<PAGE> 1
As filed with the Securities and Exchange Commission on March 10, 1998
Registration No. 33-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
SIZZLER INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 95-4307254
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
6101 WEST CENTINELA BOULEVARD 90230
CULVER CITY, CALIFORNIA (Zip Code)
(Address of principal executive offices)
SIZZLER INTERNATIONAL, INC.
1997 NON-EMPLOYEE DIRECTORS' STOCK INCENTIVE PLAN
(Full title of the plan)
MR. RYAN TONDRO
VICE PRESIDENT & CHIEF FINANCIAL OFFICER
SIZZLER INTERNATIONAL, INC.
6101 WEST CENTINELA BOULEVARD
CULVER CITY, CALIFORNIA 90230
(Name and address of agent for service)
(310) 568-0135
(Telephone number, including area code, of agent for service)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
=======================================================================================================================
Proposed Maximum Proposed Maximum
Title of Securities to Amount to be Offering Price Per Aggregate Offering Amount of
be Registered Registered(1) Share(2) Price(2) Registration Fee
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock 400,000 $3.50 $1,400,000 $413
- -----------------------------------------------------------------------------------------------------------------------
Total 400,000 $3.50 $1,400,000 $413
=======================================================================================================================
</TABLE>
(1) THESE SHARES ARE RESERVED FOR ISSUANCE PURSUANT TO STOCK OPTIONS IN THE
SIZZLER INTERNATIONAL, INC. 1997 NON-EMPLOYEE DIRECTORS' STOCK INCENTIVE
PLAN (THE "PLAN"). PURSUANT TO RULE 416, ALSO BEING REGISTERED ARE
ADDITIONAL SHARES OF COMMON STOCK AS MAY BECOME ISSUABLE UNDER THE PLAN
THROUGH THE OPERATION OF ANTI-DILUTION PROVISIONS.
(2) ESTIMATED SOLELY FOR THE PURPOSES OF CALCULATING THE REGISTRATION FEE
PURSUANT TO RULE 457(h) AND BASED UPON THE AVERAGE OF THE HIGH AND LOW
SALES PRICE OF THE COMMON STOCK OF SIZZLER INTERNATIONAL, INC. IN THE
CONSOLIDATED REPORTING SYSTEM OF THE NEW YORK STOCK EXCHANGE ON
MARCH 4, 1998 OF $3.50.
<PAGE> 2
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
The following documents of Sizzler International, Inc., a
Delaware corporation (the "Company"), previously filed with the Securities and
Exchange Commission are incorporated by reference:
(1) The Company's Annual Report on Form 10-K for the year
ended April 30, 1997; and
(2) The Company's Quarterly Report on Form 10-Q for the first
quarter of the year ending April 30, 1998;
(3) The Company's Quarterly Report on Form 10-Q for the second
quarter of the year ending April 30, 1998;
(4) The Company's Current Report on Form 8-K filed with the
Securities and Exchange Commission on August 27, 1997;
(5) The Company's Current Report on Form 8-K filed with the
Securities and Exchange Commission on October 8, 1997; and
(6) The description of the Common Stock contained in the
Company's Registration Statement on Form 8-A dated March
7, 1991 together with any amendment or report filed with
the Securities and Exchange Commission for the purpose of
updating such description.
All documents subsequently filed by the Company pursuant to
Section 13(a), 13(c), 14 or 15(d) or the Securities Exchange Act of 1934, as
amended, prior to the filing of a post-effective amendment which indicates that
all securities offered hereunder have been sold or which deregisters all
securities then remaining unsold, shall be deemed to be incorporated by
reference in this Registration Statement and the Prospectus that is part hereof
from the date of filing such documents.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
None.
Item 6. Indemnification of Directors and Officers.
2
<PAGE> 3
Section 145 of the General Corporation Law (the "GCL") of
Delaware empowers a corporation to indemnify any person who was or is a party or
is threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative, by
reason of the fact that he or she is a director, officer, employee or agent of
the corporation or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation or enterprise.
Depending on the character of the proceeding, a corporation may indemnify
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred in connection with such action,
suit or proceeding if the person identified acted in good faith and in a manner
he or she reasonably believed to be in or not opposed to the best interests of
the corporation and, with respect to any criminal action or proceeding, had no
cause to believe his or her conduct was unlawful. In the case of an action by or
in the right of the corporation, no indemnification may be made in respect of
any claim, issue or matter as to which such person shall have been adjudged to
be liable to the corporation unless and only to the extent that the court in
which such action or suit was brought shall determine that despite the
adjudication of liability such person is fairly and reasonably entitled to
indemnity for such expenses that the court shall deem proper. Section 145
further provides that to the extent a director or officer of a corporation has
been successful in the defense of any action, suit or proceeding referred to
above or in the defense of any claim, issue or matter herein, he or she shall be
indemnified against expenses (including attorneys' fees) actually and reasonably
incurred by him or her in connection therewith. The statute provides that
indemnification pursuant to its provisions is not exclusive of other rights of
indemnification to which a person may be entitled under any bylaw, agreement,
vote of stockholders or disinterested directors or otherwise.
The Company's Certificate of Incorporation and Bylaws, provide,
in effect, that to the full extent and under the circumstances permitted by
Section 145 of the GCL, the Company shall indemnify any person who was or is a
party or is threatened to be made a party to any action, suit or proceeding of
the type described above by reason of the fact that he or she is or was a
director, officer, employee or agent of the Company.
The Company's Certificate of Incorporation relieves its directors
from monetary damages to the Company or its stockholders for breach of such
director's fiduciary duty as a director to the fullest extent permitted by the
GCL. Under Section 102(b)(7) of the GCL, a corporation may relieve its directors
from personal liability to such corporation or its stockholders for monetary
damages for any breach of their fiduciary duty as directors except (i) for a
breach of the duty of loyalty, (ii) for failure to act in good faith, (iii) for
intentional misconduct or knowing violation of law, (iv) for willful or
negligent violation of certain provisions of the GCL imposing certain
requirements with respect to stock purchases, redemptions and dividends or (v)
for any transaction from which the director derived an improper personal
benefit.
Item 7. Exemption from Registration Claimed.
None.
3
<PAGE> 4
Item 8. Exhibits.
Exhibit
Number Description
- ------- -----------------------------------------------------------------
4.1 Certificate of Incorporation of the Registrant, incorporated
herein by reference to Exhibit 3.1 to Amendment No. 1 to the
Registrant's Registration Statement on Form S-4 (Registration No.
33-38412).
4.2 Bylaws of the Registrant, incorporated herein by reference to
Exhibit 3.2 to Amendment No. 2 to the Registrant's Form S-4
Registration No. 33-38412.
4.3 Certificate of Amendment to the Bylaws of the Registrant dated
June 19, 1991, incorporated herein by reference to Exhibit 3.3 to
the Registrant's Form 10-K report for the fiscal year ended April
30, 1995.
4.4 Rights Agreement dated January 22, 1991 between the Registrant
and The Bank of New York incorporated herein by reference to
Exhibit 4.1 to Amendment No. 1 to the Registrant's Form S-4
Registration Statement No. 33-38412.
4.5 Amendment to Rights Agreement dated March 20, 1996 between The
Bank of New York and the Registrant, incorporated herein by
reference to Exhibit 4.2 to the Registrant's Form 10-K report for
the fiscal year ended April 30, 1996.
4.6 Certificate of Designation of Series A Junior Participating
Preferred Stock of the Registrant incorporated herein by
reference to Amendment No. 1 to the Registrant's Form S-4
Registration Statement No. 33-38412.
5.1 Opinion of Pachulski, Stang, Ziehl & Young P.C.
23.1 Consent of Arthur Andersen LLP
23.2 Consent of Pachulski, Stang, Ziehl & Young P.C. (included in
Exhibit 5.1).
24.1 Power of Attorney (included on Signature Page).
99.1 Sizzler International, Inc. 1997 Non-Employee Directors' Stock
Incentive Plan.
4
<PAGE> 5
Item 9. Undertakings.
1. The undersigned registrant hereby undertakes:
(i) To file, during any period in which offers or sales
are being made, a post-effective amendment to this registration statement 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.
(ii) That, for the purpose of determining any liability
under the Securities Act of 1933, 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 the
initial bona fide offering thereof.
(iii) 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.
2. The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act of 1933, each
filing of the registrant's annual report pursuant to Section 13(a) or Section
15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing
of an employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) 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.
3. Insofar as indemnification for liabilities arising under the
Securities Act of 1933 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 Securities and
Exchange Commission such indemnification is against public policy as expressed
in the 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 registration 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 it 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 Act and will
be governed by the final adjudication of such issue.
5
<PAGE> 6
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 had duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in Culver City, State of California, on this 12th day of February,
1998.
SIZZLER INTERNATIONAL, INC.
By: /s/ James A. Collins
---------------------------------
James A. Collins
Chief Executive Officer
POWER OF ATTORNEY
Each individual whose signature appears below constitutes and appoints
James A. Collins and Christopher R. Thomas and each or either of them, his true
and lawful attorneys-in-fact and agents, each with full power of substitution
and resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all amendments (including post-effective amendments)
to this Registration Statement, and to file the same, with all exhibits thereto,
and all 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
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, or his
substitute or substitutes, may lawfully 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 dates indicated.
NAME TITLE DATE
---- ----- ----
/s/ James A. Collins Chairman of the Board and February 12, 1998
- --------------------- Chief Executive Officer
James A. Collins (Principal Executive Officer)
/s/ Peter H. Dailey Director February 12, 1998
- ---------------------
Peter H. Dailey
(SIGNATURES CONTINUED ON NEXT PAGE)
6
<PAGE> 7
/s/ Barry Krantz Director February 12, 1998
- ---------------------------
Barry Krantz
/s/ Phillip D. Matthews Director February 12, 1998
- ---------------------------
Phillip D. Matthews
/s/ H. Wallace Merryman Director February 12, 1998
- ---------------------------
H. Wallace Merryman
/s/ Robert A. Muh Director February 12, 1998
- ---------------------------
Robert A. Muh
/s/ Kevin W. Perkins Director February 12, 1998
- ---------------------------
Kevin W. Perkins
/s/ Carol A. Scott Director February 12, 1998
- ---------------------------
Carol A. Scott
/s/ Charles F. Smith Director February 12, 1998
- ---------------------------
Charles F. Smith
/s/ Ryan Tondro Vice President-Finance February 12, 1998
- --------------------------- (Principal Financial
Ryan Tondro and Accounting Officer)
7
<PAGE> 8
EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NO. DESCRIPTION NUMBERED PAGE
- ----------- ----------------------------------------------------------------- --------------
<S> <C> <C>
4.1 Certificate of Incorporation of the Registrant, incorporated
herein by reference to Exhibit 3.1 to Amendment No. 1 to the
Registrant's Registration Statement on Form S-4 (Registration No.
33-38412).
4.2 Bylaws of the Registrant, incorporated herein by reference to
Exhibit 3.2 to Amendment No. 2 to the Registrant's Form S-4
Registration No. 33-38412.
4.3 Certificate of Amendment to the Bylaws of the Registrant dated
June 19, 1991, incorporated herein by reference to Exhibit 3.3 to
the Registrant's Form 10-K report for the fiscal year ended April
30, 1995.
4.4 Rights Agreement dated January 22, 1991 between the Registrant
and The Bank of New York incorporated herein by reference to
Exhibit 4.1 to Amendment No. 1 to the Registrant's Form S-4
Registration Statement No. 33-38412.
4.5 Amendment to Rights Agreement dated March 20, 1996 between The
Bank of New York and the Registrant, incorporated herein by
reference to Exhibit 4.2 to the Registrant's Form 10-K report for
the fiscal year ended April 30, 1996.
4.6 Certificate of Designation of Series A Junior Participating
Preferred Stock of the Registrant incorporated herein by
reference to Amendment No. 1 to the Registrant's Form S-4
Registration Statement No. 33-38412.
5.1 Opinion of Pachulski, Stang, Ziehl & Young P.C.
23.1 Consent of Arthur Andersen LLP
23.2 Consent of Pachulski, Stang, Ziehl & Young P.C. (included in
Exhibit 5.1).
24.1 Power of Attorney (included on Signature Page).
99.1 Sizzler International, Inc. 1997 Non-Employee Directors' Stock
Incentive Plan.
</TABLE>
8
<PAGE> 1
February 26, 1998
Sizzler International, Inc.
6101 West Centinela Boulevard, Suite 200
Culver City, California 90230
Re: Registration Statement on Form S-8
Ladies and Gentlemen:
We have acted as counsel to Sizzler International, Inc., a Delaware
corporation (the "Company"), in connection with the preparation of a
Registration Statement on Form S-8 to be filed with the Securities and Exchange
Commission (the "Registration Statement"), with respect to the registration
under the Securities Act of 1933, as amended, of 400,000 shares of Common Stock
of the Company (the "Shares") pursuant to the Company's 1997 Non-Employee
Directors' Stock Incentive Plan (the "Plan").
We have examined, among other things, the Company's Articles of
Incorporation and Bylaws, each as amended to date, the Plan and records of
corporate proceedings taken by the Company in connection with the authorization,
issuance and sale of the Shares pursuant to the Plan. Based on the foregoing and
in reliance thereon, it is our opinion that the Shares, when they are issued
pursuant to the Plan, will be validly issued, fully paid and non-assessable.
We hereby consent to the use of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
/s/ Pachulski, Stang, Ziehl & Young P.C.
Pachulski, Stang, Ziehl & Young P.C.
DJB:bas
EXHIBIT 5.1
<PAGE> 1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference in the Form S-8 Registration Statement and related
Prospectus pertaining to the Sizzler International, Inc. 1997 Non-Employee
Directors' Stock Incentive Plan of our report, dated July 23, 1997, with
respect to the consolidated financial statements and schedules of Sizzler
International, Inc. included in Sizzler International, Inc.'s Form 10-K for its
fiscal year ended April 30, 1997 filed with the Securities and Exchange
Commission.
ARTHUR ANDERSEN LLP
Los Angeles, California
March 2, 1998
EXHIBIT 23.1
<PAGE> 1
SIZZLER INTERNATIONAL, INC.
1997 NON-EMPLOYEE DIRECTORS' STOCK INCENTIVE PLAN
1. PURPOSE OF THE PLAN
The purpose of the 1997 Non-Employee Directors' Stock Incentive Plan of
Sizzler International, Inc. is to provide incentives that will attract and
retain highly competent persons as Non-Employee directors of the Company by
providing them with opportunities to acquire a proprietary interest in the
Company by the grant to such persons of nonqualified Stock Options which may
result in their ownership of Common Stock of the Company.
2. DEFINITIONS.
(a) "Act" means the Securities Act of 1933, as amended.
(b) "Administrator" shall mean the Board or, if and to the extent
the Board delegates any of its authority hereunder in accordance with Section
4(b) hereof, the Committee.
(c) "Board" means the Board of Directors of the Company.
(d) "Committee" means a committee appointed by the Board to
administer the Plan pursuant to Section 4(b) hereof.
(e) "Common Stock" means the common stock, $0.01 par value, of
the Company.
(f) "Company" means Sizzler International, Inc.
(g) "Date of Grant" means the date of any grant of an option
under the Plan as set forth in Section 6, 7, 8 or 9 hereof, as the case may be.
(h) "Disability" means any medically determinable physical or
mental impairment of a Participant, as determined by the Administrator, in its
complete and sole discretion, which is expected to last for a period of at least
180 days, as a result of which such Participant is unable to engage in any
substantial gainful activity. All determinations as to a Participant's disabled
status or the date and extent of any disability shall be made by the
Administrator upon the basis of such information as it deems necessary or
desirable.
(i) "Eligible Participant" means a Non-Employee Director.
1
EXHIBIT 99.1
<PAGE> 2
(j) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(k) "Fair Market Value" on a given date means (i) the mean
between the highest and lowest reported sales prices for the Common Stock on
that date (or, if there were no such sales on that date, on the next most recent
date on which there were such sales) as reported by the New York Stock Exchange
(or, if the Common Stock is not then listed on the New York Stock Exchange, such
other national securities exchange on which the Common Stock is then listed),
(ii) if the Common Stock is not then listed on a national securities exchange,
the mean between the closing bid and asked price quotations for the Common Stock
on that date (or if none on that date, on the next most recent date) as reported
by The Nasdaq National Market or any successor thereto, or (iii) if the Common
Stock is not then listed on a national securities exchange or The Nasdaq
National Market, the mean between the closing bid and asked price quotations for
the Common Stock on that date (or if none on that date, on the next most recent
date) as reported by the National Association of Securities Dealers Automatic
Quotation System or any successor thereto.
(l) "Non-Employee Director" means a member of the Board who is
not an officer or employee of the Company or any of its parent or subsidiary
corporations at the time of determination.
(m) "Normal Board Retirement" means, in conjunction with
termination of a Participant's services as a member of the Board for any reason
other than death or Disability, the determination of the Administrator or the
Nominating Committee of the Board that such termination constitutes Normal Board
Retirement. In the absence of such a determination, termination of a
Participant's services as a member of the Board shall be deemed to be for
reasons other than Normal Board Retirement.
(n) "Option" or "Stock Option" means a stock option that does not
qualify as an incentive stock option within the meaning of Section 422 of the
Internal Revenue Code of 1986, as amended.
(o) "Option Agreement" means an option agreement signed by the
Company and the Participant in such form and including such terms and conditions
not inconsistent with the Plan as the Administrator may in its discretion from
time to time determine.
(p) "Participant" means any Eligible Participant entitled under
the Plan to receive Options.
2
EXHIBIT 99.1
<PAGE> 3
(q) "Plan" means the 1996 Non-Employee Directors' Stock Incentive
Plan as set forth herein, and as it may be amended from time to time.
3. SHARES OF COMMON STOCK SUBJECT TO THE PLAN.
(a) Subject to the provisions of Section 3(c) and Section 11 of
the Plan, the aggregate number of shares of Common Stock that may be issued or
transferred or exercised pursuant to Options granted under the Plan will not
exceed 400,000.
(b) The shares to be delivered under the Plan will be made
available, at the discretion of the Administrator, either from authorized but
unissued shares of Common Stock or from previously issued shares of Common Stock
reacquired by the Company, including shares purchased on the open market.
(c) Shares of Common Stock subject to an unexercised portion of
any Stock Option granted under the Plan which expires or terminates or is
canceled will again become available for the grant of further Options hereunder.
4. ADMINISTRATION OF THE PLAN.
(a) The Plan shall, to the extent possible, be self-effectuating.
The Plan will be administered by the Board. The Board is authorized and
empowered to administer the Plan, which administration shall include (but is not
limited to) authority to (i) construe and interpret the Plan and any agreements
defining the rights and obligations of the Company and Participants under the
Plan; (ii) prescribe, amend and rescind rules and regulations relating to the
Plan; (iii) further define the terms used in the Plan; (iv) determine the rights
and obligations of Participants under the Plan; and (v) make all other
determinations necessary or advisable for the administration of the Plan. Each
Option granted under the Plan shall be evidenced by an Option Agreement.
(b) The Board of Directors may, in its discretion, delegate any
or all of its authority under the Plan to a committee consisting of two or more
directors of the Company each of whom has not been eligible at any time within
one year before appointment to such committee to receive an Option under the
Plan, except the Board may not delegate the powers set forth in Section 11,
13(a), or 14 hereof or powers which, under applicable law, are nondelegable.
(c) No member of the Board or the Committee will be liable for
any action or determination made in good faith by the Board or the Committee
with respect to the Plan or any Option under it, including, without limitation,
adjustments pursuant to Section 11. In making determinations under the Plan, the
Board or the Committee may obtain and may rely upon the advice of independent
counsel and accountants and other
3
EXHIBIT 99.1
<PAGE> 4
advisors to the Company. No member of the Board or the Committee, nor an officer
of the Company shall be liable for any such action or determination taken or
made in good faith with respect to the Plan or any Option granted hereunder.
5. PARTICIPATION.
Options shall be granted to each Non-Employee Director exclusively in
accordance with the provisions set forth in Sections 6, 7, 8 and 9 hereof.
6. AUTOMATIC OPTION GRANTS.
(a) Whenever any person shall become a Non-Employee Director,
there shall be granted automatically (without any action by the Administrator) a
Stock Option (the Date of Grant of which shall be the date such person shall
have become a Non-Employee Director) to such person to purchase 1,000 shares of
Common Stock (subject to adjustment pursuant to Section 11 hereof).
(b) On January 2 (or if January 2 is not a business day, on the
next succeeding business day) in each calendar year after 1997 during the term
of the Plan, there shall be granted automatically (without any action by the
Administrator) a Stock Option (the Date of Grant of which shall be such date in
January) to each Non-Employee Director then in office to purchase 2,000 shares
of Common Stock (subject to adjustment pursuant to Section 11 hereof).
7. DEFERRED FEES.
(a) Grants. Subject to Section 14 hereof, Stock Options shall be
granted automatically (without any action by the Administrator) on January 2 (or
if January 2 is not a business day on the next succeeding business day in each
calendar year) to any Non-Employee Director who irrevocably elects, in
accordance with this Section 7, to receive all or a specified percentage of all
annual retainer fees to be earned in all future years in the form of a Stock
Option. The Date of Grant of each such Stock Option shall be the applicable date
in January. Such Stock Option shall be awarded pursuant to such irrevocable
election in lieu of all or a specified percentage of the annual retainer fees to
be earned in each succeeding calendar year ("Plan Year") after the date of such
election. Any Non-Employee Director wishing to make such an irrevocable election
shall file such election with the Secretary of the Company on or before such
date as the Company or its counsel determines is necessary to comply with
applicable laws and regulations. Such elections, including the percentage, if
any, of annual retainer fees specified therein, shall be irrevocable for the
entire term served by each Non-Employee Director; provided that such election
shall be irrevocable only to the extent required under Rule 16b-3 under the
Exchange Act.
4
EXHIBIT 99.1
<PAGE> 5
(b) Option Formula. Subject to adjustment pursuant to Section 11
hereof, the number of shares of Common Stock subject to the Stock Option granted
to such electing Non-Employee Director shall be equal to the nearest number of
whole shares determined in accordance with the following formula:
Annual Retainer or percentage thereof = Number of Shares
-------------------------------------
50% of Fair Market Value
"Annual Retainer" means the amount of fixed fees which the Non-Employee
Director of the Company will be entitled to receive for serving as a director of
the Company in the relevant Plan Year, assuming no change in such compensation
from that in effect as of the date in January on which the Stock Option is
granted, and shall not include fees for attendance at meetings of the Board or
any committee of the Board or for any other services to be provided to the
Company. Fair Market Value shall be determined as of the Date of Grant.
8. GRANTS TO DESIGNATED COMMITTEE MEMBERS.
Each Non-Employee Director that is a member of a Designated Committee
shall, in lieu of attendance or other cash fees from the Company for
participation on such Committee, automatically (without any action by the
Administrator) be granted, on the date of each meeting of the Designated
Committee attended by such Non-Employee Director, a Discount Option to purchase
1,000 shares of Common Stock. The Date of Grant of each such Stock Option shall
be the date of each such meeting so attended.
"Designated Committee" shall mean any committee of the Board that has been
designated by resolution of the Board as (a) demanding an extraordinary
commitment of time, attention and efforts by its members and (B) whose members,
by participating thereon, agree to forego any attendance or other cash fee for
participating on the committee.
"Discount Option" shall mean an Option granted under this Plan that has an
exercise price less than the aggregate Fair Market Value of the Common Stock
subject to such Option on the Date of Grant of such Option, but not less than
the aggregate par value of such shares.
9. DISCRETIONARY OPTIONS.
The Board at its discretion may, at any time and on a one-time basis,
grant to each Non-Employee Director an Option (a "Discretionary Option") to
purchase up to 10,000 shares of Common Stock. The Board in its discretion may
grant Discretionary Options in lieu of an equivalent number of future Stock
Options that would otherwise
5
EXHIBIT 99.1
<PAGE> 6
have been granted under Section 6(b) hereof provided that such condition is
stated in the Option Agreement. The Date of Grant of each such Stock Option
shall be the date of the approval by the Board of the grant of such Option.
10. TERMS AND CONDITIONS OF STOCK OPTIONS.
(a) Purchase Price. The purchase price of Common Stock under each
Stock Option granted under Section 6, 8 or 9 equal to the Fair Market Value of
the Common Stock on the Date of Grant. The purchase price per share of Common
Stock under each Stock Option granted under Section 7 will be equal to 50% of
the Fair Market Value of the Common Stock on the Date of Grant.
(b) Exercise Period. Subject to Section 14 hereof, Stock Options
may be exercised from time to time in accordance with the terms of the
applicable Option Agreement and this Section 10. No Stock Option granted
pursuant to Section 6 or 9 hereof shall be exercised prior to the first
anniversary of its Date of Grant. No Option granted pursuant to Section 7 hereof
shall be exercised prior to six months after its Date of Grant. No Option
granted pursuant to Section 8 shall be exercised prior to its Date of Grant.
Notwithstanding anything to the contrary in the Plan or any Option Agreement
hereunder, no Option granted hereunder shall be exercised after ten years and
one month from its Date of Grant.
(c) Payment of Purchase Price. Upon the exercise of a Stock
Option, the purchase price will be payable in full in cash or its equivalent
acceptable to the Company. In the discretion of the Administrator, the purchase
price may be paid by the assignment and delivery to the Company of shares of
Common Stock or a combination of cash and such shares equal in value to the
exercise price. Any shares so assigned and delivered to the Company in payment
or partial payment of the purchase price will be valued at their Fair Market
Value on the exercise date.
(d) No Fractional Shares. No fractional shares will be issued
pursuant to the exercise of a Stock Option nor will any cash payments be made in
lieu of fractional shares.
(e) Exercisability. Except as provided in the Option Agreement
for any Option granted hereunder or subsection (f) or (g) hereof, a Participant
may not, until the end of the second year after the Date of Grant of an Option
granted under Section 6 or 9 hereof, or until the end of the first year after
the Date of Grant of an Option granted under Section 7 hereof, purchase by
exercise of such Option an aggregate of more than 50% of the total number of
shares subject to such Option. At any time on or after the second anniversary of
such Date of Grant with respect to Options granted under Section 6 or 9 hereof
or the first anniversary of the Date of Grant with respect to Options
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EXHIBIT 99.1
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granted under Section 7 hereof until such Option expires or terminates, a
Participant may purchase all or any part of the shares that he theretofore
failed to purchase under such Option Agreement.
(f) Termination of Directorship. If a Participant's services as a
member of the Board terminate by reason of death, Disability or Normal Board
Retirement, an Option granted hereunder held by such Participant shall be
automatically accelerated with respect to its exercisability and shall become
immediately exercisable in full for the remaining number of shares of Common
Stock subject to such Option for three years after the date of such termination
or until the expiration of the stated term of such Option, whichever period is
shorter, and thereafter such Option shall terminate; provided, however, that if
a Participant dies or suffers a Disability during said three-year period after
Normal Board Retirement such Option shall remain exercisable in full for a
period of three years after the date of such death or Disability or until the
expiration of the stated term of such Option, whichever period is shorter, and
thereafter such Option shall terminate. If a Participant's services as a member
of the Board terminate for any other reason, any portion of an Option granted
hereunder held by such Participant which is not then exercisable shall terminate
and any portion of such Option which is then exercisable may be exercised for
three months after the date of such termination or until the expiration of the
stated term of such Option, whichever period is shorter, and thereafter such
Option shall terminate provided, however, that if a participant dies or suffers
a Disability during such three-month period, such Option may be exercised for a
period of one year after the date of such Participant's death or Disability or
until the expiration of the stated term of such Option, whichever period is
shorter, in accordance with its terms, but only to the extent exercisable on the
date of the Participant's death or Disability.
(g) Change in Control. Notwithstanding any other provisions of
the Plan, upon any Change in Control (as hereinafter defined in this Section 10)
the unexercised portion of a Stock Option granted hereunder shall be
automatically accelerated with respect to its exercisability and shall become
immediately exercisable in full during the remainder of its term without regard
to any limitations of time or amount otherwise contained in the Plan. The term
"Change in Control" shall mean
(i) any person (as such term is used in Sections 3(a)(9) and
13(d)(3) of the Exchange Act) becomes the beneficial owner (as such term is used
in Section 13(d)(1) of the Exchange Act) directly or indirectly of securities
representing at least 25% of the combined voting power of the then outstanding
securities of the Company; or
(ii) during any period of thirty-six (36) consecutive months
(whether commencing before or after the effective date of this Plan),
individuals who at the beginning of such period constituted the Board cease for
any reason to constitute at least
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EXHIBIT 99.1
<PAGE> 8
a majority thereof, unless the election, or the nomination for election, of each
new director was approved by a vote of a least two-thirds of the directors then
still in office who were directors at the beginning of the period; or
(iii) any merger, consolidation, combination, reorganization,
sale, lease or exchange or issuance or delivery of stock or other securities, or
reverse stock split, exchange, liquidation or dissolution of the Company
(hereinafter called a "Transaction"), or the approval by the stockholders of the
Company (or if such stockholder approval is not required, the approval by the
Board) of a Transaction; or
(iv) the approval by the stockholders of the Company of any plan
or proposal for the Company to be Acquired (as defined below) or for the
liquidation or dissolution of the Company.
For purposes of this Section 10, the Company shall be considered to be
"Acquired" only if the owners of its voting securities immediately prior to the
effective date of any transaction referred to in Section 11(b) below will not
own immediately thereafter, as a result of having owned such voting securities,
securities representing a majority of the combined voting power of the then
outstanding securities of the Company or the entity that then owns, directly or
indirectly, the Company or all or substantially all its assets.
11. ADJUSTMENT PROVISIONS
(a) Subject to Section 11(b), if the outstanding shares of Common
Stock of the Company are increased, decreased or exchanged for a different
number or kind of shares or other securities, or if additional shares or new or
different shares or other securities are distributed with respect to such shares
of Common Stock or other securities, through merger, consolidation, sale of all
or substantially all the property of the Company, reorganization,
recapitalization, reclassification, stock dividend, stock split, reverse stock
split or other distribution with respect to such shares of Common Stock or other
securities, an appropriate and proportionate adjustment shall be made in (i) the
maximum number and kind of shares or other securities provided in Section 3(a),
(ii) the number and kind of shares or other securities subject to the
then-outstanding Stock Options, (iii) the price for each share or other unit of
any other securities subject to then-outstanding Stock Options without change in
the aggregate purchase price or value as to which such Stock Options remain
exercisable and (iv) the number, kind and price of shares or other securities to
be granted pursuant to Section 6, 7, 8 and 9 hereof.
(b) Notwithstanding the provisions of Section 11(a) and subject
to the provisions of Section 10(g) hereof, upon dissolution or liquidation of
the Company or upon a reorganization, merger or consolidation of the Company
with one or more corporations as a result of which the Company is not the
surviving corporation or as a
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EXHIBIT 99.1
<PAGE> 9
result of which the outstanding Common Stock is converted into or exchanged for
cash or securities of another issuer or both, or upon the sale of all or
substantially all the assets of the Company, all restrictions applicable to the
exercise of outstanding Stock Options shall continue in full force and effect
and provision shall be made in connection with such transaction for the
continuance of the Plan and the assumption of the outstanding Stock Options by
or the substitution for such Stock Options of new options covering the stock of
the successor corporation, or a parent or subsidiary thereof or the Company,
with appropriate and proportionate adjustment in (i) the number and kind of
shares or other securities or cash or other property subject to such Stock
Options and (ii) the price for each share or other unit of any other securities
or cash or other property subject to such Stock Options without change in the
aggregate purchase price or value as to which such Stock Options remain
exercisable; provided, however, that if no public market exists for the Common
Stock or the other securities or property which would be subject to such Stock
Options after consummation of such transaction, such Stock Options shall be
converted into the right to receive, upon exercise thereof, an amount of each
equal to the amount determined by the Administrator to be the fair market value
on the effective date of such transaction of the stock, other securities, cash
and other property that a share of Common Stock is entitled to receive, or into
which it is converted, pursuant to such transaction.
(c) Adjustments under Sections 11(a) and 11(b) will be made by
the Administrator, whose determination as to what adjustments will be made and
the extent thereof will be final, binding and conclusive in the absence of
manifest error or arbitrary action. No fractional interest will be issued under
the Plan on account of any such adjustments.
12. GENERAL PROVISIONS.
(a) The grant of any Stock Option under the Plan may also be
subject to such other provisions (whether or not applicable to the Stock Option
awarded to any other Participant) as the Administrator determines appropriate
including, without limitation, provisions to assist the Participant in financing
the purchase of Common Stock through the exercise of Stock Options, provisions
for the forfeiture of or restrictions on resale or other disposition of shares
acquired under any form of benefit, provisions giving the Company the right to
repurchase shares acquired under any form of benefit in the event the
Participant elects to dispose of such shares, provisions to comply with Federal
and state securities laws and Federal and state income tax withholding
requirements and to such approvals by any regulatory or governmental agency
which may be necessary or advisable in connection therewith.
In connection with the administration of the Plan or the grant of any
Award, the Administrator may impose such further limitations or conditions as in
its opinion may be
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EXHIBIT 99.1
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required or advisable to satisfy, or secure the benefits of, applicable
regulatory requirements (including those rules promulgated under Section 16 of
the Exchange Act or those rules that facilitate exemption from or compliance
with the Act or the Exchange Act), the requirements of any stock exchange upon
which such shares or shares of the same class are then listed, and any blue sky
or other securities laws applicable to such shares.
(b) No person shall be entitled to the privileges of stock
ownership in respect of shares of stock which are subject to Options hereunder
until such person shall have become the holder of record of such shares.
(c) No fewer than fifty shares may be purchased at one time
pursuant to any Stock Option unless the number purchased is the total number at
the time available for purchase under the Stock Option.
(d) Options shall not be transferable by the Participants other
than by will or the laws of descent and distribution, and during the lifetime of
a Participant shall be exercisable only by such Participant, except that to the
extent permitted by applicable law, and Rule 16b-3 promulgated by the Securities
and Exchange Commission under the Exchange Act, the Administrator may permit a
Participant to designate in writing during his lifetime a beneficiary to receive
and exercise Options in the event of such Participant's death. Following the
death of a Participant, Options held by such Participant shall be exercisable,
in accordance with their terms, by such designated beneficiary or, if no such
beneficiary has been designated, by the Participant's estate or by the person or
persons who acquire the right to exercise it by bequest or inheritance. Any
attempt to transfer, assign, pledge, hypothecate or otherwise dispose of, or to
subject to execution, attachment or similar process, an Option granted
hereunder, contrary to the provisions hereof, shall be void and ineffective,
shall give no rights to the purported transferee, and shall at the sole
discretion of the Administrator result in forfeiture of such Option with respect
to the shares involved in such attempt.
(e) The Plan and all Stock Options granted under the Plan and the
documents evidencing Stock Options shall be governed by, and construed in
accordance with, the laws of the State of Delaware.
13. AMENDMENT AND TERMINATION.
(a) The Board will have the power, in its discretion, to amend,
suspend or terminate the Plan at any time. No such amendment will, without
approval of the stockholders of the Company, except as provided in Section 11 of
the Plan:
(i) Change the class of persons eligible to receive Stock
Options
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EXHIBIT 99.1
<PAGE> 11
under the Plan; or
(ii) Increase the number of shares of Common Stock subject
to the Plan.
(b) No amendment, suspension or termination of the Plan will,
without the consent of the Participant, alter, terminate, impair or adversely
affect any right or obligation under any Stock Option previously granted under
the Plan.
14. EFFECTIVE DATE OF PLAN AND DURATION OF PLAN.
This Plan will become effective upon the adoption by the Board subject to
approval by the holders of a majority of the outstanding shares of Common Stock
present in person or by proxy and entitled to vote at a meeting of stockholders
of the Company held after such Board adoption. Any Options granted hereunder
prior to approval of the Plan by the stockholders shall be granted subject to
such approval and may not be exercised or realized, nor may Common Stock be
irrevocably transferred to any Participant, until and unless such approval has
occurred and the provisions of Section 12(a) have been satisfied. Unless
previously terminated, the Plan will terminate ten years and one month after
adoption by the Board, but such termination shall not affect any Stock Option
previously made or granted.
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EXHIBIT 99.1
