As filed with the Securities and Exchange Commission on April 28, 1997
Registration No. 333-____
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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HAUPPAUGE DIGITAL, INC.
(Exact name of registrant as specified in its charter)
Delaware 11-3227864
(State or jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
91 Cabot Court
Hauppauge, New York 11788
(516) 434-1600
(Address of principal executive offices)
1994 Hauppauge Digital, Inc. Incentive Stock Option Plan
1996 Hauppauge Digital, Inc. Non-Qualified Stock Option Plan
(Full title of plans)
Mr. Kenneth R. Aupperle
President
Hauppauge Digital, Inc.
91 Cabot Court
Hauppauge, New York 11788
(Name and address of agent for service)
(516) 434-1600
(Telephone number, including area code, of agent for service)
-------------
Copies to:
Herbert W. Solomon, Esq.
Seth I. Rubin, Esq.
Hollenberg Levin Solomon Ross Belsky & Daniels, LLP
585 Stewart Avenue
Garden City, New York 11530
(516) 745-6000
<PAGE>
CALCULATION OF REGISTRATION FEE
- ---------------------------------------------------------------------------
Proposed Proposed
Title of Amount maximum maximum Amount of
securities to to be offering price aggregate registration
be registered registered(a) per share offering price fee
- ----------------------------------------------------------------------------
Common Stock,
par value $.01 200,000(1) $3.75(2) $750,000.00 $227.27
per share
- ----------------------------------------------------------------------------
Common Stock,
par value $.01 250,000(3) $3.00(2) $750,000.00 $227.27
per share
- ----------------------------------------------------------------------------
TOTAL: $454.54
(a) In addition, pursuant to Rule 416(c) under the Securities Act of 1933,
this registration statement also covers an indeterminate amount of
interests to be offered or sold pursuant to the employee benefit plans
described herein.
(1) Pursuant to 1994 Hauppauge Digital, Inc. Incentive Stock Option Plan.
(2) Calculated pursuant to Rule 457(h)(1) under the Securities Act of 1933
and based upon the maximum option exercise prices for shares of Common
Stock pursuant to options granted to date under the 1994 Hauppauge
Digital, Inc. Incentive Stock Option Plan and the 1996 Hauppauge
Digital, Inc. Non-Qualified Stock Option Plan (collectively referred to
herein as the "Plans").
(3) Pursuant to 1996 Hauppauge Digital, Inc. Non-Qualified Stock Option
Plan.
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
Item 1. Plan Information
The documents 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) under
the Securities Act of 1933, as amended (the "Securities Act"). Such
documents need not be filed with the Securities and Exchange Commission (the
"Commission") either as part of this Registration Statement or as
prospectuses or prospectus supplements pursuant to Rule 424 under the
Securities Act. These documents and the documents incorporated by reference
in the Registration Statement pursuant to Item 3 of Part II of this Form S-8,
taken together, constitute a prospectus that meets the requirements of
<PAGE>
Section 10(a) of the Securities Act.
This Registration Statement on Form S-8 of Hauppauge Digital, Inc., a
Delaware corporation (the "Registrant"), covers a total of 450,000 shares of
the Registrant's Common Stock, par value $.01 per share ("Common Stock"),
reserved for issuance under the Plans of the Registrant, as follows:
(i) 200,000 shares pursuant to the 1994 Hauppauge Digital, Inc.
Incentive Stock Option Plan
(ii) 250,000 shares pursuant to the 1996 Hauppauge Digital, Inc.
Non-Qualified Stock Option Plan
Item 2. Registrant Information and Employee Plan Annual Information
Upon written or oral request, any of the documents incorporated by
reference in Item 3 of Part II of this Registration Statement (which
documents are incorporated by reference in this Section 10(a) Prospectus),
other documents required to be delivered to eligible employees pursuant to
Rule 428(b) or additional information about the 1994 Hauppauge Digital, Inc.
Incentive Stock Option Plan and/or the 1996 Hauppauge Digital, Inc.
Non-Qualified Stock Option Plan are available without charge by contacting:
Gerald Tucciarone
Hauppauge Digital, Inc.
91 Cabot Court
Hauppauge, New York 11788
(516) 434-1600
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents filed by the Registrant with the Commission are
incorporated herein by reference:
(a) The Registrant's latest annual report filed pursuant to Section
13(a) or 15(d) of the Exchange Act or the Registrant's prospectus
filed on June 6, 1996, pursuant to Rule 424(b) under the Securities
Act;
(b) All other reports filed pursuant to Section 13(a) or 15(d) of the
Securities and Exchange Act of 1934, as amended (the "Exchange
Act"), since the end of the fiscal year covered by the Registrant's
document referred to in (a) above; and
(c) The description of the Registrant's Common Stock contained in the
Registrant's Registration Statement on Form 8-A, dated January 4,
1995, including any amendments thereto or reports filed for the
purpose of updating such description.
In addition, all documents subsequently filed by the Registrant pursuant
<PAGE>
to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act, prior to the
filing of a post-effective amendment which indicates that all securities
registered hereby have been sold or which deregisters all securities then
remaining unsold, shall be deemed to be incorporated by reference herein and
to be a part hereof from the date of the filing of such documents.
Any statement contained herein or in a document incorporated or deemed
to be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Registration Statement to the extent that a
statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any statement so modified or superseded shall not
be deemed, except as so modified or superseded, to constitute a part of this
Registration Statement.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
The legality of the Common Stock offered hereby has been passed upon by
Hollenberg Levin Solomon Ross Belsky & Daniels, LLP ("HLSRB&D"), legal
counsel of the Company. Attorneys who are partners in HLSRB&D own 21,500
shares of Common Stock.
Item 6. Indemnification of Directors and Officers.
Section 145(a) of the Delaware General Corporation Law provides, in
relevant part, that the Company may indemnify its directors and officers in
the circumstances therein provided.
Article SEVENTH of the Company's Certificate of Incorporation, as
amended, provides:
No director shall be liable to the corporation or any of its
stockholders for monetary damages for breach of fiduciary duty as
a director, except with respect to (1) a breach of the director's
duty of loyalty to the corporation or its stockholders, (2) acts or
omissions not in good faith or which involve intentional misconduct
or a knowing violation of law, (3) liability under Section 174 of
the Delaware General Corporation Law or (4) a transaction from
which the director derived an improper personal benefit, it being
the intention of the foregoing provision to eliminate the liability
of the corporation's directors to the corporation or its
stockholders to the fullest extent permitted by Section 102(b)(7)
of the Delaware General Corporation Law, as amended from time to
time. The corporation shall indemnify to the fullest extent
permitted by Sections 102(b)(7) and 145 of the Delaware General
Corporation Law, as amended from time to time, each person that
such Sections grant the corporation the power to indemnify.
<PAGE>
Article X of the Company's bylaws, as amended, provides the following:
The corporation shall indemnify any person made, or threatened
to be made, a party to any threatened, pending or completed action
or suit by or in the right of the corporation to procure a judgment
in its favor by reason of his being or having been a director or
officer of the corporation, or of any other corporation which he
served as such at the request of the corporation, against the
reasonable expenses including attorneys' fees, actually and
reasonably incurred by him in connection with the defense or
settlement of such action or suit, or in connection with an appeal
therein, except in relation to matters as to which such director or
officer is adjudged to have been guilty of negligence or misconduct
in the performance of his duty to the corporation.
The corporation shall indemnify and person made, or threatened
to be made, a party to any threatened, pending or completed action,
suit or proceeding other than one by or in the right of the
corporation to procure a judgment in its favor, whether civil,
criminal, administrative or investigative brought to impose a
liability or penalty on such person for an act alleged to have been
committed by such person in his capacity of director or officer of
the corporation, or of any other corporation which he served as
such at the request of the corporation, against judgments, fines,
amounts paid in settlement and reasonable expenses, including
attorneys' fees, actually and reasonably incurred n connection with
such action, suit or proceeding, or any appeal therein, if such
director or officer acted in good faith in the reasonable belief
that such action was in the best interests of the corporation, and
in criminal actions or proceedings, without reasonable ground for
belief that such action was unlawful. The termination of any such
civil or criminal action, suit or proceeding by judgment, order,
settlement, conviction or upon a plea of nolo contendere or its
equivalent shall not in itself create a presumption that any such
director or officer did not act in good faith in the reasonable
belief that such action was in the best interests of the
corporation or that he had reasonable ground for belief that such
action was unlawful.
Expenses (including attorneys' fees) incurred by an officer or
director in defending any civil, criminal, administrative or
investigative action, suit or proceeding may be paid by the
corporation in advance of the final disposition of such action,
suit or proceeding upon receipt of an undertaking by or on behalf
of such director or officer to repay such amount if it shall
ultimately be determined that he is not entitled to be indemnified
by the corporation."
Item 7. Exemption From Registration Claimed.
Not applicable.
<PAGE>
Item 8. Exhibits.
4.1 1994 Hauppauge Digital, Inc. Incentive Stock Option Plan
4.2 1996 Hauppauge Digital, Inc. Non-Qualified Stock Option Plan
5.1 Opinion of Hollenberg Levin Solomon Ross Belsky & Daniels, LLP, as
to the legality of the securities being offered
23.1 Consent of BDO Seidman, LLP with respect to financial statements of
the Registrant
23.2 Consent of Hollenberg Levin Solomon Ross Belsky & Daniels, LLP
Item 9. Undertakings.
(a) The Registrant hereby undertakes:
(1) To file, during any period in which it offers or sells
securities, a post-effective amendment to this registration statement to
include any additional or changed material information on the plan of
distribution.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof;
(3) To file a post-effective amendment to remove from registration
any of the securities that remain unsold at the termination of the offering.
(b) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers, and controlling
persons of the small business issuer pursuant to the foregoing provisions, or
otherwise, the small business issuer has been advised that in the opinion of
the Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act and is, therefore, unenforceable.
<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 Hauppauge, State of New York, on April 28, 1997.
HAUPPAUGE DIGITAL, INC.
By: /s/ KENNETH PLOTKIN
--------------------
KENNETH PLOTKIN
Chief Executive Officer, Vice-
President, and Secretary
By: /s/ KENNETH R. AUPPERLE
------------------------
KENNETH R. AUPPERLE
President and Chief Operations
Officer
By: /s/ GERALD TUCCIARONE
----------------------
GERALD TUCCIARONE
Treasurer and Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration has been signed below by the following persons on behalf of the
Company and in the capacities and as of the date indicated above.
By: /s/ KENNETH R. AUPPERLE
-------------------------
KENNETH R. AUPPERLE
Director
By: /s/ KENNETH PLOTKIN
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KENNETH PLOTKIN
Director
By: /s/ DOROTHY PLOTKIN
---------------------
DOROTHY PLOTKIN
Director
By: /s/ LAURA AUPPERLE
--------------------
LAURA AUPPERLE
Director
By: /s/ LEONARD A. NEUHAUS
------------------------
LEONARD A. NEUHAUS
Director
By: /s/ BERNARD HERMAN
--------------------
BERNARD HERMAN
Director
<PAGE>
EXHIBIT INDEX
Exhibit Number Description
- -------------- -----------
4.1 1994 Hauppauge Digital, Inc. Incentive
Stock Option Plan
4.2 1996 Hauppauge Digital, Inc. Non-Qualified
Stock Option Plan
5 Opinion of Counsel
23.1 Consent of Independent Certified Public
Accountant
23.2 Consent of Counsel
EXHIBIT 4.1
1994 HAUPPAUGE DIGITAL, INC. INCENTIVE STOCK OPTION PLAN
1. Purpose.
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The purpose of the Plan is to provide additional incentive for such Key
Employees of the Company and its Subsidiaries as may be designated for
participation in the Plan by granting stock incentive options and thereby
encouraging such Key Employees to invest in such shares, thereby furthering
their identity of interest with the Company's shareholders, giving them a
greater personal interest and increasing their interest in and commitment to
the future growth and prosperity of the Company.
2. Definitions.
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Unless otherwise required by the context, the following terms, when used
in the Plan, shall have the meanings set forth in this section 2.
Act: The Securities Exchange Act of 1934, as amended.
Board of Directors or Board: The Board of Directors of the Company.
Change of Control: Any merger or consolidation of the Company,
<PAGE>
any tender offer, exchange offer or other purchase of any outstanding
securities of the Company, or any sale of assets of the Company, if, as a
result of such event, the members of the Company's Board of Directors prior
to such event shall thereafter constitute less than a majority of the Board
of Directors of the Company (or of the surviving or resulting corporation, as
the case may be).
Committee: The Stock Option Committee of the Board of Directors, which
shall consist of not less than two (2) directors of the Company.
Common Stock: The Common Stock of the Company, par value $.10 per share,
or such other class of shares or other securities as may be applicable
pursuant to the provisions of section 6.
Company: Hauppauge Digital, Inc. or such amended name as utilized by the
Company.
Fair Market Value: As applied to any date, the last price of the Common
Stock reported by NASDAQ, or if not applicable, by the National Quotation
Bureau or such stock exchange as said Common Stock may be listed on.
Incentive Stock Option: A stock option that satisfies the requirements
of section 422 of the Internal Revenue Code.
Internal Revenue Code: The Internal Revenue Code of 1986, as amended,
including the regulations promulgated pursuant thereto.
Key Employee: An employee of the Company or of a Subsidiary, including
an officer or director who is an employee, who in the opinion of the
Committee can contribute significantly to the growth and successful
operations of the Company or a Subsidiary. The grant or recommendation of the
grant of an Incentive Stock Option to an employee by the Committee shall be
deemed a determination by the Committee that such employee is a Key Employee.
Plan: The Incentive Stock Option Plan herein set forth as the same may
<PAGE>
from time to time be amended.
Restricted Shares: Shares of Common Stock issued or transferred subject
to restrictions as authorized by paragraph (c) of Section 9 of the Plan.
Subsidiary: A corporation or other form of business association of which
shares (or other ownership interests) having 50% or more of the voting power
are owned or controlled, directly or indirectly, by the Company.
3. Administration of Plan.
-----------------------
(a) Committee. The Plan shall be administered by the Committee,
which shall consist of two or more members of the Board of Directors and who
shall not be eligible to participate in the Plan. The members of the
Committee shall be appointed by and shall serve at the pleasure of the Board,
which may from time to time change the Committee's membership.
(b) Authority. The Committee shall have the sole and complete
authority to:
(i) determine the individuals to whom Incentive Stock Options
are granted, the amounts of Incentive Stock Options to be
granted and the time of all such grants;
(ii) determine the terms, conditions and provisions of, and
restrictions relating to, each Incentive Stock Option granted;
(iii) interpret and construe the Plan and all agreements;
(iv) prescribe, amend and rescind rules and regulations
relating to the Plan;
(v) determine the content and form of all Agreements;
(vi) determine all questions relating to Incentive Stock
Options under the Plan;
(vii) maintain accounts, records and ledgers relating to
Incentive Stock Options;
<PAGE>
(viii) maintain records concerning its decision and
proceedings;
(ix) employ agents, attorneys, accountants or other persons
for such purposes ad the Committee considers necessary or
desirable;
(x) do and perform all acts which it may deem necessary or
appropriate for the administration of the Plan and to carry
out the objectives of the Plan.
(c) Determinations. All determinations, interpretations, or other
actions made or taken by the Committee pursuant to the provision of the Plan
shall be final, binding and conclusive for all purposes and upon all persons.
(d) Delegation. Except as required by Rule 16b-3 promulgated under
the Act (and any successor to such rule) with respect to the grant of
Incentive Stock Options to Key Employees who are subject to Section 16 of the
Act, the Committee may delegate to appropriate senior officers of the Company
its duties under the Plan pursuant to such conditions and limitations as the
Committee may establish.
4. Grants of Incentive Stock Options.
----------------------------------
Subject to the provisions of the Plan, the Committee may at any
time, or from time to time, grant Incentive Stock Options under this Plan to,
and only to, Key Employees.
5. Stock Subject to the Incentive Stock Options.
--------------------------------------------
(a) Subject to the provisions of paragraph (c) of this section 5
and of Section 7, the aggregate number of shares of Common Stock which may be
issued or transferred pursuant to Incentive Stock Options granted under the
Plan shall not exceed 200,000.
(b) Authorized but unissued shares of Common Stock and shares of
<PAGE>
Common Stock held in the treasury, whether acquired by the Company
specifically for use under the Plan or otherwise, may be used, as the
Committee may from time to time determine, for purposes of the Plan,
provided, however, that any previously issued shares acquired or held by the
Company for the purposes of the Plan shall, unless and until transferred to
a Key Employee in accordance with the Plan, be and at all times remain
treasury shares of the Company, irrespective of whether such shares are
entered in a special account for purposes of the Plan, and shall be available
for any corporate purposes and subject to the claims of creditors of the
Company.
(c) If any shares of Common Stock subject to an Incentive Stock
Option shall not be issued or transferred and shall cease to be issuable or
transferable for any reason of if any such shares shall, after issuance or
transfer, be reacquired or repurchased by the Company or Subsidiary, the
shares not so issued or transferred or the shares so reacquired or
repurchased by the Company or a Subsidiary may again be made subject to
Incentive Stock Options.
6. Provisions of Incentive Stock Options.
--------------------------------------
(a) All Incentive Stock Options shall be subject to the following
provisions:
(1) The exercise price per share shall be (A) during the first
two years after the effective date of the contemplated public offering, the
greater of the price per unit offered in the public offering or the Fair
Market Value of the Common Stock on the date of grant, or (b) thereafter, no
less than 100% of the Fair Market Value of such share on the date of grant.
(2) Subject to the provisions of paragraphs (a)(5) and (a)(7) of
this section 6, an Option granted under the Plan may not be exercised unless,
<PAGE>
at the time of such exercise, the optionee shall be in the employ of the
Company and shall have completed at least twelve months of continuous
employment with the Company from the date of the grant of his Option.
(3) Each Option shall expire at such time as the Committee may
determine, at the time the Option shall be granted, but not later than ten
years from the date such Option shall have been granted.
(4) Any Option granted under the Plan may be exercised solely by
the person to whom granted (or by his guardian or legal representative),
except as provided in paragraph (a)(7) of this section 6 in the case of such
person's death.
(5) Absence on leave, approved by an officer of the Company or a
Subsidiary authorized to give such approval, shall not be considered in
interruption or termination of employment for any purpose of the Plan, or
Options granted thereunder, except that no Option may be granted to an
employee which he is absent on leave.
(6) An Option may be exercised, in whole or in part, at any time
or from time to time during the balance of the term of the Option, except as
limited by provisions contained in the Option.
(7) The Option shall terminate if and when the optionee shall
cease to be an employee of the Company and its Subsidiaries, except as follows:
(i) If the optionee shall die while in the employ of the Company
or of a Subsidiary, the Option shall be exercisable, as and to
the extent exercisable by such person or persons as shall have
acquired the optionee's rights under the Option by will or the
laws of descent and distribution, but not later than one year
after the date of death and not after the expiration of the
specific period fixed in the Option grant.
<PAGE>
(ii) If an optionee shall become disabled (within the meaning of
section 105(d)(4) of the Internal Revenue Code) while in the
employ of the Company or of a Subsidiary and such optionee's
employment shall terminate by reason of such disability the
Option shall be exercisable, as and to the extent exercisable
at the time of the termination of his employment, within such
period as shall be set forth in the Option grant, but only
within one year after the termination of the optionee's
employment and not after the expiration of the specific period
fixed in the Option grant as in effect at the time of the
termination of his employment.
(8) Shares purchased upon exercise of an Option shall be paid for
in full cash or in the equivalent amount of the Company's Common Stock.
(9) The Option agreements or Option grants authorized by the Plan
may contain such other provisions as the Committee shall deem advisable
provided they do not violate the provisions of Section 422 of the Internal
Revenue Code.
(10) The aggregate Fair Market Value (determined as of the time of
grant) of stock for which Incentive Stock Options are exercisable for the
first time during any calendar year by an optionee is to be limited to
$100,000, but the value may exceed $100,000 for which options may be granted
to an optionee.
(11) In the event that any Incentive Stock Option is granted under
the Plan to any individual who, at the time such Incentive Stock Option is
granted, owns stock possessing more than ten percent of the total combined
voting power of all classes of stock of the Company or of any Subsidiary, the
purchase price per share under such Incentive Stock Option shall be at least
<PAGE>
110% of the fair market value of such share at the time such Incentive Stock
Option is granted and such Incentive Stock Option shall not be exercisable
after the expiration of five years from the date it is granted.
(12) Upon the exercise of the Incentive Stock Option, no
disposition of such Common Stock shall be made within two (2) years from the
date of the granting of the Option nor within one (1) year after the transfer
of the Common Stock to him.
7. Adjustment Provisions.
---------------------
In the event that any recapitalization, or reclassification, split-up
or consolidation of shares of Common Stock shall be affected, or the
outstanding shares of Common Stock are, in connection with the merger or
consolidation of the Company or a sale by the Company of all or a part of its
assets, exchanged for a different number or class of shares of stock or other
securities of any other corporation, or new, different or additional shares
or other securities of the Company or of another corporation are received by
the holder of Common Stock or any distribution is made to the holders of
Common Stock other than a cash dividend, (a) the number and class of shares
or other securities that may be issued or transferred and (b) the option
price shall in each case be equitably adjusted as the Committee may, in the
reasonable exercise of its discretion, determine. In no event may any change
be made under this section 7 in any Incentive Stock Option which would
constitute a "modification" within the meaning of Section 425(h)(3) of the
Internal Revenue Code.
8. Term.
-----
The Plan shall be deemed adopted and shall become effective on August 2,
1994. No Stock Incentives shall be granted under the Plan on or after August
1, 2004.
<PAGE>
9. General Provisions.
------------------
(a) The Committee may from time to time adopt such rules and
regulations, not inconsistent with the provisions of the Plan, as it deems
necessary to determine eligibility to participate in the Plan and for the
proper administration of the Plan, and may amend or revoke any rule or
regulation so established. The Committee may make such determinations and
interpretations under or in connection with the Plan as it deems necessary or
advisable. All such rules, regulations, determinations and interpretations
shall be binding and conclusive upon the Company, its Subsidiaries, its
shareholders and all employees and upon their respective legal
representatives, beneficiaries, successors and assigns and upon all other
persons claiming under or through any of them.
(b) Any action required or permitted to be taken by the Committee
under the Plan shall require the affirmative vote of a majority of all the
members of the Committee.
(c) With respect to any shares of Common Stock issued or
transferred under the provision of the Plan, such shares may be issued or
transferred subject to such conditions, in addition to those specifically
provided in the Plan, as the Committee may direct and, without limiting the
generality of the foregoing, provision may be made in that shares issued or
transferred upon their grant or exercise shall be Restricted Shares subject
to forfeiture upon failure to comply with conditions and restrictions imposed
in the grant of such Stock incentives.
(d) Nothing in the Plan nor in any instrument executed pursuant
thereto shall confer upon any employee any right to continue in the employ of
the Company or a Subsidiary or shall affect the right of the Company or of a
Subsidiary to terminate the employment of any employee with or without cause.
<PAGE>
(e) No shares of Common Stock shall be sold, issued or transferred
pursuant to an Incentive Stock Option unless and until there has been
compliance, in the opinion of counsel to the Company, with all legal
requirements, applicable to the sale, issuance or transfer of such shares.
In connection with any such sale, issuance or transfer, the person acquiring
the shares shall, if requested by the Company, give assurances satisfactory
to counsel to the Company that the shares are being acquired for investment
and not with a view to resale or distribution thereof and assurances in
respect of such other matters as the Company or a Subsidiary may deem
desirable to assure compliance with all applicable legal requirements.
(f) No employee (individually or as a member of a group), and no
beneficiary or other person claiming under or through him, shall have any
right, title or interest in or to any shares of Common Stock allocated or
reserved for the purposes of the Plan except as to such shares of Common
Stock, if any, as shall have been issued or transferred to him.
(g) No Incentive Stock Option shall be assignable or subject to any
encumbrance, pledge or charge of any nature, subject to execution, attachment
or similar process, or shall be transferrable other than by will or the laws
of descent and distribution, and every Stock Incentive Option and all rights
under the Plan shall be exercisable during the employee's lifetime only by
him or his guardian or legal representative.
(h) During the first two years after the effective date of a public
offering with Lew Lieberbaum & Co., Inc. as underwriter, no options may be
granted at a price less than the greater of $3.15 or the fair market value on
the day of grant.
10. Amendment or Discontinuance of Plan.
------------------------------------
(a) The Plan may be amended by the Committee at any time, provided
<PAGE>
that, without the approval of the shareholders of the Company, no amendment
shall be made which (i) increases the aggregate number of shares of shares of
Common Stock that may be issued or transferred pursuant to Stock Incentive
Options as provided in paragraph (a) of Section 5, (ii) materially increases
the benefits accruing to participants under the Plan, (iii) materially
modifies the requirements as to eligibility for participation in the Plan,
(iv) amends Section 8 to extend the term of the Plan, (v) amends this section
10 or which would otherwise invalidate this Plan under Section 422 of the
Internal Revenue Code.
(b) The Committee may, by resolution adopted by a majority of the
entire Committee, discontinue the Plan.
(c) No amendment or discontinuance of the Plan by the Committee or
the shareholders of the Company shall adversely affect, except with the
consent of the holder, any Incentive Stock Option theretofore granted.
11. Compliance with Section 422 of the Internal Revenue Code.
---------------------------------------------------------
This Plan is intended to comply with the provisions of Section 422 of
the Internal Revenue Code and to the extent inconsistent or non-complying,
the provisions of said section shall be deemed applicable to this Plan.
12. No Guarantee of Employment by Participation.
--------------------------------------------
Nothing in the Plan shall interfere with or limit in any way the right
of the Company to terminate any employee's employment at any time, nor confer
upon any employee any right to continue in the employment of the Company.
<PAGE>
EXHIBIT 4.2
1996 HAUPPAUGE DIGITAL, INC. NON-QUALIFIED STOCK OPTION PLAN
SECTION 1 - OBJECTIVE
The objective of the Hauppauge Digital, Inc. Non-Qualified Stock Option
Plan (the "Plan") is to attract and retain the best available executive
personnel and other key employees to be responsible for the management,
growth and success of the business, and to provide an incentive for such
employees to exert their best efforts on behalf of the Company and it
shareholders and to authorize the grant of Options to such other consultants
or other individuals or entities as may be deemed in the best interest of the
Company.
SECTION 2 - DEFINITIONS
2.1 General Definitions. The following words and phrases, when used
herein, shall have the following meanings:
(a) "Act" - The Securities Exchange Act of 1934, as amended.
(b) "Agreement" - The document which evidences the grant of any
Award under the Plan and which sets forth the terms,
conditions, and limitations relating to such Award.
<PAGE>
(c) "Award" - The grant of any stock option.
(d) "Board" - The Board of Directors of Hauppauge Digital, Inc.
(e) "Code" - The Internal Revenue Code of 1986, as amended, and
including the regulations promulgated pursuant thereto.
(f) "Committee" - The Stock Option Committee which shall be the
Board or two or more members of the Board.
(g) "Common Stock" - The present shares of Common Stock of the
Company, and any shares into which such shares are converted,
changed or reclassified.
(h) "Company" - Hauppauge Digital, Inc., a Delaware corporation,
and its groups, divisions and subsidiaries.
(i) "Employee" - Any person employed by the Company as an
employee.
(j) "Fair Market Value" or "FMV" - The fair market value of Common
Stock on a particular day shall be the closing price of the
Common Stock on NASDAQ, or if not applicable, by the National
Quotations Bureau or any other national stock exchange on
which the Common Stock is traded, on such date.
(k) "Option" - The right to purchase Common Stock of the Company
at a stated price for a specified period of time. For
purposes of the Plan, the option is a Non-Qualified Stock
Option.
(l) "Participant" - Any Employee or other consultant, individual
or entity designated by the Committee to participate in the
Plan.
(m) "Shares" - Shares of Common Stock.
<PAGE>
2.2 - Other Definitions. In addition to the above definitions, certain
words and phrases used in the Plan and any Agreement may be defined elsewhere
in the Plan or in such Agreement.
SECTION 3 - COMMON STOCK
3.1 - Number of Shares. Subject to the provisions of Section 3.3, the
number of Shares which may be issued for Options granted under the Plan may
not exceed 250,000 Shares.
3.2 - Re-Usage. If an Option expires or is terminated, surrendered, or
canceled without having been fully exercised, or if any other grant results
in any Shares not being issued, the Shares covered by such Option shall again
be immediately available for Awards under the Plan.
3.3 - Adjustments. In the event of any change in the outstanding Common
Stock by reason of a stock split, stock dividend, combination,
reclassification or exchange of Shares, recapitalization, merger,
consolidation or other similar event, the number of Shares available for
Options, and the number of Shares subject to outstanding Options, and the
price thereof, and the Fair Market Value, as applicable, shall be
proportionately adjusted by the Committee in its sole discretion and any such
adjustment shall be binding and conclusive on all parties. Any fractional
Shares resulting from any such adjustment shall be disregarded.
SECTION 4 - ELIGIBILITY AND PARTICIPATION
Participants in the Plan shall be those key employees, consultants or
other individuals or entities selected by the Committee to participate in the
Plan whose participation in the Plan the Committee or management of the
Company determines to be in the best interests of the Company.
<PAGE>
SECTION 5 - ADMINISTRATION
5.1 - Committee. The Plan shall be administered by the Committee, which
shall consist of the Board of Directors or a committee of at least two or
more members of the Board of Directors.
5.2 - Authority. The Committee shall have the sole and complete
authority to:
(a) determine the individuals to whom awards are granted, the
amounts of the awards to be granted and the time of all such
grants;
(b) determine the terms, conditions and provisions of, and
restrictions relating to, each Award granted;
(c) interpret and construe the Plan and all Agreements;
(d) prescribe, amend and rescind rules and regulations relating to
the Plan;
(e) determine the content and form of all Agreements;
(f) determine all questions relating to Awards under the Plan;
(g) maintain accounts, records and ledgers relating to Awards;
(h) maintain records concerning its decisions and proceedings;
(i) employ agents, attorneys, accountants or other persons for
such purposes as the Committee considers necessary or
desirable;
(j) do and perform all acts which it may deem necessary or
appropriate for the administration of the Plan and to carry
out the objectives of the Plan.
5.3 - Determinations. All determinations, interpretations, or other
actions made or taken by the Committee pursuant to the provisions of the Plan
<PAGE>
shall be final, binding and conclusive for all purposes and upon all persons.
SECTION 6 - STOCK OPTIONS
6.1 - Type of Option. It is intended that only non-qualified stock
options may be granted by the Committee under the Plan.
6.2 - Grant of Option. An Option may be granted to Participants at such
time or times as shall be determined by the Committee. Each Option shall be
evidenced by an Option Agreement that shall specify the exercise price, the
duration of the Option, the number of Shares to which the Option applies, and
such other terms and conditions not inconsistent with the Plan as the
Committee shall determine.
6.3 - Option Price. The per share option price shall be determined by
the Committee at the time the Option is granted.
6.4 - Exercise of Options. Options awarded under the Plan shall be
exercisable at such times and shall be subject to such restrictions and
conditions, including the performance of a minimum period of service after
the grant, as the Committee may impose, which need not be uniform for all
participants; provided, however, that no Option shall be exercisable for more
than 10 years after the date on which it is granted.
6.5 - Payment. The Committee shall determine the procedures governing
the exercise of Options, and shall require that the per share option price be
paid in full at the time of the exercise. The Committee may, in its
discretion, permit a Participant to make payment in cash, in Shares already
owned by the Participant, valued at the Fair Market Value thereof, as partial
or full payment of the exercise price or through a "Cashless Exercise".
If a Participant elects to utilize a Cashless Exercise, he shall be
entitled to a credit equal to the amount of that equity by which the current
<PAGE>
Fair Market Value exceeds the option price on that number of options
surrendered and to utilize that credit to exercise additional options held by
him that such equity could purchase. There shall be canceled that number of
options utilized for the credit and for the options exercised for such
credit. For example, if the Participant has options to acquire 10,000 shares
which are exercisable, the Fair Market Value is $4.15 per share, the exercise
price is $3.15 per share, and the participant elects to utilize for a credit
5,000 options ($5,000), then upon a Cashless Exercise in connection therewith
he shall be entitled to acquire 1,587 shares of Common Stock in exchange for
the options for 5,000 shares for which a credit has been received and option
for 1,587 shares have been exercised. The Participant will still have
exercisable options to acquire 3,413 shares of Common Stock.
As soon as practical after full payment of the exercise price, the
Company shall deliver to the Participant a certificate or certificates
representing the acquired shares.
6.6 - Rights of a Shareholder. Until the exercise of an Option and the
issuance of the Shares in respect thereof, a Participant shall have no rights
as a Shareholder with respect to the Shares covered by such Option.
SECTION 7 - AMENDMENT, MODIFICATION AND TERMINATION OF PLAN
The Board of Directors at any time may terminate or suspend the Plan,
and from time to time may amend or modify the Plan or modify any option
granted under the Plan. No amendment, modification, or termination of the
Plan shall in any manner adversely affect any Award theretofore granted under
the Plan without the consent of the Participant.
<PAGE>
SECTION 8 - MISCELLANEOUS PROVISIONS
8.1 - No Guarantee of Employment by Participation. Nothing in the Plan
shall interfere with or limit in any way the right of the Company to
terminate any Participant's relationship with the Company at any time, nor
confer upon any Participant any right to continue in the employment of the
Company. No employee shall have a right to be selected as a Participant, or,
having been so selected, to receive any future Awards.
8.2 - Tax Withholding. The Company shall have the authority to
withhold, or require a Participant to remit to the Company, an amount
sufficient to satisfy federal, state and local withholding tax requirements
on any Award under the Plan, and the Company may defer payment of cash or
issuance of Shares until such requirements are satisfied. The Committee may,
in its discretion, permit a Participant to elect, subject to such conditions
as the Committee shall require, to have Shares otherwise issuable under the
Plan withheld by the Company and having a Fair Market Value sufficient to
satisfy all or part of the Participant's estimated total federal, state and
local tax obligation associated with the transaction.
8.3 - Governing Law. The Plan and all determinations made and actions
taken pursuant hereto, to the extent not otherwise governed by the Code or
Act, shall be governed by the laws of the State of New York and construed in
accordance therewith.
8.4 - Effective Date. The Plan shall be submitted to the Shareholders
of the Company for approval at the Annual Meeting of Shareholders of the
Company scheduled to be held on March 5, 1996 and shall be effective
immediately upon such approval by the Shareholders of the Company. The Plan
shall terminate ten (10) years after the date of Shareholder approval.
<PAGE>
EXHIBIT 5.1
[HOLLENBERG LEVIN SOLOMON ROSS BELSKY & DANIELS, LLP LETTERHEAD]
April 28, 1997
Division of Corporate Finance
Securities and Exchange Commission
Judiciary Plaza
450 Fifth Street, NW
Washington, D.C. 20549
Re: Hauppauge Digital, Inc.
1994 Incentive Stock Option Plan and
1996 Non-Qualified Stock Option Plan
Gentlemen:
We have acted as counsel for Hauppauge Digital, Inc., a Delaware
corporation (hereinafter called the "Company") in connection with the
proposed issue and sale by the Company of a maximum of 450,000 shares of
Common Stock pursuant to incentive and non-qualified stock options (the
"Options") subject to the provisions of the Company's 1994 Incentive Stock
Option Plan and 1996 Non-Qualified Stock Option Plan (the "Plans").
As counsel to the Company, we have examined the Minute Books of the
Company, together with copies of its Articles of Incorporation and By-Laws.
We have also examined the Plans and the proposed Registration Statement on
Form S-8 to be filed with the Securities and Exchange Commission. Based upon
the foregoing, and our examination of such other documents as we deemed
pertinent, we are of the opinion that:
1. The Company is a corporation duly organized and validly existing and
in good standing under and by virtue of the laws of the State of Delaware.
2. The authorized capital of the Company consists of 10,000,000 shares
of Common Stock , par value $.01 per share, of which 4,465,302 shares of
Common Stock are presently legally issued and outstanding, fully paid and
non-assessable, which includes 46,200 in treasury shares.
3. The shares of Common Stock of the Company to be issued upon the
exercise of the Options are validly authorized and, assuming (a) the shares
of Common Stock so issuable will be validly authorized on the dates of
exercise, (b) on the dates of exercise, the Options will have been duly
executed, issued, and delivered, will constitute the legal, valid and binding
obligations of the Company, and will (subject to applicable bankruptcy,
insolvency, and other laws affecting the enforceability of creditors' rights
generally) be enforceable as to the Company in accordance with their terms,
<PAGE>
and (c) no change occurs in the applicable law or the pertinent facts, then,
when (d) the pertinent provisions of such blue sky and securities laws as may
be applicable have been complied with and (e) the Options are exercised in
accordance with their terms and the terms of the Plans, the shares of Common
Stock so issuable will be validly issued, fully paid and non-assessable.
Very truly yours,
/s/ HOLLENBERG LEVIN SOLOMON ROSS
BELSKY & DANIELS, LLP
________________________________________
Hollenberg Levin Solomon Ross
Belsky & Daniels, LLP
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement of our report dated December 12, 1996, relating to the financial
statements of Hauppauge Digital, Inc., appearing in the Company's Annual
report on Form 10-KSB for the year ended September 30, 1996.
/s/ BDO Seidman, LLP
___________________________
BDO Seidman, LLP
Certified Public Accountants
Dated: Mitchel Field, New York
April 23, 1997
<PAGE>
EXHIBIT 23.2
CONSENT OF COUNSEL
We hereby consent to the use of our name wheresoever set forth in this
Registration Statement (S-8) and also to the use of our opinion letter dated
April 28, 1997, which is included in this Registration Statement (S-8).
Dated: Garden City, New York
April 28, 1997
/s/ HOLLENBERG LEVIN SOLOMON ROSS
BELSKY & DANIELS, LLP
_________________________________
Hollenberg Levin Solomon Ross
Belsky & Daniels, LLP
