AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 14, 1997
REGISTRATION NO. 333-
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-------------------
SOUND ADVICE, INC.
(Exact name of registrant as specified in its charter)
FLORIDA 59-1520531
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
--------------------
1901 TIGERTAIL BOULEVARD
DANIA, FLORIDA 33004
(Address of Principal Executive Office, Including Zip Code)
-------------------
SECOND AMENDED AND RESTATED
SOUND ADVICE, INC.
1986 STOCK OPTION PLAN
WARRANTS TO PURCHASE COMMON STOCK
OF SOUND ADVICE, INC.
(Full Title of the Plans)
PETER BESHOURI
CHAIRMAN OF THE BOARD, PRESIDENT AND CHIEF EXECUTIVE OFFICER
SOUND ADVICE, INC.
1901 TIGERTAIL BOULEVARD
DANIA, FLORIDA 33004
(Name and Address of Agent for Service)
(954) 922-4434
(Telephone Number, Including
Area Code, of Agent for Service)
-------------------
Copy to:
ALAN D. AXELROD, ESQ.
RUBIN BAUM LEVIN CONSTANT FRIEDMAN & BILZIN
2500 FIRST UNION FINANCIAL CENTER
200 SOUTH BISCAYNE BOULEVARD
MIAMI, FLORIDA 33131-2336
(305) 374-7580
-------------------
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
- ------------------------------------------------------------------------------------------------------------------------------------
PROPOSED PROPOSED MAXIMUM
AMOUNT TO BE MAXIMUM OFFERING AGGREGATE OFFERING AMOUNT OF
TITLE OF SECURITIES TO BE REGISTERED REGISTERED (1) PRICE PER SHARE (2) PRICE (2) REGISTRATION FEE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
COMMON STOCK, $0.01 PAR VALUE 565,000 $1.4375 $812,188 $246
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Excludes 200,000 shares issuable upon exercise of options which were
previously registered on Form S-8 (File No. 33-38851). Includes 15,000
shares issuable upon the exercise of certain warrants.
(2) Estimated solely for the purpose of calculating the registration fee in
accordance with Rules 457(c) and 457(h) under the Securities Act of
1933 based upon an average of the high and low prices reported on The
Nasdaq Stock Market on May 8, 1997.
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
ITEM 1. PLAN INFORMATION.*
ITEM 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION.*
*The document(s) containing the information specified in this Part I
will be sent or given to employees as specified by Rule 428(b)(1) under the
Securities Act of 1933, as amended (the "Securities Act"). Such documents will
not be filed with the Securities and Exchange Commission (the "Commission")
either as part of this Registration Statement or as prospectuses or prospectus
supplements pursuant to Rule 424 under the Securities Act. These documents and
the documents incorporated by reference in this Registration Statement pursuant
to Item 3 of Part II of this Registration Statement, taken together, shall
constitute a prospectus which meets the requirements of Section 10(a) of the
Securities Act.
I-1
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
There are hereby incorporated by reference in this
Registration Statement the following documents and information previously filed
with the Commission:
1. The Registrant's Annual Report on Form 10-K for the fiscal
year ended June 30, 1996, which contains the Registrant's audited consolidated
balance sheets for the fiscal years ended June 30, 1996 and 1995, and the
related consolidated statements of operations, shareholders' equity and cash
flows for each of the years in the three-year period ended June 30, 1996;
2. The Registrant's Quarterly Reports on Form 10-Q for the
fiscal quarters ended September 30 and December 31, 1996;
3. The description of the Registrant's Common Stock to be
offered hereby which is contained in its registration statement on Form 8-A
(File No. 0-15194) filed with the Commission and declared effective on December
3, 1986, including any amendments or reports filed for the purpose of updating
such description; and
4. The description of the Registrant's Common Stock Purchase
Rights contained in its registration statement on Form 8-A (File No. 0-15194)
filed with the Commission on May 13, 1997, including any amendments or reports
filed for the purpose of updating such description.
All documents filed by the Registrant pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934, as amended,
after the date of this Registration Statement and prior to the filing of a
post-effective amendment which indicates that all securities offered hereby have
been sold or which deregisters all securities then remaining unsold, shall be
deemed to be incorporated by reference in this Registration Statement and to be
a part hereof from the date of filing of such documents.
Except as superseded or modified herein, any statement
contained in any document incorporated by reference herein or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Registration Statement to the extent that a statement
contained herein or in any other subsequently filed document which also is
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 document.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
II-1
<PAGE>
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Articles of Incorporation and By-Laws, as amended, of the
Registrant require the Registrant to indemnify its directors and officers to the
fullest extent permitted by law. Section 607.0850 of the Florida Business
Corporation Act in general provides that a corporation has the power to
indemnify, among others, an officer or director who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative, by
reason of the fact that he is or was a director or officer against liability and
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding (including any appeal thereof) if he acted in good
faith and in a manner he reasonably believed to be in, or not opposed to, the
best interests of the corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful.
Reference is hereby made to the Articles of Incorporation and By-Laws, as
amended, of the Registrant and such Section 607.0850.
Furthermore, pursuant to Section 607.0850(12) of the Florida
Business Corporation Act, the Registrant is permitted to purchase and maintain
insurance on behalf of any person who is or was a director or an officer against
any liability asserted against him and incurred by him in such capacity or
arising out of his status as such whether or not the Registrant would have the
power to indemnify him against such liability under applicable provisions of the
Articles of Incorporation or By-Laws, as amended, of the Registrant or
applicable law. The Registrant maintains director and officer liability
insurance that insures directors and officers against certain liabilities and
expenses arising from or in connection with the performance of their duties and
also provides under certain circumstances for payment to the Registrant of costs
incurred or payments made by it in indemnifying its directors and officers,
subject in all cases to policy limits and retention amounts.
In addition, pursuant to Sections 607.0831 of the Florida
Business Corporation Act, a director is not personally liable for monetary
damages to the corporation in which he is a director or to any other person for
any act or omission unless the director failed to meet certain specified
standards of conduct.
The Registrant has entered into agreements to indemnify its
directors and executive officers, in addition to the indemnification provided
for in the Registrant's Articles of Incorporation and By-Laws. These agreements,
among other things, indemnify the Registrant's directors and officers for all
direct and indirect expenses and costs (including, without limitation, all
reasonable attorneys' fees and related disbursements, other out of pocket costs
and reasonable compensation for time spent by such persons for which they are
not otherwise compensated by the Registrant or any third person) and liabilities
of any type whatsoever (including, but not limited to, judgments, fines and
amounts paid in settlement) actually and reasonably incurred by such person in
connection with either the investigation, defense, settlement or appeal of any
threatened, pending or completed action, suit or other proceeding, including any
action by or in the right of the corporation, arising out of such person's
services as a director, officer, employee or other agent of the Registrant, any
subsidiary of the Registrant or any other company or enterprise to which the
person provides services at the request of the Registrant. The Registrant
believes that these provisions and agreements are necessary to attract and
retain talented and experienced directors and officers.
See paragraph labelled (b) in Item 9 below.
II-2
<PAGE>
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
EXHIBIT NO. DESCRIPTION
4.1 Articles of Incorporation, as amended, of the
Registrant (incorporated by reference to Exhibit 3.1
to the Registrant's Registration Statement on Form
S-1 initially filed on May 23, 1986 (File No.
33-5942), as amended (the "S-1 Registration
Statement")).
4.2 By-Laws of the Registrant (incorporated by reference
to Exhibit 3.2 to the S-1 Registration Statement).
4.3 Second Amended and Restated Sound Advice, Inc. 1986
Stock Option Plan.*
4.4 1997 Common Stock Purchase Rights Agreement, dated as
of May 5, 1997, between the Registrant and American
Stock Transfer & Trust Company (incorporated by
reference to Exhibit 4.1 to the Registrant's
Registration Statement on Form 8-A filed on May 13,
1997).
5.1 Opinion of Rubin Baum Levin Constant Friedman &
Bilzin regarding legality of Common Stock.*
23.1 Consent of Rubin Baum Levin Constant Friedman &
Bilzin (included in Exhibit 5.1).
23.2 Consent of KPMG Peat Marwick LLP.*
24.1 Power of Attorney (see page II-6).
- -----------------
* Filed herewith.
ITEM 9. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers
or sales are being made, a post-effective amendment to this Registration
Statement:
(i) To include any prospectus
required by section 10(a)(3) of the Securities Act
of 1933;
(ii) To reflect in the prospectus any
facts or events arising after the effective date of
this Registration Statement (or the most recent
post-effective
II-3
<PAGE>
amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the
information set forth in this Registration Statement;
and
(iii) To include any material information
with respect to the plan of distribution not
previously disclosed in this Registration Statement
or any material change to such information in this
Registration Statement;
PROVIDED, HOWEVER, that paragraphs (a)(1)(i) and
(a)(1)(ii) do not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic reports
filed with or furnished to the Commission by the Registrant pursuant to Section
13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated
by reference in the Registration Statement.
(2) That, for the purpose of determining any
liability under the Securities Act of 1933, each such post-effective amendment
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial BONA FIDE offering thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being registered which remain
unsold at the termination of the offering.
(4) 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 that is incorporated by reference in this Registration Statement shall be
deemed to be a new registration statement relating to the securities offered
herein, and the offering of such securities at that time shall be deemed to be
the initial BONA FIDE offering thereof.
(b) Insofar as indemnification for liabilities arising under
the Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the foregoing provisions, or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Securities Act of 1933 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 of 1933 and will be governed by the final adjudication of such
issue.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Dania, State of Florida, on May 14, 1997.
SOUND ADVICE, INC.
By: /S/ PETER BESHOURI
------------------------
Peter Beshouri
Chairman of the Board of Directors,
President and Chief Executive Officer
II-5
<PAGE>
POWER OF ATTORNEY
We, the undersigned officers and directors of Sound Advice, Inc., do hereby
constitute and appoint Peter Beshouri and Michael Blumberg, and each of them,
our true and lawful attorneys-in-fact and agents, each with full power of
substitution and resubstitution, for each of us and in our name, place and
stead, 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 all 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
and about the premises, as fully to all intents and purposes as each of us might
or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, or their or his substitute or
substitutes, may lawfully do or cause to be done by virtue thereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/S/ PETER BESHOURI Chairman of the Board, President and May 14, 1997
- --------------------------------- Chief Executive Officer (Principal
Peter Beshouri Executive Officer)
/S/ KENNETH L. DANIELSON Chief Financial Officer and Treasurer May 14, 1997
- --------------------------------- (Principal Financial and Accounting
Kenneth L. Danielson Officer)
/S/ MICHAEL BLUMBERG Director, Senior Vice President and May 14, 1997
- --------------------------------- Secretary
Michael Blumberg
/S/ G. KAY GRIFFITH Director May 14, 1997
- ---------------------------------
G. Kay Griffith
/S/ HERBERT A. LEEDS Director May 14, 1997
- ---------------------------------
Herbert A. Leeds
/S/ RICHARD W. MCEWEN Director May 14, 1997
- ---------------------------------
Richard W. McEwen
/S/ GREGORY STURGIS Director May 14, 1997
- ---------------------------------
Gregory Sturgis
</TABLE>
II-6
<PAGE>
INDEX TO EXHIBITS
EXHIBIT
NUMBER DOCUMENT
- ------- --------
4.1 Articles of Incorporation, as amended, of the Registrant
(incorporated by reference to Exhibit 3.1 to the
Registrant's Registration Statement on Form S-1 initially
filed on May 23, 1986 (File No. 33-5942), as amended (the
"S-1 Registration Statement")).
4.2 By-laws of the Registrant (incorporated by reference to
Exhibit 3.2 to the S-1 Registration Statement).
4.3 Second Amended and Restated Sound Advice, Inc. 1986 Stock
Option Plan.*
4.4 1997 Common Stock Purchase Rights Agreement, dated as of
May 5, 1997, between the Registrant and American Stock
Transfer & Trust Company (incorporated by reference to
Exhibit 4.1 to the Registrant's Registration Statement on
Form 8-A filed on May 13, 1997).
5.1 Opinion of Rubin Baum Levin Constant Friedman & Bilzin
regarding legality of Common Stock.*
23.1 Consent of Rubin Baum Levin Constant Friedman & Bilzin
(included in Exhibit 5.1).
23.2 Consent of KPMG Peat Marwick LLP.*
24.1 Power of Attorney (see page II-6).
- -----------------
* Filed herewith.
EXHIBIT 4.3
SECOND AMENDED AND RESTATED
SOUND ADVICE, INC.
1986 STOCK OPTION PLAN*
1. PURPOSE. The purpose of the Amended and Restated Sound Advice Inc. 1986
Stock Option Plan (the "Plan") is to secure for Sound Advice, Inc. and its
subsidiaries, if any (hereinafter col lectively the "Company") and its
stockholders the benefits of the additional incentive, inherent in the ownership
of the Company's common stock, par value $. 01 per share (the "Common Stock"),
by selected key employees and non-employee directors of the Company who are
important to the success and growth of the business of the Company and to help
the Company secure and retain the services of such employees and non-employee
directors. Options granted under the Plan will be either "incentive stock
options", intended to qualify as such under the provisions of section 422 of the
Internal Revenue Code of 1986, as from time to time amended (the "Code"), or
"non-qualified stock options." For purposes of the Plan, the terms "parent" and
"subsidiary" shall mean "parent corporation" and "subsidiary corporation,
"respectively, as such terms are defined in sections 424(e) and (f) of the Code.
2. STOCK OPTION COMMITTEE.
2.1. ADMINISTRATION. The Plan shall be administered by a stock option
committee (the "Committee") appointed by the Company's Board of Directors. The
Committee shall consist of not less than two members of the Board of Directors,
each of whom is a "non-employee director" as defined in Rule 16b-3 promulgated
under Section 16(b) of the Securities Exchange Act of 1934, as amended. Once
appointed, the Committee shall continue to serve until otherwise directed by the
Board of Directors. From time to time the Board of Directors may increase the
size of the Committee and appoint additional members thereof, remove members
(with or without cause), and appoint new members in substitution therefor, and
fill vacancies however caused; provided, however, that at no time shall a
Committee of less than two members of the Board of Directors administer the
Plan, and provided, further, that all members of the Committee must be
"non-employee directors" as defined in Rule 16b-3.
2.2. PROCEDURES. The Committee shall select one of its members as
Chairman and shall adopt such rules and regulations as it shall deem appropriate
concerning the holding of its meetings and the administration of the Plan. All
determinations and actions of the Committee shall be made by not less than a
majority of its members.
- --------
*As amended by the Company's Board of Directors: (i) on December 14, 1994,
subject, however, to the approval of the amendments by the Company's
shareholders, which was obtained at the annual meeting of shareholders held on
February 1, 1995; and (ii) on January 21, 1997, which did not require the
approval of the Company's shareholders.
1
<PAGE>
2.3. INTERPRETATION. The Committee shall have full power and authority
to interpret the provisions of the Plan, and its decisions shall be final and
binding on all interested parties.
2.4. LIABILITY. No member of the Board of Directors of the Company or
the Committee shall be liable for any action or determination made in good faith
with respect to the Plan or any option granted under it.
3. SHARES SUBJECT TO OPTIONS.
3.1. NUMBER OF SHARES. Subject to the provisions of Paragraph 12
(relating to adjustments upon changes in capitalization), the number of share
of Common Stock subject at any one time to options granted under the Plan, plus
the number of shares of Common Stock theretofore issued or delivered pursuant to
the exercise of options granted under the Plan, shall not exceed 750,000 shares.
If and to the extent that options granted under the Plan terminate, expire or
are cancelled without having been exercised, new options may be granted under
the Plan with respect to the shares of Common Stock covered by such terminated,
expired or cancelled options; PROVIDED that the granting and terms of such new
options shall in all respects comply with the provisions of the Plan. In no
event shall any options be granted under the Plan after ten years from the date
of adoption of the amendment to the Plan extending its Expiration Date (as
hereinafter defined).
3.2. CHARACTER OF SHARES. Shares of Common Stock delivered upon the
exercise of options granted under the Plan may be authorized and unissued Common
Stock, unissued Common Stock held in the Company's treasury, or both.
3.3. RESERVATION OF SHARES. There shall be reserved at all times for
sale under the Plan a number of shares of Common Stock (authorized and unissued
Common Stock, issued Common Stock held in the Company's treasury, or both) equal
to the maximum number of shares which may be purchased pursuant to options
granted or that may be granted under the Plan.
4. GRANT OF OPTIONS. The Committee shall determine, within the limitations
of the Plan, the employees and non-employee directors of the Company to whom
options are to be granted, the number of shares that may be purchased under each
option, the option price, and shall designate options at the time of grant as
either "incentive stock options" or "non-qualified options;" PROVIDED that the
aggregate fair market value (determined as of the time the option is granted) of
the Common Stock with respect to which incentive stock options are exercisable
for the first time by any individual during any calendar year (under all plans
of the
2
<PAGE>
individual's employer corporation and its parent and subsidiary corporations)
shall not exceed $100,000; PROVIDED, FURTHER, that non-employee directors may be
granted only non-qualified options. In determining the key employees to whom
options shall be granted, the Committee shall take into consideration the
employee's present and potential contribution to the success of the Company and
other such factors as the Committee may deem proper and relevant. Each option
granted under the Plan shall be evidenced by a written agreement between the
Company and the Optionee (as defined in Paragraph 5) in such form, not
inconsistent with the provisions of the Plan, or with section 422 of the Code
for incentive stock options, as the Committee shall provide.
5. PERSONS ELIGIBLE. Options may be granted under the Plan to any key
employee or prospective key employee (conditioned upon, and effective not
earlier than, his becoming an employee) of the Company, including without
limitation by way of specification, any store manager or assistant store
manager, and non-employee directors or prospective non-employee directors
(conditioned upon, and effective not earlier than, an individual becoming a
director). Employees who are also officers or directors of the Company or any of
its subsidiaries shall not by reason of such offices be ineligible to receive
options under the Plan. Notwithstanding any of the foregoing, no member of the
Committee shall be eligible to receive options under the Plan. No incentive
stock options may be granted under the Plan to any person who owns, directly or
indirectly (within the meaning of sections 422(b)(6) and 424(d) of the Code), at
the time the incentive stock option is granted, stock possessing more than 10%
of the total combined voting power of all classes of stock of the Company or its
parent, if any, or its subsidiaries, if any, unless the option price is at least
110% of the fair market value of the shares subject to the option, determined on
the date of the grant, and the option by its terms is not exercisable after the
expiration of five years from the date such option is granted.
An individual receiving any option under the Plan is hereinafter
referred to as an "Optionee. " Any reference herein to the employment of an
Optionee by the Company shall include his or her employment by the Company or
its subsidiaries, if any.
6. OPTION PRICE. Subject to Paragraph 12, the option price of each share of
Common Stock purchasable under any incentive stock option granted under the Plan
shall be not less than the fair market value of such shares of Common Stock at
the time the option is granted. The option price of each share of Common Stock
purchasable under a non-qualified option granted under the Plan shall not be
less than 85% of the fair market value of such share of Common Stock at the time
the option is granted. For purposes of this Paragraph, the time at which an
option is granted, in case of
3
<PAGE>
the grant of an option to a prospective key employee or prospective non-employee
director, shall be deemed to be the effective date of such grant. The option
price of any option issued in a transaction described in section 424(a) of the
Code shall be an amount which conforms to the requirements of that section and
the regulations thereunder.
7. EXPIRATION AND TERMINATION OF THE PLAN.
7.1. GENERAL. Options may be granted under the Plan at any time and
from time to time on or prior to November 10, 2001 (the "Expiration Date"),
which is ten years from the effective date of the amendment to the Plan
extending the term to such date and on which date the Plan will expire except as
to options then outstanding under the Plan. Such outstanding options shall
remain in effect until they have been exercised, terminated or have expired. The
Plan may be terminated, modified or amended by the Board of Directors at any
time on or prior to the Expiration Date, except with respect to any options then
outstanding under the Plan; PROVIDED, however, that the approval of the
Company's shareholders will be required for any amendment which (i) changes the
class of persons eligible for the grant of options, as specified in Paragraph 5,
(ii) increases the maximum number of shares subject to options, as specified in
Paragraph 3 (unless made pursuant to the provisions of Paragraph 12) or (iii)
materially increases the benefits accruing to participants under the Plan,
within the meaning of Rule 16b-3 promulgated under the Securities Exchange Act
of 1934, as amended.
7.2. MODIFICATIONS. No modification, extension, renewal or other change
in any option granted under the Plan shall be made after the grant of such
option, unless the same is consistent with the provisions of the Plan and does
not disqualify an incentive stock option under the provisions of section 422 of
the Code.
8. EXERCISABILITY AND DURATION OF OPTIONS.
8.1. DETERMINATION OF COMMITTEE; ACCELERATION. Each option granted
under the Plan shall be exercisable at such time or times, or upon the
occurrence of such events or events, and in such amounts, as the Committee may
provide upon the granting thereof. Subsequent to the grant of an option which is
not immediately exercisable in full, the Committee, at any time before complete
termination of such option, may accelerate the time or times at which such
option may be exercised in whole or in part. Any option granted under the Plan
shall be exercisable upon the death of the Optionee or upon the termination of
the Optionee's employment by or Optionee's acting as a director of the Company
by reason of his illness or disability only to the extent such option was
exercisable by the Optionee immediately prior to such event, unless
4
<PAGE>
otherwise expressly provided in the option at the time it is granted. Without
limiting the Committee's discretion as provided hereinabove, the Committee
specifically may, in connection with and at the time of granting of
non-qualified options under the Plan, provide that the vesting of such
non-qualified options shall accelerate, and such non-qualified options shall
become fully exercisable, upon the death of an employee or non-employee director
or upon the termination or cessation of the Optionee's employment with or
Optionee's acting as a director of the Company by reason of such person's
disability.
8.2. AUTOMATIC TERMINATION. The unexercised portion of any option
granted under the Plan shall automatically and without notice terminate and
become null and void at the time of the earliest to occur of the following:
(a) The expiration of ten years from the date on which such option was
granted;
(b) The expiration of three months from the date of termination of the
Optionee's employment by or Optionee's acting as a director of the Company
(other than a termination described in subparagraph (c), (d) or (e) below);
PROVIDED, that if the Optionee shall die during such three-month period, the
time of termination of the unexpired portion of any such option shall be
determined under the provision of subparagraph (d) below;
(c) The expiration of one year from the date of termination of the
employment of an Optionee or Optionee's acting as a director due to permanent
and total disability (other than a termination described in subparagraph (e)
below);
(d) The expiration of six months following the issuance of letters
testamentary or letters of administration to the personal representative,
executor or administrator of a deceased Optionee, if the Optionee's death occurs
either during his employment by or acting as a director of the Company or
during the three-month period following the date of termination of such
employment or directorship (other than a termination described in subparagraph
(e) below), but in no event later than one year after the Optionee's death;
(e) The termination of the Optionee's employment by the Company if such
termination constitutes or is attributable to a breach by the Optionee of an
employment agreement with the Company, its parent, if any, or if the Optionee
has been discharged or removed for cause. The Committee shall have the right to
determine whether the Optionee has been discharged or removed for cause and the
date of such discharge, and such determination of the Committee shall be final
and conclusive; or
5
<PAGE>
(f) The expiration of such period of time or the occurrence of such
event as the Committee in its discretion may provide upon granting thereof.
8.2.1 NON-QUALIFIED OPTION AUTOMATIC TERMINATION. Notwithstanding
anything to the contrary contained in Section 8.2, the unexercised portion of
any non-qualified option granted under the Plan (but not any incentive stock
option, the termination of which shall continue to be governed by Section 8.2
hereof) shall automatically and without notice terminate and become null and
void at the time of the earliest to occur of the following:
(a) The expiration of ten years from the date on which such
non-qualified option was granted;
(b) The expiration of two years from the date of termination or
cessation of the Optionee's employment with or Optionee's acting as a director
of the Company for any reason [including, without limitation, as a result of
disability, voluntary resignation within sixty days after a change in control
(as hereinafter defined) or retirement] other than a termination or cessation as
a result of death or described in subparagraph (d) or (e) below; provided that
for purposes hereof "retirement" shall mean voluntarily resigning as an employee
or a director of the Company after the Optionee has reached the age of 65;
provided, further, that the Committee shall have the right to determine the
cause of cessation or termination of employment or directorship and the date of
such cessation or termination, and such determination of the Committee shall be
final and conclusive;
(c) The expiration of two years after the Optionee's death if the
Optionee's death occurs during his employment with or acting as a director of
the Company;
(d) The termination of the Optionee's employment by the Company if such
termination constitutes or is attributable to a breach by the Optionee of an
employment agreement with the Company, its parent, if any, or any of its
subsidiaries, or if the Optionee has been discharged or removed for cause;
provided that the Committee shall have the right to determine whether the
Optionee has been discharged or removed for cause and the date of such discharge
or removal, and such determination of the Committee shall be final and
conclusive;
(e) The expiration of three months from the date of termination or
cessation of the Optionee's employment with or Optionee's acting as a director
of the Company as a result of the Optionee's voluntary resignation other than
within sixty (60) days after a change in control or as a result of retirement;
provided that, if the Optionee shall die during such three-month period, the
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time of termination of the unexpired portion of such non-qualified option shall
be six months following issuance of letters testamentary or letters of
administration to the personal representative, executor or administrator of a
deceased Optionee, but in no event later than one year after the Optionee's
death; or
(f) The expiration of such period of time or the occurrence of such
event as the Committee in its discretion may provide upon granting thereof.
For purposes of this Section 8.2.1, a "change in control" shall be deemed
to have occurred upon any of the following events: (i) the acquisition in one or
more transactions by any "person" (as the term person is used for purposes of
Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended (the
"1934 Act")) of "beneficial ownership" (within the meaning of Rule 13d-3
promulgated under the 1934 Act) of fifteen percent (15%) or more of the combined
voting power of the Company's then outstanding voting securities (the "Voting
Securities"), provided, however, that for purposes hereof, the Voting Securities
acquired (by sale, merger, consolidation or in any other manner) from the
Company by any person shall be excluded from the determination of such person's
beneficial ownership of Voting Securities (but such Voting Securities shall be
included in the calculation of the total number of Voting Securities then
outstanding); or (ii) the individuals who, as December 1, 1994 are members of
the Board of Directors of the Company (the "Incumbent Board"), cease for any
reason to constitute more than one-half of the Board; provided, however, that if
the election, or nomination for election by the Company's shareholders, of any
new director was approved by a vote of more than one-half of the Incumbent
Board, such new director shall, for purposes hereof, be considered as a member
of the Incumbent Board; or (iii) approval by shareholders of the Company of (A)
a merger or consolidation involving the Company if the shareholders of the
Company immediately before such merger or consolidation do not own, directly or
indirectly immediately following such merger or consolidation, more than
one-half of the combined voting power of the outstanding voting securities of
the corporation resulting from such merger or consolidation in substantially the
same proportion as their ownership of the Voting Securities immediately before
such merger or consolidation (unless, however, the event described in
subparagraph (ii) above does not occur in connection therewith) or (B) a
complete liquidation or dissolution of the Company or an agreement for the sale
or other disposition of all or substantially all of the assets of the Company;
provided, however, that, notwithstanding the foregoing, (x) a change in control
shall not be deemed to occur solely because fifteen percent (15%) or more of the
then outstanding Voting Securities is acquired by (1) a trustee or other
fiduciary holding securities under one or more employee benefit plans maintained
by the Company or any of its subsidiaries,
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(2) any corporation which, immediately prior to such acquisition, is owned
directly or indirectly by the shareholders of the Company in the same proportion
as their ownership of stock in the Company immediately prior to such acquisition
or (3) Peter Beshouri, Michael Blumberg, Joseph Piccirilli, Gregory Sturgis or
any other person who, as of the date hereof, directly or indirectly beneficially
owns 5% or more of the Voting Securities of the Company, and (y) a change in
control shall not be deemed to occur solely because any person (the "Subject
Person") acquired beneficial ownership of more than the permitted amount of the
outstanding Voting Securities as a result of the acquisition of Voting
Securities by the Company which, by reducing the number of Voting Securities
outstanding, increases the proportional number of shares beneficially owned by
the Subject Person, provided that if a change in control would occur (but for
the operation of this sentence) as a result of the acquisition of Voting
Securities by the Company, and after such share acquisition by the Company, the
Subject Person becomes the beneficial owner of any additional Voting Securities
which increases the percentage of the then outstanding Voting Securities
beneficially owned by the Subject Person, then a change in control shall occur.
9. EXERCISE OF OPTIONS; CERTAIN LEGAL AND OTHER RESTRICTIONS.
9.1. EXERCISE. Options granted under the Plan shall be exercised by the
Optionee (or by his or her personal representatives, executors or
administrators, as provided in Paragraph 10) as to all or part of the shares
covered thereby, by the giving of written notice of exercise to the Company,
specifying the number of shares to be purchased, accompanied by payment of the
full purchase price for the shares being purchased. Payment of such purchase
price shall be made (a) by check payable to the Company, or (b) with the consent
of the Committee, by delivery of shares of Common Stock having a fair market
value (determined as of the date such option is exercised) equal to all or part
of the purchase price, and if applicable, of a check payable to the Company for
any remaining portion of the purchase price. Such notice of exercise,
accompanied by such payment, shall be delivered to the Company at its principal
business office or such other office as the Committee may from time to time
direct, and shall be in such form, containing such further provisions consistent
with the provisions of the Plan, as the Committee may from time to time
prescribe. The Company shall effect the transfer of the shares so purchased to
the Optionee (or such other person exercising the option pursuant to Paragraph
10 hereof) as soon as practicable, and within a reasonable time thereafter,
such transfer shall be evidenced on the books of the Company. No Optionee or
other person exercising an option shall have any of the rights of a shareholder
of the Company with respect to shares subject to an option granted under the
Plan until
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certificates for such shares shall have been issued following the exercise of
such option. No adjustment shall be made for cash dividends or other rights for
which the record date is prior to the date of such issuance. In no event may any
option granted hereunder be exercised for a fraction of a share.
9.2. WITHHOLDING TAX. Whenever under the Plan shares of stock are to be
delivered upon exercise of a non-qualified option, the Company shall be entitled
to require as a condition of delivery that the Optionee remit or, in appropriate
cases, agree to remit when due an amount sufficient to satisfy all federal,
state and local withholding tax requirements relating thereto.
9.3. RESTRICTIONS ON DELIVERY OF SHARES. Each award granted under the
Plan is subject to the conditions that if at any time the Committee, in its
discretion, shall determine that the listing, registration or qualification of
the shares covered by such award upon any securities exchange or under any state
or federal law is necessary or desirable as a condition of or in connection with
the granting of such option or the purchase or delivery of shares thereunder,
the delivery of any or all shares pursuant to exercise of the option may be
withheld unless and until such listing, registration or qualification shall have
been effected. The Committee may require, as a condition of exercise of any
option, that the Optionee represent, in writing, that the shares received upon
exercise of the option are being acquired for investment and not with a view to
distribution and agree that the shares will not be disposed of except pursuant
to an effective registration statement, unless the Company shall have received
an opinion of counsel satisfactory to the Company that such disposition is
exempt from such requirement under the Securities Act of 1933. The Company may
endorse on certificates representing shares issued upon the exercise of an
option such legends referring to the foregoing representations or any applicable
restrictions on resale as the Company, in its discretion, shall deem
appropriate.
10. NON-TRANSFERABILITY OF OPTIONS. No option granted under the Plan or any
right evidenced thereby shall be transferable by the Optionee other than by will
or by the laws of descent and distribution or pursuant to a qualified domestic
relations order as defined by the Code or Title I of the Employment Retirement
Income Security Act, or the rules thereunder, and, except with respect to a
qualified domestic relations order as aforesaid, an option may be exercised,
during the lifetime of on Optionee, only by such Optionee. In the event of an
Optionee's death during his or her employment by or acting as a director of the
Company, or its parent, if any, or during the three-month period following the
date of termination of such employment or directorship, his or her option shall
thereafter be exercisable, during the period specified
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in Paragraph 8.2(d), by his or her personal representatives, executors or
administrators.
11. RIGHT TO TERMINATE EMPLOYMENT. Nothing in the Plan or in any option
granted under the Plan shall confer upon any Optionee the right to continue in
the employment or as a director of the Company or affect the right of the
Company to terminate the Optionee's employment at any time, subject, however, to
the provisions of any agreement of employment between the Optionee and the
Company.
12. ADJUSTMENT UPON CHANGES IN CAPITALIZATION, ETC. In the event of any
stock split, stock dividend, reclassification or recapitalization which changes
the character or amount of the Company's outstanding Common Stock while any
portion of any option theretofore granted under the Plan is outstanding but
unexercised, the Committee shall make such adjustments in the character and
number of shares subject to such options and in the option price, as shall be
equitable and appropriate in order to make the option, as nearly as may be
practicable, equivalent to such option immediately prior to such change;
PROVIDED, however, that no such adjustment shall give any Optionee any
additional benefits under his or her option; and PROVIDED FURTHER, that, with
respect to any outstanding incentive stock option, if any such adjustment is
made by reason of a transaction described in section 424(a) of the Code, it
shall be made so as to conform to the requirements of that section and the
regulations thereunder.
If any transaction (other than a change specified in the preceding
paragraph) described in section 424(a) of the Code affects the Company's Common
Stock subject to any unexercised option theretofore granted under the Plan
(hereinafter for purposes of this paragraph 12 referred to as the "old option"),
the Board of Directors of the Company or any surviving or acquiring corporation
may take such action as it deems appropriate, and in conformity with the
requirements of that section and the regulations thereunder, to substitute a
new option for the old option, in order to make the new option, as nearly as may
be practicable, equivalent to the old option, or to assume the old option.
If any such change or transaction shall occur, the number and kind of
shares for which options may thereafter be granted under the Plan shall be
adjusted to give effect thereto.
13. APPLICATION OF FUNDS. The proceeds received by the Company from the
sale of the Common Stock may be commingled with any other corporate funds and
used for any corporate purpose.
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14. EFFECTIVE DATE OF PLAN. The Plan shall become effective on May 20,
1986, the date of its adoption by the Board of Directors of the Company,
subject, however, to the approval of the Plan by the Company's stockholders
within 12 months of such adoption.
15. EFFECTIVE DATE OF AMENDMENTS. The amendments to the Plan adopted by the
Board of Directors of the Company as of November 11, 1991, shall become
effective on November 11, 1991, subject, however, to the approval of such
amendments by the Company's shareholders at the Company's 1991 annual meeting of
shareholders.
11
EXHIBIT 5.1
May 14, 1997
Sound Advice, Inc.
1901 Tigertail Boulevard
Dania, Florida 33004
RE: REGISTRATION STATEMENT ON FORM S-8
Ladies and Gentlemen:
We have examined the Registration Statement on Form S-8 to be filed by
you with the Securities and Exchange Commission on the date hereof (the
"Registration Statement"), in connection with the registration under the
Securities Act of 1933, as amended (the "Securities Act"), of 565,000 shares
(the "Shares") of your Common Stock, $0.01 par value per share. Of the Shares,
550,000 are reserved for issuance under the Second Amended and Restated Sound
Advice, Inc. 1986 Stock Option Plan and 15,000 are reserved for issuance upon
the exercise of certain warrants. As your legal counsel, we have examined the
proceedings taken and are familiar with the proceedings proposed to be taken by
you in connection with the issuance and sale of the Shares.
It is our opinion that, when issued and sold in the manner described in
the Registration Statement and the related prospectus, the Shares will be
legally and validly issued, fully paid and non-assessable.
We consent to the use of this opinion as an exhibit to the Registration
Statement and further consent to the use of our name wherever appearing in the
Registration Statement and any amendments thereto.
Very truly yours,
/s/ Rubin Baum Levin Constant Friedman & Bilzin
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RUBIN BAUM LEVIN CONSTANT FRIEDMAN & BILZIN
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
The Board of Directors
Sound Advice, Inc.:
We consent to incorporation by reference in the registration statement
on Form S-8 of Sound Advice, Inc. of our report dated September 18, 1996,
relating to the consolidated balance sheets of Sound Advice, Inc. and
subsidiaries as of June 30, 1996 and 1995, and the related consolidated
statements of operations, shareholders' equity and cash flows for each of the
years in the three-year period ended June 30, 1996, and related schedule, which
report appears in the June 30, 1996 annual report on Form 10-K of Sound Advice,
Inc.
/s/ KPMG Peat Marwick LLP
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KPMG PEAT MARWICK LLP
Fort Lauderdale, Florida
May 14, 1997
