<PAGE>
As filed with the Securities and Exchange Commission on May 12, 1998
Registration No. 333-___________
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------------
FORM S-8
REGISTRATION STATEMENT
Under The Securities Act of 1933
------------------------
DUNN COMPUTER CORPORATION
(Exact name of registrant as specified in its charter)
Virginia 54-1890464
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
1306 Squire Court, Sterling, Virginia 20166
(Address of principal executive offices including zip code)
DUNN COMPUTER CORPORATION STOCK OPTION PLAN
(Full title of the plan)
John D. Vazzana
Executive Vice President and Chief Financial Officer
Dunn Computer Corporation
1306 Squire Court
Sterling, Virginia 20166
(703) 450-0400
(Name, address and telephone number, including area code,
of agent for service)
Copy to:
Kenneth J. Ayres, Esq.
Jones, Day, Reavis & Pogue
Metropolitan Square
1450 G Street, N.W.
Washington, D.C. 20005-2088
(202) 879-3791
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Title of Amount to be Proposed Maxi- Proposed Maxi- Amount of
Securities to Registered(1) mum Offering mum Aggregate Registration
be Registered Price Per Share (2) Offering Price(2) Fee
<S> <C> <C> <C> <C>
Common Stock, par 2,200,000 $6.73 $14,806,260 $4,368
value $0.001
</TABLE>
(1) Pursuant to Rule 416 of the Securities Act of 1933, this Registration
Statement also covers such additional Common Stock as may become issuable
pursuant to the anti-dilution provisions of the Dunn Computer Corporation
Stock Option Plan.
(2) Estimated solely for calculating the amount of the registration fee,
pursuant to paragraphs (c) and (h) of Rule 457 under the Securities Act of
1933, as follows: (a) for 1,832,000 shares issuable pursuant to
outstanding options, on the basis of a weighted average exercise price of
$6.18 per share; and (b) for 368,000 shares, on the basis of the average
of the high and low sale prices of Dunn Computer Corporation, a Delaware
corporation, as reported on the Nasdaq National Market on May 8, 1998.
- -------------------------------------------------------------------------------
<PAGE>
Part I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
The documents containing the information specified in Part I have been
and/or will be sent or given to employees as specified by Rule 428(b)(1) of the
Securities Act of 1933, as amended (the "Securities Act"). In accordance with
the instructions to Part I of Form S-8, such documents will not be filed with
the Securities and Exchange Commission (the "Commission") either as part of this
Registration Statement or as prospectuses or prospectus supplements pursuant to
Rule 424 of the Securities Act. These documents and the documents incorporated
by reference pursuant to Item 3 of Part II of this Registration Statement, taken
together, constitute the prospectus as required by Section 10(a) of the
Securities Act.
Part II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
The following document previously filed by Dunn Computer Corporation, a
Virginia corporation (the "Company" or the "Registrant"), with the Commission is
incorporated herein by reference:
the Company's final prospectus filed pursuant to Rule 424(b) of the
Securities Act on April 28, 1998 (Registration No. 333-47631), including
the description of the Company's common stock, par value $0.001 per share
(the "Common Stock") contained therein.
In addition, all documents subsequently filed by the Company pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act") 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 herein
by reference and to be part hereof from the date of filing of such documents.
Any statement contained in a document incorporated or deemed to be incorporated
by reference herein shall be deemed to be modified or superseded for purposes of
this Registration Statement to the extent that a statement contained herein or
in any other subsequently filed document that also is incorporated or deemed to
be incorporated by reference herein modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Registration Statement.
Item 4. Description of Securities
A description of the Company's Common Stock is incorporated herein by
reference under Item 3 above.
Item 5. Interests of Named Experts and Counsel
Not Applicable.
Item 6. Indemnification of Directors and Officers
Virginia Stock Corporation Act
Section 697 A of the Virginia Stock Corporation Act ("VSCA") provides that
a corporation may indemnify an individual made a party to a proceeding because
he is or was a director against liability incurred in the proceeding if (1) he
conducted himself in good faith, (2) he believed, in the case of conduct in his
official capacity with the corporation, that his conduct was in its best
interests, and, in all other cases, that his conduct was at least not opposed to
its best interests, and (3) in the case of any criminal proceeding, he had no
reasonable cause to believe his conduct was unlawful. Section 697 C of the VSCA
provides that the termination of a proceeding by judgment,
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order, settlement or conviction is not, of itself, determinative that the
director did not meet the standard of conduct set forth in Section 697 A.
Section 697 D of the VSCA provides that a corporation may not indemnify a
director under Section 697 in connection with a proceeding by or in the right of
the corporation in which the director was adjudged liable to the corporation, or
in connection with any other proceeding charging improper personal benefit to
him, whether or not involving action in his official capacity, in which he was
adjudged liable on the basis that personal benefit was improperly received by
him. Indemnification permitted under Section 697 of the VSCA in connection with
a proceeding by or in the right of the corporation is limited to reasonable
expenses incurred in connection with the proceeding.
Section 698 of the VSCA states that, unless limited by its articles of
incorporation, a corporation shall indemnify a director who entirely prevails in
the defense of any proceeding to which he was a party because he is or was a
director of the corporation against reasonable expenses incurred by him in
connection with the proceeding.
Section 701 of the VSCA provides that a corporation may not indemnify a
director under Section 697 unless authorized in the specific case after a
determination has been made that indemnification of the director is permissible
in the circumstances because he has met the standard of conduct set forth in
Section 697. Such determination is to be made (1) by the board of directors by
a majority vote of a quorum consisting of directors not at the time parties to
the proceeding, (2) if such a quorum is not obtainable, by majority vote of a
committee duly designated by the board of directors (in which designation
directors who are parties may participate), consisting solely of two or more
directors not at the time parties to the proceeding, (3) by special legal
counsel selected as set forth in the statute, or (4) by the shareholders
(without the vote of shares owned by or voted under the control of directors who
are at the time parties to the proceeding).
Section 699 of the VSCA provides that a corporation may pay for or
reimburse the reasonable expenses incurred by a director who is a party to a
proceeding in advance of the final disposition of the proceeding if (1) the
director furnishes the corporation a written statement of his good faith belief
that he has met the standard of conduct described in Section 697, (2) the
director furnishes the corporation a written undertaking to repay the advance if
it is ultimately determined that he did not meet the standard of conduct, and
(3) a determination is made that the facts then known to those making the
determination would not preclude indemnification. Determinations and
authorizations of payments under Section 699 are to be made in the manner
specified in Section 701 of the VSCA.
Under Section 700.1 of the VSCA, an individual who is made a party to a
proceeding because he is or was a director of a corporation may apply to a court
for an order directing the corporation to make advances or reimbursement for
expenses or to provide indemnification. The court shall order the corporation
to make advances and/or reimbursement for expenses or to provide indemnification
if it determines that the director is entitled to such advances, reimbursement
or indemnification and shall also order the corporation to pay the director's
reasonable expenses incurred to obtain the order. With respect to a proceeding
by or in the right of the corporation, the court may (1) order indemnification
of the director to the extent of his reasonable expenses if it determines that,
considering all the relevant circumstances, the director is entitled to
indemnification even though he was adjudged liable to the corporation and (2)
also order the corporation to pay the director's reasonable expenses incurred to
obtain the order of indemnification.
Section 702 of VSCA states that, unless limited by corporation's articles
of incorporation, (1) an officer of the corporation is entitled to mandatory
indemnification under Section 698 of the VSCA, and is entitled to apply for
court-ordered indemnification under Section 700 of the VSCA, to the same extent
as a director, and (2) the corporation may indemnify and advance expenses to an
officer, employee or agent of the corporation to the same extent as to a
director.
Section 703 of the VSCA provides that a corporation may purchase and
maintain insurance on behalf of an individual who is or was a director, officer,
employee or agent of the corporation, or who, while a director, officer,
employee, or agent of the corporation, is or was serving at the request of the
corporation as a director, officer, partner, trustee, employee or agent of
another foreign or domestic corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise, against liability asserted against
him or incurred by him in that capacity, or arising from his status as such,
whether or not the corporation would have the power to indemnify him against
such liability under the provisions of Sections 697 or 698 of the VSCA.
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<PAGE>
Section 704 of the VSCA states that a corporation shall have power to make
any further indemnity, including indemnity with respect to a proceeding by or in
the right of the corporation, and to make additional provision for advances and
reimbursement of expenses, to any director, officer employee or agent that may
be authorized by its articles of incorporation or any bylaw made by the
shareholders or any resolution adopted, before or after the event, by the
shareholders, except an indemnity against (1) his willful misconduct, or (2) a
knowing violation of the criminal law. Unless the articles of incorporation, or
any such bylaw or resolution expressly provide otherwise, any determination as
to the right to any further indemnity shall be made in accordance with Section
701 B of the VSCA. Each such indemnity may continue as to a person who has
ceased to have the capacity referred to above and may inure to the benefit of
the heirs, executors and administrators of such person.
Articles of Incorporation
Article 11 of the Company's Articles of Incorporation provides that the
Company shall, to the fullest extent permitted by the law of Virginia, indemnify
an individual who is or was a director or officer of the Company and who was,
is, or is threatened to be made, a named defendant or respondent in any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative and whether formal or informal
(collectively, a "proceeding"), against any obligation to pay a judgment,
settlement, penalty, fine (including any excise tax assessed with respect to any
employee benefit plan) or other liability and reasonable expenses (including
counsel fees) incurred with respect to such a proceeding, except such
liabilities and expenses as are incurred because of such director's or officer's
willful misconduct or knowing violation of criminal law.
Article 11 also provides that unless a determination has been made that
indemnification is not permissible, the Company shall make advances and
reimbursements for expenses reasonably incurred by a director or officer in a
proceeding as described above upon receipt of an undertaking from such director
or officer to repay the same if it is ultimately determined that such director
or officer is not entitled to indemnification.
Article 11 also provides that the determination that indemnification is
permissible, the authorization of such indemnification (if applicable), and the
evaluation as to the reasonableness of expenses in a specific case shall be made
as provided by law. Special legal counsel selected to make determinations under
such Article 11 may be counsel for the Company. The termination of a proceeding
by judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent shall not of itself create a presumption that a director or
officer acted in such a manner as to make him or her ineligible for
indemnification.
For the purposes of Article 11, every reference to a director or officer
includes, without limitation, (1) every individual who is a director or officer
of the Company, (2) an individual who, while a director or officer, is or was
serving at the Company's request as a director, officer, partner, trustee,
employee or agent of another foreign or domestic corporation, partnership, joint
venture, trust, employee benefit plan or other enterprise, (3) an individual who
formerly was a director or officer of the Company or who, while a director or
officer, occupied at the request of the Company any of the other positions
referred to in clause (2) of this sentence, and (4) the estate, personal
representative, heirs, executors and administrators of a director or officer of
the Company or other person referred to herein. Service as a director, officer,
partner, trustee, employee or agent of another foreign or domestic corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise
controlled by the Company is deemed service at the request of the Company. A
director or officer is deemed to be serving an employee benefit plan at the
Company's request if such person's duties to the Company also impose duties on,
or otherwise involve services by, such person to the plan or to participants in
or beneficiaries of the plan.
Indemnification Agreements
The Company may enter into indemnification agreements with its directors
and officers for the indemnification of and advancing of expenses to such
persons to the fullest extent permitted by law.
Insurance
The Company has purchased directors and officers liability insurance in the
amount of $1.0 million.
4
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Item 7. Exemption from Registration Claimed
Not Applicable.
Item 8. Exhibits
Exhibit
Number Description
4.1 Articles of Incorporation of the Company, dated February 5, 1998 and
effective as of February 26, 1998. (Filed as Exhibit 3.1 to the
Registration Statement on Form S-1, Amendment No. 1, of the Company,
dated April 1, 1998 (File No. 333-47631), and hereby incorporated by
reference).
4.2 By-laws of the Company, effective as of March 5, 1998. (Filed as
Exhibit 3.2 to the Registration Statement on Form S-1, Amendment No.
1, of the Company, dated April 1, 1998 (File No. 333-47631), and
hereby incorporated by reference).
4.3 Specimen common stock certificate for the Company. (Filed as Exhibit
4.1 to the Registration Statement on Form S-1, Amendment No. 2, of
the Company, dated April 23, 1998 (File No. 333-47631), and hereby
incorporated by reference).
4.4 Dunn Computer Corporation Stock Option Plan.
5.1 Opinion of Jones, Day, Reavis & Pogue.
23.1 Consents of Ernst & Young LLP, Independent Auditors.
23.2 Consent of KPMG Peat Marwick LLP, Independent Auditors.
23.3 Consent of Davis, Sita & Company, P.A. Independent Auditors.
23.4 Consent of Jones, Day, Reavis & Pogue (included in Exhibit 5.1).
24.1 Power of Attorney (set forth on Page 7 of this Registration
Statement).
99.1 Agreement of Merger, dated as of March 18, 1998 between Dunn Merger
Corp., Dunn Computer Corporation, a Delaware corporation, and the
Company. (Filed as Appendix A to the Proxy Statement/Prospectus
contained in the Registration Statement on Form S-4, Amendment No. 2,
of the Company, dated April 6, 1998 (File No. 333-48177), and hereby
incorporated by reference).
Item 9. Undertakings
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act;
(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;
(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;
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provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do
not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in
periodic reports filed by the Registrant pursuant to Section 13
or Section 15(d) of the Exchange Act that are incorporated by
reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, 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.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d)
of the Exchange Act 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 in the initial
bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act 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
Commission such indemnification is against public policy as expressed
in the Securities 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
of whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final
adjudication of such issue.
6
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SIGNATURES
Pursuant to the requirements of the Securities Act, 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 Sterling, Commonwealth of Virginia, on May 8, 1998.
DUNN COMPUTER CORPORATION
By: /s/ Thomas P. Dunne
-------------------
Thomas P. Dunne
President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each of the directors and officers of
the Registrant whose signature appears below hereby constitutes and appoints
each of Thomas P. Dunne and John D. Vazzana, jointly and severally, as his or
her true and lawful attorneys-in-fact and agents with full power of substitution
and resubstitution, for him or her and in his or her name, place and stead, in
any and all capacities, to sign any or all amendments to this Registration
Statement (including any amendment and any post-effective amendments), and to
file the same, with all exhibits thereto and other documents in connection
therewith, with the Commission, granting unto each of said attorneys-in-fact and
agents, acting alone, 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 for all intents and purposes as he or she might or could do in person,
hereby ratifying and confirming all that said attorneys-in-fact and agents,
acting alone, or his substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed by the following persons in the capacities and on the
dates indicated.
Signature Title Date
/s/ Thomas P. Dunne Chairman, Chief Executive
-------------------- Officer and President May 8, 1998
Thomas P. Dunne (Principal Executive Officer)
/s/ John D. Vazzana Executive Vice President, Chief
--------------------- Financial Officer and Director May 8, 1998
John D. Vazzana (Principal Financial and
Accounting Officer)
/s/ Claudia N. Dunne Vice President and Director May 8, 1998
---------------------
Claudia N. Dunne
/s/ VADM E.A. Burkhalter, Jr., USN (Ret.) Director May 8, 1998
- -----------------------------------------
VADM E.A. Burkhalter, Jr., USN (Ret.)
/s/ Daniel Sinnott Director May 8, 1998
--------------------
Daniel Sinnott
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EXHIBIT INDEX
Exhibit
Number Description
- ------- -----------
4.1 Articles of Incorporation of the Company, dated February 5, 1998 and
effective as of February 26, 1998. (Filed as Exhibit 3.1 to the
Registration Statement on Form S-1, Amendment No. 1, of the Company,
dated April 1, 1998 (File No. 333-47631), and hereby incorporated by
reference).
4.2 By-laws of the Company, effective as of March 5, 1998. (Filed as
Exhibit 3.2 to the Registration Statement on Form S-1, Amendment No.
1, of the Company, dated April 1, 1998 (File No. 333-47631), and
hereby incorporated by reference).
4.3 Specimen common stock certificate for the Company. (Filed as Exhibit
4.1 to the Registration Statement on Form S-1, Amendment No. 2, of
the Company, dated April 23, 1998 (File No. 333-47631), and hereby
incorporated by reference).
4.4 Dunn Computer Corporation Stock Option Plan.
5.1 Opinion of Jones, Day, Reavis & Pogue.
23.1 Consents of Ernst & Young LLP, Independent Auditors.
23.2 Consent of KPMG Peat Marwick LLP, Independent Auditors.
23.3 Consent of Davis, Sita & Company, P.A. Independent Auditors.
23.4 Consent of Jones, Day, Reavis & Pogue (included in Exhibit 5.1).
24.1 Power of Attorney (set forth on Page 7 of this Registration
Statement).
99.1 Agreement of Merger, dated as of March 18, 1998 between Dunn Merger
Corp., Dunn Computer Corporation, a Delaware corporation, and the
Company. (Filed as Appendix A to the Proxy Statement/Prospectus
contained in the Registration Statement on Form S-4, Amendment No.
2, of the Company, dated April 6, 1998 (File No. 333-48177), and
hereby incorporated by reference).
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EXHIBIT 4.4
DUNN COMPUTER CORPORATION
(a Virginia Corporation)
STOCK OPTION PLAN
April 1998
1. PURPOSE OF PLAN; ADMINISTRATION
1.1 Purpose.
The Dunn Computer Corporation Stock Option Plan (hereinafter, the "Plan")
is hereby established to grant to officers and other employees of Dunn Computer
Corporation, a Virginia corporation (the "Company") or of its parents or
subsidiaries (as defined in Sections 424(e) and (f), respectively, of the
Internal Revenue Code of 1986, as amended (the "Code")), if any, and to
non-employee directors, consultants and advisors and other persons who may
perform significant services for or on behalf of the Company, a favorable
opportunity to acquire common stock, $.001 par value ("Common Stock"), of the
Company and, thereby, to create an incentive for such persons to remain in the
employ of or provide services to the Company and to contribute to its success.
The Company may grant under the Plan both incentive stock options within
the meaning of Section 422 of the Code ("Incentive Stock Options") and stock
options that do not qualify for treatment as Incentive Stock Options
("Nonstatutory Options"). Unless expressly provided to the contrary herein, all
references herein to "options," shall include both incentive Stock Options and
Nonstatutory Options.
This Plan is being adopted in connection with the merger of Dunn Merger
Corp., a Delaware corporation wholly owned by the Company, with Dunn Computer
Corporation, a Delaware corporation ("Dunn"), in which each outstanding share of
common stock of Dunn will be exchanged for a share of common stock of the
Company and each outstanding option under Dunn's 1997 Stock Option Plan will be
converted into an option under this Plan. This Plan is, and will be interpreted
and applied as, the successor in such merger to Dunn's 1997 Stock Option Plan.
1.2 Administration.
The Plan shall be administered by the Board of Directors of the Company
(the "Board"), if each member is a "Non-Employee Director" within the meaning of
Rule 16b-3 under the Securities Exchange Act of 1934, as amended ("Rule 16b-3"),
or a committee (the "Committee") of two or more directors, each of whom is a
Non-Employee Director. Appointment of Committee members shall be effective upon
acceptance of appointment. Committee members may resign at any time by
delivering written notice to the Board. Vacancies in the Committee may be
filled by the Board.
A majority of the members of the Committee shall constitute a quorum for
the purposes of the Plan. Provided a quorum is present, the Committee may take
action by affirmative vote or consent of a majority of its members present at a
meeting. Meetings may be held telephonically as long as all members are able to
hear one another, and a member of the Committee shall be deemed to be present
for this purpose if he or she is in simultaneous communication by telephone with
the other members who are able to hear one another. In lieu of action at a
meeting, the Committee may act by written consent of a majority of its members.
Subject to the express provisions of the Plan, the Committee shall have the
authority to construe and interpret the Plan and all Stock Option Agreements (as
defined in Section 3.4) entered into pursuant hereto and to define the terms
used therein, to prescribe, adopt, amend and rescind rules and regulations
relating to the administration of the Plan and to make all other determinations
necessary or advisable for the administration of the Plan; provided, however,
that the Committee may delegate nondiscretionary administrative duties to such
employees of the Company as it deems proper; and, provided, further, in its
absolute discretion, the Board may at
9
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any time and from time to time exercise any and all rights and duties of the
Committee under the Plan. Subject to the express limitations of the Plan, the
Committee shall designate the individuals from among the class of persons
eligible to participate as provided in Section 1.3 who shall receive options,
whether an optionee will receive Incentive Stock Options or Nonstatutory
Options, or both, and the amount, price, restrictions and all other terms and
provisions of such options (which need not be identical).
Members of the Committee shall receive such compensation for their services
as members as may be determined by the Board. All expenses and liabilities
which members of the Committee incur in connection with the administration of
this Plan shall be borne by the Company. The Committee may, with the approval
of the Board, employ attorneys, consultants, accountants, appraisers, brokers or
other persons. The Committee, the Company and the Company's officers and
directors shall be entitled to rely upon the advice, opinions or valuations of
any such persons. No members of the Committee or the Board shall be personally
liable for any action, determination or interpretation made in good faith with
respect to the Plan, and all members of the Committee shall be fully protected
by the Company in respect of any such action, determination or interpretation.
1.3 Participation.
Officers and other employees of the Company, non-employee directors,
consultants and advisors and other persons who may perform significant services
on behalf of the Company shall be eligible for selection to participate in the
Plan upon approval by the Committee; provided, however, that only "employees"
(within the meaning of Section 3401(c) of the Code) of the Company shall be
eligible for the grant of Incentive Stock Options. An individual who has been
granted an option may, if otherwise eligible, be granted additional options if
the committee shall so determine. No person is eligible to participate in the
Plan by matter of right; only those eligible persons who are selected by the
Committee in its discretion shall participate in the Plan.
1.4 Stock Subject to the Plan.
Subject to adjustment as provided in Section 3.5, the stock to be offered
under the Plan shall be shares of authorized but unissued Common Stock,
including any shares repurchased under the terms of the Plan or any Stock Option
Agreement entered into pursuant hereto. The cumulative aggregate number of
shares of Common Stock to be issued under the Plan shall not exceed 2,200,000,
subject to adjustment as set forth in Section 3.5.
If any option granted hereunder shall expire or terminate for any reason
without having been fully exercised, the unpurchased shares subject thereto
shall again be available for the purposes of the Plan. For purposes of this
Section 1.4, where the exercise price of options is paid by means of the
grantee's surrender of previously owned shares of Common Stock, only the net
number of additional shares issued and which remain outstanding in connection
with such exercise shall be deemed "issued" for purposes of the Plan.
2. STOCK OPTIONS
2.1 Exercise Price; Payment.
(a) The exercise price of each Incentive Stock Option granted under the
Plan shall be determined by the Committee, but shall not be less than 100% of
the "Fair Market Value" (as defined below) of Common Stock on the date of
grant. If an Incentive Stock Option is granted to an employee who at the time
such option is granted owns (within the meaning of section 424(d) of the
Code) more than 10% of the total combined voting power of all classes of
capital stock of the Company, the option exercise price shall be at least
110% of the Fair Market Value of Common Stock on the date of grant. The
exercise price of each Nonstatutory Option also shall be determined by the
Committee, but shall not be less than 85% of the Fair Market Value of Common
Stock on the date of grant. The status of each option granted under the Plan
as either an Incentive Stock Option or a Nonstatutory Option shall be
determined by the Committee at the time the Committee acts to grant the
option, and shall be clearly identified as such in the Stock Option Agreement
relating thereto.
"Fair Market Value" for purposes of the Plan shall mean: (i) the closing
price of a share of Common Stock on the principal exchange on which shares of
Common Stock are then trading, if any, on the day immediately preceding the date
of grant, or, if shares were not traded on the day preceding such date of grant,
then on the next preceding trading day during which a sale occurred; or (ii) if
Common Stock is not traded on an exchange but is quoted on Nasdaq or a successor
quotation system, (1) the last sales price (if Common Stock is then listed on
the Nasdaq Stock Market) or (2) the mean between the closing representative bid
and asked price (in all other cases) for Common Stock on the day prior to the
date of grant as reported by Nasdaq or such successor quotation system; or (iii)
if there is no listing or trading of Common Stock either on a national exchange
or over-the-counter, that price
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determined in good faith by the Committee to be the fair value per share of
Common Stock, based upon such evidence as it deems necessary or advisable.
(b) In the discretion of the Committee at the time the option is
exercised, the exercise price of any option granted under the Plan shall be paid
in full in cash, by check or by the optionee's interest-bearing promissory note
(subject to any limitations of applicable state corporations law) delivered at
the time of exercise; provided, however, that subject to the timing requirements
of Section 2.7, in the discretion of the Committee and upon receipt of all
regulatory approvals, the person exercising the option may deliver as payment in
whole or in part of such exercise price certificates for Common Stock of the
Company (duly endorsed or with duly executed stock powers attached), which shall
be valued at its Fair Market Value on the day of exercise of the option, or
other property deemed appropriate by the Committee; and, provided further, that,
subject to Section 422 of the Code, so-called cashless exercises as permitted
under applicable rules and regulations of the Securities and Exchange Commission
and the Federal Reserve Board shall be permitted in the discretion of the
Committee. Without limiting the Committee's discretion in this regard,
consecutive book entry stock-for-stock exercises of options (or "pyramiding")
also are permitted in the Committee's discretion.
Irrespective of the form of payment, the delivery of shares issuable upon
the exercise of an option shall be conditioned upon payment by the optionee to
the Company of amounts sufficient to enable the Company to pay all federal,
state, and local withholding taxes resulting, in the Company's judgment, from
the exercise. In the discretion of the Committee, such payment to the Company
may be effected through (i) the Company's withholding from the number of shares
of Common Stock that would otherwise be delivered to the optionee by the Company
on exercise of the option a number of shares of Common Stock equal in value (as
determined by the Fair Market Value of Common Stock on the date of the exercise)
to the aggregate withholding taxes, (ii) payment by the optionee to the Company
of the aggregate withholding taxes in cash, (iii) withholding by the Company
from other amounts contemporaneously owed by the Company to the optionee, or
(iv) any combination of these three methods, as determined by the Committee in
its discretion.
2.2 Option Period.
(a) The Committee shall provide, in the terms of each Stock Option
Agreement, when the option subject to such agreement expires and becomes
unexercisable, but in no event will an Incentive Stock Option granted under the
Plan be exercisable after the expiration of ten years from the date it is
granted. Without limiting the generality of the foregoing, the Committee may
provide in the Stock Option Agreement that the option subject thereto expires 30
days following a Termination of Employment (as defined in Section 3.2 hereof)
for any reason other than death or disability, or six months following a
Termination of Employment for disability or following an optionee's death.
(b) Outside Date for Exercise. Notwithstanding any provisions of this
Section 2.2. in no event shall any option granted under the Plan be exercised
after the expiration date of such option set forth in the applicable Stock
Option Agreement.
2.3 Exercise of Options.
Each option granted under the Plan shall become exercisable and the total
number of shares subject thereto shall be purchasable, in a lump sum or in such
installments, which need not be equal, as the Committee shall determine;
provided, however, that each option shall become exercisable in full no later
than ten years after such option is granted, and each option shall become
exercisable as to at least 10% of the shares of Common Stock covered thereby on
each anniversary of the date such option is granted; and provided, further, that
if the holder of an option shall not in any given installment period purchase
all of the shares which such holder is entitled to purchase in such installment
period, such holder's right to purchase any share not purchased in such
installment period shall continue until the expiration or sooner termination of
such holder's option. The Committee may, at any time after grant of the option
and from time to time, increase the number of shares purchasable in any
installment, subject to the total number of shares subject to the option and the
limitations set forth in Section 2.5. At any time and from time to time prior
to the time when any exercisable option or exercisable portion thereof becomes
unexercisable under the Plan or the applicable Stock Option Agreement, such
option, or portion thereof may be exercised in whole or in part; provided,
however, that the Committee may, by the terms of the option, require any partial
exercise to be with respect to a specified minimum number of shares. No option
or installment thereof shall be exercisable except with respect to whole shares.
Fractional share interests shall be disregarded, except that they may be
accumulated as provided above and except that if such a fractional share
interest constitutes the total shares of Common Stock remaining available for
purchase under an option at the time of exercise, the optionee shall be entitled
to receive on exercise a certified or bank cashier's check in an amount equal to
the Fair Market Value of such fractional share of stock.
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2.4 Transferability of Options.
Except as the Committee may determine as aforesaid, an option granted under
the Plan shall, by its terms, be nontransferable by the optionee other than by
will or the laws of descent and distribution, or pursuant to a qualified
domestic relations order (as defined by the Code), and shall be exercisable
during the optionee's lifetime only by the optionee or by his or her guardian or
legal representative. More particularly, but without limiting the generality of
the immediately preceding sentence, an option may not be assigned, transferred
(except as provided in the preceding sentence), pledged or hypothecated (whether
by operation of law or otherwise), and shall not be subject to execution,
attachment or similar process. Any attempted assignment, transfer, pledge,
hypothecation or other disposition of any option contrary to the provisions of
the Plan and the applicable Stock Option Agreement, and any levy of any
attachment or similar process upon an option, shall be null and void, and
otherwise without effect, and the Committee may, in its sole discretion, upon
the happening of any such event, terminate such option forthwith.
2.5 Limitation on Exercise of Incentive Stock Options.
To the extent that the aggregate Fair Market Value (determined on the date
of grant as provided in Section 2.1 above) of the Common Stock with respect to
which Incentive Stock Options granted hereunder (together with all other
Incentive Stock Option plans of the Company) are exercisable for the first time
by an optionee in any calendar year under the Plan exceeds $100,000, such
options granted hereunder shall be treated as Nonstatutory Options to the extent
required by Section 422 of the Code. The rule set forth in the preceding
sentence shall be applied by taking options into account in the order in which
they were granted.
2.6 Disqualifying Dispositions of Incentive Stock Options.
If Common Stock acquired upon exercise of any Incentive Stock Option is
disposed of in a disposition that, under Section 422 of the Code, disqualifies
the option holder from the application of Section 421(a) of the Code, the holder
of the Common Stock immediately before the disposition shall comply with any
requirements imposed by the Company in order to enable the Company to secure the
related income tax deduction to which it is entitled in such event.
2.7 Certain Timing Requirements.
At the discretion of the Committee, shares of Common Stock issuable to the
optionee upon exercise of an option may be used to satisfy the option exercise
price or the tax withholding consequences of such exercise, in the case of
persons subject to Section 16 of the Securities Exchange Act of 1934, as
amended, only (i) during the period beginning on the third business day
following the date of release of the quarterly or annual summary statement of
sales and earnings of the Company and ending on the twelfth business day
following such date or (ii) pursuant to an irrevocable written election by the
optionee to use shares of Common Stock issuable to the optionee upon exercise of
the option to pay all or part of the option price or the withholding taxes made
at least six months prior to the payment of such option price or withholding
taxes.
2.8 No Effect on Employment.
Nothing in the Plan or in any Stock Option Agreement hereunder shall confer
upon any optionee any right to continue in the employ of the Company, any Parent
Corporation or any subsidiary or shall interfere with or restrict in any way the
rights of the Company, its Parent Corporation and its Subsidiaries, which are
hereby expressly reserved, to discharge any optionee at any time for any reason
whatsoever, with or without cause.
For purposes of the Plan, "Parent Corporation" shall mean any corporation
in an unbroken chain of corporations ending with the Company if each of the
corporations other than the Company then owns stock possessing 50% or more of
the total combined voting power of all classes of stock in one of the other
corporations in such chain. For purposes of the Plan, "Subsidiary" shall mean
any corporation in an unbroken chain of corporations beginning with the Company
if each of the corporations other than the last corporation in the unbroken
chain then owns stock possessing 50% or more of the total combined voting power
of all classes of stock in one of the other corporations in such chain.
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3. OTHER PROVISIONS
3.1 Sick Leave and Leaves of Absence.
Unless otherwise provided in the Stock Option Agreement, and to the extent
permitted by Section 422 of the Code, an optionee's employment shall not be
deemed to terminate by reason of sick leave, military leave or other leave of
absence approved by the Company if the period of any such leave does not exceed
a period approved by the Company, or, if longer, if the optionee's right to
reemployment by the Company is guaranteed either contractually or by statute. A
Stock Option Agreement may contain such additional or different provisions with
respect to leave of absence as the Committee may approve, either at the time of
grant of an option or at a later time.
3.2 Termination of Employment.
For purposes of the Plan "Termination of Employment," shall mean the time
when the employee-employer relationship between the optionee and the Company,
any Subsidiary or any Parent Corporation is terminated for any reason,
including, but not by way of limitation, a termination by resignation,
discharge, death, disability or retirement; but excluding (i) terminations where
there is a simultaneous reemployment or continuing employment of an optionee by
the Company, any Subsidiary or any Parent Corporation, (ii) at the discretion of
the Committee, terminations which result in a temporary severance of the
employee-employer relationship, and (iii) at the discretion of the Committee,
terminations which are followed by the simultaneous establishment of a
consulting relationship by the Company, a Subsidiary or any Parent Corporation
with the former employee. Subject to Section 3.1, the Committee, in its
absolute discretion, shall determine the effect of all matters and questions
relating to Termination of Employment; provided, however, that, with respect to
Incentive Stock Options, a leave of absence or other change in the
employee-employer relationship shall constitute a Termination of Employment if,
and to the extent that such leave of absence or other change interrupts
employment for the purposes of Section 422(a)(2) of the Code and the
then-applicable regulations and revenue ruling under said Section.
3.3 Issuance of Stock Certificates.
Upon exercise of an option, the Company shall deliver to the person
exercising such option a stock certificate evidencing the shares of Common Stock
acquired upon exercise. Notwithstanding the foregoing, the Committee in its
discretion may require the Company to retain possession of any certificate
evidencing stock acquired upon exercise of an option which remains subject to
repurchase under the provisions of the Stock Option Agreement or any other
agreement signed by the optionee in order to facilitate such repurchase
provisions.
3.4 Terms and Conditions of Options.
Each option granted under the Plan shall be evidenced by a written Stock
Option Agreement ("Stock Option Agreement") between the option holder and the
Company providing that the option is subject to the terms and conditions of the
Plan and to such other terms and conditions not inconsistent therewith as the
Committee may deem appropriate in each case.
3.5 Adjustments Upon Changes in Capitalization; Merger and Consolidation.
If the outstanding shares of Common Stock are changed into, or exchanged
for cash or a different number or kind of shares or securities of the Company or
of another corporation through reorganization, merger, recapitalization,
reclassification, stock split-up, reverse stock split, stock dividend, stock
consolidation, stock combination, stock reclassification or similar transaction,
an appropriate adjustment shall be made by the Committee in the number and kind
of shares as to which options may be granted. In the event of such a change or
exchange, other than for shares or securities of another corporation or by
reason of reorganization, the Committee shall also make a corresponding
adjustment changing the number or kind of shares and the exercise price per
share allocated to unexercised options or portions thereof, which shall have
been granted prior to any such change, shall likewise be made. Any such
adjustment, however, shall be made without change in the total price applicable
to the unexercised portion of the option (except for any change in the aggregate
price resulting from rounding-off of share quantities or prices).
In the event of a "spin-off" or other substantial distribution of assets of
the Company which has a material diminutive effect upon the Fair Market Value of
the Common Stock, the Committee in its discretion shall make an appropriate and
equitable adjustment to the exercise prices of options then outstanding under
the Plan.
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Where an adjustment under this Section 3.5 of the type described above is
made to an Incentive Stock Option, the adjustment will be made in a manner which
will not be considered a "modification" under the provisions of subsection
424(b)(3) of the Code.
In connection with the dissolution or liquidation of the Company or a
partial liquidation involving 50% or more of the assets of the Company, a
reorganization of the Company in which another entity is the survivor, a merger
or reorganization of the Company under which more than 50% of the Common Stock
outstanding prior to the merger or reorganization is converted into cash or into
a security of another entity, a sale of more than 50% of the Company's assets,
or a similar event that the Committee determines, in its discretion, would
materially alter the structure of the Company or its ownership, the Committee,
upon 30 days prior written notice to the option holders, may, in its discretion,
do one or more of the following: (i) shorten the period during which options
are exercisable (provided they remain exercisable for at least 30 days after the
date the notice is given); (ii) accelerate any vesting schedule to which an
option is subject; (iii) arrange to have the surviving or successor entity grant
replacement options with appropriate adjustments in the number and kind of
securities and option prices, or (iv) cancel options upon payment to the option
holders in cash, with respect to each option to the extent then exercisable
(including any options as to which the exercise has been accelerated as
contemplated in clause (ii) above), of any amount that is the equivalent of the
Fair Market Value of the Common Stock (at the effective time of the dissolution,
liquidation, merger, reorganization, sale or other event) or the fair market
value of the option. In the case of a change in corporate control, the Committee
may, in considering the advisability or the terms and conditions of any
acceleration of the exercisability of any option pursuant to this Section 3.5,
take into account the penalties that may result directly or indirectly from such
acceleration to either the Company or the option holder, or both, under Section
280G of the Code, and may decide to limit such acceleration to the extent
necessary to avoid or mitigate such penalties or their effects.
No fractional share of Common Stock shall be issued under the Plan on
account of any adjustment under this Section 3.5.
3.6 Rights of Participants and Beneficiaries.
The Company shall pay all amounts payable hereunder only to the option
holder or beneficiaries entitled thereto pursuant to the Plan. The Company shall
not be liable for the debts, contracts or engagements of any optionee or his or
her beneficiaries, and rights to cash payments under the Plan may not be taken
in execution by attachment or garnishment, or by any other legal or equitable
proceeding while in the hands of the Company.
3.7 Government Regulations.
The Plan, and the grant and exercise of options and the issuance and
delivery of shares of Common Stock under options granted hereunder, shall be
subject to compliance with all applicable federal and state laws, rules and
regulations (including but not limited to state and federal securities law) and
federal margin requirements and to such approvals by any listing, regulatory or
governmental authority as may, in the opinion of counsel for the Company, be
necessary or advisable in connection therewith. Any securities delivered under
the Plan shall be subject to such restrictions, and the person acquiring such
securities shall, if requested by the Company, provide such assurances and
representations to the Company as the Company may deem necessary or desirable to
assure compliance with all applicable legal requirements. To the extent
permitted by applicable law, the Plan and options granted hereunder shall be
deemed amended to the extent necessary to conform to such laws, rules and
regulations.
3.8 Amendment and Termination.
The Board or the Committee may at any time suspend, amend or terminate the
Plan and may, with the consent of the option holder, make such modification of
the terms and conditions of such option holder's option as it shall deem
advisable, provided, however, that, without approval of the Company's
stockholders given within twelve months before or after the action by the Board
or the Committee, no action of the Board or the Committee may, (A) materially
increase the benefits accruing to participants under the Plan; (B) materially
increase the number of securities which may be issued under the Plan; or (C)
materially modify the requirements as to eligibility for participation in the
Plan. No option may be granted during any suspension of the Plan or after such
termination. The amendment, suspension or termination of the Plan shall not,
without the consent of the option holder affected thereby, alter or impair any
rights or obligations under any option theretofore granted under the Plan. No
option may be granted during any period of suspension nor after termination of
the Plan, and in no event may any option be granted under the Plan after the
expiration of ten years from the date the Plan is adopted by the Board.
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3.9 Time of Grant And Exercise of Option.
An option shall be deemed to be exercised when the Secretary of the Company
receives written notice from an option holder of such exercise, payment of the
exercise price determined pursuant to Section 2.1 of the Plan and set forth in
the Stock Option Agreement, and all representations, indemnifications and
documents reasonably requested by the Committee.
3.10 Privileges of Stock Ownership; Non-Distributive Intent; Reports to
Option Holders.
A participant in the Plan shall not be entitled to the privilege of stock
ownership as to any shares of Common Stock not actually issued to the optionee.
Upon exercise of an option at a time when there is not in effect under the
Securities Act of 1933, as amended, a Registration Statement relating to the
Common Stock issuable upon exercise or payment therefor and available for
delivery a Prospectus meeting the requirements of Section 10(a)(3) of said Act,
the optionee shall represent and warrant in writing to the Company that the
shares purchased are being acquired for investment and not with a view to the
distribution thereof.
The Company shall furnish to each optionee under the Plan the Company's
annual report and such other periodic reports, if any, as are disseminated by
the Company in the ordinary course to its stockholders.
3.11 Legending Share Certificates.
In order to enforce any restrictions imposed upon Common Stock issued upon
exercise of an option granted under the Plan or to which such Common Stock may
be subject, the Committee may cause a legend or legends to be placed on any
share certificates representing such Common Stock, which legend or legends shall
make appropriate reference to such restrictions, including, but not limited to,
a restriction against sale of such Common Stock for any period of time as may be
required by applicable laws or regulations. If any restriction with respect to
which a legend was placed on any certificate ceases to apply to Common Stock
represented by such certificate, the owner of the Common Stock represented by
such certificate may require the Company to cause the issuance of a new
certificate not bearing the legend.
Additionally, and not by way of limitation, the Committee may impose such
restrictions on any Common Stock issued pursuant to the Plan as it may deem
advisable, including, without limitation, restrictions under the requirements of
any stock exchange upon which Common Stock is then traded.
3.12 Use of Proceeds.
Proceeds realized pursuant to the exercise of options under the Plan shall
constitute general funds of the Company.
3.13 Changes in Capital Structure; No Impediment to Corporate Transaction.
The existence of outstanding options under the Plan shall not affect the
Company's right to effect adjustments, recapitalization, reorganizations or
other changes in its or any other corporation's capital structure or business,
any merger or consolidation, any issuance of bonds, debentures, preferred or
prior preference stock ahead of or affecting Common Stock, the dissolution or
liquidation of the Company's or any other corporation's assets or business, or
any other corporate act, whether similar to the events described above or
otherwise.
3.14 Effective Date of the Plan.
The Plan shall be effective as of the date of its approval by the
stockholders of the Company within twelve months after the date of the Board's
initial adoption of the Plan. Options may be granted but not exercised prior to
stockholder approval of the Plan. If any options are so granted and stockholder
approval shall not have been obtained within twelve months of the date of
adoption of this Plan by the Board of Directors, such options shall terminate
retroactively as of the date they were granted.
3.15 Termination.
The Plan shall terminate automatically as of the close of business on
January 5, 2007 or earlier as provided in Section 3.8. Unless otherwise provided
herein, the termination of the Plan shall not affect the validity of any option
agreement outstanding at the date of such termination.
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3.16 No Effect on Other Plans.
The adoption of the Plan shall not affect any other compensation or
incentive plans in effect for the Company, any Subsidiary or any Parent
Corporation. Nothing in the Plan shall be construed to limit the right of the
Company (i) to establish any other forms of incentives or compensation for
employees of the Company, any Subsidiary or any Parent Corporation or (ii) to
grant or assume options or other rights otherwise than under the Plan in
connection with any proper corporate purpose including but not by way of
limitation, the grant or assumption of options in connection with the
acquisition by purchase, lease, merger, consolidation or otherwise, of the
business, stock or assets of any corporation, partnership, firm or association.
* * *
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EXHIBIT 5.1
May 8, 1998
Dunn Computer Corporation
1306 Squire Court
Sterling, Virginia 20166
Re: Registration Statement on Form S-8 For Dunn Computer Corporation,
a Virginia corporation, relating to 2,200,000 shares of Common Stock
Issuable Pursuant to the Dunn Computer Corporation Stock Option Plan
Ladies and Gentlemen:
We have acted as special counsel for Dunn Computer Corporation, a Virginia
corporation (the "Company"), in connection with the registration of 2,200,000
shares of common stock of the Company, par value $0.001 per share (the
"Shares"), available for issuance pursuant to the Dunn Computer Corporation
Stock Option Plan (the "Plan").
We have examined such documents, records and matters of law as we have
deemed necessary for purposes of this opinion, and based thereon, we are of the
opinion that the Shares have been duly authorized and, when issued and sold
pursuant to the Plan and forms of award agreements that are duly authorized
thereunder, against payment of the consideration therefor at least equal to the
par value of such Shares, will be validly issued, fully paid and nonassessable.
We hereby consent to the filing of this opinion as Exhibit 5 to the
Registration Statement on Form S-8 filed by the Company to effect registration
of the Shares under the Securities Act of 1933, as amended (the "Securities
Act"). In giving such consent, we do not thereby admit that we are in the
category of persons whose consent is required under Section 7 of the Securities
Act or the rules and regulations promulgated thereunder.
Very truly yours,
/s/ Jones, Day, Reavis & Pogue
Jones, Day, Reavis & Pogue
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EXHIBIT 23.1
Consent of Ernst & Young LLP, Independent Auditors
We consent to the incorporation by reference in the Registration
Statement (Form S-8 No. 333-____) of Dunn Computer Corporation (a Virginia
corporation) pertaining to the Dunn Computer Corporation Stock Option Plan,
of our report dated January 7, 1998, except for Notes 2 and 11, with respect
to the earnings per share calculations, as to which the date is March 5,
1998, with respect to the consolidated financial statements and schedule of
Dunn Computer Corporation (a Delaware corporation) included in the final
prospectus filed by Dunn Computer Corporation (a Virginia corporation)
pursuant to Rule 424(b) of the Securities Act on April 28, 1998 (Registration
No. 333-47631).
/s/ Ernst & Young LLP
Vienna, Virginia
May 6, 1998
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EXHIBIT 23.1
Consent of Ernst & Young LLP, Independent Auditors
We consent to the incorporation by reference in the Registration
Statement (Form S-8 No. 333-______) of Dunn Computer Corporation (a Virginia
corporation) pertaining to the Dunn Computer Corporation Stock Option Plan,
of our report dated February 26, 1998 with respect to the balance sheet of
Dunn Computer Corporation (a Virginia corporation) included in the final
prospectus filed by Dunn Computer Corporation (a Virginia corporation)
pursuant to Rule 424(b) of the Securities Act on April 28, 1998 (Registration
No. 333-47631).
/s/ Ernst & Young LLP
Vienna, Virginia
May 6, 1998
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EXHIBIT 23.2
Consent of KPMG Peat Marwick LLP, Independent Accountants
The Board of Directors
Dunn Computer Corporation:
We consent to the incorporation by reference in the Registration Statement
(Registration No. 333-_______) on Form S-8 of our report dated November 7,
1997 on the combined financial statements of International Data Products,
Inc. and combined company as of September 30, 1997 and 1996 and for each of
the years in the three year period ended September 30, 1997, which report
appears in the final prospectus filed by Dunn Computer Corporation on Form
S-1 on April 28, 1998 (Registration No. 337-47631).
/s/ KPMG Peat Marwick LLP
McLean, Virginia
May 7, 1998
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EXHIBIT 23.3
Consent of Davis, Sita & Company, P.A., Independent Auditors
We consent to the incorporation by reference in the Registration Statement
on Form S-8 of Dunn Computer Corporation (a Virginia corporation) for the
registration of 2,200,000 shares of common stock available for issuance under
the Dunn Computer Corporation Stock Option Plan, of our report dated August 25,
1997, except for Note 9, as to which the date is September 12, 1997, which
report appears in the final prospectus filed by Dunn Computer Corporation (a
Virginia corporation) pursuant to Rule 424(b) of the Securities Act on April 28,
1998 (Registration No. 333-47631).
/s/ Davis, Sita & Company, P.A.
Greenbelt, Maryland
May 6, 1998
21
