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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
HANOVER DIRECT, INC.
(Exact Name of Registrant as Specified in Its Charter)
DELAWARE 13-0853260
(State or Other Jurisdiction of (I.R.S. Employer Identification
Incorporation or Organization) Number)
1500 HARBOR BOULEVARD
WEEHAWKEN, NEW JERSEY 07087
(Address of Principal Executive Offices) (Zip Code)
STOCK OPTION AGREEMENT WITH RALPH DESTINO
STOCK OPTION AGREEMENT WITH ELIZABETH VALK LONG
STOCK OPTION AGREEMENT WITH ROBERT F. WRIGHT
(Full Title of the Plan)
MONTE E. WETZLER, ESQ.
BROWN RAYSMAN MILLSTEIN FELDER & STEINER LLP
CITYPLACE 1
185 ASYLUM STREET
HARTFORD, CONNECTICUT 01603
(860) 275-6400
(Name and Address of Agent For Service)
Telephone Number, Including Area Code, of Agent For Service
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CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
PROPOSED PROPOSED
MAXIMUM MAXIMUM
TITLE OF SECURITIES TO AMOUNT TO BE PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
BE REGISTERED REGISTERED OFFERING PRICE PER SHARE(1) AGGREGATE OFFERING PRICE(1) REGISTRATION FEE
<S> <C> <C> <C> <C>
COMMON STOCK, $.66 2/3 15,000 $2.53 $37,950 $10.55
PAR VALUE
</TABLE>
(1) THE PRICE IS ESTIMATED PURSUANT TO RULE 457(h) OF THE SECURITIES ACT OF
1933, AS AMENDED (THE "ACT"), SOLELY FOR THE PURPOSE OF CALCULATING THE
REGISTRATION FEE AND IS THE PRODUCT RESULTING FROM MULTIPLYING 15,000,
THE NUMBER OF ADDITIONAL SHARES REGISTERED BY THIS REGISTRATION
STATEMENT AS TO WHICH OPTIONS HAVE BEEN GRANTED UNDER THE STOCK OPTION
AGREEMENT WITH RALPH DESTINO, THE STOCK OPTION AGREEMENT WITH ELIZABETH
VALK LONG AND THE STOCK OPTION AGREEMENT WITH ROBERT F. WRIGHT, BY
$2.53, THE AVERAGE OF THE HIGH AND LOW PRICES OF HANOVER DIRECT, INC.
COMMON STOCK AS REPORTED ON THE AMERICAN STOCK EXCHANGE ON MAY 28,
1999.
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
In accordance with the rules and regulations of the Securities and
Exchange Commission, the documents containing the information called for in Part
I of Form S-8 will be sent or given to individuals who participate in our stock
Option Agreement with Ralph Destino, our Stock Option Agreement with Elizabeth
Valk Long and our Stock Option Agreement with Robert F. Wright. Such information
is not being filed with or included in this Form S-8.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents filed by Hanover Direct, Inc. (the "Company")
are incorporated herein by reference:
(i) The Company's Annual Report on Form 10-K for the
fiscal year ended December 26, 1998.
(ii) The Company's Amendment to the Annual Report on Form
10-K/A for the fiscal year ended December 26, 1998.
{iii) The Company's Quarterly Report on Form 10-Q for the
quarter ended March 27, 1999.
(iv) The description of the Company's common stock
contained in the latest prospectus filed pursuant to
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Rule 424(b) under the Act that contains audited
financial statements for the Company's latest fiscal
year for which such statements have been filed.
(v) The Company's Proxy Statement dated April 16, 1999.
In addition to the foregoing, all documents subsequently filed by the
Company pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Securities
Exchange Act of 1934, prior to the filing of a post-effective amendment
indicating that all of the securities offered hereunder have been sold or
deregistering all securities then remaining unsold, shall be deemed to be
incorporated by reference in this Registration Statement and to be part hereof
from the date of filing of such documents. Any statement contained in a document
incorporated by reference in this Registration Statement shall be deemed to be
modified or superseded for purposes of this Registration Statement to the extent
that a statement contained herein or in any subsequently filed document that is
also incorporated by reference herein modifies or supersedes such statement. Any
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES
Incorporated by reference to the description of the Common Stock of the
Company contained in the 424(b) Prospectus described above.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
The validity of the shares being offered hereby and certain other legal
matters in connection with the offering of such securities will be passed upon
for the Company by Brown Raysman Millstein Felder & Steiner LLP, securities
counsel to the Company.
Monte E. Wetzler, a partner in Brown Raysman Millstein Felder & Steiner
LLP, the Company's counsel, is the Secretary of the Company.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Except as prohibited by Section 145 of the Delaware General Corporation
Law, every director and officer of the Company shall be entitled as a matter of
right to be indemnified by the Company against reasonable expenses and any
liability paid or incurred by such person in connection with any actual or
threatened claim, action, suit or proceeding, civil, criminal, administrative,
investigative or other, whether brought by or in the right of the Company or
otherwise, in which he or she may be involved, as a party or otherwise, by
reason of such person being or having been a director or officer of the Company
or by reason of the fact that such person is or was serving at the request of
the Company as a director, officer, employee, fiduciary or other representative
of the Company or another corporation, partnership, joint venture, trust,
employee benefit plan or other entity (such claim, action, suit or proceeding
hereinafter being referred to as an "action"); provided, however, that no such
right of indemnification shall exist with respect to an action brought by a
director or officer against the Company other than in a suit for indemnification
as provided hereunder. Such indemnification shall include the right to have
expenses incurred by such person in connection with an action paid in advance by
the Company prior
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to final disposition of such action, subject to such conditions as may be
prescribed by law. As used herein, "expense" shall include, among other things,
fees and expenses of counsel selected by such person, and "liability" shall
include amounts of judgments, excise taxes, fines and penalties, and amounts
paid in settlement.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not Applicable.
ITEM 8. EXHIBITS
4.1 Stock Option Agreement, dated February 9, 1996, between the
Company and Ralph Destino
4.2 Stock Option Agreement, dated February 9, 1996, between the
Company and Elizabeth Valk Long
4.3 Stock Option Agreement, dated February 9, 1996, between the
Company and Robert F. Wright
5 Opinion of Brown Raysman Millstein Felder & Steiner LLP
23.1 Consent of Arthur Andersen LLP
23.2 Consent of Brown Raysman Millstein Felder & Steiner LLP
(included in Exhibit 5)
24 Power of Attorney (included in signature page)
ITEM 9. UNDERTAKINGS
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales
are being made, a post-effective amendment to this
registration statement:
(i) To include any prospectus required by
section 10(a)(3) of the Securities Act of
1933;
(ii) To reflect in the prospectus any facts or
events arising after the effective date of
the registration statement (or the most
recent post-effective amendment thereof)
which, individually or together, represent a
fundamental change in the information in the
registration statement. Notwithstanding the
foregoing, any increase or decrease in
volume of securities offered (if the total
dollar value of securities offered would not
exceed that which was registered) and any
deviation from the low or high end of the
estimated maximum offering range may be
reflected in the form of prospectus filed
with
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the Commission pursuant to Rule 424(b) if,
in the aggregate, the changes in volume and
price represent no more than a 20 percent
change in the maximum aggregate offering
price set forth in the "Calculation of
Registration Fee" table in the effective
registration statement; and
(iii) To include any material information with
respect to the plan of distribution not
previously disclosed in the registration
statement or any material change to such
information in the registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) of this section
do not apply if the registration statement is on Form S-3, Form S-8 or Form F-3
and the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by the registrant
pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934
that are incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, each such
post-effective amendment shall be deemed to be a new
registration statement relating to the securities
offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being
registered which remain unsold at the termination of
the offering.
(b) The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act
of 1933, each filing of the registrant's annual report
pursuant to section 13(a) or section 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section
15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in the registration statement shall
be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona
fide offering thereof.
(h) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers
and controlling persons of the registrant pursuant to the
foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Securities Act of 1933 and is, therefore,
unenforceable. In the event a claim for
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indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a
director, officer, or controlling person in the successful
defense of any action, suit or proceeding) is asserted by such
director, officer, or controlling person of the registrant in
connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
the Securities Act of 1933 and will be governed by the final
adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in Weehawken, New Jersey on the 4th day of June, 1999.
HANOVER DIRECT, INC.
By: /s/ Ralph Bulle
______________________________
Name: Ralph Bulle
Title: Senior Vice President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature
appears below constitutes and appoints Larry Svoboda and Ralph Bulle, or either
of them, the undersigned's true and lawful attorney-in-fact and agent with full
power of substitution and resubstitution, for him or her and in his or her name,
place and stead, in any and all capacities, to sign any and all amendments
(including post-effective amendments) to this Registration Statement, and to
file the same with all exhibits thereto, and all documents in connection
therewith, with the Securities and Exchange Commission, granting said
attorney-in-fact and agent, and each of them, full power and authority to do and
perform each and every act and thing requisite and necessary to be done in and
about the premises, as fully to all intents and purposes as the undersigned
might or could do in person, hereby ratifying and confirming all that said
attorney-in-fact and agent or either of them, or their or his or her substitute
or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:
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SIGNATURE TITLE DATE
/s/ Alan G. Quasha Chairman of the Board, Director June 4, 1999
- ------------------------
Alan G. Quasha
/s/ Rakesh K. Kaul President, Chief Executive Officer, June 4, 1999
- ------------------------ and Director
Rakesh K. Kaul
/s/ Larry J. Svoboda Chief Financial Officer June 4, 1999
- ------------------------
Larry J. Svoboda
/s/ Ralph Destino Director June 4, 1999
- ------------------------
Ralph Destino
- ------------------------ Director June --, 1999
J. David Hakman
/s/ June R. Klein Director June 4, 1999
- ------------------------
June R. Klein
/s/ Kenneth Krushel Director June 4, 1999
- ------------------------
Kenneth Krushel
- ------------------------ Director June --, 1999
Theodore H. Kruttschnitt
- ------------------------ Director June --, 1999
Shailesh J. Mehta
- ------------------------ Director June --, 1999
Jan P. du Plessis
- ----------------------- Director June --, 1999
Howard M.S. Tanner
/s/ Robert F. Wright Director June 4, 1999
- ------------------------
Robert F. Wright
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INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION
4.1 Stock Option Agreement, dated February 9, 1996, between the Company
and Ralph Destino
4.2 Stock Option Agreement, dated February 9, 1996, between the Company
and Elizabeth Valk Long
4.3 Stock Option Agreement, dated February 9, 1996, between the Company
and Robert F. Wright
5 Opinion of Brown Raysman Millstein Felder & Steiner LLP
23.1 Consent of Arthur Andersen LLP
23.2 Consent of Brown Raysman Millstein Felder & Steiner LLP (included in
Exhibit 5)
24 Power of Attorney (included in signature page)
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EXHIBIT 4.1
HANOVER DIRECT, INC.
STOCK OPTION AGREEMENT
Agreement made as of the 9th day of February, 1996 between HANOVER
DIRECT, INC. (the "Company"), a Delaware corporation, and Ralph Destino (the
"Optionee"), residing at 870 United Nations Plaza, Apt. 27D, New York, New York
10017.
The Optionee has served as a director of the Company since 1991. In
consideration of Optionee's serving on the Search Committee of Directors to find
a replacement for the President and Chief Executive Officer of the Company, the
Company has agreed to grant to the Optionee a five-year option to purchase 5,000
shares of Common Stock, par value 66 2/3 cents per share, of the Company (the
"Shares"), subject to and upon the terms and conditions set forth herein (the
"Option").
Therefore, in consideration of the premises and for other good and
valuable consideration, the parties hereto have agreed as follows:
1. (a) The price at which the Optionee shall have the right to purchase
Shares under this Agreement is $1.4375 per share, subject to adjustment as
provided in Paragraph 4.
(b) Subject to Paragraph 4, unless the Option is previously terminated
pursuant to this Agreement, the Option shall be exercisable in whole or in part
with respect to all 5,000 Shares beginning on the date hereof through February
8, 2001; provided, however, that the Option shall cease to be exercisable on the
date which is thirty (30) days from the termination of the Optionee's status as
a director of the Company; and provided, however, that the Company shall have
the option, in its sole discretion, to extend the period that the Option shall
be exercisable to February 8, 2002, upon written notice to the Optionee prior to
November 8, 2000.
(c) If the Optionee's status as a director of the Company terminates
due to disability or to death, the Option shall be exercisable as provided in
this subparagraph. The Optionee or, in the event of his/her disability, duly
appointed guardian or conservator or, in the event of his/her death, his/her
appointed executor or administrator, shall have the privilege of exercising the
unexercised portion of the Option which the Optionee could have exercised on the
day on which his/her status as a director of the Company terminated, provided,
however, that such exercise must be in accordance with the terms of this
Agreement and within one (1) year of the Optionee's disability or death, as the
case may be. In no event, however, shall the Optionee or his/her duly appointed
guardian or conservator or his/her duly appointed executor or administrator, as
the case may be, exercise the Option after February 8, 2001, unless the period
during which the Option is exercisable was extended pursuant to Paragraph 1(b).
2. Nothing contained herein shall be construed (a) to confer on the
Optionee any right to continue to serve as a director of the Company or (b) to
obligate the Company (including its shareholders, directors and officers) to
either re-nominate the Optionee for election or re-elect the nominee to serve as
a director or (c) to derogate from any right of the Company (including its
shareholders, director and officers) to remove or request the resignation of the
Optionee from the Company's Board of Directors.
3. (a) The Option shall not be sold, pledged, assigned or transferred
in any manner except (i) to the extent that the Option may be exercised as
provided in Paragraph 1(c) or (ii) as provided in Paragraph 3(b).
(b) The Option may be transferred to any living spouse, child or parent
of the Optionee (a "Permitted Transferee"), provided that (i) such transferee
executes an instrument, satisfactory in form and substance to the Company,
stating that such transferee is bound by all the terms and conditions of this
Agreement, including,
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without limitation, Paragraph 1(c), and (ii) the Option may not be sold, pledged
assigned or transferred in any manner by such transferee, except to another
Permitted Transferee pursuant to this Paragraph 3(b).
(c) For all purposes of this Agreement except the Preamble and
Paragraph 1(b), the term "Optionee" shall include any Permitted Transferee or
any person entitled to exercise the Option pursuant to Paragraph 1(c).
4. (a) If the outstanding Shares of the Company are subdivided,
consolidated, increased, decreased, changed into or exchanged for a different
number or kind of shares or securities of the Company through reorganization,
merger, recapitalization, reclassification, capital adjustment or in a similar
transaction, or if the Company shall issue Shares as a dividend or upon a stock
split, then the number and kind of shares subject to the unexercised portion of
the Option and the exercise price of the Option shall be adjusted to prevent the
inequitable enlargement or dilution of any rights hereunder, provided, however,
that any such adjustment shall be made without change in the total exercise
price applicable to the unexercised portion of the Option. Adjustments under
this paragraph shall be made by the Board of Directors, whose determination
shall be final, binding and conclusive. In computing any adjustment under this
paragraph, any fractional shares shall be eliminated. Nothing contained in this
Agreement shall be construed to affect in any way the right or power of the
Company to make any adjustment, reclassification, reorganization or changes to
its capital or business structure or to merge or to consolidate or to dissolve,
liquidate or transfer all or any part of its business or assets.
(b) If in the event of the dissolution or liquidation of the Company,
or in the event of a merger or consolidation in which (1) the Company is not the
surviving corporation, and (2) the agreements governing such merger or
consolidation do not provide for the issuance to the Optionee of a Substitute
Option (as hereinafter defined) or the express assumption of this Option, the
Company will make or cause to be mailed to the Optionee a notice specifying the
date on which holders of Shares shall be entitled to exchange their shares for
securities or other property deliverable in connection with such merger,
consolidation, dissolution or liquidation. Such notice shall be mailed at least
ten (10) days prior to the date therein specified to the address of the Optionee
specified on page 1 of this Agreement or to such other address as the Optionee
delivers or transmits by registered or certified mail to the Secretary of the
Company at its principal office. In the event the Option is not exercised on or
prior to the date specified herein, the Option and any rights hereunder shall
terminate as of said date. For purposes of this Paragraph 4, a Substitute Option
shall mean an option under which the Optionee has the right to purchase on
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substantially equivalent terms (as hereinafter defined) (in lieu of Shares), the
stock, securities or other property he/she would have been entitled to receive
upon the consummation of such merger or consolidation had he/she exercised the
Option immediately prior thereto. For purposes of the preceding sentence,
substantially equivalent terms shall be those terms given approval by the Board
of Directors in its sole discretion.
5. The Option shall be exercised when written notice of such exercise,
signed by the Optionee, has been delivered or transmitted by registered or
certified mail, to the Secretary of the Company at its principal office. Said
written notice shall specify the number of Shares purchasable under the Option
which the Optionee then wishes to purchase and shall be accompanied by (i) such
documentation, if any, as may be required by the Company as provided in
Paragraphs 6 or 8 and (ii) payment of the aggregate option price. The Option
shall be exercised only with respect to full shares of Common Stock; no
fractional Shares shall be issued. Such payment shall be in the form of (i) cash
or a certified check (unless such certification is waived by the Company)
payable to the order of the Company in the amount of the aggregate option price
for such number of Shares, (ii) certificates duly endorsed for transfer (with
all transfer taxes paid or provided for) evidencing a number of Shares of which
the aggregate fair market value on the date of exercise is equal to the
aggregate option exercise price of the Shares being purchased, or (iii) a
combination of these methods of payment. Delivery of said notice and such
documentation shall constitute an irrevocable election to purchase the Shares
specified in said notice, and the date on which the Company received said notice
and documentation shall, subject to the provisions of Paragraphs 6 and 8, be the
date as of which the Shares so purchased shall be deemed to have been issued.
The Optionee shall not have the right or status as a holder of the Shares to
which such exercise relates prior to receipt by the Company of such payment,
notice and documentation. For purposes of this Agreement, the fair market value
per Share on a given date shall be: (i) if the Shares are listed on a registered
securities exchange or included on the American Stock Exchange, the closing
price per Share on such date, (or, if there was not trading in the Shares on
such date, on the next preceding day on which there was trading); (ii) if the
Shares are not listed on a registered securities exchange or included on the
American Stock Exchange, but the bid and asked prices per Share are provided by
NASDAQ, the National Quotation Bureau Incorporated or any similar organization,
the average of the highest reported bid and lowest reported asked price as
furnished by NASDAQ, the National Quotation Bureau Incorporated or any similar
organization. In the absence of one or more quotations, the Board of Directors
of the Company shall in good faith determine the fair market value per share.
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6. Anything in this Agreement to the contrary notwithstanding, in no
event may the Option be exercisable if the Company shall determine in good faith
that (i) the listing, registration or qualification of any Shares otherwise
deliverable upon such exercise, upon any securities exchange or under any state
or federal law, or (ii) the consent or approval of any regulatory body or the
satisfaction of withholding tax or other withholding liabilities is necessary or
desirable in connection with such exercise. In such event, such exercise shall
be held in abeyance and shall not be effective unless and until such
withholding, listing, registration, qualification or approval shall have been
effected or obtained free of any conditions not reasonably acceptable by the
Company.
7. (a) The Optionee agrees that there will be no disposition of all or
any part of the Shares acquired pursuant to any exercise of the Option or any
interest or interests therein, unless and until such disposition has been
registered under the Securities Act of 1933, as amended (the "Act"), or the
Company receives an opinion of its counsel that registration under the Act is
not required in connection with such disposition.
(b) The Optionee agrees that upon the exercise of the Option, unless
the Shares acquired pursuant to such exercise have been registered under the
Act, the transfer agent for the Shares acquired pursuant to such exercise will
be instructed to place appropriate stop orders against the transfer of the
Shares and that the certificate or certificates to be issued representing the
Shares will conspicuously bear a legend substantially as follows:
The shares represented by this certificate have not been registered
under the Securities Act of 1933. The shares have been acquired for
investment and may not be sold, transferred, pledged, hypothecated or
otherwise disposed of in the absence of an effective registration
statement for the shares under the Securities Act of 1933 or an opinion
of counsel to the Company that registration is not required under said
Act.
(c) The Optionee acknowledges that he/she is presently familiar with
the Company's business, operations and financial condition. In this connection,
the Company agrees that, upon the request of the Optionee, it will provide the
Optionee with a copy of its then most recent Annual Report to Shareholders, its
then most recently definitive Proxy Statement in connection with a meeting of
its shareholders for the election of directors, its then most recent Annual
Report of Form 10-K, and all Quarterly Reports on Form 10-Q and Current Reports
on Form 8-K filed by the Company with the Securities and Exchange Commission
subsequent to the filing of its then most recent Annual Report on Form 10-K. The
Optionee also acknowledges that he/she has received a description of the Shares
as contained in the Company's most recent Prospectus. In addition, the principal
officers of the Company will be reasonably available to discuss with the
Optionee the information contained in these
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documents, this Agreement, or any other issues. To arrange such discussions
he/she should contact Monte E. Wetzler, Esq., counsel to the Company, at (201)
272-3434.
8. The Company covenants and agrees with the Optionee that in the event
the Company proposes to file a registration statement under the Act with respect
to any class of security (other than in connection with an exchange offer or a
registration statement on Form S-4, S-8, or S-18 or other unsuitable
registration statement) which becomes or which the Company believes will become
effective at any time after the date hereof, then the Company shall in each case
give written notice of such proposed filing to the Optionee at least twenty-five
(25) days before the earlier of the anticipated and the actual effective date of
the registration statement and (unless the Board of Directors determines in a
duly adopted resolution that for reasons of confidentiality notice prior to such
filing is likely to adversely affect the Company) at least seven (7) business
days before the initial filing of such registration statement (and, if
requested, the Optionee shall maintain the confidentiality of such information)
and such notice shall offer to Optionee the opportunity to include in such
registration statement such number of Shares as he/she may request, unless, in
the opinion of counsel to the Company reasonably acceptable to the Optionee,
registration under the Act is not required for the transfer of such Shares in
the manner proposed by the Optionee. The Company shall have no obligation to
honor any such request (i) to register fewer than 2,500 Shares, (ii) to register
Shares on more than one occasion, (iii) to register Shares if the Company is not
notified in writing of any such request pursuant to this Paragraph 8 at least
three (3) business days prior to a proposed initial filing and (iv) to register
any Shares which at the time of the filing of such registration statement are
covered by or included in any other Statement theretofore filed by the Company
under the Act. The Company shall permit, or shall cause the managing underwriter
of a proposed offering to permit, the Optionee to include the Shares requested
to be included in the registration (the "Piggy-back Shares") in the proposed
offering on the same terms and conditions as are applicable to securities of the
Company, if any, included therein for the account of any person other than the
Company and the Optionee, provided, however, that the Company need not register
Shares pursuant to such registration statement in the event the Company abandons
such filing prior to the effective date thereof. Notwithstanding the foregoing,
if any such managing underwriter shall advise the Company that it believes that
the distribution of all or a portion of the Piggy-back Shares requested to be
included in the registration statement concurrently with the securities being
registered by the Company would adversely affect the distribution of such
securities by the Company for its own account, then the Optionee shall delay the
offering and sale of Piggy-back Shares (or the portions thereof so
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designated by such managing underwriter) for such period, not to exceed ninety
(90) days, as the managing underwriter shall request provided that no such delay
shall be required as to Piggy-back Shares if any securities of the Company are
included in such registration statement for the account of any person other than
the Company and the Optionee. In the event of such delay, the Company shall
file, at its option, such supplements, post-effective amendments or separate
registration statement, take any such other steps as may be necessary to permit
the Optionee to make the proposed offering and sale for the period of ninety
(90) days immediately following the end of such period of delay (the "Piggy-back
Termination Date"); provided, however, that if any of the Piggy-back Shares are
covered by a registration statement which is or will be required to remain in
effect beyond the Piggy-back Termination Date, the Company shall maintain in
effect the registration statement as it relates to the Piggy-back Shares for so
long as such registration statement remains or is required to remain in effect
for any of such other securities. All expenses of registration pursuant to this
Paragraph 8 shall be borne by the Company, except that underwriting commission,
discounts, fees and expenses attributable to the Piggy-back Shares and fees and
disbursements of counsel (if any) to the Optionee will be borne by the Optionee.
9. This Agreement is not subject to any provisions of the Employee
Retirement Income Security Act of 1974 and is not qualified under Section 401(a)
of the Internal Revenue Code. Any Shares purchased pursuant to this Agreement
shall be purchased directly from the Company out of its authorized but unissued
Shares.
10. This Agreement shall be construed and enforced in accordance with
the laws of the State of Delaware.
11. Subject to Paragraphs 1(c) and 3(b), this Agreement shall be
binding upon that shall inure to the benefit of the parties hereto and their
respective heirs, personal representatives, successors or assigns, as the case
may be.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
HANOVER DIRECT, INC.
By: /s/ Ralph Bulle
_____________________________
Name: Ralph Bulle
Title: Senior Vice President
/s/ RALPH DESTINO
_________________________________
Ralph Destino
14
<PAGE> 1
EXHIBIT 4.2
HANOVER DIRECT, INC.
STOCK OPTION AGREEMENT
Agreement made as of the 9th day of February, 1996 between HANOVER
DIRECT, INC. (the "Company"), a Delaware corporation, and Elizabeth Valk Long
(the "Optionee"), residing at 125 East 74th Street, Apt. 3A, New York, New York
10021.
The Optionee has served as a director of the Company since 1991. In
consideration of Optionee's serving on the Search Committee of Directors to find
a replacement for the President and Chief Executive Officer of the Company, the
Company has agreed to grant to the Optionee a five-year option to purchase 5,000
shares of Common Stock, par value 66 2/3 cents per share, of the Company (the
"Shares"), subject to and upon the terms and conditions set forth herein (the
"Option").
Therefore, in consideration of the premises and for other good and
valuable consideration, the parties hereto have agreed as follows:
9. (d) The price at which the Optionee shall have the right to purchase
Shares under this Agreement is $1.4375 per share, subject to adjustment as
provided in Paragraph 4.
(e) Subject to Paragraph 4, unless the Option is previously terminated
pursuant to this Agreement, the Option shall be exercisable in whole or in part
with respect to all 5,000 Shares beginning on the date hereof through February
8, 2001; provided, however, that the Option shall cease to be exercisable on the
date which is thirty (30) days from the termination of the Optionee's status as
a director of the Company; and provided, however, that the Company shall have
the option, in its sole discretion, to extend the period that the Option shall
be exercisable to February 8, 2002, upon written notice to the Optionee prior to
November 8, 2000.
(f) If the Optionee's status as a director of the Company terminates
due to disability or to death, the Option shall be exercisable as provided in
this subparagraph. The Optionee or, in the event of his/her disability, duly
appointed guardian or conservator or, in the event of his/her death, his/her
appointed executor or administrator, shall have the privilege of exercising the
unexercised portion of the Option which the Optionee could have exercised
15
<PAGE> 2
on the day on which his/her status as a director of the Company terminated,
provided, however, that such exercise must be in accordance with the terms of
this Agreement and within one (1) year of the Optionee's disability or death, as
the case may be. In no event, however, shall the Optionee or his/her duly
appointed guardian or conservator or his/her duly appointed executor or
administrator, as the case may be, exercise the Option after February 8, 2001,
unless the period during which the Option is exercisable was extended pursuant
to Paragraph 1(b).
10. Nothing contained herein shall be construed (a) to confer on the
Optionee any right to continue to serve as a director of the Company or (b) to
obligate the Company (including its shareholders, directors and officers) to
either re-nominate the Optionee for election or re-elect the nominee to serve as
a director or (c) to derogate from any right of the Company (including its
shareholders, director and officers) to remove or request the resignation of the
Optionee from the Company's Board of Directors.
11. (a) The Option shall not be sold, pledged, assigned or transferred
in any manner except (i) to the extent that the Option may be exercised as
provided in Paragraph 1(c) or (ii) as provided in Paragraph 3(b).
(b) The Option may be transferred to any living spouse, child or parent
of the Optionee (a "Permitted Transferee"), provided that (i) such transferee
executes an instrument, satisfactory in form and substance to the Company,
stating that such transferee is bound by all the terms and conditions of this
Agreement, including, without limitation, Paragraph 1(c), and (ii) the Option
may not be sold, pledged assigned or transferred in any manner by such
transferee, except to another Permitted Transferee pursuant to this Paragraph
3(b).
(c) For all purposes of this Agreement except the Preamble and
Paragraph 1(b), the term "Optionee" shall include any Permitted Transferee or
any person entitled to exercise the Option pursuant to Paragraph 1(c).
12. (a) If the outstanding Shares of the Company are subdivided,
consolidated, increased, decreased, changed into or exchanged for a different
number or kind of shares or securities of the Company through reorganization,
merger, recapitalization, reclassification, capital adjustment or in a similar
transaction, or if the Company shall issue Shares as a dividend or upon a stock
split, then the number and kind of shares subject to the unexercised portion of
the Option and the exercise price of the Option shall be adjusted to prevent the
inequitable enlargement or dilution of any rights hereunder, provided, however,
that any such adjustment shall be made without change in the total exercise
price applicable to the unexercised portion of the Option. Adjustments under
this paragraph shall be made by the Board of Directors, whose determination
shall be final, binding and conclusive. In
16
<PAGE> 3
computing any adjustment under this paragraph, any fractional shares shall be
eliminated. Nothing contained in this Agreement shall be construed to affect in
any way the right or power of the Company to make any adjustment,
reclassification, reorganization or changes to its capital or business structure
or to merge or to consolidate or to dissolve, liquidate or transfer all or any
part of its business or assets.
(b) If in the event of the dissolution or liquidation of the Company,
or in the event of a merger or consolidation in which (1) the Company is not the
surviving corporation, and (2) the agreements governing such merger or
consolidation do not provide for the issuance to the Optionee of a Substitute
Option (as hereinafter defined) or the express assumption of this Option, the
Company will make or cause to be mailed to the Optionee a notice specifying the
date on which holders of Shares shall be entitled to exchange their shares for
securities or other property deliverable in connection with such merger,
consolidation, dissolution or liquidation. Such notice shall be mailed at least
ten (10) days prior to the date therein specified to the address of the Optionee
specified on page 1 of this Agreement or to such other address as the Optionee
delivers or transmits by registered or certified mail to the Secretary of the
Company at its principal office. In the event the Option is not exercised on or
prior to the date specified herein, the Option and any rights hereunder shall
terminate as of said date. For purposes of this Paragraph 4, a Substitute Option
shall mean an option under which the Optionee has the right to purchase on
substantially equivalent terms (as hereinafter defined) (in lieu of Shares), the
stock, securities or other property he/she would have been entitled to receive
upon the consummation of such merger or consolidation had he/she exercised the
Option immediately prior thereto. For purposes of the preceding sentence,
substantially equivalent terms shall be those terms given approval by the Board
of Directors in its sole discretion.
13. The Option shall be exercised when written notice of such exercise,
signed by the Optionee, has been delivered or transmitted by registered or
certified mail, to the Secretary of the Company at its principal office. Said
written notice shall specify the number of Shares purchasable under the Option
which the Optionee then wishes to purchase and shall be accompanied by (i) such
documentation, if any, as may be required by the Company as provided in
Paragraphs 6 or 8 and (ii) payment of the aggregate option price. The Option
shall be exercised only with respect to full shares of Common Stock; no
fractional Shares shall be issued. Such payment shall be in the form of (i) cash
or a certified check (unless such certification is waived by the Company)
payable to the order of the Company in the amount of the aggregate option price
for such number of Shares, (ii) certificates duly endorsed for transfer (with
all transfer taxes paid or provided for) evidencing a number of Shares of which
the aggregate fair
17
<PAGE> 4
market value on the date of exercise is equal to the aggregate option exercise
price of the Shares being purchased, or (iii) a combination of these methods of
payment. Delivery of said notice and such documentation shall constitute an
irrevocable election to purchase the Shares specified in said notice, and the
date on which the Company received said notice and documentation shall, subject
to the provisions of Paragraphs 6 and 8, be the date as of which the Shares so
purchased shall be deemed to have been issued. The Optionee shall not have the
right or status as a holder of the Shares to which such exercise relates prior
to receipt by the Company of such payment, notice and documentation. For
purposes of this Agreement, the fair market value per Share on a given date
shall be: (i) if the Shares are listed on a registered securities exchange or
included on the American Stock Exchange, the closing price per Share on such
date, (or, if there was not trading in the Shares on such date, on the next
preceding day on which there was trading); (ii) if the Shares are not listed on
a registered securities exchange or included on the American Stock Exchange, but
the bid and asked prices per Share are provided by NASDAQ, the National
Quotation Bureau Incorporated or any similar organization, the average of the
highest reported bid and lowest reported asked price as furnished by NASDAQ, the
National Quotation Bureau Incorporated or any similar organization. In the
absence of one or more quotations, the Board of Directors of the Company shall
in good faith determine the fair market value per share.
14. Anything in this Agreement to the contrary notwithstanding, in no
event may the Option be exercisable if the Company shall determine in good faith
that (i) the listing, registration or qualification of any Shares otherwise
deliverable upon such exercise, upon any securities exchange or under any state
or federal law, or (ii) the consent or approval of any regulatory body or the
satisfaction of withholding tax or other withholding liabilities is necessary or
desirable in connection with such exercise. In such event, such exercise shall
be held in abeyance and shall not be effective unless and until such
withholding, listing, registration, qualification or approval shall have been
effected or obtained free of any conditions not reasonably acceptable by the
Company.
15. (a) The Optionee agrees that there will be no disposition of all or
any part of the Shares acquired pursuant to any exercise of the Option or any
interest or interests therein, unless and until such disposition has been
registered under the Securities Act of 1933, as amended (the "Act"), or the
Company receives an opinion of its counsel that registration under the Act is
not required in connection with such disposition.
(b) The Optionee agrees that upon the exercise of the Option, unless
the Shares acquired pursuant to such exercise have been registered under the
Act, the transfer agent for the Shares acquired pursuant to
18
<PAGE> 5
such exercise will be instructed to place appropriate stop orders against the
transfer of the Shares and that the certificate or certificates to be issued
representing the Shares will conspicuously bear a legend substantially as
follows:
The shares represented by this certificate have not been registered
under the Securities Act of 1933. The shares have been acquired for
investment and may not be sold, transferred, pledged, hypothecated or
otherwise disposed of in the absence of an effective registration
statement for the shares under the Securities Act of 1933 or an opinion
of counsel to the Company that registration is not required under said
Act.
(c) The Optionee acknowledges that he/she is presently familiar with
the Company's business, operations and financial condition. In this connection,
the Company agrees that, upon the request of the Optionee, it will provide the
Optionee with a copy of its then most recent Annual Report to Shareholders, its
then most recently definitive Proxy Statement in connection with a meeting of
its shareholders for the election of directors, its then most recent Annual
Report of Form 10-K, and all Quarterly Reports on Form 10-Q and Current Reports
on Form 8-K filed by the Company with the Securities and Exchange Commission
subsequent to the filing of its then most recent Annual Report on Form 10-K. The
Optionee also acknowledges that he/she has received a description of the Shares
as contained in the Company's most recent Prospectus. In addition, the principal
officers of the Company will be reasonably available to discuss with the
Optionee the information contained in these documents, this Agreement, or any
other issues. To arrange such discussions he/she should contact Monte E.
Wetzler, Esq., counsel to the Company, at (201) 272-3434.
16. The Company covenants and agrees with the Optionee that in the
event the Company proposes to file a registration statement under the Act with
respect to any class of security (other than in connection with an exchange
offer or a registration statement on Form S-4, S-8, or S-18 or other unsuitable
registration statement) which becomes or which the Company believes will become
effective at any time after the date hereof, then the Company shall in each case
give written notice of such proposed filing to the Optionee at least twenty-five
(25) days before the earlier of the anticipated and the actual effective date of
the registration statement and (unless the Board of Directors determines in a
duly adopted resolution that for reasons of confidentiality notice prior to such
filing is likely to adversely affect the Company) at least seven (7) business
days before the initial filing of such registration statement (and, if
requested, the Optionee shall maintain the confidentiality of such information)
and such notice shall offer to Optionee the opportunity to include in such
registration statement such number of Shares as he/she may request, unless, in
the opinion of counsel to the Company reasonably acceptable to the Optionee,
registration
19
<PAGE> 6
under the Act is not required for the transfer of such Shares in the manner
proposed by the Optionee. The Company shall have no obligation to honor any such
request (i) to register fewer than 2,500 Shares, (ii) to register Shares on more
than one occasion, (iii) to register Shares if the Company is not notified in
writing of any such request pursuant to this Paragraph 8 at least three (3)
business days prior to a proposed initial filing and (iv) to register any Shares
which at the time of the filing of such registration statement are covered by or
included in any other Statement theretofore filed by the Company under the Act.
The Company shall permit, or shall cause the managing underwriter of a proposed
offering to permit, the Optionee to include the Shares requested to be included
in the registration (the "Piggy-back Shares") in the proposed offering on the
same terms and conditions as are applicable to securities of the Company, if
any, included therein for the account of any person other than the Company and
the Optionee, provided, however, that the Company need not register Shares
pursuant to such registration statement in the event the Company abandons such
filing prior to the effective date thereof. Notwithstanding the foregoing, if
any such managing underwriter shall advise the Company that it believes that the
distribution of all or a portion of the Piggy-back Shares requested to be
included in the registration statement concurrently with the securities being
registered by the Company would adversely affect the distribution of such
securities by the Company for its own account, then the Optionee shall delay the
offering and sale of Piggy-back Shares (or the portions thereof so designated by
such managing underwriter) for such period, not to exceed ninety (90) days, as
the managing underwriter shall request provided that no such delay shall be
required as to Piggy-back Shares if any securities of the Company are included
in such registration statement for the account of any person other than the
Company and the Optionee. In the event of such delay, the Company shall file, at
its option, such supplements, post-effective amendments or separate registration
statement, take any such other steps as may be necessary to permit the Optionee
to make the proposed offering and sale for the period of ninety (90) days
immediately following the end of such period of delay (the "Piggy-back
Termination Date"); provided, however, that if any of the Piggy-back Shares are
covered by a registration statement which is or will be required to remain in
effect beyond the Piggy-back Termination Date, the Company shall maintain in
effect the registration statement as it relates to the Piggy-back Shares for so
long as such registration statement remains or is required to remain in effect
for any of such other securities. All expenses of registration pursuant to this
Paragraph 8 shall be borne by the Company, except that underwriting commission,
discounts, fees and expenses attributable to the Piggy-back Shares and fees and
disbursements of counsel (if any) to the Optionee will be borne by the Optionee.
20
<PAGE> 7
9. This Agreement is not subject to any provisions of the Employee
Retirement Income Security Act of 1974 and is not qualified under Section 401(a)
of the Internal Revenue Code. Any Shares purchased pursuant to this Agreement
shall be purchased directly from the Company out of its authorized but unissued
Shares.
10. This Agreement shall be construed and enforced in accordance with
the laws of the State of Delaware.
11. Subject to Paragraphs 1(c) and 3(b), this Agreement shall be
binding upon that shall inure to the benefit of the parties hereto and their
respective heirs, personal representatives, successors or assigns, as the case
may be.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
HANOVER DIRECT, INC.
By: /s/ Ralph Bulle
_____________________________
Name: Ralph Bulle
Title: Senior Vice President
/s/ ELIZABETH VALK LONG
________________________________
Elizabeth Valk Long
21
<PAGE> 1
EXHIBIT 4.3
HANOVER DIRECT, INC.
STOCK OPTION AGREEMENT
Agreement made as of the 9th day of February, 1996 between HANOVER
DIRECT, INC. (the "Company"), a Delaware corporation, and Robert F. Wright (the
"Optionee"), residing at 37 Coniston Road, Short Hills, New Jersey 07078.
The Optionee has served as a director of the Company since 1991. In
consideration of Optionee's serving on the Search Committee of Directors to find
a replacement for the President and Chief Executive Officer of the Company, the
Company has agreed to grant to the Optionee a five-year option to purchase 5,000
shares of Common Stock, par value 66 2/3 cents per share, of the Company (the
"Shares"), subject to and upon the terms and conditions set forth herein (the
"Option").
Therefore, in consideration of the premises and for other good and
valuable consideration, the parties hereto have agreed as follows:
17. (d) The price at which the Optionee shall have the right to
purchase Shares under this Agreement is $1.4375 per share, subject to adjustment
as provided in Paragraph 4.
(e) Subject to Paragraph 4, unless the Option is previously terminated
pursuant to this Agreement, the Option shall be exercisable in whole or in part
with respect to all 5,000 Shares beginning on the date hereof through February
8, 2001; provided, however, that the Option shall cease to be exercisable on the
date which is thirty (30) days from the termination of the Optionee's status as
a director of the Company; and provided, however, that the Company shall have
the option, in its sole discretion, to extend the period that the Option shall
be exercisable to February 8, 2002, upon written notice to the Optionee prior to
November 8, 2000.
(f) If the Optionee's status as a director of the Company terminates
due to disability or to death, the Option shall be exercisable as provided in
this subparagraph. The Optionee or, in the event of his/her disability, duly
appointed guardian or conservator or, in the event of his/her death, his/her
appointed executor or administrator, shall have the privilege of exercising the
unexercised portion of the Option which the Optionee could have exercised on the
day on which his/her status as a director of the Company terminated, provided,
however, that such exercise must be in accordance with the terms of this
Agreement and within one (1) year of the Optionee's disability or death, as the
case may be. In no event, however, shall the Optionee or his/her duly appointed
guardian or conservator or his/her duly appointed executor or administrator, as
the case may be, exercise the Option after February 8, 2001, unless the period
during which the Option is exercisable was extended pursuant to Paragraph 1(b).
18. Nothing contained herein shall be construed (a) to confer on the
Optionee any right to continue to serve as a director of the Company or (b) to
obligate the Company (including its shareholders, directors and officers) to
either re-nominate the Optionee for election or re-elect the nominee to serve as
a director or (c) to derogate from any right of the Company (including its
shareholders, director and officers) to remove or request the resignation of the
Optionee from the Company's Board of Directors.
19. (a) The Option shall not be sold, pledged, assigned or transferred
in any manner except (i) to the extent that the Option may be exercised as
provided in Paragraph 1(c) or (ii) as provided in Paragraph 3(b).
22
<PAGE> 2
(b) The Option may be transferred to any living spouse, child or parent
of the Optionee (a "Permitted Transferee"), provided that (i) such transferee
executes an instrument, satisfactory in form and substance to the Company,
stating that such transferee is bound by all the terms and conditions of this
Agreement, including, without limitation, Paragraph 1(c), and (ii) the Option
may not be sold, pledged assigned or transferred in any manner by such
transferee, except to another Permitted Transferee pursuant to this Paragraph
3(b).
(c) For all purposes of this Agreement except the Preamble and
Paragraph 1(b), the term "Optionee" shall include any Permitted Transferee or
any person entitled to exercise the Option pursuant to Paragraph 1(c).
20. (a) If the outstanding Shares of the Company are subdivided,
consolidated, increased, decreased, changed into or exchanged for a different
number or kind of shares or securities of the Company through reorganization,
merger, recapitalization, reclassification, capital adjustment or in a similar
transaction, or if the Company shall issue Shares as a dividend or upon a stock
split, then the number and kind of shares subject to the unexercised portion of
the Option and the exercise price of the Option shall be adjusted to prevent the
inequitable enlargement or dilution of any rights hereunder, provided, however,
that any such adjustment shall be made without change in the total exercise
price applicable to the unexercised portion of the Option. Adjustments under
this paragraph shall be made by the Board of Directors, whose determination
shall be final, binding and conclusive. In computing any adjustment under this
paragraph, any fractional shares shall be eliminated. Nothing contained in this
Agreement shall be construed to affect in any way the right or power of the
Company to make any adjustment, reclassification, reorganization or changes to
its capital or business structure or to merge or to consolidate or to dissolve,
liquidate or transfer all or any part of its business or assets.
(b) If in the event of the dissolution or liquidation of the Company,
or in the event of a merger or consolidation in which (1) the Company is not the
surviving corporation, and (2) the agreements governing such merger or
consolidation do not provide for the issuance to the Optionee of a Substitute
Option (as hereinafter defined) or the express assumption of this Option, the
Company will make or cause to be mailed to the Optionee a notice specifying the
date on which holders of Shares shall be entitled to exchange their shares for
securities or other property deliverable in connection with such merger,
consolidation, dissolution or liquidation. Such notice shall be mailed at least
ten (10) days prior to the date therein specified to the address of the Optionee
specified on page 1 of this Agreement or to such other address as the Optionee
delivers or transmits by registered or
23
<PAGE> 3
certified mail to the Secretary of the Company at its principal office. In the
event the Option is not exercised on or prior to the date specified herein, the
Option and any rights hereunder shall terminate as of said date. For purposes of
this Paragraph 4, a Substitute Option shall mean an option under which the
Optionee has the right to purchase on substantially equivalent terms (as
hereinafter defined) (in lieu of Shares), the stock, securities or other
property he/she would have been entitled to receive upon the consummation of
such merger or consolidation had he/she exercised the Option immediately prior
thereto. For purposes of the preceding sentence, substantially equivalent terms
shall be those terms given approval by the Board of Directors in its sole
discretion.
21. The Option shall be exercised when written notice of such exercise,
signed by the Optionee, has been delivered or transmitted by registered or
certified mail, to the Secretary of the Company at its principal office. Said
written notice shall specify the number of Shares purchasable under the Option
which the Optionee then wishes to purchase and shall be accompanied by (i) such
documentation, if any, as may be required by the Company as provided in
Paragraphs 6 or 8 and (ii) payment of the aggregate option price. The Option
shall be exercised only with respect to full shares of Common Stock; no
fractional Shares shall be issued. Such payment shall be in the form of (i) cash
or a certified check (unless such certification is waived by the Company)
payable to the order of the Company in the amount of the aggregate option price
for such number of Shares, (ii) certificates duly endorsed for transfer (with
all transfer taxes paid or provided for) evidencing a number of Shares of which
the aggregate fair market value on the date of exercise is equal to the
aggregate option exercise price of the Shares being purchased, or (iii) a
combination of these methods of payment. Delivery of said notice and such
documentation shall constitute an irrevocable election to purchase the Shares
specified in said notice, and the date on which the Company received said notice
and documentation shall, subject to the provisions of Paragraphs 6 and 8, be the
date as of which the Shares so purchased shall be deemed to have been issued.
The Optionee shall not have the right or status as a holder of the Shares to
which such exercise relates prior to receipt by the Company of such payment,
notice and documentation. For purposes of this Agreement, the fair market value
per Share on a given date shall be: (i) if the Shares are listed on a registered
securities exchange or included on the American Stock Exchange, the closing
price per Share on such date, (or, if there was not trading in the Shares on
such date, on the next preceding day on which there was trading); (ii) if the
Shares are not listed on a registered securities exchange or included on the
American Stock Exchange, but the bid and asked prices per Share are provided by
NASDAQ, the National Quotation Bureau Incorporated or any similar organization,
the average of the highest reported bid and lowest reported asked price as
24
<PAGE> 4
furnished by NASDAQ, the National Quotation Bureau Incorporated or any similar
organization. In the absence of one or more quotations, the Board of Directors
of the Company shall in good faith determine the fair market value per share.
22. Anything in this Agreement to the contrary notwithstanding, in no
event may the Option be exercisable if the Company shall determine in good faith
that (i) the listing, registration or qualification of any Shares otherwise
deliverable upon such exercise, upon any securities exchange or under any state
or federal law, or (ii) the consent or approval of any regulatory body or the
satisfaction of withholding tax or other withholding liabilities is necessary or
desirable in connection with such exercise. In such event, such exercise shall
be held in abeyance and shall not be effective unless and until such
withholding, listing, registration, qualification or approval shall have been
effected or obtained free of any conditions not reasonably acceptable by the
Company.
23. (a) The Optionee agrees that there will be no disposition of all or
any part of the Shares acquired pursuant to any exercise of the Option or any
interest or interests therein, unless and until such disposition has been
registered under the Securities Act of 1933, as amended (the "Act"), or the
Company receives an opinion of its counsel that registration under the Act is
not required in connection with such disposition.
(b) The Optionee agrees that upon the exercise of the Option, unless
the Shares acquired pursuant to such exercise have been registered under the
Act, the transfer agent for the Shares acquired pursuant to such exercise will
be instructed to place appropriate stop orders against the transfer of the
Shares and that the certificate or certificates to be issued representing the
Shares will conspicuously bear a legend substantially as follows:
The shares represented by this certificate have not been registered
under the Securities Act of 1933. The shares have been acquired for
investment and may not be sold, transferred, pledged, hypothecated or
otherwise disposed of in the absence of an effective registration
statement for the shares under the Securities Act of 1933 or an opinion
of counsel to the Company that registration is not required under said
Act.
(c) The Optionee acknowledges that he/she is presently familiar with
the Company's business, operations and financial condition. In this connection,
the Company agrees that, upon the request of the Optionee, it will provide the
Optionee with a copy of its then most recent Annual Report to Shareholders, its
then most recently definitive Proxy Statement in connection with a meeting of
its shareholders for the election of directors, its then most recent Annual
Report of Form 10-K, and all Quarterly Reports on Form 10-Q and Current Reports
on Form 8-K filed by the Company with the Securities and Exchange Commission
subsequent to the filing
25
<PAGE> 5
of its then most recent Annual Report on Form 10-K. The Optionee also
acknowledges that he/she has received a description of the Shares as contained
in the Company's most recent Prospectus. In addition, the principal officers of
the Company will be reasonably available to discuss with the Optionee the
information contained in these documents, this Agreement, or any other issues.
To arrange such discussions he/she should contact Monte E. Wetzler, Esq.,
counsel to the Company, at (201) 272-3434.
24. The Company covenants and agrees with the Optionee that in the
event the Company proposes to file a registration statement under the Act with
respect to any class of security (other than in connection with an exchange
offer or a registration statement on Form S-4, S-8, or S-18 or other unsuitable
registration statement) which becomes or which the Company believes will become
effective at any time after the date hereof, then the Company shall in each case
give written notice of such proposed filing to the Optionee at least twenty-five
(25) days before the earlier of the anticipated and the actual effective date of
the registration statement and (unless the Board of Directors determines in a
duly adopted resolution that for reasons of confidentiality notice prior to such
filing is likely to adversely affect the Company) at least seven (7) business
days before the initial filing of such registration statement (and, if
requested, the Optionee shall maintain the confidentiality of such information)
and such notice shall offer to Optionee the opportunity to include in such
registration statement such number of Shares as he/she may request, unless, in
the opinion of counsel to the Company reasonably acceptable to the Optionee,
registration under the Act is not required for the transfer of such Shares in
the manner proposed by the Optionee. The Company shall have no obligation to
honor any such request (i) to register fewer than 2,500 Shares, (ii) to register
Shares on more than one occasion, (iii) to register Shares if the Company is not
notified in writing of any such request pursuant to this Paragraph 8 at least
three (3) business days prior to a proposed initial filing and (iv) to register
any Shares which at the time of the filing of such registration statement are
covered by or included in any other Statement theretofore filed by the Company
under the Act. The Company shall permit, or shall cause the managing underwriter
of a proposed offering to permit, the Optionee to include the Shares requested
to be included in the registration (the "Piggy-back Shares") in the proposed
offering on the same terms and conditions as are applicable to securities of the
Company, if any, included therein for the account of any person other than the
Company and the Optionee, provided, however, that the Company need not register
Shares pursuant to such registration statement in the event the Company abandons
such filing prior to the effective date thereof. Notwithstanding the foregoing,
if any such managing underwriter shall advise the Company that it believes that
the distribution of all or a portion of
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the Piggy-back Shares requested to be included in the registration statement
concurrently with the securities being registered by the Company would adversely
affect the distribution of such securities by the Company for its own account,
then the Optionee shall delay the offering and sale of Piggy-back Shares (or the
portions thereof so designated by such managing underwriter) for such period,
not to exceed ninety (90) days, as the managing underwriter shall request
provided that no such delay shall be required as to Piggy-back Shares if any
securities of the Company are included in such registration statement for the
account of any person other than the Company and the Optionee. In the event of
such delay, the Company shall file, at its option, such supplements,
post-effective amendments or separate registration statement, take any such
other steps as may be necessary to permit the Optionee to make the proposed
offering and sale for the period of ninety (90) days immediately following the
end of such period of delay (the "Piggy-back Termination Date"); provided,
however, that if any of the Piggy-back Shares are covered by a registration
statement which is or will be required to remain in effect beyond the Piggy-back
Termination Date, the Company shall maintain in effect the registration
statement as it relates to the Piggy-back Shares for so long as such
registration statement remains or is required to remain in effect for any of
such other securities. All expenses of registration pursuant to this Paragraph 8
shall be borne by the Company, except that underwriting commission, discounts,
fees and expenses attributable to the Piggy-back Shares and fees and
disbursements of counsel (if any) to the Optionee will be borne by the Optionee.
9. This Agreement is not subject to any provisions of the Employee
Retirement Income Security Act of 1974 and is not qualified under Section 401(a)
of the Internal Revenue Code. Any Shares purchased pursuant to this Agreement
shall be purchased directly from the Company out of its authorized but unissued
Shares.
10. This Agreement shall be construed and enforced in accordance with
the laws of the State of Delaware.
11. Subject to Paragraphs 1(c) and 3(b), this Agreement shall be
binding upon that shall inure to the benefit of the parties hereto and their
respective heirs, personal representatives, successors or assigns, as the case
may be.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
HANOVER DIRECT, INC.
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By: /s/ Ralph Bulle
_____________________________
Name: Ralph Bulle
Title: Senior Vice President
/s/ ROBERT F. WRIGHT
________________________________
Robert F. Wright
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<PAGE> 1
EXHIBIT 5
[Brown Raysman Millstein Felder & Steiner LLP]
Date June 4, 1999
Hanover Direct Inc.
1500 Harbor Blvd.
Weehawken, New Jersey 07087
Dear Ladies and Gentlemen:
We refer to the Registration Statement on Form S-8 (the "Registration
Statement") to be filed with the Securities and Exchange Commission under the
Securities Act of 1933, as amended (the "Act"), on behalf of Hanover Direct,
Inc., a Delaware corporation (the "Company"), relating to an aggregate of 15,000
shares of the Company's Common Stock, $.66 2/3 par value (the "Common Stock,),
issued under the Stock Option Agreement with Ralph Destino, Stock Option
Agreement with Elizabeth Valk Long and Stock Option Agreement with Robert F.
Wright (collectively the "Agreements").
As counsel to the Company, we have examined such corporate records and
other documents and such questions of law as we have deemed necessary or
appropriate for the purposes of this opinion and, upon the basis of such
examinations, advise you that in our opinion all necessary corporate proceedings
by the Company have been duly taken to authorize the issuance of the Common
Stock pursuant to the Agreements, and the shares of Common Stock being
registered pursuant to the Registration Statement, when issued and paid for in
accordance with the terms of the Agreements, will be duly authorized, validly
issued, fully paid and non-assessable.
We consent to the filing of this opinion as an exhibit to the
Registration Statement. This consent is not to be construed as an admission that
we are a person whose consent is required to be filed with the Registration
Statement under the provisions of the Act.
Very truly yours,
/s/ Brown Raysman Millstein Felder & Steiner LLP
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement on Form S-8 of our report dated
February 16, 1999 (except with respect to the matter discussed in Note 7, as to
which the date is March 2, 1999) included in The Hanover Direct, Inc. Form 10-K
for the year ended December 26, 1998 and to all references to our Firm included
in this registration statement.
Very truly yours,
/s/ Arthur Andersen LLP
