As filed with the Securities and Exchange Commission on November 22, 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.
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(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.
1999 Stock Option Plan for Non-Executive Employees
Nonqualified Stock Option Agreement for Corey P. Schlossmann
(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, 1,200,000 (2) $16,151,250.13 $4,491
no par value
====================================================================================================================
</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 per share average exercise price of $9.653 with respect to
options to purchase 836,500 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 November 19,
1999, or $22.21875 per share, with respect to 363,500 shares reserved for
issuance under the Plans.
II-2
<PAGE>
PART II
INFORMATION REQUIRED IN REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following material is incorporated herein by reference:
(a) The 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").
(c) The Company's Form 8-K Current Report as filed by the Company with
the Commission on October 6, 1999.
(d) The Company's Form 8-K Current Report as filed by the Company with
the Commission on October 28, 1999.
(e) The Company's Form 10-Q Quarterly Report as filed by the Company
with the Commission on November 15, 1999.
(e) 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.
II-3
<PAGE>
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.
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
II-4
<PAGE>
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 $7,000,000 inclusive of defense costs, expenses and charges.
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 1999 Nonqualified Stock Option Plan for
Non-Executive Officer Employees. (Filed herewith.)
4.2 Nonqualified Stock Option Agreement dated as of October 15, 1999
between the Company and Corey P. Schlossmann. (Filed with the
Commission on October 28, 1999 as Exhibit 10.6 to Form 8-K dated
October 19, 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-8 of this Registration Statement).
Item 9. Undertakings.
The registrant hereby undertakes:
(a) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
II-5
<PAGE>
(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.
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.
II-6
<PAGE>
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-7
<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 Northfield, Illinois on November 22, 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 November 22, 1999
- ----------------------- of Directors and a
John Harvey Director
/s/ Peter R. Harvey Vice Chairman of the November 22, 1999
- ----------------------- Board of Directors,
Peter R. Harvey Chairman of the Executive
Committee and a
Director
II-8
<PAGE>
/s/ Mark F. Santacrose President, Chief Executive November 22, 1999
- -------------------------- Officer and a Director
Mark F. Santacrose
/s/ John G. Hamm Vice President, Treasurer
- -------------------------- and Chief Financial Officer November 22, 1999
John G. Hamm
/s/ Lawrence D. Levin Controller and Chief November 22, 1999
- -------------------------- Accounting Officer
Lawrence D. Levin
/s/ Gerard M. Kenny Director November 22, 1999
- --------------------------
Gerard M. Kenny
/s/ Edward A. Celano Director November 22, 1999
- --------------------------
Edward A. Celano
/s/Howard R. Conant Director November 22, 1999
- --------------------------
Howard R. Conant
/s/ Robert L. Johnson Director November 22, 1999
- --------------------------
Robert L. Johnson
/s/ Robert D. Kohn President of entrade.com November 22, 1999
- -------------------------- and a Director
Robert D. Kohn
/s/ Maynard K. Louis Director November 22, 1999
- --------------------------
Maynard K. Louis
/s/ Corey P. Schlossmann Director November 22, 1999
- --------------------------
Corey P. Schlossmann
/s/ John K. Tull Director November 22, 1999
- --------------------------
John K. Tull
II-9
<PAGE>
EXHIBIT INDEX
(Pursuant to Item 601 of Regulation S-K)
Exhibit No. Exhibit Description
- ----------- -------------------
4.1 The Company's 1999 Nonqualified Stock Option Plan for
Non-Executive Officer Employees. (Filed herewith.)
4.2 Nonqualified Stock Option Agreement dated as of October 15, 1999
between the Company and Corey P. Schlossmann. (Filed with the
Commission on October 28, 1999 as Exhibit 10.6 to Form 8-K dated
October 19, 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-8 of this Registration Statement).
Exhibit 4.2
ENTRADE INC.
1999 NONQUALIFIED STOCK OPTION PLAN FOR
NON-EXECUTIVE OffICER EMPLOYEES
1. Purpose. The purpose of the Entrade Inc. 1999 Nonqualified Stock
Option Plan for Non-Executive Officer Employees (the "Plan") is to further the
growth, development and financial success of Entrade Inc. (the "Company") and
the subsidiaries of the Company by providing additional incentives to employees
of the Company and the Company's subsidiaries, which will enable them to
participate directly in the growth of the capital stock of the Company. The
Company intends that the Plan will facilitate securing, retaining and motivating
employees of high caliber and potential. To accomplish these purposes, the Plan
provides a means whereby employees of the Company or any subsidiary of the
Company may receive stock options ("Options") to purchase the Company's Common
Stock, no par value (the "Common Stock").
2. Administration.
(a) Composition of the Committee. The Plan shall be administered by a
committee (the "Committee"), which shall be appointed by, and serve at the
pleasure of, the Company's Board of Directors (the "Board"). From time to time
the Board may increase or decrease the size of the Committee, appoint additional
members thereof, remove members (with or without cause), appoint new members in
substitution therefor, fill vacancies or remove all members of the Committee and
thereafter directly administer the Plan. The initial members of the Committee
shall be the President of the Company and the Chief Financial Officer of the
Company; provided that, in the absence of either or both of them, the Chairman
of the Company and/or the Vice Chairman of the Company may act for either such
officer.
(b) Authority of the Committee. The Committee shall have full and final
authority, in its sole discretion, to interpret the provisions of the Plan and
to decide all questions of fact arising in its application; to determine the
employees to whom Options shall be granted and the amount, size, exercise price
and other terms of each such grant; to determine the time when Options shall be
granted; and to make all other determinations necessary or advisable for the
administration of the Plan. All decisions, determinations and interpretations of
the Committee shall be final and binding on all optionees and all other holders
of Options granted under the Plan.
(c) Authority of the Board. Notwithstanding anything to the contrary
set forth in the Plan, all authority granted hereunder to the Committee may be
exercised at any time and from time to time by the Board at its election. All
decisions, determinations and interpretations of the Board shall be final and
binding on all optionees and all other holders of Options granted under the
Plan.
<PAGE>
3. Stock Subject to the Plan. Subject to Section 16 hereof, the shares
that may be issued under the Plan shall not exceed in the aggregate 1,000,000
shares of Common Stock. Such shares may be authorized and unissued shares or
shares issued and subsequently reacquired by the Company. Except as otherwise
provided herein, any shares subject to an Option that for any reason expires or
is terminated unexercised as to such shares shall again be available under the
Plan.
4. Eligibility To Receive Options. Persons eligible to receive Options
under the Plan shall be limited to those employees of the Company or any
subsidiary of the Company; provided that no person who is either an officer of
the Company, as that term is defined in Rule 16a-1(f) of the Securities Exchange
Act of 1934, or a director of the Company shall be eligible to receive Options
under the Plan.
5. Types of Options. Grants may be made at any time and from time to
time by the Committee in the form of Options to purchase shares of Common Stock.
Options granted hereunder shall be non-qualified stock options that are not
intended to qualify as incentive stock options within the meaning of Section 422
of the Internal Revenue Code of 1986, as amended (the "Code") or any amendment
or substitute thereto ("Nonqualified Stock Options").
6. Option Agreements. Options for the purchase of Common Stock shall be
evidenced by written agreements in such form not inconsistent with the Plan as
the Committee shall approve from time to time. Options granted hereunder may be
evidenced by a single agreement or by multiple agreements, as determined by the
Committee in its sole discretion. Each option agreement shall contain in
substance the following terms and conditions:
(a) Type of Option. Each option agreement shall identify the Options
represented thereby as Nonqualified Stock Options.
(b) Option Price. Each option agreement shall set forth the purchase
price of the Common Stock purchasable upon the exercise of the Option evidenced
thereby.
(c) Exercise Term. Each option agreement shall state the period or
periods of time within which the Option may be exercised, in whole or in part,
as determined by the Committee (including the date or dates upon which the
Option or any portion thereof shall first become exercisable), provided that no
Option shall be exercisable after ten years from the date of grant thereof. The
Committee shall have the power to permit an acceleration of previously
established exercise terms, subject to the requirements set forth herein, upon
such circumstances and subject to such terms and conditions as the Committee
deems appropriate.
7. Date of Grant. The date on which an Option shall be deemed to have
been granted under the Plan shall be the date of the Committee's authorization
of the Option or such later date as may be determined by the Committee at the
time the Option is authorized. Notice of the determination shall be given to
each individual to whom an Option is so granted within a reasonable time after
the date of such grant.
<PAGE>
8. Exercise and Payment for Shares. Options may be exercised in whole
or in part, from time to time, by giving written notice of exercise to the
Secretary of the Company, specifying the number of shares to be purchased. The
purchase price of the shares with respect to which an Option is exercised shall
be payable in full with the notice of exercise in cash, Common Stock at fair
market value, or a combination thereof, as the Committee may determine from time
to time and subject to such terms and conditions as may be prescribed by the
Committee for such purpose. The Committee may also, in its discretion and
subject to prior notification to the Company by an optionee, permit an optionee
to enter into an agreement with the Company=s transfer agent or a brokerage firm
of national standing whereby the optionee will simultaneously exercise the
Option and sell the shares acquired thereby through the Company=s transfer agent
or such brokerage firm and either the Company=s transfer agent or the brokerage
firm executing the sale will remit to the Company from the proceeds of sale the
exercise price of the shares as to which the Option has been exercised.
9. Rights upon Termination of Employment. In the event that an optionee
ceases to be an employee of the Company or any subsidiary of the Company for any
reason other than death, retirement, as hereinafter defined, or disability
(within the meaning of Section 22(e)(3) of the Code or any substitute therefor),
the optionee shall have the right to exercise the Option during its term within
a period of three months after such termination to the extent that the Option
was exercisable at the time of termination, or within such other period, and
subject to such terms and conditions, as may be specified by the Committee. In
the event that an optionee dies, retires or becomes disabled prior to the
expiration of his Option and without having fully exercised his Option, the
optionee or his successor shall have the right to exercise the Option during its
term within a period of one year after termination of employment due to death,
retirement or disability to the extent that the Option was exercisable at the
time of termination, or within such other period, and subject to such terms and
conditions, as may be specified by the Committee. As used in this Section 9,
"retirement" means a separation from service by reason of an optionee's
retirement at or after his earliest permissible retirement date pursuant to and
in accordance with his employer's established plan, policy or practice.
10. General Restrictions. Each Option granted under the Plan shall be
subject to the requirement that, if at any time the Committee shall determine
that (i) the listing, registration or qualification of the shares of Common
Stock subject or related thereto upon any securities exchange or under any state
or federal law, or (ii) the consent or approval of any government regulatory
body, or (iii) the satisfaction of any tax payment or withholding obligation, or
(iv) an agreement by the recipient of an Option with respect to the disposition
of shares of Common Stock is necessary or desirable as a condition of or in
connection with the granting of such Option or the issuance or purchase of
shares of Common Stock thereunder, such Option shall not be consummated in whole
or in part unless such listing, registration, qualification, consent, approval
or agreement shall have been effected or obtained free of any conditions not
acceptable to the Committee.
11. Rights of a Shareholder. The recipient of any Option under the
Plan, unless otherwise provided by the Plan, shall have no rights as a
shareholder unless and until certificates for shares of Common Stock are issued
and delivered to him.
<PAGE>
12. Right to Terminate Employment. Nothing contained in the Plan or in
any option agreement entered into pursuant to the Plan shall confer upon any
optionee the right to continue in the employment of the Company or any
subsidiary of the Company or affect any right that the Company or any subsidiary
of the Company may have to terminate the employment of such optionee.
13. Withholding. 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 recipient to remit to the Company an amount sufficient to
satisfy any federal, state or local withholding tax requirements prior to the
delivery of any certificate or certificates for such shares. If and to the
extent authorized by the Committee, in its sole discretion, an optionee may make
an election, by means of a form of election to be prescribed by the Committee,
to have shares of Common Stock that are acquired upon exercise of an Option
withheld by the Company or to tender other shares of Common Stock or other
securities of the Company owned by the optionee to the Company at the time of
exercise of an Option to pay the amount of tax that would otherwise be required
by law to be withheld by the Company as a result of any exercise of an Option.
Any such election shall be irrevocable and shall be subject to termination by
the Committee, in its sole discretion, at any time. Any securities so withheld
or tendered will be valued by the Committee as of the date of exercise.
14. Non-Assignability. No Option under the Plan shall be assignable or
transferable by the recipient thereof except by will or by the laws of descent
and distribution or by such other means as the Committee may approve. During the
life of the recipient, such Option shall be exercisable only by such person or
by such person's guardian or legal representative.
15. Non-Uniform Determinations. The Committee's determinations under
the Plan (including without limitation determinations of the persons to receive
Options, the form, amount and timing of such grants, the terms and provisions of
Options, and the agreements evidencing same) need not be uniform and may be made
selectively among persons who receive, or are eligible to receive, grants of
Options under the Plan whether or not such persons are similarly situated.
<PAGE>
16. Adjustments.
(a) Changes in Capitalization. Subject to any required action by the
shareholders of the Company, the number of shares of Common Stock covered by
each outstanding Option and the number of shares of Common Stock that have been
authorized for issuance under the Plan but as to which no Options have yet been
granted or which have been returned to the Plan upon cancellation or expiration
of an Option, as well as the price per share of Common Stock covered by each
such outstanding Option, shall be proportionately adjusted for any increase or
decrease in the number of issued shares of Common Stock resulting from a stock
split, reverse stock split, stock dividend, combination or reclassification of
the Common Stock, or any other increase or decrease in the number of issued
shares of Common Stock effected without receipt of consideration by the Company;
provided, however, that conversion of any convertible securities of the Company
shall not be deemed to have been "effected without receipt of consideration."
Such adjustment shall be made by the Committee, whose determination in that
respect shall be final, binding and conclusive. Except as expressly provided
herein, no issuance by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, shall affect, and no
adjustment by reason thereof shall be made with respect to, the number or price
of shares of Common Stock subject to an Option.
(b) Dissolution or Liquidation. In the event of the proposed
dissolution or liquidation of the Company, all outstanding Options will
terminate immediately prior to the consummation of such proposed action, unless
otherwise provided by the Committee. The Committee may, in the exercise of its
discretion in such instances, declare that any Option shall terminate as of a
date fixed by the Committee and give each Option holder the right to exercise
his Option as to all or any part of the shares of Common Stock covered by the
Option, including shares as to which the Option would not otherwise be
exercisable.
(c) Sale or Merger. In the event of a proposed sale of all or
substantially all of the assets of the Company, or the merger of the Company
with or into another corporation, the Committee, in the exercise of its sole
discretion, may take such action as it deems desirable, including, but not
limited to: (i) causing an Option to be assumed or an equivalent option to be
substituted by the successor corporation or a parent or subsidiary of such
successor corporation, (ii) providing that each Option holder shall have the
right to exercise his Option as to all of the shares of Common Stock covered by
the Option, including shares as to which the Option would not otherwise be
exercisable, or (iii) declaring that an Option shall terminate at a date fixed
by the Committee provided that the Option holder is given notice and opportunity
to exercise the then exercisable portion of his Option prior to such date.
17. Amendment. The Committee may terminate or amend the Plan at any
time, with respect to shares as to which Options have not been granted, subject
to any required shareholder approval or any shareholder approval that the Board
may deem to be advisable for any reason, such as for the purpose of obtaining or
retaining any statutory or regulatory benefits under tax, securities or other
laws or satisfying any applicable stock exchange listing requirements. The
Committee may not, without the consent of the holder of an Option, alter or
impair any Option previously granted under the Plan, except as specifically
authorized herein.
18. Reservation of Shares. The Company, during the term of the Plan,
will at all times reserve and keep available such number of shares as shall be
sufficient to satisfy the requirements of the Plan. Inability of the Company to
obtain authority from any regulatory body having jurisdiction, which authority
is deemed by the Company's counsel to be necessary to the lawful issuance and
sale of any shares hereunder, shall relieve the Company of any liability for the
failure to issue or sell such shares as to which such requisite authority shall
not have been obtained.
19. Effect on Other Plans. Participation in the Plan shall not affect
an employee's eligibility to participate in any other benefit or incentive plan
of the Company or any subsidiary of the Company. Any Options granted pursuant to
the Plan shall not be used in determining the benefits provided under any other
plan of the Company or any subsidiary of the Company unless specifically
provided.
<PAGE>
20. Duration of the Plan. The Plan shall remain in effect until all
Options granted under the Plan have been satisfied by the issuance of shares or
have been cancelled unexercised, but no Option shall be granted more than ten
years after the date the Plan is adopted by the Company.
21. Forfeiture. Notwithstanding anything to the contrary in the Plan,
if the Committee finds, by a majority vote, after full consideration of the
facts presented on behalf of both the Company and any optionee, that the
optionee has been engaged in fraud, embezzlement, theft or commission of a
felony in the course of his employment or retention by the Company or any
subsidiary of the Company or that the optionee has willfully disclosed
confidential information of the Company or any subsidiary of the Company and
that such disclosure materially damaged the Company or any subsidiary of the
Company, the optionee shall forfeit all unexercised Options and all exercised
Options under which the Company has not yet delivered the certificates. The
decision of the Committee in interpreting and applying the provisions of this
Section 21 shall be final. No decision of the Committee, however, shall affect
the finality of the discharge or termination of such optionee by the Company or
any subsidiary of the Company in any manner.
22. No Prohibition on Corporate Action. No provision of the Plan shall
be construed to prevent the Company or any officer or director thereof from
taking any action deemed by the Company or such officer or director to be
appropriate or in the Company's best interest, whether or not such action could
have an adverse effect on the Plan or any Options granted hereunder, and no
optionee or optionee's estate, personal representative or beneficiary shall have
any claim against the Company or any officer or director thereof as a result of
the taking of such action.
23. Indemnification. With respect to the administration of the Plan,
the Company shall indemnify each present and future member of the Committee and
the Board against, and each member of the Committee and the Board shall be
entitled without further action on his part to indemnity from the Company for,
all expenses (including the amount of judgments and the amount of approved
settlements made with a view to the curtailment of costs of litigation, other
than amounts paid to the Company itself) reasonably incurred by him in
connection with or arising out of, any action, suit or proceeding in which he
may be involved by reason of his being or having been a member of the Committee
or the Board, whether or not he continues to be such member at the time of
incurring such expenses; provided, however, that such indemnity shall not
include any expenses incurred by any such member of the Committee or the Board
(i) in respect of matters as to which he shall be finally adjudged in any such
action, suit or proceeding to have been guilty of gross negligence or willful
misconduct in the performance of his duty as such member of the Committee or the
Board; or (ii) in respect of any matter in which any settlement is effected for
an amount in excess of the amount approved by the Company on the advice of its
legal counsel; and provided further that no right of indemnification under the
provisions set forth herein shall be available to or enforceable by any such
member of the Committee or the Board unless, within 60 days after institution of
any such action, suit or proceeding, he shall have offered the Company in
writing the opportunity to handle and defend same at its own expense. The
foregoing right of indemnification shall inure to the benefit of the heirs,
executors or administrators of each such member of the Committee or the Board
and shall be in addition to all other rights to which such member may be
entitled as a matter of law, contract or otherwise.
<PAGE>
24. Miscellaneous Provisions.
(a) Compliance with Plan Provisions. No optionee or other person shall
have any right with respect to the Plan, the Common Stock reserved for issuance
under the Plan or in any Option until a written option agreement shall have been
executed by the Company and the optionee and all the terms, conditions and
provisions of the Plan and the Option applicable to such optionee (and each
person claiming under or through him) have been met.
(b) Approval of Counsel. In the discretion of the Committee, no shares
of Common Stock, other securities or property of the Company or other forms of
payment shall be issued hereunder with respect to any Option unless counsel for
the Company shall be satisfied that such issuance will be in compliance with
applicable federal, state, local and foreign legal, securities exchange and
other applicable requirements.
(c) Effects of Acceptance of Option. By accepting any Option or other
benefit under the Plan, each optionee and each person claiming under or through
him shall be conclusively deemed to have indicated his acceptance and
ratification of, and consent to, any action taken under the Plan by the Company,
the Board and/or the Committee or its delegates.
(d) Construction. The masculine pronoun shall include the feminine and
neuter, and the singular shall include the plural, where the context so
indicates.
EXHIBIT 5
[Letterhead of Duane, Morris & Heckscher LLP]
November 22, 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 1,200,000 shares (the "Shares") of Common
Stock, no par value, of the Company, pursuant to the Company's 1999 Nonqualified
Stock Option Plan for Non-Executive Officer Employees and the Nonqualified Stock
Option Agreement dated as of October 15, 1999 between the Company and Corey P.
Schlossman (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 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
November 19, 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
November 19, 1999
