<PAGE> 1
As filed with the Securities and Exchange Commission on February 24, 1997
Registration No. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
________________________________
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
__________________________________________________
CASA OLE RESTAURANTS, INC.
(Exact name of registrant as specified in its charter)
TEXAS 76-0493269
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1135 EDGEBROOK
HOUSTON, TEXAS 77034-1899
(Address of Principal Executive Offices) (Zip Code)
CASA OLE RESTAURANTS, INC. 1996 LONG TERM
INCENTIVE PLAN CASA OLE RESTAURANTS, INC. 1996
MANAGER'S STOCK OPTION PLAN
CASA OLE RESTAURANTS, INC. STOCK OPTION PLAN FOR
NON-EMPLOYEE DIRECTORS
(Full Title of the Plans)
____________________________________
LOUIS P. NEEB
CHIEF EXECUTIVE OFFICER
1135 EDGEBROOK
HOUSTON, TEXAS 77034-1899
(Name and address of agent for service)
(713) 943-7574
(Telephone number, including area code, of agent for service)
_________________________________
Copy to:
KENT JAMISON
LOCKE PURNELL RAIN HARRELL
(A PROFESSIONAL CORPORATION)
2200 ROSS AVENUE, SUITE 2200
DALLAS, TEXAS 75201
______________________________________________________
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
TITLE OF PROPOSED MAXIMUM PROPOSED MAXIMUM
SECURITIES TO BE AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING AMOUNT OF
REGISTERED REGISTERED SHARE (1) PRICE (1) REGISTRATION FEE
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
COMMON STOCK, 620,000
$.01 PAR VALUE SHARES $8.75 $5,425,000 $1,644.00
---- --------- --------
(1) ESTIMATED IN ACCORDANCE WITH RULE 457(H) UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, (THE "ACT") SOLELY FOR PURPOSES OF CALCULATING THE
REGISTRATION FEE, BASED ON THE AVERAGE OF THE HIGH AND LOW PRICES REPORTED ON
THE NASDAQ - NATIONAL MARKET SYSTEM ON FEBRUARY 14, 1997. IN ADDITION,
PURSUANT TO RULE 416 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, THIS
REGISTRATION STATEMENT ALSO COVERS SHARES OF COMMON STOCK OF THE COMPANY
ISSUABLE TO PREVENT DILUTION RESULTING FROM STOCK SPLITS, STOCK DIVIDENDS OR
SIMILAR TRANSACTIONS.
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
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PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
The information specified by Item 1 and Item 2 of Part I of Form
S-8 is omitted from this filing in accordance with provisions of Rule 428
under the Securities Act of 1933 (the "Securities Act") and the
introductory Note to Part I of Form S-8.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The documents set forth below are incorporated by reference in this
Registration Statement. All documents subsequently filed by Casa Ole
Restaurants, Inc. (the "Company") pursuant to Sections 13(a), 13(c), 14 and
15(d) of the Securities Exchange Act of 1934 (the "Exchange Act"), prior to
the filing of a post-effective amendment which indicates that all
securities offered have been sold or which deregisters all securities then
remaining unsold, shall be deemed to be incorporated by reference in this
Registration Statement and to be part hereof from the date of filing of
such documents.
(1) The Company's prospectus dated April 25, 1996 and relating
to the Form S-1 Registration Statement (Registration
Statement 333-1678) filed pursuant to Rule 424(b) of the
Securities Act.
(2) 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 prospectus described in (1) above.
(3) The description of the Common Stock that is contained in
the Company's Registration Statement on Form 8-A dated
April 18, 1996, filed pursuant to Section 12 of the
Exchange Act, and all amendments thereto and reports which
have been filed for the purpose of updating such
description.
ITEM 4. DESCRIPTION OF SECURITIES.
Not Applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not Applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article 2.02-1 of the Texas Business Corporation Act (the "TBCA")
permits a corporation to indemnify certain persons, including officers and
directors and former
<PAGE> 3
officers and directors, and to purchase insurance with respect to liability
arising out of their capacity or status as officers and directors.
Article Twelve of the Company's Articles of Incorporation provides
as follows:
The corporation shall indemnify any person who was, is, or is
threatened to be made a named defendant or respondent in a
proceeding (as hereinafter defined) because the person (a) is or
was a director or officer of the corporation or (b) while a
director or officer of the corporation, is or was serving at the
request of the corporation as a director, officer, partner,
venturer, proprietor, trustee, employee, agent, or similar
functionary of another foreign or domestic corporation,
partnership, joint venture, sole proprietorship, trust, employee
benefit plan, or other enterprise, to the fullest extent that a
corporation may grant indemnification to a person serving in such
capacity under the Texas Business Corporation Act, as the same
exists or may hereafter be amended.
Such right shall be a contract right and shall include the right to
be paid by the corporation for all expenses incurred in defending
any such proceeding in advance of its final disposition to the
maximum extent permitted under the Texas Business Corporation Act,
as the same exists or may hereafter be amended. If a claim for
indemnification or advancement of expenses hereunder is not paid in
full by the corporation within 90 days after a written claim has
been received by the corporation, the claimant may at any time
thereafter bring suit against the corporation to recover the unpaid
amount of the claim and, if successful in whole or in part, the
claimant shall be entitled to be paid also the expenses of
prosecuting such claim. It shall be a defense to any such action
that such indemnification or advancement of costs of defense is not
permitted under the Texas Business Corporation Act, but the burden
of proving such defense shall be on the corporation. Neither the
failure of the corporation (including its Board of Directors or any
committee thereof, special legal counsel, or shareholders) to have
made its determination prior to the commencement of such action
that indemnification of, or advancement of costs of defense to, the
claimant is permissible in the circumstances nor an actual
determination by the corporation (including its Board of Directors
or any committee thereof, special legal counsel, or shareholders)
that such indemnification or advancement is not permissible shall
be a defense to the action or create a presumption that such
indemnification or advancement is not permissible.
The corporation additionally may indemnify any person covered by
the grant of mandatory indemnification contained above to such
further extent as is permitted by law and may indemnify any other
person to the fullest extent permitted by law.
As used herein, the term "proceeding" means any threatened,
pending, or completed action, suit, or proceeding, whether civil,
criminal, administrative, arbitrative, or investigative, any appeal
in such an action, suit, or proceeding,
<PAGE> 4
and any inquiry or investigation that could lead to such an action,
suit, or proceeding.
In addition, Article Nine of the Company's Bylaws provides for such
indemnification of officers and directors within the limits set forth in
the Articles of Incorporation and applicable provisions of Texas law. The
Company has also entered into indemnification agreements with each of its
directors which provide that such persons will be indemnified to the
fullest extent permitted by the Texas Business Corporation Act.
Article Thirteen of the Company's Articles of Incorporation
additionally includes a provision eliminating the monetary liability of a
director to the Company or its shareholders for an act or omission in the
director's capacity as a director to the fullest extent permitted by Texas
law.
The Company has obtained liability insurance coverage for its
officers and directors which will entitle the Company to be reimbursed up
to $5.0 million for certain indemnity payments it may be required or
permitted to make to such persons with respect to actions arising out of
the performance of their duties.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not Applicable.
ITEM 8. EXHIBITS.
4.1 -- Specimen Stock Certificate of the Company (incorporated
by reference to the corresponding Exhibit Number in
Amendment No. 1 to the Company's Registration
Statement on Form S-1 (Registration No. 333-1678) filed
with the Securities and Exchange Commission on April 11,
1996).
4.2 -- Articles of Incorporation of the Company (incorporated
by reference to thecorresponding Exhibit Number in
the Company's Registration Statement on Form S-1
(Registration No. 333-1678) filed with the Securities and
Exchange Commission on February 27, 1996).
4.3 -- Bylaws of the Company (incorporated by reference to the
corresponding Exhibit Number in the Company's
Registration Statement on Form S-1 (Registration No.
333-1678) filed with the Securities and Exchange
Commission on February 27, 1996).
5.1 -- Opinion of Locke Purnell Rain Harrell (A Professional
Corporation).
23.1 -- Consent of KPMG Peat Marwick LLP, Independent
Accountants.
23.2 -- Consent of Locke Purnell Rain Harrell (A Professional
Corporation) (included in its opinion filed as Exhibit
5.1).
-3-
<PAGE> 5
24.1 -- Power of Attorney (included on the signature page of
this Registration Statement).
99.1 -- Casa Ole Restaurants, Inc. 1996 Long Term Incentive
Plan (incorporated by reference to Exhibit Number 10.16
in Amendment No. 1 to the Company's Registration
Statement on Form S-1 (Registration No. 333-1678) filed
with the Securities and Exchange Commission on April
11, 1996).
99.2 -- Casa Ole Restaurants, Inc. 1996 Manager's Stock Option
Plan.
99.3 -- Casa Ole Restaurants, Inc. Stock Option Plan for
Non-Employee Directors (incorporated by reference to
Exhibit Number 10.17 in Amendment No. 1 to the Company's
Registration Statement on Form S-1 (Registration No.
333-1678) filed with the Securities and Exchange
Commission on April 11, 1996).
ITEM 9. UNDERTAKINGS.
The Company herein undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this
Registration Statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of this
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
this Registration Statement;
(iii) To include any material information with respect
to the plan of distribution not previously
disclosed in this Registration Statement or any
material change to such information in the
Registration Statement;
Provided, however, that paragraphs (1)(i) and (1)(ii) do
not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained
in periodic reports filed with or furnished to the
Securities and Exchange Commission by the Company pursuant
to Section 13 or Section 15(d) of the Exchange Act that
are incorporated by reference in the Registration
Statement.
(2) That, for the purpose of determinig any liability under
the Securities Act, each such post-effective amendment
shall be deemed to be a new registration statement
relating to the securities offered therein, and the
offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
-4-
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(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which
remain unsold at the termination of the offering.
(4) That, for purposes of determining any liability under the
Securities Act, each filing of the Company's annual report
pursuant to Section 13(a) or Section 15(d) of the Exchange
Act 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.
(5) Insofar as indemnification for liabilities arising under
the Securities Act may be permitted to directors, officers
and controlling persons of the Company pursuant to the
foregoing provisions, or otherwise, the Company has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy
as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for
indemnification against such liabilities (other than the
payment by the Company of expenses incurred or paid by a
director, officer or controlling person of the Company 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 Company 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 Securities Act and will be
governed by the final adjudication of such issue.
-5-
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as
amended, the Company 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 Houston, State of
Texas on February 12, 1997.
CASA OLE RESTAURANTS, INC.
By:/s/Louis P. Neeb
------------------------------
Louis P. Neeb,
Chief Executive Officer and
Chairman of the Board of
Directors
<PAGE> 8
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below hereby constitutes and appoints Louis P. Neeb and Stacy M.
Riffe, each of them or any one of them, as his or her true and lawful
attorneys- in-fact and agents, with full power of substitution and
resubstitution, for him or her and in his or her name, place and stead, in
any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement, and to file the
same, with all exhibits thereto, and all other documents in connection
therewith, with the Securities and Exchange Commission and any state or
other securities authority, granting unto said attorneys-in-fact and agents
and each of them or any of them, full power and authority to do and perform
each and every act in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or his or her or their substitute or
substitutes may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as
amended, this Registration Statement has been signed by the following
persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
/s/Louis P. Neeb Chief Executive Officer and February 12, 1997
---------------- Chairman of the Board of --
Louis P. Neeb Directors (Principal
Executive Officer)
/s/Larry N. Forehand Vice Chairman, Founder and February 13 , 1997
-------------------- Director --
Larry N. Forehand
/s/Patrick A. Morris President, Chief Operating February 13, 1997
-------------------- Officer and Director --
Patrick A. Morris
/s/Stacy M. Riffe Vice President, Chief February 10, 1997
----------------- Financial Officer, Secretary --
Stacy M. Riffe and Treasurer (Principal
Financial and Principal
Accounting Officer)
<PAGE> 9
/s/John C. Textor Director February 13, 1997
----------------- --
John C. Textor
/s/Michael D. Domec Director February 13, 1997
------------------- --
Michael D. Domec
Director February 13, 1997
--
/s/J.J. Fitzsimmons
-------------------
J.J. Fitzsimmons
/s/Richard E. Rivera Director February 13, 1997
-------------------- --
Richard E. Rivera
<PAGE> 10
INDEX TO EXHIBITS
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER EXHIBIT PAGE
------ ------- ----
4.1 Specimen Stock Certificate of the Company
(incorporated by reference to the corresponding
Exhibit Number in Amendment No. 1 to the Company's
Registration Statement on Form S-1 (Registration
No. 333-1678) filed with the Securities and
Exchange Commission on April 11, 1996).
4.2 Articles of Incorporation of the Company
(incorporated by reference to the corresponding
Exhibit Number in the Company's Registration
Statement on Form S-1 (Registration No. 333-1678)
filed with the Securities and Exchange Commission
on February 27, 1996).
4.3 Bylaws of the Company (incorporated by reference
to the corresponding Exhibit Number in the
Company's Registration Statement on Form S-1
(Registration No. 333-1678) filed with the
Securities and Exchange Commission on February 27,
1996).
5.1 Opinion of Locke Purnell Rain Harrell (A
Professional Corporation).
23.1 Consent of KPMG Peat Marwick LLP, Independent
Accountants.
23.2 Consent of Locke Purnell Rain Harrell (A
Professional Corporation)(included in its opinion
filed as Exhibit 5.1).
24.1 Power of Attorney (included on the signature page
of this Registration Statement).
99.1 Casa Ole Restaurants, Inc. 1996 Long Term Incentive Plan
(incorporated by reference to Exhibit Number 10.16 in
Amendment No. 1 to the Company's Registration Statement on
Form S-1 (Registration No. 333-1678) filed with the Securities
and Exchange Commission on April 11, 1996).
99.2 Casa Ole Restaurants, Inc. 1996 Manager's Stock
Option Plan.
99.3 Casa Ole Restaurants, Inc. Stock Option Plan for
Non-Employee Directors (incorporated by reference to Exhibit
No. 1 to the Company's Registration Statement on Form S-1
(Registration No. 333-1678) filed with the Securities and
Exchange Commission on April 11, 1996).
<PAGE> 1
EXHIBIT 5.1
February 21, 1997
Casa Ole Restaurants, Inc.
1135 Edgebrook
Houston, Texas 77034-1899
Re: Registration of 620,000 shares of Common Stock, $.01 par value
per share, pursuant to a Registration Statement on Form S-8
Ladies and Gentlemen:
We have acted as counsel for Casa Ole Restaurants, Inc., a Texas
corporation (the "Company"), in connection with the registration under the
Securities Act of 1933, as amended (the "Securities Act"), pursuant to a
Registration Statement on Form S-8 (the "Registration Statement"), of 620,000
shares of Common Stock, $.01 par value per share, of the Company (the "Common
Stock") to be issued to officers, directors and employees of the Company for
the purposes and substantially upon the terms and conditions set forth in the
Casa Ole Restaurants, Inc. 1996 Long Term Incentive Plan, the Casa Ole
Restaurants, Inc. 1996 Manager's Stock Option Plan and the Casa Ole
Restaurants, Inc. Stock Option Plan for Non-Employee Directors (the "Plans").
Based upon our examination of such papers and documents as we have
deemed relevant or necessary in rendering this opinion, and based upon our
review of the Texas Business Corporation Act, we hereby advise you that we are
of the opinion that assuming, with respect to shares of Common Stock issued and
sold after the date hereof, (i) the receipt of proper consideration for the
issuance thereof in excess of the par value thereof, (ii) the availability of a
sufficient number of shares of Common Stock authorized by the Company's
Articles of Incorporation then in effect, (iii) compliance with the terms of
any agreement entered into in connection with any options or shares of Common
Stock issued under the Plans, and (iv) no change occurs in the applicable law
or the pertinent facts, shares of Common Stock purchasable under the Plans will
be legally issued, fully paid and non-assessable shares of Common Stock.
We consent to the filing of this opinion as Exhibit 5.1 to the
Registration Statement filed by the Company with the Securities and Exchange
Commission. By so consenting, we do not thereby admit that our firm's consent
is required by Section 7 of the Securities Act.
Very truly yours,
LOCKE PURNELL RAIN HARRELL
(A Professional Corporation)
By: /s/ KENT JAMISON
--------------------------------
Kent Jamison
<PAGE> 1
Exhibit 23.1
The Board of Directors
Casa Ole Restaurants, Inc.
We consent to incorporation by reference in the Registration Statement (No.
333- ) on Form S-8 of Casa Ole Restaurants, Inc. of our report dated January
26, 1996, relating to the combined financial statements of Casa Ole
Restaurants, Inc., which report appears in the Form S-1 Registration Statement
(No. 333-1678) dated April 25, 1996.
KPMG Peat Marwick LLP
Houston, Texas
February 12, 1997
<PAGE> 1
EXHIBIT 99.2
CASA OLE RESTAURANTS, INC.
1996 MANAGER'S STOCK OPTION PLAN
WHEREAS, the Board of Directors of Casa Ole Restaurants, Inc. (the
"Corporation") has determined that it is advisable and in the best interests of
the Corporation and its Managers (as hereinafter defined) to adopt the 1996
Manager's Stock Option Plan, and has so adopted the 1996 Manager's Stock Option
Plan ("Manager's Plan").
1. Purpose
The Manager's Plan has been established by the Corporation to:
(a) Attract and retain key employees;
(b) Motivate participating employees, by means of
appropriate incentives, to achieve long-range goals;
(c) Provide incentive compensation opportunities that are
competitive with those of other corporations; and
(d) Further identify the interests of eligible employees
with those of the Corporation's other shareholders through compensation
alternatives based on the Corporation's Common Stock;
and thereby promote the long-term financial interest of the Corporation,
including the growth in value of the Corporation's equity and enhancement of
long-term shareholder return.
2. Scope
Awards under the Manager's Plan may be granted in the form of
(i) incentive stock options ("incentive stock options") as provided in Section
422 of the Internal Revenue Code of 1986, as amended (the "Code") to acquire
shares of the Common Stock, $.01 par value per share, of the Corporation (the
"Common Stock"), and (ii) non-qualified stock options ("non-qualified options")
(unless otherwise indicated, references in the Manager's Plan to "options"
shall include incentive stock options and non-qualified options). Unless
increased by resolution of the Board of Directors, the maximum aggregate number
of shares of Common Stock with respect to which options may be awarded from
time to time under the Manager's Plan shall be two hundred thousand (200,000)
(subject to adjustment as described in paragraph 13 hereof). The maximum
number of shares of Common Stock with respect to which incentive stock options,
and non-qualified options may be granted in any one year to any Manager (as
defined in paragraph 5(a) hereof) shall not exceed five thousand (5,000).
Shares of Common Stock with respect to which awards are granted may be, in
whole or in part, authorized and unissued shares, authorized and issued shares
held in the treasury of the Corporation, or issued shares reacquired by the
Corporation, as the Board of Directors of the Corporation (the "Board of
Directors") shall from time to time
<PAGE> 2
determine. If for any reason (other than surrender of options) any shares as
to which an option has been granted cease to be subject to purchase thereunder,
then the shares in respect of which such option was granted shall become
available for subsequent awards under the Manager's Plan to the extent
permitted by the Code and other applicable law.
3. Effective Date
The Manager's Plan shall become effective as of the date of
the first registration of an equity security of the Corporation under Section
12 of the Securities Exchange Act of 1934, as amended (the "1934 Act"), and,
unless sooner terminated pursuant to the terms hereof, the Manager's Plan shall
terminate on December 31, 2005.
4. Administration
(a) The Manager's Plan shall be administered, construed
and interpreted by the Board of Directors of the Corporation; provided, that
the Board of Directors, in its discretion, may delegate any or all of its
authority, powers and discretion under the Manager's Plan to (i) the
Compensation Committee of the Board of Directors or (ii) any other committee
selected or established by the Board of Directors or the Compensation
Committee. (References herein to the "Committee" shall be deemed to refer
exclusively to the Compensation Committee or any successor thereto or any
committee selected or established in accordance with clause (ii) above).
Notwithstanding anything in this paragraph 4 to the contrary, all authority to
exercise discretion with respect to participation in the Manager's Plan by
persons who are (i) "officers" within the meaning of the applicable Securities
and Exchange Commission rules and regulations relating to Section 16 of the
Securities Exchange Act of 1934, as amended (the "1934 Act"), or any successor
statute, (ii) directors of the Corporation, and/or (iii) beneficial owners of
more than ten percent (10%) of any class of equity securities of the
Corporation who are otherwise eligible to participate in the Manager's Plan,
and the timing, pricing, amounts and other terms and conditions of awards
granted under the Manager's Plan to such officers, directors and beneficial
owners, shall be vested in (i) the Board of Directors of the Corporation, or
(ii) the Compensation Committee, if consisting of two (2) or more directors
each of whom is a Non-Employee Director within the meaning ascribed to such
term in Rule 16b-3 promulgated under the 1934 Act, or within any successor
definition or under any successor rule.
(b) With respect to persons subject to Section 16 of the
1934 Act, transactions under the Manager's Plan are intended to comply with all
applicable conditions of Rule 16b-3 or its successors under the 1934 Act. To
the extent any provision of the Manager's Plan or action by the Board of
Directors or the Committee fails to so comply, it shall be deemed null and
void, to the extent permitted by law and deemed advisable by the Board of
Directors or the Committee, as applicable.
(c) The Board of Directors shall have plenary authority
in its sole discretion and subject to the express provisions of the Manager's
Plan, to grant options, to determine the purchase price of the Common Stock
covered by each option (the "exercise price"), the term of each option and to
change the same, the class or classes of shares of Common Stock
-2-
<PAGE> 3
to be covered by each option, the Managers (as defined in paragraph 5 hereof)
to whom, and the time or times at which, options shall be granted and the
number of shares to be covered by each option; to designate options as
incentive stock options or non-qualified options; to interpret the Manager's
Plan; to prescribe, amend and rescind rules and regulations relating to the
Manager's Plan; to determine the terms and provisions of the option agreements
entered into in connection with awards under the Manager's Plan; in its
discretion, to accelerate outstanding awards and (with respect to non-qualified
options) extend the exercisability thereof; to prepare and distribute in such
manner as the Board of Directors determines to be appropriate information
concerning the Manager's Plan, and to make all other determinations deemed
necessary or advisable for the administration of the Manager's Plan. The Board
of Directors may delegate to one or more of its members or to one or more
agents such administrative duties as it may deem advisable, and the Board of
Directors or any person to whom it has delegated duties as aforesaid may employ
one or more persons to render advice with respect to any responsibility the
Board of Directors or such person may have under the Manager's Plan; provided,
however, that except as authorized in paragraph 4(a) above, the Board of
Directors shall not delegate its authority to construe and interpret the
Manager's Plan, to determine which Employees may participate in the Manager's
Plan, or its authority to make grants of options.
(d) If appointed, the Committee shall function as
follows. The Committee may adopt such rules as it deems necessary, desirable
or appropriate. The Committee may act at a meeting or in writing without a
meeting. The Committee shall elect one of its members as chairman, appoint a
secretary (who may or may not be a Committee member, as the case may be) and
advise the Board of Directors of such actions. The secretary shall keep a
record of all minutes and forward all necessary communications to the
Corporation. A majority of the Committee shall constitute a quorum. All
decisions of the Committee shall be made by a vote of not less than a majority
of the Committee members present at a meeting of the Committee at which a
quorum is present or by a written consent signed by all of the members of the
Committee. A dissenting Committee member who, within a reasonable time after
he has knowledge of any action or failure to act in accordance with the
preceding sentence, registers his dissent in writing delivered to the other
Committee members and to the Board of Directors, shall not be responsible for
any such action or failure to act.
(e) All usual and reasonable expenses of the Committee
shall be paid by the Corporation, and no member shall receive compensation with
respect to his services for the Committee except as may be authorized by the
Board of Directors. The Board of Directors and the Committee may employ
attorneys, consultants, accountants or other persons, and the Board of
Directors, the Committee, the Corporation and its officers and directors shall
be entitled to rely upon the advice, opinions or valuations of any such
persons. All actions taken and all interpretations and determinations made by
the Board of Directors or the Committee in good faith shall be final and
binding upon all Employees who have received awards, the Corporation and all
other interested persons. No member of Board
-3-
<PAGE> 4
of Directors or the Committee shall be personally liable for any action,
determination, or interpretation taken or made in good faith with respect to
the Manager's Plan or awards made thereunder, and the Corporation shall
indemnify and hold harmless each member of the Board of Directors or the
Committee against all loss, cost, expenses or damages, occasioned by any act or
omission to act in connection with any such action, determination or
interpretation under or of the Manager's Plan, consistent with the
Corporation's articles of incorporation and bylaws.
(f) Subject to such limitations or restrictions as may be
imposed by the Code or other applicable law, the Board of Directors may grant
to a Manager who has been granted an award under the Manager's Plan or any
other benefit plan maintained by the Corporation or any of its subsidiaries, or
any predecessor or successor thereto, in exchange for the surrender and
cancellation of such prior award, a new award with such terms and conditions as
the Board of Directors may deem appropriate consistent with the provisions of
the Manager's Plan.
5. Eligibility; Factors To Be Considered in Granting Awards
(a) Awards shall be granted only to persons who are
employees of the Corporation or one or more of its subsidiaries (as defined
below) and either are managers or assistant managers of, or in the opinion of
the Board of Directors or the Committee hold key managerial positions in or
for, the Corporation or any subsidiary or any Casa Ole restaurant owned and
operated by the Corporation or any subsidiary and who are at the time of grant
neither officers, directors or ten percent (10%) shareholders of the
Corporation (each as described in paragraph 4(a) hereof) ("Managers"). In
determining the Managers to whom awards shall be granted and the terms and
conditions of each award, the Board of Directors shall take into account the
nature of the Manager's duties, his or her present and potential contributions
to the growth and success of the Corporation, and such other factors as the
Board of Directors shall deem relevant in connection with accomplishing the
purposes of the Manager's Plan. A Manager who has been granted an award or
awards under the Manager's Plan may be granted an additional award or awards,
subject to such limitations as may be imposed by the Code on the grant of
incentive stock options or other applicable law.
(b) For purposes of this Manager's Plan, the term
"subsidiary" means any corporation (other than the Corporation) during any
period of which fifty percent (50%) or more of the total combined voting power
of all classes of stock is owned, directly or indirectly, by the Corporation.
For purposes of this Manager's Plan, the term "affiliate" shall have the same
meaning as in Rule 12b-2 promulgated under the 1934 Act.
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6. Option Price; Fair Market Value
The per share exercise price of each option for shares of
Common Stock shall be determined by the Board of Directors, but shall be one
hundred percent (100%) of the Fair Market Value on the date the option is
granted unless the Board of Directors expressly determines otherwise, subject
to the requirements for incentive stock options set forth in paragraph 9
hereof. For purposes of this Manager's Plan, the term "Fair Market Value per
Share" as of any date shall mean the closing price of shares of Common Stock as
reported on the National Market System of the National Association of
Securities Dealers, Inc. Automated Quotation System ("NASDAQ"), or if such
Common Stock is not listed or admitted to trading on the NASDAQ National Market
System, the last quoted sales price or, if not so quoted, the average of the
high bid and low asked prices in the over-the-counter market, as reported by
the NASDAQ System or such other system as may then be in use, or if such Common
Stock is not reported on any such system and is not listed or admitted to
trading on any national securities exchange, the average of the closing bid and
asked prices as furnished by a professional market maker making a market in
such Common Stock selected by the Board of Directors, or if no such market
maker is making a market in such Common Stock, the fair value of such Common
Stock as determined in good faith by the Board of Directors by applying
generally recognized principles of valuing closely-held securities; provided,
however, that in any event the Fair Market Value per Share shall be
appropriately adjusted to reflect events described in paragraph 13 hereof. The
Board of Directors shall determine the date on which an option is granted,
provided that such date is consistent with the Code and any applicable rules or
regulations thereunder; in the absence of such determination, the date on which
the Board of Directors adopts a resolution granting an option shall be
considered the date on which such option is granted, provided the Manager to
whom the option is granted is promptly notified of the grant and a written
option agreement is duly executed as of the date of the resolution. The
exercise price so determined shall also be applicable in connection with the
exercise of any related right.
7. Term of Options
The term of each option granted under the Manager's Plan shall
be as the Board of Directors shall determine, but in no event shall any option
have a term of more than ten (10) years from the date of grant, subject to
earlier termination as provided in paragraphs 11 and 12 hereof. If the holder
of an incentive stock option owns Common Stock possessing more than ten percent
(10%) of the combined voting power of all classes of stock of the Corporation
or any subsidiary, the term of such incentive stock option shall not exceed
five (5) years from the date of grant.
8. Exercise of Options
(a) Subject to the provisions of this Manager's Plan and
unless otherwise provided in the option agreement, an option granted under the
Manager's Plan shall become
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one hundred percent (100%) vested at the earliest of the Manager's retirement
from active employment at or after the age of sixty-five (65) or the Manager's
death or total and permanent disability (as defined in paragraph 12 hereof).
Prior to becoming one hundred percent (100%) vested, each option shall become
exercisable in such cumulative installments and upon such events as the Board
of Directors may determine in its sole discretion. Subject to the foregoing,
the unvested portion of any option or right granted under the Manager's Plan
shall be forfeited on the date the Manager ceases to be a Manager of the
Corporation. The Board of Directors may also, in its sole discretion,
accelerate the exercisability of any option or installment thereof at any time.
(b) An option may be exercised at any time or from time
to time (subject, in the case of an incentive stock option, to such
restrictions as may be imposed by the Code), as to any or all full shares of
Common Stock as to which the option has become exercisable; provided, however,
that an option shall not be exercised at any time as to less than fifty (50)
shares (or less than the number of shares of Common Stock as to which the
option is then exercisable, if that number is less than fifty (50) shares).
(c) At the time of exercise of any option, the per share
exercise price of such option shall be paid in full for each share of Common
Stock with respect to which such option is exercised. Payment may be made in
cash or, with the approval of the Board of Directors, in shares of the Common
Stock, valued at the Fair Market Value per Share on the date of exercise. If
the Corporation shall have a class of its Common Stock registered pursuant to
Section 12 of the 1934 Act, an option holder may also make payment at the time
of exercise of an option for such class of Common Stock by delivering to the
Corporation a properly executed exercise notice together with irrevocable
instructions to a broker approved by the Corporation that upon such broker's
sale of shares with respect to which such option is exercised, it is to deliver
promptly to the Corporation the amount of sale proceeds necessary to satisfy
the option exercise price and any required withholding taxes (subject to the
provisions of paragraph 16 hereof).
(d) Notwithstanding any other provision in the Manager's
Plan to the contrary, unless an agreement with respect to an award expressly
provides otherwise, either the option or the underlying shares of Common Stock
acquired under this Manager's Plan must be held for a period of not less than
six (6) months from the date of the award thereof.
(e) Upon the exercise of an option or portion thereof in
accordance with the Manager's Plan, the option agreement and such rules and
regulations as may be established by the Board of Directors, the holder thereof
shall have the rights of a shareholder with respect to the Common Stock issued
as a result of such exercise.
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9. Incentive Stock Options
(a) The Board of Directors shall designate the Managers
to whom incentive stock options, as described in Section 422 of the Code or any
successor section thereto, are to be awarded under the Manager's Plan and shall
determine the class or classes and the number of shares of Common Stock to be
covered by each incentive stock option. Incentive stock options shall be
awarded only to Managers of the Corporation. In no event shall the aggregate
Fair Market Value of all Common Stock (determined at the time the option is
awarded) with respect to which incentive stock options are exercisable for the
first time by an individual during any calendar year (under all plans of the
Corporation and its subsidiaries) exceed $100,000.
(b) The purchase price of a share of Common Stock under
each incentive stock option shall be determined by the Board of Directors;
provided, however, that in no event shall such price be less than one hundred
percent 100% of the Fair Market Value Per Share as of the date of grant or one
hundred ten percent (110%) of such Fair Market Value Per Share if the holder of
the incentive stock option owns Common Stock possessing more than ten percent
(10%) of the combined voting power of all classes of stock of the Corporation
or any subsidiary.
(c) Except as provided in paragraphs 11 and 12 hereof, no
incentive stock option shall be exercised at any time unless the holder thereof
is then a Manager of the Corporation or one of its subsidiaries. For this
purpose, "subsidiary" shall include, as under Treasury Regulations Section
1.421-7(h)(3)-(4), example (3), any corporation that is a subsidiary of the
Corporation during the entire portion of the requisite period of employment
during which it is the employer of the holder.
(d) In the event of amendments to the Code or applicable
rules or regulations relating to incentive stock options subsequent to the date
hereof, the Corporation may amend the provisions of the Manager's Plan, and the
Corporation and the Managers holding such incentive stock options may agree to
amend outstanding option agreements to conform to such amendments.
10. Limited Transferability of Options and Rights
Incentive stock options granted under the Manager's Plan shall
not be transferable otherwise than by will or the laws of descent and
distribution, or pursuant to a qualified domestic relations order as defined by
the Code or Title I of the Manager Retirement Income Security Act of 1974, as
amended, or the rules thereunder. Incentive stock options shall be exercisable
during the lifetime of the Manager only by the Manager or by the Manager's
guardian or legal representative (unless such exercise would disqualify an
option as an incentive stock option). Unless the Board of Directors otherwise
provides in an agreement regarding the award of non-qualified options (not
granted in connection
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<PAGE> 8
with an incentive stock option), non-qualified options (not granted in
connection with incentive stock options) may be transferred by the Manager to
Permitted Transferees, provided that there cannot be any consideration for the
transfer. For purposes of this paragraph 10, the term "Permitted Transferee"
shall mean Immediate Family Members of the Manager, trusts for the benefit of
such Immediate Family Members, and partnerships in which such optionee and/or
Immediate Family Members are the only partners, provided in each event that no
consideration is provided for such transfer; and the term "Immediate Family
Member" shall mean an optionee's descendants (children, grandchildren and more
remote descendants), and shall include step-children and relationships arising
from legal adoption. Otherwise, options granted under the Manager's Plan may
not be sold, assigned, conveyed, gifted, pledged, hypothecated or otherwise
transferred in any manner other than by will or the laws of descent and
distribution. During the recipient's lifetime, a non-qualified option may only
be exercised by the optionee, the optionee's guardian or legal representatives,
or a Permitted Transferee.
11. Termination of Employment; Termination for Cause
(a) In the event that the employment of a Manager to whom
an option has been granted under the Manager's Plan terminates for any reason
(except pursuant to an authorized leave of absence for military or government
service as determined by the Board of Directors or as set forth in paragraph 12
hereof), unless otherwise determined by the Board of Directors, such Manager
shall have a period of ninety (90) days following termination of employment in
which to exercise any then vested options under the Manager's Plan, and at the
end of the 90-day period, all rights of such Manager under any then outstanding
option shall terminate and shall be forfeited immediately as to any unexercised
portion thereof.
(b) Awards granted under the Manager's Plan shall not be
affected by any change of duties or position so long as the holder continues to
be an employee of the Corporation or any subsidiary thereof; provided, however,
that notwithstanding the terms of any award granted under this Manager's Plan,
in the event that the holder becomes an officer as described in paragraph
4(a)(i) hereof either the option or the underlying shares of Common Stock
acquired under the Manager's Plan must be held for a period of not less than
six (6) months from the date of the award thereof. Any option agreement, and
any rules and regulations relating to the Manager's Plan, may contain such
provisions as the Board of Directors shall approve with reference to the
determination of the date employment terminates and the effect of leaves of
absence. Any such rules and regulations with reference to any option agreement
shall be consistent with the provisions of the Code and any applicable rules
and regulations thereunder. Nothing in the Manager's Plan or in any award
granted pursuant to the Manager's Plan shall confer upon any Manager any right
to continue in the employ of the Corporation or any subsidiary or interfere in
any way with the right of the Corporation or any subsidiary to terminate such
employment at any time.
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<PAGE> 9
(c) Notwithstanding the foregoing provisions of this
paragraph 14, the Committee may provide in the terms of any agreement or award
granted under the Manager's Plan that, if a Manager's employment terminates
for "cause," as defined in such agreement or award, that all options will be
forfeited immediately upon such termination.
12. Death or Total and Permanent Disability of Manager
If a Manager to whom an option has been granted under the
Manager's Plan shall die or suffer a total and permanent disability while
employed by the Corporation or a subsidiary, such option shall become one
hundred percent (100%) vested and may be exercised by the Manager, the legal
guardian of the Manager (unless such exercise would disqualify an option as an
incentive stock option), a legatee or legatees of the Manager under the
Manager's last will, or by the Manager's personal representatives or
distributees, whichever is applicable, at any time within twelve (12) months
after the date of the Manager's death or total and permanent disability, but in
no event later than the date on which the option or right terminates. If a
Manager who terminates employment by reason of total and permanent disability
shall die, a legatee or legatees of such Manager under the Manager's last will,
or the executor of such Manager's estate, shall have the right to exercise such
option during the period ending twelve (12) months after the date of the
Manager's termination of employment by reason of total and permanent
disability. For purposes hereof, "total and permanent disability" shall have
the meaning set forth in Code Section 22(e)(3) or any successor provision
thereto.
13. Adjustments Upon Changes in Capitalization, etc.
Notwithstanding any other provision of the Manager's Plan, the
Board of Directors shall make or provide for such adjustments to the Manager's
Plan, to the number and classes of shares available thereunder, to the terms
and number of shares of Common Stock or other securities available, and/or to
the purchase price of a share of Common Stock or other securities available
under, any outstanding options as it shall deem appropriate to prevent dilution
or enlargement, including adjustments in the event of changes in the
outstanding Common Stock by reason of stock dividends, split-ups,
recapitalizations, mergers, consolidations, combinations or exchanges of
shares, separations, reorganizations, liquidations and the like. In the event
of any offer to holders of Common Stock generally relating to the acquisition
of their shares, the Board of Directors shall make such adjustment as it deems
equitable in respect to outstanding options including revision of outstanding
options so that they may be exercisable or redeemable for or payable in the
consideration payable in the acquisition transaction. Any such determination
by the Board of Directors shall be conclusive. Any fractional shares resulting
from such adjustments to options shall be eliminated.
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14. Business Combinations
The following provisions shall apply unless a Manager's
written agreement evidencing an award of options under the Manager's Plan
provides otherwise. In the event that, while any options are outstanding under
the Manager's Plan, there shall occur (a) a merger or consolidation of the
Corporation with or into another corporation in which the Corporation shall not
be the surviving corporation (for purposes of this paragraph 14, the
Corporation shall not be deemed the surviving corporation in any such
transaction if, as the result thereof, it becomes a wholly-owned subsidiary of
another corporation), (b) a dissolution of the Corporation, (c) a transfer of
all or substantially all of the assets or shares of stock of the Corporation in
one transaction or a series of related transactions to one or more other
persons or entities, (d) if any "person" or "group" as those terms are used in
Sections 13(d) and 14(d) of the 1934 Act, other than Excluded Persons, becomes
the "beneficial owner" (as defined in Rule 13d-3 of the 1934 Act), directly or
indirectly, of securities of the Corporation representing 50% or more of the
combined voting power of the Corporation's then outstanding securities, or (e)
during any period of two consecutive years commencing on or after July 1, 1996,
individuals who at the beginning of the period constituted the Board cease for
any reason to constitute at least a majority, unless the election of each
director who was not a director at the beginning of the period has been
approved in advance by directors representing at least two-thirds (2/3) of the
directors then in office who were directors at the beginning of the period,
then, with respect to each option outstanding immediately prior to the
consummation of such transaction, if provision is not otherwise made in writing
in connection with such transaction for the substitution of securities of
another corporation, and without the necessity of any action by the Board of
Directors, each such option shall terminate, but each holder of an outstanding
option shall be entitled, immediately prior to the effective date of such
transaction, to purchase the number of shares that are then vested and
exercisable. The unexercised portion of any option shall be deemed cancelled
and terminated as of the effective date of such transaction. Notwithstanding
the foregoing, the Board of Directors may provide that upon the occurrence of
such events as the Board of Directors shall deem appropriate, all outstanding
options shall become fully vested and exercisable. The term "Excluded Persons"
means each of Larry N. Forehand, Michael D. Domec, Louis P. Neeb, John C.
Textor, Patrick A. Morris and Stacy M. Riffe, and any person, entity or group
under the control of any of them, or a trustee or other fiduciary holding
securities under an employee benefit plan of the Corporation.
15. Termination and Amendment
The Board of Directors of the Corporation shall have the right
to amend, suspend or terminate the Manager's Plan at any time; provided,
however, that an amendment shall be subject to shareholder approval if such
approval is required by any applicable rule promulgated under the 1934 Act, the
Code or the rules of any securities exchange or market system on which
securities of the Corporation are listed or admitted to
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<PAGE> 11
trading at the time such amendment is adopted. The Board of Directors may
delegate to the Committee all or any portion of its authority under this
paragraph 15. If the Manager's Plan is terminated, the terms of the Manager's
Plan shall, notwithstanding such termination, continue to apply to awards
granted prior to such termination. In addition, no suspension, termination,
modification or amendment of the Manager's Plan may, without the consent of the
Manager to whom an award shall theretofore have been granted, adversely affect
the rights of such Manager under such award.
16. Withholding Tax
(a) The Corporation shall have the right to deduct from
all amounts paid in cash in consequence of the exercise of an option under the
Manager's Plan any taxes required by law to be withheld with respect to such
cash payments. Subject to paragraph 16(b) below, where a Manager or other
person is entitled to receive shares of Common Stock pursuant to the exercise
of an option pursuant to the Manager's Plan, the Corporation shall have the
right to require the Manager or such other person to pay to the Corporation the
amount of any taxes that the Corporation is required to withhold with respect
to such shares, or, in lieu thereof, to retain, or sell without notice, a
sufficient number of such shares to cover the amount required to be withheld.
Upon the disposition (within the meaning of Code Section 424(c)) of shares of
Common Stock acquired pursuant to the exercise of an incentive stock option
prior to the expiration of the holding period requirements of Code Section
422(a)(1), the Manager shall be required to give notice to the Corporation of
such disposition and the Corporation shall have the right to require the
Manager to pay to the Corporation the amount of any taxes that are required by
law to be withheld with respect to such disposition.
(b) In the case of a Manager or other person who is
subject to Section 16 of the 1934 Act, all tax withholding obligations shall be
satisfied through the withholding or surrender of shares of Common Stock as
necessary to comply with Section 16 of the 1934 Act and the rules and
regulations thereunder or to obtain any exemption therefrom.
17. Written Agreements; Stock Legends
Each award of options shall be evidenced by a written
agreement, executed by the Manager and the Corporation, which shall contain
such restrictions, terms and conditions as the Board of Directors may require,
and certificates evidencing shares of Common Stock issued under the Manager's
Plan shall have conspicuously noted thereon such restrictions on
transferability as the Corporation may require in order to ensure compliance
with applicable federal and state securities laws and regulations.
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18. Effect on Other Stock Plans
The adoption of the Manager's Plan shall have no effect on
awards made or to be made pursuant to other plans covering Managers of the
Corporation or its subsidiaries, or any predecessors or successors thereto.
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