<PAGE> 1
As filed with the Securities and Exchange Commission on August 1, 1995
Registration No. 33-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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POLK AUDIO, INC.
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(Exact name of registrant as specified in its charter)
MARYLAND 52-0954180
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5601 METRO DRIVE, BALTIMORE, MARYLAND 21215
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(Address of Principal Executive Offices) (Zip Code)
1986 EQUITY PARTICIPATION PLAN
------------------------------
(Full title of plan)
GEORGE M. KLOPFER, President WILBERT H. SIROTA, Esquire
Polk Audio, Inc. Piper & Marbury L.L.P.
5601 Metro Drive 36 South Charles Street
Baltimore, Maryland 21215 Baltimore, Maryland 21201
(410) 358-3600 (410) 576-7696
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(Name, address and telephone number, including area code, of agent for service)
-----------------------
CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
Amount Proposed maximum Proposed maximum
Title of securities to be offering price per aggregate offering Amount of
to be registered registered share* price* registration fee
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, 300,000
$0.01 par value shares $10.50 $3,150,000 $1,086.21
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</TABLE>
* Estimated, pursuant to Rule 457, solely for the purpose of computing the
registration fee based upon the NASDAQ closing price of Registrant's Common
Stock on July 31, 1995.
<PAGE> 2
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents have been filed by Polk Audio, Inc. (the
"Registrant") with the Securities and Exchange Commission and are incorporated
herein by reference:
1. The Registrant's Annual Report on Form 10-K for the fiscal
year ended March 27, 1995.
2. Description of the Registrant's Common Stock contained in its
Registration Statement on Form S-1 under the Securities Act of 1933, which
became effective on July 2, 1986, and any amendments thereto.
All other documents subsequently filed by Registrant pursuant to
Sections 13, 14 or 15(d) of the Securities Exchange Act of 1934, prior to the
filing of a post-effective amendment which indicates that all securities
offered have been sold or which deregisters all securities 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 such documents.
Any statement contained in a document incorporated or deemed to be
incorporated by reference shall be deemed to be modified or superseded to the
extent that a statement contained in any other subsequently filed document
which also is or is deemed to be incorporated by reference herein modifies or
supersedes such prior statement. The documents required to be so modified or
superseded shall not be deemed to constitute a part of this Registration
Statement, except as so modified or superseded.
ITEM 4. DESCRIPTION OF SECURITIES.
Not Applicable.
ITEM 5. INTEREST OF NAMED EXPERTS AND COUNSEL.
Wilbert H. Sirota, Esquire, a director of the Registrant, is a
partner in the law firm of Piper & Marbury L.L.P. The firm serves as general
counsel to the Registrant.
ITEM 6. INDEMNIFICATION OF OFFICERS AND DIRECTORS.
(a) Section 2-418 of the Corporations and Associations Article
of the Annotated Code of Maryland permits a corporation to indemnify its
present and former directors, among others, against judgments, penalties,
fines, settlements and reasonable
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<PAGE> 3
expenses actually incurred by them in connection with any proceeding to which
they may be made a party by reason of their services in those or other
capacities, unless it is established that (a) the act or omission of the
director or officer was material to the matter giving rise to such proceeding
and (i) was committed in bad faith or (ii) was the result of active and
deliberate dishonesty; or (b) the director or officer actually received an
improper personal benefit in money, property, or services; or (c) in the case
of any criminal proceeding, the director or officer had reasonable cause to
believe that the act or omission was unlawful. Maryland law permits a
corporation to indemnify a present and former officer to the same extent as a
director, and to provide additional indemnification to an officer who is not
also a director. In addition, Section 2-418(f) of the Corporations and
Associations Article of the Annotated Code of Maryland permits a corporation to
pay or reimburse, in advance of the final disposition of a proceeding,
reasonable expenses (including attorney's fees) incurred by a present or former
director or officer made a party to the proceeding by reason of his service in
that capacity, provided that the corporation shall have received (a) a written
affirmation by the director or officer of his good faith belief that he has met
the standard of conduct necessary for indemnification by the corporation; and
(b) a written undertaking by or on his behalf to repay the amount paid or
reimbursed by the corporation if it shall ultimately be determined that the
standard of conduct was not met.
The Registrant has provided for indemnification of directors,
officers, employees, and agents in Article Thirteenth of its charter, as
amended and restated. This provision reads as follows:
THIRTEENTH: This Corporation shall indemnify to the full
extent permitted by, and in the manner permissible under, the laws of
the State of Maryland, any person made or threatened to be made a
party to an action or proceeding, whether criminal, civil,
administrative or investigative, by reason of the fact that he is or
was a director or officer of this corporation or served any other
enterprise as a director or officer at the request of this
corporation. The foregoing rights of indemnification shall not be
deemed exclusive of any other rights to which any director or officer
or his legal representative may be entitled apart from the provisions
of
Article VIII of the Registrant's By-Laws, as amended and restated,
implement this charter provision.
In the opinion of the Securities and Exchange Commission,
indemnification of directors and officers for liabilities arising under the
Securities Act of 1933, as amended, is against public policy and, therefore,
unenforceable.
(b) Under Maryland law, a corporation is permitted to limit by
provision in its articles of incorporation the liability of directors and
officers, so that no director or officer of the corporation shall be liable to
the corporation or to any stockholder for money damages except to the extent
that (i) the director or officer actually received an improper benefit in
money, property, or services, for the amount of the benefit or profit in money,
property or
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<PAGE> 4
services actually received, or (ii) a judgment or other final adjudication
adverse to the director or officer is entered in a proceeding based on a
finding in the proceeding that the director's or officer's action, or failure
to act, was the result of active and deliberate dishonesty and was material to
the cause of action adjudicated in the proceeding.
The Registrant has limited the liability of its directors and
officers for money damages in Article Fourteenth of its charter, as amended and
restated. This provision reads as follows:
FOURTEENTH: No director or officer of the Corporation shall
be liable to the Corporation or its stockholders for money damages,
except (1) to the extent that it is proved that the person actually
received an improper benefit or profit in money, property or services,
for the amount of the benefit or profit in money, property or services
actually received, or (2) to the extent that a judgment or other final
adjudication adverse to the person is entered in a proceeding based on
a finding in the proceeding that the person's action, or failure to
act, was the result of active and deliberate dishonesty and was
material to the cause of action adjudicated in the proceeding. No
director or officer shall be deemed to have received an improper
benefit or profit within the meaning of this article FOURTEENTH by
reason of any payment or distribution to or in respect of the common
stock of the Corporation, if such payment or distribution applies or
is available equally to all outstanding shares of common stock of the
Corporation. This Article FOURTEENTH shall only apply to events or
omissions occurring on or after February 18, 1988.
ITEM 7. EXEMPTION FROM REGISTRATIONS CLAIMED.
Not Applicable.
ITEM 8. EXHIBITS.
4 The 1986 Equity Participation Plan, as amended.
5.1 Opinion of Piper & Marbury L.L.P. as to the
legality of the securities being registered.
23.1 Consent of KPMG Peat Marwick LLP, independent
certified public accountants.
23.2 Consent of Piper & Marbury L.L.P. (included in
exhibit 5.1).
28.1 Articles of Amendment and Restatement of the
Company (filed with the Registrant's Registration
Statement on Form S-1 (No. 33-5961) on May 23,
1986 and incorporated herein by reference).
28.2 By-Laws of the Company (filed with the
Registrant's Registration Statement on Form S-1
(No. 33-5961) on May 23, 1986 and incorporated
herein by reference).
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<PAGE> 5
ITEM 9. UNDERTAKINGS
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales
are being made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by
Section 10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any
facts or events arising after the effective date of the
registration statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in
the registration statement;
(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,
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being registered which remain
unsold at the termination of the offering.
(b) The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act of 1933, each
filing of the Registrant's annual report pursuant to Section 13(a) or Section
15(d) of the Securities Exchange Act of 1934, (and, where applicable, each
filing of an employee benefit plan's annual report pursuant to Section 15(d) of
the Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the
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<PAGE> 6
question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
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,
thereunder duly authorized, in the City of Baltimore, State of Maryland, on
July 31, 1995.
POLK AUDIO, INC.
By: /s/ GEORGE M. KLOPFER
------------------------------
George M. Klopfer, President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ GEORGE M. KLOPFER Director, President, Chief July 31, 1995
--------------------- Executive Officer and Treasurer
George M. Klopfer (Principal Executive Officer)
/s/ MATTHEW S. POLK, JR. Chairman of the Board July 31, 1995
------------------------ of Directors, Secretary and
Matthew S. Polk, Jr. Vice President of Engineering
/s/ CRAIG C. GEORGI Director and Vice President July 31, 1995
------------------- of Manufacturing
Craig C. Georgi
/s/ WILBERT H. SIROTA Director July 31, 1995
---------------------
Wilbert H. Sirota
/s/ GARY B. DAVIS Chief Financial Officer July 31, 1995
----------------- (Principal Financial Officer)
Gary B. Davis
</TABLE>
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<PAGE> 7
EXHIBIT INDEX
Number Page
4
1986 Equity Participation Plan, as amended.
5.1 Opinion of Piper & Marbury L.L.P. (including Exhibit
23.2: Consent of Piper & Marbury L.L.P.)
23.1 Consent of KPMG Peat Marwick LLP, independent
certified public accountants.
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<PAGE> 1
EXHIBIT 4
AS AMENDED AUGUST 3, 1992
1986 EQUITY PARTICIPATION PLAN
OF
POLK AUDIO, INC.
1. PURPOSE
This plan, which shall be known as the "1986 Equity Participation
Plan" (the "Plan"), is intended to attract, retain and motivate key employees
and/or directors of Polk Audio, Inc. (the "Company") and of any subsidiaries
presently existing or which may be formed in the future, by providing them with
a means to acquire a proprietary interest or to increase their proprietary
interest in the Company's success.
The term "key employee(s)" when used in this Plan shall include
officers, executives, and supervisory personnel, as well as other employees who
make a valuable contribution to the Company.
The word "Company" when used in the Plan shall include
subsidiaries of the Company. The word "subsidiary" when used herein shall mean
any corporation a majority of the voting stock of which is owned directly or
indirectly by the Company.
2. ADMINISTRATION
The Plan shall be administered by a Committee appointed by the
Board of Directors of the Company (the "Committee"). The Committee shall
consist of not less than three members. The members of the committee as of the
date of this amendment are George M. Klopfer, Matthew S. Polk, Jr., and Craig
C. Georgi. The Board of Directors may from time to time remove members from or
add members to the Committee. Vacancies on the Committee, howsoever caused,
shall be filled by additions made by the Board of Directors. The Committee
shall select one of its members as Chairman, and shall hold meetings at such
times and places as it may determine. The Committee shall act by majority
agreement of its members or by written consent signed by a majority of its
members.
<PAGE> 2
Members of the committee shall not be ineligible to receive
benefits or stock options under this Plan or any other plan of the Company or
any of its affiliates solely by reason of their membership on the Committee,
provided that the award of an option under this Plan to a member of the
Committee shall be approved as provided in Section 3.2.4.
The Committee is authorized, subject to the provisions of the
Plan, from time to time to establish such rules and regulations and to appoint
such agents as it deems appropriate for the proper administration of the Plan,
and to make such determinations under, and such interpretations of, and to take
such steps in connection with the Plan or the options granted hereunder as it
deems necessary or advisable. The Committee shall, from time to time, award
options upon such terms and conditions as it deems necessary, subject to the
provisions of the Plan. The total amount of Common Stock which may be
delivered on exercise of options granted under the Plan (the "Options") and
which may be issued as award shares (the "Stock Awards") shall not exceed in
the aggregate Six Hundred Thousand (600,000) shares of the Company's authorized
Common Stock, $0.01 per share par value.
3. STOCK OPTIONS
3.1 Option Shares. The stock to be issued upon exercise of the
Options under the Plan shall be shares of the Company's Common Stock and may be
either authorized and unissued shares or issued shares held in the treasury of
the Company. Such number of shares is subject to adjustment in accordance with
the provisions of Section 7 hereof. The shares involved in the unexercised
portion of any terminated or expired options under the Plan may again be
subjected to options under the Plan.
3.2 Award of Options.
3.2.1 The Committee, at any time and from time to time,
may grant options under the Plan to any key employee or director of the Company
(the "Optionee") for such numbers of shares as the Committee shall designate,
subject to the provisions of this Section 3. The date on which an option shall
be granted shall be the date of the Committee's authorization of such grant or
such later date as may be determined by the Committee at the time such grant is
authorized. At the time of the grant of each option under the Plan, the
Committee shall
<PAGE> 3
determine whether such option is to be designated a nonqualified option, an
incentive stock option (within the meaning of Section 422A of the Internal
Revenue Code of 1986 as amended (the "Code")) or a combination of both;
provided, however, that directors which are not also employees of the Company
shall not be eligible to receive incentive stock options. Any Optionee at any
one time and from time to time may hold more than one option granted under the
Plan or under any other stock plan of the Company.
3.2.2 In the case of an incentive stock option, the
aggregate fair market value (determined as of the date of grant) with respect
to which incentive stock options are exercisable for the first time by an
Optionee in any calendar year (under all stock option plans of the Company and
its subsidiaries) shall not exceed One Hundred Thousand Dollars ($100,000), or
such other amount which may be permitted under the Code from time to time.
3.2.3 Each option shall be evidenced by a stock option
agreement (the "Stock Option Agreement") in such form and containing such
provisions not inconsistent with the provisions of the Plan as the Committee
from time to time shall approve.
3.2.4 No member of the Committee shall participate in
the approval of options granted to him or her under this Plan. The award of
any option to a member of the Committee shall be ratified by the unanimous vote
or written consent of those members of the Board of Directors who are neither
members of the Committee nor employees of the Company. Notwithstanding Section
3.2.1, the date on which an option granted to a member of the Committee shall
be the date of the ratification of such grant by the Board of Directors.
3.3 Option Price. The price of each option granted pursuant to
this Plan shall be determined by the Committee in its sole and absolute
discretion, including a price below fair market value per share as that term is
hereinafter defined. In the case of a non-qualified stock option, the option
price shall not be less than eighty-five percent (85%) of the fair market value
per share on the date of the grant. In the case of an incentive stock option,
the option price shall not be less than one hundred percent (100%) of the fair
market value per share on the date of grant. However, in the event that an
incentive stock option is granted to an employee who, at the time of the grant,
owns stock representing more than ten percent (10%) of the voting power of all
<PAGE> 4
the classes of stock of the Company, the option price shall be not less than
one hundred ten percent (110%) of the fair market value of the stock subject to
the option at the time the option is granted.
During any time the Company's Common Stock is not listed upon an
established stock exchange, the fair market value per share shall be the
reported "bid" price of the Common Stock in the over-the-counter market on the
date preceding the date of the grant as reported by the National Association of
Securities Dealers, Inc. If the stock is listed upon an established stock
exchange or exchanges, its fair market value shall be deemed to be the highest
closing price of the Company's Common Stock on that stock exchange or exchanges
on the date preceding the date of the grant, or, if no sale of the Company's
Common Stock shall have been made on any stock exchange on that day, then on
the next preceding day on which there was a sale.
3.4 Term of Option. The term of each option granted pursuant
to this Plan shall not exceed ten years and, further, in the event of an
incentive stock option is granted to an employee who, at the time of the grant,
owns stock representing more than ten percent (10%) of the voting power of all
classes of stock of the Company, no option shall be exercisable more than five
years from the date it is granted.
3.5 Effect of Termination of Employment, Death or Disability.
3.5.1 In the event of the termination of employment of
an Optionee (otherwise than by reason of death, disability or retirement of the
Optionee, as described below), any option or options granted to the Optionee
under the Plan to the extent not theretofore exercised shall be deemed canceled
and terminated forthwith, except that, such Optionee may exercise any options
theretofore granted which have not expired and which are otherwise exercisable
within three (3) months after such termination. If the employment of an
Optionee shall be terminated by reason of the Optionee's retirement by the
Company, the Optionee shall have the right to exercise such option or options
held by the Optionee to the extent that such options have not expired, at any
time within three (3) months after such retirement. Upon Optionee's retirement
by the Company, all options held by an Optionee shall be immediately
exercisable in full. The transfer of an Optionee from the employ of the
Company to a subsidiary
<PAGE> 5
corporation or vice versa or from one subsidiary corporation of the Company to
another shall not be deemed to constitute a termination of employment for
purposes of this Plan.
3.5.2 In the event that an Optionee shall die while
employed by the Company or shall die within three (3) months after retirement
by the Company, any option or options granted to him under the Plan and not
theretofore exercised or expired shall be exercisable by the estate of the
Optionee or by any person who has acquired such option by bequest or
inheritance from the Optionee at any time within one (1) year of the death of
the Optionee.
3.5.3 In the event of the termination of employment of
an Optionee by reason of Optionee's disability, the Optionee shall have the
right to exercise all options held to the extent that options have not
previously expired or been exercised at any time within one year after such
termination. The term "disability" shall, for the purposes of this Plan, be
defined in the same manner as such term is defined in Section 105(d)(4) of the
Code.
3.5.4 Whether any leave of absence shall constitute
termination of employment for the purposes of any option granted under the Plan
shall be determined in each case by the Committee in its sole discretion.
3.6 Payments for Options. The option price shall become
immediately due upon exercise of the option and shall be payable in full in
cash or cash equivalents; provided, however, that the Committee shall have the
authority, exercisable at its discretion, either at the time the option is
granted or at the time it is exercised, to make the option price payable in one
or more of the alternative forms specified below:
3.6.1 full payment in shares of Common Stock having a
fair market value on the date of exercise equal to the option price; or
3.6.2 a combination of shares of Common Stock valued at
fair market value on the date of exercise and cash or cash equivalent, equal in
the aggregate to the option price.
4. STOCK AWARDS
The Committee may authorize the issuance of Stock Awards to such
key employees and directors and on such terms as the Committee shall determine.
The Committee shall
<PAGE> 6
determine the types of awards made, the number of shares and any other terms,
conditions or restrictions relating to the awards as it may deem appropriate.
5. STOCK APPRECIATION RIGHTS
The Committee may grant stock appreciation rights covering shares
of Common Stock ("SARs") to such Optionees and on such terms as the Committee
shall determine. A SAR may be granted only in tandem with a related
nonqualified stock option under the Plan, and may be granted concurrently with
or after the grant of the stock option, but neither the SAR nor any related
option may be exercised during the first six (6) months of their respective
terms (this limitation shall not apply in the event death or disability of the
Optionee occurs prior to the six-month period). A SAR shall entitle the
Optionee to receive, in lieu of exercising the related stock option, a payment
equal to the excess of the fair market value of the shares of Common Stock
covered by the SAR on the date of exercise over the exercise price for such
shares. A SAR shall be exercisable only to the extent that the related stock
option is exercisable. The base from which the value of the SAR is measured at
its exercise shall be the purchase price under the related stock option.
Payment may be made in cash or shares of Common Stock or a combination of both,
as the Committee shall determine in its sole discretion. The Committee may
cancel or place a limit on the term of or the amount payable for any SAR at any
time. The Committee shall determine all other terms and provisions of any SAR
grant. Unless the Committee shall otherwise determine, to the extent a SAR is
exercisable, it will be exercised automatically for a cash settlement on the
expiration date of its original term. Upon exercise of a SAR as to some or all
of the shares covered by the grant and payment in accordance with the
Committee's determination, the related stock option (including any related tax
benefit right) shall be canceled automatically to the extent of the number of
shares covered by such exercise. Conversely, if the related stock option is
exercised as to some or all of the shares covered by the grant, the related
SAR, if any, shall be canceled automatically to the extent of the number of
shares covered by the stock option exercise.
SARS may only be exercised when there is a positive spread i.e.
when the fair market value of the shares subject to the option exceeds the
option price under the related option.
<PAGE> 7
6. TAX BENEFIT RIGHTS
The Committee may grant tax benefit rights ("TBRs") to such
Optionees and on such terms as the Committee shall determine. A TBR may be
granted only with respect to a nonqualified stock option under the Plan, and
may be granted concurrently with or after the grant of the stock option. A TBR
shall entitle an Optionee to receive from the Company an amount in cash equal
to the then existing maximum statutory federal income tax rates (including any
surtax or similar charge or assessment) for corporations, multiplied by the
amount of ordinary income, if any, realized by the Optionee for Federal income
tax purposes as a result of the exercise of an option granted under the Plan.
The Committee may cancel or place a limit on the term of or the amount payable
for any TBR at any time. The Committee shall determine all other terms and
provisions of any TBR grant.
7. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION
The total number of shares of Common Stock which may be purchased
on exercise of options granted under the Plan, the total number of shares of
Common Stock for which options may be granted under the Plan to any one
individual and option rights (both as to the number of shares of Common Stock
and the option price) shall be appropriately adjusted by the committee for any
increase or decrease in the number of outstanding shares of Common Stock
resulting from a stock dividend, stock split or combination of shares or
reclassification. In the event of a merger or consolidation of the Company,
the Committee may make such adjustments with respect to options or take such
other actions as it deems necessary or appropriate to reflect on in
anticipation of or in connection with such merger or consolidation including,
without limitation, the substitution of new options.
8. TRANSFERABILITY
No option or related SAR or TBR granted pursuant to this Plan
shall be transferable by an Optionee and any option granted pursuant to this
Plan shall be exercisable only by such Optionee except as set forth in Section
3.5.2.
<PAGE> 8
9. AMENDMENT, MODIFICATION AND TERMINATION OF THE PLAN
The Board of Directors, upon recommendation of the Committee or at
its own discretion, at any time may terminate, and at any time and from time to
time, and in any respect, may amend or modify, the Plan; provided, however,
that no such action of the Board of Directors shall, without the approval of
the stockholders, take any action which would result in the failure of the Plan
and the incentive stock options granted thereunder to comply with Section 422A
of the Code. No amendment, modification or termination of the Plan shall in
any manner adversely affect any option theretofore granted under the Plan
without the consent of the Optionee.
10. FINALITY OF DETERMINATIONS
The interpretation and construction by the Committee of any
provisions of the Plan or of any stock option under it shall be final unless
otherwise determined by the Board of Directors. No members of the Board of
Directors 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.
11. WITHHOLDING
The Company shall withhold any and all employment taxes required
to be withheld by Federal, State or local law from, or with respect to, any
stock, cash or other property distributed or paid to any Optionee under this
Plan. If a distribution is to be made in stock or property other than cash,
the Company shall have the right to withhold a sufficient amount of such
Optionee's wages, or require that the Optionee make a direct cash payment to
the Company, sufficient to discharge the Company's withholding obligations
under applicable law. Until the Company has discharged its withholding
obligations, it shall have the right to refuse the issuance of, or delivery of,
the stock for which the option has been exercised. The Company may make such
other arrangements as it deems reasonable or convenient, consistent with this
Plan, to discharge its withholding obligations under applicable law.
12. RIGHT TO CONTINUED EMPLOYMENT
Nothing in this Plan shall confer on an Optionee or a recipient of
a stock award any right to continue in the employ of the Company or any
subsidiary, or affect in any way the right of the Company to terminate such
person's employment at any time.
<PAGE> 9
13. GOVERNING LAW
The Plan and all agreements hereunder shall be construed in
accordance with and governed by the laws of the State of Maryland.
14. EFFECTIVE DATE
The initial effective date of this Plan was May 21, 1986. The
effective date of the first amendment to this Plan is June 13, 1990. The
effective date of the second amendment to this Plan is August 3, 1992.
<PAGE> 1
EXHIBIT 5.1
[PIPER & MARBURY LETTERHEAD]
July 31, 1995
Polk Audio, Inc.
5601 Metro Drive
Baltimore, Maryland 21215
Re: Polk Audio, Inc. - 1986 Equity Participation Plan; Form S-8
Registration Statement
Ladies and Gentlemen:
We have acted as counsel for Polk Audio, Inc. (the "Corporation")
in connection with the above-referenced Registration Statement (the
"Registration Statement") pursuant to which 300,000 shares of the Corporation's
common stock, $0.01 par value per share (the "Shares") are being registered
under the Securities Act of 1933, as amended. The Shares will be offered
pursuant to the Company's 1986 Equity Participation Plan, as amended (the
"Plan").
In this capacity, we have examined the Registration Statement (and
all amendments thereto), the Charter and By-Laws of the Corporation, minutes of
the proceedings of the Corporation's Board of Directors authorizing the
issuance of the Shares, and such other documents as we have considered
necessary. We have also examined a Certificate of Corporate Officer dated
August 1, 1995 (the "Certificate"). In rendering our opinion, we are relying
as to factual matters set forth in the Certificate and have made no independent
investigation or inquiries as to the matters set forth therein.
Based upon the foregoing and limited in all respects to applicable
Maryland law, we are of the opinion and so advise you that the issuance and
delivery of the Shares has been duly and validly authorized and, when issued in
accordance with the terms of the Registration Statement and Plan, the Shares
will be validly issued, fully paid and nonassessable.
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PIPER & MARBURY
L.L.P.
Polk Audio, Inc.
July 31, 1995
Page 2
We hereby consent to the filing of this opinion as an exhibit to
the Registration Statement. In giving our consent, we do not thereby admit
that we are in the category of persons whose consent is required under Section
7 of the Act or the Rules and Regulations of the Commission thereunder.
Very truly yours,
/s/ PIPER & MARBURY
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EXHIBIT 23.1
Consent of Independent Auditors
The Board of Directors
Polk Audio, Inc.:
We consent to the use of our reports incorporated herein by reference.
/s/ KPMG PEAT MARWICK L.L.P.
KPMG PEAT MARWICK L.L.P.
Baltimore, Maryland
July 31, 1995
