<PAGE>
As filed with the Securities and Exchange Commission on February 19, 1998
Registration No. 333-_______________
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------
FORM S-8
REGISTRATION STATEMENT
Under
The Securities Act of 1933
-----------------------
BARBEQUES GALORE LIMITED
(Exact name of registrant as specified in its charter)
AUSTRALIAN CAPITAL TERRITORY, AUSTRALIA NOT APPLICABLE
(State or other jurisdiction (IRS Employer Identification No.)
of incorporation or organization)
327 CHISHOLM ROAD, AUBURN, SYDNEY, NSW 2144, AUSTRALIA
(Address of principal executive offices) (Zip code)
------------------------
BARBEQUES GALORE LIMITED
1997 SHARE OPTION PLAN (Full title of the Plans)
-----------------------
SYDNEY SELATI
BARBEQUES GALORE LIMITED
15041 BAKE PARKWAY #A
IRVINE, CALIFORNIA 92718
(Name and address of agent for service)
(714) 597-2400
(Telephone number, including area code, of agent for service)
------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
==========================================================================================
Proposed Proposed
Title of Amount Maximum Maximum Amount of
Securities to be to be Offering Price Aggregate Registration
Registered(1) Registered(2) per Share(3) Offering Price(3) Fee
- ------------------------ ------------ -------------- ---------------- ------------
<S> <C> <C> <C> <C>
Options to Purchase
Ordinary Shares 329,254 N/A N/A N/A
Ordinary Shares 329,254 shares $6.59 $2,169,783.86 $640.09
==========================================================================================
</TABLE>
(1) American Depository Shares which may be issued with respect to Ordinary
Shares registered hereunder have been registered on a separate registration
statement on Form F-6 (File No. 333-07726).
(2) This Registration Statement shall also cover any additional Ordinary Shares
which become issuable under the 1997 Share Option Plan by reason of any
bonus issue, recapitalization or other similar transaction effected without
the receipt of consideration which results in an increase in the number of
the Registrant's outstanding Ordinary Shares.
(3) Calculated solely for purposes of this offering under Rule 457(h) of the
Securities Act of 1933, as amended, on the basis of the average of the high
and low selling prices per American Depository Shares evidencing one
Ordinary Share of Barbeques Galore Limited on February 17, 1998 as reported
by the Nasdaq National Market.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
---------------------------------------
Barbeques Galore Limited (the "Registrant") hereby incorporates by
reference into this Registration Statement the following documents previously
filed with the Securities and Exchange Commission (the "SEC"):
(a) The Registrant's prospectus filed with the SEC pursuant to Rule 424(b)
of the Securities Act of 1933, as amended (the "1933 Act"), in
connection with the Registration Statement Number 333-37259 on Form F-
1, together with the amendments thereto, filed with the SEC on October
6, 1997, in which there is set forth audited financial statements of
the Registrant; and
(b) The Registrant's Report of Foreign Issuer on Form 6-K, file number
333-37259, for the fiscal quarter ended October 31, 1997, as filed
with the SEC on December 16, 1997;
(c) The Registrant's Registration Statement No. 00-029512 on Form 8-A
filed with the SEC on October 23, 1997 pursuant to Section 12 of the
Securities Act of 1934 (the "1934 Act"), in which there is described
the terms, rights and provisions applicable to the Registrant's
outstanding Ordinary Shares.
All reports and definitive proxy or information statements filed pursuant
to Section 13(a), 13(c), 14 or 15(d) of the 1934 Act after the date of this
Registration Statement and prior to the filing of a post-effective amendment
which indicates that all securities offered hereby have been sold or which
deregisters all securities then remaining unsold shall be deemed to be
incorporated by reference into this Registration Statement and to be a part
hereof from the date of filing of such documents. Any statement contained in a
document incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Registration Statement
to the extent that a statement contained herein or in any subsequently filed
document which also is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this
Registration Statement.
Item 4. Description of Securities
-------------------------
Not Applicable.
Item 5. Interests of Named Experts and Counsel
--------------------------------------
Not Applicable.
Item 6. Indemnification of Directors and Officers
-----------------------------------------
The Registrant's Memorandum and Articles of Association provide that
subject to the laws of Australia, every Director or other officer shall be
entitled to be indemnified by the Registrant against all losses or liabilities
incurred by him in the execution and discharge of his duties, or in relation
thereto, including any liability in defending any proceedings, civil or
criminal, which relate to anything done or omitted or alleged to have been done
or omitted by him as an officer or employee of the Registrant and (i) in which
judgment is given in his favor, (ii) in which he is acquitted or (iii) in
connection with an application in relation to such proceedings in which the
court grants relief to the person under the Corporations Law. The Underwriting
Agreement will contain provisions indemnifying officers and directors of the
Registrant against certain liabilities.
<PAGE>
The Registrant's Memorandum and Articles of Association further provide
that no director or other officer shall be liable, except in the case of his own
negligence, default, breach of duty or breach of trust, for (i) the acts or
omissions of any other director or officer, (ii) joining in any act for
conformity, (iii) losses due to inadequacy of title to property or securities
acquired on behalf of the Registrant, (iv) losses due to insolvency or tortious
acts of persons with whom monies, property or securities are deposited or (v)
losses due to errors of judgment, omissions or oversights.
The Registrant maintains a policy of directors' and officers' liability
insurance with an Australian insurer for the Registrant and all subsidiaries
protecting against all losses for which directors and officers are not otherwise
indemnified by the Registrant. Such insurance has a A$5 million policy limit
and excludes (i) fines and penalties imposed by law, (ii) claims made by
entities owning 10% or more of the outstanding Ordinary Shares of the
Registrant, (iii) claims based on pollution, bodily injury, property damage or
loss, insider trading, the receipt of illegal or improper benefit, deliberately
fraudulent acts or omissions or violation of fiduciary duties with respect to
pension or benefit plans, (iv) certain insured versus insured actions and,
specifically in the United States and Canada, (v) claims relating to violations
of securities laws or the Employee Retirement Income Security Act of 1974
(ERISA) or any similar federal, state or local law. Prior to the consummation
of the Offering, the Company intends to obtain a policy of directors' and
officers' liability insurance that will insure United States directors and
officers against the cost of defense, settlement or payment of a judgment under
certain circumstances, including certain violations of the securities laws.
Item 7. Exemption from Registration Claimed
-----------------------------------
Not Applicable.
Item 8. Exhibits
--------
Exhibit Number Exhibit
- -------------- -------
4 Instruments Defining the Rights of Shareholders. Reference is
made to Registrant's Registration Statement No. 00-029512 on
Form 8-A which is incorporated herein by reference pursuant to
Item 3(c).
5 Opinion and Consent of Freehill, Hollingdale & Page.
23.1 Consent of Horwath Sydney Partnership.
23.2 Consent of KPMG.
23.3 Consent of Freehill, Hollingdale & Page is contained in
Exhibit 5.
24 Power of Attorney. Reference is made to page II-4 of this
Registration Statement.
99.1 1997 Share Option Plan.
99.2 Form of Notice of Grant under the 1997 Share Option Plan.
99.3 Stock Option Agreement under the 1997 Share Option Plan.
99.4 Addendum to Stock Option Agreement under the 1997 Share
Option Plan.
Item 9. Undertakings.
-------------
A. The undersigned Registrant hereby undertakes: (1) to file, during any
period in which offers or sales are being made, a post-effective amendment to
this Registration Statement (i) to include any prospectus required by Section
10(a)(3) of the Securities Act of 1933, as amended (the "1933 Act"), (ii) to
reflect in the prospectus any facts or events arising after the effective date
of the Registration Statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a fundamental change
in the information set forth in the Registration Statement, and (iii) to include
any material information with respect to the plan of distribution not previously
disclosed in the Registration Statement or any material change to such
information in the Registration Statement; provided, however, that clauses
--------
(1)(i) and (1)(ii) shall not apply if the information required
II-2
<PAGE>
to be included in a post-effective amendment by those paragraphs is contained in
periodic reports filed by the Registrant pursuant to Section 13 or Section 15(d)
of the 1934 Act that are incorporated by reference into the Registration
Statement; (2) that for the purpose of determining any liability under the 1933
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; and (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 1997 Share Option Plan.
B. The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the 1933 Act, each filing of the Registrant's
annual report pursuant to Section 13(a) or Section 15(d) of the 1934 Act that is
incorporated by reference into the Registration Statement shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
C. Insofar as indemnification for liabilities arising under the 1933 Act
may be permitted to directors, officers or controlling persons of the Registrant
pursuant to the foregoing provisions, or otherwise, the Registrant has been
informed that, in the opinion of the SEC, such indemnification is against public
policy as expressed in the 1933 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 1933
Act, and will be governed by the final adjudication of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Sydney, Australia on this 18th day of February,
1998.
BARBEQUES GALORE LIMITED
By: /s/ Robert Gavshon
_______________________________________
Robert Gavshon
Deputy Chairman of the Board and
General Counsel
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS:
That the undersigned officers and directors of Barbeques Galore Limited, an
Australia corporation, do hereby constitute and appoint Robert Gavshon and
Sydney Selati, or either of them, each with the power of substitution, the
lawful attorneys and agents, with full power and authority to do any and all
acts and things and to execute any and all instruments which said attorneys and
agents, and any one of them, determine may be necessary or advisable or required
to enable said corporation to comply with the Securities Act of 1933, as
amended, and any rules or regulations or requirements of the Securities and
Exchange Commission in connection with this Registration Statement. Without
limiting the generality of the foregoing power and authority, the powers granted
include the power and authority to sign the names of the undersigned officers
and directors in the capacities indicated below to this Registration Statement,
to any and all amendments, both pre-effective and post-effective, and
supplements to this Registration Statement, and to any and all instruments or
documents filed as part of or in conjunction with this Registration Statement or
amendments or supplements thereof, and each of the undersigned hereby ratifies
and confirms all that said attorneys and agents, or any of them, shall do or
cause to be done by virtue hereof. This Power of Attorney may be signed in
several counterparts.
IN WITNESS WHEREOF, each of the undersigned has executed this Power of
Attorney as of the date indicated.
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signatures Title Date
- ---------- ----- ----
<S> <C> <C>
/s/ Sam Linz Chairman of the Board February 18, 1998
- ------------------- (Principal
Sam Linz Executive Officer)
</TABLE>
II-4
<PAGE>
<TABLE>
<S> <C> <C>
/s/ Robert Gavshon Deputy Chairman of the Board February 18, 1998
- ------------------ and General Counsel
Robert Gavshon
/s/ John Price Head of Research and Product February 18, 1998
- ------------------- Development and Director
John Price
/s/ Sydney Selati President of Galore USA February 18, 1998
- ------------------ and Director (Authorized
Sydney Selati U.S. Representative)
/s/ Philip Gardiner Director February 18, 1998
- -------------------
Philip Gardiner
/s/ Gordon Howlett Director February 18, 1998
- -------------------
Gordon Howlett
/s/ David James Chief Financial Officer February 18, 1998
- ------------------- (Principal Financial and
David James Accounting Officer)
</TABLE>
II-5
<PAGE>
EXHIBIT INDEX
-------------
Exhibit
Number Exhibit
------ -------
4 Instruments Defining the Rights of Shareholders. Reference is made
to Registrant's Registration Statement No. 00-029512 on Form 8-A
which is incorporated herein by reference pursuant to Item 3(c).
5 Opinion and Consent of Freehill, Hollingdale & Page.
23.1 Consent of Horwath Sydney Partnership.
23.2 Consent of KPMG.
23.3 Consent of Freehill, Hollingdale & Page is contained in Exhibit 5.
24 Power of Attorney. Reference is made to page II-4 of this
Registration Statement.
99.1 1997 Share Option Plan.
99.2 Form of Notice of Grant under the 1997 Share Option Plan.
99.3 Stock Option Agreement under the 1997 Share Option Plan.
99.4 Addendum to Stock Option Agreement under the 1997 Share Option Plan.
<PAGE>
EXHIBIT 5
[Letterhead of Freehill Hollingdale & Page]
10 February 1998 Our ref Rick Narev
Phone 02 9225 5604
File no 1811824
Doc no SYDCP\98174045.3
Barbeques Galore Limited
327 Chisholm Road
AUBURN NSW 2144
AUSTRALIA
Ladies and Gentlemen
REGISTRATION STATEMENT ON FORM S-8
We have examined the Registration Statement on Form S-8 to be filed by you with
the Securities and Exchange Commission on the date hereof (the REGISTRATION
STATEMENT), in connection with the registration under the Securities Act of
1933, as amended (the ACT), of 329,254 ordinary shares, of Barbeques Galore
Limited, a corporation registered under the national Corporations Law of
Australia (the COMPANY) issuable under the Company's 1997 Share Option Plan (the
1997 PLAN).
We have examined a copy of the Memorandum and Articles of Association of the
Company, as amended, certified as true copies by the company secretary of the
Company on 6 October 1997. We have assumed that there have been no amendments to
the Memorandum and Articles of Association subsequent to the certification by
the company secretary on 6 October 1997.
In our examination, we have assumed the genuineness of all signatures, the
authenticity of all documents presented to us as copies of originals, the
conformity to the originals of all documents presented to us as copies, the
authenticity of the originals of such latter documents and that there have not
been, nor will there by any other actions of the Company, its directors,
shareholders or creditors or of any other person or body or authority,
governmental or non-governmental which alters, supersedes or overrides the
effect on their face of the Memorandum and Articles of Association.
Based upon the foregoing, we are of the opinion that, as a matter of Australian
law, and assuming that upon valid exercise of any options the board of directors
resolves to issue the relevant shares in accordance with the Articles of
Association of the Company, and that the authorised capital of the Company is
sufficient at that time, then when such shares have been issued and sold
pursuant to the
<PAGE>
applicable provisions of the 1997 Plan and in accordance with the Registration
Statement, such shares will be validly issued, fully paid and non-assessable
ordinary shares of the Company. This opinion may be relied upon exclusively by
you, and may not be relied upon by any other person without our prior written
consent.
This opinion is confined to matters of Australian law only. In particular, we
are not qualified to, nor do we express any opinion on the effectiveness of any
action under, nor as to any question of compliance with, any United States
Federal or state law or requirement of any regulatory body.
We consent to the use of this opinion as an exhibit to the Registration
Statement and further consent to the use of our name whenever appearing in the
Registration Statement and any amendment thereto. In giving this consent, we do
not thereby admit that we are within the category of persons whose consent is
required by Section 7 of the Act or the rules and regulations of the Securities
and Exchange Commissioner thereunder.
Yours faithfully
FREEHILL HOLLINGDALE & PAGE
/s/ Rick Narev
- -----------------------
RICK NAREV
Partner
<PAGE>
EXHIBIT 23.1
CONSENT OF HORWATH SYDNEY PARTNERSHIP
Barbeques Galore Limited
15041 Bake Parkway #A
Irvine, CA 92718
USA
Re: Barbeques Galore Limited (the "Company")
S-8 Registration Statement for Offering of an Aggregate of 329,254
Ordinary Shares
------------------------------------------------------------------
Ladies and Gentlemen:
We consent to the incorporation by reference in this Registration of
Barbeques Galore Limited on Form S-8 of our audit report dated August 8, 1997
appearing in Registration Statement No. 333-37259 on Form F-1 of Barbeques
Galore Limited.
HORWATH SYDNEY PARTNERSHIP
/s/ Horwath Sydney Partnership
- ---------------------------------------
February 18, 1998
Sydney, Australia
<PAGE>
EXHIBIT 23.2
[LETTERHEAD OF KPMG APPEARS HERE]
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
Barbeques Galore Limited
We consent to the incorporation by reference in this Registration Statement on
Form S-8 of Barbeques Galore Limited of our audit report dated August 8, 1997
relating to the consolidated balance sheet of Barbeques Galore Limited and
subsidiaries as of January 31, 1997, the related consolidated statement of
operations, shareholders' equity and cash flows for the seven month period
ended January 31, 1997 which report appears in the Registration Statement No.
333-37259 on Form F-1 of Barbeques Galore Limited.
KPMG
February 18, 1998
Sydney, Australia
<PAGE>
EXHIBIT 99.1
BARBEQUES GALORE LIMITED
ACN 008 577 759
1997 SHARE OPTION PLAN
----------------------
ARTICLE ONE
GENERAL PROVISIONS
------------------
I. PURPOSE OF THE PLAN
This 1997 Share Option Plan is intended to promote the interests of
Barbeques Galore Limited, a corporation organized under the laws of New South
Wales, Australia, by providing eligible persons with the opportunity to acquire
a proprietary interest, or otherwise increase their proprietary interest, in the
Corporation as an incentive for them to remain in the service of the
Corporation.
Capitalized terms shall have the meanings assigned to such terms in
the attached Appendix.
II. ADMINISTRATION OF THE PLAN
A. The Plan shall be administered by the Board. However, any or all
administrative functions otherwise exercisable by the Board may be delegated to
the Committee. Members of the Committee shall serve for such period of time as
the Board may determine and shall be subject to removal by the Board at any
time. The Board may also at any time terminate the functions of the Committee
and reassume all powers and authority previously delegated to the Committee.
B. The Plan Administrator shall have full power and authority
(subject to the provisions of the Plan) to establish such rules and regulations
as it may deem appropriate for proper administration of the Plan and to make
such determinations under, and issue such interpretations of, the Plan and any
outstanding options as it may deem necessary or advisable. Decisions of the
Plan Administrator shall be final and binding on all parties who have an
interest in the Plan or any option or shares issued thereunder.
III. ELIGIBILITY
A. The persons eligible to participate in the Plan are as follows:
(i) Employees,
(ii) non-employee members of the Board or the board of directors
of any Parent or Subsidiary, and
<PAGE>
(iii) consultants and other independent advisors who provide
services to the Corporation (or any Parent or Subsidiary).
B. The Plan Administrator shall have full authority (subject to the
provisions of the Plan) to determine, (i) which eligible persons are to receive
option grants, the time or times when such option grants are to be made, the
number of shares to be covered by each such grant, the status of the granted
option as either an Incentive Option or a Non-Statutory Option, the time or
times at which each option is to become exercisable, the vesting schedule (if
any) applicable to the option shares and the maximum term for which the option
is to remain outstanding.
C. The Plan Administrator shall have the absolute discretion to
grant options in accordance with the Plan.
IV. STOCK SUBJECT TO THE PLAN
A. The maximum number of Ordinary Shares which may be issued over
the term of the Plan shall initially not exceed 329,254/1/ shares. Such
authorized share reserve shall be drawn from the Corporation's authorized but
unissued Ordinary Shares.
B. The number of Ordinary Shares available for issuance under the
Plan shall automatically increase on the first trading day of each calendar year
during the term of the Plan, beginning with the 1999 calendar year, by an amount
equal to one percent (1%) of the Ordinary Shares outstanding on December 31 of
the immediately preceding calendar year. No Incentive Options may be granted on
the basis of the additional Ordinary Shares resulting from such annual
increases.
C. No one person participating in the Plan may receive options and
separately exercisable stock appreciation rights for more than 27,438/1/
--
Ordinary Shares in the aggregate per calendar year, beginning with the 1997
calendar year.
D. Ordinary Shares subject to outstanding options shall be available
for subsequent issuance under the Plan to the extent (i) the options expire or
terminate for any reason prior to exercise in full or (ii) the options are
cancelled in accordance with the cancellation-regrant provisions of Article Two.
All Ordinary Shares issued under the Plan shall reduce on a share-for-share
basis the number of Ordinary Shares available for subsequent issuance under the
Plan.
E. Should any change be made to the Ordinary Shares by reason of any
stock split, stock dividend, recapitalization, combination of shares, exchange
of shares or other change affecting the outstanding Ordinary Shares as a class
without the Corporation's receipt of
- -----------------
/1/ Reflects the 1-to-18.223 reverse split of the Ordinary Shares approved by
the Board on October 1, 1997, subject to shareholder approval.
2.
<PAGE>
consideration, appropriate adjustments shall be made to (i) the maximum number
and/or class of securities issuable under the Plan, (ii) the number and/or class
of securities for which any one person may be granted stock options under this
Plan per calendar year and (iii) the number and/or class of securities and the
exercise price per share in effect under each outstanding option in order to
prevent the dilution or enlargement of benefits thereunder. The adjustments
determined by the Plan Administrator shall be final, binding and conclusive.
3.
<PAGE>
ARTICLE TWO
OPTION GRANT PROGRAM
--------------------
I. OPTION TERMS
Each option shall be evidenced by one or more documents in the form
approved by the Plan Administrator; provided, however, that each such document
--------
shall comply with the terms specified below. Each document evidencing an
Incentive Option shall, in addition, be subject to the provisions of the Plan
applicable to such options.
A. Exercise Price.
--------------
1. The exercise price per share shall be fixed by the Plan
Administrator but shall not be less than eighty-five percent (85%) of the Fair
Market Value per Ordinary Share on the option grant date.
2. The exercise price shall become immediately due upon
exercise of the option and shall, subject to the provisions of Section I of
Article Three and the documents evidencing the option, be payable in one or more
of the forms specified below:
(i) cash or check made payable to the Corporation,
(ii) Ordinary Shares held for the requisite period
necessary to avoid a charge to the Corporation's earnings for financial
reporting purposes and valued at Fair Market Value on the Exercise Date,
or
(iii) to the extent the option is exercised for vested
shares, through a special sale and remittance procedure pursuant to which
the Optionee shall concurrently provide irrevocable written instructions
to (a) a Corporation-designated brokerage firm to effect the immediate
sale of the purchased shares and remit to the Corporation, out of the
sale proceeds available on the settlement date, sufficient funds to cover
the aggregate exercise price payable for the purchased shares plus all
applicable Federal, state, local and foreign income and employment taxes
required to be withheld by the Corporation by reason of such exercise and
(b) the Corporation to deliver the certificates for the purchased shares
directly to such brokerage firm in order to complete the sale.
Except to the extent such sale and remittance procedure is utilized,
payment of the exercise price for the purchased shares must be made on the
Exercise Date.
4.
<PAGE>
B. Exercise and Term of Options. Each option shall be exercisable at
----------------------------
such time or times, during such period and for such number of shares as shall be
determined by the Plan Administrator and set forth in the documents evidencing
the option. However, no option shall have a term in excess of ten (10) years
measured from the option grant date.
C. Effect of Termination of Service.
--------------------------------
1. The following provisions shall govern the exercise of any
options held by the Optionee at the time of cessation of Service or death:
(i) Any option outstanding at the time of the Optionee's
cessation of Service for any reason shall remain exercisable for such
period of time thereafter as shall be determined by the Plan Administrator
and set forth in the documents evidencing the option, but no such option
shall be exercisable after the expiration of the option term.
(ii) Any option exercisable in whole or in part by the Optionee
at the time of death may be exercised subsequently by the personal
representative of the Optionee's estate or by the person or persons to whom
the option is transferred pursuant to the Optionee's will or in accordance
with the laws of descent and distribution.
(iii) During the applicable post-Service exercise period, the
option may not be exercised in the aggregate for more than the number of
vested shares for which the option is exercisable on the date of the
Optionee's cessation of Service. Upon the expiration of the applicable
exercise period or (if earlier) upon the expiration of the option term, the
option shall terminate and cease to be outstanding for any vested shares
for which the option has not been exercised. However, the option shall,
immediately upon the Optionee's cessation of Service, terminate and cease
to be outstanding to the extent the option is not otherwise at that time
exercisable for vested shares.
(iv) Should the Optionee's Service be terminated for Misconduct,
then all outstanding options held by the Optionee shall terminate
immediately and cease to be outstanding.
(v) In the event of an Involuntary Termination following a
Corporate Transaction, the provisions of Section III of this Article Two
shall govern the period for which the outstanding options are to remain
exercisable following the Optionee's cessation of Service and shall
supersede any provisions to the contrary in this section.
5.
<PAGE>
2. The Plan Administrator shall have the discretion, exercisable
either at the time an option is granted or at any time while the option remains
outstanding, to:
(i) extend the period of time for which the option is to remain
exercisable following the Optionee's cessation of Service from the period
otherwise in effect for that option to such greater period of time as the
Plan Administrator shall deem appropriate, but in no event beyond the
expiration of the option term, and/or
(ii) permit the option to be exercised, during the applicable
post-Service exercise period, not only with respect to the number of vested
Ordinary Shares for which such option is exercisable at the time of the
Optionee's cessation of Service but also with respect to one or more
additional installments in which the Optionee would have vested under the
option had the Optionee continued in Service.
D. Shareholder Rights. The holder of an option shall have no
------------------
shareholder rights with respect to the shares subject to the option until such
person shall have exercised the option, paid the exercise price and become a
holder of record of the purchased shares.
E. Repurchase Rights. The Plan Administrator shall have the
-----------------
discretion to grant options which are exercisable for unvested Ordinary Shares.
Should the Optionee cease Service while holding such unvested shares, the
Corporation shall, subject to limitations imposed under Australian law, have the
right to repurchase, at the exercise price paid per share, any or all of those
unvested shares. The terms upon which such repurchase right shall be
exercisable (including the period and procedure for exercise and the appropriate
vesting schedule for the purchased shares) shall be established by the Plan
Administrator and set forth in the document evidencing such repurchase right.
F. Limited Transferability of Options. During the lifetime of the
----------------------------------
Optionee, Incentive Options shall be exercisable only by the Optionee and shall
not be assignable or transferable other than by will or by the laws of descent
and distribution following the Optionee's death. However, a Non-Statutory
Option may, in connection with the Optionee's estate plan, be assigned in whole
or in part during the Optionee's lifetime to one or more members of the
Optionee's immediate family or to a trust established exclusively for one or
more such family members. The assigned portion may only be exercised by the
person or persons who acquire a proprietary interest in the option pursuant to
the assignment. The terms applicable to the assigned portion shall be the same
as those in effect for the option immediately prior to such assignment and shall
be set forth in such documents issued to the assignee as the Plan Administrator
may deem appropriate.
6.
<PAGE>
II. INCENTIVE OPTIONS
The terms specified below shall be applicable to all Incentive
Options. Except as modified by the provisions of this Section II, all the
provisions of Articles One, Two and Three shall be applicable to Incentive
Options. Options which are specifically designated as Non-Statutory Options when
issued under the Plan shall not be subject to the terms of this Section II.
---
A. Eligibility. Incentive Options may only be granted to Employees.
-----------
B. Exercise Price. The exercise price per share shall not be less
--------------
than one hundred percent (100%) of the Fair Market Value per Ordinary Share on
the option grant date.
C. U.S. Dollar Limitation. The aggregate Fair Market Value of the
----------------------
Ordinary Shares (determined as of the respective date or dates of grant) for
which one or more options granted to any Employee under the Plan (or any other
option plan of the Corporation or any Parent or Subsidiary) may for the first
time become exercisable as Incentive Options during any one (1) calendar year
shall not exceed the sum of One Hundred Thousand U.S. Dollars (US$100,000). To
the extent the Employee holds two (2) or more such options which become
exercisable for the first time in the same calendar year, the foregoing
limitation on the exercisability of such options as Incentive Options shall be
applied on the basis of the order in which such options are granted.
D. 10% Shareholder. If any Employee to whom an Incentive Option is
---------------
granted is a 10% Shareholder, then the exercise price per share shall not be
less than one hundred ten percent (110%) of the Fair Market Value per Ordinary
Share on the option grant date, and the option term shall not exceed five (5)
years measured from the option grant date.
III. CORPORATE TRANSACTION/CHANGE IN CONTROL
A. In the event of any Corporate Transaction, each outstanding
option shall automatically accelerate so that each such option shall,
immediately prior to the effective date of the Corporate Transaction, become
fully exercisable for all of the Ordinary Shares at the time subject to such
option and may be exercised for any or all of those shares as fully-vested
Ordinary shares. However, an outstanding option shall not so accelerate if and
to the extent: (i) such option is, in connection with the Corporate
Transaction, either to be assumed by the successor corporation (or parent
thereof) or to be replaced with a comparable option to purchase shares of the
capital stock of the successor corporation (or parent thereof), (ii) such option
is to be replaced with a cash incentive program of the successor corporation
which preserves the spread existing on the unvested option shares at the time of
the Corporate Transaction and provides for subsequent payout in accordance with
the same vesting schedule applicable to such
7.
<PAGE>
option or (iii) the acceleration of such option is subject to other limitations
imposed by the Plan Administrator at the time of the option grant. The
determination of option comparability under clause (i) above shall be made by
the Plan Administrator, and its determination shall be final, binding and
conclusive.
B. All outstanding repurchase rights shall also terminate
automatically, and the Ordinary Shares subject to those terminated rights shall
immediately vest in full, in the event of any Corporate Transaction, except to
the extent: (i) those repurchase rights are to be assigned to the successor
corporation (or parent thereof) in connection with such Corporate Transaction or
(ii) such accelerated vesting is precluded by other limitations imposed by the
Plan Administrator at the time the repurchase right is issued.
C. The Plan Administrator shall have the discretion, exercisable
either at the time the option is granted or at any time while the option remains
outstanding, to provide for the automatic acceleration of one or more
outstanding options (and the automatic termination of one or more outstanding
repurchase rights with the immediate vesting of the Ordinary Shares subject to
those rights) upon the occurrence of a Corporate Transaction, whether or not
those options are to be assumed or replaced (or those repurchase rights are to
be assigned) in the Corporate Transaction. The Plan Administrator shall also
have the discretion to grant options which do not accelerate whether or not such
options are assumed (and to provide for repurchase rights that do not terminate
whether or not such rights are assigned) in connection with a Corporate
Transaction.
D. Immediately following the consummation of the Corporate
Transaction, all outstanding options shall terminate and cease to be
outstanding, except to the extent assumed by the successor corporation (or
parent thereof).
E. Each option which is assumed in connection with a Corporate
Transaction shall be appropriately adjusted, immediately after such Corporate
Transaction, to apply to the number and class of securities which would have
been issuable to the Optionee in consummation of such Corporate Transaction had
the option been exercised immediately prior to such Corporate Transaction.
Appropriate adjustments shall also be made to (i) the number and class of
securities available for issuance under the Plan following the consummation of
such Corporate Transaction, (ii) the exercise price payable per share under each
outstanding option, provided the aggregate exercise price payable for such
--------
securities shall remain the same and (iii) the maximum number of securities
and/or class of securities for which any one person may be granted stock
options, and separately exercisable stock appreciation rights under the Plan per
calendar year.
F. Any options which are assumed or replaced in the Corporate
Transaction and do not otherwise accelerate at that time shall automatically
accelerate (and any of the Corporation's outstanding repurchase rights which do
not otherwise terminate at the time of the Corporate Transaction shall
automatically terminate and the Ordinary Shares subject to those terminated
rights shall immediately vest in full) in the event the Optionee's Service
should
8.
<PAGE>
subsequently terminate by reason of an Involuntary Termination within eighteen
(18) months following the effective date of such Corporate Transaction. Any
options so accelerated shall remain exercisable for fully-vested shares until
the earlier of (i) the expiration of the option term or (ii) the expiration of
-------
the one (1)-year period measured from the effective date of the Involuntary
Termination.
G. The Plan Administrator shall have the discretion, exercisable
either at the time the option is granted or at any time while the option remains
outstanding, to (i) provide for the automatic acceleration of one or more
outstanding options (and the automatic termination of one or more outstanding
repurchase rights with the immediate vesting of the Ordinary Shares subject to
those rights) upon the occurrence of a Change in Control or (ii) condition any
such option acceleration (and the termination of any outstanding repurchase
rights) upon the subsequent Involuntary Termination of the Optionee's Service
within a specified period following the effective date of such Change in
Control. Any options accelerated in connection with a Change in Control shall
remain fully exercisable until the expiration or sooner termination of the
option term.
H. The portion of any Incentive Option accelerated in connection
with a Corporate Transaction or Change in Control shall remain exercisable as an
Incentive Option only to the extent the applicable One Hundred Thousand U.S.
Dollar (US$100,000) limitation is not exceeded. To the extent such dollar
limitation is exceeded, the accelerated portion of such option shall be
exercisable as a Non-Statutory Option under the Federal tax laws.
I. The grant of options under the Option Grant Program shall in no
way affect the right of the Corporation to adjust, reclassify, reorganize or
otherwise change its capital or business structure or to merge, consolidate,
dissolve, liquidate or sell or transfer all or any part of its business or
assets.
IV. CANCELLATION AND REGRANT OF OPTIONS
The Plan Administrator shall have the authority to effect, at any time
and from time to time, with the consent of the affected option holders, the
cancellation of any or all outstanding options under the Option Grant Program
and to grant in substitution new options covering the same or different number
of Ordinary Shares but with an exercise price per share based on the Fair Market
Value per Ordinary Share on the new grant date.
V. STOCK APPRECIATION RIGHTS
A. The Plan Administrator shall have full power and authority to
grant to selected Optionees tandem stock appreciation rights.
9.
<PAGE>
B. One or more Optionees may be granted the right, exercisable upon
such terms as the Plan Administrator may establish, to elect between the
exercise of the underlying option for Ordinary Shares and the surrender of that
option in exchange for a distribution from the Corporation in an amount equal to
the excess of (a) the Fair Market Value (on the option surrender date) of the
number of shares in which the Optionee is at the time vested under the
surrendered option (or surrendered portion thereof) over (b) the aggregate
exercise price payable for such shares.
C. No such option surrender shall be effective unless it is approved
by the Plan Administrator. If the surrender is so approved, then the
distribution to which the Optionee shall be entitled may be made in Ordinary
Shares valued at Fair Market Value on the option surrender date, in cash, or
partly in shares and partly in cash, as the Plan Administrator shall in its sole
discretion deem appropriate.
D. If the surrender of an option is rejected by the Plan
Administrator, then the Optionee shall retain whatever rights the Optionee had
under the surrendered option (or surrendered portion thereof) on the option
surrender date and may exercise such rights at any time prior to the later of
-----
(a) five (5) business days after the receipt of the rejection notice or (b) the
last day on which the option is otherwise exercisable in accordance with the
terms of the documents evidencing such option, but in no event may such rights
be exercised more than five (5) years after the option grant date.
10.
<PAGE>
ARTICLE THREE
MISCELLANEOUS
-------------
I. FINANCING
A. Subject to compliance with applicable law, the Plan Administrator
may permit any Optionee to pay the option exercise price by delivering a
promissory note payable in one or more installments. The terms of any such
promissory note (including the interest rate and the terms of repayment) shall
be established by the Plan Administrator in its sole discretion. Promissory
notes may be authorized with or without security or collateral. In all events,
the maximum credit available to the Optionee may not exceed the sum of (i) the
aggregate option exercise price or purchase price payable for the purchased
shares plus (ii) any Federal, state, local and foreign income and employment tax
liability incurred by the Optionee in connection with the option exercise or
share purchase.
B. The Plan Administrator may, in its discretion, determine that one
or more such promissory notes shall be subject to forgiveness by the Corporation
in whole or in part upon such terms as the Plan Administrator may deem
appropriate.
II. TAX WITHHOLDING
A. The Corporation's obligation to deliver Ordinary Shares upon the
exercise of options or upon the issuance or vesting of such shares under the
Plan shall be subject to the satisfaction of all applicable Federal, state,
local and foreign income and employment tax withholding requirements.
B. The Plan Administrator may, in its discretion, provide any or all
holders of Non-Statutory Options or unvested Ordinary Shares under the Plan with
the right to use Ordinary Shares in satisfaction of all or part of the Taxes
incurred by such holders in connection with the exercise of their options or the
vesting of their shares. Such right may be provided to any such holder in
either or both of the following formats:
(i) Stock Withholding: The election to have the Corporation
-----------------
withhold, from the Ordinary Shares otherwise issuable upon the exercise of
such Non-Statutory Option or the vesting of such shares, a portion of those
shares with an aggregate Fair Market Value equal to the percentage of the
Taxes (not to exceed one hundred percent (100%)) designated by the holder.
11.
<PAGE>
(ii) Stock Delivery: The election to deliver to the Corporation,
--------------
at the time the Non-Statutory Option is exercised or the shares vest, one
or more Ordinary Shares previously acquired by such holder (other than in
connection with the option exercise or share vesting triggering the Taxes)
with an aggregate Fair Market Value equal to the percentage of the Taxes
(not to exceed one hundred percent (100%)) designated by the holder.
III. EFFECTIVE DATE AND TERM OF THE PLAN
A. The Plan shall become effective on the Plan Effective Date.
Options may be granted under the Plan at any time on or after the Plan Effective
Date. However, no options granted under the Plan may be exercised, and no
shares shall be issued under the Plan, until the Plan is approved by the
Corporation's shareholders. If such shareholder approval is not obtained within
twelve (12) months after the date the Plan is adopted by the Board, then all
options previously granted under this Plan shall terminate and cease to be
outstanding, and no further options shall be granted and no shares shall be
issued under the Plan.
B. The Plan shall terminate upon the earliest of (i) September 30,
--------
2007, (ii) the date on which all shares available for issuance under the Plan
shall have been issued pursuant to the exercise of the options or the issuance
of shares (whether vested or unvested) under the Plan or (iii) the termination
of all outstanding options in connection with a Corporate Transaction. Upon
such Plan termination, all outstanding options and unvested stock issuances
shall continue to have force and effect in accordance with the provisions of the
documents evidencing such options or issuances.
IV. AMENDMENT OF THE PLAN
A. The Board shall have complete and exclusive power and authority
to amend or modify the Plan in any or all respects. However, no such amendment
or modification shall adversely affect any rights and obligations with respect
to options, stock appreciation rights or unvested stock issuances at the time
outstanding under the Plan unless the Optionee consents to such amendment or
modification. In addition, certain amendments may require shareholder approval
pursuant to applicable law or regulation.
B. Options to purchase Ordinary Shares may be granted under the Plan
that are in excess of the number of shares then available for issuance under the
Plan, provided any excess shares actually issued under that program are held in
escrow until there is obtained shareholder approval of an amendment sufficiently
increasing the number of Ordinary Shares available for issuance under the Plan.
If such shareholder approval is not obtained within twelve (12) months after the
date the first such excess grants or issuances are made, then (i) any
unexercised options granted on the basis of such excess shares shall terminate
and cease to be
12.
<PAGE>
outstanding and (ii) the Corporation shall promptly refund to the Optionees the
exercise or purchase price paid for any excess shares issued under the Plan and
held in escrow, together with interest (at the applicable Short Term Federal
Rate) for the period the shares were held in escrow, and such shares shall
thereupon be automatically cancelled and cease to be outstanding.
V. USE OF PROCEEDS
Any cash proceeds received by the Corporation from the sale of
Ordinary Shares under the Plan shall be used for general corporate purposes.
VI. REGULATORY APPROVALS
A. The implementation of the Plan, the granting of any option or
stock appreciation right under the Plan and the issuance of any Ordinary Shares
upon the exercise of any option or stock appreciation right shall be subject to
the Corporation's procurement of all approvals and permits required by
regulatory authorities having jurisdiction over the Plan, the options and stock
appreciation rights granted under it and the Ordinary Shares issued pursuant to
it.
B. No Ordinary Shares or other assets shall be issued or delivered
under the Plan unless and until there shall have been compliance with (i) all
applicable requirements of Federal and state securities laws, including the
filing and effectiveness of the Form S-8 registration statement for the Ordinary
Shares issuable under the Plan, (ii) all applicable listing requirements of any
stock exchange (or the Nasdaq National Market, if applicable) on which Ordinary
Shares (or the American Depositary Shares representing the Ordinary Shares) are
then listed for trading, and (iii) all applicable requirements of Australian
law.
VII. NO EMPLOYMENT/SERVICE RIGHTS
Nothing in the Plan shall confer upon the Optionee any right to
continue in Service for any period of specific duration or interfere with or
otherwise restrict in any way the rights of the Corporation (or any Parent or
Subsidiary employing or retaining such person) or of the Optionee, which rights
are hereby expressly reserved by each, to terminate such person's Service at any
time for any reason, with or without cause.
13.
<PAGE>
APPENDIX
--------
The following definitions shall be in effect under the Plan:
A. BOARD shall mean the Corporation's Board of Directors.
-----
B. CHANGE IN CONTROL shall mean a change in ownership or control of the
-----------------
Corporation effected through either of the following transactions:
(i) the acquisition, directly or indirectly, by any person or
related group of persons (other than the Corporation or a person that
directly or indirectly controls, is controlled by, or is under common
control with, the Corporation), of beneficial ownership (within the meaning
of Rule 13d-3 of the 1934 Act) of securities possessing more than fifty
percent (50%) of the total combined voting power of the Corporation's
outstanding securities pursuant to a tender or exchange offer made directly
to the Corporation's shareholders, or
(ii) a change in the composition of the Board over a period of
thirty-six (36) consecutive months or less such that a majority of the
Board members ceases, by reason of one or more contested elections for
Board membership, to be comprised of individuals who either (A) have been
Board members continuously since the beginning of such period or (B) have
been elected or nominated for election as Board members during such period
by at least a majority of the Board members described in clause (A) who
were still in office at the time the Board approved such election or
nomination.
C. CODE shall mean the Internal Revenue Code of 1986, as amended.
----
D. COMMITTEE shall mean a committee of two (2) or more board members
---------
appointed by the Board to administer the Plan with respect to eligible persons.
E. CORPORATE TRANSACTION shall mean either of the following shareholder-
---------------------
approved transactions to which the Corporation is a party:
(i) a merger or consolidation in which securities possessing more
than fifty percent (50%) of the total combined voting power of the
Corporation's outstanding securities are transferred to a person or persons
different from the persons holding those securities immediately prior to
such transaction; or
(ii) the sale, transfer or other disposition of all or
substantially all of the Corporation's assets in complete liquidation or
dissolution of the Corporation.
A-1.
<PAGE>
F. CORPORATION shall mean Barbeques Galore Limited, a corporation
-----------
organized under the laws of New South Wales, Australia, and any corporate
successor to all or substantially all of the assets or voting stock of Barbeques
Galore Limited which shall by appropriate action adopt the Plan.
G. EMPLOYEE shall mean an individual who is in the employ of the
--------
Corporation (or any Parent or Subsidiary), subject to the control and direction
of the employer entity as to both the work to be performed and the manner and
method of performance.
H. EXERCISE DATE shall mean the date on which the Corporation shall have
-------------
received written notice of the option exercise.
I. FAIR MARKET VALUE per Ordinary Share on any relevant date shall be
-----------------
determined in accordance with the following provisions:
(i) If the Ordinary Share (or any American Depositary Share
representing the Ordinary Share) is at the time traded on the Nasdaq
National Market, then the Fair Market Value shall be the closing selling
price per Ordinary Share (or American Depositary Share) on the date in
question, as such price is reported by the National Association of
Securities Dealers on the Nasdaq National Market or any successor system.
If there is no closing selling price for the Ordinary Share (or American
Depositary Share) on the date in question, then the Fair Market Value shall
be the closing selling price on the last preceding date for which such
quotation exists.
(ii) If the Ordinary Share (or any American Depositary Share) is
at the time listed on any Stock Exchange, then the Fair Market Value shall
be the closing selling price per Ordinary Share (or American Depositary
Share) on the date in question on the Stock Exchange determined by the Plan
Administrator to be the primary market for the Ordinary Share (or American
Depositary Share), as such price is officially quoted in the composite tape
of transactions on such exchange. If there is no closing selling price for
the Ordinary Share (or American Depositary Share) on the date in question,
then the Fair Market Value shall be the closing selling price on the last
preceding date for which such quotation exists.
(iii) For purposes of any option grants made on the Plan
Effective Date, the Fair Market Value shall be deemed to be equal to the
price per share at which the Ordinary Share (or American Depositary Share)
is sold in the initial public offering pursuant to the Underwriting
Agreement.
J. INCENTIVE OPTION shall mean an option which satisfies the requirements
----------------
of Code Section 422.
A-2.
<PAGE>
K. INVOLUNTARY TERMINATION shall mean the termination of the Service of
-----------------------
any individual which occurs by reason of:
(i) such individual's involuntary dismissal or discharge by the
Corporation for reasons other than Misconduct, or
(ii) such individual's voluntary resignation following (A) a
change in his or her position with the Corporation which materially reduces
his or her level of responsibility, (B) a reduction in his or her level of
compensation (including base salary, fringe benefits and participation in
corporate-performance based bonus or incentive programs) by more than
fifteen percent (15%) or (C) a relocation of such individual's place of
employment by more than fifty (50) miles, provided and only if such change,
reduction or relocation is effected by the Corporation without the
individual's consent.
L. MISCONDUCT shall mean the commission of any act of fraud, embezzlement
----------
or dishonesty by the Optionee, any unauthorized use or disclosure by such person
of confidential information or trade secrets of the Corporation (or any Parent
or Subsidiary), or any other intentional misconduct by such person adversely
affecting the business or affairs of the Corporation (or any Parent or
Subsidiary) in a material manner. The foregoing definition shall not be deemed
to be inclusive of all the acts or omissions which the Corporation (or any
Parent or Subsidiary) may consider as grounds for the dismissal or discharge of
any Optionee or other person in the Service of the Corporation (or any Parent or
Subsidiary).
M. 1934 ACT shall mean the Securities Exchange Act of 1934, as amended.
--------
N. NON-STATUTORY OPTION shall mean an option not intended to satisfy the
--------------------
requirements of Code Section 422.
O. OPTIONEE shall mean any person to whom an option is granted under the
--------
Discretionary Option Grant Program.
P. OPTION GRANT PROGRAM shall mean the option grant program in effect
--------------------
under the Plan.
Q. ORDINARY SHARE shall mean the Corporation's ordinary share, par value
--------------
of A$0.20 per share.
R. PARENT shall mean any corporation (other than the Corporation) in an
------
unbroken chain of corporations ending with the Corporation, provided each
corporation in the unbroken chain (other than the Corporation) owns, at the time
of the determination, stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.
A-3.
<PAGE>
S. PLAN shall mean the Corporation's 1997 Share Option Plan, as set forth
----
in this document.
T. PLAN ADMINISTRATOR shall mean the particular entity, whether the
------------------
Committee or the Board which is authorized to administer the Plan with respect
to one or more classes of eligible persons, to the extent such entity is
carrying out its administrative functions under that program with respect to the
persons under its jurisdiction.
U. PLAN EFFECTIVE DATE shall mean the date on which the Underwriting
-------------------
Agreement is executed and the initial public offering price of both the Ordinary
Shares and American Depositary Shares is established.
V. SERVICE shall mean the performance of services to the Corporation (or
-------
any Parent or Subsidiary) by a person in the capacity of an Employee, a non-
employee member of the board of directors or a consultant or independent
advisor, except to the extent otherwise specifically provided in the documents
evidencing the option grant or stock issuance.
W. STOCK EXCHANGE shall mean either the American Stock Exchange, the New
--------------
York Stock Exchange, or the Australian Stock Exchange.
X. SUBSIDIARY shall mean any corporation (other than the Corporation) in
----------
an unbroken chain of corporations beginning with the Corporation, provided each
corporation (other than the last corporation) in the unbroken chain owns, at the
time of the determination, stock possessing fifty percent (50%) or more of the
total combined voting power of all classes of stock in one of the other
corporations in such chain.
Y. TAXES shall mean the Federal, state, local and foreign income and
-----
employment tax liabilities incurred by the holder of Non-Statutory Options or
unvested Ordinary Shares in connection with the exercise of those options or the
vesting of those shares.
Z. 10% SHAREHOLDER shall mean the owner of stock (as determined under Code
---------------
Section 424(d) possessing more than ten percent (10%) of the total combined
voting power of all classes of stock of the Corporation (or any Parent or
Subsidiary).
AA. UNDERWRITING AGREEMENT shall mean the agreement between the
----------------------
Corporation and the underwriter or underwriters managing the initial public
offering of the Ordinary Share (or American Depositary Share).
A-4.
<PAGE>
EXHIBIT 99.2
BARBEQUES GALORE LIMITED
NOTICE OF GRANT OF STOCK OPTION
-------------------------------
Notice is hereby given of the following option grant (the "Option") to
purchase Ordinary Shares of Barbeques Galore Limited (the "Corporation"):
Optionee:
-------- ----------------------------------------------------------
Grant Date:
---------- ---------------------------------------------------------
Vesting Commencement Date:
-------------------------
Exercise Price: $ per share
-------------- ----------------------------------------
Number of Option Shares: shares
----------------------- ------------------------------------
Expiration Date:
--------------- --------------------------------------------------
Type of Option: ______ Incentive Stock Option
--------------
______ Non-Statutory Stock Option
Exercise Schedule: The Option shall become exercisable in three (3)
-----------------
equal successive annual installments upon Optionee's completion of
each year of Service with the first such installment becoming
exercisable on the third anniversary of the Vesting Commencement Date.
In no event shall the Option become exercisable for any additional
Option Shares after Optionee's cessation of Service.
Optionee understands and agrees that the Option is granted subject to
and in accordance with the terms of the Barbeques Galore Limited 1997 Share
Option Plan (the "Plan"). Optionee further agrees to be bound by the terms of
the Plan and the terms of the Option as set forth in the Stock Option Agreement
and any Addenda to such Stock Option Agreement attached hereto as Exhibit A. A
copy of the Plan is available upon request made to the U.S. Corporate Secretary
at the U.S. Corporation's principal offices.
No Employment or Service Contract. Nothing in this Notice or in the
---------------------------------
attached Stock Option Agreement or in the Plan shall confer upon Optionee any
right to continue in Service for any period of specific duration or interfere
with or otherwise restrict in any way the rights of the Corporation (or any
Parent or Subsidiary employing or retaining Optionee) or of Optionee, which
rights are hereby expressly reserved by each, to terminate Optionee's Service at
any time for any reason, with or without cause.
<PAGE>
Definitions. All capitalized terms in this Notice shall have the
-----------
meaning assigned to them in this Notice or in the attached Stock Option
Agreement.
DATED: , 199
----------------------- ---
BARBEQUES GALORE LIMITED
By:
----------------------------------
Title:
----------------------------------
OPTIONEE
Address:
--------------------------------
-----------------------------------------
ATTACHMENTS
- -----------
EXHIBIT A - STOCK OPTION AGREEMENT AND ADDENDA
2.
<PAGE>
EXHIBIT A
---------
STOCK OPTION AGREEMENT
----------------------
<PAGE>
EXHIBIT 99.3
BARBEQUES GALORE LIMITED
STOCK OPTION AGREEMENT
----------------------
RECITALS
- --------
A. The Board has adopted the Plan for the purpose of retaining the
services of selected Employees, non-employee members of the Board or of the
board of directors of any Parent or Subsidiary and consultants and other
independent advisors who provide services to the Corporation (or any Parent or
Subsidiary).
B. Optionee is to render valuable services to the Corporation (or a
Parent or Subsidiary), and this Agreement is executed pursuant to, and is
intended to carry out the purposes of, the Plan in connection with the
Corporation's grant of an option to Optionee.
C. All capitalized terms in this Agreement shall have the meaning
assigned to them in the attached Appendix.
NOW, THEREFORE, it is hereby agreed as follows:
1. GRANT OF OPTION. The Corporation hereby grants to Optionee, as
---------------
of the Grant Date, an option to purchase up to the number of Option Shares
specified in the Grant Notice. The Option Shares shall be purchasable from time
to time during the option term specified in Paragraph 2 at the Exercise Price.
2. OPTION TERM. This option shall have a maximum term of ten (10)
-----------
years measured from the Grant Date and shall accordingly expire at the close of
business on the Expiration Date, unless sooner terminated in accordance with
Paragraph 5 or 6.
3. LIMITED TRANSFERABILITY. This option shall be neither
-----------------------
transferable nor assignable by Optionee other than by will or by the laws of
descent and distribution following Optionee's death and may be exercised, during
Optionee's lifetime, only by Optionee. However, if this option is designated a
Non-Statutory Option in the Grant Notice, then this option may, in connection
with the Optionee's estate plan, be assigned in whole or in part during
Optionee's lifetime to one or more members of the Optionee's immediate family or
to a trust established for the exclusive benefit of one or more such family
members. The assigned portion shall be exercisable only by the person or
persons who acquire a proprietary interest in the option pursuant to such
assignment. The terms applicable to the assigned portion shall be the same as
those in effect for this option immediately prior to such assignment and shall
be set forth in such documents issued to the assignee as the Plan Administrator
may deem appropriate.
<PAGE>
4. DATES OF EXERCISE. This option shall become exercisable for the
-----------------
Option Shares in one or more installments as specified in the Grant Notice. As
the option becomes exercisable for such installments, those installments shall
accumulate, and the option shall remain exercisable for the accumulated
installments until the Expiration Date or sooner termination of the option term
under Paragraph 5 or 6.
5. CESSATION OF SERVICE. The option term specified in Paragraph 2
--------------------
shall terminate (and this option shall cease to be outstanding) prior to the
Expiration Date should any of the following provisions become applicable:
(i) Should Optionee cease to remain in Service for any reason
(other than death, Permanent Disability or Misconduct) while this option is
outstanding, then Optionee shall have a period of three (3) months
(commencing with the date of such cessation of Service) during which to
exercise this option, but in no event shall this option be exercisable at
any time after the Expiration Date.
(ii) Should Optionee dies while holding this option, then the
personal representative of Optionee's estate or the person or persons to
whom the option is transferred pursuant to Optionee's will or in accordance
with the laws of descent and distribution shall have the right to exercise
this option. Such right shall lapse, and this option shall cease to be
outstanding, upon the earlier of (A) the expiration of the twelve (12)-
-------
month period measured from the date of Optionee's death or (B) the
Expiration Date.
(iii) Should Optionee cease Service by reason of Permanent
Disability while this option is outstanding, then Optionee shall have a
period of twelve (12) months (commencing with the date of such cessation of
Service) during which to exercise this option. In no event shall this
option be exercisable at any time after the Expiration Date.
(iv) During the limited period of post-Service exercisability,
this option may not be exercised in the aggregate for more than the number
of vested Option Shares for which the option is exercisable at the time of
Optionee's cessation of Service. Upon the expiration of such limited
exercise period or (if earlier) upon the Expiration Date, this option shall
terminate and cease to be outstanding for any vested Option Shares for
which the option has not been exercised. However, this option shall,
immediately upon Optionee's cessation of Service for any reason, terminate
and cease to be outstanding with respect to any Option Shares in which
Optionee is not otherwise at that time vested or for which this option is
not otherwise at that time exercisable.
2.
<PAGE>
(v) Should Optionee's Service be terminated for Misconduct, then
this option shall terminate immediately and cease to remain outstanding.
6. SPECIAL ACCELERATION OF OPTION.
------------------------------
(a) In the event of a Corporate Transaction, this option, to the
extent outstanding at that time, but not otherwise fully exercisable, shall
automatically accelerate so that this option shall, immediately prior to the
effective date of the Corporate Transaction, become exercisable for all of the
Option Shares at the time subject to this option and may be exercised for any or
all of those Option Shares as fully-vested Ordinary Shares. No such
acceleration of this option, however, shall occur if and to the extent: (i) this
option is, in connection with the Corporate Transaction, to be assumed by the
successor corporation (or parent thereof) or to be replaced with a comparable
option to purchase shares of the capital stock of the successor corporation (or
parent thereof) or (ii) this option is to be replaced with a cash incentive
program of the successor corporation which preserves the spread existing at the
time of the Corporate Transaction on the Option Shares for which this option is
not otherwise at that time exercisable (the excess of the Fair Market Value of
those Option Shares over the aggregate Exercise Price payable for such shares)
and provides for subsequent pay-out in accordance with the same option
exercise/vesting schedule set forth in the Grant Notice.
(b) Immediately following the Corporate Transaction, this option shall
terminate and cease to be outstanding, except to the extent assumed by the
successor corporation (or parent thereof) in connection with the Corporate
Transaction.
(c) If this option is assumed in connection with a Corporate
Transaction, then this option shall be appropriately adjusted, immediately after
such Corporate Transaction, to apply to the number and class of securities which
would have been issuable to Optionee in consummation of such Corporate
Transaction had the option been exercised immediately prior to such Corporate
Transaction, and appropriate adjustments shall also be made to the Exercise
Price, provided the aggregate Exercise Price shall remain the same.
--------
(d) This Agreement shall not in any way affect the right of the
Corporation to adjust, reclassify, reorganize or otherwise change its capital or
business structure or to merge, consolidate, dissolve, liquidate or sell or
transfer all or any part of its business or assets.
7. ADJUSTMENT IN OPTION SHARES. Should any change be made to the
---------------------------
Ordinary Shares by reason of any stock split, stock dividend, recapitalization,
combination of shares, exchange of shares or other change affecting the
outstanding Ordinary Shares as a class without the Corporation's receipt of
consideration, appropriate adjustments shall be made to (i) the total number
and/or class of securities subject to this option and (ii) the Exercise Price in
order to reflect such change and thereby preclude a dilution or enlargement of
benefits hereunder.
3.
<PAGE>
8. SHAREHOLDER RIGHTS. The holder of this option shall not have any
------------------
shareholder rights with respect to the Option Shares until such person shall
have exercised the option, paid the Exercise Price and become a holder of record
of the purchased shares.
9. MANNER OF EXERCISING OPTION.
---------------------------
(a) In order to exercise this option with respect to all or any part
of the Option Shares for which this option is at the time exercisable, Optionee
(or any other person or persons exercising the option) must take the following
actions:
(i) Execute and deliver to the Corporation a Notice of Exercise
for the Option Shares for which the option is exercised.
(ii) Pay the aggregate Exercise Price for the purchased shares in
one or more of the following forms:
(A) cash or check made payable to the Corporation;
(B) a promissory note payable to the Corporation, but only
to the extent authorized by the Plan Administrator in accordance with
Paragraph 13;
(C) Ordinary Shares held by Optionee (or any other person or
persons exercising the option) for the requisite period necessary to
avoid a charge to the Corporation's earnings for financial reporting
purposes and valued at Fair Market Value on the Exercise Date; or
(D) to the extent the option is exercised for vested Option
Shares, through a special sale and remittance procedure pursuant to
which Optionee (or any other person or persons exercising the option)
shall concurrently provide irrevocable written instructions (I) to a
Corporation-designated brokerage firm to effect the immediate sale of
the purchased shares and remit to the Corporation, out of the sale
proceeds available on the settlement date, sufficient funds to cover
the aggregate Exercise Price payable for the purchased shares plus all
applicable U.S. Federal, state, local and foreign income and
employment taxes required to be withheld by the Corporation by reason
of such exercise and (II) to the Corporation to deliver the
certificates for the purchased shares directly to such brokerage firm
in order to complete the sale.
4.
<PAGE>
Except to the extent the sale and remittance procedure is
utilized in connection with the option exercise, payment of the
Exercise Price must accompany the Notice of Exercise delivered to the
Corporation in connection with the option exercise.
(iii) Furnish to the Corporation appropriate documentation
that the person or persons exercising the option (if other than Optionee)
have the right to exercise this option.
(iv) Make appropriate arrangements with the Corporation
(or Parent or Subsidiary employing or retaining Optionee) for the
satisfaction of all U.S. Federal, state, local and foreign income and
employment tax withholding requirements applicable to the option
exercise.
(b) As soon as practical after the Exercise Date, the
Corporation shall issue to or on behalf of Optionee (or any other person or
persons exercising this option) a certificate for the purchased Option Shares,
with the appropriate legends affixed thereto.
(c) In no event may this option be exercised for any fractional
shares.
10. COMPLIANCE WITH LAWS AND REGULATIONS.
------------------------------------
(a) The exercise of this option and the issuance of the Option
Shares upon such exercise shall be subject to compliance by the Corporation
and Optionee with all applicable requirements of law relating thereto and with
all applicable regulations of any stock exchange (or the Nasdaq National
Market, if applicable) on which the Ordinary Shares may be listed for trading
at the time of such exercise and issuance.
(b) The inability of the Corporation to obtain approval from
any regulatory body having authority deemed by the Corporation to be necessary
to the lawful issuance and sale of any Ordinary Shares pursuant to this option
shall relieve the Corporation of any liability with respect to the non-
issuance or sale of the Ordinary Shares as to which such approval shall not
have been obtained. The Corporation, however, shall use its best efforts to
obtain all such approvals.
11. SUCCESSORS AND ASSIGNS. Except to the extent otherwise provided
----------------------
in Paragraphs 3 and 6, the provisions of this Agreement shall inure to the
benefit of, and be binding upon, the Corporation and its successors and assigns
and Optionee, Optionee's assigns and the legal representatives, heirs and
legatees of Optionee's estate.
5.
<PAGE>
12. NOTICES. Any notice required to be given or delivered to the
-------
Corporation under the terms of this Agreement shall be in writing and addressed
to the Corporation at its principal U.S. corporate offices. Any notice required
to be given or delivered to Optionee shall be in writing and addressed to
Optionee at the address indicated below Optionee's signature line on the Grant
Notice. All notices shall be deemed effective upon personal delivery or upon
deposit in the U.S. mail, postage prepaid and properly addressed to the party to
be notified.
13. FINANCING. The Plan Administrator may, in its absolute
---------
discretion and without any obligation to do so, permit Optionee to pay the
Exercise Price for the purchased Option Shares by delivering a full-recourse
promissory note payable to the Corporation. The terms of any such promissory
note (including the interest rate, the requirements for collateral and the terms
of repayment) shall be established by the Plan Administrator in its sole
discretion.
14. CONSTRUCTION. This Agreement and the option evidenced hereby are
------------
made and granted pursuant to the Plan and are in all respects limited by and
subject to the terms of the Plan. All decisions of the Plan Administrator with
respect to any question or issue arising under the Plan or this Agreement shall
be conclusive and binding on all persons having an interest in this option.
15. GOVERNING LAW. The interpretation, performance and enforcement
-------------
of this Agreement shall be governed by the laws of the State of California
without resort to that State's conflict-of-laws rules.
16. EXCESS SHARES. If the Option Shares covered by this Agreement
-------------
exceed, as of the Grant Date, the number of Ordinary Shares which may without
shareholder approval be issued under the Plan, then this option shall be void
with respect to those excess shares, unless shareholder approval of an amendment
sufficiently increasing the number of Ordinary Shares issuable under the Plan is
obtained in accordance with the provisions of the Plan.
17. ADDITIONAL TERMS APPLICABLE TO AN INCENTIVE OPTION. In the event
--------------------------------------------------
this option is designated an Incentive Option in the Grant Notice, the following
terms and conditions shall also apply to the grant:
(i) This option shall cease to qualify for favorable tax
treatment as an Incentive Option if (and to the extent) this option is
exercised for one or more Option Shares: (A) more than three (3) months
after the date Optionee ceases to be an Employee for any reason other than
death or Permanent Disability or (B) more than twelve (12) months after the
date Optionee ceases to be an Employee by reason of Permanent Disability.
6.
<PAGE>
(ii) No installment under this option shall qualify for favorable
tax treatment as an Incentive Option if (and to the extent) the aggregate
Fair Market Value (determined at the Grant Date) of the Ordinary Shares for
which such installment first becomes exercisable hereunder would, when
added to the aggregate value (determined as of the respective date or dates
of grant) of the Ordinary Shares or other securities for which this option
or any other Incentive Options granted to Optionee prior to the Grant Date
(whether under the Plan or any other option plan of the Corporation or any
Parent or Subsidiary) first become exercisable during the same calendar
year, exceed One Hundred Thousand Dollars ($100,000) in the aggregate.
Should such One Hundred Thousand Dollar ($100,000) limitation be exceeded
in any calendar year, this option shall nevertheless become exercisable for
the excess shares in such calendar year as a Non-Statutory Option.
(iii) Should the exercisability of this option be accelerated
upon a Corporate Transaction, then this option shall qualify for favorable
tax treatment as an Incentive Option only to the extent the aggregate Fair
Market Value (determined at the Grant Date) of the Ordinary Shares for
which this option first becomes exercisable in the calendar year in which
the Corporate Transaction occurs does not, when added to the aggregate
value (determined as of the respective date or dates of grant) of the
Ordinary Shares or other securities for which this option or one or more
other Incentive Options granted to Optionee prior to the Grant Date
(whether under the Plan or any other option plan of the Corporation or any
Parent or Subsidiary) first become exercisable during the same calendar
year, exceed One Hundred Thousand Dollars ($100,000) in the aggregate.
Should the applicable One Hundred Thousand Dollar ($100,000) limitation be
exceeded in the calendar year of such Corporate Transaction, the option may
nevertheless be exercised for the excess shares in such calendar year as a
Non-Statutory Option.
(iv) Should Optionee hold, in addition to this option, one or
more other options to purchase Ordinary Shares which become exercisable for
the first time in the same calendar year as this option, then the foregoing
limitations on the exercisability of such options as Incentive Options
shall be applied on the basis of the order in which such options are
granted.
18. LEAVE OF ABSENCE. The following provisions shall apply upon the
----------------
Optionee's commencement of an authorized leave of absence:
(i) The exercise schedule in effect under the Grant Notice shall
be frozen as of the first day of the authorized leave, and this option
shall not become exercisable for any additional installments of the Option
Shares during the period Optionee remains on such leave.
7.
<PAGE>
(ii) Should Optionee resume active Employee status within sixty
(60) days after the start date of the authorized leave, Optionee shall, for
purposes of the exercise schedule set forth in the Grant Notice, receive
Service credit for the entire period of such leave. If Optionee does not
resume active Employee status within such sixty (60)-day period, then no
Service credit shall be given for the period of such leave.
(iii) If the option is designated as an Incentive Option in the
Grant Notice, then the following additional provision shall apply:
(A) If the leave of absence continues for more than ninety
(90) days, then this option shall automatically convert to a Non-
Statutory Option under the Federal tax laws at the end of the three
(3)-month period measured from the ninety-first (91st) day of such
leave, unless the Optionee's reemployment rights are guaranteed by
statute or by written agreement. Following any such conversion of the
option, all subsequent exercises of such option, whether effected
before or after Optionee's return to active Employee status, shall
result in an immediate taxable event, and the Corporation shall be
required to collect from Optionee the Federal, state and local income
and employment withholding taxes applicable to such exercise.
(iv) In no event shall this option become exercisable for any
additional Option Shares or otherwise remain outstanding if Optionee does
not resume Employee status prior to the Expiration Date of the option term.
8.
<PAGE>
EXHIBIT I
NOTICE OF EXERCISE
I hereby notify Barbeques Galore Limited (the "Corporation") that I
elect to purchase ______ Ordinary Shares of the Corporation (the "Purchased
Shares") at the option exercise price of $_____ per share (the "Exercise
Price") pursuant to that certain option (the "Option") granted to me under the
Corporation's 1997 Share Option Plan on ____________, 199___.
Concurrently with the delivery of this Exercise Notice to the
Corporation, I shall hereby pay to the Corporation the Exercise Price for the
Purchased Shares in accordance with the provisions of my agreement with the
Corporation (or other documents) evidencing the Option and shall deliver
whatever additional documents may be required by such agreement as a condition
for exercise. Alternatively, I may utilize the special broker-dealer sale and
remittance procedure specified in my agreement to effect payment of the Exercise
Price.
________________________, 199__
Date
-----------------------------------------------
Optionee
Address:
-------------------------------------
-----------------------------------------------
Print name in exact manner
it is to appear on the
stock certificate:
-----------------------------------------------
Address to which certificate
is to be sent, if different
from address above:
-----------------------------------------------
-----------------------------------------------
Social Security Number:
-----------------------------------------------
Employee Number:
-----------------------------------------------
<PAGE>
APPENDIX
--------
The following definitions shall be in effect under the Agreement:
A. AGREEMENT shall mean this Stock Option Agreement.
---------
B. BOARD shall mean the Corporation's Board of Directors.
-----
C. CODE shall mean the U.S. Internal Revenue Code of 1986, as amended.
----
D. CORPORATE TRANSACTION shall mean either of the following shareholder-
---------------------
approved transactions to which the Corporation is a party:
(i) a merger or consolidation in which securities possessing more than
fifty percent (50%) of the total combined voting power of the Corporation's
outstanding securities are transferred to a person or persons different
from the persons holding those securities immediately prior to such
transaction, or
(ii) the sale, transfer or other disposition of all or substantially
all of the Corporation's assets in complete liquidation or dissolution of
the Corporation.
E. CORPORATION shall mean Barbeques Galore Limited, a corporation
-----------
organized under the laws of New South Wales, Australia, and any corporate
successor to all or substantially all of the assets or voting stock of Barbeques
Galore Limited which shall by appropriate action adopt the Plan.
F. EMPLOYEE shall mean an individual who is in the employ of the
--------
Corporation (or any Parent or Subsidiary), subject to the control and direction
of the employer entity as to both the work to be performed and the manner and
method of performance.
G. EXERCISE DATE shall mean the date on which the option shall have been
-------------
exercised in accordance with Paragraph 9 of the Agreement.
H. EXERCISE PRICE shall mean the exercise price per share as specified in
--------------
the Grant Notice.
I. EXPIRATION DATE shall mean the date on which the option expires as
---------------
specified in the Grant Notice.
J. FAIR MARKET VALUE per Ordinary Share on any relevant date shall be
-----------------
determined in accordance with the following provisions:
A-1.
<PAGE>
(i) If the Ordinary Shares (or any American Depositary Shares
representing the Ordinary Shares) are at the time traded on the Nasdaq
National Market, then the Fair Market Value shall be the closing selling
price per Ordinary Share (or American Depositary Share) on the date in
question, as the price is reported by the National Association of
Securities Dealers on the Nasdaq National Market or any successor system.
If there is no closing selling price for the Ordinary Shares (or American
Depositary Shares) on the date in question, then the Fair Market Value
shall be the closing selling price on the last preceding date for which
such quotation exists.
(ii) If the Ordinary Shares (or any American Depositary Shares
representing the Ordinary Shares) are at the time listed on any Stock
Exchange, then the Fair Market Value shall be the closing selling price per
Ordinary Share (or American Depositary Share) on the date in question on
the Stock Exchange determined by the Plan Administrator to be the primary
market for the Ordinary Shares, as such price is officially quoted in the
composite tape of transactions on such exchange. If there is no closing
selling price for the Ordinary Shares (or American Depositary Shares) on
the date in question, then the Fair Market Value shall be the closing
selling price on the last preceding date for which such quotation exists.
K. GRANT DATE shall mean the date of grant of the option as specified in
----------
the Grant Notice.
L. GRANT NOTICE shall mean the Notice of Grant of Stock Option
------------
accompanying the Agreement, pursuant to which Optionee has been informed of the
basic terms of the option evidenced hereby.
M. INCENTIVE OPTION shall mean an option which satisfies the requirements
----------------
of Code Section 422.
N. MISCONDUCT shall mean the commission of any act of fraud, embezzlement
----------
or dishonesty by Optionee, any unauthorized use or disclosure by Optionee of
confidential information or trade secrets of the Corporation (or any Parent or
Subsidiary), or any other intentional misconduct by Optionee adversely affecting
the business or affairs of the Corporation (or any Parent or Subsidiary) in a
material manner. The foregoing definition shall not be deemed to be inclusive
of all the acts or omissions which the Corporation (or any Parent or Subsidiary)
may consider as grounds for the dismissal or discharge of Optionee or any other
individual in the Service of the Corporation (or any Parent or Subsidiary).
O. NON-STATUTORY OPTION shall mean an option not intended to satisfy the
--------------------
requirements of Code Section 422.
A-2.
<PAGE>
P. NOTICE OF EXERCISE shall mean the notice of exercise in the form
------------------
attached hereto as Exhibit I.
Q. OPTION SHARES shall mean the number of Ordinary Shares subject to the
-------------
option as specified in the Grant Notice.
R. OPTIONEE shall mean the person to whom the option is granted as
--------
specified in the Grant Notice.
S. ORDINARY SHARE shall mean the Corporation's ordinary share, par value
--------------
of A$0.20 per share.
T. PARENT shall mean any corporation (other than the Corporation) in an
------
unbroken chain of corporations ending with the Corporation, provided each
corporation in the unbroken chain (other than the Corporation) owns, at the time
of the determination, stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.
U. PERMANENT DISABILITY shall mean the inability of Optionee to engage in
--------------------
any substantial gainful activity by reason of any medically determinable
physical or mental impairment which is expected to result in death or has lasted
or can be expected to last for a continuous period of twelve (12) months or
more.
V. PLAN shall mean the Corporation's 1997 Share Option Plan.
----
W. PLAN ADMINISTRATOR shall mean either the Board or a committee of the
------------------
Board acting in its administrative capacity under the Plan.
X. SERVICE shall mean the Optionee's performance of services for the
-------
Corporation (or any Parent or Subsidiary) in the capacity of an Employee, a non-
employee member of the board of directors or a consultant or independent
advisor.
Y. STOCK EXCHANGE shall mean the American Stock Exchange or the New York
--------------
Stock Exchange.
Z. SUBSIDIARY shall mean any corporation (other than the Corporation) in
----------
an unbroken chain of corporations beginning with the Corporation, provided each
corporation (other than the last corporation) in the unbroken chain owns, at the
time of the determination, stock possessing fifty percent (50%) or more of the
total combined voting power of all classes of stock in one of the other
corporations in such chain.
A-3.
<PAGE>
EXHIBIT 99.4
ADDENDUM
TO
STOCK OPTION AGREEMENT
The following provisions are hereby incorporated into, and are hereby
made a part of, that certain Stock Option Agreement (the "Option Agreement") by
and between Barbeques Galore Limited (the "Corporation") and _________________
("Optionee") evidencing the stock option (the "Option") granted on __________,
199____ to Optionee under the terms of the Corporation's 1997 Share Option Plan,
and such provisions shall be effective immediately. All capitalized terms in
this Addendum, to the extent not otherwise defined herein, shall have the
meanings assigned to them in the Option Agreement.
INVOLUNTARY TERMINATION FOLLOWING
CORPORATE TRANSACTION/CHANGE IN CONTROL
1. To the extent the Option is, in connection with a Corporate
Transaction, to be assumed by the successor entity (or its parent company), the
Option shall not accelerate upon the occurrence of that Corporate Transaction,
and the Option shall accordingly continue, over Optionee's period of Service
after the Corporate Transaction, to become exercisable for the Option Shares in
one or more installments in accordance with the provisions of the Option
Agreement. However, immediately upon an Involuntary Termination of Optionee's
Service within twelve (12) months following such Corporate Transaction, the
Option (or any replacement grant), to the extent outstanding at the time but not
otherwise fully exercisable, shall automatically accelerate so that the Option
shall become immediately exercisable for all the Option Shares at the time
subject to the Option and may be exercised for any or all of those Option Shares
as fully vested shares.
2. The Option shall not accelerate upon the occurrence of a Change in
Control, and the Option shall, over Optionee's period of Service following such
Change in Control, continue to become exercisable for the Option Shares in one
or more installments in accordance with the provisions of the Option Agreement.
However, immediately upon an Involuntary Termination of Optionee's Service
within twelve (12) months following the Change in Control, the Option, to the
extent outstanding at the time but not otherwise fully exercisable, shall
automatically accelerate so that the Option shall become immediately exercisable
for all the Option Shares at the time subject to the Option and may be exercised
for any or all of those Option Shares as fully vested shares.
3. The Option as accelerated under Paragraphs 1 or 2 shall remain so
exercisable until the earlier of (i) the Expiration Date or (ii) the expiration
-------
of the one (1)-year period measured from the date of the Optionee's Involuntary
Termination.
<PAGE>
4. For purposes of this Addendum the following definitions shall be
in effect:
(i) An INVOLUNTARY TERMINATION shall mean the termination of
Optionee's Service by reason of:
(A) Optionee's involuntary dismissal or discharge by the
Corporation for reasons other than Misconduct, or
(B) Optionee's voluntary resignation following (A) a change
in Optionee's position with the Corporation (or Parent or Subsidiary
employing Optionee) which materially reduces Optionee's level of
responsibility, (B) a reduction in Optionee's level of compensation
(including base salary, fringe benefits and target bonus under any
corporate-performance based bonus or incentive programs) by more than
fifteen percent (15%) or (C) a relocation of Optionee's place of
employment by more than fifty (50) miles, provided and only if such
change, reduction or relocation is effected by the Corporation without
Optionee's consent.
(ii) A CHANGE IN CONTROL shall be deemed to occur in the event of
a change in ownership or control of the Corporation effected through either
of the following transactions:
(A) the acquisition, directly or indirectly, by any person
or related group of persons (other than the Corporation or a person
that directly or indirectly controls, or is controlled by, or is under
common control with, the Corporation) of beneficial ownership (within
the meaning of Rule 13d-3 of the Securities Exchange Act of 1934, as
amended) of securities possessing more than fifty percent (50%) of the
total combined voting power of the Corporation's outstanding
securities pursuant to a tender or exchange offer made directly to the
Corporation's stockholders which the Board does not recommend such
stockholders to accept, or
(B) a change in the composition of the Board over a period
of thirty-six (36) consecutive months or less such that a majority of
the Board members ceases, by reason of one or more contested elections
for Board membership, to be comprised of individuals who either (i)
have been Board members continuously since the beginning of such
period or (ii) have been elected or nominated for election as Board
members during such period by at least a majority of the Board members
described in clause (i) who were still in office at the time such
election or nomination was approved by the Board.
2.
<PAGE>
(iii) MISCONDUCT shall mean the commission of any act of fraud,
embezzlement or dishonesty by the Participant, any unauthorized use or
disclosure by the Participant of confidential information or trade
secrets of the Corporation (or any Parent or Subsidiary), or any other
intentional misconduct by the Participant adversely affecting the
business or affairs of the Corporation (or any Parent or Subsidiary)
in a material manner. The foregoing definition shall not be deemed to
be inclusive of all the acts or omissions which the Corporation (or
any Parent or Subsidiary) may consider as grounds for the dismissal or
discharge of the Participant or other person in the Service of the
Corporation (or any Parent or Subsidiary).
5. The provisions of Paragraph 3 of this Addendum shall govern the
period for which the Option is to remain exercisable following the Involuntary
Termination of Optionee's Service within twelve (12) months after the Corporate
Transaction or Change in Control and shall supersede any provisions to the
contrary in Paragraph 5 of the Option Agreement.
IN WITNESS WHEREOF, Barbeques Galore Limited has caused this Addendum
to be executed by its duly-authorized officer as of the Effective Date specified
below.
BARBEQUES GALORE LIMITED
By:
----------------------------------------
Title:
----------------------------------------
EFFECTIVE DATE: _________________, 199__
3.
