As filed with the
Securities and Exchange
Commission on
October 28, 1998
Registration No. 2-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
RICHARDSON ELECTRONICS, LTD.
(Exact name of issuer as specified in its charter)
Delaware 36-2096643
(State of Incorporation) (I.R.S. Employer Identification No.)
40W267 Keslinger Road,
P.O. Box 393
LaFox, Illinois 60147-0393
(Address of Principal Executive Offices) (Zip Code)
RICHARDSON ELECTRONICS, LTD.
EMPLOYEES' 1998 INCENTIVE COMPENSATION PLAN
(Full title of the plan)
William G. Seils,
Senior Vice President, Secretary and General Counsel
Richardson Electronics, Ltd.
40W267 Keslinger Road
P.O. Box 393
LaFox, Illinois 60147-0393
(Name and address of agent for service)
(630) 208-2370
(Telephone number, including area code, of agent for service)
Approximate date of commencement of proposed sale of the securities
to the public: As soon as practicable after the effective date of
this Registration Statement and under terms of options granted but
not earlier than October 6, 1998.
Calculation of Registration Fee
Title Proposed Proposed
of Maximum Maximum Amount
Securities Amount Offering Aggregated of
Being Being Price Per Offering Registration
Registered Registered(1) Share(2) Price Fee
Common Stock 800,000 $7.06 $5,648,000 $1,666.16
$.05 Par Value Shares
(1) The registration statement also includes an indeterminable
number of additional shares of Common Stock that may become
issuable as a result of terminated, expired or surrendered
options for Common Stock, or pursuant to the antidilution
adjustment provisions of the Plan.
(2) Estimated solely for purposes of calculating the registration
fee under Rule 457(h), based upon the average of the high and
low prices as reported by the NASDAQ National Market System as
of October 23, 1998.
Exhibit Index on page 6
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Certain Documents By Reference
Richardson Electronics, Ltd. (the "Company") hereby
incorporates into this Registration Statement by reference the
following documents filed with the Securities and Exchange
Commission (the "Commission"):
(a) The Company's Annual Report on Form 10-K filed pursuant
to Section 13(a) of the Securities Exchange Act of 1934 as amended
(the "Securities Exchange Act") for the fiscal year ended May 31,
1998;
(b) All other reports filed pursuant to Section 13(a) or
15(d) of the Securities Exchange Act since the end of the Company's
fiscal year ended May 31, 1998; and
(c) The Company's Registration Statement on Form 8-A (File
No. 0-12906) as to the description of the Company's securities set
forth in item 4 therein, including any amendment or reports filed
for the purpose of updating such description.
All documents filed by the Company subsequent to the date of
this Registration Statement pursuant to Sections 13(a), 13(c), 14
and 15(d) of the Securities 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 by reference
into this Registration Statement and to be a 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 which
also is or is 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.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
William G. Seils, Senior Vice President, Secretary and General
Counsel of the Company assisted in the preparation of this
Prospectus and the Registration Statement, has given an opinion on
the validity of the securities covered thereby and is eligible to
receive grants under the Plan.
Item 6. Indemnification of Directors and Officers.
Section 145 of the General Corporation Law of Delaware
authorizes indemnification of directors, officers and employees of
Delaware corporations. Article VII of the Company's by-laws (i)
grants indemnification of directors and officers (the
"Indemnitees") under specified circumstances to the fullest extent
authorized by the General Corporation Law of Delaware, (ii)
provides for the advancement of expenses to the Indemnitees for
defending any proceedings related to the specified circumstances,
(iii) gives the Indemnitees the right to bring suit against the
Company to enforce the foregoing rights to indemnification and
advancement of expenses, and (iv) authorizes the Company to
maintain certain policies of insurance to protect itself and any of
its directors, officers or employees. The Company currently
maintains policies of insurance under which the directors and
officers of the Company are insured, within the limits and subject
to the limitations of the policies, against certain expenses in
connection with the defense of actions, suits or proceedings, to
which they are parties by reason of being or having been such
directors or officers. Pursuant to the authority of Section
102(b)(7) of the General Corporation Law of Delaware the Company's
certificate of incorporation contains a provision which eliminates
the personal liability of a director of the Company for monetary
damages for breach of fiduciary duty as a director, except to the
extent limited by such statutory provision.
.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
The exhibits to the registration statement are listed in the
Exhibit Index elsewhere herein.
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 of 1933;
(ii) To reflect in the prospectus any facts or
events arising after the effective date of the
registration statement (or the most recent post-effective
amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the
information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease
in volume of securities offered (if the total dollar
value of securities offered would not exceed that which
was registered) and any deviation from the low or high
end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate,
the changes in volume and price represent no more than a
20% change in the maximum aggregate offering price set
forth in the "Calculation of Registration Fee" table in
the effective registration statement.
(iii) To include any material information with
respect to the plan of distribution not previously
disclosed in the registration statement or any material
change to such information in the registration statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do
not apply if the registration statement is on Form S-3 or Form S-8
or Form F-3, and the information required to be included in a
post-effective amendment by those paragraphs is contained in
periodic reports filed with or furnished to the Commission by the
registrant pursuant to section 13 or section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference
in the registration statement.
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, each such post-effective
amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering
of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-
effective amendment any of the securities being registered
which remain unsold at the termination of the offering.
(b) The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act of
1933, each filing of the registrant's annual report pursuant to
section 13(a) or section 15(d) of the Securities Exchange Act of
1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities
Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(h) Insofar as indemnification for liabilities arising under
the Securities Act of 1933 may be permitted to directors, officers
and controlling persons of the registrant pursuant to the foregoing
provisions, or otherwise, the registrant has been advised that in
the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer
or controlling person of the registrant in the successful defense
of any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities
being registered, the registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in
the Act and will be governed by the final adjudication of such
issue.
EXHIBIT INDEX
Filing Method
4. Copy of the Richardson Electronics, Ltd. E
Employees' 1998 Incentive Compensation Plan
5. Opinion of William G. Seils E
23. Consent of Ernst & Young LLP E
Consent of William G. Seils
(contained in Exhibit 5)
24 Power of Attorney* E
* Power of Attorney is contained on signature pages.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the registrant certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on Form S-8 and
has duly caused this registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the Town
of LaFox and the State of Illinois on the 28th day of October,
1998.
RICHARDSON ELECTRONICS, LTD.
By: /s/Edward J. Richardson
Edward J. Richardson
Chairman of the Board,
President and Chief Executive
Officer
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated.
By his signature, each of the following persons constitutes
and appoints each of Edward J. Richardson and William G. Seils as
his true and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution for him and in his name, place and
stead, in any and all capacities, to sign any and all documents
which said attorney-in-fact and agent may deem necessary or
advisable to enable Richardson Electronics, Ltd. to comply with the
Securities Act of 1933, as amended, and the rules, regulations and
requirements of the Securities Exchange Commission in connection
with the registration under said Act of Shares of Common Stock,
$.05 par value, to be offered or sold by said corporation pursuant
to its Employees' 1998 Incentive Compensation Plan, including but
not limited to a Registration Statement and any and all amendments
including post-effective amendments to such Registration Statement,
and to file the same, with all exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agent full
power and authority to do and perform each and every act and thing
requisite or necessary to be done in and about the premises, as
fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and
agent, or his substitutes, may lawfully do or cause to
be done by virtue thereof.
Signature Title Date
Chairman of the Board,
Chief Executive Officer
/s/ Edward J. Richardson and Director (Principal)
Edward J. Richardson Executive Officer) October 27, 1998
/s/ Bruce W. Johnson President, Chief
Operating Officer and
Director October 27,1998
Senior Vice President and
Chief Financial Officer
And Director
/s/ William J. Garry (Principal Financial and
William J. Garry Accounting Officer) October 27, 1998
/s/ Arnold R. Allen
Arnold R. Allen Director October 27, 1998
/s/ Scott Hodes
Scott Hodes Director October 27, 1998
/s/ Samuel Rubinovitz
Samuel Rubinovitz Director October 27, 1998
/s/ Kenneth J. Douglas
Kenneth J. Douglas Director October 27, 1998
/s/ Jacques Bouyer
Jacques Bouyer Director October 27, 1998
/s/ Harold L. Purkey
Harold L. Purkey Director October 27, 1998
/s/ Ad Ketelaars
Ad Ketelaars Director October 27, 1998
EXHIBIT 4
RICHARDSON ELECTRONICS, LTD.
EMPLOYEES' 1998 INCENTIVE COMPENSATION PLAN
ARTICLE I
Purpose
The purposes of the Plan are to attract and retain capable
executives and other key employees in the employ of Richardson
Electronics, Ltd., a Delaware corporation (the "Company") and its
subsidiaries by giving these individuals the opportunity either
to acquire an equity interest or to increase their present equity
interest in the Company. The Company intends that certain of the
Options granted pursuant to the Plan will qualify and that
certain other of the Options will not qualify as "incentive
stock options" within the meaning of Section 422 of the Internal
Revenue Code, and the terms of the Options shall be interpreted
in accordance with their designation in the Option Agreement.
ARTICLE II
Definitions
As used in this Plan, the following terms shall each have
the meaning set forth in this Article, unless a different meaning
is clearly required by the context. Whenever appropriate, words
used in the singular shall be deemed to include the plural and
vice versa and the masculine gender shall be deemed to include
the feminine gender.
2.1 Board shall mean the Board of Directors of the Company.
2.2 Cash Bonus shall mean the right granted by the Committee
pursuant to Section 6.11 with respect to certain Options and
pursuant to Section 8.4.9 with respect to certain Stock Awards,
which right shall entitle the Grantee to a cash payment from the
Company in addition to the shares of Common Stock subject to such
Option or Stock Award.
2.3 Code shall mean the Internal Revenue Code of 1986, as now in
effect or as hereafter amended and any regulation issued pursuant
thereto by the Internal Revenue Service. Whenever any provision
of the Code is renumbered or otherwise amended, this Plan shall,
to the extent possible, be construed by reference to the
successor to such provision.
2.4 Committee shall mean the Committee appointed by the Board in
accordance with the provisions of Article IV to administer the
Plan.
2.5 Common Stock shall mean the common stock, $.05 par value, of
the Company.
2.6 Company shall mean Richardson Electronics, Ltd., a Delaware
corporation, and any successor to it.
2.7 Disinterested Person shall mean any member of the Board, who
at the time discretion under the Plan is exercised is not
eligible, and who has not at any time for one year prior thereto
been eligible, for selection as a Grantee either under this Plan
or as a grantee under any other plan of the Company, or any of
the affiliates (as that term is used in the Securities Exchange
Act of 1934, as amended) of the Company entitling the
participants therein to acquire stock, stock appreciation rights,
or stock options of the Company or any of its affiliates;
provided that a member of the Board who is not an Employee shall
not fail to qualify as a Disinterested Person solely as a result
of having received a stock option upon becoming a member of the
Board without any exercise of discretion by the Board.
2.8 Effective Date shall mean July 14, 1998, subject to the
approval of a majority of the stockholders of the Company
entitled to vote thereon at the next annual meeting of the
stockholders of the Company or any adjournment thereof. In the
event the stockholders of the Company shall fail to so approve
the Plan, each Option or Restricted Stock Award granted under the
Plan on or after the Effective Date shall be and become null and
void.
2.9 Employee shall mean any individual employed by and receiving
compensation from the Company or any Subsidiary.
2.10 Fair Market Value of Common Stock shall mean an amount equal
to the mean of the closing bid and asked quotations for a share
of Common Stock in the over-the-counter market as of the date for
which such value is being determined, as reported by the National
Association of Securities Dealers, Inc. through NASDAQ or, in the
event that the Common Stock is listed on any exchange (including,
without limitation, the NASDAQ National Market System), the price
established by the last sale on such exchange on that date or, if
there were no sales on that date, the mean of the bid and asked
prices for Common Stock on that exchange at the close of business
on that date.
2.11 Grantee shall mean an Employee who is granted either an
Option or a Stock Award by the Committee under the Plan.
2.12 Incentive Stock Option means an Option qualifying as an
"incentive stock option" under Section 422 of the Code.
2.13 Nonqualified Stock Option means an Option which is not an
Incentive Stock Option.
2.14 Option shall mean an option to purchase a specific number of
shares of the Common Stock that is granted by the Committee on or
subsequent to the Effective Date pursuant to the terms of the
Plan.
2.15 Option Agreement shall mean a written agreement evidencing
the right of the Grantee to purchase Common Stock pursuant to the
terms of this Plan which agreement shall be in the form described
in Article VI.
2.16 Option Price means the purchase price for Common Stock under
an Option as determined pursuant to Article VI below.
2.17 Plan shall mean the Richardson Electronics, Ltd. Employees'
1998 Incentive Compensation Plan, as set forth herein, as amended
from time to time.
2.18 Restricted Stock Agreement shall mean a written agreement
evidencing the right of the Grantee to receive Common Stock
pursuant to the terms of this Plan which agreement shall be in
the form described in Article VIII.
2.19 Stock Award shall mean a grant by the Committee of a
specific number of shares of Common Stock to an eligible Employee
pursuant to the terms of the Plan in recognition of the services
performed by such Employee for the Company and without payment of
any other consideration by the Employee.
2.20 Subsidiary shall mean any corporation that at the time
qualifies as a subsidiary of the Company under the definition of
"subsidiary corporation" contained in Section 424(f) of the Code,
as that section may be amended from time to time.
ARTICLE III
Shares Subject to Plan
3.1 Number of Shares Available for Grant. Subject to adjustment
as provided in Section 3.2 and Article X, the aggregate number of
shares of Common Stock which may be issued under the Plan is
Eight Hundred Thousand (800,000) and no Grantee may be issued
Options and Stock Awards under the Plan for more than One Hundred
Thousand (100,000) shares in any one year.
3.2 Shares Subject to Options and Awards that Terminate. In the
event that any Option terminates for any reason (whether vested
or non-vested at the time of termination) without having been
exercised in full, a number of shares of the Common Stock equal
to the number of unpurchased shares of Common Stock subject to
that Option shall become available for issuance under the Plan.
In the event that any of the shares of Common Stock that have
been issued in connection with any Stock Award are subsequently
forfeited, such shares shall once again become available for
issuance under the Plan but only if the Grantee received no
benefits of ownership from such shares, such as dividends.
3.3 Source of Shares. The shares of Common Stock issued under
the Plan shall be made available, in the discretion of the Board,
either from the authorized but unissued Common Stock or from any
outstanding Common Stock which has been reacquired by the
Company.
ARTICLE IV
Administration
4.1 Authority of Committee. The authority to control and manage
the operations and administration of the Plan shall be vested
exclusively in the Committee which shall be appointed by the
Board and shall consist of not less than two (2) members of the
Board. All members of the Committee shall be Disinterested
Persons. Members of the Committee shall serve at the pleasure of
the Board. The Board may appoint new members to the Committee to
fill any vacancies occurring in the membership of the Committee.
4.2 Determinations to be made by Committee. Subject to the
provisions of this Plan, the Committee shall determine: (1) the
Grantees, (2) the number of shares of Common Stock subject to an
Option or Stock Award, (3) the dates upon which Options and Stock
Awards are granted, (4) subject to Section 6.3, the date or dates
upon which an Option may be exercised, (5) the manner in which an
Option may be exercised, (6) whether and for what period the
Option may be exercised after the Grantee ceases to be an
Employee, (7) whether or not the Option is to an Incentive Stock
Option, (8) such other terms to which an Option or Stock Award is
subject (including the time at which it vests and whether it
entitles the Grantee to receive a Cash Bonus), and (9) the form
of any Option Agreements and of any Restricted Stock Agreements.
4.3 Interpretation of Plan. The Committee shall interpret the
Plan and from time to time may adopt such rules and regulations
for carrying out the terms and purposes of the Plan and may take
such other actions in the administration of the Plan as it deems
advisable. The interpretation and construction by the Committee
of any provisions of, and the determination of any question
arising under the Plan, any such rule or regulation, or any
Option Agreement or Restricted Stock Agreement shall be final and
binding on all persons interested in the Plan. Option Agreements
or Restricted Stock Agreements may be amended by the Committee
consistent with the Plan, provided that no such amendment may
become effective without the consent of the Grantee except to the
extent that such amendment operates solely to the benefit of the
Grantee.
4.4 Actions by Committee. The Committee shall maintain written
minutes of its proceedings. A majority of the Committee shall
constitute a quorum, and the acts of a majority of the members
present at any meeting at which a quorum is present or acts
approved in writing by all the members, shall be the acts of the
Committee. The Committee shall make such rules and regulations
for the conduct of its business as it deems advisable.
4.5 Actions Performed in Good Faith. No member of the Committee
shall be liable for any action or determination made in good
faith with respect to the Plan.
ARTICLE V
Eligibility
All key administrative, managerial and executive Employees,
as determined in the sole discretion of the Committee, shall be
eligible to receive both Options and Stock Awards.
ARTICLE VI
Terms and Conditions of Options
All Options granted by the Committee under the Plan shall be
evidenced by an Option Agreement which shall be in such form as
the Committee may from time to time approve and shall be executed
on behalf of the Company by one or more officers of the Company.
Each such Option Agreement shall be subject to the terms and
conditions of the Plan as well as such other terms and conditions
as the Committee may deem desirable, including but not limited to
the period or times at which the Grantee's rights vest, and shall
provide in substance as follows:
6.1 Number of Shares and Option Price. Each Option Agreement
shall specify the number of shares of Common Stock subject to
such Option and the purchase price per share for such shares.
The purchase price per share shall not be less than 50% of the
Fair Market Value of the Common Stock on the date that the Option
is granted and the purchase price per share of Common Stock
subject to an Incentive Stock Option shall not be less than the
Fair Market Value of the Common Stock on the date that the Option
is granted. The number of shares and the purchase price per
share shall be subject to adjustment as provided in Article X.
For all Incentive Stock Options granted, the aggregate Fair
Market Value of the Common Stock (determined at the time the
Option is granted) of the Common Stock with respect to which
Incentive Stock Options are exercisable for the first time in any
calendar year (together with options granted under all incentive
stock option plans of the Company, any parent corporation or
Subsidiary) shall not exceed One Hundred Thousand Dollars
($100,000) for any one Grantee.
6.2 Transferability of Options. At the direction of the
Committee, exercised upon grant of an Option, each Option
Agreement shall provide either: (i) that during the life of the
Grantee the Option is non-transferable and non-assignable by the
Grantee and may be exercised (to the extent vested) only by the
Grantee or his guardian or legal representative and in the event
the Grantee dies prior to the expiration of the term of the
Option, the Option (to the extent vested) may be exercised only
by the Grantee's designated Beneficiary or in the absence of such
designation by his legal representative or other successor in
trust; or (ii) that during the life of the Grantee the Option is
non-transferable and non-assignable by the Grantee except that it
may be transferred and assigned to members of the Grantee's
family, trusts for such family members, or partnerships whose
only partners are such family members and may be exercised (to
the extent vested) only by the Grantee or his guardian or legal
representative or such permitted assignee and in the event the
Grantee dies prior to the expiration of the term of the Option,
the Option (to the extent vested) may be exercised only by the
Grantee's designated Beneficiary or in the absence of such
designation by his legal representative or other successor in
trust, or if assigned prior to his death only by the permitted
assignee to whom assigned. For purposes hereof a family member
of a Grantee shall mean the Grantee's spouse, children and
grandchildren. No consideration may be received by the Grantee
for the transfer or assignment of an Option. The assignee of any
Option transferred or assigned by a Grantee shall be subject to
all conditions of the Option prior to its transfer or assignment
and may not make any further assignments or transfers of the
Options. These restrictions shall be set forth in the Option
Agreement.
6.3 Maximum Term. Each Option Agreement shall set forth the
period during which it may be exercised; provided, however, that
any Option granted pursuant to this Plan shall expire not more
than ten (10) years from the date that the Option is granted.
6.4 Exercise of Options Upon Termination of Employment. Except
as otherwise provided in this Plan each Option Agreement shall
provide that:
(a) If a Grantee ceases to be an Employee, for any reason
other than the Grantee's death, disability, or termination for
cause, the Grantee may exercise his or her Options in accordance
with their terms for a period of three months after such
termination of employment unless such Option provides otherwise,
but only to the extent the Grantee was entitled to exercise the
Options on the date of termination. For purposes of the Plan:
(i) a leave of absence, duly authorized in writing by the
Company, for military service or for any other purpose approved
by the Company if the period of such leave does not exceed 90
days; and (ii) a leave of absence in excess of 90 days, duly
authorized in writing by the Company, provided the Employee's
right to reemployment is guaranteed either by statute or
contract, shall not be deemed a termination of employment.
(b) If a Grantee ceases to be an Employee due to the
Grantee's disability, he or she may exercise his or her Option in
accordance with its terms for one year after he or she ceases to
be employed unless such Option earlier expires by its terms, but
only to the extent that the Grantee was entitled to exercise the
Option on the date of such termination.
(c) If a Grantee dies either while an Employee or otherwise
during a time when the Grantee could have exercised an Option,
the Options issued to such Grantee shall be exercisable in
accordance with their terms by the Grantee's designated
Beneficiary or in the absence of such designation by the personal
representative of such Grantee or other successor to the interest
of the Grantee for a period of one year after such Grantee's
death to the extent that the Grantee was entitled to exercise the
Option on the date of death but not beyond the original term of
the Option.
(d) If a Grantee's employment is terminated for cause, the
Grantee shall have no further right to exercise any Option
previously granted him or her.
6.5 Intra-Corporate Transfers. Each Option Agreement shall
provide that a transfer of employment from the Company to a
Subsidiary or vice versa or between two such Subsidiaries shall
not be deemed a termination of employment.
6.6 Method of Exercise of Options. Each Option Agreement shall
provide that the Option shall be exercised by delivering a
written notice of exercise to the Company and payment of the
purchase price as hereinafter provided. Each such notice shall
state the number of shares of Common Stock with respect to which
the Option is being exercised and shall be signed by the person
(or persons) exercising the Option and, in the event the Option
is being exercised by any person other than the Grantee, shall be
accompanied by proof, satisfactory to counsel for the Company, of
the right of such person to exercise the Option. A certified or
cashier's check in full payment of the purchase price for the
number of shares of Common Stock specified in the notice must
accompany such notice; provided, however, the purchase price may
be paid in such other manner or form as the Committee may
approve, including, without limitation, by delivery of a
certificate or certificates for shares of Common Stock owned by
the Grantee having a Fair Market Value at the date of exercise
equal to the purchase price for such shares, or any combination
of the foregoing. Any stock certificate or certificates
delivered must be endorsed, or accompanied by an appropriate
stock power, to the order of the Company, with the signature
guaranteed by a bank or trust company or by a member firm of the
New York Stock Exchange. No shares of Common Stock shall be
issued in connection with an exercise of the Option until payment
for such shares has been made. The Company may make appropriate
arrangements with a broker or other institution to receive sale
or loan proceeds in the amount of the exercise price upon
delivery of an appropriate irrevocable exercise notice and
instructions to promptly deliver the sale or loan proceeds or
similar arrangements satisfactory to the Committee. The delivery
of such notice and instructions or compliance with similar
arrangements approved by the Committee shall be deemed
conditional payment of the purchase price authorizing delivery of
the shares by the Company.
6.7 Forfeiture. An Option Agreement may provide for such
conditions on the right of the Grantee to exercise his Option as
the Committee, in its sole discretion, deems appropriate, which
conditions may, without limitation, include conditions based upon
either (i) the completion by the Grantee of a further period of
continued employment or (ii) the performance of the Company, of
any Subsidiary, or any division thereof, or of the Grantee.
Without limiting the foregoing, an Option Agreement may provide
that the Committee may, in its sole discretion, terminate in
whole or in part any portion of the Option which has not yet
become vested if it determines that the Grantee is not
satisfactorily performing the duties to which he was assigned on
the date the Option was granted or duties of at least equal
responsibility.
6.8 Withholding. Each Option Agreement shall provide that the
Company shall have the right to require the Grantee to remit and
the Grantee shall have the obligation to remit to the Company, or
to withhold from other amounts due to the Grantee as compensation
or otherwise (including, but not limited to the Cash Bonus, if
any, granted as part of the Option or Option shares), an amount
sufficient to satisfy all applicable withholding taxes. At the
Committee's election, such amount shall be satisfied with cash or
shares of Common Stock.
6.9 Beneficiaries. Each Option Agreement may provide that the
Grantee may designate the person or persons (collectively the
"Beneficiary") who, in the event of the death of the Grantee, may
exercise the Option(s) held by the Grantee at the time of his
death and may also include restrictions on the ability of
Beneficiaries to exercise the Grantee's Options. Any designation
of a Beneficiary shall be in writing, shall be signed by the
Grantee, and shall be effective only when filed with the
Committee. In the event that the Grantee fails to designate a
Beneficiary or that none of his Beneficiaries survive the
Grantee, the legal representative of the Grantee may exercise the
Grantee's vested Options to the same extent as a Beneficiary. A
Beneficiary designation may be changed at any time and from time
to time by the Grantee; provided, however, that any such change
shall become effective only when filed with the Committee.
6.10 Section 422A(b) Statement. Each Option Agreement which is
intended to be a Non Qualified Stock Option shall contain the
statement "This Option shall not be treated as an Incentive Stock
Option within the meaning of Internal Revenue Code Section 422A."
6.11 Cash Bonus. In the event that the Committee, in its sole
discretion, grants a Cash Bonus to the Grantee as part of the
Option, then in addition to the provisions described above, the
Option Agreement shall contain provisions describing the amount
of such Cash Bonus, and the time or times at which the Grantee's
right to such Cash Bonus vests.
6.12 Surrender of Prior Options. An Option Agreement may, in the
Committee's discretion, provide that the Option is contingent
upon the Grantee agreeing to the cancellation without exercise of
another stock option granted under the Plan or any other plan
maintained by the Company or any Subsidiary. In the event that
the stockholders of the Company fail to approve the Plan as
provided in Section 2.8 above, then any option which has been
surrendered for cancellation without exercise pursuant to this
Section 6.12 shall remain in effect as originally granted and the
agreement evidencing such option shall be returned to the grantee
of such option.
ARTICLE VII
Exercise of Options
7.1 Date of Exercise. For all purposes the date of exercise of
the Option shall be the date on which the notice described in
Section 6.6 shall have been delivered to the Company and pays the
purchase price for the shares then being purchased, but the
exercise of that Option shall not be effective unless and until
the person (or persons) exercising the Option complies with all
the provisions of the Plan, Option Agreement or of the Committee
governing the exercise of the Option within a reasonable time
after the delivery of such notice.
7.2 Delivery of Certificate. The Company shall deliver
certificates for the shares of Common Stock subject to the
Option, within a reasonable period of time after the day on which
the exercise of the Option is effective provided that the Company
shall not be required, upon the exercise of any Option, to issue
or deliver any shares of Common Stock prior to the completion of
such registration or other qualification of the Common Stock
under any applicable law, rule or regulation as the Company shall
determine to be necessary, and compliance with all other
applicable laws, rules or regulations as the Company shall
determine to be necessary, and in any such event the date of
delivery shall be extended for the period necessary and to assure
and obtain compliance with all other applicable laws, rules or
regulations as the Company shall determine to be necessary. No
one shall be or be deemed to be the holder of any Common Stock
subject to an Option unless and until certificates for the shares
of such Common Stock are issued to that person.
ARTICLE VIII
Terms and Conditions of Stock Awards
8.1 Generally. The Committee shall, in its sole and absolute
discretion, determine whether a Stock Award shall take the form
of (i) an unrestricted grant of shares of Common Stock or (ii) a
grant of shares of Common Stock which are subject to the risk of
forfeiture.
8.2 Fully Vested Grant of Stock. If the Committee determines
that the Stock Award shall take the form of an unrestricted grant
of shares of Common Stock, then it shall, after the payment of
applicable withholding taxes by the Grantee, cause a certificate
representing such shares to be delivered to the Grantee.
8.3 Grant of Stock Subject to the Risk of Forfeiture. If the
Committee determines that the Stock Award shall take the form of
a grant of shares of Common Stock which are to remain subject to
the risk of forfeiture for a period of time, then it shall take
or cause to be taken the steps set forth in this Section 8.3:
8.3.1 Restricted Stock Agreement. The Committee shall cause
the Stock Award to be evidenced by a Restricted Stock Agreement
which, subject to Section 8.4, shall be in such form as the
Committee may from time to time approve and shall be executed on
behalf of the Company by one or more officers of the Company.
8.3.2 Stock Certificates.
(a) The Company shall cause a certificate or certificates
representing the shares subject to the Restricted Stock Agreement
to be registered in the name of the Grantee which certificate(s)
shall bear the following legend:
The shares represented by this certificate have been issued
pursuant to the terms of a Restricted Stock Award made under
the Richardson Electronics, Ltd. Employees' 1998 Incentive
Compensation Plan and may not be sold, assigned,
transferred, pledged, hypothecated or otherwise disposed of
until such time as is set forth in that certain Restricted
Stock Agreement dated the day of ,
____, by and between Richardson Electronics, Ltd. and
.
(b) In order to enforce the restrictions on the shares
subject to the Restricted Stock Agreement, the Committee shall
require the Grantee, immediately upon receipt of a certificate or
certificates representing such shares, to deposit such
certificates, together with stock powers and other instruments of
transfer, appropriately endorsed in blank, with the Company or an
escrow agent designated by the Company under an escrow agreement
in such form as shall be determined by the Committee.
(c) At such time as any number of the shares of Common
Stock are no longer subject to the restrictions, terms, and
conditions of the Grantee's Restricted Stock Agreement (the
"Unrestricted Shares"), the Committee shall cause a new
certificate to be delivered to the Grantee, without the legend
set forth above, for the Unrestricted Shares. The shares
remaining subject to the Restricted Stock Agreement shall either
be canceled or, if appropriate under the terms of the Restricted
Stock Agreement, continue to be held by the Company or held in
escrow subject to the restrictions, terms, and conditions of the
Restricted Stock Agreement.
(d) In the event that a Grantee becomes entitled to receive
any new, additional, or different securities by virtue of a stock
dividend, stock split, recapitalization, reorganization, merger,
consolidation, split-up, or any similar change affecting the
Common Stock subject to the Participant's Restricted Stock
Agreement, such securities shall be subject to the same
restrictions, terms and conditions as apply to the shares of
Common Stock subject to such Restricted Stock Agreement.
8.4 Form of Restricted Stock Agreement. Each Restricted Stock
Agreement shall be subject to the terms and conditions of the
Plan as well as such other terms and conditions as the Committee
may deem desirable and shall provide in substance as follows:
8.4.1 Number of Shares. Each Restricted Stock Agreement
shall specify the number of shares of Common Stock subject to
such Restricted Stock Agreement.
8.4.2 Non-Transferability of Restricted Stock. Each
Restricted Stock Agreement shall provide: (i) that during the
life of the Grantee the shares subject to the Restricted Stock
Agreement may not be transferred or assigned by the Grantee, and
that such shares may be received (to the extent vested) only by
the Grantee or his guardian or legal representative, and (ii)
that upon the death of the Grantee the shares of Common Stock (to
the extent vested) subject to any Restricted Stock Agreement held
by him at the time of his death which have not been previously
delivered to the Grantee shall be distributed to his designated
Beneficiary or in the absence of such designation to his legal
representative or other successor in interest.
8.4.3 Intra-Corporate Transfers. Each Restricted Stock
Agreement shall provide that a transfer of employment from the
Company to a Subsidiary or vice versa or between two such
Subsidiaries shall not be deemed a termination of employment.
8.4.4 Forfeiture. In addition to any other condition or
other vesting requirement, a Restricted Stock Agreement may
provide that a Grantee may forfeit in whole or in part any
portion of the shares of Common Stock subject to such Restricted
Stock Agreement which have not yet become vested if the Committee
may, in its sole discretion, determine that the Grantee is not
satisfactorily performing the duties to which he was assigned on
the date the Stock Award was granted or duties of at least equal
responsibility.
8.4.5 Vesting. Each Restricted Stock Agreement shall contain
a schedule setting forth the period over which or the conditions
upon which the Grantee's rights in the shares of Common Stock
subject to the Restricted Stock Agreement vest (which may include
any conditions described in Section 6.7) and shall also provide
whether the Restricted Stock Agreement becomes vested, in whole
or in part, if the Grantee dies before his rights would otherwise
have become fully vested.
8.4.6 Stockholder Rights. Each Restricted Stock Agreement
shall provide that during its term the Grantee shall be entitled
to receive all dividends paid on all of the shares of Common
Stock subject to such Restricted Stock Agreement, to vote all
such shares, and to enjoy all other stockholder rights, except
that the Grantee shall neither (i) be entitled to the delivery of
the certificate evidencing shares except as provided in Section
8.3 above nor (ii) be able to sell, assign, transfer, pledge,
hypothecate or otherwise dispose of such shares until such time
he has received a certificate evidencing such shares.
8.4.7 Beneficiary. Each Restricted Stock Agreement shall
provide that the Grantee may designate the person or persons
(collectively the "Beneficiary") who, in the event of the death
of the Grantee, shall receive the certificate(s) evidencing
shares of Common Stock (to the extent vested) subject to the
Restricted Stock Agreement held by the Grantee at the time of his
death. Any such designation shall be in writing, shall be signed
by the Grantee, and shall be effective only when filed with the
Committee. In the event that the Grantee fails to designate a
Beneficiary or that none of his Beneficiaries survive the
Grantee, the legal representative of the Grantee shall receive
the certificate(s) evidencing the shares of Common Stock (to the
extent vested) subject to the Grantee's Restricted Stock
Agreement. A Beneficiary designation may be changed at any time
and from time to time by the Grantee; provided, however, that any
such change shall become effective only when filed with the
Committee.
8.4.8 Withholding. Each Restricted Stock Agreement shall
provide that the Company shall have the right to require the
Grantee to remit and the Grantee shall have the obligation to
remit to the Company, or to withhold from other amounts due the
Grantee, as compensation or otherwise (including but not limited
to any Cash Bonus granted in connection with the related Stock
Award), an amount sufficient to satisfy all applicable
withholding tax requirements. At the Committee's election, such
amount shall be satisfied with cash or Common Stock.
8.4.9 Cash Bonus. In the event that the Committee grants a
Cash Bonus in connection with the Stock Award, then in addition
to the provisions described above, the Restricted Stock Agreement
shall contain provisions describing the amount of such Cash
Bonus, and the time or times at which the Grantee's right to such
Cash Bonus vests.
ARTICLE IX
Terms and Conditions of Cash Bonuses
9.1 Grant of Cash Bonuses. The Committee may, in its sole
discretion, grant Cash Bonuses as part of any Option or Stock
Award granted under the Plan. Such Cash Bonuses may be granted
at any time during the term of the Option or Stock Award to which
it relates.
9.2 Amount and Vesting of the Cash Bonuses.
(a) In the case of Cash Bonuses granted in connection with
an Option, the Grantee's (or his Beneficiary) right to receive a
Cash Bonus shall vest each time he purchases shares of Common
Stock subject to such Option. The amount of such Cash Bonus
shall be equal to the product obtained by multiplying (A) the
excess, if any, of the Fair Market Value (determined pursuant to
paragraph (d) below) of the shares so purchased over the purchase
price for such shares times (B) a fraction, the numerator of
which is an amount equal to the Combined Marginal Rate of Tax (as
that term is defined in Section 9.5 below) and the denominator of
which is an amount equal to the excess of one (1) over the
Combined Marginal Rate of Tax.
(b) In the case of Cash Bonuses granted in connection with
a Stock Award described in Section 8.2, the Grantee's right to a
Cash Bonus shall vest at the time the certificate representing
the shares subject to the Stock Award is delivered to the Grantee
(or his Beneficiary). The amount of the Cash Bonus shall be
equal to the product obtained by multiplying the Fair Market
Value (determined pursuant to paragraph (d) below) of such shares
times a fraction, the numerator of which is an amount equal to
the Combined Marginal Rate of Tax and the denominator of which is
an amount equal to the excess of one (1) over the Combined
Marginal Rate of Tax.
(c) In the case of Cash Bonuses granted in connection with
a Stock Award described in Section 8.3, the Grantee shall be
entitled to receive a Cash Bonus vesting at the times set forth
in this subparagraph (c). Right to a Cash Bonus shall vest when
a certificate representing Unrestricted Shares is delivered to
the Grantee (or his Beneficiary) pursuant to Section 8.3.2(c) or
if the employee makes an election under Section 83(b) of the
Code, when a certificate is issued in accordance with Section
8.3.2(a). The amount of such Cash Bonus shall be equal to the
product obtained by multiplying the Fair Market Value (determined
pursuant to paragraph (d) below) of the Unrestricted Shares
evidenced by such certificate times a fraction, the numerator of
which is an amount equal to the Combined Marginal Rate of Tax and
the denominator of which is an amount equal to the excess of one
(1) over the Combined Marginal Rate of Tax.
(d) For purposes of this Section 9.2, the Fair Market Value
of the shares shall be determined as of the date on which the
shares "first become transferable or are not subject to a
substantial risk of forfeiture," (within the meaning of Code
Section 83) whichever occurs earlier as determined by the
Committee in its sole and absolute discretion.
9.3 Payment of Cash Bonus. The Company may either pay the Cash
Bonus to a Grantee or withhold all or a portion of the Cash Bonus
and apply such amount to the payment of withholding taxes due in
connection with amounts received by the Grantee pursuant to the
Plan.
9.4 Combined Marginal Rate of Tax. For purposes of this Article
IX, the term Combined Marginal Rate of Tax shall mean an amount
equal to the sum of the highest marginal rates of federal, state
and local income taxes applicable to individuals residing in the
state and city where the Grantee resides, giving effect to the
deductibility for federal income tax purposes of state and local
income taxes. In the event that the Grantee is neither a
resident nor citizen of the United States, this Section 9.4 shall
be applied by replacing the term "federal, state and local income
taxes" with the term "all applicable income taxes" wherever it
appears herein.
9.5 Construction. It is the intention of the Company that the
amount of a Cash Bonus be calculated at the time at which the
ownership of the shares of Common Stock subject to the related
Option or Stock Award results in the inclusion of income by the
Grantee pursuant to Code Section 83 and this Section shall be so
construed and applied. Nothing contained herein shall be
construed as a guarantee by the Company that the Internal Revenue
Service, or other taxing authority, will agree with the
determination of the Committee as to the date upon which such
inclusion income occurs or the amount thereof. In the event of
any such disagreement, nothing contained herein shall be
construed as a promise of an additional payment by the Company to
the Grantee.
ARTICLE X
Effect of Certain Changes
10.1 Anti-Dilution. If there is any change in the number of
shares of Common Stock through the declaration of stock dividends
or through a recapitalization which results in stock splits or
reverse stock splits, the number of shares of Common Stock
available for issuance under the Plan, the number of such shares
covered by outstanding Options and Restricted Stock Awards, and
the price per share of such Options, shall be proportionately
adjusted by the Committee to reflect any increase or decrease in
the number of issued shares of Common Stock; provided, however,
that any fractional shares resulting from such adjustment shall
be eliminated.
10.2 Change in Par Value. In the event of a change in the Common
Stock of the Company, as presently constituted as of the date of
this Amendment and Restatement of the Plan, which is limited to a
change of all of its authorized shares with par value into the
same number of shares with a different par value or without par
value, the shares resulting from any such change shall be deemed
to be the Common Stock within the meaning of the Plan.
10.3 Mergers, Recapitalization, Etc. In the event that the
Company enters into an agreement or plan to merge or consolidate
with any other corporation, to reclassify, reorganize or
otherwise substantially alter its capital or business structure,
to sell all or a substantial part of its business or assets, or
to dissolve, the Committee may make such changes in the terms of
outstanding Option Agreements and Restricted Stock Agreements as
may be equitable and appropriate in the context of such
transaction, including without limitation substituting for the
shares of Stock subject to such Agreements equity interests in
any entity which will succeed to the business of the Company
pursuant to such transaction, accelerating the vesting schedule
in such Agreement, and providing that outstanding Options will
lapse if not exercised during a reasonable period prior to such
transaction.
10.4 Adjustments to be made by Committee. The foregoing
adjustments shall be made by the Committee, whose determination
in that respect shall be final, binding and conclusive.
10.5 Rights of Option Grantee. A Grantee of an Option shall not
have any of the rights or privileges of a stockholder of the
Company unless and until certificates evidencing the shares of
Common Stock subject to such Option have been issued and
delivered to the Grantee.
10.6 Right of Company to Make Adjustments. The grant of an
Option or a Stock Award shall not affect in any way the right or
power of the Company to make adjustments, reclassifications,
reorganizations or changes of its capital or business structures
or to merge or to consolidate or to dissolve, liquidate or sell
or transfer all or part of its business or assets.
ARTICLE XI
Amendment and Termination
The Board shall have the right to amend or suspend, or
terminate the Plan at any time, provided that unless first
approved by the stockholders of the Company, no amendment shall
be made to the Plan (except to conform the Plan, the Option
Agreements or Restricted Stock Agreements thereunder to changes
in the Code or governing law) which: (1) increases the total
number of shares of Common Stock which may be issued under the
Plan, or (2) lowers the minimum option price specified in Article
VI. No amendment to the Plan shall be made by the Board that
materially changes the terms of the Plan as to impair or
adversely alter the rights of a Grantee or other option holder
without such person's consent.
ARTICLE XII
Application of Funds
Any proceeds received by the Company as a result of the
exercise of Options granted under the Plan may be used for any
valid corporate purpose.
ARTICLE XIII
Notice
Any notice to the Company required under this Plan shall be
in writing and shall either be delivered in person or sent by
registered or certified mail, return receipt requested, postage
prepaid, to the Company at its offices at 40W267 Keslinger Road,
P.O. Box 393, LaFox, Illinois 60147-0393, Attention: Stock Option
Committee.
ARTICLE XIV
Term of Plan
The Board may terminate the Plan at any time but if not
sooner terminated it shall terminate at the close of business on
April 9, 2006. Options may not be granted and Restricted Stock
Awards may not be made after the Plan terminates. Termination of
the Plan shall not, however, affect the rights of Grantees under
previously granted Options or Restricted Stock Awards, and all
unexpired Options and Restricted Stock Awards shall continue in
force and operation after termination of the Plan until they are
exercised, lapse or terminate by their own terms and conditions,
and the Plan shall continue in effect solely with respect to such
Options and Restricted Stock Awards for so long as they remain
outstanding.
ARTICLE XV
No Contract of Employment
Neither the adoption of the Plan nor the grant of any Option
or Restricted Stock Award shall be deemed to obligate either the
Company or any Subsidiary to continue the employment of any
Employee.
ARTICLE XVI
Section 16 of the Securities Exchange Act
With respect to Grantees subject to Section 16 of the
Securities Exchange Act of 1934 ("1934 Act"), transactions under
this plan are intended to comply with all applicable conditions
of Rule 16b-3 or its successors under the 1934 Act. To the
extent any provision of the plan or action by the Committee fails
to so comply, it shall be deemed null and void, to the extent
permitted by law and deemed advisable by the Committee.
October 27, 1998
The Board of Directors of
Richardson Electronics, Ltd.
40W267 Keslinger Road
LaFox, IL 60147
Gentlemen:
This opinion is delivered to you in connection with the registra-
tion statement ("Registration Statement") on Form S-8 being filed
by you ("Company") with the Securities and Exchange Commission on
October 28, 1998 relating to the registration for sale and issuance
by the Company, pursuant to the Securities Act of 1933, as amended,
of 800,000 shares of the Common Stock, par value $05 per share, of
the Company, upon exercise of options and/or stock awards to be
issued pursuant to the Richardson Electronics, Ltd. Employees 1998
Incentive Compensation Plan (the "Plan").
I have examined the Company's restated certificate of incorporation
and by-laws, as amended, the registration statement, the Plan, the
records of corporate proceedings adopting the Plan and such other
instruments and documents as I deemed material to this opinion.
Based upon the foregoing examination, I am of the opinion, that up
to 800,000 shares of Common Stock, $.05 par value of the Company,
when sold and issued upon grants of stock awards or exercise of
options in accordance with their terms and the terms and provisions
of the Plan, will be legally issued, fully paid and non-assessable.
I hereby consent to the reference to me under the caption "Interest
of Named Experts and Counsel" in the registration statement and to
the filing of this opinion as an exhibit to the registration
statement.
Very truly yours,
William G. Seils
EXHIBIT 23
Consent of Independent Auditors
We consent to the incorporation by reference in the Registration
Statement (Form S-8) pertaining to the Richardson Electronics, Ltd.
Employees' 1998 Incentive Compensation Plan, of our report dated
July 14, 1998, with respect to the consolidated financial
statements of Richardson Electronics, Ltd. incorporated by
reference in its Annual Report on form 10-K for the year ended May
31, 1998 and the related financial statement schedule included
therein, filed with the Securities and Exchange Commission.
Ernst & Young LLP
October 23, 1998
Chicago, Illinois
