As filed with the Securities and Exchange Commission on February 13, 1998
Registration Statement
No. 333-______________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
SPEC'S MUSIC, INC.
(Exact name of registrant as specified in its charter)
FLORIDA 59-1362127
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
1666 N.W. 82ND AVENUE, MIAMI, FLORIDA 33126
(Address of Principal Executive Offices) (Zip Code)
SPEC'S MUSIC, INC. 1993 INCENTIVE STOCK PLAN
SPEC'S MUSIC, INC. 1993 NON-EMPLOYEE DIRECTORS STOCK OPTION PLAN
SPEC'S MUSIC, INC. 1996 NON-EMPLOYEE DIRECTORS STOCK OPTION PLAN
(Full title of the plan)
DONALD A. MOLTA
CHIEF FINANCIAL OFFICER
SPEC'S MUSIC, INC.
1666 N.W. 82ND AVENUE
MIAMI, FLORIDA 33126
(Name and address of agent for service)
(305) 592-7288
(Telephone number, including area code, of agent for service)
Copies to:
Kathleen L. Deutsch, P.A.
Broad and Cassel
201 South Biscayne Boulevard
Miami Center, Suite 3000
Miami, Florida 33131
(305) 373-9431
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
- --------------------------------------------------------------------------------------------------------------------------------
TITLE OF EACH CLASS PROPOSED MAXIMUM PROPOSED MAXIMUM
OF SECURITIES TO BE AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING AMOUNT OF
REGISTERED REGISTERED(1) SHARE(2) PRICE(2) REGISTRATION FEE
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock,
$.01 par value 700,000 $1.50 $1,050,000 $309.75
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Pursuant to Rule 416, promulgated under the Securities Act of 1933, as
amended, this Registration Statement covers an indeterminate number of
securities to be offered as a result of any adjustment from stock splits,
stock dividends or similar events.
(2) Estimated solely for the purpose of calculating the amount of the
registration fee pursuant to Rule 457, promulgated under the Securities
Act of 1933, as amended, and based upon the average of the closing bid
and asked price of the Common Stock on February 10, 1998.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
Pursuant to the reporting and informational requirements of the
Securities Exchange Act of 1934 (the "Exchange Act"), Spec's Music, Inc., a
Florida corporation (the "Registrant"), is required to file reports, proxy
statements and other information with the Securities and Exchange Commission
(the "Commission"). Reports, proxy statements and other information concerning
the Registrant filed with the Commission may be inspected and copies may be
obtained (at prescribed rates) at the Commission's Public Reference Section,
Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and
at the Commission's regional offices in New York on the Fourteenth Floor, 75
Park Place, New York, New York 10007 and in Chicago at Room 1204, Everett
McKinley Dirksen Building, 219 South Dearborn Street, Chicago, Illinois 60604.
The following documents are incorporated by reference into this
Registration Statement:
1. The Registrant's Annual Report on Form 10-K for the fiscal year
ended July 31, 1997 filed with the Commission;
2. The Registrant's Notice of Meeting and Proxy Statement filed in
connection with its annual meeting of shareholders held on December 12, 1997;
3. The Registrant's Quarterly Report on Form 10-Q for the quarter
ended October 31, 1997; and
4. The description of the Registrant's shares of common stock, $.01
par value (the "Common Stock"), incorporated by reference into Item 1 of the
Registrant's Form 8-A registration statement, dated March 14, 1986, filed under
the Exchange Act.
In addition, all documents filed by the Registrant pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act, after the date hereof
and prior to the filing of a post-effective amendment which indicates that all
securities hereby have been sold or which deregisters all securities then
remaining unsold, shall be deemed to be incorporated by reference in this
Registration Statement and to be a part hereof from the date of filing of such
documents with the Commission. Any statement contained in a document
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 in a subsequently filed document incorporated by reference
herein, modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute part of this Registration Statement.
II-1
<PAGE>
ITEM 4. DESCRIPTION OF SECURITIES.
The Common Stock has been registered pursuant to Section 12(g) of the
Exchange Act. Accordingly, a description of the Common Stock is not required.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Pursuant to Section 607.0831 of the Florida Business Corporation Act,
a director is not personally liable for monetary damages to a corporation for
breach of such director's fiduciary duty as a director, except for liability
than cannot be eliminated under the Florida Business Corporation Act. Liability
for the following acts cannot be eliminated under such Act: (i) a violation of
the criminal law, (ii) any transaction from which the director derived an
improper personal benefit, (iii) any unlawful payment of a dividend or unlawful
stock repurchase or redemption, or (iv) acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law.
The Registrant has authority under Section 607.0850 of the Florida
Business Corporation Act to indemnify its directors and officers to the extent
provided for in such statute. The Registrant's Bylaws provide that the
Registrant shall indemnify its officers and directors to the fullest extent not
prohibited by law.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS
4.1 Spec's Music, Inc. 1993 Incentive Stock Plan
4.2 Spec's Music, Inc. 1993 Non-Employee Directors Stock Option Plan
4.3 Spec's Music, Inc. 1996 Non-Employee Directors Stock Option Plan
5.1 Opinion of Broad and Cassel
23.1 Consent of Broad and Cassel (contained in its opinion filed as
Exhibit 5.1 to this Registration Statement)
23.2 Consent of Deloitte & Touche LLP
24.1 Power of Attorney (included in the signature page of this
Registration Statement)
II-2
<PAGE>
ITEM 9. UNDERTAKINGS
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(a) To include any prospectus required by Section 10(a)(3) of
the Securities Act;
(b) To reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the Registration
Statement. Notwithstanding the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration Fee"
table in the effective Registration Statement; and
(c) To include any material information with respect to the
plan of distribution not previously disclosed in the Registration Statement or
any material change to such information in the Registration Statement;
PROVIDED, HOWEVER, that paragraphs (1)(a) and (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 Registrant pursuant to Section 13 or Section 15(d) of the
Exchange Act that are incorporated by reference in the Registration
Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the Registration Statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
II-3
<PAGE>
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the 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 Registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as
amended, the Registrant certifies that it has reasonable grounds to believe that
it meets all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Miami, State of Florida, on this 9th day of
February, 1998.
SPEC'S MUSIC, INC.
By:/S/ ANN S. LIEFF
---------------------------------------
Ann S. Lieff, President,
Chief Executive Officer, and Director
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints
Ann S. Lieff and Donald A. Molta, or any one of them, as his or her true and
lawful attorneys-in-fact and agents with full power of substitution and
resubstitution for her or him and in her or his name, place and stead in any and
all capacities to execute in the name of each such person who is then an officer
or director of the Registrant any and all amendments (including post-effective
amendments) to this Registration Statement, and any registration statement
relating to the offering hereunder pursuant to Rule 462 under the Securities Act
of 1933, as amended, and to file the same with all exhibits thereto and other
documents in connection therewith with the Securities and Exchange Commission,
granting unto said attorneys-in-fact and agents and each of them full power and
authority to do and perform each and every act and thing required or necessary
to be done in and about the premises as fully as he or she might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents, or any of them, or their or his substitute or substitutes, may lawfully
do or cause to be done by virtue thereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
---------- ----- ----
<S> <C> <C>
/S/ ANN S. LIEFF President, Chief Executive February 9, 1998
- ------------------------------------------------ Officer (principal executive
Ann S. Lieff officer) and Director
/S/ DONALD A. MOLTA Vice President, Chief February 9, 1998
- ------------------------------------------------ Financial Officer
Donald A. Molta (principal financial and
accounting officer)
II-5
<PAGE>
SIGNATURES TITLE DATE
---------- ----- ----
/S/ ARTHUR H. HERTZ Director February 9, 1998
- ------------------------------------------------
Arthur H. Hertz
/S/ RICHARD J. LAMPEN Director February 9, 1998
- ------------------------------------------------
Richard J. Lampen
/S/ MARTIN W. SPECTOR Director February 9, 1998
- ------------------------------------------------
Martin W. Spector
/S/ ROSALIND S. ZACKS Director February 9, 1998
- ------------------------------------------------
Rosalind S. Zacks
</TABLE>
II-6
<PAGE>
EXHIBIT INDEX
EXHIBIT DESCRIPTION
- ------- -----------
4.1 Spec's Music, Inc. 1993 Incentive Stock Plan
4.2 Spec's Music, Inc. 1993 Non-Employee Directors Stock Option Plan
4.3 Spec's Music, Inc. 1996 Non-Employee Directors Stock Option Plan
5.1 Opinion of Broad and Cassel
23.2 Consent of Deloitte & Touche LLP
EXHIBIT 4.1
SPEC'S MUSIC, INC.
1993 INCENTIVE STOCK PLAN
<PAGE>
SPEC'S MUSIC, INC.
1993 INCENTIVE STOCK PLAN
1. OBJECTIVES. The objectives of the Incentive Stock Plan (the "Plan")
are to enable Spec's Music, Inc. (the "Company") to compete successfully in
retaining and attracting key employees of outstanding ability, to stimulate the
efforts of such employees toward the Company's objectives and to encourage the
identification of their interest with those of the Company's shareholders. To
create the appropriate incentive, the Plan provides for granting Incentive Stock
Options, Nonqualified Stock Options, Stock Appreciation Rights, Restricted Stock
Awards and Performance Share Awards, or any combination of the foregoing.
2. DEFINITIONS. For purposes of the Plan, the following terms shall
have the meanings assigned to them, unless another g is clearly indicated by a
particular usage and context:
(a) "Award" means, individually or collectively, any Option,
Stock Appreciation Right, Restricted Stock Award or Performance Share
Award.
(b) "Board" means the Board of Directors of the Company.
(c) "Committee" means the Committee of the Board, referred to
in Section
(d) "Company" means Spec's Music, Inc.
(e) "Director" means a member of the Board.
(f) "Disinterested Person" means a member of the Board who is
not, during the one year prior to his or her service as an
administrator of this Plan, or during such service, granted or awarded
equity securities pursuant to this Plan or any other plan of the
Company or any of its affiliates, except that:
(i) participation in a formula plan meeting the
conditions in paragraph (c)(2)(ii) of Rule 16b-3 promulgated
under the Securities Exchange Act of 1934, as amended (the
"1934 Act") shall not a member of the Board from being a
Disinterested Person
(ii) participation in an ongoing securities
acquisition plan meeting the conditions in paragraph (d)(2)(i)
of Rule 16b-3 promulgated under the 1934 Act shall not
disqualify a member of the Board from being a Disinterested
Person; and
(iii) an election to receive an annual retainer fee
in either cash or an equivalent amount of securities, or
partly in cash and partly in securities, shall not disqualify
a member of the Board from being a Disinterested Person.
(g) "Effective Date of Grant" means the date on which the
granting of an Award is authorized by the Committee, unless otherwise
provided in the Award.
<PAGE>
(h) "Eligible Employee" means any individual (other than one
who receives retirement benefits, stipends, consulting fees,
honorariums, and the like, or who is a full time employee of any firm
other than the Company or a Subsidiary) who:
(i) performs services for the Company or a
Subsidiary, including any individual who is standing an
officer of the Company or a Subsidiary; and
(ii) is included on the regular payroll of the
Company or a Subsidiary.
(i) "Fair Market Value" means the closing sale price on a
specified date of a Share on the Composite Tape for New York Stock
Exchange-Listed Stocks, or, if such stock is not listed on such
exchange, on the principal United States securities exchange registered
under the Securities Exchange Act of 1934 on which such stock is
listed, or, if such stock is not listed on any such exchange, the
closing bid quotation with respect to a Share on a specified date on
the National Association of Securities Dealers, Inc. Automated
Quotations Systems or any system then in use, or if no such quotations
are available, the fair market value on a specified date of a Share as
determined by the Board in good faith.
(j) "Incentive Stock Option" shall have the meaning given that
term under the appropriate sections of the Internal Revenue Code of
1986, as it may be amended from time to time, and any regulations or
rulings promulgated thereunder.
(k) "Nonqualified Stock Option" means any Option granted under
the Plan which is not an Incentive Stock Option.
(l) "Option" means an Award granted under Section 6 of the
Plan and includes Nonqualified Stock Options and Incentive Stock
Options.
(m) "Option Price" means the purchase price per Share subject
to an Option which shall be fixed by the Committee, but shall not be
less than 100% of its Fair Market Value on the Effective Date of Grant.
(n) "Performance Share" means an Award granted under Section 8
of the Plan.
(o) "Permanent and Total Disability" shall have the meaning
given that term under the member appropriate sections of the Internal
Revenue code of 1986, as it may be amended from time to time, and any
regulations or rulings promulgated thereunder.
(p) "Restricted Stock Award" means an Award granted under
Section 9 of the Plan.
(q) "Share" means one share of the Common Stock, par value
$.01 per Share, of the Company.
<PAGE>
(r) "Stock Appreciation Right" or "SAR" means the right
granted under Section 7 of the Plan, to receive a payment equal to the
excess of the Fair Market Value per Share on the date of exercise over
the Option Price per Share, multiplied by the number or Shares called
for by the related Option, or portion thereof, as specified in Section
7 of the Plan.
(s) "Subsidiary" means any subsidiary of the Company which is
considered an affiliate for purposes of and included in the filing of
the Company's consolidated federal income tax return.
3. ADMINISTRATION. The Plan shall be administered by a committee (the
"Committee") of two or more Directors who are not Eligible Employees, which
shall be designated by and serve at the pleasure of the Board. The Committee
shall have all of the powers of the Board with respect to the Plan. A member of
the Board may serve as a member of the Committee only if such person is a
Disinterested Person. Each member of the Committee may be removed at any time,
with or without cause, by resolution of the Board and any vacancy occurring in
the membership of the Committee may be filled by appointed by the Board. Any and
all decisions or determinations of the Committee shall be made either: (i) by a
majority vote of the members of the Committee at a meeting, or (ii) without a
meeting by the unanimous written approval of the members of the Committee.
Except as specifically limited by the provisions of the Plan, the
Committee in its sole discretion shall have the full and final authority to:
(a) Determine which Eligible Employees shall be granted
Awards.
(b) Determine the time or times when Awards will be made.
(c) Determine the terms and conditions to which the payment of
Awards may be subject.
(d) Prescribe the form or forms evidencing Awards.
(e) Establish Company-wide, store-wide or individual
performance goals for purposes of the Plan.
(f) Interpret the provisions of the Plan and decide all
questions of fact arising in its application.
(g) Prescribe such rules and procedures for Plan
administration as from time to time it may deem advisable.
Any action, decision, interpretation or determination by the committee
with respect to the application or administration of this Plan shall be final
and binding upon all persons, and need not be uniform with respect to its
determination of recipients, amount, timing, form, terms or provisions of
Awards.
<PAGE>
No member of the Committee shall be liable for any action or
determination taken or made in good faith with respect to the Plan or any Award
granted hereunder, and, as provided in paragraph (e) of Section 12, all members
shall be indemnified by the Company for any liability and expenses which may
occur through any claim or cause of action.
4. SHARES SUBJECT TO PLAN. The Shares that may be made subject to
Awards granted under the Plan shall not exceed 500,000 Shares in the aggregate.
Shares shall be made available to satisfy Awards either from Shares reacquired
by the Company or from authorized but unissued Shares. To the extent that an
Award lapses, is cancelled or the rights of its holder terminate, any Shares
which were subject to such Award shall again be available for the grant of an
Award.
5. EFFECTIVE DATE AND TERM OF PLAN. The Plan is effective as of
September 21, 1993, the date of its original adoption by the Board, subject to
approval by the affirmative vote of the holders of a majority of the Shares
present or represented and entitled to vote at the Annual Meeting of
Shareholders of the Company, which is scheduled to be held on December 9, 1993.
Awards may be granted from time to time under the terms and conditions
of the Plan, but no Awards may be granted after expiration of 10 years from the
date of adoption of the Plan by the Board. The Plan shall continue in effect
until all matters relating to payment or termination of previously granted
Awards and administration of the Plan have been settled.
6. STOCK OPTIONS. Subject to the terms and conditions of the Plan, the
Committee may grant Options on such terms and conditions as the Committee may
determine. More than one Option may be granted to the same Eligible Employee.
(a) STOCK OPTION AGREEMENT. Each Option granted under the Plan
shall be evidenced by a Stock Option Agreement, the form of which shall
have been approved by the Committee. The Agreement shall be executed by
the Company and the Eligible Employee and shall set forth the terms and
conditions of the Option.
(b) INCENTIVE STOCK OPTIONS AND NONQUALIFIED STOCK OPTIONS.
The Committee in its sole discretion may designate whether an Option is
to be considered an Incentive Stock Option ("ISO") or a Nonqualified
Stock Option. The Committee may grant both an ISO and a Nonqualified
Stock Option to the same individual. However, where both an ISO and a
Nonqualified Stock Option are awarded at one time, such Options shall
be deemed to have been awarded in separate grants, shall be clearly
identified, and in no event will the exercise of one such Option affect
the right to exercise the other such Option.
(c) TERM OF OPTIONS. Each Option shall be for a term of ten
years or less from the Effective Date of Grant. An Option shall become
exercisable in such amounts, at such events or occurrences and upon
such other terms and conditions as shall be determined by the Committee
and provided in such Option. The Committee may in its sole discretion
accelerate the date on which any Option may be exercised and may
accelerate the vesting of any Shares subject to any Option or
previously acquired by the
<PAGE>
exercise of any Option. Unless otherwise expressly provided in the
Option Agreement for the Option, such Option shall become fully vested
and exercisable immediately:
(i) If there occurs any transaction (which shall
include a series of transactions occurring within sixty (60)
days or occurring pursuant to a plan), that has the result
that stockholders of the Company immediately before such
transaction cease to own at least fifty-one percent (51%) of
the voting stock of the Company or of any entity that results
from the participation of the Company in a reorganization,
recapitalization, consolidation, merger, share exchange,
liquidation or any other form of corporate transaction;
(ii) If the stockholders of the Company shall approve
a plan of merger, consolidation, share exchange,
reorganization, recapitalization, liquidation or dissolution
in which the Company does not survive, unless (a) the approved
merger, consolidation, share exchange, reorganization,
recapitalization, liquidation or dissolution is subsequently
abandoned, or (b) the entity surviving or resulting from such
transaction is controlled by substantially the same persons as
was the Company, assumes all obligations of the Company under
the Option, and has a financial condition and operations
substantially equivalent or superior to those of the Company
immediately prior to the transaction; or
(iii) If the stockholders of the Company shall
approve a plan for the sale, lease, exchange or other
disposition of all or substantially all of the property and
assets of the Company (unless such plan is subsequently
abandoned).
(d) EXERCISE OF OPTIONS. Any person entitled to exercise an
Option may do so in whole or in part by delivering to the Secretary of
the Company at its principal executive office a written notice of
exercise. The written notice shall specify the number of Shares for
which an Option is being exercised and shall be accompanied by full
payment of the Option Price for the Shares being purchased. To the
extent that an SAR included in an Option is exercised, such Option
shall be deemed to have been exercised, and shall not be deemed to have
lapsed.
(e) PAYMENT OF OPTION PRICE. In the discretion of the
Committee, payment of the purchase price may be made in cash, by the
tender of Shares, or both. If payment by the tender of Shares is
permitted, the Fair Market Value of each such Share shall be determined
as of the day the Shares are tendered for payment or, if no sale has
been made on such date, then on the last preceding day on which such
sale shall have been made. Any excess of the value of the tendered
Shares over the purchase price will be returned to the option holder as
follows:
(i) Any whole Shares remaining in excess of the
purchase price will be returned to the holder of the Option in
kind, and may be represented by one or more certificates as
determined by the Company in its sole discretion.
<PAGE>
(ii) Any partial Shares remaining in excess of the
purchase price will be returned to the holder of the Option in
cash.
(f) SPECIAL TERMS AND CONDITIONS OF INCENTIVE STOCK OPTIONS.
All ISOs granted under the Plan will be subject to the general
provisions applicable to all Options granted under the Plan, as well as
the following specific provisions:
(i) at the time the ISO is granted, if the Eligible
Employee beneficially owns stock representing more than 10% of
the total combined voting power of all classes of stock of
the total combined voting power of the Company or any parent
or subsidiary of the Company, then:
A. The Option Price must equal at least
110% of the Fair Market Value on the Effective Date
of Grant of the Shares subject to the ISO; and
B. The term of the ISO shall not be greater
than five years from the Effective Date of Grant.
(ii) The holder of the ISO must remain continuously
employed by the Company or any subsidiary of the Company from
the Effective Date of Grant until the date of exercise, unless
such exercise occurs within the grace period allowed following
termination of prior employment.
(iii) The aggregate Fair Market Value (determined at
the Effective Date of Grant of the ISO) of the Shares subject
to all ISOs granted to an Eligible Employee under this Plan
and any other plan of the Company and any parent or subsidiary
of the Company, within the meaning of Section 424 of the
Internal Revenue Code of 1986, as it may be amended, which
first became exercisable in any calendar year shall not exceed
$100,000.
(iv) Any Shares received pursuant to the exercise of
an ISO may not be sold within two years from the Effective
Date of Grant, nor within one year from the date of exercise.
If any Option is not granted, exercised, or held pursuant to
the provisions noted immediately above, it will be considered to be a
Nonqualified Stock Option to the extent that any or all of the grant is
in conflict with these restrictions.
(g) NON-TRANSFERABILITY. During the lifetime of an individual
to whom an Option has been granted, such Option is not transferable and
may be exercised only by such individual. Upon the death of the
Eligible Employee, the Option may be transferred to the beneficiaries
or heirs of the holder of the Option by will or by the laws of descent
and distribution.
<PAGE>
(h) TERMINATION OF OPTIONS. An Option may be terminated as
follows:
(i) During the period of continuous employment with
the Company or a Subsidiary, an Option will be terminated only
if it has been fully exercised, has been surrendered upon the
exercise of a related SAR or has expired by its terms. For
purposes of the Plan, a leave or other to the absence approved
by the Committee shall not be deemed to be termination of
employment; however, in the event any such approved leave or
absence exceeds ninety days, the Option may be treated as a
Nonqualified Stock Option if so required by the Internal
Revenue Code as it exists at such time.
(ii) Upon termination of employment, for any reason
other than death or Permanent and Total Disability, the Option
will terminate at the end of the time period established by
the Committee; however, in the event such time period exceeds
three months, the Option may be treated as a Nonqualified
Stock Option if so required by the Internal Revenue Code as it
exists at such time.
(iii) Upon termination of employment by reason of
death, the Option will terminate at the end of one year
following the date of death.
(iv) Upon termination by reason of Permanent and
Total Disability, the option will terminate at the end of one
year following the date that the Committee determines that the
Eligible Employee is suffering a Permanent and Total
Disability.
Except as provided in Section 10 hereof, in no event will the
continuation of the term of an Option beyond the date of termination of
employment allow the holder of the Option, or the beneficiaries or
heirs of such holder, to accrue additional rights under the Plan, or to
purchase more Shares through the exercise of an Option than could have
been purchased on the day that employment was terminated.
7. STOCK APPRECIATION RIGHTS. Subject to the terms and conditions of
the Plan, and such other terms and conditions as the Committee may impose, the
Committee may from time to time grant SARs in connection with all or part of any
Option at the time of the grant of the Option or at any time the during the term
of the Option.
(a) RIGHT TO EXERCISE. SARs shall be exercisable at such time
or times and only to the extent that the Option to which they relate
shall be exercisable as set forth in this Plan or such earlier times as
determined by the Committee; except that SARs granted to persons
subject to the provisions of Section 16(b) of the Securities Exchange
Act of 1934, as amended ("Section 16(b) Persons"), may not be exercised
within six months and one day of their Effective Date of Grant. SARS
shall be exercisable only when the Fair Market Value of the Shares
subject to the Option exceeds the Option Price.
(b) PAYMENT. Upon exercise of SARS, the holder thereof shall
surrender the related option, or portion thereof, and shall be entitled
to receive, without additional
<PAGE>
payment of cash to the Company (except for applicable withholding
taxes), payment of an amount equal to the excess of the Fair Market
Value per Share, on the date of such exercise, over the Option Price
per Share as provided in such Option, multiplied by the number of
Shares called for by the Option, or portion thereof, which is so
surrendered. Such amount shall be payable, in the sole discretion of
the Committee, in cash, in Shares, or any combination thereof. If the
Committee, in its sole discretion, elects to effect payment for SARs in
the form of cash to 16(b) Persons, then such persons must exercise the
SARs during the period beginning on the third business day following
the Company's release of quarterly or annual financial statements and
ending on the twelfth business day following the date of such release.
(c) NON-TRANSFERABILITY. An SAR is transferable only when the
underlying Option is transferable and under the same conditions.
8. PERFORMANCE SHARE AWARDS. Subject to the terms and conditions of the
Plan, and such other terms and conditions as the Committee may impose, the
Committee may from time to time grant Performance Share Awards to Eligible
Employees. Each Performance Share shall be the equivalent of one Share. The
Award of Performance Shares under the Plan shall not entitle the holder to any
dividend, voting or other rights of a shareholder.
(a) VALUE OF PERFORMANCE SHARE AWARDS. Each Performance Share
Award shall have a maximum value established by the Committee at the
time of the Effective Date of Grant. In determining the value of
Performance Share Awards, the Committee shall take into account an
Eligible Employee's responsibility level, performance, potential and
such other consideration as it deems appropriate.
(b) PERFORMANCE PERIODS. At the time a Performance Share Award
is made, the Committee shall establish a period of time (the
"Performance Period") applicable to such Award, which period shall not
be less than two years. Each Performance Share Award may have a
different Performance Period, at the discretion of the Committee.
(c) PERFORMANCE GOALS. For each Performance Period, the
Committee, in its discretion, may establish performance goals. In
establishing performance goals, the Committee may use any and all
measures of individual, store-wide or Company-wide performance as it
deems appropriate. Performance goals may vary among Eligible Employees;
provided, however, that such performance goals shall state a minimum
performance level below which no Performance Shares shall be issued,
and a full performance level at which or about which all performance
Shares shall be issued, and, in the Committee's discretion, may include
intermediate levels at which specified numbers of Performance Shares
shall be issued.
The Committee is authorized to adjust performance goals at any
time during a Performance Period if it determines that such adjustments
are warranted by changes in conditions, including but not limited to
acquisitions or dispositions or the occurrence of other unusual,
unforeseen or extraordinary events.
<PAGE>
(d) PAYMENT. At the end of each Performance Period, the holder
of a Performance Share Award is entitled to receive payment of an
amount, not exceeding the maximum value of the Performance Share Award,
based on the achievement of performance goals for such Performance
Period, as determined by the Committee. Payment shall be made in a lump
sum or in installments, as prescribed by the Committee. Any payment to
be made in Shares shall be based on the Fair Market Value of a Share on
the payment date. No payment of Performance Shares shall be made prior
to the end of a Performance Period. Shares delivered upon payment of
Performance Share Awards may be authorized but unissued Shares or
Shares reacquired by the Company.
(e) TERMINATION OF EMPLOYMENT. Except as otherwise determined
by the Committee, if a holder of a Performance Share Award terminates
employment with the Company or a Subsidiary for any reason other than
death, disability or retirement prior to the payment of any portion of
a Performance Share Award, the holder shall forfeit all rights to
receive any portion of the Performance Share Award remaining unpaid at
such termination. If the employment of a holder of a Performance Share
Award who has been in the continuous employment of the Company or a
Subsidiary since the Effective Date of Grant is terminated by reason of
death, disability or retirement prior to the expiration of the
Performance Period, the Performance Share Award shall be prorated for
service during the Performance Period and distributed as soon as
practicable following such event, subject to the discretion of the
Committee to decide otherwise. Performance Shares which are forfeited,
cancelled or not paid out in full may again be awarded under the Plan.
9. RESTRICTED STOCK AWARDS. Subject to the terms and conditions of the
Plan and such other terms and conditions as the Committee may impose, the
Committee may from time to time authorize Restricted Stock Awards to Eligible
Employees.
(a) RESTRICTION PERIODS. At the time a Restricted Stock Award
is made, the Committee shall establish a period of time (the
"Restriction Period" applicable to such Award which shall be not less
than two years nor greater than five years. Each Restricted Stock Award
may have a different Restriction period, at the discretion of the
Committee; provided, however, that the Restriction Period applicable to
a particular Restricted Stock Award shall not be changed.
(b) OTHER TERMS AND CONDITIONS. Shares issued in connection
with a Restricted Stock Award shall be represented by a stock
certificate registered in the name of the holder of such Restricted
Stock Award. Until the expiration of the Restriction period the holder
shall have the right to enjoy all shareholder rights with the exception
that:
(i) The holder shall not be entitled to delivery of
the certificate representing the Shares.
<PAGE>
(ii) The Company may issue Shares subject to such
restrictive legends and/or stop transfer instructions as it
deems appropriate and/or provide for retention of custody of
the Shares by the Company or by an agent designated by the
Company.
(iii) The holder may not sell, transfer, pledge,
exchange, hypothecate, or otherwise dispose of the Shares.
(iv) If the holder's continuous employment with the
Company or any Subsidiary shall terminate for any reason other
than those specified below in paragraph (d) of this Section 9,
the Restricted Stock Award shall be forfeited immediately and
all rights of the holder to Shares issued in connection with a
Restricted Stock Award shall terminate immediately without any
further obligation on the part of the Company or a Subsidiary.
(v) Cash and stock dividends may be either currently
paid or withheld by the Company for the holder's account.
(c) DISTRIBUTION OF RESTRICTED STOCK AWARD. If the holder of a
Restricted Stock Award remains in the continuous employment of the
Company or a Subsidiary during the entire Restriction Period, upon the
expiration of the Restriction Period all restrictions applicable to
Shares issued in connection with the Restricted Stock Award shall
lapse, and the certificate or certificates representing the Shares
shall be delivered to the holder of the Restricted Stock Award.
(d) TERMINATION OF EMPLOYMENT. If the employment of a holder
of a Restricted Stock Award who has been in the continuous employment
of the Company or a Subsidiary during the entire Restriction Period is
terminated by reason of death, disability or retirement prior to the
expiration of the Restriction Period, the Restricted Stock Award shall
be prorated for service during the Restriction Period and distributed
to the holder (or in the event of the holder's death, the beneficiary)
as soon as practicable following such event, subject to the discretion
of the Committee to decide otherwise. Restricted Stock which is
forfeited, cancelled or not paid out in full may again be awarded under
the Plan.
(e) PAYMENT FOR RESTRICTED STOCK. A holder shall not be
required to make any payment for Shares received pursuant to a
Restricted Stock Award.
10. CHANGES IN CAPITAL STRUCTURE. Options, SARS, Restricted Stock
Awards, Performance Share Awards, and any agreements evidencing such Awards
shall be subject to adjustment by the Committee as to the number and price of
shares or other considerations subject to such Awards in the event of changes in
the outstanding Shares by reason of stock dividends, stock splits,
recapitalizations, reorganizations, mergers, consolidations, combinations,
exchanges, or other relevant changes in capitalization occurring after the Date
of Grant of any such Option or Award. In the event of any such change in the
outstanding Shares, the aggregate number of Shares available under the Plan
shall be appropriately adjusted by the Committee, whose determination shall be
conclusive.
<PAGE>
11. AMENDMENT OR DISCONTINUANCE OF PLAN. The Board may at any time
amend, suspend, or discontinue the Plan; provided, however, that no amendments
by the Board shall, without further approval of the shareholders of the Company:
(a) Change the class of Eligible Employees.
(b) Except as provided in Section 10 hereof, increase the
number of Shares which may be subject to Awards granted under the Plan.
(c) Extend the maximum term of the Plan or of Options or
Restricted Stock granted thereunder.
(d) Permit the granting of Awards to the individuals who are
then members of the Committee.
(e) Permit the granting of Awards to the individuals who are
then members of the Committee.
No amendment to the Plan shall alter or impair any awards granted under
the Plan without the consent of the holders thereof.
12. GENERAL.
(a) NO RIGHTS OF EMPLOYMENT. Nothing in the Plan nor in any
agreement entered pursuant to the Plan shall confer upon any Eligible Employee
any right to continued employment by the Company or a Subsidiary, nor shall it
impair any right of the Company or a Subsidiary to terminate such employment.
(i) INTERPRETATION. If any provision of the Plan
should be held invalid or illegal for any mason, such
determination shall not affect the remaining provisions
hereof, but instead the Plan shall be construed and enforced
as if such provision had never been included in the Plan.
Without limiting the generality of the foregoing, transactions
under the Plan are intended to comply with all applicable
conditions of Rule 16b-3 or its successors promulgated under
the 1934 Act. To the extent any provision of the Plan or any
action by the Committee or the Board hereunder is inconsistent
with the foregoing requirement it shall be deemed null and
void, to the extent permitted by law and deemed advisable by
the Committee or the Board. This Plan shall be governed by the
laws of the State of Florida. Headings contained in the Plan
are for convenience only and shall in no manner be construed
as part of the Plan. Any reference to the masculine, feminine,
or neuter gender shall be a reference to such other gender as
is appropriate.
EXHIBIT 4.2
SPEC'S MUSIC, INC.
1993 NON-EMPLOYEE DIRECTORS STOCK OPTION PLAN
<PAGE>
SPEC'S MUSIC, INC.
1993 NON-EMPLOYEE DIRECTORS STOCK OPTION PLAN
1. PURPOSE. The purpose of this Plan is to help attract, retain and
compensate highly qualified individuals who are not current employees of Spec's
Music, Inc. (the "Company") as members of the Board of Directors and, by
encouraging ownership of a stock interest in the Company, to gain for the
Company the advantages inherent in directors having a greater personal financial
investment in the Company.
2. DEFINITIONS. As used herein, the following terms shall have the
meanings indicated:
"Annual Meeting Date" means 5:00 p.m. on the date of the annual meeting
of the Company's shareholders at which the Directors are elected.
"Board" means the Company's Board of Directors.
"Code" means the Internal Revenue Code of 1996, as amended.
"Common Stock" means the Common Stock, par value $.01 per
share, of the Company.
"Company" refers to Spec's Music, Inc., a Florida corporation.
"Director" means a member of the Board.
"Effective Date" is the date specified in Section 14.1.
"Eligible Director" means any person who is a member of the
Board and who is not an employee, full time or part time, of the
Company.
"Fair Market Value" of the Common Stock on any date of
reference means the Closing Price on the business day immediately
preceding such date of the Common Stock. For this purpose, the Closing
Price of the Common Stock on any business day shall be (i) if such
Common Stock is listed or admitted for trading on any United States
national securities exchange, or if actual transactions are otherwise
reported on a consolidated transaction reporting system, the last
reported sale price of Common Stock on such exchange or reporting
system, as reported in any newspaper of general circulation, (ii) if
the Common Stock is quoted on the National Association of Securities
Dealers Automated Quotations System ("NASDAQ"), or any similar system
of automated dissemination of quotations of securities prices in common
use, the closing bid quotation for such day of the Common Stock on such
system, or (iii) if neither clause (i) or (ii) is applicable, the mean
between the high bid and low ask quotations for the Common Stock as
reported by the National Quotation Bureau, Incorporated if at least two
securities dealers have inserted both bid and ask quotations for the
Common Stock on at least 5 of the 10 preceding days.
<PAGE>
"Initial Grant Date" means the date on which a person is first
elected as a member of the Board, or the Effective Date of this Plan in
the case of persons who were members of the Board prior to the adoption
of this Plan.
"Option" (when capitalized) means any stock option granted
under this Plan.
"Option Agreement" means the agreement between the Company and
the Optionee for the grant of an option.
"Option Period" means the ten year period between the date an
Option is granted and the expiration date of the Option.
"Optionee" means a person to whom a stock option is granted
under this Plan or any person who succeeds to the rights of such person
under this Plan by reason of the death of such person.
"Plan" shall mean this 1993 Non-employee Directors' Stock
Option Plan for the Company.
"Share(s)" shall mean a share or shares of the Common Stock.
3. SHARES AND OPTIONS. Subject to Section 9 of this Plan, the Company
may grant to Optionees from time to time Options to purchase an aggregate of up
to 50,000 Shares from authorized and unissued Shares. If any Option granted
under the Plan shall terminate, expire, or be cancelled or surrendered as to any
Shares, new Options may thereafter be granted covering such Shares.
4. GRANTS OF OPTIONS. Each Eligible Director shall receive an initial
grant of an Option to purchase 5,000 Shares on the Initial Grant Date. In
addition, commencing in 1994, each Eligible Director who is reelected to serve
as a director on the Annual Meeting Date, shall be granted an option to purchase
1,000 Shares each year on the Annual Meeting Date. Upon the grant of each
Option, the Company and the Eligible Director shall enter into an Option
Agreement, which shall specify the grant date and the exercise price and shall
include or incorporate by reference the substance of this Plan and such other
provisions consistent with this Plan as the Board may determine.
5. EXERCISE PRICE. The exercise price per Share of any Option shall be
the Fair Market Value of the Shares underlying such Option on the date such
Option is granted.
6. EXERCISE OF OPTIONS. An Option shall be deemed exercised when (i)
the Company has received written notice of such exercise in accordance with the
terms of the Option, (ii) full payment of the aggregate exercise price of the
Shares as to which the Option is exercised has been made, and (iii) arrangements
that are satisfactory to the Board in its sole discretion have been made for the
Optionee's payment to the Company of the amount that is necessary for the
Company to withhold in accordance with applicable Federal or state tax
withholding requirements. The exercise price of any Shares purchased, and any
required tax payment, shall be paid in cash,
<PAGE>
by the tender of Shares, or both. If payment is made in cash, it may be made by
certified or official bank check, personal check or money order. If payment is
made by the tender of Shares, the Fair Market Value of each such Share shall be
determined as of the day the Shares are tendered for payment or, if no sale has
been made on such date, then on the last preceding day on which such sale shall
have been made. Any excess of the value of the tendered Shares over the purchase
price will be returned to the Optionee as follows:
(i) Any whole Shares remaining in excess of the purchase price
will be returned to the Optionee in kind, and may be represented by one
or more certificates as determined by the Company in its sole
discretion.
(ii) Any partial Shares remaining in excess of the purchase
price will be returned to the Optionee in cash.
No Optionee shall be deemed to be a holder of any Shares subject to an Option
unless and until a stock certificate or certificates for such Shares are issued
to such person(s) under the terms of the Plan. No adjustment shall be made for
dividends (ordinary or extraordinary, whether in cash, securities or other
property) or distributions or other rights for which the record date is prior to
the date such stock certificate is issued, except as expressly provided in
Section 9 hereof.
7. EXERCISE SCHEDULE FOR OPTIONS.
7.1 Each Option granted hereunder upon the Initial Grant Date
shall be exercised in accordance with the following schedule:
<TABLE>
<CAPTION>
PERCENTAGE OF NUMBER OF SHARES DATE FIRST AVAILABLE FOR EXERCISE
------------------------------ -----------------------------------
<S> <C>
25% One year after the date of grant
25% Two years after the date of grant
25% Three years after the date of grant
25% Four years after the date of grant
</TABLE>
7.2 Each Option granted hereunder upon an Eligible Director's
re-election to the Board shall become fully exercisable one year following its
grant.
7.3 Notwithstanding the foregoing provisions, each outstanding
Option shall become fully exercisable immediately:
(a) if there occurs any transaction (which shall
include a series of transactions occurring within 60 days or
occurring pursuant to a plan), that has the result that
stockholders of the Company immediately before such
transaction cease to own at least 51 percent of the voting
stock of the Company or of any entity that results from the
participation of the Company in a reorganization,
recapitalization, consolidation, merger, share exchange,
liquidation or any other form of corporate transaction;
<PAGE>
(b) if the stockholders of the Company shall approve
a plan of merger, consolidation, share exchange,
reorganization, recapitalization, liquidation or dissolution
in which the Company does not survive, unless (i) the approved
merger, consolidation, share exchange, reorganization,
recapitalization, liquidation or dissolution is subsequently
abandoned, or (ii) the entity surviving or resulting from such
transaction (x) is controlled by substantially the same
persons as was the Company, (y) assumes all obligations of the
Company under the Option, and (z) has a financial condition
and operations substantially equivalent or superior to those
of the Company immediately prior to the transaction; or
(c) if the stockholders of the Company shall approve
a plan for the sale, lease, exchange or other disposition of
all or substantially all the property and assets of the
Company (unless such plan is subsequently abandoned).
7.4 The expiration date of an Option shall be 10 years from
the date of grant of the Option, subject to earlier termination pursuant to
Section 8.
8. TERMINATION OF OPTION PERIOD. An Optionee whose directorship
terminates for any reason other than death or disability (as defined in Section
105(d)(4) of the Code) shall be entitled to exercise any Options which are then
exercisable only within the thirty day period after the date he ceases to serve
as a director, after such thirty day period, such Options shall be null and
void. In the case of termination of the directorship by reason of the Director's
death or disability within the meaning of Section 105(d)(4) of the Code, the
Option or any portion thereof which was not exercisable on the date of
termination shall be accelerated and become immediately exercisable, and the
period to exercise such Option shall be twelve months, subject to the earlier
expiration of the Option Period. The estate of an Optionee who dies, or a person
who acquires the right to exercise an Option, including any portion of such
Option which was not exercisable at the time of death, by bequest or inheritance
or by reason of the death of the Optionee, may exercise the Option only within
the twelve-month period after the death of the Optionee, subject to the earlier
expiration of the Option Period.
9. ADJUSTMENT OF SHARES.
9.1 Options Agreements evidencing Options shall be subject to
adjustment by the Board as to the number and price of Shares subject to such
Options in the event of changes in the outstanding Shares by reason of stock
dividends, stock splits, recapitalizations, reorganizations, mergers,
consolidations, combinations, exchanges, or other relevant changes in
capitalization occurring after the date of grant of any such Option. In the
event of any such change in the outstanding Shares, the aggregate number of
Shares available under the Plan shall be appropriately adjusted by the Board,
whose determination shall be conclusive.
9.2 Except as otherwise expressly provided herein, the
issuance by the Company of shares of its capital stock of any class, or
securities convertible into shares of capital stock of any class, either in
connection with a direct sale or upon the exercise of rights or warrants to
subscribe therefor, or upon conversion of shares or obligations of the Company
convertible into such shares or other securities, shall not affect, and no
adjustment by reason thereof shall be made
<PAGE>
with respect to, the number or exercise price of the Shares then subject to
outstanding Options granted under the Plan.
9.3 Without limiting the generality of the foregoing, the
existence of outstanding Options granted under the Plan shall not affect in any
manner the right or power of the Company to make, authorize or consummate (i)
any or all adjustments, recapitalizations, reorganizations or other changes in
the Company's capital structure or its business; (ii) any merger or
consolidation of the Company; (iii) any issue by the Company of debt securities,
or preferred or preference stock that would rank above the Shares subject to
outstanding Options; (iv) the dissolution or liquidation of the Company; (v) any
sale, transfer or assignment of all or any part of the assets or business of the
Company; or (vi) any other corporate act or proceedings, whether of a similar
character or otherwise.
10. TRANSFERABILITY OF OPTIONS. Each Option shall provide that such
Option shall not be transferable by the Optionee otherwise than by will or the
laws of descent and distribution, and each Option shall be exercisable during
the Optionee's lifetime only by the Optionee.
11. ISSUANCE OF SHARES. As a condition of any sale or issuance of
Shares upon exercise of any Option, the Board may require such agreements or
undertakings, if any, as the Board may deem necessary or advisable to assure
compliance with any applicable law or regulation including, but not limited to,
the following:
(a) a representation and warranty by the Optionee to the
Company, at the time any Option is exercised, that Optionee is
acquiring the Shares to be issued for investment and not with a view
to, or for sale connection with, the distribution of any such Shares;
and
(b) a representation, warranty and/or agreement to be bound by
any legends that are, in the opinion of the Board, necessary or
appropriate to comply with the provisions of any securities law deemed
by the Board to be applicable to the issuance of the Shares and are
endorsed upon the Share certificates.
12. ADMINISTRATION OF THE PLAN. The Plan shall be administered by the
Board, which shall have the authority to adopt such rules and regulations and to
make such determinations as are not inconsistent with the Plan and as are
necessary or desirable for the implementation and administration of the Plan,
provided that the Board does not have any discretion with respect to the grant
of options under the Plan.
13. INTERPRETATION.
13.1 If any provision of the Plan should be held invalid or
illegal for any reason, such determination shall not affect the remaining
provisions hereof, but instead the Plan shall be construed and enforced as if
such provision had never been included in the Plan. Without limiting the
generality of the foregoing, transactions under this Plan are intended to comply
with all applicable conditions of Rule 16b-3 or its successors promulgated under
the Securities Exchange Act of 1934, as amended (the "1934 Act"), and this Plan
is intended to constitute a "Formula Plan" pursuant to Rule 16b-3(c)(2)(ii). To
the extent any provision of the Plan or action by the
<PAGE>
Board hereunder is inconsistent with the foregoing requirements, it shall be
deemed null and void, to the extent permitted by law and deemed advisable by the
Board.
13.2 The determinations and the interpretation and
construction of any provision of the Plan by the Board shall be final and
conclusive. This Plan shall be governed by the laws of the State of Florida.
Headings contained in this Plan are for convenience only and shall in no manner
be construed as part of this Plan. Any reference to the masculine, feminine, or
neuter gender shall be a reference to such other gender as is appropriate.
14. TERM OF PLAN. Amendment and Termination of the Plan.
14.1 This Plan is effective as of September 21, 1993, the date
of its original adoption by the Board, subject to approval by the affirmative
vote of the holders of a majority of the Shares present or represented and
entitled to vote at the Annual Meeting of Shareholders of the Company, which is
scheduled to be held on December 9, 1993. This Plan shall continue in effect
until all Options granted hereunder have expired or been exercised, unless
sooner terminated under the provisions relating thereto. No Option shall be
granted after 10 years from the Effective Date.
14.2 The Board may from time to time amend, terminate or
suspend the Plan or any Option; provided, however that, except to the extent
provided in Section 9, no such amendment may (i) without approval by the
Company's shareholders, increase the number of Shares reserved for Options or
change the class of persons eligible to receive Options or involve any other
change or modification requiring shareholder approval under Rule 16b-3 of the
1934 Act; (ii) permit the granting of Options that expire beyond the maximum
10-year period described in Subsection 7.4; (iii) extend the termination date of
the Plan as set forth in Section 14.1; or (iv) give the directors discretion
with respect to the grant of options; and, provided further, that, except to the
extent otherwise specifically provided in Section 8, no amendment, termination
or suspension of the Plan or any Option issued hereunder shall substantially
impair any Option previously granted to any Optionee without the consent of such
Optionee. Any termination or suspension of the Plan shall not affect Options
already granted and such Options shall remain in full force and effect as if
this Plan had not been terminated or suspended. No Option may be granted while
the Plan is suspended or after it is terminated.
14.3 Notwithstanding anything else contained herein, the
provisions of this Plan which govern the number of Options to be awarded to
Directors, the exercise price per share under each such Option, when and under
what circumstances an Option will be granted, and the period within which each
Option may be exercised, shall not be amended more than once every six months
(even with shareholder approval), other than to conform to changes in the Code,
or the rules promulgated thereunder, and under the Employee Retirement Income
Security Act of 1974, as amended, or the rules promulgated thereunder, or with
rules promulgated by the Securities and Exchange Commission.
15. Reservation of Shares. The Company, during the term of the Plan,
will at all times reserve and keep available a number of Shares as shall be
sufficient to satisfy the requirements of the Plan.
<PAGE>
EXHIBIT 4.3
SPEC'S MUSIC, INC.
1996 NON-EMPLOYEE DIRECTORS STOCK OPTION PLAN
<PAGE>
SPEC'S MUSIC, INC.
1996 NON-EMPLOYEE DIRECTORS STOCK OPTION PLAN
1. PURPOSE. The purpose of this Plan is to help attract, retain and
compensate highly qualified individuals who are not current employees of Spec's
Music, Inc. (the "Company") as members of the Board of Directors and, by
encouraging ownership of a stock interest in the Company, to gain for the
Company the advantages inherent in directors having a greater personal financial
investment in the Company. Options granted under the Plan are intended to be
options which do not meet the requirements of Section 422 of the Code.
2. DEFINITIONS. As used herein, the following terms shall have the
meanings indicated:
"Annual Meeting Date" means 5:00 p.m. on the date of the
annual meeting of the Company's shareholders at which the Directors are elected.
"Board" means the Company's Board of Directors.
"Code" means the Internal Revenue Code of 1986, as amended.
"Common Stock" means the Common Stock, par value $.01 per
share of the Company.
"Company" refers to Spec's Music, Inc., a Florida corporation.
<PAGE>
"Director" means a member of the Board.
"Effective Date" is the date specified in Section 15.1.
"Eligible Director" means any person who is a member of the
Board and who is neither an employee, full time or part time, of the Company,
nor an independent contractor providing services to the Company, directly or
indirectly, other than as a director.
"Fair Market Value" of the Common Stock on any date of
reference means the Closing Price on the business day immediately preceding such
date of the Common Stock. For this purpose, the Closing Price of the Common
Stock on any business day shall be (i) if such Common Stock is listed or
admitted for trading on any United States national securities exchange, or if
actual transactions are otherwise reported on a consolidated transaction
reporting system, the last reported sale price of Common Stock on such exchange
or reporting system, as reported in any newspaper of general circulation, (ii)
if the Common Stock is quoted on the National Association of Securities Dealers
Automated Quotations Systems ("NASDAQ"), or any similar system of automated
dissemination of quotations of securities prices in common use, the closing bid
quotation for such day of the Common Stock on such system, or (iii) if neither
clause (i) or (ii) is applicable, the mean between the high bid and low ask
quotations for the Common Stock as reported by the National Quotation Bureau,
Incorporated if at least two securities dealers have inserted both bid and ask
quotations for the Common Stock on at least 5 of the 10 preceding days.
"First Exercise Date" shall have the meaning set forth in
Section 6(a) of this Plan.
<PAGE>
"Initial Grant Date" means the date on which a person is first
elected as a member of the Board, or the Effective Date of this Plan in the case
of persons who were members of the Board prior to the adoption of this Plan, as
applicable.
"Option" (when capitalized) means any stock option granted
under this Plan.
"Option Agreement" means the agreement between the Company and
the Optionee for the grant of an option.
"Option Period" means the period five (5) years from the date
an Option is granted.
"Optionee" means a person to whom a stock option is granted
under this Plan or any person who succeeds to the rights of such person under
this Plan by reason of the death of such person.
"Plan" shall mean this 1996 Non-Employee Directors' Stock
Option Plan for the Company.
"Share(s)" shall mean a share or shares of the Common Stock.
3. SHARES AND OPTIONS. Subject to Section 9 of this Plan, the Company
may grant to Optionees from time to time Options to purchase an aggregate of up
to One Hundred and Fifty Thousand (150,000) Shares. Such Shares may be
authorized and unissued Shares, Shares issued
<PAGE>
and thereafter acquired by the Company, and/or Shares bought on the market for
purposes of this Plan. If any Option granted under this Plan shall terminate,
expire, or be cancelled or surrendered as to any Shares, new Options may
thereafter be granted covering such Shares.
4. GRANTS OF OPTIONS. Each Eligible Director shall receive an initial
grant of an Option to purchase Twenty Thousand (20,000) Shares on the Initial
Grant Date. In addition, commencing in 1996, each Eligible Director who is
re-elected to serve as a director on the Annual Meeting Date, shall be granted
an option to purchase Two Thousand (2,000) Shares each year on the Annual
Meeting Date. Upon the grant of each Option, the Company and the Eligible
Director shall enter into an Option Agreement, which shall specify the grant
date and the exercise price and shall include or incorporate by reference the
substance of the Plan and such other provisions consistent with this Plan as the
Board may determine.
5. EXERCISE PRICE. The exercise price per Share of any Option shall be
the Fair Market Value of the Shares underlying such Option on the date such
Option is granted.
6. VESTING AND EXERCISE OF OPTIONS. Each Option granted hereunder upon
an Eligible Director's re-election to the Board shall become fully exercisable
one year following its grant. An Option granted on the Initial Grant Date under
the Plan shall vest and become exercisable in installments as follows:
(a) the Options shall not vest nor be exercisable prior to the
expiration of thirty days from the Effective Date of this Agreement, or in the
case of the Options granted upon re-election
<PAGE>
of a Director, such Options shall not vest nor be exercisable prior to the
expiration of thirty days from the Annual Meeting Date, (each, a "First Exercise
Date");
(b) after the First Exercise Date and until the three years after the
Effective Date or Annual Meeting Date, as applicable, the Options shall vest and
first become exercisable at the rate of Five Hundred and Fifty-Five (555) of the
Shares underlying the Options per month;
(c) the Options to purchase the remaining twenty (20) Shares shall vest
and be exercisable three (3) years after the Effective Date or Annual Meeting
Date, as applicable;
(d) an Option shall be deemed exercised when (i) the Company has
received written notice of such exercise in accordance with the terms of the
Option, (ii) full payment of the aggregate exercise price of the Shares as to
which the Option is exercised has been made, and (iii) arrangements that are
satisfactory to the Board in its sole discretion have been made for the
Optionee's payment to the Company of the amount that is necessary for the
Company to withhold in accordance with applicable Federal or state withholding
requirements. The exercise price of any Shares purchased, and any required tax
payment, shall be paid in full and in cash, by payment in cash or by certified,
cashier's or official bank check, personal check or money order, and the Company
shall not be required to deliver certificates for such Shares until such payment
has been made.
No Optionee shall be deemed to be a holder of any Shares subject to an Option,
nor shall an Optionee have any rights of a stockholder of the Company, unless
and until a stock certificate or certificates for such Shares are issued to such
person(s) under the terms of the Plan. No adjustment shall be made for dividends
(ordinary or extraordinary, whether in cash, securities or
<PAGE>
other property) or distributions or other rights for which the record date is
prior to the date such stock certificate is issued, except as expressly provided
in Section 9 hereof.
7. EXERCISE SCHEDULE FOR OPTIONS.
7.1 Each Option granted hereunder upon the Initial Grant Date
and upon an Eligible Director's re-election to the Board shall be exercised in
accordance with the Plan.
7.2 Notwithstanding the foregoing provisions, each outstanding
Option shall become fully exercisable immediately:
(a) If there occurs any transaction (which shall
include a series of transactions occurring within 60 days or occurring pursuant
to a plan), that has the result that stockholders of the Company immediately
before such transaction cease to own at least 51 percent of the voting stock of
the Company or of any entity that results from the participation of the Company
in a reorganization, recapitalization, consolidation, merger, share, exchange,
liquidation or any other form of corporate transaction;
(b) If the stockholders of the Company shall approve
a plan of merger, consolidation, share exchange, reorganization,
recapitalization, liquidation or dissolution in which the Company does not
survive, unless (i) the approved merger, consolidation, share exchange,
reorganization, recapitalization, liquidation or dissolution is subsequently
abandoned, or (ii) the entity surviving or resulting from such transaction (x)
is controlled by substantially the same persons as was the Company (y) assumes
all obligations of the Company under the Option, and
<PAGE>
(z) has a financial condition and operations substantially equivalent or
superior to those of the Company immediately prior to the transaction; or
(c) If the stockholders of the Company shall approve
a plan for the sale, lease, exchange or other disposition of all or
substantially all the property and assets of the Company (unless such plan is
subsequently abandoned).
7.3 The expiration date of an Option shall be five (5) years
from the date of grant of the Option, subject to earlier termination pursuant to
Section 8.
8. TERMINATION OF OPTION PERIOD. In the event an Optionee's
directorship is terminated, any Options that have not yet vested will terminate
on such date. An Optionee whose directorship is terminated for any reason other
than death or disability (as defined in the Americans With Disabilities Act of
1990 shall be entitled to exercise any Options which are then exercisable only
within the thirty day period after the date he ceases to serve as a director;
after such thirty day period, such Options shall be null and void. In the case
of termination of the directorship by reason of the Director's death or
disability as defined in the Americans With Disabilities Act of 1990, the Option
or any portion thereof which was not exercisable on the date of termination
shall terminate on such date.
9. ADJUSTMENT OF SHARES.
9.1 Options Agreements evidencing Options shall be subject to
adjustment by the Board as to the number and price of Shares subject to such
Options in the event of changes
<PAGE>
in the outstanding Shares by reason of stock dividends, stock splits,
recapitalizations, reorganizations, mergers, consolidations, combinations,
exchanges, or other relevant changes in capitalization occurring after the date
of grant of any such Option. In the event of any such change in the outstanding
Shares, the aggregate number of Shares available under the Plan shall be
appropriately adjusted by the Board, whose determination shall be conclusive.
9.2 Except as otherwise expressly provided herein, the
issuance by the Company of shares of its capital stock of any class, or
securities convertible into shares of capital stock of any class, either in
connection with a direct sale or upon the exercise of rights or warrants to
subscribe therefor, or upon conversion of shares or obligations of the Company
convertible into such shares or other securities, shall not affect, and no
adjustment by reason thereof shall be made with respect to, the number or
exercise price of the Shares then subject to outstanding Options granted under
the Plan.
9.3 Without limiting the generality of the foregoing, the
existence of outstanding Options granted under the Plan shall not affect in any
manner the right or power of the Company to make, authorize or consummate (i)
any or all adjustments, recapitalizations, reorganizations or other changes in
the Company's capital structure or its business; (ii) any merger or
consolidation of the Company; (iii) any issue by the Company of debt securities,
or preferred or preference stock that would rank above the Shares subject to
outstanding Options; (iv) the dissolution or liquidation of the Company; (v) any
sale, transfer or assignment of all or any part of the assets or business of the
Company; or (vi) any other corporate act or proceedings, whether of a similar
character or otherwise.
<PAGE>
10. TRANSFERABILITY OF OPTIONS. Each Option shall provide that such
Option may not be transferred, sold, pledged or assigned by the Optionee
otherwise than by will or the laws of descent and distribution, and each Option
shall be exercisable during the Optionee's lifetime only by the Optionee.
11. ISSUANCE OF SHARES. As a condition of any sale or issuance of
Shares upon exercise of any Option, the Board may require such agreements or
undertakings, if any, as the Board may deem necessary or advisable to assure
compliance with any applicable law or regulation including, but not limited to,
the following:
(a) A representation and warranty by the Optionee to
the Company, at the time any Option is exercised, that Optionee is acquiring the
Shares to be issued for investment and not with a view to, or for sale in
connection with, the distribution of any such Shares; and
(b) A representation, warranty and/or agreement to be
bound by any legends that are, in the opinion of the Board, necessary or
appropriate to comply with the provisions of any securities law deemed by the
Board to be applicable to the issuances of the Shares and are endorsed upon the
Share certificates.
12. RESTRICTIONS ON ISSUING SHARES. The exercise of each Option shall
be subject to the condition that if at any time the Company shall determine in
its discretion that the satisfaction of withholding tax or other withholding
liabilities, or that the listing, registration, or qualification of any shares
otherwise deliverable upon such exercise upon any securities exchange or under
any state or federal law, or that the consent or approval of any regulatory
body, is
<PAGE>
necessary or desirable as a condition of, or in connection with, such exercise
or the delivery or purchase of Shares pursuant thereto, then in any such event,
such exercise shall not be effective unless such withholding, listing,
registration, qualification, consent, or approval shall have been effected or
obtained free of any conditions not acceptable to the Company.
13. ADMINISTRATION OF THE PLAN. The Plan shall be administered by the
Board, which shall have the authority to adopt such rules and regulations and to
make such determinations as are not inconsistent with the Plan and as are
necessary or desirable for the implementation and administration of the Plan,
provided that the Board does not have any discretion with respect to the grant
of options under the Plan.
14. INTERPRETATION.
14.1 If any provision of the Plan should be held invalid or
illegal for any reason, such determination shall not affect the remaining
provisions hereof, but instead the Plan shall be construed and enforced as if
such provision had never been included in the Plan. Without limiting the
generality of the foregoing, transactions under this Plan are intended to comply
with all applicable conditions of Rule 16b-3 or its successors promulgated under
the Securities Exchange Act of 1934, as amended (the "1934 Act"), and this Plan
is intended to constitute a "Formula Plan" pursuant to Rule 16b-3(c)(2)(ii). To
the extent any provision of the Plan or action by the Board hereunder is
inconsistent with the foregoing requirements, it shall be deemed null and void
to the extent permitted by law and deemed advisable by the Board.
<PAGE>
14.2 The determinations and the interpretation and
construction of any provision of the Plan by the Board shall be final and
conclusive. This Plan shall be governed by the laws of the State of Florida.
Headings contained in this Plan are for convenience only and shall in no manner
be construed as part of this Plan. Any reference to the masculine, feminine, or
neuter gender shall be a reference to such other gender as is appropriate.
15. TERM OF PLAN, AMENDMENT AND TERMINATION OF THE PLAN.
15.1 This Plan is effective as of June 4, 1996, the date of
its original adoption by the Board, subject to approval by the affirmative vote
of the holders of a majority of the Shares present or represented and entitled
to vote at the Annual Meeting of the Shareholders of the Company, which is
scheduled to be held on December 10, 1996. This Plan shall continue in effect
until all Options granted hereunder have expired or been exercised, unless
sooner terminated under the provisions relating thereto. No Option shall be
granted after five years from the Effective Date.
15.2 The Board may from time to time amend, terminate or
suspend the Plan or any Option; provided, however, that except to the extent
provided in Section 9, no such amendment may (i) without approval by the
Company's shareholders, increase the number of Shares reserved for Options or
change the class of persons eligible to receive Options or involve any other
change or modification requiring shareholder approval under Rule 16b-3 of the
1934 Act; (ii) permit the granting of Options that expire beyond the maximum
five-year period described in Subsection 7.3; (iii) extend the termination date
of the Plan as set forth in Section
<PAGE>
15.1; or (iv) give the directors discretion with respect to the grant of
options; and, provided further, that, except to the extent otherwise
specifically provided in Section 8, no amendment, termination or suspension of
the Plan or any Option issued hereunder shall substantially impair any Option
previously granted to any Optionee without the consent of such Optionee. Any
termination or suspension of the Plan shall not affect Options already granted
and such Options shall remain in full force and effect as if this Plan had not
been terminated or suspended. No Option may be granted while the Plan is
suspended or after it is terminated.
15.3 Notwithstanding anything else contained herein, the
provisions of this Plan which govern the number of Options to be awarded to
Directors, the exercise price per share under each such Option, when and under
what circumstances an Option will be granted, and the period within which each
Option may be exercised, shall not be amended more than once every six months
(even with shareholder approval), other than to conform to changes in the Code,
or the rules promulgated thereunder, and under the Employee Retirement Income
Security Act of 1974, as amended, or the rules promulgated thereunder, or with
rules promulgated by the Securities and Exchange Commission.
16. RESERVATIONS OF SHARES. The Company, during the term of the Plan,
will at all times reserve and keep available a number of Shares as shall be
sufficient to satisfy the requirements of the Plan.
EXHIBITS 5.1
OPINION
OF
BROAD AND CASSEL
<PAGE>
BROAD AND CASSEL
ATTORNEYS AT LAW
201 SOUTH BISCAYNE BOULEVARD
MIAMI CENTER, SUITE 3000
MIAMI, FLORIDA 33131
(305) 373-9400
February 12, 1998
Spec's Music, Inc.
1666 W. 82nd Avenue
Miami, Florida 33126
RE: SPEC'S MUSIC, INC. (THE "COMPANY")
REGISTRATION STATEMENT ON FORM S-8
Ladies and Gentlemen:
You have requested our opinion with respect to the shares (the
"Shares") of the Company's common stock, $.01 par value (the "Common Stock"),
included in the Company's registration statement on Form S-8 (the "Registration
Statement"). The Registration Statement has been filed with the U.S. Securities
and Exchange Commission pursuant to the Securities Act of 1933, as amended (the
"Securities Act").
As counsel to the Company, we have examined the original or certified
copies of such records of the Company, and such agreements, certificates of
public officials, certificates of officers or representatives of the Company and
others, and such other documents as we deem relevant and necessary for the
opinion expressed in this letter. In such examination, we have assumed the
genuineness of all signatures on original documents, and the conformity to
original documents of all copies submitted to us as conformed or photostatic
copies. As to various questions of fact material to such opinion, we have relied
upon statements or certificates of officials and representatives of the Company
and others.
Based on, and subject to the foregoing, we are of the opinion that the
Shares included in the Registration Statement, when issued and paid for in
accordance with the terms of the Registration Statement, will be duly and
validly issued, fully paid and non-assessable.
In rendering this opinion, we advise you that members of this Firm are
members of the Bar of the State of Florida, and we express no opinion herein
concerning the applicability or effect of any laws of any other jurisdiction,
except the securities laws of the United States of America referred to herein.
This opinion has been prepared and is to be construed in accordance
with the Report on Standards for Florida Opinions, dated April 8, 1991, issued
by the Business Law Section of The
<PAGE>
Spec's Music, Inc.
February 12, 1998
Page 2
Florida Bar, as amended and supplemented (the "Report"). The Report is
incorporated by reference into this opinion.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. We also consent to the use of our name in the
Registration Statement. In giving such consent, we do not thereby admit that we
are included within the category of persons whose consent is required under
Section 7 of the Securities Act, or the rules and regulations promulgated
thereunder.
Very truly yours,
/s/ Broad and Cassel
BROAD AND CASSEL
EXHIBIT 23.2
CONSENT
OF
DELOITTE & TOUCHE LLP
<PAGE>
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration
Statement of Spec's Music, Inc. on Form S-8 of our report dated October 24, 1997
appearing in the Annual Report on Form 10-K of Spec's Music, Inc. for the year
ended July 31, 1997.
/s/ DELOITTE & TOUCHE LLP
- -------------------------
DELOITTE & TOUCHE LLP
Miami, Florida
February 9, 1998
