As filed with the Securities and
Exchange Commission on June 26, 1997 Registration No. 333-____
______________________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
______________________
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
_______________________
PAUL HARRIS STORES, INC.
(Exact name of registrant as specified in its charter)
INDIANA 35-0907402
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
6003 GUION ROAD, INDIANAPOLIS, INDIANA 46254
(Address of Principal Executive Offices) (Zip Code)
PAUL HARRIS STORES, INC.
1996 STOCK OPTION AND INCENTIVE PLAN
and
PAUL HARRIS STORES, INC.
OUTSIDE DIRECTORS STOCK
OPTION PLAN
(Full title of the plans)
CHARLOTTE G. FISCHER
6003 GUION ROAD, INDIANAPOLIS, INDIANA 46254
(Name and address of agent for service)
(317) 293-3900
(Telephone number, including area code, of agent for service)
COPY TO:
DAVID C. WORRELL
BAKER & DANIELS
300 NORTH MERIDIAN STREET, SUITE 2700
INDIANAPOLIS, INDIANA 46204
(317) 237-0300
<PAGE>
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Title of Amount to be Proposed Proposed maximum Amount of
Securities registered (1) maximum aggregate registration
to be registered offering price offering fee
per share (2) price (2)
<S> <C> <C> <C> <C>
Common Stock, without 1,100,000 $16.000 (3) $17,600,000 (3) $5,333.33 (3)
par value
</TABLE>
(1) Pursuant to Rule 416 under the Securities Act of 1933 (the "Securities
Act"), this Registration Statement, also registers such additional shares
of Common Stock as may be offered or issued to prevent dilution resulting
from stock splits, stock dividends and similar transactions.
(2) It is impracticable to state the maximum offering price. Shares offered
pursuant to incentive stock options granted under the 1996 Stock Option
and Incentive Plan and nonqualified stock options granted under the
Outside Directors Stock Option Plan are to be offered at not less than
the market value on the date options are granted.
(3) Estimated solely for purposes of calculating the registration fee and
computed in accordance with Rule 457(c) under the Securities Act using
the average of the high and low sale prices of the Common Stock as
reported by NASDAQ on June 24, 1997.
<PAGE>
PART I
INFORMATION REQUIRED IN SECTION 10(A) PROSPECTUS
The Section 10(a) prospectuses for the Paul Harris Stores, Inc. 1996
Stock Option and Incentive Plan and the Paul Harris Stores, Inc. Outside
Directors Stock Option Plan are not being filed with the Securities and
Exchange Commission as part of this Registration Statement.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The documents listed below are hereby incorporated by reference in this
Registration Statement:
(a) The Registrant's Annual Report on Form 10-K for the fiscal year
ended February 1, 1997;
(b) The Registrant's Quarterly Report on Form 10-Q for the fiscal
quarter ended May 3, 1997;
(c) The Registrant's Current Report on Form 8-K dated April 11, 1997;
and
(d) The description of the Registrant's common stock, without par value
(the "Common Stock"), contained in the Company's Registration
Statement on Form 8-A dated September 17, 1992, including any
amendments or reports filed for the purpose of updating such
description.
All documents subsequently filed by the Registrant pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934 (the
"Exchange Act"), prior to the filing of a post-effective amendment which
indicates that all shares of Common Stock offered hereby have been sold or
which deregisters all shares of Common Stock offered hereby then remaining
unsold, are deemed to be incorporated herein by reference and to be a part
hereof from the date of filing of such documents.
ITEM 4. DESCRIPTION OF SECURITIES.
Not Applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not Applicable.
ITEM 6. INDEMNIFICATION OF OFFICERS AND DIRECTORS.
Reference is made to Article IX of the Company's Amended and Restated
Articles of Incorporation filed as Exhibit 4.1 hereto which requires the
Company to indemnify every person (and the estate, heirs, personal
representatives of such person) against all liabilities and expenses,
including, without limitation, fees and disbursements of counsel and judgments,
fines or penalties incurred by or awarded against, and amounts paid in
settlement by or on behalf of such person, in connection with or resulting from
any pending, threatened or completed claim, action, suit or proceeding, and all
appeals thereof (each, a "Claim"), in which such person may become involved by
reason of the fact that he or she is or was a director, officer, employee or
agent of the Company, or is or was serving at the request of the Company as a
director, officer, employee, agent or fiduciary of another corporation,
partnership, joint venture, trust employee benefit plan or other entity;
provided, however, that if any such person is not wholly successful in
defending any such claim, he or she shall be indemnified only if it is
determined by a court of competent jurisdiction or by the Board of Directors,
upon advice of legal counsel, that such person acted in good faith in what he
or she reasonably believed to be in the best interest of the Company, or at
least not opposed to the Company's interests, and, in addition, with respect to
any criminal claim, that such person had no reasonable cause to believe that
his or her conduct was unlawful. Such indemnification is in addition to any
rights to which any subject person may otherwise be entitled.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not Applicable.
ITEM 8. EXHIBITS.
The list of Exhibits is incorporated herein by reference to the Index to
Exhibits at page 6.
ITEM 9. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or
the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the registration
statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
Provided, however, that paragraphs (1)(i) and (1)(ii) do not apply
if, the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports
filed by the registrant pursuant to section 13 or section 15(d) of
the Securities Exchange Act of 1934 that are incorporated by
reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at
the 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.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of an appropriate jurisdiction the question
whether such indemnification by it is against public policy as expressed in the
Act and will be governed by the final adjudication of such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Indianapolis, State of Indiana, on June 19, 1997.
PAUL HARRIS STORES, INC.
By: /S/ CHARLOTTE G. FISCHER
Charlotte G. Fischer
Chairman of the Board, President
and Chief Executive Officer
POWER OF ATTORNEY
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed by the following persons in their respective
capacities and on the respective dates indicated opposite their names. Each
person whose signature appears below hereby authorizes each of Charlotte G.
Fisher and John H. Boyers, each with full power of substitution, to execute in
the name and on behalf of such person any post-effective amendment to this
Registration Statement and to file the same, with exhibits thereto, and other
documents in connection therewith, making such changes in this Registration
Statement as the registrant deems appropriate, and appoints each of Charlotte
G. Fischer and John H. Boyers, each with full power of substitution, attorney-
in-fact to sign any amendment and any post-effective amendment to this
Registration Statement and to file same, with exhibits thereto, and other
documents in connection therewith.
<TABLE>
<CAPTION>
SIGNATURES CAPACITY DATE
<S> <C> <C>
/S/ CHARLOTTE G. FISCHER Chairman of the Board June 19, 1997
Charlotte G. Fischer President and Chief Executive Officer and
Director
(Principal Executive Officer)
/S/ JOHN H. BOYERS Senior Vice President-Finance June 19, 1997
John H. Boyers and Treasurer
(Principal Financial Officer)
/S/ KEITH L. HIMMEL, JR. Vice President-Finance, Controller and June 19, 1997
Keith L. Himmel, Jr. Corporate Secretary
(Principal Accounting Officer)
/S/ RICHARD A. FEINBERG, PH.D. Director June 19, 1997
Richard A. Feinberg, Ph.D.
/S/ RUDY GREER Director June 19, 1997
Rudy Greer
/S/ ROBERT I. LOGAN Director June 19, 1997
Robert I. Logan
/S/ JAMES T. MORRIS Director June 19, 1997
James T. Morris
/S/ GERALD PAUL Director June 19, 1997
Gerald Paul
/S/ JOHN RAU Director June 19, 1997
John Rau
/S/ SALLY M. TASSANI Director June 19, 1997
Sally M. Tassani
</TABLE>
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
DESCRIPTION OF EXHIBIT
Exhibit
NO.
<S> <C>
4.1 Amended and Restated Articles of Incorporation of the Registrant and related
amendments. (The copy of this exhibit filed as exhibits 4(a)(i) thru (iii) to
the Company's Current Report on Form 8-K dated April 11, 1997 is incorporated by
reference.)
4.2 Restated By-Laws of the Registrant, as amended to date. (The copy of this exhibit
filed as exhibit 3(b) to the Company's Annual Report on Form 10-K for fiscal year
ended February 1, 1997 is incorporated by reference.)
4.3 1996 Stock Option and Incentive Plan, as amended.
4.4 Outside Directors Stock Option Plan.
5. Option of Baker & Daniels regarding legality of the securities being registered.
23.1 Consent of Price Waterhouse LLP.
23.2 Consent of Baker & Daniels (included in the Banker & Daniels Opinion Filed as
Exhibit 5).
24 Powers of Attorney (included on the Signature Page of the Registration
Statement).
</TABLE>
EXHIBIT 4.3
PAUL HARRIS STORES, INC.
1996 STOCK OPTION AND INCENTIVE PLAN
1. PLAN PURPOSE. The purpose of the Plan is to promote the long-term
interests of the Company and its shareholders by providing a means for
attracting and retaining officers and key employees of the Company and its
Affiliates.
2. DEFINITIONS. The following definitions are applicable to the Plan:
"Affiliate" -- means any "parent corporation" or "subsidiary corporation"
of the Company as such terms are defined in Section 424(e) and (f),
respectively, of the Code.
"Award" -- means the grant by the Committee of Incentive Stock Options,
Non-Qualified Stock Options, SARs, or Restricted Stock, or any combination
thereof, as provided in the Plan.
"Affiliated SAR" -- means a SAR that is granted in connection with a
related Option, and which automatically will be deemed to be exercised at the
same time that the related Option is exercised. The deemed exercise of an
Affiliated SAR shall not necessitate a reduction in the number of Shares
subject to the related Option.
"Base Price" -- means the amount over which the appreciation in value of
a Share will be measured upon exercise of an SAR.
"Board" -- means the Board of Directors of the Company.
"Change in Control" -- means each of the events specified in the
following clauses (i) through (iii): (i) any third person, including a
"group" as defined in Section 13(d)(3) of the Exchange Act after the date of
the adoption of the Plan by the Board, first becomes the beneficial owner of
shares of the Company with respect to which 25% or more of the total number of
votes for the election of the Board of Directors of the Company may be cast,
(ii) as a result of, or in connection with, any cash tender offer, exchange
offer, merger or other business combination, sale of assets or contested
election, or combination of the foregoing, the persons who were directors of
the Company shall cease to constitute a majority of the Board of Directors of
the Company or (iii) the shareholders of the Company shall approve an agreement
providing either for a transaction in which the Company will cease to be an
independent publicly owned entity or for a sale or other disposition of all or
substantially all the assets of the Company; provided, however, that the
occurrence of any of such events shall not be deemed a Change in Control if,
prior to such occurrence, a resolution specifically approving such occurrence
shall have been adopted by at least a majority of the Board of Directors of the
Company.
"Code" -- means the Internal Revenue Code of 1986, as amended.
"Committee" -- means the Committee appointed by the Board pursuant to in
Section 3 hereof.
"Company" -- means Paul Harris Stores, Inc., an Indiana corporation.
"Continuous Service" - means the absence of any interruption or
termination of service as an Employee of the Company or an Affiliate. Service
shall not be considered interrupted in the case of sick leave, military leave
or any other leave of absence approved by the Company or in the case of any
transfer between the Company and an Affiliate or any successor to the Company.
"Director" - means any individual who is a member of the Board.
"Employee" - means any person, including an officer or Director, who is
employed by the Company or any Affiliate.
"Exchange Act" - means the Securities Exchange Act of 1934, as amended.
"Exercise Price" - means the price per Share at which the Shares subject
to an Option may be purchased upon exercise of such Option.
"Freestanding SAR" - means a SAR that is granted independently of any
Option.
"Incentive Stock Option" - means an option to purchase Shares granted by
the Committee pursuant to Section 6 hereof which is subject to the limitations
and restrictions of Section 8 hereof and is intended to qualify under Section
422 of the Code.
"Market Value" - means the last reported sale price on the date in
question (or, if there is no reported sale on such date, on the last preceding
date on which any reported sale occurred) of one Share on the principal
exchange on which the Shares are listed for trading, or if the Shares are not
listed for trading on any exchange, on the Nasdaq National Market or any
similar system then in use, or, if the Shares are not listed on the Nasdaq
National Market, the mean between the closing high bid and low asked quotations
of one Share on the date in question as reported by Nasdaq or any similar
system then in use, or, if no such quotations are available, the fair market
value on such date of one Share as the Committee shall determine.
"Non-Qualified Stock Option" - means an option to purchase shares granted
by the Committee pursuant to Section 6 hereof, which option is not intended to
qualify under Section 422 of the Code.
"Option" - means an Incentive Stock Option or a Non-Qualified Stock
Option.
"Participant" - means any Employee of the Company or any Affiliate who is
selected by the Committee to receive an Award.
"Plan" - means the Paul Harris Stores, Inc., 1996 Stock Option and
Incentive Plan.
"Reorganization" - means the liquidation or dissolution of the Company or
any merger, consolidation or combination of the Company (other than a merger,
consolidation or combination in which the Company is the continuing entity and
which does not result in the outstanding Shares being converted into or
exchanged for different securities, cash or other property or any combination
thereof).
"Restricted Period" - means the period of time selected by the Committee
for the purpose of determining when restrictions are in effect under Section 9
hereof with respect to Restricted Stock awarded under the Plan.
"Restricted Stock" - means Shares which have been contingently awarded to
a Participant by the Committee subject to the restrictions referred to in
Section 9 hereof, so long as such restrictions are in effect.
"Stock Appreciation Right" or "SAR" - means an Award, granted alone or in
connection with a related Option, pursuant to Section 10 hereof.
"Securities Act" - means the Securities Act of 1933, as amended.
"Shares" - means the Common Stock, without par value, of the Company.
"Tandem SAR" - means a SAR that is granted in connection with a related
Option, the exercise of which shall require forfeiture of the right to purchase
an equal number of Shares under the related Option (and when a Share is
purchased under the Option, the SAR shall be canceled to the same extent).
3. ADMINISTRATION. The Plan shall be administered by the Committee,
which shall consist of two or more members of the Board, each of whom shall be
a "non-employee director" as provided under Rule 16b-3 of the Exchange Act, and
an "outside director" as provided under Code section 162(m). The members of
the Committee shall be appointed by the Board. Except as limited by the
express provisions of the Plan, the Committee shall have sole and complete
authority and discretion to (a) select Participants and grant Awards; (b)
determine the number of Shares to be subject to types of Awards generally, as
well as to individual Awards granted under the Plan; (c) determine the terms
and conditions upon which Awards shall be granted under the Plan; (d) prescribe
the form and terms of instruments evidencing such grants; and (e) establish
from time to time regulations for the administration of the Plan, interpret the
Plan, and make all determinations deemed necessary or advisable for the
administration of the Plan.
A majority of the Committee shall constitute a quorum, and the acts of a
majority of the members present at any meeting at which a quorum is present, or
acts approved in writing by all members of the Committee without a meeting,
shall be acts of the Committee. All determinations and decisions made by the
Committee pursuant to the provisions of the Plan shall be final, conclusive,
and binding on all persons, and shall be given the maximum deference permitted
by law.
4. PARTICIPANTS. The Committee may select from time to time
Participants in the Plan from those officers and key Employees of the Company
or its Affiliates who, in the opinion of the Committee, have the capacity for
contributing in a substantial measure to the successful performance of the
Company or its Affiliates.
5. SHARES SUBJECT TO PLAN, LIMITATIONS ON GRANTS AND EXERCISE PRICE.
Subject to adjustment by the operation of Section 11 hereof:
(a) The maximum number of Shares with respect to which Awards may
be made under the Plan is 1,000,000 Shares. The Shares with respect to
which Awards may be made under the Plan may either be authorized and
unissued shares or unissued shares heretofore or hereafter reacquired and
held as treasury shares. Any Award which terminates or is surrendered
for cancellation or with respect to Restricted Stock which is forfeited
(so long as any cash dividends paid on such Shares are also forfeited),
may be subject to new Awards under the Plan with respect to the number of
Shares as to which such termination or forfeiture has occurred.
(b) The number of Shares which may be granted hereunder to any
Employee during any calendar year under all forms of Awards shall not
exceed 200,000 Shares.
(c) Notwithstanding any other provision under the Plan, the
Exercise Price for any Options and the Base Price for any SARs awarded
under the Plan may not be less than the Market Value of the Shares on the
date of grant.
6. GENERAL TERMS AND CONDITIONS OF OPTIONS. The Committee shall have
full and complete authority and discretion, except as expressly limited by the
Plan, to grant Options and to provide the terms and conditions (which need not
be identical among Participants) thereof. In particular, the Committee shall
prescribe the following terms and conditions: (a) the Exercise Price, (b) the
number of Shares subject to, and the expiration date of, any Option, (c) the
manner, time and rate (cumulative or otherwise) of exercise of such Option, (d)
the restrictions, if any, to be placed upon such Option or upon Shares which
may be issued upon exercise of such Option, and (e) the conditions, if any,
under which a Participant may transfer or assign Options. The Committee may,
as a condition of granting any Option, require that a Participant agree to
surrender for cancellation one or more Options previously granted to such
Participant.
7. EXERCISE OF OPTIONS.
(a) Except as provided in Section 14, an Option granted under the
Plan shall be exercisable during the lifetime of the Participant to whom
such Option was granted only by such Participant, and except as provided
in paragraphs (c), (d) and (e) of this Section 7, no such Option may be
exercised unless at the time such Participant exercises such Option, such
Participant has maintained Continuous Service since the date of the grant
of such Option.
(b) To exercise an Option under the Plan, the Participant shall
give written notice to the Company (which shall specify the number of
Shares with respect to which such Participant elects to exercise such
Option) together with full payment of the Exercise Price. The date of
exercise shall be the date on which such notice is received by the
Company. Payment shall be made either (i) in cash (including check, bank
draft or money order), (ii) by delivering Shares already owned by the
Participant and having a Market Value on the date of exercise equal to
the applicable Exercise Price, (iii) by requesting that the Company
withhold Shares issuable upon exercise of the Option having a Fair Market
Value equal to the Exercise Price, or (iv) a combination of cash and such
Shares.
(c) If the Continuous Service of a Participant is terminated for
cause, or voluntarily by the Participant for any reason other than death,
disability or retirement, all rights under any Option of such Participant
shall expire immediately upon such cessation of Continuous Service. If
the Continuous Service of a Participant is terminated by reason of death,
disability or retirement, such Participant may exercise such Option, but
only to the extent such Participant was entitled to exercise such Option
at the date of such cessation, at any time during the remaining term of
such Option, or, in the case of Incentive Stock Options, during such
shorter period as the Committee may determine and so provide in the
applicable instrument or instruments evidencing the grant of such Option.
If a Participant shall cease to maintain Continuous Service for any
reason other than those set forth above in this paragraph (c) of this
Section 7, such Participant may exercise such Option to the extent that
such Participant was entitled to exercise such Option at the date of such
cessation but only within the period of three (3) months immediately
succeeding such cessation of Continuous Service, and in no event after
the expiration date of the subject Option; provided, however, that such
right of exercise after cessation of Continuous Service shall not be
available to a Participant if the Company otherwise determines and so
provides in the applicable instrument or instruments evidencing the grant
of such Option.
(d) In the event of the death of a Participant while in the
Continuous Service of the Company or an Affiliate, the person to whom any
Option held by the Participant at the time of his death is transferred by
will or by the laws of descent and distribution may exercise such Option
on the same terms and conditions that such Participant was entitled to
exercise such Option. Following the death of any Participant to whom an
Option was granted under the Plan, the Committee, as an alternative means
of settlement of such Option, may elect to pay to the person to whom such
Option is transferred the amount by which the Market Value per Share on
the date of exercise of such Option shall exceed the Exercise Price of
such Option, multiplied by the number of Shares with respect to which
such Option is properly exercised. Any such settlement of an Option
shall be considered an exercise of such Option for all purposes of the
Plan.
(e) Notwithstanding the provisions of the foregoing paragraphs of
this Section 7, the Committee may, in its sole discretion, establish
different terms and conditions pertaining to the effect of the cessation
of Continuous Service, to the extent permitted by applicable federal and
state law.
8. INCENTIVE STOCK OPTIONS. Incentive Stock Options may be granted
only to Participants who are Employees. Any provisions of the Plan to the
contrary notwithstanding, (a) no Incentive Stock Option shall be granted more
than ten years from the date the Plan is adopted by the Board of Directors of
the Company and no Incentive Stock Option shall be exercisable more than ten
years from the date such Incentive Stock Option is granted, (b) the Exercise
Price of any Incentive Stock Option shall not be less than the Market Value per
Share on the date such Incentive Stock Option is granted, (c) any Incentive
Stock Option shall not be transferable by the Participant to whom such
Incentive Stock Option is granted other than by will or the laws of descent and
distribution and shall be exercisable during such Participant's lifetime only
by such Participant, and (d) no Incentive Stock Option shall be granted which
would permit a Participant to acquire, through the exercise of Incentive Stock
Options in any calendar year, Shares or shares of any capital stock of the
Company or any Affiliate thereof having an aggregate Market Value (determined
as of the time any Incentive Stock Option is granted) in excess of $100,000.
The foregoing limitation shall be determined by assuming that the Participant
will exercise each Incentive Stock Option on the date that such Option first
becomes exercisable. Notwithstanding the foregoing, in the case of any
Participant who, at the date of grant, owns stock possessing more than 10% of
the total combined voting power of all classes of capital stock of the Company
or any Affiliate, the Exercise Price of any Incentive Stock Option shall not be
less than 110% of the Market Value per Share on the date such Incentive Stock
Option is granted and such Incentive Stock Option shall not be exercisable more
than five years from the date such Incentive Stock Option is granted.
9. TERMS AND CONDITIONS OF RESTRICTED STOCK. The Committee shall have
full and complete authority, subject to the limitations of the Plan, to grant
awards of Restricted Stock and, in addition to the terms and conditions
contained in paragraphs (a) through (f) of this Section 9, to provide such
other terms and conditions (which need not be identical among Participants) in
respect of such Awards, and the vesting thereof, as the Committee shall
determine and provide in the agreement referred to in paragraph (d) of this
Section 9.
(a) At the time of an award of Restricted Stock, the Committee
shall establish for each Participant a Restricted Period during which or
at the expiration of which, the Shares of Restricted Stock shall vest.
The Committee may also restrict or prohibit the sale, assignment,
transfer, pledge or other encumbrance of the Shares of Restricted Stock
by the Participant during the Restricted Period. Except for such
restrictions, and subject to paragraphs (c), (d) and (e) of this Section
9 and Section 11 hereof, the Participant as owner of such Shares shall
have all the rights of a shareholder, including but not limited to, the
right to receive all dividends paid on such Shares and the right to vote
such Shares. The Committee shall have the authority, in its discretion,
to accelerate the time at which any or all of the restrictions shall
lapse with respect to any Shares of Restricted Stock prior to the
expiration of the Restricted Period with respect thereto, or to remove
any or all of such restrictions, whenever it may determine that such
action is appropriate by reason of changes in applicable tax or other
laws or other changes in circumstances occurring after the commencement
of such Restricted Period.
(b) Except as provided in Section 13 hereof, if a Participant
ceases to maintain Continuous Service for any reason (other than death,
disability or retirement) unless the Committee shall otherwise determine,
all Shares of Restricted Stock theretofore awarded to such Participant
and which at the time of such termination of Continuous Service are
subject to the restrictions imposed by paragraph (a) of this Section 9
shall upon such termination of Continuous Service be forfeited and
returned to the Company. If a Participant ceases to maintain Continuous
Service by reason of death or disability, then the restrictions with
respect to the ratable portion of the Shares of Restricted Stock shall
lapse and such Shares shall be free of restrictions and shall not be
forfeited. The ratable portion shall be determined with respect to each
separate Award of Restricted Stock issued and shall be equal to (i) the
number of Shares of Restricted Stock awarded to the Participant
multiplied by the portion of the Restricted Period that expired at the
date of the Participant's death or disability reduced by (ii) the number
of Shares of Restricted Stock awarded with respect to which the
restrictions had lapsed as of the date of the death or total or partial
disability of the Participant.
(c) Each certificate issued in respect of Shares of Restricted
Stock awarded under the Plan shall be registered in the name of the
Participant and deposited by the Participant, together with a stock power
endorsed in blank, with the Company and shall bear the following (or a
similar) legend:
"The transferability of this certificate and the shares of stock
represented hereby are subject to the terms and conditions (including
forfeiture) contained in the 1996 Stock Option and Incentive Plan of Paul
Harris Stores, Inc., and an Agreement entered into between the registered
owner and Paul Harris Stores, Inc. Copies of such Plan and Agreement are
on file in the office of the Secretary of the Company."
(d) At the time of an Award of Shares of Restricted Stock, the
Participant shall enter into an agreement with the Company, in a form
specified by the Committee, agreeing to the terms and conditions of the
Award.
(e) At the time of an Award of Shares of Restricted Stock, the
Committee may, in its discretion, determine that the payment to the
Participant of dividends declared or paid on such Shares by the Company
or a specified portion thereof, shall be deferred until the earlier to
occur of (i) the lapsing of the restrictions imposed under paragraph (a)
of this Section 9 or (ii) the forfeiture of such Shares under paragraph
(b) of this Section 9, and shall be held by the Company for the account
of the Participant until such time. In the event of such deferral, there
shall be credited at the end of each year (or portion thereof) interest
on the amount of the account at the beginning of the year at a rate per
annum as the Committee, in its discretion, may determine. Payment of
deferred dividends, together with interest accrued thereon as aforesaid,
shall be made upon the earlier to occur of the events specified in (i)
and (ii) of the immediately preceding sentence.
(f) At the expiration of the restrictions imposed by paragraph (a)
of this Section 9, the Company shall redeliver to the Participant (or
where the relevant provision of paragraph (b) of this Section 9 applies
in the case of a deceased Participant, to his legal representative,
beneficiary or heir) the certificate(s) and stock power deposited with it
pursuant to paragraph (c) of this Section 9 and the Shares represented by
such certificate(s) shall be free of the restrictions referred to in
paragraph (a) of this Section 9.
10. GRANT OF SARS. Subject to the terms and conditions of the Plan, a
SAR may be granted to Employees at any time and from time to time as shall be
determined by the Committee, in its sole discretion. The Committee may grant
Affiliated SARs, Freestanding SARs, Tandem SARs, or any combination thereof as
follows:
(a) The Committee, subject to the provisions of the Plan, shall
have complete discretion to determine the Base Price and other terms and
conditions of SARs granted under the Plan. The Base Price of Tandem or
Affiliated SARs shall equal the Exercise Price of the related Option.
(b) Tandem SARs may be exercised for all or part of the Shares
subject to the related Option upon the surrender of the right to exercise
the equivalent portion of the related Option. A Tandem SAR may be
exercised only with respect to the Shares for which its related Option is
then exercisable. With respect to a Tandem SAR granted in connection
with an Incentive Stock Option: (i) the Tandem SAR shall expire no later
than the expiration of the underlying Incentive Stock Option; (ii) the
value of the payout with respect to the Tandem SAR shall be for no more
than one hundred percent (100%) of the difference between the Exercise
Price of the underlying Incentive Stock Option and the Market Value of
the Shares subject to the underlying Incentive Stock Option at the time
the Tandem SAR is exercised; and (iii) the Tandem SAR shall be
exercisable only when the Market Value of the Shares subject to the
Incentive Stock Option exceeds the Exercise Price of the Incentive Stock
Option.
(c) Freestanding SARs shall be exercisable on such terms and
conditions as the Committee, in its sole discretion, shall determine.
(d) Each SAR grant shall be evidenced by an agreement that shall
specify the Base Price, the term of the SAR, the conditions of exercise,
and such other terms and conditions as the Committee, in its sole
discretion, shall determine.
(e) A SAR granted under the Plan shall expire upon the date
determined by the Committee, in its sole discretion, and set forth in the
agreement.
(f) Upon exercise of a SAR, a Participant shall be entitled to
receive payment from the Company in an amount determined by multiplying:
(i) The difference between the Market Value of a Share on
the date of exercise over the Base Price; times
(ii) The number of Shares with respect to which the SAR is
exercised.
At the discretion of the Committee, payment for a SAR may be in
cash, Shares or a combination thereof.
11. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. In the event of any
change in the outstanding Shares subsequent to the effective date of the Plan
by reason of any reorganization, recapitalization, stock split, stock dividend,
combination or exchange of shares, merger, consolidation or any change in the
corporate structure or Shares of the Company, the maximum aggregate number and
class of shares as to which Awards may be granted under the Plan and the number
and class of shares with respect to which Awards theretofore have been granted
under the Plan shall be appropriately adjusted by the Committee, whose
determination shall be conclusive. Any shares of stock or other securities
received, as a result of any of the foregoing, by a Participant with respect to
Restricted Stock shall be subject to the same restrictions and the
certificate(s) or other instruments representing or evidencing such shares or
securities shall be legended and deposited with the Company in the manner
provided in Section 9 hereof.
12. EFFECT OF REORGANIZATION. Awards will be affected by a
Reorganization as follows:
(a) If the Reorganization is a dissolution or liquidation of the
Company then (i) the restrictions of Section 9(a) on Shares of Restricted
Stock shall lapse and (ii) each outstanding Option or SAR Award shall
terminate, but each Participant to whom the Option or SAR was granted
shall have the right, immediately prior to such dissolution or
liquidation to exercise his Option or SAR in full, notwithstanding the
provisions of Section 8, and the Company shall notify each Participant of
such right within a reasonable period of time prior to any such
dissolution or liquidation.
(b) If the Reorganization is a merger or consolidation, other than
a Change in Control subject to Section 13 of this Plan, upon the
effective date of such Reorganization (i) each Optionee shall be
entitled, upon exercise of his Option in accordance with all of the terms
and conditions of the Plan, to receive in lieu of Shares, shares of such
stock or other securities or consideration as the holders of Shares shall
be entitled to receive pursuant to the terms of the Reorganization; and
(ii) each holder of Restricted Stock shall receive shares of such stock
or other securities as the holders of Shares received which shall be
subject to the restrictions set forth in Section 9(a) unless the
Committee accelerates the lapse of such restrictions and the
certificate(s) or other instruments representing or evidencing such
shares or securities shall be legended and deposited with the Company in
the manner provided in Section 9 hereof.
The adjustments contained in this Section and the manner of application
of such provisions shall be determined solely by the Committee.
13. EFFECT OF CHANGE OF CONTROL. If the Continuous Service of any
Participant of the Company or any Affiliate is involuntarily terminated, for
whatever reason, at any time within eighteen months after a Change in Control,
unless the Committee shall have otherwise provided in the agreement referred to
in paragraph (d) of Section 9 hereof, any Restricted Period with respect to
Restricted Stock theretofore awarded to such Participant shall lapse upon such
termination and all Shares awarded as Restricted Stock shall become fully
vested in the Participant to whom such Shares were awarded. If a tender offer
or exchange offer for Shares (other than such an offer by the Company) is
commenced, or if the event specified in clause (iii) of the definition of a
Change in Control contained in Section 2 shall occur, unless the Committee
shall have otherwise provided in the Award Agreement, all Options and SAR
Awards theretofore granted and not fully exercisable shall (except as otherwise
provided in Section 8) become exercisable in full upon the happening of such
event and shall remain so exercisable in accordance with their terms; provided,
however, that no Option or SAR Award shall be exercisable by a director or
officer of the Company within six months of the date of grant of such Option or
SAR and no Option or SAR which has previously been exercised or otherwise
terminated shall become exercisable.
14. ASSIGNMENTS AND TRANSFERS. Except as expressly authorized by the
Committee during the lifetime of a Participant, no Award nor any right or
interest of a Participant under the Plan in any instrument evidencing any Award
under the Plan may be assigned, encumbered or transferred otherwise than by
will or the laws of descent and distribution.
15. EMPLOYEE RIGHTS UNDER THE PLAN. No officer, Employee or other
person shall have a right to be selected as a Participant nor, having been so
selected, to be selected again as a Participant and no officer, Employee or
other person shall have any claim or right to be granted an Award under the
Plan or under any other incentive or similar plan of the Company or any
Affiliate. Neither the Plan nor any action taken thereunder shall be construed
as giving any Employee any right to be retained in the employ of the Company or
any Affiliate.
16. DELIVERY AND REGISTRATION OF STOCK. The Company's obligation to
deliver Shares with respect to an Award shall, if the Committee so requests, be
conditioned upon the receipt of a representation as to the investment intention
of the Participant to whom such Shares are to be delivered, in such form as the
Company shall determine to be necessary or advisable to comply with the
provisions of the Securities Act or any other applicable federal or state
securities legislation. It may be provided that any representation requirement
shall become inoperative upon a registration of the Shares or other action
eliminating the necessity of such representation under the Securities Act or
other securities legislation. The Company shall not be required to deliver any
Shares under the Plan prior to (i) the admission of such shares to listing on
any stock exchange or system on which Shares may then be listed, and (ii) the
completion of such registration or other qualification of such Shares under any
state or federal law, rule or regulation, as the Company shall determine to be
necessary or advisable.
17. WITHHOLDING TAX. Upon the termination of the Restricted Period
with respect to any Shares of Restricted Stock, the Company may (as determined
by the Committee), in lieu of requiring the Participant or other person
receiving such Shares to pay the Company the amount of any taxes which the
Company is required to withhold with respect to such Shares, retain a
sufficient number of Shares held by it to cover the amount required to be
withheld. The Company shall also have the right to deduct from all dividends
paid with respect to Shares of Restricted Stock the amount of any taxes which
the Company is required to withhold with respect to such dividend payments.
Where a Participant or other person is entitled to receive Shares
pursuant to an Award, the Company may (as determined by the Committee), in lieu
of requiring the Participant or such other person to pay the Company the amount
of any taxes which the Company is required to withhold with respect to the
Award, retain a number of such Shares sufficient to cover the amount required
to be withheld.
18. LOANS.
(a) The Company may make loans to a Participant in connection with
Restricted Stock or the exercise of Options subject to the following
terms and conditions and such other terms and conditions not inconsistent
with the Plan, including the rate of interest, if any, as the Company
shall impose from time to time.
(b) No loan made under the Plan shall exceed (i) with respect to
Options, the sum of (A) the aggregate option price payable upon exercise
of the Option in relation to which the loan is made, plus (B) the amount
of the reasonably estimated income taxes payable by the grantee and (ii)
with respect to Restricted Stock, the amount of reasonably estimated
income taxes payable by the grantee. In no event may any such loan
exceed the Market Value of the related Shares at the time of the loan.
(c) No loan shall have an initial term exceeding three years;
provided, that loans under the Plan shall be renewable at the discretion
of the Committee; and provided, further, that the indebtedness under each
loan shall become due and payable on a date no later than (i) one year
after termination of the Participant's employment due to death,
retirement or disability, or (ii) the day of termination of the
Participant's employment for any reason other than death, retirement or
disability.
(d) Loans under the Plan may be satisfied by the Participant, as
determined by the Committee, in cash or, with the consent of the
Committee, in whole or in part in Shares at Market Value on the date of
such payment.
(e) When a loan shall have been made, Shares having an aggregate
Market Value equal to the amount of the loan may, in the discretion of
the Committee, be required to be pledged by the Participant to the
Company as security for payment of the unpaid balance of the loan.
Portions of such Shares may, in the discretion of the Committee, be
released from time to time as it deems not to be needed as security.
(f) Every loan shall meet all applicable laws, regulations and
rules of the Federal Reserve Board and any other governmental agency
having jurisdiction.
19. TERMINATION, AMENDMENT AND MODIFICATION OF PLAN. The Board may at
any time terminate, and may at any time and from time to time and in any
respect amend or modify, the Plan; provided however, that to the extent
necessary and desirable to comply with Rule 16b-3 under the Exchange Act or
Section 422 of the Code (or any other applicable law or regulation, including
requirements of any stock exchange or quotation system on which the Common
Stock is listed or quoted) shareholder approval of any Plan amendment shall be
obtained in such a manner and to such a degree as is required by the applicable
law or regulation; and provided further, that no termination, amendment or
modification of the Plan shall in any manner affect any Award theretofore
granted pursuant to the Plan without the consent of the Participant to whom the
Award was granted or transferee of the Award.
20. EFFECTIVE DATE AND TERM OF PLAN. The Plan shall become effective
upon its adoption by the Board of Directors, subject to ratification by the
shareholders of the Company at the next annual meeting, and shall continue in
effect for a term of ten years from the date of adoption by the Board of
Directors unless sooner terminated under Section 19 hereof.
Adopted by the Board of Directors
of Paul Harris Stores, Inc.
as of November 21, 1996 and amended
February 28, 1997
Adopted by the Shareholders of
Paul Harris Stores, Inc.
as of June 19, 1997
EXHIBIT 4.4
PAUL HARRIS STORES, INC.
OUTSIDE DIRECTORS STOCK OPTION PLAN
1. PURPOSE. The purpose of the Plan is to advance the interests of
the Company and its shareholders by encouraging increased Common Stock
ownership by members of the Board who are not employees of the Company or any
of its Subsidiaries, in order to promote long-term shareholder value through
directors' continuing ownership of the Common Stock.
2. DEFINITIONS. Unless the context clearly indicates otherwise, the
following terms, when used in the Plan, shall have the meanings set forth
below.
"Board" shall mean the Board of Directors of the Company, as it may from
time to time be constituted.
"Committee" shall mean the Compensation and Stock Option Committee of the
Board, as it may from time to time be constituted, or any other committee of
the Board appointed by the Board to administer the Plan.
"Common Stock" shall mean the Common Stock, without par value, of the
Company, and shall include the Common Stock as it may be changed from time to
time as described in Paragraph 8 of the Plan.
"Company" shall mean Paul Harris Stores, Inc., and any successor by merger
or consolidation.
"Eligible Director" shall mean a member of the Board who is not at the time
of receipt of an Option an employee of the Company or any of its Subsidiaries.
"Fair Market Value" of the Common Stock of the Company means the last sale
price on the applicable date (or if there is no reported sale on such date, on
the last preceding date on which any reported sale occurred) of one share of
Common Stock on the principal exchange on which such shares are listed, or if
not listed on any exchange, on the NASDAQ National Market System or any similar
system then in use, or if the shares of Common Stock are not listed on the
NASDAQ National Market System, the mean between the closing high bid and low
asked quotations of one such share on the date in question as reported by
NASDAQ or any similar system then in use, or, if no such quotations are
available, the fair market value on such date of one share of Common Stock as
the Board shall determine.
"Grantee" shall mean an Eligible Director who has been granted an Option.
"Option" shall mean a non-qualified option to purchase authorized but
unissued Common Stock or Common Stock held in the treasury granted by the
Company pursuant to the terms of the Plan.
"Plan" shall mean the Paul Harris Stores, Inc. Outside Directors Stock
Option Plan, as set forth herein and as amended from time to time.
"Subsidiary" shall mean any corporation at least 50% of whose outstanding
voting stock is owned, directly or indirectly, by the Company.
3. ADMINISTRATION. The Plan shall be administered by the Committee. The
Committee shall have all the powers vested in it by the terms of the Plan, such
powers to include authority (within the limitations described herein) to
prescribe the form of the agreements embodying Options. The Committee shall,
subject to the provisions of the Plan, grant Options pursuant to the Plan and
shall have the power to construe the Plan, to determine all questions arising
thereunder, and to adopt and amend such rules and regulations for the
administration of the Plan as it may deem desirable. Any decision of the
Committee in the administration of the Plan, as described herein, shall be
final and conclusive. The Committee may act only by a majority of its members
in office, except that the members thereof may authorize any one or more of
their members or the Secretary or any other officer of the Company to execute
and deliver documents on behalf of the Committee. No member of the Committee
shall be liable for anything done or omitted to be done by him or by any other
member of the Committee in connection with the Plan, except for his own willful
misconduct or as expressly provided by statute.
4. PARTICIPATION. Each Eligible Director shall be eligible to receive
Option grants in accordance with Paragraphs 5, 6, 7, and 8 below.
5. GRANTS UNDER THE PLAN. (a) Options may be granted under the Plan,
subject to the terms, conditions and restrictions specified in Paragraphs 6, 7
and 8 below. There may be issued under the Plan pursuant to the exercise of
Options an aggregate of not more than 100,000 shares of Common Stock, subject
to adjustment as provided in Paragraph 8 below. Shares of Common Stock that
are the subject of an Option but not purchased prior to the expiration of the
Option, shall thereafter be considered unissued for purposes of the maximum
number of shares that may be issued under the Plan, and may again be the
subject of Option grants under the Plan. If at any time, the shares remaining
available for Option grants are not sufficient to make all Option grants then
required to be made under the Plan, no Option grants shall be made.
(b) An Eligible Director to whom an Option is provided to be granted or is
granted under the Plan (and any person succeeding to such an Eligible
Director's right pursuant to the Plan), shall have no rights as a shareholder
with respect to any shares of Common Stock issuable pursuant to any such Option
until such Option is exercised. Except as provided in Paragraph 8 below, no
adjustment shall be made for dividends, distributions, or other rights (whether
ordinary or extraordinary, and whether in cash, securities, or other property)
for which the record date is prior to the date an Option is exercised. Except
as expressly provided for in the Plan, no Eligible Director or other person
shall have any claim or right to be granted an Option. Neither the Plan nor
any action taken hereunder shall be construed as giving any Eligible Director
any right to be retained in the service of the Company.
6. INITIAL GRANTS AND ANNUAL GRANTS. (a) Each Eligible Director who was not
eligible to receive options under the Company's 1992 Non-Qualified Stock Option
Plan, shall, at the later of the adoption of this Plan by the Board or on the
first day of the first calendar month following the month in which such person
first becomes an Eligible Director, be automatically granted an Option to
purchase 5,000 shares of Common Stock (subject to adjustment as provided in
Paragraph 8).
(b) In addition, as of the first day of the first calendar month
following the month of each annual meeting of the Company's shareholders (the
"Annual Meeting") held after June 19, 1996, each Eligible Director will be
automatically granted an Option to purchase 3,000 shares of Common Stock
(subject to adjustment as provided in paragraph 8), provided, however, that no
person who is elected or appointed an Eligible Director within sixty (60) days
prior to such Annual Meeting shall be granted an Option pursuant to this
Paragraph 6(b).
7. TERMS OF OPTIONS. Each Option granted pursuant to Paragraph 6 shall be
evidenced by an agreement in such form as the Committee shall prescribe from
time to time in accordance with the Plan and shall comply with the following
terms and conditions and such additional terms and conditions not inconsistent
with the Plan as may from time to time be prescribed by the Committee.
(a) The Option exercise price per share shall be equal to the Fair
Market Value of a share of Common Stock on the date the Option is granted.
(b) The Option shall not be transferable by the Grantee otherwise than
by will or the laws of descent and distribution, and shall be exercisable
during his lifetime only by him.
(c) The Option shall not be exercisable before the expiration of six
months from the date it is granted and after the expiration of ten years
from the date it is granted.
(d) Payment of the Option price shall be made at the time the Option is
exercised, and shall be made in United States dollars by cash or check.
(e) An Option shall not be exercisable unless the person exercising the
Option has been, at all times during the period beginning with the date of
grant of the Option and ending on the date of such exercise, in continuous
service on the Board, except that
(i) if any Grantee of an Option shall die or become permanently
disabled or shall retire with the consent of the Board, holding an Option
that has not expired and has not been fully exercised, he or his
executor, administrators, heirs, or distributees, as the case may be,
may, at any time within one year after the date of such event (but in no
event after the Option has expired under the provisions of subparagraph
7(c) above), exercise the Option with respect to any shares as to which
the Grantee could have exercised the Option at the time of his death,
disability, or retirement; or
(ii) if a Grantee shall cease to serve as a director of the Company
for any reason other than those set forth in 7(e)(i) above, while holding
an Option that has not expired and has not been fully exercised, the
Grantee, at any time within three months of the date he ceased to be such
an Eligible Director (but in no event after the Option has expired under
the provisions of subparagraph 7(c) above), may exercise the Option with
respect to any shares of Common Stock as to which he could have exercised
the Option on the date he ceased to be such an Eligible Director.
(f) Each Grantee of an Option shall pay to the Company, or make
arrangements satisfactory to the Committee regarding the payment of, any
federal, state, or local taxes of any kind required by law to be withheld
with respect to the shares of Common Stock as to which an Option is being
exercised.
8. DILUTION AND OTHER ADJUSTMENTS. In the event of any change in the
outstanding Common Stock by reason of any stock split, stock dividend,
recapitalization, merger, consolidation, reorganization, combination or
exchange of shares or other similar event, the number or kind of shares
issuable on exercise of an Option granted under the Plan, the number or kind of
shares subject to any outstanding Option, and the Option price per share under
any outstanding Option, shall be automatically adjusted so that the
proportionate interest of the Eligible Directors or of the Grantee shall be
maintained as before the occurrence of such event. Any adjustment in
outstanding Options shall be made without change in the total Option exercise
price applicable to the unexercised portion of such Options and with a
corresponding adjustment in the Option exercise price per share. Any
adjustment permitted by this Paragraph shall be conclusive and binding for all
purposes of the Plan.
9. MISCELLANEOUS PROVISIONS. (a) An Eligible Director's rights and
interests under the Plan may not be assigned or transferred in whole or in part
either directly or by operation of law or otherwise (except in the event of a
participant's death, by will or the laws of descent and distribution),
including, but not by way of limitation, execution, levy, garnishment,
attachment, pledge, bankruptcy, or in any other manner, and no such right or
interest of any Eligible Director in the Plan shall be subject to any
obligation or liability of such Eligible Director.
(b) If the shares of Common Stock that are the subject of an Option are not
registered under the Securities Act of 1933, as amended, pursuant to an
effective registration statement, the Grantee, if the Committee shall deem it
advisable, may be required to represent and agree in writing (i) that any
shares of Common Stock acquired by such Grantee pursuant to the Plan will not
be sold except pursuant to an exemption from registration under said Act and
(ii) that such Grantee is acquiring such shares of Common Stock for his own
account and not with a view to the distribution thereof. No shares of Common
Stock shall be issued hereunder unless counsel for the Company shall be
satisfied that such issuance will be in compliance with applicable federal,
state and other securities laws.
(c) By accepting any Options under the Plan, each Grantee and each person
claiming under or through him shall be conclusively deemed to have indicated
his acceptance and ratification of and consent to, the terms and conditions of
the Plan and any action taken under the Plan by the Company or the Board.
10. AMENDMENT. The Board may at any time and from time to time and in any
respect amend or modify this Plan; provided, however, that, the Board may not
amend this Plan more than once during any six-month period, and any amendments
requiring shareholder approval in order to maintain the exemption of the Plan
under Rule 16b-3 (promulgated pursuant to the Securities Exchange Act of 1934,
as amended) as in effect from time to time, shall be subject to approval by the
shareholders of the Company in the manner required by such Rule.
11. TERMINATION. This Plan shall terminate upon the earlier of the following
dates or events to occur:
(a) Upon the adoption of a resolution of the Board terminating the
Plan;
(b) Upon the award or the purchase upon exercise of Options of all the
shares of Common Stock provided to be awarded under the Plan or as adjusted
pursuant to Paragraph 8; or
(c) Ten (10) years from the date of adoption of this Plan by the Board.
No termination of the Plan shall materially and adversely affect any of the
rights or obligations of any Grantee, without his consent, under any Option
theretofore granted under the Plan.
11. EFFECTIVE DATE; STOCKHOLDER APPROVAL. The Plan shall be effective
immediately upon approval by the Company's Board. However, any Option granted
pursuant to the Plan is expressly conditioned upon the approval and adoption of
the Plan by the shareholders at or before the next Annual Meeting.
Notwithstanding Paragraph 7, no Option granted prior to such shareholder
approval may be exercised unless and until such approval is obtained.
Adopted by the Board this 19th day
of June, 1996
Approved by the Shareholders this
19th day of June, 1997
EXHIBIT 5
BAKER & DANIELS
300 NORTH MERIDIAN STREET
SUITE 2700
INDIANAPOLIS, INDIANA 46204
(317) 237-0300
June 25, 1997
Paul Harris Stores, Inc.
6003 Guion Road
Indianapolis, IN 46254
Re: Registration Statement on Form S-8
Ladies and Gentlemen:
We have acted as counsel to Paul Harris Stores, Inc., an Indiana
corporation (the "Company"), in connection with the preparation and filing with
the Securities and Exchange Commission (the "Commission") of the Company's
Registration Statement on Form S-8 (the "Registration Statement") under the
Securities Act of 1933 (the "Act"), registering the offer and sale of up to
1,000,000 shares (the "Incentive Shares") of the Company's common stock,
without par value (the "Common Stock"), pursuant to the Company's 1996 Stock
Option and Incentive Plan, as amended (the "Incentive Plan"), and 100,000
shares (the "Directors Shares") of Common Stock pursuant to the Company's
Outside Directors Stock Option Plan (the "Directors Plan").
In so acting, we have examined and relied upon the originals, or copies
certified or otherwise identified to our satisfaction, of such records,
documents and other instruments as in our judgment are necessary or appropriate
to enable us to render the opinion expressed below.
Based on the foregoing, we are of the opinion that the Incentive Shares
and the Directors Shares have been duly authorized and, when issued in
accordance with the Incentive Plan and the Directors Plan, respectively, will
be validly issued, fully paid and non-assessable.
Our opinion expressed above is limited to the federal law of the United
States and the law of the State of Indiana.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. In giving such consent, we do not thereby concede that
we are within the category of persons who consent is required under Section 7
of the Act or the Rules and Regulations of the Commission thereunder.
Very truly yours,
/s/ BAKER & DANIELS
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated February 27, 1997, except as to Note
9, which is as of April 10, 1997, which appears on page 26 of Paul Harris
Stores, Inc.'s Annual Report on Form 10-K for the fiscal year ended February 1,
1997.
PRICE WATERHOUSE LLP
Indianapolis, Indiana
June 25, 1997
