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As filed with the Securities and Exchange Commission on August 7, 1998
Registration No. 333-
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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HASTINGS ENTERTAINMENT, INC.
(Exact name of registrant as specified in its charter)
TEXAS 75-1386375
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3601 PLAINS BLVD., SUITE #1 79102
AMARILLO, TEXAS (Zip Code)
(Address of Principal Executive Offices)
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HASTINGS 1994 STOCK OPTION PLAN
HASTINGS 1991 STOCK OPTION PLAN
AMENDED 1996 INCENTIVE STOCK PLAN
CHIEF EXECUTIVE OFFICER STOCK OPTION PLAN
HASTINGS BOOKS, MUSIC & VIDEO, INC. MANAGEMENT STOCK PURCHASE PLAN
HASTINGS ENTERTAINMENT, INC. 1996 STOCK OPTION PLAN FOR OUTSIDE DIRECTORS
HASTINGS ENTERTAINMENT, INC. 1998 STOCK GRANT PLAN FOR OUTSIDE DIRECTORS
(Full Titles of the Plans)
DENNIS MCGILL
VICE PRESIDENT OF FINANCE, CHIEF FINANCIAL OFFICER, TREASURER AND SECRETARY
HASTINGS ENTERTAINMENT, INC.
3601 PLAINS BLVD., SUITE #1
AMARILLO, TEXAS 79102
(806) 351-2300
(Name, address and telephone number, including area code, of agent for service)
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With Copies To:
KENT JAMISON, ESQ.
LOCKE PURNELL RAIN HARRELL
(A PROFESSIONAL CORPORATION)
2200 ROSS AVENUE, SUITE 2200
DALLAS, TEXAS 75201-6776
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CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
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OF SECURITIES AMOUNT TO MAXIMUM AGGREGATE OFFERING AMOUNT OF
TO BE REGISTERED BE REGISTERED OFFERING PRICE PRICE (1) REGISTRATION FEE
PER SHARE (1)
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<S> <C> <C> <C> <C>
Common Stock,
$.01 Par Value
To be issued under 632,375 shares $11.50(2) $7,272,312.50 $2,145.33
the Amended 1996
Incentive
Stock Plan
Issued under the 3,415 shares $10.68(3) $36,472.20 $10.76
1994 Stock Option Plan
To be issued under 502,485 shares $11.50(2) $5,778,577.50 $1,704.68
the 1994 Stock
Option Plan
Issued under the 8,074 shares $9.24(4) $74,603.76 $22.01
1991 Stock Option Plan
To be issued under 497,826 shares $11.50(2) $5,724,999.00 $1,688.87
the 1991 Stock
Option Plan
To be issued under 227,655 shares $11.50(2) $2,618,032.50 $772.32
the Management Stock
Purchase Plan
To be issued under 101,180 shares $11.50(2) $1,163,570.00 $343.25
the 1996 Stock
Option Plan for
Outside Directors
To be issued under 25,295 shares $11.50(2) $290,892.50 $85.81
the 1998 Stock Grant
Plan for Outside
Directors
To be issued under 404,720 shares $11.50(2) $4,654,280.00 $1,373.01
the Chief Executive
Officer Stock Option Plan
TOTAL 2,403,025 shares $27,613,739.96 $8,146.05
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</TABLE>
(1) For the sole purpose of calculating the registration fee, the number of
shares to be registered under this Registration Statement has been broken down
into nine subtotals. In addition, pursuant to Rule 416 under the Securities
Act of 1933, as amended, this Registration Statement also covers shares of
Common Stock of the Company issuable to prevent dilution resulting from stock
splits, stock dividends or similar transactions.
(2) Estimated in accordance with Rule 457 (c) and (h) under the Securities
Act of 1933, as amended, solely for purposes of calculating the registration
fee, based on the average of the high and low prices reported on the Nasdaq
National Market on August 4, 1998.
(3) Computed in accordance with Rule 457(h) under the Securities Act of
1933, as amended. Such computation is based on the weighted average exercise
price of $10.68 per share covering 3,415 shares presently outstanding under
the Registrant's 1994 Stock Option Plan.
(4) Computed in accordance with Rule 457(h) under the Securities Act of 1933,
as amended. Such computation is based on the weighted average exercise price
of $9.24 per share covering 8,074 shares presently outstanding under the
Registrant's 1991 Stock Option Plan.
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PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
The information specified by Item 1 and Item 2 of Part I of Form S-8 is
omitted from this filing in accordance with the provisions of Rule 428 under
the Securities Act of 1933, as amended (the "Securities Act"), and the
introductory Note to Part I of Form S-8.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The documents set forth below are incorporated by reference in this
Registration Statement. All documents subsequently filed by Hastings
Entertainment, Inc. (the "Company") pursuant to Sections 13(a), 13(c), 14 and
15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
prior to the filing of a post-effective amendment which indicates that all
securities offered have been sold or which deregisters all securities then
remaining unsold, shall be deemed to be incorporated by reference 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 a statement contained
herein or in any other subsequently filed document which also is or 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.
(1) The Company's prospectus dated June 11, 1998 and relating to the
Form S-1 Registration Statement (Registration Statement No.
333-47969) filed pursuant to Rule 424(b) of the Securities Act;
(2) All other reports filed with the Securities and Exchange
Commission pursuant to Section 13(a) or 15(d) of the Exchange Act
since the end of the fiscal year covered by the prospectus
described in (1) above; and
(3) The description of the Common Stock which is contained in the
Company's Registration Statement on Form 8-A filed with the
Securities and Exchange Commission on June 3, 1998 pursuant to
Section 12 of the Exchange Act, and all amendments thereto and
reports that have been filed for the purpose of updating such
description.
ITEM 4. DESCRIPTION OF SECURITIES.
Not Applicable.
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ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not Applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article 2.02-1 of the Texas Business Corporation Act (the "TBCA")
permits a corporation to indemnify certain persons, including officers and
directors and former officers and directors, and to purchase insurance with
respect to liability arising out of their capacity or status as officers and
directors.
Article Thirteen of the Company's Third Restated Articles of
Incorporation provides as follows:
The Corporation shall indemnify any person who was, is or is threatened
to be made a named defendant or respondent in a proceeding (as
hereinafter defined) because the person (a) is or was a director or
officer of the corporation or (b) while a director or officer of the
corporation, is or was serving at the request of the corporation as a
director, officer, manager, partner, venturer, proprietor, trustee,
employee, agent or similar functionary of another foreign or domestic
corporation, limited liability company, partnership, joint venture, sole
proprietorship, trust, employee benefit plan or other enterprise, to the
fullest extent that a corporation may grant indemnification to a person
serving in such capacity under the Texas Business Corporation Act, as
the same exists or may hereafter be amended.
Such right shall include the right to be paid by the corporation for all
expenses incurred in defending any such proceeding in advance of its
final disposition to the maximum extent permitted under the Texas
Business Corporation Act, as the same exists or may hereafter be
amended. If a claim for indemnification or advancement of expenses
hereunder is not paid in full by the corporation within 90 days after a
written claim has been received by the corporation, the claimant may at
any time thereafter bring suit against the corporation to recover the
unpaid amount of the claim, and if successful in whole or in part, the
claimant shall be entitled to be paid also the expenses of prosecuting
such claim. It shall be a defense to any such action that such
indemnification or advancement of costs of defense are not permitted
under the Texas Business Corporation Act, but the burden of proving such
defense shall be on the corporation. Neither the failure of the
corporation (including its Board of Directors or any committee thereof,
special legal counsel or shareholders) to have made its determination
prior to the commencement of such action that indemnification of, or
advancement of costs of defense to, the claimant is permissible in the
circumstances nor an actual determination by the corporation (including
its Board of Directors or any committee thereof, special legal counsel
or shareholders) that such indemnification or advancement is not
permissible, shall be a defense to the action or create a presumption
that such indemnification or advancement is not permissible.
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The corporation may additionally indemnify any person not covered by the
grant of mandatory indemnification contained above to the fullest extent
permitted by law.
Neither the amendment nor repeal of this Article, nor the adoption of
any provision of these Third Restated Articles of Incorporation
inconsistent with this Article, shall eliminate or reduce the effect of
this Article in respect of any proceeding that accrued or arose prior to
such amendment, repeal or adoption of any inconsistent provision.
As used herein, the term "proceeding" means any threatened, pending or
completed action, suit or proceeding, whether civil, criminal,
administrative, arbitrative or investigative, any appeal in such an
action, suit or proceeding, and any inquiry or investigation that could
lead to such an action, suit or proceeding.
Article Fourteen of the Company's Third Restated Articles of
Incorporation provides that no director of the Company shall be liable to the
Company or its shareholders for monetary damages for an act or omission in the
director's capacity as a director to the fullest extent permitted by the TBCA.
In addition, Article IX of the Company's Amended and Restated Bylaws,
provides that the Company shall indemnify any person who was, is or is
threatened to be made a named defendant or respondent in a proceeding (as
hereinafter defined) because the person is or was a director or officer of the
Company or while a director or officer of the corporation, is or was serving at
the request of the Company as a director, officer, manager, partner, venturer,
proprietor, trustee, employee, agent or similar functionary of another foreign
or domestic corporation, limited liability company, partnership, joint venture,
sole proprietorship, trust, employee benefit plan or other enterprise, to the
fullest extent that a corporation may grant indemnification to a person serving
in such capacity under the TBCA, as the same exists or may hereafter be
amended.
The Company has purchased directors' and officers' liability insurance.
Subject to conditions, limitations and exclusions in the policy, the insurance
covers amounts required to be paid for a claim or claims made against directors
and officers for any act, error, omission, misstatement, misleading statement
or breach of duty by directors and officers in their capacity as directors and
officers of the Company.
Reference is made to the Form of Indemnification Agreement by and
between the Company and its directors and executive officers filed as Exhibit
10.1 to the Company's Registration Statement on Form S-1 (File No. 333-47969)
declared effective on June 11, 1998, pursuant to which the Company does, to the
extent permitted by applicable law, indemnify such directors and executive
officers against all expenses, judgements, fines and penalties incurred in
connection with the defense or settlement of any actions brought against them
by reason of the fact that they were directors or executive officers of the
Company or assumed certain responsibilities at the direction of the Company.
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ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not Applicable.
ITEM 8. EXHIBITS.
5.1* Opinion of Locke Purnell Rain Harrell (A Professional
Corporation).
23.1* Consent of KPMG Peat Marwick LLP.
23.2* Consent of Locke Purnell Rain Harrell (A Professional
Corporation) (included in opinion filed as Exhibit 5.1).
24.1* Power of Attorney (included on the signature pages of this
Registration Statement).
99.1* Hastings 1994 Stock Option Plan.
99.2* Hastings 1991 Stock Option Plan.
99.3* Amended 1996 Incentive Stock Plan.
99.4* Hastings Books, Music & Video, Inc. Management Stock
Purchase Plan.
99.5* Hastings Entertainment, Inc. 1998 Stock Grant Plan for
Outside Directors.
99.6* Hastings Entertainment, Inc. 1996 Stock Option Plan for
Outside Directors.
99.7* Chief Executive Officer Stock Option Plan.
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* Filed herewith.
ITEM 9. UNDERTAKINGS.
The Company 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;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of this Registration Statement
(or the most recent post-effective amendment thereof)
which, individually or in the aggregate, represent a
fundamental change in the information set forth in this
Registration Statement;
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<PAGE> 7
(iii) To include any material information with respect to
the plan of distribution not previously disclosed
in this Registration Statement or any material
change to such information in this Registration
Statement;
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be
deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof;
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering;
(4) That, for purposes of determining any liability under the
Securities Act, each filing of the Company's annual report
pursuant to Section 13(a) or Section 15(d) of the Exchange Act
that is incorporated by reference in this Registration Statement
shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona
fide offering thereof;
(5) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and
controlling persons of the Company pursuant to the foregoing
provisions, or otherwise, the Company has been advised that in
the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other
than the payment by the Company of expenses incurred or paid by a
director, officer or controlling person of the Company in the
successful defense of any action, suit or proceeding) is asserted
by such director, officer or controlling person in connection
with the securities being registered, the Company will, unless in
the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will
be governed by the final adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Company
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Amarillo, State of Texas, on August 7, 1998.
HASTINGS ENTERTAINMENT, INC.
By: /s/ Dennis McGill
-----------------------------------------
Dennis McGill, Vice President of Finance,
Chief Financial Officer, Treasurer and
Secretary
-8-
<PAGE> 9
POWER OF ATTORNEY
KNOW ALL MEN AND WOMEN BY THESE PRESENTS, that each person whose
signature appears below hereby constitutes and appoints each of Dennis McGill
and Jeffrey G. Shrader, and each of them, his true and lawful attorneys-in-fact
and agents, with full power of substitution and resubstitution, for him and in
his name, place and stead, in any and all capacities, to sign any and all
amendments (including post-effective amendments) to this Registration
Statement, and to file the same, with all exhibits thereto, and all other
documents in connection therewith, with the Securities and Exchange Commission,
granting unto said attorneys-in-fact and agents, and each of them, full power
and authority to do and perform each and every act and thing requisite and
necessary to be done on and about the premises as fully and to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents, or any of them, or their substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
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<S> <C> <C>
/s/ John H. Marmaduke Chairman of the Board, August 7, 1998
------------------------------ President and Chief Executive
John H. Marmaduke Officer (Principal Executive
Officer)
/s/ Dennis McGill Vice President of Finance, August 7, 1998
------------------------------- Chief Financial Officer,
Dennis McGill Treasurer and Secretary
(Principal Financial and
Accounting Officer)
/s/ Phillip Hill Senior Vice President, Chief August 7, 1998
------------------------------- Operating Officer and Director
Phillip Hill
/s/ Leonard L. Berry Director August 7, 1998
-------------------------------
Leonard L. Berry
/s/ Peter A. Dallas Director August 7, 1998
-------------------------------
Peter A. Dallas
/s/ Gaines L. Godfrey Director August 7, 1998
-------------------------------
Gaines L. Godfrey
/s/ Craig R. Lentzsch Director August 7, 1998
-------------------------------
Craig R. Lentzsch
/s/ Stephen S. Marmaduke Director August 7, 1998
-------------------------------
Stephen S. Marmaduke
/s/ Jeffrey G. Shrader Director August 7, 1998
-------------------------------
Jeffrey G. Shrader
/s/ Ron G. Stegall Director August 7, 1998
-------------------------------
Ron G. Stegall
</TABLE>
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<PAGE> 10
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Exhibit
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<S> <C>
5.1* Opinion of Locke Purnell Rain Harrell (A Professional
Corporation).
23.1* Consent of KPMG Peat Marwick LLP.
23.2* Consent of Locke Purnell Rain Harrell (A Professional
Corporation) (included in opinion filed as Exhibit 5.1).
24.1* Power of Attorney (included on the signature pages of this
Registration Statement).
99.1* Hastings 1994 Stock Option Plan.
99.2* Hastings 1991 Stock Option Plan.
99.3* Amended 1996 Incentive Stock Plan.
99.4* Hastings Books, Music & Video, Inc. Management Stock
Purchase Plan.
99.5* Hastings Entertainment, Inc. 1998 Stock Grant Plan for
Outside Directors.
99.6* Hastings Entertainment, Inc. 1996 Stock Option Plan for
Outside Directors.
99.7* Chief Executive Officer Stock Option Plan.
</TABLE>
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* Filed herewith.
<PAGE> 1
EXHIBIT 5.1
August 7, 1998
Hastings Entertainment, Inc.
3601 Plains Blvd., Suite #1
Amarillo, Texas 79102
Re: Registration of 2,403,025 shares of Common Stock, par value $.01
per share, pursuant to a Registration Statement on Form S-8
Ladies and Gentlemen:
We have acted as counsel for Hastings Entertainment, Inc., a Texas
corporation (the "Company"), in connection with the registration under the
Securities Act of 1933, as amended (the "Securities Act"), pursuant to a
Registration Statement on Form S-8 (the "Registration Statement"), of 2,403,025
shares of Common Stock, par value $.01 per share, of the Company (the "Common
Stock") to be offered pursuant to the Hastings 1994 Stock Option Plan, Hastings
1991 Stock Option Plan, Amended 1996 Incentive Stock Plan, Chief Executive
Officer Stock Option Plan, Hastings Books, Music & Video, Inc. Management Stock
Purchase Plan, Hastings Entertainment, Inc. 1996 Stock Option Plan for Outside
Directors and Hastings Entertainment, Inc. 1998 Stock Grant Plan for Outside
Directors (the "Plans").
Based upon our examination of such documents and the investigation of
such matters of law as we have deemed relevant or necessary in rendering this
opinion, we hereby advise you that we are of the opinion that:
Assuming, with respect to shares of Common Stock issued after the
date hereof, (i) the receipt of proper consideration for the issuance thereof
in excess of par value thereof, (ii) the availability of a sufficient number of
shares of Common Stock authorized by the Company's Articles of Incorporation
then in effect, (iii) compliance with the terms of any agreement entered into
in connection with any options or restricted stock under the Plans, and (iv) no
change occurs in the applicable law or the pertinent facts, the shares of
Common Stock purchasable upon the exercise of any option granted under or
issued upon the awarding of any restricted stock under, the Plans will upon
issuance be duly authorized and validly issued, fully paid and non-assessable
shares of Common Stock.
<PAGE> 2
Hastings Entertainment, Inc.
August 7, 1998
Page 2
We consent to the filing of this opinion as Exhibit 5.1 to the
Registration Statement filed by the Company with the Securities and Exchange
Commission for the registration under the Securities Act, of 2,403,025 shares
of Common Stock of the Company covered by the Plans. By so consenting, we do
not thereby admit that our firm's consent is required by Section 7 of the
Securities Act.
Very truly yours,
LOCKE PURNELL RAIN HARRELL
(A Professional Corporation)
By: /s/ Kent Jamison
----------------------------------
Kent Jamison
<PAGE> 1
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
Hastings Entertainment, Inc.:
We consent to the use of our reports incorporated herein by reference and to
the reference to our firm under the heading "Experts" in the registration
statement on Form S-1 incoporated herein by reference.
/s/ KPMG PEAT MARWICK LLP
Dallas, Texas
August 5, 1998
<PAGE> 1
EXHIBIT 99.1
HASTINGS BOOKS, MUSIC & VIDEO, INC.
1994 STOCK OPTION PLAN
ARTICLE 1 - GENERAL
1.1 Purpose. The purposes of this 1994 Stock Option Plan
(the "Plan") are to: (1) closely associate the interests of the management of
Hastings Books, Music & Video, Inc. ("Hastings") and its subsidiaries and
affiliates (collectively referred to as the "Company") with the shareholders by
reinforcing the relationship between participants' rewards and shareholder
gains; (2) provide management with an equity ownership in the Company
commensurate with Company performance, as reflected in increased shareholder
value; (3) maintain competitive compensation levels; and (4) provide an
incentive to management for continuous employment with the Company.
1.2 Administration.
(a) The Plan shall be administered by the Board of
Directors of Hastings or by a committee named by the Board (either being
referred to herein as the "Committee").
(b) The Committee shall have the authority, in its sole
discretion and from time to time to:
(i) designate the employees, classes of
employees, directors, or other individuals eligible to participate in the Plan;
(ii) award options under the Plan in form and
amount as the Committee shall determine;
(iii) impose limitations, restrictions and
conditions upon any award as the Committee shall deem appropriate; and
(iv) interpret the Plan, adopt, amend, and rescind
rules and regulations relating to the Plan, and make all other determinations
and take all other action necessary or advisable for the implementation and
administration of the Plan.
(c) Decisions and determinations of the Committee on all
matters relating to the Plan shall be in its sole discretion and shall be
conclusive. No member of the Committee shall be liable for any action taken or
decision made in good faith relating to the Plan or any award thereunder.
1.3 Eligibility for Participation. Participants in the Plan shall
be selected by the Committee from the directors, the
<PAGE> 2
executive officers and other key employees of the Company who occupy
responsible managerial or professional positions and who have the capability of
making a substantial contribution to the success of the Company, or any other
individual whose participation the Committee determines is in the best interest
of the Company. In making this selection and in determining the form and
amount of awards, the Committee shall consider any factors deemed relevant,
including the individual's functions, responsibilities, value of services to
the Company, and past and potential contributions to the Company's
profitability and sound growth.
1.4 Types of Awards Under Plan. Awards under the Plan may be
in the form of: (i) Stock Options, as described in Article 2; or (ii)
Incentive Stock Options, as described in Article 3.
1.5 Aggregate Limitation on Awards.Shares of stock which may be
issued under the Plan shall be authorized and unissued or treasury shares of
Common Stock of Hastings ("Common Stock"). The maximum number of shares of
Common Stock which may be issued under the Plan shall be 100,000.
1.6 Effective Date and Term of Plan.
(a) The Plan shall become effective on the date approved
by the holders of a majority of the shares of Common Stock present in person or
by proxy and entitled to vote at the 1994 Annual Meeting of Shareholders of
Hastings.
(b) No awards of Incentive Stock Options shall be made
under the Plan after the tenth anniversary of its effective date, provided,
however, that the Plan and all awards made under the Plan prior to that date
shall remain in effect until the awards have been satisfied or terminated in
accordance with the Plan and the terms of the awards.
ARTICLE 2 - STOCK OPTIONS
2.1 Award of Stock Options. The Committee may from time to time,
and subject to the provisions of the Plan and the other terms and conditions
the Committee prescribes, grant to any participant in the Plan one or more
options to purchase for cash or shares of previously owned Common Stock the
number of shares of Common Stock ("Stock Options") allotted by the Committee.
The date a Stock Option is granted shall mean the date selected by the
Committee as of which the Committee allots a specific number of shares to a
participant pursuant to the Plan.
2.2 Stock Option Agreements. The grant of a Stock Option shall be
evidenced by a written Award of Stock Option ("Agreement"), executed by the
Company and the employee receiving the Stock Option (the "optionee"), in the
form the Committee determines.
<PAGE> 3
2.3 Stock Option Price. The option price per share of Common
Stock shall be established by the Committee for the particular award.
2.4 Term and Exercise. Each Stock Option shall be
exercisable at the times and in the amounts the Committee specifies in the
Agreement and unless a different period is provided by the Committee or another
section of this Plan, may be exercised during a period of ten (10) years from
the date of grant (the "option term"). No Stock Option shall be exercisable
after the expiration of its option term.
2.5 Manner of Payment. Each Agreement shall set forth the
procedure governing its exercise, and shall provide that, upon exercise the
optionee shall pay to the Company, in full, the option price with cash or with
previously owned Common Stock.
ARTICLE 3 - INCENTIVE STOCK OPTIONS
3.1 Award of Incentive Stock Options. The Committee may,
from time to time and subject to the provisions of the Plan and other terms and
conditions the Committee prescribes, grant to any participant in the Plan one
or more incentive stock options (intended to qualify under Section 422 of the
Internal Revenue Code of 1986, as amended) ("Incentive Stock Options") to
purchase for cash or shares of previously owned Common Stock the number of
shares of Common Stock allotted by the Committee. The date an Incentive Stock
Option is granted means the date selected by the Committee as of which the
Committee allots a specific number of shares to a participant pursuant to the
Plan. Notwithstanding the foregoing, Incentive Stock Options shall not be
granted to any owner of 10% or more of the total combined voting powers of
Hastings unless the option price per share shall be 110% of the fair market
value of a share of Common Stock on the date of grant and the option states
that it is not exercisable after the expiration of 5 years from the date of its
grant.
3.2 Incentive Stock Option Agreements. The grant of an
Incentive Stock Option shall be evidenced by a written Incentive Stock Option
Agreement ("Agreement"), executed by the Company and the employee receiving the
Incentive Stock Option (the "optionee"), stating the number of shares of Common
Stock subject to the Incentive Stock Option in the form the Committee
determines.
3.3 Incentive Stock Option Price. The option price per share of
Common Stock deliverable upon the exercise of an Incentive Stock Option shall
be 100% of the fair market value of a share of Common Stock on the date the
Incentive Stock Option is granted, provided that Incentive Stock Options
granted to any owner of 10% or more of the total combined voting powers of
Hastings shall be 110% of the fair market value of a share of common stock on
the date of grant.
<PAGE> 4
3.4 Term and Exercise. Each Incentive Stock Option shall be
exercisable at such times and in the amounts the Committee specifies in the
Incentive Stock Option Agreement and unless a shorter period is provided by the
Committee or another section of this Plan, may be exercised during a period of
ten years from the date of grant (the "option term"). No Incentive Stock
Option shall be exercisable after the expiration of its option term.
3.5 Applicability of Stock Options Sections.Section 2.5, Manner of
Payment, applicable to Stock Options, shall apply equally to Incentive Stock
Options.
3.6 Maximum Amount of Incentive Stock Options.The aggregate fair
market value (determined on the date the option is granted) of Common Stock
with respect to which an Incentive Stock Option may become exercisable for the
first time during any calendar year by an optionee shall not exceed $100,000.
3.7 Death of an Optionee.
(a) Upon the death of the optionee, any Incentive Stock
Option exercisable on the date of death may be exercised by the optionee's
estate or by a person who acquires the right to exercise Incentive Stock Option
by bequest or inheritance or by reason of the death of the optionee, provided
that the exercise occurs within both the remaining option term and one year
after the optionee's death.
(b) The provisions of this Section shall apply
notwithstanding the fact that the optionee's employment may have terminated
prior to death, but only to the extent of any Incentive Stock Options
exercisable on the date of death.
3.8 Retirement or Disability.Upon the termination of the
optionee's employment by reason of permanent disability (as determined by the
Committee), the optionee may, within 12 months from the date of termination,
exercise any Incentive Stock Options to the extent such options are exercisable
during the 12-month period. Upon termination of optionee's employment due to
retirement with the consent of the Company, the optionee may, within 3 months
after termination, exercise any Options to the extent the options were
exercisable on the date of termination of employment.
3.9 Termination for Other Reasons.Except as provided in Sections
3.7 and 3.8 or except as otherwise determined by the Committee, all Incentive
Stock Options shall terminate upon the termination of the optionee's
employment.
ARTICLE 4 - MISCELLANEOUS
4.1 General Restriction. Each award under the Plan shall be
subject to the requirement that, if at any time the Committee shall determine
that (i) the listing, registration, or
<PAGE> 5
qualification of the shares of Common Stock subject or related thereto upon any
securities exchange or under any state or federal law, or (ii) the consent or
approval of any government regulatory body, or (iii) an agreement by the
grantee of an award with respect to the disposition of shares of Common Stock,
is necessary or desirable as a condition of, or in connection with, the
granting of the award or the issue or purchase of shares of Common Stock
thereunder, the award may not be consummated in whole or in part unless the
listing, registration, qualification, consent, approval, or agreement shall
have been effected or obtained free of any conditions not acceptable to the
Committee.
4.2 Non-Assignability. No award under the Plan shall be
assignable or transferable by the optionee, except by will or by the laws of
descent and distribution. During the life of the optionee, an award shall be
exercisable only by the optionee or by optionee's guardian or legal
representative.
4.3 Withholding Taxes. Whenever the Company proposes or is
required to issue or transfer shares of Common Stock under the Plan, the
Company shall have the right to require the grantee to remit to the Company an
amount sufficient to satisfy any federal, state and/or local withholding tax
requirements prior to the delivery of any certificate for the shares.
Alternatively, the Company may issue or transfer the shares of Common Stock net
of the number of shares sufficient to satisfy the withholding tax requirements.
For withholding tax purposes, the shares of Common Stock shall be valued at
their fair market value on the date the withholding obligation is incurred.
4.4 Right to Terminate Employment. Nothing in the Plan or in any
agreement entered into pursuant to the Plan shall confer upon any participant
the right to continued employment by the Company or effect any right which the
Company may have to terminate the employment of the participant.
4.5 Non-Uniform Determinations. The Committee's
determinations under the Plan (including without limitation determinations of
the persons to receive awards, the form, amount and timing of such awards, the
terms and provisions of awards, and the agreements evidencing same) need not be
uniform and may be made by it selectively among persons who receive, or are
eligible to receive, awards under the Plan, whether or not the persons are
similarly situated.
4.6 Rights as a Shareholder. The recipient of any award under the
Plan shall have no rights as a shareholder with respect to the award unless and
until certificates for shares of Common Stock are issued to the recipient.
4.7 Definitions. In this Plan:
(a) "Subsidiary" means any corporation of which, at the
time more than 50% of the shares entitled to vote generally in an
<PAGE> 6
election of directors are owned directly or indirectly by Hastings or any
subsidiary thereof.
(b) "Affiliate" means any person or entity which
directly, or indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with Hastings.
(c) "Fair market value" as of any date of any share of
Common Stock means the fair market value of shares determined by the Committee
in the manner it may deem appropriate. In no event shall the fair market value
of any share of Common Stock be less than its par value.
(d) "Option" means Stock Option and Incentive Stock
Option.
(e) "Option price" means the purchase price per share of
Common Stock deliverable upon the exercise of a Stock Option or Incentive Stock
Option.
(f) "Change of Control" means any merger, transfer of
assets, or transfer of voting shares in the Company resulting in members of the
Marmaduke family owning, directly or indirectly, less than 50% of the voting
shares of the Company.
4.8 Leaves of Absence. The Committee shall be entitled to
make such rules, and regulations, and determinations as it deems appropriate
under the Plan in respect to any leave of absence taken by the recipient of any
award. Without limiting the generality of the foregoing, the Committee shall
be entitled to determine (i) whether or not any leave of absence shall
constitute a termination of employment within the meaning of the Plan, and (ii)
the impact, if any, of any leave of absence on awards under the Plan
theretofore made to any recipient who takes leave of absence.
4.9 Adjustments. If the outstanding Common Stock changes by
reason of a stock dividend or distribution, recapitalization, merger,
consolidation, split-up, combination, exchange of shares, or the like, the
Committee may appropriately adjust the number of shares of Common Stock which
may be issued under the Plan, the number of shares of Common Stock subject to
Options theretofore granted under the Plan, the Option Price of Options
theretofore granted under the Plant, and any and all other matters deemed
appropriate by the Committee.
4.10 Acceleration. Unless the Committee provides otherwise in an
Option Agreement, the exercise date of all Options shall be accelerated and
such options may be exercised immediately if a Change of Control occurs.
4.11 Amendment of the Plan. The Committee may, without further
action by the shareholders and without receiving further
<PAGE> 7
consideration from the participants, amend this Plan or condition or modify
awards under this Plan except for amendments which applicable law or regulation
require approval by the Shareholders.
<PAGE> 1
EXHIBIT 99.2
HASTINGS BOOKS, MUSIC & VIDEO, INC.
1991 STOCK OPTION PLAN
ARTICLE 1 - GENERAL
1.1 PURPOSE. The purposes of this 1991 Stock Option Plan
(the "Plan") are to: (1) closely associate the interests of the management of
Hastings Books, Music & Video, Inc. ("Hastings") and its subsidiaries and
affiliates (collectively referred to as the "Company") with the shareholders by
reinforcing the relationship between participants' rewards and shareholder
gains; (2) provide management with an equity ownership in the Company
commensurate with Company performance, as reflected in increased shareholder
value; (3) maintain competitive compensation levels; and (4) provide an
incentive to management for continuous employment with the Company.
1.2 ADMINISTRATION.
(a) The Plan shall be administered by the Board of
Directors of Hastings or by a committee named by the Board (either being
referred to herein as the "Committee").
(b) The Committee shall have the authority, in its sole
discretion and from time to time to:
(i) designate the employees, classes of
employees, directors, or other individuals
eligible to participate in the Plan;
(ii) award options under the Plan in form and
amount as the Committee shall determine;
(iii) impose limitations, restrictions and
conditions upon any award as the Committee
shall deem appropriate; and
(iv) interpret the Plan, adopt, amend, and rescind
rules and regulations relating to the Plan,
and make all other determinations and take
all other action necessary or advisable for
the implementation and administration of the
Plan.
(c) Decisions and determinations of the Committee on all
matters relating to the Plan shall be in its sole discretion and shall be
conclusive. No member of the Committee shall be liable for any action taken or
decision made in good faith relating to the Plan or any award thereunder.
1.3 ELIGIBILITY FOR PARTICIPATION. Participants in the Plan shall
be selected by the Committee from the directors, the
1
<PAGE> 2
executive officers and other key employees of the Company who occupy
responsible managerial or professional positions and who have the capability of
making a substantial contribution to the success of the Company, or any other
individual whose participation the Committee determines is in the best interest
of the Company. In making this selection and in determining the form and amount
of awards, the Committee shall consider any factors deemed relevant, including
the individual's functions, responsibilities, value of services to the Company,
and past and potential contributions to the Company's profitability and sound
growth.
1.4 TYPES OF AWARDS UNDER PLAN. Awards under the Plan may be
in the form of: (i) Stock Options, as described in Article 2; or (ii) Incentive
Stock Options, as described in Article 3.
1.5 AGGREGATE LIMITATION ON AWARDS. Shares of stock which may be
issued under the Plan shall be authorized and unissued or treasury shares of
Common Stock of Hastings ("Common Stock"). The maximum number of shares of
Common Stock which may be issued under the Plan shall be 100,000.
1.6 EFFECTIVE DATE AND TERM OF PLAN.
(a) The Plan shall become effective on the date approved
by the holders of a majority of the shares of Common Stock present in person or
by proxy and entitled to vote at the 1992 Annual Meeting of Shareholders of
Hastings.
(b) Awards may be made under the Plan prior to its
effective date, provided that all awards so made will be subject to approval of
the Plan by the shareholders of Hastings within 12 months after the Plan is
adopted by the Board of Directors of Hastings.
(c) No awards of Incentive Stock Options shall be made
under the Plan after the tenth anniversary of its effective date, provided,
however, that the Plan and all awards made under the Plan prior to that date
shall remain in effect until the awards have been satisfied or terminated in
accordance with the Plan and the terms of the awards.
ARTICLE 2 - STOCK OPTIONS
2.1 AWARD OF STOCK OPTIONS. The Committee may from time to time,
and subject to the provisions of the Plan and the other terms and conditions
the Committee prescribes, grant to any participant in the Plan one or more
options to purchase for cash or shares of previously owned Common Stock the
number of shares of Common Stock ("Stock Options") allotted by the Committee.
The date a Stock Option is granted shall mean the date selected by the
Committee as of which the Committee allots a specific number of shares to a
participant pursuant to the Plan.
2
<PAGE> 3
2.2 STOCK OPTION AGREEMENTS. The grant of a Stock Option shall be
evidenced by a written Award of Stock Option ("Agreement"), executed by the
Company and the employee receiving the Stock Option (the "optionee") in the
form the Committee determines.
2.3 STOCK OPTION PRICE. The option price per share of Common
Stock shall be established by the Committee for the particular award.
2.4 TERM AND EXERCISE. Each Stock Option shall be exercisable at
the times and in the amounts the Committee specifies in the Agreement and
unless a different period is provided by the Committee or another section of
this Plan, may be exercised during a period of ten (10) years from the date of
grant (the "option term"). No Stock Option shall be exercisable after the
expiration of its option term.
2.5 MANNER OF PAYMENT. Each Agreement shall set forth the
procedure governing its exercise, and shall provide that, upon exercise the
optionee shall pay to the Company, in full, the option price with cash or with
previously owned Common Stock.
ARTICLE 3 - INCENTIVE STOCK OPTIONS
3.1 AWARD OF INCENTIVE STOCK OPTIONS. The Committee may, from
time to time and subject to the provisions of the Plan and other terms and
conditions the Committee prescribes, grant to any participant in the Plan one
or more incentive stock options (intended to qualify Section 422 of the
Internal Revenue Code of 1986, as amended) ("Incentive Stock Options") to
purchase for cash or shares of previously owned Common Stock the number of
shares of Common Stock allotted by the Committee. The date an Incentive Stock
Option is granted means the date selected by the Committee as of which the
Committee allots a specific number of shares to a participant pursuant to the
Plan. Notwithstanding the foregoing, Incentive Stock Options shall not be
granted to any owner of 10% or more of the total combined voting powers of
Hastings unless the option price per share shall be 110% of the fair market
value of a share of Common Stock on the date of grant and the option states
that it is not exercisable until the expiration of 5 years from the date of its
grant.
3.2 INCENTIVE STOCK OPTION AGREEMENTS. The grant of an Incentive
Stock Option shall be evidenced by a written Incentive Stock Option Agreement
("Agreement"), executed by the Company and the employee receiving the Incentive
Stock Option (the "optionee"), stating the number of shares of Common Stock
subject to the Incentive Stock Option in the form the Committee determines.
3.3 INCENTIVE STOCK OPTION PRICE. The option price per share of
Common Stock deliverable upon the exercise of an Incentive Stock
3
<PAGE> 4
Option shall be 100% of the fair market value of a share of Common Stock on the
date the Incentive Stock Option is granted.
3.4 TERM AND EXERCISE. Each Incentive Stock Option shall be
exercisable at such times and in the amounts the Committee specifies in the
Incentive Stock Option Agreement and unless a shorter period is provided by the
Committee or another section of this Plan, may be exercised during a period of
ten years from the date of grant (the "option term"). No Incentive Stock Option
shall be exercisable after the expiration of its option term.
3.5 APPLICABILITY OF STOCK OPTIONS SECTIONS. Section 2.5, Manner
of Payment, applicable to Stock options, shall apply equally to Incentive Stock
Options.
3.6 MAXIMUM AMOUNT OF INCENTIVE STOCK OPTIONS. The aggregate fair
market value (determined on the date the option is granted) of Common Stock
with respect to which an Incentive Stock Option may become exercisable for the
first time during any calendar year by an optionee shall not exceed $100,000.
3.7 DEATH OF AN OPTIONEE.
(a) Upon the death of the optionee, any Incentive Stock Option
exercisable on the date of death may be exercised by the optionee's estate or
by a person who acquires the right to exercise Incentive Stock Option by
bequest or inheritance or by reason of the death of the optionee, provided that
the exercise occurs within both the remaining option term and one year after
the optionee's death.
(b) The provisions of this Section shall apply notwithstanding the
fact that the optionee's employment may have terminated prior to death, but
only to the extent of any Incentive Stock Options exercisable on the date of
death.
3.8 RETIREMENT OR DISABILITY. Upon the termination of the
optionee's employment by reason of permanent disability (as determined by the
Committee), the optionee may, within 12 months from the date of termination,
exercise any Incentive Stock Options to the extent such options are exercisable
during the 12-month period. Upon termination of optionee's employment due to
retirement with the consent of the Company, the optionee may, within 3 months
after termination, exercise any Options to the extent the options were
exercisable on the date of termination of employment.
3.9 TERMINATION FOR OTHER REASONS. Except as provided in Sections
3.7 and 3.8 or except as otherwise determined by the Committee, all Incentive
Stock Options shall terminate upon the termination of the optionee's
employment.
4
<PAGE> 5
ARTICLE 4 - MISCELLANEOUS
4.1 GENERAL RESTRICTION. Each award under the Plan shall be
subject to the requirement that, if at any time the Committee shall determine
that (i) the listing, registration, or qualification of the shares of Common
Stock subject or related thereto upon any securities exchange or under any
state of federal law, or (ii) the consent or approval of any government
regulatory body, or (iii) an agreement by the grantee of an award with respect
to the disposition of shares of Common Stock, is necessary or desirable as a
condition of, or in connection with, the granting of the award or the issue or
purchase of shares of Common Stock thereunder, the award may not be consummated
in whole or in part unless the listing, registration, qualification, consent,
approval, or agreement shall have been effected or obtained free of any
conditions not acceptable to the Committee.
4.2 NON-ASSIGNABILITY. No award under the Plan shall be
assignable or transferable by the optionee, except by will or by the laws of
descent and distribution. During the life of the optionee, an award shall be
exercisable only by the optionee or by optionee's guardian or legal
representative.
4.3 WITHHOLDING TAXES. Whenever the Company proposes or is
required to issue or transfer shares of Common Stock under the Plan, the
Company shall have the right to require the grantee to remit to the Company an
amount sufficient to satisfy any federal, state and/or local withholding tax
requirements prior to the delivery of any certificate for the shares.
Alternatively, the Company may issue or transfer the shares of Common Stock net
of the number of shares sufficient to satisfy the withholding tax requirements.
For withholding tax purposes, the shares of Common Stock shall be valued at
their fair market value on the date the withholding obligation is incurred.
4.4 RIGHT TO TERMINATE EMPLOYMENT. Nothing in the Plan or in any
agreement entered into pursuant to the Plan shall confer upon any participant
the right to continued employment by the Company or effect any right which the
Company may have to terminate the employment of the participant.
4.5 NON-UNIFORM DETERMINATIONS. The Committee's determinations
under the Plan (including without limitation determinations of the persons to
receive awards, the form, amount and timing of such awards, the terms and
provisions of awards, and the agreements evidencing same) need not be uniform
and may be made by it selectively among persons who receive, or are eligible to
receive, awards under the Plan, whether or not the persons are similarly
situated.
4.6 RIGHTS AS A SHAREHOLDER. The recipient of any award under the
Plan shall have no rights as a shareholder with respect
5
<PAGE> 6
to the award unless and until certificates for shares of common Stock are
issued to the recipient.
4.7 DEFINITIONS. In this Plan:
(a) "SUBSIDIARY" means any corporation of which, at the
time more than 50% of the shares entitled to vote Generally in an election of
directors are owned directly or indirectly by Hastings or any subsidiary
thereof.
(b) "AFFILIATE" means any person or entity which directly
or indirectly through one or more intermediaries, controls, is controlled by,
or is under common control with Hastings.
(c) "FAIR MARKET VALUE" as of any date of any share of
Common Stock means the fair market value of shares determined by the Committee
in the manner it may deem appropriate. In no event shall the fair market value
of any share of Common Stock be less than its par value.
(d) "OPTION" means Stock Option and Incentive Stock
Option.
(e) "OPTION PRICE" means the purchase price per share of
Common Stock deliverable upon the exercise of a Stock Option or Incentive Stock
Option.
(f) "CHANGE OF CONTROL" means any merger, transfer of
assets, or transfer of voting shares in the Company resulting in members of the
Marmaduke family owning, directly or indirectly, less than 50% of the voting
shares of the Company.
4.8 LEAVES OF ABSENCE. The Committee shall be entitled to make
such rules, and regulations, and determination's as it deems appropriate under
the Plan in respect to any leave of absence taken by the recipient of any
award. Without limiting the generality of the foregoing the Committee shall be
entitled to determine (i) whether or not any leave of absence shall constitute
a termination of employment within the meaning of the Plan, and (ii) the
impact, if any, of any leave of absence on awards under the Plan theretofore
made to any recipient who takes leave of absence.
4.9 ADJUSTMENTS. If the outstanding Common Stock changes by
reason of a stock dividend or distribution, recapitalization, merger,
consolidation, split-up, combination exchange of shares, or the like, the
Committee may appropriately adjust the number of shares of Common Stock which
may be issued under the Plan, the number of shares of Common Stock subject to
Options theretofore granted under the Plan, the Option Price of Options
theretofore granted under the Plant, and any and all other matters deemed
appropriate by the Committee.
6
<PAGE> 7
4.10 ACCELERATION. Unless the Committee provides otherwise in an
Option Agreement, the exercise date of all Options shall be accelerated and
such options may be exercised immediately if a Change of Control occurs.
4.11 AMENDMENT OF THE PLAN.
(a) The Committee may, without further action by the
shareholders and without receiving further consideration from the participants,
amend this Plan or condition or modify awards under this Plan except for
amendments which applicable law or regulation require approval by the
Shareholders.
7
<PAGE> 1
EXHIBIT 99.3
AMENDED
1996 INCENTIVE STOCK PLAN
I. Purpose
This 1996 Incentive Stock Plan (the "Plan") is intended to attract,
retain and provide incentives to Employees, officers, Directors and consultants
of the Company, and to thereby increase overall shareholders' value. The Plan
generally provides for the granting of stock, stock options, stock appreciation
rights, restricted shares, other stock-based awards or any combination of the
foregoing to the eligible participants.
II. Definitions
(a) "Award" includes, without limitation, stock options (including
incentive stock options within the meaning of Section 422(b) of the Code),
stock appreciation rights, stock awards, restricted share awards, dividend
equivalent rights, or other awards that are valued in whole or in part by
reference to, or are otherwise based on, the Common Stock ("other Common
Stock-based Awards"), all on a stand alone, combination or tandem basis, as
described in or granted under this Plan.
(b) "Award Agreement" means a written agreement setting forth the
terms and conditions of each Award made under this Plan.
(c) "Board" means the Board of Directors of the Company.
(d) "Change in Control" means:
(i) An acquisition by any person (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934 (the
"Exchange Act")) who is not as of the effective date of the Plan the beneficial
holder of at least 10% of the Company's then outstanding common stock, of
beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of 30% or more of either (x) the then outstanding common stock
(the "Outstanding Company Common Stock") or (y) the combined voting power of
the then outstanding common stock entitled to vote generally in the election of
directors (the "Outstanding Company Voting Securities"); excluding, however,
the following: (1) any acquisition of Outstanding Company Common Stock by the
Company, (2) any acquisition of Outstanding Company Common Stock by any
employee benefit plan (or related trust) sponsored or maintained by the Company
or any corporation controlled by the Company or (3) any acquisition of
Outstanding Company Common Stock by any person pursuant to a transaction which
complies with clauses (1), (2) and (3) of subsection (iii) of this definition;
or
(ii) A change in the composition of the Board such that the
individuals who, as of the effective date of the Plan, constitute the Board
(such Board shall be hereinafter referred to as the "Incumbent Board") ceased
for any reason to constitute at least a majority of the Board; provided,
however, for purposes of this definition, that any individual who becomes a
Director subsequent to such effective date, whose election, or nomination for
election by the Company's
<PAGE> 2
stockholders, was approved by a vote of at least a majority of those
individuals who are Directors and who were also members of the Incumbent Board
(or deemed to be such pursuant to this proviso) shall be considered as though
such individual were a member of the Incumbent Board; but, provided further,
that any such individual whose initial assumption of office occurs as a result
of either an actual or threatened election contest (as such terms are used in
Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) or other
actual or threatened solicitation of proxies or consents by or on behalf of a
person or legal entity other than the Board shall not be so considered as a
member of the Incumbent Board; or
(iii) The approval by the stockholders of the Company of a
reorganization, merger or consolidation or sale or other disposition of all or
substantially all of the assets of the Company ("Corporate Transaction");
excluding, however, such a Corporate Transaction pursuant to which (1) all or
substantially all of the individuals and entities who are the Beneficial
Owners, respectively, of the Outstanding Company Common Stock and Outstanding
Company Voting Securities immediately prior to such Corporate Transaction will
beneficially own, directly or indirectly, more than 60% of, respectively, the
outstanding common stock, and the combined voting power of the then outstanding
common stock entitled to vote generally in the election of directors, as the
case may be, of the company resulting from such Corporate Transaction
(including, without limitation, a corporation which as a result of such
transaction owns the Company or all or substantially all or more subsidiaries)
in substantially the same proportions as their ownership, immediately prior to
such Corporate Transaction, of the Outstanding Company Common Stock and
Outstanding Company Voting Securities, as the case may be, (2) no person (other
then the Company, any employee benefit plan (or related trust) sponsored or
maintained by the Company or any corporation controlled by the Company or such
corporation resulting from such Corporate Transaction) will beneficially own,
directly or indirectly, 30% or more of, respectively, the outstanding shares of
common stock of the corporation resulting form such Corporate Transaction or
the combined voting power of the outstanding voting securities of such
corporation entitled to vote generally in the election of directors except to
the extent that such ownership existed with respect to the Company prior to the
Corporate Transaction and (3) individuals who were members of the Incumbent
Board will constitute at least a majority of the board of directors of the
corporation resulting from such Corporate Transaction; or
(iv) The approval by the stockholders of the Company of a
complete liquidation or dissolution of the Company.
(e) "Code" means the Internal Revenue Code of 1986, as amended from
time to time.
(f) "Committee" means the Compensation Committee of the Board or such
other committee of the Board as may be designated by the Board from time to
time to administer this Plan.
(g) "Common Stock" means the $.01 par value Class A Common Stock of
the Company.
(h) "Company" means Hastings Books, Music & Video, Inc., a Texas
corporation.
<PAGE> 3
(i) "Director" means a member of the Board.
(j) "Employee" means an employee of the Company or a Subsidiary.
(k) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(l) "Fair Market Value" means during such time as the Common Stock of
the Company is not publicly traded, the price per share of Common Stock of the
Company established by a fair market evaluation of the Common Stock of the
Company performed by an independent third party at the direction of the Company
as the value of the Common Stock of the Company held by the Company's profit
sharing plan. A.G. Edwards & Sons, Inc., currently provides such an evaluation
annually for the Company's profit sharing plan. In the event more than one
evaluation is performed annually, the evaluation immediately prior to the date
of grant shall be the evaluation used. In the event the Common Stock of the
Company becomes publicly traded, Fair Market Value shall mean the average of
the opening and closing price of the stock on the day immediately preceding the
date of the grant. In the event the Common Stock of the Company is not
publicly traded and no evaluation is performed for the Company's profit sharing
plan, the Fair Market Value shall be as determined by a majority of the
disinterested directors of the Company.
(m) "Participant" means an Employee, officer, Director or consultant
who has been granted an Award under the Plan.
(n) "Plan Year" means a calendar year.
(o) "Subsidiary" means any corporation or other entity, whether
domestic or foreign, in which the Company has or obtains, directly or
indirectly, a proprietary interest of more than 50% by reason of stock
ownership or otherwise.
III. Eligibility
Any Employee, officer, Director or consultant of the Company or
Subsidiary selected by the Committee is eligible to receive an Award pursuant
to Section VI hereof.
IV. Plan Administration
(a) Except as otherwise determined by the Board, the Plan shall be
administered by the Committee. The Board, or the Committee to the extent
determined by the Board, shall periodically make determinations with respect to
the participation of Employees, officers, Directors and consultants in the Plan
and, except as otherwise required by law or this Plan, the grant terms of
Awards, including vesting schedules, retirement and termination rights, payment
alternatives such as cash, stock, contingent award or other means of payment
consistent with the purposes of this Plan, and such other terms and conditions
as the Board or the Committee deems appropriate which shall be contained in an
Award Agreement with respect to a Participant.
(b) The Committee shall have authority to interpret and construe the
provisions of the
<PAGE> 4
Plan and any Award Agreement and make determinations pursuant to any Plan
provision or Award Agreement which shall be final and binding on all persons.
No member of the Committee shall be liable for any action or determination made
in good faith, and the members shall be entitled to indemnification and
reimbursement in the manner provided in the Company's Certificate of
Incorporation, as it may be amended from time to time.
(c) The Committee shall have the authority at any time to provide for
the conditions and circumstances under which Awards shall be forfeited. The
Committee shall have the authority to accelerate the vesting of any Award and
the time at which any Award becomes exercisable.
V. Capital Stock Subject to the Provisions of this Plan
(a) The capital stock subject to the provisions of this Plan shall be
shares of authorized but unissued Common Stock and shares of Common Stock held
as treasury stock. Subject to adjustment in accordance with the provisions of
Section X, and subject to Section V(c) below, the maximum number of shares of
Common Stock that shall be available for grants of Awards under this Plan shall
be 125,000.
(b) The grant of a restricted share Award shall be deemed to be equal
to the maximum number of shares which may be issued under the Award. Awards
payable only in cash will not reduce the number of shares available for Awards
granted under the Plan.
(c) There shall be carried forward and be available for Awards under
the Plan, in addition to shares available for grant under paragraph (a) of this
Section V, all of the following: (i) any unused portion of the limit set forth
in paragraph (a) of this Section V; (ii) shares represented by Awards which are
cancelled, forfeited, surrendered, terminated, paid in cash or expire
unexercised; and (iii) the excess amount of variable Awards which become fixed
at less than their maximum limitations.
VI. Awards Under This Plan
As the Board or Committee may determine, the following types of Awards
and other Common Stock-based Awards may be granted under this Plan on a stand
alone, combination or tandem basis:
(a) Stock Option. A right to buy a specified number of
shares of Common Stock at a fixed exercise price during a specified time.
Unless otherwise specifically provided in an Award Agreement, (i) the exercise
price of each share of Common Stock covered by a stock option shall not be less
than the Fair Market Value of the Common Stock on the date of the grant of such
stock option and (ii) 20% of the shares covered by the stock option shall
become exercisable on the first anniversary of its grant and an additional 20%
of such shares shall become exercisable on each of the second, third, fourth
and fifth anniversary of its grant.
(b) Incentive Stock Option. An Award which may be granted
only to Employees in the form of a stock option which shall comply with the
requirements of Code Section 422 or any successor section as it may be amended
from time to time. The exercise price of any
<PAGE> 5
incentive stock option shall not be less than 100% if the Fair Market Value of
the Common Stock on the date of grant of the incentive stock option Award. An
Employee who owns stock representing 10% of the voting power or value of all
classes of stock of the Company or a Subsidiary shall only be granted an
incentive stock option (i) with an exercise price of at least 110% of the Fair
Market Value of the Common Stock on the date of the grant of such option and
(ii) that expires 5 years form the date of its grant. Subject to adjustment in
accordance with the provisions of Section X, the aggregate number of shares
which may be subject to incentive stock option Awards under this Plan shall not
exceed the maximum number of shares provided in paragraph (a) of Section V
above. To the extent that Code Section 422 requires certain provisions to be
set forth in a written plan, said provisions are incorporated herein by this
reference.
(c) Stock Option in lieu of Compensation Election. A right
given with respect to a year to a Director, officer or key Employee to elect to
exchange annual retainers, fees or compensation for stock options.
(d) Stock Appreciation Right. A right which may or may not
be contained in the grant of a stock option or incentive stock option to
receive the excess of the Fair Market Value of a share of Common Stock on the
date the option is surrendered over the option exercise price or other
specified amount contained in the Award Agreement.
(e) Restricted Shares. A transfer of Common Stock to a
Participant subject to forfeiture until such restrictions, terms and conditions
as the Committee may determine are fulfilled.
(f) Dividend Equivalent Right. A right to receive dividends
or their equivalent in value in Common Stock, cash or in a combination of both
with respect to any new or previously existing Award.
(g) Stock Award. An unrestricted transfer of ownership of
Common Stock.
(h) Other Stock-Based Awards. Other Common Stock-based
Awards which are related to or serve a similar function to those Awards set
forth in this Section VI.
VII. Award Agreements
Each Award under the Plan shall be evidenced by an Award Agreement
setting forth the terms and conditions of the Award and executed by the Company
and Participant.
VIII. Other Terms and Conditions
(a) Assignability. Unless provided to the contrary in any Award, no
Award shall be assignable or transferable except by will, by the laws of
descent and distribution and during the lifetime of a Participant, the Award
shall be exercisable only by such Participant. No Award
<PAGE> 6
granted under the Plan shall be subject to execution, attachment or process.
(b) Termination of Employment or Other Relationship. The Committee
shall determine the disposition of the grant of each Award in the event of the
retirement, disability, death or other termination of a Participant's
employment or other relationship with the Company or a Subsidiary.
(c) Rights as a Stockholder. A Participant shall have no rights as a
stockholder with respect to shares covered by an Award until the date the
Participant is the holder of record. No adjustment will be made for dividends
or other rights for which the record date is prior to such date.
(d) No Obligation to Exercise. The grant of an Award shall impose no
obligation upon the Participant to exercise the Award.
(e) Payments by Participants. The Committee may determine that
Awards for which a payment is due from a Participant may be payable: (i) in
U.S. dollars by personal check, bank draft or money order payable to the order
of the Company, by money transfers or direct account debits; (ii) pursuant to a
broker-assisted "cashless exercise" program if established by the Company (iii)
with previously owned Common Stock; (iv) by a combination of the methods
described in (i) through (iii) above; or (v) by such other methods as the
Committee may deem appropriate.
(f) Withholding. Except as otherwise provided by the Committee, (i)
the deduction of withholding and any other taxes required by law will be made
from all amounts paid in cash and (ii) in the case of payments of Awards in
shares of Common Stock, the Participant shall be required to pay the amount of
any taxes required to be withheld prior to receipt of such stock, or
alternatively, a number of shares the Fair Market Value of which equals the
amount required to be withheld may be deducted from the payment.
(g) Restrictions on Sale and Exercise. With respect to officers and
directors for purposes of Section 16 of the Exchange Act, and if required to
comply with rules promulgated thereunder, (i) no Award providing for exercise,
a vesting period, a restriction period or the attainment of performance
standards shall permit unrestricted ownership of Common Stock by the
Participant for at least six months from the date of grant, and (ii) Common
Stock acquired pursuant to this Plan (other than Common Stock acquired as a
result of the granting of a "derivative security") may not be sold for at least
six months after acquisition.
(h) Change in Control. In the event of a Change in Control, all
Awards shall vest, become immediately exercisable and/or cease to be subject to
any risk of forfeiture, as the case may be.
IX. Termination, Modification and Amendments
(a) The Plan may from time to time be terminated, modified or amended
by the affirmative vote of the holders of a majority of the outstanding shares
of the capital stock of the
<PAGE> 7
Company present or represented and entitled to vote at a duly held stockholders
meeting.
(b) The Board may at any time terminate the Plan or from time to time
make such modifications or amendments of the Plan as it may deem advisable;
provided, however, that the Board shall not make any material amendments to the
Plan which require stockholder approval under applicable law, rule or
regulation unless the same shall be approved by the requisite vote of the
Company's stockholders.
(c) No termination, modification or amendment of the Plan may
adversely affect the rights conferred by an Award without the consent of the
recipient thereof.
X. Recapitalization
The aggregate number of shares of Common Stock as to which Awards may
be granted to Participants, the number of shares thereof covered by each
outstanding Award, and the price per share thereof in each such Award, shall
all be proportionately adjusted for any increase or decrease in the number of
issued shares of Common Stock resulting from a subdivision or consolidation of
shares or other capital adjustment, or the payment of a stock dividend or other
increase or decrease in such shares, effected without receipt of consideration
by the Company, or other change in corporate or capital structure; provided,
however, that any fractional shares resulting from any such adjustment shall be
eliminated. The Committee may also make the foregoing changes and any other
changes, including changes in the classes of securities available, to the
extent it is deemed necessary or desirable to preserve the intended benefits of
the Plan for the Company and the Participants in the event of any other
reorganization, recapitalization, merger, consolidation, spin-off,
extraordinary dividend or other distribution or similar transaction.
XI. No Right to Employment
No person shall have any claim or right to be granted an Award, and
the grant of an Award shall not be construed as giving a Participant the right
to be retained in the employ of, or in the other relationship with, the Company
or a Subsidiary. Further, the Company and each Subsidiary expressly reserve
the right at any time to dismiss a Participant free from any liability, or any
claim under the Plan, except as provided herein or in any Award Agreement
issued hereunder.
XII. Governing Law
To the extent that federal laws do not otherwise control, the Plan
shall be construed in accordance with and governed by the laws of the State of
Texas.
XIII. Savings Clause
This Plan is intended to comply in all aspects with applicable laws
and regulations, including, with respect to those Employees who are officers or
director for purposes of Section 16 of the Exchange Act, Rule 16b-3 under the
Exchange Act. In case any one more of the
<PAGE> 8
provisions of this Plan shall not in any way be affected or impaired thereby
and the invalid, illegal or unenforceable provision shall be deemed null and
void; however, to the extent permissible by law, any provision which could be
deemed null and void shall first be construed, interpreted or revised
retroactively to permit this Plan to be construed in compliance with all
applicable laws (including Rule 16b-3) so as to foster the intent of this Plan.
XIV. Effective Date and Term
The Plan shall become effective upon adoption by the Board, subject to
approval of the Plan by the affirmative vote of the holders of a majority of
the outstanding shares of the capital stock of the Company entitled to vote
thereon within one year following adoption of the Plan by the Board. All
Awards granted prior to such approval by the stockholders shall be subject to
such approval and shall not be exercisable and/or transferable prior thereto.
In the event such approval is not obtained within such one-year period, the
Plan and all Awards granted thereunder shall be null and void. The Plan shall
terminate on the tenth anniversary of the date on which it becomes efficient.
No Award shall be granted after the termination of the Plan.
<PAGE> 1
EXHIBIT 99.4
MANAGEMENT STOCK PURCHASE PLAN
I. PURPOSE
The purpose of the Hastings Books, Music & Video, Inc. Management
Stock Purchase Plan (the "Plan") is to provide equity incentive compensation to
selected management employees of Hastings Books, Music & Video, Inc.
("Hastings"). Participants in the Plan may elect to receive restricted stock
units ("RSUs") in lieu of a portion of their incentive bonus under the
Corporate Officer Incentive Plan ("COIP") and Management Incentive Plan
("MIP"). Each RSU represents the right to receive one share of the Company's
Common Stock (the "Stock") upon the terms and conditions stated herein. RSUs
are granted at a discount of 25% from the fair market value of the Stock on the
date of grant. So long as the participant remains employed by the Company for
at least three years after the date of grant, his or her RSUs will be settled
in shares of Stock after a period of deferral selected by the participant, or
upon termination of employment, if earlier.
II. ADMINISTRATION
The Plan shall be administered by the Compensation Committee of the
Board of Directors of the Company (the "Committee"). Each member of the
Committee shall be a "disinterested person" within the meaning of Rule
16b-3(c)(2)(i) promulgated under the Securities Exchange Act of 1934, as
amended (the "Act"). The Committee shall have complete discretion and
authority with respect to the Plan and its application, except as expressly
limited herein. Determinations by the Committee shall be final and binding on
all par-ties with respect to all matters relating to the Plan. Capitalized
terms not otherwise defined herein shall have the meaning set forth in the
COIP.
III. ELIGIBILITY
Management employees of the Company as designated by the Committee
shall be eligible to participate in the Plan.
IV. PARTICIPATION
A. Restricted Stock Units. Participation in the Plan shall be
used on the award of RSUs. Each RSU awarded to a participant shall be credited
to a bookkeeping account established and maintained for that participant.
B. Cost of RSUs: Fair Market Value of Stock. The "Cost" of each
RSU shall be equal to 75% of the fair market value of the Stock on the date the
RSU is awarded. For all purposes of the Plan, the "fair market value of the
Stock" on any given date shall mean the average of the high and low sales price
of the Company Stock on such date or if not publicly traded prior to such date,
the most recent independent third-party evaluation of the stock prepared
<PAGE> 2
for the Company's ASOP.
C. Election to Participate. Each participant may elect to
receive an award of RSUs under the Plan during the subsequent Performance
Period by completing a Bonus Deferral and RSU Subscription Agreement
("Subscription Agreement"). The Subscription Agreement shall provide that the
participant elects to receive RSUs in lieu of a specified portion of any
incentive bonus for a Performance Period. Such portion may be expressed as the
lesser of a specified percentage up to 50% of the participant's actual bonus
amount for such Performance Period or a specified dollar amount up to 50% of
the participant's bonus. In no event may a participant receive RSUs greater
than the lesser of $25,000 or 50% of the actual bonus amount for such
Performance Period. Any dollar amount specified must be at least $1,000; and
any percentage specified must be at least 10% and not more than 50%. Amounts
specified are entirely contingent on the amount of bonus actually awarded.
Each Subscription Agreement shall specify a deferral period for the RSUs to
which it pertains. The deferral period shall be expressed as a number of whole
years, not less than three (3), beginning on the award date. Subscription
Agreements must be received by the Company no later than thirty (30) days prior
to the beginning of the Performance Period for which such bonus amount will be
determined. A participant who is not subject to the short-swing profits rule
of Section 16 of the Act may revise his or her Subscription Agreement with
respect to the amount of elected RSUs no later than thirty (30) days after the
beginning of the Performance Period for which such bonus amount has been
awarded.
D. Award of RSUs. Twice each year, on the date that incentive
bonuses are paid or would otherwise be paid, the Company shall award RSUs to
each participant as follows: Each participant's account shall be credited with
a whole number of RSUs determined by dividing the amount (expressed in dollars)
that is determined under his or her Subscription Agreement by the Cost of each
RSU awarded on such date. No fractional RSU will be credited and the amount
equivalent in value to the fractional RSU will be paid out to the participant
currently in cash.
V. VESTING AND SETTLEMENT OF RSUS
A. Vesting. A participant shall be fully vested in each RSU
three years after the date such RSU was awarded.
B. Settlement After Vesting. With respect to each vested RSU,
the Company shall issue to the participant one share of Stock at the end of the
deferral period specified in the participant's subscription agreement
pertaining to such RSU, or upon the participant's termination of employment or
the termination of the Plan, if sooner.
C. Settlement Prior to Vesting.
1. Voluntary Termination. If a participant voluntarily
terminates his/her employment with the Company for reasons other than death or
permanent disability, the participant's nonvested RSUs shall be canceled and he
or she shall receive a cash payment equal to the lesser of (a) the Cost of such
RSUs or (b) an amount equal to the number of such RSUs
-2-
<PAGE> 3
multiplied by the fair market value of the Stock on the date of the
participant's termination of employment.
2. Involuntary Termination. If a participant's
employment is terminated by the Company, or if the participant's employment
terminates as a result of death or permanent disability, the participant's
nonvested RSUs shall be canceled and he or she shall receive payment as
follows: The number of nonvested RSUs awarded on each award date shall be
multiplied by a fraction that is equal to the number of full years that the
participant was employed by the Company after each such award date divided by
three and the participant shall receive the resulting number of such RSUs in
shares of Stock. With respect to the participant's remaining nonvested RSUs,
the participant shall receive cash in an amount equal to the lesser of (a) the
Cost of such RSUs or (b) an amount equal to the number of such RSUs multiplied
by the fair market value of the Stock on the date of the participant's
termination of employment.
3. Committee's Discretion. The Committee shall have
complete discretion to determine the circumstances of a participant's
termination of employment, including whether the same results from voluntary
termination, permanent disability or termination by the Company, and the
Committee's determination shall be final and binding on all parties and not
subject to review or challenge by any participant or other person.
VI. DIVIDEND EQUIVALENT AMOUNTS
Whenever dividends (other than dividends payable only in shares of
Stock) are paid with respect to Stock, each participant shall be paid an amount
in cash equal to the number of his or her vested RSUs multiplied by the
dividend value per share. In addition, each participant's account shall be
credited with an amount equal to the number of such participant's nonvested
RSUs multiplied by the dividend value per share. Amounts credited with respect
to each nonvested RSU shall be paid, without interest, on the date the
participant becomes vested in such RSU, or when the participant receives
payment of his or her nonvested RSUs pursuant to Subsection V.(C).
VII. DESIGNATION OF BENEFICIARY
A participant may designate one or more beneficiaries to receive
payments or shares of Stock in the event of his/her death. A designation of
beneficiary shall apply to a specified percentage of a participant's entire
interest in the Plan. Such designation, or any change therein, must be in
writing and shall be effective upon receipt by the Company. If there is no
effective designation of beneficiary, or if no beneficiary survives the
participant, the participant's estate shall be deemed to be the beneficiary.
VIII. SHARES ISSUABLE; MAXIMUM NUMBER OF RSUS; ADJUSTMENTS
A. Shares Issuable. The aggregate maximum number of shares of
Stock reserved and available for issuance under the Plan shall be 45,000. For
purposes of this limitation, the shares of Stock underlying any RSUs that are
canceled shall be added back to the shares of Stock
-3-
<PAGE> 4
available for issuance under the Plan. Shares subject to the Plan are
authorized but unissued shares or shares that were once issued and subsequently
re-acquired by the Company.
B. Adjustments. In the event of a stock dividend, stock split or
similar change in capitalization affecting the Stock, the Committee shall make
appropriate adjustments in (i) the number and kind of shares of Stock or
securities with respect to which RSUs shall thereafter be granted; (ii) the
number and kind of shares remaining subject to outstanding RSUs; (iii) the
number of RSUs credited to each participant's account; and (iv) the method of
determining the cost of RSUs. In the event of any proposed merger,
consolidation, sale, dissolution or liquidation of the Company, all non-vested
RSUs shall become fully vested upon the effective date of such merger,
consolidation, sale, dissolution or liquidation and the Committee in its sole
discretion may, as to any outstanding RSUs, make such substitution or
adjustment in the aggregate number of shares reserved for issuance under the
Plan and the number of shares subject to such RSUs as it may determine on an
equitable basis and as may be permitted by the terms of such transaction, or
terminate such RSUs upon such terms and conditions as it shall provide. In the
case of the termination of any vested RSU, the Committee shall provide payment
or other consideration which the Committee deems equitable in the
circumstances.
IX. AMENDMENT OR TERMINATION OF PLAN
The Company reserves the right to amend or terminate the Plan at any
time, by action of its Board of Directors, provided that no such action shall
adversely affect a participant's rights under the Plan with respect to RSUs
awarded and vested before the date of such action, and provided further, that
the Plan amendments shall be subject to approval by the Company's shareholders
to the extent required by the Act to ensure that awards are exempt under Rule
16b-3 promulgated under the Act.
X. MISCELLANEOUS PROVISIONS
A. No Distribution, Compliance with Legal Requirements. The
Committee may require each person acquiring shares of Stock under the Plan to
represent to and agree with the Company in writing that such person is
acquiring the shares without a view to distribution thereof. No shares of
Stock shall be issued until all applicable securities law and other legal and
stock exchange requirements have been satisfied. The Committee may require the
placing of such stop-orders and restrictive legends on certificates for Stock
as it deems appropriate.
B. Withholding. Participation in the Plan is subject to any
required tax withholding on wages or other income of the participant in
connection with the Plan. Each participant agrees, by entering the Plan, that
the Company shall have the right to deduct any such taxes, in its sole
discretion, from any amount payable to the participant under the Plan or from
any payment of any kind otherwise due to the participant. Participants who
wish to avoid the withholding of shares of Stock otherwise issuable to them
under the Plan should arrange with the Company to pay the amount of taxes
required to be withheld in advance of the settlement date.
C. Notices, Delivery of Stock Certificates. Any notice required
or permitted to be
-4-
<PAGE> 5
given by the Company or the Committee pursuant to the Plan shall be deemed
given when personally delivered or deposited in the United States mail,
registered or certified, postage prepaid, addressed to the participant at the
last address shown for the participant on the records of the Company. Delivery
of stock certificates to persons entitled to receive them under the Plan shall
be deemed effective for all purposes when the Company or a share transfer agent
of the Company shall have deposited such certificates in the United States
mail, addressed to such person at his/her last known address on file with the
Company.
D. Nontransferability of Rights. During a participant's
lifetime, any payment or issuance of shares under the Plan shall be made only
to him/her. No RSU or other interest under the Plan shall be subject in any
manner to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance or charge, and any attempt by a participant or any beneficiary
under the Plan to do so shall be void. No interest under the Plan shall in any
manner by liable for or subject to the debts, contracts, liabilities,
engagements or torts of a participant or beneficiary entitled thereto.
E. Company's Obligations to be Unfunded and Unsecured. The Plan
shall at all times be entirely unfunded, and no provision shall at any time be
made with respect to segregating assets of the Company (including Stock) for
payment of any amounts or issuance of any shares of Stock hereunder. No
participant or other person shall have any interest in any particular assets of
the Company (including Stock) by reason of the right to receive payment under
the Plan, and any Participant or other person shall have only the rights of a
general unsecured creditor of the Company with respect to any rights under the
Plan.
F. Governing Law. The terms of the Plan shall be governed
construed, administered and regulated in accordance with the laws of the State
of Texas. In the event any provision of this Plan shall be determined to be
illegal or invalid for any reason, the other provisions shall continue in full
force and effect as if such illegal or invalid provision had never been
included herein.
G. Effective Date of Plan. The Plan shall become effective as of
the date of its approval by the holders of a majority of the shares of the
Company's Common Stock, present or represented and entitled to vote at a
meeting of the shareholders.
-5-
<PAGE> 1
EXHIBIT 99.5
HASTINGS ENTERTAINMENT, INC.
STOCK GRANT PLAN
FOR OUTSIDE DIRECTORS
1. PURPOSE. The purpose of this Stock Grant Plan for Outside Directors
(the "Plan") is to enable Hastings Entertainment, Inc. ("Hastings") to attract
and retain persons of outstanding competence to serve on its Board of Directors
and strengthen the link between the Directors and Hastings stockholders by
paying such persons a portion of their compensation in Hastings common stock
(the "Award").
2. DEFINITIONS.
(a) The terms "Outside Directors" or "Participant" mean a member of
the Board of Directors of Hastings who is not an employee within the meaning of
the Employee Retirement Income Security Act of 1974 ("ERISA") of Hastings or
any of its subsidiaries. A Director of Hastings which is also an employee of
Hastings or any of its subsidiaries shall become eligible to participate in the
Plan and shall be entitled to receive Award hereunder upon the termination of
such employment.
(b) The term "Committee" shall mean the Administrative Committee
established pursuant to Section 9 hereof.
(c) The term "Market Value" shall be the average of the high and low
sale price for Hastings common stock on the date in question (or the most
recent date prior thereto that sales take place).
3. ELIGIBILITY. All Outside Directors of Hastings shall be eligible to
receive an Award hereunder.
4. SHARES SUBJECT TO THE PLAN. Subject to adjustment in accordance
with Section 8 hereof, the total number of shares of common stock which may be
granted under the Program is 5,000 (the "Shares"). The Shares shall be either
previously authorized and unissued or treasury shares.
5. STOCK GRANT AWARD.
(a) Annual Grants. Effective May 1, 1998, each Outside Director shall
automatically receive a grant of Company stock with a value of $5,000.00, with
such value based upon the offering price of the common stock of Hastings in its
initial public offering. Outside Directors who are elected or appointed to the
Board of Directors after such date shall automatically receive a grant of stock
with a Market Value of $5,000.00 on the date of each such director's initial
election or appointment to the Board of Directors. (The initial grant to an
Outside Director is defined as the "Initial Grant"). Subject to the provisions
hereof, on May 1st of each and every year after the Initial Grant, each Outside
Director shall automatically receive an additional grant of common stock of the
Company with a Market Value of $5,000.00 ("Annual Grant"). Initial Grants and
Annual Grants are referred to as "Grants."
<PAGE> 2
(b) Effectiveness. All shares granted shall be fully vested without
restrictions.
(c) Service as a Director. In the event that an Outside Director is
subject to re-election in a year but does not intend to stand for re-election
in such year, he shall not receive an Annual Grant for such year.
6. PAYMENT OF TAXES. If required to do so by applicable law,
Participants shall pay to Hastings, in cash, any federal, state or local taxes
of any kind required by law to be withheld with respect to any Shares granted
hereunder.
7. LIMITATION AS TO DIRECTORSHIP. Neither the Plan nor the granting of
any Award hereunder nor any other action taken pursuant to the Plan shall
constitute or be evidence of any agreement or understanding, express or
implied, that a Participant has a right to continue as a Director for any
period of time.
8. RECAPITALIZATIONS. If as a result of stock dividend, stock split,
recapitalization (or other adjustment in the stated capital of Hastings), or as
the result of a merger, consolidation, or other reorganization, the common
stock of Hastings is increased, reduced, or otherwise changed, the aggregate
number of Shares shall be appropriately adjusted.
9. ADMINISTRATIVE COMMITTEE. The Committee shall have full power an
authority to construe and administer the Plan. Any action taken under the
provisions of the Plan by the Committee arising out of or in connection with
the administration, construction, or effect of the Plan or any rules adopted
thereunder shall, in each case, lie within the discretion of the Committee and
shall be conclusive and binding upon Hastings and upon all Participants, and
all persons claiming under or through any of them. The Committee shall have as
members the Chief Executive Officer of Hastings and two other officers of
Hastings designated by the Chief Executive Officer. In the absence of such
designation, the other members of the Committee shall be the Senior Vice
President and the Chief Financial Officer of Hastings.
10. EFFECTIVE DATE. The Plan shall be effective as of February 15,
1998.
11. AMENDMENT. The Plan may be amended or repealed by the Board of
Directors of Hastings, provided that any such action shall not adversely affect
any Participant's rights under the Plan with respect to Award which were made
prior to such action. In no event shall the provisions of the Plan be amended
more than once every six months, other to comport with changes in the Internal
Revenue Code of 1986, as amended, ERISA, or the rules thereunder.
12. EXPENSES OF THE PLAN. All costs and expenses of the adoption and
administration of the Plan shall be borne by Hastings and none of such expenses
shall be charged to any Participant.
13. COMPLIANCE WITH RULE 16b-3. It is the intention of Hastings that
the Plan comply in all respects with Rule 16b-3 under Section 16(b) of the
Securities Exchange Act of 1933 (the
<PAGE> 3
"Exchange Act") and that Participants remain disinterested persons
("disinterested persons") for purposes of administering other employee benefit
plans of Hastings and having such other plans be exempt from Section 16(b) of
the Exchange Act. Accordingly, if any Plan provision is later found to not be
in compliance with Rule 16b-3 or if any Plan provision would disqualify Plan
Participants from remaining disinterested persons, that provision shall be
deemed null and void, and in all events the Plan shall be construed in favor of
its meeting the requirements of Rule 16b-3.
<PAGE> 1
EXHIBIT 99.6
HASTINGS ENTERTAINMENT, INC.
STOCK OPTION PLAN
FOR OUTSIDE DIRECTORS
1. Purpose. The purpose of this Stock Option Plan for Outside
Directors (the "Program") is to enable Hastings Entertainment, Inc.
("Hastings") to attract and retain persons of outstanding competence to serve
on its Board of Directors and strengthen the link between the Directors and
Hastings stockholders by paying such persons a portion of their compensation in
Hastings common stock and options to purchase such stock (collectively, the
"Awards").
2. Definitions.
(a) The terms "Outside Directors" or "Participant" mean a member of
the Board of Directors of Hastings who is not an employee (within the meaning
of the Employee Retirement Income Security Act of 1974) of Hastings or any of
its subsidiaries. A Director of Hastings which is also an employee of Hastings
or any of its subsidiaries shall become eligible to participate in the Program
and shall be entitled to receive Awards hereunder upon the termination of such
employment.
(b) The term "Service" shall mean service as an Outside Director.
(c) The term "Disability" means a permanent and total disability as
defined in Section 22(e)(3) of the Internal Revenue Code of 1986, as amended.
(d) The term "Retirement" shall mean normal retirement as an Outside
Director under the policy adopted by Hastings.
(e) The term "Committee" shall mean the Administrative Committee
established pursuant to Section 10 hereof.
(f) The term "Fair Market Value" (i) if the stock is publicly traded,
shall be the average of the high and low sale price for Hastings common stock
on the date in question (or the most recent date prior thereto that sales take
place), or (ii) if Hastings common stock is not publicly traded on a national
market on the date in question, the price as determined in the most recent
valuation prepared for the Company's ASOP.
3. Eligibility. All Outside Directors of Hastings shall be eligible
to receive Awards hereunder.
4. Shares Subject to the Program. Subject to adjustment in
accordance with Section 9 hereof, the total number of common stock which may be
granted as Options, as defined herein, under the Program is 20,000 shares
("Shares"). The Shares shall be either previously authorized and unissued
shares or treasury shares. Any Shares subject to the unexercised portion of
any Option granted under the Program which expires or terminates without being
exercised shall again be available for Awards under the Program.
<PAGE> 2
5. Stock Option Awards.
(a) Annual Grants. Subject to the maximum number of Shares available
under the Program, each Outside Director shall automatically receive on June 1,
1997, an Option to purchase 500 Shares ("Initial Option"). Subject to the
maximum number of Shares available under the Program, Outside Directors who are
elected or appointed to the Board of Directors after such date shall
automatically receive an Initial Option to purchase 500 Shares on the date of
such Outside Director's initial election or appointment to the Board of
Directors. Commencing with the first anniversary of the grant of an Initial
Option to an Outside Director and annually thereafter, each such Outside
Director shall automatically receive an additional Option to purchase 500
Shares ("Annual Option") (Initial Options and Annual Options are referred to as
"Options").
(i) Option Terms. Each Option and the issuance of Shares thereunder
shall be subject to the following terms:
(A) Option Agreement. Each Option shall be evidenced by an
option agreement ("Agreement") duly executed on behalf of Hastings. Each
Agreement shall comply with and be subject to the terms and conditions of the
Program. Any Agreement may contain such other terms, provisions and conditions
not inconsistent with the Program as may be determined by the Committee.
(B) Option Exercise Price. The Option exercise price shall
be the Fair Market Value of the Shares subject to the Option on the date of
grant thereof.
(ii) Exercisability; Vesting. Subject to paragraph (iv) immediately
below and Sections 8 and 9 hereof, each Option shall become exercisable with
respect to 100 of the Shares subject thereto on each of the first, second,
third, fourth and fifth anniversaries of the date of grant of the Initial
Option, provided that the Participant optionee ("Optionee") has continued to
serve as an Outside Director until such anniversary date. Upon the date an
Optionee ceases to be an Outside Director for any reason, all unvested portion
of any Option shall immediately become vested. (The exercise date of each
Initial and Annual Option is referred to as the "Exercise Date"). No portion
of an Option shall be deemed vested until its Exercise Date.
(iii) Time and Manner of Exercise of Option.
(a) From and after its Exercise Date, an Option may be
exercised in whole or in part at any time and from time to time; provided,
however, that only whole Shares will be issued pursuant to the exercise of any
Option.
(b) Subject to Section 6 hereof, any Option may be exercised
by giving written notice, signed by the person exercising the Option, stating
the number of Shares with respect to which the Option is being exercised with
payment to be made, in whole or in part in (i) cash or (ii) shares of Hastings
common stock at their Fair Market Value. The notice of exercise shall be
irrevocable. The Committee may provide for other methods of payment, including
through broker-assisted same day transactions.
<PAGE> 3
(iv) Terms of Options. Each Option shall expire ten (10) years from
the date of grant, but shall be subject to earlier expiration under the
following circumstances:
(A) In the event that an Optionee ceases to be an Outside
Director for any reason other than the Optionee's death or resignation from the
Board due to a Disability, Retirement, a Merger of Consolidation event (as
provided in Section 9 (a)), or a "Change in Control" (as hereinafter defined),
the Options granted to such Optionee shall automatically expire nine (9) months
following the date such Optionee ceases to be an Outside Director.
(B) In the event of an Optionee's death, Disability or
Retirement, a Merger or Consolidation event (as provided in Section 9 (a)) or a
"Change in Control" (as hereinafter defined), all Options granted to such
Optionee shall immediately vest and become exercisable and shall then expire
three (3) years thereafter. After the date of the Optionee's death, the
Options held by such optionee may be exercised by the Optionee's legal
representatives or the estate, by any person or persons whom the optionee shall
have designated in writing on forms prescribed by and filed with Hastings or,
if no such designation has been made, by the person or persons to whom the
Optionee's rights have passed by will or the laws of descent and distribution.
(b) Transferability. During an Optionee's lifetime, an Option may be
exercised only by the Optionee or the Optionee's legal representative. Options
granted under the Program and the rights and privileges conferred thereby shall
not be subject to execution, attachment or similar process and may not be
transferred, assigned, pledged or hypothecated in any manner (whether by
operation of law or otherwise) other than by will or the laws of descent and
distribution or a "qualified domestic relations order" as defined in the
Internal Revenue Code of 1986 ("Code") or the Employee Retirement Income
Security Act ("ERISA") except that, to the extent permitted by applicable law
and Rule 16b-3 under Sections 16(b) of the Securities Exchange Act of 1934, as
amended ("Exchange Act"), the Committee may permit an Optionee to designate in
writing during the Optionee's lifetime a beneficiary to receive and exercise
Options in the event of the Optionee's death, as provided herein. Any attempt
to transfer, assign, pledge, hypothecate or otherwise dispose of any Option
under the Program or of any right or privilege conferred thereby, contrary to
the provisions of the Program, or the sale or levy or any attachment or similar
process upon rights and privileges conferred hereby, shall be null and void.
(c) Optionee's or Successor's Rights as Stockholder. Neither an
Optionee nor an Optionee's successors in interest shall have any rights as a
stockholder of Hastings with respect to any Shares subject to an Optionee
granted to such person until such person becomes a holder of record of such
Shares.
6. Payment of Taxes. If required to do so by applicable law,
Participants shall pay to Hastings, in cash, any federal, state or local taxes
of any kind required by law to be withheld with respect to any Shares which (a)
shall have vested in accordance herewith, and (b) are acquired upon the
exercise of Options on the date such Options are exercised, Hastings, to the
extent permitted or required by law, shall have the right to deduct from any
payment of any kind otherwise due to a Participant any federal, state or locate
taxes of any kind required by law to be withheld with respect to any vested
Shares or to the delivery of common stock issued
<PAGE> 4
pursuant to the exercise of Options under the Program. Subject to Committee
approval, a Participant may elect to (i) apply a portion of fees earned in
respect of his or her Service as an Outside Director or (ii) deliver shares of
Hastings common stock to satisfy, in whole or in part, the amount of Hastings
is required to withhold for taxes in connection with a vesting of Shares or an
exercise of an Option under the Program. Such election must be made on or
before the date the amount of tax to be withheld is determined, and if
applicable, subject to rules, regulations and interpretations of the Commission
or the Commission Staff under Section 16(b) of the Exchange Act. Once made,
the election shall be irrevocable. The withholding tax obligation that may be
paid by the delivery of shares may not exceed Hastings' minimum federal, state
and local withholding tax obligations in connection with Shares vested or
Options exercised. The value of any Hastings shares to be delivered will be
based on the Market Value of such stock on the day of delivery.
7. Limitation As To Directorship. Neither the Program nor the
granting of any Awards hereunder nor any other action taken pursuant to the
Program shall constitute or be evidence of any agreement or understanding,
express or implied, that a Participant has a right to continue as a Director
for any period of time.
8. Recapitalizations. If as a result of stock dividend, stock split,
recapitalization (or other adjustment in the stated capital of Hastings), or as
the result of a merger, consolidation, or other reorganization, the common
stock of Hastings is increased, reduced, or otherwise changed, the aggregate
number of Shares for which Options may be granted, the number of Shares covered
by each grant and each outstanding Option and exercise price per Share shall be
appropriately adjusted, and if by virtue thereof a Participant shall be
entitled to new or additional or different Options, such options to which the
Participant shall be entitled shall be subject to the same terms, conditions,
and restrictions herein contained relating to the original date and terms and
conditions governing Options.
9. Acceleration Of Vesting of Stock Options.
(a) Merger or Consolidation. Subject to the provisions of Section
5(a)(iv) hereof, in the event of a dissolution or a liquidation of Hastings or
a merger or consolidation of Hastings in which Hastings is not the surviving
corporation, any unexercised Options granted prior to the date of such
dissolution, liquidation, merger or consolidation shall automatically become
vested and exercisable, respectively, immediately prior to such date.
(b) Change in Control. Subject to the provisions of Section 5(a)(iv)
hereof, in the event of a Change in Control of Hastings, as hereinafter
defined, any unexercised Options granted prior to the date of such event shall
automatically become vested and exercisable, respectively, immediately prior to
such date; provided, however, that upon an Optionee's request, the Committee
shall provide for the purchase of any such unexercised Options for an amount of
cash equal to the amount which would have been realized if such Option were
exercised and sold on the date immediately preceding a Change in Control at the
Market Value. The Committee may, in its discretion, include such further
provisions and limitations in any Agreement entered into with respect to an
Option as it may deem equitable and in the best interests of Hastings.
<PAGE> 5
A "Change in Control" shall be deemed to have occurred if (a) absent
prior approval by the Board of Directors, thirty percent (30%) or more of
Hastings' outstanding securities entitled to vote in elections of Directors
shall be beneficially owned, directly or indirectly, by any person, entity or
group; or (b) individuals currently constituting the Board of Directors (or the
successors of such individuals nominated by the Board of Directors on which
such individuals or such successors constituted a majority) cease to constitute
a majority of the Board of Directors.
(c) Other. Notwithstanding anything to the contrary contained in the
Program, the Committee shall have discretion to accelerate the vesting of
Options awarded to an Outside Director on such terms and conditions as the
Committee may deem appropriate in the event of extraordinary circumstances.
10. Administrative Committee. The committee shall have full power an
authority to construe and administer the Program. Any action taken under the
provisions of the Program by the Committee arising out of or in connection with
the administration, construction, or effect of the Program or any rules adopted
thereunder shall, in each case, lie within the discretion of the Committee and
shall be conclusive and binding upon Hastings and upon all Participants, and
all persons claiming under or through any of them. The Committee shall have as
members the Chief Executive Officer of Hastings and two other officers of
Hastings designated by the Chief Executive Officer. In the absence of such
designation, the other members of the Committee shall be the Executive Vice
President and the Chief Financial Officer of Hastings.
11. Approval; Effective Date. The Program is subject to the approval
of a majority of the holders of Hastings' common stock present and entitled to
vote at a meeting of shareholders. Subject to the receipt of such approval,
the Program shall be effective August 6, 1996.
12. Amendment. The Program may be amended or repealed by the Board
of Directors of Hastings, except that any amendment which would materially
increase the benefits accruing to Participants, increase the number of Shares
which may be issued under the Program, or materially modify the requirements as
to eligibility for participation in the Program shall require the approval of a
majority of the holders of Hastings' common stock present and entitled to vote
at a meeting of shareholders, and provided further, that any such action shall
not adversely affect any Participant's rights under the Program with respect to
Awards which were made prior to such action. In no event shall the provisions
of the Program be amended more than once every six months, other to comport
with changes in the Code, ERISA, or the rules thereunder.
13. Expenses Of The Program. All costs and expenses of the adoption
and administration of the Program shall be borne by Hastings and none of such
expenses shall be charged to any Participant.
14. Compliance With Rule 16b-3. It is the intention of Hastings that
the Program comply in all respects with Rule 16b-3 under Section 16(b) of the
Exchange Act and that
<PAGE> 6
Participants remain disinterested persons ("disinterested persons") for
purposes of administering other employee benefit plans of Hastings and having
such other plans be exempt from Section 16(b) of the Exchange Act.
Accordingly, if any Program provision is later found to not be in compliance
with Rule 16b-3 or if any program provision would disqualify Program
Participants from remaining disinterested persons, that provision shall be
deemed null and void, and in all events the Program shall be construed in favor
of its meeting the requirements of Rule 16b-3.
<PAGE> 1
EXHIBIT 99.7
STOCK OPTION AGREEMENT
Option Agreement made May 12, 1992, between Hastings Books, Music &
Video, Inc., a Texas corporation, hereinafter referred to as the corporation,
and John H. Marmaduke the Chief Executive Officer of the Corporation,
hereinafter referred to as Marmaduke.
RECITALS
The corporation deems Marmaduke to be an important and valuable Chief
Executive Officer and deems it to be in the corporation's best interest and in
the interest of its shareholders to provide Marmaduke an incentive to increase
his proprietary interest in the corporation and desires to enter into this
Agreement to grant to him an option to purchase 80,000 shares of the common
shares of the corporation on certain terms and conditions.
In consideration of the mutual covenants and promises hereinafter set
forth and for other good and valuable consideration, the corporation and
Marmaduke agree as follows:
1. The corporation hereby irrevocably grants to Marmaduke, as a
matter of separate agreement and not in lieu of salary or other compensation
for services, the right and option, hereinafter called the "Option" to purchase
all or any part of an aggregate of 80,000 full shares of authorized by
non-issued common stock of the corporation on the terms and conditions herein
set forth. Unless otherwise provided herein, this Option may not be exercised
prior to February 1, 1997. Thereafter, the Option shall be exercisable in full
or in part from time to time until January 31, 2007, at which time this Option
shall terminate.
<PAGE> 2
2. The purchase price of the shares of common stocks subject to
this option shall be as follows:
<TABLE>
<CAPTION>
Fiscal Year Option is Exercised Purchase Price per Share
------------------------------- ------------------------
(ending January 31)
<S> <C>
1993 $39.20
1994 43.90
1995 49.17
1996 55.07
1997 61.68
1998 69.08
1999 77.37
2000 86.66
2001 97.06
2002 (and thereafter) 108.70
</TABLE>
3. If the corporation shall issue any additional shares of stock
by way of a stock dividend on, or split up, subdivision, or reclassification of
outstanding common shares, then this Option shall be deemed to cover such
additional shares to the extent that the same would have been issued to
Marmaduke had such option been exercised in its entirety at the time of such
issuance of additional shares, and there shall be a corresponding proportionate
adjustment of the option price per share so that in the aggregate the option
price for all shares then covered shall be the same as the aggregate option
price for the shares remaining subject to the Option immediately prior to the
issuance of such additional shares.
4. Anything contained herein to the contrary, upon the
dissolution or liquidation of the corporation or upon any merger or
consolidation in which the company is not the surviving corporation, prior to
the time that this Option shall become exercisable, Marmaduke shall have the
right, immediately prior to
-2-
<PAGE> 3
such dissolution, liquidation, merger, or consolidation, to exercise the Option
in full even though not otherwise exercisable.
5. This Option shall not be transferrable by Marmaduke otherwise
than by will and by the laws of dissent and distribution. During the lifetime
of Marmaduke, the Option shall be exercised only by him.
6. If Marmaduke shall die at any time prior to the expiration of
this Option, the person or persons to whom the Option shall have been
transferred by Will or the laws of dissent or distribution shall have the right
within one year from the date of Marmaduke's death, to exercise in whole or in
part the unexercised portion of this Option, but only to the extent that this
Option is exercisable on the date of Marmaduke's death.
7. Upon the termination of Marmaduke's employment by reason of
permanent disability (as determined by the Board of Directors), Marmaduke may,
within twelve (12) months from the date of termination exercise any portion of
this option to the extent that such option is exercisable during the twelve
(12) month period. Upon termination of Marmaduke's employment due to
retirement with the consent of the Board of Directors, Marmaduke may, within
three (3) months after termination, exercise any option to the extent this
Option is exercisable on the date of termination of employment. Except as
provided above, this Option shall terminate upon the termination of Marmaduke's
employment with the corporation.
8. Payment for shares of stock purchased upon exercise of this
Option shall be made in full in cash.
-3-
<PAGE> 4
9. The corporation will at all times during the terms of this
Option reserve and keep available for issue such number of shares of its
authorized and unissued common stock as will be sufficient to satisfy the
requirements of this Option Agreement.
10. This Option may not be exercised until this Agreement shall
have been submitted to and approved by the shareholders of the corporation or
until the shareholders of the corporation have otherwise waived their preemptive
rights, if any, with respect to the shares issuable upon exercise of this
Option.
11. This Option Agreement shall be subject to and governed by the
laws of the State of Texas.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement in
Amarillo, Texas, the day and year of first above written.
HASTINGS BOOKS, VIDEO, INC.
By: /s/ ILLEGIBLE
------------------------------------
Chairman of the Board
/s/ JOHN H. MARMADUKE
---------------------------------------
John H. Marmaduke
-4-
<PAGE> 5
AMENDMENT TO STOCK OPTION AGREEMENT
WHEREAS, Hastings Entertainment, Inc. (the "Company") granted to JOHN
H. MARMADUKE ("Recipient") a stock option for 80,000 shares of stock dated May
12, 1992, pursuant to that certain Option Grant Agreement No. 5; and
WHEREAS, the grant agreement provided that the exercise price of the
option would increase over time; and
WHEREAS, the Board of Directors of the Company determined that it
would be in the best interest of the Company to amend the exercise price for
such option and fix it for the term of the option; and
WHEREAS, Recipient is agreeable to the establishment of a fixed price
for the option.
NOW, THEREFORE, for and in consideration of the sum of Ten and No/100
Dollars ($10.00) and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and Recipient have
agreed as follows:
1. Option Grant Agreement No. 5 is amended as of January
15, 1998 to provide for a fixed exercise price of $56
per share for all shares granted under such Option
Grant Agreement.
2. Except as amended herein, all terms and conditions of
the Option Grant Agreement No. 5 shall remain in full
force and effect.
WHEREFORE, the parties have executed this Amendment to Option Grant
Agreement No. 5 as of January 15, 1998.
COMPANY: HASTINGS ENTERTAINMENT, INC.
By: /s/ PHILLIP HILL
-----------------------------------
Phillip Hill, Senior Vice President
RECIPIENT:
/s/ JOHN H. MARMADUKE
----------------------------
John H. Marmaduke
