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 January 6, 2000
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 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>
As filed with the U. S. Securities and Exchange Commission on January __, 2000
Registration No. 333-_________
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 or organization) (I.R.S. Employer Identification No.)
1415 LARIMER STREET, DENVER, COLORADO 80202
(Address of Principal Executive Offices) (Zip Code)
THE QUIZNO'S CORPORATION
(1) EMPLOYEE STOCK 0PTION PLAN
(2) AMENDED AND RESTATED STOCK OPTION PLAN FOR DIRECTORS AND ADVISORS
---------------------------------------------------------------------
(Full Title of the Plan)
PATRICK E. MEYERS, ESQ.
VICE PRESIDENT AND GENERAL COUNSEL
THE QUIZNO'S CORPORATION
1415 LARIMER STREET
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, ESQ.
LYLE B. STEWART, P.C.
3751 S. QUEBEC STREET
DENVER, COLORADO 80237
(303) 267-0920
CALCULATION OF REGISTRATION FEE
Proposed Proposed
Title of maximum maximum
Securities Amount offering aggretage Amount of
to be to be price per offering registration
Registered Registered(1) Share(2) price(2) fee(2)
- ------------- --------------- --------- ---------- ------------
Common Stock,
par value
$.001 per share 410,000 shares $7.19 $2,947,000 $779.00
(1) The shares registered hereby, which have been reserved by the Registrant
for issuance under the two Plans referenced above, are in addition to 460,000
shares registered by the Registrant pursuant to a Registration Statement on
Form S-8 (Reg. No. 333-45549) filed with the Commission on February 3, 1998.
(2) 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 3, 2000, as reported on the Nasdaq SmallCap Market.
This Registration Statement is being filed pursuant to General Instruction E of
Form S-8 promulgated by the U. S. Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended. Pursuant to the
terms of such General Instruction E, the contents of the Registration Statement
on Form S-8 of the Registrant, Reg. No. 333-45549, filed with the Commission on
February 4, 1998, is incorporated herein by reference.
ITEM 5. INTEREST OF NAMED EXPERTS AND COUNSEL.
Lyle B. Stewart, P.C, is named herein as giving the opinion required by Item (5)
of Item 601 of Regulation S-B. Lyle B. Stewart, Esq. is the sole owner and
employee of Lyle B. Stewart, P.C. and serves as a member of the Registrant's
Advisory Board. As a member of the Registrant's Advisory Board, Mr. Stewart
receives a grant of options to purchase 4,000 shares of the Registrant's common
stock at the fair market value on the grant date for each year he is a member of
the Advisory Board. As of January 3, 2000, Mr. Stewart held options to purchase
16,000 shares of the Registrant's common stock at exercise prices of from $3.50
to $7.625 per share.
<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 6, 2000.
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 January 6, 2000
- --------------------- and Director
Richard E. Schaden (Principal Executive Officer)
/S/JOHN L GALLIVAN Chief Financial Officer and January 6, 2000
- ------------------ Treasurer (Principal Financial
John L. Gallivan and Accounting Officer)
/S/RICHARD F. SCHADEN Vice President, Secretary and January 6, 2000
- --------------------- Director
Richard F. Schaden
/S/BRAD A. GRIFFIN Director January 6, 2000
- ------------------
Brad A. Griffin
/S/ MARK L. BROMBERG Director January 6, 2000
- --------------------
Mark L. Bromberg
/S/J. ERIC LAWRENCE Director January 6, 2000
- -------------------
J. Eric Lawrence
Director January 6, 2000
- -----------------------
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 Directors and Advisors
EXHIBIT 5.1
-----------
Board of Directors January 6, 2000
The Quizno's Corporation
1415 Larimer Street
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 670,000 shares and 200,000 shares,
respectively, of its common stock, par value $.001 per share, by the Company,
pursuant to the Company's Employee Stock Option Plan and Amended and Restated
Directors and Advisors Stock Option Plan, 410,000 shares of which are being
registered on a 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 any PROSPECTUS 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.
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statements of
The Quizno's Corporation and Subsidiaries on Form S-8 of our report dated
December 13, 1999 appearing in the annual report on Form 10-KSB of The Quizno's
Corporation and Subsidiaries for the year ended September 30, 1999.
Ehrhardt Keefe Steiner & Hottman PC
January 6, 2000
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 that 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 "NQO" 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 670,000 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 Price 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 or 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 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 that 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 "IPO 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 that 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
DIRECTORS AND ADVISORS
(As Amended Through November 4, 1999)
The purposes of The Quizno's Corporation's Amended and Restated Stock Option
Plan for Directors and Advisors (the "Plan") are to (i) enable The Quizno's
Corporation (the "Company") to attract and retain qualified 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
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.
"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 Directors and
Advisors.
"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 200,000, 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.
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.
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.
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.
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.
