ARTRA GROUP INC
10-K/A, 1995-04-25
COSTUME JEWELRY & NOVELTIES
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                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                  FORM 10-K/A

                                AMENDMENT NO. 1

[X]      Annual  Report  Pursuant to Section 13 or 15(d) of the  Securities  and
         Exchange Act of 1934 For the fiscal year ended December 29, 1994

                                       OR

[   ]    Transition Report Pursuant to Section 13 or 15(d) of the 
         Securities and Exchange Act of 1934
         For the transition period from _____________ to  ______________
                                         

                         Commission file number 1-3916

                            ARTRA GROUP INCORPORATED
             (Exact name of registrant as specified in its charter)

   Commonwealth of Pennsylvania                          25-1095978
  ------------------------------             --------------------------------
 (State or other jurisdiction of            (I.R.S. EmployerIdentification No.)
   incorporation or organization)

  500 Central Avenue, Northfield, IL                       60093
- ----------------------------------------                  -------
(Address of principal executive offices)                (Zip Code)

Registrant's telephone number, including area code:    (708) 441-6650

Securities registered pursuant to Section 12(b) of the Act:

                                                     Name of Each Exchange
      Title of Each Class                             on Which Registered
- -------------------------------                    ------------------------    
Common stock, without par value                     New York Stock Exchange
                                                     Pacific Stock Exchange

Securities registered pursuant to Section 12(g) of the Act:  None.

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not be contained,  to the
best  of  registrant's   knowledge,  in  the  definitive  proxy  or  information
statements  incorporated  by  reference  in Part  III of this  Form  10-K or any
amendment to this Form 10-K. [ ]

Indicate by check mark whether the registrant (1) has 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.  Yes X   No
                                       ---

State the aggregate  market value of the voting stock held by  nonaffiliates  of
the registrant at February 28, 1995: $24,176,000.

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of the latest practicable date.

                    
           Class                              Outstanding at February 28, 1995
- -------------------------------               --------------------------------
Common stock, without par value                          6,703,243

Documents Incorporated by Reference:   None

<PAGE>



                                    PART III

Item 10. Directors and Executive Officers of the Registrant


Information Regarding Directors
<TABLE>
<CAPTION>

         The  following  table lists the name and age of each director of ARTRA,
his business experience during the past five (5) years, his positions with ARTRA
and certain directorships.

Name                                Age                                   Positions and Experience
- ----------------------------        ---            ---------------------------------------------------------------
<S>                                 <C>            <C>

Term Expiring at Next Shareholders' Meeting at which Directors are Elected

John Harvey                         62             Chairman of the Board of Directors and Chief  Executive  Officer
                                                   of  ARTRA;  Director  since  1968;  Chairman  of  the  Board  of
                                                   Directors,  since  1985,  a  Director  since  1982 and the Chief
                                                   Executive   Officer   from  1990  to  April  1993  of  The  Lori
                                                   Corporation  (fashion  jewelry),  a 64.3%  subsidiary  of  ARTRA
                                                   ("Lori");  a Director of Plastic  Specialties and  Technologies,
                                                   Inc. ("PST") (textiles,  hose and tubing); and Director of Ozite
                                                   Corporation (textiles, hose and tubing).
Peter R. Harvey                     60             President  and Chief  Operating  Officer  and a  Director  since
                                                   1968;  Director of Lori (fashion jewelry);  a Director and Chief
                                                   Operating   Officer  of  SoftNet  Systems,   Inc.   ("SoftNet"),
                                                   formerly The Vader Group Inc. (image  processing and health care
                                                   cost   containment);   Vice   President   and  Director  of  PST
                                                   (textiles,   hose  and   tubing);   and  a  Director   of  Ozite
                                                   Corporation (textiles, hose and tubing).
Gerard M. Kenny                     44             Director  since 1988;  Executive  Vice  President  and  Director
                                                   since   1982  of   Kenny   Construction   Company   since   1982
                                                   (diversified  heavy  construction);  General  Partner of Clinton
                                                   Industries (investments), a limited partnership since 1972.

</TABLE>


         Directors  are  elected  in three  classes  to serve for terms of three
years (or the balance of the term of the class) and until their  successors have
been  elected and  qualified.  The  Articles of  Incorporation  require that six
persons serve on the Board of Directors for staggered terms,  with two directors
elected  annually.  Three  vacancies  presently  exist due to the failure of the
Company to identify persons  qualified and willing to fill these vacancies.  The
Company has been unable to identify candidates due to various factors, including
the severe  financial  difficulties the Company has experienced in recent years,
its inability to obtain directors  liability insurance coverage and the risks of
personal liability that would be faced by any person serving on the Board.

         John Harvey and Peter R. Harvey are  brothers.  Lori is a subsidiary of
ARTRA. SoftNet, Ozite Corporation, and PST are affiliates of ARTRA.



<PAGE>

Information Regarding Executive Officers
<TABLE>
<CAPTION>

         Set forth below is information  concerning  the executive  officers and
other key  employees  of ARTRA who were in  office or  employed  as of April 20,
1995.


Name                        Age                          Position
- ------------------          ---    ------------------------------------------------------------
<S>                         <C>    <C>

John Harvey                 62     Chairman of the Board and Chief Executive Officer of ARTRA
Peter R. Harvey             60     President and Chief Operating Officer of ARTRA
John G. Hamm                56     Executive Vice President of ARTRA
Robert S. Gruber            62     Vice President - Corporate Relations of ARTRA
James D. Doering            58     Vice President, Treasurer and Chief Financial Officer of ARTRA
John Conroy                 50     Vice President - Corporate Administration of ARTRA
Lawrence D. Levin           43     Controller of ARTRA
Edwin G. Rymek              64     Secretary of ARTRA
</TABLE>

         John  Harvey,  Chairman  and Chief  Executive  Officer  of  ARTRA.  See
"Information  Concerning  Directors"  above for a  description  of Mr.  Harvey's
relevant business experience.

         Peter R. Harvey,  President and Chief Operating  Officer of ARTRA.  See
"Information  Concerning  Directors"  above for a  description  of Mr.  Harvey's
relevant business experience.

         John G. Hamm, Executive Vice President of ARTRA. Mr. Hamm has served as
Executive  Vice  President,  since  February 1988, and Vice President - Finance,
from 1975 until 1988,  of ARTRA.  Mr.  Hamm has also served as Vice  President -
Finance, from June 1990 until July 1994, and as a Director, from 1984 until July
1994, of Ozite Corporation. Mr. Hamm also serves as a Director of SoftNet and of
PST.

         Robert S. Gruber,  Vice President - Corporate  Relations of ARTRA.  Mr.
Gruber has served as Vice President - Corporate Relations of ARTRA since 1975.

         James D. Doering, Vice President, Treasurer and Chief Financial Officer
of ARTRA. Mr. Doering has served as Vice President, since 1980, Treasurer, since
1987, Chief Financial Officer, since February 1988, and Controller, from 1980 to
1987,  of  ARTRA.  Mr.  Doering  has also  served  as Vice  President  and Chief
Financial Officer of Lori since February 1988.

         John Conroy,  Vice President - Corporate  Administration  of ARTRA. Mr.
Conroy has served as Vice President - Corporate Administration since March 1990.
Prior  thereto,  he served as Vice  President  -  Corporate  Administration,  of
Sargent-Welch  Scientific  Company from  September  1988 to December  1989.  Mr.
Conroy  previously  served in various risk management  positions with ARTRA from
1978 to September 1988, most recently as Corporate Risk Director.

         Lawrence  D.  Levin,  Controller  of ARTRA.  Mr.  Levin  has  served as
Controller, since 1987, Assistant Treasurer and Assistant Secretary, since 1980,
and Assistant Controller, from 1980 to 1987, of ARTRA. Mr. Levin has also served
as Controller of Lori since December 1989 and as the Assistant  Chief  Financial
Officer of Lori since April 1993.

         Edwin G. Rymek,  Secretary of ARTRA.  Mr. Rymek has served as Secretary
of ARTRA since 1987 and of Lori since 1982.

         Officers  are  appointed  by the boards of  directors  of ARTRA and its
subsidiaries and serve at the pleasure of each respective board.  Except for the
relationship  of Peter R. Harvey (a director  and  executive  officer)  and John
Harvey (a director and executive officer), who are brothers, there are no family
relationships  among the executive officers and/or directors,  nor are there any
arrangements or  understandings  between any officer and another person pursuant
to which he was appointed to office except as may be hereinafter described.


<PAGE>



Item 11.  Executive Compensation

Directors' Compensation

         Directors  who are not  employees of ARTRA  ("Outside  Directors")  are
entitled to receive an annual retainer of $4,000 and $250 per meeting  attended;
however,  no fees were paid to Outside  Directors in 1994. Each Outside Director
who sits on an  established  committee  of ARTRA is entitled to receive $150 per
committee  meeting  attended.  Employees  of ARTRA who also  serve as  directors
receive no additional compensation for such service.

Executive Officer Compensation

         The  following  table  shows  all  compensation  paid by ARTRA  and its
subsidiaries for the fiscal years ended December 29, 1994, December 30, 1993 and
December 31, 1992, to the chief executive officer of ARTRA and each of its other
most  highly  compensated  executive  officers  who were  serving  as  executive
officers  of ARTRA as of  December  29,  1994 and  whose  compensation  exceeded
$100,000 in 1994.


<PAGE>

                                                      SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>


                                                Annual Compensation(1)      Long Term Compensation(1)
                                           -------------------------------  ----------------------
                                                                                 Securities            All
                                                                                Underlying(3)         Other
     Name and                               Salary     Salary                    Options -           Compen-
 Principal Positions          Year           Paid      Deferred(2)    Bonus     No. of Shares        sation
 -------------------          ----         --------    --------       -----     -------------       -------
<S>                           <C>          <C>           <C>           <C>         <C>              <C>
 
   John Harvey,               1994         $126,200      $-0-          -0-         -0-              $2,520(4)
 Chairman and Chief           1993          126,200       -0-          -0-          4,000            2,431(5)
 Executive Officer            1992          126,200       -0-          -0-         -0-               1,792(5)


 James D. Doering,            1994          111,133      22,267        -0-         -0-               3,000(4)
   V.P. and Chief             1993          111,333      22,267        -0-         31,000            3,054(5)
 Financial Officer            1992          137,910       -0-          -0-         -0-               2,124(5)


   John G. Hamm,              1994          111,133      22,267        -0-         -0-               3,000(4)
     Executive                1993           55,667      77,933        -0-         13,200            2,210(5)
   Vice President             1992           71,027      68,800(2)     -0-         -0-               1,176(5)


 Robert S. Gruber,            1994           92,000      18,400        -0-         -0-               3,000(4)
   Vice President             1993             -0-      110,400        -0-         12,000            4,831(5)
Corporate Relations           1992           62,753      55,200        -0-         -0-                 972(5)

                                                   
- ------------------
<FN>

   (1)   No additional annual compensation was paid, no restrictive stock awards
         or stock appreciation  rights were granted,  and no long term incentive
         plan payouts were made to any of the officers listed in the table. Only
         compensation earned in 1994 (irrespective of the year in which paid) is
         considered in determining inclusion in this table.

   (2)   Salaries  are  shown as paid (or  deferred)  in the  year  earned.  Any
         deferred  salaries paid in a year subsequent to the year earned are not
         shown as paid in such  subsequent  year.  All salary  deferrals for the
         years 1991, 1992 and 1993 have been paid as of the date hereof.

   (3)   All of the  options  shown  in  this  column  were  granted  under  the
         Company's  1985 Stock  Option  Plan at an  exercise  price of $3.75 per
         share, being the closing price of the Company's common stock on the New
         York Stock  Exchange  on the date of grant  (January  8,  1993).  These
         options expire January 8, 2003.

   (4)   These amounts represent the Company's contributions to the 401(k) plan.

   (5)   These  amounts  represent  the  closing  price  on the New  York  Stock
         Exchange  of  Common  Stock as of the date the  named  officers  became
         entitled to receive the stock (i.e., December 30, 1993 and December 31,
         1992) pursuant to the ARTRA GROUP Incorporated Employee Stock Ownership
         Plan (the  "ESOP").  Annual  contributions  are made to the ESOP at the
         discretion of the Board of Directors.  Participants' interests in their
         ESOP  account  balances  vest 20% after  completion  of three  years of
         service,  with vesting of 20% per year thereafter until 100% vesting is
         reached  after  seven  years of  service.  The  Board  has  approved  a
         contribution  of 15,000  ARTRA  common  shares  for the plan year ended
         December 31, 1994. As of April 20, 1995, the 15,000 ARTRA common shares
         have  yet  to  be   transferred   to  the  plan  or  allocated  to  its
         participants.

</FN>
</TABLE>


<PAGE>

         No options to  purchase  capital  stock of the  Company or other  stock
appreciation  rights were granted by the Company in 1994 to any other  executive
officers of the Company named in the Summary Compensation Table.

         The following  table sets forth  information  concerning  the aggregate
number and values of options held by the Chief  Executive  Officer and the other
executive officers of the Company listed in the Summary Compensation Table as of
December  29,  1994 which  granted to such  officers in  consideration  of their
services as officers or directors  of the Company.  No options held by the Chief
Executive  Officer or any other executive  officers of the Company listed in the
Summary Compensation Table were exercised in 1994.


                                         AGGREGATED OPTION EXERCISES IN 1994 AND
                                          OPTION VALUES AS OF DECEMBER 29, 1994

<TABLE>
<CAPTION>

                                                                                           Value of Unexercised
                                                                 Number of Unexercised        In-the-Money
                                                                  Options at 12-29-94      Options at 12-29-94
                            Shares Acquired         Value            Exercisable/              Exercisable/
         Name                 on Exercise         Realized         Unexercisable(1)           Unexercisable(2)
- -----------------------     ---------------       --------       ----------------------     ------------------- 
<S>                                   <C>            <C>                 <C>                      <C>     

John Harvey                           0              $   0               80,000/                  $ 5,500/None
                                                                            0

James D. Doering                      0                  0               62,000/                   42,625/None
                                                                            0

John G. Hamm                          0                  0               39,200/                   18,150/None
                                                                            0

Robert S. Gruber                      0                  0               21,000/                   16,500/None
                                                                            0
- -------------------------------
<FN>

(1)      See the notes under "Principal  Shareholders"  for a description of the
         options  (including  exercise  prices) granted to each of the executive
         officers listed in this table.

(2)      The listed  options  were issued at per share  exercise  prices of from
         $3.75 per share to $8.00 per share. The market price of Common Stock as
         of the close of  trading  on  December  29,  1994 on the New York Stock
         Exchange was $5.125 per share.
</FN>
</TABLE>


Compensation Committee Interlocks And Insider Participation

         ARTRA's Board did not consider the cash  compensation  of its executive
officers  in 1993.  The  decisions  concerning  the cash  compensation  of these
executive  officers  (including of John Harvey, the Chairman and Chief Executive
Officer of ARTRA,  who was  compensated  by  Bagcraft  for his  services  as its
Chairman)  were made by Peter R.  Harvey,  the  President  and  Chief  Operating
Officer of ARTRA. Although ARTRA has an Option and Compensation Committee formed
to consider  and award  options  under  ARTRA's  1985 Stock  Option  Plan,  this
committee  did not meet in 1993.  In 1993,  the ARTRA Board  awarded  options to
executive  officers  under the 1985 Stock  Option Plan.  Peter R.  Harvey,  John
Harvey and Gerard  Kenny  executed  the  consent  approving  these  awards.  The
decision was discretionary and not based on objective  criteria.  This and other
actions of the Board were  subsequently  ratified by such persons and by Maynard
K.  Louis,  who did not serve on the Board when the  awards  were  granted.  See
"Transactions   with  Management  and  Others"  for  a  description  of  various
transactions and relationships between the Company and each of these directors.

<PAGE>


Item 12.  Security Ownership of Certain Beneficial Owners and Management

Securities Ownership of Certain Beneficial Owners

         As of April 20,  1995,  there  were  6,747,420  shares of Common  Stock
issued and outstanding. The following table sets forth the number and percentage
of Common  Stock known by  management  of ARTRA to be  beneficially  owned as of
April 20, 1995 by (i) all stockholders known by management of ARTRA to own 5% or
more of ARTRA's Common Stock, (ii) all directors of ARTRA,  (iii) each executive
officer  included  in the  Summary  Compensation  Table and (iv) all  directors,
executive  officers  and other key  employees  of ARTRA as a group (9  persons).
Unless  stated  otherwise,  each  person  so named  exercises  sole  voting  and
investment power as to the shares of Common Stock so indicated.

         As of April 20,  1995,  3,750  shares of  Series A  Preferred  Stock of
ARTRA, par value $1,000 per share,  were issued and  outstanding.  Each share of
this Series A Preferred  Stock entitles the holder to one vote on an equal basis
with each share of Common Stock. Accordingly,  for purposes of showing ownership
of Common Stock in the table below,  the Series A Preferred  Stock is treated as
Common Stock.

<TABLE>
<CAPTION>

                   Name of                          Number of Shares               Percent of Shares
               Beneficial Owner                    Beneficially Owned              Beneficially Owned
- ------------------------------------              --------------------            -------------------
<S>                                                         <C>                           <C>

Plastic Specialties and
Technologies, Inc.(1)                                         774,227                     11.5%

Research Center of Kabbalah(2)                                474,550                      6.9%

Peter R. Harvey(1)(4)                                         439,789                      6.4%

John Harvey(1)(5)                                             227,565                      3.3%

Gerard M. Kenny(6)                                            167,064                      2.5%

John G. Hamm(1)(7)                                             44,555                      0.7%

Robert S. Gruber(8)                                            39,576                      0.6%
 
James D. Doering(9)                                            66,620                      1.0%

All directors and
  executive officers as a 
  group (9 persons)(3)                                      1,103,497                     15.2%


- ---------------------------------
<FN>
 

(1)      The address of Plastic  Specialties and  Technologies,  Inc. ("PST") is
         101  Railroad  Avenue,   Ridgefield,   New  Jersey  07657.  The  shares
         beneficially owned by PST consist of 772,000 shares of Common Stock and
         2,227 shares of Series A Preferred Stock, all of which shares are owned
         directly by PST,  which is  83%-owned by Ozite  Corporation  ("Ozite").
         Peter R.  Harvey,  John  Harvey and John G. Hamm own  22.8%,  14.8% and
         12.2%, respectively, of Ozite and Peter R. Harvey and John Harvey serve
         as officers or directors of Ozite and/or PST. If Peter R. Harvey,  John
         Harvey  and/or  John G. Hamm were  deemed to  control  PST by reason of
         their   collective   stock  ownership  and  their  influence  over  the
         management and policies of PST, their respective  beneficial  ownership
         of ARTRA Common Stock would,  attributing  full ownership to all of the
         shares and Series A Preferred  Stock  owned by PST to each of them,  be
         1,214,016  shares (17.7%),  1,001,792 shares (14.7%) and 818,782 shares
         (12.1%),  respectively, and the directors and officers as a group would
         be deemed to beneficially own 1,877,724 shares (25.9%).
<PAGE>

(2)      The  address  of  Research  Center of  Kabbalah  ("RCK"),  a  religious
         organization, is 83-84 115th Street, Richmond Hill, New York 11418. The
         shares  beneficially  owned by RCK consist of 388,300  shares of Common
         Stock owned  directly,  21,250 shares of Common Stock  issuable under a
         warrant  which expires  October 29, 1998 at an exercise  price of $6.00
         per share,  and 65,000 shares of Common Stock  issuable under a warrant
         which  expires  December  31,  1998 at an  exercise  price of $7.00 per
         share.

(3)      Includes  executive  officers  and  directors  of ARTRA in office as of
         April 20,  1995.  If all of the shares of Common Stock owned by PST and
         the Series A Preferred Stock of ARTRA owned by Ozite (see note 1 above)
         are included, the executive officers and directors as a group would own
         2,049,750 shares (30.4%).

(4)      Mr.  Peter  R.  Harvey's   business  address  is  500  Central  Avenue,
         Northfield, Illinois 60093. The shares beneficially owned by Mr. Harvey
         consist of 302,248  shares held  directly by him (of which  300,725 are
         Common Stock and 1,523 are shares of Series A Preferred Stock),  23,001
         shares held as trustee for the benefit of his nieces,  800 shares owned
         by his wife and children,  547 shares held in his ESOP  account,  7,193
         shares  held  in  his  individual  retirement  account,  20,000  shares
         issuable  under  an  option  which  expires  September  19,  2001 at an
         exercise  price of $8.00 per share,  15,000  shares  issuable  under an
         option which expires  January 8, 2003 at an exercise price of $3.75 per
         share, and 71,000 shares owned by Industrial Communication Company, the
         wholly-owned  subsidiary  of ICC Acq.,  Inc.,  of which Mr. Harvey is a
         director  and owner of 25% of its  shares,  with  voting  power over an
         additional  25% of its shares.  See note 1 above for a  description  of
         shares that may be deemed to be owned  indirectly by Mr. Harvey through
         PST and Ozite.

(5)      Mr. John Harvey's  business address is 500 Central Avenue,  Northfield,
         Illinois 60093.  The shares of Common Stock  beneficially  owned by Mr.
         Harvey  consist of 123,100 shares held directly by him, 519 shares held
         in his ESOP  account,  5,746 shares held in his  individual  retirement
         account,  75,000 shares issuable under an option which expires December
         19, 2000 at an exercise price of $5.75 per share, 1,000 shares issuable
         under an option which expires  September 19, 2001 at an exercise  price
         of $8.00 per share, 4,000 shares issuable under an option which expires
         January 8, 2003 at an exercise  price of $3.75 per share,  4,700 shares
         issuable  under a  warrant  which  expires,  February  1,  1999,  at an
         exercise  price of $5.50  per  share,  1,500  shares  issuable  under a
         warrant which expires March 30, 1999 at an exercise price of $5.625 per
         share and 12,000 shares  issuable  under  warrants which expire January
         20, 2000 at an exercise price of $4.75 per share.  See note 1 above for
         a  description  of shares that may be deemed to be owned  indirectly by
         Mr. Harvey through PST and Ozite.

(6)      The shares  beneficially  owned by Mr. Kenny consist of 2,000 shares of
         ARTRA's  common stock issuable upon the exercise of an option at $10.00
         per  share  expiring  November  28,  1996,  75,652  shares  held by (or
         issuable to) Kenny Construction Company,  14,411 shares held by Clinton
         Industries,  and 75,001 shares issuable under a warrant held by Clinton
         Industries  which  expires  November  10, 1997 at an exercise  price of
         $5.00 per share. Kenny  Construction  Company holds put options to sell
         to ARTRA (i)  23,004  shares of Common  Stock for a put price of $56.76
         per share plus an amount equal to 15% per annum for each day from March
         1, 1991 to the date of  payment  by ARTRA,  which  put  option  expires
         December  31,  1997,  and (ii) 49,980  shares of Common Stock for a put
         price of $15.00 per  share,  subject  to an annual  increase  of $2.25,
         which  put  option  is  exercisable  on the  later of the date  ARTRA's
         obligations  to Bank of America  are repaid or the  $2,500,000  note of
         ARTRA payable to Kenny Construction  Company (as described in paragraph
         5 under "Transactions with Management and Others." If the stock subject
         to the put is sold at a price  less  than the put  price,  the  Company
         would  remain  liable to the  holder of the put for the amount by which
         the put price of the shares  exceeds the selling  price.  Mr.  Kenny is
         Executive Vice  President,  Director and beneficial  owner of 16.66% of
         the issued and outstanding stock of Kenny Construction  Company.  He is
         also the  General  Partner  and a 14.28%  beneficial  owner of  Clinton
         Industries,  a  limited  partnership.  See  paragraphs  4 and  5  under
         "Transactions with Management and Others."

(7)      The shares of Common  Stock  beneficially  owned by Mr. Hamm consist of
         3,107 shares held directly by him, 932 shares held in his ESOP account,
         464 shares held in his  individual  retirement  account,  25,000 shares
         issuable under an option which expires December 19, 2000 at an exercise
<PAGE>

         price of $5.75 per share,  1,000 shares  issuable under an option which
         expires September 19, 2001 at an exercise price of $8.00 per share, and
         13,200 shares issuable under an option which expires January 8, 2003 at
         an  exercise  price  of  $3.75  per  share.  See  note  1  above  for a
         description of shares that may be deemed to be owned  indirectly by Mr.
         Hamm through PST and Ozite.


(8)      The shares of Common Stock  beneficially owned by Mr. Gruber consist of
         17,317  shares  held  directly  by him,  383  shares  held in his  ESOP
         account,  1,221 shares held in his individual retirement account, 8,000
         shares  issuable under an option which expires  December 19, 2000 at an
         exercise  price of $5.75 per  share,  1,000  shares  issuable  under an
         option which expires  September 19, 2001 at an exercise  price of $8.00
         per share,  and 12,000  shares  issuable  under an option which expires
         January 8, 2003 at an exercise price of $3.75 per share.

(9)      The shares of Common Stock beneficially owned by Mr. Doering consist of
         2,000 shares held by him in joint  tenancy with his wife,  1,213 shares
         held  in  his  ESOP  account,  1,118  shares  held  in  his  individual
         retirement  account,  25,000  shares  issuable  under an  option  which
         expires  December  19,  2000 at an  exercise  price of $5.75 per share,
         6,000 shares issuable under an option which expires  September 19, 2001
         at an exercise  price of $8.00 per share,  and 31,000  shares  issuable
         under an option which expires  January 8, 2003 at an exercise  price of
         $3.75 per share.
</FN>
</TABLE>

Item 13.  Certain Relationships And Related Transactions

               On  August  5,  1982,  ARTRA  acquired  36.6% of the  issued  and
outstanding  common shares of Lori plus  preferred  shares for  $2,250,000  (the
"Investment").  The Investment was carried at cost plus equity in  undistributed
earnings  (loss) since the date of  acquisition,  less the  amortization  over a
25-year period of the excess of cost over the equity in Lori's net assets at the
date of acquisition.

        On  February  8,  1985,  Lori  acquired  in an  arms-length  transaction
negotiated by management of ARTRA, through a wholly-owned subsidiary, all of the
issued and outstanding  shares of New  Dimensions,  a creator and distributor of
fashion jewelry, for consideration of $28,500,000 including cash of $21,850,000,
a $3,000,000  9% promissory  note due February 8, 1990 (which was  prepaid),  an
earnout equal to 20% of New  Dimension's  pre-tax  earnings  during the calendar
years 1985 through 1989 and 200,000  shares of Common Stock  delivered  from its
treasury with an agreed fair market value of $20.00 per share or $4,000,000. The
delivery of ARTRA's  shares to the former  shareholders  of New  Dimensions  was
approved by ARTRA's shareholders at their July 18, 1985 annual meeting.

        In exchange for the 200,000  shares of its Common Stock,  ARTRA received
534,878 shares of Lori's common stock (thereby  increasing its ownership of Lori
from  36.6% to 55.9%)  and  10,000  shares of Lori's  Series B  Preferred  Stock
convertible into additional Lori common shares. In exchange for the cancellation
of advances by ARTRA to Lori,  amounting to  $6,457,000  as of January 31, 1985,
and an additional cash advance by ARTRA to Lori of $7,300,000,  which latter sum
was used by Lori to acquire New Dimensions, ARTRA received 10,000 shares of Lori
Series A Preferred Stock.

        On August 13, 1985, Lori stockholders  approved a 1-for-30 reverse split
of all  authorized,  issued,  outstanding  and reserved  shares of common stock,
increased  the number of resulting  authorized  shares of Lori common stock from
1,833,333  to 6 million  and  approved a 1-for-10  reverse  split of all issued,
outstanding and reserved shares of its preferred stock. ARTRA then converted its
shares of Lori Series B  Preferred  Stock into  1,099,108  shares of Lori common
stock, thereby increasing its ownership interest in Lori to 72.8%.

        In December  1985 ARTRA  purchased  50,000 Lori  common  stock  purchase
warrants (14.4% of the 347,600  outstanding  common stock purchase warrants) for
$391,000.  The warrants were issued in  conjunction  with a 1985 New  Dimensions
bond offering.  The warrants,  as adjusted,  provided for the purchase of 75,000
Lori shares at $12.00 per share and were  convertible  into Lori common stock at
the rate of 0.375  shares of Lori common  stock for each  warrant.  In September
1990 ARTRA  converted  such  warrants and received  18,750 shares of Lori common
stock therefor.  Although the conversion of these warrants  increased the number
of shares of Lori common  stock owned by ARTRA,  the  conversion  of warrants by
others at the same time  resulted  in a decrease  of ARTRA's  ownership  of Lori
common stock from 68% to 66.7%. As of March 30, 1995,  ARTRA's ownership of Lori
common stock was 64.3%.
<PAGE>

        ARTRA and a  wholly-owned  subsidiary  of ARTRA  held notes from Lori at
December 31, 1992 in the amount of $16,025,000 which were due April 1, 1994. Due
to the limited ability of Lori to receive funds from its operating subsidiaries,
effective  July 1, 1989 ARTRA placed an indefinite  moratorium on the accrual of
interest on its Lori note and  declaration  of dividends  on its Lori  preferred
stock.  The  terms  of the  notes  provided  that  the  maturity  date  would be
automatically  extended at the end of each quarter to fifteen  months beyond the
current quarter until ARTRA provides written notice to establish the due date at
such fifteen month maturity.  A bank lender is the pledgee of the Lori preferred
stock owned of record by ARTRA,  as collateral for ARTRA and New Dimensions bank
loans.  In February 1993,  ARTRA and this  wholly-owned  subsidiary  transferred
these notes to Lori's capital account.

        During 1994, ARTRA made net advances to Lori of $2,531,000. The advances
consisted of a $1,850,000  short-term note with interest at 10%, the proceeds of
which were used to fund the  $1,900,000  cash  payment to a bank in  conjunction
with  a  debt  settlement   agreement  with  Lori's  bank  lender,  and  certain
non-interest bearing advances used to fund Lori working capital requirements.

        Effective December 29, 1994, ARTRA exchanged $2,242,000 of its notes and
advances for additional Lori Series C preferred  stock.  Additionally,  the debt
settlement  agreement  required ARTRA to contribute cash of $1,500,000 and ARTRA
common stock with a fair market value of $2,500,000 to Lori's capital account.

        In November 1989, ARTRA borrowed $500,000 from John Harvey, the Chairman
and Chief Executive  Officer of ARTRA, on a short-term basis at an interest rate
of 15% per annum.  This loan was repaid in April 1990.  In July and August 1990,
ARTRA borrowed an additional  $490,000 from John Harvey bearing  interest at the
per annum rate of 15% through  December 1990 and,  thereafter,  at the per annum
rate of 13%. In 1991,  $123,000 in principal amount of this loan was repaid. The
balance was repaid in 1992. In 1992,  ARTRA borrowed $42,000 from John Harvey at
an  interest  rate of 8.35%.  In  February  and March  1994,  ARTRA  borrowed an
additional  $20,000 at 8.25%.  In  September  1994,  $27,000 of this  amount was
repaid.

        In January 1995, ARTRA borrowed an additional  $100,000 from John Harvey
on a  short-term  basis  evidenced  by a note due  March  20,  1995 and  bearing
interest at 8% per annum. In  consideration  of this additional  advance,  ARTRA
granted to John Harvey a warrant to purchase  6,000 shares of ARTRA common stock
at an  exercise  price of $4.75 per share  (being the  closing  price of ARTRA's
common  stock  on the  New  York  Stock  Exchange  on the  date of  grant)  plus
additional  warrants to purchase  200 shares of ARTRA  common stock for each day
that the note remains  unpaid  after its maturity at an exercise  price of $4.75
per share.

        As  of  the  date  hereof,   $142,000  plus  accrued   interest  remains
outstanding under loans due John Harvey.

        Since  1990,  ARTRA  has made net  advances  to  Peter  R.  Harvey,  the
President  and Chief  Operating  Officer  of ARTRA.  The  outstanding  principal
balance of these  advances bears interest at the prime rate plus 2%. In addition
to the advances made directly by ARTRA, certain advances were previously made to
Mr. Harvey by Bagcraft  prior to its  acquisition  by ARTRA in 1990. In December
1993  $1,894,000,  representing  the total amount of these  advances  (including
accrued interest of $120,000), were transferred from ARTRA's Bagcraft subsidiary
to ARTRA as a dividend (a portion of which interest has been reserved on ARTRA's
books).  The aggregate  amount of the ARTRA and Bagcraft  advances to Mr. Harvey
which  remained  outstanding  as of March  30,  1995 was  $3,392,000  (including
$491,000 of accrued interest).  Commencing January 1, 1993 to date,  interest on
these advances to Peter R. Harvey has been accrued and fully reserved.

        Peter R. Harvey has not received other than nominal compensation for his
services  as an officer or director  of ARTRA or any of its  subsidiaries  since
October 1990. Additionally, Mr. Harvey has agreed not to accept any compensation
for his  services as an officer or director of ARTRA or any of its  subsidiaries
until his obligations to ARTRA, described above, are fully satisfied.
                                 
<PAGE>


        Under the BCL, ARTRA (a  Pennsylvania  corporation) is permitted to make
loans to officers and directors. Further, under the Delaware General Corporation
Law, Fill-Mor (a Delaware  corporation) is permitted to make loans to an officer
(including  any  officer  who is also a  director,  as in the  case of  Peter R.
Harvey),  whenever, in the judgment of the directors, the loan can reasonably be
expected to benefit Fill-Mor.

        At the September 19, 1991 meeting, ARTRA's Board of Directors discussed,
but did not act on a proposal to ratify the  advances  made by ARTRA to Peter R.
Harvey.  The 1992  advances  made by ARTRA to Peter R. Harvey  were  ratified by
ARTRA's Board of Directors. In the case of the loan made by Fill-Mor to Peter R.
Harvey,  the Board of Directors of Fill-Mor approved the borrowing of funds from
Fill-Mor's  bank loan  agreement,  a condition of which was the application of a
portion of the proceeds  thereof to the payment of certain of Peter R.  Harvey's
loan obligations to the bank.  However,  the resolutions did not acknowledge the
use of such  proceeds  for this purpose and the formal loan  documents  with the
bank did not set forth this  condition  (though in fact,  the  proceeds  were so
applied by the bank).

        As partial  collateral for amounts due from Peter R. Harvey, the Company
has  received  the pledge of 1,523 shares of ARTRA  redeemable  preferred  stock
(have a  liquidation  value  of  $1,523,000  plus  unpaid,  cumulated  dividends
thereon)  which are owned by Mr. Harvey.  In addition,  Mr. Harvey has pledged a
25%  interest in  Industrial  Communication  Company (a private  company).  Such
interest is valued by Mr. Harvey at $800,000 to $1,000,000  (but no  independent
valuation has been made).

        In May 1991, a  wholly-owned  subsidiary of ARTRA made advances to Peter
R. Harvey.  The advances,  made out of a portion of the proceeds of a short-term
bank loan bear interest at the prime rate plus 2%. The amount of these  advances
at March 30,  1995 was  $1,540,000  (including  $398,000  of accrued  interest).
Commencing  January  1, 1993 to date,  interest  on these  advances  to Peter R.
Harvey has been accrued and fully reserved.

        During 1986 and through August 10, 1988,  ARTRA entered into a series of
short-term borrowing  agreements with private investors.  Each agreement granted
an investor a put option,  principally  due in one year,  that required ARTRA to
repurchase  any or all of the  shares  sold  at a 15% to 20%  premium  during  a
specified put period.  Kenny  Construction  Company ("Kenny") entered into a put
option  agreement  with ARTRA,  which has been extended from time to time,  most
recently on November 11, 1992. At such time ARTRA and Kenny agreed to extend the
put option  whereby  Kenny  received the right to sell to ARTRA 23,004 shares of
ARTRA  common  stock at a put  price of $56.76  plus an amount  equal to 15% per
annum for each day from  March 1, 1991 to the date of  payment  by ARTRA,  which
option expires December 31, 1997.

        Gerard M.  Kenny,  a  director  of  ARTRA,  is the  President  and Chief
Executive  Officer  and a  director  of Kenny and  beneficially  owns  16.66% of
Kenny's capital stock.

        On March  21,  1989,  ARTRA  borrowed  $5,000,000  from its bank  lender
evidenced by a  promissory  note.  This note has been amended and extended  from
time to time.  The borrowings on this note were  collateralized  by, among other
things,  a $2,500,000  personal  guaranty by Kenny (see  paragraph 4 above for a
discussion of Mr. Gerard M. Kenny's  relationship  with Kenny).  Kenny  received
compensation in the form of 833 shares of ARTRA common stock for each month that
its  guaranty   remained   outstanding   through  March  31,  1994.  Under  this
arrangement,  Kenny  received (or became  entitled to receive)  49,980 shares of
ARTRA common stock as compensation for its guaranty.

<PAGE>

        On March 31, 1994,  ARTRA entered into a series of  agreements  with its
bank lender and with Kenny. Under the terms of these agreements, Kenny purchased
a  $2,500,000  participation  in the  $5,000,000  note  payable to ARTRA's  bank
lender.  Kenny's  participation  is evidenced  by a  $2,500,000  ARTRA note (the
"Kenny  Note")  bearing  interest at the prime rate.  As  consideration  for its
purchase  of this  participation,  the  bank  lender  released  Kenny  from  its
$2,500,000 loan guaranty. As additional consideration,  Kenny received an option
to put back to ARTRA  the  49,980  shares  of ARTRA  common  stock  received  as
compensation  for its  $2,500,000  ARTRA loan  guaranty at a price of $15.00 per
share  (subject to  increase at the rate of $2.25 per share per annum).  The put
option is  exercisable  on the later of the date the Kenny Note is repaid or the
date ARTRA's obligations to its bank lender are fully paid.

        On September 27, 1989,  ARTRA  received a proposal to purchase  Bagcraft
from Sage Group, Inc.  ("Sage"),  a privately-owned  corporation.  On August 24,
1990, Sage was merged with and into Ozite.  Peter R. Harvey,  ARTRA's President,
and John Harvey, ARTRA's Chairman of the Board of Directors,  were the principal
shareholders  of Sage and are the  principal  shareholders  of Ozite.  Effective
March 3, 1990, a wholly-owned  subsidiary of ARTRA  indirectly  acquired 100% of
the issued and outstanding  common shares of BCA Holdings,  Inc.,  which in turn
owns 100% of the stock of  Bagcraft,  for  total  consideration  which was to be
issued to Sage,  upon  approval of ARTRA's  shareholders,  consisting of 772,000
shares of ARTRA's  common  stock and 3,750 shares of its $1,000 par value junior
non-convertible  payment-in-kind  preferred stock bearing a dividend rate of 6%.
The issuance of the Common Stock and ARTRA preferred stock as consideration  was
approved  by  ARTRA's  shareholders  at the  December  1990  annual  meeting  of
shareholders.  Upon the August  1990  merger of Sage into  Ozite,  Ozite  became
entitled to receive this  consideration,  which right Ozite  assigned to its PST
subsidiary.

        Ozite  subsequently  repurchased  the 3,750 shares of preferred stock in
February 1992, 1,523 of which shares were subsequently  assigned to Peter Harvey
in  consideration  of his discharge of certain  indebtedness  of Ozite to him in
April 1992. As described in paragraph 4 above,  Mr.  Harvey  pledged these 1,523
shares to ARTRA.  The $4,750,000 price of the 772,000 shares of common stock and
3,750 shares of preferred stock was equal to the fair market value thereof as of
January 31, 1991 as determined by an independent investment banking firm engaged
by PST to make such determination.

        Peter  R.  Harvey,   John  Harvey  and  John  G.  Hamm  are  significant
stockholders  of PST's parent,  Ozite, as described in note 1 to the table under
"Principal  Shareholders." Peter R. Harvey is a Vice President and a director of
PST and a director of Ozite. John Harvey is a director of PST and Ozite. John G.
Hamm was the Vice President - Finance and a director of Ozite until July 1994.

        In 1987, the predecessor of PST acquired a $5,000,000  subordinated note
bearing  interest  at a rate of 13.5%  per annum and  50,000  shares of  13-1/2%
cumulative redeemable preferred stock of Bagcraft with a liquidation  preference
of $5,000,000 million with $10,000,000 million of the net proceeds of its public
offering in May 1987. Interest accrued on the note at a rate of 13.5% per annum.
No cash  payments  of interest  were made during the term of the note.  However,
during  1992,  per  agreement  with PST,  the  interest  payments  for 1992 were
remitted to ARTRA and the  noteholder  received  preferred  stock of  Bagcraft's
parent,  BCA Holdings,  Inc. ("BCA") having a liquidation value of $675,000.  In
December 1993, the principal outstanding under this note was repaid in full from
proceeds of Bagcraft's new credit facility with an institutional  lender and PST
accepted additional BCA preferred stock having a liquidation value of $3,000,000
in satisfaction of all unpaid accrued interest thereon.

        The  BCA  preferred  stock  provides  a  $1,000  per  share  liquidation
preference and annual  cumulative cash dividends of $60.00 per share when and if
declared by BCA. The Bagcraft redeemable  preferred stock remains outstanding as
of the date hereof.  As of March 30,  1995,  dividends in the amount of $302,000
had cumulated thereon.

        During  1993  The  Research  Center  of  Kabbalah   ("RCK"),   religious
organization  which held  approximately 6% of ARTRA's  outstanding  Common Stock
(including  the stock  issuable  upon the  exercise of warrants) as of March 30,
1995, made certain  short-term  loans to the Company of which  $2,000,000,  with
interest at 10%, was outstanding at December 31, 1993. In January 1994, RCK made
an additional  $1,000,000  short-term loan to the Company at an interest rate of
10%. The proceeds of these loans were used to pay down various ARTRA  short-term
loans and other debt  obligations.  These loans became due March 31,  1994,  but
have not been repaid.  As additional  compensation  for making these loans,  RCK
received  warrants to purchase an aggregate of 86,250  shares of Common Stock at
prices  ranging  from  $6.00 to $7.00 per share  based upon the market of Common
Stock at the date of issuance.  The warrants  expire five years from the date of
issuance. See Note 2 to the table under "Principal Shareholders."
<PAGE>

                                   SIGNATURE


         The  undersigned  Registrant  hereby files this  amendment to it Annual
Report on Form 10-K for the fiscal year ended  December  29, 1994 to include the
information required by Part III thereto.

         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
the  Registrant  has duly  caused  this report to be signed on its behalf by the
undersigned thereunder duly authorized.




                                                 ARTRA GROUP INCORPORATED
                                                 ------------------------
                                                       Registrant







Dated:   April 25, 1995                              JAMES D. DOERING
                                                 ------------------------
                                                     JAMES D. DOERING
                                                 Vice President/Treasurer
                                                  Chief Financial Officer





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