As filed with the Securities and Exchange Commission on September 29, 1999.
Registration No. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------------
ENTRADE INC.
--------------------------------------------------
(Exact name of registrant as specified in its charter)
Pennsylvania 52-215-3008
------------ -----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
500 Central Avenue
Northfield, Illinois 60093
-------------------------------------- --------
(Address of Principal Executive Offices) (Zip Code)
--------------------
ENTRADE INC.
Restated 1985 Stock Option Plan
1996 Stock Option Plan
1996 Disinterested Directors
Stock Option Plan
1999 Nonqualified Stock Option Plan
1999 Employment Agreement Option
(Full title of the plans)
--------------------------------------
Mark F. Santacrose, President and Chief Executive Officer
Entrade Inc.
500 Central Avenue
Northfield, Illinois 60093
-------------------------------------
(Name and address of agent for service)
(847) 441-6650
-------------------------------------
(Telephone number, including area code,
of agent for service)
--------------------
Copies to:
John W. Kauffman, Esquire
Duane, Morris & Heckscher LLP
4200 One Liberty Place
Philadelphia, PA 19103-7396
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
====================================================================================================================
Proposed Proposed
Title of securities Amount to be maximum offering maximum aggregate Amount of
to be registered registered(1) price per share offering price(2) registration fee
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, no par value 4,417,603 (2) $32,756,601 $9,107
====================================================================================================================
</TABLE>
<PAGE>
(1) In addition, this registration statement (the "Registration Statement")
also registers such additional shares as may be required to be issued
under the plans listed above (the "Plans") in the event of a stock
dividend, reverse stock split, split-up, reclassification or other similar
events.
(2) Estimated solely for the purpose of calculating the registration fee based
on (i) the average per share exercise price of $4.29 with respect to
options to purchase 3,263,603 shares of Common Stock that are currently
outstanding and (ii) the average of the high and low sales prices of the
Company's Common Stock on the New York Stock Exchange on September 24,
1999, or $16.25 per share, with respect to 1,154,000 shares reserved for
issuance under the Plans.
<PAGE>
PART II
INFORMATION REQUIRED IN REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following material is incorporated herein by reference:
(a) Then Rule 424(b)(3) Proxy Statement/Prospectus filed by Entrade
Inc. (the "Company") with the Securities and Exchange Commission (the
"Commission") on August 20, 1999 in connection with the Company's Form S-4
registration statement (No. 333-79175) that was declared effective by the
Commission on August 18, 1999 (the "Form S-4 Registration Statement") under the
Securities Act of 1933 (the "Securities Act").
(b) The Company's Form 8-A registration statement as filed by the
Company with the Commission on September 15, 1999 (the "Form 8-A Registration
Statement") under Section 12 of the Securities and Exchange Act of 1934 (the
"Exchange Act").
(b) The description of the Company's Common Stock set forth in Item 1
of the Form 8-A Registration Statement.
All reports or other documents filed pursuant to Sections 13, 14 and
15(d) of the Exchange Act subsequent to the date of this Registration Statement,
in each case filed by the Company prior to the filing of a post-effective
amendment that indicates that all securities offered have been sold or that
deregisters all securities then remaining unsold, shall be deemed to be
incorporated by reference in this Registration Statement and to be a part hereof
from the date of filing of such reports and documents. Any statement contained
in a document incorporated or deemed to be incorporated herein by reference
shall be deemed to be modified or superseded for the purposes of this
Registration Statement to the extent that a statement contained herein or in any
other subsequently filed document, which also is or is deemed to be incorporated
herein by reference, 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.
No answer to this item is required because the class of securities to
be offered is registered under Section 12(b) of the Exchange Act.
Item 5. Interests of Named Experts and Counsel.
The consolidated balance sheet of the Company as of February 23, 1999
(inception) has been incorporated by reference herein and in this Registration
Statement in reliance upon the reports of PricewaterhouseCoopers LLP,
independent accountants, incorporated by reference herein, and upon the
authority of said firm as experts in accounting and auditing.
II-1
<PAGE>
The consolidated financial statements of Artra Group Incorporated and
its subsidiaries at December 31, 1998 and 1997, and for each of the years in the
period ended December 31, 1998 have been incorporated by reference herein and in
this Registration Statement in reliance upon the reports of
PricewaterhouseCoopers LLP, independent accountants, incorporated by reference
herein, and upon the authority of said firm as experts in accounting and
auditing.
The validity of the issuance of the shares of Common Stock registered
hereby has been passed upon for the Company by Duane, Morris & Heckscher LLP,
Philadelphia, Pennsylvania.
Item 6. Indemnification of Directors and Officers.
As permitted by the provisions for indemnification of directors,
officers, employees and agents in the Pennsylvania Business Corporation Law (the
ABCL@), which applies to the Company, the Company=s Bylaws provide for
indemnification of directors, officers, employees and agents for all expenses
(including without limitation attorney=s fees, judgments, fines and amounts paid
in settlement) reasonably incurred by such person in any threatened, pending or
completed action, suit or proceeding (including without limitation an action,
suit or proceeding by or in the right of the Company), whether civil, criminal,
administrative or investigative, unless the act or failure to act giving rise to
the claim for indemnification is determined by a court to have constituted
willful misconduct or recklessness. The right to indemnification provided in the
Company=s Bylaws includes the right to have the expenses incurred by such person
in defending any proceeding paid by the Company in advance of the final
disposition of the proceeding to the fullest extent permitted by Pennsylvania
law; provided that, if Pennsylvania law continues so to require, the payment of
such expenses incurred by such person in advance of the final disposition of a
proceeding may be made only upon receipt of the Company of an undertaking, by or
on behalf of such person, to repay all amounts so advanced if it is ultimately
determined that such person is not entitled to be indemnified under the
Company=s Bylaws or otherwise. Indemnification under such provisions continues
as to a person who has ceased to be a director, officer, employee or agent of
the Company and inures to the benefit of his or her heirs, executors and
administrators.
As permitted by the BCL, the Company's By-laws also provide that a
director of the Company shall not be personally liable, as such, for monetary
damages for any action taken unless the director has breached or failed to
perform the duties of his office under the bylaws and the BCL and the breach or
failure to perform constitutes self-dealing, willful misconduct or recklessness.
This limitation of liability does not apply to the responsibility or liability
of a director pursuant to any criminal statute or the liability of a director
for payment of taxes pursuant to local, state or federal law.
The Company provides liability insurance for each director and officer
for certain losses arising from claims or charges made against them while acting
in their capacities as directors or officers of the Company up to an aggregate
of $5,000,000 inclusive of defense costs, expenses and charges.
II-2
<PAGE>
Item 7. Exemption from Registration Claimed.
No answer to this item is required because no restricted securities are
to be reoffered or resold pursuant to this Registration Statement.
Item 8. Exhibits.
Exhibit No. Description of Exhibit
4.1 The Company's Restated 1985 Stock Option Plan.* (Filed
herewith.)
4.2 The Company's 1996 Stock Option Plan.* (Filed herewith.)
4.3 The Company's 1996 Disinterested Directors Stock Option
Plan.* (Filed herewith.)
4.4 The Company's 1999 Nonqualified Stock Option Plan.*
(Incorporated by reference to Exhibit 10.14 of the Form
S-4 Registration Statement, filed with the Commission on
May 24, 1999.)
4.5 The Company's 1999 Employment Agreement Option.*
(Incorporated by reference to Exhibit 10.18 of the Form
S-4 Registration Statement, Amendment No. 1, filed with
the Commission on July 20, 1999.)
5 Opinion of Duane, Morris & Heckscher LLP. (Filed
herewith.)
23.1 Consent of Duane, Morris & Heckscher LLP (included in
their opinion filed as Exhibit 5).
23.2 Consent of PricewaterhouseCoopers LLP. (Filed herewith.)
23.3 Consent of PricewaterhouseCoopers LLP. (Filed herewith.)
24 Power of Attorney (see page II-6 of this Registration
Statement).
--------------
* The Plans were assumed by the Company from Artra Group
Incorporated on September 23, 1999 pursuant to the closing under
the Agreement and Plan of Merger dated as of February 23, 1999,
as amended, among Artra Group Incorporated, WorldWide Web NetworX
Corporation, Entrade Inc. and WWWX Merger Subsidiary, Inc.
Item 9. Undertakings.
The registrant hereby undertakes:
II-3
<PAGE>
(a) 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 (the "Act");
(ii)To reflect in any 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,
represent a fundamental change in the information set forth 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 is 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 the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration Fee"
table in the effective Registration Statement;
(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)(i) and (a)(ii) of this Item 9 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 with or furnished to the
Commission by the registrant pursuant to Section 13 or Section 15(d) of the
Exchange Act that are incorporated by reference in the Registration Statement.
(b) 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 offer
thereof; and
(c) 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.
The undersigned registrant hereby further undertakes that, for purposes
of determining any liability under the Act, each filing of the registrant's
annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act
(and, where applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Exchange 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.
II-4
<PAGE>
The undersigned registrant hereby further undertakes that, insofar as
indemnification for liabilities arising under the Act may be permitted to
directors, officers and controlling persons of the registrant, the registrant
has been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other
than the payment by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the registrant will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
II-5
<PAGE>
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 Chicago, Illinois on September 29, 1999.
ENTRADE INC.
By:/s/ Mark F. Santacrose
----------------------------------
Mark F. Santacrose, President and
Chief Executive Officer
Know all men by these presents, that each person whose signature
appears below constitutes and appoints Mark F. Santacrose, as such person's true
and lawful attorney-in-fact and agent, with full power of substitution, for such
person, and in such person's name, place and stead, in any and all capacities to
sign any or all amendments or post-effective amendments to this Registration
Statement, and to file the same, with all exhibits thereto and other documents
in connection therewith, with the Securities and Exchange Commission, granting
unto said attorney-in-fact and agent 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 such person might or could do
in person, hereby ratifying and confirming all that said attorney-in-fact and
agent, or any of his substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below by the following persons in
the capacities and on the date indicated.
Signature Title Date
- --------- ----- ----
/s/ John Harvey Chairman of the Board September 29, 1999
- ------------------------- of Directors and a Director
John Harvey
/s/ Peter R. Harvey Vice Chairman of the September 29, 1999
- ------------------------- Board of Directors,
Peter R. Harvey Chairman of the Executive
Committee and a
Director
/s/ Mark F. Santacrose President, Chief Executive September 29, 1999
- ------------------------- Officer and a Director
Mark F. Santacrose
/s/ James D. Doering Vice President, Treasurer September 29, 1999
- ------------------------- and Chief Financial Officer
James D. Doering
II-6
<PAGE>
Signature Title Date
- --------- ----- ----
/s/ Lawrence D. Levin Controller and Chief September 29, 1999
- ------------------------- Accounting Officer
Lawrence D. Levin
/s/ Gerard M. Kenny Director September 29, 1999
- -------------------------
Gerard M. Kenny
/s/ Edward A. Celano Director September 29, 1999
- -------------------------
Edward A. Celano
/s/ Howard R. Conant Director September 29, 1999
- -------------------------
Howard R. Conant
/s/ Robert L. Johnson Director September 29, 1999
- -------------------------
Robert L. Johnson
/s/ Robert D. Kohn President of entrade.com September 29, 1999
- ------------------------- and a Director
Robert D. Kohn
/s/ Maynard K. Louis Director September 29, 1999
- -------------------------
Maynard K. Louis
/s/ John K. Tull Director September 29, 1999
- -------------------------
John K. Tull
II-7
<PAGE>
EXHIBIT INDEX
(Pursuant to Item 601 of Regulation S-K)
Exhibit No. Exhibit Description
- ----------- -------------------
4.1 The Company's Restated 1985 Stock Option Plan.* (Filed
herewith.)
4.2 The Company's 1996 Stock Option Plan.* (Filed herewith.)
4.3 The Company's 1996 Disinterested Directors Stock Option
Plan.* (Filed herewith.)
4.4 The Company's 1999 Nonqualified Stock Option Plan.*
(Incorporated by reference to Exhibit 10.14 of the Form
S-4 Registration Statement, filed with the Commission on
May 24, 1999.)
4.5 The Company's 1999 Employment Agreement Option.*
(Incorporated by reference to Exhibit 10.18 of the Form
S-4 Registration Statement, Amendment No. 1, filed with
the Commission on July 20, 1999.)
5 Opinion of Duane, Morris & Heckscher LLP. (Filed
herewith.)
23.1 Consent of Duane, Morris & Heckscher LLP (included in
their opinion filed as Exhibit 5).
23.2 Consent of PricewaterhouseCoopers LLP. (Filed herewith.)
23.3 Consent of PricewaterhouseCoopers LLP. (Filed herewith.)
24 Power of Attorney (see page II-6 of this Registration
Statement).
--------------
* The Plans were assumed by the Company from Artra Group
Incorporated on September 23, 1999 pursuant to the closing under
the Agreement and Plan of Merger dated as of February 23, 1999,
as amended, among Artra Group Incorporated, WorldWide Web NetworX
Corporation, Entrade Inc. and WWWX Merger Subsidiary, Inc.
EXHIBIT 4.1
ARTRA GROUP INCORPORATED
RESTATED 1985 STOCK OPTION PLAN
<PAGE>
RESTATED 1985 STOCK OPTION PLAN
Page
Article I Introduction
1. Purpose of Plan............................................1
2. Administration.............................................1
3. Shares Subject to the Plan.................................2
4. Eligible Persons...........................................2
5. Granting of Options to Employees...........................3
6. Granting of Options to Non-Employee Directors..............3
7. Effective Date.............................................3
8. Miscellaneous..............................................3
9. Rule 16b-3 Compliance......................................3
Article II Nonqualified Stock Options
1. Eligible Employees.........................................4
2. Calculation of Exercise Price..............................4
3. Terms and Conditions of Options............................4
4. Withholding Taxes..........................................4
Article III Incentive Options
1. Eligible Employees.........................................5
2. Calculation of Exercise Price..............................5
3. Terms and Conditions of Options............................5
Article IV Non-Employee Director Stock Options
1. Eligible Employees.........................................6
2. Initial Granting of Options to Non-Employee Directors......6
3. Annual Granting of Options to Non-Employee Directors.......6
4. Terms and Conditions of Options............................7
5. Calculation of Exercise Price..............................7
Article V Termination of Employment and Death...............8
Article VI Manner of Exercise................................9
Article VII Options Not Transferable.........................10
Article VIII Adjustment of Shares.............................10
Article IX Listing and Registration of Shares...............11
Article X Amendment........................................11
Article XI Other Provisions.................................12
(i)
<PAGE>
ARTRA GROUP INCORPORATED
RESTATED 1985 STOCK OPTION PLAN
ARTICLE I
INTRODUCTION
1. Purpose of Plan. The purpose of this Amended 1985 Stock Option Plan (the
"Plan") is to promote the interests of ARTRA GROUP Incorporated, a Pennsylvania
corporation ("the Company"), and its stockholders by providing key employees of
the Company, its subsidiaries, and affiliated entities and non-employee
directors with opportunities to acquire or increase their proprietary interest
in the Company and thereby participate in the growth of the Company generated by
their efforts. In addition, the opportunity to acquire a proprietary interest in
the Company will aid in attracting and retaining key personnel of outstanding
ability. The Plan is a restatement of the Company's 1985 Stock Option Plan and
incorporates amendments thereto which become effective upon approval by the
Company's stockholders. The stock options ("Options") offered pursuant to this
Plan are a matter of separate inducement and are not in lieu of any salary or
other compensation for the services of any key employee.
The Options granted under the Plan are intended to be either Incentive
Options ("Incentive Options") within the meaning of Section 422A of the Internal
Revenue Code ("Nonqualified Options"), but the Company makes no warranty as to
the qualification of any Option as an Incentive Option.
2. Administration. The Plan shall be administered by an Option Committee (herein
called the "Committee") of not less than three Directors of the Company who
shall be appointed, from time to time, by the Board of Directors of the Company.
Other than Options granted to non-employee directors (as hereinafter defined),
no person who shall have been or is a member of the Committee shall be eligible
to receive an Option under the Plan. No person shall be eligible to serve on the
Committee unless that person is then a "disinterested person" within the meaning
of Paragraph 3(d) of Rule 16b-3 of the Securities and Exchange Commission ("Rule
16b-3") promulgated under the Securities Exchange Act of 1934, as amended (the
"Act"), if and as Rule 16b-3 is then in effect. The Committee is authorized to
interpret the Plan, to prescribe, amend and rescind rules and regulations
relating to the Plan, to determine the form and content of Options or rights to
be issued under the Plan, to permit or require the acceleration of the exercise
of such Options and rights, and to make all other determinations necessary or
advisable for the administration of the Plan but only to the extent not contrary
to the express provisions of the Plan. The Plan and the Options as may be
granted hereunder and all related matters shall be governed by, and construed
and enforced in accordance with, the laws of the Commonwealth of Pennsylvania.
The act or determination of a majority of the Committee shall be deemed to be
the act or determination of the Committee and any action taken or determination
so made pursuant to this and the other paragraphs of the Plan shall be
conclusive on all parties.
The Committee also shall have the authority to require, in its
discretion, that the employee agree, promptly after the grant of an Option, not
to sell or otherwise dispose of shares o the Company's common stock, without par
value, acquired pursuant to the exercise of an Option granted under the Plan
("Shares" or "Common Stock") for a period of six (6) months following the date
of acquisition. The determination of the Committee on matters referred to in
this Article I shall be conclusive.
Notwithstanding anything to the contrary contained herein, any or all
powers and functions of the Committee may at any time and from time to time be
exercised by the Board of Directors or an executive committee thereof and
references herein to the "committee" shall also be deemed to refer to the Board
of Directors or an executive committee thereof unless the context otherwise
requires; provided, however that, with respect to the participation in the Plan
of employees who are members of the Board of Directors or of the executive
committee, as the case may be, such powers and functions of the Committee may be
exercised by the Board of Directors or the executive committee only if, at the
time of such exercise, a majority of the members of the entire Board of
Directors and a majority of the directors acting in the particular matter, or
all the members of the executive committee, as the case may be, are
"disinterested persons" within the meaning of Rule 16b-3 (or any successor rule
or regulation) promulgated under the Act.
1
<PAGE>
The Committee may employ such legal counsel, consultants and agents as
it may deem desirable for the administration of the Plan and may rely upon any
opinion received from any such counsel or consultant and any computation
received from any such consultant or agent. Expenses incurred by the Board of
Directors or the Committee in the engagement of such counsel, consultant or
agent shall be paid by the Company. No member or former member of the Committee,
the Board of Directors or an executive committee thereof shall be liable for any
action or determination made in good faith with respect to the Plan or any
Option granted hereunder.
3. Shares Subject to the Plan Subject to adjustment as provided by Article VIII
hereof, the aggregate number of Shares subject to Options which may be granted
under the Plan shall not exceed 500,000 Shares. Options granted under this Plan
will be either Incentive Options or nonqualified stock Options. In the event the
number of Shares to be delivered upon the exercise in full of any Option granted
under the Plan is reduced for any reason whatsoever or in the event any Option
granted under this Plan lapses or terminates for any reason before being
completely exercised, the Shares covered by the unexpected portion of such
Option shall be released and may again be made subject to Options granted under
the Plan. Shares of Common Stock of the Company shall be delivered unless
Article VIII shall be applicable. Common Stock issued pursuant to the exercise
of Options granted under the Plan shall be fully paid and non-assessable. In no
event shall an Option granted hereunder be exercised for a fraction of a share.
Shares which may be acquired under the Plan may be either authorized
but unissued Shares, Shares of issued stock held in the Company's treasury, or
both, at the discretion of the Company. If and to the extent that Options
granted under the Plan expire or terminate without having been exercised, new
Options may be granted with respect to the Shares covered by such expired or
terminated Options, provided that the grant and the terms of such new Options
shall in all respects comply with the provisions of the Plan.
Except as may be provided otherwise in the Plan, the Company may, from
time to time during the period beginning February 8, 1985 (the "Effective Date")
and ending February 1, 1995 (the "Termination Date"), grant Options to certain
key employees of the Company, or of any subsidiary corporation or parent
corporation of the Company now existing or hereafter formed or acquired, under
the terms hereinafter set forth.
As used in the Plan, the terms "subsidiary corporation" and "parent
corporation" shall mean, respectively, a corporation coming within the
definition of such terms contained in Sections 425(f) and 425(e) of the Code.
4. Eligible Persons. Options may be granted under the Plan to any key employee
of the Company or any subsidiary thereof, including any such employee who is
also an officer or director of the Company or a subsidiary ("Employee
Optionees"), and, subject to the limitations set forth in Article IV hereof, to
Non-Employee Directors (as therein defined) (Employee Optionees and Non-Employee
Directors sometimes collectively referred to herein as "Optionees"). Except as
otherwise provided herein, no Option may be granted under the Plan to any person
who is or has been a member of the Committee.
Any person who shall have retired from the active employment by the
Company (or, in the case of a Non-Employee Director, ceases to serve as a
director of the Company), although such person shall have entered into a
consulting contract with the Company, shall not be eligible to receive an
Option.
2
<PAGE>
5. Granting of Options to Employees Subject to the terms and conditions of the
Plan, the Committee shall have authority to grant, from time to time and as of
any date or dates prior to February 1, 1995 as shall be specified by the
Committee, to such eligible employees, Options to purchase such number of
authorized but unissued, or reacquired Shares of Common Stock of the Company on
such terms and conditions whether pursuant to or as set forth in Articles II and
III as the Committee may determine. More than one Option may be granted to the
same employee. In selecting Employee Optionees, and in determining the number of
Shares to be covered by each Option granted to Employee Optionees the Committee
may consider the office or position held by the employee Optionee, the Employee
Optionee's degree of responsibility for and contribution to the growth and
success of the Company, the Employee Optionee's degree of responsibility for an
contribution to the growth and success of the Company, the Employee Optionee's
length of service, age, promotions, potential and any other factors which it may
consider relevant.
6. Granting of Options to Non-Employee Directors. All Options granted to
Non-Employee Directors shall be Options to purchase, on the terms and conditions
hereinafter set forth in Article IV, authorized but unissued, or reacquired,
Shares of Common Stock and shall be Nonqualified Options.
7. Effective Date. The restated Plan shall become effective upon stockholder
approval and shall expire on February 8, 1995.
8. Miscellaneous. All references in the Plan to "Articles", "Paragraphs", and
other subdivisions refer to the corresponding Articles, Paragraphs, and
subdivisions of the Plan.
9. Rule 16b-3 Compliance. The Company intends:
a. that the Plan meet the requirements of Rule 16b-3;
b. that participation by Non-Employee Directors under Article IV
of the Plan will not prohibit them from being "disinterested
persons" within the meaning of Rule 16b-3(d)(3) with respect
to administration of the Plan or with respect to
administration of any other plan of the Company.
c. that transactions of the type specified in the first paragraph
of rule 16b-3 by Non-Employee Directors pursuant to Article IV
of the Plan will be exempt from the operation of Section 16(b)
of the Act; and
d. that transactions of the type specified in the first paragraph
of Rule 16b-3 by officers of the Company (whether or not they
are directors) pursuant to the Plan will be exempt from the
operation of Section 16(b) of the Act.
In all cases, the terms, provisions, conditions and limitations of the
Plan shall be construed an interpreted consistent with the company's intent as
stated in this Article I, Paragraph 9.
3
<PAGE>
ARTICLE II
NONQUALIFIED STOCK OPTIONS
1. Eligible Employees. Key employees and officers (whether or not they are
directors) of the Company, its subsidiaries and affiliated entities shall be
eligible to receive Nonqualified Options under this Article II.
2. Calculation of Exercise Price. The exercise price to be paid for each share
of Common Stock deliverable upon exercise of each Nonqualified Option granted
under Article II shall be equal to the fair market value per share of Common
Stock at the time of grant as determined by the Committee, based on the
composite transactions in the Common Stock as reported by The Wall Street
Journal, and shall not be less than the per share price of the last sale of
Common Stock on the trading day prior to the grant of such Option or the closest
day of trading prior thereto. The exercise price for each Nonqualified Option
granted under Article II shall be subject to adjustment as provided in Article
VIII.
If the Shares are listed on a national securities exchange in the
United States on the date any Option is granted, the fair market value per Share
shall be deemed to be the closing quotation at which such Shares are sold on
such national securities exchange on the date immediately prior to the date such
Option is granted. If the Shares are listed on a national securities exchange in
the United States on such date but the Shares are not traded on such date, or
such national securities exchange is not open for business on such date, the
fair market value per Share shall be determined as of the closest preceding date
on which such exchange shall have been open for business and the Shares were
traded. If the Shares are listed on more than one national securities exchange
in the United States on the date any such Option is granted, the Committee shall
determine which national securities exchange shall be used for the purpose of
determining the fair market value per Share.
If at the date an Option is granted a public market exists for the
Shares but the Shares are not listed on a national securities exchange in the
United States, the fair market value per Share shall be deemed to be the mean
between the closing bid and asked quotations in the over-the-counter market for
such Shares in the United States on the date such Option is granted. If there
are no bid and asked quotations for such Shares on such date, the fair market
value per Share shall be deemed to be the mean between the closing bid and asked
quotations in the over-the-counter market in the United States for such Shares
on the closest date preceding the date such Option is granted for which such
quotations are available.
3. Terms and Conditions of Options. Nonqualified Options granted under Article
II shall be in such form as the Committee may from time to time approve. Options
granted under Article II shall be subject to the following terms and conditions
and may contain such additional terms and conditions, not inconsistent with
Article II and other pertinent Articles contained herein and as the Committee
shall deem desirable.
Subject to Article X, no Nonqualified Option granted under Article II
shall be exercisable with respect to any of the Shares subject to the Option
earlier than the date which one year from the date of grant nor later than the
date which is ten years after the date of grant (the "Nonqualified Option
Expiration Date"). To the extent not prohibited by other provisions of the Plan,
each Nonqualified Option granted under Article II shall be exercisable at such
time or times as the Committee in its discretion may determine at or prior to
the time such Option is granted; provided, however, that unless the Committee
determines otherwise, each Nonqualified Option granted under Article II shall be
exercisable from time to time, in whole or in part, at any time after one year
from the date of grant and prior to the Nonqualified Option Expiration Date.
4. Withholding Taxes. The Company may require an employee exercising a
Nonqualified Option granted hereunder, or disposing of Shares acquired pursuant
to the exercise of an Incentive Option in a disqualifying disposition (within
the meaning of Section 421(b) of the Code), to reimburse the corporation that
employs such employee for any taxes required by any government to be withheld or
otherwise deducted and paid by such corporation in respect of the issuance or
disposition of Shares. In lieu thereof, the corporation that employs such
employee shall have the right to withhold the amount of such taxes from any
other sums due or to become due from such corporation to the employee upon such
terms and conditions as the Committee shall prescribe.
4
<PAGE>
ARTICLE III
INCENTIVE OPTIONS
1. Eligible Employees. Key employees and officers (whether or not they are
directors) of the Company, its subsidiaries and affiliated entities shall be
eligible to receive Incentive Options under this Article III. As used in this
Article III, the terms "Parent Corporation" and "Subsidiary Corporation" shall
have the meanings ascribed to them in Section 425 of the Code.
An Incentive Option shall not be granted to any person who, at the time
such Option is granted, owns stock of the Company or any subsidiary corporation
or parent corporation of the Company possessing more than ten percent (10%) of
the total combined voting power of all classes of stock of the Company of any
subsidiary corporation or parent corporation of the Company, unless (i) the
exercise price per Share is not less than one hundred ten percent (110%) of the
fair market value per Share on the date such Option is granted and (ii) such
Option by its terms is not exercisable after the expiration of five (5) years
from the date such Option is granted. In determining stock ownership of an
employee, the rules of Section 425(d) of the Code shall be applied, and the
Committee may rely on representations of fact made to it by the employee and
believed by it to be true.
2. Calculation of Exercise Price. Subject to the limitation in paragraph 1
above, the exercise price to be paid for each share of Common Stock deliverable
upon exercise of each Incentive Option granted under Article III shall be equal
to the fair market value per share of Common Stock at the time of grant as
determined by the Committee, based on the composite transactions in the Common
Stock as reported by The Wall Street Journal, and shall not be less than the per
share price of the last sale of Common Stock on the trading day prior to the
grant of such Option or the closest day of trading prior thereto.
If the Shares are listed on a national securities exchange in the
United States on the date any Option is granted, the fair market value per Share
shall be deemed to be the closing quotation at which such Shares are sold on
such national securities exchange on the date immediately prior to the date such
Option is granted. If the Shares are listed on a national securities exchange in
the United States on such date but the Shares are not traded on such date, or
such national securities exchange is not open for business on such date, the
fair market value per Share shall be determined as of the closest preceding date
on which such exchange shall have been open for business and the Shares were
traded. If the Shares are listed on more than one national securities exchange
in the United States on the date any such Option is granted, the Committee shall
determine which national securities exchange shall be used for the purpose of
determining the fair market value per Share.
If at the date an Option is granted a public market exists for the
Shares but the Shares are not listed on a national securities exchange in the
United States, the fair market value per Share shall be deemed to be the mean
between the closing bid and asked quotations in the over-the-counter market for
such Shares in the United States on the date such Option is granted. If there
are no bid and asked quotations for such Shares on such date, the fair market
value per Share shall be deemed to be the mean between the closing bid and asked
quotations in the over-the-counter market in the United States for such Shares
on the closest date preceding the date such Option is granted for which such
quotations are available.
The exercise price for each Incentive Option shall be subject to
adjustment as provided in Article VIII.
3. Terms and Conditions of Options. Incentive Options granted under Article III
shall be in such form as the Committee may from time to time approve. Options
granted under Article III shall be subject to the following terms and conditions
and may contain such additional terms and conditions, not inconsistent with
Article III, as the Committee shall deem desirable:
5
<PAGE>
a. Option Period and Conditions and Limitations on Exercise.
Subject to Article X, no Incentive Option granted under
Article III shall be exercisable with respect to any of the
Shares subject to such Option earlier than the date which is
one year from the date of grant nor later than the date which
is ten years after the date of grant; provided, however, that
in the case of an Employee Optionee who, at the time such
Option is granted, owns (within the meaning of Section 425(d)
of the Code) more than 10% of the total combined voting power
of all classes of stock of the Company or of its Parent
Corporation or any Subsidiary Corporation, then such Option
shall not be exercisable with respect to any of the Shares
subject to such Option later than five years after the date of
grant. The date on which an Incentive Option ultimately
becomes unexercisable under the previous sentence is
hereinafter referred to as the "ISO Expiration Date." To the
extent not prohibited by other provisions of the Plan, each
Incentive Option granted under this Article III shall be
exercisable at such time or times as the Committee in its
discretion may determine at or prior to the time such Option
is granted; provided, however, that unless the Committee
determines otherwise, each Incentive Option granted under this
Article III shall be exercisable from time to time, in whole
or in part, subject to the dollar limitations set forth in
Article III, Paragraph 3(b), at any time after one year from
the date of grant and prior to the ISO Expiration Date.
b. Limitation on Amount. Notwithstanding any other provision of
the Plan, the aggregate fair market value (determined as of
the time the Incentive Option is granted) of the Common Stock
with respect to which Incentive Options are exercisable for
the first time by an Employee Optionee during any calendar
year cannot exceed $100,000 as provided under Section
422A(b)(7) of the Code.
ARTICLE IV
NON-EMPLOYEE DIRECTOR STOCK OPTIONS
1. Eligible Persons. Persons who are members of the Board of Directors of the
Company but are neither employees nor officers of the Company, its subsidiaries
or affiliated entities ("Non-Employee Directors") shall be eligible to receive
Options under, and solely under, this Article IV.
2. Initial Granting of Options to Non-Employee Directors. Subject to the
limitations of the number of Shares of Common Stock set forth in this Plan, each
person who is a Non-Employee Director on the date of the Company's 1990 Annual
Meeting of Stockholders and each Director, as defined, elected at such meeting
(collectively the "1990 Non-Employee Directors"), is hereby granted, effective
on such date (which date shall be the date of grant for purposes hereof), a
Nonqualified Option to purchase 2,000 Shares of Common Stock. Subject to the
limitation of the number of Shares of Common Stock set forth in Article IV, each
Non-Employee Director who is elected to the Board of Directors of the Company
after the date of the Company's 1990 Annual Meeting of Stockholders (excluding
the 1990 Non-Employee Directors), is hereby granted, commencing with this fiscal
year end and effective on the last day of the Company's fiscal year after the
date of his initial election, a Nonqualified Option to purchase 1,000 Shares of
Common Stock.
3. Annual Granting of Options to Non-Employee Directors. Subject to the
limitation of the number of Shares of Common Stock set forth in this Plan, a
Nonqualified Option to purchase 1,000 Shares of Common Stock is hereby granted,
effective December 31, 1990 and each year thereafter until the expiration of the
Plan, to each person who is a Non-Employee Director on each such date (which
date shall be the date of grant for purposes hereof).
6
<PAGE>
4. Terms and Conditions of Options. Subject to the provisions of this Article
IV, Paragraph 4, Options granted under Article IV shall be in such form as the
Committee may from time to time approve. Options granted under Article IV shall
be subject to the following terms and conditions:
a. Option Period and Conditions and Limitations on Exercise. Each
Option granted under Article IV shall be exercisable from time
to time, in whole or in part, at any time after one year from
the date of grant and prior to the date which is seven years
after the date of grant (the "NED Option Expiration Date").
b. Termination of Directorship and Death. For purposes of Article
IV and each Option granted under Article IV, a Non-Employee
Director's directorship shall be deemed to have terminated at
the close of business on the day preceding the first day on
which he ceases to be a member of the Board of Directors of
the Company for any reason whatsoever (including his death).
If a Non-Employee Director's directorship is terminated for
any reason whatsoever (including his death), each Option
granted to him under Article IV and all of his rights
thereunder shall wholly and completely terminate:
(1) At the time the Non-Employee Director's directorship
is terminated if termination occurs within the
one-year period following the date of grant; or
(2) At the time the Non-Employee Director's directorship
is terminated if his directorship is terminated as a
result of his removal from the Board of Directors for
cause (other than disability); or
(3) At the expiration of a period of one year after the
Non-Employee Director's death (but in no event later
than NED Option Expiration Date) if the Non-Employee
Director's directorship is terminated by reason of
his death. To the extent exercisable, an Option
granted under Article IV may be exercised by the
Non-Employee Director's estate or by the person or
persons who acquire the right to exercise his Option
by bequest or inheritance with respect to any or all
of the Shares remaining subject to his Option at the
time of his death; or
(4) At the expiration of a period of three years after
the Non-Employee Director's directorship is
terminated as a result of such person's resignation
or removal from the Board of Directors of the Company
because of disability (but in no event later than the
NED Option Expiration Date); or
(5) At the expiration of a period of three months after
the Non-Employee Director's directorship is
terminated (but in no event later than the NED Option
Expiration Date) if the Non-Employee Director's
directorship is terminated for any reason other than
the reasons specified in Article IV, Paragraphs
4(b)(2) through (b)(4).
5. Calculation of Exercise Price. The exercise price to be paid for each share
of Common Stock deliverable upon exercise of each Nonqualified Option granted
under Article IV shall be equal to the fair market value per share of Common
Stock at the time of grant as determined by the Committee, based on the
composite transactions in the Common Stock as reported by The Wall Street
Journal, and shall not be less than the per share price of the last sale of
Common Stock on the trading day prior to the grant of such Option or the closest
day of trading prior thereto. The exercise price for each Nonqualified Option
granted under Article IV shall be subject to adjustment as provided in Article
VIII.
7
<PAGE>
If the Shares are listed on a national securities exchange in the
United States on the date any Option is granted, the fair market value per Share
shall be deemed to be the closing quotation at which such Shares are sold on
such national securities exchange on the date immediately prior to the date such
Option is granted. If the Shares are listed on a national securities exchange in
the United States on such date but the Shares are not traded on such date, or
such national securities exchange is not open for business on such date, the
fair market value per Share shall be determined as of the closest preceding date
on which such exchange shall have been open for business and the Shares were
traded. If the Shares are listed on more than one national securities exchange
in the United States on the date any such Option is granted, the Committee shall
determine which national securities exchange shall be used for the purpose of
determining the fair market value per Share.
If at the date an Option is granted a public market exists for the
Shares but the Shares are not listed on a national securities exchange in the
United States, the fair market value per Share shall be deemed to be the mean
between the closing bid and asked quotations in the over-the-counter market for
such Shares in the United States on the date such Option is granted. If there
are no bid and asked quotations for such Shares on such date, the fair market
value per Share shall be deemed to be the mean between the closing bid and asked
quotations in the over-the-counter market in the United States for such Shares
on the closest date preceding the date such Option is granted for which such
quotations are available.
ARTICLE V
TERMINATION OF EMPLOYMENT AND DEATH
For purposes of Article II and III, and Options granted thereunder,
unless otherwise specified by the Committee, an Employee Optionee's employment
shall be deemed to have terminated at the close of business on the day preceding
the first date on which he is no longer for any reason whatsoever (including his
death) employed by the Company or a subsidiary or affiliated entity of the
Company. If an Employee Optionee's employment is terminated for any reason
whatsoever (including his death), each Option granted to him under Articles II
and III and all of his rights thereunder shall wholly and completely terminate:
a. at the time the Employee Optionee's employment is terminated
if termination occurs within the one-year period following the
date of grant; or
b. at the time the Employee Optionee's employment is terminated
if his employment is terminated for "cause" or if an Employee
Optionee's employment is terminated by the Employee
voluntarily. For the purpose of the Plan, "for cause" shall
mean (i) with respect to an employee who is a party to a
written employment agreement with, or, alternatively,
participates in a compensation or benefit plan of, the Company
or a subsidiary corporation or parent corporation of the
Company, which agreement or plan contains a definition of "for
cause" or "cause" (or words of like import) for purposes of
termination of employment thereunder by the Company or such
subsidiary corporation or parent corporation of the Company,
"for cause" or "cause" as defined therein; provided, however,
in the event that an employee is a participant in a
compensation or benefit plan of the Company and is also a
party to a written employment agreement with the Company, the
termination provisions of the written employment agreement
shall control; or (ii) in all other cases, as determined by
the Committee or the Board of Directors, in its sole
discretion, (a) the willful commission by an employee of an
act that causes or may cause substantial damage to the Company
or a subsidiary corporation or parent corporation of the
Company; (b) the commission by an employee of an act of fraud
in the performance of such employee's duties on behalf of the
Company or a subsidiary corporation or parent corporation of
the Company; (c) the commission of the employee of a felony in
connection with the performance of the duties of such employee
8
<PAGE>
on behalf of the Company or a subsidiary corporation or parent
corporation of the Company; or (d) the continuing failure of
an employee to perform the duties of such employee to the
Company or a subsidiary corporation or parent corporation of
the Company after written notice thereof and a reasonable
opportunity to cure such failure are given to the employee by
the Board of Directors or the Committee; or
c. (i) with respect to a Nonqualified Option, at the expiration
of a period of one year after the Employee Optionee's death
(but in no event later than the Nonqualified Option Expiration
Date) if the Employee Optionee's employment is terminated by
reason of his death. To the extent exercisable, a Nonqualified
Option granted under Article II may be exercised by the
Employee Optionee's estate or by the person or persons who
acquire the right to exercise his Option by bequest or
inheritance with respect to any or all of the Shares remaining
subject to his Option at the time of his death; or (ii)with
respect to an Incentive Option at the expiration of a period
of one year after the Employee Optionee's death (but in no
event later than the ISO Expiration Date) if the Employee
Optionee's employment is terminated by reason of his death. To
the extent exercisable, an Incentive Option granted under
Article III of the Plan may be exercised by the Employee
Optionee's estate or by the person or persons who acquire the
right to exercise his Option by bequest or inheritance with
respect to any or all of the Shares remaining subject to his
Option at the time of his death; or
d. unless it is otherwise provided in the Option agreement, at
the expiration of a period of one year after the Employee
Optionee's employment is terminated because of retirement or
disability (but in no event later than the Nonqualified Option
Expiration Date or ISO Expiration Date, as the case may be);
or
e. at the expiration of a period of three months after the
Employee Optionee's employment is terminated (but in no event
later than the Nonqualified Option Expiration Date or ISO
Expiration Date, as the case may be) if the Employee
Optionee's employment is terminated for any reason other than
his death, retirement, disability or the reasons specified in
Article V, Paragraph (b).
In the event and to the extent that an Incentive Option granted under
Article III is not exercised (i) within three months after the Employee
Optionee's employment is terminated because of retirement or disability not
within the meaning of Section 22(e)(3) of the Code or (ii) within one year after
the Employee Optionee's employment is terminated because of disability within
the meaning of Section 22(c)(3) of the Code, such Option shall be taxed as a
Nonqualified Option and shall be subject to the manner of exercise provisions
described in Article VI.
ARTICLE VI
MANNER OF EXERCISE
Options granted under the Plan shall be exercised by the Optionee as to
all or part of the Shares covered thereby by the giving of written notice of the
exercise thereof to the corporate secretary of the Company at the principal
business office of the Company, specifying the number of Shares to be purchased
and accompanied by payment of the purchase price.
9
<PAGE>
Upon the exercise of an Option granted hereunder, the Company shall
cause the purchased Shares to be issued only when it shall have received the
full purchase price for the Shares in cash; provided, however, that in lieu of
cash, the holder of an Option may, if the terms of such Option so provide and to
the extent permitted by applicable law, exercise his Option, (a) in whole or in
part, by delivering to the Company common stock of the Company (in proper form
for transfer and accompanied by all requisite stock transfer tax stamps or cash
in lieu thereof) owned by such holder having a fair market value equal to the
cash exercise price applicable to that portion of the Option being exercised by
the delivery of such stock, the fair market value of the stock so delivered to
be determined as of the date immediately preceding the date on which the Option
is exercised, or as may be required in order to comply with or to conform to the
requirements of any applicable laws or regulations, or (b) in part, by
delivering to the Company an executed promissory note on such terms and
conditions as the Committee shall determine, at the time of grant, in its sole
discretion; provided, however, that the principal amount of such note shall not
exceed ninety percent (90%) (or such lesser percentage as would be permitted by
applicable margin regulations) of the aggregate purchase price of the Shares
then being purchased pursuant to the exercise of such Option.
If the Committee so requires and if necessary, such person or persons
shall also deliver a written representation that all Shares being purchased are
being acquired for investment and not with a view to, or for resale in
connection with, any distribution of such Shares.
ARTICLE VII
OPTIONS NOT TRANSFERABLE
No Option granted pursuant to this Plan shall be transferable otherwise
than by will or by the laws of descent and distribution and, during the lifetime
of the Optionee to whom any such Option is granted, it shall be exercisable only
by the Optionee (or an Optionee's lawfully appointed guardian). Any attempt to
transfer, assign, pledge, hypothecate or otherwise dispose of, or to subject to
execution, attachment or similar process, any Option granted pursuant to this
Plan, or any right thereunder, contrary to the provisions hereof, shall be void
and ineffective, shall give no right to the purported transferee, and shall, at
the sole discretion of the Committee, result in forfeiture of the Option with
respect to the Shares involved in such attempt.
ARTICLE VIII
ADJUSTMENT OF SHARES
In the event that at any time after the effective date of the Plan the
outstanding Shares of Common Stock are changed into or exchanged for a different
number or kind of Shares of the Company or other securities of the Company by
reason of merger, consolidation, reorganization, recapitalization,
reclassification, stock split, stock dividend, split-up, split-off, spin-off, or
combination of Shares, the Committee shall make an appropriate and equitable
adjustment in the number and kind of Shares subject to this Plan (including
Shares as to which all outstanding Options granted or portions thereof then
unexercised, shall be exercisable), to the end that after such event the Shares
subject to this Plan and each Optionee's proportionate interest shall be
maintained as before the occurrence of such event. Such adjustment in an
outstanding Option shall be made without change in the total price applicable to
the Option or the unexercised portion of the Option (except for any change in
the aggregate price resulting from rounding-off of share quantities or prices)
and with any necessary corresponding adjustment in exercise price per share. Any
such adjustment made by the Committee shall be final and binding upon all
Optionees, the Company and all other interested persons. Any adjustment of an
Incentive Option under this Paragraph shall be made in such manner as not to
constitute a "modification" within the meaning of Section 425(h)(3) of the Code.
10
<PAGE>
ARTICLE IX
LISTING AND REGISTRATION OF SHARES
Each Option granted pursuant to this Plan shall be subject to the
requirement that if at any time the Committee determines, in its discretion,
that the listing, registration, or qualification of the Shares subject to such
Option under any securities exchange or under any state or Federal law, or the
consent of approval of any governmental regulatory body, is necessary or
desirable as a condition of, or in connection with, the issue or purchase of
Shares thereunder, such Option may not be exercised in whole or in part unless
such listing, registration, qualification, consent or approval shall have been
effected or obtained and the same shall have been free of any conditions not
acceptable to the Committee.
Upon any exercise of an Option which may be granted hereunder and
payment of the purchase price, a certificate or certificates for the Shares as
to which the Option has been exercised shall be issued by the Company in the
name of the person exercising the Option and shall be delivered to or upon the
order of such person or persons.
The Company may endorse such legend or legends upon the certificates
for Shares issued upon exercise of an Option granted hereunder, and the
Committee may issue such "stop transfer" instructions to its transfer agent in
respect of such Shares, as the Committee, in its discretion, determines to be
necessary or appropriate to (i) prevent a violation of, or to perfect an
exemption from, the registration requirements of the Securities Act, (ii)
implement the provisions of any agreement between the Company and the Optionee
with respect to such Shares, or (iii) permit the Company to determine the
occurrence of a disqualifying disposition, as described in Section 421(b) of the
Code, of Shares transferred upon exercise of an Incentive Option granted under
the Plan.
The Company shall pay all issue or transfer taxes with respect to the
issuance or transfer of Shares, as well as all fees and expenses necessarily
incurred by the Company in connection with such issuance or transfer, except
fees and expenses which may be necessitated by the filing or amending of a
Registration Statement under the Securities Act of 1933, as amended (the
"Securities Act"), which fees and expenses shall be borne by the recipient of
the Shares unless such Registration Statement has been filed by the Company for
its own corporate purposes (and the Company so states) in which event the
recipient of the Shares shall bear only such fees and expenses as are
attributable solely to the inclusion of such Shares in the Registration
Statement.
ARTICLE X
AMENDMENT
Except for Options authorized pursuant to Article IV, the Committee
may, with the consent of the person or persons entitled to exercise any
outstanding Option granted pursuant to this Plan, amend such Option; provided,
however, that any such amendment increasing the number of Shares of Common Stock
subject to such Option (except as provided in Article VIII) or reducing the
exercise price per share of such Option (except as provided in Article VIII or
in this Article X) shall in each case be subject to approval by the stockholders
of the Company. The Committee may at any time or from time to time, in its
discretion, in the case of any Option previously granted pursuant to this Plan
which is not then immediately exercisable in full, accelerate the time or times
at which such Option may be exercised to any earlier time or times except that
any acceleration of an Incentive Option shall be subject to Article III,
Paragraph 3(b). The Committee, in its absolute discretion, may grant to holders
of outstanding Options granted pursuant to this Plan, except for Options granted
pursuant to Article IV, in exchange for the surrender and cancellation of such
Options, new Options having exercise prices lower (or higher) than the exercise
price provided in the Options so surrendered and cancelled and containing such
other terms and conditions as the Committee may deem appropriate.
11
<PAGE>
ARTICLE XI
OTHER PROVISIONS
a. The person or persons entitled to exercise, or who have
exercised an Option granted pursuant to this Plan shall not be
entitled to any rights as a stockholder of the Company with
respect to any Shares subject to such Option until he shall
have become the holder of record of such Shares.
b. No Option granted pursuant to this Plan shall be construed as
limiting any right which the Company or any subsidiary or
affiliated entity of the Company may have to terminate at any
time, with or without cause, the employment of any person or
require re-election as a director or a directors removal with
or without cause to whom an Option has been granted.
c. Notwithstanding any provision of the Plan or the terms of any
Option granted pursuant to this Plan, the Company shall not be
required to issue any Shares hereunder if such issuance would,
in the judgment of the Committee, constitute a violation of
any state or Federal law or of the rules or regulations of any
governmental regulatory body.
d. The Committee may require any person who exercises an
Incentive Option to give prompt notice to the Company of any
disposition of Shares of Common Stock acquired upon exercise
of an Incentive Option within one year after such exercise.
e. The cash proceeds of the sale of Shares subject to the Options
granted hereunder are to be added to the general funds of the
Company and used for its general corporate purposes as the
Board of Directors shall determine.
f. Except as hereafter provided, the holder of an Option granted
hereunder, upon any exercise thereof, shall execute and
deliver to the Company a written statement, in form
satisfactory to the Company, in which such holder represents
and warrants that such holder is purchasing or acquiring the
Shares acquired thereunder for such holder's own account, for
investment only and not with a view to the resale or
distribution thereof, and agrees that any subsequent resale or
distribution of any of such Shares shall be made only pursuant
to either (a) a Registration Statement on an appropriate form
under the Securities Act, which Registration Statement has
become effective and is current with regard to the Shares
being sold, or (b) a specific exemption from the registration
requirements of the Securities Act, but in claiming such
exemption the holder shall, prior to any offer of sale or sale
of such Shares, obtain a prior favorable written opinion, in
form and substance satisfactory to the Company, from counsel
for or approved by the Company, as to the application of such
exemption thereto. The foregoing restriction shall not apply
to (i) issuances by the Company so long as the Shares being
issued are registered under the Securities Act and a
prospectus in respect thereof is current or (ii) reofferings
of Shares by affiliates of the Company (as defined in Rule 405
or any successor rule or regulation promulgated under the
Securities Act) if the Shares being reoffered are registered
under the Securities Act and a prospectus in respect thereof
is current.
12
EXHIBIT 4.2
ARTRA GROUP INCORPORATED
1996 STOCK OPTION PLAN
There is hereby established a 1996 Stock Option Plan (the "Plan"). The
Plan provides for the grant to certain employees and others who render services
to Artra or its subsidiaries of options ("Options") to purchase shares of common
stock of the Company ("Common Stock").
Purpose: The purpose of the Plan is to provide additional incentive to
the officers, employees, and others who render services to the Company, who are
responsible for the management and growth of the Company, or otherwise
contribute to the conduct and direction of its business, operations and affairs.
It is intended that Options granted under the Plan strengthen the desire of such
persons to join and remain in the employ of the Company and stimulate their
efforts on behalf of the Company.
The Stock. The aggregate number of shares of Common Stock which may be
subject to Options shall not exceed 2,000,000. Such shares may be either
authorized and unissued shares, or treasury shares. If any Option granted under
the Plan shall expire, terminate or be canceled for any reason without having
been exercised in full, the corresponding number of unpurchased shares shall
again be available for the purposes of the Plan.
Types of Options. Options granted under the Plan shall be in the form
of (i) incentive stock options ("ISOs"), as defined in Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code") or (ii) non-statutory
options which do not qualify under such Section ("NSOs"), or both, in the
discretion of the Board of Directors or any committee appointed by the Board
(each, the "Committee"). The status of each Option shall be identified in the
Option Agreement.
Eligibility:
ISOs may be granted to such employees (including officers and
directors who are employees) of the Company as the Committee shall
select from time to time.
NSOs may be granted to such employees (including officers and
directors) of the Company, and to other persons who render services to
the Company, as the Committee shall select from time to time.
General Terms of Options:
Option Price. The price or prices per share of Common Stock to
be sold pursuant to an Option (the "exercise price") shall be such as
shall be fixed by the Committee but shall in any case not be less than:
the fair market value per share for such Common Stock on the date of
grant in the case of ISOs other than to a 10% Shareholder, 110% of the
fair market value per share for such Common Stock on the date of grant
in the case of ISOs to a 10% Shareholder, and the fair market value per
share on the date of grant in the case of NSOs. A "10% Shareholder"
means an individual who within the meaning of Section 422(b) (6) of the
Code owns stock possessing 10 percent or more of the total combined
voting power of all classes of stock of the Company or of its parent or
any subsidiary corporation.
Period of Option Vesting. The Committee shall determine for
each Option the period during which such Option shall be exercisable in
whole or in part, provided that no ISO to a 10% Shareholder shall be
exercisable more than five years after the date of grant.
1
<PAGE>
Special Rule for ISOs. The aggregate fair market value
(determined at the time the ISO is granted) of the stock with respect
to which ISOs are exercisable for the first time by an Optionee during
any calendar year (under all such plans of the Company, its parent or
subsidiary) shall not exceed $100,000, and any excess shall be
considered an NSO.
Effect of Termination of Employment.
The Committee shall determine for each Option the
extent, if any, to which such Option shall be exercisable in
the event of the termination of the Optionee's employment with
or rendering of other services to the Company.
However, any such Option which is an ISO shall in all
events lapse unless exercised by the Optionee: prior to the
89th day after the date on which employment terminated, if
termination was other than by reason of death; and within the
twelve-month period next succeeding the death of the Optionee,
if termination is by reason of death.
The Committee shall have the right, at any time, and
from time to time, with the consent of the Optionee, to modify
the lapse date of an Option and to convert an ISO into an NSO
to the extent that such modification in lapse date increases
the life of the ISO beyond the dates set forth above or beyond
dates otherwise permissible for an ISO.
Payment for Shares of Common Stock. Upon exercise of an
Option, the Optionee shall make full payment of the Option Price: in
cash, or, with the consent of the Committee and to the extent permitted
by it: with Common Stock of the Company valued at fair market value on
date of exercise, but only if held by the Optionee for a period of time
sufficient to prevent a pyramid exercise that would create a charge to
the Company's earnings, with a full recourse interest bearing
promissory note of the Optionee, secured by a pledge of the shares of
Common Stock received upon exercise of such Option, and having such
other terms and conditions as determined by the Committee, by
delivering a properly executed exercise notice together with
irrevocable instructions to a broker to sell shares acquired upon
exercise of the Option and promptly to deliver to the Company a portion
of the proceeds thereof equal to the exercise price, or any combination
of any of the foregoing.
Option Exercises. Options shall be exercised by submitting to
the Company a signed copy of notice of exercise in a form to be
supplied by the Company. The exercise of an Option shall be effective
on the date on which the Company receives such notice at its principal
corporate offices. The Company may cancel such exercise in the event
that payment is not effected in full, subject to the terms of Section
1(e) above.
Non-Transferability of Option. No Option shall be transferable
by the Optionee or otherwise than by will or by the laws of descent and
distribution. During the Optionee's lifetime, such Option shall be
exercisable only by such Optionee. If an Optionee should die while in
the employ of the Company, the Option theretofore granted to the
Optionee, to the extent then otherwise exercisable, shall be
exercisable only by the estate of the Optionee or by a person who
acquired the right to exercise such Option by bequest or inheritance or
otherwise by reason of the death of the Optionee.
Other Plan Terms.
Number of Options which may be Granted to, and Number of
Shares of Common Stock which may be Acquired by Employees.
The Committee may grant more than one Option to an individual,
and, subject to the requirements of Section 422 of the Code, with
respect to ISOs, such Option may be in addition to, in tandem with, or
in substitution for, Options previously granted under the Plan or of
another corporation and assumed by the Company.
2
<PAGE>
The Committee may permit the voluntary surrender of all or a
portion of any Option granted under the Plan or otherwise to be
conditioned upon the granting to the employee of a new Option for the
same or a different number of shares of Common Stock as the Option
surrendered, or may require such voluntary surrender as a condition
precedent to a grant of a new Option to such employee. Such new Option
shall be exercisable at the price, during the period, and in accordance
with any other terms or conditions specified by the Committee at the
time the new Option is granted, all determined in accordance with the
provisions of the Plan without regard to the price, period of exercise,
or any other terms or conditions of the Option surrendered.
Period of Grant of Options. Options under the Plan may be
granted at any time after the Plan has been approved by the
shareholders of the Company. However, no Option shall be granted under
the Plan after August 29, 2006.
Effect of Change in Common Stock. In the event of a
reorganization, recapitalization, liquidation, stock split, stock
dividend, combination of shares, merger or consolidation, or the sale,
conveyance, lease or other transfer by the Company of all or
substantially all of its property, or any change in the corporate
structure or shares of common stock of the Company, pursuant to any of
which events the then outstanding shares of the common stock are split
up or combined or changed into, become exchangeable at the holder's
election for, or entitle the holder thereof to other shares of common
stock, or in the case of any other transaction described in Section
424(a) of the Code, the Committee may change the number and kind of
shares of Common Stock available under the Plan and any outstanding
Option (including substitution of shares of common stock of another
corporation) and the price of any Option and the fair market value
determined under this Plan in such manner as it shall deem equitable in
its sole discretion.
Optionees not Shareholders. An Optionee or a legal representative
thereof shall have none of the rights of a stockholder with respect to shares of
Common Stock subject to Options until such shares shall be issued or transferred
upon exercise of the Option.
Option Agreement. The Company shall effect the grant of Options under
the Plan, in accordance with determinations made by the Committee, by execution
of instruments in writing in a form approved by the Committee. Each Option shall
contain such terms and conditions (which need not be the same for all Options,
whether granted at the time or at different times) as the Committee shall deem
to be appropriate and not inconsistent with the provisions of the Plan, and such
terms and conditions shall be agreed to in writing by the Optionee.
Certain Definitions.
Fair Market Value. As used in the Plan, the term "fair market
value" shall mean as of any date:
if the Common Stock is not traded on any
over-the-counter market or on a national securities exchange,
the value determined by the Committee using the best available
facts and circumstances,
3
<PAGE>
if the Common Stock is traded in the over-the-counter
market, based on most recent closing prices for the Common
Stock on the date the calculation thereof shall be made, or
if the Common Stock is listed on a national
securities exchange, based on the most recent closing prices
for the Common Stock of the Company on such exchange.
Subsidiary and Parent. The term "subsidiary" and "parent" as
used in the Plan shall have the respective meanings set forth in
Sections 424(f) and (e) of the Internal Revenue Code.
Not an Employment Contract. Nothing in the Plan or in any Option or
stock option agreement shall confer on any Optionee any right to continue in the
service of the Company or any parent or subsidiary of the company or interfere
with the right of the Company to terminate such Optionee's employment or other
services at any time.
Withholding Taxes:
(a) Whenever the Company proposes or is required to issue or
transfer shares of Common Stock under the Plan, the Company shall have
the right to require the Optionee to remit to the Company an amount
sufficient to satisfy any Federal, state and/or local withholding tax
requirements prior to the delivery of any certificate or certificates
for such shares. Alternatively, the Company may, in its sole discretion
from time to time, issue or transfer such shares of Common Stock net of
the number of shares sufficient to satisfy the withholding tax
requirements. For withholding tax purposes, the shares of Common Stock
shall be valued on the date the withholding obligation is incurred.
(b) In the case of shares of Common Stock that an Optionee
receives pursuant to his exercise of an Option which is an ISO, if such
Optionee disposes of such shares of Common Stock within two years from
the date of the granting of the ISO or within one year after the
transfer of such shares of Common Stock to him, the Company shall have
the right to withhold from any salary, wages, or other compensation for
services payable by the Company to such Optionee, amounts sufficient to
satisfy any withholding tax obligation attributable to such
disposition.
(c) In the case of a disposition described in Section (b), the
Optionee shall give written notice to the Company of such disposition
within 30 days following the disposition, which notice shall include
such information as the Company may reasonably request to effectuate
the provisions hereof.
Agreements and Representations of Optionees:
As a condition to the exercise of an Option, unless counsel to
the Company opines that it is not necessary under the Securities Act of
1933, as amended, and the pertinent rules thereunder, as the same are
then in effect, the Optionee shall represent in writing that the shares
of Common Stock being purchased are being purchased only for investment
and without any present intent at the time of the acquisition of such
shares of Common Stock to sell or otherwise dispose of the same.
Administration of the Plan:
The Plan shall be administered by the Committee. Subject to
the express provisions of the Plan, the Committee shall have authority,
in its discretion, to determine the individuals to receive Options, the
times when they shall receive them and the number of shares of Common
Stock to be subject to each Option, and other terms relating to the
grant of Options. Directors, including those that may be members of the
Committee, shall be eligible to receive Options under the Plan.
4
<PAGE>
Subject to the express provisions of the Plan, the Committee
shall have authority to construe the respective option agreements and
the Plan, to prescribe, amend and rescind rules and regulations
relating to the Plan, to determine the terms and provisions of the
respective option agreements (which need not be identical) and, as
specified in this Plan, the fair market value of the common stock, and
to make all other determinations necessary or advisable for
administering the Plan. The Committee may correct any defect or supply
any omission or reconcile any inconsistency in the Plan or in any
option agreement in the manner and to the extent it shall deem
expedient to carry it into effect, and it shall be the sole and final
judge of such expediency. The determinations of the Committee on the
matters referred to in this section shall be conclusive.
The Committee may, in its sole discretion, and subject to such
terms and conditions as it may adopt, accelerate the date or dates on
which some or all outstanding Options may be exercised.
The Committee may require that any Option Shares issued be
legended as necessary to comply with applicable federal and state
securities laws.
Amendment and Discontinuance of the Plan:
The Board of Directors of the Company may at any time alter,
suspend or terminate the Plan, but no change shall be made which will
have a material adverse effect upon any Option previously granted,
unless the consent of the Optionee is obtained; provided, however, that
the Board of Directors may not without further approval of the
shareholders, (i) increase the maximum number of shares of Common Stock
for which Options may be granted under the Plan or which may be
purchased by an individual Optionee, (ii) decrease the minimum option
price provided in the Plan, or (iii) change the class of persons
eligible to receive Options.
The Company intends that Options designated by the Committee
as ISOs shall constitute ISOs under Section 422 of the Code. Should any
provision in this Plan for ISOs not be necessary in order to so comply
or should any additional provisions be required, the Board of Directors
of the Company may amend the Plan accordingly without the necessity of
obtaining the approval of the shareholders of the Company.
Other Conditions: If at any time counsel to the Company shall be of the
opinion that any sale or delivery of shares of Common Stock pursuant to an
Option granted under the Plan is or may in the circumstances be unlawful under
the statutes, rules or regulations of any applicable jurisdiction, the Company
shall have no obligation to make such sale or delivery, and the Company shall
not be required to make any application or to effect or to maintain any
qualification or registration under the Securities Act of 1933 or otherwise with
respect to shares of Common Stock or Options under the Plan, and the right to
exercise any such Option may be suspended until, in the opinion of said counsel,
such sale or delivery shall be lawful.
At the time of any grant or exercise of any Option, the Company may, if
it shall deem it necessary or desirable for any reason connected with any law or
regulation of any governmental authority relative to the regulation of
securities, condition the grant and/or exercise of such Option upon the Optionee
making certain representations to the Company and the satisfaction of the
Company with the correctness of such representations.
Approval; Effective Date; Governing Law. The Plan was adopted by the
Board of Directors on July 8, 1996. This Plan shall be interpreted in accordance
with the internal laws of the State of Pennsylvania.
5
EXHIBIT 4.3
ARTRA GROUP INCORPORATED
1996 DISINTERESTED DIRECTORS STOCK OPTION PLAN
There is hereby established a 1996 Disinterested Directors Stock Option
Plan (the "Plan"). The Plan provides for the grant to certain directors of Artra
of options ("Options") to purchase shares of common stock of the Company
("Common Stock").
Purpose: The purpose of the Plan is to provide incentive to directors
of the Company who are not employees or officers to receive options or awards
which will disqualify them from serving as disinterested persons (within the
meaning of Rule 16b-3 under the Securities Exchange Act of 1934) in the
administration of the Company's stock option plans.
The Stock: The aggregate number of shares of Common Stock which may be
subject to Options shall not exceed 200,000. Such shares may be either
authorized and unissued shares, or treasury shares. If any Option granted under
the Plan shall expire, terminate or be cancelled for any reason without having
been exercised in full, the corresponding number of unpurchased shares shall
again be available for the purposes of the Plan.
Type of Options:
Options granted under the Plan shall be in the form of non-statutory
options.
Eligibility:
The Company will grant to each director who participates in
this Plan an Option to purchase a maximum of 10,000 shares of Common
Stock if such person first became a director concurrently with or after
the adoption of this Plan, and an Option to purchase 2,500 shares of
Common Stock on each February 1 thereafter so long as such person on
such May 1 continues to serve as a disinterested director in the
administration of the Company's stock option plans, and so long as such
February 1 is at least six months after the initial date upon which
such person became a director.
General Terms of Options:
Option Price. The price or prices per share of Common Stock to
be sold pursuant to an Option (the "exercise price") shall be the fair
market value on the date of grant.
Period of Option Vesting. All Options shall vest immediately,
provided that Optionee must retain ownership of shares acquired upon
exercise of an Option until six months has elapsed from the date of
grant of the Option.
1
<PAGE>
Effect of Termination of Director Status.
Each Optionee must exercise his or her Option within
10 days after such Optionee ceases to be a director of the
Company, unless such termination is the result of permanent
disability or upon retirement after having attained age 65, in
which event such exercise shall be valid if made within one
year after such termination. However, if the Optionee should
die while a director, the Option shall be exercisable only by
the estate of the Optionee or by a person who acquired the
right to exercise such Option by bequest or inheritance or
otherwise by reason of the death of the Optionee, and only
within the one-year period next succeeding the death of the
Optionee.
Payment for Shares of Common Stock. Upon exercise of an
Option, the Optionee shall make full payment of the Option Price: in
cash, with Common Stock of the Company valued at fair market value on
date of exercise, but only if held by the Optionee for a period of time
sufficient to prevent a pyramid exercise that would create a charge to
the Company's earnings, with a full recourse interest bearing
promissory note of the Optionee, secured by a pledge of the shares of
Common Stock received upon exercise of such Option, and having such
other terms and conditions as determined by the Board of Directors or
any committee appointed by the Board (each, the "Committee"), by
delivering a properly executed exercise notice together with
irrevocable instructions to a broker to sell shares acquired upon
exercise of the Option and promptly to deliver to the Company a portion
of the proceeds thereof equal to the exercise price, or any combination
of any of the foregoing.
Option Exercises. Options shall be exercised by submitting to
the Company a signed copy of notice of exercise in a form to be
supplied by the Company. The exercise of an Option shall be effective
on the date on which the Company receives such notice at its principal
corporate offices. The Company may cancel such exercise in the event
that payment is not effected in full, subject to the terms stated
above.
Non-Transferability of Option. No Option shall be transferable
by the Optionee or otherwise than by will or by the laws of descent and
distribution. During the Optionee's lifetime, such Option shall be
exercisable only by such Optionee. Upon an Optionee's death, the Option
theretofore granted to the Optionee, to the extent then otherwise
exercisable, shall be exercisable only by the estate of the Optionee or
by a person who acquired the right to exercise such Option by bequest
or inheritance or otherwise by reason of the death of the Optionee.
2
<PAGE>
Other Plan Terms.
Period of Grant of Options. No Option shall be granted under the Plan
after August 29, 2006.
Effect of Change in Common Stock. In the event of a
reorganization, recapitalization, liquidation, stock split, stock
dividend, combination of shares, merger or consolidation, or the sale,
conveyance, lease or other transfer by the Company of all or
substantially all of its property, or any change in the corporate
structure or shares of common stock of the Company, pursuant to any of
which events the then outstanding shares of the common stock are split
up or combined or changed into, become exchangeable at the holder's
election for, or entitle the holder thereof to other shares of common
stock, or in the case of any other transaction described in Section
424(a) of the Code, the number and kind of shares of Common Stock
available under the Plan and any outstanding Option (including
substitution of shares of common stock of another corporation) and the
price of any Option and the fair market value determined under this
Plan shall be appropriately adjusted.
Optionees not Shareholders. An Optionee or a legal
representative thereof shall have none of the rights of a stockholder
with respect to shares of Common Stock subject to Options until such
shares shall be issued or transferred upon exercise of the Option.
Option Agreement. The Company shall effect the grant of Options under
the Plan by execution of an instrument consistent with the terms and conditions
set forth in this Plan. The execution of such instrument shall be a
pre-condition to participation in the Plan.
Certain Definitions.
Fair Market Value. As used in the Plan, the term "fair market
value" shall mean as of any date:
if the Common Stock is not traded on any over-the-counter
market or on a national securities exchange, the value determined by
the Committee using the best available facts and circumstances,
if the Common Stock is traded in the over-the-counter market,
based on most recent closing prices for the Common Stock on the date
the calculation thereof shall be made, or
if the Common Stock is listed on a national securities
exchange, based on the most recent closing prices for the Common Stock
of the Company on such exchange.
3
<PAGE>
Subsidiary and Parent. The term "subsidiary" and "parent" as
used in the Plan shall have the respective meanings set forth in
Sections 424(f) and (e) of the Internal Revenue Code.
Agreements and Representations of Optionees:
As a condition to the exercise of an Option, unless counsel to
the Company opines that it is not necessary under the Securities Act of
1933, as amended, and the pertinent rules thereunder, as the same are
then in effect, the Optionee shall represent in writing that the shares
of Common Stock being purchased are being purchased only for investment
and without any present intent at the time of the acquisition of such
shares of Common Stock to sell or otherwise dispose of the same.
Administration of the Plan:
The Plan shall be administered, to the extent required, by the
Committee.
Subject to the express provisions of the Plan, the Committee
shall have authority to construe the respective option agreements and
the Plan, to prescribe, amend and rescind rules and regulations
relating to the Plan, and to make all other determinations necessary or
advisable for administering the Plan. The Committee may correct any
defect or supply any omission or reconcile any inconsistency in the
Plan or in any option agreement in the manner and to the extent it
shall deem expedient to carry it into effect, and it shall be the sole
and final judge of such expediency. The determinations of the Committee
on the matters referred to in this section shall be conclusive.
The Committee may require that any Option Shares issued be
legended as necessary to comply with applicable federal and state
securities laws.
Amendment and Discontinuance of the Plan:
The Board of Directors of the Company may at any time alter,
suspend or terminate the Plan, but no change shall be made which will
have a material adverse effect upon any Option previously granted,
unless the consent of the Optionee is obtained; provided, however, that
the Board of Directors may not without further approval of the
shareholders: increase the maximum number of shares of Common Stock for
which Options may be granted under the Plan or which may be purchased
by an individual Optionee; cause shares to be granted at less than fair
market value or change such price once a grant has been made; or change
the class of persons eligible to receive Options; and provided,
further, that Plan provisions referred to in Rule 16b-3(c)(2)(ii)(A)
under the Securities Exchange Act of 1934 may in no event be amended
more than once every six months, other than to comport with changes in
the Internal Revenue Code, the Employee Retirement Income Security Act,
or the rules thereunder.
Other Conditions: If at any time counsel to the Company shall be of the
opinion that any sale or delivery of shares of Common Stock pursuant to an
Option granted under the Plan is or may in the circumstances be unlawful under
the statutes, rules or regulations of any applicable jurisdiction, the Company
shall have no obligation to make such sale or delivery, and the Company shall
not be required to make any application or to effect or to maintain any
qualification or registration under the Securities Act of 1933 or otherwise with
respect to shares of Common Stock or Options under the Plan, and the right to
exercise any such Option may be suspended until, in the opinion of said counsel,
such sale or delivery shall be lawful.
4
<PAGE>
At the time of any grant or exercise of any Option, the Company may, if
it shall deem it necessary or desirable for any reason connected with any law or
regulation of any governmental authority relative to the regulation of
securities, condition the grant and/or exercise of such Option upon the Optionee
making certain representations to the Company and the satisfaction of the
Company with the correctness of such representations.
Approval; Effective Date; Governing Law. The Plan was adopted by the
Board of Directors on July 12, 1996. This Plan shall be interpreted in
accordance with the internal laws of the State of Pennsylvania.
5
EXHIBIT 5
[Letterhead of Duane, Morris & Heckscher LLP]
September 28, 1999
The Board of Directors of
Entrade Inc.
500 Central Avenue
Northfield, IL 60093
Gentlemen:
We have acted as counsel to Entrade Inc. (the "Company") in connection
with the preparation and filing with the Securities and Exchange Commission
under the Securities Act of 1933, as amended, of a registration statement on
Form S-8 (the "Registration Statement") relating to the offer and sale by the
Company of up to an aggregate of 4,417,603 shares (the "Shares") of Common
Stock, no par value, of the Company, pursuant to the Company's Restated 1985
Stock Option Plan, the Company's 1996 Stock Option Plan, the Company's 1996
Disinterested Directors Stock Option Plan, the Company's 1999 Nonqualified Stock
Option Plan, and the Company's 1999 Employment Agreement Option (collectively,
the "Plans").
As counsel to the Company, we have supervised all corporate proceedings
in connection with the preparation and filing of the Registration Statement. We
have also examined the Company's Articles of Incorporation and Bylaws, as
amended to date, the corporate minutes and other proceedings and the records
relating to the authorization, sale and issuance of the Shares, and such other
documents and matters of law as we have deemed necessary or appropriate in order
to render this opinion.
Based upon the foregoing, it is our opinion that each of the Shares,
when issued and paid for in accordance with the terms and conditions of the
respective Plans, will be duly authorized, legally and validly issued and
outstanding, fully paid and nonassessable.
We hereby consent to the use of this opinion in the Registration
Statement and the reference to us under "Item 5 - Interests of Named Experts and
Counsel" in the Registration Statement.
Sincerely,
/s/ DUANE, MORRIS & HECKSCHER LLP
Exhibit 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Registration Statement of
Entrade Inc. on Form S-8 of our report dated May 13, 1999 on our audit of the
consolidated balance sheet of Entrade Inc. as of February 23, 1999 (inception)
appearing in the Registration Statement on Form S-4 (Registration No. 333-79175)
of Entrade Inc. filed with the Securities and Exchange Commission, as amended
under cover of Form S-4/A on August 18, 1999. We also consent to the reference
to us under "Item 5 - Interests of Named Experts and Counsel" in such
Registration Statement.
/s/ PRICEWATERHOUSECOOPERS LLP
Chicago, Illinois
September 28, 1999
Exhibit 23.3
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Registration Statement of
Entrade Inc. on Form S-8 of our report dated February 1, 1999 on our audits of
the consolidated financial statements of ARTRA GROUP Incorporated and its
subsidiaries at December 31, 1998 and 1997, and for each of the years in the
period ended December 31, 1998 appearing in the Registration Statement on Form
S-4 (Registration No. 333-79175) of Entrade Inc. filed with the Securities and
Exchange Commission under cover of Form S-4/A on August 18, 1999. We also
consent to the reference to us under "Item 5 - Interests of Named Experts and
Counsel" in such Registration Statement.
/s/ PRICEWATERHOUSECOOPERS LLP
Chicago, Illinois
September 28, 1999
