<PAGE>
As filed with the Securities and Exchange Commission on May , 1996
Registration No. 33-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
Registration Statement
Under
The Securities Act of 1933
IDM ENVIRONMENTAL CORP.
-----------------------
(Exact name of registrant as specified in its charter)
NEW JERSEY 22-2194790
- ------------------------------------ -------------------------
(State or other jurisdiction (IRS Employer
of incorporation) Identification No.)
396 WHITEHEAD AVENUE, SOUTH RIVER, NEW JERSEY 08882
--------------------------------------------- ------------
(Address of Principal Executive Offices) (Zip Code)
IDM ENVIRONMENTAL CORP.
1995 STOCK OPTION PLAN
-----------------------
(Full title of the plan)
Copy to:
JOEL FREEDMAN MICHAEL SANDERS
IDM ENVIRONMENTAL CORP. VANDERKAM & SANDERS
P.O. BOX 388 1111 CAROLINE
396 WHITEHEAD AVENUE SUITE 2905
SOUTH RIVER, NEW JERSEY 08882 HOUSTON, TEXAS 77010
(908) 390-9550 (713) 655-0015
-----------------------------
(Name, address and telephone
number of agent for service)
APPROXIMATE DATE OF PROPOSED SALES PURSUANT TO THE PLAN: FROM TIME TO TIME
AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT.
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TITLE OF SECURITIES AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING REGISTRATION
TO BE REGISTERED REGISTERED (1) SHARE (2) PRICE FEE
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.001 par value 500,000 $ 5.48 $ 2,740,625 $ 945.04
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
</TABLE>
(1) An undetermined number of additional shares may be issued if the
antidilution provisions of the 1995 Stock Option Plan become operative.
(2) Calculated in accordance with Rule 457(h) solely for the purpose of
determining the registration fee. Offering prices for shares underlying
outstanding options are the exercise prices of the various outstanding
options. With respect to authorized but unissued options reserved under
the plan, the offering price is the closing price ($8.25) of the Common
Stock on May 22, 1996, as reported on the Nasdaq National Market System.
- --------------------------------------------------------------------------------
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<PAGE>
PART I
INFORMATION REQUIRED IN SECTION 10(a) PROSPECTUS
ITEM 1. PLAN INFORMATION
Information required by Item 1 is included in documents sent or given to
participants in the Plan pursuant to Rule 428(b)(1) of the Securities Act.
ITEM 2. REGISTRATION INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION
Information required by Item 2 is included in documents sent or given to
participants in the Plan pursuant to Rule 428(b)(1) of the Securities Act.
<PAGE>
CROSS REFERENCE SHEET
FOR PROSPECTUS TO BE USED FOR REOFFERS OF
SHARES OF COMMON STOCK BY AFFILIATES
IDM ENVIRONMENTAL CORP.
-----------------------
Registration Statement
Item and Heading Prospectus Heading
---------------------- ------------------
1. Forepart of the Registration Statement and Outside
Front Cover Page of Prospectus. . . . . . . . . . . Cover Page
2. Inside Front and Outside Back Cover Pages of
Prospectus. . . . . . . . . . . . . . . . . . . . . Available
Information;
Incorporation of
Certain Documents by
Reference
3. Summary Information, Risk Factors and Ratio of
Earnings to Fixed Charges . . . . . . . . . . . . . General Information
4. Use of Proceeds . . . . . . . . . . . . . . . . . . Use of Proceeds
5. Determination of Offering Price . . . . . . . . . . Not applicable
6. Dilution . . . . . . . . . . . . . . . . . . . . . Not applicable
7. Selling Security Holders. . . . . . . . . . . . . . Selling Shareholders
8. Plan of Distribution. . . . . . . . . . . . . . . . Plan of Distribution
9. Description of Securities to be Registered. . . . . Not applicable
10. Interests of Named Experts and Counsel. . . . . . . Legal Matters
11. Material Changes. . . . . . . . . . . . . . . . . . Not applicable
12. Incorporation of Certain Information by Reference . Incorporation of
Certain Documents by
Reference
13. Disclosure of Commission Position on Indemnification
For Securities Act Liabilities. . . . . . . . . . . Not applicable
<PAGE>
PROSPECTUS
249,000 SHARES
IDM ENVIRONMENTAL CORP.
COMMON STOCK
$.001 PAR VALUE
---------------
This Prospectus relates to the reoffer and resale by various persons (the
"Selling Shareholders") of shares (the "Shares") of Common Stock, $.001 per
value (the "Common Stock"), of IDM Environmental Corp. (the "Company") that may
be issued by the Company to the Selling Shareholders upon the exercise of
outstanding stock options granted pursuant to the 1995 Stock Option Plan (the
"1995 Plan") of the Company. The offer and sale of the Shares to the Selling
Shareholders is registered under the Securities Act of 1933, as amended (the
"Securities Act"), pursuant to a registration statement, of which this
Prospectus forms a part. The Shares are being reoffered and resold for the
account of the Selling Shareholders and the Company will not receive any of the
proceeds from the resale of the Shares.
The Selling Shareholders have advised the Company that the resale of their
Shares may be effected from time to time on the Nasdaq National Market
("Nasdaq"), or in negotiated transactions, or a combination of such methods of
sale, at fixed prices which may be changed, at market prices prevailing at the
time of sale, at prices related to such prevailing market prices, or at
negotiated prices. See "Plan of Distribution." The Company will bear all
expenses in connection with the preparation of this Prospectus.
The Common Stock of the Company is traded on Nasdaq under the symbol
"IDMC". On May 22, 1996, the last reported price of the Common Stock, as
reported on Nasdaq, was $8.25.
Any sales by the Selling Shareholders will be made subject to certain
volume limitations. During any three month period during which this Prospectus
is effective, each Selling Shareholder and affiliates may sell a maximum of the
greater of one percent of the outstanding Common Stock of the Company or the
average weekly trading volume of the Common Stock during the four calendar weeks
preceding the date of the sale.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
-------------------
The date of this Prospectus is May 29, 1996
<PAGE>
TABLE OF CONTENTS
Available Information . . . . . . . . . . . . . . . 2
Incorporation of Certain Documents by Reference . . 3
General Information . . . . . . . . . . . . . . . . 3
Use of Proceeds . . . . . . . . . . . . . . . . . . 4
Selling Shareholders. . . . . . . . . . . . . . . . 4
Plan of Distribution. . . . . . . . . . . . . . . . 4
Legal Matters . . . . . . . . . . . . . . . . . . . 4
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934,as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Reports, proxy
statements and other information filed by the Company can be inspected and
copied at the public reference facilities maintained by the Commission at 450
Fifth Street, Room 1024, Washington, D.C. 20549 or at the Commission's Regional
Offices in New York (7 World Trade Center, Suite 1300, New York, New York 10048)
and Chicago (500 West Madison Street, Suite 1400, Chicago, Illinois 60661).
Copies of such material can be obtained from the Public Reference Section of the
Commission in Washington, D.C. at prescribed rates.
2
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company's Annual Report on Form 10-KSB for the year ended December 31,
1995, the Company's Quarterly Report on Form 10-Q for the quarter ended March
31, 1996 and the description of securities included in Form 8-A declared
effective by the Commission on April 26, 1994 (Commission File No. 0-23900) are
incorporated by reference in this Prospectus and shall be deemed to be a part
hereof. All reports and other documents subsequently filed by the Company
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act
of 1934, as amended, prior to the filing of a post-effective amendment which
indicates that all securities offered hereby have been sold or which deregisters
all securities then remaining unsold, are deemed to be incorporated by reference
in this Prospectus and shall be deemed to be a part hereof from the date of the
filing of such reports and documents.
The Company hereby undertakes to provide without charge to each person to
whom a copy of this Prospectus has been delivered, on the written or oral
request of any such person, a copy of any or all of the documents incorporated
by reference in the Registration Statement of which this Prospectus forms a part
(excluding exhibits to such documents unless specifically incorporated by
reference). Requests for such copies should be directed to Mr. Michael Killeen,
IDM Environmental Corp., P.O. Box 388, 396 Whitehead Avenue, South River, New
Jersey 08882, (908) 390-9550.
-----------------------
No dealer, salesman or other person has been authorized to give any
information or to make any representations other than those contained in this
Prospectus in connection with the offer made hereby, and, if given or made, such
information or representations must not be relied upon as having been authorized
by the Company or any Selling Shareholder. This Prospectus does not constitute
an offer to sell, or a solicitation of an offer to buy, the securities offered
hereby to any person in any state or other jurisdiction in which such offer or
solicitation is unlawful. The delivery of this Prospectus at any time does not
imply that information contained herein is correct as of any time subsequent to
its date.
GENERAL INFORMATION
The Company is a national provider of contract environmental services
specializing in plant decontamination and decommissioning. The Company serves
private industry, utilities and governmental entities in the areas of plant
dismantling, plant deconstruction and relocation, asbestos abatement,
radiological remediation and hazardous waste remediation, among others.
Services are generally provided by trained craftsmen employed by the Company
based on work plans, schedules and cost estimates developed by the Company's
management team and implemented under the supervision of Company superintendents
and foremen. In order to satisfy customer concerns with respect to project
scheduling, cost control, work responsibility and overall performance, the
Company's full time work force is cross trained in each of the Company's
specialty areas allowing the Company to perform "whole jobs" in virtually all
instances without the need for additional contractors or subcontractors, other
than those retained for the hauling or transportation of hazardous materials.
In addition to offering environmental services, the Company buys and sells
equipment and entire plants and offers relocation and reinstallation services
with respect to such plants and equipment.
The Company's executive offices are located at 396 Whitehead Avenue, South
River, New Jersey 08882, telephone number (908) 390-9550.
3
<PAGE>
USE OF PROCEEDS
The Company will receive the exercise price of the options when exercised
by the holders thereof. Such proceeds will be used for working capital purposes
by the Company. The Company will not, however, receive any of the proceeds from
the reoffer and resale of the Shares by the Selling Shareholders.
SELLING SHAREHOLDERS
This Prospectus relates to the reoffer and resale of the following Shares
which may be issued to the following affiliates of the Company (the "Selling
Shareholders") under the 1995 Plan:
NUMBER OF SHARES
AVAILABLE TO BE RESOLD
NAME POSITION UNDER THE 1995 PLAN
---- -------- -------------------
Joel A. Freedman President, Chief Executive
Officer and Director 75,000
Frank A. Falco Executive Vice President,
Chief Operating Officer and
Chairman of the Board 75,000
Michael B. Killeen Treasurer and Chief Financial
Officer 20,000
Frank Pasalano Vice President of Operations 5,000
James R. Harrigan Vice President of Environmental
Services 5,000
John M. Tuohy Vice President of Nuclear Services 5,000
John Klosek Vice President of Engineering 500
Joe Dias Vice President of Sales
and Purchasing 1,000
Jose Capote Vice President of Business
Development 12,500
Stuart Brown Vice President
and General Counsel 20,000
Mori Aaron Schweitzer Director 10,000
Frank Patti Director 10,000
Robert McGuinness Director 10,000
PLAN OF DISTRIBUTION
It is anticipated that all of the Shares will be offered by the Selling
Shareholders from time to time in the open market, either directly or through
brokers or agents, or in privately negotiated transactions. The Selling
Shareholders have advised the Company that they are not parties to any
agreements, arrangements or understandings as to such sales.
Any sales by the Selling Shareholders will be made subject to certain
volume limitations. During any three month period during which this Prospectus
is effective, each Selling Shareholder and affiliates may sell a maximum of the
greater of one percent of the outstanding Common Stock of the Company or the
average weekly trading volume of the Common Stock during the four calendar weeks
preceding the date of the sale.
LEGAL MATTERS
Certain legal matters in connection with the issuance of the Shares offered
hereby have been passed upon for the Company by Vanderkam & Sanders, Houston,
Texas.
4
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents filed with the Securities and Exchange Commission
(the "Commission") are incorporated by reference into this Registration
Statement and are made a part hereof:
(a) The Company's Annual Report on Form 10-KSB for the fiscal year ended
December 31, 1995.
(b) All other reports filed pursuant to Section 13(a) or 15(d) of the
Exchange Act since the end of the fiscal year covered by the Annual
Report referred to in Item 3(a) above, including, but not limited to,
the Company's quarterly reports on Form 10-Q for the fiscal quarter
ended March 31, 1996.
(c) The description of securities included in Form 8-A declared effective
by the Commission on April 26, 1994 (Commission File No. 0-23900).
All reports and other documents subsequently filed by the Company pursuant
to Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934,
as amended, prior to the filing of a post-effective amendment which indicates
that all securities offered hereby have been sold or which deregisters all
securities then remaining unsold, shall be deemed to be incorporated by
reference herein and to be a part hereof from the date of the filing of such
reports and documents.
ITEM 4. DESCRIPTION OF SECURITIES
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
Michael Sanders, a partner in the law firm of Vanderkam & Sanders which has
rendered an opinion in connection with the Shares offered pursuant to the 1995
Plan, holds 10,000 options under the 1995 Plan exercisable to purchase common
stock at $2.94 per share for a period of ten years commencing January 8, 1996
and 10,000 options exercisable to purchase common stock at $8.25 per share for
a period of ten years commencing May 23, 1996.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company's Articles of Incorporation, as amended, eliminate the personal
liability of directors to the Company or its stockholders for monetary damages
for breach of fiduciary duty to the extent permitted by New Jersey law. The
Company's Bylaws provide that the Company shall indemnify its officers and
directors to the extent permitted by the Business Corporation Act of the State
of New Jersey. Section 14A:3-5 of the New Jersey Business Corporation Act
authorizes a corporation to indemnify directors, officers, employees or agents
of the corporation in non-derivative suits if such party acted in good faith and
in a manner he reasonably believed to be in or not opposed to the best interest
of the corporation and, with respect to any criminal action or proceeding, had
no reasonable cause to believe his conduct was unlawful, as determined in
accordance with New Jersey law. Section 14A:3-5 further provides that
indemnification shall be provided if the party in question is successful on the
merits or otherwise.
The provisions affecting personal liability do not abrogate a director's
fiduciary duty to the Company and its shareholders, but eliminate personal
liability for monetary damages for breach of that duty. The provisions do not,
however, eliminate or limit the liability of a director for failing to act in
good faith, for engaging in intentional misconduct or knowingly violating a law,
for authorizing the illegal payment of a dividend or repurchase of stock, for
obtaining an improper personal benefit, for breaching a director's duty of
loyalty, which is generally described as the duty not to engage in any
transaction which involves a conflict between the interest of the Company and
those of the director, or for violations of the federal securities laws.
The provisions regarding indemnification provide, in essence, that the
Company will indemnify its directors against expenses (including attorneys
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred in connection with any action, suit or proceeding arising out of the
director's status as
II-1
<PAGE>
a director of the Company, including actions brought by or on behalf of the
Company (shareholder derivative actions). The provisions do not require a
showing of good faith. Moreover, they do not provide indemnification for
liability arising out of willful misconduct, fraud, or dishonesty, for "short-
swing" profits violations under the federal securities laws, or for the receipt
of illegal remuneration. The provisions also do not provide indemnification for
any liability to the extent such liability is covered by insurance. However,
the Company does not currently provide such insurance to its directors, and
there is no guarantee that the Company will provide such insurance to its
directors in the near future although the Company may attempt to obtain such
insurance.
The provisions also limit or indemnify against liability resulting from
grossly negligent decisions including grossly negligent business decisions
relating to attempts to change control of the Company.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not applicable.
ITEM 8. EXHIBITS
4.1 IDM Environmental Corp. 1995 Stock Option Plan
5.1 Opinion and consent of Vanderkam & Sanders re: the legality of the
shares being registered
23.1 Consent of Vanderkam & Sanders (included in Exhibit 5.1)
23.2 Consent of Samuel Klein and Company
ITEM 9. UNDERTAKINGS
(a) The registrant hereby undertakes:
(1) To file, during any period in which offers or sells are being
made, a post-effective amendment to this registration statement
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.
(2) That, for the purpose of determining liability under the
Securities Act of 1933, each post-effective amendment shall be
treated as a new registration statement of the securities
offered, and the offering of the securities at that time shall be
deemed to be the initial bona fide offering thereof.
(3) To file a post-effective amendment to remove from registration
any of the securities that remain unsold at the end of the
offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the 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-2
<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 the City of South River, State of New Jersey on the 23rd day of
May, 1996.
IDM ENVIRONMENTAL CORP.
BY: /s/ JOEL FREEDMAN
------------------------------------------
JOEL FREEDMAN, PRESIDENT
Each of the undersigned officers and directors of IDM Environmental Corp.
hereby constitutes and appoints Joel Freedman and Frank Falco, and each of them
singly, as true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any and all amendments (including 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 and to prepare any and all exhibits thereto,
and other documents in connection therewith, and to make any applicable state
securities law or blue sky filings, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done to enable IDM
Environmental Corp. to comply with the provisions of the Securities Act of 1933,
as amended, and all requirements of the Securities and Exchange Commission, as
fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in fact and agents, or their
substitute or substitutes, may lawfully do or cause to be done by virtue
thereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the date indicated.
<TABLE>
<CAPTION>
Signatures Title Date
- ---------- ----- ----
<S> <C> <C>
/S/ JOEL FREEDMAN President, Chief Executive Officer May 23, 1996
- ------------------------- and Director (Principal Executive
JOEL FREEDMAN Officer)
/S/ FRANK A. FALCO Chairman of the Board, Chief May 23, 1996
- ------------------------- Operating Officer, Executive Vice
FRANK A. FALCO President and Director
/S/ MICHAEL B. KILLEEN Treasurer and Chief Financial Officer May 23, 1996
- ------------------------- (Principal Financial and Accounting
MICHAEL B. KILLEEN Officer)
/S/ MORI AARON SCHWEITZER Director May 23, 1996
- -------------------------
MORI AARON SCHWEITZER
/S/ FRANK PATTI Director May 23, 1996
- -------------------------
FRANK PATTI
/S/ ROBERT MCGUINNESS Director May 23, 1996
- -------------------------
ROBERT MCGUINNESS
</TABLE>
II-3
<PAGE>
EXHIBIT INDEX
Exhibit No. Description Page No.
- ------------ ----------- --------
4.1 IDM Environmental Corp. 1995 Stock Option Plan . . . . . . . . .
5.1 Opinion and consent of Vanderkam & Sanders re:
the legality of the shares being registered. . . . . . . . . . .
23.1 Consent of Vanderkam & Sanders (included in
Exhibit 5.1)
23.2 Consent of Samuel Klein and Company. . . . . . . . . . . . . . .
<PAGE>
IDM ENVIRONMENTAL CORP.
1995 STOCK OPTION PLAN
1. PURPOSE. The purpose of this IDM ENVIRONMENTAL CORP. 1995 STOCK OPTION
PLAN ("Plan") is to encourage ownership of common stock, $.001 par value
("Common Stock"), of IDM ENVIRONMENTAL CORP., a NEW JERSEY corporation (the
"Company"), by eligible key employees, consultants and directors of the Company
and its Affiliates (as defined below) and to provide increased incentive for
such employees, consultants and directors to render services and to exert
maximum effort for the business success of the Company. In addition, the
Company expects that this Plan will further strengthen the identification of
employees, consultants and directors with the shareholders. Certain options to
be granted under this Plan are intended to qualify as Incentive Stock Options
("ISOs") pursuant to Section 422 of the Internal Revenue Code of 1986, as
amended ("Code"), while other options granted under this Plan will be
nonqualified options which are not intended to qualify as ISOs ("Nonqualified
Options"), either or both as provided in the agreements evidencing the options
as provided in Section 6 hereof. As used in this Plan, the term "Affiliates"
means any "parent corporation" of the Company and any "subsidiary corporation"
of the Company within the meaning of Sections 424(e) and (f), respectively, of
the Code.
2. ADMINISTRATION.
2.1 COMPOSITION OF THE COMPENSATION COMMITTEE. This Plan shall be
administered by the Compensation Committee (the "Committee") designated by the
Board of Directors of the Company (the "Board"), which shall also designate the
Chairman of the Committee. If the Company is governed by Rule 16b-3 promulgated
by the Securities and Exchange Commission ("Commission") pursuant to the
Securities Exchange Act of 1934, as amended ("Exchange Act"), no director shall
serve as a member of the Committee unless the director is a "disinterested
person" within the meaning of such Rule 16b-3. Members of such Committee shall
only be eligible to receive stock options under this Plan pursuant to the
following formula:
Each non-employee director shall automatically receive, on the date
that the person first becomes a non-employee director, an option with
respect to 5,000 shares. Thereafter, each person who is a non-
employee director on the day following any annual meeting of
shareholders of the Company shall automatically receive an option with
respect to 5,000 shares. Notwithstanding the foregoing, any non-
employee director elected at the 1996 annual meeting of the
shareholders of the Company shall receive an option with respect to
10,000 shares, provided that such non-employee director served as a
director of the Company during 1995 and did not receive a grant of
options during 1995. The exercise price of all options granted
pursuant to the foregoing formula shall be set at the fair market
value (as defined in Section 6(b) of this Plan) of the underlying
Common Stock on the date of grant. The foregoing formula may be
amended only to the extent such amendment is not prohibited by Rule
16b-3.
<PAGE>
2.2 COMMITTEE ACTION. The Committee shall hold its meetings at such
times and places as it may be determine. A majority of its members shall
constitute a quorum, and all determinations of the Committee shall be made by
not less than a majority of its members. Any decision or determination reduced
to writing and signed by a majority of the members shall be fully effective as
if it had been made by a majority vote of its members at a meeting duly called
and held. The Committee may designate the Secretary of the Company or other
Company employees to assist the Committee in the administration of this Plan,
and may grant authority to such persons to execute award agreements or other
documents on behalf of the Committee and the Company. Any duly constituted
committee of the Board satisfying the qualifications of this Section 2 may be
appointed as the Committee.
2.3 COMMITTEE EXPENSES. All expenses and liabilities incurred by the
Committee in the administration of this Plan shall be borne by the Company. The
Committee may employ attorneys, consultants, accountants or other persons.
3. STOCK RESERVED. Subject to adjustment as provided in Section 6.11
hereof, the aggregate number of shares of Common Stock that may be optioned
under this Plan is 500,000. The shares subject to this Plan shall consist of
authorized but unissued shares of Common Stock and such number of shares shall
be and is hereby reserved for sale for such purpose. Any of such shares which
may remain unsold and which are not subject to outstanding options at the
termination of this Plan shall cease to be reserved for the purpose of this
Plan, but until termination of this Plan or the termination of the last of the
options granted under this Plan, whichever last occurs, the Company shall at all
times reserve a sufficient number of shares to meet the requirements of this
Plan. Should any option expire or be canceled prior to its exercise in full,
the shares theretofore subject to such option may again be made subject to an
option under this Plan.
4. ELIGIBILITY. The persons eligible to participate in this Plan as a
recipient of options ("Optionee") shall include only key employees, consultants
and directors of the Company or its Affiliates at the time the option is
granted. An employee or consultant who has been granted an option hereunder may
be granted an additional option or options, if the Committee shall so determine.
5. GRANT OF OPTIONS.
5.1 COMMITTEE DISCRETION. The Committee shall have sole and absolute
discretionary authority (i) to determine, authorize, and designate those key
employees, consultants and directors of the Company or its Affiliates who are to
receive options under this Plan, (ii) to determine the number of shares of
Common Stock to be covered by such options and the terms thereof, and (iii) to
determine the type of option granted: ISOs, Nonqualified Options or a
combination of ISOs and Nonqualified Options; provided that consultants and
directors who are not employees of the Company may not receive any ISOs. The
Committee shall thereupon grant options in accordance with such determination as
evidenced by a written option agreement. Subject to the express provisions of
this Plan, the Committee shall have discretionary authority to prescribe, amend
and rescind rules and regulations relating to this Plan, to interpret this Plan,
to prescribe and amend the terms of
2
<PAGE>
the option agreements (which need not be identical) and to make all other
determinations deemed necessary or advisable for the administration of this
Plan.
5.2 SHAREHOLDER APPROVAL. All options granted under this Plan are
subject to, and may not be exercised before, the approval of this Plan by the
shareholders prior to the first anniversary date of the Board meeting held to
approve this Plan, by the affirmative vote of the holders of a majority of the
outstanding shares of the Company present, or represented by proxy, and entitled
to vote thereat or written consent in accordance with the laws of the State of
New Jersey; provided that if such approval by the shareholders of the Company is
not forthcoming, all options previously granted under this Plan shall be void.
5.3 LIMITATION ON INCENTIVE STOCK OPTIONS. The aggregate fair market
value (determined in accordance with Section 6(b) of this Plan at the time the
option is granted) of the Common Stock with respect to which ISOs may be
exercisable for the first time by any Optionee during any calendar year under
all such plans of the Company and its Affiliates shall not exceed $100,000.
6. TERMS AND CONDITIONS. Each option granted under this Plan shall be
evidenced by an agreement, in a form approved by the Committee, which shall be
subject to the following express terms and conditions and to such other terms
and conditions as the Committee may deem appropriate.
6.1 OPTION PERIOD. The Committee shall promptly notify the Optionee
of the option grant and a written agreement shall promptly be executed and
delivered by and on behalf of the Company and the Optionee, provided that the
option grant shall expire if a written agreement is not signed by said Optionee
(or his agent or attorney) and returned to the Company within 60 days from date
of receipt by the Optionee of such agreement. The date of grant shall be the
date the option is actually granted by the Committee, even though the written
agreement may be executed and delivered by the Company and the Optionee after
that date. Each option agreement shall specify the period for which the option
thereunder is granted (which in no event shall exceed ten years from the date of
grant in the case of an ISO) and shall provide that the ISO shall expire at the
end of such period. If the original term of an option is less than ten years
from the date of grant, the option may be amended prior to its expiration, with
the approval of the Committee and the Optionee, to extend the term so that the
term as amended is not more than ten years from the date of grant. However, in
the case of an ISO granted to an individual who, at the time of grant, owns
stock possessing more than 10 percent of the total combined voting power of all
classes of stock of the Company or its Affiliate ("Ten Percent Stockholder"),
such period shall not exceed five years from the date of grant.
6.2 EXERCISE PRICE. The exercise price of each share of Common Stock
subject to each option granted pursuant to this option is granted and, in the
case of ISOs, shall not be less than 100% of the fair market value of a share of
Common Stock on the date the option is granted, as determined by the Committee.
In the case of ISOs granted to a Ten Percent Stockholder, the exercise price
shall not be less than 110% of the fair market value of a share of Common Stock
on the date the option is granted. The exercise price of each share of Common
Stock subject to a Nonqualified Option under this Plan shall
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be determined by the Committee prior to granting the option. The Committee
shall set the exercise price for each share subject to a Nonqualified Option at
such price as the Committee in its sole discretion shall determine, provided
that the exercise price of each share of Common Stock subject to a Nonqualified
Option shall not be less than 100% of the fair market value of a share of Common
Stock on the date the option is granted as determined by the Committee.
For all purposes under this Plan, the fair market value of a share of
Common Stock on a particular date shall be equal to the mean of the reported
high and low sales prices of the Common Stock on the Nasdaq Stock Market on that
date, or if no prices are reported on that date, on the last preceding date on
which such prices of the Common Stock are so reported. If the Common Stock is
not traded on the Nasdaq Stock Market at the time a determination of its fair
market value is required to be made hereunder, its fair market value shall be
deemed to be equal to the average between the closing bid and ask prices of the
Common Stock on the most recent date the Common Stock was publicly traded. In
the event the Common Stock is not publicly traded at the time a determination of
its value is required to be made hereunder, the determination of its fair market
value shall be made by the Committee in such manner as it deems appropriate.
6.3 EXERCISE PERIOD. The Committee may provide in the option
agreement that an option may be exercised immediately or over the period of the
grant and in whole or in increments. However, no portion of any option may be
exercisable by an Optionee prior to the approval of this Plan by the
shareholders of the Company.
6.4 PROCEDURE FOR EXERCISE. Options shall be exercised by the
delivery by the Optionee of written notice to the Secretary of the Company
setting forth the number of shares of Common Stock with respect to which the
option is being exercised. The notice shall be accompanied by, at the election
of the Optionee and as permitted by the Committee in the Agreement granting such
options, (i) cash, cashier's check, bank draft, or postal or express money order
payable to the order of the Company, (ii) certificates representing shares of
Common Stock theretofore owned by the Optionee duly endorsed for transfer to the
Company, (iii) an election by the Optionee to have the Company withhold the
number of shares of Common Stock the fair market value, less the exercise price,
of which is equal to the aggregate exercise price of the shares of Common Stock
issuable upon exercise of the option, or (iv) any combination of the preceding,
equal in value to the full amount of the exercise price. Notice may also be
delivered by telecopy provided that the exercise price of such shares is
received by the Company via wire transfer on the same day the telecopy
transmission is received by the Company. The notice shall specify the address
to which the certificates for such shares are to be mailed. An option to
purchase shares of Common Stock in accordance with this Plan, shall be deemed to
have been exercised immediately prior to the close of business on the date (i)
written notice of such exercise and (ii) payment in full of the exercise price
for the number of share for which options are being exercised, are both received
by the Company and the Optionee shall be treated for all purposes as the record
holder of such shares of Common Stock as of such date.
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As promptly as practicable after receipt of such written notice and
payment, the Company shall deliver to the Optionee certificates for the number
of shares with respect to which such option has been so exercised, issued in the
Optionee's name or such other name as Optionee directs; provided, however, that
such delivery shall be deemed effected for all purposes when a stock transfer
agent of the Company shall have deposited such certificates in the United States
mail, addressed to the Optionee at the address specified pursuant to this
Section 6.4.
6.5 TERMINATION OF EMPLOYMENT. If an employee to whom an option is
granted ceases to be employed by the Company or its affiliates for any reason
other than death or disability or if a director or consultant to whom an option
is granted ceases to serve on the Board or as a consultant for any reason other
than death or disability, any option which is exercisable on the date of such
termination of employment or cessation of serving on the Board or cessation of
service as a consultant shall expire three-months from the date of such
termination or cessation but in no event may the option be exercised after its
expiration under the terms of the option agreement.
6.6 DISABILITY OR DEATH. In the event the Optionee dies or is
determined under this Plan to be disabled while the Optionee is employed by the
Company or its Affiliates, acts as consultant or while serves on the Board of
the Company, the options previously granted to the Optionee may be exercised (to
the extent the Optionee would have been entitled to do so at the date of death
or the determination of disability) at any time and from time to time, within a
three-month period after such death or determination of disability, by the
Optionee, the guardian of the Optionee's estate, the executor or administrator
of the Optionee's estate or by the person or persons to whom the Optionee's
rights under the option shall pass by will or the laws of descent and
distribution, but in no event may the option be exercised after its expiration
under the terms of the option agreement. An Optionee shall be deemed to be
disabled if, in the opinion of a physician selected by the Committee, the
Optionee is incapable of performing services for the Company of the kind the
Optionee was performing at the time the disability occurred by reason of any
medically determinable physical or mental impairment which can be expected to
result in death or to be of long, continued and indefinite duration. The date
of determination of disability for purposes hereof shall be the date of such
determination by such physician.
6.7 TRANSFERABILITY. An option granted pursuant to this Plan shall
not be assignable or otherwise transferable by the Optionee otherwise than by
Optionee's will or by the laws of descent and distribution or pursuant to a
qualified domestic relations order as defined in the code or Title I of the
Employee Retirement Income Security Act, as amended, or the rules thereunder.
During the lifetime of an Optionee, an option shall be exercisable only by such
Optionee. Any heir or legatee of the Optionee shall take rights granted herein
and in the option agreement subject to the terms and conditions hereof and
thereof. No such transfer of any option to heirs or legatees of the Optionee
shall be effective to bind the Company unless the Company shall have been
furnished with written notice thereof and a copy of such evidence as the
Committee may deem necessary to establish the validity of the transfer and the
acceptance by the transferee or transferees of the terms and conditions hereof.
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6.8 INCENTIVE STOCK OPTIONS. Each option agreement may contain such
terms and provisions as the Committee may determine to be necessary or desirable
in order to qualify under the Code of option designated as an incentive stock
option.
6.9 NO RIGHTS AS SHAREHOLDER. No Optionee shall have any rights as a
shareholder with respect to shares covered by an option until the option is
exercised by written notice and accompanied by payment as provided in Section
6.4 above.
6.10 EXTRAORDINARY CORPORATE TRANSACTIONS. The existence of
outstanding options shall not affect in any way the right or power of the
Company or its shareholders to make or authorize any or all adjustments,
recapitalizations, reorganizations, exchanges, or other changes in the Company's
capital structure or its business, or any merger or consolidation of the
Company, or any issuance of Common Stock or other securities or subscription
rights thereto, or any issuance of bonds, debentures, preferred or prior
preference stock ahead of or affecting the Common Stock or the rights thereof,
or the dissolution or liquidation of the Company, or any sale or transfer of all
or any part of its assets or business, or any other corporate act or proceeding,
whether of a similar character or otherwise. If the Company recapitalizes or
otherwise changes its capital structure, or merges, consolidates, sells all of
its assets or dissolves (each of the forgoing a "Fundamental Change"), then
thereafter upon any exercise of an option theretofore granted the Optionee shall
be entitled to purchase under such option, in lieu of the number of shares of
Common Stock as to which option shall then be exercisable, the number and class
of shares of stock and securities to which the Optionee would have been entitled
pursuant to the terms of the Fundamental Change if, immediately prior to such
Fundamental Change, the Optionee had been the holder of record of the number of
shares of Common Stock as to which such option is then exercisable. If (i) the
Company shall not be the surviving entity in any merger or consolidation (or
survives only as a subsidiary of another entity), (ii) the Company sells all or
substantially all of its assets to any other person or entity (other than a
wholly-owned subsidiary), (iii) any person or entity (including a "group" as
contemplated by Section 13(d)(3) of the Exchange Act) acquires or gains
ownership or control of (including, without limitation, power to vote) more than
50% of the outstanding shares of Common Stock, (iv) the Company is to be
dissolved and liquidated, or (v) as a result of or in connection with a
contested election of directors, the persons who were directors of the Company
before such election shall cease to constitute a majority of the Board (each
such event in clauses (i) through (v) above is referred to herein as a
"Corporate Change"), the committee, in its sole discretion, may accelerate the
time at which all or a portion of an Optionee's options may be exercised for a
limited period of time before or after a specified date.
6.11 CHANGES IN CAPITAL STRUCTURE. If the outstanding shares of
Common Stock or other securities of the Company, or both, for which the option
is then exercisable shall at any time be changed or exchanged by declaration of
a stock dividend, stock split, combination of shares or recapitalization, the
number and kind of shares of Common Stock or other securities which are subject
to this Plan or subject to any options theretofore granted, and the exercise
prices, shall be appropriately and equitably adjusted so as to maintain the
proportionate number of shares or other securities without changing the
aggregate exercise price.
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6.12 ACCELERATION OF OPTIONS. Except as hereinbefore expressly
provided, (i) the issuance by the Company of shares of stock of any class of
securities convertible into shares of stock of any class, for cash, property,
labor or services, upon direct sale, upon the exercise of rights or warrants to
subscribe therefor, or upon conversion of shares or obligations of the Company
convertible into such shares or other securities, (ii) the payment of a dividend
in property other than Common Stock, or (iii) the occurrence of any similar
transaction, and in any case whether or not for fair value, shall not affect,
and no adjustment by reason thereof shall be made with respect to, the number of
shares of Common Stock subject to options thereto fore granted or the purchase
price per share, unless the Committee shall determine in its sole discretion
that an adjustment is necessary to provide equitable treatment to Optionee.
Notwithstanding anything to the contrary contained in this Plan, the Committee
may in its sole discretion accelerate the time at which any option may be
exercised, including, but not limited to, upon the occurrence of the events
specified in this Section 6.
6.13. CHANGES IN CONTROL OF COMPANY. In the event of a "change in
control of the Company", as defined below, all options outstanding on the day
prior to the change in control shall become fully vested and exercisable,
notwithstanding any other provisions herein or any vesting schedules or other
provisions set forth in the option agreements pursuant to which such options
were granted.
For purposes hereof, a "change in control of the Company" shall mean a
change in control that would be required to be reported in response to Item 1(a)
of Form 8-K under the Securities Exchange Act of 1934 (the "Exchange Act");
provided that, without limitation, such a change in control shall be deemed to
have occurred if (A) any "person" (as that term is used in Sections 13(d) and
14(d) of the Exchange Act), other than the Company or any "person" who on the
date prior to such change in control is a director or officer of the Company, is
or becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of the Company representing 20% or
more of the combined voting power of the Company's then outstanding securities,
or (B) during any period of two consecutive years during the term of this Plan,
individuals who at the beginning of such period constitute the Board cease for
any reason to constitute at least a majority therof, unless the election of each
director who was not a director at the beginning of such period has been
approved in advance by directors representing at least two-thirds of the
directors then in office who were directors at the beginning of the period;
provided, however, that the foregoing events shall not be deemed to be a "change
of control" if the transaction, transactions or elections causing such change
shall have been approved by the affirmative vote of at least a majority of the
members of the Board of Directors of the Company in office immediately prior to
the "change of control."
7. AMENDMENTS OR TERMINATION. The Board may amend, alter or discontinue
this Plan, but no amendment or alteration shall be made which would impair the
rights of any Optionee, without his consent, under any option theretofore
granted, or which, without the approval of the shareholders, would: (i) except
as is provided in Section 6.11 of this Plan, increase the total number of shares
reserved for the purposes of this Plan, (ii) change the class of persons
eligible to participate in this Plan as provided in Section 4 of this Plan,
(iii) extend the applicable maximum option period provided for in Section 6.1 of
this Plan, (iv)
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extend the expiration date of this Plan set forth in Section 14 of this Plan,
(v) except as provided in Section 6.11 of this Plan, decrease to any extent the
exercise price of any option granted under this Plan or (vi) withdraw the
administration of this Plan from the Committee.
8. COMPLIANCE WITH OTHER LAWS AND REGULATIONS. This Plan, the grant and
exercise of options thereunder, and the obligation of the Company to sell and
deliver shares under such options, shall be subject to all applicable federal
and state laws, rules and regulations and to such approvals by any governmental
or regulatory agency as may be required. The Company shall not be required to
issue or deliver any certificates for shares of Common Stock prior to the
completion of any registration or qualification of such shares under any federal
or state law or issuance of any ruling or regulation of any government body
which the Company shall, in its sole discretion, determine to be necessary or
advisable. Any adjustments provided for in Sections 6.10, .11 and .12 of this
Plan shall be subject to any shareholder action required by New Jersey corporate
law.
9. PURCHASE FOR INVESTMENT. Unless the options and shares of Common Stock
covered by this Plan have been registered under the Securities Act of 1933, as
amended, or the Company has determined that such registration is unnecessary,
each person exercising an option under this Plan may be required by the Company
to give a representation in writing that such person is acquiring such shares
for his or her own account for investment and not with a view to, or for sale in
connection with, the distribution of any part thereof.
10. TAXES.
10.1 The Company may make such provisions as it may deem appropriate
for the withholding of any taxes which it determines is required in connection
with any options granted under this Plan.
10.2 Notwithstanding the terms of Section 10.1, each Optionee must
pay all taxes required to be withheld by the Company or paid by the Optionee in
connection with the exercise of a Nonqualified Option.
11. REPLACEMENT OF OPTIONS. The Committee from time to time may permit an
Optionee under this Plan to surrender for cancellation any unexercised
outstanding option and receive from the Company in exchange an option for such
number of shares of Common Stock as may be designated by the Committee. The
Committee may, with the consent of the person entitled to exercise any
outstanding option, amend such option, including reducing the exercise price of
any option to not less than the fair market value of the Common Stock at the
time of the amendment and extending the term thereof.
12. NO RIGHT TO EMPLOYMENT. Employees shall be considered to be in the
employment of the Company so long as they remain employees of the Company or its
Affiliates. Any questions as to whether and when there has been a termination
of such employment and the cause of such termination shall be determined by the
Committee, and its determination shall be final. Nothing contained herein shall
be construed as conferring upon the Optionee the right to continue in the employ
of the Company or its Affiliates, nor
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shall anything contained herein be construed or interpreted to limit the
"employment at will" relationship between the Optionee and the Company or its
Affiliates. The option agreements may contain such provisions as the Committee
may approve with reference to the effect of approved leaves of absence.
13. LIABILITY OF COMPANY FOR NON-ISSUANCE OF SHARES AND TAX CONSEQUENCES.
The Company and any Affiliates which is in existence or hereafter comes into
existence shall not be liable to an Optionee or other persons as to:
13.1 The non-issuance or sale of shares as to which the Company has
been unable to obtain from any regulatory body having jurisdiction the authority
deemed by the Company's counsel to be necessary to the lawful issuance and sale
of any shares hereunder; and
13.2 Any tax consequence expected, but not realized, by any Optionee
or other person due to the exercise of any option granted hereunder.
14. EFFECTIVENESS AND EXPIRATION OF PLAN. This Plan shall be effective on
the date of adoption by the Board. If the shareholders of the Company fail to
approve this Plan within twelve months of the date of the Board adoption, this
Plan shall terminate and all options previously granted under this Plan shall
become void and of no effect. This Plan shall expire ten years after the date
of the Board adopts this Plan and thereafter no option shall be granted pursuant
to this Plan.
15. NON-EXCLUSIVITY OF THIS PLAN. Neither the adoption by the Board nor
the submission for approval of this Plan to the shareholders of the Company
shall be construed as creating any limitations on the power of the Board to
adopt such other incentive arrangements as it may deem desirable, including
without limitation, the granting of restricted stock or stock options otherwise
than under this Plan, and such arrangements may be either generally applicable
or applicable only in specific cases.
16. GOVERNING LAW. This Plan and any agreements hereunder shall be
interpreted and construed in accordance with the laws of the State of New Jersey
and applicable federal law.
17. CASHLESS EXERCISE. The Committee also may allow cashless exercises as
permitted under the Federal Reserve Board's Regulation T, subject to applicable
securities law restrictions, or by any other means which the Committee
determines to be consistent with this Plan's purpose and applicable law. The
proceeds from such a payment shall be added to the general funds of the Company
and shall be used for general corporate purposes.
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IN WITNESS WHEREOF, and as conclusive evidence of the adoption of the
foregoing by directors of the Company, IDM Environmental Corp. has caused these
presents to be duly executed in its name and behalf by its proper officers
thereunto duly authorized as of this 20th day of November, 1995.
IDM ENVIRONMENTAL CORP.
ATTEST:
By:___________________________
________________________________ Name: Joel Freedman
Secretary Title: President
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May 23, 1996
IDM Environmental Corp.
396 Whitehead Avenue
South River, New Jersey 08882
Re: Form S-8 Registration Statement
Gentlemen:
You have requested that we furnish you our legal opinion with respect to
the legality of the following described securities of IDM Environmental Corp.
(the "Company") covered by a Form S-8 Registration Statement, as amended through
the date hereof (the "Registration Statement"), filed with the Securities and
Exchange Commission for the purpose of registering such securities under the
Securities Act of 1933:
1. 500,000 shares of common stock, $.001 par value (the "Shares")
issuable upon the exercise of various options, issued, or to be
issued, pursuant to the Company's 1995 Stock Option Plan (the "Plan").
In connection with this opinion, we have examined the corporate records of
the Company, including the Company's Articles of Incorporation, Bylaws, and the
Minutes of its Board of Directors and Shareholders meetings, the Plan, the
Registration Statement, and such other documents and records as we deemed
relevant in order to render this opinion.
Based on the foregoing, it is our opinion that, after the Registration
Statement becomes effective and the Shares have been issued and delivered as
described therein, the Shares will be validly issued, fully paid and non-
assessable.
We hereby consent to the filing of this opinion with Securities and
Exchange Commission as an exhibit to the Registration Statement and further
consent to statements made therein regarding our firm and use of our name under
the heading "Legal Matters" in the Prospectus constituting a part of such
Registration Statement.
Sincerely,
VANDERKAM & SANDERS
/s/ VANDERKAM & SANDERS
<PAGE>
INDEPENDENT AUDITORS' CONSENT
As independent certified public accountants, we hereby consent to the
incorporation by reference in the Registration Statement on Form S-8 of our
report relating to the financial statements of IDM Environmental Corp., which
report appears in the Company's Annual Report on Form 10-KSB for the year ended
December 31, 1995, and to all references to this firm included in such
Registration Statement.
/s/ SAMUEL KLEIN & COMPANY
SAMUEL KLEIN & COMPANY
May 28, 1996
