<PAGE>
As filed with the Securities and Exchange Commission on May 3, 2000.
Registration No. 333-_______
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
________________________________
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
================================================================================
HARRY'S FARMERS MARKET, INC.
(Exact Name of Issuer as Specified in its Charter)
Georgia 58-2037452
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
1180 Upper Hembree Road
Roswell, Georgia 30076
(770) 667-8878
(Address, including zip code, and telephone number of Principal
Executive Offices)
225,000 STOCK OPTIONS GRANTED TO JOHN D. BRANCH
50,000 STOCK OPTIONS GRANTED TO ROBERT C. GLUSTROM
10,000 STOCK OPTIONS GRANTED TO CHARLES W. SAPP
(Full Titles of the Plans)
JOHN D. BRANCH Copy to:
Senior Vice President and Chief Financial Officer JOHN L. LATHAM
Harry's Farmers Market, Inc. Alston & Bird LLP
1180 Upper Hembree Road One Atlantic Center
Roswell, Georgia 30076 1201 West Peachtree Street, NW
(770) 667-8878 Atlanta, Georgia 30309-3424
(Name, address, including zip code, and (404) 881-7915
telephone number, including area code, of
agent for service)
_______________________
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
=====================================================================================================================
Proposed Proposed Amount of
Title of Securities Amount to Maximum Maximum Registration Fee
to be Registered be Registered (1) Offering Price Aggregate
Per Unit Offering Price
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A Common Stock, no 225,000 granted to John D. Branch $0.9688 $217,980
par value 50,000 granted to Robert C. Glustrom $0.9688 $ 48,440 $73.00
10,000 granted to Charles W. Sapp $ 1.04 $ 10,400
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Pursuant to Rule 416 under the Securities Act of 1933, this Registration
Statement also includes an indeterminate number of additional shares that
may become issuable pursuant to the antidilution adjustment provisions of
the options.
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
(a) The documents constituting Part I of this Registration Statement
will be sent or given to participants in the Plans as specified by Rule
428(b)(1) under the Securities Act of 1933, as amended.
(b) Upon written or oral request, we will provide, without charge, the
documents incorporated by reference in Item 3 of Part II of this Registration
Statement. The documents are incorporated by reference in the Section 10(a)
prospectus. We will also provide, without charge, upon written or oral request,
other documents required to be delivered pursuant to Rule 428(b). Requests for
the above mentioned information, should be directed to John D. Branch, Senior
Vice President and Chief Financial Officer, at (770) 667-8878.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
The following documents filed by Harry's Farmers Market, Inc. (File No.
000-21486) with the Securities and Exchange Commission (the "Commission")
pursuant to the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), are incorporated herein by reference and are deemed to be a part hereof
from the date of the filing of such documents:
(1) The Company's Annual Report on Form 10-K for the fiscal year ended
February 2, 2000;
(2) All other reports filed by the Company pursuant to Section 13(a) or
15(d) of the Exchange Act since February 2, 2000;
(3) The description of common stock contained in the Company's Registration
Statement filed under Section 12 of the Exchange Act, including all amendments
or reports filed for the purpose of updating such description; and
(4) All other documents subsequently filed by the Company pursuant to
Section 13(a), 13(c), 14 and 15(d) of the Exchange Act prior to the filing of a
post-effective amendment to this Registration Statement that indicates that all
securities offered have been sold or that deregisters all securities that remain
unsold.
Any statement contained in a document incorporated or deemed incorporated
herein by reference shall be deemed to be modified or superseded for the purpose
of this Registration Statement to the extent that a statement contained herein
or in any subsequently filed document which also is, or is deemed to be,
incorporated herein by reference modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Registration Statement.
<PAGE>
Item 4. Description of Securities. Not Applicable.
Item 5. Interests of Named Experts and Counsel. The legality of the common
stock registered hereby has been passed upon by Alston & Bird LLP, counsel to
the Company.
Item 6. Indemnification of Directors and Officers
As provided under Georgia law, the Company's Articles of Incorporation
provide that a director shall not be personally liable to the Company or its
shareholders for monetary damages for breach of duty of care or any other duty
owed to the Company as a director, except that such provision shall not
eliminate or limit the liability of a director (a) for any appropriation, in
violation of his duties, of any business opportunity of the Company, (b) for
acts or omissions that involve intentional misconduct or a knowing violation of
law, (c) for unlawful corporate distributions, or (d) for any transaction from
which the director received an improper personal benefit.
Article VI of the Company's By-Laws provides that the Company shall
indemnify a director who has been successful in the defense of any proceeding to
which he was a party or in defense of any claim, issue or matter therein because
he is or was a director of the Company, against reasonable expenses incurred by
him in connection with such defense.
The Company By-Laws also provide that the Company is required to
indemnify any director, officer, employee or agent made a party to a proceeding
because he is or was a director, employee or agent against liability incurred in
the proceeding if he acted in a manner he believed in good faith to be in or not
opposed to the best interests of the Company and, in the case of any criminal
proceeding, he had no reasonable cause to believe his conduct was unlawful.
Determination concerning whether or not the applicable standard of conduct has
been met can be made by (a) a disinterested majority of the Board of Director,
(b) a majority of a committee of disinterested directors, (c) independent legal
counsel, or (d) an affirmative vote of a majority of shares held by
disinterested stockholders. No indemnification may be made to or on behalf of a
director, officer, employee or agent (i) in connection with a proceeding by or
in the right of the Company in which such person was adjudged liable to the
Company or (ii) in connection with any other proceeding in which such person was
adjudged liable on the basis that personal benefit was improperly received by
him.
The Company may, if authorized by its shareholders by a majority of votes
that would be entitled to be case in a vote to amend the Company's Articles of
Incorporation, indemnify or obligate itself to indemnify a director, officer,
employee or agent made a party to a proceeding, including a proceeding brought
by or in the right of the Company.
Item 7. Exemption from Registration Claimed. Not Applicable.
<PAGE>
Item 8. Exhibits/1/
Exhibit Number Description
-------------- -----------
5 Opinion of Counsel.
4.1.1 Articles of Incorporation of HFM, Inc. (Form S-1
Exhibit 3.2)
4.1.2 Articles of Amendment to Articles of Incorporation
(Form S-1 Exhibit 3.2)
4.1.3 Articles of Amendment to Articles of Incorporation
(1/30/95 8-K Exhibit 3(I).2)
4.2 Bylaws of HFM, Inc. (Form S-1 Exhibit 3.3)
4.3 Non-Qualified Stock Option Agreement dated April
16, 1999 between Harry's Farmers Market, Inc. and
John D. Branch.
4.4 Non-Qualified Stock Option Agreement dated December
13, 1999 between Harry's Farmers Market, Inc. and
Robert C. Glustrom.
4.5 Non-Employee Director Non-Qualified Stock Option
Agreement dated February 5, 1999 between Harry's
Farmers Market, Inc. and Charles W. Sapp.
23.1 Consent of Counsel (included in Exhibit 5).
23.2 Consent of Independent Public Accountants.
24 Power of Attorney (included on signature page).
Item 9. Undertakings
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of this Registration Statement (or the most recent
post-effective amendment
- ----------------
/1/ Exhibits are numbered in accordance with Item 601 of Regulation S-K.
<PAGE>
thereof) which, individually or in the aggregate, represent a fundamental
change in the information set forth in this Registration Statement; and
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in this Registration
Statement or any material change to such information in this Registration
Statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) above do not
-----------------
apply if the information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed with or furnished to
the Commission by the Company pursuant to Section 13 or Section 15(d) of the
Exchange Act that are incorporated by reference in this Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities being offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in this Registration Statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the provisions described in Item 6 of this
Part II, or otherwise, the Registrant has been advised that in the opinion of
the Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
(Signatures on Following Page)
<PAGE>
SIGNATURES
The Registrant. Pursuant to the requirements of the Securities Act of 1933, the
Registrant, Harry's Farmers Market, Inc., certifies that it has reasonable
grounds to believe that it meets all of the requirements for filing on Form S-8
and has duly caused this Registration Statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Atlanta, State of
Georgia, on May 2, 2000.
HARRY'S FARMERS MARKET, INC.
By: /s/ Harry A. Blazer
-------------------
Harry A. Blazer
President and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Harry A. Blazer and John L. Latham, and each of
them (with full power in each to act alone), as his true and lawful attorneys-
in-fact and agents, with full power of substitution and resubstitution, for him
and in his name, place and stead, in any and all capacities, to sign any or 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 attorneys-in-fact and agents, and each of them, full power and authority to
do and perform each and every act and thing requisite and necessary to be done
in and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said attorneys-in-
fact and agents or any of the, or their or his substitutes, may lawfully do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated as of May 2, 2000.
Signatures Title
- ------------ -----
/s/ Harry A. Blazer Director, President and
- --------------------------- Chief Executive Officer
Harry A. Blazer (Principal Executive Officer)
/s/ John D. Branch Director, Senior Vice President
- --------------------------- and Chief Financial Officer
John D. Branch (Principal Financial and Accounting Officer)
/s/ Robert C. Glustrom Director
- ---------------------------
Robert C. Glustrom
<PAGE>
/s/ Donald M. Pamenter Director
- ---------------------------
Donald M. Pamenter
/s/ Charles W. Sapp Director
- ---------------------------
Charles W. Sapp
<PAGE>
Registration No. 333-________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------------------------------
EXHIBITS FILED WITH
REGISTRATION STATEMENT
ON FORM S-8
UNDER
THE SECURITIES ACT OF 1933
---------------------------------------------
HARRY'S FARMERS MARKET, INC.
1180 Upper Hembree Road
Roswell, Georgia 30076
(770) 667-8878
<PAGE>
EXHIBIT INDEX
TO
REGISTRATION STATEMENT ON FORM S-8
XXXX
Exhibit Number Description
-------------- -----------
5 Opinion of Counsel.
*4.1.1 Articles of Incorporation of HFM, Inc. (Form S-1
Exhibit 3.2)
*4.1.2 Articles of Amendment to Articles of Incorporation
(Form S-1 Exhibit 3.2)
*4.1.3 Articles of Amendment to Articles of Incorporation
(1/30/95 8-K Exhibit 3(I).2)
*4.2 Bylaws of HFM, Inc. (Form S-1 Exhibit 3.3)
4.3 Non-Qualified Stock Option Agreement dated April
16, 1999 between Harry's Farmers Market, Inc. and
John D. Branch.
4.4 Non-Qualified Stock Option Agreement dated December
13, 1999 between Harry's Farmers Market, Inc. and
Robert C. Glustrom.
4.5 Non-Employee Director Non-Qualified Stock Option
Agreement dated February 5, 1999 between Harry's
Farmers Market, Inc. and Charles W. Sapp.
23.1 Consent of Counsel (included in Exhibit 5).
23.2 Consent of Independent Public Accountants.
24 Power of Attorney (included on signature page).
* Incorporated by reference.
<PAGE>
Exhibit 4.3
NON-QUALIFIED STOCK OPTION AGREEMENT
Optionee: John D. Branch
-------------------------------------------------
Number of Shares Subject to Option: 225,000
-----------------------
Exercise Price per Share: $ .9688
---------------------------------
Date of Grand: April 16, 1999
--------------------------------------------
1. Background. The Optionee named above (the "Optionee") has been offered
----------
a position as Senior Vice President of Harry's Farmers Market, Inc. This option
is granted as an inducement to the Optionee to accept such position.
2. Defined Terms. For purposes of this Agreement, the following terms
-------------
shall have the following meanings:
"Board" means the Board of Directors of the Company.
"Cause" has the meaning assigned to such term in any employment agreement
between the Optionee and the Company.
"Change of Control" means the occurrence of any of the following events:
(a) individuals who, at the Effective Date, constitute the Board (the
"Incumbent Directors") cease for any reason to constitute at least a
majority of the Board, provided that any person becoming a director after
the Effective Date and whose election or nomination for election was
approved by a vote of at least a majority of the Incumbent Directors then
on the Board (either by a specific vote or by approval of the proxy
statement of the Company in which such person is named as a nominee for
director, without written objection to such nomination) shall be an
Incumbent Director; provided, however, that no individual initially elected
or nominated as a director of the Company as a result of an actual or
threatened election contest (as described in Rule 14a-11 under the
Securities Exchange Act of 1934, as amended (the "1934 Act") ("Election
Contest"), or other actual or threatened solicitation of proxies or
consents by or on behalf of any "person" (as such term is defined in
Section 3(a)(9) of the 1934 Act and as used in Section 13(d)(3) and
14(d)(2) of the 1934 Act) other than the Board ("Proxy Contest"), including
by reason of any agreement intended to avoid or settle any Election Contest
or Proxy Contest, shall be deemed an Incumbent Director;
(b) any person is or becomes a "beneficial owner" (as defined in Rule
13d-3 under the 1934 Act), directly or indirectly, of securities of the
Company
<PAGE>
representing 50% or more of the combined voting power of the Company's then
outstanding securities eligible to vote for the election of the Board (the
"Company Voting Securities"); provided, however, that the event described
in this paragraph (b) shall not be deemed to be a Change in Control of the
Company by virtue of any of the following acquisitions: (A) any acquisition
by a person who is on the Effective Date the beneficial owner of 25% or
more of the outstanding Company Voting Securities, (B) an acquisition by
the Company which reduces the number of Company Voting Securities
outstanding and thereby results in any person acquiring beneficial
ownership of more than 25% of the outstanding Company Voting Securities;
provided, that if after such acquisition by the Company such person becomes
the beneficial owner of additional Company Voting Securities that increases
the percentage of outstanding Company Voting Securities beneficially owned
by such person, a Change in Control of the Company shall then occur, (C) an
acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any Parent or Subsidiary, (C) an acquisition
by an underwriter temporarily holding securities pursuant to an offering of
such securities, (D) an acquisition pursuant to a Non-Qualifying
Transaction (as defined in paragraph (c) below), or (E) a transaction
(other than the one described in paragraph (c) below) in which Company
Voting Securities are acquired from the Company, if a majority of the
Incumbent Directors approve a resolution providing expressly that the
acquisition pursuant to this clause (E) does not constitute a Change in
Control of the Company under this paragraph (b); or
(c) the consummation of a reorganization, merger, consolidation,
statutory share exchange or similar form of corporate transaction involving
the Company that requires the approval of the Company's stockholders,
whether for such transaction or the issuance of securities in the
transaction (a "Reorganization"), or the sale or other disposition of all
or substantially all of the Company's assets to an entity that is not an
affiliate of the Company (a "Sale"), unless immediately following such
Reorganization or Sale: (A) more than 50% of the total voting power of (x)
the corporation resulting from such Reorganization or the corporation which
has acquired all or substantially all of the assets of the Company (in
either case, the "Surviving Corporation"), or (y) if applicable, the
ultimate parent corporation that directly or indirectly has beneficial
ownership of 100% of the voting securities eligible to elect directors of
the Surviving Corporation (the "Parent Corporation"), is represented by the
Company Voting Securities that were outstanding immediately prior to such
Reorganization or Sale (or, if applicable, is represented by shares into
which such Company Voting Securities were converted pursuant to such
Reorganization or Sale), and such voting power among the holders thereof is
in substantially the same proportion as the voting power of such Company
Voting Securities among the holders thereof immediately prior to the
Reorganization or Sale, (B) no person (other than (x) the Company, (y) any
employee benefit plan (or related trust) sponsored or maintained by the
Surviving Corporation or the Parent Corporation, or (z) a person who
immediately prior to the Reorganization or Sale was the beneficial
-2-
<PAGE>
owner of 25% or more of the outstanding Company Voting Securities) is the
beneficial owner, directly or indirectly, of 25% or more of the total
voting power of the outstanding voting securities eligible to elect
directors of the Parent Corporation (or, if there is no Parent Corporation,
the Surviving Corporation), and (C) at least a majority of the members of
the board of directors of the Parent Corporation (or, if there is no Parent
Corporation, the Surviving Corporation) following the consummation of the
Reorganization or Sale were Incumbent Directors at the time of the Board's
approval of the execution of the initial agreement providing for such
Reorganization or Sale (any Reorganization or Sale which satisfies all of
the criteria specified in (A), (B) and (C) above shall be deemed to be a
"Non-Qualifying Transaction").
"Code" means the Internal Revenue Code of 1986, as amended, or any
successor thereto, and the Treasury Regulations and rulings promulgated
thereunder.
"Committee" means the Compensation Committee of the Board, or any successor
committee.
"Company" means Harry's Farmers Market, Inc., a corporation organized under
the laws of the State of Georgia.
"Disability" means a mental or physical disability as determined by the
Board of Directors of the Company in accordance with standards and procedures
similar to those under the Company's employee long-term disability plan, if any.
At any time that the Company does not maintain such a long-term disability plan,
Disability shall mean the inability of Executive, as determined by the Board, to
substantially perform the essential functions of his regular duties and
responsibilities due to a medically determinable physical or mental illness
which has lasted (or can reasonably be expected to last) for a period of six
consecutive months.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
any successor thereto.
"Fair Market Value" means, as of any given date, the closing price of the
Stock on such date (or, if no transactions were reported on such date, on the
next preceding date on which transactions were so reported) on the Nasdaq
National Market System or, if the Stock is not on such date listed on the Nasdaq
National Market System, on the principal market in which such Stock is traded on
such date.
"Non-Qualified Stock Option" means a Stock Option that is not intended to
be an incentive stock option as described in Section 422 of the Code.
"Retirement" means normal retirement as defined in the Company's then-
current retirement plan, or there is no such retirement plan, "Retirement" shall
mean voluntary termination after age 65 with ten years of service.
-3-
<PAGE>
"Stock" means the Class A Common Stock of the Company.
"Subsidiary" means any corporation (other than the Company) in an unbroken
chain of corporations beginning with the Company if each of the corporations
(other than the last corporation in the unbroken chain) owns stock possessing
fifty percent (50%) or more of the total combined voting power of all classes of
stock in one of the other corporations in the chain.
3. Grant of Option. The Company hereby grants to the Optionee a Non-
---------------
Qualified Stock Option to purchase, on the terms and conditions set forth in
this Agreement, the number of shares of Stock indicated above, at the exercise
price per share set forth above (the "Option").
4. Vesting of Option. Unless the exercisability of the Option is
-----------------
accelerated as provided in Section 5 below, the Option shall vest (become
exercisable) in equal installments of 9,375 Option Shares each month for twenty-
four months following the Effective Date.
5. Change of Control.
-----------------
(a) Accelerated Vesting. Notwithstanding the vesting schedule provided
-------------------
in Section 4 above, in the event of a Change of Control, unless otherwise
determined by the Committee or the Board in writing prior to the occurrence
of such Change of Control, the Option shall vest and become exercisable in
full; and
(b) Minimum Payment. In the event that pursuant to a Change in
-----------------
Control, this Option is redeemed or terminated by the Company or the
surviving entity, as the case may be, the Optionee shall receive minimum
proceeds of $165,000 in exchange for such Options:
6. Period of Option and Limitations on Right to Exercise. The Option
-----------------------------------------------------
will, to the extent not previously exercised, lapse under the earliest of the
following circumstances; provided, however, that the Committee may, prior to the
lapse of the Option under the circumstances described in paragraphs (b), (c),
(d) and (e) below, provide in writing that the Option will extend until a later
date:
(a) The Option shall lapse as of 5:00 p.m., Eastern Time, on the tenth
anniversary of the date of grant (the "Expiration Date").
(b) The Option shall lapse three months after the Optionee's
termination of employment for any reason other than the Optionee's death,
Disability or Retirement.
(c) If the Optionee's employment terminates by reason of Disability or
Retirement, the Option shall lapse one year after the date of the
Optionee's termination of employment.
-4-
<PAGE>
(d) If the Optionee dies while employed, or during the three-month
period described in subsection (b) above and before the Option otherwise
lapses, the Option shall lapse three years after the date of the Optionee's
death. If the Optionee dies during the one-year period described in
subsection (d) above and before the Option otherwise lapses, the Option
shall lapse one year after the date of the Optionee's death. Upon the
Optionee's death, the Option may be exercised by the Optionee's
beneficiary.
If the Optionee or his beneficiary exercises an Option after termination of
employment, the Option may be exercised only with respect to the shares that
were otherwise vested on the Optionee's termination of employment (including
vesting by acceleration in accordance with Section 5 hereof).
7. Exercise of Option. The Option shall be exercised by written notice
------------------
directed to the Secretary of the Company at the principal executive offices of
the Company, in substantially the form attached hereto as Exhibit A, or such
other form as the Board may approve. Such written notice shall be accompanied
by full payment in cash, shares of Stock previously acquired by the Optionee, or
any combination thereof, for the number of shares specified in such written
notice; provided, however, that if shares of Stock are used to pay the exercise
price, such shares must have been held by the Optionee for at least six months.
The Fair market Value of the surrendered Stock as of the date of the exercise
shall be determined in valuing Stock used in payment of the exercise price. To
the extent permitted under Regulation T of the Federal Reserve Board, and
subject to applicable securities laws, the Option may be exercised through a
broker in a so-called "cashless exercise" whereby the broker sells the Option
shares and delivers cash sales proceeds to the Company in payment of the
exercise price.
Subject to the terms of this Agreement, the Option may be exercised at any
time and without regard to any other option held by the Optionee to purchase
stock of the Company.
8. Limitation of Rights. The Option does not confer to the Optionee or
--------------------
the Optionee's personal representative any rights of a shareholder of the
Company unless and until shares of Stock are in fact issued to such person in
connection with the exercise of the Option. Nothing in this Agreement shall
interfere with or limit in any way the right of the Company or any Subsidiary to
termination the Optionee's employment at any time, nor confer upon the Optionee
any right to continue in the employ or the Company or any Subsidiary.
9. Stock Reserve. The Company shall at all times during the term of this
-------------
Agreement reserve and keep available such number of shares of Stock as will be
sufficient to satisfy the requirements of this Agreement.
10. Optionee's Covenant. The Optionee hereby agrees to use his best
-------------------
efforts to provide services to the Company in a workmanlike manner and to
promote the Company's interests.
-5-
<PAGE>
11. Restrictions on Transfer and Pledge. The Option may not be pledged,
-----------------------------------
encumbered or hypothecated to or in favor of any party other than the Company or
a Subsidiary, or be subject to any lien, obligation or liability of the Optionee
to any other party other than the Company or a Subsidiary. The Option is not
assignable or transferable by the Optionee other than by will or the laws of
descent and distribution or pursuant to a domestic relations order that would
satisfy Section 414(p)(1)(A) of the Code; provided, however, that the Committee
may (but need not) permit other transfers where the Committee concludes that
such transferability is appropriate and desirable, taking into account any
factors deemed relevant, including without limitation, state or federal tax or
securities laws applicable to transferable options. The Option may be exercised
during the lifetime of the Optionee only by the Optionee or any permitted
transferee.
12. Restrictions on Issuance of Shares. If at any time the Board shall
----------------------------------
determine in its discretion, that listing, registration or qualification of the
shares of Stock covered by the Option upon any securities exchange or under any
state or federal law, or the consent or approval of any governmental regulatory
body, is necessary or desirable as a condition to the exercise of the Option,
the Option may not be exercised in whole or in part unless and until such
listing, registration, qualification, consent or approval shall have been
effected or obtained free of any conditions not acceptable to the Board.
13. Successors. This Agreement shall be binding upon any successor of the
----------
Company, in accordance with the terms of this Agreement.
14. Severability. If any one or more of the provisions contained in this
------------
Agreement are invalid, illegal or unenforceable, the other provisions of this
Agreement will be construed and enforced as if the invalid, illegal or
unenforceable provision had never been included.
15. Notice. Notices and communications under this Agreement must be in
------
writing and either personally delivered or sent by registered or certified
United States mail, return receipt requested, postage prepaid. Notices to the
Company must be addressed to:
Harry's Farmers Market, Inc.
1180 Upper Hembree Road
Roswell, Georgia 30076
Attn: Harry A. Blazer
or any other address designated by the Company in a written notice to the
Optionee. Notices to the Optionee will be directed to the address of the
Optionee then currently on file with the Company, or at any other address given
by the Optionee in a written notice to the Company.
-6-
<PAGE>
IN WITNESS WHEREOF, Harry's Farmer's Market, Inc., acting by and through
its duly authorized officers, has caused this Agreement to be executed, and the
Optionee has executed this Agreement, all as of the day and year first above
written.
HARRY'S FARMERS MARKET, INC.
By: /s/ Harry A. Blazer
---------------------
Harry A. Blazer
President
OPTIONEE:
/s/ John D. Branch
---------------------
John D. Branch
-7-
<PAGE>
EXHIBIT A
---------
NOTICE OF EXERCISE OF OPTION TO PURCHASE
COMMON STOCK OF HARRY'S FARMERSMARKET, INC.
Name:__________________________
Address:_______________________
_______________________
Date:__________________________
Harry's Farmers Market, Inc.
1180 Upper Hembree Road
Roswell, Georgia 30076
Attn: Secretary
Re: Exercise of Non-Qualified Stock Option
I elect to purchase _____________ shares of Class A Common Stock of Harry's
Farmers Market, Inc. ("Stock") pursuant to that certain Non-Qualified Stock
Agreement dated April 16, 1999 by and between Harry's Farmers Market, Inc. and
John D. Branch. The purchase will take place on the exercise date which will be
as soon as practicable following the date of this notice and all other necessary
forms and payments are received by the Company, unless I specify a later date
(not to exceed 30 days following the date of this notice).
On or before the exercise date, I will pay the full exercise price in the
form specified below (check one):
Cash Only: by delivering a check to Harry's Farmers Market, Inc. for
---------
$________________.
Cash and Shares: by delivering a check to Harry's Farmers Market,
---------------
Inc. for $_____________ for the part of the exercise price. I will
pay the balance of the exercise price by delivering to the Company a
stock certificate with my endorsement for shares of Company Stock that
I have owned for at least six months. If the number of shares of
Company Stock represented by such stock certificate exceeds the number
needed to pay the exercise price, the Company will issue me a new
stock certificate for the excess.
Shares Only: by delivering to the Company a stock certificate with my
-----------
endorsement for shares of Company Stock that I have owned for at least
<PAGE>
six months. If the number of shares of Company Stock represented by
such stock certificate exceeds the number needed to pay the exercise
price, the Company will issue me a new stock certificate for the
excess.
Cash From Broker: by delivering the purchase price from a broker,
----------------
dealer or other "creditor" as defined by Regulation T issued by the
Board of Governors of the Federal Reserve System (the "Broker"). I
authorize the Company to issue stock certificate in the number of
shares indicated above in the name of the Broker in accordance with
instructions received by the Company from the Broker and to deliver
such stock certificate directly to the Broker (or to any other party
specified in the instructions from the Broker) upon receiving the
exercise price from the Broker.
Please deliver the stock certificate to me (unless I have chosen to pay the
purchase price through a broker).
Very truly yours,
________________________________
John D. Branch
AGREED TO AND ACCEPTED:
HARRY'S FARMERS MARKET, INC.
By:________________________________________
Name:____________________________________
Title:___________________________________
Number of Option Shares Exercised:_________
Number of Option Shares Remaining:_________
Date:______________________________________
-2-
<PAGE>
Exhibit 4.4
HARRY'S FARMERS MARKET, INC.
NON-QUALIFIED STOCK OPTION AGREEMENT
Optionee: Robert C. Glustrom
---------------------------------------------------
Number of Shares Subject to Option: 50,000
-------------------------
Exercise Price per Share: $ .9688
-----------------------------------
Date of Grant: December 13, 1999
----------------------------------------------
1. Grant of Option. Harry's Farmers Market, Inc. (the "Company") hereby
---------------
grants to the Optionee named above (the "Optionee") a Non-Qualified Stock Option
to purchase, on the terms and conditions set forth in this Agreement, the number
of shares indicated above of the Company's Class A Common Stock (the "Stock") at
the exercise price per share set forth above (the "Option"). The Option is not
granted under the Company's 1996 Director Stock Option Plan (the "Plan") or any
other established plan of the Company. However, capitalized terms used herein
and not otherwise defined shall have the meanings assigned to such terms in the
Plan.
2. Vesting of Option. The Option shall vest (become exercisable)
-----------------
immediately upon the issuance of the Option.
3. Period of Option and Limitations on Right to Exercise. The Option
-----------------------------------------------------
will, to the extent not previously exercised, lapse under the earliest of the
following circumstances; provided, however, that the Committee may, prior to the
lapse of the Option under the circumstances described in paragraphs (b), (c) and
(d) below, provide in writing that the Option will extend until a later date:
(a) The Option shall lapse as of 5:00 p.m., Eastern Time, on the fifth
anniversary of the date of grant (the "Expiration Date").
(b) The Option shall lapse three months after the Optionee ceases to be
a Director of the Company for any reason other than the Optionee's death or
Disability.
(c) If the Optionee ceases to be a Director of the Company by reason of
Disability, the Option shall lapse one year after the date the Optionee
ceases to be a Director of the Company.
(d) If the Optionee dies while serving as a Director, or during the
three-month period described in subsection (b) above or during the one-year
period described in subsection (c) above and before the Option otherwise
lapses,
<PAGE>
the Option shall lapse one year after the date of the Optionee's death.
Upon the Optionee's death, the Option may be exercised by the Optionee's
beneficiary.
If the Optionee or his beneficiary exercises an Option after the Optionee
ceases to be a Director of the Company, the Option may be exercised only with
respect to the shares that were otherwise vested at the time the Optionee ceased
to be a Director of the Company.
4. Exercise of Option. The Option shall be exercised by written notice
------------------
directed to the Secretary of the Company at the principal executive offices of
the Company, in substantially the form attached hereto as Exhibit A, or such
---------
other form as the Board may approve. Unless the exercise is a broker assisted
"cashless exercise" as described below, such written notice shall be accompanied
by full payment in cash, shares of Stock previously acquired by the Optionee, or
any combination thereof, for the number of shares specified in such written
notice; provided, however, that if shares of Stock are used to pay the exercise
price, such shares must have been held by the Optionee for at least six months.
The Fair Market Value of the surrendered Stock as of the last trading day
immediately prior to the date of the exercise shall be used in valuing Stock
used in payment of the exercise price. To the extent permitted under Regulation
T of the Federal Reserve Board, and subject to applicable securities laws, the
Option may be exercised through a broker in a so-called "cashless exercise"
whereby the broker sells the Option shares and delivers cash sales proceeds to
the Company in payment of the exercise price. In such case, the date of
exercise shall be deemed to be the date on which notice of exercise is received
by the Company and the exercise price shall be delivered to the Company on the
settlement date.
Subject to the terms of this Agreement, the Option may be exercised at any
time and without regard to any other option held by the Optionee to purchase
stock of the Company.
5. Beneficiary Designation. The Optionee, by written notice to the
-----------------------
Committee, may designate one or more persons (and from time to time change such
designation) including the Optionee's legal representative, who, by reason of
the Optionee's death, shall acquire the right to exercise all or a portion of
the Option. If no beneficiary has been designated or survives the Optionee, the
Option may be exercised by the personal representative of the Optionee's estate.
If the person with exercise rights desires to exercise any portion of the
Option, such person must do so in accordance with the terms and conditions of
this Agreement.
6. Withholding. The Company has the authority and the right to deduct or
-----------
withhold, or require the Optionee to remit to the Company, an amount sufficient
to satisfy federal, state and local taxes (including the Optionee's FICA
obligation) required by law to be withheld with respect to any taxable event
arising as a result of the exercise of the Option. Such withholding required
may be satisfied, in whole or in part, at the election of the Company, by
withholding shares of Stock from the Option having a Fair Market Value on the
date of withholding equal to the minimum amount (and not any greater
-2-
<PAGE>
amount) required to be withheld for tax purposes, all in accordance with such
procedures as the Committee establishes.
7. Limitation of Rights. The Option does not confer to the Optionee or
--------------------
the Optionee's personal representative any rights of a shareholder of the
Company unless and until shares of Stock are in fact issued to such person in
connection with the exercise of the Option.
8. Stock Reserve. The Company shall at all times during the term of this
-------------
Agreement reserve and keep available such number of shares of Stock as will be
sufficient to satisfy the requirements of this Agreement.
9. Restrictions on Transfer and Pledge. The Option may not be pledged,
-----------------------------------
encumbered or hypothecated to or in favor of any party other than the Company or
a Parent or Subsidiary, or be subject to any lien, obligation or liability of
the Optionee to any other party other than the Company or a Parent or
Subsidiary. The Option is not assignable or transferable by the Optionee other
than by will or the laws of descent and distribution or pursuant to a domestic
relations order that would satisfy Section 414(p)(1)(A) of the Code; provided,
however, that the Committee may (but need not) permit other transfers where the
Committee concludes that such transferability (i) does not result in accelerated
taxation and (ii) is otherwise appropriate and desirable, taking into account
any factors deemed relevant, including without limitation, state or federal tax
or securities laws applicable to transferable options. The Option may be
exercised during the lifetime of the Optionee only by the Optionee or any
permitted transferee.
10. Restrictions on Issuance of Shares. If at any time the Board shall
----------------------------------
determine, in its discretion, that listing, registration or qualification of the
shares of Stock covered by the Option upon any securities exchange or under any
state or federal law, or the consent or approval of any governmental regulatory
body, is necessary or desirable as a condition to the exercise of the Option,
the Option may not be exercised in whole or in part unless and until such
listing, registration, qualification, consent or approval shall have been
effected or obtained free of any conditions not acceptable to the Board.
11. Successors. This Agreement shall be binding upon any successor of the
----------
Company, in accordance with the terms of this Agreement.
12. Severability. If any one or more of the provisions contained in this
------------
Agreement are invalid, illegal or unenforceable, the other provisions of this
Agreement will be construed and enforced as if the invalid, illegal or
unenforceable provision had never been included.
13. Notice. Notices and communications under this Agreement must be in
------
writing and either personally delivered or sent by registered or certified
United States mail, return receipt requested, postage prepaid. Notices to the
Company must be addressed to:
-3-
<PAGE>
Harry's Farmers Market, Inc.
1180 Upper Hembree Road
Roswell, Georgia 30076
Attn: Harry A. Blazer
or any other address designated by the Company in a written notice to the
Optionee. Notices to the Optionee will be directed to the address of the
Optionee then currently on file with the Company, or at any other address given
by the Optionee in a written notice to the Company.
[Signatures on Following Page]
-4-
<PAGE>
IN WITNESS WHEREOF, Harry's Farmer's Market, Inc., acting by and through
its duly authorized officers, has caused this Agreement to be executed, and the
Optionee has executed this Agreement, all as of the day and year first above
written.
HARRY'S FARMERS MARKET, INC.
By: /s/ Harry A. Blazer
--------------------------------
Name: Harry A. Blazer
Title: President
OPTIONEE:
/s/ Robert C. Glustrom
--------------------------------
Robert C. Glustrom
-5-
<PAGE>
EXHIBIT A
---------
NOTICE OF EXERCISE OF OPTION TO PURCHASE
CLASS A COMMON STOCK OF HARRY'S FARMERS MARKET, INC.
Name:_______________________________
Address:____________________________
____________________________
Date:_______________________________
Harry's Farmers Market, Inc.
1180 Upper Hembree Road
Roswell, Georgia 30076
Attn: Secretary
Re: Exercise of Non-Qualified Stock Option
I elect to purchase _____________ shares of Class A Common Stock (the
"Stock") of Harry's Farmers Market, Inc. (the "Company") pursuant to that
certain Non-Qualified Stock Agreement dated _____________ by and between Harry's
Farmers Market, Inc. and Robert C. Glustrom. The purchase will take place on
the exercise date, which will be (i) as soon as practicable following the date
of this notice and all other necessary forms and payments are received by the
Company, unless I specify a later date (not to exceed 30 days following the date
of this notice), or (ii) in the case of a broker-assisted cashless exercise (as
indicated below), the date of this notice.
On or before the exercise date (or, in the case of a broker-assisted
cashless exercise, on the settlement date following the exercise date), I will
pay the full exercise price in the form specified below (check one):
[ ] Cash Only: by delivering a check to the Company for
---------
$________________.
[ ] Cash and Shares: by delivering a check to the Company for
---------------
$_____________ for the part of the exercise price. I will pay the
balance of the exercise price by delivering to the Company a stock
certificate with my endorsement for shares of Stock of the Company
that I have owned for at least six months. If the number of shares
of Stock represented by such stock certificate exceeds the number
needed to pay the exercise price, the Company will issue me a new
stock certificate for the excess.
<PAGE>
[ ] Shares Only: by delivering to the Company a stock certificate with
-----------
my endorsement for shares of Stock of the Company that I have owned
for at least six months. If the number of shares of Stock of the
Company represented by such stock certificate exceeds the number
needed to pay the exercise price, the Company will issue me a new
stock certificate for the excess.
[ ] Cash From Broker: by delivering the purchase price from __________,
----------------
a broker, dealer or other "creditor" as defined by Regulation T
issued by the Board of Governors of the Federal Reserve System (the
"Broker"). I authorize the Company to issue a stock certificate in
the number of shares indicated above in the name of the Broker in
accordance with instructions received by the Company from the Broker
and to deliver such stock certificate directly to the Broker (or to
any other party specified in the instructions from the Broker) upon
receiving the exercise price from the Broker.
On or before the Exercise Date, I will pay satisfy any applicable tax
withholding obligations in the form specified below (check one):
[ ] Cash Only: by delivering a check to the Company for the full tax
---------
withholding amount.
[ ] Cash and Shares: by delivering a check to the Company for
---------------
$_______________, for part of the tax withholding amount. I will pay
the balance of the tax withholding amount by delivering to the
Company a stock certificate with my endorsement for shares of Stock
of the Company that I have owned for at least six months. If the
number of shares of Stock of the Company represented by such stock
certificate exceeds the number needed to pay the tax withholding
amount, the Company will issue me a new stock certificate for the
excess.
[ ] Shares Only: by delivering to the Company a stock certificate with
-----------
my endorsement for shares of Stock of the Company that I have owned
for at least six months. If the number of shares of Stock of the
Company represented by such stock certificate exceeds the number
needed to pay the tax withholding amount, the Company will issue me
a new stock certificate for the excess.
[ ] Withholding of Shares to Cover Minimum Obligation: by having the
-------------------------------------------------
Company withhold shares of Stock from the Option having a Fair
Market Value on the date of withholding equal to the minimum amount
(and not any greater amount) required to be withheld for tax
purposes. Only whole shares may be withheld. I will satisfy any
excess withholding amount by delivering a check to the Company for
the remainder of the tax withholding amount.
-2-
<PAGE>
Please deliver the stock certificate to me (unless I have chosen to pay
the purchase price through a Broker).
Very truly yours,
_________________________________
Robert C. Glustrom
AGREED TO AND ACCEPTED:
HARRY'S FARMERS MARKET, INC.
By:______________________________
Name:____________________________
Title:___________________________
Number of Option Shares Exercised:___________
Number of Option Shares Remaining:___________
Date:________________________________________
-3-
<PAGE>
Exhibit 4.5
HARRY'S FARMERS MARKET, INC.
CHARLES SAPP
Non-Employee Director
NON-QUALIFIED STOCK OPTION AGREEMENT
THIS AGREEMENT is made and entered into this 5th day of February, 1999 (the
"Grant Date") by and between HARRY'S FARMERS MARKET, INC., a Georgia corporation
(the "Company"), and CHARLES SAPP ("Grantee").
Background
A. Grantee is a non-employee director of the Company and is not at the
present time eligible to receive stock options, restricted stock and other
stock-based awards from the Company other than as currently set forth under the
terms of the Company's 1996 Director Stock Option Plan (the "Plan"). Although
granted outside of the Plan, the option represented by this Agreement is
intended to be generally consistent with the terms and conditions of the Plan.
Therefore, for purposes of reference only, and not to imply that the option
granted hereby is governed by or issued under the Plan, capitalized terms used
herein and not defined in context are defined in Section 6.11 hereof or in the
Plan.
B. The Company and Grantee wish to confirm herein the terms, conditions,
and restrictions of the option.
C. For and in consideration of the premises, the mutual covenants
contained herein, and other good and valuable consideration, the parties hereto
agree:
Article 1
Grant and Exercise of Option
1.1 Grant of Option. Subject to the terms, restrictions, limitations, and
---------------
conditions stated herein, the Company hereby grants to Grantee a non-qualified
option (the "Option") to purchase all or any part of 10,000 shares of Class A
Common Stock, no par value per share (the "Option Shares"). This Option is
intended to be a non-qualified stock option.
1.2 Exercise of Option.
------------------
(a) Except as provided in Section 1.4 below, the Option may be
exercised during the Option Period (as defined in Section 1.4) only to the
extent of the number of Option Shares that are then vested ("Vested
Shares") as determined pursuant to the vesting schedule attached hereto as
Schedule I.
<PAGE>
(b) The Option may be exercised with respect to all or any portion of
the Vested Shares at any time during the Option Period by the delivery to
the Company, at its principal place of business, of (i) a written notice of
exercise, in substantially the form attached hereto as Exhibit A (or such
other form as shall be required by the Board of Directors or as otherwise
permitted by the Board of Directors), prior to the date upon which Grantee
desires to exercise all or any portion of the Option (the "Exercise Date");
(ii) payment in full of the amount of the Option Exercise Price multiplied
by the number of Option Shares being purchased (the "Purchase Price") in
any manner permitted under Section 1.2(c) below; and (iii) a certified or
cashier's check payable to the Company in the amount of all withholding tax
obligations, if any (whether federal, state or local), imposed on the
Company by reason of the exercise of the Option. Upon acceptance of such
notice, receipt of payment in full, and receipt of payment of all
withholding tax obligations, if any, the Company shall cause a certificate
representing the shares of Common Stock purchased to be issued and
delivered to Grantee.
(c) The Purchase Price may be paid in any of the following methods:
(i) in cash
(ii) by certified or cashier's check or money order payable to
the Company (or the equivalent thereof acceptable to the Board of
Directors);
(iii) with the consent of the Board of Directors in its sole
discretion, by personal check (subject to collection), which may in
the Board of Director's sole discretion be deemed conditional;
(iv) at the option of the Grantee, in Common Stock theretofore
owned by the Grantee; provided; however, that if the Grantee acquired
such stock to be surrendered directly or indirectly from the Company,
he shall have owned such stock for six months prior to using such
stock to exercise this Option and, provided, further, that such
exercise transaction shall not result in a violation of Section 16 of
the Securities Exchange Act of 1934, as amended (the "Exchange Act").
For purposes of determining the amount, if any, of the exercise price
satisfied by payment in Common Stock, such Common Stock shall be
valued at its Fair Market Value on the date of exercise. Any Common
Stock delivered in satisfaction of all or a portion of the exercise
price shall be appropriately endorsed for transfer and assignment to
the Company; or
(v) any combination of the above.
-2-
<PAGE>
1.3 Option Exercise Price. The price for each share of Common Stock for
---------------------
which the Option is exercised is US $1.04 (the "Option Exercise Price").
1.4 Term and Termination of Option.
------------------------------
(a) Except as otherwise provided herein, the period in which the
Option may be exercised as to any Vested Shares (the "Option Period") shall
commence on the date such shares become Vested Shares and terminate at 5:00
p.m. Eastern Time on the date of the first to occur of the following
events:
(i) February 5, 2004
(ii) If Grantee ceases to be a Director of the Company for any
reason other than as provided in paragraph (iii) or (iv) below, the
Option shall lapse, unless it is previously exercised, thirty (30)
days after Grantee's position as a Director of the Company terminates.
(iii) If Grantee ceases to be a Director of the Company by
reason of his mental or physical disability determined by a medical
doctor satisfactory to the Company, the Option shall lapse, unless it
is previously exercised, within one year after the date that the
Grantee's position as a Director of the Company terminates.
(iv) If Grantee dies while serving as a Director, or during the
30-day period described in paragraph (ii) and before the Option
otherwise lapses, the Option shall lapse one year after Grantee's
death. Upon Grantee's death, any exercisable Options may be exercised
by Grantee's legal representative or representatives, by the person or
persons entitled to do so under Grantee's last will and testament, or,
if Grantee shall fail to make testamentary disposition of such Option
or shall die intestate, by the person or persons entitled to receive
such Option under the applicable laws of descent and distribution.
If Grantee exercises the Option after the Grantee's position as a
Director terminates, the Option may be exercised only with respect to the
shares that were otherwise vested on the date that the Grantee's position
as a Director of the Company terminates. Upon the expiration of the Option
Period, this Option, and all unexercised rights granted to Grantee
hereunder, shall terminate as to all Vested Shares to which the Option
Period relates, and thereafter be null and void.
(b) The Board of Directors of the Company in its sole discretion may,
by giving written notice to the Grantee ("Cancellation Notice"), cancel,
effective upon the date of a Change in Control, any portion of the Option
that remains
-3-
<PAGE>
unexercised on such date. Such Cancellation Notice shall be given to the
Grantee at least ten (10) days prior to the date of cancellation.
1.5 No Rights as Stockholder. Grantee shall have no rights as a
------------------------
stockholder with respect to any Option Shares until the issuance of a stock
certificate to him for such shares. Except as otherwise provided in Section 1.6
below, no adjustment shall be made for dividends, distributions or other rights
(whether ordinary or extraordinary, and whether in cash, securities or other
property) for which the record date is prior to the date such stock certificate
is issued.
1.6 Changes in Capitalization.
-------------------------
(a) If at any time there shall be an increase or decrease in the
number of issued an outstanding shares of Common Stock of the Company,
through the declaration of a stock dividend or through any recapitalization
resulting in a stock split-up, combination or exchange of shares of Common
Stock, then appropriate proportional adjustment shall be made in the number
of Option Shares (and, with respect to the Option Shares, the Option
Exercise Price) subject to this Option still outstanding.
(b) In the event of a merger, consolidation or other reorganization of
the Company under the terms of which the Company is not the surviving
corporation, but the surviving corporation elects to assume this Option,
the Grantee shall be entitled to receive, upon the exercise of the Option,
with respect to each Option Share: (i) the number of shares of stock of the
surviving corporation (or equity interest in any other entity); and (ii)
any other notes, evidences of indebtedness or other property, that the
Grantee would have received in connection with such merger, consolidation
or other reorganization had he exercised the Option immediately prior to
such merger, consolidation or other reorganization.
(c) Except as otherwise expressly provided herein, the issuance by the
Company of shares of its capital stock of any class or securities
convertible into shares of capital stock of any class, either in connection
with direct sale or upon the exercise of rights or warrants to subscribe
therefor, or upon conversion of shares or obligations of the Company
convertible into such shares or other securities, shall not affect and no
adjustment by reason thereof shall be made with respect to, the number of
Option Shares then outstanding or the Option Exercise Price.
(d) Without limiting the generality of the foregoing, the existence of
outstanding Options under this Agreement shall not affect in any manner the
right or power of the Company to make, authorize or consummate: (i) any or
all adjustments, recapitalizations, reorganizations or other changes in the
Company's
-4-
<PAGE>
capital structure or its business; (ii) any merger or consolidation of the
Company; (iii) any issuance by the Company of debt securities or preferred
stock that would rank above the Option Shares subject to outstanding
Options; (iv) the dissolution or liquidation of the Company; (v) any sale,
transfer or assignment of all or any part of the assets or business of the
Company; or (vi) any other corporate act or proceeding, whether of a
similar character or otherwise.
Article 2
Restriction on Transfer of Option
The Option evidenced hereby is not assignable or otherwise transferable,
except to members of the Grantee's immediate family or by will or the laws of
descent and distribution.
Article 3
Legends
3.1 Legends. Each certificate representing the Option Shares purchased
-------
upon exercise of this Option shall be endorsed with the following legend and
Grantee shall not make any transfer of the Option Shares without first complying
with the restrictions on transfer described in such legend:
THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED,
ASSIGNED, OR HYPOTHECATED UNLESS (1) THERE IS AN EFFECTIVE REGISTRATION
UNDER SUCH ACT COVERING SUCH SECURITIES, (2) THE TRANSFER IS MADE IN
COMPLIANCE WITH RULE 144 PROMULGATED UNDER SUCH ACT, OR (3) THE ISSUER
RECEIVES AN OPINION OF COUNSEL, REASONABLY SATISFACTORY TO THE COMPANY,
STATING THAT SUCH SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT
FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT.
THE SECURITIES HAVE BEEN ISSUED OR SOLD IN RELIANCE ON ONE OR MORE
EXEMPTIONS FROM REGISTRATION UNDER APPLICABLE STATE SECURITIES LAWS, AND
MAY NOT BE SOLD OR TRANSFERRED EXCEPT IN A TRANSACTION WHICH IS EXEMPT
UNDER SUCH LAWS OR PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
SUCH LAWS.
Grantee agrees that the Company may also endorse any other legends required
by applicable federal or state securities laws.
-5-
<PAGE>
The Company shall not be required to transfer on its books any Option
Shares that have been sold or transferred in violation of the provisions of this
Agreement (including the foregoing legends).
3.2 Removal of Legend and Transfer Restrictions.
-------------------------------------------
(a) Any legend endorsed on a certificate pursuant to Section 3.1
hereof and the stop transfer instructions with respect to the Option Shares
shall be removed and the Company shall issue a certificate without such
legend to the holder thereof if such Option Shares are registered under the
Securities Act of 1933, as amended (the "Securities Act") and a prospectus
meeting the requirements of Section 10 of the Securities Act is available.
(b) The restrictions described in the second sentence of the legend
set forth in Section 3.1 hereof may be removed at such time as permitted by
Rule 144 promulgated under the Securities Act.
Article 4
Purchase for Investment
As a condition of any issuance of a stock certificate for the Option
Shares, the Board of Directors may obtain such agreements or undertakings, if
any, as it may deem necessary or advisable to assure compliance with any
provision of this Agreement or any law or regulation, including, but not limited
to, the following:
(a) a representation and warranty by the Grantee to the Company, at
the time this Option is exercised, that the Grantee is acquiring the Option
Shares to be issued to him for investment and not with a view to, or for
sale in connection with, the distribution of any such Option Shares; and
(b) a representation, warranty or agreement to be bound by any legends
that are, in the opinion of the Board of Directors, necessary or
appropriate to comply with the provisions of any securities law deemed by
the Board to be applicable to the issuance of the Option Shares and are
endorsed upon the certificates representing the Option Shares.
Article 5
General Provisions
5.1 Governing Laws. This Agreement shall be construed, administered and
--------------
enforced according to the laws of the State of Georgia.
-6-
<PAGE>
5.2 Successors. This Agreement shall be binding upon and inure to the
----------
benefit of the heirs, legal representatives, successors, and permitted assigns
of the parties.
5.3 Notice. Except as otherwise specified herein, all notices and other
------
communications under this Agreement shall be in writing and shall be deemed to
have been given if personally delivered, if mailed by overnight delivery or if
sent by registered or certified United States mail, return receipt requested,
postage prepaid, addressed to the proposed recipient at the last known address
of the recipient. In each case, each notice or other communication shall be
deemed to have been received on the earlier of the date of actual receipt or the
date that is three (3) days after the date on which such notice or other
communication was mailed or sent. Any party may designate any other address to
which notices shall be sent by giving notice of the address to the other parties
in the same manner as provided herein.
5.4 Severability. In the event that any one or more of the provisions or
------------
portion thereof contained in this Agreement shall for any reason be held to be
invalid, illegal, or unenforceable in any respect, the same shall not invalidate
or otherwise affect any other provisions of this Agreement, and this Agreement
shall be construed as if the invalid, illegal or unenforceable provision or
portion thereof had never been contained herein.
5.5 Entire Agreement. This Agreement expresses the entire understanding
----------------
and agreement of the parties with respect to the subject matter hereof. This
Agreement may be executed in two or more counterparts, each of which shall be
deemed an original but all of which shall constitute one and the same
instrument.
5.6 Violation. Except as provided herein, any transfer, pledge, sale,
---------
assignment, or hypothecation of the Option or any portion thereof or of any
Option Shares issued upon exercise hereof shall be a violation of the terms of
this Agreement and shall be void and without effect.
5.7 Headings. Paragraph headings used herein are for convenience of
--------
reference only and shall not be considered in construing this Agreement.
5.8 Specific Performance. In the event of any actual or threatened
--------------------
default in, or breach of, any of the terms, conditions and provisions of this
Agreement, the party or parties who are thereby aggrieved shall have the right
to specific performance and injunction in addition to any and all other rights
and remedies at law or in equity, and all such rights and remedies shall be
cumulative.
5.9 No Rights to Continued Directorship. The grant of the Option
-----------------------------------
hereunder shall not be construed as giving Grantee the right to continue to
serve as a Director of the Company or any Affiliate of the Company.
-7-
<PAGE>
5.10 Certain Definitions. The capitalized terms listed below are used
-------------------
herein with the meaning thereafter ascribed:
(a) "Change of Control" shall be deemed to have occurred if (i) a
tender offer shall be made and consummated for the ownership of 25% or more
of the outstanding voting securities of the Company, (ii) the Company shall
be merged or consolidated with another corporation and as a result of such
merger or consolidation less than 50% of the outstanding voting securities
of the surviving or resulting corporation shall be owned in the aggregate
by the former shareholders of the Company, (iii) the Company shall sell at
least 75% of its assets by value in a single transaction or in a series of
transactions to another corporation which is not a wholly-owned subsidiary
of the Company, or (iv) a person, within the meaning of Section 3(a)(9) or
of Section 13(d)(3) (as in effect on the date hereof) of the Exchange Act,
shall acquire 50% or more of the outstanding voting securities of the
Company(whether directly, indirectly, beneficially or of record). For
purposes hereof, ownership of voting securities shall take into account and
shall include ownership as determined by applying the provisions of Rule
13d-3(d)(1)(i) (as in effect on the date hereof) pursuant to the Exchange
Act.
(b) "Board of Directors" means the Board of Directors of the Company.
(c) "Common Stock" means the Class A Common Stock, no par value per
share, of the Company.
IN WITNESS WHEREOF, the parties have executed and sealed this Agreement on
the day and year first set forth above.
HARRY'S FARMERS MARKET, INC.
By: /s/ Harry A. Blazer
------------------------
Harry A. Blazer
Title: President
GRANTEE:
/s/ Charles Sapp
------------------------
Charles Sapp
-8-
<PAGE>
EXHIBIT A
TO
CHARLES SAPP
NON-EMPLOYEE DIRECTOR
NON-QUALIFIED STOCK OPTION AGREEMENT
HARRY'S FARMERS MARKET, INC.
Notice of Exercise
------------------
Name_____________________________________
Address__________________________________
_________________________________________
Date_____________________________________
Harry's Farmers Market, Inc.
1180 Upper Hembree Road
Roswell, Georgia 30076
Re: Exercise of Stock Option
Gentlemen:
I hereby give notice of my election to exercise options granted to me to
purchase ________ shares of Class A common stock (the "Common Stock") of Harry's
Farmers Market, Inc. (the "Company") under the Charles Sapp Non-Employee
Director Non-Qualified Stock Option Agreement dated February 5, 1999 (the
"Agreement"). The purchase shall take place as of ___________ (the "Exercise
Date").
On or before the Exercise Date, I will present you with proper payment in
the form of _______________________ for $__________ for the full purchase price
payable to the order of the Company.
I hereby represent, warrant, covenant, and agree with the Company as
follows:
The shares of the Common Stock being acquired by me will be acquired
for my own account without the participation of any other person, with the
intent of holding the Common Stock for investment and without the intent of
participating, directly or indirectly, in a distribution of the Common
Stock and not with a view to, or for resale in connection with, any
distribution of the Common Stock, nor am I aware of the existence of any
distribution of the Common Stock;
I am not acquiring the Common Stock based upon any representation,
oral or written, by any person with respect to the future value of, or
income from, the
Exhibit A to Non-Qualified Stock Option Agreement-Page 1
<PAGE>
Common Stock but rather upon an independent examination and judgment as to
the prospects of the Company;
The Common Stock was not offered to me by means of publicly
disseminated advertisements or sales literature, nor am I aware of any
offers made to other persons by such means;
I am able to bear the economic risks of the investment in the Common
Stock including the risk of a complete loss of my investment therein;
I understand and agree that the Common Stock will be issued and sold
to me without registration under any state law relating to the registration
of securities for sale, and will be issued and sold in reliance on the
exemptions from registration under the Securities Act of 1933 (the "1933
Act"), provided by Sections 3(b) and/or 4(2) thereof and the rules and
regulations promulgated thereunder;
The Common Stock cannot be offered for sale, sold or transferred by me
other than pursuant to: (A) an effective registration under the 1933 Act or
in a transaction, otherwise in compliance with the 1933 Act; and (B)
evidence satisfactory to the Company of compliance with the applicable
securities laws of other jurisdictions. The Company shall be entitled to
rely upon an opinion of counsel satisfactory to it with respect to
compliance with the above laws;
The Company will be under no obligation to register the Common Stock
or comply with any exemption available for sale of the Common Stock without
registration or filing, and the information or conditions necessary to
permit routine sale of securities of the Company under Rule 144 of the 1933
Act are not now available and no assurance has been given that it or they
will become available. The Company is under no obligation to act in any
manner so as to make Rule 144 available with respect to the Common Stock;
I have and have had complete access to and the opportunity to review
and make copies of all material documents related to the business of the
Company, including, but not limited to, contracts, financial statements,
tax returns, leases, deeds and other books and records. I have examined
such of these documents as I wished and am familiar with the business and
affairs of the Company. I realize that purchase of the Common Stock is a
speculative investment and that any possible profit therefrom is uncertain;
I have had the opportunity to ask questions of and receive answers
from the Company and any person acting on its behalf and to obtain all
material informal reasonably available with respect to the Company and its
affairs. I have received all information and data with respect to the
Company which I have requested and which I have deemed relevant in
connection with the evaluation of the merits and risks of investment in the
Company;
Exhibit A to Non-Qualified Stock Option Agreement-Page 2
<PAGE>
I have such knowledge and experience in financial and business matters
that I am capable of evaluating the merits and risks of the purchase of the
Common Stock hereunder and I am able to bear the economic risk of such
purchase; and
The agreements, representations, warranties, and covenants made by me
herein extend to and apply to all of the Common Stock of the Company issued
to me pursuant to this Option. Acceptance by me of the certificate
representing such Common Stock shall constitute a confirmation by me that
all such agreements, representations, warranties, and covenants made herein
shall be true and correct at that time.
I understand that the certificates representing the shares being purchased
by me in accordance with this notice shall bear a legend referring to the
foregoing covenants, representations and warranties and restrictions on
transfer, and I agree that a legend to that effect may be placed on any
certificate which may be issued to me as a substitute for the certificates being
acquired by me in accordance with this notice.
Very truly yours,
____________________________
AGREED TO AND ACCEPTED:
HARRY'S FARMERS MARKET, INC.
By:______________________
Title:___________________
Number of Shares
Exercised:_______________
Number of Shares
Remaining:_______________ Date:_______________________
Exhibit A to Non-Qualified Stock Option Agreement-Page 3
<PAGE>
SCHEDULE 1
to Harry's Farmers Market, Inc.
Non-Qualified Stock Option Agreement
with Charles Sapp
for 10,000 Shares
Vesting Schedule
----------------
No. of Option Shares No. of Option Shares
Vesting Date Vested on the Vesting Date Cumulatively Vested
Grant Date 10,000 10,000
<PAGE>
Exhibit 5
Opinion of Alston & Bird LLP
<PAGE>
[LETERHEAD OF ALSTON & BIRD]
May 3, 2000
Harry's Farmers Market, Inc.
1180 Upper Hembree Road
Roswell, Georgia 30076
Re: Form S-8 Registration Statement --
Grants of Stock Options to John D. Branch, Robert C. Glustrom
and Charles W. Sapp
Ladies and Gentlemen:
We have acted as counsel for Harry's Farmers Market, Inc., a Georgia
corporation (the "Corporation"), in connection with the referenced Registration
Statement on Form S-8 (the "Registration Statement") being filed by the
Corporation with the Securities and Exchange Commission (the "Commission") under
the Securities Act of 1933, as amended, and covering 285,000 shares of the
Corporation's Class A Common Stock, no par value ("Common Stock"), that may be
issued upon exercise of stock options granted to John D. Branch, Robert C.
Glustrom and Charles W. Sapp. This Opinion Letter is rendered pursuant to Item
8 of Form S-8 and Item 601(b)(5) of Regulation S-K.
In the capacity described above, we have considered such matters of law and
of fact, including the examination of originals or copies, certified or
otherwise identified to our satisfaction, of such records and documents of the
Corporation, certificates of public officials and such other documents as we
have deemed appropriate as a basis for the opinions hereinafter set forth. The
opinions set forth herein are limited to the laws of the State of Georgia.
Based upon the foregoing, it is our opinion that the 285,000 shares of
Common Stock covered by the Registration Statement and to be issued upon
exercise of the Options, when issued in accordance with the terms and conditions
of the Option Agreements under which they were granted, will be legally and
validly issued, fully paid and nonassessable.
This Opinion Letter is provided to you for your benefit and for the benefit
of the Commission, in each case, solely with regard to the Registration
Statement, may be relied upon by you and the Commission only in connection with
the Registration Statement, and may not be relied upon by any other person or
for any other purpose without our prior written consent.
<PAGE>
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and further consent to the use of our name wherever
appearing in the Registration Statement.
Sincerely,
ALSTON & BIRD LLP
By: /s/ Laura G. Thatcher
---------------------
A Partner
-2-
<PAGE>
Exhibit 23.2
Consent of Grant Thornton LLP
<PAGE>
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
We have issued our report dated March 31, 2000 accompanying the
consolidated financial statements of Harry's Farmers Market, Inc. and
Subsidiaries included in the Annual Report on Form 10-K for the year ended
February 2, 2000 which is incorporated by reference in this Registration
Statement. We consent to the incorporation by reference in the Registration
Statement of the aforementioned report.
/s/ GRANT THORNTON LLP
----------------------
GRANT THORNTON LLP
Atlanta, Georgia
May 1, 2000.
-xiii-
