Registration No. 333-
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 16, 1997
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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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MOTORCAR PARTS & ACCESSORIES, INC.
(Exact name of registrant as specified in its charter)
NEW YORK 11-2153962
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2727 MARICOPA STREET, TORRANCE, CALIFORNIA 90503
(Address of Principal Executive Offices) (Zip Code)
1994 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
1996 STOCK OPTION PLAN
(Full title of the plans)
RICHARD MARKS, PRESIDENT
MOTORCAR PARTS & ACCESSORIES, INC.
2727 MARICOPA STREET, TORRANCE,
CALIFORNIA 90503 (Name and
address of agent for service)
310-212-7910
(Telephone number, including area code, of agent for service)
WITH A COPY TO:
GARY J. SIMON, ESQ.
PARKER CHAPIN FLATTAU & KIMPL, LLP
1211 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10036
(212) 704-6374
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
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Title of Securities Amount to Be Proposed Maximum Offering Proposed Maximum Amount of
to Be Registered Registered(1) Price per Share(2) Aggregate Offering Price(2) Registration Fee(2)
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par 4,500 shares $ 8.125 $ 36,563 $ 11.08
value $.01 per share 3,000 shares 19.125 57,375 17.39
7,500 shares 19.5625 146,719 44.46
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Common Stock, par 15,000 shares $ 13.44 $ 201,600 $ 61.09
value $.01 per share 15,000 shares 19.5625 293,438 88.92
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TOTAL 45,000 shares $ 735,695 $ 222.94
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</TABLE>
(1) Pursuant to Rule 416(b), there shall also be deemed covered hereby
such additional securities as may result from anti-dilution
adjustments under the 1996 Stock Option Plan.
(2) Estimated solely for the purpose of calculating the registration fee
on the basis of, pursuant to Rule 457(h): (i) with respect to
outstanding options to purchase 4,500 shares under the 1994
Non-Employee Director Stock Option Plan (the "1994 Plan"), the
exercise price thereof of $8.125 per share; (ii) with respect to
outstanding options to purchase 3,000 shares under the 1994 Plan, the
exercise prise thereof of $19.125 per share; (iii) with respect to
outstanding options to purchase 15,000 shares under the 1996 Stock
Option Plan (the "1996 Plan"), the exercise price thereof of $13.44
per share; and (iv) the average of the bid and asked prices per share
of the registrant's Common Stock on the Nasdaq National Market on
October 13, 1997 with respect to the remaining 7,500 and 15,000
shares subject to future grant under the 1994 Plan and the 1996 Plan,
respectively.
<PAGE>
PART II.
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents heretofore filed by the Company with the
Securities and Exchange Commission (File No. 0-23538) pursuant to Section 13(a)
of the Securities Exchange Act of 1934 (the "1934 Act") are incorporated herein
by reference: the Company's (a) Annual Report on Form 10-K for the fiscal year
ended March 31, 1997, as amended on Amendment No. 1 on Form 10-K/A filed July
29, 1997 and as amended on Amendment No. 2 on Form 10-K/A filed August 11, 1997;
(b) the Quarterly Report on Form 10-Q for the fiscal quarter ended June 30,
1997; and (c) the description of the Company's Common Stock contained in the
Company's Registration Statement on Form 8-A filed on March 2, 1994 under the
1934 Act, including any amendment or report filed for the purpose of updating
such description.
All documents filed subsequent to the date of this Registration
Statement pursuant to Sections 13(a), 13(c), 14 or 15(d) of the 1934 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 a part hereof from the date of the filing of such documents.
Any statement contained in a document incorporated or deemed to be incorporated
herein by reference shall be deemed to be modi fied 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.
ITEM 4. DESCRIPTION OF SECURITIES.
Not Applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not Applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 722 of the New York Business Corporation Law ("NYBCL")
permits, in general, a New York corporation to indemnify any person made, or
threatened to be made, a party to an action or proceeding by reason of the fact
that he or she was a director or officer of the corporation, or served another
entity in any capacity at the request of the corporation, against any judgment,
fines, amounts paid in settlement and reasonable expenses, including attorney's
fees actually and necessarily incurred as a result of such action or proceeding,
or any appeal therein, if such person acted in good faith, for a purpose he or
she reasonably believed to be in, or, in the case of service for another entity,
not opposed to, the best interests of the corporation and, in criminal actions
or proceedings, in
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<PAGE>
addition had no reasonable cause to believe that his or her conduct was
unlawful. Section 723 of the NYBCL permits the corporation to pay in advance of
a final disposition of such action or proceeding the expenses incurred in
defending such action or proceeding upon receipt of an undertaking by or on
behalf of the director or officer to repay such amount as, and to the extent,
required by statute. Section 721 of the NYBCL provides that indemnification and
advancement of expense provisions contained in the NYBCL shall not be deemed
exclusive of any rights to which a director or officer seeking indemnification
or advancement of expenses may be entitled, provided no indemnification may be
made on behalf of any director or officer if a judgment or other final
adjudication adverse to the director or officer establishes that his or her acts
were committed in bad faith or were the result of active and deliberate
dishonesty and were material to the cause of action so adjudicated, or that he
or she personally gained in fact a financial profit or other advantage to which
he or she was not legally entitled.
Article Seventh of the Company's Restated Certificate of
Incorporation, as amended (the "Certificate of Incorporation"), provides, in
general, that the Company may indemnify, to the fullest extent permitted by
applicable law, every person threatened to be made a party to any action, suit
or proceeding by reason of the fact that such person is or was an officer or
director or was serving at the request of the Company as a director, officer,
employee, agent or trustee of another corporation, business, partnership, joint
venture, trust, employee benefit plan, or other enterprise, against expenses,
judgments, fines and amounts paid in settlement in connection with such suit or
proceeding. Article Seventh of the Certificate of Incorporation also provides
that the Company may indemnify and advance expenses to those persons as
authorized by resolutions of a majority of the Board of Directors or
shareholders, agreement, directors' or officers' liability insurance policies,
or any other form of indemnification agreement.
In accordance with that provision of the Certificate of
Incorporation, the Company shall indemnify any officer or director (including
officers and directors serving another corporation, partnership, joint venture,
trust, employee benefit plan or other enterprise in any capacity at the
Company's request) made, or threatened to be made, a party to an action or
proceeding (whether civil, criminal, administrative or investigative) by reason
of the fact that he or she was serving in any of those capacities against
judgments, fines, amounts paid in settlement and reasonable expenses (including
attorney's fees) incurred as a result of such action or proceeding.
Indemnification would not be available under Article Seventh of the Certificate
of Incorporation if a judgment or other final adjudication adverse to such
director or officer establishes that (i) his or her acts were committed in bad
faith or were the result of active and deliberate dishonesty and, in either
case, were material to the cause of action so adjudicated, or (ii) he or she
personally gained in fact a financial profit or other advantage to which he or
she was not legally entitled. Article Seventh of the Certificate of
Incorporation further stipulates that the rights granted therein are contractual
in nature.
Each officer and director of the Company is party to an
Indemnification Agreement dated September 25, 1997, which contains, among other
things, provisions whereby, subject to the terms of the Agreement, the Company
shall indemnify such officer or director if the officer or director is made, or
threatened to be made, a party to any action or proceeding, whether civil,
criminal, administrative or investigative, including one by or in the right of
the Company or by or in the right of any other entity which such officer or
director served in any capacity at the request of the
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<PAGE>
Company by reason of the fact that such officer or director is or was an officer
or director of the Company or served another entity in any capacity, against
judgments, fines, amounts paid in settlement and reasonable expenses, including
attorneys' fees, incurred as a result of such action or appeal therein.
Indemnification would not be available under the Agreement if a judgment or
other final adjudication adverse to such officer or director establishes that
(i) his or her acts were committed in bad faith or were the result of active and
deliberate dishonesty and, in either case, were material to the cause of action
so adjudicated, or (ii) he or she personally gained in fact a financial profit
or other advantage to which he or she was not legally entitled.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not Applicable.
ITEM 8. EXHIBITS.
Exhibit
Number
4.01 Restated Certificate of Incorporation of the
Company as filed with the Department of State of
the State of New York on January 25, 1994
(Incorporated by reference to Exhibit 3.1 to the
Company's Registration Statement on Form SB-2,
File No. 33-74528 (the "Registration Statement")).
4.02 By-Laws of the Company (Incorporated by reference
to Exhibit 3.2 to the Registration Statement).
4.03 1996 Stock Option Plan.
4.04 1994 Non-Employee Director Stock Option Plan
(Incorporated by reference to Exhibit 4.5 to the
Company's Annual Report on Form 10-KSB for the
fiscal year ended March 31, 1995).
5.01 Opinion and consent of Parker Chapin Flattau &
Klimpl, LLP, counsel to the Company, as to the
legality of the securities being offered.
23.01 Consent of Richard A. Eisner & Company, LLP.
23.02 Consent of Parker Chapin Flattau & Klimpl, LLP
(contained in Exhibit 5.01).
24.01 Power of Attorney (contained in the signature page
to this registration statement).
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<PAGE>
ITEM 9. UNDERTAKINGS.
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. 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 the registration statement
or any material change to such information in the registration statement;
provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
registration statement is on Form S-3, Form S-8, and the information required to
be included in a post-effective amendment by those paragraphs is contained in
periodic reports filed by the registrant pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(4) If the registrant is a foreign private issuer, to file a
post-effective amendment to the registration statement to include any financial
statements required by Rule 3-19 of this chapter at the start of any delayed
offering or throughout a continuous offering. Financial statements and
information otherwise required by Section 10(a)(3) of the Act need not be
furnished, provided, that the registrant includes in the prospectus, by means of
a post-effective amendment, financial statements required pursuant to this
paragraph (a)(4) and other information necessary to ensure that
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<PAGE>
all other information in the prospectus is at least as current as the date of
those financial statements. Notwithstanding the foregoing, with respect to
registration statements on Form F-3, a post-effective amendment need not be
filed to include financial statements and information required by Section
10(a)(3) of the Act or Rule 3-19 of this chapter if such financial statements
and information are contained in periodic reports filed with or furnished to the
Commission by the registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the Form
F-3.
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.
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 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.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of New York, State of New York, on the 25th day of
September, 1997.
MOTORCAR PARTS & ACCESSORIES, INC.
By: /S/ MEL MARKS
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Mel Marks
Chairman of the Board and
Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Mel Marks and Richard Marks, and each of
them, his true and lawful attorneys-in-fact and agents, each acting alone, with
full powers of substitution and resubstitution, for him and in his name, place
and stead, in any and all capacities, to sign any and all amendments (including,
without limitation, post-effective amendments) to this Registration Statement,
and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorneys-in-fact and agents, and each of them, full power and authority to
do and perform each and every act and thing requisite and necessary to be done
in and about the premises, as fully to all intents and purposes as he might or
could do in person, and hereby ratifies and confirms all that his said
attorneys-in-fact and agents, each acting alone, or his substitute or
substitutes, may lawfully do or cause to be done by virtue thereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated.
SIGNATURE TITLE
/S/ MEL MARKS Chairman of the Board and September 25, 1997
- ---------------------- Chief Executive Officer
Mel Marks
/S/ RICHARD MARKS President and Chief Operating September 25, 1997
- ---------------------- Officer
Richard Marks
/S/ PETER BROMBERG Chief Financial Officer September 25, 1997
- ----------------------
Peter Bromberg
/S/ KAREN BRENNER Director September 25, 1997
- ----------------------
Karen Brenner
/S/ SELWYN JOFFE Director September 25, 1997
- ----------------------
Selwyn Joffe
/S/ MEL MOSKOWITZ Director September 25, 1997
- ----------------------
Mel Moskowitz
/S/ MURRAY ROSENZWEIG Director September 25, 1997
- ----------------------
Murray Rosenzweig
/S/ GARY SIMON Director September 25, 1997
- ----------------------
Gary Simon
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<PAGE>
EXHIBIT INDEX
Exhibit
Number Page No.
------ --------
4.01 Restated Certificate of Incorporation of the
Company as filed with the Department of State
of the State of New York on January 25, 1994
(Incorporated by reference to Exhibit 3.1 to
the Company's Registration Statement on Form
SB-2, File No. 33-74528 (the "Registration
Statement")).
4.02 By-Laws of the Company (Incorporated by
reference to Exhibit 3.2 to the Regis tration
Statement).
4.03 1996 Stock Option Plan.
4.04 1994 Non-Employee Director Stock Option Plan
(Incorporated by reference to Exhibit 4.5 to
the Company's Annual Report on Form 10-KSB for
the fiscal year ended March 31, 1995).
5.01 Opinion and consent of Parker Chapin Flattau &
Klimpl, counsel to the Company, as to the
legality of the securities being offered.
23.01 Consent of Richard A. Eisner & Company, LLP.
23.02 Consent of Parker Chapin Flattau & Klimpl
(contained in Exhibit 5.01)
24.01 Power of Attorney (contained in the signature
page to this registration statement).
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1996 STOCK OPTION PLAN
of
MOTORCAR PARTS & ACCESSORIES, INC.
----------------------------------
1. PURPOSES OF THE PLAN. This stock option plan (the "Plan") is
designed to provide an incentive to key employees (including officers and
directors who are key employees), Outside Directors (as defined in Paragraph 19)
and consultants of Motorcar Parts & Accessories, Inc., a New York corporation
(the "Company"), and its present and future subsidiary corporations, as defined
in Paragraph 19 ("Subsidiaries"), and to offer an additional inducement in
obtaining the services of such individuals. The Plan provides for the grant of
"incentive stock options" ("ISOs") within the meaning of Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code"), and nonqualified stock
options ("NQSOs"), but the Company makes no warranty as to the qualification of
any option as an "incentive stock option" under the Code.
2. STOCK SUBJECT TO THE PLAN. Subject to the provisions of Paragraph
12, the aggregate number of shares of Common Stock, $.01 par value per share, of
the Company ("Common Stock") for which options may be granted under the Plan
shall not exceed 30,000. Such shares of Common Stock may, in the discretion of
the Board of Directors of the Company (the "Board of Directors"), consist either
in whole or in part of authorized but unissued shares of Common Stock or shares
of Common Stock held in the treasury of the Company. The Company shall at all
times during the term of the Plan reserve and keep available such number of
shares of Common Stock as will be sufficient to satisfy the requirements of the
Plan. Subject to the provisions of Paragraph 13, any shares of Common Stock
subject to an option which for any reason expires, is cancelled or is terminated
unexercised or which ceases for any reason to be exercisable shall again become
available for the granting of options under the Plan.
3. ADMINISTRATION OF THE PLAN. The Plan shall be administered by the
Board of Directors which, to the extent it shall determine, may delegate its
powers with respect to the administration of the Plan to a committee of the
Board of Directors (the "Com mittee") consisting of not less than two Directors
(or such greater number as required by law), each of whom shall be a
"non-employee director" within the meaning of Rule 16b-3 (or any successor rule
or regulation) promulgated under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"). References in the Plan to determinations or actions by the
Committee shall be deemed to include determinations and actions by the Board of
Directors. A majority of the members of the Committee shall constitute a quorum,
and the acts of a majority of the members present at any meeting at which a
quorum is present, and any acts approved in writing by all members without a
meeting, shall be the acts of the Committee.
<PAGE>
Subject to the express provisions of the Plan, the Committee shall
have the authority, in its sole discretion, to determine: the key employees,
Outside Directors and consultants who shall receive options; the times when they
shall receive options; whether an Employee Option shall be an ISO or a NQSO; the
number of shares of Common Stock to be subject to each option; the term of each
option; the date each option shall become exercisable; whether an option shall
be exercisable in whole, in part or in installments, and, if in installments,
the number of shares of Common Stock to be subject to each installment; whether
the installments shall be cumulative; the date each installment shall become
exercisable and the term of each installment; whether to accelerate the date of
exercise of any installment; whether shares of Common Stock may be issued on
exercise of an option as partly paid, and, if so, the dates when future
installments of the exercise price shall become due and the amounts of such
installments; the exercise price of each option; the form of payment of the
exercise price; whether to restrict the sale or other disposition of the shares
of Common Stock acquired upon the exercise of an option and to waive any such
restriction; whether to subject the exercise of all or any portion of an option
to the fulfillment of contingencies as specified in the Contract (as described
in Paragraph 11), including without limitations, contingencies relating to
entering into a covenant not to compete with the Company and its Parent and
Subsidiaries, to financial objectives for the Company, a Subsidiary, a division,
a product line or other category, and/or the period of continued employment of
the optionee with the Company or its Subsidiaries, to determine whether such
contingencies have been met; to construe the respective Contracts and the Plan;
to determine the amount, if any, necessary to satisfy the Company's obligation
to withhold taxes; with the consent of the optionee, to cancel or modify an
option, provided such option as modified would be permitted to be granted on
such date under the terms of the Plan; to prescribe, amend and rescind rules and
regulations relating to the Plan; and to make all other determinations necessary
or advisable for administering the Plan. The determinations of the Committee on
the matters referred to in this Paragraph 3 shall be conclusive. No member or
former member of the Committee shall be liable for any action or determination
made in good faith with respect to the Plan or any option granted hereunder.
4. ELIGIBILITY; GRANTS. The Committee may, consistent with the
purposes of the Plan, grant options from time to time, to key employees
(including officers and directors who are key employees), Outside Directors and
consultants of the Company or any of its Subsidiaries. Options granted shall
cover such number of shares of Common Stock as the Committee may determine;
provided, however, that the maximum number of shares subject to options that may
be granted to any employee in any fiscal year of the Company under the Plan (the
"162(m) Maximum") may not exceed 100,000; and FURTHER, PROVIDED, that the
aggregate market value (determined at the time the option is granted) of the
shares of Common Stock for which any eligible employee may be granted ISOs under
the Plan or any other plan of the Company, or of a Parent or a Subsidiary of the
Company, which are exercisable for the first time by such optionee during any
calendar year shall not exceed $100,000. The $100,000 ISO limitation shall be
applied by taking ISOs into account in the order in which they were granted. Any
option (or the portion thereof) granted in excess of such amount shall be
treated as a NQSO.
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<PAGE>
5. EXERCISE PRICE. The exercise price of the shares of Common Stock
under each Option shall be determined by the Committee; provided, however, that
the exercise price shall not be less than 100% of the fair market value of the
Common Stock subject to such option on the date of grant; and further provided,
that if, at the time an ISO is granted, the optionee owns (or is deemed to own
under Section 424(d) of the Code) stock possessing more than 10% of the total
combined voting power of all classes of stock of the Company, of any of its
Subsidiaries or of a Parent, the exercise price of such ISO shall not be less
than 110% of the fair market value of the Common Stock subject to such ISO on
the date of grant.
The fair market value of a share of Common Stock on any day shall be
(a) if the principal market for the Common Stock is a national securities
exchange, the average between the high and low sales prices per share of the
Common Stock on such day as reported by such exchange or on a consolidated tape
reflecting transactions on such exchange, (b) if the principal market for the
Common Stock is not a national securities exchange and the Common Stock is
quoted on the National Association of Securities Dealers Automated Quotations
System ("NASDAQ"), and (i) if actual sales price information is available with
respect to the Common Stock, the average between the high and low sales prices
per share of the Common Stock on such day on NASDAQ, or (ii) if such information
is not available, the average between the highest bid and the lowest asked
prices for the Common Stock on such day on NASDAQ, or (c) if the principal
market for the Common Stock is not a national securities exchange and the Common
Stock is not quoted on NASDAQ, the average between the highest bid and lowest
asked prices per share for the Common Stock on such day as reported on the
NASDAQ OTC Bulletin Board Service, National Quotation Bureau, Incorporated or a
comparable service; provided that if clauses (a), (b) and (c) of this Paragraph
are all inapplicable, or if no trades have been made or no quotes are available
for such day, the fair market value of a share of Common Stock shall be
determined by the Committee by any method consistent with applicable regulations
adopted by the Treasury Department relating to stock options. The determination
of the Committee shall be conclusive in determining the fair market value of the
stock.
6. TERM. The term of each option granted pursuant to the Plan shall
be such term as is established by the Committee, in its sole discretion, at or
before the time such option is granted; provided, however, that the term of each
ISO granted pursuant to the Plan shall be for a period not exceeding 10 years
from the date of grant thereof, and further, provided, that if, at the time an
ISO is granted, the optionee owns (or is deemed to own under Section 424(d) of
the Code) stock possessing more than 10% of the total combined voting power of
all classes of stock of the Company, of any of its Subsidiaries or of a Parent,
the term of the ISO shall be for a period not exceeding five years from the date
of grant. Options shall be subject to earlier termination as hereinafter
provided. Each Director Option shall be exercisable for a term of 10 years
commencing on the date of grant.
7. EXERCISE. An option (or any part or installment thereof), to the
extent then exercisable, shall be exercised by giving written notice to the
Company at its principal office (at present 2727 Maricopa Street, Torrence,
California, Attn: Chairman of the Board),
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<PAGE>
stating which ISO or NQSO is being exercised, specifying the number of shares of
Common Stock as to which such option is being exercised and accompanied by
payment in full of the aggregate exercise price therefor (or the amount due on
exercise if the Contract permits installment payments) (a) in cash or by
certified check or (b) if the applicable Contract at the time of grant so
permits, with the authorization of the Committee, with previously acquired
shares of Common Stock having an aggregate fair market value, on the date of
exercise, equal to the aggregate exercise price of all options being exercised,
or with any combination of cash, certified check or shares of Common Stock.
The Committee may, in its discretion, permit payment of the exercise
price of an option by delivery by the optionee of a properly executed exercise
notice, together with a copy of his irrevocable instructions to a broker
acceptable to the Committee to deliver promptly to the Company the amount of
sale or loan proceeds sufficient to pay such exercise price. In connection
therewith, the Company may enter into agreements for coordinated procedures with
one or more brokerage firms.
A person entitled to receive Common Stock upon the exercise of an
option shall not have the rights of a shareholder with respect to such shares of
Common Stock until the date of issuance of a stock certificate to him for such
shares; provided, however, that until such stock certificate is issued, any
option holder using previously acquired shares of Common Stock in payment of an
option exercise price shall continue to have the rights of a shareholder with
respect to such previously acquired shares.
8. TERMINATION OF RELATIONSHIP. Any holder of an Employee Option
whose employment with the Company (and its Parent and Subsidiaries) has
terminated for any reason other than his death or Disability (as defined in
Paragraph 19) may exercise such option, to the extent exercisable on the date of
such termination, at any time within three months after the date of termination,
but not thereafter and in no event after the date the option would otherwise
have expired; provided, however, that if his employment shall be terminated
either (a) for cause, or (b) without the consent of the Company, said option
shall terminate immediately. Employee Options granted under the Plan shall not
be affected by any change in the status of the holder so long as he continues to
be a full-time employee of the Company, its Parent or any of the Subsidiaries
(regardless of having been transferred from one corporation to another).
For purposes of the Plan, an employment relationship shall be deemed
to exist between an individual and a corporation if, at the time of the
determination, the individual was an employee of such corporation for purposes
of Section 422(a) of the Code. As a result, an individual on military, sick
leave or other bona fide leave of absence shall continue to be considered an
employee for purposes of the Plan during such leave if the period of the leave
does not exceed 90 days, or, if longer, so long as the individual's right to
reemployment with the Company (or a related corporation) is guaranteed either by
statute or by contract. If the period of leave exceeds 90 days and the
individual's right to reemployment is not guaranteed by statute or by contract,
the employment relationship shall be deemed to have terminated on the 91st day
of
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such leave. In addition, for purposes of the Plan, an optionee's employment with
a Subsidiary or Parent of the Company shall be deemed to have terminated on the
date such corporation ceases to be a Subsidiary or Parent of the Company.
The termination of an optionee's relationship as a consultant of the
Company or of a Subsidiary of the Company shall not affect the option except as
may otherwise be provided in the Contract. A Director Option may be exercised at
any time during its 10 year term. The Director Option shall not be affected by
the holder ceasing to be a director of the Company or becoming an employee or
consultant of the Company or any of its subsidiaries.
Nothing in the Plan or in any option granted under the Plan shall
confer on any individual any right to continue in the employ or as a consultant
or director of the Company, its Parent or any of its Subsidiaries, or interfere
in any way with the right of the Company, its Parent or any of its Subsidiaries
to terminate such relationship at any time for any reason whatsoever without
liability to the Company, its Parent or any of its Subsidiaries.
9. DEATH OR DISABILITY OF AN OPTIONEE. If an optionee dies (a) while
he is employed by the Company, its Parent or any of its Subsidiaries, (b) within
three months after the termination of his employment (unless such termination
was for cause or without the consent of the Company) or (c) within one year
following the termination of his employment by reason of Disability, an Employee
Option may be exercised, to the extent exercisable on the date of his death, by
his executor, administrator or other person at the time entitled by law to his
rights under such option, at any time within one year after death, but not
thereafter and in no event after the date the option would otherwise have
expired.
Any optionee whose employment has terminated by reason of Disability
may exercise his Employee Option, to the extent exercisable upon the effective
date of such termination, at any time within one year after such date, but not
thereafter and in no event after the date the option would otherwise have
expired.
The death or Disability of an optionee to whom a Consultant Option
has been granted under the Plan shall not affect the option, except as may
otherwise be provided in the Contract. The term of a Director Option shall not
be affected by the death or Disability of the optionee. In such case, the option
may be exercised at any time during its term by his executor, administrator or
other person at the time entitled by law to the optionee's rights under such
option.
10. COMPLIANCE WITH SECURITIES LAW. It is a condition to the exercise
of any option that either (a) a Registration Statement under the Securities Act
of 1933, as amended (the "Securities Act"), with respect to the shares of Common
Stock to be issued upon such exercise shall be effective and current at the time
of exercise, or (b) there is an exemption from registration under the Securities
Act for the issuance of shares of Common Stock upon such
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exercise. Nothing herein shall be construed as requiring the Company to register
shares subject to any option under the Securities Act.
The Committee may require the optionee to execute and deliver to the
Company his representations and warranties, in form and substance satisfactory
to the Committee, that (i) the shares of Common Stock to be issued upon the
exercise of the option are being acquired by the optionee for his own account,
for investment only and not with a view to the resale or distribution thereof,
and (ii) any subsequent resale or distribution of shares of Common Stock by such
optionee will be made only pursuant to (a) a Registration Statement under the
Securities Act which is effective and current with respect to the shares of
Common Stock being sold, or (b) a specific exemption from the registration
requirements of the Securities Act, but in claiming such exemption, the optionee
shall prior to any offer of sale or sale of such shares of Common Stock provide
the Company with a favorable written opinion of counsel, in form and substance
satisfactory to the Company, as to the applicability of such exemption to the
proposed sale or distribution.
In addition, if at any time the Committee shall determine in its
discretion that the listing or qualification of the shares of Common Stock
subject to such option on any securities exchange or under any applicable law,
or the consent or approval of any governmental regulatory body, is necessary or
desirable as a condition of, or in connection with, the granting of an option,
or the issuance of shares of Common Stock thereunder, such option may not be
exercised in whole or in part unless such listing, qualification, consent or
approval shall have been effected or obtained free of any conditions not
acceptable to the Committee.
11. STOCK OPTION CONTRACTS. Each option shall be evidenced by an
appropriate Contract which shall be duly executed by the Company and the
optionee, and shall contain such terms and conditions not inconsistent herewith
as may be determined by the Committee.
12. ADJUSTMENTS UPON CHANGES IN COMMON STOCK. Not withstanding any
other provisions of the Plan, in the event of any change in the outstanding
Common Stock by reason of a stock dividend, recapitalization, merger or
consolidation in which the Company is the surviving corporation, split-up,
spin-off, combination or exchange of shares or the like, the aggregate number
and kind of shares subject to the Plan, the aggregate number and kind of shares
subject to each outstanding option and the exercise price thereof and the 162(m)
Maximum shall be appropriately adjusted by the Board of Directors, whose
determination shall be conclusive.
In the event of (a) the liquidation or dissolution of the Company,
(b) a merger or consolidation in which the Company is not the surviving
corporation, or (c) any other capital reorganization (other than a
recapitalization) in which more than 50% of the shares of Common Stock of the
Company entitled to vote are exchanged, any outstanding options shall terminate,
unless other provision is made therefor in the transaction.
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<PAGE>
13. AMENDMENTS AND TERMINATION OF THE PLAN. The Plan was adopted by
the Board of Directors on October 4, 1996. No option may be granted under the
Plan after October 3, 2006. The Board of Directors, without further approval of
the Company's shareholders, may at any time suspend or terminate the Plan, in
whole or in part, or amend it from time to time in such respects as it may deem
advisable, including, without limitation, in order that ISO granted hereunder
meet the requirements for "incentive stock options" under the Code, to comply
with the provisions of Rule 16b-3 promulgated under the Exchange Act, Section
162(m) of the Code and to conform to any change in applicable law or to
regulations or rulings of admin istrative agencies; provided, however, that no
amendment shall be effective without the requisite prior or subsequent
shareholder approval which would (a) except as contemplated in Paragraph 12,
increase the maximum number of shares of Common Stock for which options may be
granted under the Plan or the 162(m) Maximum, (b) materially increase the
benefits to participants under the Plan or (c) change the eligibility
requirements for individuals entitled to receive options hereunder. No
termination, suspension or amendment of the Plan shall, without the consent of
the holder of an existing option affected thereby, adversely affect his rights
under such option. The power of the Committee to construe and administer any
options granted under the Plan prior to the termination or suspension of the
Plan nevertheless shall continue after such termination or during such
suspension.
14. NON-TRANSFERABILITY OF OPTIONS. No option granted under the Plan
shall be transferable otherwise than by will or the laws of descent and
distribution, and options may be exercised, during the lifetime of the holder
thereof, only by him or his legal representatives. Except to the extent provided
above, options may not be assigned, transferred, pledged, hypothecated or
disposed of in any way (whether by operation of law or otherwise) and shall not
be subject to execution, attachment or similar process.
15. WITHHOLDING TAXES. The Company may withhold cash and/or, with the
authorization of the Committee, shares of Common Stock to be issued with respect
thereto having an aggregate fair market value equal to the amount which it
determines is necessary to satisfy its obligation to withhold Federal, state and
local income taxes or other taxes incurred by reason of the grant or exercise of
an option, its disposition, or the disposition of the underlying shares of
Common Stock. Alternatively, the Company may require the holder to pay to the
Company such amount, in cash, promptly upon demand. The Company shall not be
required to issue any shares of Common Stock pursuant to any such option until
all required payments have been made. Fair market value of the shares of Common
Stock shall be determined in accordance with Paragraph 5.
16. LEGENDS; PAYMENT OF EXPENSES. The Company may endorse such legend
or legends upon the certificates for shares of Common Stock issued upon exercise
of an option under the Plan and may issue such "stop transfer" instructions to
its transfer agent in respect of such shares as it determines, in its
discretion, to be necessary or appropriate to (a) prevent a violation of, or to
perfect an exemption from, the registration requirements of the Securities Act,
(b) implement the provisions of the Plan or any agreement between the Company
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<PAGE>
and the optionee with respect to such shares of Common Stock, or (c) permit the
Company to determine the occurrence of a "disqualifying disposition," as
described in Section 421(b) of the Code, of the shares of Common Stock
transferred upon the exercise of an ISO granted under the Plan.
The Company shall pay all issuance taxes with respect to the issuance
of shares of Common Stock upon the exercise of an option granted under the Plan,
as well as all fees and expenses incurred by the Company in connection with such
issuance.
17. USE OF PROCEEDS. The cash proceeds from the sale of shares of
Common Stock pursuant to the exercise of options under the Plan shall be added
to the general funds of the Company and used for its general corporate purposes
as the Board of Directors may determine.
18. SUBSTITUTIONS AND ASSUMPTIONS OF OPTIONS OF CER TAIN CONSTITUENT
CORPORATIONS. Anything in this Plan to the contrary notwithstanding, the Board
of Directors may, without further approval by the shareholders, substitute new
options for prior options of a Constituent Corporation (as defined in Paragraph
19) or assume the prior options of such Constituent Corporation.
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<PAGE>
19. DEFINITIONS.
(a) Subsidiary. The term "Subsidiary" shall have the same
definition as "subsidiary corporation" in Section 424(f) of the Code.
(b) Parent. The term "Parent" shall have the same definition as
"parent corporation" in Section 424(e) of the Code.
(c) Constituent Corporation. The term "Constituent Corporation"
shall mean any corporation which engages with the Company, its Parent or any
Subsidiary in a transaction to which Section 424(a) of the Code applies (or
would apply if the option assumed or substituted were an ISO), or any Parent or
any Subsidiary of such corporation.
(d) Disability. The term "Disability" shall mean a permanent and
total disability within the meaning of Section 22(e)(3) of the Code.
(e) Outside Director. The term "Outside Director" shall mean an
individual who, on the date of grant of a NQSO hereunder, is a director of the
Company but is not a common law employee of the Company or of any of its
Subsidiaries or its Parent.
(f) Employee Option. The term "Employee Option" shall mean an
option granted pursuant to the Plan to an individual who, on the date of grant,
is a key employee of the Company or a Subsidiary of the Company.
(g) Consultant Option. The term "Consultant Option" shall mean a
NQSO granted pursuant to the Plan to a person who, on the date of grant, is a
consultant to the Company or a Subsidiary of the Company and who is not an
employee of the Company or any of its Subsidiaries on such date.
(h) Director Option. The term "Director Option" shall mean a NQSO
granted pursuant to the Plan to a director of the Company who, on the date of
grant, is not an employee of the Company or a Subsidiary of the Company.
20. GOVERNING LAW. The Plan, such options as may be granted hereunder
and all related matters shall be governed by, and construed in accordance with,
the laws of the State of New York.
21. PARTIAL INVALIDITY. The invalidity or illegality of any provision
herein shall not affect the validity of any other provision.
22. SHAREHOLDER APPROVAL. The Plan shall be subject to approval by a
majority of the votes cast at the next duly held meeting of the Company's
shareholders at which a majority of the outstanding voting shares are present,
in person or by proxy, and voting
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<PAGE>
on the Plan. No options granted pursuant to the Plan may be exercised prior to
such approval, provided that the date of grant of any options granted thereunder
shall be determined as if the amendment to the Plan had not been subject to such
approval. Notwithstanding the foregoing, if the Plan is not approved by a vote
of the shareholders of the Company on or before October 4, 1997, the Plan and
any options granted thereunder shall terminate.
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[PARKER CHAPIN FLATTAU & KLIMPL, LLP
[LETTERHEAD]
October 15, 1997
Motorcar Parts & Accessories, Inc.
2727 Maricopa Street
Torrance, California 90503
Gentlemen:
We have acted as counsel to Motorcar Parts & Accessories, Inc., a New
York corporation (the "Company"), in connection with a Registration Statement on
Form S-8 (the "Registration Statement") being filed with the Securities and
Exchange Commission under the Securities Act of 1933, relating to the offering
of 45,000 shares (the "Shares") of Common Stock, $.01 par value per share, to
certain employees, consultants and directors of the Company issuable upon
exercise of options which either have been, or may from time to time be, granted
by the Company under its 1994 Non-Employee Director Stock Option Plan and its
1996 Stock Option Plan (the "Plans").
In connection with the foregoing, we have examined originals or
copies, satisfactory to us, of all such corporate records and of all such
agreements, certificates and other documents as we have deemed relevant and
necessary as a basis for the opinion hereinafter expressed. In such examination,
we have assumed the genuineness of all signatures, the authenticity of all
documents submitted to us as originals and the conformity with the original
documents of all documents submitted to us as copies or facsimiles. As to any
facts material to such opinion, we have, to the extent that relevant facts were
not independently established by us, relied on certificates of public officials
and certificates of officers or other representatives of the Company.
Based upon and subject to the foregoing, we are of the opinion that
the Shares, when issued and paid for in accordance with the Plans and the
options upon exercise of which they become issuable, will be validly issued,
fully paid and non-assessable (except for such liability as is provided in
Section 630 of the New York Business Corporation Law).
We hereby consent to the filing of this opinion as an Exhibit to the
Registration Statement.
Very truly yours,
/s/ PARKER CHAPIN FLATTAU & KLIMPL, LLP
PARKER CHAPIN FLATTAU & KLIMPL, LLP
CONSENT OF INDEPENDENT AUDITORS
We hereby consent to the incorporation by reference in the Registration
Statement pertaining to the 1996 stock option plan of Motorcar Parts &
Accessories, Inc. on Form S-8 of our report dated May 16, 1997 on our audit of
the financial statements which is included in the annual report on Form 10-K for
the year ended March 31, 1997.
/s/ Richard A. Eisner & Company, LLP
New York, New York
October 14, 1997
