<PAGE>
As filed with the Securities and Exchange Commission on December 15, 1997
Registration No. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
JUST FOR FEET, INC.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Alabama 63-0734234
--------------------------------- ----------------------
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
7400 Cahaba Valley Road, Birmingham, Alabama 35242
----------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
JUST FOR FEET, INC.
1997 EMPLOYEE INCENTIVE PLAN
-------------------------------------
(Full Title of the Plan)
HAROLD RUTTENBERG
Chairman, President and Chief Executive Officer
7400 Cahaba Valley Road
Birmingham, Alabama 35242
(205) 408-3000
-------------------------------------------
(Name, address, telephone number, including
area code, of agent for service)
----------------------
Copies Requested to:
Arthur Jay Schwartz, Esq.
Smith, Gambrell & Russell, LLP
Promenade II, Suite 3100
1230 Peachtree Road, N.E.
Atlanta, Georgia 30309-3592
(404) 815-3500
----------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
====================================================================================================================
Proposed Maximum Proposed Maximum
Title of Securities Amount to be Offering Price Per Aggregate Offering Amount of
to be Registered Registered Share/(1)/ Price/(1)/ Registration Fee
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Options and Shares of
Common Stock, par 1,400,000 $14.375 $20,125,000 $5,937.00
value $.0001 per Shares
share
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
/(1)/ Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) based upon the average of the high and low
reported prices of the Common Stock on the Nasdaq National Market System
on December 11, 1997.
===============================================================================
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
- ------- ----------------------------------------
The documents listed below are hereby incorporated by reference into this
Registration Statement, and all documents subsequently filed by the Company
pursuant to Section 13(a), 13(c), 14 and 15(d) of the Securities and Exchange
Act of 1934, prior to the filing of a post-effective amendment which indicates
that all securities offered have been sold or which deregisters all securities
then remaining unsold, shall be deemed to be incorporated by reference in this
Registration Statement and to be part hereof from the date of filing such
documents:
1. The Company's Annual Report on Form 10-K for the year ended January 31,
1997;
2. Amendment No. 1 on Form 10K/A to the Company's Annual Report for the year
ended January 31, 1997 filed with the Securities and Exchange Commission on
June 2, 1997;
3. The Company's Quarterly Report on Form 10-Q for the quarterly period ended
April 30, 1997;
4. The Company's Quarterly Report on Form 10-Q for the quarterly period ended
July 31, 1997;
5. The Company's Quarterly Report on Form 10-Q for the quarterly period ended
October 31, 1997; and
6. The Company's Registration Statement on Form 8-A, as filed with the
Securities and Exchange Commission on March 4, 1994, to register the
Company's Common Stock, $.0001 par value per share, under Section 12(g) of
the Securities and Exchange Act of 1934, as amended, which Registration
Statement contains a description of the Common Stock.
ITEM 4. DESCRIPTION OF SECURITIES.
- ------- --------------------------
No response is required to this item.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
- ------- ---------------------------------------
No response is required to this item.
ITEM 6. INDEMNIFICATION OF OFFICERS AND DIRECTORS.
- ------- ------------------------------------------
Section 10-2B-8.51 of the 1994 Alabama Business Corporation Act (the
"Alabama Act") provides that a corporation may indemnify an individual made a
party to a proceeding because he is or was a director of the Company against
liability incurred in the proceeding if the individual conducted himself in a
good faith and, in the case of conduct in his official capacity with the
Company, reasonably believed that his conduct was in the best interests of the
Company or, in all other cases that the conduct was at least not opposed to the
best interests of the Company, and, in the case of any criminal proceeding, he
has no reasonable cause to believe his conduct was unlawful. A corporation may
not, however, indemnify a director under section 8.51 of the Alabama Act (i) in
connection with a proceeding by or in the right of the corporation in which the
director was adjudged liable to the corporation; or (ii) in connection with any
other proceeding charging improper personal benefit of the director in which the
director was adjudged liable on the basis that personal benefit was improperly
received by him.
II-1
<PAGE>
Sections 10-2B-8.52 and 10-2B-8.56 of the Alabama Act provide that a
corporation shall indemnify a director or officer who was successful in the
defense of any proceeding, or of any claim, issue or matter in such proceeding,
where he was a party because he is or was a director or officer of the
corporation, against reasonable expenses incurred in connection therewith,
notwithstanding that he was not successful on any other claim, issue or matter
in any such proceeding.
Sections 10-2-8.53 and 10-2B-8.56(b) of the Alabama Act provide that a
corporation may pay for or reimburse the reasonable expenses incurred by a
director, officer, employee or agent of the corporation who is a party to a
proceeding in advance of final disposition of the proceeding if (i) such
individual furnishes the corporation a written affirmation of good faith belief
that he met the standard of conduct required for permissive indemnification set
forth in section 10-2B-8.51 of the Alabama Act; (ii) such individual furnishes
the corporation a written undertaking to repay the advance if it is ultimately
determined that such person did not meet such standard of conduct or is not
otherwise entitled to indemnification under section 8.51 unless indemnification
is approved by the court under section 8.54; and (iii) a determination is made
that the facts then known to those making the determination would not preclude
indemnification under the Alabama Act.
Article 11 of the Amended and Restated Certificate of Incorporation of Just
For Feet, Inc. provides that the Company shall indemnify every director or
officer against expenses and liabilities reasonably incurred by him in
connection with any claim, action, suit or proceeding to which he is a party by
reason of his being or having been a director or officer of the Company, or, at
the Company's request, a director, officer, employee or agent of any corporation
of which he reasonably believed to be the best interest of the Company, and in
addition, in any criminal act or proceeding, had no reasonable cause to believe
that his conduct was unlawful.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
- ------- ------------------------------------
No response to this Item is required.
ITEM 8. EXHIBITS.
- ------- ---------
The following exhibits are filed with this Registration Statement.
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
------ ----------------------
4.1 Form of Incentive Stock Option Agreement.
5.1 Opinion of Smith, Gambrell & Russell, LLP.
10.1 Just For Feet, Inc. 1997 Employee Incentive Plan.
23.1 Consent of Deloitte & Touche LLP.
23.2 Consent of Smith, Gambrell & Russell, LLP (contained in their
opinion filed as Exhibit 5.1).
24.1 Powers of Attorney (contained on the signature page to this
Registration Statement).
II-2
<PAGE>
ITEM 9. UNDERTAKINGS.
- ------- -------------
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement 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;
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's Annual Report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
Registration Statement shall be deemed to be a new Registration Statement
relating to the securities offered therein, and the offering of such securities
at the time shall be deemed to be the initial bona fide offering thereof.
(h) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
II-3
<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 the City of Birmingham, State of Alabama, on the 10th day of
December, 1997.
JUST FOR FEET, INC.
By: /s/ Harold Ruttenberg
------------------------------------
Harold Ruttenberg
Chairman, President and Chief
Executive Officer
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Harold Ruttenberg and Eric L. Tyra and each of
them, his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution for him, in his name, place and stead, in any
and all capacities, to sign any and all amendments (including post-effective
amendments) to this Registration Statement, and to file the same, with all
exhibits thereto, and other documents in connection therewith, including a
Registration Statement filed under Rule 462(b) of the Securities Act of 1933, as
amended, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the premises
as fully and to all intents and purposes as he might or could do in person,
hereby ratifying and confirming all that said attorneys-in-fact and agents may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities indicated and on the dates indicated.
SIGNATURE TITLE DATE
- --------- ----- ----
/s/ Harold Ruttenberg Chairman, President and Chief December 10, 1997
- ------------------------ Executive Officer (principal
Harold Ruttenberg executive officer)
/s/ Eric L. Tyra Executive Vice President - December 10, 1997
- ------------------------ Finance, Chief Financial
Eric L. Tyra Officer
(principal accounting officer)
/s/ Michael P. Lazarus Director December 10, 1997
- ------------------------
Michael P. Lazarus
II-4
<PAGE>
SIGNATURE TITLE DATE
- --------- ----- ----
/s/ Bart Starr, Sr. Director December 10, 1997
- ------------------------
Bart Starr, Sr.
/s/ Randall L. Haines Director December 10, 1997
- ------------------------
Randall L. Haines
/s/ David F. Bellet Director December 10, 1997
- ------------------------
David F. Bellet
/s/ Edward S. Croft, III Director December 10, 1997
- ------------------------
Edward S. Croft, III
II-5
<PAGE>
Exhibit Index
-------------
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
------ ------------------------------------------------
4.1 Form of Incentive Stock Option Agreement.
5.1 Opinion of Smith, Gambrell & Russell, LLP.
10.1 Just For Feet, Inc. 1997 Employee Incentive Plan.
23.1 Consent of Deloitte & Touche LLP.
<PAGE>
EXHIBIT 4.1
JUST FOR FEET, INC.
INCENTIVE STOCK OPTION AGREEMENT
--------------------------------
THIS INCENTIVE STOCK OPTION AGREEMENT ("Option Agreement") is made and
entered into this ____ day of ___________, 199__ by and between Just For Feet,
Inc., an Alabama corporation (the "Company") and __________ ("Employee").
W I T N E S S E T H:
-------------------
The Board of Directors of the Company has adopted the Just For Feet, Inc.
1997 Employee Incentive Plan (the "Plan"), a copy of which is attached hereto as
Exhibit "A" and incorporated herein by reference. Pursuant to the terms of the
Plan, the Board of Directors or its designated committee has selected Employee
to participate in the Plan and desires to grant to Employee certain incentive
stock options to purchase shares of the Company's authorized $.0001 par value
common stock ("Stock"), subject to the terms and conditions hereinafter set
forth;
NOW, THEREFORE, in consideration of the mutual promises, agreements and
covenants contained herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. INCORPORATION OF PLAN PROVISIONS
This Option Agreement is subject to and is to be construed in all respects
in a manner which is consistent with the terms of the Plan, the provisions of
which are hereby incorporated by reference into this Option Agreement and a copy
of which is on file with the Secretary of the Company. Employee acknowledges
receipt of a copy of the Plan prior to the execution of this Agreement. Unless
specifically provided otherwise, all terms used in this Option Agreement shall
have the same meaning as in the Plan.
2. GRANT OF OPTION
Subject to the further terms and conditions of this Option Agreement,
Employee is hereby granted a stock option to purchase _______________ shares
of Stock, effective as of the date first written above. This stock option is
intended to be an Incentive Stock Option as provided in (S) 422 of the Internal
Revenue Code.
3. FAIR MARKET VALUE OF STOCK
The Board of Directors has determined, in good faith and in its best
judgment, that the fair market value per share of Stock as of the date this
stock option is granted is ____________.
4. OPTION PRICE
The Board of Directors has determined that the price for each share of Stock
purchased under this Option Agreement shall be ____________ (the "Option
Price").
5. EXPIRATION OF OPTIONS
The option to acquire Stock pursuant to this Option Agreement shall expire
(to the extent not previously fully exercised) upon the first to occur of the
following:
<PAGE>
(a) ____________ (the tenth anniversary of the date of grant of the
option, or the fifth anniversary in the case of a Ten Percent Owner);
(b) As to any option or unexercised portion thereof which was otherwise
exercisable on the date of termination of Employment;
(i) The date which is three (3) months following the date on which
Employee ceases his employment with the Company or any subsidiary
of the Company, otherwise than as a result of Employee's death or
Disability or if Employee's employment is terminated for Cause (as
hereinafter defined).
(ii) The date which is the first anniversary of the date upon which
Employee ceases to be employed by the Company, or any subsidiary
of the Company, by reason of Employee's death or Disability but in
no event after the date provided in paragraph (a) of this
Article 5;
(iii) The date of termination of employment if Employee is terminated
for Cause.
For the purposes of this Agreement, Cause shall mean (i) the
commission of a felony or any act of fraud, theft, embezzlement,
dishonesty, misappropriation or moral turpitude (as hereafter
defined) on the part of the Employee, (ii) a willful failure by
the Employee to comply with any laws or regulations relating to
his employment with the Corporation (as hereinafter defined in
Section 8(a)), (iii) a material breach by the Employee of, or a
material failure by the Employee to perform, his duties and
obligations as an Employee of the Corporation, (iv) substantial
dependance or addiction to alcohol or any drug, (v) wilful
dereliction of duties or disregard of lawful instructions or
directions of the officers or directors of the Corporation
relating to a material matter, (vi) conduct disloyal to the
Corporation, or (vii) a failure by Employee to cease and desist
conducting activities prohibited by the rules and regulations of
the Company after an oral or written request by the Corporation to
so cease and desist. For purposes of this Agreement, "moral
turpitude" shall mean an act of baseness, vileness, or depravity
in the private and social duties which a person owes to another,
or to society in general, contrary to the accepted and customary
rule of right and duty between people.
(c) As to any options or portion thereof that were not exercisable on the
date Employee ceases Employment with the Corporation by reason of death
or Disability, the date which is six (6) months following such
termination but in no event after the date provided in paragraph (a) of
this Article 5.
6. EXERCISE OF OPTION
Unless options hereunder shall earlier lapse or expire pursuant to Article 5
hereof, this option may be exercised, subject to the limitations contained in
the second paragraph of this Article 6, with respect to the aggregate number of
shares subject to this Option Agreement as follows:
(i) as of ______________, 199__, _________ shares;
(ii) as of ______________, 199__, an additional _________ shares; and
(iii) as of ______________, 199__, an additional _________ shares.
-2-
<PAGE>
To the extent such options become exercisable in accordance with the
foregoing, Employee may exercise this stock option, in whole or part, from time
to time. The option exercise price may be paid by Employee either in cash, or by
surrender of other shares of unrestricted Stock of the Company held by Employee
for at least six months or a combination of cash and Stock.
7. MANNER OF EXERCISE
This stock option may be exercised by written notice to the Secretary of the
Company by specifying the number of shares to be purchased and signed by
Employee or such other person who may be entitled to acquire Stock under this
Option Agreement. If any such notice is signed by a person other than Employee,
such person shall also provide such other information and documentation as the
Secretary of the Company may reasonably require to assure that such person is
entitled to acquire Stock under the terms of the Plan and this Option Agreement.
After receipt of the notice and any other assurances requested by the
Company under this Article 7, and upon receipt of the full option price, the
Company shall issue to the person giving notice of exercise under this Option
Agreement the number of shares specified in such notice.
8. COVENANT NOT TO COMPETE
In consideration of the grant by the Company of the option, Employee agrees
with the Company as follows:
(a) While Employee is employed by the Company, or one or more of the
subsidiaries (hereinafter collectively referred to as "the Corporation")
Employee will devote his entire time, energy and skills to the service
of the Corporation. Such employment shall be at the pleasure of the
board of directors of each employing corporation. Except as provided in
Section 5 hereof, no option granted under this Agreement shall be
exercised after the termination of Employee's employment with the
Corporation.
(b) Employee will not, during the term of his employment with the
Corporation and for a period of one (1) year after termination for any
reason of his employment with the Corporation, directly or indirectly,
engage in or carry on within a fifty (50) mile radius of any of the
Corporation's retail outlets existing upon the date of termination of
such employment, any business, like or similar to that engaged in by
Corporation, either individually or as a stockholder, director, officer,
consultant, independent contractor, employee, agent, member or otherwise
of or through any corporation, partnership, association, joint venture,
firm, individual or otherwise (hereinafter "Firm"), or in any other
capacity.
The above one (1) year period shall be extended by any period of time during
which Employee is in default of the covenants contained in this Agreement.
(c) During the term of his employment with the Corporation and thereafter,
Employee shall not divulge, or furnish or make accessible to any third
party, company, corporation or other organization (including but not
limited to customers, competitors or governmental agencies), without the
Corporation's prior written consent, any trade secrets, customer lists,
information regarding customers, or other confidential information
concerning the Corporation or its business, including without
limitation, confidential methods of operation and organization,
-3-
<PAGE>
trade secrets, confidential matters related to pricing, markups,
commissions and customer lists.
(d) In the event of a breach or threatened breach by Employee of all or any
part of the provisions of subdivisions (b) or (c) of this Article 8, the
Corporation shall be entitled to an injunction restraining Employee from
such breach without limiting any other rights or remedies available to
the Corporation for such breach or threatened breach.
(e) Employee specifically recognizes and affirms that if any of the
covenants contained in subdivisions (b) or (c) of Article 8 of this
Agreement should be held or found invalid or unenforceable for any
reason whatsoever by a court of competent jurisdiction in an action
between Employee and the Corporation, the Company shall be entitled to
receive (but not obligated to acquire) from Employee all Stock held by
Employee which was obtained by Employee under this Option Agreement
(including all shares obtained by virtue of any stock dividend or
distribution, recapitalization, merger, consolidation, split-up,
combination, exchange of shares or other transaction, hereinafter "stock
dividends") by returning to Employee for each share received the Option
Price paid by Employee (as adjusted for stock dividends). If Employee
has sold, transferred, or otherwise disposed of Common Stock obtained
under this Agreement (including all shares obtained by virtue of any
stock dividends), the Company shall be entitled to receive from Employee
the difference between the Option Price paid by Employee and the fair
market value of the Common Stock (including all shares obtained by
virtue of any stock dividends) on the date of sale, transfer, or other
disposition.
(f) Notwithstanding any provision to the contrary herein contained,
Article 8(b) shall not apply:
(i) Upon the termination of the Employee's employment by the
Corporation other than for Cause within one (1) year following a
Sale of the Company; and
(ii) Upon the voluntary termination of employment by the Employee
for any reason within the thirty (30) day period immediately
after the one (1) year period following a Sale of the Company.
(g) In the event of a Sale of the Company following the execution of this
Agreement, Employee expressly agrees that the terms and conditions set
forth in this Article 8 shall be binding upon Employee and shall be
fully enforceable by the successor to the Company.
For purposes of this Agreement, "Sale of the Company" shall mean (i) the
acquisition by any individual, entity or group (within the meaning of Section
13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), (a "Person"), of beneficial ownership (within the meaning of
Rule 13d-3 promulgated under the Exchange Act) of more than 50% of either the
then outstanding shares of common stock of the Company (the "Outstanding Common
Stock") or the combined voting power of the then outstanding voting securities
of the Company entitled to vote generally in the election of directors (the
"Outstanding Voting Securities"), or (ii) consummation by the Company of a
reorganization, merger or consolidation, or sale or other disposition of all or
substantially all of the assets of the Company; unless, following such
acquisition of beneficial ownership or transaction (A) more than 60% of the then
outstanding shares of common stock of the Person resulting from such
reorganization, merger or consolidation, or (B) more than 60% of the then
outstanding shares of common stock of the Person acquiring such beneficial
ownership or assets, and the combined voting power of the then outstanding
voting securities of such Person
-4-
<PAGE>
entitled to vote generally in the election of directors of such Person, is then
beneficially owned, directly or indirectly, by all or substantially all of the
individuals and entities who were the beneficial owners, respectively, of
Outstanding Common Stock and Outstanding Voting Securities immediately prior to
such acquisition or transaction, in substantially the same proportion as their
ownership of Outstanding Common Stock and Outstanding Voting Securities prior to
such event.
9. PLAN TO CONTROL
The Plan is incorporated in this Agreement by this reference. Any question
of interpretation or application of the Plan or this Agreement shall be resolved
by the Board of Directors or the Committee, and its determination shall be final
and binding on the Company and Employee. In the event of any conflict between
the provisions of the Plan and of this Agreement, the Plan shall control.
10. BINDING EFFECT
This Agreement shall bind and inure to the benefit of the parties hereto,
the successors and assigns of the Company and the person to whom the rights of
Employee are transferred by will or the laws of descent and distribution.
11. RESTRICTIONS ON TRANSFERABILITY
(a) The stock option granted hereunder shall not be transferable by Employee
otherwise than by will or by the laws of descent and distribution, and such
stock option shall be exercisable during Employee's lifetime only by Employee.
(b) Pursuant to Section 5(h) of the Plan, the shares of stock purchased by
Employee pursuant to the exercise of the options hereunder are not transferable
by Employee until the expiration of sixty (60) days from the transfer of shares
to Employee upon the exercise of this option, and any attempt by Employee to
transfer such shares prior to the latter of such dates may result in the
repurchase of such shares by the Company as provided in that section of the
Plan.
12. FURTHER RESTRICTIONS ON EXERCISE AND SALE OF STOCK
Employee acknowledges and understands that the Stock subject to this Option
Agreement is not registered under the federal Securities Act of 1933, as amended
("Federal Act") or under the Alabama Securities Act or the securities laws of
any other state (the "State Acts"). Each option shall be subject to the
requirement that if at any time the Board of Directors shall determine, in its
discretion, that the listing, registration or qualification of the shares
subject to such option upon any securities exchange or under any state or
federal law, or the consent or approval of any government regulatory body, is
necessary or desirable as a condition of, or in connection with, the granting of
such option or the issue or purchase of shares thereunder, such option may not
be exercised in whole or in part unless such listing, registration,
qualification, consent or approval shall have been effected or obtained free of
any conditions not acceptable to the Board of Directors. The costs of any such
listing, registration, qualification, consent or approval shall be paid by the
Company. Alternatively, the Company shall not permit any exercise of this stock
option unless it receives such representations, factual assurances, and legal
opinions as it may deem necessary to determine and document the availability of
an exemption from registration under both the Federal Act and the State Acts
with respect to any particular issuance of shares under this Option Agreement.
Further, the Board of Directors shall require that Stock issued in respect of
any exercise of this stock option shall bear such restrictions on further
transfer as shall be necessary to insure the availability of any exemption so
claimed.
-5-
<PAGE>
13. REORGANIZATION
In the event that dividends are payable in Common Stock of the Company or in
the event there are subdivisions or consolidations of shares of Common Stock of
the Company or in the event of any other increase or decrease in the number of
issued shares of the Company without receipt of consideration by the Company,
the number of shares deliverable upon the exercise thereafter of any Option
theretofore granted and the exercise price with respect to such Option shall
each be increased or decreased proportionately, as the case may be, without
change in the aggregate purchase price.
In case the Company is merged or consolidated with another corporation and
the Company is not the surviving corporation, or in the case of the sale of all
or substantially all of the assets of the Company, or in case of a dissolution
or liquidation of the Company, or in the case of a sale or exchange of eighty
percent (80%) or more of the outstanding stock of the Company by the
shareholders of the Company, the Board of Directors of the Company or its
designated committee shall upon written notice to the Optionee provide that the
Option (including the shares not then exercisable) must be exercised within
thirty (30) days of the date of such notice or it will be terminated.
Notwithstanding anything in this Option Agreement or the Plan to the contrary,
nothing shall extend Optionee's right to exercise this Option after the
expiration of ten (10) years from the date it is granted.
14. GOVERNING LAW
This Option Agreement shall be interpreted and construed according to and
governed by the laws of the State of Alabama.
[SIGNATURES ON FOLLOWING PAGE]
-6-
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Option Agreement to be
executed by a member of the Board of Directors or the Committee or a duly
authorized officer of the Company, and Employee has executed this Option
Agreement as of the date first written above.
JUST FOR FEET, INC.
By:
-------------------------------------
Harold Ruttenberg, President
Attest:
- -------------------------
Scott Wynne, Secretary
EMPLOYEE
----------------------------------------
Employee
-7-
<PAGE>
EXHIBIT 5.1
December 12, 1997
Board of Directors
Just For Feet, Inc.
7400 Cahaba Valley Road
Birmingham, Alabama 35242
RE: Just For Feet, Inc.
Registration Statement on Form S-8
1,400,000 Shares of $.0001 par value
Common Stock
Just For Feet, Inc. 1997 Employee Incentive Plan
------------------------------------------------
Gentlemen:
We have acted as counsel for Just For Feet, Inc. (the "Company") in
connection with the registration of 1,400,000 shares of its $.0001 par value
Common Stock (the "Shares") reserved to the Just For Feet, Inc. 1997 Employee
Incentive Plan (the "Plan"), pursuant to a Registration Statement on Form S-8
(the "Registration Statement") to be filed with the Securities and Exchange
Commission pursuant to the Securities Act of 1933, as amended, covering the
Shares.
In connection therewith, we have examined the following:
(1) The Amended and Restated Certificate of Incorporation of the Company,
certified by the Secretary of State of the State of Alabama;
(2) The By-Laws of the Company, as amended, certified as complete and
correct by the Secretary of the Company;
(3) Resolutions adopted by the Board of Directors of the Company on May 15,
1997, certified as correct and complete by the Secretary of the
Company;
(4) Certificate of Good Standing with respect to the Company, issued by the
Secretary of State of the State of Alabama; and
(5) The Registration Statement, including all exhibits thereto.
1
<PAGE>
Board of Directors
Just For Feet, Inc.
December 12, 1997
Page Two
Based upon such examination and upon examination of such other instruments
and records as we have deemed necessary, we are of the opinion that:
(A) The Company has been duly incorporated under the laws of the State of
Alabama and is validly existing and in good standing under the laws of
that state.
(B) The Shares covered by the Registration Statement have been legally
authorized and when issued in accordance with the terms described in
said Registration Statement, will be validly issued, fully paid and
nonassessable.
We consent to the filing of this opinion as an exhibit to the aforementioned
Registration Statement on Form S-8 and to the reference to this firm under the
caption "Legal Matters" in the Prospectus. In giving this consent, we do not
thereby admit that we come within the category of persons whose consent is
required under Section 7 of the Securities Act of 1933, or the rules and
regulations of the Securities and Exchange Commission thereunder.
Sincerely,
SMITH, GAMBRELL & RUSSELL, LLP
/s/ Marlon F. Starr
-------------------
Marlon F. Starr
MFS/dkaw
2
<PAGE>
EXHIBIT 10.1
JUST FOR FEET, INC.
1997 EMPLOYEE INCENTIVE PLAN
SECTION 1. GENERAL PURPOSE OF PLAN; DEFINITIONS.
The name of this plan is the Just For Feet, Inc. 1997 Employee Incentive
Plan (the "Plan"). The purpose of the Plan is to enable Just For Feet, Inc. (the
"Company") and its Subsidiaries and Affiliates to attract and retain employees
who contribute to the Company's success by their ability, ingenuity and
industry, and to enable such employees to participate in the long-term success
and growth of the Company through an equity interest in the Company.
For purposes of the Plan, the following terms shall be defined as set forth
below:
a. "Affiliate" means any corporation (other than a Subsidiary),
partnership, joint venture or any other entity in which the Company owns,
directly or indirectly, at least a 10 percent beneficial ownership interest.
b. "Board" means the Board of Directors of the Company.
c. "Cause" means a felony conviction of a participant or the failure of a
participant to contest prosecution for a felony, or a participant's willful
misconduct or dishonesty, any of which is harmful to the business or reputation
of the Company or any Subsidiary or Affiliate.
d. "Code" means the Internal Revenue Code of 1986, as amended, or any
successor thereto and the Treasury Regulations and rulings promulgated
thereunder.
e. "Committee" means a committee of the Board appointed for the purpose of
administering the Plan, which committee shall at all times consist of two or
more Non-Employee Directors.
f. "Commission" means the U.S. Securities and Exchange Commission.
g. "Company" means Just For Feet, Inc., a corporation organized under the
laws of the State of Alabama (or any successor corporation).
h. "Disability" means total and permanent disability as determined under
the Company's long term disability program or, if the Company has no such
program, shall mean total and permanent disability as defined in Section
22(e)(3) of the Code or any successor thereto.
i. "Eligible Employee" means a person regularly employed by the Company or
a Subsidiary and who is responsible for or contributes to the management, growth
and/or profitability of the business of the Company or a Subsidiary.
j. "Eligible Participant" means directors, officers, employees, consultants
and advisors of the Company or a Subsidiary and other persons who may not
otherwise be eligible to receive Incentive Stock Options pursuant to Section 5
of the Plan.
<PAGE>
k. "Exchange Act" means the Securities Exchange Act of 1934, as amended,
and any successor thereto.
l. "Fair Market Value" means, as of any given date, the mean between the
high "bid" and low "ask" prices as of the close of business for the Company's
Stock in the over-the-counter market, as reported by the Nasdaq Stock Market (or
other national quotation service), or, if the Stock is registered on a national
securities exchange, the closing price of the Stock on such national securities
exchange or, if neither traded in the over-the-counter market nor listed on a
national securities exchange, then the fair market value as determined by the
Board or the Committee, but in no case less than the par value of such Stock.
m. "Incentive Stock Option" means any Stock Option intended to be and
designated as an "incentive stock option" within the meaning of Section 422 of
the Code.
n. "Non-Employee Director" means a member of the Board who is not a regular
salaried employee of the Company or one of its Subsidiaries. As it relates to
the members of the Committee, "Non-Employee Director" shall have the meaning set
forth in Rule 16b-3(b)(3) as promulgated by the Commission under the Securities
Exchange Act of 1934, as amended, or any successor definition adopted by the
Commission.
o. "Non-Qualified Stock Option" means any Stock Option that is not an
Incentive Stock Option.
p. "Performance Award" means an award of shares of Stock or cash pursuant
to Section 9 contingent upon achieving certain performance goals.
q. "Plan" means this 1997 Employee Incentive Plan.
r. "Restricted Stock" means an award of shares of Stock that are subject to
restrictions under Section 8.
s. "Stock" means the Common Stock, par value $.0001 per share, of the
Company.
t. "Stock Appreciation Right" means a right granted under Section 7 which
entitles the holder to receive a cash payment or an award of Stock in an amount
equal to the difference between (i) the Fair Market Value of the Stock covered
by such right at the date the right is granted, unless otherwise determined by
the Board or the Committee pursuant to Section 7 and (ii) the Fair Market Value
of the Stock covered by such right at the date the right is exercised multiplied
by the number of shares covered by the right.
u. "Stock Option" means any option to purchase shares of Stock granted to
Eligible Employees or Eligible Participants under the Plan.
v. "Subsidiary" means any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company if each of the
corporations (other than the last
<PAGE>
corporation in the unbroken chain) owns stock possessing 50% or more of the
total combined voting power of all classes of stock in one of the other
corporations in the chain.
SECTION 2. ADMINISTRATION.
The Plan shall be administered by the Board or the Committee. The Board or
the Committee shall have the power and authority to grant to Eligible Employees
or Eligible Participants, pursuant to the terms of the Plan: (i) Incentive Stock
Options; (ii) Non-Qualified Stock Options; (iii) Stock Appreciation Rights; (iv)
Restricted Stock; or (v) Performance Awards.
In particular, the Board or the Committee shall have the authority:
(i) to select the Eligible Employees or Eligible Participants to whom
Incentive Stock Options, Non-Qualified Stock Options, Stock Appreciation Rights,
Restricted Stock, or Performance Awards or a combination of the foregoing from
time to time will be granted hereunder;
(ii) to determine whether and to what extent Incentive Stock Options, Non-
Qualified Stock Options, Stock Appreciation Rights, Restricted Stock, or
Performance Awards or a combination of the foregoing, are to be granted
hereunder;
(iii) to determine the number of shares of Stock to be covered by each such
award granted hereunder;
(iv) to determine the terms and conditions, not inconsistent with the terms
of the Plan, of any award granted hereunder including, but not limited to, any
restriction on any Stock Option or other award and/or the shares of Stock
relating thereto based on performance and/or such other factors as the Board or
the Committee may determine, in its sole discretion, and any vesting
acceleration features based on performance and/or such other factors as the
Board or the Committee may determine, in its sole discretion;
(v) to determine whether, to what extent and under what circumstances Stock
and other amounts payable with respect to an award under this Plan shall be
deferred either automatically or at the election of a participant, including
providing for and determining the amount (if any) of deemed earnings on any
deferred amount during any deferral period.
Subject to Section 11, the Board or the Committee shall have the authority
to adopt, alter and repeal such administrative rules, guidelines and practices
governing the Plan as it shall, from time to time, deem advisable; to interpret
the terms and provisions of the Plan and any award issued under the Plan (and
any agreements relating thereto); and to otherwise supervise the administration
of the Plan.
All decisions made by the Board or the Committee pursuant to the provisions
of the Plan shall be final and binding on all persons, including the Company and
Plan participants.
<PAGE>
SECTION 3. STOCK SUBJECT TO PLAN.
The total number of shares of Stock reserved and available for distribution
under the Plan shall be 1,400,000. Such shares may consist, in whole or in part,
of authorized and unissued shares or treasury shares.
If any shares of Stock that have been subject to option cease to be subject
to option, or if any shares subject to any Restricted Stock award granted
hereunder are forfeited or such award is otherwise terminated, such shares shall
again be available for distribution in connection with future awards under the
Plan.
In the event of any merger, reorganization, consolidation, recapitalization,
stock dividend, or other change in corporate structure affecting the Stock, a
substitution or adjustment shall be made in the aggregate number of shares
reserved for issuance under the Plan, in the number and option price of shares
subject to outstanding Stock Options granted under the Plan and in the number of
shares subject to Restricted Stock awards granted under the Plan as may be
determined to be appropriate by the Board or the Committee, in its sole
discretion, provided that the number of shares subject to any award shall always
be a whole number. Such adjusted option price shall also be used to determine
the amount payable by the Company upon the exercise of any Stock Appreciation
Right associated with any Stock Option.
SECTION 4. ELIGIBILITY.
Incentive Stock Options shall be granted only to Eligible Employees. Non-
Qualified Stock Options, Stock Appreciation Rights, Restricted Stock and
Performance Awards may be granted to Eligible Employees and Eligible
Participants. The optionees and participants under the Plan shall be selected
from time to time by the Board or the Committee, in its sole discretion, from
among those eligible, and the Board or the Committee shall determine, in its
sole discretion, the number of shares covered by each award or grant.
SECTION 5. INCENTIVE STOCK OPTIONS.
Incentive Stock Options may be granted either alone or in addition to other
awards granted under the Plan. Any Incentive Stock Option granted under the Plan
shall be in such form as the Board or the Committee may from time to time
approve, and the provisions of Incentive Stock Option awards need not be the
same with respect to each optionee.
The Board or the Committee shall have the authority to grant any Eligible
Employee Incentive Stock Options (with or without Stock Appreciation Rights)
except that Incentive Stock Options shall not be granted to employees of an
Affiliate. To the extent that any Stock Option does not qualify as an Incentive
Stock Option, it shall constitute a separate Non-Qualified Stock Option.
Anything in the Plan to the contrary notwithstanding, no term of this Plan
relating to Incentive Stock Options shall be interpreted, amended or altered,
nor shall any discretion or authority granted under the Plan be so exercised, so
as to disqualify either the Plan or any Incentive Stock Option under Section 422
of the Code. Notwithstanding the foregoing, in the event an optionee
<PAGE>
voluntarily disqualifies an option as an Incentive Stock Option within the
meaning of Section 422 of the Code, the Board or the Committee may, but shall
not be obligated to, make such additional grants, awards or bonuses as the Board
or the Committee shall deem appropriate, to reflect the tax savings to the
Company which results from such disqualification.
Incentive Stock Options granted under the Plan shall be evidenced by
agreements to be consistent with and subject to the following terms and
conditions and shall contain such additional terms and conditions, consistent
with the terms of the Plan, as the Board or the Committee shall deem desirable:
(a) Option Price. The option price per share of Stock purchasable
under an Incentive Stock Option shall be the Fair Market Value of the Stock
on the date of the grant of the Incentive Stock Option; provided, however,
that the option price per share of an Incentive Stock Option granted to an
individual who, at the time the option is granted, owns directly or
indirectly more than ten percent (10%) of the total combined voting power of
all classes of stock of the Company or of a subsidiary (a "Ten Percent
Owner"), shall be not less than one hundred ten percent (110%) of the Fair
Market Value on the date the option is granted.
(b) Option Term. The term of each Incentive Stock Option shall be
fixed by the Board or the Committee, but no Incentive Stock Option shall be
exercisable more than ten (10) years after the date such option is granted.
Notwithstanding the foregoing, no Incentive Stock Option granted to a Ten
Percent Owner shall be exercisable more than five (5) years from the date
of grant of the option.
(c) Exercisability. Subject to paragraph (g) of this Section 5,
Incentive Stock Options shall be exercisable at such time or times and
subject to such terms and conditions as shall be determined by the Board or
the Committee at grant. If the Board or the Committee provides, in its
discretion, that any Incentive Stock Option is exercisable only in
installments, the Board or the Committee may waive such installment
exercise provision at any time in whole or in part based on performance
and/or such other factors as the Board or the Committee may determine in
its sole discretion.
(d) Method of Exercise. Incentive Stock Options may be exercised in
whole or in part at any time during the option period, by giving written
notice of exercise to the Company specifying the number of shares to be
purchased, accompanied by payment in full of the purchase price, in cash, by
check or such other instrument as may be acceptable to the Board or the
Committee. As determined by the Board or the Committee, in its sole
discretion, at or after grant, payment in full or in part may also be made
in the form of unrestricted Stock owned by the optionee (based on the Fair
Market Value of the Stock on the date the option is exercised). An optionee
shall have the right to dividends or other rights of a stockholder with
respect to shares subject to the option only when the optionee has given
written notice of exercise and has paid in full for such shares.
(e) Non-transferability of Options. No Incentive Stock Option shall
be transferable by the optionee otherwise than by will or by the laws of
descent and distribution.
<PAGE>
All Incentive Stock Options shall be exercisable, during the optionee's
lifetime, only by the optionee.
(f) Termination of Employment. In the event that an optionee during
his or her lifetime ceases to be an employee of the Company or of any
Subsidiary of the Company for any reason (including retirement) other than
death or Disability, any Incentive Stock Option or unexercised portion
thereof which was otherwise exercisable on the date of termination of
employment shall expire unless exercised within a period of three (3) months
from the date on which the optionee ceased to be an employee, but in no
event after the term provided in the optionee's stock option agreement. In
the event that an optionee ceases to be an employee of the Company or of any
Subsidiary of the Company for any reason (including retirement) other than
death or Disability prior to the time that an option is exercisable, his or
her Incentive Stock Option shall terminate immediately and be null and void.
In the event that an optionee during his or her lifetime ceases
to be an employee of the Company or any Subsidiary of the Company by reason
of death or Disability, any Incentive Stock Option or unexercised portion
thereof which was otherwise exercisable on the date such optionee ceased
employment shall expire unless exercised within a period of one (1) year
from the date on which the optionee ceased to be an employee, but in no
event after the term provided in the optionee's stock option agreement. In
the event that an optionee during his or her lifetime ceases to be an
employee of the Company or any Subsidiary of the Company by reason of death
or Disability, any Incentive Stock Option or portion thereof which was not
exercisable on the date such optionee ceased employment shall become
immediately exercisable for a period of six (6) months from the date on
which the optionee ceased to be an employee, but in no event after the term
provided in the optionee's stock option agreement. In the event of the death
of an optionee, the option shall be exercisable by his or her personal
representatives, heirs or legatees, as provided herein.
(g) Limit on Value of Incentive Stock Options First Exercisable
Annually. To the extent that the aggregate Fair Market Value (determined at
the time the option is granted) of shares of Stock with respect to which
Incentive Stock Options are exercisable for the first time by an individual
during any calendar year (under all of the Company's option plans) exceeds
$100,000, such options shall be treated as Non-Qualified Stock Options.
(h) Restriction on Transfer of Underlying Shares. Each optionee shall
hold the shares purchased by him pursuant to the exercise of a Stock Option
granted under this Plan until the expiration of sixty (60) days from the
date of exercise. The Board or the Committee may waive the restriction
imposed by this paragraph and may, in its sole discretion, as a condition to
such waiver, require the optionee to sell such shares to the Company at the
original exercise price.
SECTION 6. NON-QUALIFIED STOCK OPTIONS.
The Board or the Committee may grant to Eligible Employees or Eligible
Participants options under the Plan which are not Incentive Stock Options under
the provisions of Section 422 of the Code. Such Non-Qualified Stock Options
shall be evidenced by agreements in such form and
<PAGE>
consistent with this Plan as the Board or the Committee shall approve from time
to time, which agreements shall contain in substance the same terms and
conditions as set forth in Section 5 hereof with respect to Incentive Stock
Options; provided, however, that, subject to Section 14(f) hereof, the
limitations set forth in Sections 5(a), 5(b), 5(f), 5(g) and 5(h) shall not be
applicable to Non-Qualified Stock Options. Payment of the option exercise price
for a Non-Qualified Stock Option may be made in the form of Restricted Stock
owned by the optionee, in which case the shares received upon the exercise of
such Non-Qualified Stock Option shall be restricted or deferred, as the case may
be, in accordance with the original term of the Restricted Stock award in
question, except that the Board or the Committee may direct that such
restrictions or deferral provisions shall apply only to the number of such
shares equal to the number of shares of Restricted Stock surrendered upon the
exercise of such option. No shares of unrestricted Stock shall be issued until
full payment therefor has been made.
SECTION 7. STOCK APPRECIATION RIGHTS.
(a) Grant and Exercise When Granted in Conjunction With Stock Options.
Stock Appreciation Rights may be granted in conjunction with all or part of any
Stock Option granted under the Plan and may contain terms and conditions
different from those of the related Stock Option, except as otherwise provided
below. In the case of a Non-Qualified Stock Option, such rights may be granted
either at or after the time of the grant of such Non-Qualified Stock Option. In
the case of an Incentive Stock Option, such rights may be granted only at the
time of the grant of such Incentive Stock Option.
A Stock Appreciation Right or applicable portion thereof granted with
respect to a given Stock Option shall terminate and no longer be exercisable
upon the termination or exercise of the related Stock Option, except that,
unless otherwise provided by the Board or the Committee at the time of grant, a
Stock Appreciation Right granted with respect to less than the full number of
shares covered by a related Stock Option shall only be reduced if and to the
extent that the number of shares covered by the exercise or termination of the
related Stock Option exceeds the number of shares not covered by the Stock
Appreciation Right.
A Stock Appreciation Right may be exercised by an optionee, in accordance
with paragraph (d) of this Section 7, by surrendering the applicable portion of
the related Stock Option. Upon such exercise and surrender, the optionee shall
be entitled to receive an amount determined in the manner prescribed in
paragraph (d) of this Section 7. Stock Options which have been so surrendered,
in whole or in part, shall no longer be exercisable to the extent the related
Stock Appreciation Rights have been exercised.
(b) Grant and Exercise When Granted in Tandem With Stock Option. Stock
Appreciation Rights may be granted in tandem either at the time of grant of a
Non-Qualified Stock Option or at any time during the term of such Stock Option.
A Stock Appreciation Right may be exercised at any time to the extent that
the Stock Option to which it relates is then exercisable, and shall be subject
to the conditions applicable to such Stock Option. When a Stock Appreciation
Right is exercised in accordance with Section 7(d), the Stock Option to which it
relates shall cease to be exercisable to the extent of the number of shares with
<PAGE>
respect to which the Stock Appreciation Right is exercised. Similarly, when an
option is exercised, the Stock Appreciation Right relating to the shares covered
by such Stock Option exercise shall terminate. Any Stock Appreciation Right
which is outstanding on the last day of the term of the Stock Option to which it
is related shall be automatically exercised on such date for cash or Stock, as
determined by the Board or the Committee, without any action by the optionee.
(c) Grant and Exercise When Granted Alone. Stock Appreciation Rights may
be granted at the discretion of the Board or the Committee in a manner not
related to an award of a Stock Option. A Stock Appreciation Right granted under
this Section 7(c) is not exercisable for a period of six months from the date of
grant, unless a longer period is otherwise determined by the Board or the
Committee. The Stock Appreciation Right, granted under Section 7(c), shall be
exercisable in accordance with Section 7(d) over a period not to exceed ten
years. Any Stock Appreciation Right which is outstanding on the last day of the
exercisable period shall be automatically exercised on such date for cash or
Stock, as determined by the Board or the Committee, without any action by the
holder.
(d) Terms and Conditions. Stock Appreciation Rights shall be subject to
such terms and conditions, not inconsistent with the provisions of the Plan, as
shall be determined from time to time by the Board or the Committee, including
the following:
(i) Stock Appreciation Rights granted pursuant to Section 7(a) and
7(b) shall be exercisable only at such time or times and to the extent that
the Stock Options to which the Stock Appreciation Rights relate shall be
exercisable in accordance with the provisions of Sections 5 and 6 and this
Section 7 of the Plan; provided, however, that any Stock Appreciation Right
granted subsequent to the grant of the related Stock Option shall not be
exercisable during the first six months of the term of the Stock
Appreciation Right, except that this additional limitation shall not apply
in the event of death or Disability of the optionee prior to the expiration
of the six-month period.
(ii) Upon the exercise of a Stock Appreciation Right granted pursuant
to Section 7(a) or 7(b), an optionee shall be entitled to receive an amount
in cash or shares of Stock equal in value to the excess of the Fair Market
Value of one share of Stock over the option price per share specified in the
related Stock Option multiplied by the number of shares in respect of which
the Stock Appreciation Right shall have been exercised, with the Board or
the Committee having the right to determine the form of payment. Upon the
exercise of a Stock Appreciation Right granted pursuant to Section 7(c), the
holder shall be entitled to receive an amount in cash or shares of Stock
equal in value to the excess of the Fair Market Value of one share of Stock
at the date of such exercise over the Fair Market Value of one share of
Stock at the date the Stock Appreciation Right was granted multiplied by the
number of shares in respect of which the Stock Appreciation Right shall have
been exercised, with the Board or the Committee having the right to
determine the form of payment.
(iii) No Stock Appreciation Right shall be transferable by the holder
otherwise than by will or the laws of descent and distribution. All Stock
Appreciation Rights shall be exercisable, during the holder's lifetime,
only by the holder.
<PAGE>
(iv) Upon the exercise of a Stock Appreciation Right granted pursuant
to Section 7(a) or Section 7(b), the Stock Option or part thereof to which
such Stock Appreciation Right is related shall be deemed to have been
exercised for the purpose of the limitation set forth in Section 3 of the
Plan on the number of shares of Stock to be issued under the Plan.
(v) A Stock Appreciation Right granted in connection with an Incentive
Stock Option pursuant to Section 7(a), may be exercised only if and when
the market price of the Stock subject to the Incentive Stock Option exceeds
the exercise price of such Stock Option.
(vi) In its sole discretion, the Board or the Committee may provide,
at the time of grant of a Stock Appreciation Right under this Section 7,
that such Stock Appreciation Right can be exercised only in the event of a
"Change of Control" and/or a "Potential Change of Control" (as defined in
Section 13 below).
(vii) The Board or the Committee, in its sole discretion, may also
provide that in the event of a "Change of Control" and/or a "Potential
Change of Control" (as defined in Section 13 below) the amount to be paid
upon the exercise of a Stock Appreciation Right shall be based on the
"Change of Control Price" (as defined in Section 13 below).
(viii) Any exercise by a participant of all or a portion of a Stock
Appreciation Right for cash, may only be made during the period beginning on
the third business day following the date of the Company's release of its
quarterly or annual summary statements of sales and earnings to the public
and ending on the twelfth business day following such date; provided,
however, that the foregoing shall not apply to any exercise by a participant
of a Stock Appreciation Right for cash where the date of exercise is
automatic or fixed in advance under the Plan and is outside the control of
the participant.
SECTION 8. RESTRICTED STOCK.
(a) Administration. Shares of Restricted Stock may be issued either alone
or in addition to other awards granted under the Plan. The Board or the
Committee shall determine the Eligible Employees or Eligible Participants to
whom, and the time or times at which, grants of Restricted Stock will be made,
the number of shares to be awarded, the price, if any, to be paid by the
recipient of Restricted Stock, the time or times within which such awards may be
subject to forfeiture, and all other conditions of the awards. However, in no
event shall any restriction, including risk of forfeiture, attach to the
Restricted Stock for a term to exceed ten years from the date such Stock was
granted. The Board or the Committee may also condition the grant of Restricted
Stock upon the attainment of specified performance goals, or such other criteria
as the Board or the Committee may determine, in its sole discretion. The
provisions of Restricted Stock awards need not be the same with respect to each
recipient.
(b) Awards and Certificates. The prospective recipient of an award of
shares of Restricted Stock shall not have any rights with respect to such award,
unless and until such recipient has executed an agreement evidencing the award
(a "Restricted Stock Award Agreement") and has delivered a fully executed copy
thereof to the Company, and has otherwise complied with the then applicable
terms and conditions.
<PAGE>
(i) Awards of Restricted Stock must be accepted within a period of 60
days (or such shorter period as the Board or the Committee may specify)
after the award date by executing a Restricted Stock Award Agreement and
paying whatever price, if any, is required.
(ii) Each participant who is awarded Restricted Stock shall be issued
a stock certificate in respect of such shares of Restricted Stock. Such
certificate shall be registered in the name of the participant, and shall
bear an appropriate legend referring to the terms, conditions and
restrictions applicable to such award, substantially in the following form:
"The transferability of this certificate and the shares of stock
represented hereby are subject to the terms and conditions (including
forfeiture) of the Just For Feet, Inc. 1997 Employee Incentive Plan and
a Restricted Stock Agreement entered into between the registered owner
and Just For Feet, Inc. Copies of such Plan and Agreement are on file in
the offices of Just For Feet, Inc., 7400 Cahaba Valley Road, Birmingham,
Alabama 35242."
(iii) The Board or the Committee shall require that the stock
certificates evidencing such shares be held in custody by the Company until
the restrictions thereon shall have lapsed, and that, as a condition of any
Restricted Stock award, the participant shall have delivered a stock power,
endorsed in blank, relating to the Stock covered by such award.
(c) Restrictions and Conditions. The shares of Restricted Stock awarded
pursuant to this Section 8 shall be subject to the following restrictions and
conditions:
(i) Subject to the provisions of this Plan and Restricted Stock Award
Agreements, during the period of six months after the award or such longer
period as may be set by the Board or the Committee commencing on the grant
date (the "Restriction Period"), the participant shall not be permitted to
sell, transfer, pledge or assign shares of Restricted Stock awarded under
the Plan. Within these limits, and subject to Section 14(f) hereof, the
Board or the Committee may, in its sole discretion, provide for the lapse of
such restrictions in installments and may accelerate or waive such
restrictions in whole or in part based on performance and/or such other
factors as the Board or the Committee may determine, in its sole discretion.
(ii) Except as provided in paragraph (c)(i) of this Section 8, the
participant shall have, with respect to the shares of Restricted Stock, all
of the rights of a stockholder of the Company, including the right to
receive any dividends.
Dividends paid in cash with respect to shares of Restricted Stock
shall not be subject to any restrictions or subject to forfeiture. Dividends
paid in stock of the Company or stock received in connection with a stock
split with respect to Restricted Stock shall be subject to the same
restrictions as on such Restricted Stock. Certificates for shares of
unrestricted Stock shall be delivered to the participant promptly after, and
only after, the period of forfeiture shall expire without forfeiture in
respect of such shares of Restricted Stock.
<PAGE>
(iii) Subject to the provisions of the Restricted Stock Award
Agreement and this Section 8, upon termination of employment for any reason
during the Restriction Period, all shares still subject to restriction shall
be forfeited by the participant, and the participant shall only receive the
amount, if any, paid by the participant for such forfeited Restricted Stock.
(iv) In the event of special hardship circumstances of a participant
whose employment is involuntarily terminated (other than for Cause), the
Board or the Committee may, in it sole discretion, waive in whole or in
part any or all remaining restrictions with respect to such participant's
shares of Restricted Stock.
SECTION 9. PERFORMANCE AWARDS.
(a) Administration. Shares of Stock or a payment in cash may be distributed
under the Plan upon the attainment of achievement objectives to a participant as
a Performance Award. The Board or the Committee shall determine the Eligible
Employees or Eligible Participants to whom the Performance Award is granted, the
terms and conditions of the achievement objectives, the term of the performance
period, and the level and form of the payment of the Performance Award.
(b) Achievement Objectives. The Board or the Committee, at its sole
discretion may establish, under this Section 9, achievement objectives either in
terms of Company-wide objectives or in terms of objectives that are related to
the specific performance of the participant or the division, subsidiary,
department or function within the Company in which the participant is engaged. A
minimum level of achievement at the discretion of the Board or the Committee,
may be established.
If at the end of the performance period the specified objectives have been
attained, the participant is deemed to have fully earned the Performance Award.
If such achievement objectives have not been attained, the participant is deemed
to have partly earned the Performance Award and becomes eligible to receive a
portion of the total award, as determined by the Board or the Committee. If a
required minimum level of achievement has not been met, the participant is
entitled to no portion of the Performance Award. The Company may adjust the
payment of awards or the achievement objectives if events occur or circumstances
arise which would cause a particular payment or set of achievement objectives to
be inappropriate as a measure of performance.
(c) Terms and Conditions. A participant to whom a Performance Award has
been granted is given achievement objectives to be reached over a specified
period, the "performance period." Generally this period shall be not less than
one year but in no case shall the period exceed five years.
Any participant granted a Performance Award pursuant to this Section 9 who
by reason of death, disability or retirement terminates his position with the
Company before the end of the performance period is entitled to receive a
portion of any earned Performance Award.
A participant who terminates his position with the Company for any other
reason forfeits all rights under the Performance Award.
<PAGE>
SECTION 10. LOAN PROVISIONS.
With the consent of the Board or the Committee, the Company may make, or
arrange for, a loan or loans to an Eligible Employee or Eligible Participants
with respect to the exercise of any Stock Option granted under the Plan and/or
with respect to the payment of the purchase price, if any, of any Restricted
Stock awarded hereunder. The Board or the Committee shall have full authority
to decide whether to make a loan or loans hereunder and to determine the amount,
term and provisions of any such loan or loans, including the interest rate to be
charged in respect of any such loan or loans, whether the loan or loans are to
be with or without recourse against the borrower, the terms on which the loan is
to be repaid and the conditions, if any, under which the loan or loans may be
forgiven.
SECTION 11. AMENDMENTS AND TERMINATION.
The Board may amend, alter, or discontinue the Plan, but no amendment,
alteration, or discontinuation shall be made which would impair the right of an
optionee or participant under a Stock Option, Stock Appreciation Right,
Restricted Stock, or Performance Award theretofore granted, without the
optionee's or participant's consent, or which without the approval of the
shareholders would (a) except as expressly provided in this Plan, increase the
total number of shares reserved for the purpose of the Plan; or (b) change the
category or class of employees eligible to receive Incentive Stock Options under
the Plan.
The Plan may at any time or from time to time be terminated, modified or
amended by the affirmative vote of not less than a majority of the votes
entitled to be cast thereon by the Company's stockholders. The Board or the
Committee may amend the terms of any award or option theretofore granted,
prospectively or retroactively, but no such amendment shall impair the rights of
any holder without his consent. Subject to Section 14(f) hereof, the Board or
the Committee may also substitute new Stock Options for previously granted Stock
Options including options granted under other plans applicable to the
participant and previously granted Stock Options having higher option prices.
SECTION 12. UNFUNDED STATUS OF PLAN.
The Plan is intended to constitute an "unfunded" plan for incentive and
deferred compensation. With respect to any payments not yet made to a
participant or optionee by the Company, nothing set forth herein shall give any
such participant or optionee any rights that are greater than those of a general
creditor of the Company. In its sole discretion, the Board or the Committee may
authorize the creation of trusts or other arrangements to meet the obligations
created under the Plan to deliver Stock or a payment in lieu of or with respect
to awards hereunder, provided, however, that the existence of such trusts or
other arrangements is consistent with the unfunded status of the Plan.
SECTION 13. CHANGE OF CONTROL.
The following acceleration and valuation provisions shall apply in the
event of a "Change of Control" as defined in this Section 13:
<PAGE>
(a) In the event of a "Change of Control" as defined in paragraph (b) of
this Section 13, unless otherwise determined by the Board or the Committee in
writing at or after grant, but prior to the occurrence of such Change of
Control:
(i) any Stock Appreciation Rights and any Stock Options awarded under
the Plan which have been outstanding for at least six months, if not
previously exercisable and vested shall become fully exercisable and
vested;
(ii) with the exception of the six month restriction in Section
8(c)(i), the restrictions and deferral limitations applicable to any
Restricted Stock award under the Plan shall lapse and such shares and
awards shall be deemed fully vested; and
(iii) the value of all outstanding Stock Options, Stock Appreciation
Rights, Restricted Stock or Performance Awards shall, to the extent
determined by the Board or the Committee at or after grant, be cashed out on
the basis of the "Change of Control Price" (as defined in paragraph (c) of
this Section 13) as of the date the Change of Control occurs, or such other
date as the Board or the Committee may determine prior to the Change of
Control.
(b) For purpose of paragraph (a) of this Section 13, a "Change of Control"
means the happening of any of the following:
(i) when any "person," as such term used in Section 13(d) and 14(d) of
the Exchange Act (other than Harold Ruttenberg or any affiliate of Harold
Ruttenberg, the Company or a Subsidiary or any Company employee benefit plan
(including its trustee)), is or becomes the "beneficial owner" (as defined
in Rule 13d-3 under the Exchange Act), directly or indirectly of securities
of the Company representing 50.01 percent or more of the combined voting
power of the Company's then outstanding securities;
(ii) when, during any period of two consecutive years during the
existence of the Plan, the individuals who, at the beginning of such period,
constitute the Board cease, for any reason other than death, to constitute
at least a majority thereof, unless each director who was not a director at
the beginning of such period was elected by, or on the recommendation of, at
least two-thirds of the directors at the beginning of such period; or
(iii) the occurrence of a transaction requiring stockholder approval for
the acquisition of the Company by an entity other than the Company or a
Subsidiary through purchase of assets, or by merger, or otherwise.
(c) For purposes of this Section 13, "Change of Control Price" means the
highest price per share paid in any transaction reported on the Nasdaq Stock
Market or the New York Stock Exchange Composite Tape, whichever then applies to
the Stock, or paid or offered in any transaction related to a potential or
actual Change of Control of the Company at any time during the preceding 60 day
period as determined by the Board or the Committee, except that in the case of
Incentive Stock Options and Stock Appreciation Rights relating to Incentive
Stock Options, such price shall
<PAGE>
be based only on transactions reported for the date on which the Board or the
Committee decides to cash out such options.
SECTION 14. GENERAL PROVISIONS.
(a) All certificates for shares of Stock delivered under the Plan shall be
subject to such stock transfer orders and other restrictions as the Board or the
Committee may deem advisable under the rules, regulations, and other
requirements of the Commission, any stock exchange upon which the Stock is then
listed, and any applicable federal or state securities law, and the Board or the
Committee may cause a legend or legends to be placed on any such certificates to
make appropriate reference to such restrictions.
(b) Nothing set forth in this Plan shall prevent the Board from adopting
other or additional compensation arrangements, subject to stockholder approval
if such approval is required; and such arrangements may be either generally
applicable or applicable only in specific cases. The adoption of the Plan shall
not confer upon any employee of the Company, any Subsidiary or any Affiliate,
any right to continued employment with the Company, a Subsidiary or an
Affiliate, as the case may be, nor shall it interfere in any way with the right
of the Company, a Subsidiary or an Affiliate to terminate the employment of any
of its employees at any time.
(c) Each participant shall, no later than the date as of which the value of
an award first becomes includable in the gross income of the participant for
federal income tax purposes, pay to the Company, or make arrangements
satisfactory to the Board or the Committee regarding payment of, any federal,
state, or local taxes of any kind required by law to be withheld with respect to
the award. The obligations of the Company under the Plan shall be conditional
on such payment or arrangements and the Company (and, where applicable, its
Subsidiaries and Affiliates), shall, to the extent permitted by law, have the
right to deduct any such taxes from any payment of any kind otherwise due to the
participant. A participant may irrevocably elect to have the withholding tax
obligations or, in the case of all awards hereunder except Stock Options which
have related Stock Appreciation Rights, if the Board or the Committee so
determines, any additional tax obligation with respect to any awards hereunder
satisfied by (a) having the Company withhold shares of Stock otherwise
deliverable to the participant with respect to the award or (b) delivering to
the Company shares of unrestricted Stock.
(d) At the time of grant or purchase, the Board or the Committee may
provide in connection with any grant or purchase made under this Plan that the
shares of Stock received as a result of such grant or purchase shall be subject
to a right of first refusal, pursuant to which the participant shall be required
to offer the Company any shares that the participant wishes to sell, with the
price being the then Fair Market Value of the Stock, subject to provisions of
Section 14 hereof and to such other terms and conditions as the Board or the
Committee may specify at the time of grant.
(e) No member of the Board or the Committee, nor any officer or employee of
the Company acting on behalf of the Board or the Committee, shall be personally
liable for any action, determination, or interpretation taken or made in good
faith with respect to the Plan, and all members of the Board or the Committee
and each and any officer or employee of the Company
<PAGE>
acting on their behalf shall, to the extent permitted by law, be fully
indemnified and protected by the Company in respect of any such action,
determination or interpretation.
(f) Notwithstanding any provision herein to the contrary, the Board or the
Committee shall not grant or award Non-Conforming Awards (as defined below)
which, in the aggregate, represent in excess of ten percent (10%) of the total
number of shares of Stock reserved and available for distribution under the Plan
(as such number may be amended by the shareholders of the Company from time to
time). As used herein, "Non-Conforming Awards" means (i) Non-Qualified Stock
Options granted pursuant to Section 6 hereof with an option price less than the
Fair Market Value of the Stock on the date of grant; (ii) Stock Options granted
in exchange for the cancellation of previously granted Stock Options including
options granted under other plans applicable to the participant and previously
granted Stock Options having higher option prices, as contemplated by the second
paragraph of Section 11 hereof; (iii) awards of Restricted Stock pursuant to
Section 8 hereof with a Restricted Period (as defined in Section 8(c)(1)) of
less than one year for performance-based awards and three years for tenure-based
awards; and (iv) awards of Restricted Stock with respect to which the Restricted
Period has been accelerated or waived by the Board or the Committee pursuant to
Section 8(c)(1) hereof, except in the event of a Change of Control of the
Company or the retirement, death or Disability of a participant."
SECTION 15. EFFECTIVE DATE OF PLAN.
The Plan shall be effective on the date it is approved by a majority vote
of the Company's stockholders.
SECTION 16. TERM OF PLAN.
No Stock Option, Stock Appreciation Right, Restricted Stock or Performance
Award shall be granted pursuant to the Plan on or after the tenth anniversary of
the date of stockholder approval, but awards theretofore granted may extend
beyond that date.
<PAGE>
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement
of Just For Feet, Inc. on Form S-8 regarding the Just For Feet, Inc. 1997
Employee Incentive Plan of our report dated March 17, 1997 appearing in the
Annual Report on Form 10-K of Just For Feet, Inc. for the year ended January 31,
1997.
Deloitte & Touche LLP
Birmingham, Alabama
December 12, 1997
