<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 23 ,1996
REGISTRATION NO. _________________
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-----------------------------
BUFFETS, INC.
(Exact name of registrant as specified in its charter)
MINNESOTA 41-1462294
(State of other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
10260 VIKING DRIVE, SUITE 100 55344
EDEN PRAIRIE, MINNESOTA (ZIP CODE)
(Address of Principal Executive Offices)
BUFFETS, INC.
1995 STOCK OPTION PLAN
AND
OCTOBER 31, 1995 NONSTATUTORY STOCK OPTION AGREEMENT
WITH WALTER R. BARRY, JR.
(Full title of the plan)
ROE H. HATLEN, CHAIRMAN COPY TO:
BUFFETS, INC. DOUGLAS P. LONG
10260 VIKING DRIVE, SUITE 100 FAEGRE & BENSON PROFESSIONAL LIMITED
EDEN PRAIRIE, MN 55344 LIABILITY PARTNERSHIP
(Name and address of 2200 NORWEST CENTER
agent for service) 90 SOUTH SEVENTH STREET
MINNEAPOLIS, MN 55402
(612) 942-9760
(Telephone number, including area code, of agent for service)
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
Proposed Proposed
Title of Securities Amount to be Maximum Offering Maximum Aggregate Amount of
to be Registered Registered Price Per Share Offering Price Registration Fee
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock,
$0.01 par value 1,000,000 Shares $11.9375(1) $11,937,500.00(1)
- -----------------------------------------------------------------------------------------------------
Common Stock,
$0.01 par value 10,000 Shares $10.50 $ 105,000.00
- -----------------------------------------------------------------------------------------------------
TOTAL 1,010,000 Shares $12,042,500.00 $4,153.00
- -----------------------------------------------------------------------------------------------------
</TABLE>
(1) Estimated solely for the purpose of determining the registration fee
pursuant to the provisions of Rule 457(h) under the Securities Act of 1933, as
amended, based on the average of the high and low sale prices of the
registrant's Common Stock as reported on the National Association of
Securities Dealers Automated Quotation System on February 20, 1996.
(2) Rights to purchase Preferred Shares are initially attained to and trade
with the Common Stock. Value attributable to such rights, if any, is
reflected in the market price for the Common Stock.
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
2
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents previously filed with the Securities and
Exchange Commission (the "Commission") pursuant to the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), are, as of their respective
dates, incorporated by reference in this Registration Statement:
(a) The Annual Report on Form 10-K of Buffets, Inc. (the "Company") for
the fiscal year ended December 28, 1994 (which incorporates by reference
certain portions of the Company's 1994 Annual Report to Shareholders,
including financial statements and accompanying information, and certain
portions of the Company's definitive Proxy Statement for the Company's Annual
Meeting of Shareholders held on May 9, 1995);
(b) All other reports filed pursuant to Section 13(a) or 15(d) of the
Exchange Act since the end of the fiscal year covered by the Annual Report on
Form 10-K referred to in (a) above; and
(c) The description of the Company's Common Stock contained in the
Company's Registration Statement on Form 8-A dated March 27, 1986 and
Amendment No. 1 thereto dated May 11, 1992, and the Company's Registration
Statement on Form 8-A dated October 30, 1995 which contains a description of
the related Rights to Purchase Preferred Shares, together with any amendments
or reports filed for the purpose of updating such descriptions.
In addition, all documents filed by the Company pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act subsequent to the date of this
Registration Statement and prior to the filing of a post-effective amendment
which indicates that all shares of Common Stock offered have been sold or
which deregisters all shares of Common Stock then remaining unsold, shall be
deemed to be incorporated by reference in, and to be a part of, this
Registration Statement from the date of filing of such documents.
Any statement contained in a document incorporated, or deemed to be
incorporated, by reference herein shall be deemed to be modified or
superseded for purposes of this Registration Statement to the extent that a
statement contained herein or incorporated herein by reference or in any
other subsequently filed document that is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any statement so
modified or superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES.
Not Applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not Applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 4.01 of the Company's Restated By-Laws provides that the Company
shall indemnify its directors and officers to the full extent required or
permitted by Minnesota
II-1
<PAGE>
Statutes or by other provisions of law. Section 302A.521 of the Minnesota
Statutes provides in substance that, unless prohibited or limited by its
articles of incorporation or by-laws, a corporation must indemnify an officer
or director who is made or threatened to be made a party to a proceeding by
reason of his or her capacity as an officer or director against judgments,
penalties, fines, settlements and reasonable expenses, including attorneys'
fees and disbursements, incurred by such person in connection with the
proceeding, if certain criteria are met. These criteria, all of which must
be met by the person seeking indemnification, are: (a) that such person has
not been indemnified by another organization for the same judgments,
penalties, fines, settlements and expenses; (b) that such person must have
acted in good faith; (c) that no improper personal benefit was obtained by
such person and that, if applicable, certain statutory conflict of interest
provisions have been satisfied; (d) that, in the case of a criminal
proceeding, such person had no reasonable cause to believe that the conduct
was unlawful; and (e) that such person acted in a manner he or she reasonably
believed was in the best interests of the corporation or, in certain limited
circumstances, not opposed to the best interests of the corporation. The
determination as to eligibility for indemnification is made by the members of
the corporation's board of directors, or a committee thereof, who are at the
time not parties to the proceedings under consideration, by special legal
counsel, by the shareholders who are not parties to the proceedings or by a
court.
Article VIII of the Company's Amended and Restated Articles of
Incorporation provides that a director shall not be liable to the Company or
its shareholders for monetary damages for breach of fiduciary duty as
director, except: (i) for any breach of the director's duty of loyalty to the
Company or its shareholders; (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law; (iii) for
dividends, stock repurchases and other distributions made in violation of
Minnesota law or for violations of the Minnesota securities laws; (iv) for
any transaction from which the director derived an improper personal benefit;
or (v) for any act or omission occurring prior to the effective date of the
provision in the Company's Amended and Restated Articles of Incorporation
limiting such liability. Article VIII does not affect the availability of
equitable remedies, such as an action to enjoin or rescind a transaction
involving a breach of fiduciary duty, although, as a practical matter,
equitable relief may not be available. Article VIII also does not limit the
liability of directors for violations of, or relieve them from the necessity
of complying with, the federal securities laws.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not Applicable.
ITEM 8. EXHIBITS.
Exhibit
-------
4.1 Composite Amended and Restated Articles of Incorporation of
the Company (incorporated by reference to Exhibit 4.1 to the
Company's Registration Statement on Form S-3, File No. 33-63694).
4.2 By-Laws of the Company (incorporated by reference to Exhibit
3(b) to the Company's Annual Report on Form 10-K for the fiscal
year ended December 29, 1993).
4.3 Form of Rights Agreement, dated as of October 24, 1995, by and
between the Company and American Stock Transfer and Trust Company
(incorporated by reference to Exhibit 1 to the Company's Current
Report on Form 8-K dated October 24, 1995).
II-2
<PAGE>
4.4 Amended and Restated Credit Agreement by and between the
Company and First Bank National Association dated as of April 16,
1993 (incorporated by reference to Exhibit 4.3 to the Company's
Registration Statement on Form S-3, File No. 33-63694).
4.5 Amendment No. 1 dated as of June 29, 1993 to Amended and
Restated Credit Agreement by and between the Company and First Bank
National Association (incorporated by reference to Exhibit 19(b) to
the Company's Quarterly Report on Form 10-Q for the quarter ended
July 14, 1993).
4.6 Letter dated July 8, 1993 from First Bank National Association
to the Company amending Amended and Restated Credit Agreement
(incorporated by reference to Exhibit 19(c) to the Company's
Quarterly Report on Form 10-Q for the quarter ended July 14, 1993).
4.7 Amendment No. 2 dated as of March 27, 1994 to Amended and
Restated Credit Agreement by and between the Company and First Bank
National Association (incorporated by reference to Exhibit 10(a) to
the Company's Quarterly Report on Form 10-Q for the quarter ended
April 20, 1994).
4.8 Amendment No. 3 dated as of April 8, 1994 to Amended and
Restated Credit Agreement by and between the Company and First Bank
National Association (incorporated by reference to Exhibit 10(b) to
the Company's Quarterly Report on Form 10-Q for the quarter ended
April 20, 1994).
4.9 Amendment No. 4 dated as of June 30, 1994 to Amended and
Restated Credit Agreement by and between the Company and First Bank
National Association (incorporated by reference to Exhibit 10 to
the Company's Quarterly Report on Form 10-Q for the quarter ended
July 13, 1994).
4.10 Amendment No. 4 dated as of August 4, 1995 to Amended and
Restated Credit Agreement by and between the Company and First Bank
National Association (incorporated by reference to Exhibit 10(g) to
the Company's Quarterly Report on Form 10-Q for the quarter ended
July 12, 1995).
5 Opinion of Faegre & Benson Professional Limited Liability
Partnership.
23.1 Consent of Faegre & Benson Professional Limited Liability
Partnership (included in Exhibit 5).
23.2 Consent of Independent Auditors.
24 Powers of Attorney (included with signatures to this
Registration Statement).
99.1 Buffets, Inc. 1995 Stock Option Plan (incorporated by
reference to Exhibit 10(k) to the Company's Quarterly Report on
Form 10-Q for the quarter ended October 4, 1995).
99.2 Nonstatutory Stock Option Agreement dated October 31, 1995 by
and between the Company and Walter R. Barry, Jr.
II-3
<PAGE>
ITEM 9. UNDERTAKINGS.
A. 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:
(a) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933, as amended (the "Securities Act");
(b) 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 hereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in this
Registration Statement; and
(c) 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;
PROVIDED, however, that paragraphs (A)(1)(a) and (A)(1)(b) shall 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 Company
pursuant to Sections 13 or 15(d) of the Exchange Act that are incorporated by
reference 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 herein, 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.
B. he Company hereby undertakes that, for purposes of determining any
liability under the Securities Act, each filing of the Company's annual
report pursuant to Sections 13(a) or 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 herein,
and the offering of such securities at that time shall be deemed to the
initial BONA FIDE offering thereof.
C. 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 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 of
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.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as
amended, the Company certifies that it has reasonable grounds to believe that
it meets all of the requirements for filing on Form S-8 and has duly caused
this Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Minneapolis, State of Minnesota,
on February 22, 1996.
BUFFETS, INC.
By: /s/ Roe H. Hatlen
------------------------------------------
Roe H. Hatlen
Chairman and Chief Executive Officer
Each of the undersigned officers and directors of Buffets, Inc.
hereby appoints Roe H. Hatlen and Clark C. Grant, and each of them (with full
power to act alone), as attorneys and agents for the undersigned, with full
power of substitution, for and in the name, place, and stead of the
undersigned, to sign and file with the Securities and Exchange Commission
under the Securities Act of 1933, as amended, any and all amendments
(including post-effective amendments) and exhibits to this Registration
Statement and any and all applications, instruments, or documents to be filed
with the Securities and Exchange Commission pertaining to the registration of
the securities covered hereby, with full power and authority to do and perform
any and all acts and things whatsoever requisite and necessary or desirable.
Pursuant to the requirements of the Securities Act of 1933, as
amended, this Registration Statement has been signed by the following persons
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY DATE
- --------- -------- ----
<S> <C> <C>
/s/ Roe H. Hatlen Chairman, Chief Executive Officer and
- ------------------------ Director (Principal Executive Officer) February 22, 1996
Roe H. Hatlen
/s/ Clark C. Grant Executive Vice President and Treasurer
- ------------------------ (Principal Financial Officer) February 22, 1996
Clark C. Grant
/s/ Marguerite C. Nesset Vice President and Controller (Principal
- ------------------------ Accounting Officer) February 22, 1996
Marguerite C. Nesset
/s/ Raymond A. Lipkin
- ------------------------ Director February 22, 1996
Raymond A. Lipkin
/s/ Alan S. McDowell
- ------------------------ Director February 22, 1996
Alan S. McDowell
/s/ Keith H. Erickson
- ------------------------ Director February 22, 1996
Keith H. Erickson
/s/ David Michael Winton
- ------------------------ Director February 22, 1996
David Michael Winton
- ------------------------ Director ____________, 1996
Walter R. Barry, Jr.
</TABLE>
II-5
<PAGE>
INDEX TO EXHIBITS
Exhibit
4.1 Composite Amended and Restated Articles of
Incorporation of the Company (incorporated by
reference to Exhibit 4.1 to the Company's
Registration Statement on Form S-3, File No.
33-63694).......................................Incorporated by reference
4.2 By-Laws of the Company (incorporated by
reference to Exhibit 3(b) to the Company's
Annual Report on Form 10-K for the fiscal year
ended December 29, 1993)........................Incorporated by reference
4.3 Form of Rights Agreement, dated as of October
24, 1995, by and between the Company and
American Stock Transfer and Trust Company
(incorporated by reference to Exhibit 1 to the
Company's Current Report on Form 8-K dated
October 24, 1995)...............................Incorporated by reference
4.4 Amended and Restated Credit Agreement by and
between the Company and First Bank National
Association dated as of April 16, 1993
(incorporated by reference to Exhibit 4.3 to the
Company's Registration Statement on Form S-3,
File No. 33-63694)..............................Incorporated by reference
4.5 Amendment No. 1 dated as of June 29, 1993 to
Amended and Restated Credit Agreement by and
between the Company and First Bank National
Association (incorporated by reference to
Exhibit 19(b) to the Company's Quarterly Report
on Form 10-Q for the quarter ended July 14,
1993)...........................................Incorporated by reference
4.6 Letter dated July 8, 1993 from First Bank
National Association to the Company amending
Amended and Restated Credit Agreement
(incorporated by reference to Exhibit 19(c) to
the Company's Quarterly Report on Form 10-Q for
the quarter ended July 14, 1993)................Incorporated by reference
II-6
<PAGE>
4.7 Amendment No. 2 dated as of March 27, 1994 to
Amended and Restated Credit Agreement by and
between the Company and First Bank National
Association (incorporated by reference to
Exhibit 10(a) to the Company's Quarterly Report
on Form 10-Q for the quarter ended April 20,
1994)...........................................Incorporated by reference
4.8 Amendment No. 3 dated as of April 8, 1994 to
Amended and Restated Credit Agreement by and
between the Company and First Bank National
Association (incorporated by reference to
Exhibit 10(b) to the Company's Quarterly Report
on Form 10-Q for the quarter ended April 20,
1994)...........................................Incorporated by reference
4.9 Amendment No. 4 dated as of June 30, 1994 to
Amended and Restated Credit Agreement by and
between the Company and First Bank National
Association (incorporated by reference to
Exhibit 10 to the Company's Quarterly Report on
Form 10-Q for the quarter ended July 13, 1994)..Incorporated by reference
4.10 Amendment No. 4 dated as of August 4, 1995 to
Amended and Restated Credit Agreement by and
between the Company and First Bank National
Association (incorporated by reference to
Exhibit 10(g) to the Company's Quarterly Report
on Form 10-Q for the quarter ended July 12,
1995)...........................................Incorporated by reference
5 Opinion of Faegre & Benson Professional Limited
Liability Partnership...........................Filed Electronically
23.1 Consent of Faegre & Benson Professional Limited
Liability Partnership (included in Exhibit 5)
23.2 Consent of Independent Auditors.................Filed Electronically
24.1 Powers of Attorney (included with signatures to
this Registration Statement)
99.1 Buffets, Inc. 1995 Stock Option Plan
(incorporated by reference to Exhibit 10(k) to
the Company's Quarterly Report on Form 10Q for
the quarter ended October 4, 1995)..............Incorporated by Reference
II-7
<PAGE>
99.2 Nonstatutory Stock Option Agreement dated
October 31, 1995 by and between Buffets, Inc.
and Walter R. Barry, Jr.........................Filed Electronically
II-8
<PAGE>
EXHIBIT 5
FAEGRE & BENSON
Professional Limited Liability Partnership
2200 Norwest Center, 90 South Seventh Street
Minneapolis, Minnesota 55402-3901
Telephone 612-336-3000
Facsimile 612-336-3026
February 22, 1996
Buffets, Inc.
Suite 100
10260 Viking Drive
Eden Prairie, MN 55344
Gentlemen:
In connection with the Registration Statement on Form S-8 (the
"Registration Statement") relating to the offering of up to 1,000,000 shares
of Common Stock, par value $.01 per share, of Buffets, Inc. (the "Company"),
pursuant to the Buffets, Inc. 1995 Stock Option Plan, and the offering of up
to 10,000 shares of Common Stock, par value $.01 per share, of the Company,
pursuant to the Nonstatutory Stock Option Agreement dated October 31, 1995 by
and between the Company and Walter R. Barry, Jr., we have examined such
corporate records and other documents, including the Registration Statement,
and have reviewed such matters of law, as we have deemed relevant hereto, and,
based upon such examination and review, it is our opinion that all necessary
corporate action on the part of the Company has been taken to authorize the
issuance and sale of such shares of Common Stock by the Company, and that,
when issued and sold as contemplated in the Registration Statement, such
shares will be legally issued, fully paid and non-assessable under the current
laws of the State of Minnesota.
We consent to the filing of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
/s/ FAEGRE & BENSON PROFESSIONAL
LIMITED LIABILITY PARTNERSHIP
FAEGRE & BENSON PROFESSIONAL
LIMITED LIABILITY PARTNERSHIP
<PAGE>
EXHIBIT 23.2
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement
of Buffets, Inc. on Form S-8 of our report dated February 10, 1995, incorporated
by reference in the Annual Report on Form 10-K of Buffets, Inc. for the fiscal
year ended December 28, 1994.
/s/ DELOITTE & TOUCHE LLP
Minneapolis, Minnesota
February 19, 1996
<PAGE>
EXHIBIT 99.2
NONSTATUTORY STOCK OPTION AGREEMENT
- --------------------------------------------------------------------------------
Full Name of Optionee:
Walter R. Barry, Jr.
- --------------------------------------------------------------------------------
No. of Shares Covered: Date of Grant
10,000 October 31, 1995
- --------------------------------------------------------------------------------
Exercise Price Per Share: Expiration Date
$10.50 October 31, 2005
- --------------------------------------------------------------------------------
Exercise Schedule (Cumulative):
No. of Shares
Initial Date of As to Which Option
Exercisability Becomes Exercisable
-------------- -------------------
October 31, 1995 5,000
October 31, 1996 1,000
October 31, 1997 1,000
October 31, 1998 1,000
October 31, 1999 1,000
October 31, 2000 1,000
This NONSTATUTORY STOCK OPTION AGREEMENT is made by and between
Buffets, Inc., a Minnesota corporation (the "Company"), and Walter R. Barry,
Jr., a director of the Company (the "Optionee").
WHEREAS the Company desires to offer the Optionee an opportunity to
purchase Common Stock of the Company, par value $.01 per share (the "Common
Shares"), according to the terms set forth herein; and
WHEREAS the Optionee wishes to accept such opportunity, subject to and
in accordance with the terms and conditions set forth herein;
NOW THEREFORE, the Company and the Optionee mutually agree as follows:
1. GRANT OF OPTION. The Company hereby grants to the Optionee the
right and option (the "Option") to purchase the number of Common Shares
specified at the beginning of this Agreement, on the terms and conditions
hereinafter set forth. The Option is
<PAGE>
intended by the Company to be a nonstatutory stock option for purposes of the
Internal Revenue Code of 1986, as amended (the "Code").
2. PURCHASE PRICE. Subject to the provisions of paragraph 9
hereof, the purchase price of each of the Common Shares subject to the Option
shall be the exercise price per share specified at the beginning of this
Agreement, which price is equal to the fair market value of a Common Share on
the date of Grant.
3. OPTION PERIOD; TERMINATION OF OPTION.
(a) Subject to the provisions of paragraphs 5 and 6 hereof, the
Option shall become exercisable as to the number of shares and on the dates
specified in the exercise schedule at the beginning of this Agreement. The
exercise schedule shall be cumulative; thus, to the extent the Option has not
already been exercised and has not expired, terminated or been cancelled, the
Optionee may at any time, and from time to time, purchase all or any portion of
the Common Shares then purchasable under the exercise schedule.
(b) The Option and all rights to purchase shares thereunder shall
cease on the earliest of:
(i) the expiration date specified at the beginning of this
Agreement;
(ii) the expiration of the period specified in
paragraph 5(b) after the death or permanent disability of the
Optionee;
(iii) the date, if any, fixed for cancellation pursuant to
paragraph 7 hereof; or
(iv) ninety (90) days after the date the Optionee ceases to
be a director of the Company; provided, however, that the Option shall
be exercisable during such 90-day period only to the extent the Option
was exercisable as of the date the Optionee ceases to be a director
unless such cessation results from the Optionee's death or permanent
disability.
Notwithstanding any other provision in this Agreement, in no event may anyone
exercise the Option, in whole or in part, after its original expiration date.
4. MANNER OF EXERCISING OPTION.
(a) Subject to the terms and conditions of this Agreement, the Option
may be exercised by mailing written notice of exercise to the Company at its
principal executive office, marked for the attention of its Secretary. The
notice shall state the election to exercise the Option and the number of Common
Shares in respect of which it is being exercised and
-2-
<PAGE>
shall be signed by the person exercising the Option. If the person exercising
the Option is not the Optionee, he or she shall also send with the notice
appropriate proof of his or her right to exercise the Option. Such notice shall
be accompanied by either:
(i) payment (by check, bank draft or money order payable to
the Company) of the full purchase price of the Common Shares being
purchased; or
(ii) certificates for unencumbered Common Shares having an
aggregate Fair Market Value (as defined below) on the date of exercise
equal to the purchase price of the Common Shares to be purchased; or
(iii) a combination of cash and such unencumbered Common
Shares.
The employee shall duly endorse all certificates delivered to the Company
pursuant to the foregoing subparagraph (a)(ii) or (iii) in blank and shall
represent and warrant in writing that he or she is the owner of the shares so
delivered free and clear of all liens, security interests and other restrictions
or encumbrances.
(b) As soon as practicable after receipt of the purchase price
provided for above, the Company shall deliver to the person exercising the
Option, in the name of the Optionee, or his or her estate or heirs, as the case
may be, a certificate or certificates representing the Common Shares being
purchased. The Company shall pay all original issue or transfer taxes, if any,
with respect to the issue or transfer of the Common Shares to the person
exercising the Option and all fees and expenses necessarily incurred by the
Company in connection therewith. All Common Shares so issued shall be fully
paid and nonassessable. Notwithstanding anything to the contrary in this
Agreement, the Company shall not be required, upon the exercise of this Option
or any part thereof, to issue or deliver any Common Shares prior to the
completion of such registration or other qualification of such Common Shares
under any Federal or State rule or regulation as the Company shall determine to
be necessary or desirable.
(c) For purposes of this paragraph 4, "Fair Market Value" of a Common
Share at a specified date shall mean the closing price of a Common Share on the
date immediately preceding such date or, if no sale of Common Shares shall have
occurred on that date, on the next preceding day on which a sale of the shares
occurred, on the composite tape for New York Stock Exchange listed shares or, if
the shares are not quoted on the composite tape for New York Stock Exchange
listed shares, on the principal United States Securities Exchange registered
under the Securities Exchange Act of 1934, as amended, on which the shares are
listed, or, if the shares are not listed on any such exchange, on The Nasdaq
Stock Market or, if the shares are not quoted on The Nasdaq Stock Market, the
mean between the closing "bid" and the closing "asked" quotation of a Common
Share on the date immediately preceding the date as of which such Fair Market
Value is being determined, or, if no closing
-3-
<PAGE>
bid or asked quotation is made on that date, on the next preceding day on which
a quotation is made, on the National Association of Securities Dealers, Inc.
Automated Quotations System or any system then in use. Notwithstanding anything
stated in this paragraph, if the applicable securities exchange or system has
closed for the day by the time the determination is being made, all references
in this paragraph to the date immediately preceding the date in question shall
be deemed to be references to the date in question.
5. TRANSFERABILITY AND TERMINATION OF THE OPTION.
(a) During the lifetime of the Optionee, only his guardian or legal
representative may exercise the Option. The Option shall not be assignable or
transferable by the Optionee otherwise than by will or the laws of descent and
distribution.
(b) The Option may be exercised after the death or permanent
disability of the Optionee by such individual's legal representatives, heirs or
legatees, but only within one year after the death or permanent disability of
the Optionee.
(c) In the event of the death or permanent disability of the
Optionee, the Option shall become immediately exercisable in full.
6. CHANGE IN CONTROL.
(a) Anything to the contrary in this Agreement notwithstanding
(including paragraph 7 hereof), in the event of a "Change in Control" of the
Company, as defined in paragraph 6(b), the Option, if not expired, shall become
immediately exercisable in full.
(b) A "Change in Control", for purposes of this Agreement, means:
(i) A majority of the directors of the Company shall be
persons other than persons:
(A) for whose election proxies shall have been
solicited by the Board of Directors of the Company, or
(B) who are then serving as directors appointed by the
Board of Directors to fill vacancies on the Board of Directors
caused by death or resignation (but not by removal) or to fill
newly-created directorships;
-4-
<PAGE>
(ii) 30% or more of the outstanding voting stock of the
Company shall have been acquired or beneficially owned (as defined in
Rule 13d-3 under the Exchange Act) by any person (other than the
Company, a subsidiary of the Company or the person holding the option)
or group of persons (which group does not include the person holding
the option) acting in concert; or
(iii) The shareholders of the Company shall have approved a
definitive agreement or plan to
(A) merge or consolidate the Company with or into
another corporation (other than (1) a merger or consolidation
with a subsidiary of the Company or (2) a merger in which the
Company is the surviving corporation and either (a) no
outstanding voting stock of the Company (other than fractional
shares) held by shareholders immediately prior to the merger is
converted into cash, securities, or other property or (b) all
holders of outstanding voting stock of the Company (other than
fractional shares) immediately prior to the merger have
substantially the same proportionate ownership of the voting
stock of the Company or of its parent corporation immediately
after the merger);
(B) exchange, pursuant to a statutory exchange of
shares of voting stock of the Company held by shareholders of the
Company immediately prior to the exchange, shares of one or more
classes or series of voting stock of the Company for cash,
securities or other property;
(C) sell or otherwise dispose of all or substantially
all of the assets of the Company (in one transaction or a series
of transactions); or
(D) liquidate or dissolve the Company;
PROVIDED, HOWEVER, that if the transaction contemplated by
such definitive agreement or plan approved by the shareholders of
the Company is not actually consummated, a Change in Control
shall retroactively be deemed not to have occurred and the
acceleration of the exercise dates of options pursuant to
paragraph 6(a) shall be deemed null and void;
unless a majority of the voting stock (or the voting equity interest) of the
surviving corporation or of any corporation (or other entity) acquiring all or
substantially all of the assets of the Company (in the case of a merger,
consolidation or disposition of assets) or the Company or its parent corporation
(in the case of a statutory share exchange) is beneficially owned by the
Optionee or a group of persons that includes the Optionee acting in concert.
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<PAGE>
7. DISSOLUTION, LIQUIDATION, MERGER. In the event of a sale by
the Company of all of its assets and the consequent discontinuance of its
business, or in the event of a merger, statutory share exchange, consolidation
or liquidation, the Board of Directors, shall, as of the time of the adoption of
the plan for sale, merger, statutory share exchange, consolidation or
liquidation, provide for the termination of the Option as of the effective date
of such event; PROVIDED, HOWEVER, that the person holding the Option shall be
given either as of or prior to the sale, merger, statutory share exchange,
consolidation or liquidation (a) a reasonable time within which to exercise such
exercisable portions of their respective options prior to the effectiveness of
such sale, merger, statutory share exchange, consolidation or liquidation; or
(b) equivalent options covering shares of stock of the corporation succeeding
the Company by reason of such sale, merger, statutory share exchange,
consolidation or liquidation.
The grant of the Option shall not limit in any way the right or power
of the Company or the Board of Directors to make adjustments, reclassifications,
reorganizations or changes in the Company's capital or business structure or to
merge, consolidate, dissolve, liquidate, sell or transfer all or any portion of
the Company's business or assets.
8. SHAREHOLDER RIGHTS BEFORE EXERCISE. The Optionee shall have
none of the rights of a shareholder of the Company with respect to any share
subject to the Option until the share is actually issued to him upon exercise of
the Option.
9. ADJUSTMENT FOR CHANGES IN CAPITALIZATION. Appropriate
adjustments in the number and type of Common Shares subject to the Option and in
the Option price shall be made to give effect to adjustments made in the number
or type of Common Shares of the Company through a recapitalization,
reclassification, stock dividend, stock split, stock combination, or other
relevant change, provided that fractional Common Shares shall be rounded to the
nearest whole share.
10. TAX WITHHOLDING. Delivery of Common Shares upon exercise of
the Option shall be subject to any required withholding taxes. A person
exercising the Option may, as a condition precedent to receiving the Common
Shares, be required to pay the Company a cash amount equal to the amount of any
required withholdings.
11. GENERAL. The Company shall at all times during the term of this
Option reserve and keep available such number of Common Shares as will be
sufficient to satisfy the requirements of this Agreement. This Agreement shall
be binding in all respects on the Optionee's heirs, representatives, successors
and assigns. This Agreement is entered into under the laws of the State of
Minnesota and shall be construed and interpreted thereunder.
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<PAGE>
IN WITNESS WHEREOF, the Optionee and the Company have executed this
Agreement as of the day and year first above written.
_____________________________________________
Walter R. Barry, Jr.
BUFFETS, INC.
By __________________________________________
Its _______________________________________
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