As filed with the Securities and Exchange Commission on August
13, 1998
Registration No. ______
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
___________________
GOTTSCHALKS INC.
(Exact name of registrant as specified in its charter)
___________________
Delaware 77-0159791
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
7 River Park Place East, Fresno, California 93720
(Address of principal executive offices)
The Gottschalks Inc. 1998 Employee Stock Purchase Plan
(Full title of the plan)
______________
Warren L. Williams, Esq.
General Counsel
GOTTSCHALKS INC.
7 River Park Place East
Fresno, California 93720
(Name and address of agent for service)
___________________
Telephone number, including area code, of agent for service:
(209) 434-4800
___________________
Copy to:
D. Stephen Antion, Esq.
O'Melveny & Myers LLP
400 South Hope Street, Suite 1500
Los Angeles, California 90071
CALCULATION OF REGISTRATION FEE
Proposed Proposed
maximum maximum
Title of Amount offering aggregate Amount of
securities to be price offering registration
to be registered registered per unit price fee
Common Stock, $.01 500,000(1) $8.71875(2) $4,359,375(2) $1,286(2)
par value shares
(1) This Registration Statement covers, in addition to the
number of shares of Common Stock stated above, options
and other rights to purchase or acquire the shares of
Common Stock covered by the Prospectus and, pursuant to
Rule 416 under the Securities Act of 1933, as amended,
an additional indeterminate number of shares which by
reason of certain events specified in the Plan may
become subject to the Plan.
(2) Pursuant to Rule 457(h) under the Securities Act of
1933, as amended, the maximum offering price, per share
and in the aggregate, and the registration fee were
calculated based upon the average of the high and low
prices of the Common Stock on August 10, 1998 as
reported on the New York Stock Exchange and published
in the Western Edition of the Wall Street Journal.
The exhibit index for this Registration Statement is on
page S-3.
PART I
INFORMATION REQUIRED IN THE
SECTION 10(a) PROSPECTUS
The documents containing the information specified
in Part I of Form S-8 (plan information and registrant
information) will be sent or given to employees as
specified by Securities and Exchange Commission
Rule 428(b)(1). Such documents need not be filed with
the Securities and Exchange Commission either as part
of this Registration Statement or as prospectuses or
prospectus supplements pursuant to Rule 424. These
documents, which include the statement of availability
required by Item 2 of Form S-8, and the documents
incorporated by reference in this Registration
Statement pursuant to Item 3 of Form S-8 (Part II
hereof), taken together, constitute a prospectus that
meets the requirements of Section 10(a) of the
Securities Act of 1933.
PART II
INFORMATION REQUIRED IN THE
REGISTRATION STATEMENT
Item 3. Incorporation of Certain Documents by
Reference
The following documents of Gottschalks Inc.
(the "Company") filed with the Securities and
Exchange Commission are incorporated herein by
reference:
(a) The Company's Annual Report on Form 10-K for
the fiscal year ended January 31, 1998;
(b) The Company's Quarterly Report on Form 10-Q
for the fiscal quarter ended April 30, 1998;
and
(c) The description of the Company's Common
Stock contained in the registration
statement (and past and future amendments
thereto) for the Common Stock filed under
Section 12 of the Securities and Exchange
Act of 1934, as amended (the "Exchange Act")
including any amendment or report filed for
the purpose of updating such description.
All documents subsequently filed by the Company
pursuant to Sections 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange
Act"), prior to the filing of a post-effective amendment
which indicates that all securities offered hereby have
been sold or which deregisters all securities then
remaining unsold, are deemed to be incorporated by
reference into the prospectus and to be a part hereof from
the date of filing of such documents. Any statement
contained herein or in a document, all or a portion of
which is 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 in any
other subsequently filed document which also is or is
deemed to be 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 amended, to constitute a part of this Registration
Statement.
Item 4. Description of Securities
The Company's Common Stock is registered
pursuant to Section 12 of the Exchange Act, and therefore,
the description of securities is omitted.
Item 5. Interests of Named Experts and Counsel
Not Applicable.
Item 6. Indemnification of Directors and Officers
Delaware law provides for the indemnification of
officers and directors in terms sufficiently broad to
include indemnification under certain circumstances for
liabilities (including reimbursement for expenses incurred)
arising under the Securities Act of 1933. Pursuant to
Section 145 of the Delaware General Corporation Law (the
"DGCL"), a corporation may indemnify an officer or director
if that person acted in good faith and in a manner
reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to criminal
actions or proceedings, had no reason to believe the conduct
was unlawful.
The Certificate of Incorporation of the Company
limits directors' liability for monetary damages to the
Company and its stockholders for breaches of fiduciary duty
to the fullest extent permitted by the DGCL.
The Company's Bylaws provide that each director or
officer of the Company who was or is a party or is
threatened to be made a party to or is involved in any
action, suit or proceeding, whether civil, criminal,
administrative or investigative (hereinafter a
"proceeding"), by reason of the fact that he or she, or a
person of whom he or she is the legal representative, is or
was a director or officer of the Company or is or was
serving at the request of the Company as a director,
officer, employee or agent of another corporation or of a
partnership, joint venture, trust or other enterprise,
including service with respect to employee benefit plans,
whether the basis of such proceeding is alleged action in an
official capacity or in another capacity while serving as
director, officer, employee or agent, shall be indemnified
and held harmless by the Company to the fullest extent
permitted by the laws of Delaware, as the same exist or may
hereafter be amended (but, in the case of any such
amendment, only to the extent that such amendment permits
the Company to provide broader indemnification rights than
said law permitted the Company to provide prior to such
amendment), against all costs, charges, expenses,
liabilities and losses (including attorneys' fees,
judgments, fines, ERISA excise taxes or penalties and
amounts paid or to be paid in settlement) reasonably
incurred or suffered by such person in connection therewith,
and such indemnification shall continue as to a person who
has ceased to be a director or officer and shall inure to
the benefit of his or her heirs, executors and
administrators; provided, however, that the Company shall
indemnify any such person seeking indemnification in
connection with a proceeding (or part thereof) initiated by
such person only if such proceeding (or part thereof) was
initiated or authorized by one or more members of the
Company's Board of Directors. The right to indemnification
shall be a contract right and shall include the right to be
paid by the Company the expenses incurred in defending any
such proceeding in advance of its final disposition;
provided, however, that if the DGCL so requires, the payment
of such expenses incurred by a director or officer in his or
her capacity as a director or officer (and not in any other
capacity in which service was or is rendered by such person
while a director or officer, including, without limitation,
service to an employee benefit plan) in advance of the final
disposition of a proceeding shall be made only upon delivery
to the Company of an undertaking, by or on behalf of such
director or officer, to repay all amounts so advanced if it
will ultimately be determined that such director or officer
is not entitled to be indemnified.
Item 7. Exemption from Registration Claimed
Not Applicable.
Item 8. Exhibits
See the attached Exhibit Index at page S-3.
Item 9. Undertakings
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or
sales are being made, a post-effective amendment to this
Registration Statement:
(i) To include any prospectus required by
Section 10(a)(3) of the Securities Act of 1933 (the
"Securities Act");
(ii) To reflect in the prospectus any facts
or events arising after the effective date of the
Registration Statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth
in the Registration Statement; and
(iii) To include any material information with
respect to the plan of distribution not previously disclosed
in the Registration Statement or any material change to such
information in the Registration Statement;
Provided, however, that paragraphs (a)(1)(i) and
(a)(1)(ii) do not apply if the information required to be
included in a post-effective amendment by those paragraphs
is contained in periodic reports filed by the registrant
pursuant to Section 13 or Section 15(d) of the 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; and
(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 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 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.
(c) 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 provisions described in Item
6 above, or otherwise, the registrant has been advised
that in the opinion of the Securities and Exchange
Commission such indemnification is against public
policy as expressed in the 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.
SIGNATURES
Pursuant to the requirements of the Securities Act of
1933, 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 Fresno, State of California, on this 13 day of
August, 1998.
GOTTSCHALKS INC.
By: /s/ JOE LEVY
-----------------------------
Joe Levy
Chairman and Chief Executive
Officer
Pursuant to the requirements of the Securities Act of
1933, this Registration Statement has been signed below by the
following persons in the capacities and on the dates indicated.
Signature Title Date
/s/ JOE LEVY Chairman and Chief August 13, 1998
Joe Levy Executive Officer
/s/ JAMES R. FAMALETTE President, Chief August 13, 1998
James R. Famalette Operating Officer and
Director
/s/ BRET W. LEVY Vice President, Treasurer August 13, 1998
Bret W. Levy and Director
/s/ MAX GUTMANN Director August 13, 1998
Max Gutmann
/s/ ALAN WEINSTEIN Senior Vice President August 13, 1998
Alan Weinstein and Chief Financial Officer
/s/ SHARON LEVY Director August 13, 1998
Sharon Levy
/s/ JOSEPH J. PENBERA Director August 13, 1998
Joseph J. Penbera
/s/ FREDERICK R. RUIZ Director August 13, 1998
Frederick R. Ruiz
/s/ O. JAMES WOODWARD III Director August 13, 1998
O. James Woodward III
/s/ WILLIAM SMITH Director August 13, 1998
William Smith
EXHIBIT INDEX
Exhibit
Number Description
4 The Gottschalks Inc. 1998
Employee Stock Purchase
Plan.
5 Opinion of Warren L.
Williams, Esq. (opinion re
legality).
23.1 Consent of Independent
Auditors.
23.2 Consent of Warren L.
Williams, Esq. (included in
Exhibit 5).
EXHIBIT 4
THE GOTTSCHALKS INC.
1998 EMPLOYEE STOCK PURCHASE PLAN
The following constitute the provisions of the 1998
Employee Stock Purchase Plan of Gottschalks Inc.
1. Purpose. The purpose of the Plan is to provide
employees of the Company and its Designated Subsidiaries with an
opportunity to purchase Common Stock of the Company. It is the
intention of the Company to have the Plan qualify as an "Employee
Stock Purchase Plan" under Section 423 of the Internal Revenue
Code of 1986, as amended. The provisions of the Plan shall,
accordingly, be construed so as to extend and limit participation
in a manner consistent with the requirements of that section of
the Code.
2. Definitions.
(a) "Board" shall mean the Board of Directors of the
Company.
(b) "Code" shall mean the Internal Revenue Code of
1986, as amended.
(c) "Common Stock" shall mean the Common Stock of the
Company.
(d) "Company" shall mean Gottschalks Inc., a Delaware
corporation.
(e) "Compensation" shall mean all regular straight
time gross earnings, payments for overtime, shift premium,
incentive compensation, incentive payments, bonuses, commissions
and other cash compensation.
(f) "Continuous Status as an Employee" shall mean the
absence of any interruption or termination of service as an
Employee. Continuous Status as an Employee shall not be
considered interrupted in the case of a leave of absence agreed
to in writing by the Company, provided that such leave is for a
period of not more than 90 days or reemployment upon the
expiration of such leave is guaranteed by contract or statute.
(g) "Contributions" shall mean all amounts credited to
the account of a participant pursuant to the Plan.
(h) "Designated Subsidiaries" shall mean the
Subsidiaries which have been designated by the Board from time to
time in its sole discretion as eligible to participate in the
Plan (including any Subsidiaries which have been so designated
after the date the Plan is approved by stockholders).
(i) "Employee" shall mean any person, including an
officer, who is customarily employed for at least twenty (20)
hours per week and more than five (5) months in a calendar year
by the Company or one of its Designated Subsidiaries.
(j) "Exchange Act" shall mean the Securities Exchange
Act of 1934, as amended.
(k) "Exercise Date" shall mean the last day of each
Offering Period of the Plan.
(l) "Offering Date" shall mean the first business day
of each Offering Period of the Plan.
(m) "Offering Period" shall mean a period of six (6)
months, subject to and except as otherwise provided in Section 4.
(n) "Plan" shall mean this Employee Stock Purchase
Plan.
(o) "Subsidiary" shall mean any corporation, domestic
or foreign, in an unbroken line of corporations (beginning with
the Company) in which each corporation (other than the last
corporation) has stock possessing 50% or more of the total
combined voting power of all classes of stock in one or more of
the other corporations in the chain, whether or not such
corporation now exists or is hereafter organized or acquired by
the Company or a Subsidiary.
3. Eligibility.
(a) Any person who has been employed as an Employee
for three (3) months as of the Offering Date of a given Offering
Period shall be eligible to participate during such Offering
Period under the Plan, subject to the requirements of Section
5(a) and the limitations imposed by Section 423(b) of the Code.
(b) Any provisions of the Plan to the contrary
notwithstanding, no Employee shall be granted an option under the
Plan (i) if, immediately after the grant, such Employee (after
applying the attribution rules contained in Section 424(d) of the
Code) would own stock and/or hold outstanding options to purchase
stock possessing five percent (5%) or more of the total combined
voting power or value of all classes of stock of the Company or
of any Subsidiary, or (ii) if such option would permit his or her
rights to purchase stock under all employee stock purchase plans
(described in Section 423 of the Code) of the Company and its
Subsidiaries to accrue at a rate which exceeds Twenty Five
Thousand Dollars ($25,000) of fair market value of such stock
(determined at the time such option is granted) for each calendar
year in which such option is outstanding at any time. For this
purpose, a right to purchase stock occurs when it first becomes
exercisable during the calendar year.
4. Offering Periods. The first Offering Period shall
commence on August 1, 1998 (or such other date as the Board of
Directors shall determine) and terminate on January 31, 1999.
All subsequent new Offering Periods shall commence on or about
August 1 and February 1 of each year (or at such other time or
times as may be determined by the Board of Directors) and shall
terminate on the next succeeding January 31 and July 31,
respectively. The Plan shall continue until terminated in
accordance with Sections 19 or 23 hereof. The Board of Directors
of the Company shall have the power to change the duration and/or
the frequency of Offering Periods with respect to future
offerings without stockholder approval if such change is
announced at least ten (10) days prior to the scheduled beginning
of the first Offering Period to be affected.
5. Participation.
(a) An eligible Employee may become a participant in
the Plan by completing a subscription agreement on the form
provided by the Company and filing it with the Company's payroll
office prior to the applicable Offering Date, unless a different
time for filing the subscription agreement is set by the Board
for all eligible Employees with respect to a given Offering
Period. The subscription agreement shall set forth the
percentage of the participant's Compensation (which shall be not
less than 1% and not more than 10%) to be applied as
Contributions pursuant to the Plan.
(b) Payroll deductions shall commence on the first
payroll following the Offering Date and shall end on the last
payroll paid on or prior to the Exercise Date of the Offering
Period to which the subscription agreement is applicable, unless
sooner terminated by the participant as provided in Section 10.
6. Method of Payment of Contributions.
(a) The participant shall elect to have payroll
deductions made on each payday during the Offering Period in an
amount not less than one percent (1%) and not more than ten
percent (10%) of such participant's Compensation on each such
payday. The Company will maintain on its books or cause to be
maintained by a recordkeeper an account in the name of such
participant. All payroll deductions made by a participant shall
be credited to his or her account under the Plan. A participant
may not make any additional payments into such account.
(b) A participant may discontinue his or her
participation in the Plan as provided in Section 10, or, on one
occasion only during the Offering Period, may decrease the rate
of his or her Contributions during the Offering Period by
completing and filing with the Company a new subscription
agreement. The change in rate shall be effective as of the
beginning of the fiscal quarter following the date of filing of
the new subscription agreement.
(c) Notwithstanding the foregoing, to the extent
necessary to comply with Section 423(b)(8) of the Code and
Section 3(b) herein, a participant's payroll deductions may be
decreased to 0% at such time during any Offering Period which is
scheduled to end during the current calendar year that the
aggregate of all payroll deductions accumulated with respect to
such Offering Period and any other Offering Period ending within
the same calendar year equal $21,250. Payroll deductions shall
re-commence at the rate provided in such participant's
subscription agreement at the beginning of the first Offering
Period which is scheduled to end in the following calendar year,
unless terminated by the participant as provided in Section 10.
7. Grant of Option.
(a) On the Offering Date of each Offering Period, each
eligible Employee participating in such Offering Period shall be
granted an option to purchase on the Exercise Date a number of
shares of the Company's Common Stock determined by dividing such
Employee's Contributions accumulated prior to such Exercise Date
and retained in the participant's account as of the Exercise Date
by the lower of (i) eighty-five percent (85%) of the fair market
value of a share of the Company's Common Stock on the Offering
Date, or (ii) eighty-five percent (85%) of the fair market value
of a share of the Company's Common Stock on the Exercise Date;
provided, however, that the maximum number of shares an Employee
may purchase during each Offering Period shall be determined at
the Offering Date by dividing $12,500 by the fair market value of
a share of the Company's Common Stock on the Offering Date, and
provided further that such purchase shall be subject to the
limitations set forth in Sections 3(b) and 12. The fair market
value of a share of the Company's Common Stock shall be
determined as provided in Section 7(b).
(b) The option price per share of the shares offered
in a given Offering Period shall be the lower of: (i) 85% of the
fair market value of a share of the Common Stock of the Company
on the Offering Date; or (ii) 85% of the fair market value of a
share of the Common Stock of the Company on the Exercise Date.
The fair market value of the Company's Common Stock on a given
date shall be the closing price on The New York Stock Exchange on
such date (or, in the event that the Common Stock is not traded
on such date, on the immediately preceding trading date), as
reported in The Wall Street Journal or, in the event the Common
Stock is not listed on The New York Stock Exchange, the fair
market value shall be the closing price of the Common Stock for
such date (or, in the event that the Common Stock is not traded
on such date, on the immediately preceding trading date), as
reported on such other national securities exchange on which the
Common Stock is traded or, if such price is not reported, the
mean of the bid and asked prices per share of the Common Stock as
reported by such national securities exchange on which the Common
Stock is traded or, if such prices are not so reported, as
determined by the Board in its discretion.
8. Exercise of Option. Unless a participant withdraws
from the Plan as provided in paragraph 10, his or her option for
the purchase of shares will be exercised automatically on the
Exercise Date of the Offering Period, without any further action
on the optionee's part, and the maximum number of full shares
subject to option will be purchased at the applicable option
price with the accumulated Contributions in his or her account.
The shares purchased upon exercise of an option hereunder shall
be deemed to be transferred to the participant on the Exercise
Date. During his or her lifetime, a participant's option to
purchase shares hereunder is exercisable only by him or her.
9. Delivery. As promptly as practicable after the
Exercise Date of each Offering Period, the Company shall arrange
the delivery to each participant, as appropriate, of a
certificate representing the shares purchased upon exercise of
his or her option. Only cash remaining to the credit of a
participant's account under the Plan after a purchase by him or
her of shares at the termination of each Offering Period which is
insufficient to purchase a whole share of Common Stock of the
Company shall be carried over in the participant's account and
applied to the option price for the succeeding Offering Period.
10. Withdrawal; Termination of Employment; Reduction in
Service.
(a) A participant may withdraw all but not less than
all the Contributions credited to his or her account under the
Plan at any time prior to ten (10) days prior to the Exercise
Date of the Offering Period by giving written notice to the
Company. All of the participant's Contributions credited to his
or her account will be paid to him or her within fifteen (15)
days after receipt of his or her notice of withdrawal and his or
her option for the current period will be automatically
terminated. No further Contributions for the purchase of shares
will be made during the Offering Period.
(b) Upon termination of the participant's Continuous
Status as an Employee prior to the Exercise Date of the Offering
Period for any reason, including retirement or death, the
Contributions credited to his or her account will be returned to
him or her or, in the case of his or her death, to the person or
persons entitled thereto under Section 14, and his or her option
will be automatically terminated.
(c) In the event an Employee fails to remain in
Continuous Status as an Employee of the Company for at least
twenty (20) hours per week during the Offering Period in which
the employee is a participant, he or she will be deemed to have
elected to withdraw from the Plan and the Contributions credited
to his or her account will be returned to him or her and his or
her option terminated.
(d) A participant's withdrawal from an offering will
not have any effect upon his or her eligibility to participate in
a succeeding offering or in any similar plan which may hereafter
be adopted by the Company.
11. Interest. No interest shall accrue on the
Contributions of a participant in the Plan.
12. Stock.
(a) The maximum number of shares of the Company's
Common Stock which shall be made available for sale under the
Plan shall be 500,000 shares, subject to adjustment upon changes
in capitalization of the Company as provided in Section 18. If
the total number of shares which would otherwise be subject to
options granted pursuant to Section 7(a) on the Offering Date of
an Offering Period exceeds the number of shares then available
under the Plan (after deduction of all shares for which options
have been exercised or are then outstanding), the Company shall
make a pro rata allocation of the shares remaining available for
option grant in as uniform a manner as shall be practicable and
as it shall determine to be equitable. In such event, the
Company shall give written notice of such reduction of the number
of shares subject to the option to each Employee affected thereby
and shall similarly reduce the rate of Contributions, if
necessary.
(b) The participant will have no interest or voting
right in shares covered by his or her option until such option
has been exercised.
(c) Shares to be delivered to a participant under the
Plan will be registered in the name of the participant or, if
requested by the participant, in the name of the participant and
his or her spouse.
13. Administration. The Board, or a committee named by the
Board, shall supervise and administer the Plan and shall have
full power and discretion to adopt, amend and rescind any rules
deemed desirable and appropriate for the administration of the
Plan and not inconsistent with the Plan, to construe and
interpret the Plan, and to make all other determinations
necessary or advisable for the administration of the Plan. The
composition of the committee shall be in accordance with the
requirements to obtain or retain any available exemption from the
operation of Section 16(b) of the Exchange Act.
14. Designation of Beneficiary.
(a) A participant may file a written designation of a
beneficiary who is to receive any shares and cash, if any, from
the participant's account under the Plan in the event of such
participant's death subsequent to the end of the Offering Period
but prior to delivery to him or her of such shares and cash. In
addition, a participant may file a written designation of a
beneficiary who is to receive any cash from the participant's
account under the Plan in the event of such participant's death
prior to the Exercise Date of the Offering Period. If a
participant is married and the designated beneficiary is not the
spouse, spousal consent shall be required for such designation to
be effective in a form prescribed by the Board.
(b) Such designation of beneficiary may be changed by
the participant (and his or her spouse, if any) at any time by
written notice to the Company. In the event of the death of a
participant and in the absence of a beneficiary validly
designated under the Plan who is living at the time of such
participant's death, the Company shall deliver such shares and/or
cash to the executor or administrator of the estate of the
participant, or if no such executor or administrator has been
appointed (to the knowledge of the Company), the Company, in its
discretion, may deliver such shares and/or cash to the spouse or
to any one or more dependents or relatives of the participant, or
if no spouse, dependent or relative is known to the Company, then
to such other person as the Company may designate.
15. Transferability. Neither Contributions credited to a
participant's account nor any options or rights with regard to
the exercise of options or to receive shares under the Plan may
be assigned, transferred, pledged or otherwise disposed of in any
way (other than by will, the laws of descent and distribution, or
as provided in Section 14) by the participant. Any such attempt
at assignment, transfer, pledge or other disposition shall be
without effect, except that the Company may treat such act as an
election to withdraw funds in accordance with Section 10.
16. Use of Funds. All Contributions received or held by
the Company under the Plan may be used by the Company for any
corporate purpose, and the Company shall not be obligated to
segregate such Contributions.
17. Reports. Individual bookkeeping accounts will be
maintained for each participant in the Plan. Statements of
account will be given to participating Employees promptly
following the Exercise Date, which statements will set forth the
amount of Contributions, the per share purchase price, the number
of shares purchased and the remaining cash balance, if any.
18. Adjustments Upon Changes in Capitalization.
(a) Adjustment. Subject to any required action by the
stockholders of the Company, the number of shares of Common Stock
covered by each option under the Plan which has not yet been
exercised and the number of shares of Common Stock which have
been authorized for issuance under the Plan but have not yet been
placed under option (collectively, the "Reserves"), as well as
the price per share of Common Stock covered by each option under
the Plan which has not yet been exercised, shall be
proportionately adjusted for any increase or decrease in the
number of issued shares of Common Stock resulting from a stock
split, reverse stock split, stock dividend, combination or
reclassification of the Common Stock, or any other increase or
decrease in the number of shares of Common Stock effected without
receipt of consideration by the Company; provided, however, that
conversion of any convertible securities of the Company shall not
be deemed to have been "effected without receipt of
consideration." Such adjustment shall be made by the Board, whose
determination in that respect shall be final, binding and
conclusive. Except as expressly provided herein, no issue by the
Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall affect, and
no adjustment by reason thereof shall be made with respect to,
the number or price of shares of Common Stock subject to an
option.
(b) Corporate Transactions. In the event of the
proposed dissolution or liquidation of the Company, the Offering
Period will terminate immediately prior to the consummation of
such proposed action, unless otherwise provided by the Board. In
the event of a proposed sale of all or substantially all of the
assets of the Company, or the merger of the Company with or into
another corporation, each option under the Plan shall be assumed
or an equivalent option shall be substituted by such successor
corporation or a parent or subsidiary of such successor
corporation, unless the Board determines, in the exercise of its
sole discretion and in lieu of such assumption or substitution,
to shorten the Offering Period then in progress by setting a new
Exercise Date (the "New Exercise Date"). If the Board shortens
the Offering Period then in progress in lieu of assumption or
substitution in the event of a merger or sale of assets, the
Board shall notify each participant in writing, at least ten (10)
days prior to the New Exercise Date, that the Exercise Date for
his or her option has been changed to the New Exercise Date and
that his or her option will be exercised automatically on the New
Exercise Date, unless prior to such date he or she has withdrawn
from the Offering Period as provided in Section 10. For purposes
of this paragraph, an option granted under the Plan shall be
deemed to be assumed if, following the sale of assets or merger,
the option confers the right to purchase, for each share of
option stock subject to the option immediately prior to the sale
of assets or merger, the consideration (whether stock, cash or
other securities or property) received in the sale of assets or
merger by holders of Common Stock for each share of Common Stock
held on the effective date of the transaction (and if such
holders were offered a choice of consideration, the type of
consideration chosen by the holders of a majority of the
outstanding shares of Common Stock); provided, however, that if
such consideration received in the sale of assets or merger was
not solely common stock of the successor corporation or its
parent (as defined in Section 424(e) of the Code), the Board may,
with the consent of the successor corporation and the
participant, provide for the consideration to be received upon
exercise of the option to be solely common stock of the successor
corporation or its parent equal in fair market value of the per
share consideration received by holders of Common Stock in the
sale of assets or merger.
The Board may, if it so determines in the exercise of
its sole discretion, also make provision for adjusting the
Reserves, as well as the price per share of Common Stock covered
by each outstanding option, in the event that the Company effects
one or more reorganizations, recapitalizations, rights offerings
or other increases or reductions of shares of its outstanding
Common Stock, and in the event of the Company being consolidated
with or merged into any other corporation in connection
therewith.
19. Amendment or Termination.
(a) The Board of Directors of the Company may at any
time terminate or amend the Plan. Except as provided in Section
18, no such termination shall affect options previously granted,
nor shall an amendment make any change in an outstanding option
which adversely affects the rights of the optionee. In addition,
to the extent necessary to comply with Section 423 of the Code
(or any successor rule or provision or any applicable law or
regulation), the Company shall obtain stockholder approval in
such a manner and to such a degree as so required.
(b) Without stockholder consent and without regard to
whether any participant rights may be considered to have been
adversely affected, the Board (or its committee) shall be
entitled to change the Offering Periods, limit the frequency
and/or number of changes in the amount withheld during an
Offering Period, establish the exchange ratio applicable to
amounts withheld in a currency other than U.S. dollars, permit
payroll withholding in excess of the amount designated by a
participant in order to adjust for delays or mistakes in the
Company's processing of properly completed withholding elections,
establish reasonable waiting and adjustment periods and/or
accounting and crediting procedures to ensure that amounts
applied toward the purchase of Common Stock for each participant
properly correspond with amounts withheld from the participant's
Compensation, and establish such other limitations or procedures
as the Board (or its committee) determines in its sole discretion
advisable which are consistent with the Plan. In addition, the
Board (or its committee) shall have the right to designate from
time to time the Subsidiaries where employees may be eligible to
participate in the Plan and such designations shall not
constitute an amendment to the Plan requiring stockholder
approval in accordance with Treasury Regulations Section
1.423-2(c)(4).
20. Stockholder Approval. Stockholder approval of the Plan
shall be obtained in the manner and to the extent required under
applicable federal and state law.
21. Notices. All notices or other communications by a
participant to the Company under or in connection with the Plan
shall be deemed to have been duly given when received in the form
specified by the Company at the location, or by the person,
designated by the Company for that purpose.
22. Conditions Upon Issuance of Shares. Shares shall not
be issued with respect to an option unless the exercise of such
option and the issuance and delivery of such shares pursuant
thereto shall comply with all applicable provisions of law,
domestic or foreign, including, without limitation, the
Securities Act of 1933, as amended, the Exchange Act, any
applicable state securities laws, the rules and regulations
promulgated thereunder, and the requirements of any stock
exchange upon which the shares may then be listed.
As a condition to the exercise of an option, the
Company may require the person exercising such option to
represent and warrant at the time of any such exercise that the
shares are being purchased only for investment and without any
present intention to sell or distribute such shares if, in the
opinion of counsel for the Company, such a representation is
required by any of the aforementioned applicable provisions of
law.
23. Term of Plan; Effective Date. The Plan shall become
effective upon its approval by the stockholders of the Company.
It shall continue in effect for a term of ten (10) years unless
sooner terminated under Section 19.
24. Plan Construction. It is the intent of the Company
that transactions in and affecting options in the case of
Participants who are or may be subject to Section 16 of the
Exchange Act satisfy any then applicable requirements of Rule
16b-3 so that such persons (unless they otherwise agree) will be
entitled to the exemptive relief of Rule 16b-3 in respect of
those transactions and will not be subjected to avoidable
liability thereunder. Accordingly, this Plan shall be deemed to
contain, and such options shall contain, and the shares issued
upon exercise thereof shall be subject to, such additional
conditions and restrictions as may be required by Rule 16b-3 to
qualify for the maximum exemption from Section 16 of the Exchange
Act with respect to Plan transactions. If any provision of this
Plan or of any option would otherwise frustrate or conflict with
the intent expressed above, that provision to the extent possible
shall be interpreted as to avoid such conflict. If the conflict
remains irreconcilable, the Board or the committee may disregard
the provision if it concludes that to do so furthers the interest
of the Company and is consistent with the purposes of this Plan
as to such persons in the circumstances.
EXHIBIT 5
August 13, 1998
Gottschalks Inc.
7 River Park Place East
Fresno, CA 93720
RE: Registration on Form S-8 of Gottschalks Inc. (the "Company")
Ladies and Gentlemen:
At your request, I have examined the Registration
Statement on Form S-8 relating to The Gottschalks Inc. 1998
Employee Stock Purchase Plan (the "Plan") to be filed with the
Securities and Exchange Commission for the registration under the
Securities Act of 1933, as amended, of 500,000 shares of Common
Stock, $.01 par value per share of the Company (the "Shares").
At your request, I have examined the proceedings heretofore taken
and to be taken in connection with the authorization of the Plan
and the Common Stock that may be sold pursuant to the Plan.
Based upon such examination and upon such matters of
fact and law as I have deemed relevant, I am of the opinion that
the Shares have been duly authorized by all necessary corporate
action on the part of the Company and, when issued in accordance
with such authorization and appropriate action as contemplated
thereby and by the Plan and related agreements, the Shares will
be validly issued, fully paid and nonassessable.
I consent to the use of this opinion as an exhibit to
the above-referenced Registration Statement.
Respectfully submitted,
/s/ WARREN L. WILLIAMS
Warren L. Williams, Esq.
General Counsel
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in this Registration
Statement Gottschalks Inc. on Form S-8 and related Prospectus
pertaining to the Gottschalks Inc. 1998 Employee Stock Purchase
Plan of our report dated February 24, 1998, appearing in the Annual
Report on Form 10-K of Gottschalks Inc. for the year ended
January 31, 1998.
/s/ DELOITTE & TOUCHE LLP
DELOITTE & TOUCHE LLP
Fresno, California
August 11, 1998
