As filed with the Securities and Exchange Commission on April 16, 1997
Registration No. 333-1530
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U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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POST-EFFECTIVE AMENDMENT NO.1
TO
FORM S-8/S-3
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
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BLIMPIE INTERNATIONAL, INC.
(Exact name of Registrant as specified in its charter)
New Jersey 13-2908793
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
740 Broadway, New York, NY 10003
(212) 673-5900
(Address of principal executive offices and
telephone number)
Blimpie International, Inc. Omnibus Stock Incentive Plan
(Full title of the Plan)
Charles G. Leaness, Esq. Copy to:
Executive Vice President
Blimpie International, Inc. Steven D. Dreyer, Esq.
740 Broadway, New York, NY 10003 Hall Dickler Kent Friedman & Wood LLP
(212) 673-5900 909 Third Avenue
(Name, address and telephone number New York, NY 10022
of agent for service) (212) 339-5400
If the only securities being registered on this form are being offered pursuant
to dividend or reinvestment plans, please check the following box. [ ]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, please check the following box. [X]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
<PAGE>
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
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Proposed Proposed
Maximum Maximum Amount of
Amount to be Offering Price Aggregate Registration
Title of Each Class of Registered (1) per Share (2) Offering Fee
Securities to be Registered Price (2)
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<S> <C> <C> <C> <C>
Common Stock, $.01 par value (3) 38,900 $ 11.3125 $ 440,056.25 $ 151.82
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Common Stock, $.01 par value (4) 83,300 11.3125 942,331.25 325.10
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Common Stock, $.01 par value (5) 377,800 11.3125 4,273,862.50 1,474.48
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Common Stock, $.01 par value (6) 450,000 6.75 3,037,500.00 920.45
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Total 950,000 8,693,750.00 $ 2871.85
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Previously Paid Fee $1,951.41
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Total Fee Due $ 920.45
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</TABLE>
(1) Plus such additional numbers of shares as may be issued pursuant to the Plan
in the event of a stock dividend, stock split, recapitalization or other similar
change in the Common Stock.
(2) This calculation is made solely for the purpose of determining the
registration fee pursuant to the provisions of Rule 457(h) under the Securities
Act of 1933 (the "Securities Act") as follows: (i) in the case of shares of
Common Stock which may be purchased upon the exercise of outstanding options,
the fee is calculated on the basis of the price at which the options may be
exercised; and (ii) in the case of (a) shares of Common Stock for which options
have not yet been granted and the option price of which is therefore unknown,
and (b) shares of Common Stock which have been, or in the future will be, issued
as restricted shares, and which may be resold ("Resale Shares"), the fee is
calculated on the basis of the average of the high and low price per share of
Common Stock on the NASDAQ National Market as of February 15, 1996 with respect
to the 500,000 shares registered pursuant to the original registration statement
or as of April 14, 1997 (within 5 business days prior to filing this Amendment)
with respect to the 450,000 shares registered pursuant to this Amendment No. 1.
(3) Consists of unvested shares issued pursuant to the Company's 1993 Stock
Incentive Plan the resale or reoffer of which is now governed by the Company's
Omnibus Stock Incentive Plan (the "Plan").
(4) Consists of shares which had been subject to issuance upon the exercise of
options granted under the Company's 1993 Stock Incentive Plan the issuance,
reoffer or resale of which is now governed by the Plan.
(5) Consists of shares to be issued or subject to issuance upon the exercise of
options to be granted under the Plan.
(6) Consists of additional shares to be issued or subject to issuance upon the
exercise of options to be granted under the Plan.
Approximate Date of Commencement of Proposed Sales Pursuant to the Plan: As soon
as practicable after the effective date of this Registration Statement.
EXPLANATORY NOTE
In accordance with the instructional Note to Part 1 of Form S-8 as
promulgated by the Securities and Exchange Commission, the information specified
by Part 1 of Form S-8 has been omitted from this Registration Statement on Form
S-8 for offers of Common Stock of Blimpie International, Inc. (the "Common
Stock") pursuant to the Plan. The prospectus filed as part of this Registration
Statement has been prepared in accordance with the requirements of Form S-3 and
may be used for reofferings and resales of (i) shares previously registered
under the Securities Act on Form S-8/S-3 (File No. 33-78906) which were issued
or subject to issuance upon the exercise of options granted under the Company's
1993 Stock Incentive Plan, and (ii) shares registered hereunder to be issued or
subject to issuance upon the exercise of options granted under the Plan
(hereinafter such Prospectus will be referred to as the "Prospectus").
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<PAGE>
PROSPECTUS
BLIMPIE INTERNATIONAL, INC.
950,000 Shares of Common Stock
This Prospectus relates to an aggregate of 950,000 shares of the common
stock, $.01 par value (the "Common Stock"), of Blimpie International, Inc. (the
"Company") issued or issuable under the Company's Omnibus Stock Incentive Plan
(the "Plan") to employees, including officers and directors who are employees,
of the Company (the "Selling Shareholders") and is to be used in connection with
the reoffer and resale of such shares of Common Stock by the Selling
Shareholders. Certain of the Selling Shareholders may be deemed to be affiliates
of the Company, as defined in Rule 405 of the Securities Act of 1933, as amended
(the "Securities Act"). The Company will not receive any of the proceeds from
the sale of the Common Stock, but will receive funds upon the exercise of
options covered by the Plan.
The Common Stock issued or issuable under the Plan may be sold from time
to time by the Selling Shareholders or by their respective pledgees, donees,
transferees or other successors in interest. Such sales may be made on the
National Market System of the National Association of Securities Dealers, Inc.
("NASD"), in the over-the-counter market or otherwise at prices and at terms
then prevailing or at prices related to the then current market price, or in
negotiated transactions. The Common Stock may be sold by one or more of the
following methods: (a) a block trade in which the broker or dealer so engaged
will attempt to sell the shares as agent but may position and resell a portion
of the block as principal to facilitate the transaction; (b) purchases by a
broker or dealer as principal and resale by such broker or dealer for its
account pursuant to this Prospectus; (c) ordinary brokerage transactions and
transactions in which the broker solicits purchases; and (d) face-to-face
transactions between sellers and purchasers without a broker-dealer. In
effecting sales, brokers or dealers engaged by the Selling Shareholders may
arrange for other brokers or dealers to participate. Such brokers or dealers and
any other participating brokers or dealers may be deemed to be "underwriters"
within the meaning of the Securities Act in connection with such sales. In
addition, any securities covered by this Prospectus which qualify for sale
pursuant to Rule 144 of the Securities Act ("Rule 144") may be sold under Rule
144 rather than pursuant to this Prospectus. All discounts, commissions or fees
incurred in connection with the sale of the Common Stock offered hereby will be
paid by the Selling Shareholders, except that the expenses of preparing and
filing this Prospectus and the related Registration Statement with the
Securities and Exchange Commission, and of registering or qualifying the Common
Stock will be paid by the Company.
The Common Stock of the Company is listed on the National Market System of
the NASD under the symbol "BMPE". The closing price of the Company's Common
Stock as reported on April 14, 1997 was $6.75.
<PAGE>
PURCHASE OF THESE SECURITIES MAY INVOLVE MATERIAL RISKS. SEE "RISK FACTORS" SET
FORTH ON PAGE 5.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION NOR HAS THE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATIONS TO THE CONTRARY IS
A CRIMINAL OFFENSE.
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The date of this Prospectus is April 16, 1997.
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<PAGE>
AVAILABLE INFORMATION
No person is authorized to give any information or to make any
representations, other than as contained herein, in connection with the offer
made in this Prospectus, and any information or representation not contained
herein must not be relied upon as having been authorized by the Company or the
Selling Shareholders. This Prospectus does not constitute an offer to sell or a
solicitation of an offer to buy any security other than the Common Stock offered
by this Prospectus, nor does it constitute an offer to sell or a solicitation of
any offer to buy any shares of Common Stock offered hereby to any person in any
jurisdiction where it is unlawful to make such an offer or solicitation to such
person. Neither the delivery of this Prospectus nor any sale hereunder shall
under any circumstances create any implication that information contained herein
is correct as of any time subsequent to the date hereof.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-8/S-3 (the "Registration
Statement") under the Securities Act, which includes this Prospectus. This
Prospectus does not contain all the information set forth in the Registration
Statement and exhibits thereto. For further information with respect to the
Company and the Common Stock, reference is made to the Registration Statement
and the exhibits thereto.
The Company is subject to the periodic reporting requirements of the
Securities Exchange Act of 1934 (the "Exchange Act"), and in accordance
therewith files reports and other information with the Commission.
The Registration Statement and exhibits thereto and reports and other
information filed by the Company with the Commission may be inspected and copied
at the public reference facilities maintained by the Commission at Judiciary
Plaza, 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549, and at the
Commission's Regional Offices at 7 World Trade Center, Suite 1300, New York, New
York 10048 and Northwestern Atrium Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661. Copies of such material may be obtained upon written
request addressed to the Commission at the Public Reference Section, 450 Fifth
Street, N.W., Washington, D.C. 20549, at prescribed rates. The Commission also
maintains a Web site that contains reports, proxy and information statements and
other information regarding registrants that file electronically with the
Commission. The address of such site is http://www.sec.gov.
In addition, the Common Stock is listed for trading on the NASDAQ National
Market and reports and other information concerning the Company may be inspected
at the offices of the National Association of Securities Dealers, Inc. at 1735 K
Street, N.W., Washington, D.C. 20006.
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<PAGE>
The Company distributes to its shareholders, approximately 30 to 60 days
prior to each of its annual meetings of shareholders, annual reports containing
financial statements audited by its independent public accountants. The Company
also distributes reports to its shareholders containing its unaudited financial
statements for each of the first three quarters of its fiscal year. The
Company's fiscal year ends on June 30.
The Company will provide without charge to each person to whom this
Prospectus is delivered, upon either the written or oral request of such person,
the Annual Report to Shareholders for the Company's latest fiscal year and a
copy of any or all of the documents incorporated herein by reference other than
exhibits to such documents. See "INCORPORATION OF CERTAIN DOCUMENTS BY
REFERENCE". Such requests should be directed to Blimpie International, Inc.,
1775 The Exchange, Suite 600, Atlanta, Georgia 30339, (404) 984-2707, Attention:
Investor Relations.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents are hereby incorporated by reference in this
Prospectus as of their respective dates:
(a) The Company's Annual Report on Form 10-KSB for the Company's fiscal
year ended June 30, 1996, as filed with the Commission pursuant to
the Exchange Act;
(b) The Company's Quarterly Reports on Form 10-QSB for the Company's
fiscal quarters ended September 30, 1996 and December 31, 1996; and
(c) The description of the Company's Common Stock contained in the
Company's Registration Statement on Form SB-2 filed with the
Commission on June 30,1995, together with any amendment or report
filed for the purpose of updating such description, to the extent of
such updating.
All reports and other documents subsequently filed by the Company with the
Commission pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act
prior to the filing of a post-effective amendment which indicates that all
securities offered hereby have been sold or which deregisters all securities
then remaining unsold, shall be deemed to be incorporated by reference herein
and to be a part hereof from the date of filing of such reports and documents.
Any statement contained herein or in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus 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
statement so modified
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<PAGE>
or superseded shall not be deemed, except as so modified or superseded, to
constitute a part hereof.
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<PAGE>
THE COMPANY
Blimpie International, Inc. engages in franchising and subfranchising the
Blimpie trademarks, service marks, logos, marketing concepts and marketing
programs which are the basic attributes of the chain of non-cooking, quick
service sandwich restaurants known as "Blimpie" restaurants. The main products
sold in a Blimpie restaurant are sub sandwiches and salads.
References in this Prospectus to the "Company" refer to Blimpie
International, Inc. The Company's executive offices are located at 740 Broadway,
New York, New York 10003, and its telephone number at that location is (212)
673-5900.
RISK FACTORS
In addition to the other information in this Prospectus, the following
should be considered carefully in evaluating the Company and its business before
purchasing the Common Stock offered by this Prospectus.
1. Effects of Cancellation of Trademark and Marketing System Licensing
Agreements
The U.S. and international rights to exploit the Blimpie trademarks,
service marks, trade names and logos (collectively, the "Blimpie Trademarks")
and the methodology and know-how which comprise the Blimpie restaurant marketing
concepts and programs (the "Blimpie Marketing System") are not completely owned
or controlled by the Company. An undivided 40% interest in the international
rights to the Blimpie Trademarks and Blimpie Marketing System, and the right to
license the Blimpie Trademarks and Blimpie Marketing System in various
territories located throughout the United States are owned by Metropolitan
Blimpie, Inc. ("MBI"), a corporation which is unaffiliated with the Company. In
accordance with a written agreement executed by the Company and MBI in 1991, the
Company acquired the right to license the Blimpie Trademarks and the Blimpie
Marketing System for an initial term of 42 months which provided for annual
renewals through the year 2090, conditioned upon the payment of a minimum annual
fee to MBI of $100,000. In the event that the Company fails to satisfy its
payment obligations under the 1991 Agreement, the Company would lose the right
to license the Blimpie Trademarks and Blimpie Marketing System outside of the
United States and throughout the territories within the United States controlled
by MBI. The Company, pursuant to 99 year grants made to it by Messrs. Anthony P.
Conza and David L. Siegel, who are controlling shareholders, directors and
respectively, the Chief Executive Officer and Chief Operating Officer of the
Company, has acquired the exclusive right to license the Blimpie Trademarks and
Blimpie Marketing System in the remaining territories throughout the United
States not controlled by MBI. In accordance with a written agreement executed by
the Company and Messrs. Conza and Siegel in
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<PAGE>
1997, the Company has acquired, for $4.5 million plus certain income-based fees,
ownership of the remaining undivided 60% interest in the international rights to
the Blimpie Trademarks and Blimpie Marketing System held by such individuals.
Said agreement may be cancelled by Messrs. Conza and Siegel if the Company fails
to pay them an annual fee of $150,000 per year (subject to an annual cost of
living adjustment) during the fifty years commencing January 1, 2002, provided
that the Company derives revenues from its international operations in each of
such years of at least $150,000. In the event that the Company fails to satisfy
its payment or other obligations under such agreement, the Company would lose
its rights to the Blimpie Trademarks and Blimpie Marketing System outside of the
United States. The loss of any or all of such rights would have a material
adverse effect upon the Company's business operations, and could seriously
affect the Company's ability to operate profitably.
2. Risks of International Expansion
Until recently, the Company has not engaged in business outside of the
United States. The Company's lack of familiarity with the customs and procedures
employed in the conduct of business, in general, and the franchised quick
service restaurant business in particular, by persons and entities located in
other countries may hinder the Company's efforts to establish profitable
international franchising operations, or result in an inability to do so, in one
or more countries. Furthermore, to the extent that the revenues which the
Company may derive from its international franchising operations will be payable
in currencies other than the U.S. dollar, the Company will be subject to the
potential profit reducing effects of unfavorable fluctuations in currency
exchange rates and currency devaluations.
3. Competition.
The restaurant industry, and particularly the quick-service segment, is
highly competitive with respect to price, service, food quality (including
taste, freshness, healthfulness and nutritional value) and location, and there
are numerous well-established competitors. These competitors include national
and regional fast food chains. The Company's most significant competitor is the
Subway(R) chain of sandwich restaurants, whose restaurants offer food products
substantially similar to those offered by Blimpie restaurants, at comparable
prices. The Company and its franchisees face competition from a broad range of
other restaurants and food service establishments. Many of the Company's major
chain competitors have achieved significant national, regional and local brand
name and product recognition and engage in extensive promotional programs, both
generally and in response to efforts by additional competitors to enter new
markets or introduce new products. In addition, the quick-service industry is
characterized by the frequent introduction of new
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<PAGE>
products, accompanied by substantial promotion campaigns. In recent years,
numerous companies in the fast food industry have introduced products positioned
to capitalize on growing consumer preference for food products that are, or are
perceived to be, healthful, nutritious, low in calories and low in fat content.
Many Blimpie authorized products are, or are perceived to be, healthful,
nutritious, and in the case of its salads, low in calories, fat and cholesterol.
It can be expected that the Company will be subject to increasing competition
from companies whose products or marketing strategies address these consumer
preferences. There can be no assurance that consumers will continue to regard
the Company's products as sufficiently distinguishable from competitive
products, that substantially equivalent products will not be introduced by the
Company's other competitors or that the Company will be able to compete
successfully.
4. Certain Factors Affecting the Quick-Service Restaurant Industry.
The Company is required to respond to various consumer preferences, tastes
and eating habits; demographic trends and traffic patterns; increases in food
and labor costs; and national, regional and local economic conditions. In the
past, several quick-service restaurant companies have experienced flat growth
rates and declines in average sales per restaurant, in response to which certain
of such companies have adopted "value pricing" strategies. Such strategies could
have the effect of drawing customers away from companies that do not engage in
discount pricing and could also negatively impact the operating margins of
competitors that do attempt to match competitors price reductions. Continuing or
sustained price discounting in the fast food industry could have an adverse
effect on the Company.
5. Franchise Expansion.
The rapid growth strategy of the Company is substantially dependent upon
its ability to attract, retain and contract with qualified franchisees and the
ability of these franchisees to open and operate their restaurants successfully.
In addition, continued growth of the Company will depend in part on the ability
of existing and future franchisees to obtain sufficient financing or investment
capital to meet their market development obligations. If the Company experiences
difficulty in contracting with qualified franchisees, if the Subfranchisors are
unable to meet their development obligations or if franchisees are unable to
operate their restaurants profitably, then the Company's future operating
results could be adversely affected.
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<PAGE>
6. Government Regulation.
The Company and its franchisees are subject to various federal, state and
local laws affecting their businesses. The Company believes that it is in
material compliance with such laws. The laws applicable to franchise operations
and relationships are rapidly developing, and the Company is unable to predict
the effect on its operations of additional requirements or restrictions that may
be enacted or promulgated or of court decisions that may be adverse generally to
the franchise industry. The franchisees' restaurants are also subject to
regulatory provisions relating to the wholesomeness of food, sanitation, health,
safety, fire, land use and environmental standards. Suspension of certain
licenses or approvals, due to failure to comply with applicable regulations or
otherwise, could interrupt the operations of the affected restaurant or
otherwise adversely affect the restaurant. Because Blimpie is a non-cooking
sandwich restaurant and uses nearly all biodegradable paper products, the
Company believes that the likelihood of an inadvertent failure to comply with
applicable environmental standards is remote. The franchisees are also subject
to federal and state laws establishing minimum wages and regulating overtime and
working conditions. Changes in such laws could result in an increase in labor
costs that could adversely affect the restaurant.
7. Dependence Upon Key and Other Personnel.
The success of the Company is highly dependent on the efforts of key
personnel of the Company, particularly Anthony P. Conza, David L. Siegel, Esq.,
Patrick Pompeo and Charles G. Leaness, Esq. The loss of the services of any such
persons may have a materially adverse effect on the Company. The Company has
obtained a key man life insurance policy on Mr. Conza. The Company presently has
no employment agreements with any of its employees. The Company's success will
be dependent upon its ability to retain existing and hire additional qualified
personnel, including certain executive officers. The competition for qualified
personnel in the restaurant business is intense and, accordingly, there can be
no assurance that the Company will be able to retain or hire necessary
personnel.
8. Control by Current Shareholders, Officers and Directors.
After giving effect to the issuance of all of the Common Stock issuable
under the Plan, Anthony P. Conza, David L. Siegel, Esq., Patrick Pompeo and
Charles G. Leaness, Esq., will own, in the aggregate, approximately 56.6% of the
outstanding Common Stock of the Company and will have control over the outcome
of all matters submitted to the shareholders for approval, including the
election of directors of the Company. The shareholders do not
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<PAGE>
have cumulative voting rights with respect to the election of directors.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 14A:3-5 of the Business Corporation Law of the State of New Jersey
provides for the indemnification of a director or officer under certain
circumstances against reasonable expenses, including attorney's fees actually
and necessarily incurred in connection with the defense of an action brought
against him or her by reason of his or her being a director or officer.
Article 11 of the Company's By-laws confers upon the Board of Directors
the sole discretion to cause the Company to indemnify any person who is or was a
director or officer, employee or agent of the Company, or any person who serves
or has served in any capacity with any other enterprise at the request of the
Company, to the fullest extent permitted by law. If the Board so orders, the
Company shall indemnify such persons, in the manner and to the extent determined
by the Board of Directors, against expenses and liabilities reasonably incurred
by or imposed on them in connection with any proceedings to which they have been
or may be made parties, or any proceedings in which they may become involved by
reason of being or having been a director or officer of the Company, or by
reason of serving or having served another enterprise at the request of the
Company, whether or not in the capacities of directors or officers of the
Company at the time the expenses or liabilities are incurred.
The Company has entered into indemnity agreements (the "Indemnity
Agreements") with all of its directors and its executive officers. The Indemnity
Agreements provide that the officers and directors will be indemnified to the
fullest extent permitted by the Company's Certificate of Incorporation and/or
New Jersey law, as amended from time to time, and that absent an adjudication of
willful misconduct, breach of a duty of loyalty to the Company or conduct which
results in a personal profit to which such person is not legally entitled, the
directors and officers shall be indemnified against all expenses (including
attorneys' fees), judgments, fines and settlement amounts paid or incurred in
defending any proceeding on account of their services as a director or officer
of the Company (or any other company when they are serving in such a capacity at
the request of the Company). The Company would not be liable under the Indemnity
Agreements in respect of any suit in which judgment is rendered against the
indemnitee for any transaction in violation of Section 16(b) of the Securities
Exchange Act of 1934. The Indemnity Agreements also provide for advance payment
of indemnifiable expenses without requiring a case-by-case determination of
whether such expenses should be paid. Under these agreements the right to
advance payment is also subject to the obligation to reimburse the Company if it
is found that such person was not entitled to such indemnification.
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<PAGE>
Except to the extent hereinabove provided, there is no charter or By-Law
provision or contract arrangement under which any director or officer of the
Company is insured or indemnified in any manner against any liability which he
or she may incur in his or her capacity as such.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Company pursuant to the foregoing provisions, or otherwise, the Company has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Company of expenses
incurred or paid by a director, officer or controlling person of the Company 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 Company 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.
SELLING SHAREHOLDERS
The following table sets forth the name and relationship with the Company
within the past three years of each shareholder (other than nonaffiliates
holding less than 1,000 shares of Common Stock) eligible to resell shares of
Common Stock under this Prospectus ("Selling Shareholders"), the number of
shares of Common Stock that each Selling Shareholder beneficially owned directly
or indirectly as of April 14, 1997, the number of shares of Common Stock that
are being offered under this Prospectus on behalf of each of the Selling
Shareholders hereunder, and the amount and percentage of Common Stock to be
owned by each Selling Shareholder after completion of the offering, assuming the
sale of all of the shares of Common Stock which may be offered hereunder. None
of the Selling Shareholders own greater than 1% of the Company's outstanding
shares of Common Stock.
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<TABLE>
<CAPTION>
Shares of Shares of Shares of
Position with Common Stock Common Stock Common Stock
Selling Company (if Beneficially Owned as Covered by this to be held after
Shareholder(1) applicable) of April 7 , 1997(2) Prospectus(1) Offering (2)
- -------------- ----------- --------------------- ------------- ------------
<S> <C> <C> <C> <C>
Anthony Conza President, CEO 3,066,035(3) 8,000(4) 3,058,035
David Siegel Exec. Vice President, 1,505,830(5) 8,000(4) 1,497,830
COO
Charles Leaness Exec. Vice President 435,908(6) 4,000(7) 431,908
Patrick Pompeo Exec. Vice President 398,137(8) 4,000(7) 394,137
Robert Sitkoff Sr. Vice President, 59,200(9) 59,000(10) 200
CFO & Treasurer
Dennis Fuller Sr. Vice President- 26,410(11) 14,000(12) 12,410
Global Development
Joseph Conza Sr. Vice President- 49,913(13) 19,000(14) 30,913
Construction & Design
Joseph Morgan Sr. Vice President- 30,750(15) 11,000(16) 19,750
Strategic Planning
Bruce Kolbinsky Vice President- 13,157(17) 13,000(18) 157
Operations
Becky Killarney Vice President- 13,393(17) 13,000(18) 393
Marketing
Art Mancino Vice President- 7,750(19) 2,200(20) 5,550
New Business
Sharon Henderson Vice President- 2,200(19) 2,200(20) --
Finance
Robert Schnurr Asst. Vice President 4,000(21) 4,000(22) --
Greg Bennett Asst. Vice President 8,100(21) 6,500(22) 1,600
Jack Ritter Asst. Vice President 6,815(21) 6,500(22) 315
Kevin Chachere Asst. Vice President 3,500(23) 3,500(24) --
Lisa Knopf Asst. Vice President 2,500(25) 2,500(26) --
Jill Kirch Asst. Vice President 1,100(27) 1,100(28) --
Steve Spiegel Asst. General Counsel 1,700(29) 1,700(30) --
Courtney Carrasco Senior Marketing Manager 1,000(31) 1,000(32) --
Pam Gower Human Resources Director 1,525(33) 1,400(34) 125
Ron Landry Senior Brand Manager 1,000(31) 1,000(32) --
Melissa Strittmatter Controller 1,000(31) 1,000(32) --
Michael Trogden Construction & 6,200(35) 6,200(36) --
Equipment Manager
Christine Brando Executive Legal Assistant/ 1,200(37) 1,200(38) --
Office Manager-New York
Don Keller New Concept Manager 1,400(33) 1,400(34) --
Mildred Martin Office Manager-Atlanta 1,400(33) 1,400(34) --
Laura Mastrangelo Executive Legal Assistant 1,400(33) 1,400(34) --
Carolyn Robinson Franchise Development 1,400(33) 1,400(34) --
Manager
Mike Kennedy International Operations 1,000(39) 1,000(40) --
</TABLE>
-12-
<PAGE>
(1) The persons listed as Selling Shareholders may not have a present
intention of selling shares or, may offer less than the number of shares
indicated.
(2) Includes shares subject to currently exercisable stock options. Does not
include the non-vested portion of stock grants.
(3) Includes 8,000 shares of Common Stock subject to currently exercisable
stock options. Does not include (a) 36,250 shares owned by Mr. Conza's
daughter, (b) 15,750 shares owned by Mr. Morgan (Mr. Conza's son-in-law),
(c) 15,000 shares owned jointly by Mr. Conza's daughter and Mr. Morgan
over which Mr. Morgan has sole voting power, (d) 4,150 shares owned by Mr.
Conza's parents, (e) 49,913 shares owned by Joseph Conza, the brother of
Mr. Conza, and (f) 54,000 shares held by Mr. Conza's daughter as Trustee
for the Anthony P. Conza Charitable Remainder Trust, as to all of which
Mr. Conza disclaims beneficial ownership.
(4) Includes 8,000 shares of Common Stock subject to currently exercisable
stock options. Does not include 32,000 shares of Common Stock subject to
stock options that are not currently exercisable.
(5) Includes 8,000 shares of Common Stock subject to currently exercisable
stock options.
(6) Includes 4,000 shares of Common Stock subject to currently exercisable
stock options.
(7) Includes 4,000 shares of Common Stock subject to currently exercisable
stock options. Does not include 16,000 shares of Common Stock subject to
stock options that are not currently exercisable.
(8) Includes 4,000 shares of Common Stock subject to currently exercisable
stock options. Does not include 6,300 shares held by Mr. Pompeo's sister
and brother-in-law, as to which Mr. Pompeo disclaims beneficial ownership.
(9) Includes 53,000 shares of Common Stock subject to currently exercisable
stock options.
(10) Includes 53,000 shares of Common Stock subject to currently exercisable
stock options. Does not include 39,500 shares of Common Stock subject to
stock options that are not currently exercisable and 1,500 shares
representing the non-vested portion of a stock grant.
(11) Includes 8,000 shares of Common Stock subject to currently exercisable
stock options and 30 shares held by Mr. Fuller as custodian for his
daughter under the Georgia Transfers to Minors Act. Does not include 5,355
shares held by Mr.
-13-
<PAGE>
Fuller's mother, 1,900 shares held by Mr. Fuller's father-in-law and 750
shares held by Mr. Fuller's mother as custodian for his daughter under the
Georgia Transfers to Minors Act, as to all of which Mr. Fuller disclaims
beneficial ownership.
(12) Includes 8,000 shares of Common Stock subject to currently exercisable
stock options. Does not include 9,500 shares of Common Stock subject to
stock options that are not currently exercisable and 1,500 shares
representing the non-vested portion of a stock grant.
(13) Includes 13,000 shares of Common Stock subject to currently exercisable
stock options.
(14) Includes 13,000 shares of Common Stock subject to currently exercisable
stock options. Does not include 29,500 shares of Common Stock subject to
stock options that are not currently exercisable and 1,500 shares
representing the non-vested portion of a stock grant.
(15) Includes 8,000 shares of Common Stock subject to currently exercisable
stock options. Does not include (a) 36,250 shares held by Mr. Morgan's
wife (Mr. A. Conza's daughter), (b) 700 shares held by Mr. Morgan's son,
and (c) 54,000 shares held by Mr. Morgan's wife as Trustee for the Anthony
P. Conza Charitable Remainder Trust, as to all of which Mr. Morgan
disclaims beneficial ownership.
(16) Includes 8,000 shares of Common Stock subject to currently exercisable
stock options. Does not include 20,750 shares of Common Stock subject to
stock options that are not currently exercisable and 750 shares
representing the non-vested portion of a stock grant.
(17) Includes 7,000 shares of Common Stock subject to currently exercisable
stock options.
(18) Includes 7,000 shares of Common Stock subject to currently exercisable
stock options. Does not include 5,500 shares of Common Stock subject to
stock options that are not currently exercisable and 1,500 shares
representing the non-vested portion of a stock grant.
(19) Includes 1,600 shares of Common Stock subject to currently exercisable
stock options.
(20) Includes 1,600 shares of Common Stock subject to currently exercisable
stock options. Does not include 4,400 shares of Common Stock subject to
stock options that are not currently exercisable and 400 shares
representing the non-vested portion of a stock grant.
(21) Includes 3,500 shares of Common Stock subject to currently exercisable
stock options.
-14-
<PAGE>
(22) Includes 3,500 shares of Common Stock subject to currently exercisable
stock options. Does not include 2,750 shares of Common Stock subject to
stock options that are not currently exercisable and 750 shares
representing the non-vested portion of a stock grant.
(23) Includes 1,000 shares of Common Stock subject to currently exercisable
stock options.
(24) Includes 1,000 shares of Common Stock subject to currently exercisable
stock options. Does not include 3,000 shares of Common stock subject to
stock options that are not currently exercisable and 1,000 shares
representing the non-vested portion of a stock grant.
(25) Includes 1,500 shares of Common Stock subject to currently exercisable
stock options.
(26) Includes 1,500 shares of Common Stock subject to currently exercisable
stock options. Does not include 3,500 shares of Common Stock subject to
stock options that are not currently exercisable and 1,500 shares
representing the non-vested portion of a stock grant.
(27) Includes 800 shares of Common Stock subject to currently exercisable stock
options.
(28) Includes 800 shares of Common Stock subject to currently exercisable stock
options. Does not include 2,200 shares of Common Stock subject to stock
options that are not currently exercisable and 200 shares representing the
non-vested portion of a stock grant.
(29) Includes 1,100 shares of Common Stock subject to currently exercisable
stock options.
(30) Includes 1,100 shares of Common Stock subject to currently exercisable
stock options. Does not include 2,400 shares of Common Stock subject to
stock options that are not currently exercisable and 400 shares
representing the non-vested portion of a stock grant.
(31) Includes 600 shares of Common Stock subject to currently exercisable stock
options.
(32) Includes 600 shares of Common Stock subject to currently exercisable stock
options. Does not include 1,400 shares of Common Stock subject to stock
options that are not currently exercisable and 600 shares representing the
non-vested portion of a stock grant.
(33) Includes 800 shares of Common Stock subject to currently exercisable stock
options.
-15-
<PAGE>
(34) Includes 800 shares of Common Stock subject to currently exercisable stock
options. Does not include 1,200 shares of Common stock subject to stock
options that are not currently exercisable and 400 shares representing the
non-vested portion of a stock grant.
(35) Includes 3,200 shares of Common Stock subject to currently exercisable
stock options.
(36) Includes 3,200 shares of Common Stock subject to currently exercisable
stock options. Does not include 1,550 shares of Common stock subject to
stock options that are not currently exercisable and 750 shares
representing the non-vested portion of a stock grant.
(37) Includes 700 shares of Common Stock subject to currently exercisable stock
options.
(38) Includes 700 shares of Common Stock subject to currently exercisable stock
options. Does not include 1,200 shares of Common Stock subject to stock
options that are not currently exercisable and 400 shares representing the
non-vested portion of a stock grant.
(39) Includes 500 shares of Common Stock subject to currently exercisable stock
options.
(40) Includes 500 shares of Common Stock subject to currently exercisable stock
options. Does not include 2,000 shares of Common Stock subject to stock
options that are not currently exercisable and 2,000 shares representing
the non-vested portion of a stock grant.
Information regarding additional Selling Shareholders will be provided by
means of a supplemental prospectus to be filed at such time as the names of such
additional Selling Shareholders and the amounts of securities to be reoffered by
them become known. In addition, certain unnamed persons, each of whom is not an
affiliate of the Company, may use this Prospectus for reoffers and resales of up
to 1,000 shares of Common Stock.
PLAN OF DISTRIBUTION
The Common Stock may be sold from time to time by the Selling Shareholders
or by pledgees, donees, transferees or other successors in interest. Such sales
may be made on the NASDAQ National Market, in the over-the-counter market or
otherwise at prices and on terms then prevailing or at prices related to the
then current market price, or in negotiated transactions. The Common Stock may
be sold by one or more of the following methods: (a) a block trade in which the
broker or dealer so engaged will attempt to sell the shares as agent but may
position and resell a
-16-
<PAGE>
portion of the block as principal to facilitate the transaction; (b) purchases
by a broker or dealer as principal and resale by such broker or dealer for its
account pursuant to this Prospectus; (c) ordinary brokerage transactions and
transactions in which the broker solicits purchases; and (d) face-to-face
transactions between sellers and purchasers without a broker-dealer. In
effecting sales, brokers or dealers engaged by the Selling Shareholders may
arrange for other brokers or dealers to participate. Brokers or dealers will
receive commissions or discounts from Selling Shareholders in amounts to be
negotiated immediately prior to the sale. Such brokers or dealers and any other
participating brokers or dealers may be deemed to be "underwriters" within the
meaning of the Act in connection with such sales. In addition, any securities
covered by this Prospectus which qualify for sale pursuant to Rule 144 may be
sold under Rule 144 rather than pursuant to this Prospectus. The Company will
not receive any of the proceeds from the sale of these shares, although it has
paid the expenses of preparing this Prospectus and the related Registration
Statement. The Selling Shareholders have been advised that they are subject to
the applicable provisions of the Securities Exchange Act of 1934, including
without limitation, Rules 10b-5, 10b-6 and 10b-7 thereunder.
USE OF PROCEEDS
The Company will not receive any of the proceeds from the sale of the
shares of Common Stock being registered hereunder. The Company will receive,
from time to time, proceeds from the exercise of stock options issued under the
Plan. Such proceeds, when received by the Company, will be used for general
corporate purposes, including working capital.
LEGAL MATTERS
The validity of the Common Stock being offered hereby will be passed upon
for the Company by Hall Dickler Kent Friedman & Wood LLP, 909 Third Avenue, New
York, New York 10022-9998.
EXPERTS
The consolidated balance sheets as of June 30, 1996 and 1995 and the
consolidated statements of operations, changes in shareholders' equity and cash
flows for the years then ended incorporated by reference in this prospectus have
been incorporated herein in reliance on the report of Coopers & Lybrand L.L.P.,
independent accountants, given on the authority of that firm as experts in
accounting and auditing.
-17-
<PAGE>
ADDITIONAL INFORMATION
The Company is authorized to issue 20,000,000 shares of Common Stock. On
March 1, 1994 (the "Effective Date"), the Company effected a division of its
Common Stock. Such division was implemented by splitting each two shares of
Common Stock issued and outstanding on the Effective Date into three shares of
Common Stock. The certificates evidencing ownership of the additional shares
resulting from such split were issued on March 11, 1994. As of April 14, 1997,
9,526,226 shares of the Company's Common Stock were issued and outstanding.
Further information concerning the Company's Common Stock may be found in the
documents incorporated herein by reference. See. "Incorporation of Certain
Documents by Reference."
Shares of the Company's Common Stock previously issued under, but not
vested, or subject to issuance upon the exercise of options granted under, the
Company's 1993 Stock Option Plan are now subject to issuance under the Company's
Omnibus Stock Incentive Plan, and when issued, will be issued pursuant to the
Registration Statement of which this Prospectus is a part.
-18-
<PAGE>
PART II.
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
In accordance with the General Instructions to Form S-8, as amended,
the Company has provided the following information that is required in this
Registration Statement, pursuant to which shares of the Company's Common Stock
shall be registered, including the necessary opinion and consents, which are
attached hereto as Exhibits 5.1, 5.2, 23.1. and 23.2. The Company will deliver
a prospectus meeting the requirements of Part I of Form S-8 and Rule 428 to all
persons granted options, stock purchase rights or stock pursuant to the Plan in
accordance with the requirements of Rule 428(b).
Item 3. Incorporation of Documents By Reference.
The following documents are incorporated by reference in this
Registration Statement as of their respective dates:
(a) The Company's Annual Report on Form 10-KSB for the Company's fiscal
year ended June 30, 1996, as filed with the Commission pursuant to
the Exchange Act;
(b) The Company's Quarterly Reports on Form 10-QSB for the Company's
fiscal quarters ended September 30, 1996 and December 31, 1996; and
(c) The description of the Company's Common Stock contained in the
Company's Registration Statement on Form SB-2 filed with the
Commission on June 30,1995 (File No. 33-93738), together with any
amendment or report filed for the purpose of updating such
description, to the extent of such updating.
All reports and other documents subsequently filed by the Company with the
Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act,
prior to the filing of a post-effective amendment which indicates that all
securities offered hereby have been sold or which deregisters all securities
then remaining unsold, shall be deemed to be incorporated by reference herein
and to be a part hereof from the date of filing of such reports and documents.
Any statement contained herein or 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 statement so modified or superseded shall not be deemed, except
as so modified or superseded, to constitute a part hereof.
-II-1-
<PAGE>
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
Not applicable.
Item 6. Indemnification of Directors and Officers.
See "Indemnification of Directors and Officers" appearing in Part I
of this Registration Statement.
Item 7. Exemption from Registration Claimed.
This item is not applicable to shares of Common Stock issuable under
options granted under the Plan which have not been exercised as of the date
hereof. Restricted securities acquired under the Plan either upon the exercise
of options or by stock grant are being reoffered or resold pursuant to this
Registration Statement by certain Selling Shareholders. These restricted
securities were acquired by such Selling Shareholders pursuant to exemptions
from registration under Section 4(2) of the Securities Act.
Item 8. Exhibits.
4.1 Specimen stock certificate of the Company's common stock (a copy of which
was filed with the Commission on June 30,1995 as Exhibit 4.1 to the
Company's Registration Statement on Form SB-2 (Registration No. 33-93738),
and which is incorporated herein by this reference).*
4.2 Omnibus Stock Incentive Plan, as amended.
5.1 Opinion of Hall Dickler Kent Friedman & Wood, LLP, Esqs. regarding the
legality of the Common Stock.*
5.2 Opinion of Hall Dickler Kent Friedman & Wood, LLP, Esqs. regarding the
legality of the additional shares of Common Stock registered under Post
Effective Amendment No. 1 to the Company's Registration Statement on Form
S-8/S-3 (Registration No. 333-1530)
23.1 Consent of Coopers & Lybrand.
23.2 Consent of Counsel.
24 Power of Attorney. (See page II-4.)
- ----------
* Previously filed.
Item 9. Undertakings.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which it offers or sells
securities, a post-effective amendment to this registration statement to (i)
include any prospectus required by Section 10(a)(3) of the Securities Act; (ii)
reflect in the prospectus any facts or events which, individually or together,
represent a
-II-2-
<PAGE>
fundamental change in the information set forth in the Registration Statement;
and (iii) include any additional or changed material information on the plan of
distribution;
(2) that, for determining liability under the Securities Act, each
such post-effective amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof;and
(3) to remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the small business issuer pursuant to the foregoing provisions, or otherwise,
the small business issuer has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable.
-II-3-
<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/S-3 and has duly caused this
post-effective amendment to its registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City, County and
State of New York on the 16th day of April, 1997.
BLIMPIE INTERNATIONAL, INC.
By: /s/ Anthony P. Conza
-------------------------------
Anthony P. Conza, President
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Anthony P. Conza 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 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 attorney-in-fact and agent, full power and authority to do and perform
each and every act and thing requisite or necessary to be done in and about the
premises, as full to all intents and purposes as he might or could do in person,
hereby ratifying and confirming all that said attorney-in-fact and agent or
either 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
Post-Effective Amendment has been signed by the following persons in the
capacities and on the dates indicated.
Principal Executive Officer
Date: April 16, 1997 /s/ Anthony P. Conza
-------------------------------
Anthony P. Conza, Chairman,
President and Chief Executive
Officer
Principal Financial and
Accounting Officer
Date: April 16, 1997 /s/ Robert S. Sitkoff
-------------------------------
Robert S. Sitkoff, Senior Vice
President, Chief Financial
Officer and Treasurer
-II-4-
<PAGE>
Date: April 16, 1997 /s/ David L. Siegel
-------------------------------
David L. Siegel, Vice Chairman
Date: April 16, 1997 /s/ Patrick J. Pompeo
-------------------------------
Patrick J. Pompeo, Director
Date: April 16, 1997 /s/ Charles G. Leanes
-------------------------------
Charles G. Leaness, Director
Date: April 16, 1997 /s/ Alvin Katz
-------------------------------
Alvin Katz, Director
Date: April 16, 1997 /s/ Harry G. Chernoff
-------------------------------
Harry G. Chernoff, Director
-II-5-
BLIMPIE INTERNATIONAL, INC.
OMNIBUS STOCK INCENTIVE PLAN(1)
ARTICLE I
DEFINITIONS
1.01. Agreement means a written agreement between the Company and a Participant
or any written instrument issued by the Company to a Participant (including any
amendment or supplement thereto) specifying the terms and conditions of an award
of Restricted Shares or Performance Shares or a grant of an Option or SAR made
to such Participant.
1.02. Board means the Board of Directors of the Company.
1.03. Code means the Internal Revenue Code of 1986, as amended.
1.04. Committee means the Compensation Committee of the Board, consisting solely
of not less than two non-employee directors who have been appointed to
administer the Plan.
1.05. Common Stock means the Company's common stock, $.01 par value.
1.06. Company means Blimpie International, Inc.
1.07. Corresponding SAR means a SAR that is granted in relation to a particular
Option and that can be exercised only upon the surrender to the Company,
unexercised, of that portion of the Option to which the SAR relates.
1.08. Date of Exercise means (i) with respect to an Option, the date that the
Option price is received by, and (ii) with respect to a SAR, the date that the
notice of exercise is received by, the Company.
1.09. Fair Market Value of the Common Stock shall be the mean between the
following prices, as applicable, for the date as of which fair market value is
to be determined, as quoted in The Wall Street Journal (or in such other
reliable publication as the Committee, in its discretion, may determine to rely
upon): (a) if the Common Stock is listed on the New York Stock Exchange, the
highest and lowest sales prices per share of the Common Stock as quoted in the
NYSE-Composite Transactions listing for such date, (b) if the Common Stock is
not listed on such exchange, the highest and lowest sales prices per share of
Common Stock
- ----------
1 As amended by the Board of Directors on October 7, 1996.
<PAGE>
for such date on (or on any composite index including) the principal United
States securities exchange registered under the Exchange Act on which the Common
Stock is listed, or (c) if the Common Stock is not listed on any such exchange,
the highest and lowest sales prices per share of the Common Stock for such date
on the Nasdaq Stock Market or any successor thereto ("Nasdaq"). If there are no
such sale price quotations for the date as of which fair market value is to be
determined, but there are such sale price quotations within a reasonable period
both before and after such date, then fair market value shall be determined by
taking a weighted average of the means between the highest and lowest sales
prices per share of the Common Stock as so quoted on the nearest date before and
the nearest date after the date as of which fair market value is to be
determined. The average should be weighted inversely by the respective numbers
of trading days between the selling dates and the date as of which fair market
value is to be determined. If there are no such sale price quotations on or
within a reasonable period both before and after the date as of which fair
market value is to be determined, then fair market value of the Common Stock
shall be the mean between the bona fide bid and asked prices per share of Common
Stock as so quoted for such date on Nasdaq, or if none, the weighted average of
the means between such bona fide bid and asked prices on the nearest trading
date before and the nearest trading date after the date as of which fair market
value is to be determined, if both such dates are within a reasonable period.
The average is to be determined in the manner described above in this paragraph.
If the fair market value of the Common Stock cannot be determined on the basis
previously set forth in this paragraph on the date as of which fair market value
is to be determined, the Committee shall in good faith determine the fair market
value of the Common Stock on such date. Fair market value shall be determined
without regard to any restriction other than a restriction which, by its terms,
will never lapse.
1.10 Incentive Stock Option shall have the meaning given to it by Section 422 of
the Code.
1.11. Initial Value means, with respect to a SAR, the Fair Market Value of one
share of Common Stock on the date of grant, as set forth in an Agreement.
1.12 Involuntary Termination means a Termination of Employment for a reason
other than death, Retirement, Total Disability or voluntary resignation.
1.13 Nonstatutory Option means any Option granted by the Company pursuant to
this Plan which is not an Incentive Stock Option.
1.14. Option means any stock option that entitles the holder to purchase from
the Company a stated number of shares of Common Stock at the price set forth in
an Agreement.
1.15. Participant means an employee of the Company, or of a Subsidiary,
including
2
<PAGE>
an employee who is a member of the Board, or a non-employee director, and any
other person who satisfies the requirements of Article IV and is selected by the
Committee or by the Board to receive a Restricted Share or Performance Share
award, an Option, a SAR, or a combination thereof.
1.16 Performance Period means an accounting period of the Company or a
Subsidiary of not less than one year, as determined by the Committee in its
discretion.
1.17. Performance Share means an award, expressed in dollars or shares of Common
Stock, granted to a Participant with respect to a Performance Period. Awards of
Performace Shares expressed in dollars may be established as fixed dollar
amounts, as a percentage of salary, as a percentage of a pool based on earnings
of the Company, a Subsidiary or Subsidiaries or any branch, department or other
portion thereof or in any other manner determined by the Committee in its
discretion, provided that the amount thereof shall be capable of being
determined as a fixed dollar amount as of the close of the Performance Period.
1.18 Performance Target means that level of performance established by the
Committee which must be met in order for an award of Performance Shares to be
fully earned. The Performance Target may be expressed in terms of earnings per
share, return on assets, asset growth, ratio of capital to assets or such other
level or levels of accomplishment by the Company, a Subsidiary or Subsidiaries,
any branch, department or other portion thereof or the Participant individually
as may be established or revised from time to time by the Committee.
1.19. Plan means the Blimpie International, Inc. Omnibus Stock Incentive Plan.
1.20. Restricted Shares means shares of Common Stock awarded to a Participant
under Article VII. Shares of Common Stock shall cease to be Restricted Shares
when, in accordance with the terms of the applicable Agreement, they become
transferable and free of substantial risks of forfeiture.
1.21. Retirement means a Termination of Employment by reason of a Participant=s
cessation of employment (or, in the case of a non-employee director, the
cessation of his or her tenure as such), other than by reason of a Total
Disability or Termination for Cause.
1.22. SAR means a stock appreciation right that entitles the holder to receive,
with respect to each share of Common Stock encompassed by the exercise of such
SAR, the amount determined by the Committee and specified in an Agreement. In
the absence of such a determination, the holder shall be entitled to receive,
with respect to each share of Common Stock encompassed by the exercise of such
SAR, the excess of the Fair Market Value on the Date of Exercise over the
Initial Value. References
3
<PAGE>
to "SARs" include both Corresponding SARs and SARs granted independently of
Options, unless the context requires otherwise.
1.23. Subsidiary means any "subsidiary corporation" as such term is defined in
Code section 424.
1.24 Termination of Employment means with respect to (a) Participants who are
employees of the Company or a Subsidiary, the time when the employee-employer
relationship between the Participant and the Company ceases to exist for any
reason including, but not limited to termination by resignation, discharge,
death, Total Disability or Retirement; and (b) Participants who are non-employee
directors, the time when the Participant ceases to be a director by reason of
his or her resignation, failure to stand for re-election or dismissal.
1.25 Termination for Cause means an Involuntary Termination of a Participant:
(a) if the Participant has a written employment agreement with the Company or
any Subsidiary, "for cause" as that or a similar term is defined in the
employment agreement; or (b) if the Participant does not have a written
employment agreement with the Company or any Subsidiary, by reason of (i) the
Participant=s dishonesty or misconduct (including substance abuse) in the
performance of his or her duties; or (ii) a wilful failure by the Participant to
perform his or her assigned duties which adversely affects the Company; of (iii)
the conviction of the Participant of a felony or other criminal act. All
determinations of whether or not a Termination for Employment is "for cause"
will be made by the Committee in its sole and absolute discretion.
1.26 Total Disability means the inability of a Participant to engage in any
substantial gainful activity by reason of a medically determinable physical or
mental impairment which can be expected to result in death or which has lasted
or can be expected to last for a continuous period of not less than 12 months.
All determinations as to the date and extent of disability of a Participant will
be made by the Committee in its sole and absolute discretion.
1.27 Non-Employee Director means a director who:
(a) is not currently an officer of the Company or a parent or subsidiary
of the Company, or otherwise currently employed by the Company or a parent or
subsidiary of the Company;
(b) does not receive compensation, either directly or indirectly, for
services rendered as a consultant or in any capacity other than as a director,
except for an amount which does not exceed the dollar amount for which
disclosure would be required pursuant to any provision of Regulations S-K
promulgated by the Commission;
4
<PAGE>
(c) does not possess an interest in any other transaction for which
disclosure would be required by any provision of said Regulation S-K; and
(d) is not engaged in a business relationship for which disclosure would
be required by any provision of said Regulation S-K.
ARTICLE II
PURPOSES
The Plan is intended to assist the Company in recruiting and retaining
employees and directors with ability and initiative by enabling them to
participate in its future success and to associate their interests with those of
the Company and its shareholders. The Plan is intended to permit the award of
Restricted Shares, the award of Performance Shares, the grant of SARs, and the
grant of both Incentive Stock Options and Nonstatutory Options. The proceeds
received by the Company from the sale of Common Stock pursuant to this Plan
shall be used for general corporate purposes.
ARTICLE III
ADMINISTRATION
Except as provided in this Article III, the Plan shall be administered by
the Committee. The Committee shall have authority to award Restricted Shares and
Performance Shares and to grant Options and SARs upon such terms (not
inconsistent with the provisions of this Plan) as the Committee may consider
appropriate. Such terms may include conditions (in addition to those contained
in this Plan) on the exercisability of all or any part of an Option or SAR or on
the transferability or forfeitability of Restricted Shares. Notwithstanding any
such conditions, the Committee may, in its discretion, accelerate the time at
which any Option or SAR may be exercised or the time at which Restricted Shares
may become transferable or nonforfeitable. In addition the Committee shall have
complete authority to interpret all provisions of this Plan; to prescribe the
form of Agreements; to adopt, amend, and rescind rules and regulations
pertaining to the administration of the Plan; and to make all other
determinations necessary or advisable for the administration of this Plan. The
express grant in the Plan of any specific power to the Committee shall not be
construed as limiting any power or authority of the Committee. Any decision
made, or action taken, by the Committee or in connection with the administration
of this Plan shall be final and conclusive. No member of the Committee shall be
liable for any act done in good faith with respect to this Plan or any
Agreement, or Option, SAR, Restricted Share award or
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Performance Share award. All expenses of administering this Plan shall be borne
by the Company.
The Committee, in its discretion, may delegate to one or more officers of
the Company all or part of the Committee's authority and duties with respect to
Participants who are not subject to the reporting and other provisions of
Section 16 of the Securities Exchange Act of 1934, as in effect from time to
time (the "Exchange Act"). In the event of such delegation, and as to matters
encompassed by the delegation, references in the Plan to the Committee shall be
interpreted as a reference to the Committee's delegate or delegates. The
Committee may revoke or amend the terms of a delegation at any time, but such
action shall not invalidate any prior actions of the Committee's delegate or
delegates that were consistent with the terms of the Plan.
In addition to, and not in substitution or replacement of, the powers and
authority conferred upon the Committee pursuant to this Plan, the Board shall
also be entitled to award Restricted Shares or Performance Shares and/or to
grant one or more Options, SARs, or Options and SARs to any eligible
Participant, and when it makes such awards and/or grants, all of the provisions
of this Plan which pertain to the Committee shall be construed as though the
word "Board" appeared in place of the word "Committee," and the Board shall
have, and shall be entitled to exercise, all of the powers and authority
conferred upon the Committee when making, amending, modifying canceling,
settling or rescinding any of such awards and/or grants.
ARTICLE IV
ELIGIBILITY
4.01. General. Any employee of the Company or of any Subsidiary (including any
corporation that becomes a Subsidiary after the adoption of this Plan) is
eligible to participate in this Plan if the Committee, in its sole discretion,
determines that such person has contributed or can be expected to contribute to
the profits or growth of the Company or a Subsidiary. Any such employee may be
awarded Restricted Shares or Performance Shares or may be granted one or more
Options, SARs, or Options and SARs. A director of the Company who is an employee
of the Company or a Subsidiary, and a non-employee director of the Company or a
Subsidiary, may be awarded Restricted Shares and Performance Shares and may be
granted Options or SARs under this Plan. Further, the Committee may from time to
time in its sole discretion award Restricted Shares and Performance Shares and
may grant Options or SARs to non-employees or non-key employees in conjunction
with mergers and acquisition transactions.
4.02. Grants. The Committee will designate individuals to whom Restricted
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Shares and Performance Shares are to be awarded and to whom Options and SARs are
to be granted and will specify the number of shares of Common Stock subject to
each award or grant. An Option may be granted with or without a related SAR. The
Committee may grant Incentive Stock Options and Nonstatutory Options to the same
Participant, but not in tandem. A SAR may be granted with or without a related
Option. All Restricted Shares and Performance Shares awarded, and all Options
and SARs granted, under this Plan shall be evidenced by Agreements which shall
be subject to the applicable provisions of this Plan and to such other
provisions as the Committee may adopt. No Participant may be granted Incentive
Stock Options or related SARs (under all Incentive Stock Option plans of the
Company and its Subsidiaries) which are first exercisable in any year for Common
Stock having an aggregate Fair Market Value (determined as of the date an Option
is granted) exceeding $100,000.
ARTICLE V
COMMON STOCK SUBJECT TO PLAN
5.01. Source of Shares. Upon the award of Restricted Shares and when a
Performance Share is earned, the Company may issue authorized but unissued
shares of Common Stock. Upon the exercise of an Option or SAR, the Company may
deliver to the Participant (or the Participant's broker if the Participant so
directs), authorized but unissued Common Stock.
5.02. Maximum Number of Shares. The maximum aggregate number of shares of Common
Stock that may be issued pursuant to the exercise of Options and SARs and the
award of Restricted Shares and the settlement of Performance Shares under this
Plan is 500,000, subject to increases and adjustments as provided in this
Article V and Article IX.
5.03. Replenishment. The maximum number of shares authorized for issuance under
this Plan pursuant to Section 5.02 shall be increased each year by 8% (the
"Replenishment Percentage") of the amount, if any, by which the total number of
shares of Common Stock outstanding as of the last day of the Company's fiscal
year exceeds the total number of shares of Common Stock outstanding as of the
first day of such fiscal year. Provided, however, that in no event shall the
total number of shares authorized for issuance under this Plan exceed 8% of the
authorized and outstanding shares of Common Stock as of the time of any
replenishment adjustment. The issuance of shares of Common Stock under this Plan
and the application of Article IX shall be disregarded for purposes of applying
the preceding sentence. This Section 5.03 shall first apply with respect to the
fiscal year of the Company beginning on July 1, 1996.
5.04 Forfeitures, etc. If an Option or SAR is terminated, in whole or in part
for any
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reason other than its exercise, the number of shares of Common Stock allocated
to the Option or SAR or portion thereof may be reallocated to other Options,
SARs granted, or Restricted Shares and Performance Share awards to be granted
under this Plan. Any Restricted Shares that are forfeited or Performance Shares
that are unearned may be reallocated to other Options or SARs granted, or
Restricted Shares awarded, under this Plan.
ARTICLE VI
OPTIONS AND STOCK APPRECIATION RIGHTS
6.01 Nonstatutory Options. The Committee may grant Nonstatutory Options under
this Plan. Such Nonstatutory Stock Options must comply with all applicable
requirements of this Plan except for those which pertain solely to Incentive
Stock Options.
6.02 Incentive Stock Options. The Committee may grant Incentive Stock Options
under this Plan which shall comply with all of the restrictions and limitations
set forth in Section 422 of the Code. To the extent that any Option does not
qualify as an Incentive Stock Option, it shall constitute a Nonstatutory Stock
Option.
6.03 Vesting of Options. The Participant=s Agreement shall specify the date or
dates on which the Participant may begin to exercise all or a portion of his
Option. Subsequent to such dates or dates, the Option shall be deemed "vested."
Notwithstanding the terms of any Agreement, the Committee at any time may
accelerate such date or dates and otherwise waive or amend any conditions of the
grant.
6.04 Grant and Exercise of SARs. SARs may be granted to Participants by the
Committee independently of any Option granted pursuant to this Article or as a
Corresponding SAR. In the case of a Corresponding SAR granted in tandem with a
Nonstatutory Option, such SAR may be exercised either at or after the time of
the exercise of such Nonstatutory Option. In the case of a Corresponding SAR
granted in tandem with an Incentive Stock Option, such SAR may be exercised only
at the time of the exercise of such Incentive Stock Option.
A Corresponding SAR, shall terminate and no longer be exercisable upon the
termination or exercise of related Option. However, if a Corresponding SAR is
granted with respect to less than the full number of shares covered by a related
Option, such SAR shall terminate only if and to the extent that the number of
shares covered by the exercise or termination of the related Option exceeds the
number of shares not covered by such SAR.
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6.05 Exercise of Options and SARs Conditioned on Continuous Employment. Except
as otherwise provided in this Plan or by the Compensation Committee, no
Participant may exercise an Option or SAR unless at the time of exercise he or
she has been continuously in the employ of the Company or a Subsidiary since the
date of grant thereof.
6.06 Terms and Conditions of Stock Appreciation Rights. SARs shall be subject to
such terms and conditions as shall be determined from time to time by the
Committee and embodied in the Agreements and in procedures established by the
Committee. The Committee at any time may accelerate the exercisability of any
SAR and otherwise waive or amend any conditions of the grant of a SAR.
6.07. Maximum Option or Stock Appreciation Right Period. The maximum period in
which an Option or SAR may be exercised shall be determined by the Committee on
the date of grant except that no Option that is an Incentive Stock Option and
any Corresponding SAR that relates to such Option shall be exercisable after the
expiration of ten years from the date the Option or SAR was granted. The terms
of any Option or SAR may provide that it is exercisable for a period less than
such maximum period.
6.08 Option Exercise Price. The price per share for Common Stock purchased on
the exercise of an Option shall not be less than 100% of the Fair Market Value
of the Common Stock on the date the Option is granted.
6.09. Payment of Option Exercise Price. Unless otherwise provided by the
Agreement, payment of the Option exercise price shall be made in cash or a cash
equivalent acceptable to the Committee. If the Agreement so provides, payment of
all or part of the exercise price may be made by surrendering shares of Common
Stock to the Company. If Common Stock is used to pay all or part of the exercise
price, the shares surrendered must have a Fair Market Value (determined as of
the day preceding the Date of Exercise) that is not less than such price or part
thereof.
6.10. Determination of Payment of Cash and/or Common Stock Upon Exercise of SAR.
At the Committee's discretion, the amount payable as a result of the exercise of
a SAR may be settled in cash, Common Stock, or a combination of cash and common
Stock. A Fractional share shall not be deliverable upon the exercise of a SAR
but a cash payment will be made in lieu thereof.
6.11 Reload Options. The Committee shall have the authority to specify at the
time of grant that a Participant shall be granted another Option (a "Reload
Option") in the event such Participant exercises all or part of a Nonstatutory
Option (an "Original Option") by surrendering in accordance with Section 6.08
hereof already owned shares of Common Stock in full or partial payment of the
exercise price under such Original Option, subject to the availability of shares
of Common Stock
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under the Plan at the time of exercise. Each Reload Option shall cover a number
of shares of Common Stock equal to the number of shares of Common Stock
surrendered in payment of the exercise price, shall have an exercise price per
share of Common Stock equal to the Fair Market Value of the Common Stock on the
date of grant of such Reload Option and shall expire on the stated expiration
date of the Original Option. A Reload Option shall be exercisable at any time
and from time to time from and after the date of grant of such Reload Option
(or, as the Committee, in its sole discretion, shall determine at the time of
grant, at such time or times as shall be specified in the Reload Option);
provided, however, that a Reload Option granted to a Participant subject to the
provisions of Section 16(b) of the Exchange Act shall not be exercisable during
the first six months from the date of grant of such Reload Option. The first
such Reload Option may provide for the grant, when exercised, of one subsequent
Reload Option to the extent and upon such terms and conditions, consistent with
this Section 6.11, as the Committee, in its sole discretion, shall specify at or
after the time of grant of such Reload Option. A Reload Option shall contain
such other terms and conditions which may include a restriction on the
transferability of the number of shares of Common Stock received upon exercise
of the Original Option reduced by a number of shares equal in value to the tax
liability incurred upon exercise as the Committee, in its sole discretion, may
deem desirable which may be set forth in the Agreement evidencing the Reload
Option.
6.12. Nontransferability. Any Option or SAR granted under this Plan shall be
nontransferable except by will or by the laws of descent and distribution. In
the event of any such transfer, the Option and any Corresponding SAR that
relates to such Option must be transferred to the same person or persons or
entity or entities. During the lifetime of a Participant to whom an Option or
SAR is granted, the Option or SAR may be exercised only by the Participant. No
right or interest of a Participant in any Option or SAR shall be liable for, or
subject to, any lien, obligation, or liability of such Participant.
6.13 Cancellation and New Grant of Options. The Committee shall have the
authority to effect, at any time, and from time to time, with the consent of the
affected Participants, the cancellation of any or all outstanding Options under
the Plan and the grant in substitution therefor of new Options under the Plan
covering the same or different numbers of shares of Common Stock having an
Option exercise price per share which may be lower or higher than the exercise
price per share of the canceled Options.
6.14. Shareholder Rights. No Participant shall have any rights as a shareholder
with respect to shares subject to an Option or SAR until the Date of Exercise of
such Option or SAR.
6.15 Retirement of Holder of Options or Stock Appreciation Rights. If there is a
Termination of Employment of a Participant to whom an Option and/or SAR has
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been granted due to Retirement, each Incentive Stock Option held by the retired
Participant, whether or not then vested, may be exercised until the earlier of
(a)jthe end of the three month period immediately following the date of such
Termination of Employment; or (b)jthe expiration of the term specified in the
Option or SAR. In the case of a Nonstatutory Option, there shall be substituted
the words, "the end of the twelve month period" for the words "the end of the
three month period" in the immediately preceding sentence.
6.16 Total Disability of Holder of Options or Stock Appreciation Rights. If
there is a Termination of Employment of a Participant to whom an Option and/or a
SAR has been granted by reason of his or her Total Disability, each Option
and/or SAR held by the Participant, whether or not then vested, may be exercised
until the earlier of: (a)jthe end of the twelve month period immediately
following the date of such Termination of Employment; or (b)jthe expiration of
the term specified in the Option or SAR.
6.17 Death of Holder of Options or Stock Appreciation Rights. If there is a
Termination of Employment of a Participant to whom an Option or SAR has been
granted by reason of jhis or her death, or (b)jthe death of a former employee
within three months following the date of his or her Retirement (or, in the case
of a Non-statutory Option, within twelve months following the date of his or her
Retirement), or (c) the death of a former employee within twelve months
following the date of his or her Termination of Employment by reason of Total
Disability, then each Option and SAR held by the person at the time of his or
her death, whether or not then vested, may be exercised by the person or persons
to whom the Option or SAR shall pass by will or by the laws of descent and
distribution (but by no other persons) until the earlier of (i)jthe end of the
twelve month period immediately following the date of death (or such longer
period as is permitted by the Committee); and (ii)jthe expiration of the term
specified in the Option or SAR.
6.18 Termination of Employment for Cause: Voluntary Termination Prior to
Retirement. If there is a Termination of Employment for Cause of a Participant
to whom an Option or SAR has been granted under this Plan, or if a Participant
voluntarily terminates his or her employment prior to Retirement (other than by
reason of Total Disability), then all Options and SARs held by such Participant,
whether or not then vested, shall automatically be canceled at the time of such
Termination of Employment and shall be of no further force or effect thereafter.
This section shall not affect any Common Stock acquired by the Participant upon
exercise of Options or SARs prior to such Termination of Employment by the
Participant.
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ARTICLE VII
RESTRICTED SHARE AWARDS
7.01. Award. In accordance with the provisions of this Article VII, the
Committee will designate each individual to whom an award of Restricted Shares
is to be made and will specify the number of shares of Common Stock covered by
the award.
7.02. Vesting. The Committee, on the date of the award, may prescribe that a
Participant's rights in the Restricted Shares shall be forfeitable or otherwise
restricted for a period of time set forth in the Agreement. By way of example
and not of limitation, the restrictions may postpone transferability of the
shares or may provide that the shares will be forfeited if the Participant
separates from the service of the Company and its Subsidiaries before the
expiration of a stated term or if the Company and its Subsidiaries or the
Participant fail to achieve stated objectives.
7.03. Shareholder Rights; Escrow. Prior to their forfeiture in accordance with
the terms as the Agreement and while the shares are Restricted Shares, a
Participant will have all rights of a shareholder with respect to Restricted
Shares, including the right to receive dividends and vote the shares; provided,
however, that (a) a Participant may not sell, transfer, pledge, exchange,
hypothecate, or otherwise dispose of Restricted Shares, (b)jthe Company shall
retain custody of the certificates evidencing Restricted Shares and (c) the
Participant will deliver to the Company a stock power, endorsed in blank, with
respect to each award of Restricted Shares. The limitations set forth in the
preceding sentence shall not apply after the shares cease to be Restricted
Shares.
7.04 Restricted Share Agreement. Restricted Share awards shall be evidenced by
an Agreement in the form prescribed by the Committee which shall set forth such
terms, conditions and restrictions as the Committee in its discretion deems
appropriate. Restricted Share awards shall be effective only upon execution of
the applicable Agreement on behalf of the Company by the Chief Executive Officer
(if other than the President), the President or any Vice President, and by the
Participant.
ARTICLE VIII
PERFORMANCE SHARE AWARDS
8.01 Award. The Committee may award Performance Shares which shall be earned by
a Participant based on the level of performance over a specified period of time
by the Company, a Subsidiary or Subsidiaries, any branch, department or other
portion thereof or the Participant individually, as determined by the Committee.
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8.02 Procedure for Earning Award. A Participant shall earn awarded Performance
Shares in full by meeting the Performance Target for the Performance Period. If
the Minimum Target has not been attained at the end of the Performance Period,
no part of the Performance Share shall have been earned by the Participant. If
the Minimum Target is attained but the Performance Target is not attained, the
portion of the Performance Share award earned by the Participant shall be
determined on the basis of a formula established by the Committee.
8.03 Adjustments to Awards. At any time prior to the end of a Performance
Period, the Committee may adjust downward (but not upward) the Performance
Target and/or the Minimum Target as a result of major events unforeseen at the
time of the Performance Share award, such as changes in the economy, the
industry, laws affecting the operations of the Company or a Subsidiary or any
other event the Committee determines would have a significant impact upon the
probability of attaining the previously established Performance Target.
8.04 Payment of Awards. Payment of earned Performance Shares shall be made to
Participants following the close of the Performance Period as soon as
practicable after the time the amount payable is determined by the Committee.
Payment in respect of earned Performance Shares, whether expressed in dollars or
shares, may be made in cash, in shares of Common Stock, or partly in cash and
partly in shares of Common Stock, as determined by the Committee at the time of
payment. For this purpose, Performance Shares expressed in dollars shall be
converted to shares, and Performance Shares expressed in shares shall be
converted to dollars, based on the Fair Market Value of the Common Stock as of
the date the amount payable is determined by the Committee.
8.04 Effects of Termination of Employment. If prior to the close of the
Performance Period the employment of a Participant who received an award of
Performance Shares is voluntarily terminated with the consent of the Company or
a Subsidiary or the Participant retires, or if the Participant dies during
employment, the Committee may in its absolute discretion determine to pay all or
any part of the Performance Share award based upon the extent to which the
Committee determines the Performance Target or Minimum Target has been achieved
as of the date of termination of employment, retirement or death, the period of
time remaining until the close of the Performance Period and/or such other
factors as the Committee may deem relevant. If the Committee in its discretion
determines that all or any part of the Performance Share award shall be paid,
payment shall be made to the Participant or his or her estate as promptly as
practicable following such determination and may be made in cash, in shares of
Common Stock, or partly in cash and partly in shares of Common Stock, as
determined by the Committee at the time of the payment. For this purpose,
Performance Shares expressed in dollars shall be converted to shares, and
Performance Shares expressed in shares shall be converted to dollars, based on
the Fair Market Value of the Common Stock as of the
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date the amount payable is determined by the Committee.
If, prior to the close of a Performance Period, a Termination of
Employment of a Participant who received an award of Performance Shares occurs
for any reason other than voluntary termination with the consent of the Company
or a Subsidiary, Retirement or death, the Performance Shares of the Participant
shall be deemed not to have been earned, and no portion of such Performance
Shares may be paid. Whether Termination of Employment is a voluntary termination
with the consent of the Company or a Subsidiary shall be determined, in its
discretion, by the Committee. Any determination by the Committee on any matter
with respect to Performance Shares shall be final and binding on both the
Company and the awardee.
8.05 Performance Share Agreement. Performance Share awards shall be evidenced by
an Agreement in the form prescribed by the Committee which shall set forth the
amount or manner of determining the amount of the Performance Shares, the
Performance Period, the Performance Target and any Minimum Target and such other
terms and conditions as the Committee in its discretion deems appropriate.
Performance Share awards shall be effective only upon execution of the
applicable Performance Share Agreement on behalf of the Company by the Chief
Executive Officer (if other than the President), the President or any Vice
President, and by the Participant.
ARTICLE IX
ADJUSTMENT UPON CHANGE IN COMMON STOCK
The maximum number of shares that may be issued pursuant to the exercise
of Options and SARs and the award of Restricted Shares and the settlement of
Performance Shares under this Plan and the Replenishment Percentage in Section
5.03 shall be proportionately adjusted, and the terms of outstanding Restricted
Share awards, Performance Share Awards, Options, and SARs shall be adjusted, as
the Committee shall determine to be equitably required in the event that (a) the
Company (i)jeffects one or more stock dividends, stock split-ups, subdivisions
or consolidations of shares or (ii) engages in a transaction to which Code
section 424 applies or (b) there occurs any other event which, in the judgment
of the Committee necessitates such action. Any determination made under this
Article IX by the Committee shall be final and conclusive.
The issuance by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, for cash or property, or for
labor or services, either upon direct sale or upon the exercise of rights or
warrants to subscribe therefor, or upon conversion of shares or obligations of
the Company
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convertible into such shares or other securities, shall not affect, and no
adjustment by reason thereof shall be made with respect to, outstanding awards
of Restricted Shares, Performance Shares, Options or SARs.
The Committee may award Restricted Shares and Performance Shares, may
grant Options, and may grant SARs in substitution for stock awards, stock
options, stock appreciation rights, or similar awards held by an individual who
becomes an employee of the Company or a Subsidiary in connection with a
transaction described in the first paragraph of this Article IX. Notwithstanding
any provision of the Plan (other than the limitations of Article V), the terms
of such substituted Restricted Share and Performance Share awards and Option or
SAR grants shall be as the Committee, in its discretion, determines is
appropriate.
ARTICLE X
COMPLIANCE WITH LAW AND APPROVAL OF REGULATORY BODIES
No Option or SAR shall be exercisable, no Common Stock shall be issued, no
certificates for shares of Common Stock shall be delivered, and no payment shall
be made under this Plan except in compliance with all applicable federal and
state laws and regulations (including, without limitation, withholding tax
requirements) and the rules of all domestic stock exchanges on which shares may
be listed. The Company shall have the right to rely on an opinion of its counsel
as to such compliance. Any share certificate issued to evidence Common Stock for
which Restricted Shares are awarded, Performance Shares were earned or for which
an Option or SAR is exercised may bear such legends and statements as the
Committee may deem advisable to assure compliance with federal and state laws
and regulations. No Option or SAR shall be exercisable, no Common Stock shall be
issued, no certificate for shares shall be delivered, and no payment shall be
made under this Plan until the Company has obtained such consent or approval as
the Committee may deem advisable from regulatory bodies having jurisdiction over
such matters.
ARTICLE XI
GENERAL PROVISIONS
11.01. Effect on Employment. Neither the adoption of this Plan, its operation,
nor any documents describing or referring to this Plan (or any part thereof)
shall confer upon any employee any right to continue in the employ of the
Company or a Subsidiary or in any way affect any right and power of the Company
or a Subsidiary to terminate the employment of any employee at any time with or
without assigning a reason therefor.
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11.02. Unfunded Plan. The Plan, insofar as it provides for grants and awards,
shall be unfunded, and the Company shall not be required to segregate any assets
that may at any time be represented by grants or awards under this Plan. Any
liability of the Company to any person with respect to any grant under this Plan
shall be based solely upon any contractual obligations that may be created
pursuant to this Plan. No such obligation of the Company shall be deemed to be
secured by any pledge of, or other encumbrance on, any property of the Company
or any Subsidiary
11.03. Rules of Construction. Headings are given to the articles and sections of
this Plan solely as a convenience to facilitate reference. The reference to any
statute, regulation, or other provision of law shall be construed to refer to
any amendment to or successor of such provision of law.
11.04. Employee Status. For purposes of determining the applicability of Code
section 422 (relating to Incentive Stock Options), or in the event that the
terms of any Option or SAR provide that it may be exercised or that awards of
Restricted Shares or Performance Shares may become vested or earned only during
employment or within a specified period of time after Termination of Employment,
the Committee may decide to what extent leaves of absence for governmental or
military service, illness, temporary disability, or other reasons shall not be
deemed interruptions of continuous employment.
11.05 Tax Withholding. Each Participant shall, no later than the date as of
which the value of a grant of an Option or SAR, or an award of any Restricted
Shares or Performance Shares or other amount received thereunder first becomes
includable in the gross income of the Participant for Federal income tax
purposes, pay to the Company, or make arrangements satisfactory to the Committee
regarding payment of any Federal, state, or local taxes of any kind required by
law to be withheld with respect to such income. The Committee may permit payment
of such taxes to be made through the tender of cash or Common Stock, the
withholding of Common Stock or cash to be received through grants or awards of
any other arrangement satisfactory to the Committee. The Company and its
Subsidiaries shall, to the extent permitted by law, have the right to deduct any
such taxes from any payment of any kind otherwise due to the Participant.
11.06 Indemnification. No member of the Board or the Committee shall be liable
for any action or determination taken or made in good faith with respect to this
Plan nor shall any member of the Board or the Committee be liable for any
Agreement issued pursuant to this Plan or any grants or awards made under it.
Each member of the Board and the Committee shall be indemnified by the Company
against any losses incurred in such administration of the Plan, unless his or
her action constitutes serious and willful misconduct.
11.07 Other Compensation Plans. The adoption of the Plan shall not affect any
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other existing or future incentive or compensation plans for directors, officers
or employees of the Company or its Subsidiaries. Moreover, the adoption of this
Plan shall not preclude the Company or its Subsidiaries from: (a) establishing
any other forms for incentive or other compensation for directors, officers or
employees of the Company or its Subsidiaries; or (b) assuming any forms of
incentives or other compensation of any person or entity in connection with the
acquisition or the business or assets, in whole or in part, of any person or
entity.
11.08 Non-Contravention of Securities Laws. Notwithstanding anything to the
contrary expressed in this Plan, any provisions hereof that vary from or
conflict with any applicable Federal or State securities laws (including any
regulations promulgated thereunder) shall be deemed to be modified to conform to
and comply with such laws.
11.09 Unenforceability of a Particular Provision. The unenforceability of any
particular provision of this document shall not affect the other provisions, and
the document shall be construed in all respects as if such unenforceable
provision were omitted.
ARTICLE XII
AMENDMENT
The Board may amend or terminate this Plan from time to time; provided,
however, that no amendment may become effective until shareholder approval is
obtained if (i) the amendment increases the aggregate number of shares of Common
Stock that may be issued under the Plan or (ii) the amendment changes the class
of individuals eligible to become Participants. No amendment shall, without a
Participant's consent, adversely affect any rights of such Participant under any
outstanding Restricted Share or Performance Share award or under any Option or
SAR outstanding at the time such amendment is made.
ARTICLE XIII
DURATION OF PLAN
No Restricted Shares or Performance Shares may be awarded and no Option or
SAR may be granted under this Plan after June 30, 2000. Restricted Share and
Performance Share awards and Option and SAR grants made before that date shall
remain valid in accordance with their terms.
Restricted Shares and Performance Shares may be awarded and Options and
SARs may be granted under this Plan upon its adoption by the Board, provided
that
17
<PAGE>
no Restricted Share or Performance Share award, or Option or SAR grant will be
effective unless this Plan is approved by a majority of the Company's
shareholders voting either in person or by proxy at a duly held shareholders'
meeting within twelve months of such adoption.
18
April 15, 1997
Blimpie International, Inc.
740 Broadway
New York, New York 10003
Gentlemen:
We previously acted as counsel for Blimpie International, Inc. (the
"Company") in connection with the registration under the Securities Act of 1933,
as amended (the "Act") of (a) up to 500,000 shares of the Company's $.01 par
value common stock (the "Common Stock") issuable by the Company pursuant to its
Omnibus Stock Incentive Plan (the "Plan"); and (b) up to 122,200 shares of
Common Stock which were issued or subject to issuance upon the exercise of
outstanding options granted under the Plan, and which were being offered for
sale for the accounts of certain selling securityholders pursuant to the
Registration Statement on Form S-8/S-3 filed by the Company with the Securities
and Exchange Commission (the "Commission") on February 21, 1996 under
Registration No. 333-1530 (the "Registration Statement").
We have also acted as counsel to the Company in connection with the
registration under the Act, pursuant to Post-Effective Amendment No. 1 to the
Registration Statement, of (a) up to an additional 450,000 shares of Common
Stock (the "Shares") issuable pursuant to an amendment to the Plan duly adopted
by the Company's shareholders on December 9, 1996; and (b) up to 253,500 shares
of Common Stock which were issued or subject to issuance upon the exercise of
outstanding options granted under the Plan, as amended, and which are being
offered for sale for the accounts of certain selling securityholders (the
"Selling Securityholders' Shares" which, together with the Shares, are
hereinafter referred to as the "Securities").
In connection with the opinions hereinbelow expressed, we have
examined the following documents (or true copies thereof): the Company's
Certificate of Incorporation, as amended, its Bylaws, its stock, option and
warrant records, the minutes of actions heretofore taken by the Company's
shareholders and
<PAGE>
Blimpie International, Inc.
April 15, 1997
Page 2
directors, the Registration Statement filed with the Commission and
Post-Effective Amendment No. 1 to the Registration Statement to be filed with
the Commission, and such other documents as we deemed necessary or appropriate
under the circumstances.
Based upon, and subject to the foregoing, we are of the opinion
that:
1. The Company is a corporation duly organized, validly existing and
in good standing under the laws of the state of New Jersey, and has all
requisite power and authority (corporate and other) to own or lease its
properties and conduct its business.
2. The Company has taken all necessary corporate action required
with respect to the issuance of the Securities.
3. The Company has reserved a sufficient number of its authorized
but unissued shares of Common Stock for issuance of the Securities.
4. The Selling Securityholders' Shares have been validly issued, and
are fully paid and non-assessable shares of Common Stock.
5. Upon receipt by the Company of the full consideration, if any,
payable with respect to the issuance of the Shares, such Shares shall be fully
paid and non-assessable shares of Common Stock.
6. Subject to the proviso that none of the Securities shall be
issued in any jurisdiction unless and until a valid Blue Sky registration or
exemption therefrom pertaining to such Securities shall be in effect, upon
receipt of full payment for the Securities, the Shares and Selling
Securityholders' Shares shall be (or, in the case of the Selling
Securityholder's Shares, already will have been) validly issued and outstanding
as fully paid and non-assessable shares of the Company's Common Stock.
Very truly yours,
Hall Dickler Kent Friedman & Wood, LLP
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Post-Effective
Amendment No. 1 to the Company's Registration Statement on Form S-8/S-3 of our
report dated September 4, 1996 on our audits of the consolidated financial
statements of Blimpie International, Inc. and Subsidiaries. We also consent to
the reference to our firm under the caption "Experts."
COOPERS & LYBRAND, L.L.P.
Atlanta, Georgia
April 10, 1997
CONSENT OF COUNSEL
We consent to use of our firm's name and to statements with respect
to our Firm, as they appear under the heading "Legal Matters" in the Prospectus
which is included in Part I of this Post-Effective Amendment No. 1 to the
Company's Registration Statement on Form S-8/S-3.
