AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 19, 1995
REGISTRATION NO. 33-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
KEY TRONIC CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
WASHINGTON
(STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATION)
91-0849125
(I.R.S. EMPLOYER IDENTIFICATION NUMBER)
N. 4424 SULLIVAN ROAD
SPOKANE, WASHINGTON 99216
(509) 928-8000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
AGENT FOR SERVICE OF PROCESS)
RONALD F. KLAWITTER
VICE PRESIDENT, FINANCE AND TREASURER
KEY TRONIC CORPORATION
N. 4424 SULLIVAN ROAD
SPOKANE, WASHINGTON 99216
(509) 928-8000
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE OF PROCESS)
COPIES TO:
STEPHEN M. TENNIS, ESQ.
MORRISON & FOERSTER
755 PAGE MILL ROAD
PALO ALTO, CALIFORNIA 94304
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
FROM TIME TO TIME AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT.
IF ONLY SECURITIES BEING REGISTERED ON THIS FORM ARE BEING OFFERED PURSUANT TO
DIVIDEND OR INTEREST REINVESTMENT PLANS, PLEASE CHECK THE FOLLOWING BOX: __
IF ANY OF THE SECURITIES BEING REGISTERED ON THIS FORM ARE TO BE OFFERED ON A
DELAYED OR CONTINUOUS BASIS PURSUANT TO RULE 415 UNDER THE SECURITIES ACT OF
1933, OTHER THAN SECURITIES OFFERED ONLY IN CONNECTION WITH DIVIDEND OR INTEREST
REINVESTMENT PLANS, CHECK THE FOLLOWING BOX: _X_
CALCULATION OF REGISTRATION FEE
TITLE OF SECURITIES TO BE REGISTERED
COMMON STOCK, NO
PAR VALUE
AMOUNT TO BE REGISTERED(1) 1,000,000
SHARES
PROPOSED MAXIMUM OFFERING
PRICE PER UNIT $10.75(2)
PROPOSED MAXIMUM AGGREGATE
OFFERING PRICE $10,750,000
AMOUNT OF REGISTRATION FEE $3,707
(1) REPRESENTS 1,000,000 SHARES OF COMMON STOCK TO BE ACQUIRED BY CERTAIN
SECURITY HOLDERS OF THE COMPANY UPON THE EXERCISE OF CERTAIN OPTIONS
ACQUIRED IN FEBRUARY 1992 AND CERTAIN SHARES ACQUIRED PRIOR TO OCTOBER
1986. SEE "BACKGROUND OF THE OFFERING."
(2) ESTIMATED SOLELY FOR THE PURPOSE OF CALCULATING THE REGISTRATION FEE IN
ACCORDANCE WITH RULES 457(C).
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
AN AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL
THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES
ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH
DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED MAY 19, 1995.
KEY TRONIC CORPORATION
1,000,000 SHARES OF COMMON STOCK
THIS PROSPECTUS RELATES TO 1,000,000 SHARES OF COMMON STOCK, NO PAR VALUE (THE
"COMMON STOCK") OF KEY TRONIC CORPORATION (THE "COMPANY") TO BE OFFERED AND SOLD
FROM TIME TO TIME FOR THE ACCOUNT OF CERTAIN HOLDERS OF COMMON STOCK OF THE
COMPANY (THE "SELLING SHAREHOLDERS") WHO WILL ACQUIRE CERTAIN SHARES OF THE
COMMON STOCK UPON EXERCISE OF A CERTAIN OPTION ACQUIRED IN FEBRUARY 1992 AND
CERTAIN OTHER SHARES OF THE COMMON STOCK ACQUIRED PRIOR TO OCTOBER 1986. SEE
"BACKGROUND OF THE OFFERING," "PLAN OF DISTRIBUTION" AND "SELLING
SHAREHOLDER."
THE COMPANY WILL NOT RECEIVE ANY OF THE PROCEEDS FROM THE SALE OF THE COMMON
STOCK.
THE COMPANY HAS BEEN ADVISED BY THE SELLING SHAREHOLDERS THAT ALL OR A PORTION
OF THE COMMON STOCK MAY BE DISPOSED OF HEREUNDER FROM TIME TO TIME IN ONE OR A
COMBINATION OF THE FOLLOWING TRANSACTIONS: (A) A "BROKER'S TRANSACTION" WITHIN
THE MEANING OF SECTION 4(4) OF THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), WHERE THE BROKER ACTS AS AGENT FOR THE SELLING SHAREHOLDERS
AND RECEIVES ONLY THE NORMAL AND CUSTOMARY COMMISSIONS WITH REGARD TO SUCH
TRANSACTION; (B) A TRANSACTION DIRECTLY WITH A "MARKET MAKER" WITHIN THE MEANING
OF SECTION 3(A)(38) OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED (THE
"EXCHANGE ACT"); (C) IN PRIVATELY NEGOTIATED TRANSACTIONS AT PRIVATELY
NEGOTIATED PRICES; OR (D)BY GIFT. ANY COMMISSIONS OR DISCOUNTS PAID OR ALLOWED
TO BROKERS, DEALERS, OR AGENTS MAY BE CHANGED FROM TIME TO TIME. SEE "PLAN OF
DISTRIBUTION."
THE SELLING SHAREHOLDERS AND ANY BROKERS, DEALERS OR AGENTS WHO PARTICIPATE IN
THE SALE OF THE COMMON STOCK MAY BE DEEMED TO BE "UNDERWRITERS" WITHIN THE
MEANING OF SECTION 2(11) OF THE SECURITIES ACT, AND THE COMMISSIONS PAID OR
DISCOUNTS ALLOWED TO ANY SUCH BROKERS, DEALERS OR AGENTS, IN ADDITION TO ANY
PROFITS RECEIVED ON RESALE OF THE COMMON STOCK, IF ANY OF SUCH BROKERS, DEALERS
OR AGENTS SHOULD PURCHASE ANY COMMON STOCK AS A PRINCIPAL, MAY BE DEEMED TO BE
UNDERWRITING DISCOUNTS OR COMMISSIONS UNDER THE SECURITIES ACT. IN THE EVENT OF
A TRANSACTION HEREUNDER IN WHICH A BROKER OR DEALER ACTS AS A PRINCIPAL, THIS
PROSPECTUS WILL BE SUPPLEMENTED TO PROVIDE MATERIAL FACTS WITH RESPECT TO SUCH
TRANSACTION.
THE COMPANY WILL PAY ALL EXPENSES INCIDENT TO THE REGISTRATION OF THE COMMON
STOCK, ESTIMATED TO BE APPROXIMATELY $48,707.00. NORMAL COMMISSION EXPENSES AND
BROKERAGE FEES AND ANY APPLICABLE STOCK TRANSFER TAXES RELATING TO THE COMMON
STOCK ARE PAYABLE BY THE SELLING SHAREHOLDERS.
THE COMMON STOCK IS QUOTED ON THE NASDAQ NATIONAL MARKET UNDER THE SYMBOL
"KTCC." ON MAY 17, 1995, THE LAST REPORTED SALES PRICE OF THE COMMON STOCK
WAS $14.00.
THE SECURITIES OFFERED HEREBY INVOLVE A HIGH DEGREE OF RISK.
SEE "RISK FACTORS."
__________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
PER SHARE
PRICE TO PUBLIC SEE TEXT ABOVE
UNDERWRITING DISCOUNTS OR COMMISSIONS SEE TEXT ABOVE
PROCEEDS TO SELLING SHAREHOLDER(1) SEE TEXT ABOVE
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED OR INCORPORATED BY REFERENCE IN THIS
PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED. THIS PROSPECTUS DOES NOT CONSTITUTE
AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN
THE REGISTERED SECURITIES TO WHICH IT RELATES OR AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY SUCH SECURITIES IN ANY CIRCUMSTANCES IN WHICH
SUCH AN OFFEROR SOLICITATION WOULD BE UNLAWFUL. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY OR THAT
INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE
HEREOF.
THE DATE OF THIS PROSPECTUS IS MAY 19, 1995.
AVAILABLE INFORMATION
THE COMPANY IS SUBJECT TO THE INFORMATIONAL REQUIREMENTS OF THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED (THE "EXCHANGE ACT"), AND, IN ACCORDANCE
THEREWITH, FILES REPORTS AND OTHER INFORMATION WITH THE SECURITIES AND EXCHANGE
COMMISSION (THE "COMMISSION"). SUCH REPORTS AND OTHER INFORMATION FILED BY THE
COMPANY CAN BE INSPECTED AND COPIED AT THE PUBLIC REFERENCE FACILITIES
MAINTAINED BY THE COMMISSION AT 450 FIFTH STREET, N.W., WASHINGTON, D.C. 20549,
AT THE NEW YORK REGIONAL OFFICE OF THE COMMISSION AT 7 WORLD TRADE CENTER, 13TH
FLOOR, NEW YORK, NEW YORK 10048 AND THE CHICAGO REGIONAL OFFICE OF THE
COMMISSION AT NORTHWESTERN ATRIUM CENTER, 500 WEST MADISON STREET, SUITE 1400,
CHICAGO, ILLINOIS 60661. COPIES OF SUCH MATERIAL CAN BE OBTAINED FROM THE
PUBLIC REFERENCE SECTION OF THE COMMISSION AT 450 FIFTH STREET, N.W.,
WASHINGTON, D.C. 20549, AT PRESCRIBED RATES.
THE COMPANY HAS FILED WITH THE COMMISSION A REGISTRATION STATEMENT ON FORM S-3
(TOGETHER WITH ALL AMENDMENTS AND EXHIBITS THERETO, THE "REGISTRATION
STATEMENT") UNDER THE SECURITIES ACT WITH RESPECT TO THE SECURITIES OFFERED
HEREBY. THIS PROSPECTUS DOES NOT CONTAIN ALL THE INFORMATION SET FORTH IN THE
REGISTRATION STATEMENT, CERTAIN PARTS OF WHICH ARE OMITTED IN ACCORDANCE WITH
THE RULES AND REGULATIONS OF THE COMMISSION. STATEMENTS CONTAINED IN THIS
PROSPECTUS AS TO THE CONTENTS OF ANY CONTRACT OR OTHER DOCUMENT REFERRED TO ARE
NOT NECESSARILY COMPLETE AND IN EACH INSTANCE REFERENCE IS MADE TO THE COPY OF
SUCH CONTRACT OR OTHER DOCUMENT FILED AS AN EXHIBIT TO THE REGISTRATION
STATEMENT, EACH SUCH STATEMENT BEING QUALIFIED BY SUCH REFERENCE. FOR FURTHER
INFORMATION REGARDING THE COMPANY AND THE SECURITIES OFFERED BY THIS PROSPECTUS,
REFERENCE IS MADE TO THE REGISTRATION STATEMENT AND THE EXHIBITS AND SCHEDULES
RELATING THERETO. THE REGISTRATION STATEMENT AND THE EXHIBITS AND SCHEDULES
THERETO MAY BE INSPECTED BY ANYONE WITHOUT CHARGE AT THE OFFICE OF THE
COMMISSION AT 450 FIFTH STREET, N.W., WASHINGTON, D.C. 20549, AND COPIES CAN BE
OBTAINED FROM THE COMMISSION AT PRESCRIBED RATES.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
THE FOLLOWING DOCUMENTS FILED BY THE COMPANY WITH THE COMMISSION ARE
INCORPORATED HEREIN BY REFERENCE AND MADE A PART HEREOF, EXCEPT AS SUPERSEDED OR
MODIFIED HEREIN: (I) THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR ITS FISCAL
YEAR ENDED JULY 2, 1994; (II) THE COMPANY'S QUARTERLY REPORTS ON FORMS 10-Q FOR
THE QUARTERS ENDED OCTOBER 1, 1994, DECEMBER 31, 1994, AND APRIL 1, 1995; (III)
THE COMPANY'S AMENDMENT ON FORM 10KA TO THE COMPANY'S ANNUAL REPORT ON FORM 10K
FOR ITS FISCAL YEAR ENDED JULY 2, 1994; (IV) THE COMPANY'S AMENDMENTS ON FORM
10QA TO ITS QUARTERLY REPORTS ON FORMS 10Q FOR THE QUARTERS ENDED OCTOBER 1,
1994, DECEMBER 31, 1994, AND APRIL 1, 1995; AND (V) THE COMPANY'S REGISTRATION
STATEMENT ON FORM 8-A DATED APRIL 3, 1994.
ALL DOCUMENTS FILED BY THE COMPANY WITH THE COMMISSION PURSUANT TO SECTION
13(A), 13(C), 14 OR 15(D) OF THE EXCHANGE ACT AFTER THE DATE OF THIS PROSPECTUS
AND PRIOR TO THE TERMINATION OF THE OFFERING OF THE SECURITIES COVERED BY THIS
PROSPECTUS SHALL BE DEEMED TO BE INCORPORATED BY REFERENCE INTO THIS PROSPECTUS
AND TO BE A PART HEREOF FROM THE DATE OF FILING OF SUCH DOCUMENTS. ANY STATEMENT
CONTAINED IN ANY DOCUMENT INCORPORATED OR DEEMED TO BE INCORPORATED BY REFERENCE
IN THIS PROSPECTUS SHALL BE DEEMED TO BE MODIFIED OR SUPERSEDED FOR PURPOSES OF
THIS PROSPECTUS TO THE EXTENT THAT SUCH A STATEMENT CONTAINED HEREIN OR IN ANY
OTHER SUBSEQUENTLY FILED DOCUMENT WHICH ALSO IS OR IS DEEMED TO BE INCORPORATED
BY REFERENCE IN THIS PROSPECTUS MODIFIES OR SUPERSEDES SUCH STATEMENT. ANY SUCH
STATEMENT SO MODIFIED OR SUPERSEDED SHALL NOT BE DEEMED, EXCEPT AS MODIFIED OR
SUPERSEDED, TO CONSTITUTE A PART OF THIS PROSPECTUS.
THE COMPANY WILL PROVIDE WITHOUT CHARGE TO EACH PERSON, INCLUDING ANY
BENEFICIAL OWNER, TO WHOM THIS PROSPECTUS IS DELIVERED, UPON WRITTEN OR ORAL
REQUEST OF SUCH PERSON, A COPY OF ANY AND ALL OF THE DOCUMENTS THAT HAVE BEEN OR
MAY BE INCORPORATED BY REFERENCE IN THIS PROSPECTUS (OTHER THAN EXHIBITS TO SUCH
DOCUMENTS WHICH ARE NOT SPECIFICALLY INCORPORATED BY REFERENCE INTO SUCH
DOCUMENTS). SUCH REQUESTS SHOULD BE DIRECTED TO THE COMPANY'S VICE PRESIDENT,
FINANCE AND TREASURER, KEY TRONIC CORPORATION, N. 4424 SULLIVAN ROAD, SPOKANE,
WASHINGTON 99216 (TELEPHONE: (509) 928-8000).
"KEY TRONIC" IS A REGISTERED TRADEMARK OF THE COMPANY.
RISK FACTORS
THE FOLLOWING RISKS SHOULD BE CONSIDERED CAREFULLY IN ADDITION TO OTHER
INFORMATION CONTAINED IN THIS FILING BEFORE PURCHASING THE COMMON STOCK OFFERED
HEREBY:
POTENTIAL FLUCTUATIONS IN QUARTERLY RESULTS
THE COMPANY'S QUARTERLY OPERATING RESULTS HAVE VARIED IN THE PAST AND MAY VARY
IN THE FUTURE DUE TO A VARIETY OF FACTORS, INCLUDING SUCCESS OF CUSTOMERS'
PROGRAMS, TIMING OF NEW PROGRAMS, NEW PRODUCT INTRODUCTIONS OR TECHNOLOGICAL
ADVANCES BY THE COMPANY AND ITS COMPETITORS AND CHANGES IN PRICING POLICIES BY
THE COMPANY AND ITS COMPETITORS. FOR EXAMPLE, THE COMPANY RELIES ON CUSTOMERS'
FORECASTS TO PLAN ITS BUSINESS. IF THOSE FORECASTS ARE OVERLY OPTIMISTIC, THE
COMPANY'S REVENUES AND PROFITS MAY FALL SHORT OF EXPECTATIONS. CONVERSELY, IF
THOSE FORECASTS ARE TOO CONSERVATIVE, THE COMPANY COULD HAVE AN UNEXPECTED
INCREASE IN REVENUES AND PROFITS.
COMPETITION
THE KEYBOARD AND OTHER INPUT DEVICE INDUSTRY IS INTENSELY COMPETITIVE. MOST OF
THE COMPANY'S PRINCIPAL COMPETITORS ARE HEADQUARTERED IN JAPAN AND OTHER ASIAN
COUNTRIES THAT HAVE A LOW COST LABOR FORCE. THOSE COMPETITORS MAY BE ABLE TO
OFFER CUSTOMERS LOWER PRICES ON CERTAIN HIGH VOLUME PROGRAMS. THIS COULD RESULT
IN PRICE REDUCTIONS, REDUCED MARGINS AND LOSS OF MARKET SHARE, ALL OF WHICH
WOULD MATERIALLY AND ADVERSELY AFFECT THE COMPANY'S BUSINESS, OPERATING RESULTS
AND FINANCIAL CONDITION. IN ADDITION, COMPETITORS CAN COPY THE COMPANY'S
NON-PROPRIETARY DESIGNS AFTER THE COMPANY HAS INVESTED IN DEVELOPMENT OF
PRODUCTS FOR CUSTOMERS, THEREBY ENABLING SUCH COMPETITORS TO OFFER LOWER PRICES
ON SUCH PRODUCTS DUE TO SAVINGS IN DEVELOPMENT COSTS.
CONCENTRATION OF MAJOR CUSTOMERS
AT PRESENT, THE COMPANY'S CUSTOMER BASE IS HIGHLY CONCENTRATED, AND THERE CAN
BE NO ASSURANCE THAT ITS CUSTOMER BASE WILL NOT BECOME MORE CONCENTRATED. THREE
OF THE COMPANY'S OEM CUSTOMERS ACCOUNTED FOR 21%, 11%, AND 10%, INDIVIDUALLY, OF
NET SALES IN FISCAL 1994. IN 1993, THE SAME CUSTOMERS ACCOUNTED FOR 32%, 3% AND
0% OF THE COMPANY'S NET SALES.
THERE CAN BE NO ASSURANCE THAT THE COMPANY'S PRINCIPAL CUSTOMERS WILL CONTINUE
TO PURCHASE PRODUCTS FROM THE COMPANY AT CURRENT LEVELS. MOREOVER, THE COMPANY
TYPICALLY DOES NOT ENTER INTO LONG-TERM VOLUME PURCHASE CONTRACTS WITH ITS
CUSTOMERS, AND THE COMPANY'S CUSTOMERS HAVE CERTAIN RIGHTS TO EXTEND OR DELAY
THE SHIPMENT OF THEIR ORDERS. THE LOSS OF ONE OR MORE OF THE COMPANY'S MAJOR
CUSTOMERS OR THE REDUCTION, DELAY OR CANCELLATION OF ORDERS FROM SUCH CUSTOMERS
COULD MATERIALLY AND ADVERSELY AFFECT THE COMPANY'S BUSINESS, OPERATING RESULTS
AND FINANCIAL CONDITION.
DEPENDENCE ON KEY PERSONNEL
THE COMPANY'S FUTURE SUCCESS DEPENDS IN LARGE PART ON THE CONTINUED SERVICE OF
ITS KEY TECHNICAL, MARKETING AND MANAGEMENT PERSONNEL AND ON ITS ABILITY TO
CONTINUE TO ATTRACT AND RETAIN QUALIFIED EMPLOYEES. THE COMPETITION FOR SUCH
PERSONNEL IS INTENSE, AND THERE CAN BE NO ASSURANCE THAT THE COMPANY WILL BE
SUCCESSFUL IN ATTRACTING AND RETAINING SUCH PERSONNEL. IN ADDITION, THE COMPANY
DOES NOT HAVE ANY EMPLOYMENT CONTRACTS WITH ITS KEY PERSONNEL. THE LOSS OF KEY
EMPLOYEES COULD HAVE A MATERIAL ADVERSE EFFECT ON THE COMPANY'S BUSINESS,
OPERATING RESULTS AND FINANCIAL CONDITION.
LITIGATION
THE COMPANY CURRENTLY IS A PARTY TO APPROXIMATELY 108 LAWSUITS BROUGHT BY
COMPUTER KEYBOARD USERS IN STATE AND FEDERAL COURTS. THESE LAWSUITS ALLEGE THAT
SPECIFIC KEYBOARD PRODUCTS MANUFACTURED BY THE COMPANY WERE SOLD WITH
MANUFACTURING, DESIGN AND WARNING DEFECTS WHICH CAUSED OR CONTRIBUTED TO THE
CLAIMANTS' ALLEGED INJURIES, GENERALLY REFERRED TO AS REPETITIVE STRESS INJURIES
(RSI) OR CUMULATIVE TRAUMA DISORDERS (CTD). THE COMPANY BELIEVES IT HAS VALID
DEFENSES TO THESE CLAIMS, AND IT WILL VIGOROUSLY DEFEND THEM. THESE LAWSUITS
ARE IN THE EARLY STAGES OF DISCOVERY. AT THIS TIME, MANAGEMENT BELIEVES THAT IT
IS NOT LIKELY THAT THE ULTIMATE OUTCOME OF THESE LAWSUITS WILL HAVE A MATERIAL
ADVERSE EFFECT ON THE COMPANY'S FINANCIAL POSITION. HOWEVER, GIVEN THE LIMITED
INFORMATION CURRENTLY AVAILABLE, THE COMPLEXITY OF THE LITIGATION, THE INHERENT
UNCERTAINTY OF LITIGATION AND THE ULTIMATE RESOLUTION OF INSURANCE COVERAGE
ISSUES, MANAGEMENT'S POSITION WILL CHANGE IF WARRANTED BY FACTS AND
CIRCUMSTANCES.
TECHNOLOGICAL CHANGE AND NEW PRODUCT RISK
THE MARKET FOR THE COMPANY'S PRODUCTS IS CHARACTERIZED BY RAPIDLY CHANGING
TECHNOLOGY, EVOLVING INDUSTRY STANDARDS, FREQUENT NEW PRODUCT INTRODUCTIONS AND
RELATIVELY SHORT PRODUCT LIFE CYCLES. THE INTRODUCTION OF PRODUCTS EMBODYING
NEW TECHNOLOGIES OR THE EMERGENCE OF NEW INDUSTRY STANDARDS CAN RENDER EXISTING
PRODUCTS OBSOLETE OR UNMARKETABLE. THE COMPANY'S SUCCESS WILL DEPEND UPON ITS
ABILITY TO ENHANCE ITS EXISTING PRODUCTS AND TO DEVELOP AND INTRODUCE, ON A
TIMELY AND COST-EFFECTIVE BASIS, NEW PRODUCTS THAT KEEP PACE WITH TECHNOLOGICAL
DEVELOPMENTS AND EMERGING INDUSTRY STANDARDS AND ADDRESS EVOLVING AND
INCREASINGLY SOPHISTICATED CUSTOMER REQUIREMENTS. FAILURE TO DO SO COULD
SUBSTANTIALLY HARM THE COMPANY'S COMPETITIVE POSITION. THERE CAN BE NO
ASSURANCE THAT THE COMPANY WILL BE SUCCESSFUL IN IDENTIFYING, DEVELOPING,
MANUFACTURING AND MARKETING PRODUCTS THAT RESPOND TO TECHNOLOGICAL CHANGE,
EMERGING INDUSTRY STANDARDS OR EVOLVING CUSTOMER REQUIREMENTS.
DILUTION
AS OF DECEMBER 31, 1994, THERE WERE OUTSTANDING OPTIONS FOR THE PURCHASE OF
3,344,085 SHARES, OF WHICH OPTIONS FOR APPROXIMATELY 2,870,278 SHARES WERE
VESTED AND EXERCISABLE. PURCHASERS OF THE COMMON STOCK OFFERED HEREBY WILL
SUFFER IMMEDIATE AND SUBSTANTIAL DILUTION TO THE EXTENT OUTSTANDING OPTIONS TO
PURCHASE THE COMPANY'S COMMON STOCK ARE EXERCISED.
POSSIBLE VOLATILITY OF STOCK PRICE
THE STOCK PRICE OF THE COMPANY MAY BE SUBJECT TO WIDE FLUCTUATIONS AND
POSSIBLE RAPID INCREASES OR DECLINES OVER A SHORT TIME PERIOD. THESE
FLUCTUATIONS MAY BE DUE TO FACTORS SPECIFIC TO THE COMPANY SUCH AS VARIATIONS IN
QUARTERLY OPERATING RESULTS OR CHANGES IN ANALYSTS' EARNING ESTIMATES, OR TO
FACTORS RELATING TO THE COMPUTER INDUSTRY OR TO THE SECURITIES MARKETS IN
GENERAL, WHICH, IN RECENT YEARS, HAVE EXPERIENCED SIGNIFICANT PRICE
FLUCTUATIONS. THESE FLUCTUATIONS OFTEN HAVE BEEN UNRELATED TO THE OPERATING
PERFORMANCE OF THE SPECIFIC COMPANIES WHOSE STOCKS ARE TRADED. INVESTORS IN THE
COMPANY'S COMMON STOCK SHOULD BE WILLING TO INCUR THE RISK OF SUCH FLUCTUATIONS.
MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY AND RELATED
SHAREHOLDER MATTERS
THE COMPANY'S COMMON STOCK IS QUOTED ON THE NASDAQ NATIONAL MARKET SYSTEM
UNDER THE SYMBOL "KTCC". THE FOLLOWING TABLE SETS FORTH, FOR THE COMPANY'S
FISCAL QUARTERS INDICATED, THE HIGH AND LOW CLOSING SALE PRICES PER SHARE OF THE
COMMON STOCK AS REPORTED BY NASDAQ.
1995 HIGH LOW
1ST QUARTER $11.500 $ 6.000
2ND QUARTER $11.000 $ 9.000
3RD QUARTER $14.375 $10.000
1994 HIGH LOW
1ST QUARTER $10.750 $ 8.750
2ND QUARTER $ 9.250 $ 6.000
3RD QUARTER $ 9.000 $ 6.250
4TH QUARTER $ 8.000 $ 6.000
1993 HIGH LOW
1ST QUARTER $ 7.125 $ 5.250
2ND QUARTER $10.500 $ 6.625
3RD QUARTER $12.875 $ 9.500
4TH QUARTER $14.000 $ 9.500
THE COMPANY HAS NOT PAID ANY CASH DIVIDENDS ON ITS COMMON STOCK DURING THE
LAST TWO FISCAL YEARS. THE COMPANY CURRENTLY INTENDS TO RETAIN ITS EARNINGS FOR
ITS BUSINESS AND DOES NOT ANTICIPATE PAYING ANY CASH DIVIDENDS ON ITS COMMON
STOCK IN THE FORESEEABLE FUTURE. THE COMPANY'S ABILITY TO PAY DIVIDENDS IS
LIMITED BY CERTAIN FINANCIAL COVENANTS IN THE COMPANY'S BANK LOAN AGREEMENTS.
AS OF MARCH 31, 1995, THERE WERE APPROXIMATELY 1,715 COMMON SHAREHOLDERS OF
RECORD.
CONTROL BY THE HILLER KEY TRONIC PARTNERS, L.P. AND THE HILLER GROUP
HILLER KEY TRONIC PARTNERS, L.P. ("HKT PARTNERS") IS A LIMITED PARTNERSHIP
CREATED BY THE HILLER GROUP, A CORPORATE MANAGEMENT ORGANIZATION. PURSUANT TO
AN AGREEMENT BETWEEN THE HILLER GROUP AND THE COMPANY, STANLEY HILLER, JR., WHO
CURRENTLY HAS A 66.73% INTEREST IN HKT PARTNERS, WAS APPOINTED AS A DIRECTOR,
CHIEF EXECUTIVE OFFICER, AND CHAIRMAN OF THE COMPANY'S EXECUTIVE COMMITTEE IN
FEBRUARY 1992 AND ACQUIRED THE RIGHT TO DESIGNATE THREE ADDITIONAL PERSONS TO BE
APPOINTED TO THE COMPANY'S BOARD OF DIRECTORS. IN ADDITION, AFTER THE
COMPLETION OF THE OFFERING, HKT PARTNERS WILL BENEFICIALLY OWN APPROXIMATELY 24%
OF THE OUTSTANDING SHARES OF COMMON STOCK OF THE COMPANY. THIS CONCENTRATION OF
OWNERSHIP, IN CONJUNCTION WITH THE AGREEMENT BETWEEN THE COMPANY AND THE HILLER
GROUP, WILL ENABLE THE HILLER GROUP TO CONTINUE TO EXERT SIGNIFICANT CONTROL
OVER CORPORATE ACTIONS AFTER THE SALE OF THE SHARES OFFERED HEREBY AND MAY HAVE
THE EFFECT OF DELAYING OR PREVENTING A CHANGE IN CONTROL OF THE COMPANY.
BACKGROUND OF THE OFFERING
IN MARCH 1992, IN CONNECTION WITH AN AGREEMENT ENTERED INTO BY AND BETWEEN THE
HILLER GROUP AND LGZ, INC., A WASHINGTON CORPORATION 100% OWNED BY THE LEWIS G.
ZIRKLE FAMILY ("LGZ"), LGZ GRANTED TO STANLEY HILLER, JR. AN OPTION (THE "LGZ
OPTION"), SUBSEQUENTLY ASSIGNED IN JANUARY 1993, TO HKT PARTNERS TO PURCHASE
1,000,000 OUTSTANDING SHARES OF COMMON STOCK OF THE COMPANY OWNED BY LGZ, INC.,
AT A PRICE OF $6.00 PER SHARE. IN APRIL, 1995, THE LGZ OPTION WAS AMENDED BY
HKT PARTNERS AND LGZ TO REDUCE THE UNDERLYING SHARES TO 750,000 AND TO EXTEND
THE TERM OF THE OPTION TO JUNE 1, 1996. IN ADDITION, PURSUANT TO SUCH AMENDMENT
(THE "LGZ AMENDMENT"), THE EXERCISE PRICE PER SHARE WAS RAISED TO $7.00 FOR
OPTIONS EXERCISED BEFORE AUGUST 1, 1995, $8.00 FOR OPTIONS EXERCISED AFTER SUCH
DATE BUT ON OR BEFORE JANUARY 1, 1996, AND $9.00 FOR OPTIONS EXERCISED AFTER
JANUARY 1, 1996 BUT ON OR BEFORE JUNE 1, 1996. THE COMPANY DERIVED NO BENEFITS
FROM AND INCURRED NO LIABILITIES OR EXPENSES IN CONNECTION WITH THE LGZ
AMENDMENT. THE 750,000 OUTSTANDING SHARES UNDERLYING THE LGZ OPTION PLUS THE
250,000 SHARES HELD BY LGZ ARE THE SUBJECT SHARES OF THE OFFERING. SEE
"SELLING SHAREHOLDERS."
IN APRIL 1992, THE COMPANY AND HKT PARTNERS ENTERED INTO A REGISTRATION
RIGHTS AGREEMENT (THE "REGISTRATION RIGHTS AGREEMENT") PURSUANT TO WHICH HKT
PARTNERS WAS GRANTED CERTAIN REGISTRATION RIGHTS WITH RESPECT TO THE COMMON
STOCK, INCLUDING THE RIGHT TO CAUSE THE COMPANY TO EFFECT A FORM S-3
REGISTRATION WITH RESPECT TO THE COMMON STOCK HELD BY HKT PARTNERS. IN
ADDITION, PURSUANT TO THE LGZ AMENDMENT, HKT PARTNERS REQUESTED AND THE
COMPANY AGREED TO INCLUDE 250,000 SHARES OF THE COMPANY'S STOCK HELD BY LGZ
IN THE REGISTRATION STATEMENT OF WHICH THIS PROSPECTUS IS A PART. THE
COMPANY HAS FILED SUCH REGISTRATION STATEMENT IN ACCORDANCE WITH ITS
OBLIGATIONS TO HKT PARTNERS UNDER THE REGISTRATION RIGHTS AGREEMENT.
INDEMNIFICATION
THE COMPANY HAS AGREED TO INDEMNIFY HKT PARTNERS AND ITS CONTROL PERSONS AND
LGZ WITH RESPECT TO CERTAIN LIABILITIES IN CONNECTION WITH THE SALE OF THE
COMMON STOCK PURSUANT TO THIS PROSPECTUS, INCLUDING LIABILITIES UNDER THE
SECURITIES ACT AND THE EXCHANGE ACT. IN ADDITION, HKT PARTNERS AND LGZ HAVE
AGREED TO INDEMNIFY THE COMPANY, ITS DIRECTORS, OFFICERS, AGENTS AND CONTROL
PERSONS AGAINST CERTAIN LIABILITIES INCURRED AS A RESULT OF INFORMATION
PROVIDED BY HKT PARTNERS AND LGZ FOR USE IN THIS PROSPECTUS.
DESCRIPTION OF CAPITAL STOCK
COMMON STOCK
THE COMPANY IS AUTHORIZED TO ISSUE 25,000,000 SHARES OF COMMON STOCK, NO PAR
VALUE PER SHARE. AS OF DECEMBER 31, 1994, THERE WERE 8,338,621 SHARES OF COMMON
STOCK OUTSTANDING.
THE HOLDERS OF COMMON STOCK ARE ENTITLED TO ONE VOTE FOR EACH SHARE HELD ON
RECORD ON ALL MATTERS SUBMITTED TO A VOTE OF THE STOCKHOLDERS. HOLDERS OF
COMMON STOCK DO NOT HAVE CUMULATIVE VOTING RIGHTS IN THE ELECTION OF DIRECTORS.
HOLDERS OF COMMON STOCK ARE ENTITLED TO RECEIVE RATABLY SUCH DIVIDENDS, IF ANY,
AS MAY BE DECLARED BY THE BOARD OF DIRECTORS OUT OF FUNDS LEGALLY AVAILABLE
THEREFOR. HOLDERS OF COMMON STOCK DO NOT HAVE PREEMPTIVE RIGHTS OR RIGHTS TO
CONVERT THEIR COMMON STOCK INTO ANY OTHER SECURITIES. IN THE EVENT OF A
LIQUIDATION, DISSOLUTION OR WINDING UP OF THE COMPANY, HOLDERS OF COMMON STOCK
HAVE THE RIGHT TO A RATABLE PORTION OF THE ASSETS, IF ANY, REMAINING AFTER
PAYMENT OF LIABILITIES. ALL OUTSTANDING SHARES OF COMMON STOCK ARE FULLY PAID
AND NONASSESSABLE.
THE AFFIRMATIVE VOTE OF HOLDERS OF AT LEAST TWO-THIRDS OF THE OUTSTANDING
COMMON STOCK IS REQUIRED TO APPROVE CERTAIN BUSINESS COMBINATIONS, INCLUDING
MERGERS, CONSOLIDATIONS AND THE SALE OF SUBSTANTIALLY ALL OF THE ASSETS OF THE
COMPANY, WITH OR TO ANY 5% OR GREATER SHAREHOLDER, AS WELL AS TO APPROVE CERTAIN
AMENDMENTS TO THE RESTATED ARTICLES OF INCORPORATION OF THE COMPANY. DURING
SUCH TIME AS THERE IS SUCH 5% OR GREATER SHAREHOLDER, THE CONSENT OF ALL THE
COMPANY'S SHAREHOLDERS, OR THE AFFIRMATIVE VOTE OF AT LEAST TWO-THIRDS OF SUCH
SHAREHOLDERS PLUS TWO-THIRDS OF THE CONTINUING DIRECTORS, IS REQUIRED TO
DISSOLVE VOLUNTARILY THE COMPANY.
TRANSFER AND WARRANT AGENT AND REGISTRAR
THE COMPANY'S TRANSFER AGENT AND REGISTRAR FOR THE COMMON STOCK IS THE
CHEMICAL TRUST COMPANY OF CALIFORNIA.
PLAN OF DISTRIBUTION
THE SELLING SHAREHOLDERS MAY DISPOSE OF THE COMMON STOCK FROM TIME TO TIME IN
ONE OR A COMBINATION OF THE FOLLOWING TRANSACTIONS: (A) A "BROKER'S
TRANSACTION" WITHIN THE MEANING OF SECTION 4(4) OF THE SECURITIES ACT WHERE THE
BROKER ACTS AS AGENT FOR THE SELLING SHAREHOLDERS AND RECEIVES ONLY THE NORMAL
AND CUSTOMARY COMMISSIONS WITH REGARD TO SUCH TRANSACTION; (B) A TRANSACTION
DIRECTLY WITH A "MARKET MAKER" WITHIN THE MEANING OF SECTION 3(A)(38) OF THE
EXCHANGE ACT; (C) IN PRIVATELY NEGOTIATED TRANSACTIONS AT PRIVATELY NEGOTIATED
PRICES; OR (D) BY GIFT. ANY COMMISSIONS OR DISCOUNTS PAID OR ALLOWED TO
BROKERS, DEALERS OR AGENTS MAY BE CHANGED FROM TIME TO TIME.
THE SELLING SHAREHOLDERS HAVE ADVISED THE COMPANY THAT DURING SUCH TIME AS
THEY MAY BE ENGAGED IN THE ATTEMPT TO SELL COMMON STOCK REGISTERED HEREUNDER,
THEY WILL: (I) NOT ENGAGE IN ANY STABILIZATION ACTIVITY IN CONNECTION WITH ANY
OF THE COMPANY'S SECURITIES; (II) CAUSE TO BE FURNISHED TO EACH PERSON TO WHOM
COMMON STOCK INCLUDED HEREIN MAY BE OFFERED, AND TO EACH BROKER-DEALER, IF ANY,
THROUGH WHOM COMMON STOCK IS OFFERED, A COPY OF THIS PROSPECTUS, AS SUPPLEMENTED
OR AMENDED; AND (III) NOT BID FOR OR PURCHASE ANY OF THE COMPANY'S SECURITIES OR
ANY RIGHTS TO ACQUIRE THE COMPANY'S SECURITIES OR ATTEMPT TO INDUCE ANY PERSON
TO PURCHASE ANY OF THE COMPANY'S SECURITIES OR RIGHTS TO ACQUIRE THE COMPANY'S
SECURITIES OTHER THAN AS PERMITTED UNDER THE EXCHANGE ACT.
THE SELLING SHAREHOLDERS, AND ANY OTHER PERSONS WHO PARTICIPATE IN THE SALE OF
THE COMMON STOCK FROM TIME TO TIME, MAY BE DEEMED TO BE "UNDERWRITERS" WITHIN
THE MEANING OF SECTION 2(11) OF THE SECURITIES ACT. ANY COMMISSIONS PAID OR ANY
DISCOUNTS OR CONCESSIONS ALLOWED TO ANY SUCH PERSONS, AND ANY PROFITS RECEIVED
ON RESALE OF THE SECURITIES, MAY BE DEEMED TO BE UNDERWRITING DISCOUNTS OR
COMMISSIONS UNDER THE SECURITIES ACT.
THE COMPANY HAS AGREED TO MAINTAIN THE EFFECTIVENESS OF THIS REGISTRATION
STATEMENT UNTIL THE EARLIER OF (I) THE SALE OF ALL THE COMMON STOCK REGISTERED
PURSUANT TO THIS PROSPECTUS OR (II) 120 DAYS FROM THE DATE OF THIS PROSPECTUS.
NO SALES MAY BE MADE PURSUANT TO THIS PROSPECTUS AFTER SUCH DATE.
SELLING SHAREHOLDERS
THE SELLING SHAREHOLDERS FOR WHOM THE COMPANY IS REGISTERING THE COMMON STOCK
FOR RESALE TO THE PUBLIC ARE HKT PARTNERS AND LGZ. THE COMPANY WILL NOT RECEIVE
ANY OF THE PROCEEDS FROM THE SALE OF THE COMMON STOCK. PRIOR TO THE OFFERING,
THE HKT PARTNERS BENEFICIALLY OWNED 3,289,301 SHARES OF COMMON STOCK OF THE
COMPANY, OF WHICH 2,396,923 ARE SHARES SUBJECT TO PRESENTLY EXERCISABLE OPTIONS
PURSUANT TO THE HILLER OPTION AGREEMENT (AS DEFINED BELOW) AND 750,000 SHARES,
ALL SUBJECT SHARES OF THE OFFERING, ARE SUBJECT TO PRESENTLY EXERCISABLE OPTIONS
PURSUANT TO THE LGZ OPTION. AFTER THE COMPLETION OF THE OFFERING, THE HKT
PARTNERS WILL BENEFICIALLY OWN 2,539,301 SHARES OF COMMON STOCK OF THE COMPANY,
CONSTITUTING APPROXIMATELY 24% OF THE OUTSTANDING SHARES OF COMMON STOCK OF THE
COMPANY, ASSUMING THE EXERCISE OF ALL OPTIONS DIRECTLY OWNED BY THE HKT
PARTNERS. PRIOR TO THE OFFERING, LGZ BENEFICIALLY OWNED 1,142,378 SHARES OF
COMMON STOCK OF THE COMPANY, ALL OF WHICH ARE SUBJECT TO THE VOTING AGREEMENT
WITH HKT PARTNERS DISCUSSED BELOW, AND 750,000 OF WHICH ARE SUBJECT TO PURCHASE
BY HKT PARTNERS PURSUANT TO THE LGZ OPTION. FOLLOWING THE EXERCISE BY HKT
PARTNERS OF THE LGZ OPTION, THESE 750,000 SHARES WILL BE SOLD BY HKT PARTNERS IN
THE OFFERING. AN ADDITIONAL 250,000 SHARES WILL BE SOLD BY LGZ IN THE OFFERING.
AFTER THE COMPLETION OF THE OFFERING, AND ASSUMING THE EXERCISE IN FULL OF THE
LGZ OPTION, LGZ WILL BENEFICIALLY OWN 142,378 SHARES OF COMMON STOCK OF THE
COMPANY, CONSTITUTING APPROXIMATELY 2% OF THE OUTSTANDING SHARES OF COMMON STOCK
OF THE COMPANY.
ON FEBRUARY 3, 1992, THE COMPANY APPROVED AN AGREEMENT WITH THE HILLER GROUP,
A CORPORATE MANAGEMENT CORPORATION (THE "HILLER AGREEMENT"), UNDER WHICH STANLEY
HILLER JR. AND OTHER MEMBERS OF THE HILLER GROUP WOULD BECOME INVOLVED IN THE
MANAGEMENT OF THE COMPANY. UNDER THE HILLER AGREEMENT, MR. HILLER WAS APPOINTED
A DIRECTOR, CHIEF EXECUTIVE OFFICER AND CHAIRMAN OF THE COMPANY'S EXECUTIVE
COMMITTEE IN FEBRUARY 1992 AND ACQUIRED THE RIGHT TO DESIGNATE THREE ADDITIONAL
PERSONS TO BE APPOINTED TO THE COMPANY'S BOARD OF DIRECTORS. UNDER THESE
ARRANGEMENTS, MR. HILLER CURRENTLY RECEIVES NO SALARY FOR HIS SERVICES AS AN
EXECUTIVE OFFICER AND DIRECTOR OF THE COMPANY, AND NO SUCH SALARY IS CURRENTLY
ANTICIPATED TO BE PAID IN THE FORESEEABLE FUTURE. EVEN THOUGH MR. HILLER HAS
THE TITLE OF CHIEF EXECUTIVE OFFICER, HE IS ACTING PRIMARILY IN HIS CAPACITY AS
A MEMBER OF THE BOARD OF DIRECTORS. THE PRESIDENT & CHIEF OPERATING OFFICER,
THOMAS CASON, PERFORMS THE FUNCTIONS OF THE OFFICE OF CHIEF EXECUTIVE. MR.
HILLER SPENDS ONLY ABOUT 20% OF HIS TIME WORKING AT THE COMPANY. THIS TIME IS
SPENT IN AREAS RELATING TO HIS ROLE AS A MEMBER OF THE VARIOUS COMMITTEES OF THE
BOARD. HE IS NOT AN EMPLOYEE OF THE COMPANY NOR DOES HE RECEIVE OTHER BENEFITS
EMPLOYEES OF THE COMPANY RECEIVE.
IN CONNECTION WITH THE HILLER AGREEMENT, THE COMPANY ENTERED INTO AN OPTION
AGREEMENT THE ("HILLER OPTION AGREEMENT"), WHICH WAS APPROVED BY THE COMPANY'S
SHAREHOLDERS IN MAY 1992. THE HILLER OPTION AGREEMENT PROVIDES THAT THE HKT
PARTNERS MAY PURCHASE FROM THE COMPANY UP TO 2,396,923 SHARES OF COMMON STOCK AT
AN EXERCISE PRICE OF $4.50 PER SHARE. PRIOR TO THE OFFERING, PURSUANT TO A
VOTING AGREEMENT WITH LGZ, HKT PARTNERS ALSO SHARED VOTING CONTROL OVER
1,142,378 SHARES HELD BY LGZ, 750,000 OF WHICH ARE THE SHARES SUBJECT TO THE LGZ
OPTION AS AMENDED. SEE "BACKGROUND OF THE OFFERING."
HKT PARTNERS IS A WASHINGTON LIMITED PARTNERSHIP CREATED BY THE HILLER GROUP
IN CONNECTION WITH THE HILLER OPTION AGREEMENT AND RELATED MATTERS. MR. HILLER,
AS THE SOLE SHAREHOLDER OF HKT, INC., A WASHINGTON CORPORATION AND THE GENERAL
PARTNER OF HKT PARTNERS, AND AS A GENERAL PARTNER OF HILLER INVESTMENT PARTNERS,
A CALIFORNIA LIMITED PARTNERSHIP AND A LIMITED PARTNER OF HKT PARTNERS,
CURRENTLY HAS A 66.73% INTEREST IN HKT PARTNERS; ROYCE G. PEARSON, FORMER
PRESIDENT AND A DIRECTOR OF THE COMPANY, CURRENTLY HAS A 6.5% INTEREST IN HKT
PARTNERS AS A LIMITED PARTNER. THE FOLLOWING DIRECTORS HAVE A .5% OWNERSHIP
INTEREST IN HKT PARTNERS: ROBERT H. CANNON, JR., MICHAEL R. HALLMAN, KENNETH F.
HOLTBY, DALE F. PILZ, CLARENCE W. SPANGLE AND WILLIAM E. TERRY. IN ADDITION,
THOMAS W. CASON, THE PRESIDENT AND CHIEF OPERATING OFFICER, HAS A 10.3%
OWNERSHIP INTEREST IN HKT PARTNERS. EACH PARTNER OF HKT PARTNERS WILL SHARE IN
THE ECONOMIC BENEFIT OF THE HILLER OPTION AGREEMENT AND THE LGZ OPTION
(INCLUDING ANY APPRECIATION IN THE VALUE OF SHARES SUBJECT TO THE HILLER OPTION
AGREEMENT AND THE LGZ OPTION ABOVE THE EXERCISE PRICE OF SUCH OPTIONS) TO THE
EXTENT OF THEIR RESPECTIVE PARTNERSHIP INTEREST.
LEGAL MATTERS
THE VALIDITY OF THE COMMON STOCK OFFERED HEREBY WILL BE PASSED UPON FOR THE
COMPANY BY MORRISON & FOERSTER, PALO ALTO, CALIFORNIA. AS OF THE DATE OF THIS
PROSPECTUS, STEPHEN M. TENNIS, A PARTNER OF MORRISON & FOERSTER, HELD A 1.5%
LIMITED PARTNERSHIP INTEREST IN HKT PARTNERS.
EXPERTS
EXPERTS
THE FINANCIAL STATEMENTS AND THE RELATED FINANCIAL STATEMENT SCHEDULES
INCORPORATED IN THIS PROSPECTUS BY REFERENCE FROM THE COMPANY'S ANNUAL REPORT ON
FORM 10-K FOR THE YEAR ENDED JULY 2, 1994 HAVE BEEN AUDITED BY DELOITTE &
TOUCHE, INDEPENDENT AUDITORS, AS STATED IN THEIR REPORT, WHICH IS INCORPORATED
HEREIN BY REFERENCE, AND HAVE BEEN SO INCORPORATED IN RELIANCE UPON THE REPORT
OF SUCH FIRM GIVEN UPON THEIR AUTHORITY AS EXPERTS IN ACCOUNTING AND AUDITING.
WITH RESPECT TO THE UNAUDITED FINANCIAL INFORMATION FOR THE QUARTERS ENDED
OCTOBER 1, 1994 AND DECEMBER 31, 1994 WHICH ARE INCORPORATED HEREIN BY
REFERENCE, DELOITTE & TOUCHE HAVE APPLIED LIMITED PROCEDURES IN ACCORDANCE WITH
PROFESSIONAL STANDARDS FOR A REVIEW OF SUCH INFORMATION. HOWEVER, AS STATED IN
THEIR REPORTS INCLUDED IN THE COMPANY'S QUARTERLY REPORT ON FORM 10-Q FOR THE
QUARTERS ENDED OCTOBER 1, 1994 AND DECEMBER 31, 1994 AND INCORPORATED BY
REFERENCE HEREIN, THEY DID NOT AUDIT AND THEY DO NOT EXPRESS AN OPINION ON THAT
INTERIM FINANCIAL INFORMATION. ACCORDINGLY, THE DEGREE OF RELIANCE ON THEIR
REPORTS ON SUCH INFORMATION SHOULD BE RESTRICTED IN LIGHT OF THE LIMITED NATURE
OF THE REVIEW PROCEDURES APPLIED. DELOITTE & TOUCHE ARE NOT SUBJECT TO THE
LIABILITY PROVISIONS OF SECTION 11 OF THE SECURITIES ACT OF 1933 FOR THEIR
REPORTS ON THE UNAUDITED FINANCIAL INFORMATION BECAUSE THOSE REPORTS ARE NOT
"REPORTS" OR A "PART" OF THE REGISTRATION STATEMENT PREPARED OR CERTIFIED BY AN
ACCOUNTANT WITHIN THE MEANING OF SECTIONS 7 AND 11 OF THE ACT.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
THE FOLLOWING TABLE SETS FORTH THE VARIOUS EXPENSES PAYABLE BY THE COMPANY IN
CONNECTION WITH THE SALE AND DISTRIBUTION OF THE COMMON STOCK BEING REGISTERED.
ALL AMOUNTS SHOWN ARE ESTIMATES, EXCEPT THE REGISTRATION FEE.
REGISTRATION FEE $ 3,707
LEGAL FEES AND EXPENSES $ 25,000
ACCOUNTING FEES AND EXPENSES $ 10,000
MISCELLANEOUS $ 10,000
TOTAL $ 48,707
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
THE AMENDED AND RESTATED ARTICLES OF THE COMPANY PROVIDE THAT, TO THE FULLEST
EXTENT PERMITTED BY THE WASHINGTON BUSINESS CORPORATION ACT, THE DIRECTORS OF
THE COMPANY SHALL NOT BE LIABLE TO THE COMPANY OR ITS SHAREHOLDERS FOR MONETARY
DAMAGES FOR CONDUCT AS DIRECTORS OF THE COMPANY.
THE AMENDED AND RESTATED BY-LAWS OF THE COMPANY PROVIDE THAT, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, THE COMPANY SHALL INDEMNIFY AND HOLD
HARMLESS PERSONS WHO ARE DIRECTORS AND OFFICERS OF THE COMPANY WHO ARE PARTIES
TO OR INVOLVED IN LEGAL PROCEEDINGS IN CONNECTION WITH THEIR STATUS AS SUCH.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
4.1 REGISTRATION RIGHTS AGREEMENT, DATED AS OF APRIL 29, 1992, BY AND AMONG
THE COMPANY AND THE HILLER KEY TRONIC PARTNERS.
4.2 OPTION AGREEMENT, DATED AS OF MARCH 3, 1992, BETWEEN STANLEY HILLER AND
LGZ, INC. AND ASSIGNMENT OF THE OPTION GRANTED THEREIN HILLER KEY TRONIC
PARTNERS L.P.
4.3 AMENDMENT TO OPTION AGREEMENT, DATED AS OF APRIL 6, 1995, BY AND AMONG
HILLER KEY TRONIC PARTNERS, L.P., LGZ, INC., AND THE COMPANY.
5.1 OPINION OF MORRISON & FOERSTER.
23.1 CONSENT OF DELOITTE & TOUCHE LLP.
23.2 CONSENT OF MORRISON & FOERSTER (INCLUDED IN EXHIBIT 5.1).
24.1 POWERS OF ATTORNEY (SEE PAGE II-3 AND II-4).
ITEM 17. UNDERTAKINGS.
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 PROVISIONS DESCRIBED IN ITEM 14 OF THIS REGISTRATION
STATEMENT 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.
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 TO INCLUDE ANY
MATERIAL INFORMATION WITH RESPECT TO THE PLAN OF DISTRIBUTION NOT PREVIOUSLY
DISCLOSED IN THEIR REGISTRATION STATEMENT OR ANY MATERIAL CHANGE TO SUCH
INFORMATION 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; AND
(3) TO REMOVE FROM REGISTRATION BY MEANS OF A POST-EFFECTIVE AMENDMENT
ANY OF THE SECURITIES BEING REGISTERED WHICH REMAIN UNSOLD AT THE TIME OF THE
OFFERING.
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.
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT HAS
DULY CAUSED THIS AMENDMENT TO THE REGISTRATION STATEMENT TO BE SIGNED ON ITS
BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN SPOKANE, STATE OF
WASHINGTON, ON THE 19TH DAY OF MAY 1995.
KEY TRONIC CORPORATION
RONALD F. KLAWITTER
/S/ RONALD F. KLAWITTER
VICE PRESIDENT, FINANCE
AND TREASURER
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT TO
THE REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS IN
THE CAPACITIES AND ON THE DATES INDICATED.
SIGNATURE TITLE DATE
/S/ STANLEY HILLER, JR.*
STANLEY HILLER, JR. CHIEF EXECUTIVE OFFICER AND MAY 19, 1995
DIRECTOR (PRINCIPAL EXECUTIVE
OFFICER)
RONALD F. KLAWITTER VICE PRESIDENT, FINANCE AND MAY 19, 1995
TREASURER (PRINCIPAL FINANCIAL
AND ACCOUNTING OFFICER)
/S/ THOMAS W. CASON*
THOMAS W. CASON PRESIDENT, CHIEF OPERATING MAY 19, 1995
OFFICER AND DIRECTOR
/S/ WENDELL J. SATRE*
WENDELL J. SATRE CHAIRMAN OF THE BOARD MAY 19, 1995
/S/ ROBERT H. CANNON, JR.*
ROBERT H. CANNON, JR. DIRECTOR MAY 19, 1995
/S/ MICHAEL R. HALLMAN*
MICHAEL R. HALLMAN DIRECTOR MAY 19, 1995
/S/ KENNETH F. HOLTBY*
KENNETH F. HOLTBY DIRECTOR MAY 19, 1995
/S/ROYCE G. PEARSON*
ROYCE G. PEARSON DIRECTOR MAY 19, 1995
/S/ DALE F. PILZ*
DALE F. PILZ DIRECTOR MAY 19, 1995
/S/ YACOV A. SHAMASH*
YACOV A. SHAMASH DIRECTOR MAY 19, 1995
/S/ CLARENCE W. SPANGLE*
CLARENCE W. SPANGLE DIRECTOR MAY 19, 1995
/S/ WILLIAM E. TERRY*
WILLIAM E. TERRY DIRECTOR MAY 19, 1995
/S/ LEWIS G. ZIRKLE*
LEWIS G. ZIRKLE DIRECTOR MAY 19, 1995
* BY: /S/ RONALD F. KLAWITTER
RONALD F. KLAWITTER
ATTORNEY-IN-FACT
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION SEQUENTIALLY
NUMBERED PAGE
4.1* REGISTRATION RIGHTS AGREEMENT, DATED AS
OF APRIL 29, 1992, BY AND AMONG THE
COMPANY AND THE HILLER KEY TRONIC PARTNERS.
4.2* OPTION AGREEMENT, DATED AS OF MARCH 2, 1992,
BETWEEN STANLEY HILLER AND LGZ, INC. AND
ASSIGNMENT OF THE OPTION GRANTED THEREIN TO
HILLER KEY TRONIC PARTNERS L.P.
4.3 AMENDMENT TO OPTION AGREEMENT, DATED APRIL 6,
1995, BY AND AMONG HILLER KEY TRONIC PARTNERS,
L.P., LGZ, INC. AND THE COMPANY.
5.1* OPINION OF MORRISON & FOERSTER.
23.1* CONSENT OF DELOITTE & TOUCHE LLP.
23.2 CONSENT OF MORRISON & FOERSTER INCLUDED IN
EXHIBIT 5.1).
24.1* POWERS OF ATTORNEY (SEE PAGE II-3 AND II-4).
* PREVIOUSLY FILED
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
EXHIBITS
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
KEY TRONIC CORPORATION