<PAGE> 1
As filed with the Securities and Exchange Commission on March 20, 1998
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
PETCO ANIMAL SUPPLIES, INC.
(Exact name of registrant as specified in its charter)
Delaware 33-0479906
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
----------
9125 Rehco Road
San Diego, California 92121
(619) 453-7845
(Address of principal executive offices,
including zip code, and telephone number)
PETCARE PLUS, INC. 1989 STOCK OPTION PLAN
-----------
Copies to:
BRIAN K. DEVINE THOMAS A. EDWARDS, ESQ.
Chairman, President Latham & Watkins
and Chief Executive Officer 701 "B" Street
9125 Rehco Road Suite 2100
San Diego, California 92121 San Diego, California 92101
(619) 453-7845 (619) 236-1234
(Name, address, including zip code, and
telephone number, including area code,
of agent for service)
CALCULATION OF REGISTRATION FEE
<TABLE>
=====================================================================================================
<S> <C> <C> <C> <C>
Amount Proposed Maximum Proposed Maximum Amount of
Title of Securities to be Offering Price Aggregate Offering Registration
to be Registered Registered(1) Per Share(2) Price Fee
- ----------------------------------------------------------------------------------------------------
Common Stock, $.0001 par 188,344 $17.32 $3,262,118 $962.33
value . . . .
=====================================================================================================
</TABLE>
(1) Pursuant to the merger of PetCare Plus, Inc. ("PetCare") with and
into Petco Animal Supplies, Inc. (the "Company"), the Company has
assumed all outstanding options to purchase PetCare common stock
under the PetCare Plus, Inc. 1989 Stock Option Plan. In accordance
with the merger, such outstanding options to purchase PetCare common
stock under the 1989 Stock Option Plan now represent outstanding
options to purchase 188,344 shares of Common Stock of the Company.
Only such 188,344 shares of common stock of the Company are being
registered hereunder.
(2) Estimated solely for purposes of calculating the registration fee.
Pursuant to Rule 457(h), the Proposed Maximum Offering Price Per
Share is based on the average of the high and low prices for the
Company's Common Stock as reported on The Nasdaq National Market on
March 17,1998.
===========================================================================
Page 1 of 28
Exhibit Index on Page 7
<PAGE> 2
Part I
Item 1. Plan Information.
Not required to be filed with this Registration Statement.
Item 2. Registrant Information and Employee Plan Annual Information.
Not required to be filed with this Registration Statement.
Part II
Item 3. Incorporation of Documents by Reference.
The following documents filed with the Securities and Exchange
Commission (the "Commission") by Petco Animal Supplies, Inc., a Delaware
corporation (the "Company"), are hereby incorporated by reference in this
Registration Statement:
(a) Annual Report on Form 10-K for the fiscal year ended February
1, 1997;
(b) Quarterly Report on Form 10-Q for the quarter ended May 3,
1997;
(c) Quarterly Report on Form 10-Q for the quarter ended August 2,
1997;
(d) Quarterly Report on Form 10-Q for the quarter ended November 1,
1997;
(e) All other reports filed pursuant to Section 13(a) or 15(d) of
the Exchange Act since the end of the Company's fiscal year
ended February 1, 1997;
(f) The description of the Common Stock set forth in the
Registration Statement on Form 8-A dated February 28, 1994, as
amended by the Company's Form 8-A/A dated March 15, 1994.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date this Registration Statement is filed
with the Commission and prior to the filing of a post-effective amendment which
indicates that all securities offered have been sold or which deregisters all
securities then remaining unsold shall be deemed to be incorporated by reference
in this Registration Statement and to be a part of it from the respective dates
of filing of such documents. Any statement contained in a document incorporated
or deemed to be incorporated by reference herein shall be deemed to be modified
or superseded for purposes of this Registration Statement to the extent that a
statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of
this Registration Statement.
<PAGE> 3
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
Not applicable.
Item 6. Indemnification of Directors and Officers.
Under Section 145 of the Delaware General Corporation Law, the Company
has broad powers to indemnify its directors and officers against liabilities
they may incur in such capacities, including liabilities under the Securities
Act.
The Company's Amended and Restated Certificate of Incorporation and
Amended and Restated Bylaws provide that the Company will indemnify its
directors and officers to the fullest extent permitted by Delaware law.
Delaware law permits, but does not require, a corporation to indemnify officers,
directors, employees or agents and expressly provides that the indemnification
provided for under Delaware law shall not be deemed exclusive of any
indemnification right under any bylaw, vote of stockholders or disinterested
directors, or otherwise. Delaware law permits indemnification against expenses
and certain other liabilities arising out of legal actions brought or threatened
against such persons for their conduct on behalf of the Company, provided that
each such person acted in good faith and in a manner that he or she reasonably
believed was in or not opposed to the Company's best interests and in the case
of a criminal proceeding, had no reasonable cause to believe his or her conduct
was unlawful. Delaware law does not allow indemnification of directors in the
case of an action by or in the right of the Company (including stockholder
derivative suits) unless the directors successfully defend the action or
indemnification is ordered by the court.
The Company has entered into indemnification agreements with certain
officers and directors to effectuate these indemnity provisions.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
See Exhibit Index on page 7 hereof.
Item 9. Undertakings.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement;
<PAGE> 4
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of this Registration Statement (or the most recent
post-effective amendment hereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in this Registration
Statement. Notwithstanding the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any deviation
from the low or high and of the estimated maximum offering range may be
reflected in the form of prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume and price represent no more
than 20 percent change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective Registration Statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in this Registration Statement or
any material change to such information in this Registration Statement;
provided, however, that the undertakings set forth in paragraphs (a)(1)(i) and
(a)(1)(ii) above do not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic reports
filed with or furnished to the Commission by the Registrant pursuant to Section
13 or 15(d) of the Exchange Act that are incorporated by reference in this
Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or 15(d) of the Exchange
Act (and, where applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Exchange Act) that is incorporated by
reference in this Registration Statement shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the
Registrant will, unless in the opinion of its counsel the matter has been
<PAGE> 5
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
<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 has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of San Diego, State of California, on March 18, 1998.
PETCO ANIMAL SUPPLIES, INC.
By:/s/ BRIAN K. DEVINE
------------------------
Brian K. Devine
Chairman, President and
Chief Executive Officer
POWER OF ATTORNEY
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated. Each person whose signature appears
below hereby authorizes Brian K. Devine and Richard C. St. Peter, and either of
them, with full power of substitution and resubstitution, as his true and lawful
attorneys-in-fact, for him in any and all capacities, to sign any amendments
(including post-effective amendments or supplements) to this Registration
Statement and to file the same, with exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission.
Signature Title Date
--------- ----- ----
/s/ BRIAN K. DEVINE Chairman, President and March 18, 1998
- ------------------- Chief Executive Officer
Brian K. Devine (Principal Executive Officer)
/s/ RICHARD C. ST. PETER Executive Vice President, March 18, 1998
- ------------------------ Chief Financial Officer and
Richard C. St. Peter Secretary (Principal Financial
Officer)
/s/ JAMES M. MYERS Senior Vice President, March 18, 1998
- ------------------ Finance (Principal Accounting
James M. Myers Officer)
/s/ RICHARD J. LYNCH, JR. Director March 18, 1998
- -------------------------
Richard J. Lynch, Jr.
/s/ ANDREW G. GALEF Director March 18, 1998
- -------------------
Andrew G. Galef
/s/ JIM F. MCCANN Director March 18, 1998
- -----------------
Jim F. McCann
/s/ PETER M. STARRETT Director March 18, 1998
- ---------------------
Peter M. Starrett
<PAGE> 7
EXHIBIT INDEX
The following exhibits are filed as part of this Registration Statement on
Form S-8 or are incorporated herein by reference.
Exhibit No. Page
- ----------- ----
4.1 Amended and Restated Certificate of Incorporation, ---
as amended. (Incorporated by reference to Exhibit 3.1
to the Company's Registration Statement on Form S-4
(No. 333-14699) filed on October 23, 1996, as amended
by Amendment No. 1 filed with the Commission on
November 20, 1996.)
4.2 Amended and Restated Bylaws. (Incorporated by ---
reference to Exhibit 3.2 to the Company's Registration
Statement on Form S-1 (No. 33-74094) filed on
January 13, 1994, as amended by Amendment No. 1
filed with the Commission on February 24, 1994
and Amendment No.2 filed with the Commission on
March 11, 1994.)
4.3 The PetCare Plus, Inc. 1989 Stock Option Plan 8
(the "1989 Stock Option Plan").
4.4 Form of Incentive Stock Option Agreement under 17
the 1989 Stock Option Plan.
4.5 Form of Nonqualified Stock Option Agreement under 21
the 1989 Stock Option Plan.
5.1 Opinion of Latham & Watkins. 25
23.1 Consent of KPMG Peat Marwick LLP. 27
23.2 Consent of Arthur Andersen, LLP. 28
23.3 Consent of Latham & Watkins (included in Exhibit 5.1 ---
hereto).
24.1 Power of Attorney (included on the signature page ---
hereto).
<PAGE> 8
EXHIBIT 4.3
RESTATED
PETCARE PLUS, INC.
1989 STOCK OPTION PLAN
1. Purposes of the Plan. The purposes of this Stock Option Plan are to
attract and retain the best available personnel for positions of substantial
responsibility, to provide additional incentive to the Employees and Consultants
of the Company and to promote the success of the Company's business.
Options granted hereunder may be either Incentive Stock Options or Nonstatutory
Stock Options, at the discretion of the Board and as reflected in the terms of
the written option agreement.
2. Definitions. As used herein, the following definitions shall apply:
(a) "Board" shall mean the Committee, if one has been appointed, or the Board
of Directors of the Company, if no Committee is appointed.
(b) "Code" shall mean the Internal Revenue Code of 1986, as amended.
(c) "Common Stock" shall mean the Common Stock of the Company.
(d) "Company" shall mean PetCare Plus, Inc., a Delaware corporation.
(e) "Committee" shall mean the Committee appointed by the Board of Directors in
accordance with paragraph (a) of Section 4 of the Plan, if one is appointed.
(f) "Consultant" shall mean any person who is engaged by the Company or any
Subsidiary to render consulting services and is compensated for such consulting
services or any other person determined by the Board to have performed services
for or on behalf of the Company which merits the grant of an Option, and any
director of the Company whether compensated
for such services or not; provided that if and in the event the Company
registers any class of any equity security pursuant of Section 12 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), the term
Consultant shall thereafter not include directors who are not compensated for
their services or are paid only a director's fee by the Company.
(g) "Continuous Status as an Employee" shall mean the absence of any
interruption or termination of service as an Employee. Continuous Status as an
Employee shall not be considered interrupted in the case of sick leave, military
leave, or any other leave of absence approved by the Board; provided that such
leave is for a period of not more than 90 days or reemployment upon the
expiration of such level is guaranteed by contract or
statute.
(h) "Employee" shall mean any person, including officers and directors, employed
by the Company or any Parent or Subsidiary of the Company. The payment of a
director's fee by the Company shall not be sufficient to constitute "employment"
by the Company.
<PAGE> 9
(i) "Incentive Stock Option" shall mean an Option intended to qualify as an
incentive stock option within the meaning of Section 422 of the Code.
(j) "Nonstatutory Stock Option" shall mean an Option not intended to qualify as
an Incentive Stock Option.
(k) "Option" shall mean a stock option granted pursuant to the Plan.
(l) "Optioned Stock" shall mean the Common Stock subject to an Option.
(m) "Optionee" shall mean an Employee or Consultant who receives an Option.
(n) "Parent" shall mean a "parent corporation", whether now or hereafter
existing, as defined in Section 424(e) of the Code.
(o) "Plan shall mean this 1989 Stock Option Plan.
(p) "Share shall mean a share of the Common Stock, as adjusted in accordance
with Section 12 of the Plan.
(q) "Subsidiary" shall mean a "subsidiary corporation", whether now or hereafter
existing, as defined in Section 424(f) of the Code.
3. Stock Subject to the Plan. Subject to the provisions of Section 12 of the
Plan, the maximum aggregate number of shares which may be optioned and sold
under the Plan is 1,260,000 shares of Common Stock (402,010 after the
contemplated one for 3.134249 reverse split of the Common Stock). The Shares
may be authorized, but unissued or reacquired Common Stock.
If an Option should expire or become unexercisable for any reason without having
been exercised in full, the unpurchased Shares which were subject thereto shall,
unless the Plan shall have been terminated, become available for future grant
under the Plan. Notwithstanding any other provision of
the Plan, shares issued under the Plan and later repurchased by the Company
shall become available for future grant or sale under the Plan.
4. Administration of the Plan.
(a) Procedure. The Plan shall be administered by the Board of Directors of
the Company.
(i) Subject to subparagraph (ii), the Board of Directors may appoint a
Committee consisting of not less than two members of the Board of Directors to
administer the Plan on behalf of the Board of Directors, subject to such terms
and conditions as the Board of Directors may prescribe. Once appointed, the
committee shall continue to serve until otherwise directed by the Board of
Directors. Members of the Board who are either eligible for Options or have
been granted Options may vote on any matters affecting the administration of the
Plan or the grant of any Options pursuant to the Plan, except that no such
member shall act upon the granting of an Option to himself, but any such member
may be counted in determining the existence of a quorum at any meeting of the
Board during which action is taken with respect to the granting of Options to
him.
<PAGE> 10
(ii) Notwithstanding the foregoing subparagraph (i), if in any event the
Company registers any class of any equity security pursuant to Section 12 of the
Exchange Act, from the effective date of such registration (the "Effective
Date"), until six months after the termination of such registration (the
"Termination Date"), any grants of options to officers or directors shall only
be made by the Board of Directors; provided, however,
that if any of the members of the Board of Directors are eligible to participate
in this Plan or otherwise are not "disinterested persons" as that term is
defined by Rule 16(c)(2)(i) under the Exchange Act, any grants of options to
officers or directors of the Company must be made by, or only in accordance with
the recommendation of, a Committee consisting of two or more directors,
appointed by the Board of Directors and having full
authority to act in the matter, each of whom is a "disinterested person." Once
appointed, the Committee shall continue to serve until otherwise directed by the
Board of Directors.
(iii) Subject to the foregoing subparagraphs (i) and (ii), from time to time the
Board of Directors may increase the size of the Committee and appoint additional
members thereof, remove members (with or without cause) and appoint new members
in substitution therefor, fill vacancies however caused, or remove all members
of the Committee and thereafter directly administer the Plan.
(b) Powers of the Board. Subject to the provisions of the Plan, the Board shall
have the authority, in its discretion: (i) to grant Incentive Stock Options or
Nonstatutory Stock Options; (ii) to determine upon review of relevant
information and in accordance with Section 8(b) of the Plan, the fair market
value of the Common Stock; (iii) to determine the exercise price per share of
Options to be granted, which exercise price shall be
determined in accordance with Section 8(a) of the Plan; (iv) to determine the
Employees or Consultants to whom, and the time or times at which, Options shall
be granted and the number of shares to be represented by each Option; (v) to
interpret the Plan; (vi) to prescribe, amend and rescind rules and regulations
relating to the Plan; (vii) to determine the terms and provisions of each Option
granted (which need not be identical)
and, with the consent of the holder thereof, modify or amend each Option; (viii)
to accelerate or defer (with the consent of the Optionee) the exercise date of
any Option, consistent with the provisions of Section 5 of the Plan; (ix) to
authorize any person to execute on behalf of the Company any instrument required
to effectuate the grant of an Option previously granted by the Board; and (x) to
make all other determinations deemed
necessary or advisable for the administration of the Plan.
(c) Effect of Board's Decision. All decisions, determinations and
interpretations of the Board shall be final and binding on all Optionees and any
other holders of any Options granted under the Plan.
5. Eligibility.
(a) Options may be granted only to Employees and Consultants. Incentive Stock
Options may be granted only to Employees. An Employee or Consultant, who has
been granted an Option may, if he is otherwise eligible, be granted an
additional Option or Options.
(b) To the extent that the aggregate fair market value of Common Stock with
respect to which Incentive Stock Options are exercisable for the first time by
any Optionee during any calendar year (under all plans of the Company or any
Parent or Subsidiary) exceeds $100,000, such Incentive Stock Options shall be
treated as Nonstatutory Stock Options.
<PAGE> 11
(c) Section 5(b) of the Plan shall apply only to an Incentive Stock Option
evidenced by an "Incentive Stock Option Agreement" which sets forth the
intention of the Company and the Optionee that such Option shall qualify as an
incentive stock option. Section 5(b) of the Plan shall not apply to any Option
evidenced by a "Nonstatutory Stock Option Agreement"
which sets forth the intention of the Company and the Optionee that such Option
shall be a Nonstatutory Stock Option.
(d) The Plan shall not confer upon any Optionee any right with respect to
continuation of employment or consulting relationship with the Company, nor
shall it interfere in any way with his right or the Company's right to terminate
his employment or consulting relationship at any time.
6. Term of Plan. The Plan shall become effective upon the earlier to occur
of its adoption by the Board of Directors or its approval by the stockholders of
the Company as described in Section 18 of the Plan. It shall continue in effect
for a term of ten (10) years unless sooner terminated under Section 14 of the
Plan.
7. Term of Option. The term of each Incentive Stock Option shall be ten (10)
years from the date of grant thereof or such shorter term as may be provided in
the Incentive Stock Option Agreement. The term of each Option that is not an
Incentive Stock Option shall be determined by the Board and set forth in the
Option Agreement. However, in the case of an Incentive Stock Option granted to
an Optionee who, at the time the Incentive Stock Option is granted, owns stock
representing more than ten percent (10%) of the voting power of all classes of
stock of the Company or any Parent or Subsidiary, the term of the Incentive
Stock Option shall be five (5) years from the date of grant thereof or such
shorter time as may be provided in the Incentive Stock Option Agreement.
8. Exercise Price and Consideration.
(a) Exercise Price. The per Share exercise price for the Shares to be issued
pursuant to exercise of an Option shall be such price as is determined by the
Board, but shall be subject to the following:
(i) In the case of an Incentive Stock Option
(A) granted to an Employee who, at the time of the grant of such Incentive
Stock Option, owns stock representing more than ten percent (10%) of the voting
power of all classes of stock of the Company or any Parent or Subsidiary, the
per Share exercise price shall be no less than one hundred ten percent (110%) of
the fair market value per Share on the date of grant.
(B) granted to any other Employee, the per Share exercise price shall be no
less than one hundred percent (100%) of the fair market value per Share on the
date of grant.
(ii) In the case of an Option granted on or after the effective date of
registration of any class of equity security of the Company pursuant to Section
12 of the Exchange Act and prior to six months after the termination of such
registration, the per Share exercise price shall be no less than one hundred
percent (100%) of the fair market value per Share
on the date of grant.
(iii) In the case of Non-Statutory Stock Options, at any price per share
determined by the Board.
<PAGE> 12
(b) Fair Market Value. The fair market value shall be determined by the
Board in its discretion exercised in good faith; provided, however, that where
there is a public market for the Common Stock, the fair market value per Share
shall be the mean of the bid and asked prices (or the closing price per share if
the Common Stock listed on that National Association of
Securities Dealers Automated Quotation ("NASDAQ") National Market System) of the
Common Stock for the date of grant, as reported in The Wall Street Journal (or,
if not so reported, as otherwise reported by the NASDAQ System) or, in the event
the Common Stock is listed on a stock exchange, the fair market value per Share
shall be the closing price on such exchange on the date of grant of the Option,
as reported in The Wall Street Journal.
(c) Form of Consideration. The consideration to be paid for the Shares to be
issued upon exercise of an Option, including the method of payment, shall be
determined by the Board and may consist entirely of cash, check, other Shares of
Common Stock having a fair market value on the date of surrender equal to the
aggregate exercise price of the Shares as to which said option shall be
exercised, or any combination of such methods of payment, or such other
consideration and method of payment for the issuance of Shares to the extent
permitted under Sections 152, 153 and 157 of the Delaware General Corporation
Code. In making its determination as to the type of consideration to accept,
the Board shall consider if acceptance of such consideration may be reasonably
expected to benefit the Company.
9. Exercise of Option; Procedure for Exercise; Rights as a Stockholder. Any
option granted hereunder shall be exercisable at such times and under such
conditions as determined by the Board, including performance criteria with
respect to the Company and/or the Optionee, and as shall be
permissible under the terms of the Plan.
An Option may not be exercised for a fraction of a Share.
An Option shall be deemed to be exercised when written notice of such exercise
in the form required by the Nonstatutory or Incentive Stock Option Agreement has
been given to the Company in accordance with the terms of the Option by the
person entitled to exercise the Option and full payment for the Shares with
respect to which the Option is exercised has been received by the Company. Full
payment may, as authorized by the Board, consist of any consideration and method
of payment allowable under Section 8(c) of the Plan. Until the issuance (as
evidenced by the appropriate entry on the books of the Company or of a duly
authorized transfer agent of the Company) of the stock certificate evidencing
such Shares, no right to vote or receive dividends or any other rights as a
stockholder shall exist with respect to the Optioned Stock, notwithstanding the
exercise of the Option. The Company shall issue (or cause to be issued) such
stock certificate promptly upon exercise of the Option. No adjustment will be
made for a dividend or other right for which the record date is prior to the
date the stock certificate is issued, except as provided in Section 12 of the
Plan.
Exercise of an Option in any manner shall result in a decrease in the number of
Shares which thereafter may be available, both for purposes of the Plan and for
purchase under the Option, by the number of Shares as to which the Option is
exercised.
10. Certain Events Affecting Exercisability of Incentive Stock Options.
(a) Termination of Status as an Employee. With respect to Incentive Stock
Options, in the event of termination of an Optionee's Continuous Status as an
Employee, such Optionee may, but only within sixty (60) days (or such other
period of time not exceeding three (3) months as is determined by the Board,
with such determination being made at the time of grant of the Option) after
such event of termination of an Optionee's Continuous Status as an Employee (but
in no event later than the date of expiration of the term of such Incentive
<PAGE> 13
Stock Option as set forth in the Incentive Stock Option Agreement), exercise his
Incentive Stock Option to the extent that
he was entitled to exercise it at the date of such termination. To the extent
that he was not entitled to exercise the Incentive Stock Option at the date of
such termination, or if he does not exercise such Incentive Stock Option (which
he was entitled to exercise) within the time specified herein, the Incentive
Stock Option shall terminate.
(b) Disability of Optionee. With respect to Incentive Stock Options,
notwithstanding the provision of Section 10(a) above, in the event of
termination of an Optionee's Continuous Status as an Employee as a result of his
total and permanent disability (as defined in Section 22(e)(3)
of the Code), he may, but only within six (6) months (or such other period of
time not exceeding twelve (12) months as is determined by the Board, with such
determination being made at the time of grant of the Incentive Stock Option)
from the date of termination (but in no event later than
the date of expiration of the term of such Incentive Stock Option as set forth
in the Incentive Stock Option Agreement), exercise his Incentive Stock Option to
the extent he was entitled to exercise it at the date of such termination. To
the extent that he was not entitled to exercise
the Incentive Stock Option at the date of termination, or if he does not
exercise such Incentive Stock Option (which he was entitled to exercise) within
the time specified herein, the Incentive Stock Option shall terminate.
(c) Death of Optionee. With respect to Incentive Stock Options, in the event
of the death of an Optionee:
(i) who is at the time of his death an Employee of the Company and who shall
have been in Continuous Status as an Employee since the date of grant of the
Incentive Stock Option, the Incentive Stock Option may be exercised, at any time
within nine (9) months following the date of death (but in no event later than
the date of expiration of the term of such Incentive Stock Option as set forth
in the Incentive Stock Option Agreement), by the
Optionee's estate or by a person who acquired the right to exercise the
Incentive Stock option by bequest or inheritance, but only to the extent of the
right to exercise that would have accrued had the Optionee continued living and
remained in Continuous Status as an Employee six (6) months after the date of
death, subject to the limitation set forth in Section 5(b); or
(ii) which occurs within sixty (60) days (or such other period of time not
exceeding three (3) months as is determined by the Board, with such
determination being made at the time of grant of the Incentive Stock Option)
after the termination of Continuous Status as an Employee, the Incentive Stock
Option may be exercised, at any time within nine (9) months
following the date of death (but in no event later than the date of expiration
of the term of such Incentive Stock Option as set forth in the Incentive Stock
Option Agreement), by the Optionee's estate or by a person who acquired the
right to exercise the Incentive Stock Option by bequest or inheritance, but only
to the extent of the right to exercise that had accrued at the date of
termination.
11. Non-Transferability of Incentive Stock Options. No Incentive Stock Option
may be sold, pledged, assigned, hypothecated, transferred, or disposed of in any
manner other than by will or by the laws of descent or distribution and may be
exercised, during the lifetime of the Optionee, only by the Optionee.
12. Adjustments Upon Changes in Capitalization or Merger. Subject to any
required action by the stockholders of the Company, the number of shares of
Common Stock covered by each outstanding Option, and the number of shares of
Common Stock which have been authorized for issuance under the Plan but as to
which no Options have yet been granted or which have been returned to the Plan
upon cancellation or expiration of an Option, as well as the price per share of
<PAGE> 14
Common Stock covered by each such outstanding Option, shall be proportionately
adjusted for any increase or decrease in the number of
issued shares of Common Stock resulting form a stock split, reverse stock split,
stock dividend, combination or reclassification of the Common Stock, or any
other increase or decrease in the number of issued shares of Common Stock
effected without receipt of consideration by the Company; provided,
however, that conversion of any convertible securities of the Company shall not
be deemed to have been "effected without receipt of consideration." Such
adjustment shall be made by the Board, whose determination in that respect shall
be final, binding and conclusive. Except as expressly provided herein, no
issuance by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall affect, and no adjustment
by reason thereof shall be made with respect to, the number or price of shares
of Common Stock subject to an Option.
In the event of the proposed dissolution or liquidation of the Company, the
Option will terminate immediately prior to the consummation of such proposed
action, unless otherwise provided by the Board. The Board may, in the exercise
of its sole discretion in such instances, declare that any Option shall
terminate as of a date fixed by the Board and give each Optionee the right to
exercise his Option as to all or any part of the Optioned Stock, including
Shares as to which the Option would not otherwise be exercisable. In the event
of a proposed sale of all or substantially all of the assets of the Company, or
the merger of the Company with or into another corporation, the Option shall be
assumed or an equivalent option shall be substituted by such successor
corporation or a parent or subsidiary of such successor corporation. Unless the
option agreement granting an Option to an Optionee specifically provides
otherwise, in the event that such successor corporation refuses to assume the
Option or to substitute an equivalent option, the Board shall, in lieu of such
assumption or substitution, provide for the Optionee to have the right to
exercise the Option as to all of the Optioned Stock, including Shares as to
which the Option would not otherwise be exercisable. The board shall give
written notice to each holder of an Option of the pendency of the sale of
substantially all of the assets of the Company, a merger involving the Company
or the dissolution or liquidation of the Company not less than ten days prior to
such transaction. If the Board makes an Option fully
exercisable in lieu of assumption or substitution in the event of a merger or
sale of assets, the Board shall notify the Optionee that the Option shall be
fully exercisable for a period of thirty (30) days from the date of such notice,
and the Option will terminate upon the expiration of such period.
13. Time of Granting Options. The date of grant of an Option shall, for all
purposes, be the date on which the Board makes the determination granting such
Option. Notice of the determination shall be given to each Employee or
Consultant to whom an Option is so granted within a reasonable time after the
date of such grant.
14. Amendment and Termination of the Plan.
(a) Amendment and Termination. The Board may amend or terminate the Plan from
time to time in such respects as the Board may deem advisable; provided that the
following revisions or amendments shall require approval of the stockholders of
the Company in the manner described in Section 18 of the Plan:
(i) any increase in the number of Shares subject to the Plan, other than in
connection with an adjustment under Section 12 of the Plan;
(ii) any change in the designation of the class of persons eligible to be
granted Options; or
(iii)if the Company has a class of equity securities registered under Section 12
of the Exchange Act at the time of such revision or amendment, any material
increase in the benefit accruing to participants under the Plan.
(b) Stockholder Approval. If any amendment requiring stockholder approval
<PAGE> 15
under Section 14(a) of the Plan is made subsequent to the first registration of
any class of equity securities by the Company under Section 12 of the Exchange
Act, such stockholder approval shall be solicited as
described in Section 18 of the Plan.
(c) Effect of Amendment or Termination. Any such amendment or termination of
the plan shall not affect Options already granted and such Options shall remain
in full force and effect as if this Plan had not been amended or terminated,
unless mutually agreed otherwise between the Optionee and the
Board, which agreement must be in writing and signed by the Optionee and the
Company.
15. Conditions Upon Issuance of Shares. Shares shall not be issued
pursuant to the exercise of an Option unless the exercise of such Option and the
issuance and delivery of such Shares pursuant thereto shall comply with all
relevant provisions of law, including, without limitation, the
Securities Act of 1933, as amended, the Exchange Act, the rules and
regulations promulgated thereunder, and the requirements of any stock exchange
upon which the Shares may then be listed, and shall be further subject to the
approval of counsel for the Company with respect to such compliance.
As a condition to the exercise of an Option, the Company may require the person
exercising such Option to represent and warrant at the time of any such exercise
that the Shares are being purchased only for investment and without any present
intention to sell or distribute such Shares if, in the opinion of counsel for
the Company, such a representation is required by any of the aforementioned
relevant provisions of law.
16. Reservation of Shares. The Company, during the term of this Plan, will at
all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.
The inability of the Company to obtain authority from any regulatory body having
jurisdiction, which authority is deemed by the Company's counsel to be necessary
to the lawful issuance and sale of any Shares hereunder, shall relieve the
Company of any liability in respect of the failure to issue or
sell such Shares as to which such requisite authority shall not have been
obtained.
17. Option Agreement. Options shall be evidenced by written option agreements
in such form as the Board shall approve.
18. Stockholder Approval.
(a) Continuance of the Plan shall be subject to approval by the stockholders of
the Company within twelve (12) months before or after the date the Plan is
adopted. If such stockholder approval is obtained at a duly held stockholders'
meeting, it must be obtained by the affirmative vote of the holders of a
majority of the outstanding shares of the Company, or if such stockholder
approval is obtained by written consent, it must be obtained by the written
consent of the holders of a majority of the outstanding shares of the Company;
provided, however, that approval at a meeting or by written consent may be
obtained by a lesser degree of stockholder approval if the Board determines, in
its discretion after consultation with the Company's legal counsel, that such a
lesser degree of stockholder approval will comply with all applicable laws and
will not adversely
affect the qualification of the Plan under Section 422 of the Code.
(b) If and in the event that the Company registers any class of equity
securities pursuant to Section 12 of the Exchange Act, any required approval of
the stockholders of the Company obtained after such registration shall be
solicited substantially in accordance with Section 14(a) of the Exchange Act and
the rules and regulations promulgated thereunder.
19. Gender Reference. The words "he", "him" or "his" shall be deemed to
include the feminine and neuter gender of such words.
<PAGE> 16
Adopted by the Board of Directors of the Company on June 1, 1994, and approved
by the stockholders of the Company on June 1, 1994.
/s/ STEVEN L. JESKE
-------------------
Steven L. Jeske, Secretary
<PAGE> 17
EXHIBIT 4.4
ASSUMPTION AND AMENDMENT OF INCENTIVE STOCK OPTION AGREEMENT
This Assumption and Amendment of Incentive Stock Option Agreement
("Agreement") is entered into effective as of November 1, 1997 ("Effective
Date") by and between Petco Animal Supplies, Inc., a Delaware corporation
("Company") and __________________ ("Optionee"), with reference to the following
facts:
A. WHEREAS, PetCare Plus, Inc., a Delaware corporation ("PetCare") has
merged with and into the Company ("Merger") pursuant to that certain Agreement
and Plan of Merger dated October 20, 1997 ("Merger Agreement"); and
B. WHEREAS, pursuant to the Merger Agreement, the Company assumed all
vested and unvested outstanding options ("PetCare Options") to purchase PetCare
common stock under the PetCare 1989 Stock Option Plan ("Plan"), which Plan was
assumed by the Company pursuant to the Merger, and pursuant to such assumption
of PetCare Options, such options were deemed to be options to purchase the
common stock, $0.0001 par value, of the Company ("Company Common Stock") in
accordance with the terms of the Merger Agreement; and
C. WHEREAS, prior to the Merger, Optionee was the holder of PetCare
Options pursuant to that certain Second Amended and Restated Incentive Stock
Option Agreement between Optionee and PetCare dated _______________(the "PetCare
Option Agreement"); and
D. WHEREAS, the parties desire to amend and restate the PetCare Option
Agreement in its entirety to reflect the terms and conditions relating to the
Company's assumption of the PetCare Options as described in the Merger
Agreement.
NOW THEREFORE, in consideration of the mutual covenants and premises
contained herein and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto agree as follows:
1. Assumption of Option; Vesting. The Company hereby assumes the
option granted to Optionee pursuant to the PetCare Option Agreement (the
"Option") which, pursuant to the terms of the Merger Agreement, is exercisable
to purchase up to an aggregate of __________ shares of Company Common Stock
("Option Shares"), which number of Option Shares is subject to adjustment as
provided in Section 3 below, and further provided that the Option is subject to
the terms of the Plan, the provisions of which are incorporated herein by
reference. The foregoing option to purchase the Option Shares shall vest in
accordance with the following restated vesting schedule:
DATE NUMBER OF OPTION SHARES VESTED
___________ _______________
___________ _______________
___________ _______________
2. Exercise Price and Consideration. The per share exercise price
("Exercise Price") shall be $_________, subject to adjustment as provided in
Section 3 below.
<PAGE> 18
2.1 Form of Consideration. The consideration to be paid for the
Option Shares to be issued upon exercise of the Option, including the method of
payment, shall be determined by the Company's Board of Directors and may consist
entirely of cash, check, other shares of Company Common Stock having a fair
market value on the date of surrender equal to the aggregate exercise price of
the Option Shares as to which said Option shall be exercised, or any combination
of such methods of payment, or such other consideration and method of payment
for the issuance of Option Shares to the extent permitted under Sections 150,
153, and 157 of the Delaware General Corporation Law. In making its
determination as to the type of consideration to accept, the Board of Directors
shall consider if acceptance of such consideration may be reasonably expected to
benefit the Company.
2.2 Fair Market Value. The fair market value of shares of Company
Common Stock delivered to the Company as payment of the purchase price upon
exercise of an Option shall be the closing price per share as reported by the
National Association of Securities Dealers Automated Quotation ("NASDAQ")
National Market System) for the date of exercise, as reported in The Wall Street
Journal (or, if not so reported, as otherwise reported by the NASDAQ System) or,
if the Common Stock is listed on a stock exchange, the fair market value per
share shall be the closing price on such exchange on the date of exercise of the
Option, as reported in The Wall Street Journal.
3. Adjustment of Option Shares and Exercise Price. The parties agree
that in order to ensure that Optionee is treated in the same manner as the
stockholders of PetCare who were signatories to the Merger Agreement and other
holders of the common stock of PetCare immediately prior to the Merger
(collectively, "Stockholders"), the number of Option Shares which may be
received upon the exercise of the Option and the Exercise Prices shall be
adjusted as set forth herein. For purposes of determining
the number of shares of Company Common Stock received by the Stockholders
pursuant to Section 3.1 below, only those shares of Company Common Stock
ultimately received by the Stockholders with respect to the 11,877,638 shares of
PetCare common stock outstanding and owned by the Stockholders immediately prior
to the Merger shall be counted, and any Company Common Stock received by the
Stockholders or holders of options to purchase Company Common Stock or PetCare
Common Stock with respect to any exercise of any stock options subsequent to the
Merger shall not be counted.
3.1 Adjustment of Option Shares. If the Stockholders ultimately
receive fewer shares of Company Common Stock as a result of offsets against the
shares of Company Common Stock deposited by the Stockholders pursuant to Section
8.03 of the Merger Agreement (the "Held Back Shares"), then the number of Option
Shares granted under Section 1 above shall be proportionately reduced by
multiplying such number of Option Shares by the fraction ("Fraction") equal to
the quotient of (a) the aggregate number of shares of Company Common Stock
actually received by the
Stockholders, divided by (b) One Million Five Hundred Forty-Three Thousand Four
Hundred Forty-Five (1,543,445), with the result being the revised number of
Option Shares for which the Option may be exercised.
3.2 Adjustment of Exercise Price. If the Stockholders ultimately
receive fewer shares of Company Common Stock as a result of offsets against the
Held Back Shares, then the Exercise Price shall be increased by dividing the
Exercise Price by the Fraction, with the result being the revised Exercise Price
for all Option Shares.
4. Exercise of Option. Subject to the second sentence of this Section,
an Option shall be deemed to be exercised when the Optionee or other authorized
person gives to the Company written notice of such exercise and full payment for
the Option Shares with respect to which the Option is exercised has been
received by the Company. If any Option is exercised prior to such date after
the Effective Date as financial results covering at least thirty (30) days of
<PAGE> 19
the combined post-closing operations of PetCare and the Company after the
Effective Date have been, within the meaning of Accounting Series Release No.
130, as amended, of the Securities and Exchange Commission, filed by the Company
with the Securities and Exchange Commission or published by the Company in an
Annual Report on
Form 10-K, a Quarterly Report on Form 10-Q, a Current Report on Form 8-K, a
quarterly earnings report, a press release or other public issuance which
includes combined sales and income of PetCare and the Company (the "Release
Date"), then as conditions to the exercise of such Option, (i) the Optionee
shall become a signatory to that certain Escrow Agreement of even date herewith
entered into by and between the Company, Union Bank of California, N.A. and the
Stockholders ("Escrow Agreement") and be bound by the terms thereof, and (ii)
ten percent (10%) of such Option Shares to be received pursuant to the exercise
of the Option shall be deposited into escrow pursuant to Section 8.03 of the
Merger Agreement and held as part of the Escrowed Property, as such term is
defined in the Escrow Agreement.
Until the issuance (as evidenced by the appropriate entry on the books of
the Company or of a duly authorized transfer agent of the Company) of the stock
certificate evidencing such Option Shares, no right to vote or receive dividends
or any other rights as a stockholder shall exist with respect to the Option
Shares, notwithstanding the exercise of the Option. The Company shall issue (or
cause to be issued) such stock certificates promptly upon exercise of the
Option. No adjustment will be made for a
dividend or other right for which the record date is prior to the date of the
stock certificate is issued, except as provided in the Plan.
Exercise of an Option in any manner shall result in a decrease in the
number of Option Shares which thereafter may be available, both for purposes of
the Plan and for sale under the Option, by the number of Option Shares as to
which the Option is exercised.
5. Restrictions on Transfer. Optionee acknowledges and agrees that
with respect to all or any portion of the Option which is exercised before the
Release Date, all shares of Company Common Stock received upon such exercise
shall be restricted and shall not be assigned, transferred or conveyed until the
Release Date, except to the Escrow Agent named in the Escrow Agreement. Any
attempted assignment, transfer or conveyance of such shares of Company Common
Stock in violation of this Section 5 shall be
null and void and without effect.
6. Term of Option.
6.1 General Rule. Except as provided in Section 6.2 hereof or as
otherwise provided in the Plan, the term of the Option granted pursuant to
Section 1 hereof shall be as follows: the Option shall expire as to ________
shares on _________.
6.2 Employment of Optionee Terminated. If Optionee dies, or
resigns or is terminated, with or without cause, as an employee of the Company
for any reason whatsoever (an "Event of Termination"), then the Option shall be
exercisable for sixty (60) days following such Event of
Termination, and to the extent that such Option was not exercisable on the date
of such Event of Termination, or if such Option is not exercised (to the extent
it was entitled to be exercised) within the sixty (60) day period, the Option
shall terminate.
7. Non-Transferability of Option. The Option may not be sold, pledged,
assigned, hypothecated, transferred, or disposed of in any manner other than by
will or by the laws of descent or distribution and may be exercised, during the
lifetime of the Optionee, only by the Optionee.
8. Conditions Upon Issuance of Option Shares. Option Shares shall not
be issued pursuant to the exercise of the Option unless the exercise of such
Option and the issuance and delivery of such Option Shares pursuant thereto
shall comply with all relevant provisions of law, including, without limitation,
the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as
<PAGE> 20
amended, the rules and regulations promulgated thereunder, and the requirements
of any stock exchange upon which the
Common Stock may then be listed, and shall be further subject to the approval of
counsel for the Company with respect to such compliance.
As a condition to the exercise of the Option, the Company may require the
person exercising such Option to represent and warrant at the time of any such
exercise that the Option Shares are being purchased only for investment and
without any present intention to sell or distribute such Option Shares if, in
the opinion of counsel for the Company, such a representation is required by any
of the aforementioned relevant provisions of law.
As a condition to the issuance of Option Shares, the Optionee shall (a)
remit to the Company at the time of any exercise of the Option any taxes
required to be withheld by the Company under Federal, State or local law as a
result at the exercise of the Option, and/or (b) instruct the Company to
withhold in accordance with applicable law from any compensation payable to the
Optionee the taxes required to be withheld by the Company under Federal, State
or local law as a result of the exercise of
the Option.
9. Amendment and Restatement of PetCare Option Agreement. This
Agreement amends and restates the PetCare Option Agreement in its entirety.
10. Multiple Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Assumption and Amendment of Incentive Stock Option Agreement as of the date
first above written.
OPTIONEE:
_______________________________
Name:
PETCO ANIMAL SUPPLIES, INC.
a Delaware corporation
_______________________________
James M. Myers
Senior Vice President - Finance
<PAGE> 21
EXHIBIT 4.5
SECOND AMENDED AND RESTATED STOCK OPTION AGREEMENT
This Second Amended and Restated Nonstatutory Stock Option Agreement
("Agreement") is entered into effective as of November 1, 1997 ("Effective
Date") by and between Petco Animal Supplies, Inc., a Delaware corporation
("Company") and __________________ ("Optionee"), with reference to the following
facts:
A. WHEREAS, PetCare Plus, Inc., a Delaware corporation ("PetCare") has
merged with and into the Company ("Merger") pursuant to that certain Agreement
and Plan of Merger dated October 20, 1997 ("Merger Agreement"); and
B. WHEREAS, pursuant to the Merger Agreement, the Company assumed all
vested and unvested outstanding options ("PetCare Options") to purchase PetCare
common stock under the PetCare 1989 Stock Option Plan ("Plan"), which Plan was
assumed by the Company pursuant to the Merger, and pursuant to such assumption
of PetCare Options, such options were deemed to be options to purchase the
common stock, $0.0001 par value, of the Company ("Company Common Stock") in
accordance with the terms of the Merger Agreement; and
C. WHEREAS, prior to the Merger, Optionee was the holder of PetCare
Options pursuant to that certain Nonstatutory Stock Option Agreement between
Optionee and PetCare dated____________________ (the "Option Agreement"); and
D. WHEREAS, the parties desire to amend and restate the Option Agreement
in its entirety to reflect the terms and conditions relating to the Company's
assumption of the PetCare Options as described in the Merger Agreement.
NOW THEREFORE, in consideration of the mutual covenants and premises
contained herein and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto agree as follows:
1. Grant of Option. Optionee shall have the option ("Option") to
purchase up to an aggregate of _________ shares of Company Common Stock ("Option
Shares"), which number of Option Shares is subject to adjustment as provided in
Section 3 below, and further provided that the Option is subject to the terms of
the Plan, the provisions of which are incorporated herein by reference. The
foregoing option to purchase the Option Shares shall be fully vested as of the
Effective Date.
2. Exercise Price and Consideration. The per share exercise price
("Exercise Price") shall be ______________ subject to adjustment as provided in
Section 3 below.
2.1 Form of Consideration. The consideration to be paid for the
Option Shares to be issued upon exercise of the Option, including the method of
payment, shall be determined by the Company's Board of Directors and may consist
entirely of cash, check, other shares of Company Common Stock having a fair
market value on the date of surrender equal to the aggregate exercise price of
the Option Shares as to which said Option shall be exercised, or any combination
of such methods of payment, or such other consideration and method of payment
for the issuance of Option Shares to the extent permitted under Sections 150,
153, and 157 of the Delaware General Corporation Law. In making its
determination as to the type of consideration to accept, the Board of Directors
shall consider if acceptance of such consideration may be reasonably expected to
benefit the Company.
<PAGE> 22
2.2 Fair Market Value. The fair market value of shares of Company
Common Stock delivered to the Company as payment of the purchase price upon
exercise of an Option shall be the closing price per share as reported by the
National Association of Securities Dealers Automated
Quotation ("NASDAQ") National Market System) for the date of exercise, as
reported in The Wall Street Journal (or, if not so reported, as otherwise
reported by the NASDAQ System) or, if the Common Stock is listed on a stock
exchange, the fair market value per share shall be the closing price on such
exchange on the date of exercise of the Option, as reported in The Wall Street
Journal.
3. Adjustment of Option Shares and Exercise Price. The parties agree
that in order to ensure that Optionee is treated in the same manner as the
stockholders of PetCare who were signatories to the Merger Agreement and other
holders of the common stock of Petcare immediately prior to the Merger
(collectively, "Stockholders"), the number of Option Shares which may be
received upon the exercise of the Option and the Exercise Prices shall be
adjusted as set forth herein. For purposes of determining the number of shares
of Company Common Stock received by the Stockholders pursuant to Section 3.1
below, only those shares of Company Common Stock ultimately received by the
Stockholders with respect to the 11,877,638 shares of PetCare common stock
outstanding and owned by the Stockholders immediately prior to the Merger shall
be counted, and any Company Common Stock received by the Stockholders or holders
of options to purchase Company Common Stock or PetCare Common Stock with respect
to any exercise of any stock options subsequent to the Merger shall not be
counted.
3.1 Adjustment of Option Shares. If the Stockholders ultimately
receive fewer shares of Company Common Stock as a result of offsets against the
shares of Company Common Stock deposited by the Stockholders pursuant to Section
8.03 of the Merger Agreement (the "Held Back Shares"), then the number of Option
Shares granted under Section 1 above shall be proportionately reduced by
multiplying such number of Option Shares by the fraction ("Fraction") equal to
the quotient of (a) the aggregate number of shares of Company Common Stock
actually received by the
Stockholders, divided by (b) One Million Five Hundred Forty-Three Thousand Four
Hundred Forty-Five (1,543,445), with the result being the revised number of
Option Shares for which the Option may be exercised.
3.2 Adjustment of Exercise Price. If the Stockholders ultimately
receive fewer shares of Company Common Stock as a result of offsets against the
Held Back Shares, then the Exercise Price shall be increased by dividing the
Exercise Price by the Fraction, with the result being the revised Exercise Price
for all Option Shares.
4. Exercise of Option. Subject to the second sentence of this Section,
an Option shall be deemed to be exercised when the Optionee or other authorized
person gives to the Company written notice of such exercise and full payment for
the Option Shares with respect to which the Option is exercised has been
received by the Company. If any Option is exercised prior to such date after
the Effective Date as financial results covering at least thirty (30) days of
the combined post-closing operations of PetCare and the Company after the
Effective Date have been, within the meaning of Accounting Series Release No.
130, as amended, of the Securities and Exchange Commission, filed by the Company
with the Securities and Exchange Commission or published by the Company in an
Annual Report on
Form 10-K, a Quarterly Report on Form 10-Q, a Current Report on Form 8-K, a
quarterly earnings report, a press release or other public issuance which
includes combined sales and income of PetCare and the Company (the "Release
Date"), then as conditions to the exercise of such Option, (i) the Optionee
shall become a signatory to that certain Escrow Agreement of even date herewith
entered into by and between the Company, Union Bank of California, N.A. and the
Stockholders ("Escrow Agreement") and be bound by the terms thereof, and (ii)
ten percent (10%) of such Option Shares to be received pursuant to the exercise
of the Option shall be deposited into escrow pursuant to Section 8.03 of the
Merger Agreement and held as part of the Escrowed Property, as such term is
<PAGE> 23
defined in the Escrow Agreement.
Until the issuance (as evidenced by the appropriate entry on the books of
the Company or of a duly authorized transfer agent of the Company) of the stock
certificate evidencing such Option Shares, no right to vote or receive dividends
or any other rights as a stockholder shall exist with respect to the Option
Shares, notwithstanding the exercise of the Option. The Company shall issue (or
cause to be issued) such stock certificates promptly upon exercise of the
Option. No adjustment will be made for a
dividend or other right for which the record date is prior to the date of the
stock certificate is issued, except as provided in the Plan.
Exercise of an Option in any manner shall result in a decrease in the
number of Option Shares which thereafter may be available, both for purposes of
the Plan and for sale under the Option, by the number of Option Shares as to
which the Option is exercised.
5. Restrictions on Transfer. Optionee acknowledges and agrees that with
respect to all or any portion of the Option which is exercised before the
Release Date, all shares of Company Common Stock received upon such exercise
shall be restricted and shall not be assigned, transferred or conveyed until the
Release Date, except to the Escrow Agent named in the Escrow Agreement. Any
attempted assignment, transfer or conveyance of such shares of Company Common
Stock in violation of this Section 5 shall be
null and void and without effect.
6. Term of Option.
6.1 General Rule. Except as provided in Section 6.2 hereof or as
otherwise provided in the Plan, the term of the Option granted pursuant to
Section 1 hereof shall be as follows: the Option shall expire as to __________
shares on_________________.
6.2 Employment of Optionee Terminated. If Optionee dies, or resigns
or is terminated, with or without cause, as an employee of the Company for any
reason whatsoever (an "Event of Termination"), then the Option shall be
exercisable for sixty (60) days following such Event of
Termination, and to the extent that such Option was not exercisable on the date
of such Event of Termination, or if such Option is not exercised (to the extent
it was entitled to be exercised) within the sixty (60) day period, the Option
shall terminate.
7. Non-Transferability of Option. The Option may not be sold, pledged,
assigned, hypothecated, transferred, or disposed of in any manner other than by
will or by the laws of descent or distribution and may be exercised, during the
lifetime of the Optionee, only by the Optionee.
8. Conditions Upon Issuance of Option Shares. Option Shares shall not be
issued pursuant to the exercise of the Option unless the exercise of such Option
and the issuance and delivery of such Option Shares pursuant thereto shall
comply with all relevant provisions of law, including, without limitation, the
Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as
amended, the rules and regulations promulgated thereunder, and the requirements
of any stock exchange upon which the Common Stock may then be listed, and shall
be further subject to the approval of counsel for the Company with respect to
such compliance.
As a condition to the exercise of the Option, the Company may require the
<PAGE> 23
person exercising such Option to represent and warrant at the time of any such
exercise that the Option Shares are being purchased only for investment and
without any present intention to sell or distribute such Option Shares if, in
the opinion of counsel for the Company, such a representation is required by any
of the aforementioned relevant provisions of law.
As a condition to the issuance of Option Shares, the Optionee shall (a)
<PAGE> 24
remit to the Company at the time of any exercise of the Option any taxes
required to be withheld by the Company under Federal, State or local law as a
result at the exercise of the Option, and/or (b) instruct the Company to
withhold in accordance with applicable law from any compensation payable to the
Optionee the taxes required to be withheld by the Company under Federal, State
or local law as a result of the exercise of
the Option.
9. Amendment of Option Agreement. This Agreement amends and restates the
Option Agreement in its entirety and the Option Agreement shall be of no further
force or effect.
10. Multiple Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Second Amended and Restated Nonstatutory Stock Option Agreement as of the date
first above written.
OPTIONEE:
_______________________________
Name:
PETCO ANIMAL SUPPLIES, INC.
a Delaware corporation
_______________________________
James M. Myers
Senior Vice President - Finance
<PAGE> 25
EXHIBIT 5.1
[LETTERHEAD OF LATHAM & WATKINS]
March 20, 1998
Petco Animal Supplies, Inc.
9125 Rehco Road
San Diego, California 92121
Re: Registration Statement on Form S-8;
188,344 Shares of Common Stock, Par Value $.0001 Per Share
Ladies and Gentlemen:
In connection with the registration by Petco Animal Supplies, Inc.,
a Delaware corporation (the "Company"), of 188,344 shares of common stock of the
Company, par value $.0001 per share (the "Shares"), of the Company to be issued
upon the exercise of options granted under the PetCare Plus, Inc. 1989 Stock
Option Plan (the "Plan"), under the Securities Act of 1933, as amended (the
"Act"), on a Registration Statement on Form S-8 filed with the Securities and
Exchange Commission (the "Commission") on March 20, 1998 (as amended from time
to time, the "Registration Statement"), you have requested our opinion with
respect to the matters set forth below.
In our capacity as your counsel in connection with such
registration, we are familiar with the proceedings taken and proposed to be
taken by the Company in connection with the authorization, issuance and sale of
the Shares, and for the purposes of this opinion, have assumed such proceedings
have been timely completed in the manner described in the Registration
Statement. In addition, we have made such legal and factual examinations and
inquiries, including an examination of originals or copies
certified or otherwise identified to our satisfaction of such documents,
corporate records and instruments, as we have deemed necessary or appropriate
for purposes of this opinion.
In our examination, we have assumed the genuineness of all
signatures, the authenticity of all documents submitted to us as originals, and
the conformity to authentic original documents of all documents submitted to us
as copies.
We are opining herein as to the effect on the subject transaction
only of the General Corporation Law of the State of Delaware, and we express no
opinion with respect to the applicability thereto, or the effect thereon, of the
laws of any other jurisdiction or any other laws, or as to any matters of
municipal law or the laws of any other local agencies within the state.
Subject to the foregoing, it is our opinion that, as of the date of
this opinion, the Shares have been duly authorized, and, upon the exercise of
the options and the payment for the Shares in accordance with the terms set
forth in the Plan, the Shares will be validly issued, fully paid and non-
assessable.
<PAGE> 26
We consent to your filing this opinion as an exhibit to the
Registration Statement.
Very truly yours,
/s/ LATHAM & WATKINS
--------------------
<PAGE> 27
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors
Petco Animal Supplies, Inc:
We consent to the use of our reports incorporated herein by reference.
/s/ KPMG PEAT MARWICK LLP
-------------------------
San Diego, California
March 20, 1998
<PAGE> 28
EXHIBIT 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference of our report dated March 15, 1996 on the financial statements of Pet
Food Warehouse, Inc. (which are included in the restated pooled financial
statements of Petco Animal Supplies, Inc.) in this Registration Statement on
Form S-8 of Petco Animal Supplies, Inc. It should be noted that we have not
audited any financial statements of Pet Food Warehouse, Inc. subsequent to
February 3, 1996 or performed any audit procedures
subsequent to the date of our report.
/s/ ARTHUR ANDERSEN LLP
-----------------------
Minneapolis, Minnesota
March 20, 1998
