<PAGE> 1
As filed with the Securities and Exchange Commission on June 18, 1996
Registration No. 333-_____
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
__________
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
___________
FRIEDMAN'S INC.
(Exact name of registrant as specified in its charter)
DELAWARE 58-2058362
(State of incorporation) (IRS Employer Identification No.)
4 WEST STATE STREET
SAVANNAH, GEORGIA 31401
(Address of Principal Executive Offices) (Zip Code)
FRIEDMAN'S INC.
1995 STOCK OPTION PLAN
(Full title of the plan)
BRADLEY J. STINN
CHAIRMAN OF THE BOARD OF DIRECTORS
FRIEDMAN'S INC.
4 WEST STATE STREET
SAVANNAH, GEORGIA 31401
(912) 233-9333
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
COPY TO:
M. HILL JEFFRIES
ALSTON & BIRD
ONE ATLANTIC CENTER
1201 WEST PEACHTREE STREET
ATLANTA, GEORGIA 30309-3424
(404) 881-7000
-----------------------------
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
==========================================================================================================
TITLE OF PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
SECURITIES TO AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING REGISTRATION
BE REGISTERED REGISTERED (1) SHARE (2) PRICE FEE
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A Common Stock, $.01 par value 102,050 $ 19.50 $ 1,989,975 $ 687
- ------------------------------------ ----------- ----------- ------------- ----------
Class A Common Stock, $.01 par value 1,000 $ 18.50 $ 18,500 $ 7
- ------------------------------------ ----------- ----------- ------------- ----------
Class A Common Stock, $.01 par value 500 $ 17.25 $ 8,625 $ 3
- ------------------------------------ ----------- ----------- ------------- ----------
Class A Common Stock, $.01 par value 16,450 $ 26.000 $ 427,700 $148
- ------------------------------------ ----------- ----------- ------------- ----------
Total 120,000 $ 2,455,081 $845
- ----------------------------------------------------------------------------------------------------------
</TABLE>
(1) This Registration Statement also covers any additional shares that may
hereafter become purchasable as a result of the adjustment provisions of
the Friedman's Inc. 1995 Stock Option Plan (the "Plan").
(2) Determined in accordance with Rule 457(h), the registration fee is based
on the average option price per share for shares presently subject to
options and, for those shares not presently subject to options, on the
average of the high and low prices of the Registration's Class A Common
Stock reported on The Nasdaq Stock Market's National Market on June 14,
1996.
<PAGE> 2
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed by Friedman's Inc. (the "Company") with the
Securities and Exchange Commission (the "Commission") are incorporated herein
by reference:
(a) The Company's Annual Report on Form 10-K for the fiscal year ended
September 30, 1995.
(b) All other reports filed pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934 since the end of the fiscal year covered by the
document incorporated pursuant to (a) above.
(c) The description of the Class A Common Stock, $.01 par value per share,
of the Company which is contained in a registration statement filed under
Section 12 of the Securities Exchange Act of 1934, including any amendment or
report filed for the purpose of updating such description.
All documents subsequently filed by the Company pursuant to Sections
13(a), 13(c), 14, and 15(d) of the Securities Exchange Act of 1934 prior to the
filing of a post-effective amendment which indicates that all securities
offered have been sold or which deregisters all securities then remaining
unsold, shall be deemed to be incorporated by reference herein and to be a part
hereof from the date of the filing of such documents.
ITEM 4. DESCRIPTION OF SECURITIES. Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
The legality of the issuance the securities being registered has been
passed upon for the Company by the law firm of Alston & Bird.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the General Corporation Law of the State of Delaware
empowers a Delaware corporation to indemnify present and former directors,
officers, employees or agents of the corporation. Article Ninth of the
Certificate of Incorporation, as amended, of the Company provides:
NINTH: Limitation of Liability; Indemnification
A. Limitation of Directors' Liability
To the fullest extent that the General Corporation Law of the
State of Delaware, as it exists on the date hereof or as it may
hereafter be amended, permits the limitation or elimination of the
liability of directors, no director of the Company shall be liable to
the Company or its stockholders for monetary damages for beach of
fiduciary duty as a director. No amendment to or repeal of this
Section A of this Article shall apply to or have any effect on the
liability or alleged liability of any director of the Company for or
with respect to any acts or omissions of such director occurring
prior to such amendment or repeal.
B. Indemnification
1. Right to Indemnification. The Company shall to the fullest
extent permitted by applicable law as then in effect indemnify any
person (the "Indemnitee") who was or is involved in any manner
(including, without limitation, as a party or witness) or is
threatened to be made so involved in any threatened, pending or
completed investigation, claim, action, suit or proceeding,
II-1
<PAGE> 3
whether civil, criminal, administrative or investigative (including,
without limitation, any action, suit or proceeding by or in the right
of the Company to procure a judgment in its favor) (a "Proceeding")
by reason of the fact that he is or was a director or officer of the
Company, or is or was serving at the request of the Company as a
director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise (including,
without limitation, any employee benefit plan) against all expenses
(including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with
such Proceeding. Such indemnification shall be a contract right and
shall include the right to receive payment in advance of any expenses
incurred by the Indemnitee in connection with such Proceeding,
consistent with the provisions of applicable law as then in effect.
(2) Insurance, Contracts and Funding. The Company may purchase
and maintain insurance to protect itself and any Indemnitee against
any expenses, judgments, fines and amounts paid in settlement as
specified in Section B-1 of this Article or incurred by any
Indemnitee in connection with any Proceeding referred to in Section
B-1 of this Article, to the fullest extent permitted by applicable
law as then in effect. The Company may enter into contracts with any
director or officer of the Company in furtherance of the provisions
of this Article and may create a trust fund, grant a security
interest or use other means (including, without limitation, a letter
of credit) to ensure the payment of such amounts as may be necessary
to effect indemnification as provided in this Article.
(3) Indemnification Not Exclusive Right. The right of
indemnification provided in this Article shall not be exclusive of
any other rights to which those seeking indemnification may otherwise
be entitled, and the provisions of this Article shall inure to the
benefit of the heirs and legal representatives of any person entitled
to indemnity under this Article and shall be applicable to
proceedings commenced or continuing after the adoption of this
Article, whether arising from acts or omissions occurring before or
after such adoption.
(4) Advancement of Expenses; Procedures; Presumptions and
Effects of Certain Proceedings; Remedies. In furtherance but not in
limitation of the foregoing provisions, the following procedures,
presumptions and remedies shall apply with respect to the advancement
of expenses and the right to indemnification under this Article:
(a) Advancement of Expenses. All reasonable expenses
incurred by or on behalf of an Indemnitee in connection with any
proceeding shall be advanced to the Indemnitee by the Company
within 20 days after the receipt by the Company of a statement or
statements from the Indemnitee requesting such advance or
advances from time to time, whether prior to or after final
disposition of such Proceeding. Such statement or statements
shall reasonably evidence the expenses incurred by the Indemnitee
and, if required by law at the time of such advance, shall
include or be accompanied by an undertaking by or on behalf of
the Indemnitee to repay the amounts advanced if it should
ultimately be determined that the Indemnitee is not entitled to
be indemnified against such expenses pursuant to this Article.
(b) Procedure for Determination of Entitlement to
Indemnification. (i) To obtain indemnification under this
Article, an Indemnitee shall submit to the Secretary of the
Company a written request, including such documentation as is
reasonably available to the Indemnitee and reasonably necessary
to determine whether and to what extent the Indemnitee is
entitled to indemnification (the "Supporting Documentation").
The determination of the Indemnitee's entitlement to
indemnification shall be made no later than 60 days after receipt
by the Company of the written request for indemnification
together with the Supporting Documentation. The Secretary of the
Company shall, promptly upon receipt of such a request for
indemnification, advise the Board of Directors in writing that
the Indemnitee has requested indemnification.
(ii) The Indemnitee's entitlement to indemnification
under this Article shall be determined in one of the
following ways: (A) by a majority vote of the Disinterested
Directors (as hereinafter defined), if they constitute a
quorum of the Board of Directors;
II-2
<PAGE> 4
(B) by a written opinion of Independent Counsel (as hereinafter
defined) if a quorum of the board of Directors consisting of
Disinterested Directors is not obtainable or, even if obtainable, a
majority of such Disinterested Directors so directs; (C) by the
stockholders of the Company entitled to vote; or (D) as provided in
Section B-4(c) of this Article.
(iii) In the event the determination of entitlement to
indemnification is to be made by Independent Counsel pursuant
to Section B-4(b)(ii) of this Article, a majority of the
Disinterested Directors shall select the Independent Counsel,
but only an Independent Counsel to which the Indemnitee does
not reasonably object.
(c) Presumptions and Effect of Certain Proceedings. Except
as otherwise expressly provided in this Article, the Indemnitee
shall be presumed to be entitled to indemnification under this
Article upon submission of a request for indemnification together
with the Supporting Documentation in accordance with Section
B-4(b)(i), and thereafter the Company shall have the burden of
proof to overcome that presumption in reaching a contrary
determination. In any event, if the person or persons empowered
under Section B-4(b) of this Article to determine within 60 days
after the receipt by the Company of the request therefor together
with the Supporting Documentation, the Indemnitee shall be
entitled to indemnification unless (A) the Indemnitee
misrepresented or failed to disclose a material fact in making
the request for indemnification or in the Supporting
Documentation or (B) such indemnification is prohibited by law.
The termination of any Proceeding described in Section B-1, or of
any claim, issue or matter therein, by judgment, order,
settlement or conviction, or upon a plea of nolo contendere or
its equivalent, shall not, of itself, adversely affect the right
of the Indemnitee to indemnification or create a presumption that
the Indemnitee did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests
of the Company or, with respect to any criminal proceeding, that
the Indemnitee had reasonable cause to believe that his conduct
was unlawful.
(d) Remedies of Indemnitee. (i) In the event that a
determination is made pursuant to Section B-4(b) of this Article
that the Indemnitee is not entitled to indemnification under this
Article, (A) the Indemnitee shall be entitled to seek an
adjudication of his entitlement to such indemnification either,
at the Indemnitee's sole option, in (x) an appropriate court of
the State of Delaware or any other court of competent
jurisdiction or (y) an arbitration to be conducted by a single
arbitrator pursuant to the rules of the American Arbitration
Association; (B) any such judicial proceeding or arbitration
shall be de novo and the Indemnitee shall not be prejudiced by
reason of such adverse determination; and (C) in any such
judicial proceeding or arbitration the Company shall have the
burden of proving that the Indemnitee is not entitled to
indemnification under this Article.
(ii) If a determination shall have been made or deemed to
have been made, pursuant to Section B-4(b) or (c), that the
Indemnitee is entitled to indemnification, the Company shall be
obligated to pay the amounts constituting such indemnification
within five days after such determination has been made or deemed
to have been made and shall be conclusively bound by such
determination unless (A) the Indemnitee misrepresented or failed
to disclose a material fact in making the request for
indemnification or in the Supporting Documentation or (B) such
indemnification is prohibited by law. In the event that (C)
advancement of expenses is not timely made pursuant to Section
B-4(a) or (D) payment of indemnification is not made within five
days after a determination if entitlement to indemnification has
been made or deemed to have been made pursuant to Section B-4(b)
or (c), the Indemnitee shall be entitled to seek judicial
enforcement of the Company's obligation to pay to the Indemnitee
such advancement of expenses or indemnification. Notwithstanding
the foregoing, the Company may bring an action, in an appropriate
court of the State of Delaware or any other court of competent
jurisdiction, contesting the right of the Indemnitee to receive
indemnification hereunder due to the occurrence of an event
described in subclause (A) or (B) of this clause (ii) (a
"Disqualifying Event"); provided, however, that in any such
action the Company shall have the burden of proving the
occurrence of such Disqualifying Event.
II-3
<PAGE> 5
(iii) The Company shall be precluded from asserting in any
judicial proceeding or arbitration commenced pursuant to this
Section B-4(d) that the procedures and presumptions of this
Article are not valid, binding and enforceable and shall
stipulate in any such court or before any such arbitrator that
the Company is bound by all the provisions of this Article.
(iv) In the event that the Indemnitee, pursuant to this
Section B-4(d), seeks a judicial adjudication of or an award in
arbitration to enforce his rights under, or to recover damages
for breach of, this Article, the Indemnitee shall be entitled to
recover from the Company, and shall be indemnified by the Company
against, any expenses actually and reasonably incurred by him if
the Indemnitee prevails in such judicial adjudication. If it
shall be determined in such judicial adjudication or arbitration
that the Indemnitee is entitled to receive part but not all of
the indemnification or advancement of expenses sought, the
expenses incurred by the Indemnitee in connection with such
judicial adjudication or arbitration shall be prorated
accordingly.
(e) Definitions. For purposes of this Section B-4:
(i) "Disinterested Director" means a director of the
Company who is not or was not a party to the Proceeding in
respect of which indemnification is sought by the Indemnitee.
(ii) "Independent Counsel" means a law firm or a member
of a law firm that neither presently is, nor in the past five
years has been, retained to represent (A) the Company or the
Indemnitee in any matter material to either such party or (B)
any other party to the Proceeding giving rise to a claim for
indemnification under this Article. Notwithstanding the
foregoing, the term "Independent Counsel" shall not include
any person who, under the applicable standards of
professional conduct then prevailing under the law of the
State of Delaware, would have a conflict of interest in
representing either the Company or the Indemnitee in an
action to determine the Indemnitee's rights under this
Article.
(5) Severability. If any provisions of this Article shall be
held to be invalid, illegal or unenforceable for any reason
whatsoever: (a) the validity, legality and enforceability of the
remaining provisions of this Article (including, without limitation,
all portions of any paragraph of this Article containing any such
provision held to be invalid, illegal or unenforceable that are not
themselves invalid, illegal or unenforceable) shall not in any way be
affected or impaired thereby; and (b) to the fullest extent possible,
the provisions of this Article (including, without limitation, all
portions of any paragraph of this Article containing any such
provision held to be invalid, illegal or unenforceable that are not
themselves invalid, illegal or unenforceable) shall be construed so
as to give effect to the intent manifested by the provision held
invalid, illegal or unenforceable.
The Registrant has purchased directors' and officers liability insurance
covering many of the possible actions and omissions of persons acting or
failing to act in such capacities.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED. Not applicable.
ITEM 8. EXHIBITS.*
4(a) Registrant's Certificate of Incorporation, as amended, hereby
incorporated by reference from Exhibit 4(a) to the Registrant's Registration
Statement on Form S-8 dated May 11, 1994 with Registration No. 33-78820.
4(b) Amendment to Registrant's Certificate of Incorporation, as amended,
hereby incorporated by reference from Exhibit 3.3 to the Registrant's
Registration Statement on Form S-3 dated March 17, 1995 with Registration No.
33-90386.
II-4
<PAGE> 6
4(c) Registrant's Bylaws hereby incorporated by reference from Exhibit 3.3
to the Registrant's Registration Statement on Form S-1 dated August 19, 1993
with Registration No. 33-67662.
4(d) Friedman's Inc. 1995 Stock Option Plan.
5 Opinion of counsel of Registrant.
23(a) Consent of counsel (included in Exhibit 5).
23(b) Consent of Ernst & Young.
24 Power of Attorney (contained on page II-8).
- -----------
* Exhibits are numbered in accordance with Item 601 of Regulation S-K.
II-5
<PAGE> 7
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 the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the registration
statement; and
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change in such information in the registration statement;
provided, however, that paragraphs (a)(l)(i) and (a)(l)(ii) above do not
apply if the registration statement is on Form S-3 or Form S-8, and the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrant pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the 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 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 issuer hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of l934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(h) 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.
II-6
<PAGE> 8
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant, Friedman's 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 Savannah, State of
Georgia, on the 14th day of June, 1996.
FRIEDMAN'S INC.
Registrant
By: /s/ Bradley J. Stinn
-------------------------------------
Bradley J. Stinn
Chairman of the Board of Directors and Chief Executive
Officer (Principal Executive Officer)
II-7
<PAGE> 9
POWER OF ATTORNEY
Know All Men By These Presents, that each person whose signature appears
below constitutes and appoints Bradley J. Stinn and John G. Call, or either of
them, 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 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 attorneys-in-fact and
agents, and each of them, 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 fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents or any of
them or their or his substitute or substitutes, may lawfully do or cause to be
done by virtue thereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons in the
capacities on June 14, 1996.
SIGNATURE TITLE
--------- -----
Chairman of the Board of Directors and Chief
/s/ Bradley J. Stinn Executive Officer
- ------------------------ (Principal Executive Officer)
Bradley J. Stinn
/s/ John G. Call Senior Vice President and Chief Financial Officer
- ------------------------ (Principal Financial and Accounting Officer)
John G. Call
/s/ Sterling B. Brinkley
- ------------------------ Director
Sterling B. Brinkley
- ------------------------ Director
Robert W. Cruickshank
/s/ Robert S. Morris President and Chief Operating Officer and
- ------------------------ Director
Robert S. Morris
- ------------------------
David B. Parshall Director
/s/ Mark C. Pickup
- ------------------------
Mark C. Pickup Director
II-8
<PAGE> 10
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NUMBER* DESCRIPTION
- --------------- -----------
<S> <C>
4(d) Friedman's Inc. 1995 Stock Option Plan.
5 Opinion of counsel to Registrant.
23(a) Consent of counsel (included in Exhibit 5).
23(b) Consent of Ernst & Young.
24 Power of Attorney (contained on page II-9).
</TABLE>
- ------------
*Exhibits are numbered in accordance with Item 601 of Regulation S-K.
<PAGE> 1
EXHIBIT 4(D)
FRIEDMAN'S INC.
1995 STOCK OPTION PLAN
ARTICLE I
GENERAL
1.1 PURPOSE OF THE PLAN.
The purpose of the Friedman's Inc. 1995 Stock Option Plan (the "Plan") is
to assist Friedman's Inc. (the "Company") in securing and retaining key
employees of outstanding ability by making it possible to offer them an
increased incentive to join or continue in the service of the Company and to
increase their efforts for its welfare by participating in the ownership and
growth of the Company.
1.2 DEFINITIONS.
(a) "Acceleration Event" means any event which in the opinion of the
Board of Directors of the Company is likely to lead to changes in control of
share ownership of the Company, whether or not such change in control actually
occurs.
(b) "Board of Directors" or "Board" means the Board of Directors of the
Company.
(c) "Code" means the Internal Revenue Code of 1986, as amended.
(d) "Committee" means the committee referred to in Section 1.3.
(e) "Common Stock" means the Class A common stock of the Company.
(f) "Fair Market Value" the value determined by the Board of Directors
or Committee administering the Plan, taking into consideration those factors
affecting or reflecting value which they deem appropriate, in accordance with
Prop. T. Reg. Section 1.422 A-2(e).
(g) "Incentive Stock Option" means an option to purchase shares of
Common Stock which is intended to qualify as an incentive stock option as
defined in Section 422 of the Code.
(h) "Key Employee" means any person, including officers and directors,
in the regular employment of the Company or its Subsidiaries who is designated a
Key Employee by the Committee and is or is expected to be primarily responsible
for the management, growth, or supervision of some part or all of the business
of the Company or
<PAGE> 2
its Subsidiaries. The power to determine who is and who is not a Key Employee
is reserved solely for the Committee.
(i) "Nonqualified Stock Option" means an option to purchase shares of
Common Stock which is not intended to qualify as an Incentive Stock Option as
defined in Section 422 of the Code.
(j) "Option" means an Incentive Stock Option or a Nonqualified Stock
Option.
(k) "Optionee" means a Key Employee to whom an Option is granted
under the Plan.
(l) "Parent" means any corporation which qualifies as a parent of a
corporation under the definition of "parent corporation" contained in Section
424(e) of the Code.
(m) "Subsidiary" means any corporation which qualifies as a subsidiary
of a corporation under the definition of "subsidiary corporation" contained in
Section 424(f) of the Code.
(n) "Term" means the period during which a particular Option may be
exercised as determined by the Committee and as provided in the option
agreement.
1.3 ADMINISTRATION OF THE PLAN.
The Plan shall be administered by the Compensation Committee (the
"Committee") appointed by the Board of Directors consisting of at least two
members from the Board of Directors. No person while a member of the Committee
shall be eligible to participate in the Plan. In addition, members of the
Compensation Committee shall satisfy the requirements of an outside director as
set forth in Treasury Regulations under Code Section 162(m). Subject to the
control of the Board, and without limiting the control over decisions described
in Section 1.7, the Committee shall have the power to interpret and apply the
Plan and to make regulations for carrying out its purpose. More particularly,
the Committee shall determine which Key Employees shall be granted Options
under the Plan, the number of shares subject to each Option, the price per
share under each Option, the Term of each Option, and any restrictions on the
exercise of each Option. When granting Options, the Committee shall designate
the Option as either an Incentive Stock Option or a Nonqualified Stock Option.
Determinations by the Committee under the Plan (including, without limitation,
determinations of the person to receive Options, the form, amount and timing of
such Options, and the terms and provisions of such Options and the agreements
evidencing same) need not be uniform and may be made by it selectively among
persons who receive, or are eligible to receive, Options under the Plan,
whether or not such persons are similarly situated.
2
<PAGE> 3
1.4 SHARES SUBJECT TO THE PLAN.
The total number of shares that may be purchased pursuant to Options under
the Plan shall not exceed 120,000 shares of Common Stock. Shares subject to
the Options which terminate or expire prior to exercise shall be available for
future Options. Shares issued pursuant to the Plan may be either unissued
shares of Common Stock or reacquired shares of Common Stock held in treasury.
Notwithstanding any provision in the Plan to the contrary, the maximum
number of shares of Stock with respect to one or more Awards that may be
granted to any one Participant in any calendar year shall be 200,000.
1.5 TERMS AND CONDITIONS OF OPTIONS.
All Options shall be evidenced by agreements in such form as the Committee
shall approve from time to time subject to the provisions of Article II or
Article III, as appropriate, and the following provisions:
(a) Exercise Price. The exercise price of the Option shall not be less
than the Fair Market Value (as determined by the Committee) of the Common Stock
at the time the Option is granted.
(b) Exercise. The Committee shall determine whether the Option shall
be exercisable in full at any time during the Term or in cumulative or
noncumulative installments during the Term.
(c) Termination of Employment. An Optionee's Option shall expire on
the earlier of the expiration of (i) the date specified in the Option which
in no event shall be later than three months after the termination of the
Optionee's employment for any reason other than death or disability (as defined
in Section 422(c)(7) of the Code), or (ii) the Term specified in Section 2.1 or
3.1(a) as the case may be. In the event of exercise of the Option after
termination of employment the Optionee may exercise the Option only with
respect to the shares which could have been purchased by the Optionee at the
date of termination of employment. However, the Committee may, but is not
required to, waive any requirements made pursuant to Section 1.5(b) so that
some or all of the shares subject to the Option may be exercised within the
time limitation described in this subsection. An Optionee's employment shall
be deemed to terminate on the last date for which he receives a regular wage or
salary payment.
(d) Death or Disability. Upon termination of an Optionee's employment
by reason of death or disability (as determined by the Committee consistent with
the definition of Section 422(c)(7) of the Code), the Option shall expire on
the earlier of the expiration of (i) the date specified in the Option which in
no event shall be later than 12 months after the date of such termination, or
(ii) the Term specified in Section 2.1 or 3.1(a) as the case may be. The
Optionee or his successor in interest, as the case may
3
<PAGE> 4
be, may exercise the Option only as to the shares which could have been
purchased by the Optionee at the date of his termination of employment.
However, the Committee may, but is not required to, waive any requirements made
pursuant to Section 1.5(b) so that some or all of the shares subject to the
Option may be exercised within the time limitation described in this
subsection.
(e) Payment. Payment for shares as to which an Option is exercised
shall be made in such manner and at such time or times as shall be provided in
the option agreement, including cash, Common Stock of the Company which was
previously acquired by the Optionee, or any combination thereof. The Fair
Market Value of the surrendered Common Stock as of the date of exercise shall
be determined in valuing Common Stock used in payment for Options.
(f) Nontransferability. No Option granted under the Plan shall be
transferable other than by will or by the laws of descent and distribution.
During the lifetime of the Optionee, an Option shall be exercisable only by the
Optionee.
(g) Additional Provisions. Each option agreement may contain such
other terms and conditions not inconsistent with the provisions of the Plan as
the Committee may deem appropriate from time to time.
1.6 STOCK ADJUSTMENTS; MERGERS.
Notwithstanding Section 1.4, in the event the outstanding shares are
increased or decreased or changed into or exchanged for a different number or
kind of shares or other securities of the Company or of any other corporation
by reason of any merger, sale of stock, consolidation, liquidation,
recapitalization, reclassification, stock split up, combination of shares, or
stock dividend, the total number of shares set forth in Section 1.4 shall be
proportionately and appropriately adjusted by the Committee. If the Company
continues in existence, the number and kind of shares that are subject to any
Option and the option price per share shall be proportionately and
appropriately adjusted without any change in the aggregate price to be paid
therefor upon exercise of the Option. If the Company will not remain in
existence or substantially all of its voting Common Stock and Common Stock will
be purchased by a single purchaser or group of purchasers acting together, then
the Committee may (i) declare that all Options shall terminate 30 days after
the Committee gives written notice to all Optionees of their immediate right to
exercise all Options then outstanding (without regard to limitations on
exercise otherwise contained in the Options), or (ii) notify all Optionees that
all Options granted under the Plan shall apply with appropriate adjustments as
determined by the Committee to the securities of the successor corporation to
which holders of the numbers of shares subject to such Options would have been
entitled, or (iii) some combination of aspects of (i) and (ii). The
determination by the Committee as to the terms of any of the foregoing
adjustments shall be conclusive and binding. Any fractional shares resulting
from any of the foregoing adjustments under this section shall be disregarded
and eliminated.
4
<PAGE> 5
1.7 ACCELERATION EVENT.
If an Acceleration Event occurs in the opinion of the Board of Directors,
based on circumstances known to it, the Board of Directors may direct the
Committee to declare that all Options granted under the Plan shall become
exercisable immediately notwithstanding the provisions of the respective Option
agreements regarding exercisability.
1.8 NOTIFICATION OF EXERCISE.
Options shall be exercised by written notice directed to the Secretary of
the Company at the principal executive offices of the Company. Such written
notice shall be accompanied by any payment required pursuant to Section 1.5(e).
Exercise by an Optionee's heir or the representative of his estate shall be
accompanied by evidence of his authority to so act in form reasonably
satisfactory to the Company.
ARTICLE II
INCENTIVE STOCK OPTIONS
2.1 TERMS OF INCENTIVE STOCK OPTIONS.
Each Incentive Stock Option granted under the Plan shall be exercisable
only during a Term fixed by the Committee; provided, however, that the Term
shall end no later than 10 years after the date the Incentive Stock Option is
granted.
2.2 LIMITATION ON OPTIONS.
The aggregate Fair Market Value of Common Stock (determined at the time
the Incentive Stock Option is granted) subject to Incentive Stock Options
granted to a Key Employee under all plans of the Key Employee's employer
corporation and its Parent or Subsidiary corporations and that become
exercisable for the first time by such Key Employee during any calendar year
may not exceed $100,000.
2.3 CONTINUED EMPLOYMENT.
Whether military, government or other service or other leave of absence
shall constitute a termination of employment shall be determined in each case
by the Committee at its discretion, and any determination by the Committee
shall be final and conclusive. A termination of employment shall not occur
where the Optionee transfers from the Company to one of its Subsidiaries or
transfers from a Subsidiary to the Company.
5
<PAGE> 6
2.4 SPECIAL RULE FOR TEN PERCENT SHAREHOLDER.
If at the time an Incentive Stock Option is granted, an employee owns
stock possessing more than ten percent (10%) of the total combined voting power
of all classes of stock of his employer corporation or of its Parent or any of
its Subsidiaries, as determined using the attribution rules of Section 424(d)
of the Code, then the terms of the Incentive Stock Option shall specify that
the option price shall be at least 110% of the Fair Market Value of the stock
subject to the Incentive Stock Option and such Incentive Stock Option shall not
be exercisable after the expiration of five years from the date such Incentive
Stock Option is granted.
2.5 INTERPRETATION.
In interpreting this Article II of the Plan and the provisions of
individual option agreements, the Committee and the Board shall be governed by
the principles and requirements of Sections 421, 422 and 424 of the Code, and
applicable Treasury Regulations.
ARTICLE III
NONQUALIFIED STOCK OPTIONS
3.1 TERMS AND CONDITIONS OF OPTIONS.
In addition to the requirements of Section 1.5, Nonqualified Stock Option
shall be subject to the following provisions:
(a) Term. Each Nonqualified Stock Option granted under the Plan shall
be exercisable only during a Term fixed by the Committee.
(b) Termination of Employment. Notwithstanding the provisions of
Sections 1.5(c) and 1.5(d), the Committee in its discretion may provide, either
upon the original grant of an Option or in an amendment to an Incentive or
Nonqualified Stock Option, that an Option may be exercisable during a Term that
does not expire upon the expiration of three months following an Optionee's
termination of employment (one year in the case of termination as a result of
death or disability), but in no event later than the Term specified in Section
3.1(a) above.
3.2 SECTION 83(B) ELECTION.
The Company recognizes that certain persons who receive Nonqualified Stock
Options may be subject to restrictions regarding their right to trade Common
Stock under applicable securities laws. Such may cause Optionee's exercising
such Options not to be taxable under the provisions of Section 83(c) of the
Code. Accordingly, Optionees
6
<PAGE> 7
exercising such Nonqualified Stock Options may consider making an election to
be taxed upon exercise of the Option under Section 83(b) of the Code and to
effect such election will file such election with the Internal Revenue Service
within thirty (30) days of exercise of the Option and otherwise in accordance
with applicable Treasury Regulations.
ARTICLE IV
ADDITIONAL PROVISIONS
4.1 STOCKHOLDER APPROVAL.
The Plan shall be submitted for the approval of those stockholders of the
Company entitled to vote thereon at the first annual meeting of stockholders
held subsequent to the adoption of the Plan and in all events within one year
of its approval by the Board of Directors. If at said meeting such
stockholders of the Company do not approve the Plan, the Plan shall terminate.
4.2 COMPLIANCE WITH OTHER LAWS AND REGULATIONS.
The Plan, the grant and exercise of Options hereunder, and the obligation
of the Company to sell and deliver shares under such Options, shall be subject
to all applicable Federal and state laws, rules, and regulations and to such
approvals by any government or regulatory agency as may be required. The
Company shall not be required to issue or deliver any certificates for shares
of Common Stock prior to (a) the listing of such shares on any stock exchange
on which the Common Stock may then be listed and (b) the completion of any
registration or qualification of such shares under any Federal or state law, or
any ruling or regulation of any government body which the Company shall, in its
sole discretion, determine to be necessary or advisable.
4.3 AMENDMENTS.
The Board of Directors may discontinue the Plan at any time, and may amend
it from time to time, but no amendment, without approval by stockholders, may
(a) increase the total number of shares which may be issued under the Plan or
to any individual under the Plan, (b) reduce the Option price for shares which
may be purchased pursuant to Options under Articles II and III of the Plan, (c)
extend the period during which Options may be granted, or (d) change the class
of employees to whom Options may be granted, except as provided in Section 1.6.
Other than as expressly permitted under the Plan, no outstanding Option may be
revoked or altered in a manner unfavorable to the Optionee without the consent
of the Optionee.
7
<PAGE> 8
4.4 NO RIGHTS AS SHAREHOLDER.
No Optionee shall have any rights as a shareholder with respect to any
share subject to his or her Option prior to the date of issuance to him or her
of a certificate or certificates for such shares.
4.5 WITHHOLDING.
Whenever the Company proposes or is required to issue or transfer shares
of Common Stock under the Plan, the Company shall have the right to require the
Optionee to remit to the Company an amount sufficient to satisfy any Federal,
state or local withholding tax liability prior to the delivery of any
certificate or certificates for such shares.
4.6 CONTINUED EMPLOYMENT NOT PRESUMED.
This Plan and any document describing this Plan and the grant of any stock
Option hereunder shall not give any Optionee or other employee a right to
continued employment by the Company or its Subsidiaries or affect the right of
the Company or its Subsidiaries to terminate the employment of any such person
with or without cause.
4.7 EFFECTIVE DATE; DURATION.
The Plan shall become effective as of November 3, 1995 subject to
stockholder approval pursuant to Section 4.1 and shall expire at the close of
business on November 2, 2005. No Options may be granted under the Plan after
November 2, 2005, but Options granted on or before that date may be exercised
according to the terms of the option agreements and shall continue to be
governed by and interpreted consistent with the terms hereof.
8
<PAGE> 1
EXHIBIT 5
ALSTON&BIRD
One Atlantic Center
1201 West Peachtree Street
Atlanta, Georgia 30309-3424
404-881-7000
Fax: 404-881-7777 Telex: 54-2996
June 18, 1996
Friedman's Inc.
4 West State Street
Savannah, Georgia 31401
Re: Friedman's Inc. 1995 Stock Option Plan
Gentlemen:
This opinion is given in connection with the filing by Friedman's Inc.
(the "Company") with the Securities and Exchange Commission under the
Securities Act of 1933, as amended, of a Registration Statement on Form S-8
(the "Registration Statement") with respect to up to 120,000 shares (the
"Shares") of the $.01 par value Class A Common Stock of the Company (the "Class
A Common Stock") to be issued to employees of the Company pursuant to the
Friedman's Inc. 1995 Stock Option Plan (the "Plan").
We have examined such corporate records and documents as we deemed
relevant and necessary to enable us to give the opinion set forth herein,
including the Certificate of Incorporation and Bylaws of the Company, as
amended, the Plan, and resolutions of the Board of Directors of the Company
authorizing the Plan.
For purposes of this opinion, we assume that all Shares will be issued in
accordance with the Plan.
Based upon the foregoing, we are of the opinion that the Shares, when
issued in accordance with the terms and conditions of the Plan, will be duly
authorized, legally issued and fully paid and non-assessable under the Delaware
General Corporation Law as in effect on this date.
<PAGE> 2
We hereby consent to the use of this opinion as an Exhibit to the
Registration Statement.
Sincerely yours,
ALSTON & BIRD
By: /s/ M. Hill Jeffries
-------------------------
2
<PAGE> 1
EXHIBIT 23(b)
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement on
Form S-8 for registration of 120,000 shares of common stock pertaining to the
Friedman's Inc. 1995 Stock Option Plan of our report dated November 8, 1995,
with respect to the financial statements and schedule of Friedman's Inc.
included in its Annual Report on Form 10-K for the year ended September 30,
1995, filed with the Securities and Exchange Commission.
ERNST & YOUNG LLP
Jacksonville, Florida
June 14, 1996
