<PAGE>
As filed with the Securities and Exchange Commission on March 21, 1997
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.
1996 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 LLP
ONE ATLANTIC CENTER
1201 WEST PEACHTREE STREET
ATLANTA, GEORGIA 30309-3424
(404) 881-7000
____________________________
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
===============================================================================================================================
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
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A Common Stock, $.01 par value 124,750 $17.75 $2,214,313 $671
- -------------------------------------------------------------------------------------------------------------------------------
Class A Common Stock, $.01 par value 25,250 $17.32 437,330 133
- -------------------------------------------------------------------------------------------------------------------------------
Total 150,000 $2,651,643 $804
- -------------------------------------------------------------------------------------------------------------------------------
</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. 1996 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 National Market on March 17, 1997.
<PAGE>
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, 1996.
(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 LLP.
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-2
<PAGE>
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-3
<PAGE>
(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-4
<PAGE>
(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-3 dated March 21, 1997 with Registration No. 333-17755.
4(b) 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(c) Friedman's Inc. 1996 Stock Option Plan.
II-5
<PAGE>
5 Opinion of counsel of Registrant.
23(a) Consent of counsel (included in Exhibit 5).
23(b) Consent of Ernst & Young LLP.
24 Power of Attorney (contained on page II-8).
_________________________
* Exhibits are numbered in accordance with Item 601 of Regulation S-K.
II-6
<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 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-7
<PAGE>
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 21 day of
March, 1997.
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)
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 March 21, 1997.
SIGNATURE TITLE
--------- -----
/s/ Bradley J. Stinn Chairman of the Board of Directors, Chief
- --------------------------- Executive Officer and Interim Chief Financial
Bradley J. Stinn Officer (Principal Executive, Financial and
Accounting Officer)
/s/ Sterling B. Brinkley Director
- ---------------------------
Sterling B. Brinkley
/s/ John E. Cay III Director
- ---------------------------
John E. Cay III
/s/ Robert W. Cruickshank Director
- ---------------------------
Robert W. Cruickshank
President, Chief Operating Officer and
- --------------------------- Director
Robert S. Morris
/s/ David B. Parshall Director
- ---------------------------
David B. Parshall
/s/ Mark C. Pickup Director
- ---------------------------
Mark C. Pickup
II-8
<PAGE>
EXHIBIT INDEX
EXHIBIT NUMBER* DESCRIPTION
- -------------- -----------
4(c) Friedman's Inc. 1996 Stock Option Plan.
5 Opinion of counsel to Registrant.
23(a) Consent of counsel (included in Exhibit 5).
23(b) Consent of Ernst & Young LLP.
24 Power of Attorney (contained on page II-9).
____________
*Exhibits are numbered in accordance with Item 601 of Regulation S-K.
<PAGE>
EXHIBIT 4(C)
------------
Friedman's Inc. 1996 Stock Option Plan
<PAGE>
FRIEDMAN'S INC.
1996 STOCK OPTION PLAN
ARTICLE I
GENERAL
1.1 PURPOSE OF THE PLAN.
-------------------
The purpose of the Friedman's Inc. 1996 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. (S)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 its Subsidiaries. The power to determine who is
and who is not a Key Employee is reserved solely for the Committee.
<PAGE>
(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, limited liability company,
----------
partnership or other entity of which a majority of the outstanding voting stock
or voting power is beneficially owned directly or indirectly by the Corporation.
For Incentive Stock Options, the term shall have the meaning set forth in Code
Section 424(f).
(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>
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 150,000 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>
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 and has been held by the Optionee at least
six months, 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>
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>
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>
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; provided, however, that the Board or Committee may
condition any amendment or modification on the approval of stockholders of the
Company if such approval is necessary or deemed advisable with respect to tax,
securities or other applicable laws, policies or regulations. 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>
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 14, 1996 subject to
stockholder approval pursuant to Section 4.1 and shall expire at the close of
business on November 13, 2006. No Options may be granted under the Plan after
November 13, 2006, 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>
EXHIBIT 5
---------
Opinion of Alston & Bird LLP regarding the legality of
the securities being registered
<PAGE>
[LETTERHEAD OF ALSTON & BIRD LLP APPEARS HERE]
March 21, 1997
Friedman's Inc.
4 West State Street
Savannah, Georgia 31401
Re: Form S-8 Registration Statement of Friedman's Inc. -
1996 Stock Option Plan
Ladies and Gentlemen:
We have acted as counsel for Friedman's Inc., a Delaware corporation
(the "Company"), in connection with the referenced Registration Statement on
Form S-8 (the "Registration Statement") being filed by the Company with the
Securities and Exchange Commission (the "Commission") under the Securities Act
of 1933, as amended, and covering 150,000 shares of the Company's Class A Common
Stock, $0.01 par value ("Common Stock") that may be offered and sold to the
employees of the Company pursuant to the Friedman's Inc. 1996 Stock Option Plan
(the "Plan"). This Opinion Letter is rendered pursuant to Item 8 of Form S-8
and Item 601(b)(5) of Regulation S-K.
This Opinion Letter is limited by, and is in accordance with, the
January 1, 1992 edition of the Interpretive Standards Applicable to Legal
Opinions to Third Parties in Corporate Transactions adopted by the Legal Opinion
Committee of the Corporate and Banking Law Section of the State Bar of Georgia
(the "Interpretive Standards"), which Interpretative Standards are incorporated
in this Opinion Letter by this reference. Capitalized terms used in this
Opinion Letter and not otherwise defined herein shall have the meanings assigned
to such terms in the Interpretive Standards and in the Registration Statement.
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
Company, certificates of public officials and such other documents as we have
deemed appropriate as a basis for the opinions hereinafter set forth.
Based upon the foregoing, we are of the opinion that the 150,000
shares of Common Stock issuable under the Plan and covered by the Registration
Statement, when delivered to participants in accordance with the terms and
conditions of the Plan, will be legally and validly issued, fully paid and
nonassessable.
The Opinion expressed herein is limited to the laws of the State of
Delaware as codified in the General Corporation Law of the State of Delaware.
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.
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/ Alston & Bird LLP
-------------------------------------
<PAGE>
EXHIBIT 23(B)
-------------
Consent of Ernst & Young LLP
<PAGE>
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement on
Form S-8 for registration of 150,000 shares of common stock pertaining to the
Friedman's Inc. 1996 Stock Option Plan of our report dated November 6, 1996,
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,
1996, filed with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
ERNST & YOUNG LLP
Jacksonville, Florida
March 17, 1997
