As filed with the Securities and Exchange Commission on October 28, 1996
Registration No. 333-10615
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------
POST-EFFECTIVE AMENDMENT
NO. 1 TO FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------
CRW FINANCIAL, INC.
(Exact name of registrant as specified in its charter)
Delaware 23-2691986
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
CRW FINANCIAL, INC. AMENDED AND RESTATED 1995 STOCK OPTION PLAN
(Full Title of Each Plan)
443 South Gulph Road
King of Prussia, PA 19406
(610) 962-5100
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
J. Brian O'Neill, Chief Executive Officer
CRW Financial, Inc.
443 South Gulph Road
King of Prussia, PA 19406
(610) 962-5100
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
--------------------------
Copies to:
Dean M. Schwartz, Esquire
Stradley, Ronon, Stevens & Young, LLP
2600 One Commerce Square
Philadelphia, Pennsylvania 19103-7098
--------------------------
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
CALCULATION OF REGISTRATION FEE
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
Proposed maximum Proposed maximum
Amount to be offering price per aggregate offering Amount of
Title of securities to be registered registered(1) share(1) price(2) registration fee
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Common Stock, $.01 par value, 260,000 $2.91
upon exercise of options under the CRW 15,000 $3.81
Financial, Inc. Amended and Restated 1995 215,000 $5.81
Stock Option Plan ("Plan") 10,000 $23.75 $ 2,300,400 $ 793.25(3)
367,500 $ 3.75
75,000 $10.00
1,057,500 $11.50 $14,289,375 $4,330.12(4)(5)
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Pursuant to Rule 457(h)(1), for shares issuable upon presently outstanding
options granted under the Plan, the price at which such options may be
exercised has been used to determine the registration fee. For shares
issuable upon options not yet granted under the Plan, the registration fee
was determined in accordance with Rule 457(c).
<PAGE>
(2) Estimated solely for the purpose of determining the registration fee.
(3) A registration fee of $793.25 was previously paid to register a total of
500,000 shares of Common Stock pursuant to the Company's Registration
Statement (No. 333-10615) on Form S-8 filed with the Securities and
Exchange Commission on August 22, 1996.
(4) Pursuant to Rule 457(a), a $4,330.12 registration fee is paid herewith to
register an additional 1,500,000 shares of Common Stock based on a current
Proposed Maximum Offering Price of $14,289,375 for these additional shares.
(5) On October 24, 1996, the Company issued shares in a 3-for-1 stock split of
its Common Stock held by stockholders of record on October 14, 1996. On
such date, holders of options under the Plan on October 14, 1996 became
entitled to three shares of Common Stock for every one share of Common
Stock formerly subject to their stock options. The exercise price of such
stock options was also reduced to one third its former amount.
-2-
<PAGE>
CRW FINANCIAL, INC.
REGISTRATION STATEMENT ON FORM S-8
PART II
INFORMATION REQUIRED IN REGISTRATION STATEMENT
As used in this Registration Statement, unless the context otherwise
requires, the terms "CRW" and the "Company" mean CRW Financial, Inc. and its
subsidiaries.
Item 3. Incorporation of Documents by Reference.
The following documents, previously filed by the Company with the
Commission pursuant to the Securities Exchange Act of 1934, as amended (the
"1934 Act"), are as of their respective dates, hereby incorporated by reference
in this Registration Statement, except as superseded or modified herein:
(a) the Company's Annual Report on Form 10-K, as amended by
Form 10-K/A, for the fiscal year ended December 31, 1995;
(b) the Company's Quarterly Reports on Form 10-Q for the
quarters ended March 31, 1996 and June 30, 1996;
(c) Current Reports on Form 8-K dated March 14, 1996, August
21, 1996 and October 3, 1996; and
(d) the description of the Company's Common Stock contained in
the Company's Registration Statement on Form 8-A filed May 4, 1995.
All documents filed by the Company pursuant to Sections 13(a), 13(c),
14 and 15(d) of the 1934 Act on or after the date of this Registration Statement
and prior to the filing of a post-effective amendment which indicates that all
securities offered have been sold or which deregisters all securities then
remaining unsold, shall be deemed to be incorporated by reference in this
Registration Statement and to be part hereof from the date of filing of such
documents.
Item 4. Description of Securities.
Not Applicable
Item 5. Interests of Named Experts and Counsel.
The law firm of Stradley, Ronon, Stevens & Young, LLP is rendering its
opinion as legal counsel to the Company. Joseph V. Del Raso, a partner in the
law firm, holds an option to purchase 75,000 shares of Common Stock at an
exercise price of $3.75 per share (following the Company's 3-for-1 stock split).
At the time of the foregoing option grant, Mr. Del Raso was a Director of the
Company. Mr. Del Raso's stock option expires on November 18, 1996.
Item 6. Indemnification of Directors and Officers.
Section 145 of the Delaware General Corporation Law ("Section 145")
permits indemnification of directors, officers, agents and controlling persons
of a corporation under certain conditions and subject to certain limitations.
Section 145 empowers a corporation to 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, by reason of the fact that such person is or was a director,
officer or agent of the corporation or another enterprise if serving at the
request of the corporation. Depending on the character of the proceeding, a
corporation may indemnify against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
in connection with such action, suit or proceeding if the person indemnified
acted in good faith and
-3-
<PAGE>
in a manner such person 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 such person's conduct was
unlawful. In the case of an action by or in the right of the corporation, no
indemnification may be made with respect to 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 Delaware Court of Chancery or the court
in which such action or suit was brought shall determine that despite the
adjudication of liability such person is fairly and reasonably entitled to
indemnity for such expenses which the court shall deem proper. Section 145
further provides that to the extent a director or officer of a corporation has
been successful in the defense of any action, suit or proceeding referred to
above or in the 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.
CRW's By-laws contain provisions for indemnification of directors,
officers, employees and agents which are substantially the same as Section 145
and also permit CRW to purchase insurance on behalf of any such person 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
CRW would have the power to indemnify such person against such liability under
the foregoing provision of the CRW By-laws. CRW currently maintains such
insurance, although there can be no assurance that CRW will be able to maintain
such insurance on reasonable terms.
Item 7. Exemption from Registration Claimed.
Not Applicable.
Item 8. Exhibits.
(a) Exhibits:
4.1 CRW Financial, Inc. Amended and Restated 1995 Stock
Option Plan
5.1 Opinion of Stradley, Ronon, Stevens & Young, LLP
23.1 Consent of Stradley, Ronon, Stevens & Young, LLP
(contained in Exhibit 5.1)
23.2 Consent of Arthur Andersen LLP
24.1 Power of Attorney*
- -------------
* Previously filed.
Item 9. Undertakings.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of this Registration
Statement (or the most recent post-effective amendment hereof)
which, individually or in the aggregate, represent a
fundamental change in the information set forth in this
Registration Statement; and
(iii) To include any material information with
respect to the plan of distribution not previously disclosed
in this Registration Statement or any material change to such
information in this Registration Statement.
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
-4-
<PAGE>
Commission by the registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in this
Registration Statement;
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be an initial bona fide offering thereof; and
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(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
this 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.
-5-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant,
CRW Financial, Inc., 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
Post-Effective Amendment No. 1 to Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in King of Prussia,
Commonwealth of Pennsylvania, on October 28, 1996.
CRW FINANCIAL, INC.
By: /s/ J. Brian O'Neill
-------------------------------------------------------------------
J. Brian O'Neill, Chairman of the Board and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment No. 1 to Registration Statement has been signed below
by the following persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Name Title Date
---- ----- ----
<S> <C> <C>
/s/ J. BRIAN O'NEILL Director, Chairman of the Board October 28, 1996
- -------------------------------------------- and Chief Executive Officer
J. Brian O'Neill (Principal Executive Officer)
/s/ JONATHAN P. ROBINSON, as Attorney-in-Fact Director October 28, 1996
- ---------------------------------------------
Mark DeNino
/s/ JONATHAN P. ROBINSON, as Attorney-in-Fact Director October 28, 1996
- ---------------------------------------------
Eustace Mita
Director October __, 1996
- ---------------------------------------------
Bernard Morgan
Director October __, 1996
- ---------------------------------------------
Robert N. Verratti
/s/ JONATHAN P. ROBINSON Vice President and Chief Financial October 28, 1996
- --------------------------------------------- Officer (Principal Financial
Jonathan P. Robinson Officer and Principal Accounting Officer)
</TABLE>
-6-
<PAGE>
EXHIBIT INDEX
Exhibit # Description
- --------- -----------
4.1 CRW Financial, Inc. Amended and Restated 1995 Stock Option Plan
5.1 Opinion of Stradley, Ronon, Stevens & Young, LLP
23.1 Consent of Stradley, Ronon, Stevens & Young, LLP*
23.2 Consent of Arthur Andersen LLP
24.1 Power of Attorney**
- ----------
* Contained in Exhibit 5.1.
** Previously filed.
-7-
<PAGE>
EXHIBIT 4.1
CRW FINANCIAL, INC.
AMENDED AND RESTATED
1995 STOCK OPTION PLAN
1. Purpose. CRW Financial, Inc. (the 'Company') hereby adopts the CRW
Financial, Inc. Amended and Restated 1995 Stock Option Plan (the 'Plan'). The
Plan is intended to recognize the contributions made to the Company by employees
(including employees who are members of the Board of Directors) of the Company
or any Affiliate (as defined below) and certain consultants or advisors to the
Company or an Affiliate, to provide such persons with additional incentive to
devote themselves to the future success of the Company or an Affiliate, and to
improve the ability of the Company or an Affiliate to attract, retain and
motivate individuals upon whom the Company's sustained growth and financial
success depend, by providing such persons with an opportunity to acquire or
increase their proprietary interest in the Company through receipt of rights to
acquire the Company's Common Stock, par value $.01 per Share (the 'Common
Stock'). In addition, the Plan is intended as an additional incentive to
directors of the Company who are not employees of the Company or an Affiliate to
serve on the Board of Directors and to devote themselves to the future success
of the Company by providing them with an opportunity to acquire or increase
their proprietary interest in the Company through the receipt of Options to
acquire Common Stock.
2. Definitions. Unless the context clearly indicates otherwise, the
following terms shall have the following meanings:
(a) 'Affiliate' means a corporation which is a parent corporation or a
subsidiary corporation with respect to the Company within the meaning of
Section 424(e) or (f) of the Code.
(b) 'Board of Directors' means the Board of Directors of the Company.
(c) 'Change of Control' shall have the meaning as set forth in Section
10 of the Plan.
(d) 'Code' means the Internal Revenue Code of 1986, as amended.
(e) 'Committee' shall have the meaning set forth in Section 3 of the
Plan.
(f) 'Company' means CRW Financial, Inc., a Delaware corporation.
(g) 'Disability' shall have the meaning set forth in Section 22(e)(3)
of the Code.
(h) 'Disinterested Committee Members' means directors of the Company
who are (i) not current employees of the Company, (ii) not former employees
of the Company who received or who will receive compensation for prior
services (other than benefits under a tax-qualified retirement plan) during
the current fiscal year, (iii) not currently and have not in the past been
officers of the Company and (iv) not receiving any remuneration from the
Company in any capacity other than in their role as directors.
(i) 'Distribution' means the distribution of the stock of the Company
to the stockholders of Casino & Credit Services, Inc. ('CCS') pursuant to
the terms of the Reorganization and Distribution Agreement, dated as of
November 1, 1994, between CCS and the Company.
(j) 'Fair Market Value' shall have the meaning set forth in Subsection
8(b) of the Plan.
(k) 'ISO' means an Option granted under the Plan which is intended to
qualify as an 'incentive stock option' within the meaning of Section 422(b)
of the Code.
(l) 'Non-qualified Stock Option' means an Option granted under the
Plan which is not intended to qualify, or otherwise does not qualify, as an
'incentive stock option' within the meaning of Section 422(b) of the Code.
(m) 'Option' means either an ISO or a Non-qualified Stock Option
granted under the Plan.
(n) 'Optionee' means a person to whom an Option has been granted under
the Plan, which Option has not been exercised and has not expired or
terminated.
A-1
<PAGE>
(o) 'Option Document' means the document described in Section 8 or
Section 9 of the Plan, as applicable, which sets forth the terms and
conditions of each grant of Options.
(p) 'Option Price' means the price at which Shares may be purchased
upon exercise of an Option, as calculated pursuant to Subsection 8(b) of
the Plan.
(q) 'Rule 16b-3' means Rule 16b-3 promulgated under the Securities
Exchange Act of 1934, as amended.
(r) 'Section 16 Officers' means the Chairman of the Board of Directors
(if the Chairman of the Board of Directors is a payroll employee),
President, Executive Vice President, Senior Vice President, Vice President,
Treasurer and any other person who is an 'officer' within the meaning of
Rule 16a-1(f) promulgated under the Securities Exchange Act of 1934, as
amended, or any successor rule.
(s) 'Shares' means the shares of Common Stock of the Company which are
the subject of Options.
3. Administration of the Plan. The Plan shall be administered by the
Board of Directors or a committee or committees designated by the Board of
Directors. The Board of Directors may (i) designate a committee composed of two
or more of its directors (who will be Disinterested Committee Members) to
operate and administer the Plan, (ii) designate two committees to operate and
administer the Plan in its stead, one of such committees composed of two or more
Disinterested Committee Members to operate and administer the Plan only with
respect to the Company's Section 16 Officers, and the other such committee
composed of two or more directors to operate and administer the Plan with
respect to persons other than Section 16 Officers and Disinterested Committee
Members or (iii) designate only one committee (consisting of Disinterested
Committee Members) to operate and administer the Plan only with respect to the
Company's Section 16 Officers and itself operate and administer the Plan with
respect to persons not within the jurisdiction of such committee. Any of such
committees designated by the Board of Directors, and the Board of Directors
itself in its administrative capacity with respect to the Plan, is referred to
as the 'Committee.' The Plan, as it pertains to Disinterested Committee Members
who are to be granted Options in accordance with the provisions of Section 9,
shall be administered by the Board of Directors.
(a) Meetings. The Committee shall hold meetings at such times and places
as it may determine. Acts approved at a meeting by a majority of the members of
the Committee or acts approved in writing by the unanimous consent of the
members of the Committee shall be the valid acts of the Committee.
(b) Grants. Except with respect to Options granted to Disinterested
Committee Members pursuant to Section 9, the Committee shall from time to time
at its discretion direct the Company to grant Options pursuant to the terms of
the Plan. The Committee shall have plenary authority to (i) determine the
Optionee to whom, the times at which and the price at which Options shall be
granted, (ii) determine the type of Option to be granted and the number of
Shares subject thereto and (iii) approve the form and terms and conditions of
the Option Documents; all subject, however, to the express provisions of the
Plan. In making such determinations, the Committee may take into account the
nature of the Optionee's services and responsibilities, the Optionee's present
and potential contribution to the Company's success and such other facts as it
may deem relevant. Notwithstanding the foregoing, grants of Options to
Disinterested Committee Members shall be made only in accordance with Section 9.
The interpretation and construction by the Committee of any provisions of the
Plan or of any Option granted under it shall be final, binding and conclusive.
(c) Exculpation. No member of the Board of Directors shall be personally
liable for monetary damages for any action taken or any failure to take any
action in connection with the administration of the Plan or the granting of
Options under the Plan, provided that this Subsection 3(c) shall not apply to
(i) any breach of such member's duty of loyalty to the Company or its
stockholders, (ii) acts or omissions not in good faith or involving intentional
misconduct or a knowing violation of law, (iii) acts or omissions that would
result in liability under Section 174 of the General Corporation Law of the
A-2
<PAGE>
State of Delaware, as amended and (iv) any transaction from which the member
derived an improper personal benefit.
(d) Indemnification. Service on the Committee shall constitute service as
a member of the Board of Directors of the Company. Each member of the Committee
shall be entitled without further act on his part to indemnity from the Company
to the fullest extent provided by applicable law and the Company's Certificate
of Incorporation and/or By-laws in connection with or arising out of any action,
suit or proceeding with respect to the administration of the Plan or the
granting of Options thereunder in which he or she may be involved by reason of
his or her being or having been a member of the Committee, whether or not he or
she continues to be such member of the Committee at the time of the action, suit
or proceeding.
(e) Limitations on Grants of Options to Consultants and Advisors. With
respect to the grant of Options to consultants or advisors, bona fide services
shall be rendered by consultants or advisors and such services must not be in
connection with the offer or sale of securities in a capital-raising
transaction.
4. Grants under the Plan. Grants under the Plan may be in the form of a
Non-qualified Stock Option, an ISO or a combination thereof, at the discretion
of the Committee.
5. Eligibility. All employees, consultants and advisors of the Company or
an Affiliate and members of the Board of Directors shall be eligible to receive
Options hereunder. However, Disinterested Committee Members may receive Options
only pursuant to Section 9. The Committee, in its sole discretion, shall
determine whether an individual is eligible to receive Options under the Plan.
6. Shares Subject to Plan. The maximum aggregate number of Shares for
which Options may be granted pursuant to the Plan is One Million (1,000,000)
Shares, subject to adjustment as provided in Section 11 of the Plan. The maximum
aggregate number of Shares for which Options may be granted under the Plan to
any single employee of the Company or an Affiliate in any taxable year of the
Company shall be One Hundred Fifty Thousand (150,000) Shares, subject to
adjustment as provided in Section 11. The Shares shall be issued from authorized
and unissued Common Stock or Common Stock held in or hereafter acquired for the
treasury of the Company. If an Option terminates or expires without having been
fully exercised for any reason, the Shares for which the Option was not
exercised may again be the subject of one or more Options granted pursuant to
the Plan.
7. Term of the Plan. The Plan is effective as of April 3, 1995, the date
on which it was adopted by the Board of Directors subject to the approval of the
Plan on or before April 5, 1995 by a majority of the votes of the outstanding
voting stock of the Company. If the Plan is not so approved on or before April
5, 1995, all Options granted under the Plan shall be null and void. No Option
may be granted under the Plan after April 3, 2005.
8. Option Documents and Terms. Each Option granted under the Plan shall be
a Non-qualified Stock Option unless the Option shall be specifically designated
at the time of grant to be an ISO for federal income tax purposes. If any Option
designated an ISO is determined for any reason not to qualify as an incentive
stock option within the meaning of Section 422 of the Code, such Option shall be
treated as a Non-qualified Stock Option for all purposes under the provisions of
the Plan. Options granted pursuant to the Plan shall be evidenced by the Option
Documents in such form as the Committee shall from time to time approve, which
Option Documents shall comply with and be subject to the following terms and
conditions and such other terms and conditions as the Committee shall from time
to time require which are not inconsistent with the terms of the Plan. However,
the provisions of this Section 8 shall not be applicable to Options granted to
Disinterested Committee Members, except as otherwise provided in Subsection
9(c).
(a) Number of Option Shares. Each Option Document shall state the number
of Shares to which it pertains. An Optionee may receive more than one Option,
which may include Options which are intended to be ISOs and Options which are
not intended to be ISOs, but only on the terms and subject to the conditions and
restrictions of the Plan.
A-3
<PAGE>
(b) Option Price. Each Option Document shall state the Option Price which,
for a Non-qualified Stock Option other than a Non-Qualified Stock Option granted
pursuant to Section 9, may be less than, equal to, or greater than the Fair
Market Value of the Shares on the date the Option is granted and, for an ISO,
shall be at least 100% of the Fair Market Value of the Shares on the date the
Option is granted as determined by the Committee in accordance with this
Subsection 8(b); provided, however, that if an ISO is granted to an Optionee who
then owns, directly or by attribution under Section 424(d) of the Code, shares
possessing more than ten percent of the total combined voting power of all
classes of stock of the Company or an Affiliate, then the Option Price shall be
at least 110% of the Fair Market Value of the Shares on the date the Option is
granted. If the Common Stock is traded in a public market, then the Fair Market
Value per share shall be, if the Common Stock is listed on a national securities
exchange or included in the NASDAQ National Market System, the last reported
sale price thereof on the relevant date, or, if the Common Stock is not so
listed or included, the mean between the last reported 'bid' and 'asked' prices
thereof on the relevant date, as reported on NASDAQ or, if not so reported, as
reported by the National Daily Quotation Bureau, Inc. or as reported in a
customary financial reporting service, as applicable and as the Committee
determines. Notwithstanding anything herein to the contrary, during the twelve
month period commencing with the date on which the initial distribution of the
Common Stock of the Company is consummated, the Option Price shall not be less
than the greater of (i) the Fair Market Value of the Common Stock of the Company
on the date the Option is granted or (ii) the price at which the Common Stock of
the Company was initially offered to the public.
(c) Exercise. No Option shall be deemed to have been exercised prior to
the receipt by the Company of written notice of such exercise and of payment in
full of the Option Price for the Shares to be purchased. Each such notice shall
specify the number of Shares to be purchased and shall (unless the Shares are
covered by a then current registration statement or a Notification under
Regulation A under the Securities Act of 1933, as amended (the 'Act'), contain
the Optionee's acknowledgment in form and substance satisfactory to the Company
that (i) such Shares are being purchased for investment and not for distribution
or resale (other than a distribution or resale which, in the opinion of counsel
satisfactory to the Company, may be made without violating the registration
provisions of the Act), (ii) the Optionee has been advised and understands that
(A) the Shares have not been registered under the Act and are 'restricted
securities' within the meaning of Rule 144 under the Act and are subject to
restrictions on transfer and (B) the Company is under no obligation to register
the Shares under the Act or to take any action which would make available to the
Optionee any exemption from such registration, (iii) such Shares may not be
transferred without compliance with all applicable federal and state securities
laws and (iv) an appropriate legend referring to the foregoing restrictions on
transfer and any other restrictions imposed under the Option Documents may be
endorsed on the certificates. Notwithstanding the foregoing, if the Company
determines that issuance of Shares should be delayed pending (i) registration
under federal or state securities laws, (ii) the receipt of an opinion of
counsel acceptable to the Company that an appropriate exemption from such
registration is available, (iii) the listing or inclusion of the Shares on any
securities exchange or an automated quotation system or (iv) the consent or
approval of any governmental regulatory body whose consent or approval is
necessary in connection with the issuance of such Shares, the Company may defer
exercise of any Option granted hereunder until any of the events described in
this Subsection 8(c) has occurred.
(d) Medium of Payment. An Optionee shall pay for Shares (i) in cash, (ii)
by certified or cashier's check payable to the order of the Company or (iii) by
such other mode of payment as the Committee may approve, including payment
through a broker in accordance with procedures permitted by Regulation T of the
Federal Reserve Board. Without limiting the foregoing, the Committee may provide
in an Option Document that payment may be made in whole or in part in shares of
the Company's Common Stock. If this occurs, then the Optionee shall deliver to
the Company certificates registered in the name of such Optionee representing
shares owned by such Optionee, free of all liens, claims and encumbrances of
every kind and having an aggregate Fair Market Value on the date of delivery
that is at least as great as the Option Price of the Shares (or the relevant
portion thereof) with respect to which such Option is to be exercised by the
payment in respect to which such Option is to be exercised by the payment in
shares of Common Stock, endorsed in blank or accompanied by stock
A-4
<PAGE>
powers duly endorsed in blank by the Optionee. In the event that certificates
for shares of the Company's Common Stock delivered to the Company represent a
number of shares in excess of the number of shares required to make payment for
the Option Price of the Shares (or the relevant portion thereof) with respect to
which such option is to be exercised by payment in shares of Common Stock, the
stock certificate issued to the Optionee shall represent (i) the Shares in
respect of which payment is made, and (ii) such excess number of shares.
Notwithstanding the foregoing, the Committee may impose from time to time such
limitations and prohibitions on the use of shares of the Common Stock to
exercise an Option as it deems appropriate.
(e) Termination of Options.
(i) No Option shall be exercisable after the first to occur of the
following:
(A) Expiration of the Option term specified in the Option Document,
which, in the case of an ISO, shall not occur after (1) ten years from
the date of grant, or (2) five years from the date of grant of an ISO if
the Optionee on the date of grant owns, directly or by attribution under
Section 424(d) of the Code, shares possessing more than ten percent
(10%) of the total combined voting power of all classes of stock of the
Company or of an Affiliate;
(B) Expiration of ninety (90) days from the date the Optionee's
employment or service with the Company or its Affiliates terminates for
any reason other than Disability or death or as otherwise specified in
Subsection 8(e)(i)(D) or 8(e)(i)(E) below;
(C) Expiration of one year from the date such employment or service
with the Company or its Affiliates terminates due to the Optionee's
Disability or death;
(D) A finding by the Committee, after full consideration of the
facts presented on behalf of both the Company and the Optionee, that the
Optionee has breached his or her employment or service contract with the
Company or an Affiliate, or has been engaged in disloyalty to the
Company or an Affiliate, including, without limitation, fraud,
embezzlement, theft, commission of a felony or proven dishonesty in the
course of his employment or service, or has disclosed trade secrets or
confidential information of the Company or an Affiliate. In such event,
in addition to immediate termination of the Option, the Optionee shall
automatically forfeit all Shares for which the Company has not yet
delivered the share certificates upon refund by the Company of the
Option Price. Notwithstanding anything herein to the contrary, the
Company may withhold delivery of share certificates pending the
resolution of any inquiry that could lead to a finding resulting in a
forfeiture; or
(E) The date, if any, set by the Board of Directors as an
accelerated expiration date pursuant to Section 10 hereof.
With respect to Subsections 8(e)(i)(B) and (C) above, the only
Options which may be exercised during the ninety (90) day and one-year
period, as the case may be, following the date of Optionee's termination
of employment or service with the Company or its Affiliates, are Options
which were exercisable on the last date of such employment or service
and not Options which, if the Optionee were still employed or rendering
service during such three-month or one-year period, would become
exercisable, unless the Option Document specifically provides to the
contrary.
(ii) Notwithstanding the foregoing, the Committee may extend the
period during which all or any portion of an Option may be exercised to a
date no later than the Option term specified in the Option Document
pursuant to Subsection 8(e)(i)(A), provided that any change pursuant to
this Subsection 8(e)(ii) which would cause an ISO to become a Non-qualified
Stock Option may be made only with the consent of the Optionee.
(f) Transfers. No Option granted under the Plan may be transferred, except
by will or by the laws of descent and distribution. During the lifetime of the
person to whom an Option is granted, such Option may be exercised only by such
person. Notwithstanding the foregoing, a Non-qualified Stock
A-5
<PAGE>
Option may be transferred pursuant to the terms of a 'qualified domestic
relations order,' within the meaning of Sections 401(a)(13) and 414(p) of the
Code or within the meaning of Title I of the Employee Retirement Income Security
Act of 1974, as amended.
(g) Limitation on ISO Grants. In no event shall the aggregate fair market
value of the shares of Common Stock (determined at the time the ISO is granted)
with respect to which incentive stock options under all incentive stock option
plans of the Company or its Affiliates are exercisable for the first time by the
Optionee during any calendar year exceed $100,000.
(h) Other Provisions. Subject to the provisions of the Plan, the Option
Documents shall contain such other provisions including, without limitation,
provisions authorizing the Committee to accelerate the exercise date of all or
any portion of an Option granted pursuant to the Plan, additional restrictions
upon the exercise of the Option or additional limitations upon the term of the
Option, as the Committee shall deem advisable.
(i) Amendment. Subject to the provisions of the Plan, the Committee shall
have the right to amend Option Documents issued to an Optionee, subject to the
Optionee's consent if such amendment is not favorable to the Optionee, except
that the consent of the Optionee shall not be required for any amendment made
pursuant to Section 10 of the Plan, as applicable.
9. Special Provisions Relating to Grants of Options to Disinterested
Committee Members. Options granted pursuant to the Plan to Disinterested
Committee Members shall be granted, without any further action by the Committee,
in accordance with the terms and conditions set forth in this Section 9. Options
granted pursuant to this Section 9 shall be evidenced by Option Documents in
such from as the Committee shall from time to time approve, which Option
Documents shall comply with and be subject to the following terms and conditions
and such other terms and conditions as the Committee shall from time to time
require which are not inconsistent with the terms of the Plan.
(a) Timing of Grants; Number of Shares Subject of Options; Exercisability
of Options; Option Price. Each Disinterested Committee Member who becomes a
Committee Member prior to the initial distribution of the Shares shall be
granted an Option to purchase Seven Thousand Five Hundred (7,500) Shares on the
date of the consummation of the Distribution ('Initial Grant'). Each other
Disinterested Committee Member shall be granted an Option to purchase Seven
Thousand Five Hundred (7,500) Shares ('Initial Grant') on the April 1 coincident
with or following the date on which he becomes a member of the Committee.
Following a Disinterested Committee Member's receipt of an Initial Grant, such
Disinterested Committee Member shall be granted an Option to purchase Two
Thousand (2,000) Shares on each April 1 thereafter, commencing April 1, 1996,
provided such Disinterested Committee Member continues to serve as a
Disinterested Committee Member on the date of each such grant. In addition,
Disinterested Committee Members shall also be granted an annual Option to
purchase Twenty-Five Thousand (25,000) Shares in consideration of their service
as non-employee Directors of the Company, provided that the terms of such Option
must comply with the other provisions of this Section 9. Each such Option shall
be a Non-qualified Stock Option exercisable immediately except that the Initial
Grant shall first become exercisable on the date of the consummation of the
Distribution. The Option Price shall be equal to the Fair Market Value of the
Shares on the date the Option is granted, provided, however, that the Option
Price for all Options granted under this Section 9 during the twelve month
period commencing with the date on which the initial public offering of the
Common Stock of the Company was offered to the public shall be equal to the
greater of (i) the Fair Market Value of the Common Stock of the Company on the
date the Option is granted or (ii) the price of the Common Stock of the Company
on the date of the Initial Grant.
(b) Termination of Options Granted Pursuant to Section 9. All options
granted pursuant to this Section 9 shall be exercisable until the first to occur
of the following:
(i) Expiration of ten (10) years from the date of grant;
(ii) Expiration of six (6) months from the date the Optionee's service
as a member of the Board of Directors terminates for any reason other than
Disability or death; or
A-6
<PAGE>
(iii) Expiration of one (1) year from the date the Optionee's service
with the Company as a member of the Board of Directors terminates due to
the Optionee's Disability or death.
(c) Applicability of Provisions of Section 8 to Options Granted Pursuant to
Section 9. The following provisions of Section 8 shall be applicable to Options
granted pursuant to Section 9: Subsection 8 (a) (provided that all Options
granted pursuant to this Section 9 shall be Non-qualified Stock Options); the
last sentence of Subsection 8(b); Subsection 8(c); Subsection 8(d) (provided
that Option Documents relating to Options granted pursuant to this Section 9
shall provide that payment may be made in whole or in part in shares of Company
Common Stock); Subsection 8(f); and Subsection 8(i).
10. Change of Control. In the event of a Change of Control, the Committee
may take whatever action it deems necessary or desirable with respect to the
Options outstanding, including, without limitation, accelerating the expiration
or termination date in the respective Option Documents to a date no earlier than
thirty (30) days after notice of such acceleration is given to the Optionee,
provided, however, in the event of a Change in Control, Options granted pursuant
to the Plan shall become immediately exercisable in full.
A 'Change in Control' shall be deemed to have occurred upon the earliest to
occur of the following events: (a) the date the stockholders of the Company (or
the Board of Directors, if stockholder action is not required) approve a plan or
other arrangement pursuant to which the Company will be dissolved or liquidated,
or (b) the date the stockholders of the Company (or the Board of Directors, if
stockholder action is not required) approve a definitive agreement to sell or
otherwise dispose of substantially all of the assets of the Company, or (c) the
date the stockholders of the Company (or the Board of Directors, if stockholder
action is not required) and the stockholders of the other constituent
corporation (or its board of directors if stockholder action is not required)
have approved a definitive agreement to merge or consolidate the Company with or
into such other corporation, other than, in either case, a merger or
consolidation of the Company in which holders of shares of the Company's Common
Stock immediately prior to the merger or consolidation will hold at least a
majority of the ownership of common stock of the surviving corporation (and, if
one class of common stock is not the only class of voting securities entitled to
vote on the election of directors of the surviving corporation, a majority of
the voting power of the surviving corporation's voting securities) immediately
after the merger or consolidation, which common stock (and, if applicable,
voting securities) is to be held in the same proportion as such holders'
ownership of Common Stock of the Company immediately before the merger or
consolidation, or (d) the date any entity, person or group within the meaning of
Section 13(d)(3) or Section 14(d)(2) of the Securities Exchange Act of 1934, as
amended, (other than (i) the Company or any of its subsidiaries or any employee
benefit plan (or related trust) sponsored or maintained by the Company or any of
its subsidiaries, or (ii) any person who, on the date the Plan is effective,
shall own Common Stock of the Company or securities which are exercisable or
convertible or exchangeable into Common Stock of the Company) shall have become
the beneficial owner of or shall have obtained voting control over, more than
thirty percent (30%) of the outstanding shares of the Common Stock of the
Company, or (e) the first day after the date this Plan is effective when
directors are elected such that a majority of the Board of Directors shall have
been members of the Board of Directors for less than two (2) years, unless the
nomination for election of each new director who was not a director at the
beginning of such two (2) year period was approved by a vote of at least
two-thirds of the directors then still in office who were directors at the
beginning of such period.
11. Adjustments on Changes in Capitalization. The aggregate number of
Shares and class of shares as to which Options may be granted hereunder, the
number and class or classes of shares covered by each outstanding Option and the
Option Price thereof shall be appropriately adjusted in the event of a stock
dividend, stock split, recapitalization or other change in the number or class
of issued and outstanding equity securities of the Company resulting from a
subdivision or consolidation of the Common Stock and/or, if appropriate, other
outstanding equity securities or a recapitalization or other capital adjustment
(not including the issuance of Common Stock on the conversion of other
securities of the Company which are convertible into Common Stock) affecting the
Common Stock which is
A-7
<PAGE>
effected without receipt of consideration by the Company. The Committee shall
have authority to determine the adjustments to be made under this Section, and
any such determination by the Committee shall be final, binding and conclusive;
provided, however, that no adjustment shall be made which will cause an ISO to
lose its status as such without the consent of the Optionee, except for
adjustments made pursuant to Section 10 hereof.
12. Amendment of the Plan. The Board of Directors of the Company may amend
the Plan from time to time in such manner as it may deem advisable.
Nevertheless, the Board of Directors of the Company may not change the class of
individuals eligible to receive an ISO or increase the maximum number of Shares
as to which Options may be granted without obtaining approval, within twelve
months before or after such action, by vote of a majority of the votes cast at a
duly called meeting of the stockholders at which a quorum representing a
majority of all outstanding voting stock of the Company is, either in person or
by proxy, present and voting on the matter. In addition, the provisions of
Section 9 that determine (a) which directors shall be granted Options pursuant
to Section 9; (b) the amount of Shares subject to Options granted pursuant to
Section 9; (c) the price at which shares subject to Options granted pursuant to
Section 9 may be purchased and (d) the timing of grants of Options pursuant to
Section 9 shall not be amended more than once every six months, other than to
comport with changes in the Code or the Employee Retirement Income Security Act
of 1974, as amended. No amendment of the Plan shall adversely affect any
outstanding Option, however, without the consent of the Optionee that holds such
Option.
13. No Commitment to Retain. The grant of an Option pursuant to the Plan
shall not be construed to imply or to constitute evidence of any agreement,
express or implied, on the part of the Company or any Affiliate to retain the
Optionee in the employ of the Company or an Affiliate and/or as a member of the
Company's Board of Directors or in any other capacity.
14. Withholding of Taxes. Whenever the Company proposes or is required to
deliver or transfer shares in connection with the exercise of an Option, the
Company shall have the right to (a) require the recipient to remit or otherwise
make available to the Company an amount sufficient to satisfy any federal, state
and/or local withholding tax requirements prior to the delivery or transfer of
any certificate or certificates for such Shares or (b) take whatever other
action it deems necessary to protect its interests with respect to tax
liabilities. The Company's obligation to make any delivery or transfer of Shares
shall be conditioned on the Optionee's compliance, to the Company's
satisfaction, with any withholding requirement.
15. Interpretation. The Plan is intended to enable transactions under the
Plan with respect to directors and officers (within the meaning of Section 16(a)
under the Securities Exchange Act of 1934, as amended) to satisfy the conditions
of Rule 16b-3. To the extent that any provision of the Plan, or any provisions
of any Option granted pursuant to the Plan would cause a conflict with such
conditions or would cause the administration of the Plan as provided in Section
3 to fail to satisfy the conditions of Rule 16b-3, such provision shall be
deemed null and void to the extent permitted by applicable law. This section
shall not be applicable if no class of the Company's equity securities is then
registered pursuant to Section 12 of the Securities Exchange Act of 1934, as
amended.
A-8
EXHIBIT 5.1
October 28, 1996
CRW Financial, Inc.
443 South Gulph Road
King of Prussia, PA 19406
Attention: J. Brian O'Neill, Chairman and
Chief Executive Officer
Re: Post-Effective Amendment No. 1 to Registration Statement
on Form S-8
Ladies and Gentlemen:
We have acted as counsel to and for CRW Financial, Inc., a Delaware
corporation (the "Company"), in connection with the preparation and filing
with the Securities and Exchange Commission of Post-Effective Amendment
No. 1 to a Registration Statement on Form S-8 (the "Registration Statement")
for the purpose of registering under the Securities Act of 1933, as amended,
1,500,000 shares (the "Shares") of the Company's common stock, $.01 par value
per share (the "Common Stock"). The Shares are issuable upon the exercise
of certain options (the "Options") which may be granted under the Company's
Amended and Restated 1995 Stock Option Plan (the "Plan").
In our capacity as counsel, we have been requested to render the
opinion set forth in this letter and in connection therewith, we have
reviewed the following documents: (i) the Registration Statement, (ii) the
Plan, (iii) Restated Certificate of Incorporation of the Company, as amended
to date, (iv) Bylaws of the Company, as amended to date, (v) Resolutions
of the Board of Directors of the Company, and (vi) such other documents,
<PAGE>
CRW Financial, Inc.
October 28, 1996
Page 2
instruments and records as we deemed necessary or appropriate for purposes of
rendering the opinion set forth herein.
In rendering this opinion, we have assumed and relied upon, without
independent investigation, (i) the authenticity, completeness, truth and due
authorization and execution of all documents submitted to us as originals, (ii)
the genuineness of all signatures on all documents submitted to us as originals,
and (iii) the conformity to the originals of all documents submitted to us as
certified or photostatic copies.
No opinion is expressed herein in any respect as to (i) federal and
state securities laws and regulations, (ii) pension and employee benefit
laws and regulations, including without limitation the Employee Retirement
Income Security Act of 1974, as amended, and (iii) federal and state tax
laws and regulations.
The opinion expressed herein is limited and qualified in all respects
by the effects of general principles of equity, whether applied by a court
of law or equity, and by the effects of bankruptcy, insolvency, reorganization,
moratorium, arrangement, fraudulent conveyance or fraudulent transfer,
receivership, and other laws now or hereafter in force affecting the rights
and remedies of creditors generally (not just creditors of specific types
of debtors) and other laws now or hereafter in force affecting generally only
creditors of specific types of debtors.
The law covered by the opinion expressed herein is limited to (a)
the Federal statutes, judicial decisions and rules and regulations of the
governmental agencies of the United States and (b) the Delaware General
Corporation Law, as amended.
This opinion letter is given only with respect to laws and regulations
presently in effect. We assume no obligation to advise you of any changes in
law or regulation which may hereafter occur, whether the same are retroactively
or prospectively applied, or to update or supplement this letter in any fashion
to reflect any facts or circumstances which hereafter come to our attention.
Based upon, and subject to, the foregoing, we are of the opinion
that the Shares, when issued upon proper exercise of the Options pursuant
to and in accordance with the Plan, will be validly issued, fully paid and
nonassessable shares of the Common Stock of the Company.
We hereby consent to the use of this opinion as an exhibit to the
Registration Statement and we further consent to the reference under the
caption "Named Experts and Counsel" in the Registration Statement and to any
reference to our firm in the Registration
<PAGE>
CRW Financial, Inc.
October 28, 1996
Page 3
Statement as legal counsel who have passed upon the legality of the securities
offered thereby.
Very truly yours,
STRADLEY, RONON, STEVENS & YOUNG, LLP
By: /s/ DEAN M. SCHWARTZ
----------------------------------
Dean M. Schwartz, A Partner
EXHIBIT 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
by reference in this Post-Effective Amendment No. 1 to Form S-8 Registration
Statement of our report dated February 29, 1996 included in the CRW Financial,
Inc. Form 10-K for the year ended December 31, 1995, and to all references to
our firm included in this Registration Statement.
Arthur Andersen, LLP
Philadelphia, Pa.
October 25, 1996
