SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 3)
TII Industries, Inc.
(Name of issuer)
Common Stock, $.01 par value
(Title of Class of Securities)
872479 20 9
(CUSIP Number)
Alfred J. Roach
c/o TII Industries, Inc.
1385 Akron Street
Copiague, New York 11726
(Name, address and telephone number of person authorized to receive notices and
communications)
September 27, 1995
(Date of event which requires filing of this statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box
Check the following box if a fee is being paid with the statement . (A fee is
not required only if the reporting person: (1) has a previous statement on file
reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
Page 1 of 19 Pages<PAGE>
CUSIP No. 872479 20 9 Page 2 of 19 Pages
Response to Question 1: Alfred J. Roach
Response to Question 2: N/A
Response to Question 3: SEC USE ONLY
Response to Question 4: PF SC OO
Response to Question 5: N/A
Response to Question 6: United States
Response to Question 7: 862,100
Response to Question 8: 0
Response to Question 9: 862,100
Response to Question 10: 0
Response to Question 11: 862,100
Response to Question 12: N/A
Response to Question 13: 12.2%
Response to Question 14: IN
<PAGE>
CUSIP No. 872479 20 9 Page 3 of 19 Pages
INTRODUCTION
This amendment to the Schedule 13D (the "Statement") is being filed by
Alfred J. Roach. This Statement restates (except for previously filed paper
exhibits) the entire text of the Schedule 13D but omits information no longer
applicable and reflects transactions after the Original Schedule 13D even if not
required to be reflected in this or a previously filed amendment.
In April 1994, TII Industries, Inc., a Delaware corporation (the
"Company"), the issuer of the security to which this Statement pertains,
effected a 1 for 2 1/2 reverse stock split of the Company's Common Stock and
Class B Stock. All disclosures in this Statement regarding stock ownership and
per share price amounts reflect post-split numbers.
Item 1. Security and Issuer.
This Statement relates to the Common Stock, $.01 par value per share
("Common Stock"), of the Company. The principal executive offices of the
Company are located at 1385 Akron Street, Copiague, New York 11726.
Item 2. Identity and Background.
(a) This Statement is being filed by Alfred J. Roach.
(b) The residence address of Mr. Roach is Route 2 - Kennedy
Avenue, Guaynabo, Puerto Rico 00657.
(c) The principal occupation or employment of Mr. Roach is
Chairman of the Board of directors of American Biogenetic
Sciences, Inc. ("ABS"). Mr. Roach is also Chairman of the
Board of Directors of the Company.
ABS conducts research and development of therapeutic and diagnostic
products in the area of blood coagulation and human cancer.
ABS's principal executive offices are located at 1539 North Ironwood
Drive, South Bend, Indiana 46635.
(d) During the last five years, Mr. Roach has not been convicted
in a criminal proceeding (excluding traffic violations or
similar misdemeanors).
(e) During the last five years, Mr. Roach has not been a party to
a civil proceeding of a judicial or administrative body of
competent jurisdiction and as a result of such proceeding was
or is subject to a judgment, decree or final order enjoining
future violations of, or prohibiting or mandating activities
subject to, federal or state securities laws or finding any
violation with respect to such laws.
(f) Mr. Roach is a citizen of the United States.<PAGE>
CUSIP No. 872479 20 9 Page 4 of 19 Pages
Item 3. Source and Amount of Funds or Other Consideration.
(a) In the original Schedule 13D, dated December 8, 1988,
("Original 13D"), Mr. Roach reported the acquisition on
December 1, 1988 of an aggregate of 113,960 shares of Common
Stock upon the exercise of stock options and in an open market
transaction, which shares were acquired with personal funds
aggregating $646,255.
(b) In Amendment No. 1 to the Original 13D, dated August 20, 1992
("Amendment No. 1"), Mr. Roach reported that he had expended
$500,000 from personal funds for the purchase of 5,000 shares
of the Company's Series B Cumulative 10% Preferred Stock (the
"Series B Preferred Stock"). Effective August 7, 1992, the
Company completed a private placement (the "Private
Placement") of 2,200,000 shares of Common Stock and warrants
(the "Warrants") to purchase a like number of shares of Common
Stock. Included in such shares and Warrants was the issuance
to Mr. Roach of 200,000 shares and Warrants to purchase a like
number of shares of Common Stock in exchange for the 5,000
shares of the Series B Preferred Stock.
(c) In Amendment No. 1, Mr. Roach also reported that he and
Dorothy Roach, his spouse, expended from personal funds
$75,000 and $8,600, respectively, upon the exercise of options
to purchase an aggregate of 30,000 and 3,440 shares of Common
Stock, respectively, under the Company's 1986 Stock Option
Plan.
(d) On August 4, 1995, the Company redeemed 10,000 of the 27,626
shares of the Company's Series A Cumulative Convertible
Redeemable Preferred Stock (the "Series A Preferred Stock")
owned by Mr. Roach at their aggregate liquidation and
redemption price of $1,000,000 and Mr. Roach exercised his
Warrants, paid the exercise price thereunder of $1,000,000 and
received 200,000 shares of Common Stock upon such exercise.
Of the 27,626 shares of Series A Preferred Stock owned by Mr.
Roach (i) 12,390 shares were acquired in exchange for all of
the issued and outstanding shares of capital stock of Crown
Tool & Die Company ("Crown"), which was owned by Mr. Roach;
(ii) 11,850 shares were acquired by Mr. Roach from PRC Leasing
Inc., a corporation owned by Mr. Roach ("PRC"), which in turn
had acquired 5,000, 2,850 and 4,000 of such shares as part of
the purchase price for Crown (which received the 5,000 shares
of Series A Preferred Stock in settlement of $500,000 of
indebtedness owed by Crown to PRC), for the purchase from PRC
of certain equipment and for rental payments under an
equipment lease agreement with PRC (as amended, the "Equipment
Lease"), respectively, and (iii) 3,386 shares were issued to
Mr. Roach in payment of dividends payable in Series A
Preferred Stock on outstanding shares of Series A Preferred
Stock.
(e) On September 27, 1995, Mr. Roach and Dorothy Roach converted
the 245,300 and 48,304 shares of Class B Stock owned by them,
respectively, into an equal number of shares of Common Stock.
The Class B Stock had been issued to them in exchange <PAGE>
CUSIP No. 872479 20 9 Page 5 of 19 Pages
for an equal number of shares of Common Stock in January 1987
in an Exchange Offer by the Company.
Item 4. Purpose of Transaction.
The securities of the Company held by Mr. Roach were acquired and are
being held, as an investment. Mr. Roach has no present plans or proposals which
relate to or would result in: (a) the acquisition or disposition by any person
of additional securities of the Company (although Mr. Roach retains the right,
which he may exercise at any time or from time to time, in his discretion, to
exercise the stock options owned by him and to purchase or sell equity
securities of the Company owned by him in open market or in privately negotiated
t r a nsactions as circumstances warrant), (b) an extraordinary corporate
transaction, such as a merger, reorganization or liquidation involving the
Company or any of its subsidiaries, (c) a sale or transfer of a material amount
of assets of the Company or of any of its subsidiaries, (d) any change in the
present board of directors or management of the Company, including any plans or
proposals to change the number or term of directors or to fill any existing
vacancies on the board, (e) any material change in the present capitalization or
dividend policy of the Company, (f) any other material change in the Company's
business or corporate structure, (g) any change in the Company's charter, by-
laws or instruments corresponding thereto or other actions which may impede the
acquisition of control of the Company by any person, (h) causing a class of
securities of the Company to be delisted from a national securities exchange or
cease being authorized to be quoted in an inter-dealer quotation system of a
registered national securities association, (i) a class of equity securities of
the Company becoming eligible for termination of registration pursuant to
Section 12(g)(4) of the Securities Exchange Act of 1934 or (j) any action
similar to any of those enumerated above.
Item 5. Interest in Security of the Issuer.
(a)& (b) The following table sets forth the separate beneficial
ownership (and information concerning voting and dispositive power) of Alfred J.
Roach as of September 30, 1995:
Number of Percent
Name Shares(1) of Class(2)
Alfred J. Roach 862,100(3)(4) 12.2%
____________________
(1) Alfred J. Roach has sole voting and dispositive power with respect to the
shares owned by him.
(2) Percent of Class assumes the issuance of the Common Stock upon the
exercise of options (to the extent exercisable on or within 60 days after
September 30, 1995) deemed beneficially owned by Alfred J. Roach but by no
other person or entity.<PAGE>
CUSIP No. 872479 20 9 Page 6 of 19 Pages
(3) Includes (a) 801,740 outstanding shares owned by Mr. Roach, and (b) 60,360
shares issuable upon the exercise of the portion of options held under the
Company's 1986 Stock Option Plan which are exercisable on or within 60
days after September 30, 1995. Excludes (a) 51,744 outstanding shares and
(b) 8,960 shares issuable upon the exercise of options granted under the
Company's 1986 Stock Option Plan, which are presently exercisable in full,
that are owned by Dorothy Roach. Alfred J. Roach disclaims beneficial
ownership of all securities held by Dorothy Roach.
(c)(i) In the Original 13D, Mr. Roach reported that he acquired an
aggregate of 113,960 shares of Common Stock on December 1, 1988 for $646,255, as
follows:
Per
Share
Transaction Shares Price Total
Option exercise 61,760 $5.00 $308,800
Option exercise 33,000 6.575 216,975
Open market purchase 19,200 6.275 120,480
113,960 $646,255
(ii) In Amendment No. 1, Mr. Roach reported that:
(A) On November 14, 1989, Mr. Roach was granted an option to
purchase up to 70,360 shares of Common Stock under the
Company's 1986 Stock Option Plan, which option became
exercisable as to 17,590 shares on each of November 14,
1989, May 14, 1990, November 14, 1990 and May 14, 1991 at
an exercise price of $2.50 per share.
(B) On July 18, 1991, Mr. Roach acquired 15,130 shares of the
Series A Preferred Stock in exchange for all of the issued
and outstanding shares of capital stock of Crown, which was
owned by Mr. Roach. Crown was established by Mr. Roach in
1985 to acquire certain assets of a vendor of certain
components to the Company and thereupon became a vendor of
components to the Company. See paragraph (c)(iv)(A) below.
Each share of Series A Preferred Stock was valued at $100
and became convertible commencing July 18, 1994 into Common
Stock, based on such value, at an exercise price of $6.25
per share subject to potential anti-dilution adjustments.
(C) On July 18, 1991, the Company issued 5,000 shares of the
Series A Preferred Stock to PRC as part of the purchase
price for Crown in settlement of $500,000 of indebtedness
owed by Crown to PRC and 2,850 <PAGE>
CUSIP No. 872479 20 9 Page 7 of 19 Pages
shares of Series A Preferred Stock for the purchase from
PRC of certain equipment. These shares were subsequently
transferred by PRC to Mr. Roach.
(D) On each of July 18, 1991, January 18, 1992 and July 18,
1992, the Company issued 1,000 shares of Series A Preferred
Stock in consideration of $100,000 semi-annual rentals
under the Equipment Lease. These shares were subsequently
transferred by PRC to Mr. Roach.
(E) On each of December 3, 1991 and January 17, 1992, Mr. Roach
purchased 15,000 shares of Common Stock by exercising an
option previously granted to him under the Company's 1986
Stock Option Plan at an exercise price of $2.50 per share.
(F) On each of December 3, 1991 and January 17, 1992,
Dorothy Roach purchased 1,720 shares of Common Stock by
exercising an option previously granted to her under the
Company's 1986 Stock Option Plan at an exercise price of
$2.50 per share. Mr. Roach disclaims beneficial
ownership of his wife's shares.
(G) On August 10, 1992, effective as of August 7, 1992, Mr.
Roach, in the Private Placement, exchanged 5,000 shares of
the Series B Preferred Stock acquired by him from the
Company on February 3, 1992 for $500,000 for 200,000 shares
of Common Stock and Warrants entitling him to purchase
200,000 shares of Common Stock until August 6, 1995 at an
exercise price of $5.00 per share.
(iii) In Amendment No. 2, Mr. Roach reported that, on September
14, 1994, he was granted an option to purchase up to
100,000 shares of Common Stock under the Company's 1986
Stock Option Plan at an exercise price of $4.625 per share,
which option is exercisable, on a cumulative basis, as to
20,000 shares on each of September 14, 1995, September 14,
1996, September 14, 1997, September 14, 1998 and September
14, 1999.
(iv) In addition to the transactions described above:
(A) On February 26, 1992, the Company and Mr. Roach reduced
(pursuant to the terms of the agreement under which they
were issued) by 2,740 shares (to 12,390 shares) the 15,130
shares of Series A Preferred Stock issued to Mr. Roach in
consideration for all of the issued and outstanding capital
stock of Crown.<PAGE>
CUSIP No. 872479 20 9 Page 8 of 19 Pages
(B) On February 26, 1992, the Company issued to Mr. Roach 3,386
shares of Series A Preferred Stock in payment of dividends
payable in Series A Preferred Stock on outstanding shares
of Series A Preferred Stock.
(C) On February 15, 1993, the Company issued 1,000 shares of
Series A Preferred Stock to PRC (which subsequently
transferred such shares to Mr. Roach) in consideration of a
$100,000 semi-annual rental payment due January 18, 1993.
(D) On May 15, 1995, Mr. Roach was granted an option to
purchase up to 100,000 shares of Common Stock under the
Company's 1986 Stock Option Plan at an exercise price of
$5.125 per share, which option is exercisable, on a
cumulative basis, as to 20,000 shares on each of May 15,
1996, May 15, 1997, May 15, 1998, May 15, 1999 and May 15,
2000.
(E) On August 9, 1995, Mr. Roach received as a gift 2,400
shares of the Company's Class B Stock, $.01 par value per
share ("Class B Stock").
(F) On the same date, Mr. Roach made a gift of 2,400 shares
of Common Stock.
(G) On August 4, 1995, the Company redeemed 10,000 of the
27,626 shares of Series A Preferred Stock owned by Mr.
Roach at their aggregate liquidation and redemption price
of $1,000,000 and Mr. Roach exercised his Warrants (which
entitled Mr. Roach to purchase 200,000 shares of Common
Stock until August 6, 1995 at an exercise price of $5.00
per share of Common Stock), paid the exercise price of
$1,000,000 and received 200,000 shares of Common Stock upon
such exercise.
(H) On September 21, 1995, the Company redeemed the remaining
17,626 shares of Series A Preferred Stock from Mr. Roach at
t h eir aggregate liquidation and redemption price of
$1,762,600.
(I) On September 27, 1995, Alfred J. Roach and Dorothy Roach
converted, in accordance with the provisions of the
Company's Restated Certificate of Incorporation, as
amended, the 245,300 and 48,304 shares of the Company's
Class B Stock, respectively, owned by them, for an equal
number of shares of the Company's Common Stock, resulting
in a reduction in outstanding Class B Stock to a level that
all remaining Class B Stock (having, generally, 10 votes
per shares) were automatically converted into Common Stock
(having 1 vote per share).<PAGE>
CUSIP No. 872479 20 9 Page 9 of 19 Pages
(d) No other person is known to have the right to receive or the
power to direct the receipt of dividends from, or the proceeds
from the sale of, the shares owned by Mr. Roach.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect
to Securities of the Company.
(a) On July 18, 1991, as an inducement to the Company's then bank
lenders to restructure the Company's then long-term bank loan,
the Company entered into the Equipment Lease pursuant to which
the Company leases certain equipment from PRC. The Equipment
Lease, as amended to date, provides for the leasing of such
equipment for a term expiring July 17, 1996 (subject to automatic
extensions until July 17, 1999 and July 17, 2001, unless canceled
by either party upon notice prior to the then scheduled renewal
period) and rentals at the rate of $200,000 per year. Rentals
were to be paid in shares of the Company's Series A Preferred
Stock, valued at $100 per share, for the period through January
17, 1994 and thereafter in shares of Common Stock, valued at the
average market value thereof during the period for which rentals
are payable in Common Stock. However, during any time that there
is no restriction contained in any mortgage or other indenture or
loan agreement binding on the Company, accumulated rentals are to
be paid in cash and future rentals are to be paid semi-annually
in cash. On January 31, 1995, the Company entered into a
Revolving Credit Agreement with a new bank lender (replacing its
former bank indebtedness) which allows such rentals to be paid in
cash instead of Common Stock. Accordingly, all accrued but
unpaid rentals have been paid in cash and future rentals are
expected to be paid in cash.
(b) Mr. Roach holds options, granted under the Company's 1986 Stock
Option Plan, to purchase (i) 40,360 shares of Common Stock at an
exercise price of $2.50 per share, which option is presently
exercisable in full and expires on November 13, 1999, (ii)100,000
shares of Common Stock at an exercise price of $4.625 per share,
which option is exercisable, on a cumulative basis, as to 20,000
shares on each of September 14, 1995, September 14, 1996,
September 14, 1997, September 14, 1998 and September 14, 1999 and
expires on September 13, 2004 and (iii) 100,000 shares of Common
Stock at an exercise price of $5.125 per share, which option is
exercisable, on a cumulative basis, as to 20,000 shares on each
of May 15, 1996, May 15, 1997, May 15, 1998, May 15, 1999 and May
15, 2000 and expires on May 14, 2005.
The foregoing summaries of agreements are qualified in their entirety
by reference to the exhibits to this Schedule 13D.<PAGE>
CUSIP No. 872479 20 9 Page 10 of 19 Pages
Item 7. Material to be Filed as Exhibits.
The following are exhibits to this Statement:
1(a). Stock Option Agreement, dated November 14, 1989, between the
Company and Alfred J. Roach. (Filed as Exhibit 2 to Amendment
No. 1).
1(b). Stock Option Agreement, dated November 14, 1989, between the
Company and Dorothy Roach. (Filed as Exhibit 3 to Amendment No.
1).
1(c). Stock Option Agreement, dated September 14, 1994, between the
Company and Alfred J. Roach. (Filed as Exhibit 1(b) to Amendment
No. 2).
1(d). Stock Option Agreement, dated May 15, 1995, between the Company
and Alfred J. Roach.*
2. Certificate of Designations filed by the Company with the
Secretary of State of Delaware on July 9, 1991 with respect to
the Company's Series A Preferred Stock. (Filed as Exhibit 5 to
Amendment No. 1).
3(a). Equipment Lease, dated July 18, 1991. (Filed as Exhibit 6 to
Amendment No. 1).
3(b). Amendment, dated July 18, 1992 to the Equipment Lease
(Incorporated by reference to Exhibit 10(b)(67) to the Company's
Annual Report on Form 10-K for the fiscal year ended June 25,
1993).
3(c). Second Amendment, dated February 25, 1993 to the Equipment Lease
(Incorporated by reference to Exhibit 10(b)(68) to the Company's
Annual Report on Form 10-K for the fiscal year ended June 25,
1993).
3(d). Restated Third Amendment, dated December 14, 1993 to the
Equipment Lease. (Filed as Exhibit 4(d) to Amendment No. 2).
- --------------------------
* Filed herewith.<PAGE>
CUSIP No. 872479 20 9 Page 11 of 19 Pages
Signatures
After reasonable inquiry and to the best of the knowledge and belief of
the undersigned, the undersigned certify that the information set forth in this
Statement is true, complete and correct.
Dated: October 2,1995
/s/ Alfred J. Roach
Alfred J. Roach<PAGE>
CUSIP No. 872479 20 9 Page 12 of 19 Pages
Exhibit 1(c)
TII INDUSTRIES, INC.
1986 STOCK OPTION AGREEMENT
OPTION AGREEMENT made this 15th day of May, 1995,
between TII Industries, Inc. ("Company"), and Alfred J. Roach
residing at P. O. Box 433, Toa Alta, PR 00954 ("Optionee").
W I T N E S S E T H :
WHEREAS, the Company desires, by affording the Optionee
an opportunity to purchase shares of its common stock, $.01 par
value per share (the "Common Stock"), as hereinafter provided, to
carry out the purposes of the Company's 1986 Stock Option Plan (the
"Plan") administered by a committee (the "Committee") of the
Company.:
NOW, THEREFORE, in consideration of the premises and of
the mutual promises hereinafter contained, the parties hereto agree
as follows:
1. Grant of Option. The Company hereby grants to the
Optionee an option ("the Option") to purchase all or any part of an
aggregate of 100,000 shares of Common Stock (such number being
subject to adjustment as provided in Section 9 hereof) on the terms
and conditions hereinafter set forth. The Option is/is not (strike
one) intended to be an "incentive stock option" as defined in
Section 422 of the Internal Revenue Code of 1986, as amended or any
corresponding provisions of succeeding law (the "Code").
2. Purchase Price. The purchase price of the shares
of Common Stock covered by the Option shall be $5.125 per share of
Common Stock, which is not less than one hundred percent <PAGE>
CUSIP No. 872479 20 9 Page 13 of 19 Pages
(100%) of the fair market value of a share of Common Stock on the
date hereof. Payment shall be made in cash, check or in shares of
Common Stock in the manner prescribed in Section 10 hereof.
3. Term of Option. The term of the Option shall be
for a period of ten (10) years from the date hereof, subject to
earlier termination as provided in Sections 6, 7 and 8 hereof. The
Option may be exercised in whole or in part at any time and from
time to time prior to the termination of the Option, as to all or
any of the shares of Common Stock then purchasable hereunder;
provided, however, that no shares of Common Stock covered by the
Option may be purchased within the first 12 months' period after the
date hereof, and that in each subsequent 12 months' period during
the term of the Option, the holder of the Option may purchase a
number of shares of Common Stock equal to one fifth of the total
number of shares originally subject to this Option (such numbers
being subject to adjustment as provided in Section 9 hereof) until
one hundred percent of the Option shall be exercisable (five years
after the date hereof). If fewer than the number of available
shares are purchased in any period under the Option, the holder may
purchase any such unpurchased shares in any subsequent period during
the term of the Option.
Except as provided in Sections 6 and 7 hereof, the
Option may not be exercised at any time unless the Optionee shall
then be and shall have been, at all times from the date of grant of
the Option, an employee of the Company or any of its subsidiaries.
The term "employee" shall include officers and directors who are
employees of the Company or any of its subsidiaries. Solely for
purposes of granting non-incentive stock options, the term
"employee" shall also include consultants to the Company or any of
its subsidiaries and officers and directors of the Company who are
not employees of the Company or any of its subsidiaries. <PAGE>
CUSIP No. 872479 20 9 Page 14 of 19 Pages
4. Outstanding Options. Any Option which is an
incentive stock option may not be exercised while there is
outstanding (within the meaning of Section 422(A) (c) (7) of the
Code), any incentive stock option which was granted before the
granting of the Option, to the Optionee to purchase stock in the
Company or any corporation which is, at any time, a "parent" or a
"subsidiary" of the Company (as such terms are defined in Section
425(e) and (f) of the Code), or any predecessor corporation of any
such corporations; provided, however, that this provision shall not
apply to any Option which is an incentive stock option granted after
December 31, 1986.
5. Non-transferability. The Option shall not be
transferable otherwise than by will or the laws of descent and
distribution, and the Option may be exercised during the lifetime of
the Optionee only by the Optionee, more particularly (but without
limiting the generality of the foregoing), the Option may not be
assigned, transferred (except as provided above), pledged or
hypothecated in any way, shall not be assignable by operation of
law, and shall not be subject to execution, attachment or similar
process. Any attempted assignment, transfer, pledge, hypothecation
or other disposition of the Option contrary to the provisions
hereof, or the levy of any execution, attachment, or similar process
upon the Option, shall render the option null and void and without
effect.
6. Employment. Nothing in the Option shall confer
upon the Optionee the right to continue in the employment of the
Company or a parent or subsidiary of the Company or affect the right
of the Company or parent or subsidiary of the Company to terminate
the Optionee's employment at any time in its sole discretion, with
or without cause.
CUSIP No. 872479 20 9 Page 15 of 19 Pages
In the event that the Optionee shall cease to be so
employed for any reason other than death, retirement with the
consent of the Company or disability (within the meaning of Section
22(e)(3) of the Code), the Option shall terminate on the date of
termination of employment or on a date not more than three (3)
months after such date of termination of employment (as determined
by the Committee in its sole discretion); provided, however, that in
the event of exercise after termination of employment, but in no
event may the Option be exercised after the date on which the Option
would have expired and, during such period as the Option may be
exercised, the Option may only be exercised to the extent
exercisable at the date of termination of employment. If the holder
of an Option ceases to be employed by reason of such disability or
retires with the consent of the Company, the Option shall terminate
one (1) year after the date of disability and not later than three
(3) months after the date of retirement (as determined by the
Committee), but in no event may the Option be exercised after the
date on which the Option would have expired (except for termination
of employment) and, during such period as the Option may be
exercised, the Option may only be exercised to the extent
exercisable at the date of termination of employment..
7. Death of Optionee. If the Optionee shall die
while in the employ of the Company, or any parent or subsidiary of
the Company, the estate, personal representative or beneficiary
shall have the right to exercise the Option at any time within one
(1) year after the date of the Optionee's death to exercise the
portions of the Option which were exercisable by the Optionee at
the time of the Optionee's death, but in no event may the Option be
exercised after the date on which the Option would have (except for
termination of employment) expired.
CUSIP No. 872479 20 9 Page 16 of 19 Pages
8. Termination of Option. In the event of the
institution of any legal proceedings directed to the validity of the
Plan pursuant to which the Option is granted, or to any option
granted under it, the Company may, in it sole discretion, and
without incurring any liability therefor to the Optionee or any
other person, terminate the Option.
9. Stock Splits, Mergers, etc. In case of any stock
split, stock dividend or similar transaction which increases or
decreases the number of outstanding shares of Common Stock,
appropriate adjustment shall be made by the Board of Directors,
whose determination shall be final, to the number and Option
exercise price per share which may be purchased under the Option and
the number of shares that may be purchased in any period under
Section 3 hereof. In the case of a merger, sale of assets or
similar transaction which results in a replacement of the Company's
shares of Common Stock with stock of another corporation, the
Company will make a reasonable effort, but shall not be required, to
replace any outstanding options with comparable options to purchase
the stock of such other corporation, or will provide for immediate
exercisability of all outstanding options, with all options not
being exercised within the time period specified by the Board of
Directors being terminated.
10. Method of Exercising Option. Subject to the terms
and conditions of the Option Agreement, the Option may be exercised
by written notice to the Company at its office at 1385 Akron Street,
Copiague, New York 11726 (Attention: Assistant Secretary). Such
notice shall state the election to exercise the Option and the
number of shares of Common Stock in respect of which it is being
exercised. It shall be signed by the person or persons so
exercising the Option and shall be accompanied by payment of the
full purchase price of such shares in cash, by check or by the
CUSIP No. 872479 20 9 Page 17 of 19 Pages
delivery of certificates representing shares of Common Stock (valued
at the fair market value on the date of exercise of the Option) with
fully executed stock powers, and the Company shall issue, in the
name of the person or persons exercising the Option, and deliver a
certificate or certificates representing such shares of Common Stock
as soon as practicable after the notice and payment have been
received.
The holder of the Option shall not have any of the
rights of a shareholder of the Company with respect to the shares of
Common Stock covered by the Option until one or more certificates
for such shares of Common Stock shall have been issued to the
Optionee upon the due exercise of the Option; provided, however that
an Optionee using existing shares of Common Stock in payment of the
Option exercise price (pursuant to Section 10) shall continue to
have the rights of a stockholder with respect to such existing
shares of Common Stock until replacement shares are issued to the
Optionee.
In the event the Option shall be exercised by any person
or persons other than the Optionee, pursuant to Section 7 hereof,
such notice shall be accompanied by appropriate proof of the right
of such person or persons to exercise the Option. All shares of
Common Stock that shall be purchased upon the exercise of the Option
as provided herein shall be fully paid and non-assessable.
The Committee may require an Optionee to remit any
amount required to be withheld to satisfy federal, state or local
income taxes arising in connection with the exercise of an Option.
Each Optionee making an election under Section 83(b) of the Code
shall provide a copy thereof to the Company within 30 days of the
filing of such election with the Internal Revenue Service.
CUSIP No. 872479 20 9 Page 18 of 19 Pages
11. General. The Company shall at all times during
the term of the Option reserve and keep available such number of
shares of Common Stock as will be sufficient to satisfy the
requirements of this Agreement, and shall pay all taxes with respect
to the issue of shares of Common Stock pursuant hereto and all other
fees and expenses necessarily incurred by the Company in connection
therewith.
12. Representation of Optionee. The Optionee, if
receiving an incentive stock option, represents that he and any
related persons or entities, within the meaning of Section 425(d) of
the Code, do not own as much as ten percent (10%) of the total
combined voting power or value of all capital stock of the Company
or any subsidiary of the Company, and in accepting the Option herein
granted to him, agrees to the terms of the Option as of the date
hereof.
13. Notices. Each notice relating to this Option
Agreement shall be in writing and delivered in person or by first
class mail, postage prepaid, to the proper address. Each notice
shall be deemed to have been given on the date it is received. Each
notice to the Company shall be addressed to it at its principal
office, 1385 Akron Street, Copiague, New York 11726 (Attention:
Secretary). Each notice to the Optionee or other person or persons
then entitled to exercise the Option shall be addressed to the
Optionee at the Optionee's address set forth in the heading of this
Agreement. Anyone to whom a notice may be given under this
Agreement may designate a new address by notice to that effect.
14. Incorporation of Plan. Notwithstanding the terms
and conditions herein, the Option shall be subject to and governed
by all the terms and conditions of the Plan. A copy of the
CUSIP No. 872479 20 9 Page 19 of 19 Pages
Plan has been delivered to the Optionee and is hereby incorporated
by reference. In the event of any discrepancy or inconsistency
between this Agreement and the Plan, the terms of the Plan shall
govern.
15. Enforceability. This Agreement shall be binding
upon the Optionee, his estate, his personal representatives and
beneficiaries.
IN WITNESS WHEREOF, the Company has caused this Agree-
ment to be duly executed by one of its officers thereunto duly
authorized, and the Optionee has hereunto set his hand all as of the
day and year first above written.
TII INDUSTRIES, INC.
By: /s/Timothy J. Roach
Timothy J. Roach
Title: President
Optionee:
/s/ Alfred J. Roach
