Lyle B. Stewart, P.C.
3751 South Quebec Street
Denver, Colorado 80237
Telephone: 303-267-0920
Fax: 303-267-0922
United States Securities and Exchange Commission
February 3, 1998
Division of Corporation Finance
450 Fifth Street, N.W.
Washington, D.C. 20459
Dear Madams and Sirs:
On behalf of my client, The Quizno's Corporation, I am filing herewith a Form
S-8 relating to such company's Employee Stock Option Plan and Amended and
Restated Stock Option Plan for Non-Employee Directors and Advisors.
If you have any questions about this filing, please contact the undersigned at
the telephone or fax numbers indicated above.
Very truly yours
/S/Lyle B. Stewart
<PAGE>
497657.001(B&F) Registration No. 333-
(as filed with the SEC on February 3, 1998)
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
The Quizno's Corporation
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Colorado 84-1169286
(STATE OR OTHER JURISDICTION OF INCORPORATION (I.R.S. EMPLOYER
OR ORGANIZATION) IDENTIFICATION NO.)
1099 18th Street, Suite 2850
Denver, Colorado 80202
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
The Quizno's Corporation
(1) Employee Stock 012tion Plan
--- ---------------------------
(2) Amended and Restated Stock Option Plan for Non-Employee Directors and
--- ---------------------------------------------------------------------
Advisors
--------
(FULL TITLE OF THE PLAN)
Patrick E. Meyers, Esq.
Vice President and General Counsel
The Quizno's Corporation
1099 18th Street, Suite 2850
Denver, Colorado 80202
----------------------
(NAME AND ADDRESS OF AGENT FOR SERVICE)
(303) 291-0999
--------------
(TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE)
with a copy to:
Lyle B. Stewart, Esquire
Lyle B. Stewart, P.C.
3751 S. Quebec Street
Denver, Colorado 80237
(303) 267-0920
CALCULATION OF REGISTRATION FEE
-------------------------------
<TABLE>
<CAPTION>
Proposed Proposed
Title of Maximum Maximum
Securities Offering Price Aggregate Amount of
to be Amount to be Per Offering Registration
Registered Registered (1) Share (2) Price (1) Fee
- ------------ --------------- ---------- -------------- ---------
<S> <C> <C> <C> <C>
Common stock,
par value
$.001 per
share 460,000 $ 5.4375 $ 2,501,250 $ 737.90
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee.
In accordance with Rule 457(c) and (h), the price shown is based upon the
average of the high and low price of The Quizno's Corporation Common Stock on
January 28, 1998, $5.4375, as reported on the Nasdaq SmallCap Market.
<PAGE>
PART I - INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
The documents containing the information specified in Part I of this
Registration Statement will be given or sent to all persons who are granted or
exercise options under the Area Director Equity Participation Stock Option
Plan of The Quizno's Corporation (the "Company"), as specified by Rule 428.
PART II - INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE.
----------------------------------------------------
The following documents filed with the Securities and Exchange Commission (the
"Commission") pursuant to the Securities Exchange Act of 1934 (the "Exchange
Act") by the Company (File No. 000-23174) are incorporated herein by
reference:
(a) the Company's annual report for the fiscal year ended December 31,
1996 filed on Form 10-KSB, as filed with the Commission on March 31, 1997;
(b) the Company's quarterly reports for the periods ended March 31, June
30, and September 30, 1997, each filed on Form 10-QSB, as filed with the
Commission on May 15, August 12, and October 9, 1997, respectively, and as
amended on Forms 10-QSB/A filed on August 19 and October 14, 1997,
respectively;
(c) the Company's current reports dated January 21, April 2, May 28, June
27, July 3 1, August 13 and November 26, 1997 on Form 8-K, as amended by Form
8-K/A filed on December 31, 1997; and
(d) the description of the Company's Common Stock which is contained in
the Company's Registration Statement on Form 8-A filed under the Exchange Act,
including any amendment or reports filed for the purpose of updating such
description.
Each document filed by the Company after the date hereof pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act and prior to the filing of a
post-effective amendment which indicates that all securities offered hereby
have been sold or which deregisters all securities remaining unsold, shall be
deemed to be incorporated by reference in this Registration Statement and
shall be part hereof from the date of filing of such document. Any statement
contained in a document incorporated by reference herein shall be deemed to be
modified or superseded for purposes hereof to the extent that a statement
contained herein (or any other subsequently filed document which also is
incorporated by reference herein) modifies or supersedes such statement. Any
statement so modified or superseded shall not be deemed to constitute a part
hereof except as so modified or superseded.
ITEM 4. DESCRIPTION OF SECURITIES.
---------------
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
-------------------------------------------
Not applicable.
<PAGE>
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
---------------------------------------------
Article 109 of the Colorado Business Corporation Act generally provides that a
corporation may indemnify its directors, officers, employees and agents
against liabilities and reasonable expenses incurred in connection with any
threatened, pending, or completed action, suit or proceeding whether civil,
criminal, administrative or investigative and whether formal or informal (a
"Proceeding"), by reason of being or having been a director, officer, employee
or agent of the Company, if such person acted in good faith and reasonably
believed that his conduct, in his conduct, in his official capacity, was in
the best interests of the Company (or, with respect to employee benefit plans,
was in the best interests of the participants of the plan), and in all other
cases his conduct was at least not opposed to the Company's best interests.
In the case of a criminal proceeding, the director, officer, employee or agent
must have had no reasonable cause to believe his conduct was unlawful. Under
Colorado Law, the Company may not indemnify a director, officer, employee or
agent in connection with a Proceeding by or in the right of the Company if the
director is adjudged liable to the Company, or in a proceeding in which the
director, officer, employee or agent is adjudged liable for an improper
personal benefit.
The Company's Articles of Incorporation provide that the Company shall
indemnify its directors, and officers, employees and agents to the fullest
extent and in the manner permitted by the provisions of the laws of the State
of Colorado, as amended from time to time, subject to any permissible
expansion or limitation of such indemnification as may be set forth in the
by-laws of the Company or any shareholders' or directors' resolution or by
contract. The Company has entered into agreements to provide indemnification
for the Company's directors consistent with its Articles of Incorporation.
Insofar as indemnification for liabilities under the Act may be permitted to
directors, officers or persons controlling the Company pursuant to the
foregoing provisions, the Company has been informed that in the opinion of the
Commission, such indemnification is against public policy as expressed in the
Act and is therefore unenforceable.
ITEM 7. EXEMPTION FROM RE2ISTRATION CLAIMED.
--------------------------------------
Not applicable.
ITEM 8. EXHIBITS.
--------
5.1 Opinion of Lyle B. Stewart, P.C.
23.1 Consent of Ehrhardt Keefe Steiner & Hottman PC
23.2 Consent of Lyle B. Stewart, P.C. (included in Exhibit 5. 1)
24. Power of Attorney (included on signature page)
99.1 Employee Stock Option Plan
99.2 Amended and Restated Stock Option Plan for Non-Employee Directors and
Advisors
<PAGE>
ITEM 9. UNDERTAKINGS.
------------
The undersigned registrant hereby undertakes:
A. (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. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range may
be reflected in the form of prospectus filed with the Commission pursuant to
Rule 424(b) if, in the aggregate, the changes in volume and price represent no
more than a 20% change in the maximum aggregate offering price set forth in
the "Calculation of Registration Fee" table in the effective registration
statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) 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.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in Denver, Colorado on January 30, 1998.
THE QUIZNO'S CORPORATION
By /s/ Patrick E. Meyers
------------------------
Patrick E. Meyers, Vice President and General Counsel
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities and
on the dates indicated.
Each person whose signature appears below in so signing also makes,
constitutes and appoints Richard E. Schaden and Patrick E. Meyers, and each of
them, his or her true and lawful attorney-in-fact, with full power of
substitution, for him in any and all capacities, to execute and cause to be
filed with the Securities and Exchange Commission any and all amendments and
post-effective amendments to this Registration Statement, with exhibits
thereto and other documents in connection therewith, and hereby ratifies and
confirms all that said attorney-in-fact or his substitute or substitutes may
do or cause to be done by virtue hereof.
Signature Title Date
- ------------------- ---------------------------------- --------------
/s/ Richard E. Schaden President, Chief Executive Office
Richard E. Schaden and Director (Principal Executive
Officer) February 3, 1998
/s/ John L. Gallivan Chief Financial Officer and
John L. Gallivan Treasurer (Principal Financial
and Accounting Officer) February 3, 1998
/s/ Richard F. Schaden Vice President, Secretary and
Richard F. Schaden Director February 3, 1998
/s/ Brownell M. Bailey Director February 3, 1998
Brownell M. Bailey
/s/ Mark L. Bromberg Director February 3, 1998
Mark L. Bromberg
/s/ J. Eric Lawrence Director February 3, 1998
J. Eric Lawrence
/s/ Frederick H. Schaden Director February 3, 1998
Frederick H. Schaden
<PAGE>
EXHIBIT INDEX
Number Exhibit
- ------ -------
5.1 Opinion of Lyle B. Stewart, P.C.
23.1 Consent of Ehrhardt Keefe Steiner & Hottman PC
23.2 Consent of Lyle B. Stewart, P.C. (included in Exhibit 5. 1)
24. Power of Attorney (included on signature page)
99.1 Employee Stock Option Plan
99.2 Amended and Restated Stock Option Plan for Non-Employee Directors and
Advisors
Exhibit 5.1
Lyle B. Stewart, P.C.
3751 South Quebec Street
Denver, Colorado 80237
Telephone: 303-267-0920
Fax: 303-267-0922
Board of Directors
January, 30 1998
The Quizno's Corporation
1099 18th Street, Suite 2850
Denver, CO 80202
Gentlemen:
We have acted as counsel to The Quizno's Corporation (the "Company") in
connection with the proposed sale of up to 460,000 shares of its common stock,
par value $.OOI per share, by the Company, which sale is being registered on
Form S-8 (the "Registration Statement") filed by the Company on or about the
date hereof with the Securities and Exchange Commission, under the Securities
Act of 1933, as amended.
In connection therewith, we have examined and relied upon such corporate
records and other documents, instruments and certificates and have made such
other investigation as we deem appropriate as basis for the opinion set forth
below.
Based upon the foregoing, we are of the opinion that the shares of common
stock to be sold by the Company in the manner described in the Registration
Statement and the Prospectuses relating thereto, will be legally issued, fully
paid and non-assessable.
We hereby consent to the use of our name in the Registration Statement and the
filing of this opinion as an exhibit to the Registration Statement.
Very truly yours,
/s/ Lyle B. Stewart, P.C.
Exhibit 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
The Quizno's Corporation and Subsidiaries on Form S-8 of our report dated
February 28, 1997 appearing in the annual report on Form 10-KSB of The
Quizno's Corporation and Subsidiaries for the year ended December 31, 1996.
/s/Ehrhardt Keefe Steiner & Hottman PC
Ehrhardt Keefe Steiner & Hottman PC
February 2, 1998
Denver, Colorado
Exhibit 99.1
THE QUIZNO'S CORPORATION
EMPLOYEE STOCK OPTION PLAN
ARTICLE I
Purpose
The purposes of this Employee Stock Option Plan (the "Plan") are to enable The
Quizno's Corporation (the "Company") to (i) provide opportunities for certain
persons, including directors, officers and key employees of the Company, as
determined by the Committee, as defined below (the "Eligible Participants"),
to acquire a proprietary interest in the Company, (ii) increase incentives for
the Eligible Participants to contribute to the Company's performance and
future success and (iii) attract and retain individuals with exceptional
business, managerial and administrative talent upon whom, in large measure,
the sustained progress, growth and profitability of the Company depend.
ARTICLE II
Plan Overview
The Plan provides for the grant of Incentive Stock Options, as defined below,
and Stock Options which do not qualify as Incentive Stock Options
("Nonqualified Stock Options"), as contemplated by Sections 421 and 422 of the
Internal Revenue Code of 1986, as amended, and the rules and regulations
promulgated thereunder (the "Code").
ARTICLE III
Definitions
For Plan purposes, except where the context clearly indicates otherwise, the
following terms shall have the following meanings:
"Adoption Date" shall have the meaning set forth in Article XIII.
"Board" shall mean the Board of Directors of the Company.
"Committee" shall mean the Compensation Committee of the Board, or such other
Committee of the Board as the Board shall designate from time to time, which
other Committee shall consist of three or more directors appointed by the
Board from time to time, each of whom is a Disinterested Person.
"Common Stock" shall mean the Common Stock, $.001 par value per share, of the
Company.
"Disinterested Person" shall mean an administrator of this Plan who is not, at
the time he exercises discretion in administering the Plan, eligible, and has
not at any time within one year prior thereto been eligible, to be selected as
an Eligible Participant of this Plan or any other plan of the Company
entitling such participant a right to acquire stock, stock options or stock
appreciation rights of the Company; provided, however, that Committee members
may be eligible for grants or awards under this or another Plan of the Company
which constitute "Formula Awards," as that term is defined in section 16b-3 of
the Securities Exchange Act of 1934.
<PAGE>
"Effective Date" shall have the meaning set forth in Article XIII.
"Eligible Participant" shall have the meaning set forth in Article VI.
"Exercise Price" shall have the meaning set forth in Article VII.
"Fair Market Value" of the Common Stock shall mean the value per share of the
Company's Common Stock, determined without regard to any restriction other
than a restriction which, by its terms, will never lapse, as determined
through the good faith efforts of the Committee, consistent with applicable
requirements of the Code.
"Incentive Stock Option" or "ISO" shall mean a stock option granted under this
Plan which complies with all the terms and conditions for an Incentive Stock
Option, as set forth in Section 422 of the Code.
"Nonqualified Stock Option" or IINQOII shall mean a stock option granted under
this Plan which does not comply with one or more requirements for an Incentive
Stock Option.
"Option" shall mean an Incentive Stock Option or a Nonqualified Stock Option
granted under this Plan.
"Option Shares" shall mean shares of the Company's Common Stock received by an
optionee upon exercise of an option.
"Optionee" shall mean an Eligible Participant who has been granted one or more
options.
"Reorganization" shall have the meaning set forth in Article IX.
"Special Exercise Price" shall have the meaning set forth in Article VII.
"Stock Adjustment" shall have the meaning set forth in Article VIII.
"Stock Option Agreement" shall mean the written agreement entered into by the
Company and each Optionee evidencing the terms and conditions of an Option.
"Ten Percent Share Owner" shall mean an employee of the Company who owns,
whether outright or by attribution under Section 424(d) of the Code, Common
Stock possessing more than ten percent of the total combined voting power of
all classes of stock of the Company.
ARTICLE IV
Administration
4.1 The Committee. The Committee shall administer the Plan and shall have
-------------
full power and authority to, in addition to other powers set forth herein,
construe and interpret the Plan, establish any and all rules and regulations
for the operation of the Plan, establish any and all rules and regulations for
the operation of the Committee and the performance by the Committee of its
purposes and functions, and perform all other acts, including the delegation
of administrative responsibilities, that it deems reasonable and proper.
<PAGE>
The Committee shall hold its meetings at such times and places as it shall
deem advisable. A majority of the members of the Committee shall constitute a
quorum of the Committee. All actions of the Committee shall be taken by a
majority of its members. Any action of the Committee may be taken by a
written instrument signed by a majority of the Committee's members, and any
action so taken shall be as effective as if it had been taken by a vote of the
Committee.
4.2 Powers of the Committee. The Committee, without limitation and in its
-----------------------
sole discretion, shall have full power and authority to, among other things:
(a) determine those persons who are Eligible Participants;
(b) determine any conditions precedent and other applicable criteria in
allocating and granting Options;
(c) determine the number and type of each Option and the number of shares
of Common Stock covered by each option;
(d) determine the Exercise Price of each option (subject to the terms and
conditions set forth in this Plan and in any Stock Option Agreement);
(e) determine the grant date of any option;
(f) impose any vesting restrictions or other restrictions on exercise of
an Option;
(g) accelerate the exercise or vesting date of an option;
(h) impose cancellation, transfer, forfeiture and other repurchase
restrictions and limitations on any option or Option Shares; and
(i) determine any and all other terms, provisions and/or conditions
regarding the grant or exercise of an Option or the exchange, gift, transfer,
pledge or other disposition of Options or Option Shares.
The terms and conditions of each Stock Option Agreement shall be determined
solely in the discretion of the Committee, subject to the terms and conditions
of this Plan. The terms and conditions of each option and the related Stock
option Agreement may be different as among optionees and/or as among Options
granted to the same optionee.
4.3 Corrective Measures. The Committee may correct any defect, supply any
-------------------
omission or reconcile any inconsistency in the Plan, any Option or Stock
Option Agreement, in the manner and to the extent it shall deem necessary,
including amendments hereto or thereto approved by not less than a majority of
the Committee; provided, however, that any such Committee action shall be
effective only if (i) any stockholder consent required by applicable
provisions of the Code is obtained, and (ii) such action is otherwise
consistent with the applicable provisions of the Code.
<PAGE>
4.4 Decisions Final. Any decision made or action taken by the Committee
---------------
or the Board arising out of or in connection with the interpretation and
administration of the Plan shall be final and conclusive and shall be binding
upon all Optionees and their successors or assigns.
ARTICLE V
Number of Shares Subject to the Plan
The aggregate number of shares of Common Stock available for grants of Options
under this Plan shall be 320,000 shares, subject to adjustment in accordance
with Article VIII of the Plan, and the aggregate number of shares of Common
Stock for which options may be granted under this Plan shall not exceed such
number. Such shares may be either authorized but unissued shares or treasury
shares. If an Option or portion thereof shall expire or terminate for any
reason without having been exercised, the unpurchased shares covered by such
option shall be available for future grants of options; provided, however,
that in no event shall the Committee have any obligation to make such shares
available for the granting of other Options under the Plan.
ARTICLE VI
Eligibility
Consistent with this Plants purposes and the terms herein, options may be
granted to persons, including directors, officers and key employees of the
Company ("Eligible participants") at times and based on criteria the
Committee, in its sole discretion, determines are appropriate.
ARTICLE VII
Option Terms and conditions
All Options granted under this Plan shall be evidenced by a Stock Option
Agreement in substantially the form attached hereto, or such other form as the
Committee shall approve from time to time. The Stock Option Agreement shall
be subject to the provisions of the Plan and such other provisions as the
Committee may adopt, including the following provisions:
7.1 Exercise Price. The exercise price per share for each Option granted
--------
under this Plan shall be set forth in the Stock Option Agreement; provided,
however, that the exercise price per share for any Option shall not be less
than the Fair Market Value of a share of Common Stock on the date such option
is granted (the "Exercise Price"). The Committee shall be authorized to grant
Nonqualified Stock Options which shall have an exercise price per share which
is below the Fair Market Value of a share of Common Stock on the date such
Option is granted at the "Special Exercise Price").
7.2 Term of Option. No Option shall be granted pursuant to the Plan after
--------------
the date ten (10) years after the earlier of the Adoption Date and the
Effective Date. Options which are outstanding after such date will, however,
remain in effect until such options are exercised or expire pursuant to their
terms. An Option shall not be exercisable after the expiration of ten years
from the date such option is granted.
<PAGE>
7.3 Assignability of Option. An Option shall be exercisable only by the
-----------------------
Optionee, his guardian or legal representative during his or her lifetime and
shall not be assignable or transferable by the Optionee otherwise than by will
or the laws of descent and distribution. Executors, administrators, heirs,
successors and assigns of the optionee shall be bound by the terms of the
Stock Option Agreement and this Plan.
7.4 Time of Exercise. Each Option granted under this Plan shall be
------------------
exercisable on the date or dates, and during the period, and for the number of
shares specified in the Stock option Agreement. The Committee may establish
vesting provisions applicable to an Option such that the option becomes fully
exercisable, for example, in a series of cumulating portions. The Committee
may, upon request, permit the accelerated exercise of any option, the exercise
of all or a portion of which is !subject to vesting provisions. Also,
exercise of an option shall be accelerated upon the occurrence of an event of
acceleration as described in any applicable Stock Option Agreement or this
Plan.
7.5 Exercise. An Option or portion thereof shall be exercised by delivery
--------
of a written notice of exercise to the Secretary of the Company and payment of
the full Exercise Price or the Special Exercise Price. Until the certificates
for Option Shares represented by an exercised option are issued to an
(Optinee, such Optionee shall have none of the rights of a stockholder. No
Option Shares shall be delivered upon any exercise of an Option until the
requirements of all applicable .laws, rules and regulations have, in the
opinion of the Company's counsel, been satisfied. Under normal circumstances,
certificates for Option Shares to be delivered upon exercise of an option
shall be delivered within thirty (30) days following exercise of an option.
7.6 Payment. The Exercise Price or the Special .Exercise Price payable
-------
upon exercise of an option or portion -thereof may be paid:
(a) in United States dollars in cash or by check, bank draft or money
order,
(b) by delivery of shares of Common Stock with an aggregate value equal to
the Exercise Price, or the Special Exercise Price,
(c) by delivery of options with an aggregate net value (i.e., the
aggregate value of the Common Stock subject to such Options less the aggregate
Exercise Price or the Special Exercise Price of such Options), or
(d) by a combination of both (a), (b) or (c) above.
If the optionee delivers shares of Common Stock or Options as payment of the
Exercise Price or the Special Exercise price upon exercise of an Option, the
Committee shall determine acceptable methods for tendering such shares or
Options by the optionee, and may impose such limitations and prohibitions on
the use of Common Stock or options for such purposes as it deems appropriate.
Any Option tendered as payment of the Exercise ]?rice or the Special Exercise
Price shall be canceled by the Company upon receipt.
<PAGE>
7.7 Termination of Service. Subject to the terms set forth in any
------------------------
employment or other binding agreement, in the event an Optionee's Current
Position, as defined below, with the Company shall terminate (i) "for cause,"
as defined below, while holding one or more Options, that portion of each
option which has not already been exercised shall expire coincident with the
termination of the Optionee's Current Position, or (ii) for a reason other
than "for cause," other than by reason of disability (Dr. death as discussed
below, any options or portion thereof which are exercisable on the date of
such termination shall be exercisable until a date three (3) months after such
date of -termination or shall expire coincident with such three (3) month
period, except to the extent the Committee shall determine otherwise. For
purposes hereof, "Current Position" shall mean -the Optionee's position with
the Company as an employee, director, officer or independent contractor. For
purposes hereof ' "for cause" shall mean termination of an optionee's Current
Position with the Company because of such Optionee's (i) misfeasance, waste of
corporate assets, gross negligence or ,willful continued failure to
substantially perform his reasonably ,assigned duties or (ii) engagement in
dishonest or illegal ,conduct that is demonstrably injurious to the Company.
Upon the termination of an Optionee's Current Position with the ,Company by
reason of disability (within the meaning of Section 22(e)(3) of the Code)or
death, the Option may be exercised within one (1) year after such termination.
For the purposes of this Plan, it shall not be considered a termination of a
Current Position when an optionee is placed by the Company on military or sick
leave or such other type of leave of absence that is deemed by the Committee
to continue intact the employment relationship.
Notwithstanding anything in this Section VII. 7.7 to the contrary, the
committee, in its sole discretion, may waive any restrictions, including
applicable exercise periods.
7.8 Special Rules for Incentive Stock Options.
----------------------------------------------
(a) Employment Status. An ISO must be granted for a reason connected with
-----------------
employment, as defined in the Code, by the Company and shall not be
exercisable unless the optionee was, at all times during the period beginning
on the date of the grant of the option and ending on the date three (3) months
(one year if the Optionee is disabled, within the meaning of Section 22(e)(3)
of the Code) before the exercise of the Option, an employee of the Company,
except that such employment requirement does not apply in the event of an
Optionee's death as provided in Section 421(c)(1) of the Code. ISO's may not
be granted to Company directors who are not also employees.
(b) Ten Percent Stockholder. No ISO shall be granted under this Plan to a
-----------------------
Ten Percent Share Owner unless (a) such ISO is granted at an Exercise Price
equal to not less than 110% of Fair Market Value of the Common Stock on the
date of grant, and (b) such ISO expires on a date not later than five years
from the date of grant.
(c) Aggregate Value of Options. The aggregate Fair Market Value
-----------------------------
(determined at the time the ISO is granted) of ISO's granted by the Company
-
(under this and all other Plans) to an optionee which are exercisable for the
first time by such optionee in any single calendar year shall not exceed
$100,000.
(d) Notification of Disqualifying Dispositions. Any Optionee who disposes
------------------------------------------
of Option Shares acquired pursuant to the exercise of an ISO during the period
within two years from the date such option is granted or within one year after
the transfer of the Option Shares to such Optionee pursuant to the ISO's
exercise (the "ISO Nontransfer Periods") shall notify the Company of such
disposition and of the amount realized upon such disposition.
<PAGE>
ARTICLE VIII
Adjustments
In the event of a stock dividend, stock split or other subdivision,
consolidation, reorganization or similar change in the outstanding shares of
Common Stock or capital structure of the Company (collectively, a "Stock
Adjustment"), the following shall occur under the Plan: (i) the number of
shares of Common Stock reserved or otherwise available under Article V for
options, and subject to outstanding options, shall be adjusted proportionately
(and automatically reduced by any fraction resulting from such adjustment);
and (ii) the Exercise Price per share of outstanding Options shall be adjusted
so that the aggregate Exercise Price payable pursuant to each outstanding
Option after the Stock Adjustment shall equal the aggregate amount so payable
prior to the Stock Adjustment. In the event of any dispute concerning such
adjustment, the decision of the Committee shall be conclusive. If a Stock
Adjustment is made, the Committee shall notify all optionees of such
adjustment within thirty (30) days of making such an adjustment, which
notification shall state the adjusted number of shares of Common Stock for
which a particular option is exercisable.
ARTICLE IX
Corporate Reorganization or Initial Public Offering
9.1 Merger, Consolidation or Change of Control. In connection with any
------------------------------------------
merger, consolidation, change in control or similar reorganization, excluding
an initial public offering ("Reorganization"), the Committee may in its
discretion:
(a) Negotiate a binding agreement whereby any acquiring or successor
corporation will assume each option then outstanding or substitute an
equivalent option meeting the requirements of Section 424(a) of the Code for
each Option outstanding;
(b) Accelerate any applicable vesting provisions; or
(c) Authorize cash payments to optionees equal to the difference between
the aggregate Exercise Price of each
Option then outstanding irrespective of the option's current exercisability,
and, (i) if the Common Stock is not publicly traded, the Fair Market Value of
the shares covered by such Option or (ii) if the Common Stock is publicly
traded, the average of the daily Closing Price, as defined below, per share of
Common Stock for the ten (10) consecutive trading days commencing fifteen (15)
trading days before such date. For purposes hereof, "Closing Price" shall
mean, with respect to each share of Common Stock for any day, (a) the last
reported sale price or, in case no such sale takes place on such day, the
average of the closing bid and asking price, in either case as reported on the
principal national securities exchange on which the Common Stock is listed or
admitted for trading or, (b) if the Common Stock is not listed or admitted for
trading on any national securities exchange, the last reported sale price, or
in the case no such sale takes place on such day, the average of the highest
reported bid and the lowest reported asked quotation for the Common Stock, in
either case as reported on the Automatic Quotation System of NASDAQ or a
similar service if NASDAQ is no longer reporting such information. Any cash
payment which the Company may be required to make pursuant to such Committee
authorization shall be made within sixty days following such authorization and
fully discharge any and all obligation the Company may have in connection with
the Options.
<PAGE>
Notwithstanding the forgoing, the Committee shall have no obligation to take
any action with respect to any option in connection with a Reorganization.
9.2 Initial Public offering. Notwithstanding the registration with the
-----------------------
Securities and Exchange Commission of any Common Stock pursuant to a plan for
the initial public offering of Common Stock (the IIIPO Plan"), the applicable
vesting schedule shall continue to apply to all Options. Upon the
registration of any Common Stock, and notwithstanding anything herein to the
contrary, the Optionee must comply with all securities laws which apply to
such optionees and any stock received upon exercise of any Options.
ARTICLE X
Securities and Other Regulation
10.1 Applicable Law. The obligation of the Company to issue Common Stock
--------------
upon the exercise of options shall be subject to all applicable laws,
regulations, rules and orders which shall then be in effect and required by
governmental entities and the stock exchanges on which the Common Stock may
then be traded.
10.2 Disclosures and Certificate Legend. Any person exercising an option
----------------------------------
shall make such representations and furnish such information as may, in the
opinion of counsel for the Company, be appropriate to permit the Company to
issue the Option shares in compliance with the provisions of the Securities
Act of 1933 and any applicable state securities laws or any comparable laws.
If appropriate under applicable law, the Company may legend the stock
certificates evidencing the shares in a manner that is the same or similar to
that which follows: "The securities evidenced by this certificate have been
issued to the registered owner in reliance upon written representations that
these shares have been purchased for investment. These shares may not be
sold, transferred, or assigned unless, in the opinion of the Company and its
legal counsel, such sale, transfer, or assignment will not be in violation of
the Securities Act of 1933, as amended, applicable rules and regulations of
the Securities and Exchange Commission, and any applicable state securities
laws."
Nothing contained herein shall be deemed to require the Company to file any
registration statement under the securities Act of 1933 or other applicable
securities laws with respect to any options or Option Shares.
ARTICLE XI
Amendment and Termination of Plan
11.1 Amendment or Termination. The Board, without further approval of the
------------------------
stockholders of the Company, except as otherwise provided herein, may at any
time and from time to time suspend or terminate the Plan in whole or in part,
or amend the Plan in such respects as the Board may deem appropriate and in
the best interests of the Company; provided, however, that no such amendment
shall be made more than once every six months, other than to comport with
changes in the Code, or without approval of a majority of the stockholders
entitled to vote thereon which would:
<PAGE>
(a) change the class of persons from which Eligible Participants are
selected;
(b) increase the total number of shares of Common Stock which may be
issued pursuant to Options, except as provided in Article VIII;
(c) reduce the Exercise Price;
(d) extend the period for granting options; or
(e) otherwise materially increase the benefits accruing to Optionees.
11.2 No Impairment. No amendment, suspension or termination of the Plan
-------------
shall, without the Optionee's written consent, alter or impair any of the
rights or obligations under any Option therefore granted to such optionee
under this Plan.
11.3 Conforming Amendments. The Board may amend the Plan, subject to the
---------------------
limitations cited above, in such manner as it deems necessary to permit the
granting of Options meeting the requirements of future amendments, if any, to
the Code.
ARTICLE XII
Miscellaneous Provisions
12.1 Right to Continued Employment. No person shall have any claim or
-----------------------------
right to be granted an Option, and the grant of options shall not be construed
as giving an Optionee the right to be retained in the employ of, or retain any
other relationship with, the Company. Further, the Company expressly reserves
the right at any time to dismiss an optionee with or without cause, free from
any liability or claim under the Plan, except as provided herein or in another
binding agreement.
12.2 Rights as Stockholders. Optionees and their heirs, successors or
----------------------
assigns shall not have any rights with respect to any shares of Common Stock
subject to an Option until the date of the issuance of stock certificates for
such Option Shares. No adjustment shall be made for dividends (ordinary or
extraordinary, whether in cash, securities or other property) or other rights
distributed with respect to the Common Stock for which the record date is
prior to the date such stock certificate is issued, except as provided in
Article VIII.
12.3 Non-Transferability. Except by will or the laws of descent and
-------------------
distribution, or as otherwise provided herein, no right or interest in any
option granted under the Plan shall be assignable or transferable, and no
right or interest of any Optionee shall be subject to attachment or
garnishment proceedings.
12.4 Withholding Taxes. To cover applicable withholding for income and
-----------------
employment taxes in the event of the exercise of an NQO or upon a
disqualifying disposition during the ISO Nontransfer Periods, or at such other
times as it may be necessary, the Company shall withhold shares of Common
Stock otherwise to be received by the optionee equal in value to the federal
and state withholding taxes due upon said exercise. The withholding by the
Company for such tax liability shall be mandatory; provided, however, the
payment of such liability by the Company on behalf of the optionee does not
cause the Company to be in violation of any loan covenant or other agreement
or law to which it may be subject. In such event, the Optionee must satisfy
such liability in cash upon the request of the Company and comply with all
applicable securities laws.
<PAGE>
12.5 Plan Expenses. Any expenses of administering the Plan shall be borne
-------------
by the Company.
12.6 Use of Exercise Proceeds. The Payment received from optionee from
------------------------
the exercise of options shall be used for the general corporate purposes of
the Company.
12.7 No Liability of Committee Members and Indemnification Thereof. No
-------------------------------------------------------------
member of the Committee shall be personally liable by reason of any contract
or other instrument executed by him or on his behalf in his capacity as a
member of the Committee, nor for any mistake of judgment made in good faith,
and the Company shall indemnify and hold harmless each member of the Committee
and each other officer, employee or director of the Company to whom any duty
or power relating to the administration or interpretation of the Plan may be
allocated or delegated, against any cost and expense, including legal fees and
costs, or liability, including any sum paid in settlement of a claim with the
approval of the Board, arising out of any act or omission to act in connection
with the Plan unless arising out of such person's own fraud or bad faith,
provided that within fifteen (15) business days after the institution of any
such action, suit or proceeding by service of process on the Committee member,
such member shall give the Company written notice thereof and an opportunity,
at the Company's expense, to undertake to defend the same before such
Committee member undertakes such defense on his own behalf, and provided that
the Committee member cooperates with the Company in such defense and takes no
actions (including inaction) which would materially prejudice the Company.
The foregoing right to indemnification shall be in addition to such other
rights as the Committee member or other person may enjoy as a matter of law or
by reason of insurance coverage of any kind. Rights granted hereunder shall
be in addition to and not in lieu of any rights to indemnification to which
the Committee member or other person may be entitled pursuant to the articles
or bylaws of the Company.
12.8 Severability. In the event any provision of the Plan shall be held
------------
to be illegal, invalid or unenforceable for any reason, the illegality,
invalidity or unenforceability of such provision shall not affect the
remaining provisions of the Plan, but shall be fully severable and the Plan
shall be construed and enforced as if the illegal, invalid or unenforceable
provision had never been included herein.
ARTICLE XIII
Board of Director Adoption and Stockholder Approval of the Plan
This Plan was adopted by the Board on November 30, 1993 (the "Adoption Date")
and shall be approved by the Company's stockholders at the first stockholders'
meeting following such date which shall be within twelve (12) months of the
Adoption Date. The Plan shall be effective as of December 1, 1993 (the
"Effective Date"). Stockholder approval shall comply with all applicable
provisions of the Company's charter, bylaws, and applicable state law
prescribing the method and degree of stockholder approval required for the
issuance of corporate stock or options. In the event stockholder approval is
not obtained within the requisite period, the Plan shall have no force or
effect.
Exhibit 99.2
THE QUIZNO'S CORPORATION
AMENDED AND RESTATED STOCK OPTION PLAN FOR
NON-EMPLOYEE DIRECTORS AND ADVISORS
(As Amended Through February 6, 1997)
The purposes of The Quizno's Corporation's Amended and Restated Stock Option
Plan for Non-Employee Directors and Advisors (the "Plan") are to (i) enable
The Quizno's Corporation (the "Company") to attract and retain qualified
non-employee directors and advisors who will serve and advise the Company
regarding the establishment and satisfaction of long-term, strategic
objectives, (ii) furnish an incentive to non-employee directors and advisors
of the Company by making ownership in the Company available to them and (iii)
amend and restate the Company's original Non-Employee Director Stock Option
Plan, adopted by the Board on the November 30, 1993 and approved by the
stockholders on December 20, 1993, under which no options were granted.
Options granted under the Plan do not qualify as "incentive stock options"
under Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code").
ARTICLE I
Definitions
For Plan purposes, except where the context clearly indicates otherwise, the
following terms shall have the following meanings:
"Advisors" shall mean any person or persons appointed or designated by
resolution of the Board as an advisor to the Company or the Board.
"Board" shall mean the Board of Directors of the Company.
"Closing Price," see definition in "Fair Market Value."
"Committee" shall mean the Compensation Committee of the Board, or such other
Committee of the Board as the Board shall designate from time to time, which
other Committee shall consist of three or more directors appointed by the
Board from time to time.
"Company" shall mean The Quizno's Corporation.
"Eligible Participant" shall mean any Advisor or member of the Board who, on
the date of the Committee's decision to grant, or the date of the granting of,
an Option hereunder, is not an officer or an employee of the Company.
"Option" shall mean a right to purchase Shares granted pursuant to the Plan
and evidenced by an option certificate or stock option agreement in such form
as the Committee may adopt for general use from time to time.
"Optionee" shall mean an Eligible Participant to whom an Option is granted
pursuant to this Plan.
"Plan" shall mean The Quizno's Corporation Stock Option Plan for Non-Employee
Directors and Advisors.
<PAGE>
"Shares" shall mean shares of the Company's common stock, par value $.001.
"Fair Market Value" of the Shares shall mean the average of the daily Closing
Price, as defined below, per Share for the ten (10) consecutive trading days
commencing fifteen (15) trading days before such date. For purposes hereof,
"Closing Price" shall mean, with respect to each share of the Company's common
stock for any day, (a) the last reported sale price or, in case no such sale
takes place on such day, the average of the closing bid and asking price, in
either case as reported on the principal national securities exchange on which
the Shares are listed or admitted for trading or, (b) if the Shares are not
listed or admitted for trading on national securities exchange, the last
reported sale price, or in the case no such sale takes place on such day, the
average of the highest reported bid and the lowest reported asked quotation
for the Shares, in either case as reported on the Automatic Quotation System
of NASDAQ or a similar service if NASDAQ is no longer reporting such
information. If no such market exists for the Shares, and no such market has
existed for the Shares for ninety (90) days or more, the Board shall make a
good faith determination of the Fair Market Value.
ARTICLE II
Shares Subject to the Plan
The aggregate number of Shares which may be delivered upon exercise of Options
granted under the Plan shall not exceed 140,000, subject to appropriate
adjustment in the event the number of issued Shares shall be increased or
reduced by a change in par value, combination, split-up, merger,
reclassification, distribution of a dividend payable in stock, or the like.
Shares covered by Options which have lapsed or expired may, in the
Board's discretion, again be made subject to grants pursuant to the Plan.
ARTICLE III
Option Grants
3.1 Grant of Options. During the term of this Plan, all Advisors and
----------------
directors shall automatically be granted an Option to purchase 4,000 Shares
(pro-rated on a quarterly basis for service before an Advisor's or director's
initial January 1 and subject to appropriate adjustment in the event the
number of issued Shares shall be increased or reduced by a change in par
value, combination, split-up, merger, reclassification, distribution of a
dividend payable in stock, or the like) on (i) the date of their initial
appointment or designation by the Board as an Advisor or their initial
election to the Board, as the case may be, and (ii) every January 1 subsequent
to that appointment, designation or election; provided, however, that such
Advisor or director continues to hold such position of Advisor or director on
such January 1. An Advisor or director may waive their right to the automatic
grant of an Option as provided herein by notifying the Company in writing at
least ten (10) business days prior to the grant date.
3.2 Stock Option Agreement. Each Option shall be evidenced by a written
----------------------
instrument, in such form as the Committee shall from time to time approve,
which shall state the terms and conditions of the Option in accordance with
the Plan and also shall contain such additional provisions as may be necessary
or appropriate under applicable laws, regulations and rules.
<PAGE>
ARTICLE IV
Terms of Options
4.1 Exercise Price. The Option exercise price per Share shall be one
--------------
hundred percent (100%) of the "Closing Price," as defined in Article I above,
of a Share on the date the Option is granted.
4.2 Transfer--Restrictions. All Options shall be exercisable during an
----------------------
Optionee's lifetime only by such optionee. Options shall not be transferable
other than by will or the laws of descent and distribution. No Option shall
be subject, in whole or in part, to attachment, execution or levy of any kind.
4.3 Vesting. All Options granted shall vest and be exercisable on the
-------
grant date.
4.4 Expiration. All Options shall expire ten (10) years from the grant
----------
date or, if an Optionee ceases to be a director or an Advisor of the Company
for any reason, all Options held by such optionee shall terminate upon the
earlier of (i) three years after the date on which he or she ceased to be a
director or an Advisor, as the case may be, or (ii) ten (10) years from the
date of grant.
4.5 No Rights as Stockholder. No Optionee shall have any rights to
--------------------------
dividends or other rights of a stockholder of the Company prior to the
purchase of such Shares upon the exercise of the Option.
ARTICLE V
Delivery of Shares
No Shares will be delivered upon exercise of an Option until the exercise
price of the option is paid in full (i) in cash, (ii) by the delivery to the
Company of Shares with a Fair Market Value equal to the exercise price of the
Option, (iii) by delivery of a combination of (i) and (ii) with an aggregate
Fair Market Value equal to the exercise price or (iv) by delivery of an Option
or Options to purchase Shares with a net aggregate value (i.e., the aggregate
value of all Shares subject to the exercised options less the aggregate
exercise price of such Options) equal to the exercise price.
Share certificates issued to Optionees upon exercise of Options may, at the
sole discretion of the Committee, be issued subject to, and bear language
limiting their transfer otherwise than in accordance with, the Plan and
applicable state and federal law, including the then existing regulations
under Section 16(b) of the Securities and Exchange Act of 1934, as amended.
ARTICLE VI
Continuation of Service
Neither this Plan nor the grant of any Option hereunder shall confer upon any
Optionee the right to continue as a director or Advisor of the Company or
obligate the Company to nominate any Optionee for election as a director or
appointment or designation an as Advisor at any time.
<PAGE>
ARTICLE VII
Fundamental Transactions
7.1 Merger, Consolidation or Change of Control. In connection with any
------------------------------------------
merger, consolidation, change in control or similar reorganization, excluding
an initial public offering ("Reorganization"), the Committee may in its
discretion:
(a) Negotiate a binding agreement whereby any acquiring or successor
corporation will assume each Option then outstanding or substitute an
equivalent option meeting the requirements of Section 424(a) of the Code for
each Option outstanding;
(b) Accelerate any applicable vesting provisions; or
(c) Authorize cash payments to Optionees equal to the difference between
the aggregate Exercise Price of each Option then outstanding irrespective of
the Option's current exercisability and the Fair Market Value of the Shares
covered by such Option. Any cash payment which the Company may be required to
make pursuant to such Committee authorization shall be made within sixty (60)
days following such authorization and fully discharge any and all obligations
the Company may have in connection with the Options. Notwithstanding the
forgoing, the Committee shall have no obligation to take any action with
respect to any Option in connection with a Reorganization.
7.2 Initial Public Offering. Notwithstanding the registration with the
-----------------------
Securities and Exchange Commission of any Shares pursuant to a plan for the
initial public offering of the Company's common stock, the applicable vesting
schedule shall continue to apply to all Options. Upon the registration of any
of the Company's common stock, the optionee must comply with all applicable
federal and state securities laws which apply to such Optionees and any stock
received upon exercise of any options.
ARTICLE VIII
Plan Administration
8.1 Administration by Committee. The Plan shall be administered by the
---------------------------
Committee. The Committee shall be empowered, subject to the provisions of the
Plan and to any other directives issued by the Board, to prescribe, amend and
rescind rules and regulations of general application relating to the operation
of the Plan and to make all other determinations necessary or desirable for
its proper administration. Decisions of the Committee shall be final,
conclusive and binding upon all parties, including the Company, the
stockholders and the Eligible Participants.
8.2 Indemnification. Neither the Company, any subsidiary thereof, nor any
---------------
director or officer thereof, nor the Committee nor any member of the Committee
shall be liable for any act, omission, interpretation, construction or
determination made in connection with the Plan in good faith. The Committee
and each of its members shall be entitled to indemnification and reimbursement
by the Company in respect of any claim, loss, damage or expense (including
reasonable attorneys, fees and costs) arising therefrom to the full extent
permitted by law and under any directors and officers liability insurance
coverage which may be in effect from time to time.
<PAGE>
ARTICLE IX
Amendment and Discontinuance
The Board is authorized to make such changes in the Plan as it, in its sole
discretion, deems necessary. The Board may at any time suspend or discontinue
the Plan. No action of the Board or of the stockholders, however, shall alter
or impair any Option therefore granted under the Plan except as herein
provided.
ARTICLE X
Adjustments
In the event of a stock dividend, stock split or other subdivision,
consolidation, reorganization or similar change in the outstanding shares of
Common Stock or capital structure of the Company (collectively, a "Stock
Adjustment"), the following shall occur under the Plan: (i) the number of
shares of Common Stock reserved or otherwise available under Article II for
Options, and subject to outstanding Options, shall be adjusted proportionately
(and automatically reduced by any fraction resulting from such adjustment);
and (ii) the Exercise Price per share of outstanding Options shall be adjusted
so that the aggregate Exercise Price payable pursuant to each outstanding
Option after the Stock Adjustment shall equal the aggregate amount so payable
prior to the Stock Adjustment. In the event of any dispute concerning such
adjustment, the decision of the Committee shall be conclusive. if a Stock
Adjustment is made, the Committee shall notify all Optionees of such
adjustment within thirty (30) days of making such an adjustment, which
notification shall state the adjusted number of shares of Common Stock for
which a particular Option is exercisable.
ARTICLE XI
Miscellaneous
10.1 No Obligation or Entitlement. It is expressly understood that this
----------------------------
Plan grants powers to the Committee but does not require their exercise; nor
shall any person, by reason of the adoption of this Plan, be deemed to be
entitled to the grant of any Option; nor shall any rights be deemed to accrue
under the Plan except as Options may actually be granted hereunder.
10.2 Other Grants. The adoption of this Plan shall not preclude the Board
-----
from granting options to purchase Shares to any person in connection with his
or her service on the Board without reference to, and outside of, this Plan.
10.3 Expenses. All expenses of the Plan, including the cost of
--------
maintaining records, shall be borne by the Company.
-
<PAGE>
ARTICLE XII
Plan Adoption and Term
This Plan shall become effective upon the (i) adoption by the Board and (ii)
approval by the Company's stockholders at an Annual Meeting of Stockholders.
This Plan shall continue in effect for ten years from the date of its initial
approval by the Company's stockholders. No Option may be granted hereunder
after such ten-year period, but Options granted within such ten-year period
may extend beyond the termination date of the Plan.
