SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 5)
TII Industries, Inc.
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(Name of issuer)
Common Stock, $.01 par value
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(Title of Class of Securities)
872479 20 9
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(CUSIP Number)
Timothy J. Roach
c/o TII Industries, Inc.
1385 Akron Street
Copiague, New York 11726
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(Name, address and telephone number of person authorized to receive notices and
communications)
April 7, 1999
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(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 |_|
Page 1 of 9 Pages
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Page 2 of 9 Pages
CUSIP No. 872479 20 9
Response to Question 1: Timothy J. Roach
Response to Question 2: N/A
Response to Question 3: SEC USE ONLY
Response to Question 4: PF
Response to Question 5: N/A
Response to Question 6: United States
Response to Question 7: 510,045
Response to Question 8: 0
Response to Question 9: 510,045
Response to Question 10: 0
Response to Question 11: 510,045
Response to Question 12: X
Response to Question 13: 6.1%
Response to Question 14: IN
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CUSIP No. 872479 20 9
INTRODUCTION
This Amendment No. 4 to Schedule 13D is being filed by Timothy J. Roach. Mr.
Roach filed an original Schedule 13D dated December 7, 1988 (the "Original
13D"). The Original 13D was amended by Amendment No. 1 dated August 20, 1992
("Amendment No. 1"), Amendment No. 2 dated March 30, 1995 ("Amendment No. 2"),
Amendment No. 3 dated September 27, 1995 ("Amendment No. 3") and Amendment No. 4
dated December 8, 1998 ("Amendment No.4"). The Original 13D, as heretofore
amended, is referred to as the "Existing 13D." Capitalized terms which are used
herein but are not defined herein shall have the meaning ascribed to them in the
Existing 13D. Items 5, 6 and 7 of the Existing 13D are amended to read in their
entirety as follows:
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 Timothy J. Roach as of June 21, 1999:
Number of Percent
Name Shares (1) of Class (2)
- ---- ------ --------
Timothy J. Roach 510,045 (3) 6.1% (3)
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(1) Timothy J. Roach has sole voting and dispositive power with respect to the
shares owned by him. Includes 510,045 outstanding shares owned by Mr. Roach.
Excludes 968 shares owned by Mr. Roach's wife (who has sole voting and
dispositive power with respect to such shares and as to which Mr. Roach
disclaims beneficial ownership).
(2) Percent of Class is based on 8,406,034 shares of Common Stock actually
outstanding on June 21, 1999. As a result of the restructuring of options
occurring on October 8, 1998 and December 8, 1998 (and as amended and restated
on April 7, 1999) as described in paragraphs (c)(x) and (c)(xi) below, no
options to acquire Common Stock held by Mr. Roach are exercisable on or within
60 days of June 21, 1999.
(3) If Mr. Roach is also deemed the beneficial owner of the shares beneficially
owned by his wife, he would be deemed to beneficially own an aggregate of
511,013 shares of Common Stock, or 6.1% of the Company's outstanding shares.
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Page 4 of 9 Pages
CUSIP No. 872479 20 9
(c)(i) On December 1, 1998, Mr. Roach acquired 10,000 shares of Common
Stock for $62,753.50 in an open market purchase.
(ii) On December 3, 1991, he purchased 2,880 shares of Common Stock
underlying an option previously granted to him under the
Company's 1986 Stock Option Plan at an exercise price of
$3.125 per share. See paragraph (c)(xi) below for information
regarding the restructuring of this option.
(iii) Effective August 7, 1992, he exchanged, in the Private
Placement, 2,500 shares of the Company's Series B Preferred
Stock, acquired by him from the Company on February 3, 1992
for $250,000, for 100,000 shares of Common Stock and Warrants
entitling him to purchase 100,000 shares of Common Stock until
August 6, 1995 at an exercise price of $5.00 per share.
(iv) On February 5, 1993, he purchased 3,200 shares of Common Stock
underlying an option previously granted to him under the
Company's 1986 Stock Option Plan at an exercise price of
$3.125 per share. See paragraph (c)(xi) below for information
regarding the restructuring of this option.
(v) On September 14, 1994, he was granted an option to purchase
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 became exercisable, on a cumulative basis, as to 20,000
shares on each of September 14, 1996, September 14, 1997,
September 14, 1998 and September 14, 1999. See paragraph
(c)(xi) below for information regarding the restructuring of
this option.
(vi) On May 15, 1995, 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 $5.125 per share, which
option became 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. See
paragraph (c)(xi) below for information regarding the
restructuring of this option.
(vii) On September 27, 1995, in accordance with the provisions of
the Company's Restated Certificate of Incorporation, as
amended, the 27,680; 968; and 2,240 shares of the Company's
Class B Stock (having generally 10 votes per share) owned by
Mr. Roach directly, Mr. Roach's wife and Mr. Roach as
custodian for his children, respectively, were converted into
an equal number of shares of the Company's Common Stock
(having 1 vote per share).
(viii) On July 25, 1996, Mr. Roach was granted an option to purchase
up to 50,000 shares of Common Stock under the Company's 1995
Stock Option Plan, at an exercise price
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Page 5 of 9 Pages
CUSIP No. 872479 20 9
of $4.50 per share, which option became exercisable, on a
cumulative basis, as to 10,000 shares on each of July 25,
1997, July 25, 1998, July 25, 1999, July 25, 2000 and July 25,
2001. See paragraph (c)(x) below for information regarding the
restructuring of this option.
(ix) On December 30, 1997, Mr. Roach was granted an option to
purchase up to 100,000 shares of Common Stock under the
Company's 1995 Stock Option Plan, at an exercise price of
$4.375 per share, which option became exercisable, on a
cumulative basis, as to 20,000 shares on each of December 30,
1998, December 30, 1999, December 30, 2000, December 30, 2001
and December 30, 2002. See paragraph (c)(x) below for
information regarding the restructuring of this option.
(x) On October 8, 1998, the Board of Directors of the Company
offered Mr. Roach the right (which Mr. Roach accepted on that
date) to modify his existing options to purchase an aggregate
of 150,000 shares of Common Stock under the Company's 1995
Stock Option Plan (the "1995 Plan") by reducing the exercise
price of such options to $1.563 per share, providing a new ten
year term which extends until October 7, 2008, with such
modified options becoming exercisable in five equal annual
installments commencing October 8, 1999. Similar offers to
modify all other existing options under the 1995 Plan were
also made to all other option holders. This modification may
be considered a cancellation of the old options and a grant of
a new option under the 1995 Plan. The 1995 Plan contains a
limit on the number of shares of Common Stock for which
options may be granted to any person in a calendar year to
100,000. With the foregoing limit in mind, the Board of
Directors of the Company intended to modify options as to
100,000 of such 150,000 shares in 1999, but the options with
respect to all 150,000 shares were inadvertently modified on
October 8, 1998. On March 19, 1999, certain stockholders of
the Company commenced a purported class action lawsuit against
the Company and its directors in the Court of Chancery of the
State of Delaware in and for New Castle County. The lawsuit
alleged, among other things, that all options modified by the
Company on October 8, 1998 were invalid. On April 7, 1999,
counsel for the plaintiffs and counsel for the defendants
entered into a Memorandum of Understanding (the "Memorandum of
Understanding") pursuant to which an agreement in principle
was reached to settle the lawsuit. The Memorandum of
Understanding was embodied in a formal Stipulation of
Settlement entered into on May 25, 1999 (the "Stipulation of
Settlement"). The settlement is subject to, among other
things, final court approval of the settlement and dismissal
of the action with prejudice, on the merits and without costs
(except for a maximum of $300,000 for plaintiffs' attorneys'
fees and expenses). Pursuant to the Memorandum of
Understanding and the Stipulation of Settlement, among other
things, the October 8, 1998 modification was corrected and
restated to cover 100,000 shares of Common Stock which remain
exercisable at a price of $1.563 per share until October 7,
2008 and continue to become exercisable in five equal annual
installments
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CUSIP No. 872479 20 9
commencing October 8, 1999. Options to purchase 50,000 shares
originally modified on October 8, 1998 were modified on April
7, 1999 so that they are exercisable at an exercise price of
$1.594 per share until April 6, 2009 and become exercisable in
five equal annual installments commencing April 7, 2000. All
such options, to purchase 150,000 shares, were specifically
stated not to be incentive stock options within the meaning of
Section 422 of the Internal Revenue Code of 1986, as amended.
(xi) On December 8, 1998, the Board of Directors of the Company
offered Mr. Roach the right (which Mr. Roach accepted on that
date) to cancel his existing options granted on January 9,
1992 (to purchase 30,000 shares of Common Stock), September
14, 1994 (to purchase 100,000 shares of Common Stock) and May
15, 1995 (to purchase 100,000 shares of Common Stock) under
the Company's 1986 Stock Option Plan and receive new options
to purchase an aggregate of 230,000 shares of Common Stock
under the Company's 1998 Stock Option Plan. Similar offers
were made to all other Option holders under the Company's 1986
Stock Option Plan with respect to all of their options under
the Company's 1986 Stock Option Plan. The new option has an
exercise price of $2.313 per share, a term of ten years which
extends until December 7, 2008, and is exercisable, on a
cumulative basis, in five equal annual installments commencing
December 8, 1999. The new option is governed by the Company's
new 1998 Stock Option Plan instead of the 1986 Stock Option
Plan which governed the then existing options.
(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.
After giving effect to the modification of options described in
Item 5(c)(x), Mr. Roach holds options, granted under the Company's 1995 Stock
Option Plan, to purchase (i) 100,000 shares of Common Stock at an exercise price
of $1.563 per share, which options are exercisable, on a cumulative basis, as to
20,000 shares on each of October 8, 1999, October 8, 2000, October 8, 2001,
October 8, 2002 and October 8, 2003 and expire on October 7, 2008 and (ii)
50,000 shares of Common Stock at an exercise price of $1.594 per share, which
options are exercisable, on a cumulative basis, as to 12,500 shares on each of
April 7, 2000, April 7, 2001, April 7, 2002, April 7, 2003 and April 7, 2004 and
expire on April 6, 2009. After giving effect to the cancellation of options and
receipt of a replacement option described in Item 5(c)(xi), Mr. Roach further
holds an option granted under the Company's 1998 Stock Option Plan to purchase
230,000 shares of Common Stock at an exercise price of $2.313 per share, which
option is exercisable, on a cumulative basis as to 46,000 shares on each of
December 8, 1999, December 8, 2000, December 8, 2001, December 8, 2002 and
December 8, 2003 and expires on December 7, 2008.
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CUSIP No. 872479 20 9
The foregoing summaries of agreements are qualified in their entirety
by reference to the exhibits to this Schedule 13D.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
The following are exhibits to this Statement:
1(a). Stock Option Agreement, dated December 24, 1991, between the
Company and Timothy J. Roach. (Filed as Exhibit 4(a) to Amendment No. 1).
1(b). Stock Option Agreement, dated January 9, 1992, between the
Company and Timothy J. Roach. (Filed as Exhibit 4(b) to Amendment No. 1).
1(c). Stock Option Agreement, dated September 14, 1994, between the
Company and Timothy J. Roach. (Filed as Exhibit 1(c) to Amendment No. 2).
1(d). Stock Option Agreement, dated May 15, 1995, between the
Company and Timothy J. Roach. (Filed as Exhibit 1(d) to Amendment No. 3).
1(e). Stock Option Agreement, dated July 25, 1996, between the
Company and Timothy J. Roach. (Filed as Exhibit 1(e) to Amendment No. 4).
1(f). Stock Option Agreement, dated December 30, 1997, between the
Company and Timothy J. Roach. (Filed as Exhibit 1(f) to Amendment No. 4).
1(g). Corrected and Restated Letter Agreement, dated October 8, 1998,
between the Company and Timothy J. Roach.*
1(h). Letter Agreement, dated December 8, 1998, between the Company
and Timothy J. Roach. (Filed as Exhibit No. 1(h) to Amendment No. 4).
1(i). Stock Option Agreement, dated December 8, 1998, between the
Company and Timothy J. Roach. (Filed as Exhibit No. 1(i) to Amendment No. 4).
1(j) Letter Agreement, dated April 7, 1999, between the Company and
Alfred J. Roach.*
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Page 8 of 9 Pages
CUSIP No. 872479 20 9
5(a) Memorandum of Understanding between counsel to the plaintiffs and
counsel to the defendants in the action entitled David H. Addis and Hemda Z.
Addis v. TII Industries, Inc., Alfred J. Roach, Timothy J. Roach, Dorothy Roach,
George S. Katsarakes, James R. Grover, Jr., William G. Sharwell, Dr. Joseph C.
Hogan and C. Bruce Barksdale. (Filed as Exhibit 99.1 to the Company's Form 8-K
dated (Date of earliest event reported): March 19, 1999).
5(b) Stipulation of Settlement between counsel to the plaintiffs and
counsel to the defendants in the action entitled David H. Addis and Hemda Z.
Addis v. TII Industries, Inc., Alfred J. Roach, Timothy J. Roach, Dorothy Roach,
George S. Katsarakes, James R. Grover, Jr., William G. Sharwell, Dr. Joseph C.
Hogan and C. Bruce Barksdale. (Filed as Exhibit 99.1 to the Company's Form 8-K
dated (Date of earliest event reported): May 25, 1999).
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* Filed herewith.
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Page 9 of 9 Pages
CUSIP No. 872479 20 9
Signatures
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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: June 22, 1999
/s/ Timothy J. Roach
---------------------------
Timothy J. Roach
<PAGE>
EXHIBIT INDEX
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1(a). Stock Option Agreement, dated December 24, 1991, between the
Company and Timothy J. Roach. (Filed as Exhibit 4(a) to Amendment No. 1).
1(b). Stock Option Agreement, dated January 9, 1992, between the
Company and Timothy J. Roach. (Filed as Exhibit 4(b) to Amendment No. 1).
1(c). Stock Option Agreement, dated September 14, 1994, between the
Company and Timothy J. Roach. (Filed as Exhibit 1(c) to Amendment No. 2).
1(d). Stock Option Agreement, dated May 15, 1995, between the Company
and Timothy J. Roach. (Filed as Exhibit 1(d) to Amendment No. 3).
1(e). Stock Option Agreement, dated July 25, 1996, between the Company
and Timothy J. Roach. (Filed as Exhibit 1(e) to Amendment No. 4).
1(f). Stock Option Agreement, dated December 30, 1997, between the
Company and Timothy J. Roach. (Filed as Exhibit 1(f) to Amendment No. 4).
1(g). Corrected and Restated Letter Agreement, dated October 8, 1998,
between the Company and Timothy J. Roach.*
1(h). Letter Agreement, dated December 8, 1998, between the Company and
Timothy J. Roach. (Filed as Exhibit No. 1(h) to Amendment No. 4).
1(i). Stock Option Agreement, dated December 8, 1998, between the
Company and Timothy J. Roach. (Filed as Exhibit No. 1(i) to Amendment No. 4).
1(j) Letter Agreement, dated April 7, 1999, between the Company and
Alfred J. Roach.*
5(a) Memorandum of Understanding between counsel to the plaintiffs and
counsel to the defendants in the action entitled David H. Addis and Hemda Z.
Addis v. TII Industries, Inc., Alfred J. Roach, Timothy J. Roach, Dorothy Roach,
George S. Katsarakes, James R. Grover, Jr., William G. Sharwell, Dr. Joseph C.
Hogan and C. Bruce Barksdale. (Filed as Exhibit 99.1 to the Company's Form 8-K
dated (Date of earliest event reported): March 19, 1999).
5(b) Stipulation of Settlement between counsel to the plaintiffs and
counsel to the defendants in the action entitled David H. Addis and Hemda Z.
Addis v. TII Industries, Inc., Alfred J. Roach, Timothy J. Roach, Dorothy Roach,
George S. Katsarakes, James R. Grover, Jr., William G. Sharwell, Dr. Joseph C.
Hogan and C. Bruce Barksdale. (Filed as Exhibit 99.1 to the Company's Form 8-K
dated (Date of earliest event reported): May 25, 1999).
Exhibit 1(g)
CORRECTED AND RESTATED
TII Industries, Inc.
1385 Akron Street
Copiague, New York 11726
October 8, 1998
Dear 1995 Plan Option Holders:
Our Board of Directors, after reviewing stock options held by you, has
noted that the value of the option(s) granted to you under the Company's 1995
Stock Option Plan has been diminished as a result of the recent decline in the
market value of the Company's Common Stock. Therefore, the Board has authorized
an offer to you to modify your existing option(s) under that Plan to reduce the
exercise price to $1.563 per share and provide a new ten-year term which extends
until October 7, 2008, but with a new vesting schedule which is similar to that
which would pertain if a brand new option was granted to you today, that is, the
option(s) would vest in five equal annual installments commencing October 8,
1999. The option(s) would otherwise continue to be governed under your existing
option contract(s) and the provisions of the Company's 1995 Stock Option Plan,
as amended. A copy of the 1995 Stock Option Plan is enclosed herewith, as is a
copy of a Summary Plan Description.
The modified option will not be an incentive stock option under Section
422 of the Internal Revenue Code of 1986, as amended, but rather will be a
non-qualified stock option.
If you elect to accept this modification, please complete, sign and
return the enclosed copy of this letter. The offer is open until November 30,
1998. Accordingly, if we do not receive a signed copy of this letter on or
before that date, your option contract(s) will not be modified and you will
retain your old option(s) without modification -- with its existing exercise
price, term and vesting schedule. This election can be made separately as to
each option held by you under the 1995 Stock Option Plan. (See list of options
granted to you under the 1995 Plan attached.)
This letter corrects and restates a similar letter which called on an
amendment to the entire option granted to Timothy J. Roach on December 30, 1997
(covering an aggregate of 100,000 shares) in lieu of a portion of such option
covering 50,000 shares.
Should you have any questions, please feel free to call Virginia M.
Hall, Vice President-Administration at 516-789-5000. Very truly yours,
/s/ Timothy J. Roach
---------------------------
Timothy J. Roach
President
As to my option dated:
Do Do Not
Accept Accept
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7/25/96 , I X the Company's offer
- -------------------------------
12/30/97 (as to options for , I X the Company's offer
50,000 shares)
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/s/ Timothy J. Roach
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Signature
Name: Timothy J. Roach
-2-
Exhibit 1(j)
TII Industries, Inc.
1385 Akron Street
Copiague, New York 11726
April 7, 1999
Dear 1995 Plan Option Holders:
Our Board of Directors, after reviewing the remaining stock options
granted to you on December 30, 1997 under the Company's 1995 Stock Option Plan
(to purchase 10,000 shares of the Company's Common Stock) that were not modified
on October 8, 1998, has noted that the value of those option(s) has been
diminished as a result of the recent decline in the market value of the
Company's Common Stock. Therefore, the Board has authorized an offer to you to
modify your existing option(s) under that Plan to reduce the exercise price to
$1.594 per share and provide a new ten-year term which extends until April 6,
2009, but with a new vesting schedule which is similar to that which would
pertain if a brand new option was granted to you today, that is, the option(s)
would vest in five equal annual installments commencing April 7, 2000. The
option(s) would otherwise continue to be governed under your existing option
contract(s) and the provisions of the Company's 1995 Stock Option Plan, as
amended. A copy of the 1995 Stock Option Plan is enclosed herewith, as is a copy
of a Summary Plan Description.
The modified option will not be an incentive stock option under Section
422 of the Internal Revenue Code of 1986, as amended, but rather will be a
non-qualified stock option.
If you elect to accept this modification, please complete, sign and
return the enclosed copy of this letter. The offer is open until May 7, 1999.
Accordingly, if we do not receive a signed copy of this letter on or before that
date, your option contract(s) will not be modified and you will retain your old
option(s) without modification -- with its existing exercise price, term and
vesting schedule.
Should you have any questions, please feel free to call Virginia M.
Hall, Vice President- Administration at 516-789-5000. Very truly yours,
/s/ Timothy J. Roach
---------------------------
Timothy J. Roach
President
As to my option dated:
Do Do Not
Accept Accept
------ ------
12/30/97 (as to options , I X the Company's offer
for 50,000 shares)
- -------------------------------
/s/ Timothy J. Roach
- -------------------------------
Signature
Name: Timothy J. Roach
-3-
