As filed with the Securities and Exchange Commission on February 10, 1995
Registration No. 33-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
KEY TRONIC CORPORATION
(Exact Name of Registrant as Specified in Its Charter)
WASHINGTON
(State or Other Jurisdiction of Incorporation or organization)
91-0849125
(I.R.S. Employer Identification Number)
N. 4424 Sullivan Road
Spokane, Washington 99216
(509) 928-8000
(Address, including zip code, and telephone number, including area code, of
agent for service of process)
Ronald F. Klawitter
Vice President, Finance and Treasurer
Key Tronic Corporation
N. 4424 Sullivan Road
Spokane, Washington 99216
(509) 928-8000
(Name, address, including zip code, and telephone number, including area code,
of agent for service of process)
COPIES TO:
Stephen M. Tennis, Esq.
Morrison & Foerster
755 Page Mill Road
Palo Alto, California 94304
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
From time to time after the effective date of this Registration Statement.
If only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box: __
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box: _X_
CALCULATION OF REGISTRATION FEE
TITLE OF SECURITIES TO BE REGISTERED COMMON STOCK, NO
PAR VALUE
AMOUNT TO BE REGISTERED(1) 1,000,000 SHARES
PROPOSED MAXIMUM OFFERING
PRICE PER UNIT $10.75(2)
PROPOSED MAXIMUM AGGREGATE
OFFERING PRICE $10,750,000
AMOUNT OF REGISTRATION FEE $3,707
(1) Represents 1,000,000 shares of Common Stock acquired by a certain security
holder of the Company immediately prior to the effective date of the
Registration Statement upon the exercise of certain options acquired in
February 1992. See "Background of the Offering."
(2) Estimated solely for the purpose of calculating the registration fee in
accordance with Rules 457(c).
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
AN AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL
THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES
ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH
DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
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Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.1
KEY TRONIC CORPORATION
1,000,000 SHARES OF COMMON STOCK
This Prospectus relates to 1,000,000 shares of Common Stock, no par value (the
"Common Stock") of Key Tronic Corporation (the "Company") to be offered and sold
from time to time for the account of a certain holder of Common Stock of the
Company (the "Selling Shareholder") who acquired the Common Stock immediately
prior to the effective date of the Registration Statement upon exercise of
certain options acquired in February 1992. See "Background of the Offering,"
"Plan of Distribution" and "Selling Shareholder." The Company will not receive
any of the proceeds from the sale of the Common Stock.
The Company has been advised by the Selling Shareholder that all or a portion
of the Common Stock may be disposed of hereunder from time to time in one or a
combination of the following transactions: (a) a "broker's transaction" within
the meaning of Section 4(4) of the Securities Act of 1933, as amended (the
"Securities Act"), where the broker acts as agent for the Selling Shareholder
and receives only the normal and customary commissions with regard to such
transaction; (b) a transaction directly with a "market maker" within the meaning
of Section 3(a)(38) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"); (c) in privately negotiated transactions at privately
negotiated prices; or (d)by gift. Any commissions or discounts paid or allowed
to brokers,dealers or agents may be changed from time to time. See "Plan of
Distribution."
The Selling Shareholder and any brokers, dealers or agents who participate in
the sale of the Common Stock may be deemed to be "underwriters" within the
meaning of Section 2(11) of the Securities Act, and the commissions paid or
discounts allowed to any such brokers, dealers or agents, in addition to any
profits received on resale of the Common Stock, if any of such brokers, dealers
or agents should purchase any Common Stock as a principal, may be deemed to be
underwriting discounts or commissions under the Securities Act. In the event of
a transaction hereunder in which a broker or dealer acts as a principal, this
Prospectus will be supplemented to provide material facts with respect to such
transaction.
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The Company will pay all expenses incident to the registration of the Common
Stock, estimated to be approximately $48,707.00. Normal commission expenses and
brokerage fees and any applicable stock transfer taxes relating to the Common
Stock are payable by the Selling Shareholder.
The Common Stock is quoted on the Nasdaq National Market under the symbol
"KTCC." On February 9 1995, the last reported sales price of the Common Stock
was $10.75.
THE SECURITIES OFFERED HEREBY INVOLVE A HIGH DEGREE OF RISK.
SEE "RISK FACTORS."
__________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
PER SHARE
PRICE TO PUBLIC See Text Above
UNDERWRITING DISCOUNTS OR COMMISSIONS See Text Above
PROCEEDS TO SELLING SHAREHOLDER(1) See Text Above
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED OR INCORPORATED BY REFERENCE IN THIS
PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED. THIS PROSPECTUS DOES NOT CONSTITUTE
AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN
THE REGISTERED SECURITIES TO WHICH IT RELATES OR AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY SUCH SECURITIES IN ANY CIRCUMSTANCES IN WHICH
SUCH AN OFFER OR SOLICITATION WOULD BE UNLAWFUL. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY OR THAT
INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE
HEREOF.
The date of this Prospectus is February 10, 1995
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AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports and other information with the Securities and Exchange
Commission (the "Commission"). Such reports and other information filed by the
Company can be inspected and copied at the public reference facilities
maintained by the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549,
at the New York Regional Office of the Commission at 7 World Trade Center, 13th
Floor, New York, New York 10048 and the Chicago Regional Office of the
Commission at Northwestern Atrium Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661. Copies of such material can be obtained from the
Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates.
The Company has filed with the Commission a Registration Statement on Form S-3
(together with all amendments and exhibits thereto, the "Registration
Statement") under the Securities Act with respect to the Securities offered
hereby. This Prospectus does not contain all the information set forth in the
Registration Statement, certain parts of which are omitted in accordance with
the rules and regulations of the Commission. Statements contained in this
Prospectus as to the contents of any contract or other document referred to are
not necessarily complete and in each instance reference is made to the copy of
such contract or other document filed as an exhibit to the Registration
Statement, each such statement being qualified by such reference. For further
information regarding the Company and the Securities offered by this Prospectus,
reference is made to the Registration Statement and the exhibits and schedules
relating thereto. The Registration Statement and the exhibits and schedules
thereto may be inspected by anyone without charge at the office of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, and copies can be
obtained from the Commission at prescribed rates.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission are
incorporated herein by reference and made a part hereof, except as superseded or
modified herein: (i) the Company's Annual Report on Form 10-K for its fiscal
year ended July 2, 1994; (ii) the Company's Quarterly Report on Form 10-Q for
the quarter ended October 1, 1994; and (iii) the Company's Registration
Statement on Form 8-A dated April 3, 1984.
All documents filed by the Company with the Commission pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this Prospectus
and prior to the termination of the offering of the Securities covered by this
Prospectus shall be deemed to be incorporated by reference into this Prospectus
and to be a part hereof from the date of filing of such documents. Any statement
contained in any document incorporated or deemed to be incorporated by reference
in this Prospectus shall be deemed to be modified or superseded for purposes of
this Prospectus to the extent that such a statement contained herein or in any
other subsequently filed document which also is or is deemed to be incorporated
by reference in this Prospectus modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as modified or
superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person, including any
beneficial owner, to whom this Prospectus is delivered, upon written or oral
request of such person, a copy of any and all of the documents that have been or
may be incorporated by reference in this Prospectus (other than exhibits to such
documents which are not specifically incorporated by reference into such
documents). Such requests should be directed to the Company's Vice President,
Finance and Treasurer, Key Tronic Corporation, N. 4424 Sullivan Road, Spokane,
Washington 99216 (telephone: (509) 928-8000).
"Key Tronic" is a registered trademark of the Company.
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RISK FACTORS
The following risks should be considered carefully in addition to other
information contained in this filing before purchasing the Common Stock offered
hereby:
Potential Fluctuations in Quarterly Results
The Company's quarterly operating results have varied in the past and may vary
in the future due to a variety of factors, including success of customers'
programs, timing of new programs, new product introductions or technological
advances by the Company and its competitors and changes in pricing policies by
the Company and its competitors. For example, the Company relies on customers'
forecasts to plan its business. If those forecasts are overly optimistic, the
Company's revenues and profits may fall short of expectations. Conversely, if
those forecasts are too conservative, the Company could have an unexpected
increase in revenues and profits.
Competition
The keyboard and other input device industry is intensely competitive. Most
of the Company's principal competitors are headquartered in Japan and other
Asian countries that have a low cost labor force. Those competitors may be
able to offer customers lower prices on certain high volume programs. This
could result in price reductions, reduced margins and loss of market share, all
of which would materially and adversely affect the Company's business,
operating results and financial condition. In addition, competitors can copy
the Company's non-proprietary designs after the Company has invested in
development of products for customers, thereby enabling such competitors to
offer lower prices on such products due to savings in development costs.
Concentration of Major Customers
At present, the Company's customer base is highly concentrated, and there can
be no assurance that its customer base will not become more concentrated. Three
of the Company's OEM customers accounted for 21%, 11%, and 10%, individually, of
net sales in fiscal 1994. In 1993, the same customers accounted for 32%, 3% and
0% of the Company's net sales. There can be no assurance that the Company's
principal customers will continue to purchase products from the Company at
current levels. Moreover, the Company typically does not enter into long-term
volume purchase contracts with its customers, and the Company's customers have
certain rights to extend or delay the shipment of their orders. The loss of one
or more of the Company's major customers or the reduction, delay or cancellation
of orders from such customers could materially and adversely affect the
Company's business, operating results and financial condition.
Dependence on Key Personnel
The Company's future success depends in large part on the continued service of
its key technical, marketing and management personnel and on its ability to
continue to attract and retain qualified employees. The competition for such
personnel is intense, and there can be no assurance that the Company will be
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successful in attracting and retaining such personnel. In addition, the Company
does not have any employment contracts with its key personnel. The loss of key
employees could have a material adverse effect on the Company's business,
operating results and financial condition.
Litigation
The Company currently is a party to approximately 100 lawsuits brought by
computer keyboard users in state and federal courts. These lawsuits allege that
specific keyboard products manufactured by the Company were sold with
manufacturing, design and warning defects which caused or contributed to the
claimants' alleged injuries, generally referred to as repetitive stress injuries
(RSI) or cumulative trauma disorders (CTD). The Company believes it has valid
defenses to these claims, and it will vigorously defend them. These lawsuits
are in the early stages of discovery. At this time, management believes that it
is not likely that the ultimate outcome of these lawsuits will have a material
adverse effect on the Company's financial position. However, given the limited
information currently available, the complexity of the litigation, the inherent
uncertainty of litigation and the ultimate resolution of insurance coverage
issues, management's position will change if warranted by facts and
circumstances.
Technological Change and New Product Risk
The market for the Company's products is characterized by rapidly changing
technology, evolving industry standards, frequent new product introductions and
relatively short product life cycles. The introduction of products embodying
new technologies or the emergence of new industry standards can render existing
products obsolete or unmarketable. The Company's success will depend upon its
ability to enhance its existing products and to develop and introduce, on a
timely and cost-effective basis, new products that keep pace with technological
developments and emerging industry standards and address evolving and
increasingly sophisticated customer requirements. Failure to do so could
substantially harm the Company's competitive position. There can be no
assurance that the Company will be successful in identifying, developing,
manufacturing and marketing products that respond to technological change,
emerging industry standards or evolving customer requirements.
Dilution
As of December 31, 1994, there were outstanding options for the purchase of
3,344,085 shares, of which options for approximately 2,870,278 shares were
vested and exercisable. Purchasers of the Common Stock offered hereby will
suffer immediate and substantial dilution to the extent outstanding options to
purchase the Company's Common Stock are exercised.
Possible Volatility of Stock Price
The stock price of the Company may be subject to wide fluctuations and
possible rapid increases or declines over a short time period. These
fluctuations may be due to factors specific to the Company such as variations in
quarterly operating results or changes in analysts' earning estimates, or to
factors relating to the computer industry or to the securities markets in
general, which, in recent years, have experienced significant price
fluctuations. These fluctuations often have been unrelated to the operating
performance of the specific companies whose stocks are traded. Investors in the
Company's Common Stock should be willing to incur the risk of such fluctuations.
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BACKGROUND OF THE OFFERING
In March 1992, in connection with an agreement entered into by The Hiller
Group, a corporate management organization, LGZ, Inc., a Washington corporation
("LGZ"), granted Stanley Hiller, Jr. an option (the "LGZ Option"),
subsequently assigned in January 1993 to Hiller Key Tronic Partners, to
purchase 1,000,000 shares of Common Stock of the Company, the subject shares of
the offering, at a price of $6.00 per share. See "Selling shareholder."
In April 1992, the Company and the Selling Shareholder entered into a
registration rights agreement (the "Registration Rights Agreement") pursuant to
which the Selling Shareholder was granted certain registration rights with
respect to the Common Stock, including the right to cause the Company to effect
a Form S-3 registration with respect to the Common Stock held by the Selling
Shareholder. The Company has filed the Registration Statement of which this
Prospectus is a part in accordance with its obligations to the Selling
Shareholder under the Registration Rights Agreement.
INDEMNIFICATION
The Company has agreed to indemnify the Selling Shareholder and its control
persons with respect to certain liabilities in connection with the sale of the
Common Stock pursuant to this Prospectus, including liabilities under the
Securities Act and the Exchange Act. In addition, the Selling Shareholder has
agreed to indemnify the Company, its directors, officers, agents and control
persons against certain liabilities incurred as a result of information provided
by the Selling Shareholder for use in this Prospectus.
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DESCRIPTION OF CAPITAL STOCK
COMMON STOCK
The Company is authorized to issue 25,000,000 shares of Common Stock, no par
value per share. As of December 31, 1994, there were 8,338,621 shares of Common
Stock outstanding.
The holders of Common Stock are entitled to one vote for each share held on
record on all matters submitted to a vote of the stockholders. Holders of
Common Stock do not have cumulative voting rights in the election of directors.
Holders of Common Stock are entitled to receive ratably such dividends, if any,
as may be declared by the Board of Directors out of funds legally available
therefor. Holders of Common Stock do not have preemptive rights or rights to
convert their Common Stock into any other securities. In the event of a
liquidation, dissolution or winding up of the Company, holders of Common Stock
have the right to a ratable portion of the assets, if any, remaining after
payment of liabilities. All outstanding shares of Common Stock are fully paid
and nonassessable.
The affirmative vote of holders of at least two-thirds of the outstanding
Common Stock is required to approve certain business combinations, including
mergers, consolidations and the sale of substantially all of the assets of the
Company, with or to any 5% or greater shareholder, as well as to approve certain
amendments to the Restated Articles of Incorporation of the Company. During
such time as there is such 5% or greater shareholder, the consent of all the
Company's shareholders, or the affirmative vote of at least two-thirds of such
shareholders plus two-thirds of the continuing directors, is required to
dissolve voluntarily the Company.
TRANSFER AND WARRANT AGENT AND REGISTRAR
The Company's transfer agent and registrar for the Common Stock is the
Chemical Trust Company of California.
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PLAN OF DISTRIBUTION
The Selling Shareholder may dispose of the Common Stock from time to time in
one or a combination of the following transactions: (a) a "broker's
transaction" within the meaning of Section 4(4) of the Securities Act where the
broker acts as agent for the Selling Shareholder and receives only the normal
and customary commissions with regard to such transaction; (b) a transaction
directly with a "market maker" within the meaning of Section 3(a)(38) of the
Exchange Act; (c) in privately negotiated transactions at privately negotiated
prices; or (d) by gift. Any commissions or discounts paid or allowed to
brokers, dealers or agents may be changed from time to time.
The Selling Shareholder has advised the Company that during such time as it
may be engaged in the attempt to sell Common Stock registered hereunder, it
will: (i) not engage in any stabilization activity in connection with any of
the Company's securities; (ii) cause to be furnished to each person to whom
Common Stock included herein may be offered, and to each broker-dealer, if any,
through whom Common Stock is offered, a copy of this Prospectus, as supplemented
or amended; and (iii) not bid for or purchase any of the Company's securities or
any rights to acquire the Company's securities or attempt to induce any person
to purchase any of the Company's securities or rights to acquire the Company's
securities other than as permitted under the Exchange Act.
The Selling Shareholder, and any other persons who participate in the sale of
the Common Stock from time to time, may be deemed to be "underwriters" within
the meaning of Section 2(11) of the Securities Act. Any commissions paid or any
discounts or concessions allowed to any such persons, and any profits received
on resale of the Securities, may be deemed to be underwriting discounts or
commissions under the Securities Act.
The Company has agreed to maintain the effectiveness of this Registration
Statement until the earlier of (i) the sale of all the Common Stock registered
pursuant to this Prospectus or (ii) 120 days from the date of this Prospectus.
No sales may be made pursuant to this Prospectus after such date.
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SELLING SHAREHOLDER
The Selling Shareholder for whom the Company is registering the Common Stock
for resale to the public is Hiller Key Tronic Partners L.P. The Company will
not receive any of the proceeds from the sale of the Common Stock. Prior to the
offering, the Selling Shareholder beneficially owned 3,539,301 shares of Common
Stock of the Company, of which 2,396,923 are shares subject to presently
exercisable options pursuant to the Hiller Option Agreement (as defined below)
and 1,000,000 shares, the subject shares of the offering, are subject to
presently exercisable options pursuant to the LGZ Option. After the completion
of the offering, the Selling Shareholder will beneficially own 2,539,301 shares
of Common Stock of the Company, constituting approximately 24% of the
outstanding shares of Common Stock of the Company, assuming the exercise of all
options directly owned by the Selling Shareholder.
On February 1, 1992, the Company approved an agreement with the Hiller Group,
a corporate management corporation (the "Hiller Agreement"), under which Stanley
Hiller Jr. and other members of the Hiller Group would become involved in the
management of the Company. Under the Hiller Agreement, Mr. Hiller was appointed
a director, Chief Executive Officer and Chairman of the Company's Executive
Committee in February 1992 and acquired the right to designate three additional
persons to be appointed to the Company's Board of Directors. Under these
arrangements, Mr. Hiller currently receives no salary for his services as an
executive officer and director of the Company, and no such salary is currently
anticipated to be paid in the foreseeable future.
In connection with the Hiller Agreement, the Company entered into an option
agreement the ("Hiller Option Agreement"), which was approved by the Company's
shareholders in May 1992. The Hiller Option Agreement provides that the Selling
Shareholder may purchase from the Company up to 2,396,923 shares of Common Stock
at an exercise price of $4.50 per share. Prior to the offering, pursuant to a
voting agreement with LGZ, the Selling Shareholder also shared voting control
over 1,142,378 shares held by LGZ, 1,000,000 of which are the shares subject to
the LGZ Option. See "Background of the Offering."
The Selling Shareholder is a Washington limited partnership created by the
Hiller Group in connection with the Hiller Option Agreement and related matters.
Mr. Hiller, as the sole shareholder of HKT, Inc., a Washington corporation and
the general partner of the Selling Shareholder, and as a general partner of
Hiller Investment Partners, a California limited partnership and a limited
partner of the Selling Shareholder, currently has a 68.1% interest in the
Selling Shareholder; Royce G. Pearson, former president and a director of the
Company, currently has a 6.6% interest in the Selling Shareholder as a limited
partner. The following directors have a .5% ownership interest in the Selling
Shareholder: Robert H. Cannon, Jr., Michael R. Hallman, Kenneth F. Holtby,
Dale F. Pilz, Clarence W. Spangle and William E. Terry. In addition, Thomas W.
Cason, the President and Chief Operating Officer, has a 10.3% ownership
interest in the Selling Shareholder. Each partner of the Selling Shareholder
will share in the economic benefit of the Hiller Option Agreement and the LGZ
Option (including any appreciation in the value of shares subject to the Hiller
Option Agreement and the LGZ Option above the exercise price of such options) to
the extent of their respective partnership interest.
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LEGAL MATTERS
The validity of the Common Stock offered hereby will be passed upon for the
Company by Morrison & Foerster, Palo Alto, California. As of the date of this
Prospectus, Stephen M. Tennis, a partner of Morrison & Foerster, held a 1.5%
limited partnership interest in the Selling Shareholder.
EXPERTS
The financial statements and the related financial statement schedules
incorporated in this prospectus by reference from the Company's Annual Report
on Form 10-K for the year ended July 2, 1994 have been audited by Deloitte &
Touche, independent auditors, as stated in their report, which is
incorporated herein by reference, and have been so incorporated in reliance upon
the report of such firm given upon their authority as experts in accounting and
auditing.
With respect to the unaudited financial information for the quarter ended
October 1, 1994 which is incorporated herein by reference, Deloitte &
Touche have applied limited procedures in accordance with professional
standards for a review of such information. However, as stated in their
reports included in the Company's Quarterly Report on Form 10-Q for the
quarter ended October 1, 1994 and incorporated by reference herein, they
did not audit and they do not express an opinion on that interim financial
information. Accordingly, the degree of reliance on their reports on such
information should be restricted in light of the limited nature of the review
procedures applied. Deloitte & Touche are not subject to the liability
provisions of Section 11 of the Securities Act of 1933 for their reports on
the unaudited financial information because those reports are not "reports"
or a "part" of the registration statement prepared or certified by an
accountant within the meaning of Sections 7 and 11 of the Act.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the various expenses payable by the Company in
connection with the sale and distribution of the Common Stock being registered.
All amounts shown are estimates, except the registration fee.
Registration fee $ 3,707
Legal fees and expenses $ 25,000
Accounting fees and expenses $ 10,000
Miscellaneous $ 10,000
TOTAL $ 48,707
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Amended and Restated Articles of the Company provide that, to the fullest
extent permitted by the Washington Business Corporation Act, the directors of
the Company shall not be liable to the Company or its shareholders for monetary
damages for conduct as directors of the Company.
The Amended and Restated By-Laws of the Company provide that, to the fullest
extent permitted by applicable law, the Company shall indemnify and hold
harmless persons who are directors and officers of the Company who are parties
to or involved in legal proceedings in connection with their status as such.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
4.1 Registration Rights Agreement, dated as of April 29, 1992, by and among
the Company and the Hiller Key Tronic Partners.
4.3 Option Agreement, dated as of March 3, 1992 between Stanley
Hiller and LGZ, Inc. and Assignment of the optoin granted therein to
Hiller Key Tronic Partners L.P.
5.1 Opinion of Morrison & Foerster.
23.1 Consent of Deloitte & Touche LLP.
23.2 Consent of Morrison & Foerster (included in Exhibit 5.1).
24.1 Powers of Attorney (see page II-3 and II-4).
ITEM 17. UNDERTAKINGS.
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 provisions described in Item 14 of this Registration
Statement 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
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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.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement
to include any material nformation with respect to the plan of
distribution not previously disclosed in their registration
statement or any material change to such information 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; and
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the time of the offering.
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.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in Spokane, State of Washington, on the
10th day of February 1995.
KEY TRONIC CORPORATION
Ronald F. Klawitter
Ronald F. Klawitter
Vice President, Finance and Treasurer
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Stanley Hiller, Jr. and Ronald F.
Klawitter, and each of them, his attorneys-in-fact and agents, each with full
power of substitution and resubstitution, for him in any and all capacities, to
sign any and all amendments (including post-effective amendments) to this
Registration Statement, and to file the same, with exhibits thereto and other
documents in connection therewith, with the Securities and Exchange Commission,
granting unto said attorneys-in-fact and agents, and each of them, full power
and authority to do and perform each and every act and thing requisite and
necessary to be done in connection therewith, as fully as to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that each of said attorneys-in-fact and agents, or any of them, or their or his
substitute or substitutes, may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
Stanley Hiller, Jr.
Stanley Hiller, Jr. Chief Executive Officer and February 10, 1995
Director (Principal Executive
Officer)
Ronald F. Klawitter
Ronald F. Klawitter Vice President, Finance and February 10, 1995
Treasurer (Principal Financial
and Accounting Officer)
Thomas W. Cason
Thomas W. Cason President, Chief Operating February 10, 1995
Officer and Director
_____________________
Wendell J. Satre Chairman of the Board February 10, 1995
14
Robert H. Cannon, Jr.
Robert H. Cannon, Jr. Director February 10, 1995
Michael R. Hallman
Michael R. Hallman Director February 10, 1995
Kenneth F. Holtby
Kenneth F. Holtby Director February 10, 1995
Royce G. Pearson
Royce G. Pearson Director February 10, 1995
Dale F. Pilz
Dale F. Pilz Director February 10, 1995
_____________________
Yacov A. Shamash Director February 10, 1995
_____________________
Clarence W. Spangle Director February 10, 1995
_____________________
William E. Terry Director February 10, 1995
_____________________
Lewis G. Zirkle Director February 10, 1995
15
EXHIBIT INDEX
Exhibit
Number Description Sequentially
Numbered Page
4.1 Registration Rights Agreement, dated as
of April 29, 1992, by and among the
Company and the Hiller Key Tronic Partners.
4.3 Option Agreement, dated as of March 2, 1992
between Stanley Hiller and LGZ, Inc. and Assignment of the
option granted therein to Hiller Key Tronic Partners L.P.
5.1 Opinion of Morrison & Foerster.
23.1 Consent of Deloitte & Touche LLP.
23.2 Consent of Morrison & Foerster included in
Exhibit 5.1).
24.1 Powers of Attorney (see page II-3 and II-4).
16
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
EXHIBITS
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
KEY TRONIC CORPORATION
EXHIBIT 4.1
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement is entered into as of this 2nd day
of March, 1992 by and among Key Tronic Corporation, a Washington corporation
(the "Company"), and Hiller Key Tronic Partners, a California limited
partnership ("Hiller").
R E C I T A L S
1. The Company is party to a Stock Option Agreement with Hiller of even
date herewith ("Option Agreement"), pursuant to which Hiller was granted options
to purchase Common Stock of the Company (the "Option").
2. The Company wishes to enter into this Agreement to provide Hiller
certain rights to cause those shares of Common Stock acquirable upon the
exercise of the option to be registered pursuant to the Securities Act of 1933,
as amended (the "Act").
NOW THEREFORE, in consideration of the foregoing and the mutual promises
herein contained, the parties agree as follows:
A G R E E M E N T
1. Definitions. As used in this Agreement:
(a) The terms "register," "registered" and "registration" refer
to a registration effected by preparing and filing a registration statement in
compliance with the Act and the declaration or ordering of the effectiveness of
such registration statement;
(b) The term "Registrable Securities" means: (i) the Option;
(ii) any Common Stock issued or to be issued by the Company to Hiller pursuant
to the exercise of the Option; and (iii) any other Common Stock issued as a
dividend or other distribution with respect to, or in exchange for or in
replacement of, such Common Stock issued pursuant to the exercise of the Option;
(A) if and so long as they have not been sold to or through a broker or dealer
or underwriter in a public distribution or a public securities transaction
pursuant to an effective registration statement or pursuant to SEC Rule 144, or
(B) if in the opinion of counsel to the Company they may be sold in a
transaction exempt from the prospectus delivery requirements of the Act so that
all transfer restrictions and legends with respect thereto are removed upon the
consummation of such sale; and (iv) any other shares of the Company's Common
Stock owned by Hiller or which Hiller has a right to acquire;
(c) The term "Holder" means (i) Hiller; or (ii) any holder of
outstanding Registrable Securities to which the registration rights provided for
in this Agreement shall have been properly assigned in accordance with
Section 11 hereof;
(d) The term "Initiating Holders" means any Holder or Holders
making a request for registration pursuant to the provisions of Section 2
hereof; and
(e) The term "Substantial Amount of Registrable Securities"
means at least twenty-five percent (25%) of the Registrable Securities.
2. Requested Registration.
(a) Requested Registration. In case at any time after March 31,
1993 the Company shall receive from the Holders of a Substantial Amount of
Registrable Securities a written request that the Company effect any
registration, qualification or compliance with respect to all or a part of the
Registrable Securities with an expected aggregate offering price to the public
of at least $5,000,000, the Company will:
(i) promptly give written notice of the proposed
registration, qualification or compliance to all other Holders; and
(ii) as soon as practicable, use its diligent best
efforts to effect all such registrations, qualifications and compliances
(including, without limitation, the execution of an undertaking to file post-
effective amendments, appropriate qualification under the applicable blue sky or
other state securities laws and appropriate compliance with exemptive
regulations issued under the Act and any other governmental requirements or
regulations) as may be so requested and as would permit or facilitate the sale
and distribution of all or such portion of such Holder's or Holders' Registrable
Securities as are specified in such request, together with all or such portion
of the Registrable Securities of any other Holder or Holders joining in such
request as are specified in a written notice given within fifteen (15) days
after receipt of such written notice from the Company, except that the Company
shall not be obligated to take any action to effect any such registration,
qualification or compliance pursuant to this Section 2 after the Company has
effected two registrations, qualifications or compliances pursuant to requests
under this Section 2.
Subject to the foregoing provisions, the Company shall file
a registration statement covering the Registrable Securities so requested to be
registered as soon as practicable, but in any event within ninety (90) days
after receipt of the request or requests of the Initiating Holders.
(b) Underwriting. If the Initiating Holders intend to
distribute the Registrable Securities covered by their request by means of an
underwriting, they shall so advise the Company and shall designate the
underwriter or underwriters to be employed in connection therewith (who shall be
selected by the majority in interest of the Initiating Holders and who shall be
subject to the Company's right of reasonable approval) as a part of their
request made pursuant to Section 2(a) and the Company shall include such
information in the written notice referred to in Section 2(a)(i). In such
event, the right of any Holder to registration pursuant to this Section 2 shall
be conditioned upon such Holder's participation in such underwriting and the
inclusion of such Holder's Registrable Securities in the underwriting (unless
otherwise mutually agreed by a majority in interest of the Initiating Holders
and such Holder) to the extent provided herein. The Company shall (together
with all Holders proposing to distribute their securities through such
underwriting) enter into an underwriting agreement in customary form with the
underwriter or underwriters selected for such underwriting by a majority in
interest of the Initiating Holders. Notwithstanding any other provision of this
Section 2, if the underwriter advises the Initiating Holders in writing that
marketing factors require a limitation of the number of shares to be
underwritten, then the Initiating Holders shall so advise all Holders of
Registrable Securities that would otherwise be registered and underwritten
pursuant hereto, and the number of shares included in the registration and
underwriting shall be allocated among the Holders of Registrable Securities
requesting registration in proportion, as nearly as practicable, to the total
number of Registrable Securities held by such Holders at the time of filing of
the registration statement. If any Holder disapproves of the terms of the
underwriting, it may elect to withdraw therefrom by written notice to the
Company, the underwriter and the Initiating Holders. The Registrable Securities
so withdrawn shall also be withdrawn from registration.
3. Company Registration.
(a) Notice of Registration. If at any time or from time to
time, the Company shall determine to register any of its securities, either for
its own account or the account of a security holder or holders (other than a
registration relating solely to employee stock option or purchase plans or
relating solely to an SEC Rule 145 transaction), the Company will:
(ii) promptly give to each Holder written notice
thereof which shall include a list of the jurisdictions in which the Company
intends to attempt to qualify such securities under the applicable blue sky or
other state securities laws;
(ii) include in such registration (and any related
qualification under blue sky laws or other compliance), and in any underwriting
involved therein, all the Registrable Securities specified in a written request
or requests, made within thirty (30) days after receipt of such written notice
from the Company, by any Holder or Holders, except as set forth in Section 3(b)
below.
(b) Underwriting. If the registration of which the Company
gives notice is for a registered public offering involving an underwriting, the
Company shall so advise the Holders as a part of the written notice given
pursuant to Section 3(a)(i). In such event the right of any Holder to
registration pursuant to this Section 3 shall be conditioned upon such Holder's
participation in such underwriting and the inclusion of such Holder's
Registrable Securities in the underwriting to the extent provided herein. All
Holders proposing to distribute their securities through such underwriting shall
(together with the Company and other holders distributing their securities
through such underwriting) enter into an underwriting agreement in customary
form with the underwriter or underwriters selected for such underwriting by the
Company. Notwithstanding any other provision of this Section 3, if the
underwriter determines that marketing factors require a limitation of the number
of shares to be underwritten, the underwriter may limit the number of
Registrable Securities to be included in the registration and underwriting on a
pro rata basis based on the total number of the Registrable Securities held by
the Holders and based on the total number of securities (other than Registrable
Securities) entitled to registration held by the Holders and by other persons or
organizations selling securities pursuant to registration rights granted them by
the Company, provided that no such reduction may reduce the securities being
offered by the Holders to less than 30% of the total number of securities
included in such registration and underwriting. The Company shall advise all
Holders of Registrable Securities which would otherwise be registered and
underwritten pursuant hereto of any such limitations, and the number of shares
of Registrable Securities that may be included in the registration. If any
Holder disapproves of the terms of any such underwriting, he may elect to
withdraw therefrom by written notice to the Company and the underwriter. The
Registrable Securities so withdrawn shall also be withdrawn from registration.
4. Expenses of Registration. All expenses incurred in connection
with the registration, qualification or compliance pursuant to Section 2 and any
registration, qualification or compliance pursuant to Section 3, including
without limitation, all registration, filing and qualification fees, printing
expenses, fees and disbursements of counsel for the Company, expenses of any
special audits incidental to or required by such registration and the fees and
disbursements of one counsel retained by the Holders of Registrable Securities
covered by such registration, qualification or compliance shall be borne by the
Company, except that:
(a) The Company shall not be required to pay for expenses of any
registration proceeding begun pursuant to Section 2, the request of which has
been subsequently withdrawn by the Initiating Holders, in which case, such
expenses shall be borne by the Holders of securities (including Registrable
Securities) requesting or causing such withdrawal; and
(b) The Company shall not be required to pay underwriters'
discounts, commissions, or stock transfer taxes relating to Registrable
Securities.
5. Form S-3 Registration. In case the Company shall receive from
any Holder or Holders a written request or requests that the Company effect a
registration on Form S-3 (or any substantially equivalent registration form
under the Act subsequently adopted by the SEC that permits inclusion or
incorporation by reference to other documents filed by the Company with the SEC
other than Form S-8) and any related qualification or compliance with respect to
all or a part of the Registrable Securities owned by such Holder or Holders, the
Company will:
(a) promptly give written notice of the proposed registration,
and any related qualification or compliance, to all other Holders; and
(b) as soon as practicable, effect such registration and all
such qualifications and compliances as may be so requested and as would permit
or facilitate the sale and distribution of all or such portion of such Holder's
or Holders' Registrable Securities as are specified in such request, together
with all or such portion of the Registrable Securities of any other Holder or
Holders joining in such request as are specified in a written request given
within fifteen (15) days after receipt of such written notice from the Company,
except that the Company shall not be obligated to effect any such registration,
qualification or compliance, pursuant to this Section 12: (1) if Form S-3 is not
available for such offering by the Holders; (2) if the Holders, together with
the holders of any other securities of the Company entitled to inclusion in such
registration, propose to sell Registrable Securities and such other securities
(if any) at an aggregate price to the public (net of any underwriters' discounts
or commissions) of less than $500,000; (3) if the Company shall furnish to the
Holders a certificate signed by the President of the Company stating that, in
the good faith judgment of the Board of Directors of the Company, it would be
seriously detrimental to the Company and its shareholders for such Form S-3
registration to be effected at such time, in which event the Company shall have
the right to defer the filing of the Form S-3 registration statement for a
period of not more than 60 days after receipt of the request of the Holder or
Holders under this Section 12, except that the Company shall not utilize this
right more than once in any twelve (12) month period; (4) if the Company has
already effected one registration on Form S-3 for the Holders during the
immediately preceding six (6) month period; or (5) in any particular
jurisdiction in which the Company would be required to qualify to do business or
to execute a general consent to service of process in effecting such
registration, qualification or compliance.
Subject to the foregoing, the Company shall file a
registration statement covering the Registrable Securities and other securities
so requested to be registered as soon as practicable after receipt of the
request or requests of the Holders. All expenses incurred in connection with a
registration requested pursuant to this Section 12, including (without
limitation) all registration, filing, qualification, printer's and accounting
fees and the reasonable fees and disbursements of counsel for the selling Holder
or Holders shall be borne pro rata by the Holder or Holders participating in the
Form S-3 registration. Registrations effected pursuant to this Section 12 shall
not be counted as demands for registration or registrations effected pursuant to
Section 2 or 3, respectively.
6. Registration Procedures. In the case of each registration,
qualification or compliance effected by the Company, the Company will keep each
Holder participating therein advised in writing as to the initiation of each
registration, qualification and compliance and as to the completion thereof. At
its expense (except as otherwise provided in Section 4 above) the Company will:
(a) keep such registration, qualification or compliance pursuant
to Sections 2, 3 or 5 effective for a period of one hundred twenty (120) days or
until the Holder or Holders have completed the distribution described in the
registration statement relating thereto, whichever first occurs;
(b) furnish such number of prospectuses and other documents
incident thereto as a Holder from time to time may reasonably request;
(c) prepare and file with the Securities and Exchange Commission
(the "SEC") such amendments and supplements to such registration statement and
the prospectus used in connection with such registration statements as may be
necessary to comply with the provisions of the Act with respect to the
disposition of all securities covered by such registration statement;
(d) notify each Holder of Registrable Securities covered by such
registration statement, at any time when a prospectus relating thereto covered
by such registration statement is required to be delivered under the Act, of the
happening of any event as a result of which the prospectus included in such
registration statement, as then in effect, includes an untrue statement of a
material fact or omits to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in the light of the
circumstances then existing; and
(e) furnish, at the request of any Holder requesting
registration of Registrable Securities pursuant to this Agreement, on the date
that such Registrable Securities are delivered to the underwriters for sale in
connection with a registration pursuant to this Agreement, if such securities
are being sold through underwriters, or, if such securities are not being sold
through underwriters, on the date that the registration statements with respect
to such securities becomes effective, (i) an opinion, dated such date, of the
counsel representing the Company for the purposes of such registration, in form
and substance as is customarily given to underwriters in an underwritten public
offering, addressed to the underwriters, if any, and to the Holders requesting
registration of Registrable Securities and (ii) a letter dated such date, from
the independent certified public accountants of the Company, in form and
substance as is customarily given by independent certified public accounts to
underwriters in an underwritten public offering, addressed to the underwriters,
if any, and to the Holders requesting registration of Registrable Securities.
7. Indemnification.
(a) The Company will indemnify each Holder of Registrable
Securities, each of its officers and directors, and each person controlling such
Holder, with respect to which registration, qualification or compliance has been
effected pursuant to this Agreement and each underwriter, if any, and each
person who controls any underwriter of the Registrable Securities held by or
issuable to such Holder, against all claims, losses, damages, costs, expenses
and liabilities whatsoever (or actions in respect thereof) arising out of or
based on any untrue statement (or alleged untrue statement) of a material fact
contained in any registration statement, prospectus, offering circular or other
documents (including any related registration, statement, notification or the
like) incident to any such registration, qualification or compliance, or based
on any omission (or alleged omission) to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
or any violation by the Company of the Act or any state securities law or of any
rule or regulation promulgated under the Act or any state securities law
applicable to the Company and relating to action or inaction required of the
Company in connection with any such registration, qualification or compliance,
and will reimburse each such Holder, each of its officers and directors, and
each person controlling such Holder, and each such underwriter and each person
who controls any such underwriter, for any legal and any other expenses
reasonably incurred in connection with investigating or defending any such
claim, loss, damage, cost expense, liability or action, except that the Company
will not be liable in any such case to the extent that any such claim, loss,
damage, cost, expense, liability, or action arises out of or is based in any
untrue statement or omission based upon written information furnished to the
Company by an instrument duly executed by any Holder or underwriter and stated
to be specifically for use therein, and except that the foregoing indemnity
agreement is subject to the condition that, insofar as it relates to any such
untrue statement (or alleged untrue statement) or omission (or alleged omission)
made in the preliminary prospectus but eliminated or remedied in the amended
prospectus on file with the SEC at the time the registration statement becomes
effective or in the amended prospectus filed with the SEC pursuant to Rule
424(b) (the "Final Prospectus"), such indemnity agreement shall not inure to the
benefit of any underwriter or any Holder, if there is no underwriter, if a copy
of the Final Prospectus was not furnished to the person or entity asserting the
loss, liability, claim or damage at or prior to the time such action is required
by the Act.
(b) Each Holder will, if Registrable Securities held by or
issuable to such Holder are included in the securities to which such
registration, qualification or compliance is being effected, indemnify the
Company, each of its directors and officers who sign such registration
statement, each underwriter, if any, of the Company's securities covered by such
a registration statement, each person who controls the Company within the
meaning of the Act, and each other Holder, each of such other Holder's officers
and directors and each person controlling such other Holder, against all claims,
losses, damages, costs, expenses and liabilities whatsoever (or actions in
respect thereof) arising out of or based on any untrue statement (or alleged
untrue statement) of a material fact contained in any such registration
statement, prospectus, offering circular or other documents (including any
related registration statement, notification or the like) incident to any such
registration, qualification or compliance, or based on any omission (or alleged
omission) to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and will reimburse the
Company, such other Holders, such directors, officers, persons or underwriters
for any legal or any other expenses reasonably incurred in connection with
investigating or defending any such claim, loss, damage, cost, expense,
liability or action, in each case to the extent, but only to the extent, that
such untrue statement (or alleged untrue statement) or omission (or alleged
omission) is made in such registration statement, prospectus, offering circular
or other document in reliance upon and in conformity with written information
furnished to the Company by an instrument duly executed by such Holder and
stated to be specifically for use therein, except that the foregoing indemnity
agreement is subject to the condition that, insofar as it relates to any such
untrue statements (or alleged untrue statement) or omission (or alleged
omission) made in the preliminary prospectus but eliminated or remedied in the
amended prospectus on file with the SEC at the time the registration statement
become effective or the amended prospectus filed with the SEC pursuant to
Rule 424(b) (the "Final Prospectus"), such indemnity agreement shall not inure
to the benefit of (i) the Company and (ii) any underwriter or any Holder, if
there is no underwriter, if a copy of the Final Prospectus was not furnished to
the person or entity asserting the loss, liability, claim or damage at or prior
to the time such action is required by the Act.
(c) Each party entitled to indemnification under this Section 7
(the "Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom, provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or litigation, shall be
approved by the Indemnified Party (whose approval shall not unreasonably be
withheld), and the Indemnified Party's cost. The failure of the Indemnified
Party may participate in such defense at the Indemnified Party to give notice as
provided herein shall not relieve the Indemnifying Party of its obligations
under this Agreement. No Indemnifying Party, in the defense of any such claim
or litigation, shall, except with the consent of each Indemnified party, consent
to entry of any judgment or enter into any settlement that does not include as
an unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party of a release from all liability in respect to such claim or
litigation. If any such Indemnified Party shall have been advised by counsel
chosen by it that there may be one or more legal defenses available to such
Indemnified Party that are different from or additional to those available to
the Indemnifying Party, the Indemnifying Party shall not have the right to
assume the defense of such action on behalf of such Indemnified Party and will
reimburse such Indemnified Party and any person controlling such Indemnified
Party for the reasonable fees and expenses of any counsel retained by the
Indemnified Party, it being understood that the Indemnifying Party shall not, in
connection with any one action or separate but similar or related actions in the
same jurisdiction arising out of the same general allegations or circumstances,
be liable for the reasonable fees and expenses of more than one separate firm of
attorneys for such Indemnified Party or controlling person, which firm shall be
designated in writing by the Indemnified Party to the Indemnifying Party.
8. Information by Holder. The Holder or Holders or Registrable
Securities included in any registration shall furnish to the Company such
information regarding such Holder or Holders and the distribution proposed by
such Holder or Holders as the Company may request in writing and as shall be
required in connection with any registration, qualification or compliance
referred to in this Agreement.
9. Sale Without Registration. If at the time of any transfer of any
Registrable Securities, such Registrable Securities shall not be registered
under the Act, the Company may require, as a condition of allowing such
transfer, that the Holder or transferee furnish to the Company (a) such
information as is necessary in order to establish that such transfer may be made
without registration under the Act; and (b) at the expense of the Holder or
transferee, an opinion by legal counsel designated by such Holder or transferee
and reasonably satisfactory in form and substance to the Company, to the effect
that such transfer may be made without registration under the Act, except that
nothing contained in this Section 9 shall relieve the Company from complying
with any request for registration, qualification or compliance made pursuant to
the other provisions of this Agreement.
10. Termination of Company's Obligations. This Company shall have no
obligations pursuant to Section 2, 3, or 5 hereof with respect to any request or
request made by any Holder after March 1, 2002.
11. Rule 144 Reporting. With a view to making available to Holders
the benefits of certain rules and regulations of the SEC which may permit the
sale of Registrable Securities to the public without registration or pursuant to
Form S-3, the Company agrees to:
(a) take such action, including the voluntary registration of
its Common Stock under the Securities Exchange Act of 1934 (the "34 Act") as is
necessary to enable the Holders to utilize Form S-3 for the sale of their
Registrable Securities;
(b) file with the SEC in a timely manner all reports and other
documents required of the Company under the Act and the 34 Act; and
(c) furnish to any Holder so long as such Holder owns any
Registrable Securities forthwith upon written request a written statement by the
Company that it has complied with the reporting requirements of said Rule 144,
and of the Act and the 34 Act, a copy of the most recent annual or quarterly
report of the Company, and such other reports and documents so filed by the
Company as may be reasonably requested in availing the Purchaser of any rule or
regulation of the SEC permitting the selling of any such securities without
registration.
12. Transfer of Registration Rights. The rights to cause the Company
to register securities granted by the Company under Sections 2, 3 and 5 may be
assigned by any Holder to: (i) its partners; and (ii) to any transferee or
assignee who acquires at least one hundred thousand (100,000) shares of
Registrable Securities, provided that such transfer may otherwise be and is
effected in accordance with applicable securities laws and provided further that
the Company is given written notice by such Purchaser at the time of or within a
reasonable time after said transfer, stating the name and address of the
transferee or assignee and identifying the securities with respect to which such
registration rights are being assigned.
13. Limitations on Subsequent Registration Rights. From and after
the date hereof, the Company, except as provided in Section 14 below, shall not,
without the prior written consent in accordance with Section 14(d) hereof of
Holders owning more than 50% of the Registrable Securities, enter into any
agreement with any holder or prospective holder of any securities of the Company
which would allow such holder or prospective holder of any securities of the
Company to include such securities in any registration filed under Section 2
hereof, unless (anything in subsection 2(b) to the contrary notwithstanding)
under the terms of such agreement, such holder or prospective holder may include
such securities in any such registration only to the extent that the inclusion
of his securities will not diminish the amount of Registrable Securities which
are included.
14. Miscellaneous.
(a) Governing Law. This Agreement shall be governed in all
respects by the laws of the State of Washington as such laws are applied to
agreements between Washington residents entered into and to be performed
entirely within Washington.
(b) Successors and Assigns. Except as otherwise expressly
provided herein, the provisions hereof shall inure to the benefit of, and be
binding upon, the successors, assigns, heirs, executors and administrators of
the parties hereto whose rights or obligations hereunder are affected by such
amendments.
(c) Notices. Except as otherwise provided, all notices and
other communications required or permitted hereunder shall be in writing and
shall be mailed by first class mail, postage prepaid, addressed (a) if to
Hiller, at the address set forth below its signature, or at such other address
as Hiller shall have furnished to the Company in writing, or (b) if to any other
holder of any of the Shares or other securities issued with respect thereto, at
such address such holder shall have furnished the Company in writing, or until
any such holder furnishes an address to the Company, then to and at the address
of the last holder of such securities who has so furnished an address to the
Company, or (c) if to the Company, at its address set forth below, or at such
other address as the Company shall have furnished to Hiller in writing.
(d) Amendments and Waivers. Any term of this Agreement may be
amended and the observance of any term of the Agreement may be waived (either
generally or in a particular instance and either retroactively or
prospectively), with the written consent of the Company and the holders of more
than fifty percent (50%) of the Registrable Securities. Any amendment or waiver
effected in accordance with this paragraph shall be binding upon each holder of
any securities purchased under this agreement at the time outstanding (including
securities into which such securities have been converted), each future holder
of all such securities, and the Company.
(e) Titles and Subtitles. The titles of the paragraphs and
subparagraphs of this Agreement are for convenience of reference only and are
not to be considered in construing this Agreement.
(f) Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
(g) Severability. Should any provision of this Agreement be
determined to be illegal or unenforceable, such determination shall not affect
the remaining provisions of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year hereinabove first written.
KEY TRONIC CORPORATION,
a Washington corporation
By: WENDELL J. SATRE
Wendell J. Satre
Chairman
HILLER KEY TRONIC PARTNERS,
a California Limited Partnership
By: STANLEY HILLER, JR.
Stanley Hiller, Jr.
General Partner
binding upon each holder of any securities purchased under this agreement at the
time outstanding (including securities into which such securities have been
converted), each future holder of all such securities, and the Company.
(e) Titles and Subtitles. The titles of the paragraphs and
subparagraphs of this Agreement are for convenience of reference only and are
not to be considered in construing this Agreement.
(f) Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
(g) Severability. Should any provision of this Agreement be
determined to be illegal or unenforceable, such determination shall not affect
the remaining provisions of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year hereinabove first written.
KEY TRONIC CORPORATION,
a Washington corporation
By: /s/ Wendell J. Satre
Wendell J. Satre
Chairman
HILLER KEY TRONIC PARTNERS,
a California Limited Partnership
By: /s/ Stanley Hiller
Stanley Hiller
General Partner
EXHIBIT 4.3
OPTION AGREEMENT
This Agreement is entered into this 2nd day of March, 1992 between
Stanley Hiller ("Hiller") and LGZ, Inc. ("LGZ"), a Washington corporation.
WHEREAS, LGZ owns 1,259,725 shares of common stock of Key Tronic
Corporation, a Washington corporation ("Key Tronic").
WHEREAS, Hiller and certain members of a management group formed by
Hiller (the "Hiller Group") have been requested by Key Tronic to become involved
in the management of Key Tronic; and
WHEREAS, LGZ wishes to provide incentives for Hiller and the Hiller
Group to perform such services.
NOW, THEREFORE, the parties hereto agree as follows:
1. Grant of Option. In consideration of the agreement of Hiller and
the Hiller Group to become involved in the management of Key Tronic and in
consideration of payment of the sum of $100, receipt of which is hereby
acknowledged, LGZ hereby grants Hiller an option (the "Option") to purchase
1,000,000 shares of Key Tronic common stock (the "Option Shares") at an exercise
price of $6.00 per share. Subject to Sections 4 and 5 of this Agreement, the
Option may be exercised in whole or in part at any time within three (3) years
from the date of this Agreement by notice thereof in writing sent to LGZ in
accordance with Section 8.10 of this Agreement. Such notice shall specify the
number of Option Shares to be purchased, and the date upon which Hiller will
purchase the Option Shares pursuant to such exercise, which date shall not be
later than ten (10) business days and not earlier than three (3) business days
after the date of the notice. The closing of the purchase shall occur in
Spokane, Washington. The Option shall continue in force in accordance with the
terms of this Agreement as to any Option Shares not purchased pursuant to an
Option exercise.
2. Payment and Delivery. At any closing hereunder, Hiller shall
make payment to LGZ of the aggregate purchase price for the Option Shares as to
which the Option is exercised in next day funds by certified or cashier's bank
check payable to the order of LGZ. LGZ shall deliver to Hiller its certificate
or certificates representing the Option Shares so purchased duly endorsed for
transfer to Hiller.
3. Approval of LGZ Board of Directors and Shareholders. (a) LGZ has
full corporate power and authority to enter into this Agreement and to carry out
the transactions contemplated hereby; (b) the Board of Directors and
Shareholders of LGZ has taken all action required by law, its Articles of
Incorporation, its Bylaws or otherwise to authorize the execution and delivery
of this Agreement and the transactions contemplated hereby and no other
corporate action is necessary to authorize the execution and delivery hereof or
the consummation of the transactions contemplated hereby; and (3) this Agreement
has been duly and validly executed and delivered by LGZ, and constitutes the
valid and binding obligation of LGZ enforceable in accordance with its terms,
except as may be limited by laws affecting the enforcement of creditor's rights
and equitable principles generally.
4. Early Termination of Option. The Option shall terminate without
notice: (a) if the Hiller Proposal (as defined in Section 5 below) is not
approved by the Key Tronic shareholders within nine (9) months from the date of
this Agreement; and (b) at such time as Hiller or the Hiller Group is no longer
involved in the management of Key Tronic. For purposes of this Agreement,
Hiller shall be deemed to be involved in the management of Key Tronic if Hiller
or a member of the Hiller Group shall be an employee, officer or director of Key
Tronic. In addition, if on or before eighteen (18) months from the date hereof,
the price of Key Tronic's common stock has not reached $6.00 per share or the
after-tax earnings of Key Tronic have not reached $.50 per share (both adjusted
for stock splits, combinations or similar events), then the Option shall
terminate without notice eighteen (18) months from the date hereof unless Hiller
shall have paid to LGZ on or before that date the sum of One Hundred Thousand
Dollars ($100,000) cash.
5. Shareholder Approval of Key Tronic Option. Hiller and Key Tronic
have entered into an agreement pursuant to which Hiller and the Hiller Group
will be granted options to purchase Key Tronic stock (the "Key Tronic Option")
and certain persons will be nominated as candidates for the Key Tronic Board of
Directors (the "Hiller Proposal"). A copy of the Hiller Proposal is attached
hereto as Exhibit A. The Hiller Proposal will be presented to the Key Tronic
shareholders for their approval as soon as possible. The Option shall not be
exercisable until the Key Tronic shareholders have approved the Hiller Proposal
or a substantially similar proposal.
6. Assignment of Option. LGZ acknowledges that Hiller may assign
all or a portion of the Option to members of the Hiller Group and others and
agrees that the Option may be assigned by Hiller without the consent of LGZ.
Written notice of any such assignment shall be given to LGZ within ten (10) days
thereof in accordance with Section 8.10 of this Agreement. If any assignee of
all or a portion of the Option is unable or unwilling to pay the exercise price
as required hereunder upon an exercise of the Option, Hiller shall pay such
exercise price.
7. Irrevocable Proxy. LGZ agrees that it shall consult with Hiller
with respect to the voting of its shares of Key Tronic stock, and shall vote
those shares as Hiller and LGZ shall agree. LGZ specifically agrees to vote all
shares of Key Tronic stock then owned by it in favor of the Hiller Proposal when
presented to the Key Tronic shareholders for their approval. If Hiller so
requests, LGZ shall irrevocably appoint and constitute Stanley Hiller, a member
of the Hiller Group, or such other person as may be designated by Hiller or his
successor in interest under this Agreement, as its attorney and proxy to attend
meetings, vote, give consents, and in all other ways to act in its place and
stead as the holder of all shares of Key Tronic's common stock then owned by LGZ
until the expiration or termination of the Option. LGZ acknowledges that the
proxy granted pursuant to this Section is coupled with an interest. Any proxies
heretofore given by LGZ with respect to its Key Tronic stock are hereby revoked.
If LGZ sells or otherwise transfers any of its Key Tronic stock subject to a
proxy granted subject to this section but not subject to the Option, the proxy
shall terminate as to such shares.
8. Representations and Warranties.
8.1 LGZ is a corporation duly organized, validly existing and in
good standing under the laws of the State of Washington. LGZ shall remain in
good standing until the Option is exercised or terminates.
8.2 The execution and delivery of this Agreement or the
consummation of the transactions contemplated hereby will not: (i) violate any
provision of the Articles of Incorporation or Bylaws of LGZ; (ii) violate, or be
in conflict with, or constitute a default (or an event which, with or without
due notice or lapse of time, or both, would constitute a default) under any
debt, obligation, contract, commitment or other agreement to which LGZ is a
party or by which it or any of its properties or assets is or may be bound;
(iii) result in the creation or imposition of any mortgage, pledge, lien,
security interest, encumbrance, restriction or charge of any kind, upon any of
LGZ's Key Tronic stock under any debt, obligation, contract, commitment or other
agreement to which LGZ is a party or by which it or any of its properties or
assets is or may be bound; or (iv) violate any statute or law or any judgement,
decree, order, regulation or rule of any court or governmental authority.
8.3 No consent, approval or authorization of, or declaration,
filing or registration with, any governmental or regulatory authority is
required by LGZ in connection with the execution, delivery and performance of
this Agreement and the consummation of the transactions contemplated hereby.
8.4 LGZ is the true and lawful owner of and has good and
marketable title to all of the Option Shares. Upon exercise of the Option
pursuant to this Agreement Hiller will acquire good and marketable title to all
Option Shares free and clear of all claims, liens, title defects and objections,
equities, security interests or other encumbrances or restrictions of any kind.
9. Miscellaneous Provisions.
9.1 Expenses. Each of the parties hereto shall bear its own
fees and expenses in connection with the preparation and consummation of the
transactions contemplated hereby, whether or not such transactions are
consummated, including, without limitation, attorneys, accountants and other
professional fees and expenses.
9.2 Amendment and Modification. Subject to applicable law, this
Agreement may be amended or supplemented only by written agreement of the
parties hereto.
9.3 Waiver of Compliance. Any failure of LGZ, on the one hand,
or Hiller, on the other, to comply with any obligation, agreement or condition
herein may only be expressly waived in writing by Hiller or LGZ, respectively,
but such waiver or failure to insist upon strict compliance with such
obligation, covenant, agreement or condition shall not operate as a waiver of,
or estoppel with respect to, any subsequent or other failure.
9.4 Parties in Interest. Nothing in this Agreement, whether
express or implied, is intended to confer any rights or remedies under or by any
reason of this Agreement on any persons other than the parties to it and their
respective permitted successors and assigns, nor is anything in this Agreement
intended to relieve or discharge the obligation or liability of any third
persons to any party to this Agreement, nor shall any provision give any third
persons any right of subrogation or action over against any party to this
Agreement.
9.5 Recovery of Litigation Costs. If any legal action or any
other proceeding is brought for the enforcement of this Agreement, or because of
an alleged dispute, breach, default, or misrepresentation in connection with any
of the provisions of this Agreement, the prevailing party or parties shall be
entitled to recover reasonable attorneys' fees and other costs incurred in that
action or proceeding, in addition to any other relief to which it or they may be
entitled.
9.6 Governing Law. This Agreement and the legal relations among
the parties hereto shall be governed by and construed in accordance with the
laws of the State of Washington without reference to conflict of laws
principles.
9.7 Counterparts. This Agreement may be executed simultaneously
in two or more counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.
9.8 Headings. The headings of the Sections of this Agreement
are inserted for convenience only and shall not constitute a part hereof.
9.9 Entire Agreement. This Agreement embodies the entire
agreement and understanding of the parties hereto in respect of the subject
matter contained herein. There are no restrictions, promises, warranties,
covenants, or undertakings, other than those expressly set forth or referred to
herein. This Agreement supersedes all prior agreements and understandings
between the parties with respect to such subject matter.
9.10 Notices. All notices, requests, demands, and other
communications under this Agreement shall be in writing and shall be deemed to
have been duly given on the date of service if served personally on the party to
whom notice is to be given, or on the fourth day after mailing if mailed to the
party to whom notice is being given, by first class mail, registered or
certified, postage prepaid, or on the date of confirmation of confirmed receipt
if sent by telex or facsimile. Notice shall be sent to:
To LGZ at: LGZ, Inc.
East 925 Sturgeon Road
Rathdrum, Idaho 83858
Attention: President
To Hiller at: Stanley Hiller
3000 Sand Hill Road
Building 2, Suite 260
Menlo Park, Calif. 94025
9.11 Further Assurances. The parties hereto agree to execute any
and all other documents and to take such other action or corporate proceeding as
may be reasonably necessary or desirable to carry out the terms hereof,
including, but not limited to, the legending of LGZ's stock certificates to
reflect the existence of the Option and, if applicable, any proxy granted
pursuant to this Agreement.
9.12 Stock Splits, etc. In the event of any stock split, stock
dividend, combination or other change in the capitalization of Key Tronic
("Recapitalization"), the number of shares subject to the Option shall be
appropriately adjusted so that the number of shares subject to the Option shall
represent the same portion of the outstanding key Tronic stock before and after
the Recapitalization.
10. Mandatory Exercise of Option. If Hiller or any member of
the Hiller Group (or any assignee of Hiller, or any member of the Hiller Group)
exercises all or a proportion of the Key Tronic Option (as described in
Section 5) Hiller must exercise no less than the same proportion of the Option
at the same time in accordance with Section 1 hereof.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the date first above written.
LGZ, Inc.
By:
Lewis G. Zirkle Stanley Hiller
Chairman and President
duly given on the date of service if served personally on the party to whom
notice is to be given, or on the fourth day after mailing if mailed to the party
to whom notice is being given, by first class mail, registered or certified,
postage prepaid, or on the date of confirmation of confirmed receipt if sent by
telex or facsimile. Notice shall be sent to:
To LGZ at: LGZ, Inc.
East 925 Sturgeon Road
Rathdrum, Idaho 83858
Attention: President
To Hiller at: Stanley Hiller
3000 Sand Hill Road
Building 2, Suite 260
Menlo Park, Calif. 94025
9.11 Further Assurances. The parties hereto agree to execute any
and all other documents and to take such other action or corporate proceeding as
may be reasonably necessary or desirable to carry out the terms hereof,
including, but not limited to, the legending of LGZ's stock certificates to
reflect the existence of the Option and, if applicable, any proxy granted
pursuant to this Agreement.
9.12 Stock Splits, etc. In the event of any stock split, stock
dividend, combination or other change in the capitalization of Key Tronic
("Recapitalization"), the number of shares subject to the Option shall be
appropriately adjusted so that the number of shares subject to the Option shall
represent the same portion of the outstanding key Tronic stock before and after
the Recapitalization.
10. Mandatory Exercise of Option. If Hiller or any member of
the Hiller Group (or any assignee of Hiller, or any member of the Hiller Group)
exercises all or a proportion of the Key Tronic Option (as described in
Section 5) Hiller must exercise no less than the same proportion of the Option
at the same time in accordance with Section 1 hereof.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the date first above written.
LGZ, Inc.
By: /s/ Lewis G. Zirkle /s/ Stanley Hiller
Lewis G. Zirkle Stanley Hiller
Chairman and President
EXHIBIT 5.1
Key Tronic Corporation
February 10, 1995
Page 1
February 10, 1995
Key Tronic Corporation
N. 4424 Sullivan Road
Spokane, WA 99216
Ladies and Gentlemen:
At your request, we have examined the Registration Statement on Form
S-3 filed by Key Tronic Corporation, a Washington corporation (the "Company"),
with the Securities and Exchange Commission on February 10, 1995 (the
"Registration Statement"), relating to the registration under the Securities Act
of 1933, as amended, of up to 1,000,000 shares of the Company's common stock, no
par value (the "Stock") being offered by Hiller Key Tronic Partners L.P. (the
"Selling Shareholder").
As counsel to the Company, we have examined the proceedings taken by
the Company and the Selling Shareholders in connection with the sale by the
Selling Shareholder of up to 1,000,000 shares of Stock.
It is our opinion that, upon completion of the proceedings to be taken
by the Company and the Selling Shareholder prior to the sale of the shares of
Stock, the 1,000,000 shares of Stock sold by the Selling Shareholder when sold
in the manner described in the Registration Statement and the related
Prospectus, will be legally and validly issued, fully paid and nonassessable.
We consent to the use of this opinion as an exhibit to the
Registration Statement and further consent to all references to us in the
Registration Statement, the Prospectus constituting a part thereof and any
amendments thereto.
Very truly yours,
/s/ Morrison & Foerster
EXHIBIT 23.1
CONSENT OF DELOITTE & TOUCHE LLP,
INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration
Statement of Key Tronic Corporation on Form S-3 of our report dated August
24, 1994, appearing in and incorporated by reference in the Annual Report
on Form 10-K of Key Tronic Corporation for the year ended July 2, 1994 and
to the reference to us under the heading "Experts" in this Registration
Statement
DELOITTE & TOUCHE LLP
Seattle, Washington
February 27, 1995
