereunder at any time to enforce strict compliance thereafter
with any term or condition of this Warrant.
(f) Any notice or other document required or permitted to be given
or delivered to the Holder of this Warrant shall be delivered personally, or
sent by certified or registered mail, to each such Holder at the last address
shown on the books of the Company for the registration of, and the registration
of transfer of, the Warrant or at any more recent address of which the Holder of
this Warrant shall have notified the Company in writing. Any notice or other
document required or permitted to be given or delivered to the Company, shall be
delivered personally at, or sent by certified or registered mail to, the office
of the Company at 245 Park Avenue, 39th Floor, New York, New York 10167,
Attention: Executive Vice President, or such other address as shall have been
furnished by the Company to the Holder of the Warrant.
-4-
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Warrant to be
signed by its duly authorized officers and its corporate seal to be affixed
hereto.
Dated: October 22, 1999
[SEAL]
NEW GENERATION PLASTIC, INC.
Attest:
/s/ Thomas R. Marshall By: /s/ Jacques Mot
- ---------------------------------- ------------------------------
Thomas R. Marshall Jacques Mot, Chairman
Secretary
-5-
<PAGE>
PURCHASE FORM
-------------
The undersigned, the holder of the foregoing Warrant, hereby elects to
exercise purchase rights represented by said Warrant for, and to purchase
thereunder, ________ shares of the Common Stock covered by said Warrant and
herewith makes payment in full therefor of $_______ by certified or cashier's
check payable to the order of the Company, and requests (a) that certificates
for such shares (and any securities or other property issuable upon such
exercise) be issued in the name of and delivered to ______________ whose address
is _________________________________ and (b) if such shares shall not include
all of the shares issuable as provided in said Warrant, that a new Warrant of
like tenor and date for the balance of the shares issuable thereunder be
delivered to the undersigned or that appropriate notation be made on the Warrant
which shall be returned to the undersigned.
-------------------------------
Dated:
Signature Guaranteed:
Signature Guaranteed:
-6-
<PAGE>
ASSIGNMENT FORM
---------------
FOR VALUE RECEIVED,____________________________________ hereby sells,
assigns and transfers unto:
Name_________________________________________________________________________
(Please type or print in block letters)
Address_______________________________________________________________________,
the right to purchase Common Stock represented by this Warrant to the extent of
__________ shares of Common Stock as to which such right is exercisable and does
hereby irrevocably constitute and appoint_______________________________________
________________________ Attorney, to transfer the same on the books of the
Company with full power of substitution in the premises.
Date____________________
Signature________________________________________
-7-
Exhibit 4.(iii)
NEITHER THIS WARRANT NOR THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF
THE WARRANT ("WARRANT SHARES") HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933 (THE "ACT") NOR UNDER ANY STATE SECURITIES LAW AND MAY NOT BE PLEDGED,
SOLD, ASSIGNED, EXERCISED OR OTHERWISE TRANSFERRED UNTIL (1) A REGISTRATION
STATEMENT UNDER THE ACT AND ANY APPLICABLE STATE SECURITIES LAW HAS BECOME
EFFECTIVE WITH RESPECT THERETO OR (2) RECEIPT BY THE COMPANY OF AN OPINION OF
COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION IS NOT REQUIRED UNDER THE
ACT OR APPLICABLE STATE SECURITIES LAW.
WW- No. of Shares-
WARRANT TO PURCHASE COMMON STOCK
OF
NEW GENERATION PLASTIC, INC.
This is to Certify that, FOR VALUE RECEIVED, _________________________
____________________________________________________________________ ("Holder"),
is entitled to purchase, subject to the provisions of this Warrant, from New
Generation Plastic, Inc., a Delaware corporation ("Company"), ______________
_______________________________fully paid, validly issued and nonassessable
shares of Common Stock, par value $0.001 per share, of the Company ("Common
Stock") at a price of $12.00 per share at any time or from time to time during
the period beginning on the date that this Warrant first becomes exercisable
(the "Commencement Date"), and ending at 5:00 p.m. New York time on March 5,
2004 (the "Expiration Date"). The shares of Common Stock issuable upon such
exercise are hereinafter sometimes referred to as "Warrant Shares" and the
exercise price of a share of Common Stock is hereinafter sometimes referred to
as the "Exercise Price." This Warrant shall not be exercisable until the Warrant
Shares have been registered under the Securities Act of 1933.
1. EXERCISE OF WARRANT. This Warrant may be exercised in whole or in
part at any time or from time to time on or after the Commencement Date and
until 5:00 p.m. New York time on the Expiration Date; provided, however, that if
such day is a day on which banking institutions in the State of New York are
authorized by law to close, then on the next succeeding day which shall not be
such a day. This Warrant may be exercised by presentation and surrender of the
original Warrant to the Company at its principal office, or at the office of its
stock transfer agent, if any, with the Purchase Form annexed hereto duly
executed and accompanied by payment, in the form of a certified or cashier's
check, of the Exercise Price for the number of Warrant Shares being purchased,
as specified in such form. As soon as practicable after each such exercise of
this Warrant, but not later than seven (7) days from the date of such exercise,
-1-
<PAGE>
the Company shall issue and deliver to the Holder a certificate or certificate
for the Warrant Shares issuable upon such exercise, registered in the name of
the Holder. If this Warrant should be exercised in part only, the Company shall,
upon surrender of this Warrant for cancellation, execute and deliver a new
Warrant evidencing the rights of the Holder thereof to purchase the balance of
the Warrant Shares purchasable thereunder.
2. RESERVATION OF SHARES. The Company shall at all times reserve for
issuance and delivery upon exercise of this Warrant such number of shares of its
Common Stock as shall be required for issuance and delivery upon exercise in
full of the Warrants.
3. TRANSFER, ASSIGNMENT OR LOSS OF WARRANT. Upon surrender of this
Warrant to the Company at its principal office or at the office of its stock
transfer agent, if any, with the Assignment Form annexed hereto duly executed
and funds sufficient to pay any transfer tax, the Company shall, without charge,
execute and deliver a new Warrant in the name of the assignee named in such
instrument of assignment and this Warrant shall promptly be canceled. The
Company may deem and treat the registered Holder of this Warrant at any time as
the absolute owner hereof for all purposes and shall not be affected by any
notice to the contrary. This Warrant may be divided or combined with other
warrants which carry the same rights upon presentation hereof at the principal
office of the Company or at the office of its stock transfer agent, if any,
together with a written notice specifying the names and denominations in which
new Warrants are to be issued and signed by the Holder hereof. Upon receipt by
the Company of evidence satisfactory to it of the loss, theft, destruction or
mutilation of this Warrant, and (in the case of loss, theft or destruction) of
reasonably satisfactory indemnification, and upon surrender and cancellation of
this Warrant, if mutilated, the Company will execute and deliver a new Warrant
of like tenor and date. Any such new Warrant executed and delivered shall
constitute an additional contractual obligation on the part of the Company,
whether or not this Warrant so lost, stolen, destroyed, or mutilated shall be at
any time enforceable by anyone.
4. RIGHTS OF THE HOLDER. No Holder of this Warrant, as such, shall be
entitled to vote, receive dividends, receive notice in respect of meetings of
stockholders or any other matter whatsoever as a stockholder of the Company or
be deemed to be a stockholder of the Company for any purpose, and the rights of
the Holder are limited to those expressed in this Warrant and are not
enforceable against the Company except to the extent set forth herein.
5. ADJUSTMENT OF WARRANT PRICE AND NUMBER OF WARRANT SHARES. The
Warrant Price and the number of Warrant Shares shall be subject to adjustment
from time to time in accordance with the following provisions:
(a) In case the Company shall at any time subdivide the
outstanding shares of its Common Stock, the Exercise Price in effect immediately
prior to such subdivision shall be proportionately decreased, and in case the
Company shall at any time combine the outstanding shares of its Common Stock,
the Exercise Price in effect immediately prior to such combination shall be
proportionately increased, effective from and after the record date of such
subdivision or combination, as the case may be. Upon any adjustment in the
Exercise Price per share pursuant to this subparagraph (a), the Holder of this
Warrant shall thereafter be entitled to purchase, at the adjusted Exercise
-2-
<PAGE>
Price, the number of shares of Common Stock, calculated to the nearest full
share obtained by (X) multiplying the number of shares of Common Stock
purchasable hereunder immediately prior to such adjustment by the Exercise Price
in effect immediately prior to such adjustment, and (y) by dividing the product
thereof by the Exercise Price resulting from such adjustment.
(b) In the event of the issuance of additional shares of Common
Stock of the Company as a dividend on the Common Stock, from and after the day
that is the record day for the determination of stockholders entitled to such
dividend the Holder of this Warrant shall (until another adjustment) be entitled
to purchase the number of shares of Common Stock, calculated to the nearest full
share, obtained by multiplying the number of shares of Common Stock purchasable
hereunder immediately prior to said record date by the percentage which the
number of additional shares constituting any such dividend is of the total
number of shares of Common Stock outstanding immediately prior to said record
date plus the number of shares of Common Stock issuable upon conversion of the
outstanding convertible securities or upon exercise of any outstanding warrants,
options or rights (including those with respect to convertible securities) and
adding the result so obtained to the number of shares of Common Stock
purchasable hereunder immediately prior to said record date. Upon each
adjustment pursuant to this subparagraph (b), the Exercise Price in effect
immediately prior to such adjustment shall be reduced to an amount determined by
dividing (X) the product obtained by multiplying such Exercise Price by the
number of shares of Common Stock purchasable hereunder immediately prior to such
adjustment by (Y) the number of shares of Common Stock purchasable hereunder
immediately following such adjustment.
6. Reorganization, Reclassification, Consolidation or Merger. If at any
time while this Warrant is outstanding there shall be any reorganization or
reclassification of the Common Stock of the Company (other than a subdivision or
combination of shares provided for in paragraph 5 above) or any consolidation or
merger of the Company with another corporation effected in such a way that
holders of Common Stock shall be entitled to receive stock, securities or
property with respect to or in exchange for Common Stock, the Holder of this
Warrant shall thereafter be entitled to receive, during the term hereof and upon
payment of the Exercise Price, the number of shares of stock or other securities
or property of the Company or of the successor corporation resulting from such
consolidation or merger, as the case may be, to which a holder of the Common
Stock of the Company deliverable upon the exercise of this Warrant, would have
been entitled upon such reorganization, reclassification, consolidation or
merger if this Warrant had been exercised immediately prior to such
reorganization, reclassification, consolidation or merger; and in any such case,
appropriate adjustment (as determined in good faith by the Board of Directors of
the Company) shall be made in the application of the provisions herein set forth
with respect to the rights and interest thereafter of the Holder of this Warrant
to the end that the provisions set forth herein (including the adjustment of the
Exercise Price and the number of shares issuable upon the exercise of this
Warrant) shall thereafter be applicable, as near as reasonably may be, in
relation to any shares or other property thereafter deliverable upon the
exercise hereof.
7. Charges, Taxes and Expenses. The issuance of certificates for shares
of Common Stock upon any exercise of this Warrant shall be made without charge
to the Holder hereof for any tax or other expense in respect to the issuance of
such certificates, all of which taxes and expenses shall be paid by the Company,
and such certificates shall be issued in the name of, or in such name or names
-3-
<PAGE>
as may be directed by, the Holder of this Warrant; provided, however, that in
the event that certificates for shares of Common Stock are to be issued in a
name other than the name of the Holder of this Warrant, this Warrant when
surrendered for exercise shall be accompanied by an instrument of transfer in
form satisfactory to the Company, duly executed by the Holder hereof in person
or by an attorney duly authorized in writing and the Holder shall pay all stock
transfer taxes payable upon issuance of such stock certificate.
8. MISCELLANEOUS.
(a) The terms of this Warrant shall be binding upon and shall inure
to the benefit of any successors or assigns of the Company and of the Holder or
Holders hereof.
(b) Notwithstanding any provision herein to the contrary, the Holder
hereof may not sell, transfer or otherwise assign this Warrant unless the
Company is provided with an opinion of counsel satisfactory in form and
substance to the Company, to the effect that such sale, transfer or assignment
does not violate the Securities Act of 1933 or any applicable state securities
laws.
(c) This Warrant contains the entire agreement between the Holder
hereof and the Company with respect to the purchase of shares of Common Stock of
the Company and supersedes all prior arrangements or understandings with respect
thereto.
(d) This Warrant shall be governed by and construed in accordance
with the laws of the State of Delaware.
(e) Any term or provision of this Warrant may be waived at any time
by the party which is entitled to the benefits thereof and any term or
provisions of this Warrant may be amended or supplemented at any time by
agreement of the Holder of this Warrant and the Company, except that any waiver
of any term or condition, or any amendment or supplementation, of this Warrant
must be in writing. A waiver of any breach of failure to enforce any of the
terms or conditions of this Warrant shall not in any way affect, limit or waive
a party's rights hereunder at any time to enforce strict compliance thereafter
with any term or condition of this Warrant.
(f) Any notice or other document required or permitted to be given
or delivered to the Holder of this Warrant shall be delivered personally, or
sent by certified or registered mail, to each such Holder at the last address
shown on the books of the Company for the registration of, and the registration
of transfer of, the Warrant or at any more recent address of which the Holder of
this Warrant shall have notified the Company in writing. Any notice or other
document required or permitted to be given or delivered to the Company, shall be
delivered personally at, or sent by certified or registered mail to, the office
of the Company at 245 Park Avenue, 39th Floor, New York, New York 10167,
Attention: Executive Vice President, or such other address as shall have been
furnished by the Company to the Holder of the Warrant.
-4-
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Warrant to be
signed by its duly authorized officers and its corporate seal to be affixed
hereto.
Dated:
[SEAL]
NEW GENERATION PLASTIC, INC.
Attest:
/s/ Thomas R. Marshall By: /s/ Jacques Mot
- ------------------------------- ------------------------------
Thomas R. Marshall Jacques Mot, Chairman
Secretary
-5-
<PAGE>
PURCHASE FORM
-------------
The undersigned, the holder of the foregoing Warrant, hereby elects to
exercise purchase rights represented by said Warrant for, and to purchase
thereunder, ________ shares of the Common Stock covered by said Warrant and
herewith makes payment in full therefor of $_______ by certified or cashier's
check payable to the order of the Company, and requests (a) that certificates
for such shares (and any securities or other property issuable upon such
exercise) be issued in the name of and delivered to ______________ whose address
is _________________________________ and (b) if such shares shall not include
all of the shares issuable as provided in said Warrant, that a new Warrant of
like tenor and date for the balance of the shares issuable thereunder be
delivered to the undersigned or that appropriate notation be made on the Warrant
which shall be returned to the undersigned.
-------------------------------
Dated:
Signature Guaranteed:
Signature Guaranteed:
-6-
<PAGE>
ASSIGNMENT FORM
---------------
FOR VALUE RECEIVED,____________________________________ hereby sells,
assigns and transfers unto:
Name_________________________________________________________________________
(Please type or print in block letters)
Address_______________________________________________________________________,
the right to purchase Common Stock represented by this Warrant to the extent of
__________ shares of Common Stock as to which such right is exercisable and does
hereby irrevocably constitute and appoint ______________________________________
_________________________ Attorney, to transfer the same on the books of the
Company with full power of substitution in the premises.
Date_______________________
Signature________________________________________
-7-
Exhibit 4.(iv)
NEITHER THIS WARRANT NOR THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF
THE WARRANT ("WARRANT SHARES") HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933 (THE "ACT") NOR UNDER ANY STATE SECURITIES LAW AND MAY NOT BE PLEDGED,
SOLD, ASSIGNED, EXERCISED OR OTHERWISE TRANSFERRED UNTIL (1) A REGISTRATION
STATEMENT UNDER THE ACT AND ANY APPLICABLE STATE SECURITIES LAW HAS BECOME
EFFECTIVE WITH RESPECT THERETO OR (2) RECEIPT BY THE COMPANY OF AN OPINION OF
COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION IS NOT REQUIRED UNDER THE
ACT OR APPLICABLE STATE SECURITIES LAW.
WWW- No. of Shares-
WARRANT TO PURCHASE COMMON STOCK
OF
NEW GENERATION PLASTIC, INC.
This is to Certify that, FOR VALUE RECEIVED, __________________________
_____________________________________________________________________("Holder"),
is entitled to purchase, subject to the provisions of this Warrant, from New
Generation Plastic, Inc., a Delaware corporation ("Company"), ______________
_______________________________fully paid, validly issued and nonassessable
shares of Common Stock, par value $0.001 per share, of the Company ("Common
Stock") at a price of $12.00 per share at any time or from time to time during
the period beginning on the date that this Warrant first becomes exercisable
(the "Commencement Date"), and ending at 5:00 p.m. New York time on February 24,
2004 (the "Expiration Date"). The shares of Common Stock issuable upon such
exercise are hereinafter sometimes referred to as "Warrant Shares" and the
exercise price of a share of Common Stock is hereinafter sometimes referred to
as the "Exercise Price." This Warrant shall not be exercisable until the Warrant
Shares have been registered under the Securities Act of 1933.
1. EXERCISE OF WARRANT. This Warrant may be exercised in whole or in
part at any time or from time to time on or after the Commencement Date and
until 5:00 p.m. New York time on the Expiration Date; provided, however, that if
such day is a day on which banking institutions in the State of New York are
authorized by law to close, then on the next succeeding day which shall not be
such a day. This Warrant may be exercised by presentation and surrender of the
original Warrant to the Company at its principal office, or at the office of its
stock transfer agent, if any, with the Purchase Form annexed hereto duly
executed and accompanied by payment, in the form of a certified or cashier's
check, of the Exercise Price for the number of Warrant Shares being purchased,
as specified in such form. As soon as practicable after each such exercise of
this Warrant, but not later than seven (7) days from the date of such exercise,
-1-
<PAGE>
the Company shall issue and deliver to the Holder a certificate or certificate
for the Warrant Shares issuable upon such exercise, registered in the name of
the Holder. If this Warrant should be exercised in part only, the Company shall,
upon surrender of this Warrant for cancellation, execute and deliver a new
Warrant evidencing the rights of the Holder thereof to purchase the balance of
the Warrant Shares purchasable thereunder.
2. RESERVATION OF SHARES. The Company shall at all times reserve for
issuance and delivery upon exercise of this Warrant such number of shares of its
Common Stock as shall be required for issuance and delivery upon exercise in
full of the Warrants.
3. TRANSFER, ASSIGNMENT OR LOSS OF WARRANT. Upon surrender of this
Warrant to the Company at its principal office or at the office of its stock
transfer agent, if any, with the Assignment Form annexed hereto duly executed
and funds sufficient to pay any transfer tax, the Company shall, without charge,
execute and deliver a new Warrant in the name of the assignee named in such
instrument of assignment and this Warrant shall promptly be canceled. The
Company may deem and treat the registered Holder of this Warrant at any time as
the absolute owner hereof for all purposes and shall not be affected by any
notice to the contrary. This Warrant may be divided or combined with other
warrants which carry the same rights upon presentation hereof at the principal
office of the Company or at the office of its stock transfer agent, if any,
together with a written notice specifying the names and denominations in which
new Warrants are to be issued and signed by the Holder hereof. Upon receipt by
the Company of evidence satisfactory to it of the loss, theft, destruction or
mutilation of this Warrant, and (in the case of loss, theft or destruction) of
reasonably satisfactory indemnification, and upon surrender and cancellation of
this Warrant, if mutilated, the Company will execute and deliver a new Warrant
of like tenor and date. Any such new Warrant executed and delivered shall
constitute an additional contractual obligation on the part of the Company,
whether or not this Warrant so lost, stolen, destroyed, or mutilated shall be at
any time enforceable by anyone.
4. RIGHTS OF THE HOLDER. No Holder of this Warrant, as such, shall be
entitled to vote, receive dividends, receive notice in respect of meetings of
stockholders or any other matter whatsoever as a stockholder of the Company or
be deemed to be a stockholder of the Company for any purpose, and the rights of
the Holder are limited to those expressed in this Warrant and are not
enforceable against the Company except to the extent set forth herein.
5. ADJUSTMENT OF WARRANT PRICE AND NUMBER OF WARRANT SHARES. The
Warrant Price and the number of Warrant Shares shall be subject to adjustment
from time to time in accordance with the following provisions:
(a) In case the Company shall at any time subdivide the outstanding
shares of its Common Stock, the Exercise Price in effect immediately prior to
such subdivision shall be proportionately decreased, and in case the Company
shall at any time combine the outstanding shares of its Common Stock, the
Exercise Price in effect immediately prior to such combination shall be
proportionately increased, effective from and after the record date of such
subdivision or combination, as the case may be. Upon any adjustment in the
Exercise Price per share pursuant to this subparagraph (a), the Holder of this
Warrant shall thereafter be entitled to purchase, at the adjusted Exercise
-2-
<PAGE>
Price, the number of shares of Common Stock, calculated to the nearest full
share obtained by (X) multiplying the number of shares of Common Stock
purchasable hereunder immediately prior to such adjustment by the Exercise Price
in effect immediately prior to such adjustment, and (y) by dividing the product
thereof by the Exercise Price resulting from such adjustment.
(b) In the event of the issuance of additional shares of Common
Stock of the Company as a dividend on the Common Stock, from and after the day
that is the record day for the determination of stockholders entitled to such
dividend the Holder of this Warrant shall (until another adjustment) be entitled
to purchase the number of shares of Common Stock, calculated to the nearest full
share, obtained by multiplying the number of shares of Common Stock purchasable
hereunder immediately prior to said record date by the percentage which the
number of additional shares constituting any such dividend is of the total
number of shares of Common Stock outstanding immediately prior to said record
date plus the number of shares of Common Stock issuable upon conversion of the
outstanding convertible securities or upon exercise of any outstanding warrants,
options or rights (including those with respect to convertible securities) and
adding the result so obtained to the number of shares of Common Stock
purchasable hereunder immediately prior to said record date. Upon each
adjustment pursuant to this subparagraph (b), the Exercise Price in effect
immediately prior to such adjustment shall be reduced to an amount determined by
dividing (X) the product obtained by multiplying such Exercise Price by the
number of shares of Common Stock purchasable hereunder immediately prior to such
adjustment by (Y) the number of shares of Common Stock purchasable hereunder
immediately following such adjustment.
6. Reorganization, Reclassification, Consolidation or Merger. If at any
time while this Warrant is outstanding there shall be any reorganization or
reclassification of the Common Stock of the Company (other than a subdivision or
combination of shares provided for in paragraph 5 above) or any consolidation or
merger of the Company with another corporation effected in such a way that
holders of Common Stock shall be entitled to receive stock, securities or
property with respect to or in exchange for Common Stock, the Holder of this
Warrant shall thereafter be entitled to receive, during the term hereof and upon
payment of the Exercise Price, the number of shares of stock or other securities
or property of the Company or of the successor corporation resulting from such
consolidation or merger, as the case may be, to which a holder of the Common
Stock of the Company deliverable upon the exercise of this Warrant, would have
been entitled upon such reorganization, reclassification, consolidation or
merger if this Warrant had been exercised immediately prior to such
reorganization, reclassification, consolidation or merger; and in any such case,
appropriate adjustment (as determined in good faith by the Board of Directors of
the Company) shall be made in the application of the provisions herein set forth
with respect to the rights and interest thereafter of the Holder of this Warrant
to the end that the provisions set forth herein (including the adjustment of the
Exercise Price and the number of shares issuable upon the exercise of this
Warrant) shall thereafter be applicable, as near as reasonably may be, in
relation to any shares or other property thereafter deliverable upon the
exercise hereof.
7. Charges, Taxes and Expenses. The issuance of certificates for shares
of Common Stock upon any exercise of this Warrant shall be made without charge
to the Holder hereof for any tax or other expense in respect to the issuance of
such certificates, all of which taxes and expenses shall be paid by the Company,
and such certificates shall be issued in the name of, or in such name or names
-3-
<PAGE>
as may be directed by, the Holder of this Warrant; provided, however, that in
the event that certificates for shares of Common Stock are to be issued in a
name other than the name of the Holder of this Warrant, this Warrant when
surrendered for exercise shall be accompanied by an instrument of transfer in
form satisfactory to the Company, duly executed by the Holder hereof in person
or by an attorney duly authorized in writing and the Holder shall pay all stock
transfer taxes payable upon issuance of such stock certificate.
8. MISCELLANEOUS.
(a) The terms of this Warrant shall be binding upon and shall inure
to the benefit of any successors or assigns of the Company and of the Holder or
Holders hereof.
(b) Notwithstanding any provision herein to the contrary, the Holder
hereof may not sell, transfer or otherwise assign this Warrant unless the
Company is provided with an opinion of counsel satisfactory in form and
substance to the Company, to the effect that such sale, transfer or assignment
does not violate the Securities Act of 1933 or any applicable state securities
laws.
(c) This Warrant contains the entire agreement between the Holder
hereof and the Company with respect to the purchase of shares of Common Stock of
the Company and supersedes all prior arrangements or understandings with respect
thereto.
(d) This Warrant shall be governed by and construed in accordance
with the laws of the State of Delaware.
(e) Any term or provision of this Warrant may be waived at any time
by the party which is entitled to the benefits thereof and any term or
provisions of this Warrant may be amended or supplemented at any time by
agreement of the Holder of this Warrant and the Company, except that any waiver
of any term or condition, or any amendment or supplementation, of this Warrant
must be in writing. A waiver of any breach of failure to enforce any of the
terms or conditions of this Warrant shall not in any way affect, limit or waive
a party's rights hereunder at any time to enforce strict compliance thereafter
with any term or condition of this Warrant.
(f) Any notice or other document required or permitted to be given
or delivered to the Holder of this Warrant shall be delivered personally, or
sent by certified or registered mail, to each such Holder at the last address
shown on the books of the Company for the registration of, and the registration
of transfer of, the Warrant or at any more recent address of which the Holder of
this Warrant shall have notified the Company in writing. Any notice or other
document required or permitted to be given or delivered to the Company, shall be
delivered personally at, or sent by certified or registered mail to, the office
of the Company at 245 Park Avenue, 39th Floor, New York, New York 10167,
Attention: Executive Vice President, or such other address as shall have been
furnished by the Company to the Holder of the Warrant.
-4-
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Warrant to be
signed by its duly authorized officers and its corporate seal to be affixed
hereto.
Dated:
[SEAL]
NEW GENERATION PLASTIC, INC.
Attest:
/s/ Thomas R. Marshall By: /s/ Jacques Mot
- -------------------------------- --------------------------------
Thomas R. Marshall Jacques Mot, Chairman
Secretary
-5-
<PAGE>
PURCHASE FORM
-------------
The undersigned, the holder of the foregoing Warrant, hereby elects to
exercise purchase rights represented by said Warrant for, and to purchase
thereunder, ________ shares of the Common Stock covered by said Warrant and
herewith makes payment in full therefor of $_______ by certified or cashier's
check payable to the order of the Company, and requests (a) that certificates
for such shares (and any securities or other property issuable upon such
exercise) be issued in the name of and delivered to ______________ whose address
is _________________________________ and (b) if such shares shall not include
all of the shares issuable as provided in said Warrant, that a new Warrant of
like tenor and date for the balance of the shares issuable thereunder be
delivered to the undersigned or that appropriate notation be made on the Warrant
which shall be returned to the undersigned.
--------------------------------
Dated:
Signature Guaranteed:
Signature Guaranteed:
-6-
<PAGE>
ASSIGNMENT FORM
---------------
FOR VALUE RECEIVED,____________________________________ hereby sells,
assigns and transfers unto:
Name_________________________________________________________________________
(Please type or print in block letters)
Address_______________________________________________________________________,
the right to purchase Common Stock represented by this Warrant to the extent of
__________ shares of Common Stock as to which such right is exercisable and does
hereby irrevocably constitute and appoint_______________________________________
________________________ Attorney, to transfer the same on the books of the
Company with full power of substitution in the premises.
Date____________________
Signature________________________________________
-7-
Exhibit 10.(i)
EMPLOYMENT AGREEMENT
THIS AGREEMENT, made and entered into as of the 25th day of January,
2000, by and between New Generation Plastic, Inc., a Delaware corporation
("NGP") and Paul Hokfelt (the "Executive");
W I T N E S S E T H
WHEREAS, NGP proposes to employ the Executive in the operations of NGP
and NGP is desirous of affording Executive incentives in connection therewith;
NOW, THEREFORE, in consideration of the mutual covenants contained herein and
other good and valuable consideration, NGP and Executive hereby agree as
follows:
ARTICLE I
EMPLOYMENT
Section 1.1. Employment. NGP hereby employs the Executive as Chief
Executive Officer of NGP to perform such duties and discharge such functions in
and about the business and affairs of NGP and the Affiliated Corporations as the
board of directors of NGP may from time to time determine. Executive agrees,
during the term hereof, to diligently and in good faith perform and discharge
such duties and functions and Executive shall devote all of his working time,
energy and ability exclusively to the performance of his duties hereunder.
During the term hereof, Executive shall not directly or indirectly engage or
participate in the operations or management of, or render any services to, any
other businesses or enterprises.
Section 1.2. Basic Compensation. NGP agrees to pay Executive an initial
base annual salary of 240,000 CHF through the December 31, 1999 and for the
balance of the term of this Agreement an increased amount as may be mutually
agreed to by the parties from time to time. Basic compensation payable under
this Section 1.2 shall be payable monthly in accordance with such practices and
procedures that are generally applicable to other employees of NGP. In
consideration of the Executive giving notice to his current employer, NGP has
prior to the date of such notice caused a bank draft to be delivered to the
Executive in the amount of US$100,000 (the "Security Amount"). The Security
Amount is intended to be a prepayment of the first six (6) months of: (i) the
base annual salary payable under this Section 1.2 and the fringe benefits
afforded under Section 1.4, provided that if the Executive's employment
hereunder does not extend beyond said six (6) month period the Executive is
under no obligation to return any of the Security Amount. In view of the
foregoing, the next monthly payment of base annual salary shall be paid in the
seventh month of the Executive's employment.
Section 1.3. Expense Reimbursement. NGP shall reimburse reasonable and
necessary out-of-pocket business expenses, such as travel, lodging, long
distance telephone calls and the like, consistent with the policies that may
promulgated from time to time for NGP's senior executives upon submission by
Executive of appropriate receipts therefor. Notwithstanding the foregoing, NGP
shall reimburse the Executive for his reasonable moving expenses from his
current principal residence to a new principal residence in Switzerland.
Section 1.4. Fringe Benefits. While Executive is in the employ of NGP,
NGP agrees to provide to Executive those benefits generally provided to all
salaried employees of NGP (with the exception of life insurance benefits), and
<PAGE>
in addition NGP shall provide the Executive with private health insurance
coverage for he and his family in Switzerland, long term disability coverage and
at least $1,500,000 coverage under an individual life insurance policy or
policies. NGP acknowledges the Executives desire to continue his private pension
arrangements in the United Kingdom and agrees that the complimentary portion of
his pension benefits may be paid into that plan. Such benefits shall include
payment by NGP on behalf of the Executive of leased car expenses plus payment of
insurance, maintenance, cost of repairs and gas as are mutually agreed by the
parties. Such additional car expense payment will be made on a monthly basis,
unless NGP and the Executive otherwise agree.
NGP intends to adopt a Stock Option Plan (the "Option Plan") for
selected employees, directors and consultants of NGP and the Affiliated
Corporations. An award under the Option Plan, when adopted, will be extended to
the Executive in an amount commensurate with his position as Chief Executive
Officer and shall be in addition to the basic compensation and bonus payable
under Sections 1.2 and 1.6 hereof, respectively. Further, it is the intention of
the Company and the Board of Directors that the Executive be afforded the
opportunity, based on specific performance goals to be determined by the Board
of Directors and the Executive, to be awarded options under the Option Plan to
purchase stock constituting up to 4% of the total equity of the Company on a
fully diluted basis.
Section 1.5. Severance. If NGP terminates the employment of the
Executive without Cause at any time during the Initial Term (as defined herein)
or any Renewal Term, NGP shall continue to pay to the Executive: (1) basic
compensation as set forth in Section 1.2 hereof for the remainder of the Initial
Term or Renewal Term as the case may be or until the Executive's earlier death
or Disability (as defined herein), (2) notwithstanding any contrary provision
contained in any formal written bonus plan which may be adopted by the Board of
Directors, any bonus thereunder shall be pro-rated to the date of termination,
and (3) the Fringe Benefits described in 1.4 above for the remainder of the term
of this Agreement or until the Executive's earlier death. Items 1, 2 and 3 above
are collectively referred to as "Severance". Also, should the Executive become
Disabled during a period when he is entitled to receive the Severance described
in paragraph (1) above (basic compensation) and he is covered by a long-term
disability plan of NGP or an Affiliated Corporation and determined to be
entitled to coverage under such plan, then and in that event he will receive
disability payments under that plan in lieu of any further payments under
paragraph (1) above. It is agreed that any termination of employment by NGP is
without prejudice to any other remedy to which NGP may be entitled, either by
law, in equity or under this Agreement. The Severance described above shall
represent liquidated damages and shall mitigate damages (if any), which may
otherwise be payable to the Executive.
NGP has the absolute right to terminate this Agreement, and the
employment of the Executive hereunder, for Cause without any further obligation
to the Executive in respect of the Severance to the Executive hereunder. For
purposes of this Agreement, for Cause includes, but is not limited to any of the
following:
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(i) Executive's material breach of the terms of this Agreement or
any other material legal obligation to NGP or an Affiliated
Corporation;
(ii) Executive's fraud, dishonesty, gross negligence, willful
misconduct or other deliberate action which causes injury to
NGP or any of its Affiliated Corporations or to their
respective reputations or which results in a material loss to
NGP or an Affiliated Corporation; or an act of the Executive
involving moral turpitude or a serious crime resulting in a
conviction by a court or tribunal of competent jurisdiction or
a plea of "nolo contendere"; or
(iii) willful breach in the performance by Executive of his material
duties hereunder resulting in demonstrable economic harm to
NGP or an Affiliated Corporation and which Executive shall not
have taken steps in good faith to cure within ninety (90) days
after notice from the Board of Directors; provided, however,
that it is understood and agreed that failure to meet the
business plan of NGP alone or errors in judgment made by
Executive in good faith shall not constitute Cause hereunder.
The Executive shall not be entitled to Severance under this Section 1.5
if the employment of the Executive is terminated for any of the following
reasons:
(i) the Executive terminates this Agreement at any time;
(ii) death of the Executive; provided, however, that in the
event of his death being the cause of his termination, the
Executive's estate will receive the payments described in
paragraph (2) (target bonus) of Section 1.5 above;
(iii) the Disability of the Executive; provided, however, that
in the event of his Disability being the cause of his
termination, Executive will receive the items described in
paragraphs (2)(target bonus) and (3)(Fringe Benefits) of
Section 1.5 above; or
(iv) the Executive is terminated for Cause as described above.
Section 1.6. Bonus. NGP intends to adopt a formal written bonus program
for certain of its executives including the Executive. Any awards under such
written bonus program will be in addition to the basic compensation payable
under Section 1.2 hereof. NGP reserves the absolute right to adopt, amend,
replace or terminate, from time to time, any such written bonus program and to
determine the extent of its application, all without any liability to the
Executive. The bonus, if any, payable under this Section 1.6 shall be paid in
accordance with the terms of the formal written bonus program, if any, adopted
by NGP.
Section 1.7. Term. It is the intention of the parties that the
Executive's employment under this Agreement commence as soon as practicable
after the execution hereof, however the parties have agreed that the Executive
may begin employment within one hundred eighty (180) days after the date hereof.
The term of this Agreement shall be deemed to commence on the date that the
Executive is actually available to begin his employment (herein called the
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<PAGE>
"Effective Date") and continue through the third anniversary of the Effective
Date (the "Initial Term"), provided, however, that Executive shall have the
continuing option to immediately terminate the employment provided by this
Agreement by giving one hundred eighty (180) days written notice thereof to NGP
and NGP shall have the continuing option to immediately terminate the employment
provided by Section 1.1 hereof by giving written notice thereof to Executive
which notice may be effective immediately. Upon any such termination, all of the
rights and obligations set forth in this Article I shall terminate provided,
only, that NGP shall pay to Executive the Severance, if any, payable under
Section 1.5 hereof.
Section 1.8. Renewal Term. Unless NGP shall notify the Executive in a
writing received at least one hundred eighty (180) days prior to the end of the
Initial Term indicating that NGP has elected not to extend the term of this
Agreement, the term of this Agreement shall be automatically extended for one
(1) year. Thereafter, a successive Renewal Term shall automatically commence
immediately after the expiration of each Renewal Term, unless NGP shall notify
the Executive in a writing received at least one hundred eighty (180) days prior
to the end of the then existing Renewal Term indicating that NGP has elected not
to extend the term of this Agreement.
Section 1.9 Change of Control.
a. Change in Control or Ownership. Change in Control or Ownership
means:
i. An acquisition by any "person" or "group" (as those
terms are defined or used in Section 13(d) of the
Securities Exchange Act of 1934, as amended (the
"Exchange Act") of "beneficial ownership" (within the
meaning of Rule 13d-3 under the Exchange Act, as
enacted and in force on the date hereof) of
securities of NGP representing more than 50% of the
combined voting power of NGP's securities then
outstanding;
ii. A merger, consolidation or other reorganization of
NGP, except where the resulting entity is controlled,
direct or indirectly, by NGP;
iii. A merger, consolidation or other reorganization of
NGP, except where shareholders of NGP immediately
prior to consummation of any such transaction
continue to hold at least a majority of the voting
power of the outstanding voting securities of the
legal entity resulting from or existing after any
transaction and a majority of the members of the
Board of Directors of the legal entity resulting from
or existing after a transaction are former members of
NGP's Board of Directors;
iv. A sale, exchange, transfer or other disposition of
substantially all of the assets of NGP to another
entity, except to an entity controlled, directly or
indirectly, by NGP;
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<PAGE>
v. A sale, exchange, transfer or other disposition of
substantially all of the assets of NGP to another
entity, or a corporate division involving NGP; or
vi. A contested proxy solicitation of NGP's shareholders
that results in the contesting party obtaining the
ability to cast 50% or more of the votes entitled to
be cast in an election of directors of NGP.
b. Resignation of Executive. If a Change in Control or Ownership
shall occur and if thereafter, at any time, there shall be:
i. Any involuntary termination of the Executive's
employment (other than for Cause, death or
Disability);
ii. Any reduction in the Executive's title,
responsibilities, including reporting
responsibilities, or authority, including title,
responsibilities or authority as it may be increased
from time to time;
iii. The assignment to the Executive of duties
inconsistent with the Executive's office immediately
prior to a Change in Control or Ownership or as the
same may be increased from time to time after a
change in Control or Ownership;
iv. Any reassignment of the Executive to a location
farther than a one hour commute by automobile from
his primary workplace immediately prior to the Change
in Control or Ownership;
v. Any reduction in the Executive's annual base salary
in effect immediately prior to a Change in Control or
Ownership or as the same may be increased from time
to time after a Change in Control or Ownership;
vi. Any failure to continue the Executive's
participation, on substantially similar terms, in any
of the incentive compensation or bonus plans of NGP
or an affiliate in which the Executive participated
at the time of the Change in Control or Ownership or
any change or amendment to any of the substantive
provisions of any of such plans which would
materially decrease the potential benefits to the
Executive under any of these plans;
vii. Any failure to provide the Executive with benefits at
least as favorable as those enjoyed by the Executive
under any of the pension, life insurance, medical,
health and accident, disability or other employee
plans of NGP or an affiliate in which the Executive
participated immediately prior to a Change in Control
or Ownership, or the taking of any action that would
materially reduce any of such benefits in effect at
the time of the Change in Control or Ownership,
unless this reduction relates to a reduction in
benefits applicable to all employees generally;
5
<PAGE>
viii. Any requirement that the Executive travel in
performance of his duties on behalf of NGP or an
affiliate for a greater period of time during any
year than was required of the Executive during the
year preceding the year in which the Change in
Control or Ownership occurred;
ix. Any failure of NGP's Board of Directors to nominate
the Executive for election as a member of NGP's Board
of Directors, as the case may be, at the expiration
of the Executive's then existing term;
x. Any sustained pattern of interruption or disruption
of the Executive for matters substantially unrelated
to the Executive's performance of the Executive's
duties on behalf of NGP or an affiliate; or
xi. Any breach of this Agreement of any nature whatsoever
on the part of NGP;
then, at the option of the Executive, exercisable by the Executive within one
hundred eighty (180) days of the occurrence of each and every of the foregoing
events, the Executive may resign from employment (or, if involuntarily
terminated, give notice of intention to collect benefits hereunder) by
delivering a notice in writing (the "Notice of Termination") to NGP, and the
Continuing Compensation and Benefits' provisions of this Agreement shall apply.
c. Continuing Compensation and Benefits.
i. (a) If, at the time of termination of the Executive's
employment in accordance with Section 1.9(b) hereof,
a Tax Change has also occurred, NGP shall make a
lump-sum cash payment to the Executive no later than
thirty (30) days following the date of such
termination in an amount ("X") determined pursuant to
the following formula: X=(2.99A - B) x (1+C). For the
purpose of the foregoing formula,
A = The Executive's base amount (determined
pursuant to Internal Revenue Code Section
280G(b)(3)(A)) on the date of the Tax Change;
B = The present value of all other amounts which
qualify as parachute payments under Internal
Revenue Code Section 280G(b)(2)(A) or (B)
(without regard to the provisions of Code
Section 280G(b)(2)(A)(ii)), such present value
to be determined pursuant to the provisions of
Internal Revenue Code Section 280G; and
C = 120% times 0.5 times the lowest of the
semiannual applicable federal rates (determined
pursuant to Internal Revenue Code Section
1274(d)) in effect on the date of the Tax
Change.
6
<PAGE>
Notwithstanding the foregoing or any other provision
of this Agreement to the contrary, if the amount
determined under "B" above equals or exceeds 2.99
times the amount determined under "A" above, no
payment shall be made to the Executive under this
Section.
(b) If, at the time of termination of the Executive's
employment in accordance with Section 1.9(b) hereof,
a Tax Change has not occurred, NGP shall make a
lump-sum cash payment to the Executive no later than
thirty (30) days following the date of such
termination in an amount equal to (A) 2.99 times the
lesser of (I) the Executive's base amount determined
pursuant to the principles set forth in the
regulations promulgated under Code Section
280G(b)(3)(A) and as though a Tax Change has occurred
on the date of the Executive's termination of
employment and (II) the Executive's base amount so
determined but as though a Tax Change will occur in
the calendar year following the date of the
Executive's termination of employment, minus (B) any
other amount paid or payable within thirty (30) days
following the Executive's termination of employment
which would constitute (or be presumed to constitute)
parachute payments under Code Section 280G(b)(2)(A)
or (B) (without regard to the provisions of Code
Section 280G(b)(2)(A)(ii)) if a Tax Change had
occurred on the date of such termination of
employment.
ii. The Executive shall not be required to mitigate the
amount of any payment provided for in Section
1.9(c)(i) by seeking other employment or otherwise,
nor shall the amount of any payment or benefit
provided for in Section 1.9(c)(i) be reduced by any
compensation earned by the Executive as the result of
employment by another employer or by reason of the
Executive's receipt of or right to receive any
retirement or other benefits after the date of
termination of employment or otherwise, except as
otherwise provided therein.
iii. Upon written request of the Executive, NGP's
obligation to make the payment under this Section
shall be secured in total (i) by a standby letter of
credit obtained by NGP from a recognized financial
institution the long-term obligations of which are
rated, on the date of the request, investment grade
or better by Standard & Poor's Corporation or Moody's
Investors Service, Inc. or (ii) by other security as
the Executive shall approve, obtained within ten (10)
days of the Executive's written request following a
Change in Control or Ownership.
iv. NGP shall pay all reasonable legal fees and related
expenses (including the costs of experts, evidence
and counsel and expenses included in connection with
7
<PAGE>
an arbitration or in other litigation or appeal)
incurred by the Executive as a result of (i)(a) his
delivery of a Notice of Termination or (i)(b) his
seeking to obtain or enforce any right or benefit
provided by this Agreement.
Section 1.10 Place of Employment. The performance of Executive's duties
hereunder will require travel and will include involvement with businesses and
projects away from home.
ARTICLE II
NON-DISCLOSURE OF CONFIDENTIAL INFORMATION
AND NON-COMPETITION.
Section 2.1 Non-Disclosure of Confidential Information. (a) The
Executive acknowledges that it is the policy of NGP to maintain as secret and
confidential all information heretofore or hereafter acquired, developed or used
by NGP or any Affiliated Corporation relating to its business, operations,
employees and customers (all such information is hereinafter referred to as
"Confidential Information"). The parties hereto recognize that the Executive's
services are special and unique, and that by reason of the employment the
Executive has acquired and will acquire Confidential Information. Confidential
Information shall not include any information which (1) is or becomes generally
available to the public other than as a result of a disclosure by Executive, (2)
is in the possession of Executive prior to the date of rendering any services to
NGP and was not received directly or indirectly from NGP, or (3) is
independently developed by Executive without the use of information received
directly or indirectly from NGP or revealed pursuant to this Agreement.
Executive recognizes that all such Confidential Information is the property of
NGP.
(b) In consideration of the Executive's employment by NGP pursuant to
this Agreement, the Executive agrees that:
(1) except as required by the duties of his employment,
without the prior written consent of NGP, the Executive shall
never, directly or indirectly, either during or after the term
of this Agreement, use, publish, disseminate or otherwise
disclose in any manner any Confidential Information obtained
during his employment with NGP or any Affiliated Corporation;
and
(2) both during and after the term of this Agreement , the
Executive shall exercise all due and diligent precautions to
protect the integrity of the business plans, customer lists,
statistical data and compilations, agreements, contracts,
memoranda, manuals, trade secrets or other documents and
materials of NGP and any Affiliated Corporation which embody
any Confidential Information, and upon either the termination
of the Executive's employment or expiration of the term of
this Agreement, the Executive shall return to NGP all such
documents or materials, including any computer encoded
material (and copies thereof) which are in the possession or
8
<PAGE>
under the control of the Executive. The Executive agrees that
the provisions of this Section 2.1 are reasonably necessary to
protect the proprietary rights of NGP in the Confidential
Information and its trade secrets, good will and reputation;
provided, however, the foregoing shall not prevent Executive from responding to
a valid subpoena of a governmental agency or to a valid court order or as
otherwise required by law.
2.2 Non-Competition. Executive hereby covenants that, for a period of
twelve months next following the date of termination of his employment (except
if such termination occurs as a result of the expiration of the Initial Term or
a renewal term thereof), Executive shall not be engaged or interested (whether
as a proprietor, partner with another, shareholder, agent or consultant of,
employee of or lender to, another) in any business which competes, directly or
indirectly, with the businesses of NGP or any business of an Affiliated
Corporation; provided that if the employment of Executive is terminated by NGP
without Cause, the foregoing covenant shall not apply (without affecting the
obligations hereinafter contained in this Section 2.1 in respect of disclosures
or solicitations by Executive) unless the Executive shall have been paid
Severance pursuant to Section 1.5 hereof, in which event the covenant period
shall continue for the period that Severance is paid.
For a period of one year following the date of termination of his
employment, Executive agrees not to offer employment to, not to initiate
discussions of the nature of any prospective employment opportunities with, and
not to otherwise solicit any director, officer or employee of NGP or any
Affiliated Corporation (or any person who was an employee of NGP or any
Affiliated Corporation within 180 days of the date of Executive's termination of
employment) on his own behalf, on behalf of any employer of the Executive, on
behalf of any entity with which the Executive is acting as a consultant or with
which the Executive is then otherwise affiliated.
The provisions of this Article II shall survive the termination of the
employment hereunder or expiration of the term of this Agreement.
2.3 NGP's Right to Injunctive Relief. The Executive acknowledges that
his services are of a unique character which gives them a special value to NGP.
The Executive further acknowledges that any breach or threatened breach by the
Executive of any of the provisions of this Article II will result in irreparable
and continued harm to NGP and its Affiliated Corporations for which NGP and its
Affiliated Corporations would have no adequate remedy at law. Therefore, in
addition to any other remedy which NGP may have at law or in equity, NGP shall
be entitled to injunctive relief or other equitable remedies in the event of any
such breach or threatened breach. The provisions of this Article II shall
survive the termination of the Employment or the expiration of the term of this
Agreement.
2.4 Invalidity of Covenants. The parties acknowledge that the laws and
public policies of the State of Delaware and various other states of the United
States may differ as to the validity and enforceability of the covenants
contained in this Article II. It is the intention of the parties that activities
of the Executive be restricted only to the extent necessary for the protection
of legitimate business interests of NGP, that the provisions of this Agreement
9
<PAGE>
shall, to the fullest extent permissible under law and public policy, be
enforced by the courts and construed under the laws of the State of Delaware,
and that any part of Article II adjudicated to be invalid or unenforceable shall
not affect the validity or enforceability of any other part of Article II or
this Agreement. Accordingly, if any part of Article II shall be adjudicated to
be invalid or unenforceable in any action or proceeding in which the Executive,
or the Executive's heirs, executors or administrators and NGP, its successors or
assigns, are parties, either in its entirety or as modified as to duration,
territory or otherwise, then such part shall be deemed to be amended so as to be
enforceable or, if required, deleted from this Agreement, as the case may be, in
order to render the remainder of Article II valid and enforceable.
ARTICLE III
DEFINITIONS AND GENERAL PROVISIONS
Section 3.1. Definitions. As used in this Agreement, the following
terms shall have the respective meanings set forth below:
Affiliated Corporation: "Affiliate Corporation" or "Affiliate" shall
mean any corporation or other entity, that directly or indirectly,
through one or more intermediaries, is controlled by NGP.
Disability: Disability shall mean Total Disability as defined in the
NGP long-term disability plan which currently provides that "Total
Disability" means "the inability of the Participant to perform the
normal duties of his or her regular occupation, except that if benefits
have been paid for twenty-four (24) months of any continuous
disability, then for the balance of the period of disability after such
twenty-four (24) months, the inability of the Participant to perform
any and every duty of any gainful occupation for which he or she is
reasonably fitted by training, education, or experience", or as defined
by any substitute plan which provides long-term disability coverage for
the Executive, or in the event that the executive is not covered by
such a plan, Disability shall mean: the physical or mental incapacity
of Executive for a period of more than one hundred twenty (120)
consecutive days, the determination of which by the board of directors
of NGP shall be conclusive on the parties hereto.
Parent: Any person, corporation or other entity which holds in excess
of 50% of the issued and outstanding equity securities of NGP.
Section 3.2. Withholding Taxes. NGP may withhold from any payment to be
made under this Agreement (and transmit to the proper taxing authority) such
amount as it may be required to withhold under any applicable law.
10
<PAGE>
Section 3.3. Administration. The Board of Directors and NGP's executive
officers, except the Executive, shall have full power to interpret, construe and
administer this Agreement, including authority to determine any dispute or claim
with respect thereto. The determination of NGP in any matter, made in good
faith, shall be binding and conclusive upon Executive and all other persons
having any right or benefit hereunder.
Section 3.4. Notices. All notices, requests and other communications
from any of the parties hereto to the other shall be in writing and shall be
considered to have been duly given or served when personally delivered to any
individual party, an executive officer of any corporate party, or on the first
day after the date of deposit with Federal Express or other overnight courier
for next day delivery, postage prepaid, or on the third day after deposit in the
United States mail, certified or registered, return receipt requested, postage
prepaid, or on the date of telecopy, fax or similar telephonic transmission
during normal business hours, provided that the recipient has specifically
acknowledged by telephone receipt of such telecopy, fax or telephonic
transmission; addressed, in all cases, to the party at his or its address set
forth below, such other address as such party may hereafter designate by written
notice to the other party:
(i) If to NGP to:
Mr. Jacques Mot
New Generation Plastic, Inc.
245 Park Avenue, 39th Floor
New York, NY 10167
FACSIMILE 212 986-0272
(ii) If to Executive to:
Paul Hokfelt
[Address]
Section 3.5. Binding Effect. Except as provided herein, the provisions
of this Agreement shall not give Executive any rights to continue to be employed
or otherwise retained by NGP or any Affiliated Corporation. Except as so
provided, this Agreement shall be binding upon and inure to the benefit of the
parties hereto, the respective successors and assigns of NGP and the
beneficiaries, personal representatives and heirs of Executive. NGP may assign
this Agreement to any subsidiary or Affiliate of NGP so long as the Executive's
duties and principal business location shall not differ substantially from those
set forth in this Agreement.
Section 3.6. Controlling Law. This Agreement shall be construed, and
the legal relations between the parties determined, in accordance with the laws
of the State of Delaware.
11
<PAGE>
Section 3.7. Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed to be an original without the
production of the others, but all of which together shall constitute one and the
same instrument.
Section 3.8. Entire Agreement. This Agreement contains the entire
understanding of the parties with respect to the subject matter hereof and may
not be varied, modified or amended except by a writing signed by the parties to
be charged. The making, execution and delivery of this Agreement by the parties
hereto have been induced by no representations, statements, warranties or
agreements of the other except those herein expressed.
Section 3.9. Heading. The division of this Agreement into sections and
paragraphs and the titles assigned thereto is only a matter of convenience for
reference and shall not define or limit any of the terms or provisions thereof.
IN WITNESS WHEREOF, the individual party has hereunto set his hand and
the corporate party has caused these presents to be executed by a proper officer
thereunto duly authorized all as of the day and year first above written.
New Generation Plastic, Inc.
By: /s/ Jacques Mot
---------------------------------------
Jacques Mot
(Chairman)
/s/ Paul Hokfelt
---------------------------------------
Paul Hokfelt
12
Exhibit 21
Exhibit 21 Subsidiaries of the Registrant
Name State of Incorporation
- ---- ----------------------
New Generation Partners, Inc. Delaware
NG Plastic, Inc. Delaware
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