As filed with the Securities and Exchange Commission on December 3, 1997
Registration No. 33-81026
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
------------------------------------
POST-EFFECTIVE AMENDMENT NO. 1
TO
FORM SB-2
ON
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------------------
THE SOLOMON-PAGE GROUP LTD.
(Exact Name of Registrant as Specified in Its Charter)
Delaware 51-0353012
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
1140 Avenue of the Americas, 9th Floor
New York, New York 10036
(212) 764-9200
(Address, Including Zip Code, and Telephone Number,
Including Area Code, of Registrant's Principal Executive Offices)
Lloyd Solomon
Vice Chairman of the Board and Chief Executive Officer
The Solomon-Page Group Ltd.
1140 Avenue of the Americas
New York, New York 10036
(212) 764-9200
(Name, Address, Including Zip Code, and Telephone Number,
Including Area Code, of Agent for Service)
------------------------------------
Copy to:
David J. Adler, Esq.
Olshan Grundman Frome & Rosenzweig LLP
505 Park Avenue
New York, New York 10022
(212) 753-7200
(212) 755-1467 (Facsimile)
------------------------------------
Approximate date of commencement of proposed sale to the public: From
time to time after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, please check the following box. /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. / /
<PAGE>
PROSPECTUS
2,571,738 Shares of Common Stock
THE SOLOMON-PAGE GROUP LTD.
The Solomon-Page Group Ltd. (the "Company"), a Delaware corporation, is
offering 2,196,738 shares of common stock, $.001 par value (the "Common Stock"),
which are issuable upon the exercise of 2,196,738 redeemable Class A common
stock purchase warrants of the Company (the "Class A Warrants"). Of such Class A
Warrants, 200,000 are issuable upon the exercise by Stratton Oakmont, Inc., the
underwriter (the "Underwriter") in the Company's initial public offering in
October 1994, of a purchase option (the "Purchase Option") received by the
Underwriter as partial consideration for its services. The Purchase Option is
exercisable until October 20, 1999 at a price of $6.60 per unit, consisting of a
share of Common Stock and a Class A Warrant. The remaining 175,000 Class A
Warrants are issuable upon exercise of certain purchase options (the "Bridge
Options") issued in 1994 to four bridge lenders, Harvey Bibicoff, Steven Madden,
Calvin Caldwell and Lester Garrett.
Each Class A Warrant entitles the holder to purchase one share of
Common Stock, for a price of $4.50 per share, until October 20, 1999. The Class
A Warrants are redeemable by the Company for $.05 per Warrant, upon thirty (30)
days' prior written notice, if the average closing price or bid price of the
Common Stock, as reported by the principal exchange on which the Common Stock is
quoted, equals or exceeds $9.00 per share for any twenty (20) trading days
within a period of thirty (30) consecutive trading days ending ten (10) days
prior to the date of the notice of redemption. Upon thirty (30) days' written
notice to all holders of the Class A Warrants, the Company shall have the right
to reduce the exercise price and/or extend the term of the Class A Warrants.
This Prospectus also relates to 200,000 shares of Common Stock issuable
to the Underwriter upon exercise of the Purchase Option and an aggregate of
175,000 shares of Common Stock issuable to the bridge lenders named above upon
exercise of the Bridge Options.
The Common Stock and the Class A Warrants are quoted on the Nasdaq
SmallCap Market under the symbols, SOLP and SOLPW, respectively. On December 1,
1997, the closing prices of the Common Stock and the Class A Warrants were 4
3/16 and 1, respectively.
AN INVESTMENT IN THE SECURITIES OFFERED HEREBY INVOLVES A HIGH DEGREE
OF RISK AND SHOULD ONLY BE MADE BY INVESTORS WHO CAN AFFORD THE RISK OF LOSS OF
THEIR ENTIRE INVESTMENT. SEE "RISK FACTORS" BEGINNING ON PAGE 4 OF THIS
PROSPECTUS.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE 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 , 199
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company hereby incorporates in this Prospectus by reference the
following documents which have been filed with the Securities and Exchange
Commission (the "Commission") pursuant to the Securities Exchange Act of 1934,
as amended (the "Exchange Act"): (i) the Company's Annual Report on Form 10-KSB
for the fiscal year ended September 30, 1996 ("Fiscal 1996"), (ii) the Company's
Quarterly Reports on Form 10-QSB for the quarters ended December 31, 1996, March
31, 1997 and June 30, 1997 and (iii) the Company's Proxy Statement dated
February 19, 1997.
The Company's Application for Registration of its Common Stock under
Section 12(g) of the Exchange Act filed with the Commission on October 21, 1994,
is incorporated by reference into this Prospectus and shall be deemed to be a
part hereof.
All documents filed by the Company pursuant to Sections 13(a), 13(c),
14 or 15(d) of the Exchange Act after the date of this Prospectus and prior to
the termination of this offering shall be deemed to be incorporated by reference
in this Prospectus and to be a part hereof from the date of filing of such
documents. Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any other subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus.
Any person receiving a copy of this Prospectus may obtain without
charge, upon written or oral request, a copy of any of the documents
incorporated by reference herein, except for the exhibits to such documents
(unless such exhibits are specifically incorporated by reference in such
documents). Such requests should be directed to The Solomon-Page Group Ltd.,
1140 Avenue of the Americas, New York, New York 10036, Attention: Eric Davis,
Secretary, telephone number (212) 764-9200.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Exchange Act and, in accordance therewith, files reports, proxy statements and
other information with the Commission. Such reports, proxy statements and other
information can be inspected and copied at the public reference facilities
maintained by the Commission at Room 1024, Judiciary Plaza, 450 Fifth Street,
N.W., Washington, DC 20549, as well as at the following regional offices: 7
World Trade Center, Suite 1300, New York, New York 10048, Suite 788 and 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661 upon payment of the fees
prescribed by the Commission. Also, copies of such material can be obtained from
the Public Reference Section of the Commission at Room 1024, Judiciary Plaza,
450 Fifth Street, N.W., Washington, DC 20549, upon payment of the fees
prescribed by the Commission. Such material may also be accessed electronically
by means of the Commission's home page on the Internet at http://www.sec.gov. In
addition, reports, proxy statements and other information concerning the Company
can be inspected and copied at the offices of the Nasdaq Stock Market, 1735 K
Street, N.W., Washington, DC 20006.
The Company has filed with the Commission a Registration Statement on
Form SB-2, as amended by Post- Effective Amendment on Form S-3 (together with
all further amendments and all exhibits thereto, the "Registration Statement")
under the Securities Act with respect to the securities offered hereby. This
Prospectus does not contain all of the information set forth in the Registration
Statement, certain parts of which are omitted in accordance with the rules and
regulations of the Commission. For further information, reference is made to the
Registration Statement, copies of which may be obtained from the Public
Reference Section of the Commission at Room 1024, Judiciary Plaza, 450 Fifth
Street, N.W., Washington, DC 20549, upon payment of the fees prescribed by the
Commission.
-2-
<PAGE>
THE COMPANY
The Company's business is organized into two primary operating
divisions: executive search and contingency recruitment as well as flexible
staffing and consulting. The executive search and full time contingency
recruitment division has eight lines of business, including four industry
(capital markets, publishing and new media, healthcare and fashion services),
and four functional (information technology, accounting, human resources and
legal). The executive search and full time contingency recruitment division
generated approximately 49% of the Company's revenue for the nine months ended
June 30, 1997. The flexible staffing and consulting division, which provides
services to all companies seeking personnel in the information technology,
accounting and human resources areas, generated approximately 51% of the
Company's revenue for the nine months ended June 30, 1997. The accounting and
human resources flexible staffing businesses commenced operations during the
fiscal year ended September 30, 1997.
The Company's revenues are derived primarily from fees paid by its
clients in connection with placements conducted by the Company on behalf of its
clients. In the executive search and contingency recruitment divisions of the
Company's business, fees usually range between 20% and 33% of the guaranteed
first year's compensation payable to a placed employee. In the executive search
division, the Company usually obtains a non-refundable retainer of approximately
one-third of the estimated fee at the inception of an engagement with the
balance of the fee payable on terms negotiated with the client. A substantial
portion of the deferred payment is usually contingent on the successful
completion of the placement and, in certain circumstances, no retainer is
obtained and the entire fee is contingent on a successful placement. In the
contingency recruitment division, the entire fee is usually contingent upon
successful completion of the placement, although under certain circumstances a
non-refundable retainer payment of a portion of the fee may be received at the
outset. In the professional temporary staffing division, the Company is
compensated by its clients for services provided by temporary employees assigned
by the Company, based on the number of hours or days worked by each assigned
employee at a dollar rate negotiated with the client. The Company's primary
costs, in addition to its fixed costs such as rental expense, salaries of
administrative personnel and advertising, are the variable costs attributable to
its employee compensation. The Company's placement counselors receive either a
base salary or a draw against commission, plus a commission generally ranging
between 30% and 65% of the fees generated by each placement they effectuate,
which percentage varies depending upon the counselors' seniority and/or
historical productivity.
The Company's executive offices are located at 1140 Avenue of the
Americas, 9th Floor, New York, New York 10036. The telephone number of the
Company is (212) 764-9200.
MATERIAL CHANGES
On October 31, 1997, the Company announced that its Board of Directors
had authorized the repurchase of up to 1,000,000 of the Class A Warrants.
Purchases are being made from time to time on the Nasdaq Small Cap market or
otherwise at prevailing market prices and may be made in privately negotiated
transactions. At December 1, 1997, an aggregate of 478,262 Class A Warrants had
been repurchased for an aggregate purchase price of $447,478.
-3-
<PAGE>
RISK FACTORS
THE SECURITIES OFFERED HEREBY ARE SPECULATIVE AND INVOLVE A HIGH DEGREE OF RISK.
PROSPECTIVE INVESTORS, PRIOR TO MAKING AN INVESTMENT DECISION, SHOULD CAREFULLY
READ THIS PROSPECTUS AND CONSIDER, ALONG WITH OTHER MATTERS REFERRED TO HEREIN,
THE FOLLOWING RISK FACTORS:
INTENSE COMPETITION. Competition in the recruitment and placement, personnel
consulting and temporary personnel industries is intense. The Company is in
competition with numerous firms, many of which have far greater financial
resources and more extensive industry relationships than the Company. In
addition, many of such organizations have longer operating histories, which may
afford these firms significant advantages in obtaining future clients, arranging
financing and attracting skilled personnel. The Company competes on the basis of
client service and responsiveness. There can be no assurance that this strategy
can continue to be successfully implemented.
SIGNIFICANT DEPENDENCE ON MAJOR CUSTOMER; POTENTIAL ADVERSE EFFECT OF LOSS OF
MAJOR CUSTOMER OR CUSTOMERS. Fifteen percent of the Company's revenues for
Fiscal 1996 came from, and a significant portion of the Company's resources have
been devoted to, its largest customer, AT&T Corp. The loss of this customer or a
substantial reduction in its hiring activities through the Company would have a
material adverse effect on the Company's financial performance. In addition, the
termination of the employees who have a strong relationship with the Company by
this customer could also adversely affect the Company's financial performance.
Further, there is no assurance that the Company will not continue to be
dependent upon one or a small number of major customers for a significant
portion of its revenues and earnings.
DEPENDENCE ON KEY PERSONNEL. The Company's operations are dependent upon the
continued efforts of senior management. While the Company has entered into
employment agreements with Herbert Solomon, Lloyd Solomon and Scott Page, the
Company's principal executive officers, the Company does not have
non-competition agreements or other restrictive covenants in any employment
agreements with any of its other officers or key employees. Should any of the
members of the Company's senior management be unable or unwilling to continue in
their present roles or should such persons determine to enter into competition
with the Company, the Company's prospects could be adversely affected.
DEPENDENCE ON RECRUITMENT AND PLACEMENT COUNSELORS. The Company's revenues and
future success also are materially dependent on the skills of the Company's
recruitment and placement counselors in attracting clients, matching their needs
to appropriate candidates in each recruiting opportunity and in establishing
successful long-term relationships with such clients. The failure to attract and
retain qualified recruitment and placement counselors, or the failure of
recruitment and placement counselors to effectively perform these tasks, may
have a material adverse effect on the Company's revenues, profitability and
growth. The Company generally does not have non-competition agreements or other
restrictive covenants with its recruitment and placement counselors.
The Company often attracts qualified recruitment and placement counselors from
its competitors. In several instances, these competitors have instituted or
threatened to institute legal proceedings seeking to enforce non-competition
agreements with, or to prevent the disclosure of trade secrets by, these
recruitment and placement counselors. To date, these litigations, singly or in
the aggregate, have not had a material adverse effect on the Company's financial
position, results of operations or liquidity. While the Company believes that
any similar future litigations will also not have any such effect, no assurance
can be given in this regard.
CONTROL BY MANAGEMENT. Officers and directors of the Company, specifically,
Messrs. Herbert and Lloyd Solomon, Scott Page and Eric M. Davis (the "Management
Group"), own an aggregate of approximately 39.2% of the issued and outstanding
shares of Common Stock. Stockholders of the Company do not have cumulative
voting rights and, accordingly, each stockholder is entitled to cast one vote
per share held on all matters submitted to a vote of stockholders, including the
election of directors. As a result, the Management Group has effective control
over the
-4-
<PAGE>
Company. Moreover, such effective control could serve to perpetuate current
management and could make the Company less attractive to potential acquirors.
RELATED PARTY TRANSACTIONS AND POSSIBLE CONFLICTS OF INTEREST. The Company has
been controlled, and may in the future be controlled, by the Management Group
and has from time to time engaged in transactions with members of the Management
Group. The Company previously borrowed funds from Herbert Solomon to fund its
operations. While the Company has agreed that no future transactions will be
entered into between the Company and its officers, directors or more than 5%
shareholders unless such transactions are on terms no less favorable to the
Company than could be obtained from unaffiliated third parties, any current or
future transactions between the Company and such affiliates may involve possible
conflicts of interest.
EFFECT OF CLASS A WARRANTS AND UNIT PURCHASE OPTIONS ON THE MARKET FOR THE
COMMON STOCK. The Class A Warrants and the Unit Purchase Options are exercisable
until October 20, 1999 at an exercise price of $4.50 per Class A Warrant and
$6.60 per Unit Purchase Option. For the life of the Class A Warrants and the
Unit Purchase Options, the holders thereof will be given the opportunity to
profit from a rise in the market price of the Common Stock and the Units with a
resulting dilution in the interest of the Company's other stockholders. The
terms on which the Company could obtain additional capital during the life of
the Warrants and the Unit Purchase Option may be adversely affected because the
holders of the Class A Warrants and the Unit Purchase Options might be expected
to exercise them if the Company were able to obtain any needed additional
capital in a new offering of securities at a price greater than the exercise
price of the Class A Warrants or the Unit Purchase Options.
RISK OF RAPID GROWTH AND BUSINESS EXPANSION. The Company is expanding its
current retained executive search, contingency recruitment and professional
temporary staffing business divisions through the retention of its existing
staff of experienced personnel counselors as well as the addition of new
counselors with placement experience, who will complement the Company's current
scope of business. Also, the Company aggressively pursues opportunities to
attract highly skilled staffing industry professionals in new areas of retained
executive search, contingency recruitment and professional flexible staffing on
an ongoing proactive basis. There can be no assurance that the Company will
successively achieve its planned growth. Accomplishing the Company's planned
growth will depend upon a number of factors, including the Company's ability to
secure additional clients and hire and train additional recruitment and
placement professionals. In addition, the Company may incur start-up,
acquisition or expansion costs that represent a higher percentage of total
revenues than larger or more established companies, which may adversely affect
the Company's results of operations. There can be no assurance that the Company
will be able to obtain additional clients and recruitment and placement
counselors in the future or that the Company's strategy of increasing revenues
and net income through such additions will be successful.
CREDIT FACILITY. In February 1997, the Company entered into a one year
$4,000,000 demand line of credit facility agreement with The Dime Savings Bank
(the "Dime Credit Facility") which is collateralized by all the Company's
assets. The agreement provides for borrowings at the Dime Reference Rate + 1%
(currently 9.25%) in amounts not exceeding 80% of eligible accounts receivable
(as defined therein) and expires on February 28, 1998, on which date the
outstanding principal amount is required to be repaid. At November 30, 1997, the
Company had borrowed $300,000 under this facility. The Company has no other
significant assets other than the proceeds of this offering which would be
available to collateralize any future borrowings. Accordingly, the Company's
business could be adversely affected in the event that it has a need for funds
in amounts greater than its cash on hand and the proceeds of the Dime Credit
Facility, which it is unable to obtain through a debt or equity financing. The
Company believes that its current cash position and investment balances will be
sufficient to support current working capital requirements for the next 12
months. There is no assurance, however, that the Company will not require
additional financing in the future. No source of potential financing has been
identified and there is no assurance that any such financing will be available
on terms acceptable to the Company, or at all, if needed.
ECONOMIC CONDITIONS. The Company's revenues are directly dependent on the hiring
activities of its clients. Under generally adverse economic conditions or if
economic conditions in its clients' industries deteriorate, these clients'
hiring needs may decline and this could have an adverse effect on the Company's
financial performance by reducing
-5-
<PAGE>
the number of positions the Company has an opportunity to fill, forcing the
Company to accept lower commissions on its placements, or both.
POSSIBLE ISSUANCE OF SUBSTANTIAL AMOUNTS OF ADDITIONAL SHARES WITHOUT
STOCKHOLDER APPROVAL. The Company has an aggregate of 9,220,715 shares of Common
Stock authorized but unissued and not reserved for specific purposes and an
additional 5,650,000 shares of Common Stock unissued but reserved for issuance
pursuant to (i) the Company's 1993 Long Term Incentive Plan, 1995 Directors'
Stock Option Plan and 1996 Stock Option Plan, (ii) exercise of the Class A
Warrants, (iii) the exercise of the Company's redeemable Class B common stock
purchase warrants and (iv) the Unit Purchase Options. All of such shares may be
issued without any action or approval by holders of Common Stock. Although there
are no other present plans, agreements, commitments or undertakings with respect
to the issuance of additional shares of Common Stock, or securities convertible
into any such shares by the Company, the 14,870,715 shares referred to above and
any other shares issued would further dilute the percentage ownership of the
Company held by the public stockholders.
POSSIBLE ISSUANCE OF PREFERRED STOCK AND SUPERIOR RIGHTS OF PREFERRED STOCK;
POTENTIAL ADVERSE EFFECT ON HOLDERS OF COMMON STOCK. The Company is authorized
to issue up to 2,000,000 shares of Preferred Stock, upon terms to be fixed by
the Company's Board of Directors with preferential voting, dividend or other
rights. The Company presently has no issued and outstanding shares of Preferred
Stock. While the Company has no present plans to issue any shares of Preferred
Stock, the issuance of Preferred Stock without action or approval by holders of
Common Stock could have an adverse affect on the holders of Common Stock.
CERTAIN ANTI-TAKEOVER EFFECTS. The Company's Certificate of Incorporation and
By-Laws include provisions that may delay, discourage or prevent a change of
control of the Company. These provisions include a Board of Directors consisting
of three classes, Board of Directors authorization to issue preferred stock in
one or more series with such rights, obligations and preferences as the Board of
Directors may provide and provisions in the employment agreements with the
Company's three executive officers that require substantial payments to such
officers in the event of a change in control (as defined) of the Company.
Section 203 of the Delaware General Corporation Law, which prohibits business
combination transactions with certain stockholders for a period of three years
after the person becomes such a stockholder without prescribed approval may also
delay, discourage or prevent a change of control of the Company.
SHARES ELIGIBLE FOR FUTURE SALE. All of the shares of the Company's Common Stock
owned by non-public stockholders are "restricted securities" as that term is
defined under Rule 144 promulgated under the Securities Act of 1933, as amended
(the "Act"), and may only be sold pursuant to a registered offering or in
accordance with applicable exemptions from the registration requirements of the
Act. Rule 144 provides for the sale of limited quantities of restricted
securities without registration under the Act. In general, under Rule 144, a
person (or persons whose shares are aggregated) who has satisfied a one-year
holding period may, under certain circumstances, sell within any three-month
period, a number of shares that does not exceed the greater of 1% of the then
outstanding shares of common stock or the average weekly trading volume during
the four calendar weeks prior to such sale. Rule 144(k) also permits, under
certain circumstances, the sale of shares without any quantity limitation by a
person who is not an affiliate of the Company and who has satisfied a two-year
holding period. The Company is unable to predict the effect that future sales
under Rule 144 may have on the then prevailing market price of Common Stock. It
can be expected, however, that the sale of any substantial number of shares of
Common Stock will have a depressive effect on the market price of the Common
Stock. As of the date of this Prospectus, all restricted securities issued by
the Company are eligible for resale under Rule 144. Any such sale, particularly
if large in volume, could have a material adverse effect on the market for and
price of shares of Common stock.
NO DIVIDENDS. The Company has not declared or paid and does not anticipate
declaring or paying in the foreseeable future, any cash dividends on its Common
Stock. The Company's ability to pay dividends is dependent upon, among other
things, future earnings, the operating and financial condition of the Company,
its capital requirements, general business conditions and other pertinent
factors, and is subject to the discretion of the Board of Directors.
Accordingly, there can be no assurance that any dividends will ever be paid on
the Common Stock.
-6-
<PAGE>
ARBITRARY DETERMINATION OF OFFERING AND EXERCISE PRICE. The exercise price of
the Class A Warrants as well as the offering price of the Units of which all but
175,000 of the Class A Warrants were a part, were arbitrarily determined in
negotiations between the Company and the Underwriter. Among the factors
considered in determining the price of the Units and the exercise price of the
Class A Warrants were the history of and prospects for the industry in which the
Company competed in 1994, estimates of the business potential of the Company,
the then current state of the development of the Company's business, the
Company's then current financial condition, an assessment of the Company's
management, the general condition of the securities markets at the time of the
Company's initial public offering, and the then current demand for similar
securities of comparable companies. There was, however, no relationship
whatsoever at that time between the offering price of the Units and the exercise
price of the Class A Warrants on the one hand and the Company's net worth,
projected earnings, book value, or any other objective criteria of value on the
other.
DEPENDENCE OF WARRANT HOLDERS ON MAINTENANCE OF CURRENT REGISTRATION STATEMENT;
POSSIBLE LOSS OF VALUE OF WARRANTS. In order for holders of the Class A Warrants
to exercise such warrants there must be a current registration statement (or an
exemption therefrom) in effect with the Commission and with the various state
securities authorities in the states where warrant holders reside. The Company
has undertaken to use its best efforts to keep (and intends to keep) the
registration statement effective with respect to the warrants for as long as the
warrants remain exercisable. However, maintenance of an effective registration
statement will subject the Company to substantial continuing expenses for legal
and accounting fees, and there can be no assurance that the Company will be able
to maintain a current registration statement throughout the period during which
the warrants remain exercisable. The warrants may become unexercisable and
deprived of value by the Company's inability to maintain an effective
registration statement (or an exemption therefrom) with respect to the
underlying shares or by the non- qualification of the underlying shares in the
jurisdiction of such holder's residence.
POTENTIAL ADVERSE EFFECT OF REDEMPTION OF CLASS A WARRANTS. The Class A Warrants
may be redeemed by the Company at a price of $.05 per warrant, at any time on
thirty days' prior written notice provided that the closing or bid price of the
Common Stock for a period of any twenty (20) consecutive trading days in a
thirty (30) consecutive trading day period ending ten (10) days prior to the
notice of redemption equals or exceeds $9.00. Redemption of the Class A Warrants
could force the Class A Warrant holders to exercise the Class A Warrants (and
the Underwriter to exercise the Unit Purchase Options) earlier than they would
otherwise have exercised them or at a time when it may be disadvantageous for
the holders to do so or to sell the Class A Warrants at their then current
market price when the holders might otherwise wish to hold the warrants for
possible appreciation. Alternatively, the holders may accept the redemption
price, when it is likely to be substantially less than the market value of the
Class A Warrants at the time of redemption. Any holders who do not exercise
Class A Warrants prior to their expiration or redemption, as the case may be,
will forfeit the right to purchase the shares of Common Stock underlying the
Class A Warrants.
EXERCISE OF CLASS A WARRANTS MAY HAVE DILUTIVE EFFECT ON MARKET. The Class A
Warrants provide, during their term, an opportunity for the holder to profit
from a rise in the market price, of which there is no assurance, with resulting
dilution in the ownership interest in the Company held by the then present
stockholders. Holders of the Warrants mostly likely would exercise the Class A
Warrants and purchase the underlying Common Stock at a time when the Company may
be able to obtain capital by a new offering of securities on terms more
favorable than those provided by such Class A Warrants, in which event the terms
on which the Company may be able to obtain additional capital would be affected
adversely.
"PENNY STOCK" REGULATIONS MAY IMPOSE CERTAIN RESTRICTIONS ON MARKETABILITY OF
SECURITIES. The Commission has adopted regulations that generally define "penny
stock" to be any equity security that has a market price (as defined) of less
than $5.00 per share or an exercise price of less than $5.00 per share, subject
to certain exceptions. As the securities offered hereby are currently authorized
for quotation on the Nasdaq SmallCap Market, they are exempt from the "penny
stock" regulations. If such securities are for any reason no longer authorized
for quotation on the Nasdaq SmallCap Market or on another securities exchange or
automated quotation system referred to in the penny stock regulations, the
Company's securities may become subject to rules that impose additional sales
practice
-7-
<PAGE>
requirements on broker-dealers who sell such securities to persons other than
established customers and accredited investors (generally those with assets in
excess of $1,000,000 or annual income exceeding $200,000, or $300,000 together
with their spouses). For transactions covered by these rules, the broker-dealer
must make a special suitability determination for the purchase of such
securities and must have received the purchaser's written consent to the
transaction prior to the purchase. Additionally, for any transaction involving a
penny stock, unless exempt, the rules require the delivery, prior to the
transaction, of a risk disclosure document mandated by the Commission relating
to the penny stock market. The broker-dealer also must disclose the commission
payable to both the broker-dealer and the registered representative, current
quotations for the securities and, if the broker-dealer is the sole
market-maker, the broker-dealer must disclose this fact and the broker-dealer's
presumed control over the market. Finally, monthly statements must be sent
disclosing recent price information for the penny stock held in the account and
information on the limited market in penny stocks. Consequently, the "penny
stock" rules may restrict the ability of broker-dealers to sell the Company's
securities and may affect the ability of purchasers of Common Stock to resell
the Common Stock in the secondary market.
FORWARD-LOOKING STATEMENTS AND ASSOCIATED RISKS. Certain forward-looking
statements, including statements regarding the Company's expected financial
position, business and financing plans are contained in or are incorporated by
reference in this Prospectus. These forward-looking statements reflect the
Company's views with respect to future events and financial performance. The
words, "believe," "expect," "plans" and "anticipate" and similar expressions
indentify forward-looking statements. Although the Company believes that the
expectations reflected in such forward-looking statements are reasonable, it can
give no assurance that such expectations will prove to have been correct.
Important factors that could cause actual results to differ materially from such
expectations (the "Cautionary Statements") are disclosed in this Prospectus or
the documents incorporated therein by reference, including, without limitation,
under "Risk Factors." All subsequent written and oral forward-looking statements
attributable to the Company, its subsidiaries or persons acting on the Company's
behalf are expressly qualified in their entirety by the Cautionary Statements.
Readers are cautioned not to place undue reliance on these forward- looking
statements, which speak only as of their dates. The Company undertakes no
obligations to publicly update or revise any forward-looking statements, whether
as a result of new information, future events or otherwise.
-8-
<PAGE>
USE OF PROCEEDS
If the Class A Warrants (including those issuable upon exercise of the
Purchase Option and Bridge Options) are exercised in full at $4.50 per share of
Common Stock, the Company would receive gross proceeds of approximately
$9,885,321. However, there can be no assurance that all or any portion of the
Class A Warrants will be exercised. The funds, if any, received upon exercise of
the Class A Warrants will be retained and used for working capital and other
general corporate purposes.
TRANSFER AGENT, WARRANT AGENT AND REGISTRAR
The transfer agent, warrant agent and registrar for the Common Stock
and Class A Warrants is American Stock Transfer & Trust Company, New York, New
York.
PLAN OF DISTRIBUTION
This offering is self-underwritten; the Company has not employed an
underwriter for the issuance of the Common Stock upon the exercise of the Class
A Warrants and will bear all expenses of the offering. The Company previously
agreed to pay to the Underwriter a commission equal to 4% of the exercise price
of the Class A Warrants, which amount was paid concurrently with the initial
public offering in 1994.
The Class A Warrants may be exercised, at the discretion of the holder,
by the delivery to American Stock Transfer & Trust Company (the "Warrant Agent")
at 40 Wall Street, New York, New York 10005 of the Warrant certificate (the
"Warrant Certificate") accompanied by an election of exercise and payment of the
warrant exercise price for each share of Common Stock purchased in accordance
with the terms of such warrant. Payment must be made in the form of cash or a
cashier's or certified check payable to the order of the Company. Delivery of
the certificates representing the Common Stock issuable therefor will be made
upon receipt of a certificate representing the underlying stock purchase rights,
duly executed for transfer together with payment for the exercise price thereof.
If fewer than all Class A Warrants are exercised, a new Warrant Certificate
evidencing the Class A Warrants remaining unexercised will be issued to the
warrantholder.
LEGAL MATTERS
The validity of the issuance of the securities offered hereby
previously has been passed upon for the Company by the law firm of Blau, Kramer,
Wachtlar & Lieberman, P.C., Jericho, New York.
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
Section 145 of the Delaware General Corporation Law provides as
follows:
(a) A corporation may indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than action by or in the right
of the corporation) by reason of the fact that he is or was a director,
officer, employee or agent of the corporation, or is or was serving at
the request of the corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or
other enterprise, against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if
he acted in good faith and in a manner he reasonably believed to be in
or not opposed to the best interests of the corporation, and, with
respect to any criminal action or proceeding, had no reasonable cause
to believe
-9-
<PAGE>
his conduct was unlawful. The termination of any action, suit or
proceeding by judgment, order, settlement, conviction, or upon a plea
of nolo contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner
which he reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action
or proceeding, had reasonable cause to believe that his conduct was
unlawful.
(b) A corporation may indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the corporation to
procure a judgment in its favor by reason of the fact that he is or was
a director, officer, employee or agent of the corporation, or is or was
serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture,
trust or other enterprise against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection with the defense
or settlement of such action or suit if he acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best
interests of the corporation and except that no indemnification shall
be made in respect of any claim, issue or matter as to which such
person shall have been adjudged to be liable to the corporation unless
and only to the extent that the Court of Chancery or the court in which
such action or suit was brought shall determine upon application that,
despite the adjudication of liability but in view of all the
circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which the Court of Chancery or
such other court shall deem proper.
(c) To the extent that a present or former director or officer
of a corporation has been successful on the merits or otherwise in
defense of any action, suit or proceeding referred to in subsections
(a) and (b) of this section, or in defense of any claim, issue or
matter therein, such person shall be indemnified against expenses
(including attorneys' fees) actually and reasonably incurred by such
person in connection therewith.
(d) Any indemnification under subsections (a) and (b) of this
section (unless ordered by a court) shall be made by the corporation
only as authorized in the specific case upon a determination that
indemnification of the present or former director, officer, employee or
agent is proper in the circumstances because he has met the applicable
standard of conduct set forth in subsections (a) and (b) of this
section. Such determination shall be made, with respect to a person who
is a director or officer at the time of such determination, (1) by a
majority vote of the directors who are not parties to such action, suit
or proceeding even though less than a quorum, (2) by a committee of
such directors designated by majority vote of such directors, even
though less than a quorum, or (3) if there are no such directors, or if
such directors so direct, by independent legal counsel in a written
opinion, or (4) by the stockholders.
(e) Expenses (including attorney's fees) incurred by an
officer or director in defending a civil, criminal, administrative or
investigative action, suit or proceeding may be paid by the corporation
in advance of the final disposition or such action, suit or proceeding
upon receipt of an undertaking by or on behalf of such director or
officer to repay such amount if it shall ultimately be determined that
such person is not entitled to be indemnified by the corporation as
authorized in this section. Such expenses (including attorney's fees)
incurred by former directors and officers or other employees and agents
may be paid upon such terms and conditions, if any, as the corporation
deems appropriate.
(f) The indemnification and advancement of expenses provided
by, or granted pursuant to, the other subsections of this section shall
not be deemed exclusive of any other rights to which those seeking
indemnification or advancement of expenses may be entitled under any
bylaw, agreement, vote of stockholders or disinterested directors or
otherwise, both as to action in such person's official capacity and as
to action in another capacity while holding such office.
(g) A corporation shall have power to purchase and maintain
insurance on behalf of any person who is or was a director, officer,
employee or agent of the corporation, or is or was serving at the
request of the corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture,
-10-
<PAGE>
trust or other enterprise against any liability asserted against such
person and incurred by such person in any such capacity, or arising out
of such person's status as such, whether or not the corporation would
have the power to indemnify such person against such liability under
this section.
(h) For purposes of this section, references to "the
corporation" shall include, in addition to the resulting corporation,
any constituent corporation (including any constituent of a
constituent) absorbed in a consolidation or merger which, if its
separate existence had continued, would have had the power and
authority to indemnify its directors, officers, and employees or
agents, so that any person who is or was a director, officer, employee
or agent of such constituent corporation, or is or was serving at the
request of such constituent corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, shall stand in the same position under this
section with respect to the resulting or surviving corporation as such
person would have with respect to such constituent corporation if its
separate existence had continued.
(i) For purposes of this section, references to "other
enterprises" shall include employee benefit plans; references to
"fines" shall include any such excise taxes assessed on a person with
respect to any employee benefit plan; and references to "serving at the
request of the corporation" shall include any service as a director,
officer, employee or agent of the corporation which imposes duties on,
or involves services by, such director, officer, employee, or agent
with respect to any employee benefit plan, its participants or
beneficiaries; and a person who acted in good faith and in a manner
such person reasonably believed to be in the interest of the
participants and beneficiaries of an employee benefit plan shall be
deemed to have acted in a manner "not opposed to the best interests of
the corporation" as referred to in this section.
(j) The indemnification and advancement of expenses provided
by, or granted pursuant to, this section shall, unless otherwise
provided when authorized or ratified, continue as to a person who has
ceased to be a director, officer, employee or agent and shall inure to
the benefit of the heirs, executors and administrators of such a
person.
(k) The Court of Chancery is hereby vested with exclusive
jurisdiction to hear and determine all actions for advancement of
expenses or indemnification brought under this section or under any
bylaw, agreement, vote of stockholders or disinterested directors, or
otherwise. The Court of Chancery may summarily determine a corporations
obligation to advance expenses (including attorneys' fees).
The Company's certificate of incorporation provides that the directors
of the Company shall not be liable to the Company or its stockholders for
monetary damages for breach of fiduciary duty in such capacity except as
otherwise required by law.
The Company's by-laws provide that the Company shall indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding by reason of the
fact that he is or was a director, officer, employee or an agent of the Company
or is or was serving at the request of the Company as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, against all expenses (including attorneys' fees), judgments,
fines and amounts paid in settlement actually and reasonably incurred by him in
connection with the defense or settlement of such action, suit or proceeding, to
the fullest extent and in the manner set forth in and permitted by the General
Corporation Law of the State of Delaware, as from time to time in effect, and
any other applicable law, as from time to time in effect. Such right of
indemnification is not be deemed exclusive of any other rights to which such
director, officer, employee or agent and shall inure to the benefit of the
heirs, executors and administrators of each such person.
The Company has entered into indemnity agreements with its directors
and executive officers. The indemnity agreements provide that the Company shall
indemnify such directors and executive officers from and against any and all
liabilities, costs and expenses, amounts of judgments, fines, penalties and
amounts paid in settlement of or incurred in defense of any settlement in
connection with any threatened, pending or completed claim,
-11-
<PAGE>
action, suit or proceeding in which such persons are a party (other than a
proceeding or action by or in the right of the Company to procure a judgment in
its favor), or which may be asserted against them by reason of their being or
having been an officer or director of the Company (the "Losses"), unless it is
determined that such directors and executive officers did not act in good faith
and for a purpose which they reasonably believed to be in, or in the case of
service to an entity related to the Company, not opposed to, the best interests
of the Company and, in the case of a criminal proceeding or action, that they
had reasonable cause to believe that their conduct was unlawful. The indemnity
agreements also provide that the Company shall indemnify such directors and
executive officers from and against any and all Losses that they may incur if
they are a party to or threatened to be made a party to any proceeding or action
by or in the right of the Company to procure a judgment in its favor, unless it
is determined that they did not act in good faith and for a purpose that they
reasonably believed to be in, or, in the case of service to an entity related to
the Company, not opposed to, the best interests of the Company, except that no
indemnification for Losses shall be made in respect of (i) any claim, issue or
matter as to which they shall have been adjudged to be liable to the Company or
(ii) any threatened or pending action to which they are a party or are
threatened to be made a party that is settled or otherwise disposed of, unless
and only to the extent that any court in which such action or proceeding was
brought determines upon application that, in view of all the circumstances of
the matter, they are fairly and reasonably entitled to indemnity for such
expenses as such court shall deem proper. Such indemnification is in addition to
any other rights to which such officers or directors may be entitled under any
law, charter provision, by-law, agreement, vote of shareholders or otherwise.
The Company maintains a directors liability insurance policy providing
for $1,000,000 of coverage.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Company pursuant to the foregoing provisions, or otherwise, the Company has been
advised that in the opinion of the Commission such indemnification is against
public policy as expressed in the Securities Act and is, therefore,
unenforceable.
EXPERTS
The consolidated financial statements of the Company as of September
30, 1996, and for the years ended September 30, 1995 and 1996, included in the
Company's Form 10-KSB for the fiscal year ended September 30, 1996, which is
incorporated herein by reference, have been audited by Moore Stephens, P.C.,
independent public accountants, as indicated in their reports with respect
thereto, and are included herein in reliance upon the authority of said firm as
experts in accounting and auditing.
-12-
<PAGE>
No dealer, salesman or any other person is authorized to give any information or
to make any representations in connection with this offering not contained in
this Prospectus and, if given or made, such information or representations must
not be relied upon as having been authorized by the Company or any other person.
This Prospectus does not constitute an offer to sell or a solicitation of an
offer to buy any security other than the Securities offered by this Prospectus
or an offer by any person in any jurisdiction where such an offer or
solicitation is not authorized or is unlawful. Neither the delivery of this
Prospectus nor any sale made hereunder shall, under any circumstances, create
any implication that information herein is correct as of any time subsequent to
its date.
TABLE OF CONTENTS
PAGE
Incorporation of Certain Documents
by Reference......................................... 2
Available Information................................. 2
The Company............................................ 3
Material Changes....................................... 3
Risk Factors.......................................... 4
Use of Proceeds....................................... 9
Transfer Agent, Warrant Agent and Registrar........... 9
Plan of Distribution.................................. 9
Legal Matters......................................... 9
Indemnification for Securities Act Liabilities........ 9
Experts............................................... 12
THE SOLOMON-PAGE GROUP LTD.
2,571,738 SHARES OF COMMON STOCK
PROSPECTUS
, 199
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the various expenses (other than
underwriting discounts and commissions) which will be paid by the Registrant in
connection with the issuance and distribution of the securities being
registered. With the exception of the SEC registration fee and the NASD filing
fee, all amounts shown are estimates.
SEC Registration Fee.................................... $9,371.00(1)
NASD Filing Fee......................................... 2,789.75(1)
Nasdaq Fee.............................................. 11,000.00(1)
Blue Sky Fees and Expenses.............................. 40,000.00(1)
Printing and Engraving.................................. 70,000.00(1)
Transfer Agent Fees..................................... 10,000.00(1)
Accounting Fees and Expenses............................ 30,000.00(2)
Legal Fees and Expenses................................. 110,000.00(3)
Underwriter's Non-Accountable Expense Allowance......... 240,000.00(1)
Miscellaneous expenses.................................. 1,839.25(1)
-----------
Total................................................... $525,000.00(4)
===========
(1) Estimated expenses as previously set forth in the earlier effective
registration statement for the same offering.
(2) $25,000 of which comprised estimated expenses set forth in the earlier
effective registration statement.
(3) $100,000 of which comprised estimated expenses set forth in the earlier
effective registration statement.
(4) $510,000 of which comprised estimated expenses set forth in the earlier
effective registration statement.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law provides
as follows:
(a) A corporation may indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than action by or in the right
of the corporation) by reason of the fact that he is or was a director,
officer, employee or agent of the corporation, or is or was serving at
the request of the corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or
other enterprise, against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if
he acted in good faith and in a manner he reasonably believed to be in
or not opposed to the best interests of the corporation, and, with
respect to any criminal action or proceeding, had no reasonable cause
to believe his conduct was unlawful. The termination of any action,
suit or proceeding by judgment, order, settlement, conviction, or upon
a plea of nolo contendere or its equivalent, shall not, of itself,
create a presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action
or proceeding, had reasonable cause to believe that his conduct was
unlawful.
(b) A corporation may indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the corporation to
procure a judgment in its favor by reason of the fact that he is or was
a director, officer, employee or agent of the corporation, or is or was
serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture,
trust or other enterprise against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection with the defense
or settlement of such
II-1
<PAGE>
action or suit if he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the
corporation and except that no indemnification shall be made in respect
of any claim, issue or matter as to which such person shall have been
adjudged to be liable to the corporation unless and only to the extent
that the Court of Chancery or the court in which such action or suit
was brought shall determine upon application that, despite the
adjudication of liability but in view of all the circumstances of the
case, such person is fairly and reasonably entitled to indemnity for
such expenses which the Court of Chancery or such other court shall
deem proper.
(c) To the extent that a present or former director or officer
of a corporation has been successful on the merits or otherwise in
defense of any action, suit or proceeding referred to in subsections
(a) and (b) of this section, or in defense of any claim, issue or
matter therein, such person shall be indemnified against expenses
(including attorneys' fees) actually and reasonably incurred by such
person in connection therewith.
(d) Any indemnification under subsections (a) and (b) of this
section (unless ordered by a court) shall be made by the corporation
only as authorized in the specific case upon a determination that
indemnification of the present or former director, officer, employee or
agent is proper in the circumstances because he has met the applicable
standard of conduct set forth in subsections (a) and (b) of this
section. Such determination shall be made, with respect to a person who
is a director or officer at the time of such determination, (1) by a
majority vote of the directors who are not parties to such action, suit
or proceeding even though less than a quorum, (2) by a committee of
such directors designated by majority vote of such directors, even
though less than a quorum, or (3) if there are no such directors, or if
such directors so direct, by independent legal counsel in a written
opinion, or (4) by the stockholders.
(e) Expenses (including attorney's fees) incurred by an
officer or director in defending a civil, criminal, administrative or
investigative action, suit or proceeding may be paid by the corporation
in advance of the final disposition or such action, suit or proceeding
upon receipt of an undertaking by or on behalf of such director or
officer to repay such amount if it shall ultimately be determined that
such person is not entitled to be indemnified by the corporation as
authorized in this section. Such expenses (including attorney's fees)
incurred by former directors and officers or other employees and agents
may be paid upon such terms and conditions, if any, as the corporation
deems appropriate.
(f) The indemnification and advancement of expenses provided
by, or granted pursuant to, the other subsections of this section shall
not be deemed exclusive of any other rights to which those seeking
indemnification or advancement of expenses may be entitled under any
bylaw, agreement, vote of stockholders or disinterested directors or
otherwise, both as to action in such person's official capacity and as
to action in another capacity while holding such office.
(g) A corporation shall have power to purchase and maintain
insurance on behalf of any person who is or was a director, officer,
employee or agent of the corporation, or is or was serving at the
request of the corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other
enterprise against any liability asserted against such person and
incurred by such person in any such capacity, or arising out of such
person's status as such, whether or not the corporation would have the
power to indemnify such person against such liability under this
section.
(h) For purposes of this section, references to "the
corporation" shall include, in addition to the resulting corporation,
any constituent corporation (including any constituent of a
constituent) absorbed in a consolidation or merger which, if its
separate existence had continued, would have had the power and
authority to indemnify its directors, officers, and employees or
agents, so that any person who is or was a director, officer, employee
or agent of such constituent corporation, or is or was serving at the
request of such constituent corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, shall stand in the same position under this
section with respect to the resulting or surviving corporation as such
person would have with respect to such constituent corporation if its
separate existence had continued.
II-2
<PAGE>
(i) For purposes of this section, references to "other
enterprises" shall include employee benefit plans; references to
"fines" shall include any such excise taxes assessed on a person with
respect to any employee benefit plan; and references to "serving at the
request of the corporation" shall include any service as a director,
officer, employee or agent of the corporation which imposes duties on,
or involves services by, such director, officer, employee, or agent
with respect to any employee benefit plan, its participants or
beneficiaries; and a person who acted in good faith and in a manner
such person reasonably believed to be in the interest of the
participants and beneficiaries of an employee benefit plan shall be
deemed to have acted in a manner "not opposed to the best interests of
the corporation" as referred to in this section.
(j) The indemnification and advancement of expenses provided
by, or granted pursuant to, this section shall, unless otherwise
provided when authorized or ratified, continue as to a person who has
ceased to be a director, officer, employee or agent and shall inure to
the benefit of the heirs, executors and administrators of such a
person.
(k) The Court of Chancery is hereby vested with exclusive
jurisdiction to hear and determine all actions for advancement of
expenses or indemnification brought under this section or under any
bylaw, agreement, vote of stockholders or disinterested directors, or
otherwise. The Court of Chancery may summarily determine a corporations
obligation to advance expenses (including attorneys' fees).
(l) A corporation may indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than action by or in the right
of the corporation) by reason of the fact that he is or was a director,
officer, employee or agent of the corporation, or is or was serving at
the request of the corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or
other enterprise, against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if
he acted in good faith and in a manner he reasonably believed to be in
or not opposed to the best interests of the corporation, and, with
respect to any criminal action or proceeding, had no reasonable cause
to believe his conduct was unlawful. The termination of any action,
suit or proceeding by judgment, order, settlement, conviction, or upon
a plea of nolo contendere or its equivalent, shall not, of itself,
create a presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action
or proceeding, had reasonable cause to believe that his conduct was
unlawful.
(m) A corporation may indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the corporation to
procure a judgment in its favor by reason of the fact that he is or was
a director, officer, employee or agent of the corporation, or is or was
serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture,
trust or other enterprise against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection with the defense
or settlement of such action or suit if he acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best
interests of the corporation and except that no indemnification shall
be made in respect of any claim, issue or matter as to which such
person shall have been adjudged to be liable to the corporation unless
and only to the extent that the Court of Chancery or the court in which
such action or suit was brought shall determine upon application that,
despite the adjudication of liability but in view of all the
circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which the Court of Chancery or
such other court shall deem proper.
(n) To the extent that a director, officer, employee or agent
of a corporation has been successful on the merits or otherwise in
defense of any action, suit or proceeding referred to in subsections
(a) and (b) of this section, or in defense of any claim, issue or
matter therein, he shall be indemnified against expenses (including
attorneys' fees) actually and reasonably incurred by him in connection
therewith.
II-3
<PAGE>
(o) Any indemnification under subsections (a) and (b) of this
section (unless ordered by a court) shall be made by the corporation
only as authorized in the specific case upon a determination that
indemnification of the director, officer, employee or agent is proper
in the circumstances because he has met the applicable standard of
conduct set forth in subsections (a) and (b) of this section. Such
determination shall be made (1) by a majority vote of the directors who
are not parties to such action, suit or proceeding even though less
than a quorum, or (2) if there are no such directors, or if such
directors so direct, by independent legal counsel in a written opinion,
or (3) by the stockholders.
(p) Expenses (including attorney's fees) incurred by an
officer or director in defending a civil, criminal, administrative or
investigative action, suit or proceeding may be paid by the corporation
in advance of the final disposition or such action, suit or proceeding
upon receipt of an undertaking by or on behalf of such director or
officer to repay such amount if it shall ultimately be determined that
he is not entitled to be indemnified by the corporation as authorized
in this section. Such expenses (including attorney's fees) incurred by
other employees and agents may be paid upon such terms and conditions,
if any, as the board of directors deems appropriate.
(q) The indemnification and advancement of expenses provided
by, or granted pursuant to, the other subsections of this section shall
not be deemed exclusive of any other rights to which those seeking
indemnification or advancement of expenses may be entitled under any
bylaw, agreement, vote of stockholders or disinterested directors or
otherwise, both as to action in his official capacity and as to action
in another capacity while holding such office.
(r) A corporation shall have power to purchase and maintain
insurance on behalf of any person who is or was a director, officer,
employee or agent of the corporation, or is or was serving at the
request of the corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other
enterprise against any liability asserted against him and incurred by
him in any such capacity, or arising out of his status as such, whether
or not the corporation would have the power to indemnify him against
such liability under this section.
(s) For purposes of this section, references to "the
corporation" shall include, in addition to the resulting corporation,
any constituent corporation (including any constituent of a
constituent) absorbed in a consolidation or merger which, if its
separate existence had continued, would have had the power and
authority to indemnify its directors, officers, and employees or
agents, so that any person who is or was a director, officer, employee
or agent of such constituent corporation, or is or was serving at the
request of such constituent corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, shall stand in the same position under this
section with respect to the resulting or surviving corporation as he
would have with respect to such constituent corporation if its separate
existence had continued.
(t) For purposes of this section, references to "other
enterprises" shall include employee benefit plans; references to
"fines" shall include any such excise taxes assessed on a person with
respect to any employee benefit plan; and references to "serving at the
request of the corporation" shall include any service as a director,
officer, employee or agent of the corporation which imposes duties on,
or involves services by, such director, officer, employee, or agent
with respect to any employee benefit plan, its participants or
beneficiaries; and a person who acted in good faith and in a manner
reasonably believed to be in the interest of the participants and
beneficiaries of an employee benefit plan shall be deemed to have acted
in a manner "not opposed to the best interests of the corporation" as
referred to in this section.
(u) The indemnification and advancement of expenses provided
by, or granted pursuant to, this section shall, unless otherwise
provided when authorized or ratified, continue as to a person who has
ceased to be a director, officer, employee or agent and shall inure to
the benefit of the heirs, executors and administrators of such a
person.
II-4
<PAGE>
(v) The Court of Chancery is hereby vested with exclusive
jurisdiction to hear and determine all actions for advancement of
expenses or indemnification brought under this section or under any
bylaw, agreement, vote of stockholders or disinterested directors, or
otherwise. The Court of Chancery may summarily determine a corporations
obligation to advance expenses (including attorneys' fees).
The Company's certificate of incorporation provides that the directors
of the Company shall not be liable to the Company or its stockholders for
monetary damages for breach of fiduciary duty in such capacity except as
otherwise required by law.
The Company's by-laws provide that the Company shall indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding by reason of the
fact that he is or was a director, officer, employee or an agent of the Company
or is or was serving at the request of the Company as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, against all expenses (including attorneys' fees), judgments,
fines and amounts paid in settlement actually and reasonably incurred by him in
connection with the defense or settlement of such action, suit or proceeding, to
the fullest extent and in the manner set forth in and permitted by the General
Corporation Law of the State of Delaware, as from time to time in effect, and
any other applicable law, as from time to time in effect. Such right of
indemnification is not be deemed exclusive of any other rights to which such
director, officer, employee or agent and shall inure to the benefit of the
heirs, executors and administrators of each such person.
The Company has entered into indemnity agreements with its directors
and executive officers. The indemnity agreements provide that the Company shall
indemnify such directors and executive officers from and against any and all
liabilities, costs and expenses, amounts of judgments, fines, penalties and
amounts paid in settlement of or incurred in defense of any settlement in
connection with any threatened, pending or completed claim, action, suit or
proceeding in which such persons are a party (other than a proceeding or action
by or in the right of the Company to procure a judgment in its favor), or which
may be asserted against them by reason of their being or having been an officer
or director of the Company (the "Losses"), unless it is determined that such
directors and executive officers did not act in good faith and for a purpose
which they reasonably believed to be in, or in the case of service to an entity
related to the Company, not opposed to, the best interests of the Company and,
in the case of a criminal proceeding or action, that they had reasonable cause
to believe that their conduct was unlawful. The indemnity agreements also
provide that the Company shall indemnify such directors and executive officers
from and against any and all Losses that they may incur if they are a party to
or threatened to be made a party to any proceeding or action by or in the right
of the Company to procure a judgment in its favor, unless it is determined that
they did not act in good faith and for a purpose that they reasonably believed
to be in, or, in the case of service to an entity related to the Company, not
opposed to, the best interests of the Company, except that no indemnification
for Losses shall be made in respect of (i) any claim, issue or matter as to
which they shall have been adjudged to be liable to the Company or (ii) any
threatened or pending action to which they are a party or are threatened to be
made a party that is settled or otherwise disposed of, unless and only to the
extent that any court in which such action or proceeding was brought determines
upon application that, in view of all the circumstances of the matter, they are
fairly and reasonably entitled to indemnity for such expenses as such court
shall deem proper. Such indemnification is in addition to any other rights to
which such officers or directors may be entitled under any law, charter
provision, by-law, agreement, vote of shareholders or otherwise.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Exhibits:
EXHIBIT NO.
4.1 Specimen Common Stock Certificate*
4.2 Specimen Warrant Certificates*
4.3 Form of Warrant Agreement*
4.4 Form of Underwriter's Purchase Option Agreement*
II-5
<PAGE>
5.1 Opinion of Blau, Kramer, Wachtlar & Lieberman, P.C.,
regarding the legality of the securities being registered*
10.7 Form of Bridge Loan Agreement*
23.1 Consent of Blau, Kramer, Wachtlar & Lieberman, P.C.
(included in Exhibit 5.1)*
23.2 Consent of Moore Stephens, P.C.**
24 Powers of Attorney**
- ------------------
* Previously filed.
** Filed herewith.
ITEM 17. UNDERTAKINGS.
(a) 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 an 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.
(b) The undersigned Registrant hereby undertakes that it will:
(1) File, during any period in which it offers or sells
securities, a post-effective amendment to this registration statement to include
any additional or changed material information on the plan of distribution.
(2) For determining any liability under the Securities Act,
treat each post-effective amendment as a new registration statement for the
securities offered, and the offering of the securities at that time to be the
initial BONA FIDE offering.
(3) File a post-effective amendment to remove from
registration any of the securities that remain unsold at the end of the
offering.
II-6
<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-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of New York, State of New York on the 30th day of
November, 1997.
THE SOLOMON-PAGE GROUP LTD.
By: /S/ LLOYD SOLOMON
-----------------
Lloyd Solomon
Vice Chairman of the Board
and Chief Executive Officer
POWER OF ATTORNEY AND SIGNATORIES
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated. Each of the undersigned officers and
directors of The Solomon-Page Group, Ltd. hereby constitutes and appoints Lloyd
Solomon, Scott Page and Eric M. Davis and each of them singly, as true and
lawful attorneys-in-fact and agents with full power of substitution and
resubstitution, for him in his name 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, full power and authority to do
and perform each and every act and thing requisite or necessary to be done to
enable The Solomon-Page Group, Ltd. 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 hereof.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/S/HERBERT SOLOMON Chairman of the Board November 30, 1997
- ------------------------
Herbert Solomon
/S/LLOYD SOLOMON Vice Chairman of the Board and Director November 30, 1997
- ------------------------ (Principal Executive Officer)
Lloyd Solomon
/S/SCOTT PAGE President and Director November 30, 1997
- ------------------------
Scott Page
/S/ERIC M. DAVIS Vice President - Finance, Chief Financial November 30, 1997
- ------------------------ Officer and Director (Principal Financial
Eric M. Davis and Accounting Officer)
/S/EDWARD EHRENBERG Director November 30, 1997
- ------------------------
Edward Ehrenberg
/S/JOEL A. KLARREICH Director November 30, 1997
- ------------------------
Joel A. Klarreich
</TABLE>
II-7
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We consent to incorporation by reference in the registration statement
of The Solomon-Page Group Ltd. on Form S-3 of our report dated December 6, 1996,
except as to Note 15, for which the date is December 18, 1996, on our audits of
the consolidated financial statements of The Solomon-Page Group Ltd. and its
subsidiary as of September 30, 1996, and for the two fiscal years in the period
ended September 30, 1996 which report is incorporated by reference in this Form
S-3.
We also consent to the reference to us under the caption "Experts" in
the Registration Statement.
/s/ MOORE STEPHENS P.C.
------------------------
MOORE STEPHENS, P.C.
Certified Public Accountants
Cranford, New Jersey
December 2, 1997
