AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 9, 1996
REGISTRATION NO. 333-__________
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-8
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933
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GARDEN RIDGE CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 13-3671679
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
19411 ATRIUM PLACE, SUITE 170
HOUSTON, TEXAS 77084
(Address of Principal Executive Office) (Zip Code)
AMENDED AND RESTATED 1994 STOCK OPTION PLAN
1996 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
STOCK PURCHASE PLAN
(Full title of the plans)
JANE L. ARBUTHNOT
GARDEN RIDGE CORPORATION
19411 ATRIUM PLACE, SUITE 170
HOUSTON, TEXAS 77084
(Name and address of agent for service)
(713) 579-7901
(Telephone number, including area code, of agent for service)
----------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED PROPOSED
AMOUNT MAXIMUM MAXIMUM
TO BE OFFERING PRICE AGGREGATE AMOUNT OF
TITLE OF SECURITIES TO BE REGISTERED REGISTERED(1) PER SHARE(2) OFFERING PRICE(2)REGISTRATION FEE
======================================= =====================================================================
<S> <C> <C> <C> <C>
Common Stock, par value $.01 per share. 370,000 shares $15.83 $5,855,625.00 $1,774.43
======================================= =====================================================================
</TABLE>
(1) Represents the maximum number of shares of Common Stock of the Registrant
which could be purchased upon exercise of all stock options now outstanding
or which may hereafter be granted under the Amended and Restated 1994 Stock
Option Plan and the 1996 Non-Employee Director Stock Option Plan, and which
may hereafter be purchased under the Stock Purchase Plan, as adjusted for
the stock split effective June 28, 1996. The Company previously registered
219,176 shares under the Amended and Restated 1994 Stock Option Plan
pursuant to Form S-8 filed on July 26, 1995 (Registration No. 33-95064).
(2) Estimated solely for purposes of calculating the registration fee pursuant
to Rule 457(c) and (h), based on the option exercise prices of options to
acquire 25,000 shares of Common Stock which have been granted under the 1996
Non-Employee Director Stock Option Plan, and the average of the high and low
prices reported by the Nasdaq National Market on October 7, 1996 with
respect to 345,000 shares of Common Stock as to which options or rights to
purchase have not been granted as of the date of filing this Registration
Statement.
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<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents, which have been filed with the Securities and
Exchange Commission (the "Commission") by Garden Ridge Corporation (the
"Company"), are incorporated by reference herein and made a part hereof: (a) the
Company's Annual Report on Form 10-K for the fiscal year ended January 28, 1996,
(b) the Company's Quarterly Report on Form 10-Q for the quarter ended April 28,
1996, (c) the Company's Quarterly Report on Form 10-Q for the quarter ended July
28, 1996, and (d) the description of the common stock, par value $.01 per share
(the "Common Stock"), of the Company as set forth under the caption "Description
of Registrant's Securities to be Registered" in the Company's Registration
Statement on Form 8-A dated May 3, 1995, including any amendment or report filed
for the purpose of updating such description.
All documents filed subsequent to the date hereof by the Company
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act
of 1934 prior to the filing of a post-effective amendment which indicates that
all securities offered have been sold or which deregisters all securities then
remaining unsold, shall be deemed to be incorporated by reference herein and to
be part hereof from the date of the filing of such documents.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTEREST OF NAMED EXPERTS AND COUNSEL.
None.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Subsection (a) of Section 145 of the General Corporation Law of the
State of Delaware empowers a corporation to indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation) by
reason of the fact that he is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful.
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<PAGE>
Subsection (b) of Section 145 empowers a corporation to indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, or suit by or in the right of the
corporation to procure a judgment in its favor by reason of the fact that such
person acted in any of the capacities set forth above, against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he acted in
good faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the corporation, except that no indemnification may be made in
respect of any claim, issue or matter as to which such person shall have been
adjudged to be liable to the corporation unless and only to the extent that the
Court of Chancery or the court in which such action or suit was brought shall
determine upon application that, despite the adjudication of liability but in
view of all the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which the Court of Chancery or such
other court shall deem proper.
Section 145 further provides that to the extent a director or officer of
a corporation has been successful on the merits or otherwise in the defense of
any action, suit or proceeding referred to in subsections (a) and (b) of Section
145 in the defense of any claim, issue or matter therein, he shall be
indemnified against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection therewith; that indemnification provided for by
Section 145 shall not be deemed exclusive of any other rights to which the
indemnified party may be entitled; that indemnification provided for by Section
145 shall, unless otherwise provided when authorized or ratified, continue as to
a person who has ceased to be a director, officer, employee or agent and shall
inure to the benefit of such person's heirs, executors and administrators; and
empowers the corporation to purchase and maintain insurance on behalf of a
director or officer of the corporation against any liability asserted against
him and incurred by him in any such capacity, or arising out of his status as
such whether or not the corporation would have the power to indemnify him
against such liabilities under Section 145.
Section 102(b)(7) of the General Corporation Law of the State of
Delaware provides that a certificate of incorporation may contain a provision
eliminating or limiting the personal liability of a director to the corporation
or its stockholders for monetary damages for breach of fiduciary duty as a
director provided that such provision shall not eliminate or limit the liability
of a director (i) for any breach of the director's duty of loyalty to the
corporation or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) under
Section 174 of the Delaware General Corporation Law, or (iv) for any transaction
from which the director derived an improper personal benefit.
Article 7 of the Company's Restated Certificate of Incorporation states
that:
7. INDEMNIFICATION.
7.1 To the extent not prohibited by law, the Company shall
indemnify any person who is or was made, or threatened to be
made, a party to any threatened, pending or completed action,
suit or proceeding
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<PAGE>
(hereinafter a "Proceeding"), whether civil, criminal,
administrative or investigative, including, without limitation,
an action by or in the right of the Company to procure a judgment
in its favor, by reason of the fact that such person, or a person
of whom such person is the legal representative, is or was a
director or officer of the Company, or is or was serving in any
capacity at the request of the Company for any other corporation,
partnership, joint venture, trust, employee benefit plan or other
enterprise (an "Other Entity"), against judgments, fines,
penalties, excise taxes, amounts paid in settlement and costs,
charges and expenses (including attorneys' fees and
disbursements). Persons who are not directors or officers of the
Company may be similarly indemnified in respect of service to the
Company or to an Other Entity at the request of the Company to
the extent the Board at any time specifies that such persons are
entitled to the benefits of this Section 7.
7.2 The Company shall, from time to time, reimburse or
advance to any director or officer or other person entitled to
indemnification hereunder the funds necessary for payment of
expenses, including attorneys' fees and disbursements, incurred
in connection with any Proceeding, in advance of the final
disposition of such proceeding; provided, however, that, if
required by the DGCL, such expenses incurred by or on behalf of
any director or officer or other person may be paid in advance of
the final disposition of a Proceeding only upon receipt by the
Company of an undertaking, by or on behalf of such director or
officer (or other person indemnified hereunder), to repay any
such amount so advanced if it shall ultimately be determined by
final judicial decision from which there is no further right of
appeal that such director, officer or other person is not
entitled to be indemnified for such expenses.
7.3 The right to indemnification and reimbursement or
advancement of expenses provided by, or granted pursuant to, this
Section 7 shall not be deemed exclusive of any other rights to
which a person seeking indemnification or reimbursement or
advancement of expenses may have or hereafter be entitled under
any statute, this Certificate of Incorporation, the Bylaws of the
Company (the "Bylaws"), any agreement, any vote of stockholders
or disinterested directors or otherwise, both as to action in his
or her official capacity and as to action in another capacity
while holding such office.
7.4 The right to indemnification and reimbursement or
advancement of expenses provided by, or granted pursuant to, this
Section 7 shall continue as to a person who has ceased to be a
director or officer (or other person indemnified hereunder) and
shall inure to the
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<PAGE>
benefit of the executors, administrators, legatees and
distributees of such person.
7.5 The Company shall have power to purchase and maintain
insurance on behalf of any person who is or was a director,
officer, employee or agent of the Company, or is or was serving
at the request of the Company as a director, officer, employee or
agent of an Other Entity, against any liability asserted against
such person and incurred by such person in any such capacity, or
arising out of such person's status as such, whether or not the
Company would have the power to indemnify such person against
such liability under the provisions of this Section 7, the Bylaws
or under Section 145 of the DGCL or any other provision of law.
7.6 The provisions of this Section 7 shall be a contract
between the Company, on the one hand, and each director and
officer who serves in such capacity at any time while this
Section 7 is in effect and any other person indemnified
hereunder, on the other hand, pursuant to which the Company and
each such director, officer, or other person intend to be legally
bound. No repeal or modification of this Section 7 shall affect
any rights or obligations then existing with respect to any state
of facts then or theretofore existing or any proceeding
theretofore or thereafter brought or threatened based in whole or
in part upon any such state of facts.
7.7 The right to indemnification and reimbursement or
advancement of expenses provided by, or granted pursuant to, this
Section 7 shall be enforceable by any person entitled to such
indemnification or reimbursement or advancement of expenses in
any court of competent jurisdiction. The burden of proving that
such indemnification or reimbursement or advancement of expenses
is not appropriate shall be on the Company. Neither the failure
of the Company (including its Board of Directors, its independent
legal counsel and its stockholders) to have made a determination
prior to the commencement of such action that such
indemnification or reimbursement or advancement of expenses is
proper in the circumstances nor an actual determination by the
Company (including its Board of Directors, its independent legal
counsel and its stockholders) that such person is not entitled to
such indemnification or reimbursement or advancement of expenses
shall constitute a defense to the action or create a presumption
that such person is not so entitled. Such a person shall also be
indemnified for any expenses incurred in connection with
successfully establishing his or her right to such
indemnification or reimbursement or advancement of expenses, in
whole or in part, in any such proceeding.
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<PAGE>
7.8 Any director or officer of the Company serving in any
capacity (a) another corporation of which a majority of the
shares entitled to vote in the election of its directors is held,
directly or indirectly, by the Company or (b) any employee
benefit plan of the Company or any corporation referred to in
clause (a) shall be deemed to be doing so at the request of the
Company.
7.9 Any person entitled to be indemnified or to
reimbursement or advancement of expenses as a matter of right
pursuant to this Section 7 may elect to have the right to
indemnification or reimbursement or advancement of expenses
interpreted on the basis of the applicable law in effect at the
time of the occurrence of the event or events giving rise to the
applicable Proceeding, to the extent permitted by law, or on the
basis of the applicable law in effect at the time such
indemnification or reimbursement or advancement of expenses is
sought. Such election shall be made, by a notice in writing to
the Company, at the time indemnification or reimbursement or
advancement of expenses is sought; provided, however, that if no
such notice is given, the right to indemnification or
reimbursement or advancement of expenses shall be determined by
the law in effect at the time indemnification or reimbursement or
advancement of expenses is sought.
The Company's Bylaws contain indemnification provisions which are
essentially the same as the indemnification provisions contained in the Restated
Certificate of Incorporation.
Policies of insurance are maintained by the Company under which the
directors and officers of the Company are insured, within the limits and subject
to the limitations of the policies, against certain expenses in connection with
the defense of actions, suits or proceedings, and certain liabilities which
might be imposed as a result of such actions, suits or proceedings, to which
they are parties by reason of being or having been such directors or officers.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
EXHIBIT
NUMBER IDENTIFICATION OF EXHIBITS
*4.1 - Restated Certificate of Incorporation effective May 16,
1995 (filed as Exhibit 3.5 to the Registration Statement
on Form S-1 (Registration No. 33-90748) (the "1995 Form
S-1"), and incorporated herein by reference)
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<PAGE>
EXHIBIT
NUMBER IDENTIFICATION OF EXHIBITS
*4.2 - Bylaws (filed as Exhibit 3.4 to the 1995 Form S-1, and
incorporated herein by reference)
*4.3 - Amendment No. 1 to the Bylaws effective May 16, 1995
(filed as Exhibit 3.6 to the 1995 Form S-1, and
incorporated herein by reference)
*4.4 - Specimen Common Stock Certificate (filed as Exhibit 4.1 to
the 1995 Form S-1, and incorporated herein by reference)
*4.5 - Form of Stock Purchase Warrant (Primary Warrant) dated
December 20, 1993, as amended (filed as Exhibit 4.5 to the
1995 Form S-1, and incorporated herein by reference)
*4.6 - Common Stock Purchase Warrant Expiring May 26, 1997 to
purchase 67,500 shares of Common Stock held by Corporate
Property Associates 11 Incorporated dated May 26, 1995
(filed as Exhibit 4.1 to the Form 10-Q for the Quarterly
period ended April 30, 1995, and incorporated herein by
reference)
*4.7 - SRC Option Agreement to purchase 135,000 shares of
Common Stock held by SRC Speciality Retail Corporation
dated July 16, 1992, as amended (filed as Exhibit 4.7 to
the 1995 Form S-1, and incorporated herein by reference)
*4.8 - Common Stock Purchase Warrant Expiring January 7, 1999
to purchase 10,000 shares of Common Stock held by Larry
Ham dated January 8, 1996 (filed as Exhibit 4.5 to the
Form 10-K for the fiscal year ended January 28, 1996, and
incorporated herein by reference)
5.1 - Opinion of Liddell, Sapp, Zivley, Hill & LaBoon, L.L.P.,
regarding legality of the Common Stock being issued.
23.1 - Consent of Liddell, Sapp, Zivley, Hill & LaBoon, L.L.P.
(contained in opinion in Exhibit 5.1)
23.2 - Consent of Arthur Andersen LLP
99.1 - Amended and Restated 1994 Stock Option Plan
99.2 - 1996 Non-Employee Director Stock Option Plan
99.3 - Stock Purchase Plan
* Incorporated by reference as indicated.
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.
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<PAGE>
(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 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) 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.
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<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 Houston, State of Texas, on October 9, 1996.
GARDEN RIDGE CORPORATION
By: /s/ JANE L. ARBUTHNOT
JANE L. ARBUTHNOT
Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities indicated on October 9, 1996.
SIGNATURE TITLE
/S/ ARMAND SHAPIRO Chairman of the Board and Chief Executive
ARMAND SHAPIRO Officer (Principal Executive Officer
/S/ JANE L. ARBUTHNOT Chief Financial Officer and Secretary
JANE L. ARBUTHNOT (Principal Financial and Accounting Officer)
/S/ TERRY S. BOYCE Director
TERRY S. BOYCE
/S/ NOLAN LEHMANN Director
NOLAN LEHMANN
/S/ IRA NIEMARK Director
IRA NIEMARK
/S/ RONALD RASHKOW Director
RONALD RASHKOW
/S/ SAM J. SUSSER Director
SAM J. SUSSER
/S/ WHITNEY WAGNER
WHITNEY WAGNER Director
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<PAGE>
INDEX TO EXHIBITS
EXHIBIT
NUMBER IDENTIFICATION OF EXHIBITS
*4.1 - Restated Certificate of Incorporation effective May 16,
1995 (filed as Exhibit 3.5 to the Registration Statement
on Form S-1 (Registration No. 33-90748) (the "1995 Form
S-1"), and incorporated herein by reference)
*4.2 - Bylaws (filed as Exhibit 3.4 to the 1995 Form S-1, and
incorporated herein by reference)
*4.3 - Amendment No. 1 to the Bylaws effective May 16, 1995
(filed as Exhibit 3.6 to the 1995 Form S-1, and
incorporated herein by reference)
*4.4 - Specimen Common Stock Certificate (filed as Exhibit 4.1 to
the 1995 Form S-1, and incorporated herein by reference)
*4.5 - Form of Stock Purchase Warrant (Primary Warrant) dated
December 20, 1993, as amended (filed as Exhibit 4.5 to the
1995 Form S-1, and incorporated herein by reference)
*4.6 - Common Stock Purchase Warrant Expiring May 26, 1997 to
purchase 67,500 shares of Common Stock held by Corporate
Property Associates 11 Incorporated dated May 26, 1995
(filed as Exhibit 4.1 to the Form 10-Q for the Quarterly
period ended April 30, 1995, and incorporated herein by
reference)
*4.7 - SRC Option Agreement to purchase 135,000 shares of
Common Stock held by SRC Speciality Retail Corporation
dated July 16, 1992, as amended (filed as Exhibit 4.7 to
the 1995 Form S-1, and incorporated herein by reference)
*4.8 - Common Stock Purchase Warrant Expiring January 7, 1999
to purchase 10,000 shares of Common Stock held by Larry
Ham dated January 8, 1996 (filed as Exhibit 4.5 to the
Form 10-K for the fiscal year ended January 28, 1996, and
incorporated herein by reference)
5.1 - Opinion of Liddell, Sapp, Zivley, Hill & LaBoon, L.L.P.,
regarding legality of the Common Stock being issued.
23.1 - Consent of Liddell, Sapp, Zivley, Hill & LaBoon, L.L.P.
(contained in opinion in Exhibit 5.1)
23.2 - Consent of Arthur Andersen LLP
99.1 - Amended and Restated 1994 Stock Option Plan
99.2 - 1996 Non-Employee Director Stock Option Plan
99.3 - Stock Purchase Plan
* Incorporated by reference as indicated.
EXHIBIT 5.1
[Letterhead of Liddell, Sapp, Zivley, Hill & LaBoon, L.L.P.]
October 8, 1996
Garden Ridge Corporation
19411 Atrium Place, Suite 170
Houston, Texas 77084
Ladies and Gentlemen:
We have acted as counsel for Garden Ridge Corporation, a Delaware
Corporation (the "Company") in connection with the registration, pursuant to a
Registration Statement on Form S-8 being filed with the Securities and Exchange
Commission (the "Registration Statement") under the Securities Act of 1933, as
amended, of the offering and sale to certain employees and non-employee
directors of the Company of up to 370,000 shares of the Company's common stock,
par value $.01 per share (the "Common Stock") which may be issued upon the
exercise of (i) certain stock options (the "Options") which may be granted under
the Company's Amended and Restated 1994 Stock Option Plan and 1996 Non-Employee
Director Stock Option Plan, and (ii) certain stock purchase rights (the
"Purchase Rights") which may be granted under the Company's Stock Purchase Plan.
In such capacity, we have examined the corporate documents of the Company,
including its Restated Certificate of Incorporation, its Bylaws, as amended, and
resolutions adopted by its board of directors and committees thereof. We have
also examined the Registration Statement, together with the exhibits thereto,
and such other documents which we have deemed necessary for the purposes of the
expressing the opinion contained herein. We have relied on representations made
by and certificates of the officers of the Company and public officials with
respect to certain facts material to our opinion. We have made no independent
investigation regarding such representations and certificates.
<PAGE>
Garden Ridge Corporation
September 20, 1996
Page 2
Based upon the foregoing, we are of the opinion that when the Options and
the Purchase Rights have been duly exercised in accordance with their respective
terms, the Common Stock issued thereupon will be validly issued, fully paid and
nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
Liddell, Sapp, Zivley,
Hill & LaBoon, L.L.P.
EXHIBIT 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this Registration Statement of our report dated March 7, 1996
included in the Garden Ridge Corporation's Annual Report on Form 10-K for the
year ended January 28, 1996.
/s/ ARTHUR ANDERSEN LLP
Arthur Andersen LLP
Houston, Texas
October 8, 1996
EXHIBIT 99.1
GARDEN RIDGE CORPORATION
AMENDED AND RESTATED 1994 STOCK OPTION PLAN
ARTICLE I
PURPOSE
The purpose of this Amended and Restated 1994 Stock Option Plan (the
"Plan") of Garden Ridge Corporation, a Delaware corporation (the "Company"), is
to secure for the Company and its stockholders the benefits arising from stock
ownership by selected executive employees and other key employees of the Company
or its subsidiaries as the Board of Directors of the Company (the "Board"), or a
Committee constituted for such purpose, may from time to time determine. The
Plan will provide a means whereby (i) such employees may purchase shares of the
common stock, $0.01 par value per share (the "Common Stock"), of the Company
pursuant to stock options which will qualify as "incentive stock options" under
Section 422 of the Internal Revenue Code of 1986, as amended (the "Code") and
(ii) such employees may purchase shares of the Common Stock of the Company
pursuant to "non-incentive" or "non-qualified" stock options.
ARTICLE II
ADMINISTRATION
The Plan shall be administered by the Stock Option Committee (the
"Committee"), which shall at all times consist of not less than two members of
the Board, and all members of the Committee shall be "disinterested persons"
within the meaning of Rule 16b-3 of the General Rules and Regulations under the
Securities Exchange Act of 1934, as amended (the "1934 Act"). All members of the
Committee shall be selected by (and serve at the pleasure of) the Board. Subject
to the express provisions of the Plan and the policies of each stock exchange on
which any of the Company's stock may at any time be traded, the Committee shall
have plenary authority, in its discretion, to recommend to the Board the
individuals within the class set forth in ARTICLE IV to whom, and the time and
price per share at which, stock options shall be granted, the number of shares
to be subject to each stock option and the other terms and provisions of their
respective Agreements (as defined herein), which need not be identical. In
making such recommendations and determinations, the Committee may take into
account the nature of the services rendered by the respective employees, their
present and potential contributions to the Company's success and such other
factors as the Committee in its discretion shall deem relevant.
Subject to the express provisions of the Plan, the Committee shall have
authority (i) to construe and interpret the Plan, (ii) to define the terms used
therein, (iii) to prescribe, amend and rescind rules and regulations relating to
the Plan, (iv) to recommend to the Board the terms and provisions of the
respective stock options, (v) to approve and determine the duration of leaves of
absence which may be granted to participants without constituting a termination
of their employment for the purposes of the Plan, and (vi) to make all other
determinations necessary or advisable for the administration of the Plan. All
determinations and interpretations made by the Committee shall be binding and
conclusive on all participants in the Plan and their legal
<PAGE>
representatives and beneficiaries. The Committee shall hold meetings at such
times and places as it may determine. Acts by the majority of the Committee or
acts reduced to or approved in writing by a majority of the members of the
Committee shall be the valid acts of the Committee. From time to time, the Board
may increase the size of the Committee and appoint additional members thereof,
remove members (with or without cause), and appoint new members in substitution
therefore, or fill vacancies however caused, subject to the requirements that
the members of the Committee shall be "disinterested persons" as described above
and that there always be at least two members of the Committee. No member of the
Committee shall be liable for any action, failure to act, determination or
interpretation made in good faith with respect to the Plan or any transaction
under the Plan.
ARTICLE III
SHARES SUBJECT TO PLAN AND DURATION OF PLAN
Under the Plan, the Board may, but only upon recommendation of the
Committee, grant to eligible persons incentive stock options (as defined in the
Code) and/or non-qualified stock options, to purchase up to but not exceeding an
aggregate amount of 209,588 shares of the Company's Common Stock (subject to
adjustment as provided in ARTICLE X). Shares subject to stock options under the
Plan may be either authorized and unissued shares or issued shares that have
been acquired by the Company and held in its treasury, in the discretion of the
Board. When stock options have been granted under the Plan and have lapsed
unexercised or partially unexercised or have been surrendered for cancellation
by the optionee thereof, the unexercised shares which were subject thereto may
be reoptioned under the Plan. No stock options shall be granted after April
2004.
ARTICLE IV
ELIGIBILITY AND PARTICIPATION
To the fullest extent permitted by applicable laws, all executive
employees and other key employees of the Company or of any subsidiary
corporation (as defined in Section 424(f) of the Code) shall be eligible for
selection to fully participate in the Plan; provided, however, that no member of
the Committee shall be entitled to receive a stock option under this Plan while
serving as a member of the Committee. Directors of the Company who are not
regular employees of the Company are not eligible to participate in the Plan. An
individual who has been granted an option may, if such individual is otherwise
eligible, be granted an additional option or options if the Board or the
Committee shall so determine, subject to the other provisions of the Plan.
ARTICLE V
TERMS AND CONDITIONS OF STOCK OPTIONS
Each stock option granted under the Plan shall be evidenced by a stock
option agreement (the "Agreement"), the form of which shall have been approved
by the Committee. The Agreement shall be executed by the Company and the
optionee and shall set forth the terms and conditions of the stock option, which
terms and conditions shall include, but not be limited to the following:
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(a) OPTION PRICE. The option price shall be determined by the
Committee, but shall not in any event be less than the par value of the Common
Stock.
(b) TERM OF STOCK OPTION. The term of the stock option shall be
selected by the Committee, but in no event shall such term exceed ten years from
the grant thereof. Each stock option shall be subject to earlier termination as
hereinafter provided.
(c) TRANSFERABILITY. The stock options granted hereunder shall not
be transferable other than by will or operation of the laws of descent and
distribution or pursuant to a qualified domestic relations order, as defined in
the Code or Title I of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), or the rules thereunder. During the lifetime of the optionee,
stock options granted hereunder shall be exercisable only by the optionee, the
optionee's guardian or legal representative.
(d) VESTING. The Committee shall have complete discretion in
determining when stock options granted hereunder are to vest; provided, however,
that the sale of shares of Common Stock issued upon the exercise of a stock
option by any person subject to Section 16 of the 1934 Act shall not be allowed
until at least six months after the grant of the stock option. Such
determination for each stock option is to be made prior to or at the time that
stock option is granted and shall be set forth in each Agreement.
(e) TERMINATION OF EMPLOYMENT. In the event of an optionee's
termination of employment with the Company for any reason other than death, all
stock options shall terminate to the extent they were not exercisable at the
date of the optionee's termination, but to the extent they were then exercisable
by the optionee, the optionee shall be entitled to exercise such options for a
period of 30 days from the date of the optionee's termination. Upon the
termination of an optionee's employment by reason of death, the optionee's stock
options shall terminate to the extent they were not exercisable at the date of
the optionee's death, but to the extent they were then exercisable by the
optionee, the optionee's estate or the beneficiaries thereof shall be entitled
to exercise such options for a period of one year from the date of the
optionee's death but not thereafter. Notwithstanding any other provisions of
this subparagraph (e), no stock option shall be exercised after the expiration
of ten years from the date such stock option is granted.
(f) OTHER CONDITIONS. At its sole discretion, the Committee may
impose other conditions upon the stock options granted hereunder, so long as
those conditions do not conflict with any other provisions of the Plan. Such
conditions may include, by way of illustration, but not by way of limitation,
percentage limitations upon the exercisability of stock options granted
hereunder.
ARTICLE VI
INCENTIVE STOCK OPTIONS
The Committee, in recommending and granting stock options hereunder, shall
have the discretion to determine that certain stock options shall be incentive
stock options, as defined in Section 422 of the Code, while other stock options
shall be non-qualified stock options. Neither
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the members of the Committee, the members of the Board nor the Company shall be
under any obligation or incur any liability to any person by reason of the
determination by the Committee or the Board whether a stock option granted under
the Plan shall be an incentive stock option or a non-qualified stock option. The
provisions of this ARTICLE VI shall be applicable to all incentive stock options
at any time granted or outstanding under the Plan.
All incentive stock options granted or outstanding under the Plan shall be
granted and held subject to and in compliance with terms and conditions
previously set forth in ARTICLES II, III, IV AND V hereof and, in addition,
subject to and in compliance with the following further terms and conditions:
(a) The per share option price of all incentive stock options shall
not be less than 100% of the Fair Market Value (as defined below) of one share
of the Company's Common Stock at the time the stock option is granted
(notwithstanding any provision of ARTICLE V hereof to the contrary);
(b) No incentive stock option shall be granted to any person who, at
the time of the grant, owns stock possessing more than 10% of the total combined
voting power of all classes of stock of the Company or any subsidiary
corporation of the Company; provided, however, that this ownership limitation
will be waived if at the time the option is granted the per share option price
is at least 110% of the Fair Market Value of one share of the Company's Common
Stock and such stock option by its terms is not exercisable after the expiration
of five years from the date such option is granted;
(c) An incentive stock option shall not be transferable other than
by will or the laws of descent and distribution, and shall be exercisable during
the lifetime of the optionee, only by the optionee; and
(d) The aggregate Fair Market Value of all shares of Common Stock
(determined at the time of the grant of the stock option) with respect to which
incentive stock options are exercisable for the first time by any optionee
during any one calendar year shall not exceed $100,000.
ARTICLE VII
EXERCISE OF STOCK OPTIONS
Each stock option granted hereunder may be exercised in such installments
during the period prior to its expiration date as the Committee shall determine;
provided that, unless otherwise determined by the Committee, if the optionee
shall not in any given installment period purchase all of the shares which the
optionee is entitled to purchase in such installment period, then the optionee's
right to purchase any shares not purchased in such installment period shall
continue until the expiration date or sooner termination of the optionee's stock
option.
The purchase price of the shares of Common Stock acquired upon exercise of
a stock option shall be paid in full at the time of exercise in cash or by
certified or cashier's check payable to the order of the Company, or, upon
receipt of all required regulatory approvals, if
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any, by delivery of shares of Common Stock of the Company already owned by, and
in the possession of, the stock option holder having a Fair Market Value equal
to such stock option price, or any combination thereof. Shares of Common Stock
used to satisfy the exercise price of a stock option shall be valued at their
Fair Market Value determined as of the close of business on the date such stock
option is exercised, or if such date is not a business day, on the business day
immediately preceding the date of exercise. Deliveries of cash, shares and
notices to the Company shall be directed to the Secretary of the Company.
No stock option granted hereunder shall be exercisable unless the Plan and
all shares issuable on the exercise thereof have been registered under the
Securities Act of 1933, as amended (the "1933 Act"), and all other applicable
securities laws, and there is available for delivery a prospectus meeting the
requirements of Section 10 of the 1933 Act, or the Company shall have first
received assurance that registration under the 1933 Act and all other applicable
securities laws is not required in connection with such issuance. At the time of
exercise, if the shares with respect to which the stock option is being
exercised have not been registered under the 1933 Act and all other applicable
securities laws, the Company may require the optionee to provide the Company
whatever written assurance counsel for the Company may require that the shares
are being acquired for investment and not with a view to the distribution
thereof, and that the shares will not be disposed of without the written opinion
of counsel acceptable to the Company that registration under the 1933 Act and
all other applicable securities laws is not required. Share certificates issued
to the optionee upon exercise of the stock option shall bear a legend to the
foregoing effect to the extent counsel for the Company deems it advisable.
ARTICLE VIII
FAIR MARKET VALUE OF COMMON STOCK
For purposes of the Plan, the term "Fair Market Value" on any date shall
mean (i) if the Common Stock is not listed or admitted to trade on a national
securities exchange and if bid and asked prices for the Common Stock are not
furnished through NASDAQ or a similar organization as described below, the value
established by the Committee, in its sole discretion, for purposes of the Plan;
(ii) if the Common Stock is listed or admitted to trade on a national securities
exchange or national market system, the closing price of the Common Stock, as
published in THE WALL STREET JOURNAL, so listed or admitted to trade on such
date or, if there is no trading of the Common Stock on such date, then the
closing price of the Common Stock on the next preceding date on which there was
trading in such shares; or (iii) if the Common Stock is not listed or admitted
to trade on a national securities exchange or national market system, the mean
between the bid and asked price for the Common Stock on such date, as furnished
by the National Association of Securities Dealers, Inc. through NASDAQ or a
similar organization if NASDAQ is no longer reporting such information. In
addition to the above rules, Fair Market Value shall be determined without
regard to any restriction other than a restriction which, by its terms, will
never lapse.
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ARTICLE IX
WITHHOLDING TAX
Upon (i) the disposition by an employee or other person of shares of
Common Stock acquired pursuant to the exercise of an incentive stock option
granted pursuant to the Plan within two years of the granting of the incentive
stock option or within one year after exercise of the incentive stock option, or
(ii) the exercise of "non-incentive" or "non-qualified" options, the Company
shall have the right to require such employee or such other person to pay the
Company the amount of any taxes (including but not limited to any federal, state
and local income taxes, old-age, survivors, and disability insurance premiums
and taxes, medicare taxes, FICA taxes and any other withholding taxes) which the
Company may be required to withhold with respect to such shares.
ARTICLE X
ADJUSTMENTS
(a) ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. Subject to any
required action by the Company's directors and stockholders, the number of
shares provided for in each outstanding stock option and the price per share
thereof, and the number of shares provided for in the Plan, shall be
proportionately adjusted for any increase or decrease in the number of issued
shares of the Company's Common Stock resulting from a subdivision or
consolidation of shares or the payment of a stock dividend (but only on the
Common Stock), a stock split, a reverse stock split, or any other increase or
decrease in the number of such shares effected without receipt of consideration
by the Company, and shall also be proportionately adjusted in the event of a
spin-off, spin-out, or other distribution of assets to stockholders of the
Company, to the extent necessary to prevent dilution of the interests of
grantees pursuant to the Plan or of the other stockholders of the Company, as
applicable. If the Company shall engage in a merger, consolidation,
reorganization or recapitalization, each outstanding stock option (or if such
transaction involves less than all of the shares of the Company's Common Stock,
then a number of stock options proportionate to the number of such involved
shares), shall become exercisable for the securities and other consideration to
which a holder of the number of shares of the Company's Common Stock subject to
each such stock option would have been entitled to receive in any such merger,
consolidation, reorganization or recapitalization.
(b) SIGNIFICANT EVENT. In the event of a potential merger or
consolidation involving the Company regardless of whether the Company is the
surviving entity of such merger or consolidation, a potential liquidation or
dissolution of the Company, a potential sale or other disposition by the Company
of all or substantially all of its assets, a potential sale or other disposition
by the stockholders of the Company of all or substantially all of the
outstanding Common Stock to one purchaser, or an underwritten public offering of
the Common Stock of the Company (any such merger, consolidation, liquidation,
dissolution, sale or offering being referred to herein as a "Significant
Event"), then the Company, upon obtaining approval of the Board, may (but shall
not be required to) waive any and all restrictions on the vesting of optionees'
rights under stock options granted pursuant to the Plan by providing written
notice thereof to the optionees. If the Company, upon obtaining approval of the
Board, elects to waive any such vesting restrictions, the optionees' rights
under their respective stock options shall vest
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in accordance with the terms of such waiver, subject to the actual occurrence of
the Significant Event. In consideration for any such waiver of vesting
restrictions by the Company, the Company shall have the option (the "Termination
Option") to require all optionees to exercise their vested (determined after
taking into account any waiver of vesting restrictions) but unexercised stock
options upon the occurrence of the Significant Event, by providing written
notice to all optionees at least 10 days before the occurrence of the
Significant Event. Any exercise by an optionee in these circumstances may be
conditioned upon the occurrence of the Significant Event. If the Company
exercises the Termination Option under this paragraph (b), upon the actual
occurrence of the Significant Event, each stock option that is vested
(determined after taking into account any waiver of vesting restrictions) but
unexercised as of such date shall terminate. If the potential Significant Event
does not in fact occur for any reason, then any waiver by the Company of the
vesting restrictions and any exercise by the Company of the Termination Option
under this paragraph (b) shall have no effect, and the optionee's rights will be
vested only to the extent that they would be vested if no restrictions on
vesting had been waived by the Company herein.
(c) CHANGE OF PAR VALUE. In the event of a change in the Company's
Common Stock which is limited to a change of all of its authorized shares with
par value into the same number of shares with a different par value or without
par value, the shares resulting from any such change shall be deemed to be
Common Stock within the meaning of the Plan.
(d) MISCELLANEOUS. The adjustments provided for in this Article
shall be made by the Committee whose determination in that respect shall be
final, binding and conclusive. Except as hereinbefore expressly provided in this
Article, the holder of a stock option shall not be entitled to the privilege of
stock ownership as to any shares of Common Stock or other stock not actually
issued and delivered to the holder. Any issue by the Company of shares of stock
of any class, or securities convertible into shares of stock of any class, shall
not affect and no adjustment by reason thereof shall be made with respect to the
number or price of shares of the Company's Common Stock subject to any stock
option. The grant of a stock option pursuant to the Plan shall not affect in any
way the right or power of the Company to, among other things, make adjustments,
reclassifications, reorganizations or changes of its capital or business
structure or to merge or to consolidate or to dissolve or liquidate or sell or
transfer all or any part of its business or assets.
ARTICLE XI
PRIVILEGES OF STOCK OWNERSHIP
No person entitled to exercise any stock option granted under the Plan
shall have any of the rights or privileges of a stockholder of the Company in
respect of any shares of stock issuable upon exercise of such stock option until
certificates representing such shares shall have
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been issued and delivered. Upon exercise of a stock option, the person
exercising the stock option shall be entitled to one stock certificate
evidencing the shares acquired upon such exercise.
ARTICLE XII
CONTINUATION OF EMPLOYMENT
Nothing contained in the Plan (or in any stock option granted pursuant to
the Plan) shall confer upon any employee any right to continue in the employ of
the Company or any subsidiary corporation or constitute any contract or
agreement of employment or interfere in any way with the right of the Company or
any subsidiary corporation to reduce any person's compensation from the rate in
existence at the time of the granting of a stock option or to terminate such
person's employment. Nothing contained herein or in any Agreement shall affect
any other contractual rights of an employee.
ARTICLE XIII
AMENDMENT OR DISCONTINUANCE
The Board or the Committee may at any time and from time to time amend,
rescind, suspend or terminate the Plan, as it shall deem advisable, provided
that the Plan may not be amended more than once every six months, other than to
comport with changes in the Code, ERISA, or the rules thereunder. In addition to
Board approval of any amendment to the Plan, if the Board or Committee further
determines on advice of counsel that it is necessary or desirable to obtain
stockholder approval of any amendment to the Plan in order to comply with Rule
16b-3 of the General Rules and Regulations under the 1934 Act, or any successor
rule, as it shall read as of the time of amendment, or for any other reason,
then the effectiveness of any such amendment may be conditioned upon its
approval by the affirmative votes of the holders of a majority of the
outstanding voting stock of the Company (voting as a single class) present, or
represented, and entitled to vote at a meeting duly held in accordance with the
applicable laws of the state or other jurisdiction in which the Company is
incorporated.
No change may be made in, and no amendment, rescission, suspension or
termination of the Plan shall have an effect on, stock options previously
granted under the Plan which may impair or alter the rights or obligations of
the holders thereof, except that any change may be made in stock options
previously granted with the consent of the optionees.
ARTICLE XIV
EFFECTIVE DATE OF PLAN; STOCKHOLDER APPROVAL
The Plan shall be effective as of March 6, 1996, the date on which it
received the approval of a majority of the disinterested members of the Board.
However, the Plan and all stock options granted under the Plan shall be void if
the Plan is not approved by the stockholders within twelve (12) months from the
date the Plan is approved by the Board. The Plan shall be deemed approved by the
holders of the outstanding voting stock of the Company by the affirmative votes
of the holders of a majority of the outstanding voting stock of the Company
present, or represented, and entitled to vote at a meeting duly held in
accordance with the
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applicable laws of the state or other jurisdiction in which the Company is
incorporated. No stock option granted under the Plan shall be exercisable in
whole or in part unless and until such stockholder approval is obtained.
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EXHIBIT 99.2
GARDEN RIDGE CORPORATION
1996 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
ARTICLE I
PURPOSE
Garden Ridge Corporation, a Delaware corporation (the "Company"), is
dependent for the successful conduct of its business on the initiative, effort
and judgment of its directors. This 1996 Non-Employee Director Stock Option Plan
(the "Plan") is intended to provide the non-employee directors of the Company
additional compensation for their service as directors and an incentive, through
options to acquire stock in the Company, to increase the value of the Company's
Common Stock, par value $0.01 per share ("Common Stock").
ARTICLE II
ADMINISTRATION
The Plan shall be administered by the Board of Directors of the Company
(the "Board"). Subject to the express provisions of the Plan and the policies of
each stock exchange on which any of the Company's stock at any time may be
traded, the Board shall have plenary authority (i) to construe and interpret the
Plan, (ii) to define the terms used therein, (iii) to prescribe, amend and
rescind rules and regulations relating to the Plan, and (iv) to make all other
determinations necessary or advisable for the administration of the Plan. All
determinations and interpretations made by the Board shall be binding and
conclusive on all participants in the Plan and their legal representatives and
beneficiaries. No member of the Board shall be liable for any action, failure to
act, determination or interpretation made in good faith with respect to the Plan
or any transaction under the Plan.
ARTICLE III
SHARES SUBJECT TO PLAN AND DURATION OF PLAN
The Plan shall expire and terminate on the earlier of (i) the date ten
years from the effective date of this Plan, or (ii) the date on which there have
been granted to eligible non-employee Directors pursuant to the Plan stock
options to purchase an aggregate of 35,000 shares of the Common Stock. Shares
subject to stock options under the Plan may be either authorized and unissued
shares or issued shares that have been acquired by the Company and held in its
treasury, in the sole discretion of the Board. When stock options have been
granted under the Plan and have lapsed unexercised or partially unexercised or
have been surrendered for cancellation by the optionee thereof, the unexercised
shares which were subject thereto may be reoptioned under the Plan.
<PAGE>
ARTICLE IV
ELIGIBILITY AND PARTICIPATION
Under the Plan, each non-employee director shall, effective as of the date
of his initial election to the Board, be granted a stock option to purchase from
the Company 2,500 shares of Common Stock, and effective each year on the date
which is three days following the Company's release of financial results for its
first fiscal quarter, be granted a stock option to purchase from the Company
2,500 shares of Common Stock, at a price determined as set forth in ARTICLE IV
below.
ARTICLE V
TERMS AND CONDITIONS OF STOCK OPTIONS;
STOCK OPTION PRICE; TRANSFERABILITY
Each stock option granted under the Plan shall be evidenced by a stock
option agreement (the "Agreement"), the form of which shall have been approved
by the Board. The Agreement shall be executed by the Company and the optionee,
and shall set forth the terms and conditions of the stock option, which terms
and conditions shall include, but not be limited to the following:
(a) OPTION PRICE. The per share stock option price shall be an amount
equal to the Fair Market Value (as defined below) of the Common Stock on the
date of grant of the stock option. In no event shall the stock option price be
less than the par value of the Company's Common Stock.
(b) TERM. The term of each stock option granted under the Plan shall be
for a period of five years from the grant thereof.
(c) TRANSFERABILITY. Except as set forth below, the stock options granted
hereunder shall not be transferable otherwise than by will or operation of the
laws of descent and distribution or pursuant to a qualified domestic relations
order as defined in the Internal Revenue Code of 1986, as amended (the "Code"),
or Title I of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), or the rules thereunder. During the lifetime of the optionee, stock
options granted hereunder shall be exercisable only by the optionee, the
optionee's guardian or legal representative.
(d) VESTING. Each stock option granted under the Plan shall vest
immediately; provided, however, that the sale of the shares issued upon the
exercise of a stock option by any person subject to Section 16 of the Securities
Act of 1934 (the "1934 Act") shall not be allowed until at least six months
after the later of (i) the approval of this Plan by the stockholders of the
Company in accordance with ARTICLE XI hereof or (ii) the grant of the stock
option.
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ARTICLE VI
EXERCISE OF STOCK OPTIONS
The purchase price of shares of Common Stock acquired upon exercise of a
stock option shall be paid in full at the time of exercise in cash or by
certified or cashier's check payable to the order of the Company, or, upon
receipt of all required regulatory approvals, if any, by delivery of shares of
Common Stock of the Company already owned, and in the possession of, the stock
option holder having a Fair Market Value equal to such stock option price, or
any combination thereof. Shares of Common Stock used to satisfy the exercise
price of a stock option shall be valued at their Fair Market Value determined as
of the close of business on the date such stock option is exercised, or if such
date is not a business date, on the business day immediately preceding the date
of exercise. Deliveries of cash, shares and notices to the Company shall be
directed to the Secretary of the Company.
No stock option granted hereunder shall be exercisable unless the Plan and
all shares issuable on the exercise thereof have been registered under the
Securities Act of 1933, as amended (the "1933 Act") and all other applicable
securities laws, and there is available for delivery a prospectus meeting the
requirements of Section 10 of the 1933 Act, or the Company shall have first
received the opinion of its counsel that registration under the 1933 Act and all
other applicable securities laws is not required in connection with such
issuance. At the time of exercise, if the shares with respect to which the stock
option is being exercised have not been registered under the 1933 Act and all
other applicable securities laws, the Company may require the optionee to
provide the Company whatever written assurance counsel for the Company may
require that the shares are being acquired for investment and not with a view to
the distribution thereof, and that the shares will not be disposed of without
the written opinion of such counsel that registration under the 1933 Act and all
other applicable securities laws is not required. Share certificates issued to
the optionee upon exercise of the stock option shall bear a legend to the
foregoing effect to the extent counsel for the Company deems it advisable.
ARTICLE VII
FAIR MARKET VALUE OF COMMON STOCK
For purposes of the Plan, the term "Fair Market Value" on any date shall
mean (i) if the Common Stock is not listed or admitted to trade on a national
securities exchange and if bid and asked prices for the Common Stock are not so
furnished through NASDAQ or a similar organization, the value established by the
Board for purposes of the Plan; (ii) if the Common Stock is listed or admitted
to trade on a national securities exchange or national market system, the
closing price of the Common Stock, as published in the WALL STREET JOURNAL, so
listed or admitted to trade on such date or, if there is no trading of the
Common Stock on such date, then the closing price of the Common Stock on the
next preceding date on which there was trading in such shares; or (iii) if the
Common Stock is not listed or admitted to trade on a national securities
exchange or national market system, the mean between the bid and asked price for
the Common Stock on such date, as furnished by the National Association of
Securities Dealers, Inc. through NASDAQ or a similar organization if NASDAQ is
no longer reporting such
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information. In addition to the above rules, Fair Market Value shall be
determined without regard to any restriction other than a restriction which, by
its terms, will never lapse.
ARTICLE VIII
ADJUSTMENTS
(a) ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. Subject to any required
action by the Company's directors and stockholders, the number of shares
provided for in each outstanding stock option and the price per share thereof,
and the number of shares provided for in the Plan, shall be proportionately
adjusted for any increase or decrease in the number of issued shares of the
Company's Common Stock resulting from a subdivision or consolidation of shares
or the payment of a stock dividend (but only on the Common Stock), a stock
split, a reverse stock split, or any other increase or decrease in the number of
such shares effected without receipt of consideration by the Company, and shall
also be proportionately adjusted in the event of a spin-off, spin-out, or other
distribution of assets to stockholders of the Company, to the extent necessary
to prevent dilution of the interests of grantees pursuant to the Plan or of the
other stockholders of the Company, as applicable. If the Company shall engage in
a merger, consolidation, reorganization or recapitalization, each outstanding
stock option (or if such transaction involves less than all of the shares of the
Company's Common Stock, then a number of stock options proportionate to the
number of such involved shares), shall become exercisable for the securities and
other consideration to which a holder of the number of shares of the Company's
Common Stock subject to each such stock option would have been entitled to
receive in any such merger, consolidation, reorganization or recapitalization.
(b) SIGNIFICANT EVENT. In the event of a potential merger or consolidation
involving the Company regardless of whether the Company is the surviving entity
of such merger or consolidation, a potential liquidation or dissolution of the
Company, a potential sale or other disposition by the Company of all or
substantially all of its assets, or a potential sale or other disposition by the
stockholders of the Company of all or substantially all of the outstanding
Common Stock to one purchaser (any such merger, consolidation, liquidation,
dissolution, or sale being referred to herein as a "Significant Event"), then
the Company shall have the option of terminating all outstanding stock options
upon the actual occurrence of the Significant Event, by notice to all optionees
at least 10 days before the occurrence of the Significant Event. Any exercise by
an optionee in these circumstances may be conditioned upon the occurrence of the
Significant Event. Upon the actual occurrence of the Significant Event, each
outstanding stock option shall terminate if the Company exercises its option
under this paragraph (b). If the potential Significant Event does not in fact
occur for any reason, then the Company's exercise of its option under this
paragraph (b) shall have no effect and his or her rights will be the same as if
the Company had never exercised its option under this paragraph (b).
(c) CHANGE OF PAR VALUE. In the event of a change in the Company's Common
Stock which is limited to a change of all of its authorized shares with par
value into the same number of shares with a different par value or without par
value, the shares resulting from any such change shall be deemed to be Common
Stock within the meaning of the Plan.
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(d) MISCELLANEOUS. The adjustments provided for in this Article shall be
made by the Board whose determination in that respect shall be final, binding
and conclusive. Except as hereinbefore expressly provided in this Article, the
holder of a stock option shall not be entitled to the privilege of stock
ownership as to any shares of Common Stock or other stock not actually issued
and delivered to the holder. Any issue by the Company of shares of stock of any
class, or securities convertible into shares of stock of any class, shall not
affect and no adjustment by reason thereof shall be made with respect to the
number or price of shares of the Company's Common Stock subject to any stock
option. The grant of a stock option pursuant to the Plan shall not affect in any
way the right or power of the Company to, among other things, make adjustments,
reclassifications, reorganizations or changes of its capital or business
structure or to merge or to consolidate or to dissolve or liquidate or sell or
transfer all or any part of its business or assets.
ARTICLE IX
PRIVILEGES OF STOCK OWNERSHIP
No person entitled to exercise any stock option granted under the Plan
shall have any of the rights or privileges of stockholder of the Company in
respect of any shares of stock issuable upon exercise of such stock option until
certificates representing such shares shall have been issued and delivered. Upon
exercise of a stock option, the person exercising the stock option shall be
entitled to one stock certificate evidencing the shares acquired upon such
exercise.
ARTICLE X
AMENDMENT OR DISCONTINUANCE
The Board may at any time and from time to time amend, rescind, suspend or
terminate the Plan, as it shall deem advisable, provided that the Plan may not
be amended more than once every six months, other than to comport with changes
in the Code, ERISA, or the rules thereunder. In addition to Board approval of
any amendment to the Plan, if the Board further determines on advice of counsel
that it is necessary or desirable to obtain stockholder approval of any
amendment to the Plan in order to comply with Rule 16b-3 of the General Rules
and Regulations under the 1934 Act, or any successor rule, as it shall read as
of the time of amendment, or for any other reason, then the effectiveness of any
such amendment may be conditioned upon its approval by the affirmative votes of
the holders of a majority of the outstanding voting stock of the Company (voting
as a single class), present, or represented, and entitled to vote at a meeting
duly held in accordance with the applicable laws of the state or other
jurisdiction in which the Company is incorporated.
No change may be made in, and no amendment, rescission, suspension or
termination of the Plan shall have an effect on, stock options previously
granted under the Plan which may impair or alter the rights or obligations of
the holders thereof, except that any change may made in stock options previously
granted with the consent of the optionees.
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ARTICLE XI
EFFECTIVE DATE; STOCKHOLDER APPROVAL
The Plan shall be effective as of March 6, 1996, the date on which it
received the approval of a majority of the disinterested members of the Board.
However, the Plan and all stock options granted under the Plan shall be void if
the Plan is not approved by the stockholders within twelve (12) months from the
date the Plan is approved by the Board. The Plan shall be deemed approved by the
holders of the outstanding voting stock of the Company by the affirmative votes
of the holders of a majority of the outstanding voting stock of the Company
present, or represented, and entitled to vote at a meeting of such stockholders
duly held in accordance with the applicable laws of the state or other
jurisdiction in which the Company is incorporated. No stock option granted under
the Plan shall be exercisable in whole or in part unless and until such
stockholder approval is obtained.
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EXHIBIT 99.3
GARDEN RIDGE CORPORATION
STOCK PURCHASE PLAN
1. PURPOSE OF PLAN. The purpose of this Stock Purchase Plan (the "Plan")
is to provide employees of Garden Ridge Corporation, a Delaware corporation
("Garden Ridge"), and its subsidiaries (collectively, the "Company") with a
strong incentive for the future growth of the Company by enabling such employees
to acquire shares of Garden Ridge's common stock, par value $0.01 per share
("Common Stock"), in the manner contemplated by the Plan. Rights to purchase
shares offered pursuant to the Plan are a matter of separate inducement and not
in lieu of any salary or other compensation for the services of any employee.
The Plan is intended to qualify as an employee stock purchase plan within the
meaning of Section 423 of the Internal Revenue Code of 1986, as amended (the
"Code"), and shall be construed accordingly.
2. AMOUNT OF STOCK SUBJECT TO THE PLAN; PAYMENT FOR SHARES. The total
number of shares of Common Stock that may be issued pursuant to rights of
purchase granted under the Plan shall not exceed 50,000 shares of the authorized
Common Stock. In the discretion of the Board of Directors of Garden Ridge (the
"Board of Directors") or its delegate, such shares may be (i) treasury shares,
including shares acquired by Garden Ridge in open market transactions, or (ii)
authorized but unissued shares. If a right of purchase under the Plan expires or
is terminated unexercised for any reason, the shares as to which such right so
expired or terminated again may be made subject to a right of purchase under the
Plan.
3. ADMINISTRATION. The Board of Directors shall appoint a committee (the
"Committee") comprised of not less than three persons, all of whom shall be
members of the Board of Directors, who shall not be eligible, and shall not have
been eligible at any time within one year prior thereto, for selection as a
person to whom rights to purchase shares of Common Stock may be granted pursuant
to the Plan. The Committee shall designate an administrator (the
"Administrator") of the Plan, who may be, but shall not be required to be, a
member of the Committee. The Committee and the Administrator shall administer
the Plan, all as provided herein. The members of the Committee shall serve at
the pleasure of the Board of Directors, and the Administrator shall serve at the
pleasure of the Committee. The Committee shall hold meetings at such times and
places as it may determine and may take action by unanimous written consent or
by means of a meeting held by conference telephone call or similar
communications equipment pursuant to which all persons participating in the
meeting can hear each other. The Committee may request advice or assistance or
employ such other persons as it deems necessary for proper administration of the
Plan. Subject to the express provisions of the Plan and the requirements of
applicable law, the Committee shall have authority, in its discretion, to
determine: (i) when each offering hereunder of rights to purchase shares
(hereinafter, an "Offering") shall be made; (ii) the duration of each Offering
(the "Purchase Period"); (iii) the date on which the Purchase Period for each
Offering shall begin (the "Offering Commencement Date") and end (the "Offering
Termination Date"); (iv) the total number of shares subject to each Offering;
(v) the purchase price of shares subject to each Offering; and (vi) the
exclusion of any classes of employees pursuant to Section 4(iii) hereof. Subject
to the express provisions
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of the Plan, the Committee shall have the discretionary authority: (a) to
construe and interpret Offerings, the Plan and the respective rights to purchase
shares; (b) to prescribe, amend and rescind rules and regulations relating to
the Plan; (c) to supply omissions, reconcile inconsistencies, and correct
defects in the Plan and correct errors made in the administration of the Plan;
and (d) to make all other determinations necessary or advisable for
administering the Plan. The determination of the Committee with respect to
matters referred to in this Section 3 as within its province shall be final and
conclusive.
4. ELIGIBILITY. No right to purchase shares of Common Stock shall be
granted hereunder to a person who is not an employee of Garden Ridge or a
subsidiary corporation or parent corporation now existing or hereafter formed or
acquired. As used in the Plan, the terms "parent corporation" and "subsidiary
corporation" shall have the meanings respectively given to such terms in
Sections 424(e) and 424(f) of the Code. Each Offering shall be made to all
employees of Garden Ridge and/or all employees of such parent and/or subsidiary
corporations as are designated by the Committee, excluding: (i) employees whose
customary employment is 20 hours or less per week or not more than five months
in any calendar year; (ii) employees who have been employed less than two years
as of the effective date of an Offering hereunder; and (iii) any employee who,
immediately after the grant of a right to purchase shares pursuant to an
Offering, owns capital stock possessing 5% or more of the total combined voting
power or value of all classes of stock of Garden Ridge (in determining stock
ownership of an individual, the rules of Section 424(d) of the Code shall be
applied; shares that the employee may purchase under outstanding rights of
purchase and options shall be treated as stock owned by him or her; and the
Committee and the Administrator may rely on representations of fact made to them
by the employee and believed by them to be true). Hereinafter, "Eligible
Employee" refers to employees who meet the eligibility criteria of this Section
4 with respect to the Offering in question.
5. OFFERINGS. The Committee may make grants to Eligible Employees of
rights to purchase shares of Common Stock pursuant to the terms and conditions
hereinafter set forth. The terms and conditions of each Offering shall: (i)
state the Offering Commencement Date and the Offering Termination Date; (ii)
define the Purchase Period thereunder; (iii) specify the maximum number of
shares of Common Stock that may be purchased thereunder; (iv) specify the
purchase price for such shares; and (v) specify what class of employees, if any,
are excluded pursuant to Section 4(iii) hereof. During the Purchase Period
specified in the terms of an Offering (or during such portion thereof as an
Eligible Employee may elect to participate), payroll deductions shall be made
from such employee's compensation pursuant to Sections 6 and 7. Any stated
Purchase Period shall end no later than 27 months from the Offering Commencement
Date. The measure of an employee's participation in an Offering shall be based
on the salary, commissions, bonuses and overtime paid to the employee during the
Purchase Period specified in such Offering (or for such portion thereof as the
employee is eligible to participate), subject to appropriate adjustments that
would exclude items such as reimbursement of moving, travel, trade or business
expenses ("Compensation").
6. PARTICIPATION. An Eligible Employee on the Offering Commencement Date,
or thereafter during the Offering, may participate in such Offering only by
completing a payroll
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deduction authorization form (an "Authorization Form") and forwarding it to the
Administrator at any time prior to the beginning of the next payroll period in
which payroll deductions will be made. The Authorization Form will authorize a
regular payroll deduction from the employee's Compensation and must specify the
date on which such deduction is to commence, which may not be retroactive.
7. PAYROLL DEDUCTIONS. The Company will maintain a payroll deduction
account for each participating employee. With respect to any Offering made under
the Plan, and subject to the limitations set forth in Section 11 of the Plan, an
Eligible Employee may authorize a payroll deduction of any whole percentage, up
to a maximum of 10%, of the Compensation he or she receives during the Purchase
Period specified in an Offering.
8. CHANGES IN PAYROLL DEDUCTIONS. A participating employee may discontinue
his or her participation in the Plan as provided in Section 9, but no other
change can be made during an Offering and, specifically, a participating
employee may not alter the payroll deduction amount for that Offering.
9. TERMINATION OF PURCHASE RIGHTS AND WITHDRAWAL OF FUNDS. A participating
employee may at any time and for any reason withdraw the entire cash balance
then accumulated in his or her payroll deduction account and withdraw from the
Plan by providing written notice to the Administrator, thereby allowing the
participating employee to withdraw from participation in an Offering. Upon
withdrawal of the cash balance in his or her payroll deduction account, a
participating employee shall cease to be eligible to participate in the Offering
pursuant to which the withdrawn funds were withheld; provided, however, any
participating employee subject to Section 16 of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), shall cease to be eligible to participate
in any Offering until six months after such withdrawal. Partial withdrawals
shall not be permitted. Any cash balance withdrawn in accordance with this
Section 9 may not be transferred to any payroll deduction account maintained for
the participating employee pursuant to another Offering, whether under the Plan
or under another such plan. No interest shall be paid on cash balances in a
participating employee's payroll deduction account.
10. RIGHT OF PURCHASE-OPTION FOR A MAXIMUM NUMBER OF SHARES. The right of
a participating employee to purchase Common Stock pursuant to an Offering under
the Plan shall be an "option" (and an Offering shall be the "grant" of such
option) to purchase a maximum number of shares determined by dividing: (i) 10%
of the Eligible Employee's Compensation for the Purchase Period or for the
portion of such Purchase Period during which he or she is eligible to
participate in the Offering, whichever is less; by (ii) the purchase price of a
share of Common Stock determined in the manner set forth in Section 12.
11. MAXIMUM ALLOTMENT OF RIGHTS OF PURCHASE. Any right to purchase shares
of Common Stock under the Plan shall be subject to the limitations of Section
423(b)(8) of the Code (generally limiting accrual of the right of any
participating employee to purchase shares under all employee stock purchase
plans of Garden Ridge and any subsidiary or parent
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corporation, qualified under Section 423 of the Code, to an annual rate of
$25,000 in fair market value).
12. PURCHASE PRICE. The purchase price for each share of Common Stock
under each right to purchase granted pursuant to an Offering shall not be less
than 85% of the Fair Market Value (as defined herein) of such share at the time
that the right to purchase is exercised. For purposes of the Plan, the term
"Fair Market Value" on any date shall mean (i) if the Common Stock is not listed
or admitted to trade on a national securities exchange and if bid and asked
prices for the Common Stock are not furnished through NASDAQ or a similar
organization as described below, the value established by the Committee, in its
sole discretion, for purposes of the Plan; (ii) if the Common Stock is listed or
admitted to trade on a national securities exchange or national market system,
the closing price of the Common Stock, as published in THE WALL STREET JOURNAL,
so listed or admitted to trade on such date or, if there is no trading of the
Common Stock on such date, then the closing price of the Common Stock on the
next preceding date on which there was trading in such shares; or (iii) if the
Common Stock is not listed or admitted to trade on a national securities
exchange or national market system, the mean between the bid and asked price for
the Common Stock on such date, as furnished by the National Association of
Securities Dealers, Inc. through NASDAQ or a similar organization if NASDAQ is
no longer reporting such information. In addition to the above rules, Fair
Market Value shall be determined without regard to any restriction other than a
restriction which, by its term, will never lapse.
13. AUTOMATIC EXERCISE; METHOD OF PAYMENT. As of the Offering Termination
Date, the payroll deduction account of each participating employee shall be
totalled. If a participating employee shall have sufficient funds in his or her
payroll deduction account on an Offering Termination Date to purchase at least
one full share (or such greater number of full shares as the Committee, from
time to time, may determine) at the offering price, the participating employee
shall purchase, at such Offering Termination Date, without any further action,
the maximum whole number of shares of Common Stock (subject to the limitation
provided in Section 10 hereof) that could be purchased with the funds in his or
her payroll deduction account. The participating employee's payroll deduction
account shall be charged for the amount of the purchase, and a stock certificate
shall be issued for the benefit of the participating employee as soon thereafter
as practicable for the shares so purchased, which certificate may be issued in
nominee name. No fractional shares shall be issued, and the cash balance, if
any, remaining in each participating employee's payroll deduction account at the
end of each Purchase Period shall remain in such account and be available for
the purchase of shares in any subsequent Offerings, or may be withdrawn
therefrom by a participating employee pursuant to Section 9 hereof.
14. RIGHTS AS A STOCKHOLDER. A participating employee shall have no rights
as a stockholder with respect to any shares covered by a right of purchase until
a stock certificate for such shares is issued for his or her benefit, which
stock certificate may be issued in nominee name. No adjustment shall be made for
dividends (ordinary or extraordinary, whether in cash or in other property) or
distributions or other rights for which the record date is prior to the date on
which such stock certificate is issued, except as provided in Section 17 hereof.
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15. SALE OF STOCK. Shares of Common Stock purchased under the Plan
pursuant to an Offering may not be sold until at least two years after the
Offering Commencement Date and at least one year after the purchase of such
Common Stock. If a participating employee sells, disposes, transfers for value
or otherwise, shares of Common Stock purchased through the Plan prior to
expiration of the time periods set forth above, the participating employee shall
immediately provide information to the Administrator including, without
limitation, the manner of the transfer, the date of the transfer, the number of
shares involved and the transfer price. By executing the Authorization Form,
each participating employee obligates himself or herself to provide such
information to the Administrator.
16. RIGHTS NOT TRANSFERABLE. Except as provided in Section 18 hereof
regarding exercise by a beneficiary (or executor or person performing similar
duties), rights to purchase shares under the Plan are not transferrable by a
participating employee and may be exercised only by him or her during his or her
lifetime.
17. ADJUSTMENT OF SHARES. If any change is made in the number, class or
rights of shares subject to the Plan or subject to any Offering under the Plan
(through merger, consolidation, reorganization, recapitalization, stock
dividend, split-up, combination of shares, exchange of shares, issuance of
rights to subscribe or other change in capital structure), appropriate
adjustments shall be made as to the maximum number of shares subject to the Plan
and the number of shares and price per share subject to outstanding rights of
purchase as shall be equitable to prevent dilution or enlargement of such
rights; provided, however, that any such adjustment shall comply with the rules
of Section 424(a) of the Code if the transaction is one described in said
Section 424(a); provided further that in no event shall any adjustment be made
that would render any Offering other than an offering pursuant to an employee
stock purchase plan within the meaning of Section 423 of the Code.
18. RETIREMENT, TERMINATION AND DEATH. In the event of a participating
employee's retirement or termination of employment for any reason other than
death, the amount in such participating employee's payroll deduction account
shall be refunded to the participating employee and any restricted and
nonrestricted shares of Common Stock purchased by the participating employee
that have not been issued shall be issued and delivered to the participating
employee. In the event of a participating employee's death, the amount in the
deceased participating employee's payroll deduction account may, at the option
of the beneficiaries designated by such participating employee pursuant to
Section 19 (or such participating employee's executor or a person performing
similar duties), be utilized to purchase Common Stock at the end of the Purchase
Period during which the deceased participating employee dies, whereupon all
shares so purchased shall be delivered to such beneficiary (or executor or
person performing similar duties).
19. DESIGNATION OF BENEFICIARY. A participating employee may file a
written designation of a beneficiary who is to receive any shares and/or cash.
Such designation of beneficiary may be changed by the participating employee at
any time by written notice to the Committee. Upon the death of a participating
employee and upon receipt by the Committee of proof of identity and existence at
the participating employee's death of a beneficiary validly
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designated by him or her under the Plan, the Company shall deliver such shares
and/or cash to such beneficiary. In the event of the death of a participating
employee and in the absence of a beneficiary validly designated under the Plan
who is living at the time of such participating employee's death, the Company
shall deliver such shares and/or cash to the executor or administrator of the
estate of the participating employee, or if no such executor of administrator
has been appointed (to the knowledge of the Committee), the Committee, in its
discretion, may cause the delivery of such shares and/or cash to the spouse or
to any one or more dependents of the participating employee as the Committee may
designate. No beneficiary shall, prior to the death of the participating
employee by whom he or she has been designated, acquire any interest in the
shares or cash credited to the participating employee under the Plan.
20. AMENDMENT OF THE PLAN. The Plan may be amended at any time by the
Board of Directors, provided that, without the approval of the stockholders of
Garden Ridge entitled to vote thereon, no such amendment shall become effective
if it would: (i) increase the number of shares reserved for rights of purchase
under the Plan; (ii) modify the requirements as to eligibility for participation
in the Plan; or (iii) materially increase the benefits to participants under the
Plan.
21. TERMINATION OF THE PLAN. The Plan and all rights of employees
hereunder shall terminate (i) on the Offering Commencement Date that
participating employees become entitled to purchase a number of shares greater
than the number of shares remaining available for purchase under the Plan or
(ii) in the discretion of the Board of Directors, upon the completion of any
Purchase Period. In the event that the Plan terminates under the circumstances
described in clause (i) above, shares of Common Stock remaining available for
purchase under the Plan as of the termination date shall be issued to
participating employees on a pro rata basis (in proportion to their payroll
deduction accounts). Any cash balances remaining in participating employees'
payroll deduction accounts upon termination of the Plan shall be refunded as
soon thereafter as practicable. The powers of the Committee provided by Section
3 hereof to construe and administer the Plan shall nevertheless continue after
such termination.
22. THIRD-PARTY BENEFICIARIES. None of the provisions of the Plan shall be
for the benefit of or enforceable by any creditor of a participating employee or
any other third party (except for a beneficiary designated by a participant
pursuant to Section 19 (or such participant's executor or person performing
similar duties)). A participating employee may not create a lien, encumbrance or
assignment on any portion of the cash balance accumulated in his or her payroll
deduction account or on any shares covered by a right to purchase before a stock
certificate for such shares is issued for his or her benefit.
23. CONTINUATION OF EMPLOYMENT. Nothing contained in the Plan (or any
right to purchase Common Stock granted pursuant to the Plan) shall confer upon
any employee any right to continue in the employ of the Company or any
subsidiary corporation or constitute any contract or agreement of employment or
interfere in any way with the right of the Company or any subsidiary corporation
to reduce any person's compensation from the rate in existence at the time of
the grant or to terminate such person's employment. Nothing contained herein or
in any agreement shall affect any other contractual rights of an employee.
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24. GOVERNING LAW. The Plan and rights to purchase shares that may be
granted hereunder shall be governed by and construed and enforced in accordance
with the laws of the State of Delaware without regard to principles of conflicts
of laws.
25. EFFECTIVE DATE. The Plan shall be effective as of March 6, 1996, the
date on which it received the approval of the majority of the disinterested
members of the Board. However, the Plan and all rights to purchase Common Stock
granted pursuant to the Plan shall be void if the Plan is not approved by the
stockholders within twelve (12) months from the date the Plan is approved by the
Board. The Plan shall be deemed approved by the holders of the outstanding
voting stock of the Company by the affirmative votes of the holders of a
majority of the outstanding voting stock of the Company present, or represented,
and entitled to vote at a meeting duly held in accordance with the applicable
laws of the state or other jurisdiction in which the Company is incorporated.
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