February 15, 2000
Securities and Exchange Commission
450 Fifth Street N.W.
Washington, D.C. 20549
Re: Buffets, Inc.
-------------
Ladies and Gentlemen:
On behalf of Buffets, Inc., a Minnesota corporation (the "Company"), we
hereby transmit for filing, pursuant to the Electronic Data Gathering, Analysis
and Retrieval System, a copy of the Company's Registration Statement on Form S-8
relating to the Buffets, Inc. 1999 Stock Option Plan.
The applicable filing fee is $1,040.16 and the SEC should withdraw that
amount from the Company's account (CIK no. 0000750274) at Mellon Bank.
Very truly yours,
/s/ Jennifer L. Cumming
------------------------
Jennifer L. Cumming
<PAGE>
As filed with the Securities and Exchange Commission on
February 15, 2000 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 Identification No.)
incorporation or organization)
10260 Viking Drive 55344
Eden Prairie, Minnesota (Zip Code)
(Address of Principal Executive Offices)
BUFFETS, INC. 1999 STOCK OPTION PLAN
- --------------------------------------------------------------------------------
(Full title of the plans)
Roe H. Hatlen, Chairman Copy to:
Buffets, Inc. Douglas P. Long
10260 Viking Drive Faegre & Benson LLP
Eden Prairie, MN 55344 2200 Norwest Center
(Name and address of 90 South Seventh Street
agent for service) Minneapolis, MN 55402
(612) 942-9760
(Telephone number, including area code, of agent for service)
CALCULATION OF REGISTRATION FEE
<TABLE>
<S> <C> <C> <C> <C>
Proposed Proposed
Title of Securities Amount to be Maximum Offering Maximum Aggregate Amount of
to be Registered Registered (1) Price Per Share Offering Price Registration Fee
- ------------------------------------------------------------------------------------------------
Common Stock, $.01
par value 400,000 Shares $ 9.85 $3,940,000 $1,040.16
================================================================================================
</TABLE>
(1) Maximum number of shares available upon exercise of options issued under
the Buffets, Inc. 1999 Stock Option Plan.
(2) Estimated solely for the purpose of calculating the registration fee under
Rule 457(c) and (h)(1), based upon the average of the high and low sale
prices per share of the registrant's Common Stock on February 11, 2000, as
reported on the Nasdaq National Market System.
<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 30, 1998 (which incorporates by reference certain
portions of the Company's 1998 Annual Report to Shareholders, including
financial statements and accompanying information, and certain portions of the
Company's definitive proxy statement for the Company's 1999 Annual Meeting of
Shareholders);
(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 those 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 By-Laws provides that the Company shall
indemnify its directors and officers to the full extent required or permitted by
Minnesota Statutes or by other provisions of law. Section 302A.521 of the
Minnesota Business Corporation Act provides in substance that, unless prohibited
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<PAGE>
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 official capacity 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 acted in good faith;
(c) that no improper personal benefit was obtained by such person
and certain statutory conflicts of interest provisions have been
satisfied, if applicable;
(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 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 of the board who
are at the time not parties to the proceeding under consideration, by special
legal counsel, by the shareholders who are not parties to the proceeding, or by
a court.
Article VIII of the Company's Composite Amended and Restated Articles
of Incorporation provides that no director shall be personally liable to the
Company or its shareholders for monetary damages for breach of fiduciary duty as
a director, except:
(1) for any breach of the director's duty of loyalty to the
Company or its shareholders;
(2) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law;
(3) for dividends, stock repurchases, and other distributions
made in violation of Minnesota law or for violations of the Minnesota
securities laws;
(4) for any transaction from which the director derived an
improper personal benefit; or
(5) for any act or omission occurring prior to the effective date
of the provision limiting such liability in the Company's Composite
Amended and Restated Articles of Incorporation.
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. This Article also does not limit liability of the 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.
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<PAGE>
Item 8. Exhibits.
Exhibit
Number Exhibit
------- -------
4.1 Composite Amended and Restated Articles of Incorporation of the
Company. (1)
4.2 By-Laws of the Company. (2)
4.3 Form of Rights Agreement, dated as of October 24, 1995 between
the Company and the American Stock Transfer and Trust Company, as
Rights Agent. (3)
5 Opinion of Faegre & Benson LLP.
3.1 Consent of Faegre & Benson LLP (included in Exhibit 5).
23.2 Independent Auditors' Consent of Deloitte & Touche LLP.
24 Powers of Attorney (included with signatures to this Registration
Statement).
99 Buffets, Inc. 1999 Stock Option Plan.
- --------------------------
(1) Incorporated by reference to Exhibit 4.1 to Registration Statement on
Form S-3 dated June 2, 1993 (Registration No. 33-63694).
(2) Incorporated by reference to Exhibit 3(b) to Annual Report on Form
10-K for the fiscal year ended December 29, 1993.
(3) Incorporated by reference to Exhibit 1 to Report on Form 8-K dated
October 24, 1995.
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.
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<PAGE>
(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. The 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 SEC 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.
5
<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 14,
2000.
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 H. Thomas Mitchell 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.
Signature Capacity Date
- --------- -------- ----
<TABLE>
<S> <C> <C>
/s/ Roe H. Hatlen Chairman, Chief Executive Officer and February 14, 2000
- ------------------------ Director (Principal Executive Officer)
Roe H. Hatlen
/s/ Clark C. Grant Senior Vice President of Finance and February 14, 2000
- ------------------------ Treasuer (Principal Financial Officer)
Clark C. Grant
/s/ Marguerite C. Nesset Vice President of Accounting and February 14, 2000
- ------------------------ Controller (Principal Accounting Officer)
Marguerite C. Nesset
/s/ Walter R. Barry, Jr. Director February 14, 2000
- ------------------------
Walter R. Barry, Jr.
/s/ Marvin W. Goldstein Director February 14, 2000
- ------------------------
Marvin W. Goldstein
/s/ Alan S. McDowell Director February 14, 2000
- ------------------------
Alan S. McDowell
/s/ C. Dennis Scott Director February 14, 2000
- ------------------------
C. Dennis Scott
/s/ Michael T. Sweeney Director February 14, 2000
- ------------------------
Michael T. Sweeney
</TABLE>
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INDEX TO EXHIBITS
<TABLE>
<S> <C> <C>
Exhibit Manner of Filing
- ------- ----------------
4.1 Composite Amended and Restated Articles of
Incorporation of the Company.......................................Incorporated by reference
4.2 By-Laws of the Company.............................................Incorporated by reference
4.3 Form of Rights Agreement dated as of October 24, 1995
between the Company and the American Stock Transfer and
Trust Company, as Rights Agent.....................................Incorporated by reference
5 Opinion of Faegre & Benson LLP..........................................Filed Electronically
23.1 Consent of Faegre & Benson LLP (included in Exhibit 5)..................Filed Electronically
23.2 Independent Auditors' Consent of Deloitte & Touche LLP..................Filed Electronically
24 Powers of Attorney (included with signatures to this
Registration Statement).................................................Filed Electronically
99 Buffets, Inc. 1999 Stock Option Plan....................................Filed Electronically
</TABLE>
7
Exhibit 5
February 14, 2000
Buffets, Inc.
10260 Viking Drive
Eden Prairie, Minnesota 55344
Ladies and Gentlemen:
In connection with the Registration Statement on Form S-8 under the
Securities Act of 1933, as amended (the "Registration Statement"), relating to
the offering of up to 400,000 shares of Common Stock, $.01 par value (the
"Shares"), of Buffets, Inc., a Minnesota corporation (the "Company"), pursuant
to the Buffets, Inc. 1999 Stock Option Plan, 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 the Shares and that, when issued and sold as contemplated by the terms
of the options and the Registration Statement, the Shares will be legally
issued, fully paid and nonassessable under the current laws of the State of
Minnesota.
We are admitted to the practice of law in the State of Minnesota and the
foregoing opinions are limited to the laws of that state and the federal laws of
the United States of America.
We consent to the filing of this opinion as an exhibit to the Registration
Statement.
Very truly yours,
/s/ Faegre & Benson LLP
-----------------------
FAEGRE & BENSON LLP
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 15, 1999, incorporated
by reference in the Annual Report on Form 10-K of Buffets, Inc. for the fiscal
year ended December 30, 1998.
/s/ Deloitte & Touche LLP
- -------------------------
Minneapolis, Minnesota
February 8, 2000
Exhibit 99
BUFFETS, INC.
1999 STOCK OPTION PLAN
1. PURPOSE OF PLAN. The purpose of this Buffets, Inc. 1999 Stock Option
Plan (the "Plan"), is to promote the interests of Buffets, Inc., a Minnesota
corporation (the "Company"), and its shareholders by providing key employees of
the Company and its subsidiaries, if any, with an opportunity to acquire a
proprietary interest in the Company and thereby develop a stronger incentive to
put forth maximum effort for the continued success and growth of the Company and
its subsidiaries. In addition, the opportunity to acquire a proprietary interest
in the Company will aid in attracting and retaining key personnel of outstanding
ability.
2. ADMINISTRATION OF PLAN. This Plan shall be administered by a committee
(the "Committee") appointed by the Company's board of directors (the "Board"). A
majority of the members of the Committee shall constitute a quorum for any
meeting of the Committee, and the acts of a majority of the members present at
any meeting at which a quorum is present or the acts unanimously approved in
writing by all members of the Committee shall be the acts of the Committee.
Subject to the provisions of this Plan, the Committee may from time to time
adopt such rules for the administration of this Plan as it deems appropriate.
The decision of the Committee on any matter affecting this Plan or the rights
and obligations arising under this Plan or any option granted hereunder or any
related Limited Right, as hereinafter defined, shall be final, conclusive and
binding upon all persons, including without limitation the Company,
shareholders, employees and optionees. To the full extent permitted by law, no
member of the Committee shall be liable for any action or determination taken or
made in good faith with respect to this Plan or any option or Limited Right
granted hereunder.
3. SHARES SUBJECT TO PLAN. The shares that may be made subject to options
granted under this Plan shall be authorized but previously unissued shares of
Common Stock (the "Common Shares") of the Company, of the par value of $.01 per
share, and they shall not exceed 400,000 in the aggregate, except that, if any
option lapses or terminates for any reason before such option or the related
Limited Rights, if any, have been completely exercised, the shares covered by
the unexercised portion of such option may again be made subject to options and
Limited Rights granted under this Plan. Appropriate adjustments in the number of
shares and in the option price per share may be made by the Committee or the
Board to give effect to adjustments made in the number of outstanding Common
Shares of the Company through a merger, consolidation, recapitalization,
reclassification, combination, stock dividend, stock split or other relevant
change, provided that fractional shares shall be rounded to the nearest whole
share.
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4. ELIGIBLE EMPLOYEES. Options may be granted under this Plan to any key
employee of the Company or any subsidiary thereof, excluding officers and
directors of the Company.
5. GRANTING OF OPTIONS. Subject to the terms and conditions of this Plan,
the Committee may, from time to time prior to December 7, 2009, grant to such
eligible employees as the Committee may determine options to purchase such
number of Common Shares of the Company on such terms and conditions as the
Committee may determine. No eligible employee may receive options to purchase
more than 100,000 Common Shares in the aggregate in any single year under this
Plan.
In determining the employees to whom options shall be granted and the
number of Common Shares to be covered by each option, the Committee may take
into account the nature of the services rendered by the respective employees,
their present and potential contributions to the success of the Company, and
such other factors as the Committee in its sole discretion shall deem relevant.
The date and time of approval by the Committee of the granting of an option
shall be considered the date and the time of the grant of such option. The
Committee may grant only nonstatutory stock options under the Plan.
6. OPTION PRICE. The purchase price of each Common Share subject to an
option shall be fixed by the Committee and shall be not less than 85% of the
Fair Market Value (as defined below) of a Common Share on the date of grant.
For purposes of this Plan, the "Fair Market Value" of any share of capital
stock of any company (including a Common Share of the Company) at a specified
date shall, unless otherwise expressly provided in this Plan, mean the closing
price of such share on the date immediately preceding such date or, if no sale
of shares of such Capital Stock shall have occurred on that date, on the next
preceding day on which a sale of such shares occurred, on the composite tape for
New York Stock Exchange listed shares or, if such 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 such shares are not
listed on any such exchange, on The Nasdaq Stock Market or, if such shares are
not quoted on The Nasdaq Stock Market, the mean between the closing "bid" and
the closing "asked" quotation of such a share on the date immediately preceding
the date as of which such Fair Market Value is being determined, or, if no
closing 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, provided that if the
shares in question are not quoted on any such system, Fair Market Value shall be
what the Committee determines in good faith to be 100% of the fair market value
of such a share as of the date in question. 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.
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<PAGE>
7. OPTION PERIOD.
(a) No option may be exercised less than twelve months after the date it is
granted except upon the occurrence of the disability of the holder of the option
while employed by the Company or a parent or subsidiary thereof, or the death of
the holder while so employed or within three (3) months after the termination of
such employment, or upon a Change in Control as defined in paragraph 10(b) of
this Plan, or pursuant to paragraph 11(b) of this Plan. In addition, no option
may be exercised prior to such time, if any, as a registration statement
covering the Common Shares for which the option may be exercised shall have
become effective under the Federal Securities Act of 1933, as amended
("Registration"). Subject to the foregoing limitations, each option agreement
provided for in paragraph 16 hereof shall specify when the option shall become
exercisable.
(b) Each option granted under this Plan and all rights to purchase shares
thereunder shall cease on the earliest of:
(i) Ten years after the date such option is granted or on such date
prior thereto as may be fixed by the Committee on or before the date such
option is granted;
(ii) The expiration of the period after the termination of the
optionee's employment within which the option is exercisable as specified
in paragraph 9(b) or 9(c), whichever is applicable; or
(iii) The date, if any, fixed for cancellation pursuant to paragraph
11(b) of this Plan.
In no event shall any option be exercisable at any time after its original
expiration date. When an option is no longer exercisable, it shall be deemed to
have lapsed or terminated and will no longer be outstanding.
8. MANNER OF EXERCISING OPTIONS. A person entitled to exercise an option
may, subject to its terms and conditions and the terms and conditions of this
Plan, exercise it in whole at any time, or in part from time to time, by
delivery to the Company at its principal executive office, to the attention of
its Secretary, of written notice of exercise, specifying the number of shares
with respect to which the option is being exercised, accompanied by payment in
full of the purchase price of the shares to be purchased at the time. The
purchase price of each share on the exercise of any option shall be paid in full
in cash (including check, bank draft or money order) at the time of exercise or,
at the discretion of the holder of the option, by delivery to the Company of
unencumbered Common Shares having an aggregate Fair Market Value on the date of
exercise equal to the purchase price, or by a combination of cash and such
unencumbered Common Shares. To the extent permitted by law, the person entitled
to exercise any option may also use a broker-assisted cashless
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<PAGE>
exercise in which the optionee irrevocably instructs a broker to deliver
proceeds of a sale of all or a portion of the shares to be issued pursuant to
the exercise (or a loan secured by such shares) to the Company in payment of the
purchase price of such shares. No shares shall be issued until full payment
therefor has been made, and the granting of an option to an individual shall
give such individual no rights as a shareholder except as to shares issued to
such individual.
9. TRANSFERABILITY AND TERMINATION OF OPTIONS.
(a) During the lifetime of an individual to whom an option is granted, only
such individual or his or her guardian or legal representative may exercise the
option. No option shall be assignable or transferable by the individual to whom
it is granted otherwise than by will or the laws of descent and distribution.
(b) During the lifetime of an optionee, an option may be exercised only
while the optionee is an employee of the Company or of a parent or subsidiary
thereof, and only if such individual has been continuously so employed since the
date the option was granted, except that, (i) as to any individual who has been
continuously employed by the Company (or a parent or subsidiary thereof) for at
least twelve full calendar months following the grant of the option, such
individual may exercise the option within three (3) months after termination of
such individual's employment to the extent that the option was exercisable
immediately prior to such individual's termination of employment, (ii) in the
case of an employee who is disabled (within the meaning of Section 22(e)(3) of
the Code) while employed, such individual or his or her legal representative may
exercise the option within one year after termination of such individual's
employment, (iii) as to any individual whose termination of employment occurs
following a Change of Control as defined in paragraph 10(b) of this Plan, such
individual may exercise the option within three (3) months after termination,
and (iv) as to any individual whose termination occurs following a declaration
pursuant to paragraph 11(b) of this Plan, such individual may exercise the
option at any time permitted by such declaration.
(c) An option may be exercised after the death of the individual to whom it
was granted, by such individual's legal representatives, heirs or legatees, but
only within one year after the death of such individual.
(d) In the event of the disability (within the meaning of Section 22(c)(3)
of the Code) or death of an employee holding an outstanding option, any option
held by such individual or his or her legal representative that was not
previously exercisable shall become immediately exercisable in full if
Registration has been completed, and the disabled or deceased individual shall
have been continuously employed by the Company or a parent or subsidiary thereof
between the date such option was granted and the date of such disability, or, in
the event of death, a date not more than three (3) months prior to such death.
If Registration is completed after such date of death or disability but prior to
the expiration of
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the option under paragraph 7(b), the option shall become immediately exercisable
in full upon such completion of Registration.
10. CHANGE IN CONTROL.
(a) Subject to paragraph 10(c), but anything else to the contrary in this
Plan notwithstanding, in the event of a "Change in Control" of the Company, as
defined in paragraph 10(b), an option held by a person under this Plan that
shall not have expired shall become immediately exercisable in full, provided
Registration shall have been completed prior to exercise of the option.
(b) A "Change in Control", for purposes of this Plan, 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;
(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 Securities Exchange Act of 1934, as amended, or any successor rule
thereto) 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);
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<PAGE>
(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 10(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 person
holding the option or a group of persons that includes the person holding the
option acting in concert.
(c) Notwithstanding paragraph 10(a) above, if the exercise of any option or
Limited Right (as defined in paragraph 12) granted to an employee under this
Plan, either alone or together with other payments in the nature of compensation
to such employee which are contingent on a change in the ownership or effective
control of the Company or in the ownership of a substantial portion of the
assets of the Company or otherwise, would result in any portion thereof being
subject to an excise tax imposed under Section 4999 (or successor provisions) of
the Code or would not be deductible in whole or in part by the Company, an
affiliate of the Company (as defined in Section 1504 (or successor provisions)
of the Code), or other person making such payments as a result of Section 280G
(or successor provisions) of the Code, such option, Limited Right and/or such
other benefits and payments shall be reduced (but not below zero) to the largest
aggregate amount that will result in no portion thereof being subject to an
excise tax or being not deductible. For such purposes:
(i) No portion of payments the receipt or enjoyment of which an
employee shall have effectively waived in writing prior to the date of
issuance of stock or distribution of a payment hereunder shall be taken
into account;
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(ii) No portion of such option, Limited Right, benefits and other
payments shall be taken into account which, in the opinion of tax counsel
selected by the Company's independent auditors and acceptable to the
employee, does not constitute a "parachute payment" within the meaning of
Section 280G(b)(2) (or successor provisions) of the Code;
(iii) Such options, Limited Rights, benefits and other payments shall
be reduced only to the extent necessary so that the total of such payments
(other than those referred to in clause (i) or (ii)) in their entirety
constitute reasonable compensation for services rendered within the meaning
of Section 280G(b)(4) (or successor provisions) of the Code, in the opinion
of the tax counsel referred to in clause (ii), and
(iv) The value of any non-cash benefit or any deferred payment or
benefit included in such payment shall be determined by the Company's
independent auditors in accordance with the principles of Sections
280G(d)(3) and (4) (or successor provisions) of the Code.
Any option or Limited Right not exercised or paid as a result of this paragraph
10(c), or reduced to zero as a result of the limitations imposed hereby, shall
remain outstanding in full force and effect subject to the other terms and
provisions of this Plan.
11. DISSOLUTION, LIQUIDATION, MERGER. In the event of the proposed
dissolution or liquidation of the Company or in the event of a proposed sale of
substantially all of the assets of the Company or in the event of a proposed
merger or consolidation of the Company with or into any other corporation,
regardless of whether the Company is the surviving corporation, or a statutory
share exchange involving capital stock of the Company (such dissolution,
liquidation, sale, merger, consolidation or exchange being herein called an
"Event"), the Committee may, but shall not be obligated to:
(a) If the Event is a merger or consolidation or statutory share exchange,
make appropriate provision for the protection of the outstanding options granted
under this Plan by the substitution, in lieu of such options, of options to
purchase appropriate voting common stock (the "Survivor's Stock") of the
corporation surviving any merger or consolidation or, if appropriate, the parent
corporation of the Company or such surviving corporation, or, alternatively, by
the delivery of a number of shares of the Survivor's Stock which has a Fair
Market Value as of the effective date of the Event equal to the Fair Market
Value as of such effective date of the Common Shares covered by the option, or
(b) At least ten (10) days prior to the actual effective date of an Event,
declare, and provide written notice to each optionee of the declaration, that
each outstanding option, whether or not then exercisable, shall be cancelled at
the time of, or immediately prior to the occurrence of, the Event (unless it
shall have been exercised prior to the occurrence of the Event) in exchange for
payment to each option holder, within ten days after the Event, of cash equal to
the amount (if any), for each share covered by the cancelled
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option, by which the Event Proceeds per Common Share (as hereinafter defined)
exceeds the exercise price per Common Share covered by such option, provided
that no such declaration shall be made unless Registration shall have been
completed. At the time of the declaration provided for in the immediately
preceding sentence, except as otherwise set forth in paragraph 10(c), each
option shall immediately become exercisable in full and each person holding an
option shall have the right, during the period preceding the time of
cancellation of the option, to exercise his or her option as to all or any part
of the shares covered thereby. In the event of a declaration pursuant to this
paragraph 11(b), each outstanding option granted pursuant to this Plan that
shall not have been exercised prior to the Event shall be cancelled at the time
of, or immediately prior to, the Event, as provided in the declaration, and this
Plan shall terminate at the time of such cancellation, subject to the payment
obligations of the Company provided in this paragraph 11(b) or paragraph 12. For
purposes of this paragraph, "Event Proceeds" per share shall mean the cash plus
the fair market value, as determined in good faith by the Committee, of the
non-cash consideration to be received per Common Share by the shareholders of
the Company upon the occurrence of the Event.
12. LIMITED RIGHTS. The Committee may, in its discretion, in the
circumstances set forth below, grant limited stock appreciation rights ("Limited
Rights") as hereafter provided in this paragraph 12 to the holder of any option
granted hereunder (the "Related Option") with respect to all or any portion of
the shares covered by the Related Option. Each Limited Right shall relate to a
specific Related Option and may be granted at any time either concurrently with
the grant of the Related Option or (with respect to nonstatutory stock options
only) at any time the Related Option is outstanding.
Limited Rights are rights to receive cash equal to the amount (if any) by
which the Fair Market Value on the exercise date of the Common Shares covered by
the Related Option exceeds the exercise price of the Related Option, which
rights shall be exercisable in lieu of exercising the Related Option (but only
if and to the extent that the Related Option is exercisable) at any time within
the thirty day period after any Change in Control, as defined in paragraph 10(b)
of this Plan, regardless of whether the person holding the Limited Right is an
employee on the date of exercise, so long as the optionee was an employee
immediately preceding the Change in Control.
Notwithstanding the provisions of the immediately preceding paragraph, no
Limited Rights shall be exercised within a period of six months after the date
of grant of the Limited Rights and no Limited Rights shall be exercised if the
Committee shall previously have made the declaration provided for in paragraph
11(b) and the Event resulting in the cancellation of all options pursuant to
paragraph 11(b) shall have occurred.
If Limited Rights are exercised, the Related Option shall no longer be
exercisable to the extent of the number of shares with respect to which the
Limited Rights were exercised. Upon the exercise or termination of a Related
Option, Limited Rights granted with respect thereto shall terminate to the
extent of the number of shares as to which the Related Option was exercised or
terminated.
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A person entitled to exercise a Limited Right may, subject to its terms and
conditions and the terms and conditions of this Plan, exercise such Limited
Right in whole or in part by delivery to the Company at its principal executive
office, to the attention of its Secretary, of written notice of an election to
exercise such Limited Right specifying the number of shares purchasable under
the Related Option with respect to which the Limited Right is being exercised.
The date the Company receives the notice is the exercise date. Upon exercise of
Limited Rights, the holder shall promptly be paid an amount in cash for each
share with respect to which the Limited Rights are exercised equal to the amount
(if any) by which the Fair Market Value on the exercise date per Common Share
covered by the Related Option exceeds the option exercise price per Common Share
covered by the Related Option; provided that the Company may withhold from any
cash payment due upon exercise of a Limited Right a cash amount sufficient to
cover any required withholding taxes.
A Limited Right may not be assigned and shall be transferable only if and
to the extent that the Related Option is transferable.
13. TAX WITHHOLDING. Delivery of Common Shares upon exercise of a
nonstatutory stock option shall be subject to any required withholding taxes. A
person exercising such an 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. In lieu of all or any part of such a cash payment,
the Committee may, but shall not be required to, permit the individual to elect
to cover all or any part of the required withholdings, and to cover any
additional withholdings up to the amount needed to cover the individual's full
FICA and federal, state and local income tax with respect to income arising from
the exercise of the option, through a reduction of the number of Common Shares
delivered to the person exercising the option or through a subsequent return to
the Company of shares delivered to the person exercising the option.
14. TERMINATION OF EMPLOYMENT. Neither the transfer of employment of an
individual to whom an option is granted between any combination of the Company,
a parent corporation and a subsidiary thereof, nor a leave of absence granted to
such individual and approved by the Committee, shall be deemed a termination of
employment for purposes of this Plan. The terms "parent" or "parent corporation"
and "subsidiary" as used in this Plan shall have the meaning ascribed to "parent
corporation" and "subsidiary corporation," respectively, in Sections 425(e) and
(f) (or successor provisions) of the Code.
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15. OTHER TERMS AND CONDITIONS. The Committee shall have the power, subject
to the limitations contained herein, to fix any other terms and conditions for
the grant or exercise of any option under this Plan. Nothing contained in this
Plan, or in any option granted pursuant to this Plan, shall confer upon a person
holding an option any right to continued employment by the Company or any parent
or subsidiary of the Company or limit in any way the right of the Company or any
such parent or subsidiary to terminate an employee's employment at any time.
16. OPTION AGREEMENTS. All options granted under this Plan shall be
evidenced by a written agreement in such form or forms as the Committee may from
time to time determine. All Limited Rights shall be evidenced in the written
option agreements or in written addenda thereto delivered to the grantees
thereof promptly after any grant of Limited Rights by the Committee.
17. AMENDMENT AND DISCONTINUANCE OF PLAN. The Board may at any time amend,
suspend or discontinue this Plan; provided, however, that no amendment to this
Plan shall, without the consent of the holder of the option, alter or impair any
options previously granted under this Plan.
18. EFFECTIVE DATE. This Plan shall be effective upon approval thereof by
the Board.
