VICORP RESTAURANTS, INC.
EMPLOYEE STOCK PURCHASE PLAN
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ARTICLE 1
PURPOSE
1.1 PURPOSE. The VICORP Restaurants, Inc. Employee Stock
Purchase Plan (the "Plan") is intended to provide a method
whereby employees of VICORP Restaurants, Inc. and its subsidiary
corporations (hereinafter referred to, unless the context
otherwise requires, as the "Company") will have an opportunity
to acquire an equity interest in the Company through the
purchase of shares of the Common Stock, $.05 par value per
share, of the Company ("VICORP Stock"). It is the intention of
the Company to have the Plan qualify as an "employee stock
purchase plan" under Section 423 of the Internal Revenue Code of
1986, as amended (the "Code"). The provisions of the Plan shall
be construed so as to extend and limit participation in a manner
consistent with the requirements of Code Section 423.
1.2 EFFECTIVE DATE. The Effective Date of this Plan is October 1, 1996.
1.3 TERM OF PLAN. The Plan will remain in effect until September 30, 2001.
ARTICLE 2
DEFINITIONS
2.1 ADMINISTRATOR. "Administrator" shall mean the person
appointed by the Committee to perform the duties delegated to the
Administrator under this Plan. The initial Administrator will be
Smith Barney Inc.
2.2 BASE PAY. "Base Pay" shall mean regular base wages
(which includes pay for overtime, holidays, vacation and sick
days, and bonuses), but excluding commissions, other special or
incentive payments, moving expense reimbursements, and disability pay.
2.3 COMMITTEE. "Committee" shall mean the individuals described in
Article 10.
2.4 EMPLOYEE. "Employee" means any person who is employed on a
full-time or part-time basis by the Company.
2.5 HOLDING PERIOD. "Holding Period" means the period during which
the Committee, in its sole discretion, has imposed restrictions on the sale,
transfer, or other disposition of VICORP Stock purchased under this Plan.
The initial Holding Period for the VICORP Stock will be two years from the
date the VICORP Stock is purchased under this Plan. This Holding Period
will be applicable to all VICORP Stock purchased under this Plan
from the Effective Date until the Committee determines otherwise.
2.6 SUBSIDIARY CORPORATION. "Subsidiary Corporation" shall
mean any present or future corporation which (a) would be a "subsidiary
corporation" of VICORP Restaurants, Inc. as that term is defined in Code
Section 424, and (b) is designated as a participating employer in the
Plan by the Committee.
ARTICLE 3
ELIGIBILITY AND PARTICIPATION
3.1 INITIAL ELIGIBILITY. Any employee who has completed
twelve (12) months of employment with the Company and who is
employed by the Company on the date of his or her commencement of
participation in the Plan shall be eligible to participate in
Offerings under the Plan which commence on or after such twelve-
month period has concluded; provided, however, that signed
participation forms are received in the Benefits Department no
later than the day before the Offering Commencement Date of the
Offering in which the employee elects to participate.
3.2 ELIGIBILITY UPON REEMPLOYMENT. Any employee who has
completed the twelve (12) months of employment with the Company
required under Section 3.1, who terminates employment with the
Company, and who subsequently becomes reemployed with the
Company, shall be eligible to participate in Offerings under the
Plan which commence on or after such reemployment date.
3.3 LEAVE OF ABSENCE. Solely for purposes of participation
in the Plan, a person on leave of absence shall be deemed to be
an employee for the first 180 days of such leave of absence and
such employee's employment shall be deemed to have terminated at
the close of business on the 180th day of such leave of absence
unless such employee shall have returned to regular full-time or
part-time employment (as the case may be) prior to the close of
business on such 180th day. If an employee's leave of absence is
terminated for any reason (except for the employee's return to
full or part time employment with the Company), then such
employee's participation in this Plan and right to exercise
options under the Plan shall terminate as of the date the leave
of absence is terminated.
3.4 RESTRICTIONS ON PARTICIPATION. Notwithstanding any
contrary provision of the Plan, no employee shall be granted an
option to participate in the Plan:
(a) if, immediately after the grant, such employee
would own stock, and/or hold outstanding options to purchase
stock, possessing 5% or more of the total combined voting power
or value of all classes of stock of the Company (for purposes of
this paragraph, the rules of Code Section 424(d) shall apply in
determining the stock ownership of any employee). For purposes
of this paragraph (a), the Market Value of the stock on the
Offering Commencement Date will be used to determine an employee's
ownership; or
(b) which permits his or her rights to purchase VICORP
Stock under all employee stock purchase plans of the Company to
accrue at a rate which exceeds $25,000 in fair market value of
the VICORP Stock (determined at the time such option is granted)
for any calendar year.
3.5 COMMENCEMENT OF PARTICIPATION. An eligible employee
may become a participant by completing an authorization for a
payroll deduction on the form provided by the Company (the
"Enrollment Form") and filing the Enrollment Form with the
Benefits Department on or before the date set by the Committee,
which date shall be prior to the Offering Commencement Date for
the Offering (as such terms are defined below). Upon delivery of
the Enrollment Form to the Benefits Department, payroll deductions
for the participant shall commence on the first Payroll Date
immediately following the Offering Commencement Date for which the
employee's Enrollment Form is effective. An employee's Enrollment
Form shall be effective as of the quarterly Offering Commencement
Date specified by the employee, and for all subsequent Offerings
unless the employee terminates his or her Enrollment Form as provided
in Article 8. The Payroll Date is the last day of any payroll period.
ARTICLE 4
OFFERINGS
4.1 OFFERINGS. The Plan shall be implemented by quarterly
offerings of VICORP Stock (the "Offerings"), with each Offering
consisting of one three-month period. The first Offering will
commence on October 1, 1996, and subsequent Offerings will
commence on the next following January 1, April 1, July 1, and
October 1 until the final Offering commences on July 1, 2001. As
used in the Plan, "Offering Commencement Date" means the first
day of an Offering and "Offering Termination Date" means the last
day of an Offering.
4.2 MAXIMUM NUMBER OF SHARES AVAILABLE TO PARTICIPANTS.
Not less than fifteen (15) days prior to any Offering Commencement
Date, the Board may, in its sole discretion, set a maximum number
of share which may be purchased by any participant for such Offering
(the "Maximum Share Amount"). Initially, there shall be no Maximum
Share Amount (except as provided under Section 3.4(b)). If a Maximum
Share Amount is set, then all participants must be notified of such
Maximum Share Amount no less than five (5) days prior to the Offering
Commencement Date on which such Maximum Share Amount first is applicable.
Once a Maximum Share Amount is set, such Maximum Share Amount shall
continue to apply with respect to all succeeding Offerings unless
revised by the Board as set forth above.
ARTICLE 5
PAYROLL DEDUCTIONS
5.1 AMOUNT OF DEDUCTION. The participant's Enrollment Form
shall designate, in even percentages or dollar amounts, the
amount the participant elects to have deducted from his or her
pay on each Payroll Date during the time he or she is a participant
in an Offering and such designation shall be based on the participant's
Base Pay in effect at the Offering Commencement Date of such Offering.
The minimum amount which a participant may elect to have deducted from
his or her Base Pay is $2.00 for each Payroll Date.
5.2 PARTICIPANT'S ACCOUNT. All payroll deductions made for
a participant shall be credited to the participant's account
under the Plan. A participant may not make any separate cash
payment into such account except when on leave of absence and
then only as provided in Section 5.4.
5.3 CHANGES IN PAYROLL DEDUCTIONS. A participant may
discontinue his or her participation in the Plan as provided in
Article 8, but no other change can be made during an Offering and
specifically, a participant may not alter the amount of his or her
payroll deductions for that Offering.
5.4 LEAVE OF ABSENCE. If a participant goes on a leave of
absence, such participant shall have the right to elect: (a) to
withdraw the balance in his or her account pursuant to Section
8.1, or (b) to discontinue contributions to the Plan but remain a
participant in the Plan, or remain a participant in the Plan
during such leave of absence, authorizing deductions to be made
from payments by the Company to the participant during such leave
of absence and undertaking to make cash payments to the Plan at
the end of each payroll period to the extent that amounts payable
by the Company to such participant are insufficient to meet such
participant's authorized Plan deductions.
ARTICLE 6
GRANTING OF OPTION
6.1 MAXIMUM NUMBER OF OPTION SHARES. On the Commencement
Date of each Offering, a participating employee shall be deemed
to have been granted an option to purchase a maximum number of
shares of VICORP Stock equal to an amount determined as follows:
an amount equal to (a) the sum of the employee's Base Pay which
the employee has elected to have withheld during any Offering,
divided by (b) the Option Price.
6.2 MAKET VALUE. The Market Value of a share of VICORP
Stock shall be the closing price of the VICORP Stock on the
Offering Termination Date (or on the first business day following
the Offering Termination Date if the Offering Termination Date is
not a business day) or the next following business day on which
trading occurred on the NASDAQ National Market System. If the
VICORP Stock is not traded on the NASDAQ National Market System,
the Market Value will be the average of the bid and ask prices for
the VICORP Stock as reported on the NASDAQ over-the-counter quotation
system on the Offering Termination Date (or on the first business
day following the Offering Termination Date if the Offering Termination
Date is not a business day). If the VICORP Stock is not so quoted or
listed, the Market Value will be the fair market value of the VICORP
Stock on such determination date, as determined on such basis as
shall be established or specified for the purpose by the Committee.
6.3 DISCOUNT RATE. The Discount Rate is the amount,
determined by the Committee in its discretion, of the discount to
be applied to the Market Value to determine the Option Price for
the purchase of a share of VICORP Stock. The Discount Rate for
any Offering shall be determined by the Committee prior to the
Offering Commencement Date, and shall not be more than 15% off of
the Market Value of a share of VICORP Stock. Initially, the
Discount Rate will be 15% off of the Market Value of a share of
VICORP Stock and such Discount Rate will remain in effect until
the Committee revises the Discount Rate as provided in this Section.
6.4 OPTION PRICE. The option price of a share of VICORP
Stock purchased with payroll deductions made during any Offering
shall be the Market Value of a share of VICORP Stock reduced by
the Discount Rate.
ARTICLE 7
EXERCISE OF OPTION
7.1 AUTOMATIC EXERCISE. Except as provided in Section 8.1,
the participant's option for the purchase of VICORP Stock with
payroll deductions made during any Offering shall be deemed to
have been exercised automatically on the Offering Termination
Date applicable to such Offering, for the purchase of the number
of shares (including fractional interests in shares) of VICORP
Stock which the accumulated payroll deductions in the participant's
account at that time shall purchase at the applicable Option Price
(but not in excess of the number of shares for which options have been
granted to the employee pursuant to Section 6.1). No fractional
shares of VICORP Stock will be issued by VICORP.
7.2 TRANSFERABILITY OF OPTION. During a participant's lifetime,
options held by such participant shall be exercisable only by that participant.
7.3 PARTICIPANT'S OWNERSHIP OF VICORP STOCK AFTER EXERCISE.
Except as provided in Section 7.5 with respect to the Holding
Period applicable to the VICORP Stock acquired under this Plan,
after the automatic exercise of the participant's option for any
Offering, as described in Section 7.1, the participant will have
full ownership rights in the full shares of VICORP Stock
purchased with the participant's payroll deductions made during
the Offering and to a fractional interest in any shares of VICORP
Stock to the extent such participant's payroll deduction amount
results in the purchase of less than a full share of VICORP
Stock. Upon the participant's election after the expiration of
the Holding Period to receive his or her entire VICORP Stock
account held by the Administrator, the participant will receive
certificates for the full shares of VICORP Stock and a single
cash payment for the participant's fractional interest in any
share of VICORP Stock equal to the participant's fractional
interest multiplied by the Market Value of the VICORP Stock on
the date the Administrator transfers such stock certificates to
the participant.
7.4 ADMINISTRATOR TO HOLD STOCK. The certificates representing
the whole shares of VICORP Stock purchased upon the exercise of the
participant's option and the participant's fractional interest in any
share of VICORP Stock shall be held by the Administrator during any
Holding Period imposed by the Committee.
7.5 HOLDING PERIODS FOR STOCK. In order to qualify for
favorable tax treatment under Code Section 423, the participant
must hold the VICORP Stock obtained in any Offering until the
date which is later of (a) two years after the Offering
Commencement Date applicable to such Offering, or (b) one year
after the date the VICORP Stock subject to such Offering is
purchased. In addition, except as provided in Section 11.1 for
a deceased participant, the VICORP Stock may not be sold,
transferred, or otherwise disposed of prior to the expiration of
the Holding Period. Initially, the Holding Period for the VICORP
Stock will be two years from the date the VICORP Stock is purchased
under the Plan. Any attempt to sell, transfer, or otherwise dispose
of such shares of VICORP Stock during the Holding Period will be void
and of no force an effect. This Holding Period will remain in effect
until such time as the Committee determines otherwise.
ARTICLE 8
WITHDRAWAL
8.1 WITHDRAWAL OF ACCOUNT UPON TERMINATION OF EMPLOYMENT OR DEATH.
Upon termination of the participant's employment (including a termination
because of the participant's death), the participant (or, if applicable,
the participant's beneficiary as defined in Section 11.1) shall receive all
of the payroll deductions credited to the participant's account under the Plan
as of such termination date.
8.2 EFFECT ON SUBSEQUENT PARTICIPATION. A participant's withdrawal
from any Offering shall not have any effect upon the participant's
eligibility to participate in any succeeding Offering or in any similar plan
that hereafter may be adopted by the Company if such participant becomes
reemployed by the Company.
8.3 NO INTEREST TO BE PAID. No interest shall be paid or allowed on
any money paid into the Plan or credited to the account of any participant
employee.
8.4 LEAVE OF ABSENCE. A Participant on leave of absence shall, subject
to the election made by such Participant pursuant to Section 5.4, continue to
be a participant in the Plan so long as such participant is on continuous leave
of absence. A participant who has been on leave of absence for more than 180
days shall not be entitled to participate in any Offering commencing after the
180th day of such leave of absence. Notwithstanding any other provision of the
Plan, unless a participant on leave of absence returns to regular full time or
part time employment with the Company at the earlier of: (a) the termination of
such leave of absence or (b) the date after the 180th day of such leave of
absence, such participant's participation in the Plan shall terminate on
whichever of such dates first occurs.
ARTICLE 9
STOCK ISSUED UNDER PLAN
9.1 MAXIMUM SHARES. The maximum number of shares of VICORP
Stock which shall be issued under the Plan, subject to adjustment
upon changes in capitalization of the Company as provided in
Section 11.4, shall be 500,000 shares. All unissued shares from
prior Offerings, whether offered or not, will be available for
issuance in subsequent Offerings. If the total number of shares
for which options are exercised on any Offering Termination Date
in accordance with Article 7 exceeds the maximum number of shares
for the applicable Offering, the Company shall make a pro rata
allocation of the shares available for delivery and distribution
in as nearly a uniform manner as shall be practicable and as it
shall determine to be equitable, and the balance of payroll
deductions credited to the account of each participant under the
Plan shall be returned to him or her as promptly as possible.
9.2 PARTICIPANT'S INTEREST IN OPTION STOCK. The participant shall
have no interest in VICORP Stock covered by his or her option until such
option has been exercised.
9.3 REGISTRATION OF STOCK. Any shares of VICORP Stock purchased
under the Plan, whether such VICORP Stock is held by the Administrator
of the Plan or delivered to a participant upon request under the Plan,
shall be registered in the name of the participant.
9.4 RESTRICTIONS ON EXERCISE. The Board of Directors may, in its
discretion, require as conditions to the exercise of any option that the
shares of VICORP Stock reserved for issuance upon the exercise of the option
shall have been duly listed, upon official notice of issuance, upon a stock
exchange, and that either:
(a) Registration Statement under the Securities Act of 1933, as
amended, with respect to said shares shall be effective, or
(b) the participant shall have represented at the time of purchase,
in form and substance satisfactory to the Company, that it is the participant's
intention to purchase the shares for investment and not for resale or
distribution.
ARTICLE 10
ADMINISTRATION
10.1 APPOINTMENT OF COMMITTEE. The Benefits Committee appointed by
the Board of Directors shall constitute the committee (the "Committee")
which shall perform all administrative duties under this Plan, except those
expressly delegated to the Administrator under this Plan. If no Benefits
Committee has been appointed, the Board of Directors shall constitute the
Committee.
10.2 AUTHORITY OF COMMITTEE. Subject to the express provisions of the
Plan, the Committee shall have plenary authority in its discretion to
interpret and construe any and all provisions of the Plan, to adopt rules and
regulations for administering the Plan, and to make all other determinations
deemed necessary or advisable for administering the Plan. The Committee's
determination on the foregoing matters shall be conclusive.
10.3 RULES GOVERNING THE ADMINISTRATION OF THE COMMITTEE.
The Board of Directors may from time to time appoint members of the Committee
in substitution for or in addition to members previously appointed and may
fill vacancies, however caused, in the Committee. The Committee may select
one of its members as its Chairman and shall hold its meetings at such times
and places as it shall deem advisable and may hold telephonic meetings. A
majority of its members shall constitute a quorum. All determinations of the
Committee shall be made by a majority of its members. The Committee may
correct any defect or omission or reconcile any inconsistency in the Plan, in
the manner and to the extent it shall deem desirable. Any decision or
determination reduced to writing and signed by a majority of the members of the
Committee shall be as fully effective as if it had been made by a majority vote
at a meeting duly called and held. The Committee may appoint a secretary and
shall make such rules and regulations for the conduct of its business as it
shall deem advisable.
ARTICLE 11
MISCELLANEOUS
11.1 DESIGNATION OF BENEFICIARY. Upon the death of a participant, the
Holding Period applicable to any VICORP Stock purchased with such participant's
payroll deductions will be deemed to have expired. A participant must file a
written designation of a beneficiary who is to receive any VICORP Stock
and/or cash. Such designation of beneficiary may be changed by the participant
at any time by written notice to the Benefits Department. Upon the death of a
participant and upon receipt by the Administrator of proof of identity and
existence at the participant's death of a beneficiary validly designated by him
or her under the Plan, the Administrator shall deliver such VICORP Stock and/or
cash to such beneficiary. In the event of the death of a participant and in the
absence of a beneficiary validly designated under the Plan who is living at the
time of such Participant's death, the Administrator shall deliver such VICORP
Stock and/or cash to the executor or administrator of the estate of the
participant, or if no such executor or administrator has been appointed (to the
knowledge of the Administrator), the Administrator, in its discretion, may
deliver such VICORP Stock and/or cash to the spouse or to any one or more
dependents of the participant as the Administrator may designate. No
beneficiary shall, prior to the death of the participant by whom he or she
has been designated, acquire any interest in the VICORP Stock or cash credited
to the participant under the Plan.
11.2 TRANSFERABILITY. Neither payroll deductions credited to a
participant's account nor any rights with regard to the exercise of an option
or to receive VICORP Stock under the Plan may be assigned, transferred, pledged,
or otherwise disposed of in any way by the participant other than by the laws
of descent and distribution. Any such attempted assignment, transfer, pledge
or other disposition shall be without effect, except that the Company may treat
such act as an election to withdraw funds in accordance with Section 8.1.
11.3 USE OF FUNDS. All payroll deductions received or held by the Company
under this Plan may be used by the Company for any corporate purpose and the
Company shall not be obligated to segregate such payroll deductions.
11.4 ADJUSTMENT UPON CHANGES IN CAPITALIZATION.
(a) If, while any options are outstanding, the
outstanding shares of VICORP Stock have increased, decreased,
changed into, or been exchanged for a different number or kind of
shares or securities of the Company through reorganization,
merger, recapitalization, reclassification, stock split, reverse
stock split or similar transaction, appropriate and proportionate
adjustments may be made by the Committee in the number and/or
kind of shares which are subject to purchase under outstanding
options and on the Option Price or prices applicable to such
outstanding options. In addition, in any such event, the number
and/or kind of shares which may be offered in the Offerings
described in Article 4 hereof shall also be proportionately
adjusted. No adjustments shall be made for stock dividends. For
the purposes of this Section 11.4(a), any distribution of shares
to shareholders in an amount aggregating 20% or more of the
outstanding shares shall be deemed a stock split and any
distributions of shares aggregating less than 20% of the
outstanding shares shall be deemed a stock dividend.
(b) Upon the dissolution or liquidation of the
Company, or upon a reorganization, merger or consolidation of the
Company with one or more corporations as a result of which the
Company is not the surviving corporation, or upon a sale of
substantially all of the property or stock of the Company to
another corporation, the holder of each option then outstanding
under the Plan shall thereafter be entitled to receive at the
next Offering Termination Date upon the exercise of such option
for each share as to which such option shall be exercised, as
nearly as reasonably may be determined, the cash, securities
and/or property which a holder of one share of the VICORP Stock
was entitled to receive upon and at the time of such transaction.
The Board of Directors shall take such steps in connection with
such transactions as the Board shall deem necessary to assure
that the provisions of this Section 11.4 shall thereafter be
applicable, as nearly as reasonably may be determined, in
relation to the said cash, securities and/or property as to which
such holder of such option might thereafter be entitled to receive.
11.5 AMENDMENT AND TERMINATION. The Board of Directors
shall have complete power and authority to terminate or amend the
Plan; provided, however, that the Board of Directors shall not,
without the approval of the stockholders of the Corporation (i)
increase the maximum number of shares which may be issued under
any Offering (except pursuant to Section 11.4); (ii) amend the
requirements as to the class of employees eligible to purchase
VICORP Stock under the Plan. No termination, modification, or
amendment of the Plan may, without the consent of an employee
then having an option under the Plan to purchase VICORP Stock,
adversely affect the rights of such employee under such option.
11.6 EFFECTIVE DATE. The Plan shall become effective as of
October 1, 1996, subject to approval by the holders of the majority
of the Common Stock present and represented at a special or annual
meeting of the shareholders held on or before September 30, 1997.
If the Plan is not so approved, the Plan shall not become effective.
11.7 NO EMPLOYMENT RIGHTS. The Plan does not, directly or
indirectly, create any right for the benefit of any employee or
class of employees to purchase any shares of VICORP Stock under
the Plan, or create in any employee or class of employees any
right with respect to continuation of employment by the Company,
and it shall not be deemed to interfere in any way with the
Company's right to terminate, or otherwise modify, an employee's
employment at any time.
11.8 EFFECT OF PLAN. The provisions of the Plan, shall in
accordance with its terms, be binding upon, and inure to the
benefit of all successors of each employee participating in the
Plan, including, without limitation, such employee's estate and
the executors, administrators or trustees thereof, heirs and
legatees, and any receiver, trustee in bankruptcy or
representative of creditors of such employee.
11.9 GOVERNING LAW. The law of the State of Colorado shall
govern all matters relating to this Plan except to the extent it
is superseded by the laws of the United States.
