As filed with the Securities and Exchange Commission on February 3, 1998;
Registration No. 333-_________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
TMCI ELECTRONICS, INC.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of
incorporation or organization)
77-0413814
(I.R.S. Employer
Identification No.)
1875 Dobbin Drive
San Jose, California 95133
(408) 272-5700
(Address, including zip code, and telephone number, including area
code, of registrant's principal executive offices)
TMCI ELECTRONICS, INC.
1995 STOCK OPTION PLAN, AS AMENDED
(Full Title of the Plan)
ROLANDO LOERA
President/Chief Executive Officer
TMCI Electronics, Inc.
1875 Dobbin Drive
San Jose, California 95133
(408) 272-5700
(Name, address, including zip code, and
telephone number,including area code, of
agent for service)
Copy to:
THOMAS F. CHAFFIN, ESQ.
Rosenblum, Parish & Isaacs, P.C.
160 W. Santa Clara Street, Suite 1500
San Jose, California 95113
(408) 280-2800
<TABLE>
CALCULATION OF REGISTRATION FEE
<S> <C> <C> <C> <C>
Title of Each Class Amount to be Proposed Maximum Proposed Maximum Amount of
of Securities to be Registered Offering Price Per Aggregate Offering Registration Fee
Registered Share (1) Price (1)
- ------------------ ------------- ------------------ ----------------- ----------------
Common Stock 500,000s 4.875 2,437,500 $737.50
- ------------------ ------------- ------------------ ----------------- ----------------
Stock Options 500,000 0.01 5000 $1.48
================== ============= ================== ================= ================
(1) Estimated pursuant to Rule 457(c) solely for the purpose of
calculating the filing fee, based on the average of the high and low
prices for the Company's Common Stock as reported on the NASDAQ SmallCap
Market on January 22, 1998.
</TABLE>
Part II.
FORWARD LOOKING STATEMENTS. Certain statements made in documents incorporated by
reference herein relating to the plans, objectives, and economic performance of
the TMCI Electronics, Inc. (the "Company") go beyond historical information and
may provide an indication of future results. To that extent, they are forward
looking statements within the meaning of Section 27A of the Securities Act of
1933, as amended, and each is subject to factors that could cause the actual
results to differ from those in the forward looking statement. Such factors are
described in the documents filed by the Company with the Securities and Exchange
Commission from time to time and are herein incorporated by reference.
ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents are incorporated herein by reference (a) the
Registrant's form 10-KSB for the fiscal year ended December 31, 1996 filed on
March 31, 1997, (b) all other reports filed pursuant to Section 13(d) or 15(d)
of the Securities Exchange Act of 1934, as amended, up to the date of the filing
of this registration statement; and (c) the form 8-A filed with the Securities
and Exchange Commission on January 11, 1996. In addition, all documents
subsequently filed by the registrant pursuant to Sections 13(a), 13(c), 14 and
15(d) of the Securities Exchange Act of 1934, as amended, prior to the filing of
a post-effective amendment which indicates that all securities offered have been
sold or which de registers all securities then remaining unsold, shall be deemed
to be incorporated by reference in this registration statement and shall be a
part of this registration statement from the date of the filing of such
documents.
ITEM 4. DESCRIPTION OF SECURITIES
Not Applicable
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
Not Applicable
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Certificate of Incorporation and the Bylaws of TMCI Electronics, Inc.,
a Delaware Corporation (the "Company") both contain provisions which reduce the
potential personal liability of directors for certain monetary damages and
provide for indemnity of directors and other persons. The Company is unaware of
any pending or threatened litigation against the Company or its directors that
would result in any liability for which such director would seek indemnification
or similar protection.
The provision limiting the liability of a director for breach of a
fiduciary duty by a director eliminates such liability to the Company and its
shareholders to the maximum extent permissible by Delaware law. This limitation
does not limit or eliminate the liability of a director:
(i) for any breach of the director's duty of loyalty to the
corporation or its stockholders;
(ii) for acts or omissions not in good faith or which involved
intentional misconduct or a knowing violation of law;
(iii) for certain unlawful dividend payments, stock purchases or
stock redemptions as more fully described in Section 174
of the Delaware General Corporation Law; or
(iv) for any transaction from which the director derived an
improper personal benefit.
The indemnification provisions are intended to increase the protection
provided directors and, thus, increase the Company's ability to attract and
retain qualified persons to serve as directors. The increased risk of
litigation combined with the possibility that the Company's insurance policy may
not cover specific acts or omissions, serves as a deterrent to qualified
personnel serving on the Board of Directors. The Company believes that the
added protection against personal liability provided by the limitation on
personal liability in its articles of incorporation and bylaws will help it
retain its current directors and attract new directors in the future.
The provisions regarding indemnification provide, in essence, that the
Company will indemnify its directors against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonable
incurred in connection with any action, suit or proceeding arising out of the
director's status as a director of the Company, including actions brought by or
on behalf of the Company (shareholder derivative actions) to the maximum extent
permitted by law.
Delaware law requires that the person to be indemnified "acted in good
faith and in a manner the person reasonably believed to be in the best interest
of the corporation and, in the case of a criminal proceeding, had no reason to
believe the conduct of the person was unlawful." In addition, because the
Company is located in San Jose, California, the Company may be a California
pseudo foreign corporation under Section 2115 of the California General
Corporation Law based on certain criteria set forth therein. If, in fact, at the
time of any action for which indemnification is sought, the Company is a
California pseudo foreign corporation, the standards set forth under the
California General Corporation Law would be applicable. Currently, the standards
for indemnification are the same under the California and Delaware laws. No
assurance can be given that they will remain the same.
The provisions diminish the potential rights of action which might
otherwise be available to shareholders by limiting the liability of officers and
directors to the maximum extent allowable under Delaware law and by affording
indemnification against most damages and settlement amounts paid by a director
of the Company in connection with any shareholders' derivative action. However,
the provisions do not have the effect of limiting the right of a shareholder to
enjoin a director from taking actions in breach of his fiduciary duty, or to
cause the Company to rescind actions already taken, although as a practical
matter courts may be unwilling to grant such equitable remedies in circumstances
in which such actions have already been taken. In the opinion of the Securities
and Exchange Commission, indemnification for liabilities arising under the
Securities Act of 1933, as amended, is contrary to public policy and, therefore,
is unenforceable.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not Applicable
ITEM 8. EXHIBITS.
Exhibit Number Description
4.0 TMCI Electronics, Inc. 1995 Stock Option Plan
4.1 Amendment Number 1 to TMCI Electronics, Inc. 1995 Stock
Option Plan
5 Opinion of Rosenblum, Parish & Isaacs, PC re Legality
23(a) Consent of Moore Stephens PC
23(b) Consent of Rosenblum, Parish & Isaacs, PC (included in
Exhibit 5) 24 Power of Attorney (included on Page 4)
ITEM 9. UNDERTAKINGS.
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 1993;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent post-
effective amendment thereof) which, individually or in the aggregate, represent
a fundamental change in the information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in volume of securities
offered (if the total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the prospectus filed with
the Commission pursuant to Rule 424(b) (ss.230.424(b) of this chapter) if, in
the aggregate, the changes in volume and price represent no more than a 20%
change in the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;
Provided, however, That paragraphs (1)(i) and (1)(ii) of
this section do not apply if the registration statement is on Form S-3, Form S-8
or Form F-3, and the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed with or
furnished to the commission by the registrant pursuant to section 13 or section
15(d) of the Securities Exchange Act of 1934 that are incorporated by reference
in the registration statement.
(2) 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.
(3) That, for purposes of determining any liability under the Securities
Act of 1933, as amended, (the "Act") each filing of the registrant's
annual report pursuant to section 13(a) or section 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, as amended, each
filing of the registrant's annual report pursuant to section 13(a) or section
15(d) of the Securities Exchange Act of 1934 (and, where applicable, each
filing of an employee benefit plan's annual report pursuant to section 15(d)
of the Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933, as amended, 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
of 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.
* * * * *
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of San Jose, State of California, on January 28,
1998.
TMCI ELECTRONICS, INC.
By _______________________________________________
Rolando Loera, President/Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Rolando
Loera and Robert Loera, jointly and severally, his attorney-in-fact, each with
the power of substitution for him in any and all capacities, to sign any
amendments (including post-effective amendments) to this Registration Statement,
and to file the same, with exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, hereby ratifying and
confirming all that each of said attorney in-fact, or his substitute or
substitutes, may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this registration statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title Date
/s/ Rolando Loera President and February 3, 1998
- ---------------------------- Chairman of the Board of Directors
Rolando Loera (Principal Executive Officer)
/s/ Charles E. Shaw Vice President, Chief Financial February 3, 1998
- ----------------------------- Officer, and Director
Charles E. Shaw (Principal Financial Officer)
/s/Robert Loera Controller, Secretary, and February 3, 1998
- ----------------------------- Director
Robert Loera (Principal Accounting Officer)
/s/ Dominic Polemini Director February 3, 1998
- -----------------------------
Dominic Polemini
/s/ Thomas F. Chaffin Assistant Secretary and February 3, 1998
- ----------------------------- Director
Thomas F. Chaffin
/s/ Boris Lipkin Director February 3, 1998
- -----------------------------
Boris Lipkin.
/s/ Robert C. Fink Director February 3, 1998
- -----------------------------
Robert C. Fink
<PAGE>
EXHIBIT INDEX
Exhibit Number Description
4.0 TMCI Electronics, Inc. 1995 Stock Option Plan
4.1 Amendment to TMCI Electronics 1995 Stock Option Plan
5 Opinion of Rosenblum, Parish & Isaacs, PC re Legality
23(a) Consent of Moore Stephens PC
23(b) Consent of Rosenblum, Parish & Isaacs, PC (included in
Exhibit 5).
24 Power of Attorney (included on Page 4).
<PAGE>
Exhibit 4.0
TMCI ELECTRONICS, INC.
1995 STOCK OPTION PLAN
SECTION 1. Purpose. The purpose of the TMCI Electronics, Inc. 1995 Stock
Option Plan is to advance the interests of TMCI Electronics, Inc.(the "Company")
by enabling officers, employees and consultants of the Company and its
Affiliates to participate in the Company's future and to enable the Company to
attract and retain such persons by offering them proprietary interests in the
Company.
SECTION 2. Definitions. For purposes of the Plan, the following terms are
defined as set forth below:
a. "Affiliate" means a corporation or other entity controlled directly, or
indirectly through one or more intermediaries, by the Company and designated by
the Committee as such.
b. "Award" means an award granted to a Participant in the form of a Stock
Appreciation Right, Stock Option, or Restricted Stock, or any combination of the
foregoing.
c. "Board" means the Board of Directors of the Company.
d. "Cause" shall have the meaning set forth in Section 8.
e. "Change" in Control" in Control" shall have a the meaning set forth in
Section 11.
f. "Code" means the Internal Revenue Code of 1986, as amended from time to
time, and any successor thereto.
g. "Commission" means the Securities and Exchange Commission or any
successor agency.
h. "Committee" means the Committee referred to in Section 5.
i. "Common Stock" means common stock, $.01 per share par value, of the
Company.
j. "Company" means TMCI Electronics, Inc., a Delaware corporation.
k. "Disability" means permanent and total disability as determined under
procedures established by the Committee for purposes of the Plan.
l. "Disinterested Person" shall mean a director who is not, during the one
year prior to service as an administrator of the Plan, or during such service,
granted or awarded equity securities pursuant to the Plan or any other plan of
the Company or any of its affiliates, except as permitted by Rule 16b- 3(b)(2),
as promulgated by the Commission under the Exchange Act, or as such term is
defined under any successor rule adopted by the Commission.
m. "Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, and any successor thereto.
n. "Fair Market Value" means the average, as of any given date, between
the highest and lowest reported closing bid and asked prices of the Stock on
NASDAQ or the closing sale price as of any given date if the Stock is listed on
a national securities exchange or the NASDAQ National Market System. If there
is no regular public trading-market for such Stock under circumstances specified
above, the Fair Market Value of the Stock shall be determined by the committee
in good faith.
o. "Incentive Stock Option" means any Stock Option intended to be and
designated as an "incentive stock option" within the meaning of Section 422 of
the Code.
p. "Non-qualified Stock Option" means any stock Option that is not an
Incentive Stock Option.
q. "Normal Retirement" means retirement from active employment with the
Company or an Affiliate at or after age 65 or at such other age as may be
specified by the Committee.
r. "Participant" means an employee or consultant of the Company or of an
Affiliate to whom as Award has been granted which has not terminated, expired or
been fully exercised.
s. "Plan" means the TMCI Electronics, Inc. 1995 Stock Option Plan, as set
forth herein and as hereinafter amended from time to time.
t. "Restricted Period" means the period of time, which may be a single
period or multiple periods, during which Restricted Stock awarded to a
Participant remains subject to the restrictions imposed on such Stock, as
determined by the Committee.
u. "Restrictions" means the restrictions and conditions imposed on
Restricted Stock awarded to a Participant, as determined by the Committee, which
must be satisfied in order for the Restricted Stock to vest, in whole or in
part, in the Participant.
v. "Restricted Stock" means an Award of Stock on which are imposed
Restriction Period(s) and Restrictions whereby the Participant's rights to full
enjoyment of the Stock are conditioned upon the future performance of
substantial services by any individual or are otherwise subject to a
"substantial risk of forfeiture" within the meaning of Section 83 of the Code,
as amended.
w. "Restricted Stock Agreement" means a written agreement between a
Participant and the Company evidencing as award of Restricted Stock.
x. "Restricted Stock Award Date" means the date on which the committee
awarded Restricted Shares to the Participant.
y. "Retirement" means Normal Retirement or early retirement if a defined
benefit or 401(k) retirement plan of the Company provides for same.
z. "Rule 16b-3" means Rule 16b-3, as promulgated by the Commission
granted under Section 16(b) of the Exchange Act, as amended from time to time.
aa. "Stock" means the Common Stock.
bb. "Stock Appreciation Right" means a right granted under Section 9.
cc. "Stock Option" or "Option" means an option granted under Section 8.
dd. Termination of Employment" means the termination of the Participant's
employment with the Company and any Affiliated. A Participant employed by an
Affiliate shall also be deemed to incur a Termination of Employment if the
Affiliate ceases to be an Affiliate and the Participant does not immediately
thereafter become an employee of the Company or another Affiliate.
In addition, certain other terms used herein have definitions given to
them in the first place in which they are used.
SECTION 3. Effective Date.
The effective date of the Plan shall be the date upon which the Plan is
approved by the stockholders of the Company.
SECTION 4. Stock Subject to Plan.
The total number of shares of Stock reserved and available for
distribution pursuant to Awards under the Plan shall be 500,000 shares of Stock.
Such shares may consist, in whole or in part, of authorized and unissued shares
or treasury shares.
If any shares of Stock that have been Optioned cease to be subject to a
Stock Option, if any shares of Stock that are subject to any Award are
forfeited or if any Award otherwise terminates without a distribution being
made to the Participant in the form of Stock, such shares shall again be
available for distribution in connection with Awards under the Plan. In
addition, any stock purchased by a Participant upon exercise of an Option under
the Plan which is subsequently repurchased by the Company pursuant to the terms
of such Option may again be the subject of an Option under the Plan.
In the event of any merger, reorganization, consolidation,
recapitalization (including but not limited to the issuance of Stock or any
securities convertible into Stock in exchange for securities of the Company),
stock dividend, stock split or reverse stock split, extraordinary distribution
with respect to the Stock or other similar change in corporate structure
affecting the Stock, such substitution or adjustments shall be made in the
aggregate number of shares reserved for issuance under the Plan, in the number
and Option price of shares subject to outstanding Stock Options and Stock
Appreciation Rights, and in the number of shares subject to other outstanding
Awards granted under the Plan as may be determined to be appropriate by the
Committee, in its sole discretion; provided, however, that the number of shares
subject to any Award shall always be a whole number. Such adjusted Option price
shall also be used to determine the amount payable by the Company upon the
exercise of any Stock Appreciation Right associated with any Stock Option.
SECTION 5. Administration.
The Plan shall be administered by the Stock Award Committee ("Committee")
of the Board or such other committee of the Board, composed of not less than two
directors both of whom shall be Disinterested Persons unless otherwise
determined by the Board. Each member of the Committee shall be appointed by and
serve at the pleasure of the Board. If at any time no Committee shall be in
place, the functions of the Committee specified in the Plan shall be exercised
by the Board.
The Committee shall have plenary authority to grant Awards to officers,
employees, and consultants of the Company or an Affiliate.
Among other things, the Committee shall have the authority, subject to the
terms of the Plan:
(a) to select the officers, employees and consultants to whom Awards may
from time to time be granted;
(b) to determine whether and to what extent Incentive Stock Options,
Non-qualified Stock Options, Stock Appreciation Rights and Restricted Stock, or
any combination thereof are to be granted hereunder;
(c) to determine the number of shares to Stock to be covered by each Award
granted hereunder;
(d) to determine the terms and conditions of any Award granted hereunder
(including, but not limited to, the Option price, any vesting restrictions or
limitation, any repurchase rights in favor of the Company and any vesting
acceleration of forfeiture waiver regarding any Award and the shares of Stock
relating thereto, based on such factors as the Committee shall determine);
(e) to adjust the terms and conditions, at any time or from time to time,
of any Award, including with respect to performance goals and measurements
applicable to performance-based Awards pursuant to the terms of the Plan;
(f) to determine under what circumstances an Award may be settled in cash
or Stock:
(g) if appropriate, to determine Fair Market Value; and
(h) to substitute new Stock Options for Previously granted Stock Options,
including previously granted Stock Options having higher Option prices.
The Committee shall have the authority to adopt, alter and repeal such
administrative rules, guidelines and practices governing the Plan as it shall,
from time to time, deem advisable, to interpret the terms and provisions of the
Plan and any Award issued under the Plan (and any agreement relating thereto)
and to otherwise supervise the administration of the Plan.
The Committee may act only by a majority of its members then in office,
except that the members thereof may authorize any one or more of their number or
any officer of the Company to execute and deliver documents on behalf of the
Committee.
Any determination made by the Committee pursuant to the provisions of the
Plan with respect to any Award shall be made in its sole discretion at the time
of the grant of the Award or, unless in contravention of any express term of the
Plan, at any time thereafter. All decisions made by the Committee pursuant to
the provisions of the Plan shall be final and binding on all persons, including
the Company and Participants.
SECTION 6. Eligibility.
Officers, employees and consultants of the Company and its Affiliates (but
excluding members of the Committee who are Disinterested Persons) who are
responsible for or contribute to the management, growth and profitability of the
business of the Company and its Affiliates are eligible to be granted Awards
under the Plan. Any person who files with the Committee, in a form satisfactory
to the Committee, a written waiver of eligibility to receive any Award under the
Plan shall not be eligible to receive an Award under the Plan for the duration
of the waiver.
SECTION 7. Duration of the Plan.
The Plan shall terminate ten (10) years from the effective date specified
in Section 3 of the Plan, unless terminated earlier pursuant to Section 12
hereto, and no Options may be granted thereafter.
SECTION 8. Stock Options.
Stock options granted under the Plan may be of two types: Incentive Stock
options and Non-qualified Stock Options. Any Stock Option granted under the
Plan shall be in such form as the Committee may from time to time approve.
The Committee shall have the authority to grant any optionee Incentive
Stock Options, Non-qualified Stock Options or both types of Stock Options (in
each case with or without Stock Appreciation Rights). Incentive Stock Options
may be granted only to employees of the Company and its subsidiaries (within the
meaning of Section 424(f) of the Code). To the extent that any Stock Option is
not designated as an Incentive Stock Option or even if so designated does not
qualify as an Incentive Stock Option, it shall constitute a Non-qualified Stock
Option.
Stock Options shall be evidenced by Option agreements, the terms and
provisions of which may differ. An Option agreement shall indicate on its face
whether it is an agreement for an Incentive Stock Option or a Non-qualified
Stock Option. The grant of a Stock Option shall occur on the date the Committee
by resolution selects an individual to be a participant in any grant of a Stock
Option, determines the number of shares of Stock to be subject to such Stock
Option to be granted to such individual and specifies the terms and provisions
of the Option agreement. The Company shall notify a Participant of any grant of
a Stock Option, and a written Option agreement or agreements shall be duly
executed and delivered by the Company to the Participant, which among other
things, will make appropriate arrangements with respect to the Company's tax
withholding obligations. Such agreement or agreements shall become effective
upon execution by the participant.
Anything in the Plan to the contrary notwithstanding, no term of the Plan
relating to Incentive Stock Options shall be interpreted, amended or altered nor
shall any discretion or authority granted under the Plan be exercised so as to
disqualify the Plan under Section 422 of the Code or, without the consent of the
optionee affected, to disqualify any Incentive Stock Option under such Section
422.
Options granted under the Plan shall be subject to the following terms and
conditions and shall contain such additional terms and conditions as the
Committee shall deem desirable:
(a) Option Price. The Option price per share of Stock purchasable under
an Option shall be determined by the Committee and set forth in the Option
agreement, and shall not be less than the Fair Market Value of the Stock subject
to the Option on the date of grant in the case of Incentive Stock Options and
not less than 50% of the Fair Market Value of the Stock subject to the Option on
the date of grant in the case of Non-qualified Stock Options.
(b) Option Term. The term of each Stock Option shall be fixed by the
Committee, but no Incentive Stock Option shall be exercisable more than 10 years
after the date of grant; and no Non-qualified Stock Option shall be exercisable
more than 10 years and one day after the date the Stock Option is granted.
(c) Exercisability. Subject to Section 12, Stock Options shall
otherwise be exercisable at such time or times and subject to such terms and
conditions as shall be determined by the committee. If the Committee provides
that any Stock Option is exercisable only in installments, the Committee may at
any time waive such installments exercise provisions, in whole or in part, based
on such factors as the Committee may determine. In addition, the Committee may
at any time accelerate the exercisability of any Stock Option.
(d) Methods of Exercise. Subject to the provisions of this Section 8,
Stock Options may be exercised, in whole or in part, at any time during the
Option period by giving written notice of exercise to the Company specifying the
number of shares of Stock subject to the Stock Option to be purchased.
Such notice shall be accompanied by payment in full of the purchase price
by certified or bank check or such other instrument as the Company may accept.
If approved by the Committee, payment in full or in part may also be made in the
form of unrestricted Stock already owned by the optionee of the same class as
the Stock subject to the Stock Option provided, however, that, in the case of
an Incentive Stock Option, the right to make a payment in the form of already
owned shares of Stock of the same class as the Stock subject to the Stock option
shall be authorized only at the time the Stock Option is granted.
An optionee shall have all of the rights of a stockholder of the Company
holding the class or series of Stock that is subject to such Stock Option
(including, if applicable, the right to vote the shares and the right to
receive dividends), when the optionee has given written notice of exercise, and
has paid in full for such shares. In the discretion of the Committee, payment
for any Stock subject to an option may also be made by delivering a properly
executed exercise notice to the Company together with a copy of irrevocable
instructions to a broker to deliver promptly to the Company the amount of sale
or loan proceeds to pay the purchase price. To facilitate the foregoing, the
Company may enter into agreements for coordinated procedures with one or more
brokerage firms. The value of previously owned Stock exchanged in full or
partial payment for the shares purchased upon the exercise of an Option shall
be equal to the aggregate Fair Market Value of such shares on the date of the
exercise of such Option.
(e) Non-transferability of Options Non-transferability of Options. No
Stock Option shall be transferable by the optionee other than by will or by the
laws of descent and distribution, and all Stock Options shall be exercisable,
during the optionee's lifetime, only by the optionee or by the guardian or
legal representative of the optionee, it being understood that the terms
"holder" and "optionee" include the guardian and legal representative of the
optionee named in the Option agreement and any person to whom an Option is
transferred by will or the laws of descent and distribution.
(f) Termination by Death. If an optionee's employment terminates by
reason of death, any Stock Option held by such optionee may thereafter be
exercised, to the extent then exercisable or on such accelerated basis as the
Committee may determine, for a period of one year and one day (or such other
period as the Committee may specify) from the date of such death or until the
expiration of the stated term of such Stock Option, whichever period is the
shorter.
(g) Termination by Reason of Disability. If any optionee's employment
terminates by reason of Disability, any Stock Option held by such optionee may
thereafter be exercised by the optionee, to the extent it was exercisable at
the time of termination or on such accelerated basis as the Committee may
determine, for a period of one year and one day (or such shorter period as the
Committee may specify at grant) from the date of such termination of
employment or until the expiration of the stated term of such Stock Option,
whichever period is the shorter; provided, however, that if the optionee dies
within such one year and one day period (or such shorter period ending upon
the expiration of the stated term of the Stock Option), any unexercised Stock
Option held by such optionee shall, notwithstanding the expiration of the such
one year and one day period, continue to be exercisable to the extent to which
it was exercisable at the time of death for a period of one year and one day
from the date of such death or until the expiration of the stated term of such
Stock Option, whichever period is the shorter. In the event of termination of
employment by reason of disability, if an Incentive Stock Option is exercised
after the expiration of the exercise periods that apply for purposes of
Section 422 of the Code, such Stock Option will thereafter be treated as a
Non-qualified Stock Option.
(h) Other Termination. Unless otherwise determined by the Committee
and subject to the provisions of Section 11 of the Plan, if an optionee incurs a
Termination of Employment for any reason other than death or Disability, any
Stock Option held by such optionee shall thereupon terminate, except that such
Stock Option, to the extent then exercisable, may be exercised for the lesser of
three months and one day from the date of such Termination of Employment or the
balance of such Stock Option' term if such Termination of Employment of the
optionee is involuntary and without Cause. Unless otherwise determined by the
Committee, for the purposes of the Plan "Cause" shall have the same meaning as
that set forth in any employment or severance agreement, in effect between the
Company and the Participant. Otherwise, it shall mean (1) the conviction of the
optionee for committing a felony under Federal law or the law of the state in
which such action occurred, (2) dishonesty in the course of fulfilling the
optionee's employment duties or (3) willful and deliberate failure on the part
of the optionee to perform his employment duties in any material respect.
(i) Cashing Out of Option. On receipt of written notice of
exercise, the Committee may, in its sole discretion, elect to cash out all or
part of any Stock Option to be exercised by paying the optionee an amount, in
cash or Stock, equal to the excess of the Fair Market Value of the Stock that is
the subject of the Option over the Option price times the number of shares of
Stock subject to the option on the effective date of such cash out.
Cash outs relating to Options held by optionees who are acturally or
potentially subject to Section 16(b) of the Exchange Act shall comply with the
"window period" provisions of Rule 16b-3, to the extent applicable, and, in the
case of cash outs of Non-qualified Stock Options held by such optionees, the
Committee may determine Fair Market Value with reference to the pricing
provision of Section 9(b)(ii)(2).
SECTION 9. Stock Appreciation Rights.
(a) Grant and Exercise. Stock Appreciation Rights may be granted in
conjunction with all or part of any Stock Option granted under the Plan. In the
case of a Non-qualified Stock Option, such rights may be granted either at or
after the time of grant of such Stock Option. In the case of an Incentive Stock
Option, such rights may be granted only at the time of grant of such Stock
Option. A Stock Appreciation Right shall terminate and no longer be exercisable
upon the termination or exercise of the related Stock Option.
A Stock Appreciation Right may be exercised by an optionee in accordance
with Section 9(b) by surrendering the applicable portion of the related Stock
Option in accordance with procedures established by the Committee. Upon such
exercise and surrender, the optionee shall be entitled to receive an amount
determined in the manner prescribed in Section 9(b). Stock Options which have
been so surrendered shall no longer be exercisable to the extent the related
Stock Appreciation Rights have been exercised.
(b) Terms and Conditions. Stock Appreciation Rights shall be subject to
such terms and conditions as shall be determined by the Committee, including the
following:
(i) Stock Appreciation Rights shall be exercisable only at such time or
times and to the extent that the Stock Options to which they relate are
exercisable in accordance with the provisions of Section 8 and this Section 9;
provided, however, that a Stock Appreciation Right shall not be exercisable
during the first six months of its term by an optionee who is actually or
potentially subject to Section 16(b) of the Exchange Act, except that this
limitation shall not apply in the event of death or Disability of the optionee
prior to the expiration of the six-month period.
(ii) Upon the exercise of a Stock Appreciation Right, an optionee shall
be entitled to receive an amount in cash, shares of Stock or both equal in value
to the excess of the Fair Market Value of one share of Stock over the option
price per share specified in the related Stock Option multiplied by the number
of shares in respect of which the Stock Appreciation Right shall have been
exercised, with the Committee having the right, in its sole discretion, to
determine the form of payment.
In the case of Stock Appreciation Rights relating to Stock Options held by
optionees who are acturally or potentially subject to Section 16(b) of the
Exchange Act, the Committee:
(1) may require that such Stock Appreciation Rights be exercised
only in accordance with the applicable "window period" provisions of Rule 16-b3;
and
(2) in the case of Stock Appreciation Rights relating to Non-
qualified Stock Options, may provide that the amount to be paid upon exercise of
such Stock Appreciation Rights during a Rule 16b-3 "window period" shall be
based on the highest mean sales price of the Stock on NASDAQ, or on such
national securities exchange upon which the Stock may be traded, on any day
during such "window period".
(iii) Stock Appreciation Rights shall be transferable only when and to the
extent that the underlying Stock Option would be transferable under Section
8(e).
(iv) Upon the exercise of a Stock Appreciation Right, the Stock Option or
part thereof to which such Stock Appreciation Right is related shall be deemed
to have been exercised for the purpose of determining the number of shares of
Stock available for issuance under the Plan in accordance with Section 5 of the
Plan, but only to the extent of the number of shares resulting from dividing the
value of the Stock Appreciation Right at the time of exercise by the Fair Market
Value of one share of Stock determined in accordance with this Section 9.
SECTION 10. Terms of Restricted Stock Awards.
Subject to and consistent with the provisions of the Plan, with respect to
each Award of Restricted Stock to a Participant, the Committee shall determine:
(a) the terms and conditions of the Restricted Stock Agreement between the
Company and the Participant evidencing the Award;
(b) the Restricted Period for all or a portion of the Award;
(c) the Restrictions applicable to the Award, including but not limited
to, continuous employment with the Company for a specified term or the
attainment of specific corporate, divisional or individual performance standards
or goals, which Restricted Period and Restrictions may differ with respect to
each Participant;
(d) whether the Participant shall receive the dividends and other
distributions paid with respect to an award of the Restricted Stock as declared
and paid to the holders of Stock during the Restricted Period or shall be
withheld by the Company for the account of the Participant until the Restricted
Periods have expired or the Restrictions have been satisfied, and whether
interest shall be paid on such dividends and other distributions withheld, and
if so, the rate of interest to be paid;
(e) the percentage of the Award which shall vest in the Participant in
the event of death, Disability or Retirement prior to the expiration of the
Restricted Period or the satisfaction of the Restrictions applicable to an award
of Restricted Stock; and
(f) notwithstanding the Restricted Period and the Restrictions imposed
on the Restricted Shares, as set forth in a Restricted Stock Agreement, whether
to shorten the Restriction the Restricted Period or waive any Restrictions, if
the Committee concludes that it is in the best interests of the Company to do
so.
Upon an award of Restricted Stock to a Participant, the stock certificate
representing the Restricted Stock to a Participant, the stock certificate
representing the Restricted Stock shall be issued and transferred to and in the
name of the Participant, whereupon the Participant shall become a stockholder of
the Company with respect to such Restricted Stock and shall be entitled to vote
the Stock. Such stock certificates shall be held in custody by the Company,
together with stock powers executed by the Participant in favor of the Company,
until the Restricted Period expires and the Restrictions imposed on the
Restricted Stock are satisfied.
SECTION 11. Change of Control.
(a) Upon the occurrence of an event of "Change of Control", as defined
below and subject to such additional conditions and restrictions as the
Committee may determine at the time of the granting of the Award:
(i) any and all outstanding Options shall become immediately
exercisable;
(ii) the Restricted Period and Restrictions imposed on the Restricted
Stock shall lapse, and the Restricted Stock shall vest in the Participant to the
extent determined by the Committee; and
(iii) within ten business days after the occurrence of a Change of
Control, the certificates representing the Restricted Stock so vested, without
any restrictions or legend thereon, other than as required by law, shall be
delivered to the Participant, and any dividends and distributions paid with
respect to the Restricted Stock which were escrowed during the Restricted Period
and the earnings thereon shall be paid to the Participant.
(b) A "Change of Control" shall occur when, in addition to the
occurrence of such other events as the Committee may determine at the time of
the grant of the Award, one or more of the following events occurs:
(i) any "Person" (which term, when used in this Section 11, shall mean two
or more persons acting as a partnership, limited partnership, syndicate or other
group for the purpose of acquiring, holding or disposing of securities of the
issuer or shall have such other meaning assigned to it in a successor provision
to Section 13(d) of the Exchange Act) is or becomes without the approval of a
majority of the Continuing Directors (as defined below) the "beneficial Owner"
(which term, when used in this Section 11, shall include any person who,
directly or indirectly, through any contract, arrangement, understanding,
relationship or otherwise has or shares (i) voting power which includes the
power to vote or to which includes the power to dispose or to direct the
disposition of such security, or such other meaning assigned to it in a
successor provision to Rule 13d-3 promulgated under the Exchange Act), directly
or indirectly, of Voting Stock (as defined below) representing twenty percent
(20%) or more o the votes entitled to be cast by the holders of all then
outstanding Shares of the Company; or
(ii) the stockholders of the Company approve a definitive agreement or
plan to merge or consolidate the Company with or into another corporation, or to
sell, or otherwise dispose of, all or substantially all of the Company's
property and assets, or to liquidate the Company or the business of the Company
for which the participant's services are principally performed is disposed of by
the Company pursuant to a sale of assets (including stock of a subsidiary of the
Company), a merger or consolidation or otherwise; or
(iii) the individuals who are Continuing Directors of the Company cease
without the approval of a majority of the Continuing Directors for any reason to
constitute at least a majority of the Board of the Company.
The term "Continuing Director" means (i) any member of the Board who is a
member of the Board on the effective date of the registration statement relating
to the initial public offering of the Company's securities, or (ii) any person
who subsequently becomes a member of the Board whose nomination for election or
election to the Board is recommended or approved by a two-thirds majority of the
Continuing Directors. The term "Voting Stock" means all capital stock of the
Company which by its terms may be voted on all matters submitted to stockholders
of the Company generally.
SECTION 12. Amendments and Termination.
The Board may amend, alter, or discontinue the Plan, but no amendment,
alteration or discontinuation shall be made which would (i) impair the rights of
an Award theretofore granted without the Participant's consent, except such an
amendment made to cause the Plan to qualify for the exemption provided by Rule
16b-3, or (ii) disqualify the Plan from the exemption provided by Rule 16b-3. In
addition, no such amendment shall be made without the approval of the Company's
stockholders to the extent such approval is required by law or agreement.
The Committee may amend the terms of any Stock Option or other Award
theretofore granted, prospectively or retroactively, but no such amendment shall
impair the rights of any holder without the holder's consent except such an
amendment made to cause the Plan or Award to qualify for the exemption provided
by rule 16b-3. The Committee may also substitute new Stock Options for
previously granted Stock Options, including previously granted Stock Options
having higher option prices.
Subject to the above provisions, the Board shall have authority to amend
the Plan to take into account changes in law and tax and accounting rules, as
well as other developments and to grant Awards which qualify for beneficial
treatment under such rules without shareholder approval.
SECTION 13. General Provisions.
(a) Nothing contained in the Plan shall prevent the Company or an
Affiliate from adopting other or additional compensation arrangements for its
employees.
(b) The Plan shall not confer upon any employee any right to continued
employment nor shall it interfere in any way with the right of the Company or an
Affiliate to terminate the employment of any employee at any time.
(c) No later than the date as of which an amount first becomes
includable in the gross income of the Participant for Federal income tax
purposes with respect to any Award under the Plan, the Participant shall pay to
the Company, or make arrangements satisfactory to the Company regarding the
payment of, any Federal, state, local or foreign taxes of any kind required by
law to be withheld with respect to such amount. Unless otherwise determined by
the Company, withholding obligations may be settled with Stock, including Stock
that is part of the Award that gives rise to the withholding requirement. The
obligations of the Company under the Plan shall be conditional on such payment
or arrangements, and the Company and its Affiliates shall, to the extent
permitted by law, have the right to deduct any such taxes from any payment
otherwise due to the participant.
(d) The Committee shall establish such procedures as it deems
appropriate for a Participant to designate a beneficiary to whom any amounts
payable in the event of the participant's death are to be paid.
(e) Agreements entered into by the Company and Participants relating to
Awards under the Plan, in such form as may be approved by the Committee from
time to time, to the extent consistent with or permitted by the Plan shall
control with respect to the terms and conditions of the subject Award. If any
provisions of the Plan or any agreement entered into pursuant to the Plan shall
be held invalid or unenforceable, such invalidity or unenforceability shall not
affect any other provisions of the Plan or the subject agreement.
(f) The Plan and all Awards made and actions taken thereunder shall be
governed by and construed in accordance with the laws of the State of Delaware.
<PAGE>
Exhibit 4.1
AMENDMENT NO. 1
TO
TMCI ELECTRONICS, INC.
1995 STOCK OPTION PLAN
Each Subsection below replaces in its entirety the subsection to which it
corresponds in the 1995 Stock Option Plan
Section 8. Stock Options.
(a) Option Price. The option price shall be not less than 100% of the fair
market value of the Stock at the time the option is granted, which shall be the
date the Committee and/or Board, or its delegate, awards the grant, except in
the case of non-statutory stock options, in which case the option price shall be
not less than 85% of the fair market value of the Stock at the time the option
is granted. If the Participant, at the time the option is granted, owns shares
possessing more than ten percent (10%) of the total combined voting power of all
the classes of stock of the Company or of its Affiliates, the option price of
incentive and non-statutory stock options shall be not less than 110% of the
fair market value of the Stock at the time the option is granted. [The fair
market value of the Stock shall be determined and the option price of the Stock
set by the Committee and/or Board in accordance with the valuation methods
described in Section 20.2031-2 of the Treasury Regulations.]
(b) Option Term. The Committee and/or Board may grant options for any
term, but shall not grant any options for a term longer than ten (10) years from
the date the option is granted (except in the case of an incentive option
granted to an Affiliate in which case the term shall be no longer than five (5)
years from the date the option is granted). Each option shall be subject to
earlier termination as provided in this Section 8 of this Plan. In addition, the
Committee and/or Board may, upon notice given at any time subsequent to the date
four and one-half years after the effective date of its grant, shorten the term
of
any individual outstanding non-statutory option so that such option terminates
on a date not earlier than six (6) months after the date of such notice. The
Committee and/or Board has the right in its sole and absolute discretion to so
shorten the term of any individual outstanding option(s) it deems appropriate.
(c) Exercisability. Subject to Section 12, each option granted under this
Plan shall be exercisable on such date or dates, upon or after the occurrence of
certain events, or upon or after the achievement of certain performance
milestones which dates may be advanced or which occurrences or achievements may
be waived in whole or in part or extended at the discretion of the Committee and
during such period and for such number of Shares as shall be determined by the
Committee. Even if an option becomes exercisable upon the achievement of certain
performance milestones, it shall vest at a minimum rate of 20% per year, so long
as the option or Shares underlying the Option are issued pursuant to a permit
issued by the California Department of Corporations, and such minimum vesting is
a requirement of issuance of such permit. If an option becomes exercisable upon
the occurrence of certain events or achievements or certain performance
milestones, such option may not be exercised unless the Committee shall
determine and notify the Participant in writing that such events have occurred
or that such performance milestones have been achieved.
(g) Death or Disability of Participant. If prior to ten (10) years from
the effective date the Participant shall die or become disabled (as defined in
Code Section 22(e)(3)) while employed by the Company or one or more of its
Affiliates or within sixty (60) days of termination of such employment, the
Option may be exercised (to the extent that the Participant shall have been
entitled to do so at the date of the Participant's death or disability or, if
sooner, employment termination) by the Participant (or by the Participant's
personal representatives, heirs, or legatees) at any time within one year after
his or her death or disability, but not after ten (10) years from the effective
date, at the expiration of which time the Option shall terminate and no longer
be exercisable.
If prior to ten (10) years from the effective date the Participant shall
become disabled as defined under the Americans with Disabilities Act, but such
disability is not a disability as defined in Code Section 22(e)(3), while
employed by the Company or one or more of its Affiliates or within sixty (60)
days after the termination of such employment, the Option may be exercised (to
the extent that the Participant shall have been entitled to do so at the date of
the Participant's disability) by the Participant at any time within six (6)
months after his/her disability, but not after ten (10) years from the effective
date, at the expiration of which time the Option shall terminate. The fact that
the Company permits the Participant to exercise the Option subsequent to sixty
(60) days after the termination of such employment shall not give rise to any
implication (or be admissible as evidence in any proceeding as an admission or
evidence) that the Participant was disabled as defined by state law or th
Americans with Disabilities Act, that the Participant was unable to perform the
Participant's job functions, that the Participant's employment was terminated
because the Participant could not perform the Participant's job functions, or
that the Company has not made reasonable efforts to accommodate any disability
which Participant may have had. If the Participant and the Company can not agree
as to whether the Participant is disabled, they shall both appear before the
Company's Board of Directors, or any committee that the Company's Board of
Directors shall appoint, which shall make such determination which shall be
final, binding, and conclusive on the Participant and the Company.
Section 11. Change of Control or Change in Capital Structure.
(c) If a stock dividend, stock split or reverse stock split, or
reclassification were to occur, then the aggregate number and/or class of shares
subject to this Option and the exercise price prior to such occurrence shall be
appropriately adjusted by the Committee in accordance with the terms of this
Plan, and such adjustment shall be conclusive. Such adjustment shall have the
result that if the Participant were to exercise a portion of the Option
subsequent to such occurrence, then Participant shall have paid the same
aggregate exercise price to exercise such portion of the Option and shall then
hold the same class and aggregate number of shares as if the Participant had
exercised such portion of the Option immediately prior to such occurrence.
In the event of (A) a merger or consolidation in which the Company is not
the surviving Company (other than a merger or consolidation with a wholly owned
subsidiary, a reincorporation of the Company in a different jurisdiction, or
other transaction in which there is no substantial change in the shareholders of
the Company and the options granted under this Plan are assumed by the successor
Company, which assumption shall be binding on all Participants); (B) a
dissolution or liquidation of the Company; (C) the sale of substantially all of
the assets of the Company; or (D) any other transaction which qualifies as a
"corporate transaction" under Section 424(a) of the Code wherein the
shareholders of the Company give up all of their equity interest in the Company
(except for the acquisition, sale or transfer of all or substantially all of the
outstanding shares of the Company), then the Board of Directors shall at its
complete discretion make arrangements which shall be binding upon the Participan
as to any portion of the Option, for the substitution of new options for such
portion, for the assumption of such portion by any successor to the Company, or
for the acceleration of the expiration date of such portion to a date not
earlier than thirty (30) daysafter notice to the Participant. Any such
substitution or assumption of any portion of the Option need not comply with
Section 425(a) of the Code nor in the event of the acceleration of the
expiration date of any portion of the Option need the exercisability of such
portion be accelerated.
<PAGE>
Exhibit 23(a)
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the Registration Statement
of TMCI Electronics, Inc. on Form S-8 filed with the Securities and Exchange
Commission on January 28, 1998 of our report dated March12, 1997, except as to
Note 10 for which the date is March 27, 1997, on our audits of the consolidated
financial statements of TMCI Electronics, Inc. as of December 31, 1996, and
for the two years then ended, which report was included in the Annual Report on
Form 10-K.
MOORE STEPHENS, P. C.
Certified Public Accountants.
Cranford, New Jersey
January 28, 1998
<PAGE>
January 23, 1998 Exhibit 23(b)
3776-07
TMCI Electronics, Inc.
1877 Dobbin Drive
San Jose, CA 95133
Re: Proposed Form S-8 Registration
of Options and Shares of Common Stock
for Stock Option Plan
Ladies and Gentlemen:
We refer to the Registration Statement on Form S-8 to which this letter
will be attached as an exhibit, to be filed by TMCI Electronics, Inc. a Delaware
corporation (the "Company") with the Securities and Exchange Commission under
the Securities Act of 1933, as amended (the "Act"), relating to 500,000 options
to purchase shares of the Company's $0.001 par value per share Common Stock (the
"Options") and 500,000 shares of the Company's $0.001 per share par value Common
Stock (the "Shares") to be issued pursuant to the Company's 1995 Stock Option
Plan, as amended (the "Plan").
As counsel to the Company, we have examined such corporate records and
other documents and have made such legal examinations and factual inquiries as
we have considered necessary for the purpose of rendering this opinion. On the
basis of such examinations and inquiries, we are of the opinion that upon their
issuance pursuant to the Plan, the Options will be validly authorized, legally
issued, fully paid and non assessable. Further, on the basis of such examination
and inquiries, we are of the opinion that upon their issuance pursuant to the
exercise of the Options or restricted stock awards made pursuant to the Plan
that the Shares will be validly authorized, legally issued, fully paid and non
assessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to this firm under the heading
"Legal Matters" in the Prospectus contained therein. This consent is not to be
construed as an admission that we are a person whose consent is required to be
filed with the Registration Statement under the provisions of Section 7 of the
Act.
ROSENBLUM, PARISH & ISAACS, PC
By Member of the firm
------------------------
Member of the Firm
<PAGE>
