Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
MANCHESTER EQUIPMENT CO., INC.
(Exact name of registrant as specified in its charter)
New York 11-2312854
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
160 Oser Avenue 11788
Hauppauge, New York (Zip Code)
(Address of principal executive offices)
Manchester Equipment Co., Inc. Amended and Restated 1996
Incentive and Non-Incentive Stock Option Plan
(Full title of the plan)
BARRY R. STEINBERG
Manchester Equipment Co, Inc.
160 Oser Avenue
Hauppauge, New York 11788
(Name and address of agent for service)
(516) 435-1199
(Telephone number, including area code, of agent for service)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- ----------------------------- -------------------------- ----------------------- ------------------------ ---------------------
Title of securities to be Proposed Proposed
registered Amount to be registered maximum maximum Amount of
offering price aggregate registration fee
per share1 Offering price1
- ----------------------------- -------------------------- ----------------------- -------------------------- ------------------
<S> <C> <C> <C> <C>
Common Stock, $.01 1,100,000 shares2 $4.07 $4,477,000.00 $1,245.00
par value
- ----------------------------- -------------------------- --------------------- -------------------------- -----------------
</TABLE>
- -------------------
1 Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(h) under the Securities Act of 1933 on the basis of
(i) 862,800 shares underlying outstanding options under the Stock Option
Plan at a weighted average exercise price of $3.99 per share and (ii) the
237,200 balance of shares reserved for issuance under the Stock Option Plan
at an average aggregate offering price of $4.34 per share, as computed
based on the average of the high and low prices of the Common Stock
reported in the consolidated reporting system on The Nasdaq Stock Market as
of January 25, 1999.
2 Consists of 1,100,000 shares of Common Stock issuable upon exercise of
options granted or to be granted under the Stock Option Plan.
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
Item 1. Plan Information.*
Item 2. Registrant Information and Employee Plan Annual Information.*
*Information required by Part I to be contained in the Section 10(a)
prospectus is omitted from the Registration Statement in accordance with the
Note to Part I of Form S-8.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents which have heretofore been filed by Manchester
Equipment Co., Inc. (the "Registrant") with the Securities and Exchange
Commission (the "Commission") are hereby incorporated by reference in this
Registration Statement:
1. The Annual Report on Form 10-K of the Registrant for the twelve
months ended July 31, 1998.
2. The Quarterly Report on Form 10-Q of the Registrant for the three
(3) months ended October 31, 1998.
3. The description of the Company's Common Stock contained in the
Company's Registration Statement on Form S-1 dated October 3, 1996.
All reports and proxy statements filed by the Registrant with the
Commission pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Securities
Exchange Act of 1934, as amended, after the date of this Registration Statement
and prior to the filing of a post-effective amendment which indicates that all
of the shares to which this Registration Statement relates have been sold or
which deregisters all of the shares then remaining unsold shall likewise be
deemed incorporated herein and made a constituent part hereof by reference from
the respective dates of the filings.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
Not applicable.
2
<PAGE>
Item 6. Indemnification of Directors and Officers.
As permitted by the New York Business Corporation Law ("BCL"), the
Company's Restated Certificate of Incorporation provides that, to the fullest
extent permitted by the BCL, no director of the Company shall be liable to the
Company or its shareholders for monetary damages for the breach of fiduciary
duty in such capacity. Such provision does not eliminate or limit the liability
of any director (i) if a judgment or other final adjudication adverse to such
director establishes that his acts or omissions were in bad faith or involved
intentional misconduct or a knowing violation of law or that he personally
gained in fact a material profit or other advantage to which he was not legally
entitled or that his acts violated Section 719 of the BCL, or (ii) for any act
or omission prior to the adoption of this provision. As a result of this
provision, the Company and its shareholders may be unable to obtain monetary
damages from a director for breach of his duty of care. Although shareholders
may continue to seek injunctive or other equitable relief for an alleged breach
of fiduciary duty by a director, shareholders may not have any effective remedy
against the challenged conduct if equitable remedies are unavailable. In
addition, under the Restated Certificate of Incorporation, the Company has
agreed to indemnify its officers, directors, employees and agents to the fullest
extent permitted by the BCL against actions that may arise against them in such
capacities, and to advance expenses in connection with any such actions.
The foregoing summary is necessarily subject to the complete text of the
statute and the Restated Certificate of Incorporation of the referenced above
and are qualified in their entirety by reference thereto.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
The following are filed as exhibits to this Registration Statement:
Exhibit
No. Description
-------- -----------
4.1 Copy of the Registrant's Amended and Restated 1996 Incentive and
Non- Incentive Stock Option Plan, as amended, with forms of
Incentive Stock Option Agreement and Non-Incentive Stock Option
Agreement.
5 Opinion of Stebel & Paseltiner, P.C.
23.1 Consent of KPMG LLP.
23.2 Consent of Stebel & Paseltiner, P.C. (included in Exhibit 5).
24 Power of Attorney (included in signature page of this
Registration Statement).
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 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.
(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 the initial bona
fide offering thereof.
(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.
3
<PAGE>
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.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933, as amended (the "Act"), may be permitted to directors, officers or
controlling persons of the Registrant pursuant to the provisions of Registrant's
Restated Certificate of Incorporation or By-Laws, as amended, or the provisions
of the New York Business Corporation Law or otherwise, the Registrant has been
advised that in the opinion of the Commission such indemnification is against
public policy as expressed in the Act and is, therefore, unenforceable. 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.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in Hauppauge, New York, on this 26th day of January, 1999.
MANCHESTER EQUIPMENT CO., INC.
By: /s/ Barry R.Steinberg
---------------------------
Barry R. Steinberg
President and Chief Executive Officer
4
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose
signature appears below constitutes and appoints Barry R. Steinberg and Joel G.
Stemple, and each of them, with full power to act without the other, his true
and lawful attorney-in-fact and agent, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all amendments (including post-effective amendments)
to this Registration Statement and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission and any other regulatory authority, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises, as fully to all intents and purposes as they or he might
or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed by the following persons in the
capacities set forth and on the date indicated.
Signature Title Date
- --------- ----- ----
/s/ Barry R. Steinberg President, Chief Executive January 20, 1999
Barry R. Steinberg Officer, Chairman of the
Board and Director (Principal
Executive Officer)
/s/ Joel G. Stemple Director January 20, 1999
Joel G. Stemple
/s/ Joseph Looney Chief Financial Officer January 20, 1999
Joseph Looney (Principal Accounting Officer)
/s/ Joel Rothlein Director January 20, 1999
Joel Rothlein
/s/ Julian Sandler Director January 20, 1999
Julian Sandler
/s/ Michael Russell Director January 20, 1999
Michael Russell
/s/ Bert Rudofsky Director January 20, 1999
Bert Rudofsky
5
<PAGE>
INDEX TO EXHIBITS
-----------------
Exhibit
No. Description
--- -----------
4.1 Copy of the Registrant's Amended and Restated 1996 Incentive
and Non- Incentive Stock Option Plan, as amended, with forms
of Incentive Stock Option Agreement and Non-Incentive Stock
Option Agreement.
5 Opinion of Stebel & Paseltiner, P.C.
23.1 Consent of KPMG LLP.
23.2 Consent of Stebel & Paseltiner, P.C. (included in Exhibit
5).
24 Power of Attorney (included in signature page of this
Registration Statement).
6
EXHIBIT 4.1
MANCHESTER EQUIPMENT CO., INC.
AMENDED AND RESTATED
1996 INCENTIVE AND NON-INCENTIVE
STOCK OPTION PLAN
1. Purpose of Plan.
The purpose of this Amended and Restated 1996 Incentive and
Non-Incentive Stock Option Plan ("Plan") is to further the growth and
development of Manchester Equipment Co., Inc. ("Company") and any direct and
indirect subsidiaries thereof (collectively, "Subsidiaries" and each, singly, a
"Subsidiary") by encouraging selected employees, directors and other persons who
contribute and are expected to contribute materially to the Company's success to
obtain a proprietary interest in the Company through the ownership of stock,
thereby providing such persons with an added incentive to promote the best
interests of the Company and affording the Company a means of attracting to its
service persons of outstanding ability.
2. Stock Subject to this Plan.
An aggregate of 1,100,000 shares of the Company's Common Stock, par
value $.01 per share ("Common Stock"), subject, however, to adjustment or change
pursuant to Article 10 hereof, shall be reserved for issuance upon the exercise
of options which may be granted from time to time in accordance with this Plan
("Options"). Such shares may be, in whole or in part, authorized but unissued
shares or issued shares which have been reacquired by the Company. If, for any
reason, an Option shall lapse, expire or terminate without having been exercised
in full, the unpurchased shares covered thereby shall again be available for
purposes of this Plan.
3. Administration.
(a) The Board of Directors of the Company shall have and may exercise
any and all of the powers relating to the administration of this
Plan and the grant of Options hereunder as are set forth herein.
<PAGE>
(b) The Board shall administer this Plan and, subject to the
provisions of this Plan, shall have sole authority in its
discretion to determine the persons to whom, and the time or
times at which, Options shall be granted, the number of shares to
be subject to each such Option and whether all or any portion of
such Options shall be incentive stock options ("Incentive
Options") qualifying under Section 422 of the Internal Revenue
Code of 1986, as amended ("Code"), or stock options which do not
so qualify ("Non-Incentive Options"). Both Incentive Options and
Non-Incentive Options may be granted to the same person at the
same time provided each type of Option is clearly designated. In
making such determinations, the Board may take into account the
nature of the services rendered by such persons, their present
and potential contributions to the Company's success and such
other factors as the Board in its sole discretion may deem
relevant. Subject to the express provisions of this Plan, the
Board shall also have the authority to interpret this Plan, to
prescribe, amend and rescind rules and regulations relating
thereto, to determine the terms and provisions of the respective
Option Agreements, which shall be, subject to the rights granted
to the Company and the Board hereunder, substantially in the
forms attached hereto as Exhibit A and Exhibit B, with such
changes thereto as may be necessary to reflect the terms and
conditions of the grant in question, and to make all other
determinations necessary or advisable for the administration of
this Plan, all of which determinations shall be conclusive and
not subject to review.
4. Eligibility for Receipt of Options.
(a) Incentive Options.
Incentive Options may be granted only to employees (including
officers) of the Company and/or any of its Subsidiaries.
The aggregate Fair Market Value (as defined in Article 5 of this
Plan), determined as of the time the Incentive Option is granted,
of the shares of the Company's Common Stock purchasable hereunder
exercisable for the first time by an employee during any calendar
year may not exceed $100,000.
A director of the Company or any Subsidiary who is not an
employee of the Company or of one of its Subsidiaries is not
eligible to receive Incentive Options under this Plan. Further,
Incentive Options may not be granted to any person who, at the
time the Incentive Option is granted, owns (or is considered as
owning within the meaning of Section 424(d) of the Code) stock
possessing more than 10% of the total combined voting powers of
all classes of stock of the Company or any Subsidiary (a "10%
Owner"), unless at the time the Incentive Option is granted to a
10% Owner, the option price is at least 110% of the fair market
value of the Common Stock subject thereto and such Incentive
Option by its terms is not exercisable subsequent to five years
from the date of grant.
(b) Non-Incentive Options.
Non-Incentive Options may be granted to any employees (including
employees who have been granted Incentive Options), directors,
consultants, agents, independent contractors and other persons
whom the Board determines will contribute to the Company's
success.
(c) Notwithstanding the forgoing, the maximum aggregate number of
shares with respect to which Options, whether Incentive or
Non-Incentive, may be granted to any person eligible therefor
under this Plan within any one calendar year is 200,000 shares.
<PAGE>
5. Option Price.
The purchase price of the shares of Common Stock under each Option
shall be determined by the Board, which determination shall be conclusive and
not subject to review, but in no event shall such purchase price be less than
(i) 100% of the fair market value of the Common Stock on the date of grant of
Incentive Options (110% of the fair market value of Common Stock on the date of
grant where the grant of Incentive Options is made to a 10% Owner), and (ii) 85%
of the fair market value of the Common Stock on the date of grant for
Non-Incentive Options.
In determining the fair market value of the Common Stock as of a
specified date ("Fair Market Value"), the Board shall consider, if the Common
Stock is: (a) publicly traded and listed on the New York Stock Exchange or
another national securities exchange or The Nasdaq Stock Market, the closing
sale price of the Common Stock on the business day immediately preceding the
date as of which the Fair Market Value is being determined, or on the next
preceding date on which such Common Stock is traded if no Common Stock was
traded on such immediately preceding business day, or, if the Common Stock is
not so listed on a national securities exchange or The Nasdaq Stock Market, but
publicly traded, the representative closing sale price in the over-the-counter
market as quoted by the National Quotation Bureau or a recognized dealer in the
Common Stock, on the date immediately preceding the date as of which the Fair
Market Value is being determined, or on the next preceding date on which such
Common Stock is traded if no Common Stock was traded on such immediately
preceding business day; or (b) not publicly traded, the fair market value as
determined by the Board in good faith based on such factors as it shall deem
appropriate. The Board may also consider such other factors as it shall deem
appropriate.
For purposes of this Plan, the date of grant of an Option shall be the
date on which the Board shall by resolution duly authorize such Option.
6. Term of Options; Termination.
(a) The term of each Option shall be such number of years as the
Board shall determine, subject to earlier termination as provided
herein and in the Option Agreement (and each Incentive Option
being subject to the limitations set forth in Section 4(a) of
this Plan with respect to grants to 10% Owners), but in no event
shall the term of any Option be more than ten years from the date
of grant. No Option may be exercised following termination
thereof.
(b) If an Incentive Option holder's employment with the Company or a
Subsidiary is terminated for any reason other than by reason of
death or disability (within the meaning of Section 22(e)(3) of
the Code), such holder's Incentive Option shall terminate on the
earlier of (i) three (3) months from the date of such termination
of employment, or (ii) the expiration date of the term of such
Option. Absence on leave approved by the employer corporation
shall not be considered an interruption of employment for any
purpose under this Plan.
<PAGE>
(c) If an Incentive Option holder's employment with the Company or a
Subsidiary is terminated by reason of such holder's disability
within the meaning of Section 22(e)(3) of the Code, subject to
paragraph 6(d) hereof, such holder's Incentive Option shall
terminate on the earlier of (i) one (1) year from the date of
such termination, or (ii) the expiration date of the term of such
Option.
(d) If an Incentive Option holder dies while in the employ of the
Company or a Subsidiary (or within one (1) year following
termination of employment due to disability within the meaning of
Section 22(e)(3) of the Code), such holder's Incentive Option
shall terminate on the earlier of (i) one (1) year from the date
of death, or (ii) the expiration date of the term of the Option.
To the extent such Incentive Option was exercisable by such
holder at the date of death (or the date of termination of
employment due to disability within the meaning of Section
22(e)(3) of the Code), such Option may be exercised by the
legatee or legatees of such person under such person's Last Will,
or by such person's personal representative or distributees,
within one (1) year from the date of death but in no event
subsequent to the expiration date of the Incentive Option.
7. Exercise of Options.
(a) Incentive and Non-Incentive Options shall be exercisable within
the times or upon the events determined by the Board as set forth
in the Option Agreements.
(b) An Option may not be exercised for fractional shares of the
Company's Common Stock.
(c) If an Option holder ceases to be an employee, director,
consultant, agent, independent contractor or other person
employed by or engaged in performing services for the Company
and/or a Subsidiary, the Option held by such person shall be
exercisable after the date of termination of employment or
engagement only to the extent such Option was exercisable by such
holder at the date of termination. In no event shall such option
be exercisable following the expiration of its term or earlier
termination.
<PAGE>
(d) The exercise of an Option shall be contingent upon receipt by the
Company from the holder of such Option of a written
representation that at the time of such exercise it is the
Optionholder's then present intention to acquire the Option
shares for investment and not with a view to the distribution or
resale thereof (unless a Registration Statement covering the
shares purchasable upon exercise of the Options shall have been
declared effective by the Securities and Exchange Commission) and
upon receipt by the Company of cash, or a check to its order, for
the full purchase price of such shares. In addition, the holder
of such Option must agree to refrain from selling or offering to
sell any securities of the Company for such reasonable period of
time after the effective date of any registration statement
relating to an underwritten offering of securities of the
Company, as may be requested by the managing underwriter of such
underwritten offering, and approved by the Board of Directors.
The Company shall be under no obligation to register the Shares
with the Securities and Exchange Commission or to effect
compliance with the Securities Act of 1933 or with the
registration or qualification requirement of any state securities
laws or stock exchange.
(e) Payment for the shares of Common Stock may be made (i) in cash or
by check to the order of the Company; (ii) by surrender of shares
of Common Stock having a Fair Market Value equal to the exercise
price of the Option; or (iii) by any combination of the foregoing
where approved by the Board in its sole discretion; provided,
however, in the event of payment for the shares of Common Stock
by method (ii) above, the shares of Common Stock so surrendered,
if originally issued to the Optionholder upon exercise of an
Option(s) granted by the Company, shall have been held by the
Optionholder for more than six months.
(f) The holder of an Option shall have none of the rights of a
shareholder with respect to the shares purchasable upon exercise
of the Option until a certificate for such shares shall have been
issued to the holder upon due exercise of the Option.
(g) The proceeds received by the Company upon exercise of an Option
shall be added to the Company's working capital and be available
for general corporate purposes.
8. Non-Transferability of Incentive Options.
No Incentive Option granted pursuant to this Plan shall be transferable
otherwise than by will or the laws of descent or distribution and an Incentive
Option may be exercised during the lifetime of the Option holder only by such
Option holder.
9. No Right of Employment.
Nothing in this Plan or in any Option Agreement granted hereunder
shall: (a) confer upon any Option holder any right to continue in the employ of
the Company or any Subsidiary or obligate the Company or any Subsidiary to
continue the engagement of any Option holder; or (b) interfere in any way with
the right of the Company or any such Subsidiary to terminate such Option
holder's employment or engagement at any time.
10. Adjustments Upon Changes in Capitalization.
If at any time after the date of grant of an Option, the Company shall
by stock dividend, split-up, combination, reclassification or exchange, or
through merger or consolidation or otherwise, change its shares of Common Stock
into a different number or kind or class of shares or other securities or
property, then the number of shares covered by such Option and the price per
share thereof shall be proportionately adjusted for any such change by the
Board, whose determination thereon shall be conclusive. In the event that a
fraction of a share results from the foregoing adjustment, said fraction shall
be eliminated and the price per share of the remaining shares subject to the
Option adjusted accordingly.
<PAGE>
11. Vesting of Rights Under Options.
Nothing contained in this Plan or in any resolution adopted or to be
adopted by the Board or the shareholders of the Company shall constitute the
vesting of any rights under any Option. The vesting of such rights shall take
place only when a written Option Agreement, substantially in the form of the
Incentive Stock Option Agreement attached hereto as Exhibit A or the
Non-Incentive Stock Option Agreement attached hereto as Exhibit B (with such
changes to such Exhibits as may be necessary to reflect the terms and conditions
of the grant in question), shall be duly executed and delivered by and on behalf
of the Company and the person to whom the Option shall be granted, subject,
however, in either event, to the rights granted to the Company and the Committee
hereunder and to the terms and conditions of the Option Agreement.
12. Withholding Taxes.
Whenever under this Plan shares are to be issued in satisfaction of the
exercise of Options granted hereunder, the Company shall have the right to
require the recipient to remit to the Company an amount sufficient to satisfy
federal, state and local withholding tax requirements prior to the delivery of
any certificate or certificates for such shares.
13. Restrictions on Shares.
At the discretion of the Board, the Company may reserve to itself or
its assignee(s) in the Option Agreement (a) a right of first refusal to purchase
any shares that an Optionholder (or a subsequent transferee) may propose to
transfer to a third party and (b) a right to repurchase any or all shares held
by an Optionholder upon the Optionee's termination of employment or service with
the Company or a subsidiary for any reason within a specified time as determined
by the Board at the time of grant at (i) the Optionholder's original purchase
price, (ii) the Fair Market Value of such shares as determined by the Board in
good faith, or (iii) a price determined by a provision set forth in the Option
Agreement.
14. Termination and Amendment.
The Board may at any time terminate, amend or modify this Plan in any
respect (including, but not limited to, any form of grant, agreement or
instrument to be executed pursuant to this Plan); provided, however, that
shareholder approval shall be required to be obtained by the Company if required
to comply with the Incentive Option provisions or Section 162(m) of the Code, or
the listed company requirements of The Nasdaq Stock Market or of a national
securities exchange on which the shares of Common Stock are traded, or other
applicable provisions of state or federal law or self-regulatory agencies;
provided, further, that no termination, amendment or modification of this Plan
may materially adversely affect the rights of a holder of an Option previously
granted under this Plan without the written consent of such Optionholder.
<PAGE>
15. Term of Plan.
This Plan was originally adopted by the Board of Directors on October
1, 1996 and approved by the shareholders of the Company on October 1, 1996. No
Option shall be granted pursuant to this Plan on or after September 30 , 2006,
but Options theretofore granted may extend beyond that date and the terms of
this Plan shall continue to apply to such Options and to any shares of Common
Stock acquired upon exercise thereof.
16. Applicable Law.
The validity, interpretation and enforcement of this Plan shall be
governed in all respects by the laws of the State of New York and the United
States of America.
17. Issuance of Shares.
The Shares, when issued and paid for pursuant to the Options granted
hereunder, shall be fully paid and non-assessable Shares.
18. Partial Invalidity.
The invalidity or illegality of any provision herein shall not be
deemed to affect the validity of any other provision.
<PAGE>
EXHIBIT A
---------
INCENTIVE STOCK OPTION AGREEMENT
---------------
To:
We are pleased to notify you that by the determination of the Board of
Directors (hereinafter called the "Board") an incentive stock option to purchase
________ shares of the Common Stock of Manchester Equipment Co., Inc. (herein
called the "Company") at a price of $______ per share has this ____ day of
_______________, been granted to you under the Company's Amended and Restated
1996 Incentive and Non-Incentive Stock Option Plan, as amended (herein called
the "Plan"). This option may be exercised only upon the terms and conditions set
forth below.
A. Purpose of Option.
The purpose of this Plan under which this incentive stock
option has been granted is to further the growth and development of the Company
and its direct and indirect subsidiaries by encouraging key employees,
directors, consultants, agents, independent contractors and other persons who
contribute and are expected to contribute materially to the Company's success to
obtain a proprietary interest in the Company through the ownership of stock,
thereby providing such persons with an added incentive to promote the best
interests of the Company, and affording the Company a means of attracting to its
service persons of outstanding ability.
1. Acceptance of Option Agreement.
Your execution of this incentive stock option agreement will indicate your
acceptance of and your willingness to be bound by its terms; it imposes no
obligation upon you to purchase any of the shares subject to the option. Your
obligation to purchase shares can arise only upon your exercise of the option in
the manner set forth in Article 3 hereof.
2. When Option May Be Exercised.
The option granted you hereunder may not be exercised for a period of [one
year] from the date of its grant by the Board as set forth above. Thereafter,
this option shall be exercisable as follows:
(i) at the end of [one year] from the date of grant, up to [25%] of
the total shares subject to the option;
(ii) at the end of the [second year] from the date of grant, up to
[50%] of such shares;
(iii) at the end of the [third year] from the date of grant, up to
[75%] of such shares;
(iv) at the end of the [fourth year] from the date of grant, up to
[100%] of such shares.
<PAGE>
This option may not be exercised for less than ten shares at any one time (or
the remaining shares then purchasable if less than ten) and expires at the end
of ten years from the date of grant whether or not it has been duly exercised,
unless sooner terminated as provided in Articles 5, 6 and 7 hereof.
3. How Option May Be Exercised.
This option is exercisable by a written notice signed by you and delivered
to the Company at its executive offices, signifying your election to exercise
the option. The notice must state the number of shares of Common Stock as to
which your option is being exercised, must contain a statement by you (in a form
acceptable to the Company) that such shares are being acquired by you for
investment and not with a view to their distribution or resale (unless a
registration statement covering the shares purchasable has been declared
effective by the Securities and Exchange Commission) and must be accompanied by
payment as set forth in Article 4 hereof for the full purchase price of the
share being purchased. No share shall be issued until full payment therefor has
been made.
If notice of the exercise of this option is given by a person or persons
other than you, the Company may require, as a condition to the exercise of this
option, the submission to the Company of appropriate proof of the right of such
person or persons to exercise this option.
Certificates for shares of the Common Stock so purchased will be issued as
soon as practicable. The Company, however, shall not be required to issue or
deliver a certificate for any shares until it has complied with all requirements
of the Securities Act of 1933, the Securities Exchange Act of 1934, any stock
exchange on which the Company's Common Stock may then be listed and all
applicable state laws in connection with the issuance or sale of such shares or
the listing of such shares on said exchange. Until the issuance of the
certificate for such shares, you or such other person as may be entitled to
exercise this option, shall have none of the rights of a shareholder with
respect to shares subject to this option.
You shall promptly advise the Company of any sale of shares of Common Stock
issued upon exercise of this option which occurs within one (1) year from the
date of the exercise of this option relating to the issuance of such shares.
4. Payment of Options.
Payment for the shares of Common Stock may be made (i) in cash or by check
to the order of the Company; (ii) by surrender of shares of Common Stock having
a Fair Market Value equal to the exercise price of the Option; or (iii) by any
combination of the foregoing where approved by the Board in its sole discretion;
provided, however, in the event of payment for the shares of Common Stock by
method (ii) above, the shares of Common Stock so surrendered, if originally
issued to you upon exercise of an option(s) granted by the Company, shall have
been held by you for more than six months.
<PAGE>
5. Termination of Employment.
If your employment with the Company (or a subsidiary thereof) is terminated
for any reason other than by death or disability, this option shall terminate
three (3) months from the date of such termination of employment (but in no
event shall you be able to exercise this option after ten years from the date
this option was granted to you), provided, however, you shall only be entitled
to exercise that portion of this option which was exercisable by you at the date
of such termination of employment.
6. Disability.
If your employment with the Company (or a subsidiary thereof) is terminated
by reason of your disability, you may exercise, within one (1) year from the
date of such termination, that portion of this option which was exercisable by
you at the date of such termination, provided, however, that such exercise
occurs within ten years from the date this option was granted to you.
7. Death.
If you die while employed by the Company (or a subsidiary thereof) or
within one (1) year after termination of your employment due to disability, that
portion of this option which was exercisable by you at the date of your death
may be exercised by your legatee or legatees under your Last Will, or by your
personal representatives or distributees, within one (1) year from the date of
your death, provided, however, that such exercise occurs within ten years from
the date this option was granted to you.
8. Non-Transferability of Option.
This option shall not be transferable except by Last Will or the laws of
descent and distribution, and may be exercised during your lifetime only by you.
9. Adjustments upon Changes in Capitalization.
If at any time after the date of grant of this option, the Company shall,
by stock dividend, split-up, combination, reclassification or exchange, or
through merger or consolidation, or otherwise, change its shares of Common Stock
into a different number or kind or class of shares or other securities or
property, then the number of shares covered by this option and the price of each
such share shall be proportionately adjusted for any such change by the Board
whose determination shall be conclusive. Any fraction of a share resulting from
any adjustment shall be eliminated and the price per share of the remaining
shares subject to this options adjusted accordingly.
<PAGE>
10. Subject to Terms of this Plan.
This incentive stock option agreement shall be subject in all respects to
the terms and conditions of this Plan and in the event of any question or
controversy relating to the terms of this Plan, the decision of the Board shall
be conclusive.
Sincerely yours,
MANCHESTER EQUIPMENT CO., INC.
By:
Barry R. Steinberg, President
Agreed to and accepted this
day of , 199 .
Signature of Optionholder
<PAGE>
EXHIBIT B
---------
NON-INCENTIVE STOCK OPTION AGREEMENT
---------------
To:
We are pleased to notify you that by the determination of the
Board of Directors (hereinafter called the "Board") a non-incentive stock option
to purchase _______ shares of the Common Stock of Manchester Equipment Co., Inc.
(herein called the "Company") at a price of $_______ per share has this ___ day
of ______________, been granted to you under the Company's 1996 Amended and
Restated Incentive and Non-Incentive Stock Option Plan, as amended (herein
called the "Plan"). This option may be exercised only upon the terms and
conditions set forth below.
1. Purpose of Option.
The purpose of this Plan under which this non-incentive stock option has
been granted is to further the growth and development of the Company and its
direct and indirect subsidiaries by encouraging key employees, directors,
consultants, agents, independent contractors and other persons who contribute
and are expected to contribute materially to the Company's success to obtain a
proprietary interest in the Company through the ownership of stock, thereby
providing such persons with an added incentive to promote the best interests of
the Company, and affording the Company a means of attracting to its service
persons of outstanding ability.
2. Acceptance of Option Agreement.
Your execution of this non-incentive stock option agreement will indicate
your acceptance of and your willingness to be bound by its terms; it imposes no
obligation upon you to purchase any of the shares subject to the option. Your
obligation to purchase shares can arise only upon your exercise of the option in
the manner set forth in Article 4 hereof.
3. When Option May Be Exercised.
The option granted you hereunder shall be exercisable as follows:
This option may not be exercised for less than ten shares at any one time
(or the remaining shares then purchasable if less than ten) and expires at the
end of [indicate term of option, not to exceed ten years] years from the date of
grant whether or not it has been duly exercised, unless sooner terminated as
provided in Article 6 hereof.
<PAGE>
4. How Option May Be Exercised.
This option is exercisable by a written notice signed by you and delivered
to the Company at its executive offices, signifying your election to exercise
the option. The notice must state the number of shares of Common Stock as to
which your option is being exercised, must contain a statement by you (in a form
acceptable to the Company) that such shares are being acquired by you for
investment and not with a view to their distribution or resale (unless a
registration statement covering the shares purchasable has been declared
effective by the Securities and Exchange Commission) and must be accompanied by
payment as set forth in Article 5 hereof for the full purchase price of the
shares being purchased, plus such amount, if any, as is required for withholding
taxes. No share shall be issued until full payment therefor has been made.
If notice of the exercise of this option is given by a person or persons
other than you, the Company may require, as a condition to the exercise of this
option, the submission to the Company of appropriate proof of the right of such
person or persons to exercise this option.
Certificates for shares of the Common Stock so purchased will be issued as
soon as practicable. The Company, however, shall not be required to issue or
deliver a certificate for any shares until it has complied with all requirements
of the Securities Act of 1933, the Securities Exchange Act of 1934, any stock
exchange on which the Company's Common Stock may then be listed and all
applicable state laws in connection with the issuance or sale of such shares or
the listing of such shares on said exchange. Until the issuance of the
certificate for such shares, you or such other person as may be entitled to
exercise this option, shall have none of the rights of a shareholder with
respect to shares subject to this option.
5. Payment of Options.
Payment for the shares of Common Stock may be made (i) in cash or by check
to the order of the Company, (ii) by surrender of shares of Common Stock having
a Fair Market Value equal to the exercise price of the Option; or (iii) by any
combination of the foregoing where approved by the Board in its sole discretion;
provided, however, in the event of payment for the shares of Common Stock by
method (ii) above, the shares of Common Stock so surrendered, if originally
issued to you upon exercise of an option(s) granted by the Company, shall have
been held by you for more than six months.
<PAGE>
6. Termination of Employment or Engagement.
If your employment or engagement with the Company (or a subsidiary thereof)
is terminated for any reason, [insert terms upon which non-incentive option
holder's options shall lapse and expire.] [Insert terms upon which non-incentive
options shall survive the termination of a holder's employment or engagement,
but in such event the option shall be exercisable only to the extent exercisable
on the date of such termination and in no event shall the option be exercisable
after the expiration date of this option.] [If the option survives the death of
the option holder, add language that it may be exercised by the holder's legatee
or legatees under his Last Will, or by his personal representatives or
distributees.]
7. Adjustments upon Changes in Capitalization.
If at any time after the date of grant of this option, the Company shall,
by stock dividend, split-up, combination, reclassification or exchange, or
through merger or consolidation, or otherwise, change its shares of Common Stock
into a different number or kind or class of shares or other securities or
property, then the number of shares covered by this option and the price of each
such share shall be proportionately adjusted for any such change by the Board
whose determination shall be conclusive. Any fraction of a share resulting from
any adjustment shall be eliminated and the price per share of the remaining
shares subject to this option adjusted accordingly.
8. Subject to Terms of this Plan.
This non-incentive stock option agreement shall be subject in all respects
to the terms and conditions of this Plan and in the event of any question or
controversy relating to the terms of this Plan, the decision of the Board shall
be conclusive.
9. Tax Status.
This option does not qualify as an "incentive stock option" under the
provisions of Section 422 of the Internal Revenue Code of 1986, as amended, and
the income tax implications of your receipt of a non-incentive stock option and
your exercise of such an option should be discussed with your tax counsel.
Sincerely yours,
MANCHESTER EQUIPMENT CO., INC.
By:
Barry R. Steinberg, President
Agreed to and accepted this
day of , 199 .
Signature of Optionholder
EXHIBIT 5
January 22, 1999
Board of Directors of
Manchester Equipment Co., Inc.
160 Oser Avenue
Hauppauge, New York 11788
Re: Stock Option Plan
Gentlemen:
We have acted as counsel to Manchester Equipment Co., Inc. (the
"Company") in connection with its filing of a Registration Statement on Form S-8
(the "Registration Statement") covering 1,100,000 shares (the "Shares") of the
Company's authorized and unissued shares of Common Stock, $.01 par value,
issuable upon the exercise of options under the Company's Amended and Restated
1996 Incentive and Non-Incentive Stock Option Plan (as amended, the "Plan").
As such counsel, we have examined originals, or copies certified to our
satisfaction, of the corporate records of the Company, agreements and other
instruments, certificates of public officials, certificates of officers of the
Company and such other documents as we deemed necessary as a basis for the
opinion hereinafter set forth.
In such examination we have assumed the genuineness of all signatures
and the authenticity of all documents submitted to us as originals and the
conformity to original documents of documents submitted to us as certified or
photostatic copies.
On the basis of the foregoing, we are of the opinion that the Shares
have been duly authorized and, when issued, delivered and paid for in accordance
with the Plan, will be validly issued, fully paid and non-assessable.
We hereby consent to the filing of this opinion as an exhibit to the
aforesaid Registration Statement.
Very truly yours,
STEBEL & PASELTINER, P.C.
By: /s/ David E. Paseltiner
David E. Paseltiner
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
Board of Directors of Manchester Equipment Co., Inc.:
We consent to the use in this registration statement on Form S-8 of Manchester
Equipment Co., Inc. of our report dated September 18, 1998, which report is
included in the Company's Annual Report on Form 10-K for July 31, 1998 and is
incorporated by reference herein.
/s/ KPMG LLP
KPMG LLP
Melville, New York
January 25, 1999
