CEDAR GROUP INC, S-8, 1996-02-16

CEDAR GROUP INC
S-8, 1996-02-16
HARDWARE

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<PAGE> 1

As filed with the Securities and Exchange Commission on February 16, 1996
Registration No. 33-_________________

================================================================================

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

---------------------

FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933

--------------------

CEDAR GROUP, INC.
- --------------------------------------------------------------------------------
(Exact name of issuer as specified in its charter)

<TABLE>
<S> <C> <C>
Delaware 1-10372 23-2577796
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(State or other jurisdiction of incorporation or organization) (S.E.C. File Number) (I.R.S. Employer Identification No.)

500 Rue Notre Dame, Lachine, Quebec, Canada H8S 2B2
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(Address of Principal Executive Offices) (Zip Code)
</TABLE>

1995 STOCK OPTION PLAN
EXECUTIVE OPTION AGREEMENTS

- --------------------------------------------------------------------------------
(Full title of the plans)

The Corporation Trust Company
1209 Orange Street, Wilmington, Delaware 19801
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(Name and Address of Agent for Service)

(215) 563-7750
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(Telephone number, including area code of agent for service)

Copies to:

<TABLE>
<S> <C>
Joseph P. Galda, Esquire Mr. Michel L. Marengere
Clark, Ladner, Fortenbaugh & Young Chairman and Chief Executive Officer
One Commerce Square Cedar Group, Inc.
2005 Market Street - 22nd Floor 500 Rue Notre Dame
Philadelphia, Pennsylvania 19103 Lachine, Quebec CANADA H8S 2B2
(215) 241-5043 (514) 634-3550
</TABLE>

If the only securities being registered on this form are being offered pursuant
to dividend or reinvestment plans, please check the following box. / /

If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. / x /

EXHIBIT INDEX APPEARS AT PAGE II-7.

<PAGE> 2
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
==========================================================================================================================
Proposed Maximum Proposed Maximum
Title of Securities Amount to be Offering Price Aggregate Amount of
to be Registered registered(1) Per Share(2) Offering Price(2) Registration Fee

- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares of Common Stock
Issuable upon Exercise of
Options under the 1995 Plan 1,500,000 $5.875 $8,812,500 $3,038.55

Shares of Common Stock
Issuable upon Exercise of
Options under the Option
Agreements 300,000 $2.68 $ 804,000 $ 277.22

==========================================================================================================================
</TABLE>

(1) Indicates the aggregate number of shares of common stock, $.001 par
value ("Common Stock") authorized and reserved for issuance and which
may be sold upon the exercise of options which have been or may be
issued under the 1995 Stock Option Plan (the "1995 Plan") and the
Stock Option Agreements between the Company and each of Michel
Marengere, Rene Amyot and Micheline Prud'homme (collectively, the
"Option Agreements").

(2) This calculation is made solely for the purpose of determining the
registration fee pursuant to Rule 457 under the Securities Act of
1933 (the "Act"). With respect to the 1995 Plan, the fee is
calculated on the basis of the average between the high and low price
per share of Common Stock on the National Market System of the
National Association of Securities Dealers Automated Quotation System
("NASDAQ") as of February 9, 1996 (within 5 business days prior to
filing this Registration Statement). With respect to the Option
Agreements, the fee is calculated on the basis of the United States
dollar equivalent of the exercise price pursuant to the Option
Agreements.

EXPLANATORY NOTE

The prospectus filed as part of this Registration Statement has been
prepared in accordance with the requirements of Form S-3 and may be used for
reofferings and resales of registered shares of Common Stock which may be
issued in the future upon the exercise of options granted under the 1995 Plan
and under the Option Agreements (hereinafter such prospectus will be referred
to as the "Prospectus"). In accordance with the instructional Note to Part I of
Form S-8 as promulgated by the Securities and Exchange Commission, the
information specified by Part I of Form S-8 has been omitted from this
Registration Statement on Form S-8.

(ii)
<PAGE> 3
PROSPECTUS
(FORM S-3)
CEDAR GROUP, INC.

1,500,000 Shares of Common Stock
($.001 par value)
Issuable upon exercise of Options covered by the
the 1995 Stock Option Plan

-------------------------------------------------

300,000 Shares of Common Stock Issuable
upon exercise of Options covered by Certain
Stock Option Agreements

-------------------------------------------------

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

-------------------------------------------------

This Prospectus is being used in connection with the offering from
time to time by certain stockholders ("Selling Stockholders") of Cedar Group,
Inc. (the "Company") of shares of Common Stock of the Company which may be
acquired upon the exercise of stock options pursuant to the 1995 Stock Option
Plan (the "1995 Plan") and pursuant to the Stock Option Agreements between the
Company and each of Michel Marengere, Rene Amyot and Micheline Prud'homme
(collectively, the "Option Agreements"). The Company will not receive any of
the proceeds from the sale of the shares, but will receive funds upon the
exercise of the options covered by the 1995 Plan and the Option Agreements.

The Common Stock issuable upon exercise of the options covered by the
1995 Plan and the Option Agreements may be sold from time to time by the
Selling Stockholders or by their pledgees, donees, transferees or other
successors in interest. Such sales may be made on the National Association of
Securities Dealers Automated Quotation System ("NASDAQ"), in the
over-the-counter market or otherwise at prices and at terms then prevailing or
at prices related to the then current market price, or in negotiated
transactions. The Common Stock may be sold by one or more of the following:
(a) a block trade in which the broker or dealer so engaged will attempt to sell
the shares as agent but may position and resell a portion of the block as
principal to facilitate the transaction; (b) purchases by a broker or dealer
for its account pursuant to this Prospectus; and (c) ordinary brokerage
transactions and transactions in which the broker solicits
<PAGE> 4
purchases. In effecting sales, brokers or dealers engaged by the Selling
Stockholders may arrange for other brokers or dealers to participate. Such
brokers or dealers and any other participating brokers or dealers may be deemed
to be "underwriters" within the meaning of the Securities Act of 1933, as
amended (the "Act") in connection with such sales. In addition, any securities
covered by this Prospectus which qualify for sale pursuant to Rule 144 may be
sold under Rule 144 rather than pursuant to this Prospectus. All discounts,
commissions or fees incurred in connection with the sale of the shares offered
hereby will be paid by the Selling Stockholders or by the purchasers of the
shares, except that the expenses of preparing and filing this Prospectus and
the related Registration Statement with the Securities and Exchange Commission,
and of registering or qualifying the shares under any applicable state
securities law will be paid by the Company.

The Common Stock of the Company is listed on the National Market
System of the National Association of Securities Dealers Automated Quotation
System ("NASDAQ") under the symbol "CGMV". The closing price of the
Corporation's Common Stock as reported by NASDAQ on February 9, 1996 was $5.875.

--------------------------

No person is authorized to give any information or to make any
representations, other than as contained herein or specifically incorporated
herein by reference, in connection with the offer made in this Prospectus, and
any information or representation not contained or incorporated herein must not
be relied upon as having been authorized by the Company or the Selling
Stockholders. This Prospectus does not constitute an offer to sell or a
solicitation of an offer to buy any security other than the Common Stock
offered by this Prospectus, nor does it constitute an offer to sell or a
solicitation of any offer to buy any shares of Common Stock offered hereby to
any person in any jurisdiction where it is unlawful to make such an offer or
solicitation to such person. Neither the delivery of this Prospectus nor any
sale hereunder shall under any circumstances create any implication that
information contained herein is correct as of any time subsequent to the date
hereof.

PURCHASE OF THESE SECURITIES MAY INVOLVE MATERIAL RISKS. SEE "RISK FACTORS."

--------------------------

2
<PAGE> 5

- --------------------------

The date of this Prospectus is February 16, 1996.

3
<PAGE> 6
AVAILABLE INFORMATION

The Company is subject to the informational requirements of the
Securities Exchange Act of 1934 (the "1934 Act") and in accordance therewith
files reports and other information with the Securities and Exchange Commission
(the "Commission"). Reports and other information filed by the Company with
the Commission may be inspected and copied at the public reference facilities
maintained by the Commission at Room 1024, Judiciary Plaza, 450 Fifth Street,
N.W., Washington, D.C. 20549, and at the Commission's Regional Offices at: 7
World Trade Center, Suite 1300, New York, New York 10048 and Northwest Atrium
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511.
Copies of such material may be obtained upon written request addressed to the
Commission at the Public Reference Section, at 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates. In addition, the Common Stock is
listed on NASDAQ and reports and other information concerning the Company may
also be inspected at the offices of the National Association of Securities
Dealers, Inc. at 1735 K Street, N.W., Washington, DC 20006.

In addition, the Company will provide without charge to each person to
whom this Prospectus is delivered, upon either the written or oral request of
such person, a copy of any or all of the documents incorporated herein by
reference other than exhibits to such documents. See "INCORPORATION OF
DOCUMENTS BY REFERENCE". Such requests should be directed to J. Arthur Gelinas,
Vice-President Corporate Services, Cedar Group, Inc., 500 Rue Notre Dame,
Lachine, Quebec, CANADA H8S 2B2, (514) 634-3550.

4
<PAGE> 7
TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
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<S> <C>
The Company . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . 7

Selling Stockholders . . . . . . . . . . . . . . . . . . . . . . 12

Plan of Distribution . . . . . . . . . . . . . . . . . . . . . . 12

Description of Securities . . . . . . . . . . . . . . . . . . . . 13

Legal Matters . . . . . . . . . . . . . . . . . . . . . . . . . 14

Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . 14

Experts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

Incorporation of Documents By Reference . . . . . . . . . . . . . 15
</TABLE>

5
<PAGE> 8
THE COMPANY

Cedar Group, Inc. (the "Company"), through its operating subsidiaries,
participates in two principal market segments: infrastructure engineering and
manufacturing services, and industrial specialty fasteners, respectively.

Dominion Bridge Inc. ("Dominion Bridge") and Steen Contractors Ltd.
("Steen") are the Company's principal operating subsidiaries and are involved
in the engineering infrastructure segment, which accounted for approximately
97% of the Company's consolidated revenue during the fiscal year ended
September 30, 1995 ("Fiscal 1995"). Dominion Bridge was acquired from United
Dominion Industries Limited ("UDIL") in April 1994, though pursuant to the
acquisition agreement the transaction was effective from an accounting point of
view from March 9, 1994. Steen was acquired in July 1995 pursuant to a Share
Purchase Agreement whereby the Company acquired 75% of the outstanding common
stock of Steen with the remaining 25% to be purchased in two installments in
1996 and 1997. The acquisition of Steen was given effect from an accounting
point of view from April 1, 1995.

The Company has three operating subsidiaries in the industrial
fastener segment located in the United States, namely, Unimetric Corporation
("Unimetric"), a 70% owned subsidiary involved in the manufacturing of
specialty fasteners for the industrial and aerospace markets, and Banyan
Fastener Corp. and M.S.W. International, Inc. (collectively, the "Fastener
Importers"), both of which are importers and distributors of standard
industrial fasteners.

The Company has announced its intention to make an offer to acquire
all of the ordinary shares of McConnell Dowell Corporation Limited ("MDC"), a
publicly-traded infrastructure engineering company in Australia and New
Zealand, subject to approval by the Australian Treasurer under the Foreign
Acquisitions and Takeover Act of 1975. The Company currently owns 14.9% of the
ordinary shares of MDC and the tender offer for MDC is contingent upon the
Company acquiring an aggregate minimum of 40.1% of the ordinary shares of MDC
which it does not own. It is anticipated that the tender offer will remain
open until the end of March 1996. There can be no assurances that even if the
Australian Treasurer approves the tender offer that it will be completed
successfully.

The Company is incorporated in Delaware and its principal executive
offices are located at 500 Rue Notre Dame, Lachine, Quebec, CANADA H8S 2B2.
The Company's telephone number is (514) 634-3550.

6
<PAGE> 9
RISK FACTORS

An investment in shares of Common Stock being offered by this
Prospectus may involve a material degree of risk. Accordingly, prospective
investors should consider carefully the following risk factors, in addition to
the other information concerning the Company and its business contained
elsewhere in this Prospectus, before purchasing shares of Common Stock offered
hereby.

1. NEED FOR ADDITIONAL FINANCING. As of the date of this
Prospectus, the Company is attempting to acquire control of MDC. As a result,
the Company is in the process of negotiating bank lines of credit necessary to
complete the MDC acquisition. In addition, the Company's wholly-owned
subsidiary, Cedar Group (TCI) Inc. LLC ("TCI") is undertaking a private offering
outside of the United States of up to an additional $15 milion of shares of
preferred stock convertible into the Company's Common Stock.

There can be no assurances that the Company will successfully secure
financing when necessary. The Company's failure to secure additional financing
when required could have an adverse effect on its acquisition of MDC, its
financial condition and the continued viability of some of
its operating subsidiaries.

2. RISK OF PRODUCT AND CONSTRUCTION LIABILITY. The Company is
subject to a risk of claims for product and construction liability. If a
liability claim exceeding the Company's insurance coverage or its own available
resources were to be successfully asserted against the Company, it could have a
material adverse effect on the Company's financial condition. The Company has
liability insurance which it believes is customary for the industries in which
it participates. However, there is no assurance that such coverage will be
sufficient to fully insure against claims brought against the Company and its
subsidiaries, or that the Company will be able to maintain such insurance at
affordable rates or obtain additional insurance covering its business.

3. CONTRACTUAL LIABILITY FOR LATE PROJECTS AND COST OVERRUNS.
Many of the projects undertaken by the Company provide for penalties for
delays in completion. In addition, such projects are usually undertaken on a
fixed price basis. Accordingly, the Company's results of operations may be
adversely affected by delays in completion or cost overruns. Furthermore,
Dominion Bridge obtains contractual assistance from subcontractors on various
projects and is solely responsible for the costs of the subcontractors without
recourse to the owner of the project.

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<PAGE> 10
Accordingly, the Company may suffer financial losses if it cannot successfully
claim such losses from the owner of the project.

4. SECURED LIENS -- EXISTENCE OF LIENS ON SIGNIFICANT PORTIONS OF
ASSETS. A significant portion of Dominion Bridge's assets have been pledged as
collateral to secure the Company's obligations under its arrangements with
UDIL. Additionally, the inventory and book debts and other assets of Dominion
Bridge have been pledged to a Canadian bank to secure its line of credit. In
the event Dominion Bridge fails to comply with its obligations, Dominion
Bridge's assets, inventory and book debts could be foreclosed upon. Moreover,
to the extent that Dominion Bridge's assets, inventory and book debts continue
to be pledged to secure the obligations and line of credit, such assets,
inventory and book debts will be unavailable to secure additional debt
financing, which may adversely affect Dominion Bridge's ability to borrow in
the future.

5. LIMITATIONS ON NET OPERATING LOSS CARRYFORWARDS. The Company
had federal net operating loss carryforwards for financial reporting and income
tax purposes, however, these carryforwards are subject to limitations on the
amount that can utilized by the Company in a fiscal year due to change of
ownership rules as defined by applicable federal tax statutes. Consequently,
the Company may not receive future benefits from existing net operating loss
carryforwards available to offset future taxable income.

6. NEED TO OBTAIN PERFORMANCE BONDS. Many of the projects
undertaken by Dominion Bridge and by Steen are subject to a requirement that
Dominion Bridge and Steen post a performance bond. If the Company is unable to
secure bonding it will not be able to undertake additional projects which would
have a significant adverse effect on the Company's financial condition.

7. POSSIBLE ENVIRONMENTAL LIABILITY. Government regulations in
Canada and the United States prohibit the discharge into the environment of
hazardous substances. Although the Company believes that it complies with
these regulations, there can be no assurance that the Company will not be held
financially responsible for environmental contamination that may have occurred
prior to its acquisition of its operating businesses.

8. ASSUMED LITIGATION. As a result of its acquisition of
Dominion Bridge, the Company has assumed certain pending and threatened
litigation. It is impossible at this time for the Company to predict with any
certainty the outcome of such litigation. However, management is of the
opinion, based upon information presently available, that it is unlikely that
any liability, to the extent not provided for through insurance or

8
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otherwise, would be material in relation to the Company's consolidated
financial position.

9. DEPENDENCE ON KEY PERSONNEL. To a material extent, the
Company's future success is dependent upon the continued efforts of its
Chairman and Chief Executive Officer, Mr. Michel L. Marengere, and its President
and Chief Operating Officer, Mr. Nicolas Matossian. The loss of their services
would likely have a material adverse effect on the Company's business. The
Company has obtained "key-man" insurance on Mr. Marengere's life.

10. COMPETITION. The markets in which the Company competes are
highly competitive. In particular, a significant portion of the business
sought by its Dominion Bridge and Steen subsidiaries is awarded on a
competitive bid basis. Many of the companies with which the Company competes
have substantially greater financial, managerial and other resources than those
of the Company. As a result, the Company may be at a competitive disadvantage
when bidding for new projects.

11. FOREIGN JOINT VENTURES. The Company's principal operating
subsidiary, Dominion Bridge, has formalized or reached agreements in principle
with respect to six large scale infrastructure joint venture projects in China
and a water treatment project in Indonesia to be undertaken by one of its
subsidiaries. These joint ventures are subject to significant conditions,
including the negotiation of definitive agreements, third party participation
and the raising of required capital. There can be no assurances that these
arrangements will lead to completed projects, or that the projects, if
completed, will prove to be profitable to the Company. Furthermore, doing
business in China entails significant additional risk factors, including, among
others, the need to comply with Chinese currency restrictions and that
country's federal, state and local laws. The Company believes the present
attitude to foreign investment in the People's Republic of China and to
infrastructure projects, in general, to be favorable, however, investors should
assess the political risks of investing in a foreign country. Similar risks
apply in Indonesia and in other countries where Dominion Bridge and Steen may
be undertaking business opportunities.

12. POSSIBLE VOLATILITY OF STOCK PRICES. Taking into account the
registration under the Securities Act of the securities offered hereby, the
Company may have approximately 17,297,582 shares of Common Stock outstanding,
substantially all of which will be eligible for public trading. This amount
does not include the shares of TCI, which are convertible into shares of the
Company, which will be issued in the offshore private placement currently being
undertaken by TCI, the investors in which will have certain rights to register
under the Sercurities Act the resale of shares of Common Stock received upon
conversion of the TCI shares. Although it is impossible to predict market

9
<PAGE> 12
influences and prospective values for securities, it is possible that, in and
of itself, the substantial increase in the number of shares available for sale
could have a depressive effect upon the market value of the Company's Common
Stock. Furthermore, certain of the Selling Security Holders have obtained
significant unrealized appreciation in their investment and may desire to
realize all or a portion of these gains. Because of the factors described
above and elsewhere in this Prospectus, the market prices of the Company's
Common Stock following the date of this Prospectus may be highly volatile.

13. ADDITIONAL POSSIBLE DILUTION. The Company is authorized to
issue 20,000,000 shares of Common Stock of which 15,497,582 shares were
outstanding as of February 1, 1996. In addition, the Company has reserved for
issuance an additional 1,592,167 shares of Common Stock in connection with its
acquisition of Dominion Bridge, and 2,435,000 share purchase warrants and
stock options issued to its directors, executive officers and investment
bankers. In connection with other business matters deemed appropriate by the
Company's management, there can be no assurances that the Company will not, in
fact, undertake the issuance of more shares of Common Stock without notice to
then existing stockholders. This may be done in order to, among other things,
facilitate a business combination, acquire assets or stock of another business,
generate debt or equity financing, or for other valid business reasons in the
discretion of the Company's Board of Directors.

14. EFFECT OF OUTSTANDING OPTIONS AND WARRANTS. As of February 1,
1996, the Company had outstanding options and warrants to purchase 2,435,000
shares of Common Stock upon exercise. Additionally, there are outstanding Cdn
$9,952,000 Class "A" Preferred Shares of Dominion Bridge which are held by UDIL
and convertible into the Company's Common Stock. To the extent that the shares
underlying the options, warrants and Class "A" Preferred Shares enter the
market, the price of the Common Stock in the market may be substantially
reduced. For the term of the options and warrants issued by the Company, the
holders thereof are given an opportunity to profit from a rise in the market
price of the Company's Common Stock, with a resulting dilution in the interest
of the other stockholders. Further, the terms on which the Company may obtain
additional financing during that period may be adversely affected by the
existence of such options and warrants. The holders of such options and
warrants may exercise them at a time when the Company might be able to obtain
additional capital through a new offering of securities on terms more favorable
than those provided therein.

15. STAGGERED BOARD OF DIRECTORS. The Company's Certificate of
Incorporation provides for a staggered Board of Directors

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pursuant to which the Board is divided into three classes of directors and the
members of only one class (or one-third of the Board) are elected each year to
serve a three-year term. A director may be removed only for cause by a vote of
the holders of eighty percent (80%) of the voting power of the Company's
outstanding securities. This provision makes it more difficult to change
majority control of the Board which may discourage attempts by third parties to
make a tender offer or otherwise obtain control of the Company, even if such
attempt would be beneficial to the Company and its stockholders.

16. DIVIDENDS NOT LIKELY. The Company does not intend to declare
or pay cash dividends in the foreseeable future. Earnings, if any, are
expected to be retained to finance and develop its businesses. See
"DESCRIPTION OF SECURITIES."

17. AUTHORIZATION AND DISCRETIONARY ISSUANCE OF PREFERRED STOCK.
The Company's Certificate of Incorporation authorizes the issuance of up to an
aggregate of 5,000,000 shares of "blank check" preferred stock with such
designations, rights and preferences as may be determined from time to time by
the Board of Directors. Accordingly, the Board of Directors is empowered,
without stockholder approval, to issue preferred stock with dividend,
liquidation, conversion, voting or other rights which would adversely affect
the voting power or other rights of the holders of the Company's Common Stock.
In the event of issuance, the preferred stock could be utilized, under certain
circumstances, as a method of discouraging, delaying or preventing a change in
control of the Company, which could have the effect of discouraging bids for
the Company and thereby prevent stockholders from receiving the maximum value
for their shares. The Company has no present intention to issue any additional
shares of its preferred stock. However, there can be no assurance that the
preferred stock of the Company will not be issued at some time in the future.

18. EXCHANGE RATE FLUCTUATIONS. Although the Company's financial
results are reported in United States dollars, a substantial portion of its
business is conducted in other currencies, principally the Canadian dollar.
The exchange rate between the Canadian and United States dollars, although
historically less volatile than that of certain other currencies, has varied
significantly over the last five years.

19. DIVESTED BUSINESSES. Effective July 1, 1994, the Company
decided to divest the Canadian commodity fastener distribution businesses
formerly conducted by Edinov Corporation. The transaction was completed on
December 20, 1994 by the receipt of Cdn. $1,000,000 in cash and Cdn. $5,135,000
preferred shares of the acquiror. These preferred shares are redeemable at
varying amounts

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annually through the year 2009, commencing at Cdn. $250,000 in 1995 and 1996
and Cdn. $350,000 each year thereafter. The Company's ability to realize the
value of the preferred shares is dependent on future operations of the divested
businesses. There can be no assurance that the future operations of the
divested businesses will be profitable and that the preferred shares held by
the Company will be able to be redeemed.

SELLING STOCKHOLDERS

The following table sets forth the name of each Selling Stockholder,
the nature of his or her position, office, or other material relationship to
the Company and the number of shares of Common Stock of each such Selling
Stockholder (1) owned of record as of January 25, 1996, (2) which are to be
registered hereunder, and (3) the amount of Common Stock to be owned by each
such Selling Stockholder assuming the exercise of all options granted under the
1995 Plan and the Option Agreements and the sale of all shares registered
hereunder. There can be no assurance that any of the Selling Stockholders will
offer for sale or sell any or all of the Common Stock offered by them pursuant
to this Prospectus.

<TABLE>
<CAPTION>
Name and Relationship Number of Shares Amount of Common Stock
to the Corporation owned Number of Shares to be Owned After
as of January 25, to be Registered Sales of Shares
1996 Registered Hereunder
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Michel L. Marengere 1,631,766 675,000 1,631,766
Chief Executive
Officer,
Chairman of the Board

Nicolas Matossian 115,000 300,000 115,000
President and Chief
Operating Officer

Robert Chartier 0 100,000 0
Vice President and
Corporate Comptroller

Micheline Prud'homme 80,300 75,000 80,300
Secreary and Director

Rene Amyot 85,000 50,000 85,000
Director
=====================================================================================================
</TABLE>

PLAN OF DISTRIBUTION

The Common Stock may be sold from time to time by the Selling
Stockholders or by their pledgees, donees, transferees or other successors in
interest. Such sales may be made on NASDAQ, on the over-the-counter market or
otherwise at prices and at terms then prevailing or at prices related to the
then current market price, or in negotiated transactions. The Common Stock may
be sold by one

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<PAGE> 15
or more of the following: (a) a block trade in which the broker or dealer so
engaged will attempt to sell the shares as agent but may position and resell a
portion of the block as principal to facilitate the transaction; (b) purchases
by a broker or dealer for its account pursuant to this Prospectus; and (c)
ordinary brokerage transactions and transactions in which the broker solicits
purchases. In effecting sales, brokers or dealers engaged by the Selling
Stockholders may arrange for other brokers or dealers to participate. Brokers
or dealers will receive commissions or discounts from Selling Stockholders in
amounts to be negotiated immediately prior to the sale. Such brokers or
dealers and any other participating brokers or dealers may be deemed to be
"underwriters" within the meaning of the Act in connection with such sales. In
addition, any securities covered by this Prospectus which qualify for sale
pursuant to Rule 144 may be sold under Rule 144 rather than pursuant to this
Prospectus. The Company will not receive any of the proceeds from the sale of
these shares, although it has paid the expenses of preparing this Prospectus
and the related Registration Statement. The Selling Stockholders have been
advised that they are subject to the applicable provisions of the Securities
Exchange Act of 1934, including without limitation, Rules 10b-5, 10b-6 and
10b-7 thereunder.

DESCRIPTION OF SECURITIES

COMMON STOCK

The Company is authorized to issue 20,000,000 shares of Common Stock,
of which 15,497,582 were outstanding as of February 1, 1996.

Holders of Common Stock have equal rights to receive dividends when,
as and if declared by the Board of Directors, out of funds legally available
therefor. Holders of Common Stock have one vote for each share held of record
and do not have cumulative voting rights.

Holders of Common Stock are entitled upon liquidation of the Company
to share ratably in the net assets available for distribution, subject to the
rights, if any, of holders of any preferred stock then outstanding. Shares of
Common Stock are not redeemable and have no pre-emptive or similar rights. All
outstanding shares of Common Stock are fully paid and non-assessable.

PREFERRED STOCK

Within the limits and restrictions contained in the Certificate of
Incorporation, the Board of Directors has the authority, without further action
by the stockholders, to issue up to 5,000,000 shares of preferred stock, $.001
par value per share (the "Preferred Stock"), in one of more series, and to fix,
as to any such series, the dividend rate, redemption prices, preferences on
liquidation or dissolution, sinking fund terms, if any, conversion rights,
voting rights, and any other preference or special rights and qualifications.

Shares of Preferred Stock issued by the Board of Directors could be
utilized, under certain circumstances, to make an attempt to gain control of
the Company more difficult or time consuming. For example, shares of Preferred
Stock could be issued with certain rights which might have the effect of
diluting the percentage of Common Stock owned by a significant stockholder or
issued to purchasers who might side with management in opposing a takeover bid
which the Board of Directors determines is not in the best interest of the
Company and its stockholders. This provision may be viewed as having possible
anti-takeover effects. A takeover transaction frequently affords stockholders
the opportunity to sell their shares at a premium over current market prices.
The Board of Directors has not authorized any series of Preferred Stock, and
there are no agreements, understandings or plans for the issuance of any
Preferred Stock.

LEGAL MATTERS

Legal matters with respect to the Common Stock being offered hereby
have been passed upon for the Company by Clark, Ladner, Fortenbaugh & Young,
Philadelphia, Pennsylvania. On February 6, 1996, the partners, of counsel,
associates and other non-clerical employees of Clark, Ladner, Fortenbaugh &
Young and their spouses did not beneficially own any shares of the Common
Stock of the Corporation.

INDEMNIFICATION

The Company has adopted the provisions of Section 102(b)(7) of the
Delaware General Corporation Law (the "Delaware Act") which eliminate or limit
the personal liability of a director to the Company or its stockholders for
monetary damages for breach of fiduciary duty under certain circumstances.
Furthermore, under Section 145 of the Delaware Act, the Company may indemnify
each of its directors and officers against his expenses (including reasonable
costs, disbursements and counsel fees) in connection with any proceeding
involving such person by reason of his having been an officer or director to
the extent he acted in good faith and in a manner reasonably believed to be in,
or not opposed to the best interest of the Company, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his

13
<PAGE> 16
conduct was unlawful. The determination of whether indemnification is proper
under the circumstances, unless made by a court, shall be determined by the
Board of Directors.

Insofar as indemnification for liabilities 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 that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in a successful defense of any action, suit or
proceeding) is asserted by a director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issuer.

EXPERTS

The consolidated financial statements incorporated in this Prospectus
by reference to the Report on Form 10-KSB for the fiscal year ended September
30, 1995 and 1994, have been so incorporated in reliance on the reports of
Ernst & Young, independent accountants, given on the authority of said firm as
experts in auditing and accounting.

INCORPORATION OF DOCUMENTS BY REFERENCE

The following documents previously filed with the Commission are
incorporated herein by reference:

(a) The Company's Form 10-KSB/A for the fiscal year ended September
30, 1995 filed on February 15, 1996;

(b) The Company's quarterly report on Form 10-Q for the quarterly
period December 31, 1995 filed on February 8, 1996;

(d) 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 Act
(prior to the filing of a post-effective amendment which indicates that all
securities offered hereby have been sold or which deregisters all securities
remaining unsold), shall be

14
<PAGE> 17
deemed to be incorporated by reference herein and to be a part hereof from the
date of the filing of such reports and documents.

15
<PAGE> 18
PART II

INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

ITEM 14 (FORM S-3). OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

The expenses in connection with the offering of shares pursuant to that portion
of the Registration Statement on Form S-3 are listed below. The Corporation
will pay each of these expenses.

<TABLE>
<S> <C>
Filing Fee -- Securities and Exchange
Commission . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3,315.77

Fees and Expenses of the Company's
Counsel and Auditors* . . . . . . . . . . . . . . . . . . . . . . $ 7,500.00

Duplicating Expenses* . . . . . . . . . . . . . . . . . . . . . . $ 500.00

Miscellaneous Expenses* . . . . . . . . . . . . . . . . . . . . . $ 1,000.00

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $12,315.77
</TABLE>
---------------------
* Estimated

ITEM 3 (FORM S-8). INCORPORATION OF DOCUMENTS BY REFERENCE.

Incorporated by reference into this Registration Statement are (a) the
Company's Form 10-KSB/A for the fiscal year ended September 30, 1995 filed on
February 15, 1996; (b) the Company's quarterly report on Form 10-Q for the
quarterly period ended December 31, 1995 filed on February 8, 1996; (c) the
Company's Current Report on Form 8-K filed on January 29, 1995; and (d) all
documents subsequently filed by the Corporation pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Act prior to the filing of a post-effective
amendment which indicates that all securities offered hereby have been sold or
deregisters all securities remaining unsold, shall be deemed to be incorporated
by reference herein and to be a part hereof from the date of the filing of such
reports and documents.

ITEM 4 (FORM S-8). DESCRIPTION OF SECURITIES.

Not applicable.

ITEM 5 (FORM S-8). INTERESTS OF NAMED EXPERTS AND COUNSEL.

Legal matters with respect to the Common Stock being offered hereby
have been passed upon for the Corporation by Clark, Ladner,

II-1
<PAGE> 19
Fortenbaugh & Young, Philadelphia, Pennsylvania. On February 6, 1996, the
partners, of counsel, associates and other non-clerical employees of Clark,
Ladner, Fortenbaugh & Young and their spouses did not beneficially own any
shares of the Company's Common Stock.

ITEM 6 (FORM S-8) AND ITEM 15 (FORM S-3). INDEMNIFICATION OF DIRECTORS AND
OFFICERS.

Reference is made to Item 9 (Form S-8) and Item 17 (Form S-3) for the
undertakings of the Company with respect to indemnification for liabilities
arising under the Securities Act of 1933, as amended.

ITEM 7 (FORM S-8). EXEMPTION FROM REGISTRATION CLAIM.

Not Applicable.

ITEM 8 (FORM S-8) AND ITEM 16 (FORM S-3). EXHIBITS.

4.0 Copy of Specimen Stock Certificate (Incorporated by reference to
Exhibit 4.0 of the Registration Statement on Form S-3 filed on January
26, 1995).

4.1 Cedar Group, Inc. 1995 Stock Option Plan (Incorporated by reference to
Exhibit 10 of the Form 10-KSB filed on December 29, 1995).

4.2 Stock Option Agreement between Michel Marengere and the Company dated
November 19, 1993.

4.3 Stock Option Agreement between Rene Amyot and the Company dated
November 19, 1993.

II-2
<PAGE> 20
4.4 Stock Option Agreement between Micheline Prud'homme and the Company
dated November 19, 1993.

5 Opinion of Counsel.

23 Consent of Independent Auditors.

ITEM 9 (FORM S-8) AND ITEM 17 (FORM S-3). UNDERTAKINGS.

The undersigned Company hereby undertakes:

(1) To file, during any period in which offers or sales are being
made of the securities registered hereby, a post-effective amendment to this
Registration Statement:

(i) To include any prospectus required by Section
10(a)(3) of the Act;

(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
in the aggregate, represents a fundamental change in the information
set forth in this Registration Statement;

(iii) To include any material information with respect to the
plan of distribution not previously disclosed in this registration
statement or any material change to such information in this
Registration Statement;

(2) That, for the purpose of determining any liability under the
Act, 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.

II-3
<PAGE> 21
(4) That, for the purposes of determining any liability under the
Act, each filing of the Company's Annual Report pursuant to Section 13(a) or
Section 15(d) of the 1934 Act 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.

(5) To deliver or cause to be delivered with the Prospectus to
each employee to whom the Prospectus is sent or given, a copy of its Annual
Report to Stockholders for its last fiscal year, unless such employee otherwise
has received a copy of such Report, in which case the Company shall state in
the Prospectus that it will promptly furnish, without charge, a copy of such
Report on written request of the employee. If the last fiscal year of the
Corporation has ended within 120 days prior to the use of the Prospectus, the
Annual Report for the preceding fiscal year may be so delivered, but within
such 120 day period the Annual Report for the last fiscal year will be
furnished to each such employee.

(6) To deliver or cause to be delivered to all optionees under the
1995 Plan, who do not otherwise receive such material as stockholders of the
Company, at the time and in the manner such material is sent to its
stockholders, copies of all reports, proxy statements, and other communications
distributed to its stockholders generally.

(7) Insofar as indemnification for liabilities arising under the
Act may be permitted to directors, officers and controlling persons of the
Company pursuant to the foregoing provisions, or otherwise, the Company has
been advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Company of expenses
incurred or paid by a director, officer or controlling person of the Company in
the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Company will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication
of such issue.

II-4
<PAGE> 22
SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the
Company certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized on the 14th day of February, 1996.

CEDAR GROUP, INC.

By: /s/ MICHEL MARENGERE By: /s/ ROBERT CHARTIER
--------------------------- ----------------------------
Michel Marengere Robert Chartier
Chief Executive Officer and Principal Accounting Officer
Chairman of the Board of
Directors

By: /s/ NICOLAS MATOSSIAN
---------------------------
Nicolas Matossian
President and Chief Operating Officer
(Principal Financial Officer)

KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below under the heading "Signatures" constitutes and appoints Michel L.
Marengere and Chris Theodoropoulos, his true and lawful attorneys-in-fact and
agents with full power of substitution and resubstitution, for him and in his
name, place and stead, in any and all capacities to sign any or all amendments
to this Registration Statement, and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents 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 for all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents or their substitute or substitutes, may
all that said attorneys-in-fact and agents or their substitute or substitutes,
may lawfully do or cause to be done by virtue hereof.

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ MICHEL MARENGERE Chief Executive Officer February 14, 1996
- ------------------------ and Chairman of the
Michel Marengere Board of Directors

</TABLE>

II-5
<PAGE> 23

<TABLE>
<S> <C> <C>
/s/ RENE AMYOT Director February 14, 1996
- ------------------------
Rene Amyot

/s/ MICHELINE PRUD'HOMME Director and Secretary February 14, 1996
- ------------------------
Micheline Prud'homme

/s/ REYNALD LEMIEUX Director February 14, 1996
- ------------------------
Reynald Lemieux

Director
- ------------------------
Rt. Hon. Marc Lalonde

Director
- ------------------------
Louis Berlinguet
</TABLE>

II-6
<PAGE> 24
EXHIBIT INDEX

4.0 Copy of Specimen Stock Certificate (Incorporated by reference to
Exhibit 4.0 of the Registration Statement on Form S-3 filed on
January 26, 1995).

4.1 Cedar Group, Inc. 1995 Stock Option Plan (Incorporated by reference to
Exhibit 10 of the Form 10-KSB filed on December 29, 1995).

4.2 Stock Option Agreement between Michel Marengere and the Company dated
November 19, 1993.

4.3 Stock Option Agreement between Rene Amyot and the Company dated
November 19, 1993.

4.4 Stock Option Agreement between Micheline Prud'homme and the Company
dated November 19, 1993.

5 Opinion of Counsel.

23 Consent of Independent Auditors.

II-7

<PAGE> 1
EXHIBIT 4.2

STOCK OPTION AGREEMENT
(Director)

This Agreement made as of the 19th day of November, 1993.

BETWEEN:

MICHEL L. MARENGERE

29 Montee du Golf, St-Duncian du Lac Beauport, Quebec, G0A 2C0

(hereinafter called the "Optionee")

OF THE FIRST PART

AND:

CEDAR GROUP, INC., a body corporate having an office at 115
Labrosse Avenue, Pointe Claire, Quebec H9R 1A3;

(hereinafter called the "Company")

OF THE SECOND PART

WHEREAS the Directors of the Company have authorized the granting of options to
purchase shares in the capital of the Company to certain of its directors.

NOW THEREFORE THIS AGREEMENT WITNESSETH:

DEFINITION

1. In this Agreement the term "share" or "shares" means, as the case may
be, one or more Common shares without par value in the capital stock of the
Company as constituted at the date of this Agreement.

GRANTING OF OPTION

2. The Company hereby irrevocably grants to the Optionee, being one of
the directors of the Company, a non-assignable, non-transferable option to
purchase 175,000 shares in the capital stock of the Company (hereinafter called
the "Option") at a price of Cdn.$3.40 per share (the "Option Price") on the
terms and conditions hereinafter set forth.
<PAGE> 2
-2-
EXERCISE OF OPTION

3. Subject to paragraph 8 hereof, the Option, or any part thereof, may be
exercised by the Optionee at any time, and from time to time until and including
November 19, 1995 by notice in writing to the Company to that effect. Any such
notice given to the Company (an "Exercise Notice") shall specify the number of
shares with respect to which the Option is being exercised and shall be
accompanied by a certified cheque drawn on a Canadian chartered bank in favour
of the Company in full payment of the Option Price for the number of shares
then being purchased.

DELIVERY OF SHARE CERTIFICATE

4. The Company shall, within five business days after receipt of the
Exercise Notice deliver to the Optionee a share certificate representing the
number of shares with respect to which the Option was exercised and issued as
of the date of the Exercise Notice.

5. An Exercise Notice shall be deemed to have been given, if delivered,
on the date of delivery, or if mailed, on the date of mailing. A mailed
Exercise Notice shall be sent by prepaid registered mail addressed to the
Company at its address.

OPTION ONLY

6. Nothing herein contained or done pursuant hereto shall obligate the
Optionee to purchase and/or pay for any shares of the Company, except those
shares in respect of which the Optionee shall have exercised all or any part of
the Option granted hereunder.

7. The Optionee shall have no rights whatsoever as a shareholder in
respect of any of the shares optioned hereunder other than in respect of
optioned shares upon which the Optionee shall have exercised all or any part of
the Option granted hereunder and which shall have been taken up and paid for in
full.

APPROVAL

8. The Option granted hereunder is subject to approval by ordinary
resolution of the members of the Company entitled to vote at a general meeting
of the Company, passed prior to the exercise of the Option or any part thereof.

FILING WITH VANCOUVER STOCK EXCHANGE

9. This Agreement is required to be filed with the Vancouver Stock
Exchange (the "Exchange") and the Optionee hereby agrees to be bound by any
modification of the terms and conditions of the Option as may be required by
the said Exchange.
<PAGE> 3
-3-

10. A Declaration of Stock Option Position as attached as Schedule "A" to
this Agreement, being Exchange Form 14, is required to be completed and filed
with the Exchange and the Optionee hereby agrees to complete the attached
Schedule "A" as part of this Agreement, for filing with the Exchange.

CAPITAL REORGANIZATION

11. In the event the authorized capital of the Company as presently
constituted is consolidated into a lesser number of shares or subdivided into a
greater number of shares, the number of shares in respect of which the Option
remains unexercised shall be decreased or increased proportionately as the case
may be, and the then prevailing purchase price to be paid by the Optionee for
each such share shall be correspondingly decreased or increased as applicable.
In the event the Company shall determine to amalgamate or merge with any other
company or companies (and the right to do so is hereby expressly reserved)
whether by way of statutory amalgamation, sale of its assets and undertaking,
or otherwise howsoever, then and in each such event the number of shares in the
corporation resulting from such amalgamation or merger in respect of which the
Option remains unexercised shall be such number of shares in that corporation
as would have been acquired by the Optionee pursuant to the amalgamation or
merger had the Option been fully exercised immediately prior to the date of
such amalgamation or merger and the then prevailing purchase price of the
shares to be paid by the Optionee shall be correspondingly decreased or
increased as applicable.

TERMINATION OF OPTION

12. The Option is not assignable or transferable and shall terminate on
the 30th day following the date upon which the Optionee ceases to be a director
of the Company; provided, however, that if such cessation is due to the death
of the Optionee, the personal representative of the Optionee shall have the
right to exercise any unexercised part of the Option for a period of one year
following the date of death of the Optionee.

AMENDMENT OF MATERIAL TERMS

13. Any amendment to the Option is subject to approval by ordinary
resolution of the members of the Company entitled to vote at a general meeting
of the Company.

TIME OF THE ESSENCE

14. Time shall be of the essence of this Agreement.
<PAGE> 4
-4-
SUCCESSORS

15. This Agreement shall enure to the benefit of and be binding upon the
heirs, executors and administrators of the Optionee and the successors of the
Company.

IN WITNESS WHEREOF the parties hereto have caused these presents to be executed
as of the day and year first above written.

SIGNED, SEALED AND DELIVERED by )
the Optionee in the presence of: )
)
)
)
)
)
Name: Rene Amyot ) /s/ MICHEL L. MARENGERE
--------------------------------- ) -----------------------

Address: 2960 Laurier, Suite 500 ) MICHEL L. MARENGERE
------------------------------ )
Quebec )
- -------------------------------------- )
)
)
Occupation: Director )
--------------------------- )

The Common Seal of CEDAR GROUP, )
INC. was hereunto affixed in the )
presence of: )
) c/s
)
/s/ MICHEL L. MARENGERE )
- -------------------------------------- )
Authorized Signatory )
)
)
- -------------------------------------- )
Authorized Signatory )

<PAGE> 1
EXHIBIT 4.3

STOCK OPTION AGREEMENT
(Director)

This Agreement made as of the 19th day of November, 1993.

BETWEEN:

RENE AMYOT

2960 Laurier, Suite 500 Quebec, G1V 4S1

(hereinafter called the "Optionee")

OF THE FIRST PART

AND:

CEDAR GROUP, INC., a body corporate having an office at 115
Labrosse Avenue, Pointe Claire, Quebec H9R 1A3;

(hereinafter called the "Company")

OF THE SECOND PART

WHEREAS the Directors of the Company have authorized the granting of options to
purchase shares in the capital of the Company to certain of its directors.

NOW THEREFORE THIS AGREEMENT WITNESSETH:

DEFINITION

GRANTING OF OPTION

2. The Company hereby irrevocably grants to the Optionee, being one of
the directors of the Company, a non-assignable, non-transferable option to
purchase 50,000 shares in the capital stock of the Company (hereinafter called
the "Option") at a price of Cdn.$3.40 per share (the "Option Price") on the
terms and conditions hereinafter set forth.
<PAGE> 2
-2-
EXERCISE OF OPTION

DELIVERY OF SHARE CERTIFICATE

OPTION ONLY

APPROVAL

FILING WITH VANCOUVER STOCK EXCHANGE

CAPITAL REORGANIZATION

TERMINATION OF OPTION

AMENDMENT OF MATERIAL TERMS

13. Any amendment to the Option is subject to approval by ordinary
resolution of the members of the Company entitled to vote at a general meeting
of the Company.

TIME OF THE ESSENCE

14. Time shall be of the essence of this Agreement.
<PAGE> 4
-4-
SUCCESSORS

15. This Agreement shall enure to the benefit of and be binding upon the
heirs, executors and administrators of the Optionee and the successors of the
Company.

IN WITNESS WHEREOF the parties hereto have caused these presents to be executed
as of the day and year first above written.

SIGNED, SEALED AND DELIVERED by )
the Optionee in the presence of: )
)
)
)
)
)
Name: Michel L. Marengere ) /s/ RENE AMYOT
--------------------------------- ) -----------------------
Address: 29 Montee du Golf ) RENE AMYOT
------------------------------ )
Luc Beauport Quebec G0A 2C0 )
- -------------------------------------- )
)
)
Occupation: President )
--------------------------- )

<PAGE> 1
EXHIBIT 4.4

STOCK OPTION AGREEMENT
(Director)

This Agreement made as of the 19th day of November, 1993.

BETWEEN:

MICHELINE PRUD'HOMME

65 St-Paulovest, Suite 602 Quebec, H2Y 3S1

(hereinafter called the "Optionee")

OF THE FIRST PART

AND:

CEDAR GROUP, INC., a body corporate having an office at 115
Labrosse Avenue, Pointe Claire, Quebec H9R 1A3;

(hereinafter called the "Company")

OF THE SECOND PART

WHEREAS the Directors of the Company have authorized the granting of options to
purchase shares in the capital of the Company to certain of its directors.

NOW THEREFORE THIS AGREEMENT WITNESSETH:

DEFINITION

GRANTING OF OPTION

2. The Company hereby irrevocably grants to the Optionee, being one of
the directors of the Company, a non-assignable, non-transferable option to
purchase 75,000 shares in the capital stock of the Company (hereinafter called
the "Option") at a price of Cdn.$3.40 per share (the "Option Price") on the
terms and conditions hereinafter set forth.
<PAGE> 2
-2-
EXERCISE OF OPTION

DELIVERY OF SHARE CERTIFICATE

OPTION ONLY

APPROVAL

FILING WITH VANCOUVER STOCK EXCHANGE

CAPITAL REORGANIZATION

TERMINATION OF OPTION

AMENDMENT OF MATERIAL TERMS

13. Any amendment to the Option is subject to approval by ordinary
resolution of the members of the Company entitled to vote at a general meeting
of the Company.

TIME OF THE ESSENCE

14. Time shall be of the essence of this Agreement.
<PAGE> 4
-4-
SUCCESSORS

15. This Agreement shall enure to the benefit of and be binding upon the
heirs, executors and administrators of the Optionee and the successors of the
Company.

IN WITNESS WHEREOF the parties hereto have caused these presents to be executed
as of the day and year first above written.

SIGNED, SEALED AND DELIVERED by )
the Optionee in the presence of: )
)
)
)
)
)
Name: Michel L. Marengere ) /s/ MICHELINE PRUD'HOMME
--------------------------------- ) ------------------------
Address: 29 Montee du Golf ) MICHELINE PRUD'HOMME
------------------------------ )
Lac Beauport (Quebec) )
- -------------------------------------- )
)
)
Occupation: President )
--------------------------- )

<PAGE> 1
[CLARK, LADNER, FORTENBAUGH & YOUNG LETTERHEAD]

Exhibit 5
February 14, 1996

Cedar Group, Inc.
500 Rue Notre Dame
Lachine, Quebec
CANADA H8S 2B2

Re: The Company's Registration Statement on Form S-8

Gentlemen:

We have participated in the preparation of the Registration Statement
on Form S-8 (the "Registration Statement") to be filed with the Securities
and Exchange Commission by Cedar Group, Inc. ("Cedar Group") for the purpose of
registering under the Securities Act of 1933 shares of Common Stock of Cedar
Group, $.001 par value, which may be issued by Cedar Group in connection with
its 1995 Stock Option Plan (the "Plan") and the Stock Option Agreements between
Cedar Group and each of Michel Marengere, Rene Amyot and Micheline Prud'homme
(collectively, the "Option Agreements"). As counsel to Cedar Group, we have
examined such corporate records, certificates and other documents as we
considered to be relevant and necessary to express the opinion hereinafter set
forth.

On the basis of the foregoing and of our consideration of such other legal and
factual matters that we have deemed appropriate, we are of the opinion that the
common stock of Cedar Group covered by the Registration Statement has been duly
authorized and, when the options granted under the Plan and Option Agreements
are exercised, will be legally issued, fully paid and non-assessable, assuming
that the applicable option exercise price (as that term is defined in the Plan
and the Option Agreements) is paid with respect to each share of common stock
prior to issuance and full compliance with the Plan and Option Agreements is
otherwise made.

With respect to our opinion set forth above, we note that Cedar Group is
authorized to issue 20,000,000 shares of common stock, of which 15,497,582 are
presently issued and outstanding. Cedar Group has contractually committed,
pursuant to outstanding options, warrants, and exchange rights, to issue
additional shares of common stock. The opinion expressed above is based upon
the assumption that there will exist sufficient authorized, but unissued,
shares of common stock at the time the options are exercised.

This opinion is being delivered to you in compliance with Item
601(b)(5)(i) of Regulation S-K of the Securities and Exchange Commission. This
firm consents to the filing of this opinion as an exhibit to the Registration
Statement.

Very truly yours,

Clark, Ladner, Fortenbaugh & Young

<PAGE> 1
Exhibit 23

CONSENT OF INDEPENDENT AUDITORS

We consent to the incorporation by reference into the Registration Statement on
Form S-8 of Cedar Group, Inc. (the "Company"), relating to the offer of shares
of Common Stock pursuant to the Company's 1995 Stock Option Plan and pursuant
to certain executive option agreements, of our report dated December 20, 1995
on the financial statements of the Company as of and for the fiscal years ended
September 30, 1995 and September 30, 1994.

/s/ ERNST & YOUNG
------------------
February 15, 1996 Ernst & Young