<PAGE> 1
As filed with the Securities and Exchange Commission on April 1, 1998
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.
1997 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:
MARK F. MCELREATH
ALSTON & BIRD LLP
ONE ATLANTIC CENTER
1201 WEST PEACHTREE STREET
ATLANTA, GEORGIA 30309-3424
(404) 881-7378
-----------------------------
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 FEE
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A Common Stock, $.01 par 444,000 $14.52 $6,446,880 $1,901.83
value
- -----------------------------------------------------------------------------------------------------------
Class A Common Stock, $.01 par 56,000 $20.25 $1,134,000 $ 334.53
value
- -----------------------------------------------------------------------------------------------------------
Total 500,000 $7,580,880 $2,236.36
- -----------------------------------------------------------------------------------------------------------
</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. 1997 Stock Option Plan (the "Plan").
(2) Determined in accordance with Rule 457(h), the registration fee is based
on the weighted 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 Registrant's
Class A Common Stock reported on the Nasdaq National Market on March 31,
1997.
<PAGE> 2
PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
(a) The documents constituting Part I of this
Registration Statement will be sent or given to participants in the Plan as
specified by Rule 428(b)(1) under the Securities Act of 1933, as amended.
(b) Upon written or oral request, the Company will
provide, without charge, the documents incorporated by reference in Item 3 of
Part II of this Registration Statement. The documents are incorporated by
reference in the Section 10(a) prospectus. The Company will also provide,
without charge, upon written or oral request, other documents required to be
delivered to employees pursuant to Rule 428(b). Requests for the above mentioned
information, should be directed to Victor M. Suglia, Corporate Secretary, at
(912) 233-9333.
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") (File
No. 22356) with the Securities and Exchange Commission (the "Commission")
pursuant to the Securities Exchange Act of 1934, as amended (the "Exchange Act")
are incorporated herein by reference and deemed to be a part hereof from the
date of the filing of such documents:
(a) The Company's Annual Report on Form 10-K for the
fiscal year ended September 30, 1997.
(b) All other reports filed pursuant to Section 13(a) or
15(d) of the Exchange Act 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 the Company's Registration
Statement filed under Section 12 of the Exchange Act, 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 Exchange Act prior to the filing of a
post-effective amendment to this Registration Statement 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. Not applicable.
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. The Ninth article of the
Certificate of Incorporation, as amended, of the Company provides:
II-1
<PAGE> 3
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 breach 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, 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
II-2
<PAGE> 4
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; (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-3
<PAGE> 5
(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.
(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
II-4
<PAGE> 6
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 (incorporated
by reference from Exhibit 4(a) to the Registrant's Registration Statement on
Form S-8 dated March 21, 1997, Registration No. 333-17755).
4(b) Registrant's Bylaws (incorporated by reference from Exhibit 3.2 to
the Registrant's Registration Statement on Form S-1 dated August 19, 1993,
Registration No. 33-67662).
5 Opinion of Counsel of Registrant, filed herewith.
23(a) Consent of Counsel (included in Exhibit 5).
23(b) Consent of Ernst & Young LLP, filed herewith.
24 Power of Attorney (contained on page II-7).
99 Friedman's Inc. 1997 Stock Option Plan, filed herewith.
- ---------------
* 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 this 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 this
Registration Statement; and
(iii) To include any material information with respect
to the plan of distribution not previously disclosed in this Registration
Statement or any material change in such information in this 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 Exchange Act 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 Registrant hereby undertakes that, for purposes
of determining any liability under the Securities Act of 1933, each filing of
the Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in this Registration Statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(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
The Registrant. 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 31st day of March, 1998.
FRIEDMAN'S INC.
Registrant
By: /s/Richard Ungaro
--------------------------------
Richard Ungaro
Chief Executive Officer
POWER OF ATTORNEY
KNOW BY ALL MEN BY THESE PRESENT that each person whose signature
appears below constitutes and appoints Richard Ungaro and Victor M. Suglia and
each of them (with full power in each to act alone), as his or her true and
lawful attorneys-in-fact and agents, with full power of substitution and
resubstitution, for him or her and in his or her 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 such attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents, or either of them, or their or his substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities on March 31, 1998.
SIGNATURE TITLE
/s/ Bradley J. Stinn Chairman of the Board of
----------------------------------- Directors
Bradley J. Stinn
/s/ Victor M. Suglia Senior Vice President --
----------------------------------- Chief Financial Officer
Victor M. Suglia (Principal Financial and
Accounting Officer)
/s/ Sterling B. Brinkley Director
-----------------------------------
Sterling B. Brinkley
Director
-----------------------------------
John E. Cay III
/s/ Robert W. Cruickshank Director
-----------------------------------
Robert W. Cruickshank
President, Chief Operating
----------------------------------- Officer and Director
Linda McFarland Jenkins
II-7
<PAGE> 9
/s/ Robert S. Morris Director
-----------------------------------
Robert S. Morris
/s/ David B. Parshall Director
-----------------------------------
David B. Parshall
/s/ Mark C. Pickup Director
-----------------------------------
Mark C. Pickup
/s/ Richard Ungaro Chief Executive Officer
----------------------------------- and Director (Principal
Richard Ungaro Executive Officer)
II-8
<PAGE> 10
Registration No. 333-
------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------------------
EXHIBITS FILED WITH
REGISTRATION STATEMENT
ON FORM S-8
UNDER
THE SECURITIES ACT OF 1933
------------------------------------
FRIEDMAN'S INC.
4 WEST STATE STREET
SAVANNAH, GEORGIA 31401
(912) 233-9333
<PAGE> 11
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NUMBER* DESCRIPTION
- --------------- -----------
<S> <C>
5 Opinion of Counsel of Registrant, filed herewith.
23(a) Consent of Counsel (included in Exhibit 5).
23(b) Consent of Ernst & Young LLP, filed herewith.
24 Power of Attorney (contained on page II-7).
99 Friedman's Inc. 1997 Stock Option Plan, filed herewith.
</TABLE>
- --------------
*Exhibits are numbered in accordance with Item 601 of Regulation S-K.
<PAGE> 1
EXHIBIT 5
Opinion of Alston & Bird LLP regarding the legality of
the securities being registered
<PAGE> 2
ALSTON&BIRD LLP
One Atlantic Center
1201 West Peachtree Street
Atlanta, Georgia 30309-3424
404-881-7000
Fax: 404-881-4777
www.alston.com
April 1, 1998
Friedman's Inc.
4 West State Street
Savannah, Georgia 31401
Re: Registration Statement on Form S-8 -- Friedman's Inc. 1997 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 500,000 shares of the Company's common stock,
$0.01 par value per share ("Common Stock"), that may be offered and sold to the
employees of the Company pursuant to the Friedman's Inc. 1997 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.
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 500,000 shares
of Common Stock issuable under the Plan and covered by the Registration
Statement, when issued 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
1211 East Morehead Street 3605 Glenwood Avenue 601 Pennsylvania Avenue, N.W.
P. O. Drawer 34009 P. O. Drawer 31107 North Building, 11th Floor
Charlotte, NC 28234-4009 Raleigh, NC 27622-1107 Washington, DC 20004-2601
704-331-6000 919-420-2200 202-508-3300
Fax: 704-334-2014 Fax: 919-881-3175 Fax: 202-508-3333
<PAGE> 3
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/ Laura G. Thatcher
---------------------------
Partner
2
<PAGE> 1
EXHIBIT 23(B)
Consent of Ernst & Young LLP
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We consent to the incorporation by reference in the Registration Statement on
Form S-8 for registration of 500,000 shares of common stock pertaining to the
Friedman's Inc. 1997 Stock Option Plan of our report dated November 7, 1997,
with respect to the consolidated financial statements and schedule of Friedman's
Inc. included in its Annual Report on Form 10-K for the year ended September 30,
1997, filed with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
ERNST & YOUNG LLP
Jacksonville, Florida
Mach 30, 1998
<PAGE> 1
EXHIBIT 99
Friedman's Inc. 1997 Stock Option Plan
<PAGE> 2
FRIEDMAN'S INC.
1997 STOCK OPTION PLAN
ARTICLE I
GENERAL
1.1 PURPOSE OF THE PLAN.
The purpose of the Friedman's Inc. 1997 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" means 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. ss.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.
(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.
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(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.
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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 500,000 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 22(e)(3) 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 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
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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.
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.
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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.
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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.
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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, excepted 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.
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.
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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, 1997 subject to
stockholder approval pursuant to Section 4.1 and shall expire at the close of
business on November 14, 2007. No Options may be granted under the Plan after
November 14, 2007, 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.
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