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As filed with the Securities and Exchange Commission on April 16, 1997
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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REMEC, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
CALIFORNIA 3812 95-3814301
(State or Other Jurisdiction (Primary Standard Industrial (I.R.S. Employer
of Incorporation or organization) Classified Code Number) Identification No.)
</TABLE>
9404 CHESAPEAKE DRIVE, SAN DIEGO, CALIFORNIA 92123, (619) 560-1301
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
RONALD E. RAGLAND, CHAIRMAN AND CHIEF EXECUTIVE OFFICER
9404 CHESAPEAKE DRIVE, SAN DIEGO, CALIFORNIA 92123, (619) 560-1301
(Name, address, including zip code, and telephone number, including
area code, of agent for service)
----------------------
COPIES TO:
Victor A. Hebert
Paul H. Greiner
Heller Ehrman White & McAuliffe
601 South Figueroa Street
Los Angeles, California 90017-5758
(213) 689-0200
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From
time to time after the effective date of this Registration Statement.
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, check the following box. [X]
If this Form is filed to register additional securities for an offering
persuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
----------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
===============================================================================================================================
Proposed maximum Proposed maximum
Title of each class of securities Amount to be aggregate offering aggregate offering Amount of
to be registered registered price per share(1) price(1) registration fee
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value $0.01 per share 633,349 $21.875 $13,854,509 $4,198
===============================================================================================================================
</TABLE>
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(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) under the Securities Act of 1933 based upon the
average of the high and low prices of the Registrant's Common Stock on
April 11, 1997, as reported on the Nasdaq National Market.
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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 A FURTHER 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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SUBJECT TO COMPLETION, DATED APRIL 16, 1997
PROSPECTUS
633,349 Shares
REMEC
Common Stock
----------------------
This Prospectus relates to the public offering, which is not being
underwritten, of up to 633,349 shares of Common Stock (the "Shares") of REMEC,
Inc. ("REMEC" or the "Company"), which may be offered from time to time by any
or all of the shareholders of the Company named herein (the "Selling
Shareholders"). The Company will receive no part of the proceeds of such sales.
All of the Shares were originally issued by the Company in connection with the
Company's acquisition of Radian Technology, Inc. ("Radian"), by and through a
merger of a newly formed subsidiary of REMEC ("Acquisition Sub") with and into
Radian (the "Radian Merger"). The Shares were issued pursuant to an exemption
from the registration requirements of the Securities Act of 1933, as amended
(the "Securities Act"), provided by Section 4(2) thereof. The Shares are being
registered by the Company pursuant to the Agreement and Plan of Reorganization
and Merger dated February 24, 1997 (the "Reorganization Agreement"), by and
among REMEC, Acquisition Sub and Radian.
The Shares may be offered by the Selling Shareholders from time to time
in one or more transactions in the over-the-counter market at prices prevailing
therein, in negotiated transactions at such prices as may be agreed upon, or in
a combination of such methods of sale. See "Plan of Distribution." The price at
which any of the Shares may be sold, and the commissions, if any, paid in
connection with any such sale, are unknown and may vary from transaction to
transaction. The Company will pay all expenses incident to the offering and sale
of the Shares to the public other than any commissions and discounts of
underwriters, dealers or agents and any transfer taxes. See "Selling
Shareholders" and "Plan of Distribution."
The Company's Common Stock is listed on the Nasdaq National Market
under the symbol "REMC." On April 11, 1997, the last reported sale price of the
Company's Common Stock on the Nasdaq National Market was $21 1/8 per share.
----------------------
SEE "RISK FACTORS" BEGINNING ON PAGE 3 FOR CERTAIN INFORMATION WHICH
SHOULD BE CAREFULLY CONSIDERED BEFORE PURCHASING SHARES OF COMMON STOCK OFFERED
HEREBY.
----------------------
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.
The date of this Prospectus is , 1997
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.
<PAGE> 3
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, proxy and information statements and other
information with the Commission. Such reports, proxy and information statements
and other information may be inspected and copied at the public reference
facilities maintained by the Commission at Room 1024, Judiciary Plaza, 450 Fifth
Street, NW, Washington, D.C. 20549, and at the following Regional Offices of the
Commission: New York Regional Office, Seven World Trade Center, Suite 1300, New
York, New York 10048 and Chicago Regional Office, Northwest Atrium Center, 500
West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such
material may be obtained by mail at prescribed rates from the Public Reference
Section of the Commission at Judiciary Plaza, 450 Fifth Street, NW, Washington,
D.C. 20549. The Commission maintains a Web site that contains reports, proxy and
information statements and other information regarding registrants that file
electronically with the Commission. The address of the site is
http://www.sec.gov. The Common Stock of the Company is listed on the Nasdaq
National Market, and such reports, proxy and information statements and other
information concerning the Company may be inspected at the offices of Nasdaq
Operations, 1735 K Street, NW, Washington, D.C. 20006.
This Prospectus constitutes a part of a Registration Statement on Form
S-3 (herein, together with all amendments and exhibits, referred to as the
"Registration Statement") filed by the Company with the Commission under the
Securities Act. This Prospectus does not contain all of the information set
forth in the Registration Statement, certain parts of which are omitted in
accordance with the rules and regulations of the Commission. For further
information with respect to the Company and the shares of Common Stock offered
hereby, reference is hereby made to the Registration Statement. The Registration
Statement may be inspected at the public reference facilities maintained by the
Commission at the addresses set forth in the preceding paragraph. Statements
contained herein concerning any document filed as an exhibit are not necessarily
complete and, in each instance, reference is made to the copy of such document
filed as an exhibit to the Registration Statement. Each such statement is
qualified in its entirety by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission by the
Company (File No. 0-027414) pursuant to the Exchange Act are hereby incorporated
by reference in this Prospectus:
(1) The Company's Annual Report on Form 10-K for the year ended
January 31, 1997;
(2) The Company's Quarterly Reports on Form 10-Q for the quarters
ended May 5, 1996, August 4, 1996 and November 3, 1996;
(3) The Company's Current Report on Form 8-K dated August 26,
1996, filed with the Commission on September 9, 1996, in
connection with the Company's acquisition of Magnum Microwave
Corporation;
(4) The Company's Current Report on Form 8-K dated April 30, 1996,
filed with the Commission on May 15, 1996 and Form 8-KA
relating thereto filed with the Commission on June 26, 1996,
in connection with the Company's acquisition of RF
Microsystems; and
(5) The description of the Company's Common Stock contained in its
Registration Statement on Form 8-A, filed with the Commission
on December 13, 1995.
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Any statement contained in a document incorporated by reference into
this Prospectus shall be deemed to be modified or superseded for purposes of
this Prospectus to the extent that a statement contained herein or in any other
subsequently filed document that also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus.
The Company hereby undertakes to provide without charge to each person,
including any beneficial owner, to whom a copy of this Prospectus has been
delivered, upon written or oral request of such person, a copy of any or all of
the foregoing documents incorporated by reference into this Prospectus (other
than exhibits to such documents, unless such exhibits are specifically
incorporated by reference into such documents). Requests for such documents
should be submitted in writing to Investor Relations, REMEC, Inc., 9404
Chesapeake Drive, San Diego, California 92123, (619) 560-1301.
FORWARD LOOKING STATEMENTS
The statements in this Prospectus and the documents incorporated herein
by reference that relate to future plans, events or performance are
forward-looking statements. The Company's future operations, financial
performance, business and share price may be affected by a number of factors,
including the factors listed below, any of which could cause actual results to
vary materially from anticipated results. Readers are cautioned not to place
undue reliance on these forward-looking statements, which speak only as of the
date hereof. The Company undertakes no obligation, other than as required under
the Securities Act or the Exchange Act, to publicly release the result of any
revisions to these forward-looking statements that may be made to reflect events
or circumstances after the date hereof or to reflect the occurrence of
unanticipated events.
RISK FACTORS
DEPENDENCE ON COMMERCIAL WIRELESS TELECOMMUNICATIONS MARKET
Until recently, the Company's business has been almost exclusively
focused on the defense market. The Company believes that its future growth
depends on continued success in the commercial wireless telecommunications
market. The Company believes that, while the technologies used in the defense
and commercial industries are very similar, the two industries differ
significantly in terms of the customer base, manufacturing requirements and lead
times, the need to expend substantial resources for research and development
without the assurance of reimbursement or recovery of those costs, and credit
risks with customers. As a result, the Company is subject to risks inherent in
the operation of a new business enterprise, including risks associated with
attracting and servicing a new customer base, manufacturing products in a cost
effective and profitable manner, managing the expansion of a business operation
and attracting and retaining qualified engineering, manufacturing and marketing
personnel with industry experience. For example, the Company believes that
microwave engineers with the skills necessary to develop products for the
wireless telecommunications market currently are in high demand and that the
Company may not be able to attract and retain sufficient engineering expertise.
A number of the commercial markets for the Company's products in the
wireless telecommunications area have only recently begun to develop. Because
these markets are relatively new, it is difficult to predict the rate at which
these markets will grow, if at all. Existing or potential wireless
telecommunications market applications for the Company's products may fail to
develop or may erode for many different reasons, including insufficient growth
to support expensive infrastructure equipment, insufficient consumer demand for
wireless products or services because of pricing or otherwise, or real or
perceived security risks
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associated with wireless communications. If the markets for the Company's
products in commercial wireless telecommunications fail to grow, or grow more
slowly than anticipated, the Company's business, operating results and financial
condition could be materially adversely affected.
DEPENDENCE ON DEFENSE MARKET
A substantial portion of the Company's sales has been to the defense
market. As a result, the Company's sales could be materially adversely impacted
by a decrease in defense spending by the United States government because of
defense spending cuts, general budgetary constraints or otherwise. The United
States defense budget has recently been reduced and may be further reduced.
Fewer available defense industry production programs, coupled with continued
pricing pressure on follow-on orders for programs on which the Company
participates, caused sales of the Company's core defense products -- MFMs and
components for microwave systems -- to decline from $35.3 million in the year
ended January 31, 1994 to $27.5 million for the year ended January 31, 1997. The
Company expects to continue to derive a substantial portion of its revenues from
these business segments and to develop microwave products for defense
applications. Failure of the Company to replace sales attributable to a
significant defense program or contract at the end of that program or contract,
whether due to cancellation, spending cuts, budgetary constraints or otherwise,
could have a material adverse effect upon the Company's business, operating
results and financial condition in subsequent periods. In addition, a large
portion of the Company's expenses are fixed and difficult to reduce, thus
magnifying the material adverse effect of any revenue shortfall. Also, defense
contracts frequently contain provisions that are not standard in private
commercial transactions, such as provisions permitting the cancellation of a
contract if funding for a program is reduced or canceled. For example, the
government terminated a large defense program in December 1992 for which the
Company had been supplying in excess of $4.0 million of products on an annual
basis. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations.
CUSTOMER CONCENTRATION AND EXCLUSIVITY
As of January 31, 1997, two customers, P-COM, Inc. ("P-COM") and STM
Wireless, Inc. ("STM"), accounted for a substantial portion of total backlog.
P-COM, which produces point-to-point millimeter wave radio systems for use in
wireless telecommunications applications, was founded in August 1991 and began
commercial shipment of its products in October 1993. P-COM experiences intense
competition worldwide from a number of leading telecommunications companies,
most of which have substantially greater installed bases, financial resources
and other capabilities than P-COM, and is subject to the risks inherent in the
operation of a new business enterprise. The sales agreement between the Company
and P-COM provides that all of the units will be delivered by December 1998.
REMEC has agreed to sell the products which are the subject of the agreement
with P-COM exclusively to P-COM and not to compete with P-COM in the sale of
point-to-point radios under conditions applicable to both parties. In 1996,
REMEC received orders from STM for $30.4 million for the design and manufacture
of C-Band VSAT equipment. STM experiences intense competition worldwide from a
number of leading telecommunications companies, most of which have substantially
greater installed bases, financial resources and other capabilities than STM.
Aside from P-COM and STM, the Company derives significant revenues from a
limited group of customers, including Department of Defense, Hughes Aircraft
Co., Texas Instruments Inc., Lockheed Martin Corporation ("Lockheed Martin"),
Northrop Grumman Corporation, GEC Marconi Aerospace, Inc., TRW Inc., Motorola,
Inc., Alcatel Network Systems, and Farinon Division of Harris Corporation
("Harris-Farinon"). The Company anticipates that it will continue to sell
products to a relatively small group of customers. As a result, any
cancellation, reduction or delay in orders by or shipments to P-COM, STM or any
other significant customer, as a result of manufacturing or supply difficulties
or otherwise, or the inability of any customer to finance its purchases of the
Company's products would materially adversely affect the Company's business,
financial condition and results of operations. The Company has granted P-COM and
STM exclusivity for certain products and expects that in order to enter into
other significant relationships in the wireless
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telecommunications industry, customers will either expressly or implicitly
require exclusivity. In entering into such exclusive arrangements, the Company
will have to forego opportunities to supply products to competing companies. If
the Company enters into exclusive relationships with customers who prove to be
unsuccessful, the Company may be materially adversely affected and the Company
may be unable then to establish relationships with the industry leaders. There
can be no assurance that the Company will be able to locate, or negotiate
acceptable arrangements with, significant customers or that its current or
future arrangements with significant customers will continue or will be
successful.
INTEGRATION OF ACQUISITIONS
In August 1996, the Company completed a merger (the "Magnum Merger") of
Magnum Microwave Corporation ("Magnum") into a newly formed subsidiary of the
Company. The anticipated benefits of the Magnum Merger will not be achieved
unless the Company and Magnum are successfully combined in an efficient and
effective manner. The transition to a combined Company in which Magnum is a
wholly owned subsidiary of the Company will require substantial attention from
management, which has limited experience in integrating companies the size of
REMEC and Magnum. In addition, following the Magnum Merger, the Company acquired
Radian and Verified Technical Corporation ("Veritek") and has entered into an
agreement to acquire C&S Hybrid ("C&S Hybrid"). The collective integration of
Radian, Veritek and C&S Hybrid also will require substantial attention from
management. The diversion of management attention and any difficulties
encountered in the integration of Magnum or Radian, Veritek and C&S Hybrid as a
group could have an adverse impact on the business and results of operations of
the Company. There can be no assurance that Magnum, Radian, Veritek or C&S
Hybrid will be successfully integrated or that the consolidated operations of
REMEC and its subsidiaries will be profitable. The Company will face similar
risks in the integration of any future acquisitions.
MANAGEMENT OF GROWTH
The growth in size and complexity of the Company's business and
expansion of its product lines and customer base have placed, and are expected
to continue to place, significant demands on the Company's management and
operations. The Company's ability to compete effectively and to manage future
growth will depend on its ability to continue to implement and improve
operational and financial systems on a timely basis. There can be no assurance
that the Company will be able to manage its future growth, and the failure to do
so could have a material adverse effect on the Company's business, financial
condition and results of operations.
FLUCTUATIONS IN QUARTERLY RESULTS
The Company's quarterly results have in the past been, and will
continue to be, subject to significant variations due to a number of factors,
any one of which could substantially affect the Company's results of operations
for any particular fiscal quarter. In particular, quarterly results of
operations can vary due to the timing, cancellation or rescheduling of customer
orders and shipments, the pricing and mix of products sold, new product
introductions by the Company, the Company's ability to obtain components and
subassemblies from contract manufacturers and suppliers, and variations in
manufacturing efficiencies. In addition, with the decline in available defense
industry production programs, the Company has placed more reliance on
development contracts as a source of defense revenues, resulting in an increased
susceptibility to fluctuations due to an increase in revenues from fixed price
development contracts as a percentage of total revenues. Development contracts
carry reduced gross margins and are typically for minimal hardware deliveries
and sporadic non-hardware revenue items which results in fluctuating sales and
gross margins. Accordingly, the Company's performance in any one fiscal quarter
is not necessarily indicative of financial trends or future performance.
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BACKLOG
The Company's order backlog is subject to fluctuations and is not
necessarily indicative of future sales. There can be no assurance that current
order backlog will necessarily lead to sales in any future period. The Company's
order backlog as of January 31, 1997 was approximately $127.8 million,
approximately 53% of which was attributable to commercial customers and
approximately 47% of which was attributable to defense customers. A substantial
amount of the Company's order backlog can be canceled at any time without
penalty, except, in some cases, the recovery of the Company's actual committed
costs and profit on work performed up to the date of cancellation. Cancellations
of pending purchase orders or termination or reductions of purchase orders in
progress from customers of the Company could have a material adverse effect on
the Company's business, operating results and financial condition.
RISKS OF COST OVERRUNS AND PRODUCT NON-PERFORMANCE; LOSS OF INVESTMENT IN DESIGN
AND ENGINEERING
The Company's customers establish demanding specifications for product
performance, reliability and cost. The Company's contract with P-COM to produce
microwave front ends for point-to-point radios and its contract with STM to
produce C-Band VSAT equipment, and a significant portion of the Company's
defense contracts are firm fixed-price ("FFP") contracts that provide for a
predetermined fixed price for stipulated products, regardless of the costs
incurred. The Company has made pricing commitments to P-COM and STM and to other
customers in anticipation of achieving more cost effective product designs and
introducing more widespread manufacturing automation. A substantial portion of
the P-COM backlog involves the re-design by the Company of a substantial portion
of the point-to-point radio front end. The Company faces the risk of
experiencing cost overruns or order cancellation if it fails to achieve
forecasted product design and manufacturing efficiencies or if products cost
more to produce because of increased cost of materials, components or labor or
otherwise. Manufacture of the Company's products is an extremely complex
process. The Company has in the past experienced cost overruns on FFP contracts.
There can be no assurance that cost overruns or problems with performance or
reliability of Company products will not occur in the future. Any such cost
overruns or performance problems may have a material adverse effect on the
Company's business, operating results and financial condition. In addition, the
Company often makes significant investments in design and engineering of new
products for customers without any commitment by the customer for the future
purchase of such products. Failure to receive initial or follow-on orders may
have a material adverse effect on results of operations.
NECESSITY OF IMPLEMENTING HIGH VOLUME MANUFACTURING
Historically, the volume of the Company's production requirements in
the defense market was not sufficient to justify the widespread implementation
of automated manufacturing processes. Fulfillment of substantial orders in the
wireless telecommunications industry will require a significant increase in the
Company's manufacturing capacity. For example, the Company is introducing more
automated manufacturing processes in order to fulfill its obligations to P-COM,
some of which are specialized processes that must be developed. There can be no
assurance that the Company will be able to implement the desired automated
manufacturing processes on a timely basis or at all or that, if implemented,
such manufacturing processes will be sufficient to fulfill the Company's current
and future production commitments in a cost effective manner or that the Company
will obtain a sufficient amount of high volume orders to absorb the capital
costs incurred.
COMPETITION
The markets for the Company's products are extremely competitive and
are characterized by technological change, new product development, product
obsolescence and evolving industry standards. In addition, price competition is
intense and significant price erosion generally occurs over the life of a
product.
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The Company faces some competition from component manufacturers which have
integration capabilities, but believes that its primary competition is from the
captive manufacturing operations of large wireless telecommunications OEMs
(including all of the major telecommunications equipment providers) and defense
prime contractors which are responsible for a substantial majority of the
present worldwide production of MFMs. The Company's future success is dependent
upon the extent to which these OEMs and defense prime contractors elect to
purchase from outside sources rather than manufacture their own microwave MFMs
and components. The Company's customers and large manufacturers of microwave
transmission equipment could also elect to enter into the non-captive market for
microwave products and compete directly with the Company. Many of the Company's
current and potential competitors have substantially greater technical,
financial, marketing, distribution and other resources than the Company and have
greater name recognition and market acceptance of their products and
technologies. No assurance can be given that the Company's competitors will not
develop new technologies or enhancements to existing products or introduce new
products that will offer superior price or performance features or that new
products or technologies will not render obsolete the products of the Company's
customers. For example, Magnum experienced a $2.3 million reduction in cavity
oscillator shipments in its 1996 fiscal year to Harris-Farinon due to
obsolescence. In addition, innovations such as a wireless telephone system
utilizing satellites instead of terrestrial base stations or a device that
integrates microwave functionality could significantly reduce the potential
market for the Company's products. The Company believes that to remain
competitive in the future it will need to invest significant financial resources
in research and development.
DECLINING AVERAGE SELLING PRICES
Many of the Company's customers are under continuous pressure to reduce
prices and, therefore, the Company expects to continue to experience downward
pricing pressure on its products. The Company's customers frequently negotiate
supply arrangements well in advance of delivery dates, requiring the Company to
commit to price reductions before it is determined that assumed cost reductions
can be achieved. To offset declining average sales prices, the Company believes
that it must achieve manufacturing cost reductions and obtain orders for higher
volume products. If the Company is unable to offset declining average selling
prices, the Company's gross margins will decline, and such decline will have a
material adverse effect on the Company's business, financial condition and
results of operations.
ENVIRONMENTAL REGULATIONS AND RISKS
The Company is subject to a variety of local, state and federal
governmental regulations relating to the storage, discharge, handling, emission,
generation, manufacture and disposal of toxic or other hazardous substances used
to manufacture the Company's products. The failure to comply with current or
future regulations could result in the imposition of substantial fines on the
Company, suspension of production, alteration of its manufacturing processes or
cessation of operations.
News reports have asserted that power levels associated with hand held
cellular telephones and infrastructure equipment may pose certain health risks.
If it were determined or perceived that electromagnetic waves carried through
wireless telecommunications equipment create a significant health risk, the
market for these products could be materially adversely affected, which could
have a material adverse effect on the Company's business, financial condition
and results of operations. Moreover, if wireless telecommunications systems or
other systems or devices that rely on or incorporate the Company's products are
determined or alleged to create a significant health risk, the Company could be
named as a defendant, and held liable, in product liability lawsuits commenced
by individuals alleging that the Company's products harmed them, which could
have a material adverse effect on the Company's business, financial condition
and results of operations.
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GOVERNMENT REGULATIONS
The Company's products are incorporated into wireless
telecommunications systems that are subject to regulation domestically by the
Federal Communications Commission ("FCC") and internationally by other
government agencies. Although the equipment operators and not the Company are
responsible for compliance with such regulations, regulatory changes, including
changes in the allocation of available frequency spectra, could materially
adversely affect the Company's operations by restricting development efforts by
the Company's customers, obsoleting current products or increasing the
opportunity for additional competition. Changes in, or the failure by the
Company to manufacture products in compliance with, applicable domestic and
international regulations could have a material adverse effect on the Company's
business, financial condition and results of operations. In addition, the
increasing demand for wireless telecommunications has exerted pressure on
regulatory bodies worldwide to adopt new standards for such products, generally
following extensive investigation of and deliberation over competing
technologies. The delays inherent in this governmental approval process have in
the past caused and may in the future cause the cancellation, postponement or
rescheduling of the installation of communications systems by the Company's
customers, which in turn may have a material adverse effect on the sale of
products by the Company to such customers.
Because of its participation in the defense industry, the Company is
subject to audit from time to time for its compliance with government
regulations by various agencies, including the Defense Contract Audit Agency,
the Defense Investigative Service and the Office of Federal Control Compliance
Programs. These and other governmental agencies may also from time to time
conduct inquiries or investigations that cover a broad range of Company
activity. Responding to any such audits, inquiries or investigations may involve
significant expense and divert management attention. Also, an adverse finding in
any such audit, inquiry or investigation could involve penalties that may have a
material adverse effect on the Company's business, financial condition or
results of operations.
DEPENDENCE ON SUPPLIERS AND CONTRACT MANUFACTURERS
The Company relies on contract manufacturers and suppliers, in some
cases sole suppliers or limited groups of suppliers, to provide it with services
and materials necessary for the manufacture of products. Certain ceramic low
drift substrates (supplied by NTK of Japan and Alpha Industries, Inc.), certain
semiconductors (supplied by Alpha Industries, Inc., NEC Corp., M/A-Com, Inc.,
MWT and others) and certain components used in VCO products (supplied by Alpha
Industries, Inc., Lockheed Martin and Micrometrics, Ltd.) used by the Company
are sole source items and would require significant effort, time or design
changes to develop alternate sources. The Company is also dependent on P-COM to
supply it with certain modules necessary for the production of microwave front
ends for point-to-point radios for P-COM. The Company's reliance on contract
manufacturers and on sole suppliers involves several risks, including a
potential inability to obtain critical materials or services and reduced control
over production costs, delivery schedules, reliability and quality of components
or assemblies. Any inability to obtain timely deliveries of acceptable quality,
or any other circumstance that would require the Company to seek alternative
contract manufacturers or suppliers, could delay the Company's ability to
deliver products to customers, which in turn would have a material adverse
effect on the Company's business, financial condition and results of operations.
In addition, in the event that costs for the Company's contract manufacturers or
suppliers increase, the Company may suffer losses due to an inability to recover
such cost increases under fixed price production commitments to its customers.
LIMITATION ON PROTECTION OF PROPRIETARY TECHNOLOGY; RISK OF THIRD PARTY CLAIMS
The Company does not presently hold any significant patents applicable
to its products. In order to protect its intellectual property rights, the
Company relies on a combination of trade secret, copyright and trademark laws
and employee and third-party nondisclosure agreements, as well as limiting
access to and
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distribution of proprietary information. There can be no assurance that the
steps taken by the Company to protect its intellectual property rights will be
adequate to prevent misappropriation of the Company's technology or to preclude
competitors from independently developing such technology. Furthermore, there
can be no assurance that, in the future, third parties will not assert
infringement claims against the Company or with respect to its products for
which the Company has indemnified certain of its customers. Asserting the
Company's rights or defending against third party claims could involve
substantial costs and diversion of resources, thus materially and adversely
affecting the Company's business, financial condition and results of operations.
In the event a third party were successful in a claim that one of the Company's
products infringed its proprietary rights, the Company may have to pay
substantial royalties or damages, remove that product from the marketplace or
expend substantial amounts in order to modify the product so that it no longer
infringes such proprietary rights, any of which could have a material adverse
effect on the Company's business, financial condition and results of operations.
DEPENDENCE ON KEY PERSONNEL
The Company is highly dependent on the continued service of, and on its
ability to attract and retain, qualified engineering, management, manufacturing,
quality assurance, marketing and support personnel. The Company does not
maintain key man life insurance on its key executive officers and, except for
Joseph Lee (Executive Vice President) and James Mongillo (Vice President), such
personnel do not have employment or non-competition agreements with the Company.
Competition for such personnel is intense, and there can be no assurance that
the Company will be successful in attracting or retaining such personnel. For
example, the Company believes that microwave engineers with the skills necessary
to develop products for the wireless telecommunications market currently are in
high demand and that the Company may not be able to attract and retain
sufficient engineering expertise.
CONTROL BY MANAGEMENT
The Company's executive officers beneficially own a substantial portion
of the outstanding shares of the Common Stock of the Company and comprise five
of the ten members of the Board of Directors. As a result, such persons have the
ability to exercise influence over significant matters regarding the Company.
Such a high level of influence may have a significant effect in delaying,
deferring or preventing a change in control of the Company.
VOLATILITY OF STOCK PRICE
The market price of the shares of Common Stock, like the stock prices
of many technology companies, is subject to wide fluctuations in response to
such factors as actual or anticipated operating results, announcements of
technological innovations, new products or new contracts by the Company, its
competitors or their customers, government regulatory action, developments with
respect to wireless telecommunications, general market conditions and other
factors. In addition, the stock market has from time to time experienced
significant price and volume fluctuations that have particularly affected the
market prices for the stocks of technology companies and that have often been
unrelated to the operating performance of particular companies. The market price
of REMEC Common Stock has been volatile and may continue to be highly volatile.
SHARES ELIGIBLE FOR FUTURE SALE
Sales of substantial amounts of shares in the public market or the
prospect of such sales could adversely affect the market price of the Common
Stock. Of the Company's 12,301,266 outstanding shares of Common Stock, 1,918,967
are subject to lock-up agreements pursuant to which the holders of such shares
have agreed not to sell or otherwise dispose of such shares until July 28, 1997
without the prior written
9
<PAGE> 11
consent of Needham & Company, Inc. The Company has filed registration statements
under the Securities Act of 1933, as amended (the "Securities Act") covering the
sale of 1,296,996 shares of Common Stock reserved for issuance under the
Company's Equity Incentive Plan, 1996 Nonemployee Directors Stock Option Plan
and the Employee Stock Purchase Plan.
USE OF PROCEEDS
The Company will not receive any of the proceeds from the sale of the
Shares. All proceeds from the sale of the Shares will be for the account of the
Selling Shareholders, as described below. See "Selling Shareholders" and "Plan
of Distribution" described below.
SELLING SHAREHOLDERS
The following table sets forth as of the date of this Prospectus, the
name of each of the Selling Shareholders, the number of shares of Common Stock
that each such Selling Shareholder owns as of such date, the number of shares of
Common Stock owned by each Selling Shareholder that may be offered for sale from
time to time by this Prospectus, and the number of shares of Common Stock to be
held by each such Selling Shareholder assuming the sale of all the Common Stock
offered hereby. Except as indicated, none of the Selling Shareholders has held
any position or office or had a material relationship with the Company or any of
its affiliates within the past three years other than as a result of the
ownership of the Company's Common Stock. The Company may amend or supplement
this Prospectus from time to time to update the disclosure set forth herein.
<TABLE>
<CAPTION>
Number of
Number of Shares to be
Number of Shares to be Owned after
Shares Owned Sold under Completion of
Name Prior to Offering(1) this Prospectus Offering
---- -------------------- --------------- --------
<S> <C> <C> <C>
Mongillo Family Trust(2) 171,947 171,947 0
McLaughlin 1996 Revocable Trust 137,558 137,558 0
John L. and Dorothy J. Matson
1986 Family Trust 137,558 137,558 0
Nam S. Han 137,558 137,558 0
Peter Lansberg 41,267 41,267 0
William J. Ress 4,023 4,023 0
Patrick Wong 3,438 3,438 0
</TABLE>
- ----------
(1) The number and percentage of shares beneficially owned is determined in
accordance with Rule 13d-3 of the Exchange Act, and the information is
not necessarily indicative of beneficial ownership for any other
purpose. Under such rule, beneficial ownership includes any shares as
to which the individual has sole or shared voting power or investment
power and also any shares which the individual has the right to acquire
within 60 days of the date of this Prospectus through the exercise of
any stock option or other right. Unless otherwise indicated in the
footnotes, each person has sole voting and investment power (or shares
such powers with his or her spouse) with respect to the Shares shown as
beneficially owned.
(2) James L. Mongillo, a trustee of the Mongillo Family Trust, began
serving as Vice President of the Company after its acquisition of
Radian on February 28, 1997.
10
<PAGE> 12
PLAN OF DISTRIBUTION
The Shares covered by this Prospectus may be offered and sold from time
to time by the Selling Shareholders. The Selling Shareholders will act
independently of the Company in making decisions with respect to the timing,
manner and size of each sale. The Selling Shareholders may sell the Shares being
offered hereby on the Nasdaq National Market, or otherwise, at prices and under
terms then prevailing or at prices related to the then current market price or
at negotiated prices. The Shares may be sold by one or more of the following
means of distribution: (a) a block trade in which the broker-dealer so engaged
will attempt to sell Shares as agent, but may position and resell a portion of
the block as principal to facilitate the transaction; (b) purchases by a
broker-dealer as principal and resale by such broker-dealer for its own account
pursuant to this Prospectus; (c) an over-the-counter distribution in accordance
with the rules of the Nasdaq National Market; (d) ordinary brokerage
transactions and transactions in which the broker solicits purchasers; and (e)
in privately negotiated transactions. To the extent required, this Prospectus
may be amended and supplemented from time to time to describe a specific plan of
distribution. In connection with distributions of the Shares or otherwise, the
Selling Shareholders may enter into hedging transactions with broker-dealers or
other financial institutions. In connection with such transactions,
broker-dealers or other financial institutions may engage in short sales of the
Company's Common Stock in the course of hedging the positions they assume with
Selling Shareholders. The Selling Shareholders may also sell the Company's
Common Stock short and redeliver the shares to close out such short positions.
The Selling Shareholders may also enter into option or other transactions with
broker-dealers or other financial institutions which require the delivery to
such broker-dealer or other financial institution of Shares offered hereby,
which Shares such broker-dealer or other financial institution may resell
pursuant to this Prospectus (as supplemented or amended to reflect such
transaction). The Selling Shareholders may also pledge Shares to a broker-dealer
or other financial institution, and, upon a default, such broker-dealer or other
financial institution, may effect sales of the pledged Shares pursuant to this
Prospectus (as supplemented or amended to reflect such transaction). In
addition, any Shares that qualify for sale pursuant to Rule 144 may be sold
under Rule 144 rather than pursuant to this Prospectus.
In effecting sales, brokers, dealers or agents engaged by the Selling
Shareholders may arrange for other brokers or dealers to participate. Brokers,
dealers or agents may receive commissions, discounts or concessions from the
Selling Shareholders in amounts to be negotiated prior to the sale. Such brokers
or dealers and any other participating brokers or dealers may be deemed to be
"underwriters" within the meaning of the Securities Act in connection with such
sales, and any such commissions, discounts or concessions may be deemed to be
underwriting discounts or commissions under the Securities Act. The Selling
Shareholders may agree to indemnify, under certain circumstances, brokers or
dealers engaged by them to effect sales of the Shares against certain
liabilities, including liabilities arising under the Securities Act. The Company
will pay all expenses incident to the offering and sale of the Shares to the
public other than any commissions and discounts of underwriters, dealers or
agents and any transfer taxes.
In order to comply with the securities laws of certain states, if
applicable, the Shares will be sold in such jurisdictions only through
registered or licensed brokers or dealers. In addition, in certain states the
Shares may not be sold unless they have been registered or qualified for sale in
the applicable state or an exemption from the registration or qualification
requirement is available and is complied with.
The Company has advised the Selling Shareholders that the
anti-manipulation rules of Regulation M under the Exchange Act may apply to
sales of Shares in the market and to the activities of the Selling Shareholders
and their affiliates. In addition, the Company will make copies of this
Prospectus available to the Selling Shareholders and has informed them of the
need for delivery of copies of this Prospectus to purchasers at or prior to the
time of any sale of the Shares offered hereby.
11
<PAGE> 13
At the time a particular offer of Shares is made, if required, a
Prospectus Supplement will be distributed that will set forth the number of
Shares being offered and the terms of the offering, including the name of any
underwriter, dealer or agent, the purchase price paid by any underwriter, any
discount, commission and other item constituting compensation, any discount,
commission or concession allowed or reallowed or paid to any dealer, and the
proposed selling price to the public.
The sale of Shares by the Selling Shareholders is subject to compliance
by the Selling Shareholders with certain contractual restrictions with the
Company. There can be no assurance that the Selling Shareholders will sell all
or any of the Shares.
The Company has agreed to indemnify the Selling Shareholders and any
person controlling a Selling Shareholder against certain liabilities, including
liabilities under the Securities Act. The Selling Shareholders have agreed to
indemnify the Company and certain related persons against certain liabilities,
including liabilities under the Securities Act.
The Company has agreed with the Selling Shareholders to keep the
Registration Statement of which this Prospectus constitutes a part effective for
up to two years following February 28, 1997, the closing date of the Radian
Merger (which period may be shortened or extended under certain circumstances).
The Company intends to de-register any of the Shares not sold by the Selling
Shareholders at the end of such two year period; however it is anticipated that
at such time any unsold shares may be freely tradable subject to compliance with
Rule 144 of the Securities Act.
LEGAL MATTERS
The validity of the shares of Common Stock offered hereby will be
passed upon by Heller Ehrman White & McAuliffe, Los Angeles, California, counsel
to the Company.
EXPERTS
The consolidated financial statements of REMEC, Inc. as of January 31,
1996 and 1997, and for each of the three years in the period ended January 31,
1997, appearing in REMEC, Inc.'s 1997 Annual Report to Shareholders (Form 10-K)
have been audited by Ernst & Young LLP, independent auditors, as set forth in
their report thereon included therein and incorporated herein by reference. Such
consolidated financial statements are incorporated herein by reference in
reliance upon such report given upon the authority of such firm as experts in
accounting and auditing.
12
<PAGE> 14
No dealer, salesperson or other person has been authorized to give any
information or make any representations not contained in this Prospectus in
connection with the offering covered by this Prospectus. If given or made, such
information or representations must not be relied upon as having been authorized
by the Company. This Prospectus does not constitute an offer to sell, or a
solicitation of an offer to buy, the Shares in any jurisdiction where, or to any
person to whom, it is unlawful to make such offer or solicitations. Neither the
delivery of this Prospectus nor any sale made hereunder shall, under any
circumstances, create any implication that there has been no change in the facts
set forth in this Prospectus or in the affairs of the Company since the date
hereof.
----------------------
TABLE OF CONTENTS
PAGE
Available Information ....................................................... 2
Incorporation of Certain Documents
by Reference ................................................................ 2
Forward-Looking Statements .................................................. 3
Risk Factors ................................................................ 3
Use of Proceeds ............................................................. 10
Selling Shareholders ........................................................ 10
Plan of Distribution ........................................................ 11
Legal Matters ............................................................... 12
Experts ..................................................................... 12
633,349 SHARES
REMEC
COMMON STOCK
----------------------
PROSPECTUS
----------------------
, 1997
<PAGE> 15
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The Company will pay all expenses incident to the offering and sale to
the public of the shares being registered other than any commissions and
discounts of underwriters, dealers or agents and any transfer taxes. Such
expenses are set forth in the following table. All of the amounts shown are
estimates except the Securities and Exchange Commission ("SEC") registration
fee.
<TABLE>
<S> <C>
SEC registration fee......................... $ 4,282
Legal fees and expenses...................... 5,000
Accounting fees and expenses................. 1,000
Miscellaneous expenses....................... 1,000
-------
Total................................. $11,282
=======
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Registrant has the power to indemnify its officers and directors
against liability for certain acts pursuant to Section 317 of the General
Corporation Law of California. Articles Fifth and Sixth of the Registrant's
Amended and Restated Articles of Incorporation provide as follows:
"Fifth: The liability of directors of this Corporation for
monetary damages shall be eliminated to the fullest extent permissible
under California law."
"Sixth: This Corporation is authorized to provide
indemnification of agents (as defined in Section 317 of the California
Corporations Code) for breach of duty to this Corporation and its
shareholders through bylaw provisions, or through agreements with the
agents, or otherwise, in excess of the indemnification otherwise
permitted by Section 317 of the California Corporations Code, subject
to the limits on such excess indemnification set forth in Section 204
of the Code."
In addition, Article V of the Registrant's By-laws provides that the
Registrant shall indemnify its directors and executive officers to the fullest
extent not prohibited by California General Corporation Law and provides for the
advancement of expenses upon a receipt of an undertaking to repay such amounts
if the person is determined ultimately not to be entitled to indemnification.
The Registrant has entered into Indemnification Agreements with its
officers and directors.
ITEM 16. EXHIBITS.
5.1 Opinion of Heller Ehrman White & McAuliffe.
23.1 Consent of Ernst & Young LLP, Independent Auditors.
23.2 Consent of Counsel (included in Exhibit 5.1).
24.1 Power of Attorney (included on page II-4).
II-1
<PAGE> 16
ITEM 17. UNDERTAKINGS.
A. UNDERTAKING PURSUANT TO RULE 415.
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) Securities Act of 1933 (the "Securities
Act");
(ii) to reflect in the prospectus any facts or events
arising after the effective date of the Registration
Statement (or the most recent post-effective
amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the
information set forth in the Registration Statement.
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 SEC 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(l)(i) and
A(l)(ii) do not apply if the Registration Statement
is on Form S-3 or Form S-8, and the information
required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports
filed by the Registrant pursuant to Section 13 or
Section 15(d) of the Securities Exchange Act of 1934
(the "Exchange Act") that are incorporated by
reference in the Registration Statement;
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be
deemed to be a new registration statement relating to the
securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of this offering.
B. UNDERTAKING REGARDING FILINGS INCORPORATING SUBSEQUENT
EXCHANGE ACT DOCUMENTS BY REFERENCE.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the Registration Statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
II-2
<PAGE> 17
C. UNDERTAKING IN RESPECT OF INDEMNIFICATION.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the SEC such indemnification is against
public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
II-3
<PAGE> 18
SIGNATURE
Pursuant to the requirements of the Securities Act of 1933, REMEC, Inc.
has duly caused this Registration Statement on Form S-3 to be signed on its
behalf by the undersigned, thereunto duly authorized, in San Diego, California
on April 15, 1997.
REMEC, INC.
By: /s/ Ronald E. Ragland
---------------------------------
Ronald E. Ragland
Chairman of the Board and
Chief Executive Officer
POWERS OF ATTORNEY
Each person whose signature appears below constitutes and appoints
Ronald E. Ragland and Thomas A. George his true and lawful attorneys-in-fact and
agents, each acting alone, with full power of substitution and resubstitution,
for him and in his name, place and stead, in any and all capacities, to sign any
or all amendments (including post-effective amendments) to the Registration
Statement, and to sign any registration statement for the same offering covered
by this Registration Statement that is to be effective upon filing pursuant to
Rule 462(b) under the Securities Act of 1933, as amended, and all post-effective
amendments thereto, and to file the same, with all exhibits thereto, and all
documents in connection therewith, with the Securities and Exchange Commission,
granting unto said attorneys-in-fact and agents, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, each acting alone, or his or her substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
SIGNATURE CAPACITY DATE
- --------- -------- ----
/s/ Ronald E. Ragland Chairman of the Board and Chief April 15, 1997
- ----------------------------- Executive Officer (Principal
Ronald E. Ragland Executive Officer)
/s/ Errol Ekaireb President, Chief Operating April 15, 1997
- ----------------------------- Officer and Director
Errol Ekaireb
/s/ Jack A. Giles Executive Vice President, April 15, 1997
- ----------------------------- President of REMEC Microwave
Jack A. Giles Division and Director
/s/ Denny Morgan Director, Senior Vice President April 15, 1997
- ----------------------------- and Chief Engineer
Denny Morgan
II-4
<PAGE> 19
/s/ Joseph T. Lee Executive Vice President and April 15, 1997
- ----------------------------- Director
Joseph T. Lee
/s/ Thomas A. George Chief Financial Officer, Senior April 15, 1997
- ----------------------------- Vice President and Secretary
Thomas A. George (Principal Financial and
Accounting Officer)
/s/ Andre R. Horn Director April 15, 1997
- -----------------------------
Andre R. Horn
/s/ Gary L. Luick Director April 15, 1997
- -----------------------------
Gary L. Luick
/s/ Jeffrey M. Nash Director April 15, 1997
- -----------------------------
Jeffrey M. Nash
/s/ Thomas A. Corcoran Director April 15, 1997
- -----------------------------
Thomas A. Corcoran
/s/ William H. Gibbs Director April 15, 1997
- -----------------------------
William H. Gibbs
II-5
<PAGE> 20
EXHIBIT INDEX
<TABLE>
<CAPTION>
Sequentially
Exhibit No. Description Numbered Pages
- ----------- ----------- --------------
<S> <C> <C>
5.1 Opinion of Heller Ehrman White & McAuliffe.
23.1 Consent of Ernst & Young LLP, Independent Auditors.
23.2 Consent of Counsel (included in Exhibit 5.1).
24.1 Power of Attorney (included on page II-4).
</TABLE>
<PAGE> 1
EXHIBIT 5.1
April 15, 1997
21860-0006
REMEC, Inc.
9404 Chesapeake Drive
San Diego, California 92123
Registration Statement on Form S-3
Ladies and Gentlemen:
We have acted as counsel to REMEC, Inc., a California
corporation (the "Company"), in connection with the Registration Statement on
Form S-3 contemplated to be filed with the Securities and Exchange Commission on
April 16, 1997 (the "Registration Statement"), for the purpose of registering
under the Securities Act of 1933, as amended, 633,349 currently issued and
outstanding shares of the Company's Common Stock, $0.01 par value per share (the
"Shares"), that may be sold by certain shareholders (the "Selling Shareholders")
of the Company pursuant to the Registration Statement.
In connection with this opinion, we have assumed the
authenticity of all records, documents and instruments submitted to us as
originals, the genuineness of all signatures, the legal capacity of natural
persons and the conformity to the originals of all records, documents and
instruments submitted to us as copies. We have based our opinion upon our review
of the following records, documents, instruments and certificates:
(a) The Restated Articles of Incorporation of the Company
certified by the Secretary of State of the State of
California as of February 26, 1996, and certified to
us by an officer of the Company as being complete and
in full force and effect as of the date of this
opinion;
(b) The Bylaws of the Company certified to us by an
officer of the Company as being complete and in full
force and effect as of the date of this opinion;
(c) A Certificate of the Secretary of the Company: (i)
certifying that copies of all records of proceedings
and actions of the Board of Directors of the Company,
including any committee thereof, relating to the
issuance of the Shares and the proposed resale of the
Shares pursuant to the Registration Statement have
been provided to us; and (ii) certifying as to
certain factual matters; and
(d) The Registration Statement.
This opinion is limited to the laws of the State of
California, and we disclaim any opinion as to the laws of any other
jurisdiction. We further disclaim any opinion as to any other statute, rule,
regulation, ordinance, order or other promulgation of any other jurisdiction or
any regional or local governmental body or as to any related judicial or
administrative opinion. Our opinion to the effect that
<PAGE> 2
REMEC, Inc.
April 15, 1996
Page 2
all issued and outstanding Shares are fully paid and nonassessable is based on
the certification obtained from the Company identified in item (c) above to the
effect that the consideration for such Shares recited in the Board of Directors'
resolutions for such Shares has been received.
Our opinion expressed below also assumes that: (i) the
Registration Statement becomes and remains effective during the period when the
Shares are offered and sold; (ii) the capitalization of the Company is as
described in the Registration Statement; and (iii) all applicable securities
laws are complied with in connection with the sale of the Shares by the Selling
Shareholders.
Based upon the foregoing and our examination of such questions
of law as we have deemed necessary or appropriate for the purpose of this
opinion, it is our opinion that the currently issued and outstanding Shares
covered by the Registration Statement to be sold by the Selling Shareholders are
legally issued, fully paid and nonassessable.
This opinion is rendered to you in connection with the
Registration Statement and is solely for your benefit. This opinion may not be
relied upon by you for any other purpose, or relied upon by any other person,
firm, corporation or other entity for any purpose, without our prior written
consent. We disclaim any obligation to advise you of any change of law that
occurs, or any facts of which we become aware, after the date of this opinion.
We hereby consent to the filing of this opinion as an exhibit
to the Registration Statement. We also consent to the reference to our firm
under the caption "Legal Matters" in the Registration Statement and any
amendments thereto.
Very truly yours,
HELLER EHRMAN WHITE & McAULIFFE
<PAGE> 1
Exhibit 23.1
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in
the Registration Statement (Form S-3) and related Prospectus of REMEC, Inc. for
the registration of 633,349 shares of its common stock and to the incorporation
by reference therein of our report dated February 24, 1997, with respect to the
consolidated financial statements of REMEC, Inc. included in its Annual Report
(Form 10-K) for the year ended January 31, 1997 and the related financial
statement schedule included therein, filed with the Securities and Exchange
Commission.
San Diego, California
April 16, 1997
