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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 12, 1996
REGISTRATION NO. 0-22524
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
REAL GOODS TRADING CORPORATION
(Exact Name of Registrant as Specified in Its Charter)
CALIFORNIA NO. 68-0227324
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
555 LESLIE STREET
UKIAH, CALIFORNIA 95482-3471
(Address of Principal Executive Offices - Zip Code)
REAL GOODS TRADING CORPORATION SECOND AMENDED AND RESTATED
FISCAL 1993 STOCK INCENTIVE PLAN
(600,000 SHARES OF COMMON STOCK)
REAL GOODS TRADING CORPORATION SECOND AMENDED AND RESTATED
NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN
(100,000 SHARES OF COMMON STOCK)
(Full Title of the Plans)
JOHN SCHAEFFER
555 LESLIE STREET
UKIAH, CALIFORNIA 95482-3471
(Name and Address of Agent for Service)
(707) 468-9292
(Telephone Number, Including Area Code, of Agent For Service)
CALCULATION OF REGISTRATION FEE
================================================================================
Proposed Proposed
Title of Maximum Maximum
Securities Amount Offering Aggregate Amount of
To Be To Be Price Offering Registration
Registered Registered Per Share Price (1) Fee
- --------------------------------------------------------------------------------
Common Stock, 700,000 $6.00 $4,200,000 $1,448.27
without par value
================================================================================
(1) Plus such additional number of shares as may be required pursuant to the
option plan in the event of a stock dividend, split-up, merger, consolidation,
recapitalization, combination or reclassification of shares or other similar
event.
Page 1 of 35 sequentially numbered pages.
Index to Exhibits is on sequentially numbered page 17.
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REAL GOODS TRADING CORPORATION
REGISTRATION STATEMENT ON FORM S-8
PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
In accordance with the Note to Part I of Form S-8, the information specified by
Part I of Form S-8 has been omitted from this Registration Statement on Form S-8
for offers of shares of Common Stock of Real Goods Trading Corporation (the
"Company") under the Real Goods Trading Corporation Second Amended and Restated
Fiscal 1993 Stock Incentive Plan (the "1993 Plan") and (ii) the Real Goods
Trading Corporation Second Amended and Restated Non-Employee Directors' Stock
Option Plan (the "Non-Employee Directors' Plan"). The document(s) containing the
information specified in Part I of Form S-8 will be sent or given to
participants as specified by Rule 428(b)(1). Those documents and the documents
incorporated by reference in this Registration Statement pursuant to Item 3 of
Part II of Form S-8, taken together, constitute a prospectus that meets the
requirements of Section 10(a) of the Securities Act of 1933, as amended (the
"Securities Act").
A reoffer prospectus, prepared in accordance with Part I of Form S-3, is filed
herewith to permit the reoffer and resale of "restricted securities" (as such
term is defined in Rule 144(a)(3) promulgated under the Securities Act) issued
under the 1993 Plan or the Non-Employee Directors' Plan.
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CROSS-REFERENCE SHEET SHOWING LOCATION IN PROSPECTUS
OF INFORMATION REQUIRED BY ITEMS OF FORM S-3
Form S-3 Items and Heading Location in Prospectus
- -------------------------- ----------------------
1. Forepart of the Registration Statement
and Outside Front Cover Page of Prospectus Front cover Page
2. Inside Front And Outside Back Cover Inside Front cover Page
3. Summary Information, Risk Factors and Ratio
of Earnings to Fixed Charges The Company
4. Use of Proceeds Use of Proceeds
5. Determination of Offering Price Not Applicable
6. Dilution Not Applicable
7. Selling Security Holders Selling Stockholders
8. Plan of Distribution Plan of Distribution
9. Description of Securities to be Registered Description of Securities
10. Interest of Named Experts and Counsel Legal Matters
11. Material Changes Not Applicable
12. Incorporation of Certain Information by Incorporation of Certain
Reference Documents by Reference
13. Disclosure of Commission Position on
Indemnification for Securities Act Indemnification of
Liabilities Directors and Officers
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REOFFER PROSPECTUS
REAL GOODS TRADING CORPORATION
COMMON STOCK
This Prospectus relates to offers and sales by certain officers and
directors of Real Goods Trading Corporation, a California corporation (the
"Company"), named herein or to be named supplementally, who may be deemed to be
"affiliates" of the Company as defined in Rule 405 under the Securities Act of
1933, as amended (the "Securities Act") (such officers and directors
collectively may be referred to herein as the "Selling Stockholders"), of shares
of the Company's Common Stock, without par value (the "Common Stock"), that may
be acquired by such persons upon exercise of stock options granted, or stock
bonuses issued, to them pursuant to the Company's Second Amended and Restated
Fiscal 1993 Stock Incentive Plan (the "1993 Plan") or the Company's Second
Amended and Restated Non-Employee Directors' Stock Option Plan (the
"Non-Employee Directors' Plan") (the 1993 Plan and the Non-Employee Directors'
Plan together may be referred to as the "Plans"). The shares that may be so
acquired by such persons pursuant to the Plans are herein referred to as the
"Option and Restricted Shares."
The Option and Restricted Shares may be offered hereby from time to
time by any and all of the Selling Stockholders named herein or to be named
supplementally, for their own benefit. The Company will receive no portion of
the proceeds of sales made hereunder. The aggregate expenses of registration
incurred in connection with this offering are approximately $12,000 and are
being borne by the Company; provided that all selling and other expenses
incurred by the Selling Stockholders will be borne by such Selling Stockholders.
Legal fees incurred and registration fees imposed in connection with the
preparation and filing of this Reoffer Prospectus and the Registration Statement
on Form S-8 with which this Reoffer Prospectus is filed equal approximately
$10,000 and $2,000, respectively. All other expenses incurred or to be incurred
in connection herewith are negligible.
All or a portion of the shares of Common Stock offered hereby may be
offered for sale, from time to time, on the Pacific Stock Exchange (the "PSE"),
the NASDAQ Small Cap system or otherwise, at prices and terms then obtainable.
All brokers' commissions, concessions or discounts will be paid by the Selling
Stockholders.
The Selling Stockholders and any broker executing sell orders on behalf
of the Selling Stockholders may be deemed to be "underwriters" within the
meaning of the Securities Act, in which event commissions received by such
broker may be deemed to be underwriting commissions under the Securities Act.
The Common Stock of the Company is listed on the PSE under the symbol
RGT.P and the NASDAQ Small Cap system under the Syntax RGTC. On October 31,
1996, the last day prior to the date hereof on which the Common Stock was
traded, reported sale price of the Company's Common Stock was $5.75.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE 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 November 12, 1996.
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TABLE OF CONTENTS
Section Prospectus
- ------- Page
----
Available Information................................................... 2
The Company............................................................. 3
Risk Factors............................................................ 3
Selling Stockholders.................................................... 5
Transfer Agent and Registrar............................................ 7
Use of Proceeds......................................................... 7
Plan of Distribution.................................................... 7
Incorporation of Certain Documents by Reference......................... 7
Legal Matters........................................................... 8
Experts ............................................................... 8
Indemnification of Directors and Officers............................... 8
No person is authorized to give any information or to make any
representation, other than those contained in this Prospectus, in connection
with the offering described herein, and, if given or made, such information or
representations must not be relied upon as having been authorized by the Company
or the Selling Stockholders. This Prospectus does not constitute an offer to
sell, or a solicitation of an offer to buy, nor shall there be any sale of these
securities by any person in any jurisdiction in which it is unlawful for such
person to make such offer, solicitation or sale. Neither the delivery of this
Prospectus nor any sale made hereunder shall under any circumstances create an
implication that the information contained herein is correct as of any time
subsequent to the date hereof.
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 statements and other information with
the Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information can be inspected and copied at the Commission
at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549,
and at the Commission's regional offices at Room 1204, Everett McKinley Dirksen
Building, 219 South Dearborn Street, Chicago, Illinois 60604 and 7 World Trade
Center, Suite 1300, New York, New
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York 10048. Copies of such material can also be obtained at prescribed rates
from the Public Reference Section of the Commission at its principal office at
450 Fifth Street, N.W., Washington, D.C. 20549. The Commission maintains a World
Wide Web site (whose address is http://www.sec.gov) that contains reports, proxy
and information statements and other information regarding registrants that file
electronically with the Commission.
This Prospectus does not contain all of the information set forth in
the Registration Statement of which this Prospectus is a part and which the
Company has filed with the Commission. For further information with respect to
the Company and the securities offered hereby, reference is made to the
Registration Statement, including the exhibits filed as a part thereof, copies
of which can be inspected at, or obtained at prescribed rates from the Public
Reference Section of the Commission at the address set forth above. Additional
updating information with respect to the Company may be provided in the future
by means of appendices or supplements to the Prospectus.
The Company hereby undertakes to provide without charge to each person
to whom a copy of this Prospectus is delivered, upon written or oral request of
such person, a copy of any and all of the information that has been or may be
incorporated herein by reference (other than exhibits to such documents unless
such exhibits are specifically incorporated by reference into such documents).
Requests should be directed to Ms. Donna Montag, Chief Financial Officer, Real
Goods Trading Corporation, 555 Leslie Street, Ukiah, California 95482-3471. The
telephone number at the Company is (707) 468-9292.
THE COMPANY
The Company was incorporated under the laws of the State of California
in 1990.
The Company's principal executive offices are located at 555 Leslie
Street, Ukiah, California 95482-3471. The telephone number at the Company is
(707) 468-9292.
RISK FACTORS
The following factors should be considered carefully in evaluating the
Company's business and before making any investment in the Company.
A. CATALOG SALES. The Company sells environmentally oriented goods
made by others; although the Company operates three retail stores, the Company's
sales are primarily made through mail order catalogs. The mail order industry is
susceptible to the ebb and flow of both trends and the general economy. While
the Company could be a beneficiary of increased popularity of the Company's
products, that trend could also ebb away. Of approximately 360 products in each
of its color catalogs, 30% are new to those catalogs; there can be no assurance
that the product selection will be effective. While the Company must both incur
catalog production and mailing costs and purchase inventory and staff up in
preparation for customer responses in advance of need, if customer response is
below management's expectations and the Company's revenue from sales decreases,
the Company's expense cannot be reduced timely and proportionately. In
addition, the Company will be reliant to some extent on the state of the
general economy. Finally, catalog companies seeking
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to increase revenues and their "house list" often "prospect" with rented lists;
unwise or excessive prospecting can adversely affect operating results.
B. RETAIL STORES. There are substantial risks in store retailing,
including poor location of retail stores, failing to identify consumer trends
correctly, theft by customers and employees, poor financial controls, excessive
and uncollectible receivables and losing customers to competitors. The Company
is experimenting with retail store formats; there can be no assurance that any
of those formats will be profitable, or, if profitable, replicatable.
C. SOLAR LIVING CENTER. The Company has spent approximately $2,500,000
to construct the Solar Living Center as a demonstration of many of the
principles underlying the Company's mission and vision. There can be no
assurance that the Solar Living Center, which opened in May 1996, will fulfill
the Company's hopes to increase the public's awareness of the Company's mission,
that the Company will ever realize a suitable return on its investment or that
the Company will not incur a substantial loss from the Solar Living Center. The
Solar Living Center is located on a flood plain.
D. SEASONALITY. As with nearly all retail enterprises, the Company's
business is very seasonal, and the Company customarily generates approximately
40% of its revenues in the third fiscal quarter which is the last calendar
quarter of the year. The Company's execution in its third quarter is material to
its financial success for a fiscal year. Poor third quarter results in any given
year would adversely impact the Company to a greater absolute extent than poor
results in any other quarter.
E. COMPETITION. The Company believes that as to certain of its products
it operates in a niche presently too technical and specific to interest the
larger catalogs and that the Company's knowledge of its customers and vendors
offerings enables it to be a better intermediary between suppliers and customers
for its segment of the market than larger catalogs. However, the Company is
small compared to industry leaders. If one of more of the larger catalog
retailers either decides to have a major alternative energy and conservation
section in an existing catalog or to launch a comparable catalog, the Company's
business could be adversely affected.
F. UNCONTROLLABLE EVENTS. The Company is subject to larger trends and
events which are beyond the Company's control. For instance, a severe recession
would decrease disposable income and the amounts people spend on non-essential
products such as those the Company offers. If there is a war, earthquake, fire
or similar event, the Company will be adversely impacted. While the Company will
carry reasonable insurance considering its size and resources, such insurance
may not fully protect the Company from events which are beyond the Company's
control. Any long term drop in energy prices could also reduce the
attractiveness of certain of the Company's products. The Company could benefit
from a long term increase in energy prices.
G. SALES TAXES. In 1992, the United States Supreme Court ruled that
states may not impose taxes on out-of-state direct marketers, but it suggested
that Congress could delegate that power. To date, there has been no
congressional action. The Company collects sales tax only on sales made in the
States of California and Wisconsin. If the Congress does delegate the power to
levy a sales tax and states do levy those taxes, the operations of the Company
will likely be affected substantially because the Company's average order is
relatively high and sales taxes combined with shopping charges may affect
consumer buying decisions.
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H. DEPENDENCE ON CERTAIN SUPPLIERS, INCLUDING FOREIGN SUPPLIERS. The
Company carries approximately 360 articles in each color catalog. No more than
5% of the Company's sales arise from a single product. Approximately 3.5% of the
Company's sales are generated from products made in foreign countries.
Accordingly, the Company is subject to both exchange rate fluctuations and
possible disruptions in supplies for those products. The Company could also be
vulnerable because 12% of its revenues derive from products purchased from a
single supplier. However, there is at least one alternative supplier for each
product in every case, and management believes that any such effect would be
temporary.
I. DEPENDENCE ON KEY PERSONNEL. The Company is substantially dependent
on the continued services of John Schaeffer. The loss of Mr. Schaeffer's
services for any substantial period of time is certain to have a material
adverse impact on the Company. The Company does not anticipate acquiring
disability or key person insurance on Mr. Schaeffer.
J. COST INCREASES. As a mail order catalog, the Company is particularly
susceptible to increase in paper prices and postal and shipping charges. In late
1994 and early 1995 paper prices increased dramatically. Additionally, both the
United States Postal Service and United Parcel Service increased their rates in
early 1995. While the Company cannot predict paper prices, they are often
directly affected by the strength of the economy, since the paper industry's
capacity is relatively fixed. Management does not anticipate significant
increases in the cost of mailing catalogs in the short term, but it does expect
annual increases in United Parcel Services's charges. Increased paper prices as
well as increased mailing and shipping charges could substantially impact the
Company's growth and profitability.
K. CONTROL. Because of his stock ownership position, John Schaeffer has
the ability to control the operations and strategy of the Company.
L. POSSIBLE VOLATILITY OF STOCK PRICE. There can be no assurance that
there will continue to be a public market for the Common Stock. The market price
of the Common Stock may be significantly affected by factors such as
announcements by the Company or its competitors, as well as variations in the
Company's results of operations and market conditions in the alternative energy
industry in general. The market price of the Common Stock may also be affected
by movements in stock prices generally. The relatively limited amount of
publicly tradable shares renders the Company's securities especially susceptible
to sharp price fluctuations. Possible or actual sales of Common Stock in the
future by existing shareholders may have a depressive effect on the price of the
Common Stock in the open market.
SELLING STOCKHOLDERS
The Prospectus covers Option and Restricted Shares that have been or
may be acquired upon exercise of options held by the Selling Stockholders, named
herein or to be supplementally named, as of November 11, 1996.
The following table sets forth the name of each Selling Stockholder,
the nature of his or her position, office, or other material relationship with
the Company, the number of shares of Common Stock beneficially owned by each
Selling Stockholder prior to the offering, and the number of shares and (if one
percent or more) the percentage of the class to be beneficially owned by such
Selling Stockholder after the offering. Non-affiliate Selling Stockholders who
hold fewer than 1,000 shares
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of Common Stock issued under the Plans and not named below may use this
Prospectus for reoffers and resales of such Common Stock.
<TABLE>
<CAPTION>
===============================================================================
SHARES OWNED AFTER
OFFERING(6)
- -------------------------------------------------------------------------------
SHARES NUMBER OF
OWNED SHARES
PRIOR TO OFFERED
NAME POSITION OFFERING(1) HEREIN (5) NUMBER PERCENT
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Jim Robello Director 2,615(2) 2,615 None *(7)
- -------------------------------------------------------------------------------
Stephen Morris Director 31,400(3) 31,400 None *(7)
- -------------------------------------------------------------------------------
Donna Montag Chief 3,500(4) 3,500 None *(7)
Financial
Officer
===============================================================================
</TABLE>
- ------------------------
(1) For purposes of this table, a person is deemed to have
"beneficial ownership" of any shares of Common Stock when such
person has the right to acquire such shares within 60 days
after November 12, 1996. For purposes of computing the
percentage of outstanding shares of Common Stock held by each
person named above, any security which such person has the
right to acquire within such date is deemed to be outstanding
but is not deemed to be outstanding for the purpose of
computing the percentage ownership of any other person. Except
as indicated in the footnotes to this table and pursuant to
applicable community property laws, the Company believes based
on information supplied by such persons, that the persons
named in this table have sole voting and investment power with
respect to all shares of Common Stock which they beneficially
own.
(2) Includes 500 shares subject to issuance within 60 days after
November 12, 1996, upon exercise of the stock options granted
under the Directors' Plan.
(3) Includes 31,300 shares subject to issuance within 60 days
after November 12, 1996, upon exercise of stock options
granted under the 1993 Plan and 100 shares subject to issuance
within 60 days after November 12, 1996, upon exercise of stock
options granted under the Directors' Plan.
(4) All such shares are subject to issuance within 60 days after
November 12, 1996, upon exercise of stock options granted
under the 1993 Plan.
(5) Indicates the maximum number of shares of Common Stock that
may be offered. There is no guaranty that any such shares will
be sold.
(6) Assumes sale of all shares offered.
(7) Less than 1%.
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TRANSFER AGENT AND REGISTRAR
The name and address of the Transfer Agent and Registrar for the Common
Stock of the Company is U.S. Stock Transfer Corporation, 1745 Gardena Avenue,
Glendale, California 91204.
USE OF PROCEEDS
Inapplicable as there are no proceeds to the Company in connection with
the sale of any shares Common Stock being registered under the Registration
Statement with which this Prospectus is filed.
PLAN OF DISTRIBUTION
The Selling Stockholders may sell shares of Common Stock in any of the
following ways (i) through dealers; (ii) through agents; or (iii) directly to
one or more purchasers. Selling Stockholders who are not Affiliates of the
Company may also sell shares of Common Stock on the Company's Bulletin Board on
the World Wide Web. The distribution of the shares of Common Stock may be
effected from time to time in one or more transactions (which may involve block
transactions) (A) on Nasdaq or the PSE (or on such other national stock
exchanges on which the shares of Common Stock may be traded from time to time)
in transactions which may include special offerings, exchange distributions
and/or secondary distributions pursuant to and in accordance with rules of such
exchanges, (B) in the over-the-counter market, or (C) in transactions other than
on such exchanges or in the over-the-counter market, or a combination of such
transactions. Any such transaction may be effected at market prices prevailing
at the time of sale, at prices related to such prevailing market prices, at
negotiated prices or fixed prices. The Selling Stockholders may effect such
transactions by selling shares of Common Stock to or through broker-dealers, and
such broker-dealers may receive compensation in the form of discounts,
concessions, or commissions from Selling Stockholders and/or commissions from
purchasers of shares of Common Stock for whom they may act as agent. The Selling
Stockholders and any broker-dealers or agents that participate in the
distribution of shares of Common Stock by them might be deemed to be
underwriters, and any discounts, commissions or concessions received by any such
broker-dealers or agents might be deemed to be underwriting discounts and
commissions, under the Securities Act.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents previously filed by the Company with the
Commission and are hereby incorporated herein by reference:
(a) The Company's Annual Report on Form 10-KSB for the fiscal year
ended March 31, 1996;
(b) Amendment No. 1 to the Company's Annual Report on Form 10-KSB/A-1
amending the Company's Annual Report on Form 10-KSB filed for the fiscal year
ended March 31, 1996;
(c) The Company's Quarterly Reports on Form 10-QSB for the three month
periods ended June 30, 1996 and September 28, 1996, respectively;
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(d) The description of the Company's Common Stock contained in the
Company's Registration Statement (and past and future amendments thereto) for
such Common Stock filed pursuant to Section 12 of the Exchange Act; and
(e) All other reports filed by the Company pursuant to Section 13(a)
and 15(d) of the Exchange Act since the end of the Company's fiscal year ended
March 31, 1996.
All documents filed by the Company with the Commission pursuant to
sections 13, 14 or 15(d) of the Exchange Act subsequent hereto, but prior to the
termination of the offering of securities made by this Prospectus shall be
deemed to be incorporated by reference herein and to be part hereof from their
respective dates of filing.
Any statement contained in a document incorporated by reference herein
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 which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
LEGAL MATTERS
The legality of the shares offered hereby has been passed upon for the
Company by Coblentz, Cahen, McCabe & Breyer, LLP, 222 Kearny Street, Seventh
Floor, San Francisco, California 94108. Such law firm acts as counsel for the
Company. Barry Reder, a partner at such law firm, is a member of the Company's
Board of Directors.
EXPERTS
The financial statements as of and for the years ended March 31, 1994
and 1995 incorporated in this prospectus by reference from the Company's Annual
Report on Form 10-KSB/A for the year ended March 31, 1996 have been audited by
Deloitte & Touche LLP, independent auditors, as stated in their report, which
is incorporated herein by reference (which report expresses an unqualified
opinion and includes an explanatory paragraph referring to the Company's change
in method of accounting for certain inventory acquisition and distribution
costs), and have been so incorportated in reliance upon the report of such firm
given upon their authority as experts in accounting and auditing.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 317 of the California Corporations Code permits indemnification
of directors, officers and employees of corporations under certain conditions
and subject to certain limitations. The Company's Bylaws specifically authorize
the Company to indemnify agents in excess of that expressly permitted by
Section 317 of the California Corporations Code for breach of duty to the
Registrant and its shareholders; provided, however, that the Company is not
authorized to provide indemnification of any agent for any acts or omissions or
transactions from which a director may not be relieved of liability as set
forth in the exception to Section 204(a)(10) of the California Corporations
Code or as to the circumstances in which indemnity is expressly prohibited by
Section 317. Article VI of the Company's Bylaws requires indemnification of
directors, officers, and employees within the limitations permitted by Section
317. Additionally, the Company has entered
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into Indemnification Agreements with each of its directors and executive
officers which provide for the payment of amounts an indemnitee is legally
obligated to pay because of claims which may be based on any act or omission, or
neglect or breach of duty, including any error, misstatement or misleading
statement made, suffered or permitted by such executive officer or director. The
Company carries Directors' and Officers' Liability insurance with a policy limit
of $1,000,000 per incident and $1,000,000 in the aggregate. The obligation of
the Company to indemnify directors and officers under the Indemnification
Agreements is broader than that otherwise afforded by California Law.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers, and controlling persons of the
Company, the Company has been advised that in the opinion of the Commission 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 Company of expense
incurred or paid by a director, officer, or controlling person of the Company in
the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person of the Company in connection with the
securities being registered, the Company will, unless in the opinion of its
counsel the matter has been settled by a 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 issues.
[END OF REOFFER PROSPECTUS]
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PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents previously filed by the Company with the
Commission are hereby incorporated by reference in this Registration Statement:
(a) The Company's Annual Report on Form 10-KSB filed for the fiscal
year ended March 31, 1996;
(b) Amendment No. 1 to the Company's Annual Report on Form 10-KSB/A-1
amending the Company's Annual Report on Form 10-KSB filed for the fiscal year
ended March 31, 1996;
(c) The Company's Quarterly Reports on Form 10-QSB filed for the
quarters ended June 30, 1996 and September 28, 1996, respectively;
(d) The description of the Company's Common Stock contained in the
Company's Registration Statement (and past and future amendments thereto) for
such Common Stock filed pursuant to Section 12 of the Securities Exchange Act of
1934, as amended (the "Exchange Act"); and
(e) All other reports filed by the Company pursuant to Section 13(a)
and 15(d) of the Exchange Act since the end of the Company's fiscal year ended
March 31, 1996.
All documents subsequently filed by the Company pursuant to Sections
13, 14 or 15(d) of the Exchange Act, prior to the filing of a post-effective
amendment which indicates that all securities offered 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 part hereof
from the date of filing of such documents.
Any statement contained in a document incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this Registration
Statement, to the extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
The legality of the shares offered hereby has been passed upon for the
Company by Coblentz, Cahen, McCabe & Breyer, LLP, 222 Kearny Street, Seventh
Floor, San Francisco, California 94108. Such law firm acts as counsel for the
Company. Barry Reder, a partner at such law firm, is a member of the Company's
Board of Directors.
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ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 317 of the California Corporations Code permits indemnification
of directors, officers and employees of corporations under certain conditions
and subject to certain limitations. The Company's Bylaws specifically authorize
the Company to indemnify agents in excess of that expressly permitted by
Section 317 of the California Corporations Code for breach of duty to the
Company and its shareholders; provided, however, that the Company is not
authorized to provide indemnification of any agent for any acts or omissions or
transactions from which a director may not be relieved of liability as set
forth in the exception to Section 204(a)(10) of the California Corporations
Code or as to the circumstances in which indemnity is expressly prohibited by
Section 317. Article VI of the Company's Bylaws requires indemnification of
directors, officers, and employees within the limitations permitted by Section
317. Additionally, the Company has entered into Indemnification Agreements with
each of its directors and executive officers which provide for the payment of
amounts an indemnitee is legally obligated to pay because of claims which may
be based on any act or omission, or neglect or breach of duty, including any
error, misstatement or misleading statement made, suffered or permitted by such
executive officer or director. The Company carries Directors' and Officers'
Liability insurance with a policy limit of $1,000,000 per incident and
$1,000,000 in the aggregate. The obligation of the Company to indemnify
directors and officers under the Indemnification Agreements is broader than
that otherwise afforded by California Law.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
Exhibit
Number
4.1 Real Goods Trading Corporation Second Amended and Restated Fiscal
1993 Stock Incentive Plan
4.2 Real Goods Trading Corporation Second Amended and Restated Non-
Employee Directors' Stock Option Plan
5 Opinion of Coblentz, Cahen, McCabe & Breyer as to the legality of
the securities being registered
23.1 Consent of Deloitte & Touche LLP
23.2 Consent of Coblentz, Cahen, McCabe & Breyer (included in Exhibit
5)
24 Power of Attorney (included on page 4 of this Registration
Statement)
ITEM 9. UNDERTAKINGS.
1. The undersigned Company hereby undertakes:
(a) To file, during any period in which it offers or sells
securities, a post-effective amendment to this Registration Statement
to:
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<PAGE> 15
(i) Include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) Reflect in the prospectus any facts or events
arising after the effective date of this Registration
Statement (or the most recent post-effective amendment hereof)
which, individually or in the aggregate, represent a
fundamental change 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 and of the estimated
maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b)
if, in the aggregate, the changes in volume and price
represent no more than 20 percent 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 this Registration Statement or any material change to such
information in the Registration Statement;
provided, however, that paragraphs (1)(a)(i) and (1)(a)(ii) shall 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 Company under the Exchange Act and incorporated herein by
reference.
(b) That, for determining liability under the Securities Act,
to treat each post-effective amendment as a new registration statement
of the securities offered, and the offering of such securities at that
time shall be the initial bona fide offering thereof.
(c) To file a post-effective amendment to remove from
registration any of the securities that remain unsold at the
termination of the offering.
2. 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 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 this 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.
3. The undertaking required pursuant to Item 512(h) of Regulation S-K is
set forth under "Indemnification of Directors and Officers" on page 2 of this
Registration Statement.
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<PAGE> 16
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Company
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 Ukiah, State of California on November 11, 1996.
REAL GOODS TRADING CORPORATION
By: /s/ John Schaeffer
----------------------------------------
(John Schaeffer, President and Principal
Executive Officer)
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints John Schaeffer his or her
attorney-in-fact, with the power of substitution, for him or her in any and all
capacities, to sign any amendments to this Registration Statement, and to file
the same, with exhibits thereto and other documents in connection therewith,
with the Securities and Exchange Commission, hereby ratifying and confirming all
that said attorney-in-fact, or his substitute or substitutes, may do or cause to
be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------- ----- ----
<S> <C> <C>
/s/ John Schaeffer President and Principal Executive Officer November 11, 1996
- -----------------------------
(John Schaeffer)
/s/ Donna Montag Chief Financial Officer November 11, 1996
- -----------------------------
(Donna Montag)
/s/ Stephen Morris Director November 11, 1996
- -----------------------------
(Stephen Morris)
/s/ Linda Francis Director November 11, 1996
- -----------------------------
(Linda Francis)
/s/ James T. Robello Director November 11, 1996
- -----------------------------
(James T. Robello)
/s/ John Lenser Director November 11, 1996
- -----------------------------
(John Lenser)
/s/ Barry Reder Director November 11, 1996
- -----------------------------
(Barry Reder)
</TABLE>
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<PAGE> 17
EXHIBIT INDEX
EXHIBIT
NUMBER PAGE*
4.1 Real Goods Trading Corporation Second Amended
and Restated Fiscal 1993 Stock Incentive Plan 18
4.2 Real Goods Trading Corporation Second Amended
and Restated Non-Employee Directors' Stock
Option Plan 28
5 Opinion of Coblentz, Cahen, McCabe & Breyer as
to the legality of the securities being registered 34
23.1 Consent of Deloitte & Touche 35
23.2 Consent of Coblentz, Cahen, McCabe & Breyer
(included in Exhibit 5) 34
24 Power of Attorney (on sequentially numbered
page 16 within the Registration Statement) 16
- ---------
* Refers to sequentially numbered page.
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<PAGE> 1
EXHIBIT 4.1
REAL GOODS TRADING CORPORATION
SECOND AMENDED AND RESTATED
FISCAL 1993 STOCK INCENTIVE PLAN
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<PAGE> 2
TABLE OF CONTENTS
Page
----
1. Name and Purpose................................................... 1
2. Definitions........................................................ 1
3. Administration of the Plan......................................... 2
4. Stock Subject to the Plan.......................................... 3
5. Eligibility........................................................ 3
6. The Option Price................................................... 4
7. Terms and Conditions of Options.................................... 4
8. Terms and Conditions of Stock Bonuses.............................. 5
9. Use of Proceeds.................................................... 6
10. Amendment, Suspension or Termination of the Plan................... 6
11. Assignability...................................................... 6
12. Investment Purpose................................................. 7
13. Indemnification.................................................... 7
14. Miscellaneous...................................................... 8
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<PAGE> 3
REAL GOODS TRADING CORPORATION
SECOND AMENDED AND RESTATED
FISCAL 1993 STOCK INCENTIVE PLAN
1. Name and Purpose.
1.1 This plan is the REAL GOODS TRADING CORPORATION SECOND
AMENDED AND RESTATED FISCAL 1993 STOCK INCENTIVE PLAN, hereinafter referred to
as the "Plan."
1.2 The purpose of the Plan is to provide incentives to
employees, officers, directors, and consultants of the Company for efforts and
achievements on behalf of the Company. Under the Plan, eligible employees,
officers, directors and consultants may be awarded Stock Bonuses, and may be
given an opportunity to purchase shares of the Stock of the Company pursuant to
options which may or may not be designated as "incentive stock options" under
Section 422 of the Code (as defined below). Prior to February 10, 1994, this
Plan was intended to comply with the provisions of Rule 701 promulgated under
the Securities Act of 1933 (the "Act") pursuant to which certain offers and
sales are exempt from the provisions of Section 5 of the Act by virtue of
Section 3(b) of the Act.
2. Definitions. For purposes of interpreting the Plan and
related documents, the following terms shall have the meanings set forth
below.
2.1 "Affiliates." Parent or subsidiary corporations of the
Company as such terms are defined for purposes of Section 422 of the Code.
2.2 "Board." The Board of Directors of the Company.
2.3 "Board Member." A member of the Board
2.4 "Code." The Internal Revenue Code of 1986, as amended.
2.5 "Company." Real Goods Trading Corporation, a California
corporation and its Affiliates, if any.
2.6 "Disability." A disability which prevents Optionee from
performing duties on behalf of the Company as such term is defined in Section
22(e)(3) of the Code.
2.7 "Expiration Date." The last day on which an Option may be
exercised, subject to the provisions of Section 7.6 of this Plan which provides
for expiration of Options prior to the Expiration Date in the event of
termination of Optionee's employment, or cessation of Optionee's consulting
arrangement or status as a member of the Board of the Company prior to the
Expiration Date.
2.8 "Fair Market Value." A value for each share of Stock
determined as follows: If the Stock is listed on the Pacific, American or New
York Stock Exchange or the NASDAQ National Market System, the mean of the high
and low sale prices of the Stock on such Exchange
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<PAGE> 4
as of the effective date of the Fair Market Value determination, or, if there
was no trading on that date, on the last date on which there was trading, may be
considered to be the Fair Market Value of such Stock. During such time as the
Stock is not listed on any of the aforesaid Exchanges or the NASDAQ National
Market System and is publicly traded, its Fair Market Value may be considered to
be the mean between the closing bid and asked quotations in the over-the-counter
market on the determination date, as reported by the National Association of
Securities Dealers, Inc. Where, however, the Stock is not publicly traded or
listed or such market quotations are unavailable or not reflective of actual
transactions, or where they do not, in the opinion of the Board of Directors,
accurately reflect the true value of the Stock, the Board may use any method it
deems reasonable to ascertain the Fair Market Value of the Stock.
2.9 "Grant Date." The date on which the Board takes effective
action to grant an Option hereunder or to grant a Stock Bonus hereunder unless
the Board specifies a later Grant Date on which the Board's action is to be
effective.
2.10 "Incentive Stock Option." An option which qualifies for
tax treatment under Section 422 of the Code.
2.11 "Option." Any right to purchase one or more shares of
Stock pursuant to this Plan.
2.12 "Optionee." Any recipient of a grant of an Option.
2.13 "Option Period." The period commencing on the Grant Date
and ending on the Expiration Date during which an Option may be exercised,
subject to vesting provisions included in the Stock Option Agreement or earlier
expiration of the Option pursuant to Section 7.6 of this Plan.
2.14 "Option Price." The purchase price for each share of
Stock subject to an Option.
2.15 "Recipient." Any recipient of a grant of a Stock Bonus.
2.16 "Restricted Stock Agreement." The written notice and
agreement provided by the Company to each Recipient setting forth the terms of a
Stock Bonus.
2.17 "Stock." The common stock of the Company.
2.18 "Stock Bonus." Stock transferred to a Recipient in
exchange for cash paid or services rendered by Recipient or in exchange for cash
or cash equivalent consideration at a discount determined by the Board, other
than Stock transferred pursuant to an Option.
2.19 "Stock Option Agreement." An agreement evidencing the
grant of an Option hereunder and the terms of the Option so granted.
3. Administration of the Plan.
3.1 The Plan shall be administered by the Board.
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<PAGE> 5
3.2 The Board shall administer the Plan in accordance with
the requirements of the Regulations promulgated under the California Corporate
Securities Law of 1968, including without limitation, Sections 260.140.41 and
260.140.42 thereof.
3.3 The Board may from time to time determine which
employees, officers, directors or consultants of the Company shall be granted
Options under the Plan, the terms and conditions thereof, and the number of
shares for which an Option or Options shall be granted.
3.4 The Board may from time to time determine which
employees, officers or directors of the Company shall be granted Stock Bonuses
under the Plan, the terms and conditions thereof, and the number of the shares
to be granted.
3.5 The Board is authorized to establish such rules and
regulations consistent with provisions of the Plan as it may deem appropriate
for the proper administration of the Plan, and to make such interpretations of
and determinations under the Plan, and to take such steps in connection with the
Plan or the Options granted thereunder as it may deem necessary or advisable.
The interpretation by the Board of any provision of the Plan or any Option
granted pursuant thereto shall be final, binding and conclusive.
4. Stock Subject to the Plan.
4.1 Options and Stock Bonuses may be granted under the Plan
from time to time to employees, officers, directors or consultants of the
Company for an aggregate of not more than 600,000 shares of Stock. If an Option
is surrendered for any reason (except for exercise), or otherwise ceases to be
exercisable in whole or in part, the shares of Stock which were subject to such
Option but as to which the Option had not been exercised shall continue to be
available for grant under the Plan.
4.2 If there is any change in the Stock subject to the Plan
or in the Stock subject to any Option granted hereunder, through merger,
consolidation, reorganization, recapitalization, reincorporation, stock split,
stock dividend, or other change in the corporate structure of the Company,
appropriate adjustments shall be made by the Board in the aggregate number of
shares of Stock subject to the Plan and in the number of shares of Stock and the
Option Price subject to outstanding Options in order to preserve, but not to
increase, the benefits of the Optionee.
4.3 If the Company is not a surviving corporation following
any merger, consolidation, or reorganization, the Board shall (i) make
arrangements with the successor corporation (or its affiliate) for assumption of
outstanding Options or substitution of equivalent Options by such successor
corporation, or (ii) terminate the exercisability of outstanding unexpired
Options. If Options are assumed or substituted, the Board shall have authority
to make arrangements with the successor corporation which shall be binding on
Participants for substitution of new Options for any unexpired Options granted
under this Plan.
5. Eligibility.
Persons eligible for grant of Options or grant of Stock
Bonuses provided for by the Plan are such employees, officers, directors, and
consultants of the Company as the Board shall designate from time to time.
Persons who are not employed as regular salaried officers or
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<PAGE> 6
employees of the Company (including members of the Board of the Company who are
not regular salaried employees and consultants) are not eligible to receive
Options intended to qualify as Incentive Stock Options.
6. The Option Price.
The Option Price of the Stock covered by each Option intended
to qualify as an Incentive Stock Option shall not be less than the Fair Market
Value of such Stock on the Grant Date. The Option Price for Options not intended
to qualify as Incentive Stock Options shall not be less than 85% of the Fair
Market Value of such Stock on the Grant Date. If any Option, whether or not
designated as an Incentive Stock Option, is granted to a person possessing, as
of the Grant Date, more than 10% of the outstanding Stock (or the outstanding
voting stock of any Affiliate), the Option Price shall not be less than 110% of
the Fair Market Value of the Stock on the Grant Date. Such prices shall be
subject to adjustment as provided in Section 4.2 hereof.
7. Terms and Conditions of Options.
7.1 Each Option granted pursuant to the Plan shall be
evidenced by a Stock Option Agreement executed by the Company and the Optionee.
If an Optionee fails to execute a Stock Option Agreement within the time
prescribed by the Board, the Option evidenced thereby shall become void and of
no effect.
7.2 The Option Period of each Option shall be for no more than
ten years from the Grant Date; provided, however, that the Option Period of any
Option designated as an Incentive Stock Option granted to any person possessing,
as of the Grant Date, more than 10% of the outstanding Stock (or the outstanding
voting stock of any Affiliate), shall be no more than five years from the Grant
Date.
7.3 Payment of the exercise price upon exercise of any Option
granted under this Plan shall be made in cash, check or money order, in the
amount of the applicable Option Price multiplied by the number of shares of
Stock subject to such exercise; provided, however, that the Board, in its sole
discretion, may provide that an Optionee may pay the Option Price in whole or in
part with shares of Stock or notes by expressly permitting such payment in the
Stock Option Agreement. Any notes used to exercise Options shall be full
recourse, interest-bearing obligations containing such terms as the Board shall
determine. Any Stock used to exercise Options shall be valued at its Fair Market
Value on the date of exercise of the Option.
7.4 An Option granted under this Plan shall be treated as an
Incentive Stock Option only to the extent that the aggregate Fair Market Value
of all Stock with respect to which Incentive Stock Options first become
exercisable during a calendar year does not exceed $100,000. For purposes of
this provision, all Incentive Stock Options outstanding under any plan of the
Company shall be aggregated, and Fair Market Value of Stock subject to Options
shall be determined as of the Grant Date of the respective Options.
7.5 The Stock Option Agreement shall provide for vesting of
rights to exercise the Option with respect to not less than 20% of the Stock
subject to such Option per year for each full year following the Grant Date.
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<PAGE> 7
7.6 Unless otherwise specified in the Stock Option
Agreement, in the case of an Optionee who is an employee of the Company, in the
event of termination of Optionee's employment, the Option Period shall end on
the earliest of (i) the Expiration Date, (ii) the date one year after the date
of Optionee's termination by reason of Optionee's death or Disability, or (iii)
three months after the date of Optionee's termination for any other reason. In
no event shall the Stock Option Agreement provide for early termination of the
Option Period less than six (6) months following termination by reason of death
or Disability or less than 30 days for any other reason; provided, however, that
the Option Period shall in all circumstances expire no later than ten (10) years
from the date of grant regardless of the amount of time passing from the event
causing termination.
7.7 The Stock Option Agreement shall require Optionee to
make satisfactory provision for withholding of any required federal or state
withholding taxes with respect to the Option.
7.8 The Stock Option Agreement may contain such other terms,
provisions, and conditions as may be determined by the Board (not inconsistent
with this Plan) including, without limitation, provisions for repurchase of
Stock purchased pursuant to exercise of Options under terms permitted by
Section 260.140.41(k) of the Regulations promulgated under the California
Corporate Securities Law of 1968 or provisions imposing, as a condition of
exercise of the Option, transfer restrictions or rights-of-first refusal
complying with any applicable provision of such Regulations.
8. Terms and Conditions of Stock Bonuses.
8.1 Stock transferred pursuant to a Stock Bonus may be
transferred in exchange for cash paid or services rendered by the Recipient or
in exchange for payment of cash or cash equivalent consideration discounted
below Fair Market Value as determined by the Board.
8.2 Each Stock Bonus granted pursuant to the Plan shall be
evidenced by execution of a Restricted Stock Agreement by the Recipient and the
Company. The Restricted Stock Agreement will set forth the terms of the Stock
Bonus, including, without limitation: (a) a vesting provision which shall be at
the rate of not less than 20% per year for each full year following the Grant
Date; (b) the cash price, if any, to be paid for the Stock.
8.3 As a condition of receiving any Stock Bonus granted
hereunder, Recipient must:
(a) execute the Restricted Stock Agreement in the form
provided by the Company and deliver it to the Company; and
(b) make satisfactory provision with the Company for the
withholding, by payment of cash or by withholding from Recipient's salary, of
any federal or state taxes required by law to be withheld with respect to a
Stock Bonus.
8.4 The Restricted Stock Agreement may contain such other
terms, provisions, and conditions as may be determined by the Board (not
inconsistent with this Plan) including, without limitation, provisions for
forfeiture or repurchase of Stock received pursuant to a Stock Bonus under terms
permitted by Section 260.140.42(h) of the Regulations promulgated under the
California Corporate Securities Law of 1968 or provisions imposing, as a
condition of receiving a Stock Bonus,
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<PAGE> 8
transfer restrictions or rights-of-first refusal complying with any applicable
provisions of such Regulations.
8.5 As soon as practicable after satisfaction of the
conditions, if any, set forth in the Plan and in the Restricted Stock Agreement,
the Company shall, without transfer or issue tax and without any other
incidental expense to Recipient, issue the shares of Stock. Notwithstanding the
foregoing, the Company may retain any share certificate evidencing a grant of a
Stock Bonus but shall deliver a receipt for such certification to the Recipient.
The Recipient may report such share certificate(s) when the Stock Bonus is fully
vested. If a Recipient fails to meet the terms set forth in the Restricted Stock
Agreement within 30 days after the date of delivery of the Restricted Stock
Agreement to Recipient, the Stock Bonus shall be void and of no effect.
9. Use of Proceeds.
Cash proceeds realized from the sale of Stock pursuant to
Options or Stock Bonuses granted under the Plan shall constitute general funds
of the Company.
10. Amendment, Suspension or Termination of the Plan.
The Board may at any time suspend or terminate the Plan, and
may amend it from time to time in such respects as the Board may deem advisable;
provided, however, except as provided in Section 4.3 hereof, the Board shall not
amend the Plan in the following respects without the consent of stockholders
then sufficient to approve the Plan in the first instance: (a) to increase the
maximum number of shares subject to the Plan; (b) to change the designation or
class of employees eligible to receive options under the Plan.
No Option or Stock Bonus may be granted during any suspension
or after the termination of the Plan, and no amendment, suspension or
termination of the Plan shall, without the Optionee's consent, alter or impair
any rights or obligations under any Option theretofore granted under the Plan.
This Plan shall terminate on June 10, 2002 unless previously terminated by the
Board pursuant to this Section 10.
11. Assignability.
11.1 Except as provided below, each Option granted pursuant to
this Plan shall, during Optionee's lifetime, be exercisable only by Optionee,
and neither the Option nor any right thereunder (including any stock
appreciation right) shall be transferable by Optionee by operation of law or
otherwise other than by will or the laws of descent and distribution, and shall
not be pledged or hypothecated (by operation of law or otherwise) or subject to
execution, attachment or similar processes. Notwithstanding anything to the
contrary herein, if permitted by the terms of the applicable Stock Option
Agreement, nonqualified Options (i.e., Options other than Incentive Stock
Options) may be transferred by an Optionee to the following Permitted
Transferees: (a) to a testamentary trust whose only life or term beneficiary
consists of a spouse and/or issue of an Optionee and whose ultimate remainder
interest is distributable only to the issue or spouse of an Optionee; and (b) by
inter vivos gift or other transfer to a trust for the benefit of an Optionee, an
Optionee's issue and/or spouse of an Optionee, provided that the ultimate
remainder interest is distributable only to the issue or spouse of an Optionee
(cumulatively, subparagraphs (a) and (b) shall be referred to as "Permitted
Transfers" and such persons or entities as "Permitted Transferees").
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<PAGE> 9
For purposes of this Plan, the term "issue" shall include natural children or
issue, or any adopted children or issue, provided that the adopted child was a
minor living with the adopting parent at the time of the adoption. Any Permitted
Transferee to whom a nonqualified Option is transferred shall hold such
nonqualified Option and the Option Stock subject to all of the terms of this
Plan and the applicable Stock Option Agreement.
11.2 Any right granted pursuant to a Stock Bonus granted
hereunder shall not be transferable by Recipient by operation of law or
otherwise.
12. Investment Purpose.
At the time of exercise of any Option or grant of any Stock
Bonus, the Board may, if it deems it necessary or desirable for any reason
connected with any securities law or regulation, require, as a condition to the
issuance of any Stock to Optionee or Stock Bonus to Recipient, that Optionee or
Recipient represent in writing to the Company, on the Company's then standard
form used for that purpose, that it is Optionee's intention to acquire the Stock
for investment and not with a view to the distribution thereof or that Optionee
or Recipient agree to any other appropriate restriction on transfer of the
Stock. In the event such a representation is required and made, no Stock shall
be issued unless and until the Company is satisfied with the correctness of such
representation and, in such event, the Board may require that a legend be placed
on the certificates evidencing any Stock to be issued which legend shall
disclose the existence of an investment representation and such further
restrictions on transfer as may be imposed to comply with applicable laws as the
Board may deem appropriate to protect the interest of the Company. The Company
may also retain all Stock issued and/or legend the Stock in each case to assure
implementation of the Company's right to repurchase the Stock which may be
referred to in the Restricted Stock Agreement.
13. Indemnification.
13.1 Each Board Member shall be indemnified and held harmless
by the Company against and from any and all loss, cost, liability or expense
that may be imposed upon or reasonably incurred by such Board Member in
connection with or resulting from any claim, action, suit or proceeding to which
the Board Member may be a party or in which the Board Member may be involved by
reason of any action taken or failure to act under this Plan, and against and
from any and all amounts paid by the Board Member (with the Company's written
approval) in the settlement thereof, or paid by the Board Member in satisfaction
of a judgment in any such action, suit or proceeding except a judgment in favor
of the Company based upon a finding of the Board Member's bad faith; subject,
however, to the conditions that upon the institution of any claim, action, suit
or proceeding against the Board Member, the Board Member shall in writing give
the Company an opportunity, at its own expense, to handle and defend the same
before the Board Member undertakes to handle and defend it on the Board Member's
own behalf. The foregoing right of indemnification shall not be exclusive of any
other right to which such person may be entitled as a matter of law or
otherwise, or any power the Company may have to indemnify the Board Member or
hold the Board Member harmless.
13.2 Each Board Member and each officer and employee of the
Company or any Affiliate shall be fully justified in relying or acting upon any
information furnished in connection with the administration of this Plan by any
person or persons other than an Optionee or a Stock
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Bonus Recipient. In no event shall any person who is or shall have been a Board
Member, or an officer or employee of the Company, be liable for any
determination made or other action taken or any omission to act in reliance upon
any such information, or for any action (including furnishing of information)
taken or any failure to act, if in good faith.
14. Miscellaneous.
14.1 The validity, interpretation and effect of this Plan, and
the rights of all persons hereunder, shall be governed by and determined in
accordance with the laws of California.
14.2 Neither the grant of an Option to any Optionee under this
Plan nor the grant of a Stock Bonus to any Recipient under this Plan shall give
such Optionee or Recipient any right, or imply that Optionee or Recipient has
any right, to be retained in the employ or service of the Company, and the right
and power of the Company to discharge any such person shall not be affected by
such grant. No Recipient, Optionee, or any person entitled to exercise an Option
under this Plan shall have any of the rights of a shareholder with respect to
the shares of Stock subject to an Option or subject to a Stock Bonus except to
the extent Stock Certificates have been issued. No person shall have any right
or claim whatever, directly, indirectly, or by implication, to receive an Option
or Stock Bonus nor any expectancy thereof, unless and until an Option or Stock
Bonus in fact shall have been granted to such person by the Board as provided
herein. The grant of an Option or Stock Bonus shall not create any right or
implication that any other or further Option or Stock Bonus may or shall be
granted at another time. Each Option hereunder and each Stock Bonus hereunder
shall be separate and distinct from every other Option or Stock Bonus and shall
not be considered part of any continuing series.
14.3 The Company shall provide to each Optionee under this
Plan financial information (including a balance sheet, management's discussion
and analysis of financial condition and statement of profit and loss) regarding
the Company on at least an annual basis during the period such Optionee's Option
is outstanding.
14.4 This Plan shall be submitted to the Company's
shareholders for approval within 12 months of the date of the Board's adoption
hereof. Any Options or Stock Bonuses granted hereunder prior to the date the
Shareholders approval of the Plan shall be made expressly subject to rescission
in the event the Shareholders fail to approve the Plan within such 12 month
period.
END OF PLAN
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EXHIBIT 4.2
SECOND AMENDED AND RESTATED
REAL GOODS TRADING CORPORATION
NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN
1. Name and Purposes.
(a) This Plan is the Second Amended and Restated Real
Goods Trading Corporation Non-Employee Directors' Stock Option Plan (the
"Plan").
(b) The purposes of the Plan are (i) to promote
ownership by non-employee Directors of a greater proprietary interest in Real
Goods Trading Corporation (the "Company"), thereby aligning such Directors'
interests more closely with the interests of the stockholders of the Company and
(ii) to assist the Company in attracting and retaining qualified persons to
serve as non-employee Directors.
2. Definitions. In addition to terms defined elsewhere in
the Plan, the following are defined terms under the Plan:
(a) "Code" means the Internal Revenue Code of 1986, as
amended. References to any provision of the Code include regulations thereunder
and successor provisions and regulations.
(b) "Exchange Act" means the Securities Exchange Act of
1934, as amended. References to any provision of the Exchange Act include rules
thereunder and successor provisions and rules.
(c) "Fair Market Value" means a value for each share of
Stock determined as follows: If the Stock is listed on the Pacific, American or
New York Stock Exchange, the mean of the high and low sale prices of the Stock
on such Exchange as of the effective date of the Fair Market Value determination
or, if there is no trading on that date, on the last date on which there was
trading may be considered to be the Fair Market Value of such Stock. During such
time as the Stock is not listed on any of the aforesaid Exchanges and is
publicly traded, its Fair Market Value may be considered to be the mean between
dealer bid and asked quotations in the over-the-counter market on the
determination date, as reported by the National Association of Securities
Dealers, Inc. Where, however, (i) the Stock is not publicly traded or listed or
(ii) such market quotations are unavailable or not reflective of actual
transactions, or (iii) they do not, in the opinion of the Board of Directors,
accurately reflect the true value of the Stock, the Board may use any method it
deems reasonable to ascertain the Fair Market Value of the Stock.
(d) "Option" means the right, granted to a Participant
under Section 6, to purchase Stock at the specified exercise price for a
specified period of time under the Plan.
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(e) "Participant" means a Director who is eligible to
receive and is granted Options under the Plan.
(f) "Stock" means the Common Stock, without par value,
of the Company and such other securities as may be substituted for Stock or such
other securities pursuant to Section 7.
3. Shares Available Under the Plan. The total number of
shares of Stock reserved and available for delivery under the Plan is One
Hundred Thousand (100,000), subject to adjustment as provided in Section 7
below. Such shares may be authorized but unissued shares. If any Option expires
or terminates for any reason without having been exercised in full, the shares
remaining subject to such Option will again be available for delivery under the
Plan.
4. Administration of the Plan. The Plan will be
administered by the Board of Directors of the Company or any committee they may
designate from time to time, provided that any action by the Board of Directors
relating to the Plan will be taken only if, in addition to any other required
vote, approved by the affirmative vote of the majority of the Directors who are
not then eligible to participate under the Plan.
5. Eligibility. Each Director of the Company who on any
date on which an Option is to be granted hereunder, is not an employee of either
the Company or any parent or subsidiary of the Company will be eligible to
receive a grant of an Option at such date. Any eligible director may permanently
or temporarily disclaim issuance of an option hereunder by submitting a written
notice to the Company stating such refusal; upon any withdrawal of such
disclaimer, the director shall automatically be granted an option hereunder as
if he had been first elected on the date of withdrawal of the disclaimer. If an
eligible Director who receives an Option subsequently becomes an employee, the
Option shall remain in effect and shall continue to vest in accordance with its
terms, but no additional options shall be granted hereunder to such person. No
person other than those specified in this Section 5 will participate in the
Plan.
6. Stock Options. An option to purchase 10,000 shares of
Stock shall be granted under the Plan to each person who first becomes a
non-employee Director of the Company on or after May 21, 1996. An option to
purchase 10,000 shares of Stock less the number of shares previously subject to
options hereby shall be granted to each Director as of May 21, 1996 who
previously participated in this Plan. Additionally, an option to purchase 2,000
shares of Stock shall be granted under the Plan on the sixth and each succeeding
anniversary of service on the Board to each eligible non-employee Director who
continues to serve as a Director of the Company, which option shall,
notwithstanding the provisions of subparagraph (c) below, be immediately
exercisable. Options granted under the Plan will be non-qualified stock options
which will be subject to the following terms and conditions:
(a) Exercise Price. The exercise price per share of
Stock purchasable under an Option will be equal to one hundred percent (100%) of
the Fair Market Value of Stock on the date of grant of the Option.
(b) Option Term. Each Option will expire at the earlier
of (i) ten (10) years after the date of grant, (ii) twelve months after the
Participant ceases to serve as a Director of the Company due to death, permanent
disability, or retirement at or after age 65, or (iii) ten (10)
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days after the Participant ceases to serve as a Director of the Company for any
reason other than death, permanent disability, or retirement at or after age 65.
(c) Exercisability. Options granted pursuant to this
Plan will vest and become exercisable as follows:
<TABLE>
<CAPTION>
Cumulative
Percentage of Stock
Subject to Option Vesting Date
------------------- ------------
<S> <C>
20% First Anniversary of Date of Grant
40% Second Anniversary of Date of Grant
60% Third Anniversary of Date of Grant
80% Fourth Anniversary of Date of Grant
100% Fifth Anniversary of Date of Grant
</TABLE>
This Option shall be exercisable at any time during the Option Period with
respect to any shares which have vested in accordance with the foregoing
schedule. Any portion of the Option that is not exercised shall accumulate and
may be exercised at any time during the Option Period. In no event shall the
Company be required to issue fractional shares. Notwithstanding anything to the
contrary herein, an Option previously granted to a Participant will be
exercisable after the Participant ceases to serve as a Director of the Company
for any reason other than death, disability, or retirement at or after age 65
only if the Option was exercisable at the date of such cessation of service.
(d) Method of Exercise. Each Option may be exercised, in
whole or in part, at such time as it is exercisable and prior to its expiration
by giving written notice of exercise to the Company specifying the Option to be
exercised and the number of shares to be purchased, and accompanied by payment
in full of the exercise price in cash (including by check) or by surrender of
shares of Stock of the Company acquired by the Participant at least six (6)
months prior to the exercise date and having a Fair Market Value at the time of
exercise equal to the exercise price, or a combination of a cash payment and
surrender of such Stock.
7. Adjustment Provisions. In the event any
recapitalization, reorganization, merger, consolidation, spin-off, combination,
repurchase, exchange of shares or other securities of the Company, stock split
or reverse split, extraordinary dividend having a value in excess of 150% of the
quarterly dividends paid during the preceding twelve-month period, liquidation,
dissolution, or other similar corporate transaction or event affects Stock such
that an adjustment is determined by the Board of Directors to be appropriate in
order to prevent dilution or enlargement of Participants' rights under the Plan,
then the Board of Directors will, in an equitable manner that is substantially
proportionate to the change to the Stock, adjust (i) any or all of the number or
kind of shares of Stock reserved for issuance and delivery under the Plan, (ii)
the number or kind of shares of Stock to be subject to each automatic grant of
Options under Section 6, and (iii) the number and kind of shares of Stock
issuable or deliverable upon exercise of outstanding Options, and/or the
exercise price per shares thereof (provided that no fractional shares will be
issued upon exercise of any Option). The foregoing notwithstanding, no
adjustment may be made hereunder except as shall be necessary to preserve,
without exceeding, the value of outstanding Options and potential grants of
Options. If at any date an insufficient
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number of shares are available for the automatic grant of Options at that date,
Options will be automatically granted under Section 6 proportionately to
Participants to the extent shares are available.
8. Changes to the Plan. The Board of Directors may amend,
alter, suspend, discontinue, or terminate the Plan or authority to grant Options
under the Plan without the consent of stockholders or Participants, except that
any such action will be subject to the approval of the Company's stockholders at
the next annual meeting of stockholders having a record date after the date such
action was taken if such stockholder approval is required by any federal or
state law or regulation or the rules of any automated quotation system or stock
exchange on which the Stock may then be quoted or listed, or if the Board of
Directors determines in its discretion to seek such stockholder approval;
provided, however, that, without the consent of an affected Participant, no such
action may materially impair the rights of such Participant with respect to any
previously granted Option; and provided further, that any Plan provision that
specifies the Directors who may receive grants of Options, the amount and price
of securities to be granted to such Directors, and the timing of grants to such
Directors, or is otherwise a "plan provision" referred to in Rule
16b-3(c)(2)(ii)(B) under the Exchange Act, shall not be amended more than once
every six months, other than to comport with changes in the Code or the rules
thereunder.
9. General Provisions.
(a) Consideration of Grants; Agreements. Options will be
granted under the Plan in consideration of the services of the Participants and,
except for the payment of the Option exercise price upon exercise of the
options, no other consideration shall be required therefor. Grants of Options
will be evidenced by agreements executed by the Company and the Participant
containing the terms and conditions set forth in the Plan together with such
other terms and conditions not inconsistent with the Plan as the Board of
Directors may from time to time approve.
(b) Compliance with Laws and Obligations. The Company
will not be obligated to issue or deliver Stock in connection with any Option in
a transaction subject to the registration requirements of the Securities Act of
1933, as amended, or any state securities law, any requirement under any listing
agreement between the Company and any automated quotation system or national
securities exchange, or any other law, regulation or contractual obligation,
until the Company is satisfied that such laws, regulations, and other
obligations of the Company have been complied with in full. Certificates
representing shares of Stock delivered under the Plan will be subject to such
stop-transfer orders and other restrictions as may be applicable under such
laws, regulations, and other obligations of the Company, including any
requirement that a legend or legends be placed thereon.
(c) Non-Transferability. Except as provided below, each
Option granted pursuant to this Plan shall, during Optionee's lifetime, be
exercisable only by Optionee, and neither the Option nor any right thereunder
shall be transferable by Optionee by operation of law or otherwise other than by
will or the laws of descent and distribution, and shall not be pledged or
hypothecated (by operation of law or otherwise) or subject to execution,
attachment or similar processes. Notwithstanding anything to the contrary
herein, if permitted by the terms of the applicable Stock Option Agreement,
Options may be transferred by an Optionee to the
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following Permitted Transferees: (a) to a testamentary trust whose only life or
term beneficiary consists of a spouse and/or issue of an Optionee and whose
ultimate remainder interest is distributable only to the issue or spouse of an
Optionee; and (b) by inter vivos gift or other transfer to a trust for the
benefit of an Optionee, an Optionee's issue and/or spouse of an Optionee,
provided that the ultimate remainder interest is distributable only to the issue
or spouse of an Optionee (cumulatively, subparagraphs (a) and (b) shall be
referred to as "Permitted Transfers" and such persons or entities as "Permitted
Transferees"). For purposes of this Plan, the term "issue" shall include natural
children or issue, or any adopted children or issue, provided that the adopted
child was a minor living with the adopting parent at the time of the adoption.
Any Permitted Transferee to whom an Option is transferred shall hold such Stock
subject to all of the terms of this Plan and the applicable Stock Option
Agreement.
(d) Compliance with Rule 16b-3. It is the intent of the
Company that this Plan comply in all respects with applicable provisions of Rule
16b-3 under the Exchange Act in connection with any grant of Options to a
Participant. Accordingly, if any provision of this Plan or any agreement
hereunder does not comply with the requirements of Rule 16b-3 as then applicable
to any such grant to a Participant, or would cause any Participant no longer to
be deemed a "disinterested person" within the meaning of Rule 16b-3, such
provision will be construed or deemed amended to the extent necessary to conform
to such requirements with respect to such Participant. In addition, the Board of
Directors shall have no authority to make any amendment, alteration, suspension,
discontinuation, or termination of the Plan or any agreement hereunder, to make
any adjustment under Section 7, or take other action if and to the extent such
authority would cause a Participant's transactions under the Plan not to be
exempt, or would cause any Participant no longer to be deemed a "disinterested
person" under Rule 16b- 3 under the Exchange Act.
(e) Continued Service as a Director. If a Participant
ceases serving as a Director and, immediately thereafter, he or she is employed
by the Company or any subsidiary, then solely for purposes of Sections 6(b) and
(c) of the Plan, such Participant will not be deemed to have ceased service as a
Director at that time, and his or her continued employment by the Company or any
subsidiary will be deemed to be continued service as a Director; provided,
however, that such former Director will not be eligible for additional grants of
Options under the Plan.
(f) No Right to Continue as a Director. Nothing
contained in the Plan or any agreement hereunder will confer upon any
Participant any rights to continue to serve as a Director of the Company.
(g) No Stockholder Rights Conferred. Nothing contained
in the Plan or any agreement hereunder will confer upon any Participant any
rights of a stockholder of the Company unless and until an Option is duly
exercised hereunder.
(h) Governing Law. The place of administration of the
Plan shall be conclusively deemed to be within the State of California; and the
validity, construction, interpretation and effect of the Plan and all rights of
any of the persons having or claiming to have any interest in the Plan shall be
governed by the laws of the State of California.
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10. Effective Date and Duration of Plan. The Plan will be
effective at the time stockholders of the Company have approved it by the
affirmative votes of the holders of a majority of the shares of Stock present in
person, or represented by proxy, and entitled to vote at a meeting of the
Company's stockholders duly held in accordance with the California Corporations
Code or any adjournment thereof. Unless earlier terminated by action of the
Board of Directors, the Plan will remain in effect until such time as no Stock
remains available for issuance or delivery under the Plan and the Company has no
further rights or obligations with respect to outstanding Options under the
Plan.
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EXHIBIT 5
November 11, 1996
6306-001
Real Goods Trading Corporation
555 Leslie Street
Ukiah, CA 95482
Ladies and Gentlemen:
In connection with the registration by you in a registration
statement (the "Registration Statement") filed on Form S-8 under the Securities
Act of 1933, as amended, on or about November 12, 1996, of 600,000 shares of
your Common Stock, without par value, issuable under the Real Goods Trading
Corporation Second Amended and Restated Fiscal 1993 Stock Incentive Plan (the
"1993 Plan") and 100,000 shares of your Common Stock, without par value,
issuable under the Real Goods Trading Corporation Second Amended and Restated
Non- Employee Directors' Stock Option Plan (the "Directors' Plan"), we advise
you that in our opinion such Shares, when issued and sold in accordance with the
terms of the 1993 Plan and the Directors' Plan, as applicable, will be legally
issued, fully paid and nonassessable.
We hereby consent to the use of this opinion in connection
with the Registration Statement.
Sincerely,
COBLENTZ, CAHEN, McCABE & BREYER, LLP
By: /s/ Barry Reder
------------------------------
Barry Reder
BR/pjw
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EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in this
Registration Statement of Real Goods Trading Corporation on Form S-8 of our
report dated June 3, 1996 (which report expresses an unqualified opinion and
includes an explanatory paragraph referring to the Company's change in method
of accounting for certain inventory acquisition and distribution costs),
appearing in the Annual Report on Form 10-KSB/A of Real Goods Trading
Corporation for the fiscal year ended March 31, 1996.
/s/ Deloitte & Touche LLP
DELOITTE & TOUCHE LLP
Santa Rosa, California
November 8, 1996
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