<PAGE>
As filed with the Securities and Exchange Commission on August 4, 1998
Registration No. 333- ___________
- ------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------------------------------------
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
--------------------------------------------------
TECH SQUARED INC.
(Exact Name of Registrant as Specified in its Charter)
MINNESOTA 41-1591872
- ------------------------------ --------------------------------
(State or Other Jurisdiction of (IRS Employer Identification No.)
Incorporation or Organization)
5198 West 76th Street
Edina, Minnesota 55439
(612) 832-5622
--------------------------------------------------
(Address of Principal Executive Offices)
NONQUALIFIED STOCK OPTION AGREEMENT
--------------------------------------------------
(Full Title of the Plan)
Joel A. Ronning
5198 West 76th Street
Edina, Minnesota 55439
(612) 832-5622
--------------------------------------------------
(Name, Address, and Telephone Number of Agent for Service)
Copies to:
Michael W. Schley, Esq.
Larkin, Hoffman, Daly & Lindgren, Ltd.
1500 Norwest Financial Center
7900 Xerxes Avenue South
Bloomington, Minnesota 55431
(612) 835-3800
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
Title of Securities to be Registered Amount to be Proposed Maximum Offering Proposed Maximum Amount of
Registered Price Per Share (1) Aggregate Offering Price Registration Fee
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common stock (no par value) 1,000,000 $4.84 $4,840,000 $1,427.80
- --------------------------------------------------------------------------------------------------------------------------
Common Stock (no par value) (2) 1,000,000 $4.84 $4,840,000 $1,427.80
- --------------------------------------------------------------------------------------------------------------------------
Total 2,000,000 N/A N/A $2,855.60
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Pursuant to Rule 457(h) and (c), the proposed maximum offering price
per share, $4.84, was estimated based on the average of the bid and
asked prices of the registrant's common stock as reported in the local
over-the-counter market on July 28, 1998. 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 nonqualified stock option agreement
described herein, to the extent such interests may be deemed
securities. No additional fee is payable for the registration of such
interests.
(2) Represents shares of Common Stock issuable to an affiliate of the
Registration upon exercise of options and which are being registered
for resale by the holder thereof.
- ------------------------------------------------------------------------------
<PAGE>
INTRODUCTION
Tech Squared Inc. (the "Registrant") hereby registers the sale of up to
1,000,000 shares of its Common Stock, no par value. Such shares may be
issued upon the exercise of stock options granted pursuant to the
Nonqualified Stock Option Agreement (the "NOA") made effective the 31st day
of May, 1998 between Tech Squared Inc. and Joel A. Ronning. The purposes of
the Registrant's issuance of the stock options are to (i) improve individual
performance by providing long-term incentives and rewards; (ii) attract,
retain and motivate such employees; and (iii) align the interest of such
person with those of the Corporation's shareholders. All of the shares of
common stock issuable upon exercise of the NOA are held by Joel A. Ronning,
an officer and director of the Registrant. Additionally, the Registration
hereby also registers for resale those shares of its Common Stock issuable
upon exercise of the options granted in the NOA.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The Registrant incorporates herein the following documents filed with
the Securities and Exchange Commission (the "Commission") and makes them a
part hereof by reference:
(a) The Registrant's Annual Report on Form 10-K for the year ended
December 31, 1997;
(b) The Registrant's Quarterly Report on Form 10-Q for the period
ended March 31, 1998;
(c) The description of the Registrant's Common Stock that is
contained in the Registrant's Registration Statement on Form 10-SB,
registering the Registrant's Common Stock under Section 12 of the
Securities Exchange Act of 1934, including any amendments or reports
filed for the purpose of updating such description; and
(d) The Registrant's definitive proxy statement dated April 30, 1998,
filed pursuant to Section 14 of the Securities Exchange Act in connection
with the annual meeting of stockholders held June 5, 1998.
All reports and other documents subsequently filed by the Registrant
after the date of this Registration Statement pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Securities Exchange Act prior to the filing of a
post-effective amendment which indicates that all securities offered hereby
have been sold or which deregisters all securities then remaining unsold
shall be deemed to be incorporated by reference herein and to be a part
hereof from the date of the filing of such reports and documents.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTEREST OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
As permitted by the Minnesota Business Corporation Act, the Registrant's
Restated Articles of Incorporation eliminate the liability of the
Registrant's directors for monetary damages arising from any breach of
fiduciary duty as a member of the Registrant's Board of Directors (except as
expressly prohibited by Minnesota Statutes, Section 302A.521, subd. 4).
Article VII of the Registrant's Restated Articles of Incorporation provides
as follows:
No directors of this corporation shall be personally liable to
the corporation or its shareholders for monetary damages for a
breach of fiduciary duty as a director; provided, however, that
this Article VII shall not limit or eliminate the liability of
a director to the extent provided by applicable law for
(i) breach of a director's duty of loyalty to the corporation
or its shareholders; (ii) acts or omissions not in good
II-2
<PAGE>
faith or that involve intentional misconduct or a knowing violation
of law; (iii) violations of Section 302A.559 or 80A.23 of the
Minnesota Statutes; (iv) any transaction from which a director
derived any improper personal benefit; or (iv) any act or
omission occurring prior to the date when this provision
becomes effective.
The provisions of this Article VII shall not be deemed to limit
or preclude indemnification of a director by this corporation
for any liability of a director which has not been eliminated
by the provisions of this Article VII.
If the Minnesota Statutes hereinafter are amended to authorize
the further elimination or limitation of the liability of
directors, then the liability of a director of the corporation
in addition to what is provided herein, shall be further
eliminated or limited to the fullest extent permitted by the
Minnesota Statutes as so amended.
Any amended or repeal of this Article VII shall be prospective
only and shall not adversely affect any limitation of the
personal liability of a director of the corporation existing at
the time or such repeal or limitation.
Section 302A.521 of the Minnesota Statutes requires the Company to
indemnify a person made or threatened to be made a party to a proceeding by
reason of the former or present official capacity of the person with respect
to the Company, against judgments, penalties, fines, including reasonable
expenses, if such person: (1) has not been indemnified by another
organization or employee benefit plan for the same judgments, penalties,
fines, including without limitation, excise taxes assessed against the person
with respect to an employee benefit plan, settlements, and reasonable
expenses, including attorneys' fees and disbursements, incurred by the person
in connection with the proceeding with respect to the same acts or omissions;
(2) acted in good faith; (3) received no improper personal benefit, and
statutory procedure has been followed in the case of any conflict of interest
by a director; (4) in the case of a criminal proceeding, had no reasonable
cause to believe the conduct was unlawful; and (5) in the case of acts or
omissions occurring in the person's performance in the official capacity of
director or, for a person not a director, in the official capacity of
officer, committee member, employee or agent, reasonably believed that the
conduct was in the best interests of the Company, or, in the case of
performance by a director, officer, employee or agent of the Company as a
director, officer, partner, trustee, employee or agent of another
organization or employee benefit plan, reasonably believed that the conduct
was not opposed to the best interests of the Company. In addition, Section
302A.521, subd. 3, requires payment by the Company, upon written request, of
reasonable expenses in advance of final disposition in certain instances. A
decision as to required indemnification shall be made by a disinterested
majority of the Board of Directors present at a meeting at which a
disinterested quorum is present, or by a designated committee of the Board of
Directors, by special legal counsel, by the shareholders or by a court.
Article VI of the Registrant's Bylaws set forth the rights of directors,
officers and employees of the Registrant to indemnification and the
procedures related thereto. In addition, the Bylaws provide that the right
of such persons to indemnification shall not be exclusive of any other right
of indemnification of such person, authorize the Registrant to obtain
directors and officer's liability insurance and authorize the Registrant to
enter into indemnification agreements with its directors.
II-3
<PAGE>
The Registrant maintains a policy of directors and officers liability
insurance which reimburses the Registrant for expenses which may be incurred
in conjunction with the foregoing indemnity provision.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
4.1 Articles of Merger of MacUSA and Jaguar Newco Inc. effective May 9,
1995 (incorporated herein as Exhibit No. 2.1 in (1) below).
4.2 Amendment to Articles of Incorporation of the Registrant effective May
9, 1995 (incorporated herein as Exhibit No. 3.1 in (2) below).
4.3 Amendment to Articles of Incorporation of the Registrant effective
July
11, 1995 (incorporated herein as Exhibit No. 3.1 in (3) below).
4.4 Bylaws of the Registrant (incorporated herein as Exhibit No. 3.2 in
(3) below).
4.5 Amendment to Bylaws of the Registrant effective December 7, 1995
(incorporated herein as Exhibit No. 3.3 in (1) below).
5.1 Opinion of Larkin, Hoffman, Daly & Lindgren, Ltd. (filed herewith).
10.59 Tech Squared Inc. Nonqualified Stock Option Agreement made
effective the 31st day of May, 1998, between Tech Squared and Joel
A. Ronning (filed herewith).
23.1 Consent of Indepent Public Accountants (filed herewith).
23.2 Consent of Larkin, Hoffman, Daly & Lindgren, Ltd. (included in
Exhibit 5.1 to this registration statement).
- -------------------------------------------------------------------------------
(1) The Registrant's Annual Report on Form 10-KSB for the year ended
December 31, 1995.
(2) The Registrant's Current Report on Form 8-K filed May 1995.
(3) The Registrant's Report on Form 10-KSB for the Transition Period from
June 1, 1994 to December 31, 1994.
ITEM 9. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement:
a. To include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933;
b. 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;
c. 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:
II-4
<PAGE>
Provided, however, that Paragraphs (a)(1)(a) and (a)(1)(b) do not apply
if the Registration Statement is on Form S-3, Form S-8 or Form F-3 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 Section 15(d) of the Securities Exchange Act of 1934 that
are incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment
shall be deemed to be a new Registration Statement relating to the
securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial BONA FIDE offering
thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act of 1933,
each filing of the Registrant's annual report pursuant to Section 13(a)
or Section 15(d) of the Securities Exchange Act of 1934 (and, where
applicable, each filing of an employee benefit plan's annual report
pursuant to section 15(d) of the Securities Exchange Act of 1934) that
is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall
be deemed to be the initial BONA FIDE offering thereof.
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.
II-5
<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 Edina, State of Minnesota, on July
29, 1998.
TECH SQUARED INC.
By: /s/ Richard J. Apple
----------------------------------
Richard J. Apple
Its: Chief Executive Officer (Principal
Executive Officer)
POWER OF ATTORNEY
The officers and directors of Tech Squared Inc., whose signatures appear
below, hereby constitute and appoint Joel A. Ronning and Richard J. Apple,
and each of them (with full power to each of them to act alone) their true
and lawful attorneys-in-fact to sign and execute on behalf of the undersigned
any amendment or amendments to this registration statement of Tech Squared
Inc., and each of the undersigned does hereby ratify and confirm all that
said attorneys shall do or cause to be done by virtue thereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<S> <C> <C>
/s/ Joel A. Ronning Chairman July 30, 1998
----------------------- --
Joel A. Ronning
Chief Executive Officer (Principal July 29, 1998
/s/ Richard J. Apple Executive Officer) --
-----------------------
Richard J. Apple
/s/ Chuck Reese President, Chief Operating Officer July 30, 1998
----------------------- and Director --
Chuck Reese
/s/ Jeffrey L. Abramovitz Chief Financial Officer and Corporate July 30, 1998
----------------------- Secretary (Principal Accounting and --
Jeffrey L. Abramovitz Financial Officer)
/s/ Richard Runbeck Director July 30, 1998
----------------------- --
Richard Runbeck
</TABLE>
S-1
<PAGE>
TECH SQUARED INC.
INDEX TO EXHIBITS
FILED WITH REGISTRATION STATEMENT ON FORM S-8
NONQUALIFIED STOCK OPTION PLAN
<TABLE>
<CAPTION>
Exhibit No. Description
- ----------- ------------
<S> <C>
5.1 Opinion of Larkin, Hoffman, Daly & Lindgren, Ltd.
10.59 Tech Squared Inc. Nonqualified Stock Option Agreement made
effective the 31st day of May, 1998, between Tech Squared Inc.
and Joel A. Ronning.
23.1 Consent of Independent Public Accountants
23.2 Consent of Larkin, Hoffman, Daly & Lindgren, Ltd. is contained in
Exhibit 5.1 to this Registration Statement
</TABLE>
E-1
<PAGE>
Exhibit 5.1
Opinion of Larkin, Hoffman, Daly & Lindgren, Ltd.
August 4, 1998
Tech Squared Inc.
5198 West 76th Street
Edina, MN 55439
Gentlemen:
You have requested our opinion with respect to certain matters in connection
with the filing by Tech Squared Inc. (the "Company") of a Registration
Statement on Form S-8 (the "Registration Statement") with the Securities and
Exchange Commission covering the sale of up to 1,000,000 shares of the
Company's Common Stock (the "Shares") upon exercise of stock options
(collectively, the "Options") issued pursuant to the Tech Squared Inc.
Nonqualified Stock Option Agreement made effective the 31st day of May, 1998,
between Tech Squared Inc. and Joel A. Ronning (the "NOA").
In connection with this opinion, we have examined and relied upon the
Registration Statement and related Prospectus, the NOA, the Company's
Articles of Incorporation and Bylaws, as amended, and such other records,
documents, certificates, memoranda and other instruments as in our judgment
are necessary or appropriate to enable us to render the opinion expressed
below. We have assumed the genuineness and authenticity of all documents
submitted to us as originals, the conformity to originals of all documents
submitted to us as copies thereof, and the due execution and delivery of all
documents where due execution and delivery are a prerequisite to the
effectiveness thereof.
On the basis of the foregoing, and in reliance thereon, we are of the opinion
that:
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 issuable will be validly authorized on the dates of exercise, (b) the
Options will have been duly executed, issued and delivered and 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 its terms, (c) no change occurs in the applicable
law or the pertinent facts after the date of this letter, when (d) the
pertinent provisions of applicable state and federal securities laws as may
be applicable have been complied with, and (e) the Options are exercised in
accordance with the terms of the NOA, the Shares of Common Stock issuable
will be validly issued, fully paid and nonassessable.
This opinion is intended solely for your benefit and is not to be made
available to or be relied upon by any other person, firm or entity without
our prior written consent.
We consent to the filing of this opinion as an exhibit to the Registration
Statement.
Sincerely,
/s/ Larkin, Hoffman, Daly & Lindgren, Ltd.
LARKIN, HOFFMAN, DALY & LINDGREN, Ltd.
<PAGE>
EXHIBIT 10.59
TECH SQUARED INC.
NONQUALIFIED STOCK OPTION AGREEMENT
THIS AGREEMENT is made effective the 31st day of May, 1998, between TECH
SQUARED INC., a Minnesota corporation (the "Corporation"), and JOEL A.
RONNING (the "Optionee").
RECITALS
WHEREAS, the Corporation desires to improve individual performance by
providing long-term incentives and rewards to certain employees, directors
and/or consultants of the Corporation; and
WHEREAS, the Corporation desires to attract, retain and motivate certain
employees, directors and/or consultants with experience and ability; and
WHEREAS, the Corporation desires to align the interests of such persons
with those of the Corporation's shareholders.
NOW, THEREFORE, in consideration of the promises and covenants contained
herein, the Corporation and the Optionee hereby agree as follows:
1.) GRANT OF OPTION - The Corporation hereby grants to the Optionee,
effective as of January 12, 1998 (the "Grant Date"), an option (the "Option")
to purchase an aggregate of One Million (1,000,000) shares of Common Stock
upon the terms and conditions set forth in this Agreement. The shares of
Common Stock subject to the Option are hereinafter referred to as the "Option
Shares." The Option IS NOT intended to qualify as an "Incentive Stock
Option" under Section 422 of the Internal Revenue Code of 1986, as amended
(the "Code"). This Option is not granted pursuant to any stock option plan.
2.) OPTION PRICE - Subject to any adjustments pursuant to the
provisions of this Agreement, the purchase price for the shares subject to
the Option is One and 50/100 Dollars ($1.50) per share (the "Option Price"),
which price is not less than one hundred percent (100%) of the Fair Market
Value (as hereinafter defined) of a single share of Common Stock as of the
Grant Date.
3.) TERM OF OPTION; TIME OF EXERCISE -
(a) The Option shall expire September 1, 2004.
(b) The Option shall be immediately vested and shall become exercisable
in full as of September 1, 1998;
(c) The Option may be exercised only to the extent the Option has
vested at the time of exercise of the Option;
4.) EXERCISE OF OPTION - MANNER -
(a) Subject to the terms and conditions hereof, the Option may be
exercised in whole or in part by written notice to the Company at its
offices in Edina, Minnesota, addressed to the attention of the Chief
Financial Officer. Such notice will state the election to exercise the
Option and the number of
<PAGE>
Option Shares being purchased, provided that the shares shall be purchased
in increments of one hundred (100) shares, and will be signed by the
person or persons so exercising the Option. The exercise of the Option
will be conditioned upon the receipt from the Optionee (or his heir(s) or
legal representative(s)) of a representation that, at the time of such
exercise, it is the intent of such person(s) to acquire the Option Shares
for investment and not with a view to distribution; provided, however,
that the receipt of this representation will not be required upon exercise
of the Option in the event that, at the time of such exercise, the Option
Shares are covered by an effective registration statement under the
Securities Act of 1933, as amended. The certificates for unregistered
shares issued for investment will be restricted by the Company as to
transfer unless the Company receives an opinion of counsel satisfactory to
the Company that such restriction is not necessary.
(b) Notice of exercise of the Option will be accompanied by payment of
the full Option Price of the Option Shares being purchased, and the
Company will issue and deliver a certificate or certificates representing
such shares as soon as practicable after such notice and payment are
received. Payment of such Option Price will be made (a) by a check payable
to the order of the Company, (b) subject to acceptance by the Board, by
the transfer from the Optionee to the Company of previously acquired
Common Shares of the Company, issued and outstanding for at least six (6)
months prior to exercise, having a then-current aggregate Fair Market
Value, determined as of the close of business on the business day
preceding the transfer, equal to the Option Price of the shares as to
which the Option is exercised, or (c) subject to acceptance by the Board,
by any combination of check payment and transfer of previously acquired
Common Shares. The certificate or certificates for the shares as to which
the Option has been so exercised will be registered in the name of the
Optionee (or his heir(s) or legal representative(s)) and will be delivered
as aforesaid to or upon the written order of such person(s). In the event
the Option is exercised by any person(s) other than the Optionee, such
notice will be accompanied by appropriate proof of the authority and right
of such person(s) to exercise the Option. All shares purchased upon the
exercise of the Option will be fully paid and nonassessable.
5.) ADJUSTMENTS FOR CHANGES IN COMMON STOCK - In the event that
outstanding Common Shares (other than shares held by dissenting
shareholders) should be changed into, or exchanged for, a different number
or kind of shares of stock or other securities of the Company, or if
further changes or exchanges of any stock or other securities into which
the Common Shares have been changed, or for which they have been
exchanged, are made (whether by reason of merger, consolidation,
reorganization, recapitalization, stock dividend, reclassification, split
up, combination of shares or otherwise), then for each Common Share
subject to the Option there will be substituted and exchanged therefor the
number and kind of shares of stock or other securities into or for which
each outstanding Common Share (other than shares held by dissenting
shareholders) is so changed or exchanged. In the event of any such
changes or exchanges, if the Board, in its sole discretion, should
determine that in order to prevent dilution or enlargement of rights
hereunder an adjustment should be made in the number, kind, or option
exercise price of the shares or other securities then subject to the
Option, such adjustment shall be made and shall be effective and binding
for all purposes of this Agreement. In no event shall the excess of the
aggregate Fair Market Value of the shares subject to the Option
immediately after any substitution, exchange, or adjustment over the
aggregate option price of such shares be more than the excess of the
aggregate Fair Market Value of all shares subject to the Option
immediately before the substitution, assumption, or exchange over the
aggregate option price of such shares, nor shall the adjusted Option give
the Optionee any additional benefits that the Optionee did not have under
the old Option.
<PAGE>
6.) NONTRANSFERABILITY OF OPTION - The Option granted under this
Agreement is not transferable by the Optionee, either voluntarily or
involuntarily, except by will or the laws of descent and distribution.
Any attempt to do so will void the Option. The Option is exercisable only
by the Optionee or the Optionee's legal representative.
7.) NO OBLIGATION TO EXERCISE OPTION - The granting of the Option shall
impose no obligation upon the Optionee to exercise the Option. Nothing in
this Agreement confers upon the Optionee any rights respecting continued
employment or limits the Optionee's rights or the Corporation's rights to
terminate such employment.
8.) RIGHTS AS A SHAREHOLDER - No rights of a shareholder of the Company
will inhere in the Optionee with respect to any of the Option Shares until
this Option is duly exercised as to such shares and the person has become
holder of record of such shares. No adjustments will be made for cash
dividends or other distributions or other rights as to which there is a
record date preceding the date such person becomes the holder of record of
such shares.
9.) WITHHOLDING TAXES - The Optionee acknowledges that under the law in
effect as of the date of this Agreement, he will generally realize income
for federal and state income tax purposes at the time of the exercise of
the Option, and further, that such income may constitute compensation
subject to withholding of income taxes. At the time of any exercise of
the Option, the Optionee will make arrangements with Company to satisfy
any withholding tax obligations resulting from the exercise of the Option.
10.) GOVERNING LAW - This Agreement will be construed in accordance with
and governed by the laws of the State of Minnesota.
11. FAIR MARKET VALUE - Fair Market Value is defined and determined as
follows: (a) if the Company's Common Stock is listed for trading on one
or more national securities exchanges or is quoted on the NASDAQ National
Market, the reported last sales price on such principal exchange or system
on the date in question (if such Common Stock shall not have been traded
on such principal exchange on such date, the reported last sales price on
such principal exchange on the first day prior thereto on which such
Common Stock was so traded); or (b) if the Common Stock is not listed for
trading on a national securities exchange and is not quoted on the NASDAQ
National Market but is quoted on the NASDAQ Small Cap System or is
otherwise traded in the over-the-counter market, the mean of the highest
and lowest bid prices for such Common Stock on the date in question (if
there are no such bid prices for such Common Stock on such date, the mean
of the highest and lowest bid prices on the first day prior thereto on
which such prices existed); or (c) if neither (a) nor (b) is applicable,
by any means deemed fair and reasonable by the Board of Directors, which
determination shall be final and binding on all parties.
12.) REPRESENTATIONS - The Optionee acknowledges and represents as follows:
(a) The Option and any Option Shares acquired pursuant to exercise of the
Option are being acquired for the Optionee's own account and for
investment and not with the view to, or for resale in connection with, any
distribution or public offering of the Option Shares within the meaning of
the Act or any applicable state securities laws.
(b) The Optionee understands that:
<PAGE>
(1) Neither the Option nor the Option Shares to be issued upon
exercise of the Option have been registered for offering or sale
under the Act or any state securities laws;
(2) The Option and the Option Shares have not been registered
under the Act or any state securities laws by reason of their
contemplated issuance in transactions exempt from the registration
requirements of such laws, and the reliance of the Corporation upon
such exemptions is predicated upon the representations, warranties
and covenants of the Optionee;
(3) The Option Shares may not be transferred or resold without
registration under the Act and any applicable state securities laws or
the existence of an exemption from those registration requirements;
(4) The records of the Corporation will be marked to prevent any
proposed transfer of the Option Shares until there is compliance
with the registration requirements of the Act and any applicable
state securities laws, or until the Corporation is satisfied that an
exemption from such registration requirements is applicable to any
proposed transfer and the terms;
(5) The certificates issued to evidence the Option Shares will bear
a legend describing the existence of the restrictions on the transfer
of the shares imposed as a result of the registration requirements
of the Act and applicable state securities laws; and
(6) The Corporation has not agreed to register the Option or the
Option Shares for distribution under the provisions of the Act or
applicable state securities laws, and has not agreed to comply with
any exemption under the Act or applicable state securities laws for
the resale of the Option Shares.
(c) By reason of the Optionee's knowledge and experience in financial and
business matter in general, and investments in particular, the Optionee is
capable of evaluating the merits and risks of an investment in the Option
Shares.
(d) The Optionee realizes that the acquisition of the Option Shares is a
long-term investment, and the Optionee must bear the economic risk of such
investment for an indefinite period of time.
(e) Notwithstanding any of the other provisions of this Agreement,
the Optionee shall not exercise the Option, and the Corporation will not
be obligated to issue the Option Shares to the Optionee hereunder, if the
exercise of the Option or the issuance of the Option Shares will constitute
a violation by the Optionee or the Corporation of any provisions of any law
or regulation of any governmental authority.
IN WITNESS WHEREOF, the Corporation and the Optionee have executed this
Agreement as of the day and year first above written.
CORPORATION: OPTIONEE:
TECH SQUARED INC.
By: /s/ Chuck Reese /s/ Joel A. Ronning
------------------------- ---------------------
Its: President, COO Joel A. Ronning
<PAGE>
Exhibit 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated March 6, 1998
included in Tech Squared Inc.'s Form 10-K for the year ended December 31,
1997 and to all references to our Firm included in this registration statement
/s/ ARTHUR ANDERSEN LLP
ARTHUR ANDERSEN LLP
Minneapolis, Minnesota
August 4, 1998
