As filed with the U.S. Securities and Exchange Commission on July
29, 1996.
FORM S-8
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933
FAMOUS SAM'S GROUP, INC.
(Exact name of registrant as specified in its charter)
Nevada 88-0361701
(State or other jurisdiction of (IRS employer identification no.)
incorporation or organization)
8351 E. Broadway, Tucson, Arizona 85710
(Address of Principal Executive Offices, including ZIP Code)
1996 Employee Incentive Plan
(Full title of the plan)
Mark S. Pierce, 1200 Seventeenth Street, Suite 1350, Denver,
Colorado 80202
(Name and address of agent for service)
(303) 572-6800
(Telephone number, including area code, of agent for service)
CALCULATION OF REGISTRATION FEE
Title of Securities Amount Proposed Proposed Amount
to be Registered to be Offering Maximum of
Registered Price per Aggregate Regist-
Share Offering ration
Price Fee
$.001 par Value
Common Stock 500,000 $0.01 $5,000 $100
shares per share
TOTALS 500,000 shares $5,000 $100
Total No. of Pages: 33; Exhibit Index on Page No.: 13
PROSPECTUS
FAMOUS SAM'S GROUP, INC.
8351 E. Broadway, Tucson, Arizona 85710
(520) 296-1110
(500,000 SHARES OF COMMON STOCK)
This Prospectus relates to the Famous Sam's Group, Inc., 1996 Stock
Option Plan dated July 29,
1996 (the
"Plan"). Under the Plan, officers, directors, agents, consultants,
advisors and employees of and to Famous Sam's Group, Inc. (the
"Company"), and its subsidiaries are eligible to receive options to
acquire shares of the $.001 par value per share common stock of the
Company (the "Options" and the "Common Stock," respectively). The
Company is registering hereunder and then subsequently issuing up
to 500,000 shares of Common Stock to cover the Options granted over
the term of the Plan.
Options issued under the Plan and/or the underlying Common Stock
may be or become subject to restrictions on transfer, and until any
imposed restrictions lapse, are subject to forfeiture by the holder
upon the occurrence of certain events. ) Options and Common Stock
which are subject to forfeiture will be held in escrow by the
Company until such time as the imposed restrictions. (See "General
Information Regarding the Plan - Restrictions on Transfer; Voting
and Dividend Rights" and "General Information Regarding the Plan
- - Forfeiture."
Sales of Options and the underlying Common Stock by "affiliates,"
as defined in "Rule 144" under the Securities Act of 1933, as
amended (the "Securities Act"), may not be made without compliance
with the registration and prospectus delivery requirements of the
Securities Act, or an exemption therefrom, such as that provided by
Rule 144. The sale of shares by participants who are not
affiliates may be effected without compliance these requirements.
Affiliates may also be subject to Section 16(b) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). If so, such
participants must comply with the provisions of this section as
well. (See "General Information Regarding the Plan - Restrictions
onResales by Affiliates.")
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SECURITIES AND EXCHANGE COMMISSION NOR HAS THE
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is July 29, 1996<PAGE>
This Prospectus is part
of a Registration Statement which was filed
and became effective under the Securities Act, and does not contain
all of the information set forth in the Registration Statement,
certain portions of which have been omitted pursuant to the rules
and regulations promulgated by the U.S. Securities and Exchange
Commission (the "Commission") under the Securities Act. The
statements in this Prospectus as to the contents of any contracts
or other documents filed as an exhibit to either the Registration
Statement or any other filings by the Company with the Commission
which are incorporated herein are qualified in their entirety by
reference thereto.
A copy of any document or part thereof incorporated by reference in
this Prospectus but not delivered herewith will be furnished
without charge upon written or oral request. Requests should be
addressed to: Management Compensation Committee, c/o Famous Sam's
Group, Inc., 8351 E. Broadway, Tucson, Arizona 85710; (520)
296-1110.
The Company is subject to the reporting requirements of the
Exchange Act and in accordance therewith files reports and other
information with the Commission. These reports, as well as the
proxy statements, information statements and other information
filed by the Company under the Exchange Act, if any, may be
inspected and copied at the public reference facilities maintained
by the Commission at 450 Fifth Street, N.W., Washington, D.C.
20549. Copies may be obtained at the prescribed rates. In
addition, if and when the Common Stock becomes quoted on the
"bulletin board" maintained by the National Association of
Securities Dealers, Inc. ("NASD"), copies of these reports, proxy
statements, information statements and other information may also
be examined at the offices of the NASD at 1735 K St., N.W.,
Washington, D.C. 20549.
No person has been authorized to give any information or to make
any representation, other than those contained in this Prospectus,
and, if given or made, such other information or representation
must not be relied upon as having been authorized by the Company.
This Prospectus does not constitute an offer or a solicitation by
anyone in any state in which such is not authorized or in which the
person making such is not qualified or to any person to whom it is
unlawful to make an offer or solicitation.
Neither the delivery of this Prospectus nor any sale made hereunder
shall, under any circumstance, create an implication that there has
not been a change in the affairs of the Company since the date
hereof.<PAGE>
GENERAL INFORMATION REGARDING THE PLAN
Issuer. The Company will be the issuer of the Options and the
underlying Common Stock on exercise. The Company maintains its
principal executive offices at 8351 E. Broadway, Tucson, Arizona;
(520) 296-1110.
Purposes. The Plan was adopted by the shareholders of the Company
on July 29, 1996, after recommendation by the "Board of Directors,"
and is intended to provide a method whereby persons who are
interested in the well being of the Company may be stimulated by
personal involvement in the future prosperity of the Company,
thereby advancing the interests of the Company and its
shareholders.
Term; Shares of Common Stock Subject to Plan. The Plan has a ten
year term which began on July 29, 1996. The Plan authorizes the
issuance and delivery of up to 500,000 shares of Common Stock. No
shares had been issued under the Plan as of the date of this
Prospectus.
Administration. The Plan is initially being administered by the
Board of Directors, which may subsequently appoint a committee for
this purpose. (For purposes of this paragraph only, any reference
to the Board of Directors also includes such committee.) The Board
of Directors must be comprised of a majority of persons who have no
interest at the time of their service in the Plan. The Board of
Directors has full authority to determine the recipients and the
Options awarded under the Plan, and may impose restrictions on the
transfer of Options and/or the underlying Common Stock. The Board
of Directors interprets and constructs the provisions of the Plan,
is authorized to adopt rules and regulations for administering the
Plan and may amend the Plan in any respect at any time. The date
upon which Options become exercisable, their exercise price, the
basis for determining the price, whether and under what
circumstances the price may be modified, the maximum amount which
may be exercised in any year, whether such amount is cumulative and
the period during which all Options must be exercised will be
determined in the sole discretion of the Board of Directors in
accordance with the terms and conditions of the Plan. The Board of
Directors may also amend the Plan from time to time in their sole
discretion, but such amendments will only apply prospectively.
Eligible Participants; Qualified and Non-Qualified Options;
Limitation on Fair Market Value of Grants; Exercise Price; Term of
Options; Tax Effects. All full-time employees of the Company
and/or of its subsidiaries are eligible as participants in the
Plan. Also eligible under the Plan are any other persons
specified under the General Instructions to Form S-8 under the
Securities Act. Awards under the Plan will be based upon the
contributions made by each eligible person to the Company and/or
its subsidiaries.
Options granted to full-time employees of the Company and/or its
subsidiaries will be qualified under the Employee Retirement Income
Security Act of 1974, as set forth in the Internal Revenue Code
("Qualified Options"). Options granted to other than such
employees will not be so qualified ("Non-Qualified Options").
The aggregate fair market value of the Common Stock underlying
Qualified Options granted to any individual in a single calendar
year may not exceed $100,000 in amount. No such limitation applies
to Non-Qualified Options.
If the recipient of a Qualified Option owns or controls 10% or more
of the Common Stock on the date of grant, the exercise price of the
Option must not be less than 110% of the fair market value of the
Common Stock at the date of grant; otherwise, the exercise price
must at least equal the fair market value on the date of grant.
Non-Qualified Options must have a strike price which is not less
than 85% of the fair market value of the Common Stock on the date
of grant.
A Qualified Option will have no more than a five-year term
beginning on the date of grant, while a Non-Qualified Option will
have no more than a ten-year term.
A recipient of Qualified Options and the underlying Common Stock on
exercise will not be deemed for federal income tax purposes to
recognize income until he actually sells the shares, and will at
the time of sale be taxed on the difference between the proceeds
actually received from the sale and the monetary consideration paid
by the recipient for the Option and underlying Common Stock. A
recipient of Qualified Options and the underlying Common Stock on
exercise may, however, elect to include in his income for the
taxable year in which such securities are received the fair market
value on the date received.
The recipient of Non-Qualified Options and the underlying Common
Stock on exercise may incur income tax on the difference between
the fair market value of the security received on the date of
receipt and the cost to the recipient of the security; provided,
however, that no tax will be incurred until any and all provisions
on forfeiture, if significant, have lapsed. Each recipient of
Non-Qualified Options should consult his tax advisor as to the
consequences of grant and exercise, as such consequences depend
entirely upon the terms and conditions of the grant and the
circumstances of the recipient at the date of grant and exercise.
Consideration for Options. Options awarded under the Plan will be
issued in consideration of past services rendered by the
participant for and on behalf of the Company and/or its
subsidiaries. Participants in the Plan will not pay any monetary
consideration, other than upon exercise of any Options which may be
granted.
Restrictions on Transfer; Voting and Dividend Rights. Each
participant immediately becomes the record and beneficial owner of
the Options awarded to him under the Plan on the date of award,
although the Board of Directors may impose forfeiture provisions to
take effect after the date of grant. Options are not transferable,
other than by will or the laws of descent and distribution. The
Board of Directors will maintain possession of the certificate
representing the Option until exercised. On exercise of an Option,
the holder of the Common Stock received immediately becomes the
record owner of the shares and acquires all beneficial rights of
ownership, although the Board of Directors may impose forfeiture
provisions to take effect after the date of exercise. If
forfeiture provisions are imposed, the Board of Directors will
maintain possession of the certificate representing the shares
until the provisions on forfeiture lapse. After exercise, the
holder is entitled to all of the rights of ownership, including the
right to vote any shares of Common Stock awarded and to receive
ordinary cash dividends, subject to any restrictions on forfeiture
imposed.
The Board of Directors may impose a vesting schedule as to any
Option upon award and as to any shares of underlying Common Stock
upon exercise, and may at any time modify the schedule as to which
restrictions upon transfer have not yet lapsed. Any restriction
or forfeiture provisions which may be imposed may lapse earlier
under certain circumstances. (See "Recapitalizations,
Reorganizations and the Like.")
Forfeiture. In the event that an employee ceases to be employed by
the Company or any of its subsidiaries for any reason whatsoever,
except termination for death or permanent or total disability,
while holding one or more Options or non-vested shares of Common
Stock, the employee will have the right to exercise the Option on
the termination date only to the extent then exercisable and only
with respect to the unexercised portion thereof and all rights to
non-vested shares of Common Stock on the termination date will
lapse.
If the employee dies or becomes permanently or totally disabled
while employed by the Company or any of its subsidiaries, the
guardian, legal administrator, personal representative or
administrator of the estate for the person will have the right to
exercise any outstanding Option in full regardless of any other
terms or conditions and any non-vested shares of Common Stock will
vest in full.
No transfer of an Option or non-vested Common Stock by will or by
the laws of descent and distribution will be effective to bind the
Company unless the Company has been furnished with written notice
thereof and an authenticated copy of the will and/or such other
evidence as the Board of Directors may deem necessary to establish
the validity of the transfer and the acceptance by the transferee
or transferees of the terms and conditions of such Option and/or
non-vested Common Stock.
Recapitalizations; Reorganizations and the Like. In the event the
outstanding Common Stock is subsequently changed into or exchanged
for a different number or kind of shares or other securities, a
prompt and equitable adjustment will be made in the aggregate
number and kind of shares of non-vested Common Stock and shares
subject to unexercised Options. Further, upon dissolution or
liquidation of the Company, each outstanding and unexercised Option
and non-vested share of Common Stock will immediately become
exercisable or vest, as the case may be. The foregoing adjustments
will be determined solely by the Board of Directors, whose
determination will be final, binding and conclusive.
Exercise of Stock Options. Exercise of an Option may be had,
either in whole or in part, through the payment of the exercise
price applicable to the number of shares of Common Stock to be
acquired, either in cash or by cashier's check, certified check,
bank draft or money order made payable to the order of the Company.
The Board of Directors may elect to allow the exercise of an Option
through the delivery of Common Stock or a combination of Common
Stock and cash or its equivalent. No Option may be exercised in
part for less than 100 shares of Common Stock, unless there are
fewer than 100 shares remaining under the Option.
Restrictions on Resales by Affiliates. In the event that an
affiliate of the Company acquires Common Stock, whether by direct
grant or the exercise of an Option, the affiliate will be subject
to Section 16(b) of the Exchange Act. This means that the
affiliate could not sell any shares acquired under the Option for
a period of six months thereafter. Further, in the event that the
optionee had sold any shares of Common Stock in the previous six
months preceding the receipt or exercise of the Option, any so
called "profit," as computed under Section 16(b) of the Exchange
Act, would be required to be disgorged from the optionee by the
Company or the Commission. Common Stock acquired on exercise of an
Option by other than affiliates are not subject to Section 16(b) of
the Exchange Act. Participants should consult their counsel as to
the effects and application of Section 16(b) of the Exchange Act on
them.
DOCUMENTS INCORPORATED BY REFERENCE
AND
ADDITIONAL INFORMATION
The Company hereby incorporates by reference (i) its annual report
on Form 10-KSB for the year ended December 31, 1995, filed pursuant
to Section 15(d) of the Exchange Act, (ii) any and all Forms 10-QSB
under the Exchange Act subsequent to any filed Form 10-KSB, as well
as all other reports filed under Section 15(d) of the Exchange Act,
and (iii) its annual report, if any, to shareholders delivered
pursuant to Rule 14a-3 of the Exchange Act. In addition, all
further documents filed by the Company pursuant to Sections 13, 14,
or 15(d) of the Exchange Act prior to the termination of this
offering are deemed to be incorporated by reference into this
Prospectus and to be a part hereof from the date of filing.
A copy of any document or part thereof incorporated by reference in
the Registration Statement but not delivered with this Prospectus
will be furnished without charge upon written or oral request.
Requests should be addressed to: Management Compensation Committee,
Famous Sam's Group, Inc. 8351 E. Broadway, Tucson, Arizona 95710.
A copy of the Company's most recent Forms 10-KSB and 10-QSB
accompanies the copy of this Prospectus when furnished to those
Plan participants not otherwise receiving a copy thereof. The
Company will promptly furnish, without charge, an additional copy
to any participant who requests it.
Indemnification. Insofar as indemnification for liabilities
arising under the Securities Act may be permitted to directors,
officers, or persons controlling the Company, the Company has been
informed that in the opinion of the Commission such indemnification
is against public policy as expressed in the Securities Act and is,
therefore, unenforceable.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 3. Incorporation of Documents by Reference.
Registrant hereby states that (i) all documents set forth in (a)
through (c), below, are incorporated by reference in this
registration statement, and (ii) all documents subsequently filed
by registrant pursuant to Sections 13(a), 13(c), 14 and 15(d) of
the Securities Exchange Act of 1934, as amended, 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
a part hereof from the date of filing of such documents.
(a) Registrant's latest annual report, whether of nor filed
pursuant to Sections 13(a) or 15(d) of the Exchange;
(b) All other reports filed pursuant to Sections 13(a) or 15(d) of
the Exchange Act since the end of the fiscal year covered by the
registrant documents referred to in (a), above; and
(c) Each common share currently outstanding is fully paid for and
nonassessable, and is entitled to one vote per share on all matters
submitted for action by shareholders. All common shares are equal
to each other with respect to the election of directors and
cumulative voting is not permitted; therefore, the holders of more
than 50% of the outstanding common shares can, if they choose to do
so, elect all directors. The terms of the directors are not
staggered. Directors are elected annually to serve until the next
annual meeting of shareholders and until their successors are
elected and qualified. There are no preemptive rights to purchase
any additional shares of common or other securities of registrant.
In the event of liquidation or dissolution, holders of common
shares are entitled to receive, pro rata, the remaining assets
after creditors and holders of any class of stock having
liquidation rights senior to holders of common have been paid in
full. Reference is made to the description of the common shares
prepared in compliance with Item 202 of Regulation S-K in the Form
10 filed with the U.S. Securities and Exchange Commission to
register such shares under Section 12 of the Exchange Act.
Item 4. Description of Securities.
Not Applicable.
Item 5. Interests of Named Experts and Counsel.
Not Applicable.
Item 6. Indemnification of Directors and Officers.
The only statute, charter provision, bylaw, contract, or other
arrangement under which any controlling person, director or officer
of registrant is insured or indemnified in any manner against any
liability which they may incur in their capacity as such is set
forth under the Nevada Corporation Code, as enacted and in effect
upon adoption of the registrant's articles of incorporation and
bylaws, both of which mirror this statute. The statute and said
articles in substance provide, in part and summary, as follows;
however, this summary is qualified in its entirety by reference to
the specific statutory provision:
The provisions of this code generally provide that registrant may,
but is not obligated to, indemnify against liability an individual
made a party to a lawsuit because they were previously or are
currently a director or officer of registrant, if such person acted
in good faith and reasonably believed their actions were in the
best interests of registrant. Registrant may not indemnify such
persons if they are found liable to registrant in a shareholders'
derivative suit or are found liable for receiving an improper
personal benefit. Registrant is required to indemnify such persons
if they are ultimately successful in the suit. Pending a final
determination, registrant may advance funds to these persons, but
only if provision is made for return of the funds advanced in the
event such persons are subsequently found to not be entitled to
indemnification as set forth above. The general effect of this
statute is to make indemnification available to the officers and
directors of registrant regarding actions taken in their official
capacity, unless they are found liable to registrant for their
actions, they received an improper benefit therefrom, or they did
not act in good faith while reasonably believing their actions were
in the best interests of registrant. Indemnification under this
section would include actions of the officers and directors of
registrant taken in connection with this offering.
Item 7. Exemption from Registration Claimed.
Not Applicable.
Item 8. Exhibits.
The following exhibits are filed as part of this registration
statement pursuant to Item 601 of Regulation S-KSB and are
specifically incorporated herein by this reference:
Exhibit No. Title
1. Not Required.
2. Not Required.
3. Not Required.
4. Not Applicable.
5. Opinion of Mark S. Pierce, special counsel to the registrant,
regarding the legality of the securities registered.
6. Not Required.
7. Not Required.
8. Not Required.
9. Not Required.
10. 1996 Stock Option Plan.
11. Not Required.
12. Not Required.
13. Not Required.
14. Not Required.
15. Not Applicable.
16. Not Required.
17. Not Required.
18. Not Required.
19. Not Required.
20. Not Required.
21. Not Required.
22. Not Required.
23. Not Required.
24. Consent of Mark S. Pierce, special counsel to Registrant, to
the use of his opinion with respect to the legality of the
securities being registered hereby and to the references to him in
the Prospectus, if any, filed as a part hereof.
Consent of Halliburton, Hunter & Associates, auditors to
Registrant, to the incorporation by reference of their audit
opinion from the Form 10-KSB for the period ended December 31,
1996.
25. Not Applicable.
26. Not Required.
27. Not Applicable.
28. Not Applicable.
29. Not Applicable.
Item 9. Undertakings.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and
controlling persons of registrant pursuant to the foregoing
provisions, or otherwise, registrant has been advised that in the
opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that
a claim for indemnification against such liabilities (other that
the payment by registrant of expenses incurred or paid by a
director, officer or controlling person of 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, 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 is against public policy as
expressed in the Act and will be governed by the final adjudication
of such issue.
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:
(i) include any prospectus required by Section 10(a)(3) of the
Securities Act; (ii) reflect in the prospectus any facts or
events arising after the effective date of the registration
statement (or the most recent post-effective amendment thereof)
which, individually or in the aggregate, represents a fundamental
change in the information set forth in the registration statement;
and (iii) 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, including, but not limited to, any addition
or deletion of a managing underwriter.
(2) that, for the purpose of determining any liability under the
Securities Act, each post-effective amendment to 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.
(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.
(4) to deliver or cause to be delivered with the prospectus, to
each person to whom the prospectus is sent or given, the latest
annual report to security holders that is incorporated by reference
in the prospectus and furnished pursuant to and meeting the
requirements of Rule 14a-3 or Rule 14c-3 under the Securities
Exchange Act of 1934; and, where interim financial information
required to be presented by Article 3 of Regulation S-X are not set
forth in the prospectus, to deliver, or cause to be delivered to
each person to whom the prospectus is sent or given, the latest
quarterly report that is specifically incorporated by reference in
the prospectus to provide such interim financial information.
Registrant hereby undertakes that, for purposes of determining any
liability under the Securities Act of 1933, each filing of
registrant's annual report pursuant to section 13(a) 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.
<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 in the City of Tucson, State of Arizona, on the
29th day of July, 1996.
FAMOUS SAM'S GROUP, INC.
(Registrant)
By: /s/ Gerald Ross
Gerald Ross, President and
Chief Executive Officer
By: /s/ Sandra Ross
Sandra Ross, Chief Financial
and Accounting Officer
and Treasurer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
/s/ Gerald Ross
Gerald Ross, Director
Date: July 29, 1996
/s/ Sandra Ross
Sandra Ross, Director
Date: July 29, 1996<PAGE>
FORM S-8 REGISTRATION STATEMENT
EXHIBIT INDEX
The following Exhibits are filed as part of this registration
statement pursuant to Item 601 of Regulation S-K and are
specifically incorporated herein by this reference:
Exhibit Number
in Registration Statement Description
5. Opinion of Counsel
10. 1996 Stock Option Plan
24. Consents to Use of Opinion
<PAGE>
EXHIBIT 5
Opinion of Counsel<PAGE>
July 29, 1996
Famous Sam's Group, Inc.
8351 East Broadway
Tucson, Arizona 85710
RE: Employee Option Plan Registration on Form S-8
Gentlemen:
As special securities counsel for Famous Sam's Group, Inc., f/k/a
U.S. Flywheel Systems, Inc. (the "Company"), I am furnishing this
opinion to you in compliance with the referenced matter, and am
familiar with the Company's articles of incorporation and its
corporate powers, franchises and other rights under which it
carries on its business. I am also familiar with the Company's
Bylaws, minute book and other corporate records. For the purpose
of the opinions expressed below, I have examined, among other
things, the registration statement on Form S-8 to be filed in
regards of the above offering (the "Registration Statement"), and
have supervised proceedings taken in connection with the
authorization, execution and delivery by the Company of the
Registration Statement and, as contemplated thereby, the
authorization and issuance of the shares of common stock to be
issued thereunder. In arriving at the opinions set forth below, I
have examined and relied upon originals or copies, certified or
otherwise identified to my satisfaction, of all such corporate
records and all such other instruments, documents and certificates
of public officials, officers and representatives of the Company
and of other persons and have made such investigations of law as I
have considered necessary or appropriate as a basis for my
opinions. Moreover, I have with your approval relied as to factual
matters stated therein on the certificates of public officials, and
I have assumed, but not independently verified, that the signatures
on all documents which I have examined are genuine and that the
persons signing such had the capacity to do so. This opinion
further expressly assumes that the shares covered by the
Registration Statement will be issued in conformity with the terms
and conditions applicable thereto.
Based upon and subject to the forgoing, I am of the opinion that
the issuance and sale of the stock in this offering have been duly
and validly authorized and upon delivery to the shareholders in
accordance with the terms and conditions of the exhibits to the
Form S-8 will have been duly authorized, validly issued, fully paid
for and nonassessable.
I am admitted to practice before the Bar of the State of Colorado
only. I am not admitted to practice in any other jurisdiction in
which the Company may own property or transact business. My
opinions herein are with respect to federal law only and, to the
extent my opinions are derived from laws of other jurisdictions,
are based upon an examination of relevant authorities and are
believed to be correct, but I have not directly obtained legal
opinions as to such matters from attorneys licensed in such other
jurisdictions. My opinions are qualified to the extent that the
enforcement of rights and remedies are subject to bankruptcy,
insolvency and other laws of general application affecting the
rights and remedies of creditors and security holders and to the
extent that the availability of the remedy of specific enforcement
or of injunctive relieve is subject to the discretion of the court
before which any proceeding thereof may be brought.
<PAGE>
Page Two
Famous Sam's Opinion
July 29, 1996
This opinion is furnished by me to you as counsel for the Company
and it is solely for your benefit. This opinion is not to be used,
circulated, quoted or otherwise referred to for any other purpose,
other than as set forth in my consent to the use of the same in the
Form S-8.
Very truly yours,
/s/ Mark S. Pierce
Mark S. Pierce
MSP:adt
<PAGE>
EXHIBIT 10
1996 Stock Option Plan<PAGE>
EXHIBIT A
FAMOUS SAM'S GROUP, INC.
1996 STOCK OPTION PLAN
(July 29, 1996)
1. Purpose of the Plan.
The purpose of the Famous Sam's Group, Inc., 1996 Stock Option Plan
(the "Plan") is to advance the interests of Famous Sam's Group,
Inc., a Nevada corporation (the "Company"), by providing an
opportunity for ownership of the stock of the Company by employees,
agents and directors of, and consultants to, the Company and its
subsidiaries, as defined below. By providing an opportunity for
such stock ownership, the Company seeks to attract and retain such
qualified personnel, and otherwise to provide additional incentive
for optionees to promote the success of its business.
2. Stock Subject to the Plan.
(a) The total number of shares of the authorized but unissued or
treasury shares of the common stock, .001 par value per share, of
the Company (the "Common Stock") for which options may be granted
under the Plan (the "Options") shall be 500,000 post May, 1996,
reverse split subject to adjustment as provided in Section 13
hereof.
(b) If an Option granted or assumed hereunder shall expire or
terminate for any reason without having been exercised in full, the
unpurchased shares subject thereto shall again be available for
subsequent Option grants under the Plan.
(c) Stock issuable upon exercise of an Option may be subject to
such restrictions on transfer, repurchase rights or other
restrictions as shall be determined by the Board of Directors of
the Company (the "Board").
3. Administration of the Plan.
The Plan shall be administered by the Board, unless is expressly
establishes a committee for this purpose. No member of the Board
shall act upon any matter exclusively affecting any Option granted
or to be granted to himself or herself under the Plan. A majority
of the members of the Board shall constitute a quorum, and any
action may be taken by a majority of those present and voting at
any meeting. The decision of the Board as to all questions of
interpretation and application of the Plan shall be final, binding
and conclusive on all persons. The Board, in its sole discretion,
may grant Options to purchase shares of the Common Stock, and the
Board shall issue shares upon exercise of such Options as provided
in the Plan. The Board shall have the authority, subject to the
express provisions of the Plan, to construe the respective Option
agreements and the Plan, to prescribe, amend and rescind rules and
regulations relating to the Plan, to determine the terms and
provisions of the respective Option agreements, which may but need
not be identical, and to make all other determinations in the
judgment of the Board necessary or desirable for the administration
of the Plan. The Board may correct any defect or supply any
omission or reconcile any inconsistency in the Plan or in any
Option agreement in the manner and to the extent it shall deem
expedient to implement the Plan and shall be the sole and final
judge of such expediency. No director shall be liable for any
action or determination made in good faith. The Board, in its
discretion, may delegate its power, duties and responsibilities to
a committee, consisting of two or more members of the Board, all of
whom are "disinterested persons" (as hereinafter defined). If a
committee is so appointed, all references to the Board herein shall
mean and relate to such committee, unless the context otherwise
requires. For the purposes of the Plan, a director or member of
such committee shall be deemed to be "disinterested" only if such
person qualified as a "disinterested person" within the meaning of
paragraph (c) (2) of Rule 16b-3 promulgated under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), as such term
is interpreted from time to time.
4. Type of Options.
Options granted pursuant to the Plan shall be authorized by action
of the Board and may be designated as either incentive stock
options meeting the requirements of Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code"), or non-qualified
options which are not intended to meet the requirements of such
Section 422 of the Code, the designation to be in the sole
discretion of the Board. Options designated as incentive stock
options that fail to continue to meet the requirements of Section
422 of the Code shall be redesignated as non-qualified options
automatically without further action by the Board on the date of
such failure to continue to meet the requirements of Section 422 of
the Code.
5. Eligibility.
Options designated as incentive stock options may be granted to any
full-time employee of the Company or any subsidiary corporation
(herein called "subsidiary" or "subsidiaries"), as defined in
Section 424(f) of the Code and the Treasury regulations promulgated
thereunder (the "Regulations"). Directors who are not otherwise
employees of the Company or a subsidiary shall not be eligible to
be granted incentive stock options pursuant to the plan. Options
designated as non-qualified options may be granted to (i) officers
and key employees of the Company or of any of its subsidiaries, or
(ii) agents, directors of and consultants to the Company, whether
or not otherwise employees of the Company.
In determining the eligibility of an individual to be granted an
Option, as well as in determining the number of shares to be
optioned to any individual, the Board shall take into account the
position and responsibilities of the individual being considered,
the nature and value to the Company or its subsidiaries of his or
her service and accomplishments, his or her present and potential
contribution to the success of the Company or its subsidiaries, and
such other factors as the Board may deem relevant.
6. Restrictions on Incentive Stock Options.
Incentive stock options (but not non-qualified options) granted
under this Plan shall be subject to the following restrictions:
(a) Limitation on Number of Shares. Ordinarily, the aggregate
fair market value of the shares of Common Stock with respect to
which incentive stock options are granted (determined as of the
date the incentive stock options are granted), exercisable for the
first time by an individual during any calendar year shall not
exceed $100,000. If an incentive stock option is granted pursuant
to which the aggregate fair market value of shares with respect to
which it first becomes exercisable in any calendar year by an
individual exceeds such $100,000 limitation, the portion of such
option which is in excess of the $100,000 limitation shall be
treated as a non-qualified option pursuant to Section 422(d)(1) of
the Code. In the event that an individual is eligible to
participate in any other stock option plan of the Company or any
subsidiary of the Company which is also intended to comply with the
provisions of Section 422 of the Code, such $100,000 limitation
shall apply to the aggregate number of shares for which incentive
stock options may be granted under this Plan and all such other
plans.<PAGE>
(b) Ten Percent (10%) Shareholder. If any employee to whom an
incentive stock option is granted pursuant to the provisions of
this Plan is on the date of grant the owner of stock (as determined
under Section 424(d) of the Code) possessing more than 10% of the
total combined voting power of all classes of stock of the Company
or any subsidiary of the Company, then the following special
provisions shall be applicable to the incentive stock options
granted to such individual:
(i) The Option price per share subject to such incentive stock
options shall be not less than 110% of the fair market value of the
stock determined at the time such Option was granted. In
determining the fair market value under this clause (i), the
provisions of Section 8 hereof shall apply.
(ii) The incentive stock option by its terms shall not be
exercisable after the expiration of five (5) years from the date
such option is granted.
7. Option Agreement.
Each Option shall be evidenced by an Option agreement (the
"Agreement") duly executed on behalf of the Company and by the
optionee to whom such Option is granted, which Agreement shall
comply with and be subject to the terms and conditions of the Plan.
The Agreement may contain such other terms, provisions and
conditions which are not inconsistent with the Plan as may be
determined by the Board; provided that Options designated as
incentive stock options shall meet all of the conditions for
incentive stock options as defined in Section 422 of the Code. No
Option shall be granted within the meaning of the Plan and no
purported grant of any Option shall be effective until the
Agreement shall have been duly executed on behalf of the Company
and the optionee. More than one Option may be granted to an
individual.
8. Option Price.
(a) The Option price or shares of the Common Stock for Options
designated as non-qualified stock options shallbe as determined by
the Board; provided, however, such Option price shall be not less
than 85% of the fair market value of the stock subject to such
Option, determined as of the date of grant of such Option.
(b) Subject to the conditions set forth in Section 6(b) hereof,
the Option price or prices of shares of the Company's Common Stock
for incentive stock options shall be at least the fair market value
of such Common Stock at the time the Option is granted as
determined by the Board in accordance with the Regulations
promulgated under Section 422 of the Code.
(c) If such shares are then listed on any national securities
exchange, the fair market value shall be
the mean
between the high and low sales prices, if any, on the largest such
exchange on the date of the grant of the Option or, if none, shall
be determined by taking a weighted average of the means between the
highest and lowest sales price on the nearest date before and the
nearest date after the date of grant in accordance with Section
25.2512-2 of the Regulations. If the shares are not then listed on
any such exchange, the fair market value of such shares shall be
the mean between the closing "Bid" and the closing "Ask" prices, if
any, as reported on the National Association of Securities Dealer
Automated Quotation System ("NASDAQ") on the date of the grant of
the Option, or, if none, shall be determined by taking a weighted
average of the means between the highest and lowest sales prices on
the nearest date before and the nearest date after the date of
grant in accordance with Section 25.2512-2 of the Regulations. If
the shares are not then either listed on any such exchange or
quoted on NASDAQ, the fair market value shall be the mean between
the average of the closing "Bid" and "Ask" prices as quoted on the
National Daily Quotation Services on the date of the grant of the
Option, or, if none, shall be determined by taking a weighted
average of the means between the highest and lowest sales price on
the nearest date before and the nearest date after the date of
grant in accordance with Section 25.2512-2 of the Regulations. If
the fair market value cannot be determined under the preceding
three sentences, it shall be determined in good faith by the Board.
9. Manner of Payment; Manner of Exercise.
(a) Options granted under the Plan may provide for the payment of
the exercise price by delivery of (i) cash or a check payable to
the order of the Company in an amount equal to the exercise price
of such Options, (ii) shares of Common Stock owned by the optionee
having a fair market value equal in amount to the exercise price of
the Options being exercised, or (iii) any combination of (i) and
(ii); provided; however, that payment of the exercise price by
delivery of shares of Common Stock owned by such optionee may be
made only upon the condition that such payment does not result in
a charge to earnings for financial accounting purposes as
determined by the Board, unless such condition is waived by the
Board. The fair market value of any shares of Common Stock which
may be delivered upon exercise of an Option shall be determined by
the Board in accordance with Section 8 hereof.
(b) To the extent that the right to purchase shares under an
Option has accrued and is in effect, Options may be exercised in
full at one time or in part from time to time by giving written
notice, signed by the person or persons exercising the Option, to
the Company and stating the number of shares with respect to which
the Option is being exercised, accompanied by payment in full for
such shares as provided in subparagraph (a) above. Upon such
exercise, delivery of a certificate for paid-up non-assessable
shares shall be made at the principal office of the Company to the
person or persons exercising the Option at such time, during
ordinary business hours, after five (5) but not more than ten (10)
days from the date of receipt of the notice by the Company, as
shall be designated in such notice, or at such time, place and
manner as may be agreed upon by the Company and the person or
person exercising the Option.
10. Exercise of Options.
Each Option granted under the Plan shall, subject to Section 11(b)
and Section 13 hereof, be exercisable at such time or times and
during such period as shall be set forth in the Agreement;
provided, however, that no Option granted under the Plan shall have
a term in excess of ten (10) years form the date of grant. To the
extent that an Option to purchase shares is not exercised by an
optionee when it becomes initially exercisable, it shall not expire
but shall be carried forward and shall be exercisable, on a
cumulative basis, until the expiration of the exercise period. No
partial exercise may be made for less than one hundred (100) full
shares of Common Stock.
11. Term of Options; Exercisability.
(a) Term.
(i) Each Option shall expire on a date determined by the Board
which is not more than ten (10) years from the date of the granting
thereof, except (a) as otherwise provided pursuant to the
provisions of Section 6(b) hereof, and (b) for earlier termination
as herein provided.
(ii) Except as otherwise provided in this Section 11, an Option
granted to any optionee whose employment for the Company or any of
its subsidiaries is terminated shall terminate on the earlier of
(i) ninety days after the date such optionee's employment by the
Company or by any such subsidiary is terminated, or (ii) the date
on which the Option expires by its terms.
(iii) If the employment of an optionee is terminated by the
Company or any of its subsidiaries for cause or because the
optionee is in breach of any employment agreement, such Option will
terminate on the date the optionee's employment is terminated by
the Company or any such subsidiary.
(iv) If the employment of an optionee is terminated by the Company
or any of its subsidiaries because the optionee has become
permanently disabled (within the meaning of Section 22(e)(3) of the
Code), such Option shall terminate on the earlier of (i) one year
after the date such optionee's employment by the Company or by any
such subsidiary is terminated, or (ii) the date on which the Option
expires by its terms.
(v) In the event of the death of any optionee, any Option granted
to such optionee shall terminate one year after the date of death,
or on the date on which the Option expires by its terms, whichever
occurs first.
(b) Exercisability.
(i) Except as provided below, an Option granted to an optionee
whose employment by the Company or by any of its subsidiaries is
terminated shall be exercisable only to the extent that the right
to purchase shares under such Option has accrued and is in effect
on the date such optionee's employment by the Company or by any
such subsidiary is terminated.
(ii) An Option granted to an optionee whose employment is
terminated by the Company or by any of its subsidiaries because he
or she has become permanently disabled, as defined above, shall be
immediately exercisable as to the full number of shares covered by
such Option, whether or not under the provisions of Section 10
hereof such Option was otherwise exercisable as of the date of
disability.
(iii) In the event of the death of an optionee, the Option granted
to such optionee may be exercised as to the full number of shares
covered thereby, whether or not under the provisions of Section 10
hereof the optionee was entitled to do so at the date of his or her
death, by the executor, administrator or personal representative of
such optionee, or by any person or persons who acquired the right
to exercise such Option by bequest or inheritance or by reason of
the death of such optionee.
12. Options Not Transferable.
The right of any optionee to exercise any Option granted to him or
her shall not be assignable or transferrable by such optionee other
than by will or the laws of descent and distribution, and any such
Option shall be exercisable during the lifetime of such optionee
only by him or her. Any Option granted under the Plan shall be
null and void and without effect upon the bankruptcy of the
optionee to whom the Option is granted, or upon any attempted
assignment or transfer, except as herein provided, including
without limitation, any purported assignment, whether voluntary or
by operation of law, pledge, hypothecation or other disposition,
attachment, trustee process or similar process, whether legal or
equitable, upon such Option.
13. Recapitalization, Reorganizations and the Like.
In the event that the outstanding shares of the Common Stock are
changed into or exchanged for a different number or kind of shares
or other securities of the Company or of another corporation by
reason of any reorganization, merger, consolidation,
recapitalization, reclassification, stock split-up, combination of
shares, or dividends payable in capital stock, appropriate
adjustment shall be made in the number and kind of shares as to
which Options may be granted under the Plan and as to which
outstanding Options or portions thereof then unexercised shall be
exercisable, to the end that the proportionate interest of the
optionee shall be maintained as before the occurrence of such
event; such adjustment in outstanding Options shall be made without
change in the total price applicable to the unexercised portion of
such Options and with a corresponding adjustment in the Option
price per share.
In addition, unless otherwise determined by the Board in its sole
discretion, in the case of any (i) sale or conveyance to another
entity of all or substantially all of the property and assets of
the Company or (ii) Change in Control (as hereinafter defined) of
the Company, the purchaser(s) of the Company's assets or stock, in
his, her or its sole discretion, may deliver to the optionee the
same kind of consideration that is delivered to the shareholders of
the Company as a result of such sale, conveyance or Change in
Control, or the Board may cancel all outstanding Options in
exchange for consideration in cash or in kind, which consideration
in both cases shall be equal in value to the value of those shares
of stock or other securities the optionee would have received had
the Option been exercised (but only to the extent then exercisable)
and had no disposition of the shares acquired upon such exercise
been made prior to such sale, conveyance or Change in Control, less
the Option price therefor. Upon receipt of such consideration, all
Options (whether or not then exercisable) shall immediately
terminate and be of no further force or effect. The value of the
stock or other securities the optionee would have received if the
Option had been exercised shall be determined in good faith by the
Board, and in the case of shares of Common Stock, in accordance
with the provisions of Section 8 hereof.
The Board shall also have the power and right to accelerate the
exercisability of any Options, notwithstanding any limitations in
this Plan or in the Agreement upon such a sale, conveyance or
Change in Control. Upon such acceleration, any Options or portion
thereof originally designated as incentive stock options that no
longer qualify as incentive stock options under Section 422 of the
code as a result of such acceleration shall be redesignated as
non-qualified stock options.
A "Change in Control" shall be deemed to have occurred if any
person, or any two or more persons acting as a group, and all
affiliates of such person or persons, who prior to such time owned
less than fifty percent (50%) of the then outstanding Common Stock,
shall acquire such additional shares of Common Stock in one or more
transactions, or series of transactions, such that following such
transaction or transactions, such person or group and affiliates
beneficially own fifty percent (50%) or more of the Common Stock
outstanding.
Upon dissolution or liquidation of the Company, all Options granted
under this Plan shall terminate, but each optionee (if at such time
in the employ of or otherwise associated with the Company or any of
its subsidiaries as a director, agent or consultant) shall have the
right, immediately prior to such dissolution or liquidation, to
exercise his or her Option to the extent then exercisable.
If by reason of a corporate merger, consolidation, acquisition of
property or stock, separation, reorganization or liquidation, the
Board shall authorize the issuance or assumption of a stock option
or stock options in a transaction to which Section 424(a) of the
Code applies, then, notwithstanding any other provision of the
Plan, the Board may grant an option or options upon such terms and
conditions as it may deem appropriate for the purpose of assuming
the old Option, or substituting a new option for the old Option, in
conformity with the provisions of such Section 424(a) of the Code
and the Regulations thereunder, and any such option shall not
reduce the number of shares otherwise available for issuance under
the Plan.
No fraction of a share shall be purchasable or deliverable upon the
exercise of any Option, but in the event any adjustment hereunder
in the number of shares covered by the Option shall cause such
number to include a fraction of a share, such fraction shall be
adjusted to the nearest smaller whole number of shares.
<PAGE>
14. No Special Employment Rights.
Nothing contained in the Plan or in any Option granted under the
Plan shall confer upon any Option holder any right with respect to
the continuation of his or her employment by the Company or by any
subsidiary or interfere in any way with the right of the Company or
any subsidiary, subject to the terms of any separate employment
agreement to the contrary, at any time to terminate such employment
or to increase or decrease the compensation of the Option holder
from the rate in existence at the time of the grant of an Option.
Whether an authorized leave of absence, or absence in military or
government service, shall constitute termination of employment
shall be determined by the Board at the time of such occurrence.
15. Withholding.
The Company's obligation to deliver shares upon the exercise of any
non-qualified Option granted under the Plan shall be subject to the
Option holder's satisfaction of all applicable Federal, state and
local income and employment tax withholding requirements. The
Company and optionee may agree to withhold shares of Common Stock
purchased upon exercise of an Option to satisfy the above-mentioned
withholding requirements; provided, however, no such agreement may
be made by an optionee who is an "officer" or "director" within the
meaning of Section 16 of the Exchange Act, except pursuant to a
standing election to so withhold shares of Common Stock purchased
upon exercise of an Option, such election to be made not less than
six months prior to such exercise and which election may be revoked
only upon six months prior written notice.
16. Restrictions on Issuance of Shares.
(a) Notwithstanding the provisions of Section 9, the Company may
delay the issuance of shares covered by the exercise of an Option
and the delivery of a certificate for such shares until one of the
following conditions shall be satisfied:
(i) The shares with respect to which such Option has been
exercised are at the time of the issue of such shares effectively
registered or qualified under applicable Federal and state
securities acts now in force or as hereafter amended; or
(ii) Counsel for the Company shall have given an opinion, which
opinion shall not be unreasonably conditioned or withheld, that
such shares are exempt from registration and qualification under
applicable Federal and state securities acts now in force or as
hereafter amended.
(b) It is intended that all exercises of Options shall be
effective, and the Company shall use its best efforts to bring
about compliance with the above conditions within a reasonable
time, except that the Company shall be under no obligation to
qualify shares or to cause a registration statement or a
post-effective amendment to any registration statement to be
prepared for the purpose of covering the issue of shares in respect
of which any Option may be exercised, except as otherwise agreed to
by the Company in writing in its sole discretion.
17. Purchase for Investment; Rights of Holder on Subsequent
Registration.
Unless and until the shares to be issued upon exercise of an Option
granted under the Plan have been effectively registered under the
1933 Act, as now in force or hereafter amended, the Company shall
be under no obligation to issue any shares covered by any Option
unless the person who exercises such Option, in whole or in part,
shall give a written representation and undertaking to the Company
which is satisfactory in form and scope to counsel for the Company
and upon which, in the opinion of such counsel, the Company may
reasonably rely, that he or she is acquiring the shares issued
pursuant to such exercise of the Option for his or her own account
as an investment and not with a view to, or for sale in connection
with, the distribution of any such shares, and that he or she will
make no transfer of the same except in compliance with any rules
and regulations in force at the time of such transfer under the
1933 Act, or any other applicable law, and that if shares are
issued without such registration, a legend to this effect may be
endorsed upon the securities so issued.
In the event that the Company shall, nevertheless, deem it
necessary or desirable to register under the 1933 Act or other
applicable statutes any shares with respect to which an Option
shall have been exercised, or to qualify any such shares for
exemption from the 1933 Act or other applicable statues, then the
Company may take such action and may require from each Optionee
such information in writing for use in any registration statement,
supplementary registration statement, prospectus, preliminary
prospectus or offering circular as is reasonably necessary for such
purpose and may require reasonable indemnity to the Company and its
officers and directors from such holder against all losses, claims,
damages and liabilities arising from such use of the information so
furnished and caused by any untrue statement of any material fact
therein or caused by the omission to state a material fact required
to be stated therein or necessary to make the statements therein
not misleading in the light of the circumstances under which they
were made.
18. Loans.
At the discretion of the Board, the Company may loan to the
optionee some or all of the purchase price of the shares acquired
upon exercise of an Option.
19. Modification of Outstanding Options.
Subject to any applicable limitations contained herein, the Board
may authorize the amendment of
any
outstanding Option with the consent of the optionee when and
subject to such conditions as are deemed to be in the best
interests of the Company and in accordance with the purposes of the
Plan.
20. Approval of Stockholders.
The Plan has become effective on even date hereof after
presentation to and approval of the Board and the stockholders of
the Company.
21. Termination and Amendment of Plan.
Unless sooner terminated as herein provided, the Plan shall
terminate ten (10) years from the date upon which the Plan was duly
adopted by the Board of the Company. The Board may at any time
terminate the Plan or make such modification or amendment thereof
as it deems advisable; provided, however, (i) the Board may not,
without the approval of the stockholders of the Company obtained in
the manner stated in Section 20, increase the maximum number of
shares for which Options may be granted or change the designation
of the class of persons eligible to receive Options under the Plan,
and (ii) any such modification or amendment of the Plan shall be
approved by a majority of the stockholders of the Company to the
extent that such stockholder approval is necessary to comply with
applicable provisions of the Code, rules promulgated pursuant to
Section 16 of the Exchange Act, applicable state law or applicable
NASD or exchange listing requirements. Termination or any
modification or amendment of the Plan shall not, without the
consent of an optionee, affect his or her rights under an Option
theretofore granted to him or her.
22. Limitation of Rights in the Option Shares.
An optionee shall not be deemed for any purpose to be a stockholder
of the Company with respect to any of the Options except to the
extent that the Option shall have been exercised with respect
thereto, and in addition, a certificate shall have been issued
theretofore and delivered to the optionee.
23. Notices.
Any communication or notice required or permitted to be given under
the Plan shall be in writing, and mailed by registered or certified
mail or delivered by hand, if to the Company, to the attention of
the President at the Company's principal place of business; and, if
to an optionee, to his or her address as it appears on the records
of the Company.<PAGE>
INCENTIVE STOCK OPTION AGREEMENT
THIS AGREEMENT has been made this day of
, 19 , between
(the "Employee"), and Famous Sam's Group, Inc., a Nevada
corporation (the "Company").
1. Grant of Option. The Company, pursuant to the provisions of
the Famous Sam's Group, Inc., 1996 Incentive Stock Option Plan (the
"1996 Plan"), a copy of which was previously received by the
Employee, hereby grants to the Employee, subject to the terms and
conditions set forth or incorporated herein, an option to purchase
from the Company all or any part of an aggregate of
Common Shares, as such Common Shares are now constituted, at the
purchase price of $ per share. The provisions of the
1996 Plan governing the terms and conditions of the Option granted
hereby are incorporated in full herein and made a part hereof by
this reference. The Employee, by his signature below, agrees to be
bound by the terms and conditions thereof.
2. Exercise. The Option evidenced hereby shall be exercisable in
whole or in part (but only in multiples of 100 Shares unless
exercise is as to the remaining balance of this Option) on or after
and on or before
provided that the cumulative number of Common Shares as to which
this Option may be exercised (except in the event of death,
retirement, or disability, as provided in paragraph 11(a) of the
1996 Plan) shall not exceed the following amounts:
Cumulative Number of Shares Prior To
Date (Not Inclusive of)
The Option evidenced hereby shall be exercisable by the delivery to
and receipt by the Company of (i) a written notice of election to
exercise, in the form set forth in Exhibit B hereto, specifying the
number of Common Shares to be purchased; (ii) accompanied by
payment of the full purchase price thereof in cash or certified
check payable to the order of the Company, or by fully-paid and
nonassessable Common Shares of the Company properly endorsed over
to the Company, or by a combination thereof, and (iii) by return of
this Incentive Stock Option Agreement for endorsement of exercise
by the Company. In the event fully-paid and nonassessable Common
Shares are submitted as whole or partial payment for shares to be
purchased hereunder, such Common Shares will be valued at their
Fair Market Value (as defined in the 1996 Plan) on the date such
shares received by the Company are applied to payment of the
exercise price.
3. Transferability. The Option evidenced hereby is not
assignable or transferable by the Employee other than by the
Employee's will or by the laws of descent and distribution, as
provided in paragraph 12 of the 1996 Plan. The Option shall be
exercisable only by the Employee during the Employee's lifetime.
FAMOUS SAM'S GROUP, INC.
By:
Gerald Ross, President
ATTEST:
By:
Sandra Ross, Secretary
The Employee hereby acknowledges receipt of the copy of the 1996
Plan attached hereto, and accepts this Option subject to each and
every term and provision of such Plan. The Employee hereby agrees
to accept as binding, conclusive and final all decisions or
interpretations of the Compensation Committee of the Board of
Directors administering the 1996 Plan on any questions arising
under such Plan. The Employee recognizes that if his employment
with the Company or any subsidiary thereof shall be terminated for
any reason whatsoever, all of the Employee's rights hereunder shall
thereupon terminate as provided in the Plan.
Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Employee:. . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Print Name
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Address
Social Security No.: . . . . . . . . . . . . . . . . . . . . . .
<PAGE>
EXHIBIT B
(Suggested form of letter to be used for notification of election
to exercise. Please do not use this page, but follow this form in
a separately typed letter.)
Date:
Treasurer
Famous Sam's Group, Inc.
8351 E. Broadway
Tucson, Arizona 85710
Dear Sir:
In accordance with paragraph 2 of the Stock Option Agreement
evidencing the Option granted to me on under the Famous
Sam's Group, Inc., 1996 Incentive Stock Option Plan, I hereby elect
to exercise this Option to the extent of
Common Shares.
Enclosed are (i) Certificate(s) No.(s)
representing fully-paid Common
Shares of Famous Sam's Group, Inc., endorsed to the Company with
signature guaranteed; (ii) and/or a certified check payable to
the order of "Famous Sam's Group, Inc." in the amount of $
as the balance of the purchase price of $
for the shares which I have elected to purchase; and (iii) the
original Incentive Stock Option Agreement for endorsement by the
Company as to exercise. I acknowledge that the Common Shares (if
any) submitted as part payment of the exercise price due hereunder
will be valued by the Company at their Fair Market Value (as
defined in the 1996 Plan) on the date this exercise is effected by
the Company. In the event I hereafter sell any Common Shares
issued pursuant to this option within two years from the date of
exercise or within five years after the date of grant of this
Option, I agree to notify the Company promptly of the amount of
taxable compensation realized by me by reason of such for federal
income tax purposes.
When the certificate for Common Shares which I have elected to
purchase has been issued, please deliver it to me, along with my
endorsed Incentive Stock Option Agreement in the event there
remains an unexercised balance of shares under the Option, at the
following address:
Very Truly Yours,
Signature of Employee
Print Name
<PAGE>
EXHIBIT C
VESTING OPTION GRANT
THIS AGREEMENT has been made this day of
, 19 ,
between
(the "Employee"), and Famous
Sam's Group, Inc., a Nevada corporation (the
"Company").
1. Grant of ISO. The Company, pursuant to the provisions of the
Famous Sam's Group, Inc., 1996 Incentive Stock Option Plan (the
"1996 Plan"), a copy of which was previously received by the
Employee, hereby grants to the Employee, subject to the terms and
conditions set forth or incorporated herein, an option to acquire
Common Shares. The provisions of the 1996 Plan
governing the terms and conditions of the ISO granted hereby are
incorporated in full herein and made a part hereof by this
reference.
2. Vesting. The ISO granted hereunder shall be issuable as
follows:
Cumulative Number of Shares Issuance Date
3. Transferability. The grant evidenced hereby is not assignable
or transferable by the Employee other than by the Employee's will
or by the laws of descent and distribution, as provided in
paragraph 12 of the 1996 Plan. The shares shall be issuable only
to the Employee during the Employee's lifetime.
FAMOUS SAM'S GROUP, INC.
By:
Gerald Ross, President
ATTEST:
By:
Sandra Ross, Secretary
The Employee hereby acknowledges receipt of the copy of the 1996
Plan attached hereto, and accepts this grant subject to each and
every term and provision of such Plan. The Employee hereby agrees
to accept as binding, conclusive and final all decisions or
interpretations of the Compensation Committee of the Board of Directors
administering the 1996 Plan on any questions arising under such
Plan. The Employee recognizes that if the Employee's employment
with the Company or any subsidiary thereof shall be terminated for
any reason whatsoever (except as otherwise provided in paragraph
11(a) of the 1996 Plan), all of the Employee's rights hereunder
shall thereupon terminate as provided in the Plan.
Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Employee:. . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Print Name
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Address
Social Security No.: . . . . . . . . . . . . . . . . . . . . . .
<PAGE>
EXHIBIT 24
Consents to Use of Opinion
<PAGE>
July 29, 1996
Board of Directors
8351 East Broadway
Tucson, AZ 85710
RE: Employee Option Plan Registration on Form S-8
Gentlemen:
Please allow this letter to serve as my consent to the filing of,
and reference in the prospectus to, my opinion dated even date
herewith in the registration statement under the referenced matter.
If you have any questions with regards to the above matter, please
call the undersigned at the Denver address.
Sincerely,
/s/ Mark S. Pierce
Mark S. Pierce
MSP:adt
<PAGE>
July 29, 1996
Board of Directors
Famous Sam's Group, Inc.
8351 E. Broadway
Tucson, Arizona 85710
RE: Employee Option Plan Registration on Form S-8
Gentlemen:
Please allow this letter to serve as our consent to the
incorporation by reference of our opinion in the registration
statement under the referenced matter.
If you have any questions with regards to the above matter, please
call the undersigned.
Yours very truly,
/s/ Halliburton, Hunter & Associates
