-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, VLCsM4xIsQw/T3+hVo96tM/aYc1LqIG7ZrAqUqBPjGYlvAixW6mvP76I+FCEEkVF 2qAShUOzjHypCvweB1Z8tw== 0001116502-01-500311.txt : 20010430 0001116502-01-500311.hdr.sgml : 20010430 ACCESSION NUMBER: 0001116502-01-500311 CONFORMED SUBMISSION TYPE: S-8 PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 20010427 EFFECTIVENESS DATE: 20010427 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SINGING MACHINE CO INC CENTRAL INDEX KEY: 0000923601 STANDARD INDUSTRIAL CLASSIFICATION: PHONOGRAPH RECORDS & PRERECORDED AUDIO TAPES & DISKS [3652] IRS NUMBER: 953795478 STATE OF INCORPORATION: DE FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: S-8 SEC ACT: SEC FILE NUMBER: 333-59684 FILM NUMBER: 1613313 BUSINESS ADDRESS: STREET 1: 6601 LYONS ROAD STREET 2: BLDG A-7 CITY: COCONUT CREEK STATE: FL ZIP: 33073 BUSINESS PHONE: 9545961000 MAIL ADDRESS: STREET 1: 6601 LYONS ROAD BLDG CITY: COCONUT CREEK STATE: FL ZIP: 33073 S-8 1 s8-singingmachine.txt REGISTRATION STATEMENT As filed with the Securities and Exchange Commission on April 27, 2001 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM S-8 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 THE SINGING MACHINE COMPANY, INC.. ---------------------------------- (Exact Name of Registrant as Specified in its Charter) Delaware 95-3795478 - -------- ---------- (State or Jurisdiction of (I.R.S. Employer Incorporation or Organization) Identification No.) 6601 Lyons Road, Bldg. A-7 Coconut Creek, FL 33073 ----------------------- (Address of Principal Executive Office) The Singing Machine Company, Inc. Amended and Restated 1994 Management Stock Option Plan ------------------------------------------------------ (Full Title of the Plan) John Klecha 6601 Lyons Road, Bldg. A-7 Coconut Creek, FL 33073 ----------------------- (Name and Address of Agent for Service) CALCULATION OF REGISTRATION FEE
Proposed Maximum ------------------------ Title of Each Class of Amount Offering Aggregate Securities to be to be Price Per Offering Amount of Registered Registered Share Price Registration Fee - ------------------------- ----------------- ----------- ------------ ------------------- Common Stock (1) 425,500 $0.43 $ 182,965 $ 45.74 Common Stock (2) 104,000 $1.66 $ 172,640 $ 43.16 Common Stock (3) 685,500 $3.06 $ 2,097,630 $ 524.41 Common Stock (4) 14,500 $4.90 $ 71,050 $ 17.76 - ---------------- -------- ----- ------------ -------------- Total Registration Fee $ 631.07 - ------------------------------------------------------------------------------
(1) Calculated in accordance with Rule 457 based upon the price at which outstanding options can be exercised. (2) Calculated in accordance with Rule 457 based upon the price at which the outstanding options can be exercised. (3) Calculated in accordance with Rule 457 based upon the price at which the outstanding options can be exercised. (4) Calculated in accordance with Rule 457 based upon the price at which the outstanding options can be exercised. PART 1. INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS EXPLANATORY NOTE The Singing Machine Company, Inc. (the "Company," "we" or "us") has prepared this Registration Statement on Form S-8 under the Securities Act of 1933, as amended to register 1,229,500 shares of our common stock, which will be awarded to eligible persons pursuant to options granted under our Amended and Restated 1994 Management Stock Option Plan (the "Plan"). ITEM 1. PLAN INFORMATION The documents containing the information specified in Part I of Form S-8 will be sent or given to participants in our Amended and Restated 1994 Management Stock Option Plan as specified by Rule 428(b)(1) under the Securities Act. Such documents are not filed with the Securities and Exchange 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 this Registration Statement pursuant to Item 3 of Part II of this Registration Statement, taken together, constitute a prospectus that meet the requirements of Section 10(a) of the Securities Act relating to the 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 participants pursuant to Rule 428(b) or additional information about our Plan and its administrators are available without charge by contacting: The Singing Machine Company, Inc. 6602 Lyons Road, Bldg. A-7 Coconut Creek, FL 33073 John Klecha, Chief Financial Officer (954) 596-1000 2 PART II INFORMATION REQUIRED IN REGISTRATION STATEMENT Item 3. Incorporation of Documents by Reference - ----------------------------------------------- The SEC allows us to "incorporate by reference" the information we file with them, which means that we can disclose important information to you by referring you to documents we file with the SEC. The information incorporated by reference is considered to be part of this Registration Statement. Information that we file later with the SEC will automatically update and supersede this information. We incorporate by reference the documents listed below and any documents subsequently filed by us pursuant to Section 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), until all the shares covered by this Registration Statement have been sold or deregistered: o Annual Report on Form 10-KSB for the year ended March 31, 2000, filed on June 30, 2000; o Quarterly Report on Form 10-QSB for the quarter ended June 30, 2000, filed on August 2, 2000; o Quarterly Report on Form 10-QSB for the quarter ended September 30, 2000, filed on November 14, 2000; o Quarterly Report on Form 10-QSB for the quarter ended December 31, 2000, filed on February 14, 2001; o Current Report on Form 8-K filed August 11, 2000; o Current Report on Form 8-K filed November 30, 2000; o Current Report on Form 8-K filed January 5, 2001; o Proxy Statement filed July 28, 2000. o All other reports filed pursuant to Section 13(a) or 15(d) of the Exchange Act since the end of the fiscal year covered by the Registrant's document referred to in (a) above; and o The description of our common stock contained in our Registration Statement on Form 8-A filed with the SEC on October 19, 1994 and Amendment No. 1 to the Registration Statement on Form 8-A filed with the SEC on March 2, 2001 and any amendment thereto; 3 We hereby undertake to provide without charge to each person, including any beneficial owner, to whom a copy of the prospectus has been delivered, on the written request of any such person, a copy of any or all of the documents referred to above which have been or may be incorporated by reference in this prospectus, other than exhibits to such documents. Written requests for such copies should be directed to John Klecha, Chief Financial Officer, The Singing Machine Company, Inc., 6601 Lyons Road, Bldg. A-7, Coconut Creek, FL 33073. Item 4. Description of Securities - --------------------------------- Not Applicable. Item 5. Interests of Named Experts and Counsel - ---------------------------------------------- Not Applicable. Item 6. Indemnification of Directors and Officers - ------------------------------------------------- As a Delaware corporation, we are subject to the Delaware General Corporation Law. Section 102(b)(7) of Delaware law enables a corporation in its certificate of incorporation to eliminate or limit personal liability of members of its Board of Directors for monetary damages for breach of a director's fiduciary duty of care. Article 10 of our Certificate of Incorporation provides that a director shall not be personally liable to us or our stockholders for monetary damages for breach of fiduciary duty as a director, except for liability (i) for any breach of the director's duty of loyalty to us or our stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the General Corporation Law of Delaware or (iv) for any transaction from which the director derived an improper personal benefit and contains a comparable provision. Section 145 of Delaware law permits a corporation organized under Delaware law to indemnify directors and officers with respect to any matter in which the director or officer acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the company, and with respect to any criminal action or proceeding, he had no reasonable cause to believe his conduct was unlawful. Article VI of our Bylaws provides that our officers, directors, employees or agent shall be indemnified to the full extent permitted by Delaware law. Article VI also provides that we may advance expenses to a director if he prior to the final disposition of the action. However, if required under Delaware law, we may require an officer or director to give us an undertaking in advance of the final disposition that he will repay all amounts so advanced, if it shall ultimately be determined that such officer or director is not entitled to be indemnified under these by-laws or otherwise. The above discussion of Delaware law and our certificate of incorporation and bylaws is not intended to be exhaustive and is qualified in its entirety by our certificate of incorporation, bylaws and Delaware law. 4 Insofar as indemnification for liabilities arising under the Securities Act of 1933, as amended, may be permitted to our directors, officers and controlling persons pursuant to the foregoing provisions, or otherwise, we have been advised that in the opinion of the Securities and Exchange Commission, this indemnification is against public policy as expressed in the securities laws, and is, therefore unenforceable. Item 7. Exemption From Registration Claimed - ------------------------------------------- Not Applicable. Item 8. Exhibits - ---------------- 5.1 Opinion and Consent of English, McCaughan & O'Bryan, P.A. 10.1 Amended and Restated 1994 Management Stock Option Plan* 23.1 Consent of Weinberg & Company, P.A.* 23.2 Consent of English, McCaughan & O'Bryan, P.A. (Contained in Exhibit 5.1) - --------------------- * Filed herewith. Item 9. Undertakings - -------------------- A. We hereby undertake to: (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 n 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 end 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 a 20% 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; 5 Provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the Registration Statement is on Form S-3 or 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 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. C. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers, and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act against such liabilities (other than the payment by the registrant in the successful defense of an 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. 6 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, The Singing Machine Company, Inc. 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 on Form S-8 to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Coconut Creek, State of Florida, on April 25, 2001. THE SINGING MACHINE COMPANY, INC. By: /s/ John F. Klecha ----------------------------------------------- John F. Klecha, Chief Financial Officer Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement on Form S-8 has been signed below by the following persons in the capacities and on the dates indicated.
Signature Title Date - --------- ----- ---- /s/ Edward Steele Chairman of the Board of Directors and - ---------------------------- Chief Executive Officer April 25, 2001 Edward Steele /s/ John F. Klecha President, Chief Operating Officer, - ---------------------------- Chief Financial Officer, Treasurer, April 25, 2001 John F. Klecha Secretary and Director /s/ Josef A. Bauer Director April 25, 2001 - ----------------------------- Josef A. Bauer /s/ Howard Moore Director April 25, 2001 - -------------------------- Howard Moore /s/ Robert Weinberg Director April 25, 2001 - -------------------------- Robert Weinberg
7 EX-5.1 2 ex5-1.txt OPINION AND CONSENT EXHIBIT 5.1 ENGLISH, MCCAUGHAN & O'BRYAN 100 N.E. Third Ave., Suite 1100 Ft. Lauderdale, FL 33301 The Singing Machine Company, Inc. 6601 Lyons Road, Bldg. A-7 Coconut Creek, FL 33073 Re: Registration Statement on Form S-8 (the "Registration Statement"); The Singing Machine Company, Inc. (the "Company") Amended and Restated 1994 Management Stock Option Plan Ladies and Gentlemen: This opinion is submitted pursuant to the applicable rules of the Securities and Exchange Commission ("Commission") with respect to the registration by The Singing Machine Company, Inc., a Delaware corporation (the "Company") of an aggregate of 1,229,500 shares of common stock of the Company (the "Shares"). The Shares are covered by the Registration Statement and consist of 1,229,500 shares of the Company's common stock to be issued upon the exercise of options to be granted under the Plan. In our capacity as counsel to the Company, we have examined the original, certified, conformed, photostat or other copies of the Company's Certificate of Incorporation, By-Laws, the Plan and various other agreements and corporate minutes provided to us by the Company and such other documents and instruments as we deemed necessary. In all such examinations, we have assumed the genuineness of all signatures on original documents, and the conformity to originals or certified documents of all copies submitted to us as conformed, photostat or other copies. In passing upon certain corporate records and documents of the Company, we have necessarily assumed the correctness and completeness of the statements made or included therein by the Company, and we express no opinion thereon. Subject to and in reliance upon the foregoing, we are of the opinion that the Shares to be issued upon exercise of options granted under the Plan, when issued in accordance with the terms thereof, will be validly issued, fully paid and non-assessable. We hereby consent to the use of this opinion in the Registration Statement on Form S-8 to be filed with the Commission. Very truly yours, /s/ ENGLISH, McCAUGHAN & O'BRYAN, P.A. Date: April 27, 2001 EX-10.1 3 ex10-1.txt AMENDED AND RESTATED STOCK OPTION PLAN EXHIBIT 10.1 THE SINGING MACHINE COMPANY, INC. AMENDED AND RESTATED 1994 MANAGEMENT STOCK OPTION PLAN Section 1. Purpose. ------------------- This Amended and Restated 1994 Stock Option Plan is intended to provide incentives: (a) to the officers and other employees of the Singing Machine Company, Inc. or any of its present or future subsidiaries by providing such employees with opportunities to purchase stock in The Singing Machine Company, Inc., pursuant to options granted hereunder that qualify as "Incentive Stock Options" under Section 422(b) of the Internal Revenue Code of 1986, as amended; and (b), to directors, officers, employees, advisors and consultants of The Singing Machine Company, Inc. or any of its present or future subsidiaries by providing such persons with opportunities to purchase stock in The Singing Machine Company, Inc., pursuant to options granted hereunder which do not qualify as "incentive stock options." Section 2. Definitions. ----------------------- (a) "Agreement" shall have the meaning ascribed to the term as set forth in Section 6 hereof. (b) "Board of Directors" means the Board of Directors of the Company or any Subsidiary. (c) "Common Stock" means the common stock, $.01 par value per share, of the Company. (d) "Company" means, The Singing Machine Company, Inc., a Delaware corporation. (e) "Employee" means every individual performing services for the Company or any Subsidiary if the relationship between him and the person for whom he performs such services is the legal relationship of employer and employee as determined in accordance with Section 3401(c) of Internal Revenue Code and Treasury Regulations promulgated thereunder. A member of the Board of Directors in his sole capacity as such is not an Employee. (f) "Incentive Stock Option" means a right granted pursuant to this Plan to purchase Common Stock that satisfies the requirements of Section 422 of the Internal Revenue Code. (g) "Internal Revenue Code" means the Internal Revenue Code of 1986, as amended. (h) "Non-Employee Director" means every member of the Board of Directors who is not also an Employee of the Company or any Subsidiary. 1 (i) "Nonqualified Stock Option" means a right granted pursuant to this Plan to purchase Common Stock that does not satisfy the requirements of Section 422 of the internal Revenue Code. (j) "Option" means a right granted pursuant to this Plan to purchase Common Stock which may be either an Incentive Stock Option or a Nonqualified Stock Option as determined by the Board of Directors. (k) "Optionee" means an individual who has received an option under the Plan. (1) "Plan" means this stock option plan authorizing the granting of stock Options. (m) "Plan Administrators" shall have the meaning ascribed to the term as set forth in Section 5 hereof. (n) "Reserved Shares" shall have the meaning ascribed to the term as set forth in Section 3 hereof. (o) "Subsidiary" means any corporation (other than the Company) in an unbroken chain of corporations beginning with the company if, at the time the Option is granted, each of the corporations other than the last corporation in the unbroken chain owns 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. Section 3. Shares Subject to the Plan. -------------------------------------- Subject to adjustments pursuant to section 8 of the Plan, no more than One Million Three Hundred Thousand shares (1,300,000) in the aggregate of the Company's Common Stock (the "Reserved Shares") may be issued pursuant of the Plan to eligible participants. The number of the Reserved Shares shall be reduced by the number of options granted under the Plan. The Reserved Shares may be made available from authorized but unissued Common Stock of the Company, from Common Stock of the Company held as treasury stock, from any shares which may become available due to the expiration, cancellation or other termination of any Option previously granted by the Company, or from any combination of the foregoing. Section 4. Eligibility ---------------------- The individuals eligible to receive Options under this Plan shall be such valued Employees, Non-Employee Directors, advisors or consultants of the Company or any, Subsidiary, as the Board of Directors may from time to time determine and select. Non-Employee Directors, advisors and consultants shall only be eligible to receive Nonqualified Stock Options. Employees shall be eligible to receive both Incentive Stock Options and Nonqualified Stock Options. An Optionee may hold more than one Option. No Employee of the Company or any Subsidiary is eligible to receive any Incentive Stock Options if such employee, at the time the option is granted, owns, beneficially or of record, in excess of the outstanding voting stock of the Company or a Subsidiary; provided, however, that such employee will be eligible to receive an Incentive Stock Option if at the time such 2 Option is granted the Option price is at least 110% or the fair market value (determined with regard to Section 422 (c) (7) of the Internal Revenue Code) of the, stock subject to the option and such option by its terms is not exercisable after the expiration of five (5) years from the date such Option is granted. Pursuant to Section 422(d) of the Internal Revenue Code, no Option granted pursuant to this Plan shall be treated as an Incentive Stock Option to the extent that the aggregate fair market value (determined at the time the Option was granted) or common stock with, respect to which Options (that otherwise qualify as Incentive Stock Options) are exercisable for the first time by an Employee during any calendar year (under all plans of the Company and its Subsidiaries) exceeds $100,000. Section 5. Administration of the Plan. -------------------------------------- (a) The Plan shall be administered by the Board of Directors, or by a committee appointed by the Board of Directors (the "Plan Administrators"). (b) The Plan Administrators shall have the power, subject to, and within the limits of the express provisions of the Plan: (i) To determine from time to time which eligible persons shall be granted options under the Plan, and the time when any Option shall be granted to them; (ii) To determine the number of Options to be granted to any person; (iii) To grant Incentive Stock Options, Nonqualified Stock Options, or both, under the Plan to such persons; (iv) To determine the duration and purposes of leaves of absence which may be granted to Optionees without constituting a termination of their employment for purposes of the Plan; (v) To prescribe terms and provisions of each Option granted under the Plan (which need not be identical) (vi) To determine the maximum period during which options may be exercised; (vii) To construe and interpret the Plan and Options granted under it, and to establish, amend, and revoke rules and regulations for its administration; and (viii) Generally, to exercise such, powers and to perform such acts as are deemed necessary or expedient to promote the best interests of the Company with respect to the Plan. (c) The Plan Administrators, in the exercise of these powers, may correct any defect or supply any omission, or reconcile any inconsistency in the Plan, or in any option, in the manner and to the extent it shall deem necessary or expedient to make the Plan fully effective. All determinations 3 of the Plan Administrators shall be made by majority vote. Subject to any applicable provisions of the Company or Bylaws, all decisions made by the Plan Administrators pursuant, to the provisions of the Plan and related orders or resolutions of the Plan Administrators shall be final, conclusive and binding on all persons, including the company, stockholders of the Company, Employees and Optionees. (d) The Plan Administrators may designate the Secretary of the Company, or other, Employees of the Company or competent professional advisors, to assist, in the administration of this Plan and may grant authority to such, persons to execute agreements or other documents on behalf of the Plan Administrators. (e) The Plan Administrators may employ such legal counsel, consultants and agents as they may deem desirable for the administration of this Plan and may rely upon any opinion received from any such counsel or consultant and any computation received from any such consultant or agent. No present or former Plan Administrator shall be liable for any action or determination made in good faith with respect to this Plan, or any Option granted hereunder. To the maximum extent permitted by applicable law and the Company's Certificate of Incorporation and Bylaws, each present or former Plan Administrator shall be indemnified and held harmless by the Company against any cost or expenses (including counsel fees) or liability (including any sum paid in settlement of a claim with the approval of the Company) arising out of any act or omission to act in connection with this Plan unless arising out of such persons own fraud or bad faith. Such indemnification shall be in addition to any rights at indemnification the person may have as a director, officer or employee or, under the Certificate of Incorporation of the Company, the Bylaws of the Company or otherwise. Expenses incurred by the Plan administrators in the engagement of such counsel, consultant or agent shall be paid by the Company. Section 6. Option Terms and Conditions. --------------------------------------- The Options granted under the Plan shall be evidenced by written Option Agreements (the "Agreements") consistent with the terms of the Plan which shall be executed by the Company and the Optionee. The Agreements, in such form as the Plan Administrators shall from time to time approve shall, incorporate the following terms and conditions: (a) Time of Exercise. Options shall be exercisable in accordance with the terms of the Agreements as approved by the Plan Administrators, from time to time. Incentive Stock Options may be exercised only if, at all times during the period that begins on the date of the granting of the Incentive Stock Option and that ends on the day three (3) months before the date of such exercise, the Optionee was an Employee of the Company or any Subsidiary; provided, however, that if the Optionee is "disabled" within the meaning of Section 22 (c) of the Internal Revenue code, then the end of the preceding post-employment exercise period shall be extended to one (1) year. (b) Purchase Price. Except as otherwise provided in section 4 hereof, the purchase price per share of Common Stock deliverable upon the exercise of an Incentive Stock Option shall not be less than the fair market value of the Common Stock on the date the Option is granted. The purchase 4 price per share of Common Stock deliverable upon the exercise of a Nonqualified Stock Option shall be determined by the Plan Administrators in their sole discretion. (c) Method of Exercise. In order to exercise an option in whole or in part, the Optionee shall give written notice to the Company at its principal place of business of such exercise, stating the number of shares with respect to which the Option is being exercised. Such notice shall be accompanied by full payment of the purchase price thereof either (i) in cash, or (ii) at the discretion of the Plan Administrators, in whole shares of Common Stock having a fair market value equal as of the date of the exercise to the cash exercise price of the Option, or (iii) at the discretion of the Plan Administrators, by delivery of the Optionee's personal recourse note bearing interest payable not less than annually at no less than 100% of the lowest applicable federal rate, as defined in Section 1274(d) of the Internal Revenue Code, or (iv) any combination of (i), (ii) and (iii) above. If the Plan Administrators exercise their discretion to permit payment of the exercise price of any Option by means of the methods set forth in clauses (ii), (iii) or (iv) , of the preceding sentence, such discretion shall be exercised in writing at the time of the grant of the option in question. The exercise date of the Option shall be the date the Company receives such notice with any necessary accompaniments in satisfactory order. (d) Transferability. An Option shall not be transferable by the Optionee other than at death and an Option granted to such Optionee is exercisable, during his lifetime, only by such Optionee. The Agreements may also contain such other terms, provisions, and conditions consistent with the Plan and applicable provisions of the Internal Revenue Code as the Plan Administrators may determine are necessary or proper. Section 7. Rights of Stockholders and Optionee. ------------------------------------------------ An Optionee shall not deemed to be the holder of, or to have any of the rights of a holder with respect to, any shares subject to such option, unless and until: (a) the Option shall have been exercised pursuant a the terms thereof; (b) the Company shall have issued and delivered the shares to the Optionee; and (c) the Optionee's name shall have been entered as a stockholder of record on the books of the Company. Thereupon, the Optionee shall have full voting and other ownership rights with respect to such shares. Section 8. Adjustments in the Event of Changes in the ----------------------------------------------------- Capital Structure, Reorganization Anti-Dilution or -------------------------------------------------- Accounting Changes. ------------------- (a) Changes in Capital Structure. In the event of a change in the corporate structure or shares of the Company, the Plan Administrators (subject to any required action by the stockholders) shall make such equitable adjustments designed to protect against dilution as they may deem appropriate in the number and share authorized by the Plan and, with respect to outstanding Options in the number and kind of shares covered thereby and in the exercise price of such Options on the 5 dates granted. For the purpose of this Section, a change in the corporate structure or shares of the Company shall include, but is not limited to, changes resulting from a recapitalization, stock split, consolidation, rights offering, stock dividend, reorganization, or liquidation. (b) Reorganization-Continuation of the Plan. Upon the effective date of the dissolution or liquidation of the Company, or a reorganization, merger or consolidation of the Company with one or more corporations in which the Company is not the surviving corporation, or of a transfer of substantially all of the Company's assets or stockholders, the Plan and any Option previously granted under the Plan shall terminate unless provision be made in writing in connection with such transaction for the continuation of the Plan and for the assumption of the Options previously granted, or for the substitution of new options covering the shares of a successor employer corporation, or a parent or subsidiary thereof, with appropriate adjustments (in accordance with the applicable provisions of the Internal Revenue code) as to the number and kind of shares and price per share, in which event the Plan and the previously granted or new options substituted therefor shall continue in the manner and under the terms as provided. (c) Reorganization-Termination of the Plan. In the event of a dissolution, liquidation, reorganization, merger, consolidation, transfer of assets or transfer of shares, as provided in Section 9 (b) above, and if provision is not made in such transaction for the continuance of the Plan and for the assumption of Options previously granted or the substitution of new Options covering the shares of a successor employer corporation or a parent or subsidiary thereof, then an Optionee under the Plan shall be entitled to written notice prior to the effective date of any such transactions stating that rights under this option must be exercised within thirty (30) days of the date of such notice or they will be terminated. Section 9. General Restrictions. -------------------------------- Each Option shall be subject to a requirement that, if at any time the Plan Administrator shall determine, in their discretion, that the listing or qualification of the shares or other securities subject to such Option upon any securities exchange, or under any state or federal law or the consent or approval of any government regulatory body, is necessary or desirable as a condition of, or in connection with the granting thereof or the issue or purchase of shares or payments of any amount thereunder, such Option may not be exercised in whole or in part and no amounts may be received thereunder unless such listing, qualification, consent or approval shall have been effected or obtained free of any conditions unacceptable to the Plan Administrators. Section 10. Employment. ----------------------- Nothing in this Plan shall be deemed to grant any right of continued employment to a participating employee or to limit or waive any rights of the Company or its Subsidiary to terminate such employment at any time, with or without cause. 6 Section 11. Amendment. ---------------------- The Board of Directors of the Company shall have the power to amend or revise the terms of this Plan or any part thereof without further action of the stockholders; provided, however, that no such amendment shall impair any Option or deprive any Optionee of shares that may have been granted to him under the Plan without his consent; and provided, further, that no such amendment shall, without stockholder approval: (a) increase the aggregate number of the Reserved Shares for the purpose of the Plan; (b) change the class of individuals eligible to receive options under the Plan; (c) extend the maximum period during which any option may be granted or exercised; (d) reduce the Option price per share under any Option below fair market value; or (e) extend the term of the Plan. Section 12. Effective Date and Termination of Plan. --------------------------------------------------- (a) The effective date of the Plan shall be the Effective Date of the Merger of the Singing Machine Company, Inc., a California corporation, with and into The Singing Machine Company, Inc., a Delaware corporation; provided, however, in the event that the Plan is not approved by the voting stockholders of the Company on or before July 31, 1994, the Plan and all Options granted and to be granted hereunder shall be null and void and the Company shall have no obligation of any nature whatsoever to any employee or other person arising out of the Plan or any options granted or to be granted hereunder. (b) The Board of Directors of the Company may terminate the Plan at any time with respect to any shares that are not subject to Options. Unless terminated earlier by the Board of Directors, the Plan shall terminate on ten (10) years from adoption of this Plan and no options shall be granted under this Plan after it has been terminated. Termination of this Plan shall not affect the right and obligation of any Optionee with respect to Options granted prior to termination. Section 13. Withholding Taxes. ------------------------------ Whenever under the Plan shares are to be issued in satisfaction of Options granted hereunder, the Company shall have the right to require the recipient to make arrangements to remit to the Company an amount sufficient to satisfy federal, state and local withholding tax requirements, if any, prior to or following the delivery of any certificate or certificates for such shares. 7 Section 14. Qualification ------------------------- This Plan is adopted pursuant to, and is intended to comply with, the applicable provisions of the Internal Revenue Code and the regulations thereunder. Incentive Stock Options granted pursuant to this Plan are intended to be "incentive stock options" as that term is defined in Section 422 of the Internal Revenue Code and the regulations thereunder. In the event this Plan or any Incentive Stock Option granted pursuant to this Plan is in any way inconsistent with the applicable legal requirements of the Internal Revenue Code or any regulation thereunder, this Plan and any Incentive Stock Option granted pursuant to this Plan shall be deemed automatically amended as of the date hereof to conform to such legal requirements, if such conformity can be achieved by amendment. Section 15. Notice to Company of Disqualifying Disposition. ----------------------------------------------------------- Each Employee who receives an Incentive Stock Option must agree to notify the Company in writing immediately after the Employee makes a disqualifying disposition of any Common Stock acquired pursuant to the exercise of an Incentive Stock Option. For purposes of this Plan, a "disqualifying disposition" is any disposition (including any sale) of such Common Stock before the later of (i) two years after the date the Employee was granted the Incentive Stock Option, or (ii) one year after the date the Employee Acquired Common Stock by exercising the Incentive Stock Option. 8 EX-23.1 4 ex23-1.txt CONSENT OF INDEPENDENT CERTIFIED ACCOUNTANTS EXHIBIT 23.1 CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT We hereby consent to the use in the Form S-8 Registration Statement of The Singing Machine Company, Inc. our report for the years ended March 31, 2000 and 1999, dated June 12, 2000 relating to the consolidated financial statements of The Singing Machine Company, Inc. and Subsidiaries which are incorporated by reference in such Form S-8 and to the reference to our Firm under the heading "Experts" in the registration statement. /s/ WEINBERG & COMPANY, P.A. ------------------------------- WEINBERG & COMPANY, P.A. Certified Public Accountants Boca Raton, Florida April 26, 2001 -----END PRIVACY-ENHANCED MESSAGE-----