Registration No. 33-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
__________________
BARNES & NOBLE, INC.
(Exact Name of Registrant as Specified in Its Charter)
Delaware
(State or Other Jurisdiction of
Incorporation or Organization)
06-119501
(I.R.S. Employer Identification No.)
122 Fifth Avenue
New York, New York 10011
(Address of Principal Executive Offices) (Zip Code)
Barnes & Noble, Inc. 1996 Incentive Plan
(Full Title of the Plan)
_________________________
Leonard Riggio
Chairman of the Board
Barnes & Noble, Inc.
122 Fifth Avenue
New York, New York 10011
(Name and Address of Agent for Service)
(212) 633-3300
(Telephone Number, Including Area Code,
of Agent for Service)
_________________________
Copies to:
Jay M. Dorman, Esq.
Robinson Silverman Pearce Aronsohn & Berman LLP
1290 Avenue of the Americas
New York, New York 10104
CALCULATION OF REGISTRATION FEE
- --------------------------------------------------------------------------
Proposed
Maximum Proposed
Title of Offering Maximum
Securities Amount Price Aggregate Amount of
to be to be Per Offering Registration
Registered Registered(1) Share(2) Price(2) Fee
- --------------------------------------------------------------------------
Common Stock,
par value
$.001
per share 5,000,000 $42.531(3) $212,655,000(3) $62,733.23
(1) The maximum number of shares as to which options may be granted under
the employee benefit plans referred to above. In addition, in
accordance with Rule 416, this Registration Statement also covers an
indeterminate number of shares as may become issuable by reason of the
anti-dilution provisions of such plans.
(2) Estimated solely for purposes of calculating the registration fee.
(3) In accordance with Rule 457(c), based on the average of the high and low
prices of the Common Stock on the New York Stock Exchange on July 8,
1998.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents filed with the Securities and Exchange
Commission (the "Commission") by Barnes & Noble, Inc., a Delaware corporation
(the "Company"), are incorporated herein by reference: (1) the Company's
Annual Report on Form 10-K for the fiscal year ended January 31, 1998; (2)
the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended May
2, 1998; and (3) the description of the Company's Common Stock contained in
Item 1 of the Company's Registration Statement on Form 8-A filed with the
Commission on September 2, 1993.
All documents filed by the Company pursuant to Section 13(a),
13(c), 14 and 15(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), subsequent to 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 by this Registration Statement
have been sold or which deregisters all such securities then remaining
unsold, shall be deemed to be incorporated by reference in this Registration
Statement and to be a part hereof from the date of the filing of such
documents. Any statement contained in a document incorporated or deemed to
be incorporated herein by reference 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 subsequently filed document which also
is, or is deemed to be, incorporated by reference herein modifies or
supersedes such prior statement. Any statement so modified or superseded
shall not be deemed, except as so modified or superseded, to constitute a
part of this Registration Statement, except as indicated herein.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
Certain legal matters in connection with the shares of Common Stock
being registered hereby have been passed upon for the Company by Robinson
Silverman Pearce Aronsohn & Berman LLP, 1290 Avenue of the Americas, New
York, New York 10104. Michael N. Rosen, a senior member of Robinson
Silverman Pearce Aronsohn & Berman LLP, is a director and Secretary of the
Company, and is deemed to be the beneficial owner of 42,000 shares of Common
Stock.
Item 6. Indemnification of Directors and Officers.
Section 145 of the Delaware General Corporation Law and Article X
of the Company's By-laws provide for the indemnification of the Company's
directors and officers in a variety of circumstances, which may include
liabilities under the Securities Act of 1933, as amended (the "Securities
Act").
Article X of the Company's By-laws generally requires the Company
to indemnify its directors and officers against all liabilities (including
judgments, settlements, fines and penalties) and reasonable expenses incurred
in connection with the investigation, defense, settlement or appeal of any
type of action, whether instituted by a third party or a stockholder (either
directly or derivatively) and including specifically, but without limitation,
actions brought under the Securities Act and/or the Exchange Act.
In addition, the Company's Certificate of Incorporation, as
amended, contains a provision which eliminates the personal liability of a
director to the Company and its stockholders for certain breaches of his or
her fiduciary duty of care as a director. This provision does not, however,
eliminate or limit the personal liability of a director (i) for any breach of
such director's duty of loyalty to the Company or its stockholders, (ii) for
acts or omissions not in good faith or which involve intentional misconduct
or a knowing violation of law, (iii) under the Delaware statutory provision
making directors personally liable, under a negligence standard, for unlawful
dividends or unlawful stock repurchases or redemptions, or (iv) for any
transaction from which the director derived an improper personal benefit.
This provision offers persons who serve on the Board of Directors of the
Company protection against awards of monetary damages resulting from breaches
of their duty of care (except as indicated above), including grossly
negligent business decisions made in connection with takeover proposals for
the Company. As a result of this provision, the ability of the Company or a
stockholder thereof to successfully prosecute an action against a director
for a breach of his duty of care has been limited. However, the provision
does not affect the availability of equitable remedies such as an injunction
or rescission based upon a director's breach of his duty of care. The
Commission has taken the position that the provision will have no effect on
claims arising under the federal securities laws.
Item 7. Exemption from Registration Claimed.
Restricted securities, if any, to be reoffered or resold pursuant
to this Registration Statement will be sold pursuant to a prospectus included
in this Registration Statement or pursuant to Section 4(1) of the Securities
Act or Rule 144 under the Securities Act, and were originally issued by the
Company pursuant to an exemption under Section 4(2) of the Securities Act.
Item 8. Exhibits.
4.1 Barnes & Noble, Inc. 1996 Incentive Plan, as amended June 3,
1998.
5.1 Opinion of Robinson Silverman Pearce Aronsohn & Berman LLP,
counsel to the Company, as to certain legal matters in
connection with the shares of Common Stock being registered.
23.1 Consent of Robinson Silverman Pearce Aronsohn & Berman LLP
(included as part of Exhibit 5.1).
23.2 Independent Auditor's Consent of BDO Seidman, LLP.
24.1 Power of Attorney (included on signature page of this
Registration Statement).
Item 9. Undertakings.
1. The undersigned registrant hereby undertakes:
(a) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act;
(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 end of the estimated
maximum offering range may be reflected in the form
of prospectus filed with the Commission pursuant to
Rule 424(b) if, in the aggregate, the changes in
volume and price represent no more than a 20 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 paragraphs (1)(a)(i) and (1)(a)(ii) will not apply if
the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by the registrant
pursuant to Section 13 or Section 15(d) of the Exchange Act that are
incorporated by reference in this Registration Statement.
(b) 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.
(c) 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 further undertakes that, for
purposes of determining any liability under the Securities Act, each filing
of the registrant's annual report pursuant to Section 13(a) or Section 15(d)
of the Exchange Act (and, where applicable, each filing of an employee
benefit plan's annual report pursuant to Section 15(d) of the Exchange Act)
that is incorporated by reference in 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.
3. Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling
persons of the registrant pursuant to the provisions described under Item 6
above, or otherwise, the registrant has been advised that in the opinion of
the Commission such indemnification is against public policy as expressed in
the Securities Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the registrant
will, unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final
adjudication of such issue.<PAGE>
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 New York, State of New York, on the
14th day of July, 1998.
BARNES & NOBLE, INC.
By: /s/LEONARD RIGGIO
--------------------------------
Leonard Riggio, Chairman of the Board
and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below does hereby constitute and appoint Leonard Riggio, Stephen
Riggio and Michael N. Rosen, and each and any one of them, his true and
lawful attorney-in-fact and agent, 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, without limitation,
post-effective amendments) to this Registration Statement, and to file the
same, with all exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said attorneys-in-
fact and agents, and each of them, full power and authority to do and perform
each and every act and thing 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 their 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/LEONARD RIGGIO Chairman of the Board and July 14, 1998
- --------------------------- Chief Executive Officer
Leonard Riggio (Principal Executive Officer)
/S/MARIE J. TOULANTIS Executive Vice President, Finance July 14, 1998
- --------------------------- (Principal Financial and
Marie J.Toulantis Accounting Officer)
/s/MATTHEW A. BERDON Director July 14, 1998
- ---------------------------
Matthew A. Berdon
/s/WILLIAM DILLARD, II Director July 14, 1998
- ---------------------------
William Dillard, II
/s/JAN MICHIEL HESSELS Director July 14, 1998
- ---------------------------
Jan Michiel Hessels
/S/IRENE R. MILLER Director July 14, 1998
- ---------------------------
Irene R. Miller
/s/MARGARET T. MONACO Director July 14, 1998
- ---------------------------
Margaret T. Monaco
/s/STEPHEN RIGGIO Director July 14, 1998
- ---------------------------
Stephen Riggio
/s/MICHAEL N. ROSEN Director July 14, 1998
- ---------------------------
Michael N. Rosen
/s/WILLIAM SHELUCK, JR. Director July 14, 1998
- ---------------------------
William Sheluck, Jr.
<PAGE>
EXHIBIT INDEX
Exhibit No. Document
4.1 Barnes & Noble, Inc. 1996 Incentive Plan, as amended June 3,
1998.
5.1 Opinion of Robinson Silverman Pearce Aronsohn & Berman LLP,
counsel to the Company, as to certain legal matters in
connection with the shares of Common Stock being registered.
23.1 Consent of Robinson Silverman Pearce Aronsohn & Berman LLP
(included as part of Exhibit 5.1).
23.2 Independent Auditor's Consent of BDO Seidman, LLP.
24.1 Power of Attorney (included on signature page of this
Registration Statement).
EXHIBIT 4.1
BARNES & NOBLE, INC.
1996 INCENTIVE PLAN*
BARNES & NOBLE, INC., a corporation formed under the laws of the
State of Delaware (the "Company"), hereby establishes and adopts the
following 1996 Incentive Plan (the "Plan").
RECITALS
WHEREAS, the Company desires to encourage high levels of
performance by those individuals who are key to the success of the Company,
to attract new individuals who are highly motivated and who will contribute
to the success of the Company and to encourage such individuals to remain as
directors, employees, consultants and/or advisors of the Company and its
subsidiaries by increasing their proprietary interest in the Company's growth
and success.
WHEREAS, to attain these ends, the Company has formulated the Plan
embodied herein to authorize the granting of incentive awards through grants
of stock options ("Options"), grants of stock appreciation rights, grants of
Stock Purchase Awards (hereafter defined), and grants of Restricted Stock
Awards (hereafter defined) to those individuals whose judgment, initiative
and efforts are or have been responsible for the success of the Company.
NOW, THEREFORE, the Company hereby constitutes, establishes and
adopts the following Plan and agrees to the following provisions:
ARTICLE 1.
PURPOSE OF THE PLAN
1.1. Purpose. The purpose of the Plan is to assist the Company in
attracting and retaining selected individuals to serve as directors,
officers, consultants, advisors and employees of the Company who will
contribute to the Company's success and to achieve long-term objectives which
will inure to the benefit of all stockholders of the Company through the
additional incentive inherent in the ownership of the Company's shares of
common stock ("Shares"). Options granted under the Plan will be either
"incentive stock options," intended to qualify as such under the provisions
of section 422 of the Internal Revenue Code of 1986, as from time to time
amended (the "Code"), or "nonqualified stock options." For purposes of the
Plan, the term "subsidiary" shall mean "subsidiary corporation," as such term
is defined in section 424(f) of the Code, and "affiliate" shall have the
meaning set forth in Rule 12b-2 of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"). For purposes of the Plan, the term "Award"
shall mean a grant of an Option, a grant of a stock appreciation right, a
grant of a Stock Purchase Award, a grant of a Restricted Stock Award, or any
other award made under the terms of the Plan.
_______________________________
* Revised to reflect two-for-one stock split effected September 22, 1997 and
5,000,000 share increase in shares available for issuance effected June 3,
1998.
ARTICLE 2.
SHARES SUBJECT TO AWARDS
2.1. Number of Shares. Subject to the adjustment provisions of
Section 9.10 hereof, the aggregate number of Shares which may be issued under
Awards under the Plan, whether pursuant to Options, stock appreciation
rights, Stock Purchase Awards or Restricted Stock Awards shall not exceed
11,000,000. No Options to purchase fractional Shares shall be granted or
issued under the Plan. For purposes of this Section 2.1, the Shares that
shall be counted toward such limitation shall include all Shares:
(1) issued or issuable pursuant to Options that have been or may
be exercised;
(2) issued or issuable pursuant to Stock Purchase Awards; and
(3) issued as, or subject to issuance as, a Restricted Stock
Award.
2.2. Shares Subject to Terminated Awards. The Shares covered by
any unexercised portions of terminated Options granted under Articles 4 and
6, Shares forfeited as provided in Section 8.2(a) and Shares subject to any
Awards which are otherwise surrendered by the Participant without receiving
any payment or other benefit with respect thereto may again be subject to new
Awards under the Plan. In the event the purchase price of an Option is paid
in whole or in part through the delivery of Shares, the number of Shares
issuable in connection with the exercise of the Option shall not again be
available for the grant of Awards under the Plan. Shares subject to Options,
or portions thereof, which have been surrendered in connection with the
exercise of stock appreciation rights shall not again be available for the
grant of Awards under the Plan.
2.3. Character of Shares. Shares delivered under the Plan may be
authorized and unissued Shares or Shares acquired by the Company, or both.
2.4. Limitations on Grants to Individual Participant. Subject to
adjustments pursuant to the provisions of Section 9.10 hereof, the number of
Shares which may be granted hereunder to any employee during any fiscal year
under all forms of Awards shall not exceed 700,000 Shares. If an Option is
cancelled, the cancelled Option shall continue to be counted toward the
700,000 limit for the year granted. An Option (or a stock appreciation
right) that is repriced during any fiscal year is treated as the cancellation
of the Option (or stock appreciation right) and a grant of a new Option (or
stock appreciation right), both of which shall be counted toward the 700,000
limit for that fiscal year.
ARTICLE 3.
ELIGIBILITY AND ADMINISTRATION
3.1. Awards to Employees and Directors. (a) Participants who
receive (i) Options under Articles 4 and 6 hereof or stock appreciation
rights under Article 5 ("Optionees"), and (ii) Stock Purchase Awards under
Article 7 or Restricted Stock Awards under Article 8 (in either case, a
"Participant"), shall consist of such key officers, employees, consultants,
advisors and directors of the Company or any of its subsidiaries or
affiliates as the Committee shall select from time to time, provided,
however, that an Option that is intended to qualify as an "incentive stock
option" may be granted only to an individual that is an employee of the
Company or any of its subsidiaries. The Committee's designation of an
Optionee or Participant in any year shall not require the Committee to
designate such person to receive Awards or grants in any other year. The
designation of an Optionee or Participant to receive Awards or grants under
one portion of the Plan shall not require the Committee to include such
Optionee or Participant under other portions of the Plan.
(b) No Option which is intended to qualify as an "incentive
stock option" may be granted to any employee who, at the time of such grant,
owns, directly or indirectly (within the meaning of sections 422(b)(6) and
424(d) of the Code), shares of stock possessing more than ten percent (10%)
of the total combined voting power of all classes of stock of the Company or
any of its subsidiaries or affiliates, unless at the time of such grant, (i)
the option price is fixed at not less than 110% of the Fair Market Value (as
defined below) of the Shares subject to such Option, determined on the date
of the grant, and (ii) the exercise of such Option is prohibited by its terms
after the expiration of five years from the date such Option is granted.
3.2. Administration. (a) The Plan shall be administered by a
committee (the "Committee") consisting of not fewer than two directors of the
Company (the directors of the Company being hereinafter referred to as the
"Directors"), as designated by the Directors. The Directors may remove from,
add members to, or fill vacancies in the Committee. Each member of the
Committee shall be a "disinterested person" within the meaning of Rule 16b-
3(c)(2)(i) of the Exchange Act and an "outside director" within the meaning
of Section 162(m)(4)(C)(i) of the Code, except that if the Directors
determine that (i) the Plan cannot satisfy the requirements of Rule 16b-3 of
the Exchange Act (such that grants of Awards are not exempt from Section
16(b) of the Exchange Act), then the members of the Committee need not be
"disinterested persons," or (ii) they no longer want the Plan to comply with
the requirements of Code Section 162(m), then the members of the Committee
need not be "outside directors." Any Award to a member of the Committee
shall be made strictly in accordance with the terms of Section 4.1(b).
(b) The Committee is authorized, subject to the provisions of
the Plan, to establish such rules and regulations as it may deem appropriate
for the conduct of meetings and proper administration of the Plan. All
actions of the Committee shall be taken by majority vote of its members.
(c) Subject to the provisions of the Plan, the Committee
shall have authority, in its sole discretion, to grant Awards under the Plan,
to interpret the provisions of the Plan and, subject to the requirements of
applicable law, including Rule 16b-3 of the Exchange Act, to prescribe,
amend, and rescind rules and regulations relating to the Plan or any Award
thereunder as it may deem necessary or advisable. All decisions made by the
Committee pursuant to the provisions of the Plan shall be final, conclusive
and binding on all persons, including the Company, its stockholders,
Directors and employees, and other Plan participants.
ARTICLE 4.
OPTIONS
4.1. Grant of Options. (a) Key Individuals, Directors and
Employees. The Committee shall determine, within the limitations of the
Plan, those key individuals and the Directors and employees of the Company
and its subsidiaries and affiliates to whom Options are to be granted under
the Plan, the number of Shares that may be purchased under each such Option
and the option price, and shall designate such Options at the time of the
grant as either "incentive stock options" or "nonqualified stock options";
provided, however, that Options granted to employees of an affiliate (that is
not also a subsidiary) or to non-employees of the Company may only be
"nonqualified stock options."
(b) Non-Employee Directors. Notwithstanding any provision of
this Plan to the contrary, all persons who are Non-Employee Directors (as
defined below) shall receive Awards under this Plan only as follows: (i) all
Non-Employee Directors on January 16, 1996 shall automatically be granted
Options to purchase 40,000 Shares at their then Fair Market Value, with 25%
of each such Option (covering 10,000 Shares) exercisable immediately (or on
such later date as stockholder approval of this Plan is obtained) and an
additional 25% shall become exercisable on each January 1 thereafter through
January 1, 1999, at which time 100% of said Options shall be exercisable; and
(ii) each person who thereafter is elected or appointed to membership on the
Board of Directors of the Company and who is a Non-Employee Director on the
date of his election or appointment, shall on such effective date of election
or appointment automatically be granted Options to purchase 40,000 Shares at
their then Fair Market Value, with 25% of each such Option (covering 10,000
Shares) becoming exercisable on each of the next four anniversaries of said
grant date, at which time (said fourth anniversary) 100% of said Options
shall be exercisable. For purposes of this paragraph (b), a "Non-Employee
Director" shall be a Director who is not otherwise an employee of the Company
or any of its affiliates or subsidiaries on the grant date and has not been
employed by the Company or any of its affiliates or subsidiaries for any part
of the twelve months preceding such date. Each Option granted to a Non-
Employee Director hereunder shall be exercisable for a period of ten years
from the date of automatic grant and shall be subject to the restrictions and
limitations set forth in the Plan. Notwithstanding any provision of this
Plan to the contrary, the provisions of this Section 4.1(b) may not be
amended more than once every six (6) months, other than to comport with
changes in the Code, the Employee Retirement Income Security Act of 1974, as
amended, or the rules thereunder.
4.2. Stock Option Agreements; etc. All Options granted pursuant to
Article 4 and Article 6 herein (a) shall be authorized by the Committee
(other than Options to Non-Employee Directors under Section 4.1(b)) and (b)
shall be evidenced in writing by stock option agreements ("Stock Option
Agreements") in such form and containing such terms and conditions as the
Committee shall determine which are not inconsistent with the provisions of
the Plan, and, with respect to any Stock Option Agreement granting Options
which are intended to qualify as "incentive stock options," are not
inconsistent with Section 422 of the Code. Granting of an Option pursuant to
the Plan shall impose no obligation on the recipient to exercise such option.
Any individual who is granted an Option pursuant to this Article 4 and
Article 6 herein may hold more than one Option granted pursuant to such
Articles at the same time and may hold both "incentive stock options" and
"nonqualified stock options" at the same time. To the extent that any Option
does not qualify as an "incentive stock option" (whether because of its
provisions, the time or manner of its exercise or otherwise) such Option or
the portion thereof which does not so qualify shall constitute a separate
"nonqualified stock option."
4.3. Option Price. Subject to Section 3.1(b), the option price
per each Share purchasable under any "incentive stock option" granted
pursuant to this Article 4 and any "nonqualified stock option" granted
pursuant to Article 6 herein shall not be less than 100% of the Fair Market
Value (as hereinafter defined) of such Share on the date of the grant of such
Option. The option price per each Share purchasable under any "nonqualified
stock option" granted pursuant to this Article 4 shall be such amount as the
Committee shall determine at the time of the grant of such Option.
Notwithstanding the foregoing, the option price per each Share purchasable
under any Option granted to a Non-Employee Director pursuant to Section
4.1(b) shall be equal to 100% of the Fair Market Value of such Share on the
date of grant of such Option.
4.4. Other Provisions. Options granted pursuant to this Article 4
shall be made in accordance with the terms and provisions of Article 9 hereof
and any other applicable terms and provisions of the Plan.
ARTICLE 5.
STOCK APPRECIATION RIGHTS
5.1. Grant and Exercise. Stock appreciation rights may be granted
in conjunction with all or part of any Option granted under the Plan provided
such rights are granted at the time of the grant of such Option. A "stock
appreciation right" is a right to receive cash or Shares, as provided in this
Article 5, in lieu of the purchase of a Share under a related Option. A
stock appreciation right or applicable portion thereof shall terminate and no
longer be exercisable upon the termination or exercise of the related Option,
and a stock appreciation right granted with respect to less than the full
number of Shares covered by a related Option shall not be reduced until, and
then only to the extent that, the exercise or termination of the related
Option exceeds the number of Shares not covered by the stock appreciation
right. A stock appreciation right may be exercised by the holder thereof
(the "Holder"), in accordance with Section 5.2 of this Article 5, by giving
written notice thereof to the Company and surrendering the applicable portion
of the related Option. Upon giving such notice and surrender, the Holder
shall be entitled to receive an amount determined in the manner prescribed in
Section 5.2 of this Article 5. Options which have been so surrendered, in
whole or in part, shall no longer be exercisable to the extent the related
stock appreciation rights have been exercised.
5.2. Terms and Conditions. Stock appreciation rights shall be
subject to such terms and conditions, not inconsistent with the provisions of
the Plan, as shall be determined from time to time by the Committee,
including the following:
(a) Stock appreciation rights shall be exercisable only at
such time or times and to the extent that the Options to which they
relate shall be exercisable in accordance with the provisions of the
Plan.
(b) Upon the exercise of a stock appreciation right, a Holder
shall be entitled to receive up to, but no more than, an amount in cash
or whole Shares equal to the excess of the then Fair Market Value of one
Share over the option price per Share specified in the related Option
multiplied by the number of Shares in respect of which the stock appre-
ciation right shall have been exercised. The Holder shall specify in
his written notice of exercise, whether payment shall be made in cash or
in whole Shares; provided, however, in the case of a stock appreciation
right exercised by a person subject to Section 16 of the Exchange Act,
the Holder's written notice specifying the form of payment is subject to
the approval of the Committee. Each stock appreciation right may be
exercised only at the time and so long as a related Option, if any,
would be exercisable or as otherwise permitted by applicable law;
provided, however, that no stock appreciation right granted under the
Plan to a person then subject to Section 16 of the Exchange Act shall be
exercised during the first six months of its term for cash.
(c) No stock appreciation right shall be transferable by a
Holder otherwise than by will or by the laws of descent and
distribution, and stock appreciation rights shall be exercisable, during
the Holder's lifetime, only by the Holder.
(d) Upon the exercise of a stock appreciation right, the
Option or part thereof to which such stock appreciation right is related
shall be deemed to have been exercised for the purpose of the limitation
of the number of Shares to be issued under the Plan, as set forth in
Section 2.1 of the Plan.
(e) Stock appreciation rights granted in connection with an
Option may be exercised only when the Fair Market Value of the Shares
subject to the Option exceeds the option price at which Shares can be
acquired pursuant to the Option.
(f) Stock appreciation rights may be exercised for cash by a
person subject to Section 16 of the Exchange Act only during the period
beginning on the third business day, and ending on the twelfth business
day, following the release of quarterly and annual summary statements of
sales and earnings, as set forth in Rule 16b-3(e)(1)(ii) of the Exchange
Act.
ARTICLE 6.
RELOAD OPTIONS
6.1. Authorization of Reload Options. Concurrently with the award
of any Option (such Option hereinafter referred to as the "Underlying
Option") to any participant in the Plan, the Committee may grant a reload
option (a "Reload Option") to such participant to purchase for cash or Shares
a number of Shares as specified below. A Reload Option shall be exercisable
for an amount of Shares equal to (i) the number of Shares delivered by the
Optionee to the Company to exercise the Underlying Option, and (ii) to the
extent authorized by the Committee, the number of Shares used to satisfy any
tax withholding requirement incident to the exercise of the Underlying
Option, subject to the availability of Shares under the Plan at the time of
such exercise. The grant of a Reload Option shall become effective upon the
exercise of an Underlying Option by delivering to the Company Shares held by
the Optionee for at least six months. Notwithstanding the fact that the
Underlying Option may be an "incentive stock option," a Reload Option is not
intended to qualify as an "incentive stock option" under Section 422 of the
Code.
6.2. Reload Option Amendment. Each Stock Option Agreement shall
state whether the Committee has authorized Reload Options with respect to the
Underlying Option. Upon the exercise of an Underlying Option, the Reload
Option will be evidenced by an amendment to the underlying Stock Option
Agreement.
6.3. Reload Option Price. The option price per Share deliverable
upon the exercise of a Reload Option shall be the Fair Market Value of a
Share on the date the grant of the Reload Option becomes effective.
6.4. Term and Exercise. Each Reload Option is fully exercisable
six months from the effective date of grant. The term of each Reload Option
shall be equal to the remaining option term of the Underlying Option.
6.5. Termination of Employment. No Reload Option shall be granted
to an Optionee when Options are exercised pursuant to the terms of this Plan
following termination of the Optionee's employment.
6.6. Applicability of Other Sections. Except as otherwise
provided in this Article 6, the provisions of Article 9 applicable to Options
shall apply equally to Reload Options.
ARTICLE 7.
STOCK PURCHASE AWARDS
7.1. Grant of Stock Purchase Awards. The term "Stock Purchase
Award" means the right to purchase Shares of the Company and to pay for such
Shares through a loan made by the Company to an employee (a "Purchase Loan")
as set forth in this Article 7.
7.2. Terms of Purchase Loans. (a) Purchase Loan. Each Purchase
Loan shall be evidenced by a promissory note. The term of the Purchase Loan
shall be a period of years, as determined by the Committee, and the proceeds
of the Purchase Loan shall be used exclusively by the Participant for
purchase of Shares from the Company at a purchase price equal to their Fair
Market Value on the date of the Stock Purchase Award.
(b) Interest on Purchase Loan. A Purchase Loan shall be non-
interest bearing or shall bear interest at whatever rate the Committee shall
determine (but not in excess of the maximum rate permissible under applicable
law), payable in a manner and at such times as the Committee shall determine.
Those terms and provisions as the Committee shall determine shall be
incorporated into the promissory note evidencing the Purchase Loan.
(c) Forgiveness of Purchase Loan. Subject to Section 7.4
hereof, the Company may forgive the repayment of up to 100% of the principal
amount of the Purchase Loan, subject to such terms and conditions as the
Committee shall determine and set forth in the promissory note evidencing the
Purchase Loan (the "Conditions"). A Participant's Purchase Loan can be
prepaid at any time, and from time to time, without penalty.
7.3. Security for Loans. (a) Stock Power and Pledge. Purchase
Loans granted to Participants shall be secured by a pledge of the Shares
acquired pursuant to the Stock Purchase Award. Such pledge shall be
evidenced by a pledge agreement (the "Pledge Agreement") containing such
terms and conditions as the Committee shall determine. Purchase Loans shall
be recourse or non-recourse with respect to a Participant, as determined from
time to time by the Committee. The share certificates for the Shares
purchased by a Participant pursuant to a Stock Purchase Award shall be issued
in the Participant's name, but shall be held by the Company as security for
repayment of the Participant's Purchase Loan together with a stock power
executed in blank by the Participant (the execution and delivery of which by
the Participant shall be a condition to the issuance of the Stock Purchase
Award). The Participant shall be entitled to exercise all rights applicable
to such Shares, including, but not limited to, the right to vote such Shares
and the right to receive dividends and other distributions made with respect
to such Shares. When the Purchase Loan and any accrued but unpaid interest
thereon has been repaid or otherwise satisfied in full, the Company shall
deliver to the Participant the share certificates for the Shares purchased by
a Participant under the Stock Purchase Award.
(b) Release and Delivery of Share Certificates During the
Term of the Purchase Loan. The Company shall release and deliver to each
Participant certificates for Shares purchased by a Participant pursuant to a
Stock Purchase Award, in such amounts and on such terms and conditions as the
Committee shall determine, which shall be set forth in the Pledge Agreement.
(c) Release and Delivery of Share Certificates Upon Repayment
of the Purchase Loan. The Company shall release and deliver to each
Participant certificates for the Shares purchased by the Participant under
the Stock Purchase Award and then held by the Company, provided the
Participant has paid or otherwise satisfied in full the balance of the
Purchase Loan and any accrued but unpaid interest thereon. In the event the
balance of the Purchase Loan is not repaid, forgiven or otherwise satisfied
within 90 days after (i) the date repayment of the Purchase Loan is due
(whether in accordance with its term, by reason of acceleration or
otherwise), or (ii) such longer time as the Committee, in its discretion,
shall provide for repayment or satisfaction, the Company shall retain those
Shares then held by the Company in accordance with the Pledge Agreement.
7.4. Termination of Employment. (a) Termination of Employment by
Death, Disability or by the Company Without Cause; Change of Control. In the
event of a Participant's termination of employment by reason of death,
"disability" or by the Company without "cause," or in the event of a "change
of control," the Committee shall have the right (but shall not be required)
to forgive the remaining unpaid amount (principal and interest) of the
Purchase Loan in whole or in part as of the date of such occurrence. "Change
of Control," "disability" and "cause" shall have the respective meanings as
set forth in the promissory note evidencing the Purchase Loan.
(b) Termination of Employment by Voluntary Resignation. In
the event of a Participant's termination of employment for any reason other
than death or "disability," the Participant shall repay to the Company the
entire balance of the Purchase Loan and any accrued but unpaid interest
thereon, which amounts shall become immediately due and payable, unless
otherwise determined by the Committee.
7.5. Restrictions on Transfer. No Stock Purchase Award or Shares
purchased through such an Award and pledged to the Company as collateral
security for the Participant's Purchase Loan (and accrued and unpaid interest
thereon) may be otherwise pledged, sold, assigned or transferred (other than
by will or by the laws of descent and distribution).
<PAGE>
ARTICLE 8.
RESTRICTED STOCK AWARDS
8.1. Restricted Stock Awards. (a) Grant. A grant of Shares made
pursuant to this Article 8 is referred to as a "Restricted Stock Award." The
Committee may grant to any employee an amount of Shares in such manner, and
subject to such terms and conditions relating to vesting, forfeitability and
restrictions on delivery and transfer (whether based on performance
standards, periods of service or otherwise) as the Committee shall establish
(such Shares, "Restricted Shares"). The terms of any Restricted Stock Award
granted under this Plan shall be set forth in a written agreement (a
"Restricted Stock Agreement") which shall contain provisions determined by
the Committee and not inconsistent with this Plan. The provisions of
Restricted Stock Awards need not be the same for each Participant receiving
such Awards.
(b) Issuance of Restricted Shares. As soon as practicable
after the date of grant of a Restricted Stock Award by the Committee, the
Company shall cause to be transferred on the books of the Company, Shares
registered in the name of the Company, as nominee for the Participant,
evidencing the Restricted Shares covered by the Award; provided, however,
such Shares shall be subject to forfeiture to the Company retroactive to the
date of grant, if a Restricted Stock Agreement delivered to the Participant
by the Company with respect to the Restricted Shares covered by the Award is
not duly executed by the Participant and timely returned to the Company. All
Restricted Shares covered by Awards under this Article 8 shall be subject to
the restrictions, terms and conditions contained in the Plan and the
Restricted Stock Agreement entered into by and between the Company and the
Participant. Until the lapse or release of all restrictions applicable to an
Award of Restricted Shares, the share certificates representing such
Restricted Shares shall be held in custody by the Company or its designee.
(c) Stockholder Rights. Beginning on the date of grant of
the Restricted Stock Award and subject to execution of the Restricted Stock
Agreement as provided in Sections 8.1(a) and (b), the Participant shall
become a stockholder of the Company with respect to all Shares subject to the
Restricted Stock Agreement and shall have all of the rights of a stockholder,
including, but not limited to, the right to vote such Shares and the right to
receive distributions made with respect to such Shares; provided, however,
that any Shares distributed as a dividend or otherwise with respect to any
Restricted Shares as to which the restrictions have not yet lapsed shall be
subject to the same restrictions as such Restricted Shares and shall be
represented by book entry and held as prescribed in Section 8.1(b).
(d) Restriction on Transferability. None of the Restricted
Shares may be assigned or transferred (other than by will or the laws of
descent and distribution), pledged or sold prior to lapse or release of the
restrictions applicable thereto.
(e) Delivery of Shares Upon Release of Restrictions. Upon
expiration or earlier termination of the forfeiture period without a
forfeiture and the satisfaction of or release from any other conditions
prescribed by the Committee, the restrictions applicable to the Restricted
Shares shall lapse. As promptly as administratively feasible thereafter,
subject to the requirements of Section 10.1, the Company shall deliver to the
Participant or, in case of the Participant's death, to the Participant's
beneficiary, one or more stock certificates for the appropriate number of
Shares, free of all such restrictions, except for any restrictions that may
be imposed by law.
8.2. Terms of Restricted Shares. (a) Forfeiture of Restricted
Shares. Subject to Section 8.2(b), all Restricted Shares shall be forfeited
and returned to the Company and all rights of the Participant with respect to
such Restricted Shares shall terminate unless the Participant continues in
the service of the Company as an employee until the expiration of the
forfeiture period for such Restricted Shares and satisfies any and all other
conditions set forth in the Restricted Stock Agreement. The Committee in its
sole discretion, shall determine the forfeiture period (which may, but need
not, lapse in installments) and any other terms and conditions applicable
with respect to any Restricted Stock Award.
(b) Waiver of Forfeiture Period. Notwithstanding anything
contained in this Article 8 to the contrary, the Committee may, in its sole
discretion, waive the forfeiture period and any other conditions set forth in
any Restricted Stock Agreement under appropriate circumstances (including the
death, disability or retirement of the Participant or a material change in
circumstances arising after the date of an Award) and subject to such terms
and conditions (including forfeiture of a proportionate number of the
Restricted Shares) as the Committee shall deem appropriate.
ARTICLE 9.
GENERALLY APPLICABLE PROVISIONS
9.1. Option Period. Subject to Section 3.1(b), the period for
which an Option is exercisable shall not exceed ten years from the date such
Option is granted, provided, however, in the case of an Option that is not
intended to be an "incentive stock option," the Committee may prescribe a
period in excess of ten years. After the Option is granted, the option
period may not be reduced.
9.2. Fair Market Value. If the Shares are listed or admitted to
trading on a securities exchange registered under the Exchange Act, the "Fair
Market Value" of a Share as of a specified date shall mean the per Share
closing price of the Shares for the day immediately preceding the date as of
which Fair Market Value is being determined (or if there was no reported
closing price on such date, on the last preceding date on which the closing
price was reported) reported on the principal securities exchange on which
the Shares are listed or admitted to trading. If the Shares are not listed
or admitted to trading on any such exchange but are listed as a national
market security on the National Association of Securities Dealers, Inc.
Automated Quotations System ("NASDAQ"), traded in the over-the-counter market
or listed or traded on any similar system then in use, the Fair Market Value
of a Share shall be the last sales price for the day immediately preceding
the date as of which the Fair Market Value is being determined (or if there
was no reported sale on such date, on the last preceding date on which any
reported sale occurred) reported on such system. If the Shares are not
listed or admitted to trading on any such exchange, are not listed as a
national market security on NASDAQ and are not traded in the over-the-counter
market or listed or traded on any similar system then in use, but are quoted
on NASDAQ or any similar system then in use, the Fair Market Value of a Share
shall be the average of the closing high bid and low asked quotations on such
system for the Shares on the date in question. If the Shares are not
publicly traded, Fair Market Value shall be determined by the Committee in
its sole discretion using appropriate criteria. An Option shall be con-
sidered granted on the date the Committee acts to grant the Option or such
later date as the Committee shall specify.
9.3. Exercise of Options. Options granted under the Plan shall be
exercised by the Optionee thereof (or by his executors, administrators,
guardian or legal representative, as provided in Sections 9.6 and 9.7 hereof)
as to all or part of the Shares covered thereby, by the giving of written
notice of exercise to the Company, specifying the number of Shares to be pur-
chased, accompanied by payment of the full purchase price for the Shares
being purchased. Full payment of such purchase price shall be made within
five business days following the date of exercise and shall be made (i) in
cash or by certified check or bank check, (ii) with the consent of the
Committee, by delivery of a promissory note in favor of the Company upon such
terms and conditions as determined by the Committee, (iii) with the consent
of Committee, by tendering previously acquired Shares (valued at its Fair
Market Value, as determined by the Committee as of the date of tender), or
(iv) with the consent of the Committee, any combination of (i), (ii) and
(iii); provided, however, that payment may not be pursuant to (iii) above
unless the Optionee shall have owned the Shares being tendered in payment for
a period of at least six months prior to the date of exercise of the Option.
Such notice of exercise, accompanied by such payment, shall be delivered to
the Company at its principal business office or such other office as the
Committee may from time to time direct, and shall be in such form, containing
such further provisions consistent with the provisions of the Plan, as the
Committee may from time to time prescribe. In no event may any Option
granted hereunder be exercised for a fraction of a Share. The Company shall
effect the transfer of Shares purchased pursuant to an Option as soon as
practicable, and, within a reasonable time thereafter, such transfer shall be
evidenced on the books of the Company. No person exercising an Option shall
have any of the rights of a holder of Shares subject to an Option until
certificates for such Shares shall have been issued following the exercise of
such Option. No adjustment shall be made for cash dividends or other rights
for which the record date is prior to the date of such issuance.
9.4. Non-Transferability of Options. Except as provided in
Section 9.11, no Option shall be assignable or transferable by the Optionee,
other than by will or the laws of descent and distribution, and may be
exercised during the life of the Optionee only by the Optionee or his
guardian or legal representative.
9.5. Termination of Employment. In the event of the termination
of employment of an Optionee or the termination or separation from service of
an advisor or consultant or a Director (who is an Optionee) for any reason
(other than death or disability as provided below), any Option(s) granted to
such Optionee under this Plan and not previously exercised or expired shall
be deemed cancelled and terminated on the day of such termination or
separation, unless the Committee decides, in its sole discretion, to extend
the term of the Option for a period not to exceed three months after the date
of such termination or separation, provided, however, that in no instance may
the term of the Option, as so extended, exceed the maximum term established
pursuant to Section 3.1(b)(ii) or 9.1 above. Notwithstanding the foregoing,
in the event of the termination or separation from service of an Optionee for
any reason other than death or disability, under conditions satisfactory to
the Company, the Committee may, in its sole discretion, allow any
"nonqualified stock options" granted to such Optionee under the Plan and not
previously exercised or expired to be exercisable for a period of time to be
specified by the Committee, provided, however, that in no instance may the
term of the Option, as so extended, exceed the maximum term established
pursuant to Section 9.1 above.
9.6. Death. In the event an Optionee dies while employed by the
Company or any of its subsidiaries or affiliates or during his term as a
Director of the Company or any of its subsidiaries or affiliates, as the case
may be, any Option(s) granted to him not previously expired or exercised
shall, to the extent exercisable on the date of death, be exercisable by the
estate of such Optionee or by any person who acquired such Option by bequest
or inheritance, at any time within one year after the death of the Optionee,
unless earlier terminated pursuant to its terms, provided, however, that if
the term of such Option would expire by its terms within six months after the
Optionee's death, the term of such Option shall be extended until six months
after the Optionee's death, provided further, however, that in no instance
may the term of the Option, as so extended, exceed the maximum term
established pursuant to Section 3.1(b)(ii) or 9.1 above.
9.7. Disability. In the event of the termination of employment of
an Optionee or the separation from service of a Director (who is an Optionee)
due to total disability, the Optionee, or his guardian or legal
representative, shall have the unqualified right to exercise any Option(s)
which have not been previously exercised or expired and which the Optionee
was eligible to exercise as of the first date of total disability (as
determined by the Committee), at any time within one year after such termina-
tion or separation, unless earlier terminated pursuant to its terms,
provided, however, that if the term of such Option would expire by its terms
within six months after such termination or separation, the term of such
Option shall be extended until six months after such termination or
separation, provided further, however, that in no instance may the term of
the Option, as so extended, exceed the maximum term established pursuant to
Section 3.1(b)(ii) or 9.1 above. The term "total disability" shall, for
purposes of this Plan, be defined in the same manner as such term is defined
in Section 22(e)(3) of the Code.
9.8. Six-Month Holding Period. Notwithstanding anything to the
contrary in the Plan, each Option (or the Shares underlying the Option)
granted to an individual who is subject to Section 16 of the Exchange Act,
must be held by such individual for a combined period of at least six months
from the date the Option is granted (or until such earlier date as satisfies
any legal requirement for exemption under Rule 16b-3 of the Exchange Act and
as satisfies all other applicable law); provided that the sale, transfer or
other disposition of any Shares underlying any Option shall be permitted
within such period to the extent the sale, transfer or other disposition is
exempt under Rule 16b-3 of the Exchange Act and all other applicable law.
9.9. Amendment and Modification of the Plan. The Board of
Directors of the Company may, from time to time, alter, amend, suspend or
terminate the Plan as it shall deem advisable, subject to any requirement for
stockholder approval imposed by applicable law or any rule of any stock
exchange or quotation system on which Shares are listed or quoted; provided
that the Board of Directors may not amend the Plan in any manner that would
result in noncompliance with Rule 16b-3 of the Exchange Act or any applicable
law, except as otherwise provided in Sections 3.2 or 9.11 hereof; and further
provided that the Board of Directors may not, without the approval of the
Company's stockholders, amend the Plan to (a) increase the number of Shares
that may be the subject of Options under the Plan (except for adjustments
pursuant to Section 9.10 hereof), (b) reduce the minimum option price
specified by Sections 3.1(b) and 4.3 hereof, (c) increase the maximum
permissible term of any Option specified by Section 3.1(b)(ii) or 9.1 hereof,
and (d) remove responsibility for administering the Plan from the Committee.
In addition, no amendments to, or termination of, the Plan shall in any way
impair the rights of an Optionee or a Participant under any Award previously
granted without such Optionee's or Participant's consent.
9.10. Adjustments. In the event that the Committee shall determine
that any dividend or other distribution (whether in the form of cash, Shares,
other securities, or other property), recapitalization, stock split, reverse
stock split, reorganization, merger, consolidation, split-up, spin-off, com-
bination, repurchase, or exchange of Shares or other securities, the issuance
of warrants or other rights to purchase Shares or other securities, or other
similar corporate transaction or event affects the Shares with respect to
which Options have been or may be issued under the Plan, such that an
adjustment is determined by the Committee to be appropriate in order to
prevent dilution or enlargement of the benefits or potential benefits
intended to be made available under the Plan, then the Committee shall, in
such manner as the Committee may deem equitable, adjust any or all of (i) the
number and type of Shares that thereafter may be made the subject of Options,
(ii) the number and type of Shares subject to outstanding Options and stock
appreciation rights, and (iii) the grant or exercise price with respect to
any Option, or, if deemed appropriate, make provision for a cash payment to
the holder of any outstanding Option; provided, in each case, that with
respect to "incentive stock options," no such adjustment shall be authorized
to the extent that such adjustment would cause such options to violate
Section 422(b) of the Code or any successor provision; and provided further,
that the number of Shares subject to any Option denominated in Shares shall
always be a whole number.
9.11. Other Provisions. Notwithstanding anything in this Plan to
the contrary, if the Board of Directors determine that the Plan cannot, or
that an Award need not, satisfy the requirements of Rule 16b-3 of the
Exchange Act (such that grants of Awards are not exempt from Section 16(b) of
the Exchange Act), then the Committee shall have the authority to waive or
modify those provisions of the Plan which are intended to satisfy such Rule
16b-3 requirements and shall allow an Optionee who has been granted
"nonqualified stock options" to transfer any or all of such options to any
one or more of the following persons: (i) the spouse, parent, issue, spouse
of issue, or issue of spouse ("issue" shall include all descendants whether
natural or adopted) of such Optionee; or (ii) a trust for the benefit of
those persons described in clause (i) above or for the benefit of such
Optionee, or for the benefit of any such persons and such Optionee; provided,
however, that such transferee shall be bound by all of the terms and
conditions of this Plan and shall execute an agreement satisfactory to the
Company evidencing such obligation; and provided further, however, that such
Optionee shall remain bound by the terms and conditions of this Plan. The
Company shall cooperate with an Optionee's transferee and the Company's
transfer agent in effectuating any transfer permitted pursuant to this
Section 9.11.
ARTICLE 10.
MISCELLANEOUS
10.1. Tax Withholding. The Company shall notify an Optionee or
Participant of any income tax withholding requirements arising as a result of
the grant of any Award, exercise of an Option or stock appreciation rights or
any other event occurring pursuant to this Plan. The Company shall have the
right to withhold from such Optionee or Participant such withholding taxes as
may be required by law, or to otherwise require the Optionee or Participant
to pay such withholding taxes. If the Optionee or Participant shall fail to
make such tax payments as are required, the Company or its subsidiaries or
affiliates shall, to the extent permitted by law, have the right to deduct
any such taxes from any payment of any kind otherwise due to such Optionee or
Participant or to take such other action as may be necessary to satisfy such
withholding obligations.
10.2. Right of Discharge Reserved. Nothing in the Plan nor the
grant of an Award hereunder shall confer upon any employee, Director or other
individual the right to continue in the employment or service of the Company
or any subsidiary or affiliate of the Company or affect any right that the
Company or any subsidiary or affiliate of the Company may have to terminate
the employment or service of (or to demote or to exclude from future Options
under the Plan) any such employee, Director or other individual at any time
for any reason. Except as specifically provided by the Committee, the
Company shall not be liable for the loss of existing or potential profit from
an Award granted in the event of termination of an employment or other
relationship even if the termination is in violation of an obligation of the
Company or any subsidiary or affiliate of the Company to the employee or
Director.
10.3. Nature of Payments. All Awards made pursuant to the Plan are
in consideration of services performed or to be performed for the Company or
any subsidiary or affiliate of the Company. Any income or gain realized
pursuant to Awards under the Plan and any stock appreciation rights consti-
tutes a special incentive payment to the Optionee, Participant or Holder and
shall not be taken into account, to the extent permissible under applicable
law, as compensation for purposes of any of the employee benefit plans of the
Company or any subsidiary or affiliate of the Company except as may be
determined by the Committee or by the Directors or directors of the
applicable subsidiary or affiliate of the Company.
10.4. Severability. If any provision of the Plan shall be held
unlawful or otherwise invalid or unenforceable in whole or in part, such
unlawfulness, invalidity or unenforceability shall not affect any other
provision of the Plan or part thereof, each of which remain in full force and
effect. If the making of any payment or the provision of any other benefit
required under the Plan shall be held unlawful or otherwise invalid or unen-
forceable, such unlawfulness, invalidity or unenforceability shall not
prevent any other payment or benefit from being made or provided under the
Plan, and if the making of any payment in full or the provision of any other
benefit required under the Plan in full would be unlawful or otherwise
invalid or unenforceable, then such unlawfulness, invalidity or unenforce-
ability shall not prevent such payment or benefit from being made or provided
in part, to the extent that it would not be unlawful, invalid or
unenforceable, and the maximum payment or benefit that would not be unlawful,
invalid or unenforceable shall be made or provided under the Plan.
10.5. Gender and Number. In order to shorten and to improve the
understandability of the Plan document by eliminating the repeated usage of
such phrases as "his or her" and any masculine terminology herein shall also
include the feminine, and the definition of any term herein in the singular
shall also include the plural except when otherwise indicated by the context.
10.6. Governing Law. The Plan and all determinations made and
actions taken thereunder, to the extent not otherwise governed by the Code or
the laws of the United States, shall be governed by the laws of the State of
Delaware and construed accordingly.
10.7. Effective Date of Plan; Termination of Plan. The Plan shall
be effective on the date of the approval of the Plan by the holders of a
majority of the shares entitled to vote at a duly constituted meeting of the
stockholders; provided, however, that the adoption of the Plan is subject to
such stockholder approval within 12 months after the date of adoption of the
Plan by the Board of Directors. The Plan shall be null and void and of no
effect if the foregoing condition is not fulfilled and in such event each
Award and related stock appreciation rights shall, notwithstanding any of the
preceding provisions of the Plan, be null and void and of no effect. Awards
may be granted under the Plan at any time and from time to time on or prior
to May 28, 2006, on which date the Plan will expire except as to Awards and
related stock appreciation rights then outstanding under the Plan. Such
outstanding Awards and stock appreciation rights shall remain in effect until
they have been exercised or terminated, or have expired.
10.8. Captions. The captions in this Plan are for convenience of
reference only, and are not intended to narrow, limit or affect the substance
or interpretation of the provisions contained herein.
EXHIBIT 5.1
ROBINSON SILVERMAN PEARCE ARONSOHN & BERMAN LLP
1290 Avenue of the Americas
New York, New York 10104
July 14, 1998
Barnes & Noble, Inc.
122 Fifth Avenue
New York, New York 10011
Re: Barnes & Noble, Inc.
Registration Statement on Form S-8
Ladies and Gentlemen:
We are rendering this opinion in connection with the registration
by Barnes & Noble, Inc., a Delaware corporation (the "Company"), of 5,000,000
shares (the "Shares") of its common stock, par value $.001 per share, under
the Securities Act of 1933, as amended, pursuant to the above-referenced
Registration Statement (the "Registration Statement"). The Shares are
reserved for issuance upon the exercise of options issued under the Company's
1996 Incentive Plan, as amended June 3, 1998 (the "Incentive Plan").
We have examined a copy of the Registration Statement, the
Incentive Plan, the Certificate of Incorporation of the Company, and all
amendments thereto, certified by the Secretary of State of Delaware, and are
familiar with the records of the Company's corporate proceedings as reflected
in its minute books.
Based on the foregoing, and upon such further investigation as we
have deemed relevant, we are of the opinion that:
(a) The Company has been duly incorporated under the laws of
the State of Delaware.
(b) The Shares, when issued in accordance with the terms of the
Incentive Plan, including payment of the applicable purchase price, will be
duly authorized, validly issued, fully paid and nonassessable.
We consent to the filing of this opinion as an exhibit to the
Registration Statement relating to the Shares and to the use of our name
wherever appearing in the Registration Statement and any amendment thereto.
Very truly yours,
ROBINSON SILVERMAN PEARCE
ARONSOHN & BERMAN LLP
EXHIBIT 23.2
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Barnes & Noble, Inc.
New York, New York
We hereby consent to the incorporation by reference in the Prospectus
constituting a part of this Registration Statement on Form S-8 of our report
dated March 10, 1998, relating to the consolidated financial statements of
Barnes & Noble, Inc. appearing in the Company's Annual Report on Form 10-K
for the fiscal year ended January 31, 1998.
We also consent to the reference to us under the caption "Experts" in
the Prospectus.
BDO SEIDMAN, LLP
New York, New York
July 14, 1998<PAGE>
