<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 16, 1997.
REGISTRATION NO. 333-
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------------------
FORM S-8
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
QUALITY FOOD CENTERS, INC.
(Exact name of issuer as specified in its charter)
WASHINGTON 91-1330075
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
10112 N.E. 10TH STREET
BELLEVUE, WASHINGTON 98004
(206) 455-3761
(Address and telephone number of principal executive offices)
QUALITY FOOD CENTERS, INC. AMENDED AND RESTATED 1987 INCENTIVE STOCK OPTION PLAN
QUALITY FOOD CENTERS, INC. AMENDED AND RESTATED 1990 EMPLOYEE
STOCK PURCHASE PLAN
(Full title of the Plan)
MARC W. EVANGER
VICE PRESIDENT AND CHIEF FINANCIAL OFFICER
QUALITY FOOD CENTERS, INC.
10112 N.E. 10TH STREET
BELLEVUE, WASHINGTON 98004
(Name and address of agent for service)
(206) 455-3761
(Telephone number, including area code, of agent for service)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------
PROPOSED MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF AMOUNT TO PROPOSED MAXIMUM AGGREGATE OFFERING REGISTRATION
SECURITIES TO BE REGISTERED BE REGISTERED(1) OFFERING PRICE PER SHARE(2) PRICE FEE(2)
<S> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------
Common Stock, par value $.001 500,000 shares US$34.625 US$17,312,500.00 US$5,246.21
- ---------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Of this number, 200,000 are being registered for issuance pursuant to the
Amended and Restated 1987 Incentive Stock Option Plan and 300,000 are being
registered for issuance pursuant to the Amended and Restated 1990 Employee
Stock Purchase Plan.
(2) The proposed maximum offering price per share and the registration fee were
calculated in accordance with Rule 457(c) and (h) based on the average of
the bid and asked prices for shares of the registrant's common stock on
January 13, 1997, as quoted by the Nasdaq National Market System, which
was $34.625 per share.
<PAGE>
REGISTRATION OF ADDITIONAL SECURITIES
Pursuant to General Instruction E, this Registration Statement on Form S-8
is filed by Quality Food Centers, Inc. (the "Registrant") to register additional
securities under the Quality Food Centers, Inc. Amended and Restated 1987
Incentive Stock Option Plan (the "Option Plan") covered by and filed as an
exhibit to the Registrant's Registration Statement on Form S-8 (No. 33-32878 and
33-84202), and under the Quality Food Centers, Inc. Amended and Restated 1990
Employee Stock Purchase Plan (the "Purchase Plan") covered by and filed as an
exhibit to the Registrant's Registration Statement on Form S-8 (No. 33-34073 and
33-69512), as amended. The additional securities are to be issued pursuant to
amendments to the Plans approved by the Registrant's Board of Directors on
February 21, 1996 and on March 14, 1996, and by the Registrant's Shareholders
on April 30, 1996. Portions of Registration Statement Nos. 33-32878, 33-84202,
33-34073 and 33-69512 are incorporated herein by reference.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 8. EXHIBITS.
EXHIBIT NUMBER EXHIBIT
- -------------- -------
5.1 Opinion of Bogle & Gates P.L.L.C.
10.1 Amended and Restated 1987 Incentive Stock Option Plan.
10.2 Amended and Restated 1990 Employee Stock Purchase Plan.
23.1 Consent of Bogle & Gates P.L.L.C. (included in Exhibit 5.1).
23.2 Consent of Deloitte & Touche LLP.
23.3 Consent of Arthur Andersen LLP.
24.1 Power of Attorney (See page II-3 of this Registration
Statement).
ITEM 9. UNDERTAKINGS.
Incorporated herein by reference to Registration Statement No. 33-84202.
II-1
<PAGE>
SIGNATURES
THE REGISTRANT. 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 Bellevue, Washington on this 16th day of
January, 1997.
QUALITY FOOD CENTERS, INC.
By /s/ Marc W. Evanger
--------------------------------
Marc W. Evanger
Vice President and Chief Financial
Officer and Secretary/Treasurer
II-2
<PAGE>
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Stuart
M. Sloan and Marc W. Evanger, or either of them, his attorney-in-fact, with the
power of substitution, for him in any and all capacities, to sign any amendments
to this Registration Statement, and to file the same, with exhibits thereto and
other documents in connection therewith, with the Securities and Exchange
Commission, hereby ratifying and confirming all that said attorneys-in-fact, or
their substitute or substitutes, may do or cause to be done by virtue hereof.
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 date indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C> <C>
/s/ Christopher A. Sinclair President, Chief Executive January 9, 1997
- ------------------------------ Officer and Director (Principal ---------------
Christopher A. Sinclair Executive Officer)
/s/ Dan Kourkoumelis President, Chief Executive January 16, 1997
- ------------------------------ Officer and Director ----------------
Dan Kourkoumelis
/s/ Marc W. Evanger Vice President and Chief January 16, 1997
- ------------------------------ Financial Officer (Principal ----------------
Marc W. Evanger Financial and Accounting Officer)
/s/ Stuart M. Sloan Chairman of the Board January 16, 1997
- ------------------------------ of Directors ----------------
Stuart M. Sloan
/s/ John W. Creighton, Jr. Director January 16, 1997
- ------------------------------ ----------------
John W. Creighton, Jr.
/s/ Maurice F. Olson Director January 10, 1997
- ------------------------------ ----------------
Maurice F. Olson
/s/ Marc Rapaport Director January 16, 1997
- ------------------------------ ----------------
Marc Rapaport
/s/ Sheli Z. Rosenberg Director January 16, 1997
- ------------------------------ ----------------
Sheli Z. Rosenberg
/s/ Ronald A. Weinstein Director January 16, 1997
- ------------------------------ ----------------
Ronald A. Weinstein
/s/ Samuel Zell Director January 16, 1997
- ------------------------------ ----------------
Samuel Zell
</TABLE>
II-3
<PAGE>
EXHIBIT NUMBER EXHIBIT INDEX PAGE
- -------------- ------------- ----
5.1 Opinion of Bogle & Gates P.L.L.C.
10.1 Amended and Restated 1987 Incentive Stock Option
Plan.
10.2 Amended and Restated 1990 Employee Stock Purchase
Plan.
23.1 Consent of Bogle & Gates P.L.L.C. (included in
Exhibit 5.1).
23.2 Consent of Deloitte & Touche LLP.
23.3 Consent of Arthur Andersen LLP.
24.1 Power of Attorney (see page II-3 of this
Registration Statement).
II-4
<PAGE>
Exhibit 5.1
[LETTERHEAD]
January 16, 1997
Quality Food Centers, Inc.
10112 N.E. 10th Street
Bellevue, WA 98004
Dear Gentlemen and Ladies:
We are delivering this opinion in connection with the Registration
Statement on Form S-8 (the "Registration Statement") of Quality Food Centers,
Inc. (the "Company") to be filed with the Securities and Exchange Commission
under the Securities Act of 1933, as amended (the "Securities Act"), with
respect to an aggregate of 500,000 shares, par value $0.001 per share, of common
stock of the Company (the "Shares"). From the aggregate, 200,000 Shares are to
be offered pursuant to the terms of the Quality Food Centers, Inc. Amended and
Restated 1987 Incentive Stock Option Plan and 300,000 Shares are to be offered
pursuant to the Quality Food Centers, Inc. Amended and Restated 1990 Employee
Stock Purchase Plan (the "Plans") to participants in the Plans (the
"Participants").
We have examined and are familiar with originals or copies, certified or
otherwise identified to our satisfaction, of such documents, corporate records
and other instruments relating to the authorization and issuance of the Shares,
and have made such investigations of law, as we have deemed necessary and
advisable.
Based upon the foregoing and having due regard for such legal questions as
we have deemed relevant, we are of the opinion that the Shares have been duly
authorized and, when issued, delivered and sold by the Company and paid for by
the Participants, pursuant to the terms of the Plans, will constitute duly
authorized, validly issued, fully paid and nonassessable shares of common stock
of the Company.
<PAGE>
Quality Food Centers, Inc.
January 16, 1997
Page 2
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement referred to above and to the reference to our firm in the
summary of the Plans provided to the Participants.
Very truly yours,
BOGLE & GATES P.L.L.C.
<PAGE>
QUALITY FOOD CENTERS, INC.
AMENDED AND RESTATED
1987 INCENTIVE STOCK OPTION PLAN
This Amended and Restated Incentive Stock Option Plan (the "Plan") of
QUALITY FOOD CENTERS, INC., a Washington corporation (the "Corporation") is
intended to qualify under Section 422A of the Internal Revenue Code of 1986 (the
"Code").
1. PURPOSE
The purpose of the Plan is to retain the services of key employees of the
Corporation, to encourage such employees to acquire a greater proprietary
interest in the Corporation, thereby strengthening their incentive to achieve
the objectives of the stockholders, and to serve as an aid and inducement in the
hiring of new key employees.
2. ADMINISTRATION
The Plan shall be administered by the Board of Directors of the Corporation
(the "Board"), except that the Board, in its discretion, may establish a
committee composed of members of the Board for this purpose (the "Committee"),
which Committee may be an executive committee or some other committee especially
created for this purpose. Any such Committee shall have such of the powers and
authority vested in the Board hereunder as the Board may delegate to it
(including the power and authority to interpret any provision of the Plan or of
any Incentive Stock Option issued under it). The members of any such Committee
shall serve at the discretion of the Board.
The interpretation and construction by the Board of any provisions of the
Plan or of any Incentive Stock Option, or any rule or regulation promulgated in
connection therewith, shall be conclusive and binding, both on the Corporation
and on the optionees.
3. ELIGIBILITY
Persons eligible to receive Incentive Stock Options shall be such regular
and full-time employees of the Corporation holding key positions (the
"Employees" or "Employee") as the Board, in its discretion, may select.
4. STOCK
The Stock for which options may be granted under the Plan shall be an
aggregate of not more than 1,700,000 of the Corporation's authorized but
unissued or reacquired, Common Stock, par value $.001 per share (the "Stock"),
subject to adjustment as set forth in Section 5(k) below. If any outstanding
Incentive Stock Option expires or is terminated for any reason, those shares of
Stock allocable to the unexercised portion of such Incentive Stock Option may
again be subject to an Incentive Stock Option granted to the same or to a
different Employee.
5. TERMS AND CONDITIONS OF INCENTIVE STOCK OPTIONS
Incentive Stock Options shall be evidenced by written agreements approved
by the Board (the "Agreements"). Agreements may contain such additional
provisions, not inconsistent herewith, as the Board in its discretion may deem
advisable. All Incentive Stock Options shall also comply with the following
requirements.
-1-
<PAGE>
(a) NUMBER OF SHARES
Each agreement shall state the number of shares to which it pertains.
(b) DATE OF GRANT
Each Agreement shall state the date which the Board of Directors has deemed
to be the effective date of the Incentive Stock Options granted thereunder (the
"Date of Grant").
(c) OPTION PRICE
(1) Each Incentive Stock Option shall state the price per
share of Stock at which it is exercisable (the "Option Price"). This Price
shall be equal to or greater than the fair market value of the Stock on the Date
of Grant as established by the Board.
(2) If an Employee owns more than ten percent (10%) of the
total combined voting power of all classes of stock of the Corporation or its
parent or subsidiary corporation the Option Price shall be one hundred ten
percent (110%) of the value otherwise determined in section 5(c)(1) above and
such Incentive Stock Option must lapse by its terms within five (5) years from
the Date of Grant. The attribution of stock ownership rules in Section 425(d)
of the Code are incorporated herein by this reference and apply for purposes of
calculating the ten percent (10%) voting power limitation.
(d) LIMITATIONS
The Stock with respect to which Incentive Stock Options are granted to an
Employee by the Corporation and its parent or subsidiary corporations shall not
exceed $100,000 aggregate fair market value (determined at the Date of Grant)
exercisable for the first time during any calendar year.
(e) TERMINATION OF EMPLOYMENT
(1) DEATH: If Employee's employment with the Corporation
is terminated by reason of death, the Employee's personal representative, heirs
or devisees shall be entitled to exercise all vested Incentive Stock Options for
three (3) months after the date of death.
(2) DISABILITY: If Employee's employment with the
Corporation is terminated by reason of disability (within the meaning of section
105(d)(4) of the Code, incorporated herein by this reference) the Employee shall
be entitled to exercise all vested Incentive Stock Options for one (1) year
after the date of disability.
(3) CERTAIN TERMINATION: a) If the Employee's employment
by the Corporation is terminated by the Corporation for willful or wanton
misconduct, all Options granted to the Employee, whether vested or unvested,
shall terminate at the time of the Employee's termination. b) If the Employee
has been granted options in connection with a promotion within the Corporation
and is subsequently, voluntarily or involuntarily, demoted, the Employee shall
be entitled to exercise all vested Options not otherwise terminated until the
end of the expiration period in Section 5(c)2 above or Section 5(f)2 below.
Each unvested option granted in connection with such promotion shall terminate
automatically at the date of demotion.
(4) OTHER TERMINATION: a) If Employee's employment by
the Corporation is terminated, voluntarily or involuntarily, for any other
reason, the Employee shall be entitled to exercise all Incentive Stock Options
that are vested on the date of termination for a period of one (1) month after
such date of termination. b) Notwithstanding the foregoing, if an Employee
shall have attained the age of sixty-two (62) years or more by the date on which
such Employee's employment by the Corporation is terminated pursuant to this
Section 5(e)(4), all Incentive Stock Options held by such Employee shall
accelerate and become fully vested and immediately exercisable for a period of
one (1) month beginning on the date of such termination.
-2-
<PAGE>
(f) VESTING AND TERM OF INCENTIVE STOCK OPTIONS
(1) VESTING: In order to ensure that the Corporation will
receive the benefits contemplated in exchange for the grant of Incentive Stock
Options pursuant hereto, no Incentive Stock Option shall be exercisable until it
has vested or as provided in subsection (k) below. The vesting schedule for
each Incentive Stock Option shall be specified by the Board at the time of grant
of the Option; provided however, that should the Board for any reason fail to
specify such vesting schedule, Incentive Stock Options granted hereunder will be
exercisable according to the following vesting schedule:
20% of the Incentive Stock Options may be exercised after the first
anniversary of the Date of Grant.
40% of the Incentive Stock Options may be exercised after the second
anniversary of the Date of Grant.
60% of the Incentive Stock Options may be exercised after the third
anniversary of the Date of Grant.
80% of the Incentive Stock Options may be exercised after the fourth
anniversary of the Date of Grant.
100% of the Incentive Stock Options may be exercised after the fifth
anniversary of the Date of Grant.
(2) TERM: Each Incentive Stock Option shall terminate, to
the extent not previously exercised, upon the occurrence of the first to occur
of the following events: (i) the expiration of the period prescribed in Section
5(e) above; or (ii) the date which is ten (10) years after the Date of Grant.
(g) EXERCISE OF INCENTIVE STOCK OPTIONS
Incentive Stock Options shall be exercisable, either in whole or in part,
at any time after vesting. If less than all of the shares included in the
vested portion of any Incentive Stock Option are purchased, the remainder may be
purchased at any subsequent time prior to the expiration of the Incentive Stock
Option term. Only whole shares may be issued pursuant to an Incentive Stock
Option, and to the extent that an Incentive Stock Option covers a fraction of a
share, it is unexercisable. Incentive Stock Options or portions thereof may be
exercised by giving written notice to the Corporation, which notice shall
specify the number of shares to be purchased, and be accompanied by payment in
the amount of the aggregate option price for the Stock so purchased in
accordance with section 5(1) below. The Corporation shall not be obligated to
issue, transfer or deliver a certificate of Stock to any Employee, or to his
personal representative, until the aggregate option price has been paid for all
shares for which the Incentive Stock Option shall have been exercised.
(h) RIGHTS AS A STOCKHOLDER
An optionee or a transferee of an Incentive Stock Option shall have no
rights as a stockholder with respect to any shares covered by the Incentive
Stock Option until the optionee becomes a record holder of such shares,
irrespective of whether or not he or she has given notice of exercise. Subject
to the provisions of Section 5(k) hereof, no rights shall accrue to an optionee
and no adjustments shall be made on account of dividends (ordinary or
extraordinary, whether in cash, securities or other property) or distributions
or other rights declared on, or created in, the capital stock of the Corporation
for which the record date is prior to the date the optionee becomes a record
holder of the shares covered by the Incentive Stock Option, irrespective of
whether or not he or she has given notice of exercise.
-3-
<PAGE>
(i) TRANSFER OF INCENTIVE STOCK OPTION
Incentive Stock Options shall not be transferable by the optionee other
than by will or the laws of descent and distribution.
(j) SECURITIES REGULATION
No Incentive Stock Option shall be exercisable unless such Incentive Stock
Option and Stock to be issued pursuant thereto shall be registered under
appropriate federal and state securities laws, or shall be exempt therefrom, in
the opinion of the Board of Directors upon advice of counsel to the Company.
Each Agreement shall contain adequate provisions to assure that there be no
violation of such laws. Where necessary to effect exemption from registration
under such laws, an optionee hereunder shall be required to take Stock with
investment intent, and not with a view to distribution, and to give the Board a
letter to that effect in form suitable to the Board. The Board may take such
action or require such action or agreement by optionees as may from time to time
be necessary to comply with federal and state securities laws. This provision
shall in no way obligate the Corporation to undertake registration of Incentive
Stock Options or Stock hereunder. The issuance, transfer or delivery of
certificates of Stock pursuant to the exercise of Incentive Stock Options may be
delayed, at the discretion of the Board, until the Board is satisfied that the
applicable requirements of the federal and state securities laws have been met.
(k) STOCK DIVIDEND, REORGANIZATION OR LIQUIDATION
Until the optionee becomes a record holder of the shares of Stock covered
by each outstanding Incentive Stock Option, the number of such shares and the
option price per share thereof shall be proportionately adjusted for any
increase or decrease in the number of issued shares of the Corporation resulting
from a subdivision or consolidation of shares, payment of a stock dividend, or
any other increase or decrease in the number of shares effected without receipt
of or for a nominal consideration by the Corporation.
If the presently authorized capital stock of the Corporation is changed
into the same number of shares with a different par value, or without par value,
the stock resulting from any such change shall be deemed to be Stock within the
meaning of the Plan, and each Incentive Stock Option shall apply to the same
number of shares immediately prior to such change.
If the Corporation is the surviving or resulting corporation in any
"reorganization," as that term is defined in Section 368 of the Code, each
outstanding Incentive Stock Option shall apply to such securities of the
corporation after the reorganization as a holder of the number of shares of
Stock subject to the Incentive Stock Option would be entitled under the terms of
such reorganization. If, pursuant to the terms of any reorganization in which
the Corporation is not the surviving or resulting corporation, Incentive Stock
Options granted hereunder are assumed by the surviving or resulting corporation,
each Incentive Stock Option shall continue in full force and effect, and shall
apply to such securities of the surviving corporation as a holder of the number
of shares of Stock subject to the Incentive Stock Option would be entitled under
the terms of the reorganization. Should there be any such surviving or
resulting corporation to which Incentive Stock Options would then be deemed to
apply, the terms of such options shall be fixed solely by the terms of any
applicable reorganization or other agreement, and holders of Incentive Stock
Options shall have no rights whatsoever concerning the type and terms of the
substituted securities to which Incentive Stock Options would then apply. In
particular, holders of Incentive Stock Options shall have no rights as to the
setting of distribution, payment, expiration or maturity dates of any preferred
stock, certificates, bonds, debentures, warrants, rights, options or other
securities of any surviving or resulting corporation, with respect to the date
or dates of exercise of such Incentive Stock Options; but any such distribution,
payment expiration or maturity date shall be determined solely by the terms of
any such reorganization or other agreement.
If the Corporation is liquidated or dissolved, or if there is a
reorganization in which the Corporation is not the surviving or resulting
corporation and the Incentive Stock Options granted hereunder are not assumed by
the surviving or resulting corporation, the Board, in its sole discretion, may
allow the holders of any outstanding Incentive Stock Options to exercise all
or any part of the unvested portion of the Incentive
-4-
<PAGE>
Stock Options held by them; provided, however, that such Incentive
Stock Options are exercised prior to the effective date of the liquidation or
dissolution or reorganization. If the option holders do not exercise their
Incentive Stock Options prior to such effective date, or if the Corporation does
not allow the option holders to exercise the unvested portion of such Incentive
Stock Options, each outstanding Incentive Stock Option shall terminate as of the
effective date of the liquidation or dissolution or reorganization.
In lieu of assuming any Incentive Stock Option, any resulting or surviving
corporation may substitute new options for Incentive Stock Options, as
contemplated by Section 425 of the Code and in such event each outstanding
Incentive Stock Option shall terminate as of the date of effectiveness of the
corresponding substitute option. In the event of reorganization, surviving
Incentive Stock Options or substitute options shall have the same vesting dates
as the corresponding Incentive Stock Options granted hereunder.
The foregoing adjustments in the shares subject to Incentive Stock Options
shall be made by the Board, or by any successor administrator of the Plan, or by
applicable terms of any assumption or substitution document; and such
adjustments so made shall be final, binding and conclusive.
Except as provided in this Section 5(k), no optionee shall have rights by
reason of any subdivision or consolidation of shares of stock of any class, or
the payment of any stock dividend, or any other increase or decrease in the
number of shares of stock, or by reason of any liquidation, dissolution,
corporate combination or division; and any issue by the Corporation of shares of
stock of any class, or securities convertible into shares of stock of any class,
shall not affect, and no adjustment by reason thereof shall be made with respect
to, the number or price of shares of Stock subject to the Incentive Stock
Option.
The grant of an Incentive Stock Option shall not affect in any way the
right or power of the Corporation to make adjustments, reclassifications,
reorganizations or changes of its capital or business structure, or to merge or
to consolidate or to dissolve, liquidate, or sell or transfer all or any part of
its business or assets.
(l) PAYMENT UPON EXERCISE OF INCENTIVE STOCK OPTION
In addition to payment in cash by certified check or cashier's check, an
optionee or transferee of an Incentive Stock Option may pay for all or a portion
of any shares purchased under the terms of an Incentive Stock Option by
exchanging shares of stock in the Corporation previously held by him or her for
shares in the Corporation to be purchased pursuant to the Incentive Stock Option
or, with the permission of the Board, by having shares withheld from the number
of shares of stock to be received by the optionee or transferee. The shares to
be exchanged in payment for shares purchased pursuant to an Incentive Stock
Option shall have a fair market value equal to the Option Price (or the portion
thereof to be paid by the exchange of shares).
6. TERM OF PLAN
Incentive Stock Options may be granted only until a date ten (10) years
from the earlier of the date of approval of the Plan by the stockholders of the
Corporation, or the date of adoption of the Plan by the Corporation.
7. NO OBLIGATION TO EXERCISE STOCK OPTIONS
The granting of an Incentive Stock Option shall impose no obligation upon
the optionee to exercise such Incentive Stock Option.
8. NO RIGHT TO INCENTIVE STOCK OPTIONS OR EMPLOYMENT
The grant of any Incentive Stock Options hereunder shall be exclusively
within the discretion of the Board and nothing contained herein shall be
construed as giving any Employee any right to participate hereunder. The
granting of an Incentive Stock Option hereunder shall in no way constitute any
form of
-5-
<PAGE>
agreement or understanding binding on the Corporation, express or implied, that
the Corporation will employ an optionee for any length of time.
9. APPLICATION OF FUNDS
The proceeds received by the Corporation from the sale of Stock pursuant to
Incentive Stock Options granted hereunder shall be used for general corporate
purposes.
10. INDEMNIFICATION OF BOARD AND COMMITTEE
In addition to all other rights or indemnification they may have as
directors of the Corporation or as members of the Committee, members of the
Board and of the Committee shall be indemnified by the Corporation for all
reasonable expenses and liabilities of any type and nature, including attorneys'
fees, incurred in connection with any action, suit or proceeding to which they
or any of them are a party by reason of, or in connection with, any Incentive
Stock Option granted hereunder; and against all amounts paid by them in
settlement thereof (if such settlement be approved by the independent legal
counsel selected by the Corporation), except to the extent that such expenses
relate to matters for which it be adjudged such Board or Committee members are
liable for willful misconduct; provided that within fifteen (15) days after
institution of any such action, suit or proceeding, the Board or Committee
member(s) involved therein shall, in writing, notify the Corporation thereof, so
that the Corporation may have the opportunity to make appropriate arrangements
to prosecute or defend the same.
11. AMENDMENT OF PLAN
The Board may, at any time, modify or amend this Plan and any Incentive
Stock Option granted hereunder; except that no amendment with respect to an
outstanding Incentive Stock Option shall be made over the objection of the
optionee thereof.
DATED: February 21, 1996
QUALITY FOOD CENTERS, INC.
/s/ MARC W. EVANGER
-----------------------------------
Marc W. Evanger, Secretary
-6-
<PAGE>
QUALITY FOOD CENTERS, INC.
AMENDED AND RESTATED
1990 EMPLOYEE STOCK PURCHASE PLAN
1. PURPOSE OF THE PLAN. This Employee Stock Purchase Plan (the "Plan")
is intended to encourage stock ownership by all eligible employees of Quality
Food Centers, Inc. (the "Company") and participating subsidiaries so that they
may share in the fortunes of the Company by acquiring a, or increasing their,
proprietary interest in the Company. The Plan is designed to encourage eligible
employees to remain in the employ of the Company. It is intended that options
issued pursuant to this Plan shall constitute options issued pursuant to an
"employee stock purchase plan" within the meaning of Section 423 of the Internal
Revenue Code of 1986, as amended (the "Code").
2. DEFINITIONS.
2.1 "Account" shall mean the funds accumulated with respect to an
individual employee as a result of deductions from his or her paycheck
for the purpose of purchasing stock under the Plan. The funds
allocated to an employee's account shall remain the property of the
respective employee at all times during each offering.
2.2 "Base Pay" means regular straight time earnings plus compensation
for overtime, incentive bonuses and other additional compensation,
except to the extent that any such item is specifically excluded by
the Board of Directors of the Company (the "Board").
2.3 "Fair market value" means the last sale price for the common
stock, $.001 par value (the "Common Stock"), of the Company as
reported on the NASDAQ National Market System, or if the stock is
traded on a stock exchange, the closing price for the Common Stock on
the principal such exchange.
2.4 "Offering Date" means the commencement date of the offering if
such date is a regular business day or the first business day
following such commencement date. A different date may be set by
resolution of the Board.
2.5 "Participating subsidiaries" means any subsidiary of the Company
which is designated by the Board to participate in the Plan. The
Board shall have the power to make such designation before or after
the Plan is approved by the shareholders.
3. EMPLOYEES ELIGIBLE TO PARTICIPATE. Any person who is in the employ of
the Company or any of its subsidiaries is eligible to receive options under the
Plan, except (a) employees whose customary employment is less than eight (8)
hours per week and (b) employees whose customary employment is not more than
five (5) months in any calendar year; PROVIDED, HOWEVER, that no employee who
after the grant of options hereunder owns shares (including all
-1-
<PAGE>
shares which may be purchased under outstanding options granted under the Plan)
possessing 5% or more of the total combined voting power or value of all classes
of shares of the Company or of its parent or subsidiary corporations shall be
eligible to participate. For this purpose, the rules of Section 424(d) of the
Code shall apply in determining share ownership.
4. OFFERINGS. Offerings under this Plan shall commence on each April 1
and terminate on the following March 31 until this Plan is terminated by the
Board or no additional shares of Common Stock of the Company are available for
purchase under the Plan.
5. PRICE. The purchase price per share shall be the lesser of (1) 85% of
the fair market value of the Common Stock on the Offering Date; or (2) 85% of
the fair market value of the Common Stock on the last business day of the
offering.
6. STOCK SUBJECT TO THE PLAN. The stock subject to the options shall be
shares of the Company's authorized but unissued Common Stock or shares of Common
Stock reacquired by the Company, including shares purchased in the open market.
The aggregate number of shares which may be issued pursuant to the Plan is
800,000, subject to increase or decrease by reason of stock split-ups,
reclassification, stock dividends, changes in par value and the like. The
aggregate number of shares which may be issued pursuant to the Plan in any given
offering period is limited to 150,000, subject to the increases or decreases
above-stated.
7. CHANGES IN CAPITAL STRUCTURE.
7.1 In the event that the outstanding shares of Common Stock of the
Company are hereafter increased or decreased or changed into or
exchanged for a different number or kind of shares or other securities
of the Company or of another corporation by reason of any
reorganization, merger, consolidation, recapitalization,
reclassification, stock split-up, combination of shares or dividend
payable in shares, appropriate adjustment shall be made by the Board
in the number and kind of shares as-to which an option granted under
this Plan shall be exercisable, to the end that the participant's
proportionate interest shall be maintained as before the occurrence of
such event. Any such adjustment made by the Board shall be
conclusive.
7.2 If the Company is not the surviving or resulting corporation in
any reorganization, merger, consolidation or recapitalization, each
outstanding option shall be assumed by the surviving or resulting
corporation and each option shall continue in full force and effect,
and shall apply to the same number and class of securities of the
surviving corporation as a holder of the number of shares of Common
Stock subject to the option would be entitled under the terms of the
reorganization, merger, consolidation or recapitalization.
8. PARTICIPATION. An eligible employee may become a participant by
completing, signing and filing an Enrollment Agreement and any other necessary
papers with the Company at least ten (10) days prior to the commencement of the
particular offering in which he or she
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wishes to participate. Payroll deductions for a participant shall commence the
first pay date after the Offering Date and shall end on the last pay date before
the termination date of such offering, unless earlier terminated by the
employee, as provided in Section 14. Participation in one offering under the
Plan shall neither limit, nor require, participation in any other offering.
9. PAYROLL DEDUCTIONS.
9.1 At the time a participant files his or her Enrollment Agreement,
he or she shall elect to have deductions made from his or her pay on
each pay date during the time he or she is a participant in any
offering at not less than $5 or more than 10% of his or her Base Pay.
9.2 All payroll deductions made for a participant shall be credited
to his or her Account under the Plan. A participant may not make any
separate cash payment into such Account nor may payment for shares be
made other than by payroll deduction.
9.3 A participant may discontinue his or her payroll deductions or
participation in the Plan, as provided in Section 14, but no other
change can be made during an offering and, specifically, except as
provided in Section 14, a participant may not alter the rate of his or
her payroll deductions for that offering.
10. GRANTING OF OPTION.
10.1 On the Offering Date, this Plan shall be deemed to have granted
to the participant an option for as many full shares as he or she will
be able to purchase with the payroll deductions credited to his or her
Account during his or her participation in that offering.
10.2 Notwithstanding the foregoing, no employee shall be granted an
option which permits his or her rights to purchase Common Stock under
the Plan and any similar employee stock purchase plans of the Company
or any parent or subsidiary corporations to accrue at a rate which
exceeds $25,000 of fair market value of such stock (determined at the
time such option is granted) for each calendar year which such option
is outstanding at any time. The purpose of the limitation in the
preceding sentence is to comply with Section 423(b)(8) of the Code.
Further, no employee shall be granted an option which permits his or
her rights to purchase Common Stock under the Plan to exceed four
hundred (400) shares in any given offering period.
10.3 If the total number of shares for which options are to be granted
on any date in accordance with Paragraph 10.1 exceeds the number of
shares available pursuant to Section 6 or allowed pursuant to Section
10.2 (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 in as
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nearly a uniform manner as shall be practical and as it shall
determine to be equitable.
11. EXERCISE OF OPTION. Each employee who continues to be a participant
in an offering on the last business day of that offering shall be deemed to have
exercised his or her option on such date and shall be deemed to have purchased
from the Company such number of full shares of Common Stock reserved for the
purpose of the Plan as his or her accumulated payroll deductions on such date
will pay for at the purchase price, subject only to the limitations set forth in
Section 10.2.
12. EMPLOYEE'S RIGHTS AS A SHAREHOLDER.
12.1 No participating employee shall have any right as a shareholder
with respect to any shares under the Plan until the shares have been
purchased in accordance with Section 11 above and the stock
certificate has actually been issued.
12.2 Shares to be delivered to a participant under the Plan will be
registered in the name of the participant or, if the participant so
directs, by written notice to the Company prior to the termination
date of the pertinent offering, in the names of the participant and
one such other person as may be designated by the participant, as
joint tenants with right of survivorship or as community property, to
the extent and in the manner permitted by applicable law.
13. DELIVERY. Certificates for stock issued to participants will be
delivered as soon as practicable after the end of each offering.
14. WITHDRAWAL.
14.1 An employee may withdraw from the Plan, in whole but not in part,
at any time prior to the last business day of each offering by
delivering a Withdrawal Notice to the Company, in which event the
Company will refund the entire balance of his or her Account as soon
as practicable thereafter.
14.2 To re-enter the Plan, an employee who has previously withdrawn
must file a new Enrollment Agreement in accordance with Section 8.
His or her re-entry into the Plan cannot, however, become effective
before the beginning of the next offering following his or her
withdrawal.
14.3 An employee may elect to discontinue his or her payroll
deductions during the course of a particular offering, at any time
prior to the last business day preceding the final pay day during such
offering, by delivering an Election to Discontinue Deductions to the
Company, and such election shall not constitute a withdrawal for the
purposes of this Section 14. In the event that an employee elects to
discontinue his or her payroll deductions pursuant to this
Paragraph 14.3,
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the employee shall remain a participant in such offering and shall be
entitled to purchase from the Company such number of full shares of
Common Stock as set forth in and in accordance with Section 11.
15. CARRYOVER OF ACCOUNT. At the termination of each offering the Company
shall return to the employee the balance of his or her Account unless the
employee has advised the Company otherwise by way of re-executing an Enrollment
Agreement before the commencement of the succeeding offering electing to have
the balance carried over to be applied against option exercises in such
succeeding offering. Upon termination of the Plan, the balance of each
employee's Account shall be returned to him or her.
16. INTEREST. No interest will be paid or allowed on any money in the
Accounts of participating employees.
17. RIGHTS NOT TRANSFERABLE. No participant shall be permitted to sell,
assign, transfer, pledge or otherwise dispose of or encumber either the payroll
deductions credited to his or her Account or any rights with regard to the
exercise of an option or to receive shares under the Plan other than by will or
the laws of descent and distribution, and such right and interest shall not be
liable for, or subject to, the debts, contracts or liabilities of the employee.
If any such action is taken by the participant, or any claim is asserted by any
other party in respect of such right and interest, whether by garnishment, levy,
attachment or otherwise, such action or claim will be treated as an election to
withdraw funds in accordance with Section 14.
18. TERMINATION OF EMPLOYEE'S RIGHTS. An employee's rights under the Plan
will terminate when he or she ceases to be an employee because of resignation,
disability, retirement, lay-off, discharge or change of status. A Withdrawal
Notice will be considered as having been received from the employee on the day
his or her employment ceases, and all payroll deductions not used will be
refunded.
If an employee's employment shall be terminated by reason of death prior to
the end of the current offering, he or she (or his or her designated
beneficiary, in the event of his or her death, or if none, his or her legal
representative) shall have the right, within ninety (90) days thereafter, to
elect to have the balance in his or her account either paid to him or her in
cash or applied at the end of the current offering toward the purchase of Common
Stock.
19. ADMINISTRATION OF THE PLAN. Primary authority for administration of
the Plan is held by the Board, but the Board, in its discretion, may establish a
committee composed of members of the Board to administer the Plan (the
"Committee") (such administrative body hereinafter referred to as the "Plan
Administrator"). The Plan Administrator, if a Committee, shall have such of the
power and authority vested in the Board under the Plan as the Board may delegate
to it, including the power and authority to interpret any provision of the Plan
or any option under it.
20. AMENDMENT OR DISCONTINUANCE OF THE PLAN. The Board shall have the
right to amend, modify or terminate the Plan at any time without notice;
provided, however, that no
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employee's existing rights under any offering already made under Section 4 may
be adversely affected thereby; and provided, further, that no such amendment of
the Plan shall, except as provided in Section 7, increase the total number of
shares to be offered unless shareholder approval is obtained therefor. Upon any
termination of the Plan, all payroll deductions not used to purchase stock will
be refunded.
21. LIMITATIONS ON SALE OF STOCK PURCHASED UNDER THE PLAN. The Plan is
intended to provide Common Stock for investment and not for resale. The Company
does not, however, intend to restrict or influence any participant in the
conduct of his or her own affairs. A participant, therefore, may sell stock
purchased under the Plan at any time he or she chooses, subject to compliance
with any applicable federal or state securities laws; provided, however, that
because of certain federal tax requirements, each participant will agree by
entering the Plan, promptly to give the Company notice of any such stock
disposed of within two years after the date of grant of the applicable option,
showing the number of such shares disposed of. THE EMPLOYEE ASSUMES THE RISK OF
ANY MARKET FLUCTUATIONS IN THE PRICE OF THE STOCK.
22. WITHHOLDING OF ADDITIONAL FEDERAL INCOME TAX. The Company, in
accordance with Section 3402(a) of the Code and the Regulations and Rulings
promulgated thereunder, will withhold from the wages of all participants, in all
payroll periods following and in the same calendar year as the date on which
compensation is deemed received by the participants, additional income taxes in
respect of the amount that is considered compensation includable in the
participant's gross income.
23. GOVERNMENTAL REGULATION. The Company's obligation to sell and deliver
shares of the Company's Common Stock under this Plan is subject to the approval
of any governmental authority required in connection with the authorization,
issuance or sale of such shares.
24. APPROVAL OF SHAREHOLDERS. The Plan shall not take effect until
approved by the holders of a majority of the outstanding shares of Common Stock
of the Company, which approval must occur within the period beginning twelve
(12) months before and ending twelve (12) months after the date the Plan is
adopted by the Board.
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INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement
of Quality Food Centers, Inc. on Form S-8 dated January 16, 1997, of our
report dated March 20, 1996, incorporated by reference in the Annual Report
on Form 10-K of Quality Food Centers, Inc. for the year ended December 30,
1995.
DELOITTE & TOUCHE LLP
Seattle, Washington
January 16, 1997
<PAGE>
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation of
our report of Hughes Markets, Inc. and subsidiaries dated May 10, 1996
included in Quality Food Centers, Inc.'s previously filed Form 8-K/A, into
Quality Food Centers, Inc.'s previously filed Form S-8 Registration
Statements Nos. 33-32878, 33-84202, 33-34073 and 33-69512, 33-38736, and
33-69514 and this form S-8 Registration Statement dated January 16, 1997.
ARTHUR ANDERSEN LLP
Los Angeles, California
January 14, 1997
