<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
------------------------------------------------------------------------
Dave & Buster's, Inc.
(Name of Registrant as Specified In Its Charter)
------------------------------------------------------------------------
Alan L. Murray, Vice President, General Counsel and Secretary
(Name of Person Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on the table below per Exchange Act Rule 14a-6(i)(4) and 0-11
("Rule 0-11").
(1) Title of each class of securities to which transaction applies
(2) Aggregate number of securities to which transaction applies
(3) Per unit price or other underlying value of transaction computed
pursuant to Rule 0-11
(4) Proposed maximum aggregate value of transaction
(5) Total fee paid
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party
(4) Date Filed
<PAGE> 2
DAVE & BUSTER'S, INC.
2481 MANANA DRIVE
DALLAS, TEXAS 75220
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 5, 2000
To the holders of Common Stock of
Dave & Buster's, Inc.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Dave &
Buster's, Inc. (the "Company") will be held in The Show Room at Dave & Buster's,
10727 Composite Drive, Dallas, Texas, on June 5, 2000, at 1:00 p.m. local time,
for the following purposes:
(a) To elect one class of directors (consisting of three directors) of
the Company for a three year term, or until their successors have been
elected and qualified;
(b) To consider and vote upon the proposed amendment and restatement
of the Dave & Buster's, Inc. 1995 Stock Option Plan (the "Stock Plan"); and
(c) To transact such other business as may properly come before the
meeting or any adjournment thereof.
Only stockholders of record at the close of business on April 20, 2000 are
entitled to notice of, and to vote at, the meeting or any adjournment thereof.
Whether or not you plan to attend the Annual Meeting and regardless of the
number of shares you own, please date, sign and return the enclosed proxy card
in the enclosed envelope (which requires no postage if mailed in the United
States).
By Order of the Board of Directors
/s/ ALAN L. MURRAY
Alan L. Murray
Secretary
Dallas, Texas
April 28, 2000
<PAGE> 3
DAVE & BUSTER'S, INC.
2481 MANANA DRIVE
DALLAS, TEXAS 75220
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 5, 2000
This Proxy Statement is furnished to stockholders of Dave & Buster's, Inc.,
a Missouri corporation (the "Company"), in connection with the solicitation of
proxies by the Board of Directors of the Company for use at the Annual Meeting
of Stockholders to be held on June 5, 2000, and at any and all adjournments or
postponements thereof. Proxies in the form enclosed will be voted at the meeting
if properly executed, returned to the Company prior to the meeting and not
revoked. The proxy may be revoked at any time before it is voted by giving
written notice to the Secretary of the Company.
This Proxy Statement and accompanying form of proxy are being mailed to the
Company's stockholders on or about April 28, 2000. The Company's Annual Report,
covering the Company's 1999 fiscal year, is enclosed herewith but does not form
any part of the materials for solicitation of proxies.
QUORUM AND VOTING
Record Date. The record date for the Annual Meeting ("Record Date") is
April 20, 2000. Only holders of record of common stock at the close of business
on such date are entitled to notice of, and to vote at, the Annual Meeting. At
the close of business on the Record Date, the Company had issued and
outstanding, and entitled to vote at the Annual Meeting, approximately
12,953,000 shares of common stock.
Quorum. In order for any business to be conducted at the Annual Meeting,
the holders of more than 50% of the shares entitled to vote must be represented
at the meeting, either in person or by properly executed proxy. If a quorum is
not present at the scheduled time of the Annual Meeting, the stockholders who
are present may adjourn the Annual Meeting until a quorum is present. The time
and place of the adjourned meeting will be announced at the time the adjournment
is taken, and no other notice will be given. An adjournment will have no effect
on the business that may be conducted at the Annual Meeting.
Voting by Street Name Holders. If a stockholder owns shares in "street
name" by a broker, the broker, as the record holder of the shares, is required
to vote those shares in accordance with your instructions. If you do not give
instructions to the broker, the broker will nevertheless be entitled to vote the
shares with respect to "discretionary" items but will not be permitted to vote
the shares with respect to "non-discretionary" items (in which case, the shares
will be treated as "broker non-votes").
Required Vote. The election as a director of each nominee requires the
affirmative vote of the holders of record of a plurality of the outstanding
voting power of the shares of common stock represented, in person or by proxy,
at the Annual Meeting. Abstentions and "broker non-votes" are counted as present
and entitled to vote for the purposes of determining a quorum but are not
counted for purposes of the election of a director.
The affirmative vote of the holders of a majority of the outstanding common
stock represented at the Annual Meeting is required to approve the proposal to
amend and restate the Stock Plan. An abstention is counted as a vote against the
Stock Plan proposal. A broker "non-vote" is also counted as a vote against the
Stock Plan proposal.
Default Voting. Where stockholders have appropriately specified how their
proxies are to be voted, they will be voted accordingly. If a stockholder
properly executes and return the accompanying proxy, but does not indicate any
voting instructions, such stockholder's shares will be voted (i) FOR the
election to a three year term as directors of the Company of the three nominees
set forth above; (ii) FOR the proposal to amend and restate the Stock Plan; and
(iii) at the discretion of the proxy holders on any other matter that may
properly
<PAGE> 4
come before the meeting or any adjournment thereof. If any other matter or
business is brought before the meeting, the proxy holders may vote the proxies
in their discretion. The directors do not know of any such other matter or
business.
BENEFICIAL OWNERSHIP OF COMMON STOCK
The following table sets forth certain information regarding the beneficial
ownership of the Company's common stock as of March 31, 2000, for (i) each
person who is known by the Company to own beneficially more than 5% of the
outstanding shares of common stock, (ii) each director and nominee for director
of the Company, (iii) each of the executive officers of the Company named in the
table under "Election of Directors -- Summary of Executive Compensation" and
(iv) all of the directors and officers of the Company as a group. Except
pursuant to applicable community property laws and except as otherwise
indicated, each stockholder identified in the table possesses sole voting and
investment power with respect to the listed shares.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY
OWNED(1)
--------------------
NAME NUMBER PERCENT
- ---- --------- -------
<S> <C> <C>
5% OR MORE STOCKHOLDERS(2):
LJH Corporation(3).......................................... 1,500,300 11.2%
Mandarin, Inc.(4)........................................... 1,422,100 10.6
DIRECTORS AND EXECUTIVE OFFICERS:
David O. Corriveau(5)....................................... 540,728 4.0
James W. Corley(6).......................................... 533,867 4.0
Charles Michel.............................................. 46,217 *
Sterling R. Smith........................................... 27,000 *
Bryan L. Spain.............................................. 18,500 *
Allen J. Bernstein.......................................... 22,500 *
Peter A. Edison(7).......................................... 311,768 2.3
Bruce H. Hallett............................................ 19,000 *
Walter S. Henrion........................................... 101,529 *
Mark A. Levy................................................ 7,500 *
Christopher C. Maguire...................................... 25,500 *
All directors and officers as a group (22 persons).......... 1,772,053 13.2
</TABLE>
- ---------------
* Indicates less than 1%.
(1) Includes shares issuable upon exercise of stock options which are vested or
will be vested prior to May 31, 2000.
(2) Based upon information filed by such holders with the Securities and
Exchange Commission.
(3) LJH Corporation shares voting and dispositive power with its principal
stockholder, Lacy J. Harber. The address of LJH Corporation and Mr. Harber
is 377 Neva Lane, Denison, Texas 75020.
(4) Mandarin, Inc. shares voting and dispositive power with its principal
stockholders, Joseph and Jane Lewis. The address of Mandarin, Inc. and Mr.
and Mrs. Lewis is P.O. Box N7776, Lyford Cay, New Providence, Bahamas,
United Kingdom.
(5) Mr. Corriveau shares voting and dispositive power with respect to 74,545
shares owned of record by a family limited partnership. Mr. Corriveau
disclaims beneficial ownership with respect to such shares.
(6) Mr. Corley shares voting and dispositive power with respect to 99,559 shares
owned of record by a family limited partnership. Mr. Corley disclaims
beneficial ownership with respect to such shares.
(7) Mr. Edison owns the shares as Trustee for the benefit of self and others.
2
<PAGE> 5
ELECTION OF DIRECTORS
At the Annual Meeting, holders of the Company's common stock will consider
and vote for the election of James W. Corley, Peter A. Edison and Walter S.
Henrion to a three year term as directors of the Company. Should any nominee
become unable or unwilling to accept nomination or election, the proxy holders
may vote the proxies for the election in his stead of any other person the Board
of Directors may recommend. Each nominee has expressed his intention to serve
the entire term of three years for which election is sought.
BIOGRAPHICAL INFORMATION
A brief description of each director of the Company is provided below.
Directors hold office for three year terms or until their successors are elected
and qualified. All officers serve at the discretion of the Board of Directors,
except as provided below.
Mr. Corriveau, 48, a co-founder of the Dave & Buster's concept in 1982, has
served as Co-Chief Executive Officer and President since June 1995, and as a
director of the Company since May 1995 and as Co-Chairman of the Board since
February 1996. Mr. Corriveau served as President and Chief Executive Officer of
D&B Holding (a predecessor of the Company) from 1989 through June 1995. From
1982 to 1989, Messrs. Corriveau and Corley operated the Company's business.
Mr. Corley, 48, a co-founder of the Dave & Buster's concept in 1982, has
served as Co-Chief Executive Officer and Chief Operating Officer since June
1995, and as a director of the Company since May 1995 and as Co-Chairman of the
Board since February 1996. Mr. Corley served as Executive Vice President and
Chief Operating Officer of D&B Holding from 1989 through June 1995. From 1982 to
1989, Messrs. Corley and Corriveau operated the Company's business.
Mr. Bernstein, 53, is founder of Morton's Restaurant Group, Inc. and has
been its Chairman of the Board and Chief Executive Officer since its inception
in 1988. Morton's owns and operates more than 58 restaurants, comprised of two
distinct restaurant companies, Morton's of Chicago Steak Houses and Bertolini's
Restaurants. He has been a director of the Company since 1996.
Mr. Edison, 44, has been the Chairman and Chief Executive Officer of the
Weiss and Neuman Shoe Company since October 1997. He was Senior Executive Vice
President of Edison Brothers Stores, Inc., a specialty retailer ("Edison
Brothers"), from 1995 to February 1997 and Director, Corporate Development of
Edison Brothers from 1989 until February 1997. He served as a director of Edison
Brothers from 1989 until February 1997. Edison Brothers filed for protection
under Chapter 11 of the Federal Bankruptcy Code in November 1995.
Mr. Hallett, 48, has been engaged in the practice of corporate and
securities law since 1976 and has been a partner of the Hallett & Perrin law
firm since 1992. He has been a director of the Company since 1998.
Mr. Henrion, 61, has served as a consultant to the Company's business since
1989, and he has been a director of the Company since 1995. He has also been a
consultant to the restaurant industry since 1983. From 1972 to 1981, Mr. Henrion
served as Executive Vice President and a director of TGI Friday's, Inc.
Mr. Levy, 53, is founder and has been managing director of Alexander
Capital Group, a private investment firm, since June 1998. He is a director of
The Levy Restaurants and served as its Vice Chairman from 1978 to 1998. The Levy
Restaurants operates restaurants, food service and special concession operations
throughout the United States. Mr. Levy has been a director of the Company since
1995.
Mr. Maguire, 38, has served as President of Staubach Retail Services, a
national retail real estate consulting company, since its inception in 1994. Mr.
Maguire joined The Staubach Company, a Dallas-based national real estate
brokerage firm in 1986 to form its Retail Services Division. Mr. Maguire has
been a director of the Company since 1997.
The Board of Directors is comprised of three classes. The terms of Messrs.
Corriveau, Levy and Maguire expire at the annual meeting of stockholders to be
held in 2002. The terms of Messrs. Bernstein and Hallett expire at the annual
meeting of stockholders to be held in 2001. Mr. Henrion was previously elected
to a term
3
<PAGE> 6
expiring at the annual meeting to be held in 2001, but his term was
reclassified, and accordingly shortened, as a result of the resignation of Mr.
Mark Vittert in late 1999 from the class of directors to be elected at the
upcoming Annual Meeting and Mr. Henrion's filling of such vacancy.
The Board of Directors held four meetings in fiscal 1999. No director
attended fewer than 75% of the meetings of the Board which they were required to
attend.
COMMITTEES OF THE BOARD OF DIRECTORS
The Audit Committee, comprised of Messrs. Edison, Hallett and Maguire,
recommends to the Board of Directors the appointment of the Company's
independent auditors, reviews and approves the scope of the annual audit of the
Company's financial statements, reviews and approves any non-audit services
performed by the independent auditors, reviews the findings and recommendations
of the internal and independent auditors and periodically reviews and approves
major accounting policies and significant internal accounting control
procedures. The Audit Committee met three times during fiscal 1999.
The Compensation Committee, comprised of Messrs. Levy and Bernstein reviews
and recommends compensation of officers and directors, administers equity plans
and reviews major personnel matters. The Compensation Committee met five times
during fiscal 1999.
The Executive Committee, comprised of Messrs. Corriveau, Corley and
Henrion, exercises all of the powers and authority of the Board of Directors in
the management and affairs of the Company when the Board of Directors is not in
session, except to the extent such authority is delegated to another committee.
SUMMARY OF EXECUTIVE COMPENSATION
The following table sets forth information concerning cash compensation
paid or accrued by the Company during fiscal 1997, 1998 and 1999 to or for the
Company's Co-Chief Executive Officers and the three other highest compensated
executive officers of the Company whose total salary and bonus exceeded $100,000
(collectively the "Named Executive Officers").
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
-----------------------------------------
SECURITIES
ANNUAL COMPENSATION RESTRICTED UNDERLYING
------------------------- STOCK OPTIONS/ ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS AWARDS SAR'S COMPENSATION(1)
- --------------------------- ---- -------- ------- ---------- ---------- ---------------
<S> <C> <C> <C> <C> <C> <C>
David O. Corriveau........ 1999 $352,500 $35,000 0 0 0
1998 297,870 30,500 0 0 0
1997 275,189 21,555 0 0 0
James W. Corley........... 1999 352,500 35,000 0 0 0
1998 297,870 0 0 0 0
1997 275,189 0 0 0 0
Charles Michel............ 1999 175,356 16,250 0 0 0
1998 160,664 2,500 0 0 0
1997 151,250 37,504 0 0 0
Sterling R. Smith......... 1999 173,269 22,900 0 0 0
1998 140,428 2,500 0 0 0
1997 105,192 14,116 0 0 0
Bryan L. Spain............ 1999 134,751 12,800 0 0 0
1998 127,308 1,100 0 0 0
1997 92,524 11,164 0 0 0
</TABLE>
- ---------------
(1) None of the named executive officers received perquisites and other personal
benefits, securities or property in excess of the lesser of $50,000 or 10%
of such officer's total annual salary and bonus.
4
<PAGE> 7
EMPLOYMENT AGREEMENTS
In June 1995, the Company entered into five year employment agreements with
each of Messrs. Corriveau and Corley (the "Employment Agreements"). Based upon
the recommendations of its Compensation Committee, the Company expects to enter
into new employment agreements with Messrs. Corriveau and Corley prior to the
June 2000 expiration of the Employment Agreements.
1995 STOCK PLAN
The following table sets forth information regarding the grant of stock
options during fiscal 1999 under the Stock Plan to the Named Executive Officers:
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE AT
PERCENT OF TOTAL ASSUMED ANNUAL RATES OF
OPTIONS/ OPTIONS/SARS EXERCISE STOCK PRICE APPRECIATION FOR
SARS GRANTED TO OR BASE OPTION TERM(1)
GRANTED EMPLOYEES IN PRICE EXPIRATION -----------------------------
NAME (#) FISCAL YEAR ($/SH) DATE 5%($) 10%($)
- ---- -------- ---------------- -------- ---------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
D. Corriveau.............. 90,000 12.3% $18.81 2/09 $1,064,700 $2,698,200
J. Corley................. 90,000 12.3 18.81 2/09 1,064,700 2,698,200
C. Michel................. 30,000 4.1 18.81 2/09 354,900 899,400
S. Smith.................. 30,000 4.1 18.81 2/09 354,900 699,400
B. Spain.................. 30,000 4.1 18.81 2/09 354,900 699,400
</TABLE>
- ---------------
(1) The 5% and 10% assumed annual rates of appreciation are mandated by the
rules of the Securities and Exchange Commission and do not reflect the
Company's estimates or projections of future prices of the shares of the
Company's common stock. There can be no assurance that the amounts reflected
in this table will be achieved.
The following table sets forth certain information with respect to the
options held by the Named Executive Officers at January 30, 2000 and options
exercised during the fiscal year then ended:
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED IN-THE-MONEY OPTION AT
OPTIONS AT JANUARY 30, 2000 JANUARY 30, 2000(1)
SHARES VALUE --------------------------- ---------------------------
NAME EXERCISED REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- --------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
David O. Corriveau..... 0 $ 0 73,010 133,253 $0 $0
James W. Corley........ 0 0 73,010 133,253 0 0
Charles Michel......... 0 0 35,250 57,250 0 0
Sterling R. Smith...... 5,500 78,025 7,150 42,450 0 0
Bryan L. Spain......... 0 0 5,000 18,450 0 0
</TABLE>
- ---------------
(1) Based upon the closing price of the Common Stock of the Company on January
30, 2000 of $6.875 per share.
REPORT OF THE COMPENSATION COMMITTEE
The Compensation Committee of the Board of Directors of the Company (the
"Compensation Committee") has furnished the following report on executive
compensation. The Compensation Committee report documents the components of the
Company's executive officer compensation programs and describes the compensation
philosophy on which 1999 compensation determinations were made by the
Compensation Committee with respect to the executive officers of the Company,
including the Co-Chief Executive Officers and the three other executive officers
that are named in the compensation tables who are currently employed by the
Company (the "Named Executives"). The Compensation Committee, composed solely of
non-employee directors, also administers the Stock Plan.
5
<PAGE> 8
Compensation Philosophy and Overall Objectives of Executive Compensation
Programs
It is the philosophy of the Company to ensure that executive compensation
is directly linked to continuous improvements in corporate performance and
increases in stockholder value. The following objectives have been adopted by
the Compensation Committee as guidelines for compensation decisions:
- Provide a competitive total executive compensation package that enables
the Company to attract and retain key executives.
- Integrate all pay programs with the Company's annual and long-term
business objectives and strategy, and focus executives on the fulfillment
of these objectives.
- Provide variable compensation opportunities that are directly linked with
the performance of the Company.
Cash Compensation
Cash compensation includes base salary and the Company's annual incentive
plan awards. The base salary of each of the Company's executive officers is
determined by an evaluation of the responsibilities of that position and by
comparison to the average level of salaries paid in the competitive market in
which the Company competes for comparable executive ability and experience.
Annually, the performance of each Named Executive officer is reviewed by the
Compensation Committee using information and evaluations provided by the Co-CEOs
(the Co-CEOs review the performance of all other senior management) taking into
account the Company's operating and financial results for that year, the
contribution of each executive officer to such results, the achievement of goals
established for each such executive officer at the beginning of each year, and
competitive salary levels for persons in those positions in the markets in which
the Company competes. To assist in its deliberations, the Compensation Committee
is provided market competitive base salary and incentive compensation
information for a number of representative companies in the industry for
comparison purposes. Following its review of the performance of the Company's
Named Executive officers, the Compensation Committee Chairman reports the
Compensation Committee's recommendations for salary increases and incentive
awards to the Board of Directors.
The Company enhanced the pay-for-performance feature of its executive
incentive plan (EIP) in 1999, which is designed to recognize and reward those
employees that make significant contributions to the Company's annual business
plan. The Compensation Committee believes the EIP should be the principal
short-term incentive program for providing cash bonus opportunities for the
Company's executives contingent upon profitability of operating results. The
1999 EIP corporate financial target was earnings per share (EPS). The
Compensation Committee will continue to review and modify the performance goals
for the EIP as necessary to ensure reasonableness, achievability, and
consistency with overall Company objectives and shareholder expectations. In
1999, annual base salary increases and incentive compensation awards for all of
the Named Executives were approved by the Compensation Committee and reported to
the Board of Directors. The Compensation Committee believes the recommended
salary increases and incentive awards were warranted and consistent with the
performance of such executives during fiscal year 1999 based on the Compensation
Committee's evaluation of each individual's overall contribution to
accomplishing the Company's fiscal year 1999 corporate goals and of each
individual's achievement of individual goals during the year.
In certifying 1999 EIP results, the Compensation Committee recognized that
the Company fell below its targeted EPS corporate goals, therefore, there was no
award paid.
Long-Term Incentives
The Compensation Committee believes that it is essential to align the
interests of Dave & Buster's executives and other key management personnel
responsible for the growth of the Company with the interests of the Company's
stockholders. The Compensation Committee believes that this objective is best
accomplished through the provision of stock-based incentives that align
themselves to enhancing the Company's value. The Compensation Committee believes
the Company needs a mechanism to keep senior management
6
<PAGE> 9
focused on the strategic business and stock price appreciation. Therefore, the
Compensation Committee reviewed a plan concept and as a result of this review,
recommended to the Board of Directors for approval an amendment and restatement
of the current Stock Plan to allow granting of time accelerated restricted stock
grants. The restated Stock Plan does not propose an increase in the number of
shares of Common Stock reserved under Stock Plan at this time. The purpose of
the Stock Plan, as restated, is to continue to foster and promote the long-term
financial success of Dave & Buster's and materially increase the value of the
equity interests in the Company by: (a) encouraging the long-term commitment of
selected key employees, (b) motivating superior performance of key employees by
means of long-term performance related incentives, (c) encouraging and providing
key employees with a formal program for obtaining an equity interest in the
Company, (d) attracting and retaining outstanding key employees by providing
incentive compensation opportunities competitive with other major companies and
(e) enabling participation by key employees in the long-term growth and
financial success of the Company. Such restricted stock will vest 100% at the
end of seven years and if significant performance milestones are met, 100%
vesting could occur in two to three years rather than seven.
The Compensation Committee will continue to review long-term incentives and
make recommendations, where it deems appropriate, to the Company's Board of
Directors, from time to time, to assure the Company's executive officers and
other key employees are appropriately motivated and rewarded based on the
long-term financial success of the Company.
Co-CEO Compensation
In determining the compensation of Mr. Corriveau and Mr. Corley, Co-Chief
Executive Officers, the Compensation Committee considered the Company's
operating and financial results for fiscal year 1999, evaluated their individual
performance and substantial contribution to Company results, and considered the
compensation range for other chief executive officers of companies in the
industry. Based on that review and assessment in February 1999, the Compensation
Committee recommended, and the Company's Board of Directors approved, an
increase in Mr. Corriveau and Mr. Corley's base salary to $370,000 per year
effective March 29, 1999 and an annual incentive award, as certified by the
Compensation Committee, of $35,000, which represented 9.5% of their base salary
for 1999. Mr. Corriveau and Mr. Corley were each granted 90,000 stock options
under the Stock Plan in February 1999 at an exercise price of $18.81, which was
equal to the fair market value of the Company's common stock on the date of
grant.
Summary
As a result of pay-for-performance concepts incorporated in Dave & Buster's
executive compensation program, the Compensation Committee believes that the
total compensation program for executive officers of the Company are competitive
with the compensation programs provided by other companies with which the
Company competes, emulates programs of high-performing companies and will serve
the best interests of the shareholders of the Company. The Compensation
Committee also believes this program will provide opportunities to participants
that are consistent with the expectations of the Board and with the returns that
are generated on the behalf of the Company's stockholders.
MARK A. LEVY,
Chairman
ALLEN J. BERNSTEIN
DIRECTOR COMPENSATION
Directors who are employees of the Company receive no additional
compensation for their attendance at meetings of the Board or any of its
committees of which they are members. Directors who are not employees of the
Company receive $8,000 as an annual retainer, $1,000 for participation in each
Board meeting and $800 for participation in each committee meeting. When
participation in a Board or committee meeting is by telephone, the fee paid is
one-half of the amount reported above.
7
<PAGE> 10
In February 1996, the Company adopted a stock option plan for outside
directors (the "Directors Plan") to provide independent, outside directors
(excluding those directors who were stockholders prior to February 1996) with an
incentive for serving as a director by providing a proprietary interest in the
Company through the granting of options. Directors who are not employees are
entitled to participate in the Directors Plan. A total of 150,000 shares of
common stock are subject to the Directors Plan. Upon election to the Board of
Directors of the Company, each eligible director is granted an option to
purchase 22,500 shares effective as of the date of such election and vesting
over a three year period. The options granted under the Directors Plan are not
entitled to "incentive stock option" treatment for federal income tax purposes.
Accordingly, under federal income tax laws, an optionee upon exercise of an
option under the Directors Plan will recognize ordinary income equal to the fair
market value of the stock on the date of exercise minus the exercise price.
CERTAIN FILINGS BY EXECUTIVE OFFICERS AND DIRECTORS
Under the securities laws of the United States, the Company's directors,
executive officers and persons who own more than 10% of the Company's common
stock are required to report their initial ownership of the Company's common
stock and any subsequent changes in that ownership to the Securities and
Exchange Commission. Specific due dates have been established for these reports,
and the Company is required to disclose in this proxy statement any failure to
file by these dates. Mr. Corley filed a late Form 4 with respect to the purchase
of 20,000 shares, and Mr. Carter filed a late Form 5 with respect to the
purchase of 1,000 shares.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
No executive officer of the Company serves as member of the board of
directors or compensation committee of any entity which has one or more
executive officers serving as a member of the Company's Board of Directors or
Compensation Committee.
CERTAIN TRANSACTIONS
Pursuant to a 1995 consulting agreement between the Company and Mr.
Henrion, which expired in January 2000, the Company paid consulting fees to Mr.
Henrion, a director of the Company, for advisory services relating to
international licensing activities, expansion and site selection, market
analysis, improvement and enhancement of the Company's business and other
similar activities. The Company paid Mr. Henrion or his affiliates the amount of
$125,000 in fiscal 1999 under the 1995 consulting agreement. Upon expiration of
the 1995 agreement, the Company and Mr. Henrion entered into a new agreement
expiring January 2005. Under the new agreement, the Company will pay Mr. Henrion
the sum of $12,500 per month during the term of such agreement.
Hallett & Perrin provides legal services to the Company from time to time.
Mr. Hallett, a shareholder of Hallett & Perrin, is a director of the Company.
8
<PAGE> 11
STOCK PRICE PERFORMANCE
The Company's common stock has been traded publicly since June 26, 1995.
Prior to such date, there was no established market for its common stock. Set
forth below is a line graph indicating a comparison of cumulative total returns
(change in stock price plus reinvested dividends) for the Company's common stock
for the five fiscal years ending January 30, 2000 as contrasted with (i) the
Standard & Poor's 500 Stock Index and (ii) the Standard & Poor's Restaurant
Stock Composite Index. Each index assumes $100 invested at February 4, 1996 and
is calculated assuming reinvestment of dividends.
[Dave & Buster Performance Graph]
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
02/04/96 02/02/97 02/01/98 01/31/99 01/30/00
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Dave & Buster's, Inc. 100.00 144.45 217.31 225.63 70.51
S&P 500 100.00 127.09 161.30 213.70 247.70
S&P Restaurants 100.00 93.56 97.92 160.34 156.10
</TABLE>
9
<PAGE> 12
APPROVAL OF RESTATEMENT OF STOCK PLAN
GENERAL
The Company proposes to amend and restate the Stock Plan and, in so doing,
to rename the Stock Plan as the "Dave & Buster's 1995 Stock Incentive Plan." The
purposes of the amendment and restatement are (i) to incorporate in the Stock
Plan changes made to the income tax and federal securities law and financial
accounting rules since the original adoption of the Stock Plan in 1995, (ii) to
allow the Compensation Committee to grant restricted stock awards, in addition
to stock options, under the Stock Plan and (iii) to prohibit the "repricing" of
stock options under the Stock Plan.
The amendment and restatement of the Stock Plan does NOT propose an
increase in the number of shares of Common Stock reserved under the Stock Plan
(which is presently 2,350,000 shares).
The Company's Board of Directors originally adopted the Stock Plan in order
to encourage ownership of the Company's common stock by key employees of the
Company and its subsidiaries as well as other persons providing services to the
Company. The Board of Directors has amended the Stock Plan to permit the award
of restricted stock to promote immediate stock ownership and thus provide an
even greater incentive to attract and retain the services of management in
competition with other employers.
A complete text of the Stock Plan, as amended, is set forth on Exhibit A of
this Proxy Statement. Approval of this amendment and restatement requires the
affirmative vote of the holders of a majority of the shares of the Company's
Common Stock represented at the Annual Meeting. THE COMPANY'S BOARD OF DIRECTORS
RECOMMENDS A VOTE FOR APPROVAL OF THE AMENDMENT OF THE STOCK PLAN.
AWARDS UNDER THE STOCK PLAN
Awards under the Stock Plan may consist of the grant of stock options
and/or restricted stock awards, granted singly or in combination to an eligible
person (a "Participant"). Stock options may be granted in the form of
"non-qualified stock options" or "incentive stock options" which comply with
Section 422 of the Code. In the case of a stock option, the purchase price for
the shares as to which the option is exercised will be payable in full upon
exercise, in cash or, if permitted by the Compensation Committee, by tender of
Common Stock or by surrender of another award, valued at "fair market value" on
the date such option is granted. The exercise price of each non-qualified stock
option may not be less than 85% of the fair market value of the Common Stock
and, in the case of incentive stock options, not less than 100% of the fair
market value of the underlying Common Stock, on the date of grant of the option.
The Company has granted all options since the inception of the Stock Plan at
exercise prices equal to 100% of the fair market value on the date of grant. The
Stock Plan allows a maximum of 10% of the non-qualified options outstanding from
time to time to be granted at exercise prices of 85% or more of fair market
value on the date of grant; however, the Company does not anticipate any
variation from its historic practice of requiring all options to be granted at
100% of fair market value on the date of grant. The aggregate fair market value
of the shares of Common Stock covered by incentive stock options granted to any
individual Participant under the Stock Plan (determined at the time of grant)
that may be exercisable for the first time by a Participant during any calendar
year may not exceed $100,000. To the extent, if any, that such aggregate fair
market value limitation is exceeded, the incentive stock options granted to such
Participant will, to the extent and in the order required by regulations,
automatically be deemed to be non-qualified stock options, but all other terms
and provisions of such incentive stock options will remain unchanged. No
incentive stock option may be granted to a Participant, if, at the time of the
proposed grant, such Participant owns more than 10% of the total combined voting
power of all classes of the Company's Common Stock, unless the incentive stock
option has an exercise price of at least 110% of the fair market value and is
not exercisable until five years from the date the option is granted. The Stock
Plan provides that not more than 100,000 shares of Common Stock may be granted
as an option to any one individual during a calendar year. The Stock Plan also
prohibits the Company from "repricing" options by granting new options in
substitution for or upon cancellation of outstanding options previously granted
to Participants under the Stock Plan or any of the Company's prior plans.
10
<PAGE> 13
The Compensation Committee may grant shares of restricted stock pursuant to
the Stock Plan. A grant of shares of restricted stock represents the promise of
the Company to issue shares of Common Stock of the Company on a predetermined
date (the "Issue Date") to an employee, provided the employee is continuously
employed by the Company until the Issue Date. Prior to the vesting of the
shares, the shares are not transferable by the Participant and are forfeitable.
At the time of the grant of shares of restricted stock, the Compensation
Committee may impose restrictions or conditions, not inconsistent with the
provisions of the Stock Plan, including, but not limited to, performance
criteria and continued employment for a specified time period. The Compensation
Committee may provide performance criteria to the restricted stock grant in the
form of time acceleration of vesting due to meeting stretch performance goals.
The Compensation Committee has also established a percentage limitation of 25%
of the shares reserved for the Stock Plan to be granted in restricted stock, and
a maximum of 70,000 restricted shares to be granted to any one individual during
a calendar year.
Upon the occurrence of a "change in control" of the Company where the
successor company assumes the options granted under the Stock Plan or
substitutes new options for such options and an involuntary termination or
termination for good reason within two years after the change in control, all
such options outstanding immediately vest and become exercisable (unless
provided otherwise in a particular award agreement) and remain exercisable until
their expiration, termination or cancellation pursuant to the terms of the Stock
Plan and the agreement evidencing such options. If, following a change in
control, the successor company fails or refuses to assume or substitute options
for outstanding options granted under the Stock Plan, such outstanding options
immediately vest and become exercisable for a period of thirty days. Upon the
occurrence of a change in control of the Company, all restricted stock awards
under the Stock Plan that have not vested or have not been canceled or forfeited
automatically vest.
To the extent that any awards granted under the Stock Plan or prior plans
expire, terminate or are canceled or otherwise settled for any reason without
the issuance of all or any portion of the shares of Common Stock covered by an
award, such unissued shares of Common Stock will become available for grant
under the Stock Plan.
ELIGIBILITY AND GRANT OF AWARDS
Employees of the Company eligible for awards under the Stock Plan are those
who hold positions of responsibility in the Company, and whose performance, in
the judgment of the Compensation Committee can have a significant effect on the
success of the Company and its subsidiaries. Currently, there are approximately
150 persons for stock option purposes and 22 persons for restricted stock grant
purposes who will be eligible to participate in the Stock Plan.
As of March 31, 2000, options to purchase an aggregate of 1,681,712 shares
of the Company's common stock (net of options canceled or expired) have been
granted pursuant to the Stock Plan, options to purchase 113,225 shares have been
exercised, options to purchase 1,568,487 shares remain outstanding, and 668,288
shares remain available for future grant. As of March 31, 2000, the market value
of all shares of the Company's common stock (i) subject to outstanding options
under the Stock Plan and (ii) remaining available for future grant was
approximately $14,018,353 and $5,972,824, respectively (based on the closing
sale price of the Company's common stock as reported on the Nasdaq National
Market on such date).
During the 1999 fiscal year, options covering 733,500 shares of the
Company's common stock were granted to the Company's employees. See also "1995
Stock Plan" for disclosure of grants made in the 1999 fiscal year to the Named
Executive Officers.
Since adoption of the Stock Plan, all current executive officers, as a
group, have been granted options under the Stock Plan covering 875,776 shares of
the Company's common stock which represents approximately 52.1% of the total
number of options granted pursuant to the Stock Plan. Messrs. Corriveau, Corley
and Michel have received options covering 5% or more of those available under
the Stock Plan. All employees of the Company as a group (including all officers
who are not executive officers) received options covering 805,936 shares (47.9%)
of the total options granted. In addition, all current directors who are not
executive officers, as a group, have been granted options covering 90,000 shares
(100%) of the total options granted under the separate Directors Plan.
11
<PAGE> 14
ADMINISTRATION OF THE STOCK PLAN
The Compensation Committee is responsible for administration and
interpretation of the Stock Plan, and may correct any defect, supply any
omission or reconcile any inconsistency in the Stock Plan or any award in its
discretion. The Compensation Committee is constituted so as to comply with Rule
16b-3 under the Exchange Act of 1934 ("Rule 16b-3") and Section 162(m) of the
Code. The Compensation Committee may delegate to the Co-Chief Executive Officers
and other senior officers of the Company its duties under the Stock Plan
pursuant to such conditions or limitations as the Compensation Committee may
establish, except that the Compensation Committee may not delegate to any person
the authority to grant awards to, or take other action with respect to,
Participants who are subject to Section 16 of the Exchange Act or with respect
to Participants who are subject to Section 162(m) of the Code.
AMENDMENT AND TERMINATION
The Board of Directors may amend, modify, suspend or terminate the Stock
Plan for the purpose of meeting or addressing any changes in legal requirements
or for any other purpose permitted by law except that (i) no amendment or
alteration that would impair the rights of any Participant under any award
granted to such Participant will be made without such Participant's consent and
(ii) no amendment or alteration will be effective prior to approval by the
Company's stockholders to the extent such approval is then required pursuant to
Rule 16b-3, in order to preserve the applicability of any exemption provided by
such rule to any award then outstanding (unless the holder of such award
consents) or to the extent stockholder approval is otherwise required by
applicable legal requirements.
Without stockholder approval, no amendment may (i) increase the number of
shares of Common Stock that may be issued under the Stock Plan, (ii) materially
increase the benefits accruing to individuals holding Stock Plan awards, (iii)
materially modify the requirements as to eligibility for participation in the
Stock Plan, or (iv) increase the number of awards that may be granted to any one
individual.
TAX WITHHOLDING
Under the terms of the Stock Plan as restated, a Participant is required to
tender payment of the amount as may be requested by the Company for the purpose
of satisfying its statutory liability to withhold minimum federal, state or
local income or other taxes incurred by reason of the exercise of a
non-qualified stock option or the lapse of restrictions under a restricted stock
award.
FEDERAL INCOME TAX CONSEQUENCES
Non-qualified Stock Options. A Participant will not be deemed to receive
any income at the time a non-qualified stock option (NQSO) is granted, nor will
the Company be entitled to a deduction at that time. However, when any part of
an NQSO is exercised, the Participant will be deemed to have received
compensation taxable as ordinary income in an amount equal to the excess of (A)
the fair market value of the shares received on the exercise of the NQSO over
(B) the exercise price of the NQSO. The taxability of a Participant who is
subject to the reporting and short swing profit recovery provisions of Section
16 of the Exchange Act (a "Section 16 Person") is modified slightly. A Section
16 Person also will not be deemed to receive any income at the time an NQSO is
granted, nor will the Company be entitled to a deduction at that time. However,
upon the exercise of the NQSO, the Section 16 Person will be deemed to have
received compensation taxable as ordinary income in an amount equal to the
excess of (A) the fair market value of the shares received on the exercise of
the NQSO was awarded to the Section 16 Person over (B) the exercise price of the
NQSO. The Section 16 Person's basis in the Common Stock acquired pursuant to the
exercise of the NQSO is the sum of the exercise price of the Option and the
amount of such income required to be recognized. If, however, a Section 16
Person files an appropriate election under Section 83(b) of the Code with the
IRS within thirty days of the exercise of the NQSO, the Participant will be
treated for tax purposes as if he were not a Section 16 Person.
Upon any subsequent sale of the shares acquired upon the exercise of an
NQSO, any gain (the excess of the amount received over the fair market value of
the shares on the date ordinary income was recognized) or
12
<PAGE> 15
loss (the excess of the fair market value of the shares on the date ordinary
income was recognized over the amount received) will be a long-term capital gain
or loss if the sale occurs more than one year after such date or recognition and
otherwise will be a short-term capital gain or loss. A section 16 Person's
(other than a Section 16 Person who makes a Section 83(b) election described
above) holding period for purposes of determining whether any such gain or loss
is short-term or long-term is measured from the later to occur of (i) the date
the NQSO is exercised or (ii) six months after the NQSO was granted. The Company
will be entitled to a tax deduction in an amount equal to the amount of
compensation taxable as ordinary income recognized by the Participant.
If all or any part of the exercise price of an NQSO is paid by the
Participant with shares of Common Stock (including, based upon proposed
regulations under the Code, shares previously acquired on exercise of an ISO),
no gain or loss will be recognized on the shares surrendered in payment. The
number of shares received on such exercise of the NQSO equal to the number of
shares surrendered will have the same basis and holding period, for purposes of
determining whether subsequent dispositions result in long-term or short-term
capital gain or loss, as the basis and holding period of the shares surrendered.
The balance of the shares received on such exercise will be treated for federal
income tax purposes as described in the preceding paragraphs as though issued
upon the exercise of the NQSO for an exercise price equal to the consideration,
if any, paid by the Participant in cash. The Participant's compensation, which
is taxable as ordinary income upon such exercise, and the Company's deduction,
will not be affected by whether the exercise price is paid in cash or in shares
of Common Stock.
Incentive Stock Option. In general, a Participant will not be deemed to
receive any income at the time an Incentive Stock Option ( ISO) is granted or
exercised if a Participant does not dispose of the shares acquired on exercise
of the ISO within two years after the grant of the ISO and one year after the
exercise of the ISO. In such a case, the gain (if any) on a subsequent sale (the
excess of the amount received over the exercise price) or loss (if any) on a
subsequent sale (the excess of the exercise price over the amount received) will
be a long-term capital gain or loss. However, for purposes of computing the
"alternative minimum tax" applicable to a Participant, the Participant will
include in the Participant's alternative minimum taxable income the amount that
would have been included in income if the ISO was a NQSO. Such amount may be
subject to an alternative minimum tax. Similarly, for purposes of making
alternative minimum tax calculations, the Participant's basis in the stock
received on the exercise of an ISO will be determined as if the ISO were an
NQSO.
If the Participant sells the shares acquired on exercise of an ISO within
two years after the date of grant of the ISO or within one year after the
exercise of the ISO, the disposition is a "disqualifying disposition", and the
Participant will recognize income in the year of the disqualifying disposition
equal to the excess of the amount received for the shares over the exercise
price. Of that income, the portion equal to the excess of the fair market value
of the shares at the time the ISO was exercised over the exercise price will be
treated as compensation to the Participant, taxable as ordinary income, and the
balance (if any) will be long-term or short-term capital gain depending on
whether the shares were sold more than one year after the ISO was exercised. If
the Participant sells the shares in a disqualifying disposition at a price that
is below the exercise price, the loss will be a short-term capital loss if the
Participant has held the shares for one year or less and the otherwise will be a
long-term capital loss.
If a Participant uses shares acquired upon the exercise of an ISO to
exercise an ISO, and the sale of the shares so surrendered for cash on the date
of surrender would be a disqualifying disposition of such shares, the use of
such shares to exercise an ISO also would constitute a disqualifying
disposition. In such case, proposed regulations under the Code appear to provide
that tax consequences described above with respect to disqualifying dispositions
would apply, except that no capital gain would be recognized with respect to
such disqualifying disposition. In addition, the basis of the surrendered shares
would be allocated to the shares acquired upon exercise of the ISO, and the
holding period of the shares so acquired would be determined, in a manner
prescribed in proposed regulations under the Code.
If a Participant uses shares acquired upon the exercise of an ISO to
exercise and ISO and such use of such shares does not constitute a disqualifying
disposition of the shares so surrendered or, if the Participant
13
<PAGE> 16
uses other shares of the Company to exercise an ISO, the Participant will not
recognize any income or gain or loss upon exercise of the ISO. In such case, the
basis of the surrendered shares would be allocated to the shares acquired upon
exercise of the ISO, and the holding period of the shares so acquired would be
determined, in a manner prescribed in proposed regulations under the Code.
The Company is not entitled to a deduction as the result of the grant or
exercise of an ISO. If the Participant has compensation taxable as ordinary
income as a result of a disqualifying disposition, the Company will be entitled
to a deduction of an equivalent amount in the taxable year of the Company in
which the disposition occurs.
Restricted Stock. A Participant will not be deemed to receive any income at
the time shares of restricted stock are granted or issued, nor will the Company
be entitled to a deduction at that time. However, when the restrictions
associated with shares of restricted stock lapse, the Participant will be deemed
to have received compensation taxable as ordinary income in an amount equal to
the fair market value of the shares of restricted stock on the date on which the
restrictions lapse. However, a Section 16 Person would not be required to
recognize income in connection with the grant of restricted stock until the
later of (a) the date the restrictions associated with restricted stock lapse
and (b) the expiration of six months after the date of grant. If, however, a
Participant files an appropriate election under Section 83(b) of the Code with
the IRS within thirty days of the issuance of the restricted stock, the
Participant will be deemed to have received compensation taxable as ordinary
income in an amount equal to the fair market value of the shares of restricted
stock on the date on which they are issued. The Participant will not be entitled
to a deduction if the restricted stock is subsequently forfeited. The Company
will be entitled to a deduction in an amount equal to the amount of ordinary
income recognized by the Participant.
STOCKHOLDERS' PROPOSALS
Any proposals that stockholders of the Company desire to have presented at
the annual meeting of stockholders following the conclusion of the 2000 fiscal
year must have been received by the Company at its principal executive offices
no later than February 28, 2001.
MISCELLANEOUS
Proxy Solicitation. The accompanying proxy is being solicited on behalf of
the Board of Directors of the Company. The expense of preparing, printing and
mailing the form of proxy and the material used in the solicitation thereof will
be borne by the Company. In addition to the use of the mails, proxies may be
solicited by personal interview, telephone and telegram by directors and regular
officers and employees of the Company, and the Company has contracted with
ChaseMellon Shareholder Services to provide additional proxy solicitation
services. Arrangements may also be made with brokerage houses and other
custodians, nominees and fiduciaries for the forwarding of solicitation material
to the beneficial owners of stock held of record by such persons, and the
Company may reimburse them for reasonable out-of-pocket expenses incurred by
them in connection therewith.
Internet and Telephone Voting. For shares that are beneficially owned and
held in "street name" through a broker, stockholders will have the opportunity
to vote via the Internet or by telephone by utilizing a program provided through
ADP Investor Communication Services ("ADP"). Votes submitted electronically via
the Internet or by telephone through this program must be received by 4:00 p.m.,
New York time, on June 2, 2000. The giving of such a proxy will not affect the
right to vote in person, should the stockholder decide to attend the Annual
Meeting. The Internet voting procedures are designed to authenticate stockholder
identities, to allow stockholders to give their voting instructions and to
confirm that stockholder instructions have been recorded properly. Stockholders
voting via the Internet should understand that there may be costs associated
with electronic access, such as usage charges from Internet access providers and
telephone companies, that must be borne by the stockholder.
14
<PAGE> 17
EXHIBIT A
DAVE & BUSTER'S, INC.
1995 STOCK INCENTIVE PLAN
(AS AMENDED AND RESTATED APRIL 26, 2000)
The Dave & Buster's, Inc. 1995 Stock Incentive Plan was adopted by the
Board of Directors of Dave & Buster's, Inc. on April 26, 2000, as an amendment
and restatement of the Dave & Buster's, Inc. 1995 Stock Option Plan.
ARTICLE I
SCOPE AND PURPOSES OF PLAN
1.1 Incentive Award Recipients. Key Employees of the Company and its
Affiliates and other Eligible Persons are eligible to receive Incentive Awards
under the Plan, subject to the terms and conditions of the Plan and the
applicable Incentive Award Agreement.
1.2 Available Incentive Awards. The Plan has been designed to provide
recipients of Incentive Awards with an opportunity to benefit from materially
increasing the value of the Common Stock through the granting of (i) Incentive
Stock Options, (ii) Nonstatutory Stock Options, and (iii) Restricted Stock
Awards.
1.3 General Purposes. The Company, by means of the Plan, seeks to (i)
attract outstanding persons to enter the employ of the Company or its
Affiliates, or to perform services for the Company, (ii) retain the services of
the members of this group, (iii) provide incentives for such persons, upon whom
the responsibilities of the successful administration and management of the
Company and its Affiliates rest and/or whose present and potential contributions
to the welfare of the Company and its Affiliates are of importance, to attain
and maintain the highest standards of performance, and (iv) further the identity
of interest of such persons with those of the Company's stockholders in the
enhancement of value of the Common Stock.
ARTICLE II
DEFINITIONS
For the purpose of this Plan, unless the context requires otherwise, the
following terms shall have the meanings indicated below:
2.1 "Affiliate", means (i) any corporation, limited partnership or other
entity which owns, directly or indirectly, a majority of the voting equity
securities of the Company, (ii) any corporation, limited partnership or other
entity of which a majority of the voting power of the voting equity securities
or equity interest is owned, directly or indirectly, by the Company, and (iii)
with respect to an Incentive Award that is intended to be an Incentive Stock
Option, any parent corporation or subsidiary corporation of the Company, whether
now or hereafter existing, as those terms are defined in Sections 424(e) and
(f), respectively, of the Code.
2.2 "Board" means the Board of Directors of the Company.
2.3 "Change in Control" means the occurrence, on or after the date the
Plan as amended and restated herein is adopted by the Board, of any of the
following:
(a) an acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a "Person")
of beneficial ownership (within the meaning of Rule 13d-3 promulgated under
the Exchange Act) of 30% or more of either (i) the then outstanding shares
of Common Stock (the "Outstanding Common Stock") or (ii) the combined
voting power of the then outstanding voting securities of the Company
entitled to vote generally in the election of its directors (the
"Outstanding Voting Securities"); provided, however, that the following
acquisitions shall not constitute a Change of Control: (A) any acquisition
directly from the Company (excluding an acquisition by virtue of the
exercise of a conversion privilege), (B) any acquisition by the Company,
(C) any acquisition by
A-1
<PAGE> 18
any employee benefit plan (or related trust) sponsored or maintained by the
Company or any corporation controlled by the Company or (D) any acquisition
by any corporation pursuant to a reorganization, merger or consolidation,
if, following such reorganization, merger or consolidation, the conditions
described in clauses (i), (ii) and (iii) of paragraph (c) of this Section
2.3 are satisfied; or
(b) individuals who, as of the effective date of the amendment and
restatement of the Plan as set forth herein, constitute the Board (the
"Incumbent Board") cease for any reason to constitute at least a majority
of the Board; provided, however, that any individual becoming a Director
subsequent to the date hereof whose election, or nomination for election by
the Company's shareholders, was approved by a vote of at least a majority
of the Directors then comprising the Incumbent Board shall be considered as
though such individual were a member of the Incumbent Board, but excluding,
for this purpose, any such individual whose initial assumption of office
occurs as a result of either an actual or threatened election contest (as
such terms are used in Rule 14a-11 of Regulation 14.A promulgated under the
Exchange Act) or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board; or
(c) the approval by the shareholders of the Company of a
reorganization, merger or consolidation, in each case, unless, following
such reorganization, merger or consolidation, (i) more than 50% of the then
outstanding shares of common stock of the corporation resulting from such
reorganization, merger or consolidation and more than 50% of the combined
voting power of the then outstanding voting securities of such corporation
entitled to vote generally in the election of Directors is then
beneficially owned, directly or indirectly, by all or substantially all of
the individuals and entities who were the beneficial owners, respectively,
of the Outstanding Common Stock and Outstanding Voting Securities
immediately prior to such reorganization, merger or consolidation in
substantially the same proportions as their ownership immediately prior to
such reorganization, merger or consolidation, of the Outstanding Common
Stock and Outstanding Voting Securities, as the case may be; (ii) no Person
(excluding the Company, any employee benefit plan (or related trust) of the
Company or such corporation resulting from such reorganization, merger or
consolidation and any such Person beneficially owning, immediately prior to
such reorganization, merger or consolidation, directly or indirectly, 30%
or more of the Outstanding Common Stock or Outstanding Voting Securities,
as the case may be) beneficially owns, directly or indirectly, 30% or more
of the then outstanding shares of common stock of the corporation resulting
from such reorganization, merger or consolidation or the combined voting
power of the then outstanding voting securities of such corporation
entitled to vote generally in the election of directors; and (iii) at least
a majority of the members of the board of directors of the corporation
resulting from such reorganization, merger or consolidation were members of
the Incumbent Board at the time of the execution of the initial agreement
providing for such reorganization, merger or consolidation; or
(d) the approval by the shareholders of the Company of (i) a complete
liquidation or dissolution of the Company or (ii) the sale or other
disposition of all or substantially all of the assets of the Company, other
than to a corporation with respect to which, following such sale or other
disposition, (A) more than 50% of the then outstanding shares of common
stock of such corporation and more than 50% of the combined voting power of
the then outstanding voting securities of such corporation entitled to vote
generally in the election of directors is then beneficially owned, directly
or indirectly, by all or substantially all of the individuals entities who
were the beneficial owners, respectively, of the Outstanding Common Stock
and Outstanding Voting Securities immediately prior to such sale or other
disposition in substantially the same proportion as their ownership
immediately prior to such sale or other disposition of the Outstanding
Common Stock or Outstanding Voting Securities, as the case may be; (B) no
Person (excluding the Company and any employee benefit plan (or related
trust) of the Company or such corporation and any Person beneficially
owning, immediately prior to such sale or other disposition, directly or
indirectly, 30% or more of the Outstanding Common Stock or Outstanding
Voting Securities, as the case may be) beneficially owns, directly or
indirectly 30% or more of the then outstanding shares of common stock of
such corporation or 30% or more of the combined voting power of the then
outstanding voting securities of such corporation entitled to vote
generally in the election of directors; and (C) at least a majority of the
members of the board of directors of such corporation were members of the
Incumbent
A-2
<PAGE> 19
Board at the time of the execution of the initial agreement or action of
the Board providing for such sale or other disposition of assets of the
Company.
With respect to Options that are outstanding on the date of this amendment
and restatement of the Plan, the term "Change in Control" shall have the meaning
set forth in this Section 2.3, as well as the definition of "Potential Change in
Control" under the Plan prior to this amendment and restatement.
2.4 "Code" means the Internal Revenue Code of 1986, as amended. Reference
in the Plan to any section of the Code shall be deemed to include any amendments
or successor provisions to such section and any regulations under such section.
2.5 "Committee" means the Compensation Committee of the Board or such
other committee, as constituted from time to time, of the Board that is selected
by the Board as provided in Section 4.3 to administer the Plan; provided,
however that while the Common Stock is publicly traded, the Committee will be
the Compensation Committee of the Board or any other committee consisting solely
of two or more Outside Directors, in accordance with Section 162(m) of the Code,
and/or solely of two or more Non-Employee Directors, in accordance with Rule
16b-3, as necessary in each case to satisfy such requirements with respect to
awards granted under the Plan. Within the scope of such authority, the Committee
may (i) delegate to a committee of one or more members of the Board who are not
Outside Directors the authority to grant Incentive Awards to eligible persons
who are either (A) not then Covered Employees and are not expected to be Covered
Employees at the time of recognition of income resulting from such Incentive
Award or (B) not persons with respect to whom the Company wishes to comply with
Section 162(m) of the Code and/or (ii) delegate to a committee of one or more
members of the Board who are not Non-Employee Directors the authority to grant
Incentive Awards to eligible persons who are not then subject to Section 16 of
the Exchange Act.
2.6 "Common Stock" means the common stock, par value $0.01 per share, of
the Company.
2.7 "Company" means Dave & Buster's, Inc., a Missouri corporation.
2.8 "Continuous Service" means that a Holder's service with the Company or
an Affiliate, whether as an Employee or other Eligible Person, is not
interrupted or terminated. The Holder's Continuous Service shall not be deemed
to have terminated merely because of a change in the capacity in which the
Holder renders service to the Company or an Affiliate as an Employee or other
Eligible Person or a change in the entity for which the Holder renders such
service, provided that there is no interruption or termination of the Holder's
Continuous Service. The Committee, in its sole discretion, may determine whether
Continuous Service of an Employee shall be considered interrupted in the case of
any leave of absence approved by the Company or an Affiliate, including sick
leave, military leave or any other personal leave.
2.9 "Covered Employee" means the chief executive officer and the four
other highest compensated officers of the Company for whom total compensation is
required to be reported to stockholders under the Exchange Act, as determined
for purposes of Section 162(m) of the Code.
2.10 "Director" means a member of the Board of Directors of the Company.
2.11 "Disability" means the permanent and total disability of a person
within the meaning of Section 22(e)(3) of the Code.
2.12 "Eligible Person" means (a) a Key Employee and (b) for Incentive
Awards other than Incentive Stock Options, any other person or entity that the
Committee designates as eligible for such an Incentive Award because such person
or entity performs bona fide consulting, advisory or other independent
contractor services for the Company or an Affiliate (other than services in
connection with the offer or sale of securities in a capital-raising
transaction) and the Committee determines that such person or entity has a
direct and significant effect on the financial development of the Company or an
Affiliate and whose receipt of an Incentive Award would not disqualify the
Company from utilizing a Form S-8 Registration Statement for the Common Stock
subject to an Incentive Award.
2.13 "Employee" means any person in an employment relationship with the
Company or an Affiliate.
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2.14 "Exchange Act" means the Securities Exchange Act of 1934, as amended.
2.15 "Fair Market Value" means, as of any date, the value of the Common
Stock determined as follows:
(a) If the Common Stock is listed on any established stock exchange or
traded on the Nasdaq National Market or the Nasdaq Smallcap Market, the
Fair Market Value of a share of Common Stock shall be the closing sales
price for such stock (or the closing bid, if no sales were reported) as
quoted on such exchange or market (or the exchange or market with the
greatest volume of trading in the Common Stock) on the day of
determination, as reported in The Wall Street Journal or such other source
as the Committee deems reliable.
(b) In the absence of such markets for the Common Stock, the Fair
Market Value shall be determined in good faith by the Committee.
2.16 "Good Reason" with respect to a Key Employee to whom an Incentive
Award has been granted means (i) a material diminution in the Key Employee's
duties, authority or responsibilities, (ii) a decrease in the compensation
(including benefits) of the Key Employee, (iii) requiring the Key Employee to be
based at an office more than 25 miles from the present location, (iv) purported
termination by the Company of the Key Employee's employment otherwise than as
expressly permitted, (v) failure by the Company to obtain agreement from any
successor to the Company to assume the Company's obligations under the Incentive
Award, (vi) requiring the Key Employee to engage in excessive travel, (vi)
requiring the Key Employee to engage in excessive travel, or (vii) a substantial
change in organizational reporting relationships that will have a significant
impact on the status, offices, titles and reporting requirements of the Key
Employee.
2.17 "Holder" means a Key Employee, Director or other Eligible Person to
whom an Incentive Award has been granted.
2.18 "Incentive Award" means any right granted under the Plan, including
an Option and a Restricted Stock Award, whether granted singly or in
combination, to a Holder pursuant to the terms, conditions and limitations that
the Committee may establish in order to fulfill the objectives of the Plan.
2.19 "Incentive Award Agreement" means the written document or agreement
evidencing the terms, conditions, and limitations of the Incentive Award
Agreement granted by the Company to a Holder, in the form of an Option Agreement
or a Restricted Stock Agreement. Each Incentive Award Agreement shall be subject
to the terms and conditions of, and governed by, the provisions of this Plan
which shall be attached to the Award Agreement and deemed to form a part of the
Award Agreement.
2.20 "Incentive Stock Option" or "ISO" means an Option intended to qualify
as an incentive stock option within the meaning of Section 422 of the Code.
2.21 "Key Employee" means an executive or other Employee employed in a
position of administrative or managerial responsibility.
2.22 "Non-Employee Director" means a Director of the Company who either
(i) is not a current Employee or Officer of the Company or an Affiliate, does
not receive compensation (directly or indirectly) from the Company or an
Affiliate for services rendered as a consultant or in any capacity other than as
a Director (except for an amount as to which disclosure would not be required
under Item 404(a) of Regulation S-K promulgated pursuant to the Securities Act
("Regulation S-K")), does not possess an interest in any other transaction as to
which disclosure would be required under Item 404(a) of Regulation S-K and is
not engaged in a business relationship as to which disclosure would be required
under Item 404(b) of Regulation S-K or (ii) is otherwise considered a
"non-employee director" for purposes of Rule 16b-3.
2.23 "Nonstatutory Stock Option" or "NSO" means an Option not intended to
qualify as an Incentive Stock Option.
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2.24 "Officer" means a person who is an officer of the Company within the
meaning of Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder.
2.25 "Option" means an Incentive Award granted under Article VII of the
Plan as an Incentive Stock Option or a Nonstatutory Stock Option.
2.26 "Option Agreement" means a written agreement between the Company and
a Holder evidencing the terms and conditions of an individual Option grant. Each
Option Agreement shall be subject to the terms and conditions of the Plan and
shall state whether it is a NSO or ISO.
2.27 "Outside Director" means a Director of the Company who either (i) is
not a current employee of the Company or an "affiliated corporation" (within the
meaning of Treasury Regulations promulgated under Section 162(m) of the Code),
is not a former employee of the Company or an "affiliated corporation" receiving
compensation for prior services (other than benefits under a tax qualified
pension plan), was not an officer of the Company or an "affiliated corporation"
at any time and is not currently receiving direct or indirect remuneration from
the Company or an "affiliated corporation" for services in any capacity other
than as a Director or (ii) is otherwise considered an "outside director" for
purposes of Section 162(m) of the Code.
2.28 "Plan" means the amendment and restatement of the Dave & Buster's,
Inc. 1995 Stock Option Plan as set forth herein as the "Dave & Buster's Inc.
1995 Stock Incentive Plan" and as it may be amended from time to time.
2.29 "Qualifying Shares" means shares of Common Stock which either (i)
have been owned by the Holder for more than six months and have been "paid for"
within the meaning of Rule 144 promulgated under the Securities Act, or (ii)
were obtained by the Holder in the public market.
2.30 "Restricted Stock Agreement" means a written agreement between the
Company and a Holder with respect to a Restricted Stock Award.
2.31 "Restricted Stock Award" means an Incentive Award granted under
Article VIII of the Plan of shares of Common Stock that are nontransferable and
subject to substantial risk of forfeiture until specific conditions are met and
subject to other restrictions or limitations set forth in this Plan and in the
related Restricted Stock Agreement.
2.32 "Restriction Period" means the period during which the Common Stock
under a Restricted Stock Award is nontransferable and subject to forfeiture by
the Holder, as described in Article VIII and in the related Incentive Award
Agreement.
2.33 "Retirement" means an Employee's voluntary termination of employment
with the Company or an Affiliate after attaining age 65 or such younger age
consistent the Company's then policies for voluntary retirement.
2.34 "Rule 16b-3" means Rule 16b-3 promulgated under the Exchange Act, as
it may be amended from time to time, and any successor to Rule 16b-3, as in
effect from time to time.
2.35 "Securities Act" means the Securities Act of 1933, as amended.
2.36 "Ten Percent Stockholder" means a person who owns (or is deemed to
own pursuant to Section 424(d) of the Code) stock possessing more than ten
percent (10%) of the total combined voting power of all classes of stock of the
Company or of any of its Affiliates.
2.37 "Termination for Cause" with respect to an Eligible Person to whom an
Incentive Award has been granted means the Eligible Person's employment or
business relationship with the Company or an Affiliate is terminated as a result
of the Eligible Person's violation of law or the business conduct rules of the
Company or an Affiliate, or for other breach of duty.
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ARTICLE III
EFFECTIVE DATE AND DURATION OF THE PLAN
The amendment and restatement of the Plan as set forth herein shall become
effective upon the date of its adoption by the Board, provided such amendment
and restatement of the Plan is approved by the stockholders of the Company
within twelve months thereafter. Notwithstanding any provision in the Plan or in
any Restricted Stock Agreement, the restrictions with respect to a Restricted
Stock Award shall not lapse prior to such stockholder approval. No further
Incentive Awards may be granted under the Plan after ten years from May 25,
1995, the date the Plan was adopted originally by the Board. The Plan shall
remain in effect until all Options granted under the Plan have been exercised or
expired, and all Restricted Stock Awards granted under the Plan have vested or
been forfeited.
ARTICLE IV
ADMINISTRATION
4.1 Administration by Committee. The Plan shall be administered by the
Committee as provided for in this Article IV.
4.2 Powers of the Committee. The Committee shall have the following
powers, subject to, and within the limitations of, the express provisions of the
Plan:
(a) To determine from time to time (i) which Key Employees and other
Eligible Persons shall be granted Incentive Awards, (ii) when and how each
Incentive Award shall be granted, (iii) what type or combination of types
of Incentive Award shall be granted, (iv) the provisions of each Incentive
Award granted (which need not be identical), including the time or times
when a person shall be permitted to receive Common Stock pursuant to an
Incentive Award as set forth in the Incentive Award Agreement, and (v) the
number of shares of Common Stock with respect to which an Incentive Award
shall be granted to each such person, the price at which such shares may be
purchased, and all other terms and provisions of each Incentive Award.
(b) To construe and interpret the Plan and Incentive Awards granted
under the Plan, to establish, amend and revoke rules and regulations for
its administration, and to determine the terms, restrictions and provisions
of each Incentive Award Agreement, including such terms, restrictions and
provisions as shall, in the judgment of the Committee, be required to cause
designated Options to qualify as Incentive Stock Options, and to make all
other determinations necessary or advisable for administering the Plan. The
Committee, in the exercise of this power, may correct any defect, omission
or inconsistency in the Plan or in any Option Agreement or Restricted Stock
Agreement, in a manner and to the extent it shall deem necessary or
expedient to make the Plan fully effective. The determinations of the
Committee on the matters referred to in this Article IV shall be conclusive
and binding on the Holders and any other interested persons.
(c) Generally, to exercise such powers and to perform such acts as the
Committee deems necessary or expedient to promote the best interests of the
Company which are not in conflict with the provisions of the Plan. The
expenses of administering the Plan shall be borne by the Company.
(d) The Committee shall set performance goals/targets and certify
performance goal results with respect to Incentive Awards in compliance
with Section 162(m) of the Code.
4.3 Delegation to Committee. The Board will delegate administration of the
Plan to a Committee or Committees of two or more members of the Board, including
the Compensation Committee of the Board, and the term "Committee" shall apply to
any person or persons to whom such authority has been delegated. Except as
provided otherwise in this Plan, the Committee shall have the administrative
powers theretofore possessed by the Board, including the power to delegate to a
subcommittee any of the administrative powers the Committee is authorized to
exercise, subject, however, to such resolutions, not inconsistent with the
provisions of the Plan, as may be adopted from time to time by the Board. The
Committee may select one of
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its members as its Chairman and shall hold its meetings at such times and places
as it may determine. A majority of its members shall constitute a quorum. All
determinations of the Committee shall be made by a majority of its members. Any
decision or determination reduced to writing and signed by a majority of the
members shall be fully as effective as if it had been made by a majority vote at
a meeting duly called and held. The Committee may appoint a Secretary, shall
keep minutes of its meetings and shall make such rules and regulations for the
conduct of its business as it shall deem advisable.
ARTICLE V
SHARES SUBJECT TO THE PLAN
5.1 Share Reserve. Subject to the provisions of Section 5.6 and Article IX
hereof relating to adjustments upon changes in stock, the aggregate number of
shares of Common Stock that may be issued or transferred pursuant to Incentive
Awards shall not exceed 2,350,000 shares.
5.2 Reversion of Shares to the Share Reserve. If Common Stock subject to
any Incentive Award is not issued or transferred, or ceases to be issuable or
transferable for any reason, including because an Incentive Award is forfeited,
terminated, expires unexercised, or is exchanged for other Incentive Awards, the
Common Stock not acquired under such Incentive Award shall revert to and again
become available for issuance or transfer under the Plan. Shares shall be deemed
to have been issued under the Plan only (i) to the extent actually issued and
delivered pursuant to an Incentive Award or (ii) to the extent an Incentive
Award is settled in cash. If any Common Stock acquired pursuant to the exercise
of an Option shall for any reason be repurchased by the Company, the stock
repurchased by the Company shall not become available for future issuance or
transfer under the Plan.
5.3 Source of Shares. The shares to be delivered under the Plan shall be
made available from (a) authorized but unissued shares of Common Stock, (b)
Common Stock held in the treasury of the Company, or (c) previously issued
shares of Common Stock reacquired by the Company, including shares purchased on
the open market, in each situation as the Committee may determine from time to
time at its sole discretion.
5.4 Limitation on Restricted Stock Awards. No more than 25% of the
aggregate shares of Common Stock that may be issued under the Plan may be issued
pursuant to Restricted Stock Awards.
5.5 Registration and Listing of Shares. From time to time, the Board and
appropriate Officers shall and are authorized to take whatever actions are
necessary to file required documents with governmental authorities, stock
exchanges, and other appropriate persons to make shares of Common Stock
available for issuance pursuant to Incentive Awards.
5.6 Reduction in Outstanding Shares of Common Stock. Nothing in this
Article V shall impair the right of the Company to reduce the number of
outstanding shares of Common Stock pursuant to repurchases, redemptions, or
otherwise; provided, however, that no reduction in the number of outstanding
shares of Common Stock shall (a) impair the validity of any outstanding
Incentive Award, whether or not that Incentive Award is fully exercisable or
fully vested or (b) impair the status of any shares of Common Stock previously
issued pursuant to an Incentive Award as duly authorized, validly issued, fully
paid, and nonassessable shares.
ARTICLE VI
ELIGIBILITY
6.1 Eligible Persons. Incentive Awards may be granted pursuant to the Plan
only to persons who are Eligible Persons at the time of the grant thereof. An
Eligible Person may be granted more than one Incentive Award under the Plan, and
Incentive Awards may be granted at any time or times during the term of the
Plan.
6.2 Eligibility for Specific Awards. Incentive Stock Options may be
granted only to Employees. Incentive Awards other than Incentive Stock Options
may be granted to any Eligible Person.
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6.3 Ten Percent Stockholders. No Ten Percent Stockholder shall be eligible
for the grant of an Incentive Stock Option unless the exercise price of such
Option is at least one hundred ten percent (110%) of the Fair Market Value of
the Common Stock at the date of grant and the Option is not exercisable after
the expiration of five (5) years from the date of grant.
6.4 Limitation on Individual Incentive Awards. Subject to the provisions
of Section 5.6 and Article IX hereof relating to adjustments to reflect stock
dividends, stock splits, recapitalization and similar changes to the Company's
capital structure, the maximum number of shares of Common Stock that may be
subject to Incentive Awards granted to any one individual during any calendar
year that are Options may not exceed 100,000 shares of the Common Stock and
shares of Common Stock that may be subject to Restricted Stock Awards granted to
any one individual during any calendar year may not exceed 70,000 shares of the
Common Stock. The limitations set forth in the preceding sentence shall be
applied in a manner which will permit compensation generated under the Plan to
constitute "performance-based" compensation for purposes of section 162(m) of
the Code, including, without limitation, counting against such maximum number of
shares, to the extent required under section 162(m) of the Code and applicable
interpretive authority thereunder, any shares subject to Options that are
canceled or repriced.
6.5 Incentive Award Agreements. Each Incentive Award granted under the
Plan shall be evidenced by an Incentive Award Agreement in the form of an Option
Agreement or a Restricted Stock Agreement that is executed by the Company and
the Holder to whom the Incentive Award is granted and incorporating those terms
that the Committee shall deem necessary or desirable. More than one Incentive
Award may be granted under the Plan to the same Holder and be outstanding
concurrently. If a Holder is granted both one or more Incentive Stock Options
and one or more Nonstatutory Stock Options, those grants shall be evidenced by
separate Option Agreements, one for each Incentive Stock Option grant and one
for each Nonstatutory Stock Option grant.
ARTICLE VII
TERMS AND CONDITIONS OF OPTIONS
Each Option shall be in such form and shall contain such terms and
conditions as the Committee shall deem appropriate at the date of grant. All
Options shall be separately designated Incentive Stock Options or Nonstatutory
Stock Options at the time of grant, and a separate certificate or certificates
will be issued for shares purchased on exercise of each type of Option. The
provisions of separate Options need not be identical, but each Option shall
comply with, and the related Option Agreement shall be deemed to include and be
subject to the terms and conditions of, the Plan and this Article VII through
incorporation of provisions hereof by reference in the Option Agreement or
otherwise.
7.1 Number of Shares. Each Option Agreement shall state the total number
of shares of Common Stock to which it relates.
7.2 Option Period. Nonstatutory Stock Options and Incentive Stock Options
may be exercised during the term determined by the Committee and set forth in
the Option Agreement at the date of grant; provided, however, that subject to
the provisions of Section 6.3 regarding Ten Percent Stockholders, no Option
shall be exercisable after the expiration of ten (10) years from the date it was
granted. The Committee may provide for the exercise of Options in installments
and, subject to the provisions hereof, upon such terms, conditions and
restrictions as it may determine. The Committee may provide in an Option
Agreement for termination of the Option in the case of termination of employment
or service to the Company or an Affiliate as an Eligible Person, with or without
cause, or for any other reason.
7.3 Option Agreement. Each Option shall be evidenced by an Option
Agreement in such form and containing such provisions not inconsistent with the
provisions of the Plan as the Committee from time to time shall approve,
including, without limitation, provisions to qualify an Incentive Stock Option
under Section 422 of the Code, such as the special conditions described in
Sections 6.2, 6.3 and 7.16 hereof. Each Option Agreement shall specify the
effect of termination of employment or service to the Company or Affiliate, as
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applicable, on the exercisability of the Option. The terms and conditions of
respective Option Agreements need not be identical.
7.4 Exercise of Option. Options granted under the Plan may be exercised
during the term of the Option, in accordance with the provisions of this Article
VII, or at such other times, in such amounts, and in accordance with such terms
and subject to such restrictions as are set forth in the applicable Option
Agreements, including, if deemed appropriate by the Committee, the acceleration
of the time of exercise based on performance goals, corporate transactions
involving the Company, the Holder's death, Disability or attainment of
retirement age, and other factors. In no event may an Option be exercised or
shares be issued pursuant to an Option if any requisite action, approval or
consent of any governmental authority of any kind having jurisdiction over the
exercise of Options shall not have been taken or secured. An Option shall be
exercisable in whole or in installments as determined by the Committee, but an
Option may not be exercised for a fraction of a share of Common Stock. An Option
or portion thereof shall be deemed to be exercised when irrevocable written
notice of such exercise has been given to the Company in accordance with the
terms of the Option, or as specified by the Committee, by the person entitled to
exercise the Option and full payment for the shares of Common Stock with respect
to which the Option is exercised in the manner prescribed by the Committee has
been received by the Company. Full payment may, as authorized by the Committee,
consist of any consideration and method of payment allowable under Section 7.6.
Exercise of an Option in any manner shall result in a decrease in the number of
shares of Common Stock which thereafter may be available, both for purposes of
the Plan and for sale under the Option, by the number of shares of Common Stock
as to which the Option is exercised.
7.5 Exercise Price. Each Option Agreement shall state the exercise price
per share of Common Stock. The exercise price for an Option shall be not less
than 100% of the Fair Market Value per share of the Common Stock on the date the
Option is granted, or such greater price required pursuant to Section 6.3;
provided, however, that up to 10% of the Nonstatutory Stock Options outstanding
under the Plan from time to time may be granted at exercise prices determined by
the Committee equal to 85% or more of the Fair Market Value of the Common Stock
at the date the Nonstatutory Option is granted. Notwithstanding the foregoing,
an Option may be granted with an exercise price lower than that set forth in the
preceding sentence if such Option is granted pursuant to an assumption or
substitution for another option in a manner satisfying the provisions of Section
424(a) of the Code.
7.6 Manner of Exercise and Payment. Full payment for shares purchased upon
exercising an Option shall be made in cash or by check or, if the Option
Agreement so permits, by tendering Qualifying Shares at the Fair Market Value
per share at the time of exercise, or on such other terms as are set forth in
the applicable Option Agreement. The Committee may, in its discretion, permit a
Holder exercising an Option to simultaneously exercise the Option and sell a
portion of the shares acquired, pursuant to a brokerage or similar arrangement
approved in advance by the Committee, and use the proceeds from the sale as
payment of the Option price of the Common Stock being acquired by exercise of
the Option. In addition, the Holder shall tender payment of the amount as may be
requested by the Company, if any, for the purpose of satisfying its statutory
liability to withhold minimum federal, state or local income or other taxes
incurred by reason of the exercise of an Option as provided in Section 11.6. No
shares may be issued until full payment of the purchase price therefor has been
made.
7.7 Stockholder Rights. The Holder shall be entitled to all of the
privileges and rights of a stockholder only with respect to shares that have
been purchased under an Option and issued to the Holder. Until the issuance (as
evidenced by the appropriate entry on the books of the Company or of a duly
authorized transfer agent of the Company) of the stock certificate evidencing
such shares of Common Stock, no right to vote or receive dividends or any other
rights as a shareholder shall exist with respect to the optioned stock,
notwithstanding the exercise of the Option. The Company shall issue (or cause to
be issued) such stock certificate promptly upon exercise of the Option. No
adjustment will be made for a dividend or other right for which the record date
is prior to the date the stock certificate is registered in the Holder's name.
7.8 Transferability. Unless permitted otherwise by the Code and Rule 16b-3
and approved in advance by the Committee and permitted under an Option
Agreement, an Incentive Stock Option shall not be
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transferable except by will or by the laws of descent and distribution and shall
be exercisable during the lifetime of the Holder only by the Holder. A
Nonstatutory Stock Option shall be transferable to the extent provided in the
Option Agreement only if the Committee has been furnished a signed letter that
Holder has consulted with a financial advisor and Holder releases the Committee
from any liability in connection with such transfer. If a Nonstatutory Stock
Option does not provide for transferability, then the Nonstatutory Stock Option
shall not be transferable except by will or by the laws of descent and
distribution and shall be exercisable during the lifetime of the Holder only by
the Holder. Notwithstanding the foregoing provisions of this Section 7.8, the
Holder may, by delivering written notice to the Company, in a form satisfactory
to the Company, designate a third party who, in the event of the death of the
Holder, shall thereafter be entitled to exercise the Option.
7.9 Vesting. The total number of shares of Common Stock subject to an
Option may, under the terms of an Option Agreement, but need not, vest and
therefore become exercisable in periodic installments which may, under the terms
of an Option Agreement, but need not, be equal. The Option may be subject to
such other terms and conditions providing for the time or times when it may be
exercised (which may be based on performance or other criteria such as
acceleration events described in Section 7.4) as the Committee may deem
appropriate and as set forth in the Option Agreement. The vesting provisions of
individual Options may vary. Vesting of options due to performance-based
acceleration must be certified by the Committee.
7.10 Termination of Continuous Service. In the event a Holder's Continuous
Service terminates (other than upon the Holder's Retirement, death, Disability
or Termination for Cause), the Holder may exercise his or her Option (to the
extent that the Holder was entitled to exercise it as of the date of
termination) but only within such period of time ending on the earlier of (i)
the date three (3) months following the termination of the Holder's Continuous
Service (or such longer or shorter period specified in the Option Agreement, or
(ii) the expiration of the term of the Option as set forth in the Option
Agreement. If, after termination of Continuous Service, the Holder does not
exercise his or her Option within the time specified in the Option Agreement,
the Option shall terminate.
7.11 Rights in Event of Retirement. If a Holder who is an Employee
terminates employment with the Company or an Affiliate by reason of Retirement,
all or any portion of the Holder's unexercised unexpired Options, whether
otherwise eligible for immediate exercise under the terms of the Option
Agreement, shall be exercisable during the term of the Options for a period of
(i) three months following the Holder's Retirement for an Option that is an
Incentive Stock Option, and (ii) twelve months following the Holder's Retirement
for an Option that is a Nonstatutory Stock Option.
7.12 Rights in Event of Death or Disability. If a Holder terminates
employment or services with the Company or an Affiliate by reason of death or
Disability prior to termination of his right to exercise an Option in accordance
with the provisions of his Option Agreement without having totally exercised the
Option, all or any portion of the unexercised Option may be exercised, whether
otherwise eligible for immediate exercise under the terms of the Option
Agreement on the date of the Holder's death or Disability, (i) in the case of
death, by the Holder's estate or by the person who acquired the right to
exercise the Option by bequest or inheritance or by reason of the death of the
Holder, or (ii) in the case of Disability, by the Holder or his personal
representative, provided the Option is exercised prior to the date of its
expiration or one year from the date of the Holder's death or Disability,
whichever first occurs. The date of Disability of a Holder shall be determined
by the Committee.
7.13. Rights in Event of Change in Control. In the event an Employee's
employment with the Company or an Affiliate is terminated by the Employee for
Good Reason or involuntarily by the Company or an Affiliate other than a
Termination for Cause, in either case, during the period commencing ninety days
before and ending on the day two years following the effective date of a Change
in Control described in Paragraph(b) of Section 2.3 hereof, all of the
Employee's Options then outstanding under the Plan shall become immediately and
fully exercisable, subject, however, to the provisions of Section 7.16 and the
terms of the Employee's Option Agreement, if any, referring to Section 280G of
the Code, and provided that no Incentive Stock Option may be exercised by a
Holder earlier than one year after the date of grant. In the event of a Change
in Control described in paragraphs (a), (c), or (d) of Section 2.3 hereof, each
outstanding Option shall be assumed or an equivalent option or right substituted
by the successor corporation or a parent or subsidiary of the successor
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corporation. If Options are assumed or substituted upon such Change in Control
and within two years following the effective date of the Change in Control the
Employee's employment with the successor corporation or its parent or subsidiary
is terminated by the Employee for Good Reason or involuntarily by the successor
corporation or its parent or subsidiary other than a Termination for Cause, then
the Employee's assumed or substituted options shall become fully vested and
exercisable following the date of such involuntary termination or termination
for Good Reason, provided that the term of the substituted or assumed option has
not expired. If the Employee does not exercise such option to the extent so
entitled prior to its expiration, the option shall terminate, and the shares of
Common Stock covered by such option shall revert to the Plan or, if applicable,
to the plan of the successor corporation. For the purposes of this paragraph,
the Option shall be considered assumed if, following the applicable Change in
Control event, the option substituted for such Option confers the right to
purchase or receive, for each share of Common Stock subject to the Option
immediately prior to the applicable Change in Control event, the per share
consideration (whether stock, cash, or other securities or property) received by
holders of Common stock (and if holders were offered a choice of consideration,
the type of consideration chosen by the holders of a majority of the outstanding
shares); provided, however, that if such consideration received in the
applicable Change in Control event, is not solely common stock of the successor
corporation or its parent (if any), the Committee may, with the consent of the
successor corporation, provide for the consideration to be received upon the
exercise of the Option, for each share of Common Stock subject to the Option, to
be solely common stock of the successor corporation or its parent (if any) equal
in fair market value to the per share consideration received by holders of
Common Stock in the applicable Change in Control event. In the event that the
successor corporation or its parent or subsidiary refuses to assume or
substitute for the Option, the Employee shall fully vest in and have the right
to exercise the Option (provided it has not already terminated) as to all of the
Common Stock subject to the Option, including shares which would not otherwise
be vested or exercisable. If an Option becomes fully vested and exercisable
because the Option is not assumed or substituted for as a result of an
applicable Change in Control event, the Committee shall notify the Employee that
the Option shall be fully exercisable for a period of thirty (30) days from the
date of such notice, and the Option shall terminate upon the expiration of such
period.
7.14 Termination for Cause. If a Holder's employment or business
relationship with the Company or an Affiliate is terminated by reason of a
Termination for Cause, all unexercised Options shall immediately terminate and
be unexercisable. The existence or nonexistence of conditions resulting in the
Termination for Cause and the date of termination of employment shall be
determined by the Committee in its sole discretion, and such determination shall
be final and binding on all persons.
7.15 Options in Substitution for Options Granted by Other
Corporations. Options may be granted under the Plan from time to time in
substitution for stock options held by individuals employed by entities who
become Employees as a result of a merger or consolidation or other business
combination of the employing entity with the Company or an Affiliate.
7.16 Incentive Stock Option Limitation. To the extent that the aggregate
Fair Market Value (determined at the time of grant) of stock with respect to
which Incentive Stock Options are exercisable for the first time by any Holder
during any calendar year (under all plans of the Company and its Affiliates)
exceeds one hundred thousand dollars ($100,000), the Options or portions thereof
which exceed such limit (according to the order in which they were granted and
determined in a manner consistent with the Code) shall be treated as
Nonstatutory Stock Options. The Committee shall determine, in accordance with
the applicable provisions of the Code and administrative pronouncements, which
of a Holder's Incentive Stock Options will not constitute Incentive Stock
Options as a result of the limitation described in this Section 7.16 and shall
notify the Holder of such determination as soon as administratively practicable
after such determination is made.
ARTICLE VIII
TERMS AND CONDITIONS OF RESTRICTED STOCK AWARDS
Each Restricted Stock Award shall be evidenced by a Restricted Stock
Agreement in such form and containing such terms and conditions as the Committee
shall deem appropriate. The terms and conditions of
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such Restricted Stock Agreements may change from time to time, and the terms and
conditions of separate Restricted Stock Agreements need not be identical, but
each such Restricted Stock Agreement shall include and be subject to the terms
and conditions of this Article VIII, through incorporation of provisions hereof
by reference in the Restricted Stock Agreement or otherwise.
8.1 Forfeiture Restrictions. Shares of Common Stock that are the subject
of a Restricted Stock Award shall be subject to restrictions on disposition by
the Holder and an obligation of the Holder to forfeit and surrender the shares
to the Company under certain circumstances ("Forfeiture Restrictions").
Forfeiture Restrictions applicable to a Restricted Stock Award shall be
determined by the Committee in its sole discretion, and the Committee may
provide that Forfeiture Restrictions shall lapse upon the passage of a specified
period of time or the attainment of one or more performance targets established
by the Committee and as set forth in the Restricted Stock Agreement. Forfeiture
restrictions that lapse due to acceleration resulting from the attainment of
performance-based goals must be certified by the Committee.
8.2 Terms and Conditions of Restricted Stock Awards. At the time any
Restricted Stock Award is made under this Article VIII, the Company and the
Holder shall enter into a Restricted Stock Agreement setting forth each of the
matters contemplated hereby and such other matters as the Committee may
determine to be appropriate. The terms and provisions of the respective
Restricted Stock Agreements need not be identical. Common Stock awarded pursuant
to a Restricted Stock Award shall be represented by a stock certificate
registered in the name of the Holder of such Restricted Stock Award. The Holder
shall have the right to receive dividends with respect to Common Stock subject
to a Restricted Stock Award, to vote Common Stock subject thereto and to enjoy
all other stockholder rights, except that (i) the Holder shall not be entitled
to delivery of the stock certificate until Forfeiture Restrictions have expired,
(ii) the Company shall retain custody of the stock until Forfeiture Restrictions
have expired, (iii) the Holder may not sell, transfer, pledge, exchange,
hypothecate or otherwise dispose of the stock until Forfeiture Restrictions
applicable to the Incentive Award have expired, and (iv) a breach of the terms
and conditions established by the Committee pursuant to the Restricted Stock
Agreement shall cause a forfeiture of the Restricted Stock Award. At the time of
such Incentive Award, the Committee may, in its sole discretion, prescribe
additional terms, conditions or restrictions relating to Restricted Stock
Awards, including, but not limited to, rules pertaining to the termination of
the Holder's employment or service to the Company or an Affiliate as an Eligible
Person (by retirement, Disability, death or otherwise) prior to expiration of
the Forfeiture Restrictions. Such additional terms, conditions or restrictions
shall be set forth in a Restricted Stock Agreement made in connection with the
Incentive Award.
8.3 Rights and Obligations of Holder. Certificates for shares of Common
Stock free of restriction under this Plan shall be delivered to the Holder
promptly after, and only after, Forfeiture Restrictions have expired. Each
Restricted Stock Agreement shall require that (i) the Holder, by his or her
acceptance of the Incentive Award, shall irrevocably grant to the Company a
power of attorney to transfer any shares forfeited to the Company under the
Incentive Award as a result of the application of Forfeiture Restrictions and
agrees to execute any documents requested by the Company in connection with such
forfeiture and transfer, and (ii) such provisions regarding transfers of stock
certificates with respect to forfeited shares of Common Stock shall be
specifically performable by the Company in a court of equity or law.
8.4 Restriction Period. The Restriction Period for a Restricted Stock
Award shall commence on the date of grant of the Incentive Award and unless
otherwise established by the Committee in the Restricted Stock Agreement setting
forth the terms of the Incentive Award, shall expire upon satisfaction of the
conditions set forth in the Restricted Stock Agreement, at which time Forfeiture
Restrictions will lapse.
8.5 Securities Restrictions. The Committee may impose other conditions on
any shares of Common Stock subject to a Restricted Stock Award granted pursuant
to the Plan as it may deem advisable, including, without limitation, (i)
restrictions under applicable state or federal securities laws, and (ii) the
requirements of any securities exchange upon which the shares or shares of the
same class of Common Stock are then issued.
8.6 Payment for Restricted Stock. The Committee shall determine the amount
and form of any payment for Common Stock received pursuant to a Restricted Stock
Award, provided that in the absence of
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such a determination, a Holder shall not be required to make any payment for
Common Stock received pursuant to a Restricted Stock Award, except to the extent
otherwise required by law.
8.7 Forfeiture of Restricted Stock. Subject to the provisions of Section
8.8 hereof and of the particular Restricted Stock Agreement, upon a Holder's
termination of employment or service to the Company or an Affiliate as an
Eligible Person during the Restriction Period, the shares of Common Stock
subject to the Incentive Award shall be forfeited by the Holder. Upon any
forfeiture, all rights of a Holder with respect to the forfeited shares of the
Common Stock subject to the Incentive Award shall cease and terminate, without
any further obligation on the part of the Company.
8.8 Lapse of Forfeiture Restrictions in Certain Events; Committee's
Discretion. Notwithstanding the provisions of Section 8.7 or any other provision
in this Plan to the contrary, the Committee may, in its discretion and as of a
date determined by the Committee, fully vest any or all Common Stock awarded to
a Holder pursuant to a Restricted Stock Award and, upon such vesting, all
Forfeiture Restrictions applicable to such Restricted Stock Award shall lapse as
of such date. Any action by the Committee pursuant to this Section 8.8 shall be
set forth in the Restricted Stock Agreement and may vary among individual
Holders and may vary among the Restricted Stock Awards held by any individual
Holder. In addition, the Forfeiture Restrictions applicable to a Restricted
Stock Award shall lapse (i) if the Employee's employment with the Company or an
Affiliate terminates by reason of Retirement, (ii) as a result of the Holder's
death or Disability, or (iii) on the effective date of a Change in Control. If
the Holder's employment or business relationship with the Company or an
Affiliate is terminated by reason of a Termination for Cause, the Restricted
Stock Award shall be forfeited on the date of the Holder's termination of
employment or business relationship. The existence or nonexistence of
circumstances resulting in a Termination for Cause shall be determined by the
Committee in its sole discretion, and such determination shall be final and
binding on all persons. Notwithstanding the preceding provisions of this Section
8.8, the Committee may not take any action described in this Section 8.8 with
respect to a Restricted Stock Award that has been granted to a Covered Employee
if such Incentive Award has been designed to meet the exception for
performance-based compensation under Section 162(m) of the Code.
ARTICLE IX
CAPITALIZATION ADJUSTMENTS
If any change is made in the Common Stock subject to any Incentive Award,
without the receipt of consideration by the Company by reason of merger,
subdivision, consolidation, reorganization, recapitalization, reincorporation,
stock dividend, dividend in property other than cash, stock split, liquidating
dividend, combination of shares, exchange of shares, change in corporate
structure or other relevant change in capitalization or other transaction not
involving the receipt of consideration by the Company, such Incentive Award and
any agreement evidencing such Incentive Award shall be subject to adjustment by
the Committee in its discretion as to the number, and price of shares of Common
Stock subject to such Incentive Award. In the event of any such change in the
Common Stock subject to the Plan, the aggregate number of shares of Common Stock
available under the Plan and the maximum number of shares of Common Stock that
may be subject to Incentive Awards granted to any one individual may be
appropriately adjusted by the Committee. The Committee, the determination of
which shall be final, binding and conclusive, shall make such adjustments. For
purposes of this Article IX, the conversion of any convertible securities of the
Company shall not be treated as a transaction "without receipt of consideration"
by the Company.
ARTICLE X
AMENDMENT AND TERMINATION OF THE PLAN
The Board in its discretion may terminate the Plan at any time with respect
to any shares of Common Stock for which Incentive Awards have not theretofore
been granted. The Board shall have the right to alter or amend the Plan or any
part thereof from time to time; provided that no change in any Incentive Award
theretofore granted may be made which would impair the rights of the Holder
without the consent of the
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Holder, and provided, further, that the Board may not, without approval of the
stockholders, amend the Plan to increase the maximum aggregate number of shares
that may be issued under the Plan, change the class of individuals eligible to
receive Incentive Awards under the Plan, or materially increase the benefits
accruing to Holders under the Plan. In addition, the Board shall submit to the
stockholders for approval any other amendment to the Plan to the extent
stockholder approval is necessary to satisfy the requirements of Section 422 of
the Code, Rule 16b-3, the Nasdaq National Market, the Nasdaq SmallCap Market or
any securities exchange, or Section 162(m) of the Code.
ARTICLE XI
MISCELLANEOUS
11.1 Availability of Shares. During the terms of the Incentive Awards, the
Company shall keep available at all times the number of shares of Common Stock
required to satisfy such Incentive Awards.
11.2 Securities Law Compliance. Each Incentive Award under the Plan shall
be granted only on the condition that all purchases and transfers of Common
Stock thereunder shall be for investment purposes, and not with a view to resale
or distribution, except that the Committee may make such provision in Incentive
Awards granted under the Plan as it deems necessary or advisable for the release
of such conditions upon the registration with the Securities and Exchange
Commission of Common Stock subject to the Incentive Awards, or upon the
happening of any other contingency warranting the release of such condition. The
Company shall seek to obtain from each regulatory commission or agency having
jurisdiction over the Plan such authority as may be required to grant Incentive
Awards and to issue and sell shares of Common Stock upon exercise or
satisfaction of the Incentive Awards; provided, however, that this undertaking
shall not require the Company to register under the Securities Act the Plan, any
Incentive Award or any stock issued or issuable pursuant to any such Incentive
Award. If, after reasonable efforts, the Company is unable to obtain from any
such regulatory commission or agency the authority which counsel for the Company
deems necessary for the lawful issuance and sale of stock under the Plan, the
Company shall be relieved from any liability for failure to issue and sell stock
upon exercise of such Incentive Awards unless and until such authority is
obtained.
11.3 Use of Proceeds from Stock. Proceeds from the sale of stock pursuant
to Incentive Awards shall constitute general funds of the Company.
11.4 Effect of Plan. Neither the adoption of the Plan nor any action of
the Board or the Committee shall be deemed to give any Employee or Director any
right to be granted an Option, a Restricted Stock Award, or any other rights
hereunder except as may be evidenced by an Option Agreement or a Restricted
Stock Agreement, or any amendment thereto, authorized by the Committee and duly
executed on behalf of the Company and then only to the extent and on the terms
and conditions expressly set forth therein. The existence of the Plan and the
Incentive Awards granted hereunder shall not affect in any way the right of the
Board or the shareholders of the Company to make or authorize any adjustment,
recapitalization, reorganization or other change in the Company's capital
structure or its business, any merger or consolidation of the Company, any issue
of bonds, debentures, or shares of preferred stock ahead of or affecting Common
Stock or the rights thereof, the dissolution or liquidation of the Company or
any sale or transfer of all or any part of its assets or business, or any other
corporate act or proceeding. In addition, nothing contained in the Plan shall be
construed to prevent the Company or any Affiliate from taking any corporate
action which is deemed by the Company or such Affiliate to be appropriate or in
its best interest, whether or not such action would have an adverse effect on
the Plan or any Incentive Award made under the Plan. No Employee, Director,
beneficiary or other person shall have any claim against the Company or any
subsidiary as a result of any such action.
11.5 No Employment or Membership Rights. Nothing contained in the Plan
shall (i) confer upon any Employee any right with respect to continuation of
employment with the Company or any Affiliate or (ii) interfere in any way with
the right of the Company or any Affiliate to terminate his or her employment at
any time. Nothing contained in the Plan shall confer upon any Director any right
with respect to continuation of membership on the Board.
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11.6 Withholding Obligations. To the extent provided by the terms of an
Option Agreement or a Restricted Stock Agreement, the Holder may satisfy any
minimum federal, state or local income or other tax withholding obligation
relating to the exercise or acquisition of stock under a Incentive Award by any
of the following means (in addition to the Company's right to withhold from any
compensation paid to the Holder by the Company) or by a combination of such
means: (i) tendering a cash payment; (ii) authorizing the Company to withhold
shares from the shares of the Common Stock otherwise issuable to the Holder as a
result of the exercise or acquisition of stock under the Incentive Award in an
amount equal to the statutory prescribed minimum withholding applicable to the
ordinary income resulting from the Incentive Award; or (iii) delivering to the
Company owned and unencumbered shares of the Common Stock in an amount equal to
the statutory prescribed minimum withholding applicable to the ordinary income
resulting from the Incentive Award.
11.7 Dispute Resolution. The exclusive remedy or method of resolving all
disputes or questions arising out of or related to Incentive Awards granted
pursuant to the Plan shall be arbitration. Arbitration shall be held in Dallas,
Texas, by three arbitrators, one to be appointed by the Company, a second to be
appointed by the Holder, and a third to be appointed by those two arbitrators.
The third arbitrator shall act as chairman. Any arbitration may be initiated by
either party upon written notice ("Arbitration Notice") to the other party,
specifying the subject of the requested arbitration and appointing that party's
arbitrator. If (i) the non-initiating party fails to appoint an arbitrator by
written notice to the initiating party within ten days after the Arbitration
Notice, or (ii) the two arbitrators appointed by the Company and the Holder fail
to appoint a third arbitrator within ten days after the date of the appointment
of the second arbitrator, the American Arbitration Association, upon application
of the initiating party, shall appoint an arbitrator to fill that position. The
arbitration proceeding shall be conducted in accordance with the rules of the
American Arbitration Association. A determination or award made or approved by
at least two of the arbitrators shall be the valid and binding action of the
arbitrators. The costs of arbitration (exclusive of the expense in obtaining and
presenting evidence and attending the arbitration and of the fees and expenses
of legal counsel to a party, all of which shall be borne by that party) shall be
borne by the Company only if the Holder receives substantially the relief sought
by him in the arbitration, whether by settlement, award or judgment; otherwise,
the costs shall be borne equally between the Company and the Holder. The
arbitration determination or award shall be final and conclusive on the Company
and the Holder, and judgment upon such award may be entered and enforced in any
court of competent jurisdiction.
11.8 No Effect on Retirement and Other Benefit Plans. Except as
specifically provided in a retirement or other benefit plan of the Company or
Affiliate, Incentive Awards shall not be deemed compensation for purposes of
computing benefits or contributions under any retirement plan of the Company or
an Affiliate, and shall not affect any benefits under any other benefit plan of
any kind or any benefit plan subsequently instituted under which the
availability or amount of benefits is related to level of compensation. The Plan
is not intended to constitute a "Retirement Plan" or "Welfare Plan" under the
Employee Retirement Income Security Act of 1974, as amended.
11.9 Severability and Reformation. The Company intends all provisions of
the Plan to be enforced to the fullest extent permitted by law. Accordingly,
should a court of competent jurisdiction determine that the scope of any
provision of the Plan is too broad to be enforced as written, the parties
intended that the court should reform the provision to such narrower scope as it
determines to be enforceable. If, however, any provision of the Plan is held to
be wholly illegal, invalid, or unenforceable under present or future law, such
provision shall be fully severable and severed, and the Plan shall be construed
and enforced as if such illegal, invalid, or unenforceable provision were never
a part hereof, and the remaining provisions hereof shall remain in full force
and effect and shall not be affected by the illegal, invalid, or unenforceable
provision or by its severance.
11.10 Governing Law. The Plan shall be construed and interpreted in
accordance with the laws of the State of Missouri.
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IN WITNESS WHEREOF, the Company has caused this Plan to be executed by its
duly authorized officer, effective as set forth herein.
DAVE & BUSTER'S, INC.
By: /s/ DAVID CORRIVEAU
----------------------------------
David Corriveau
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<PAGE> 33
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
DAVE & BUSTER'S, INC.
The undersigned hereby appoints David O. Corriveau and James W. Corley, or
each of them, his proxies, with full power of substitution and revocation, for
and in the name, place and stead of the undersigned, to vote upon and act with
respect to all of the shares of Common Stock of the Company standing in the
name of the undersigned or with respect to which the undersigned is entitled to
vote and act at said meeting or at any adjournment or postponement thereof, and
the undersigned directs that his proxy be voted as designated on the other side.
THIS PROXY WILL BE VOTED AS SPECIFIED ON THE REVERSE SIDE. IF NO
SPECIFICATION IS MADE, THIS PROXY WILL BE VOTED FOR ALL NOMINEES FOR DIRECTORS
AND FOR THE APPROVAL TO RESTATE THE COMPANY'S 1995 STOCK PLAN.
THE UNDERSIGNED HEREBY REVOKES ANY PROXY OR PROXIES HERETOFORE GIVEN TO
VOTE UPON OR ACT WITH RESPECT TO SUCH STOCK AND HEREBY RATIFIES AND CONFIRMS ALL
THAT SAID PROXIES, THEIR SUBSTITUTES, OR ANY OF THEM, MAY LAWFULLY DO BY VIRTUE
HEREOF.
(CONTINUED, AND TO BE MARKED, DATED AND SIGNED, ON THE OTHER SIDE)
- --------------------------------------------------------------------------------
o FOLD AND DETACH HERE o
YOUR VOTE IS IMPORTANT!
YOU CAN VOTE IN ONE OF THREE WAYS:
1. Mark, sign and date your proxy card and return it promptly in the
enclosed envelope.
OR
2. Call TOLL FREE 1-800-840-1208 on a Touch Tone telephone and follow
the instructions on the reverse side. There is NO CHARGE to you for
this call.
OR
3. Vote by Internet at our Internet Address: http://www.eproxy.com/dab
PLEASE VOTE
<PAGE> 34
<TABLE>
<S> <C>
THIS PROXY WILL BE VOTED AS DIRECTED, OR IF NO DIRECTION IS INDICATED, WILL BE VOTED "FOR" THE PROPOSALS. PLEASE MARK
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. YOUR VOTES AS
INDICATED IN [X]
THIS EXAMPLE
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEMS 1 AND 2.
ITEM 1 - ELECTION OF DIRECTORS
FOR AGAINST ABSTAIN
FOR ALL NOMINEES WITHHOLD ITEM 2 - RESTATED 1995 STOCK PLAN. [ ] [ ] [ ]
LISTED BELOW AUTHORITY
(EXCEPT AS MARKED TO VOTE FOR ALL NOMINEES
TO THE CONTRARY) LISTED BELOW
[ ] [ ]
NOMINEES: 01 JAMES W. CORLEY, 02 PETER A. EDISON, 03 WALTER S. HENRION
WITHHELD FOR: (WRITE THAT NOMINEE'S NAME IN THE SPACE PROVIDED BELOW.)
- ----------------------------------------------------------------------
</TABLE>
SIGNATURE SIGNATURE DATE
----------------- ------------- ------------
NOTE: PLEASE SIGN AS NAME APPEARS HEREON. JOINT OWNERS SHOULD EACH SIGN. WHEN
SIGNING AS ATTORNEY, EXECUTOR, ADMINISTRATOR, TRUSTEE, OR GUARDIAN, PLEASE GIVE
FULL TITLE AS SUCH.
- --------------------------------------------------------------------------------
o FOLD AND DETACH HERE o
[IMAGE] VOTE BY TELEPHONE OR INTERNET [IMAGE]
QUICK***EASY***IMMEDIATE
YOUR VOTE IS IMPORTANT! - YOU CAN VOTE IN ONE OF THREE WAYS:
1. TO VOTE BY PHONE: CALL TOLL-FREE 1-800-840-1208 ON A TOUCH TONE TELEPHONE
24 HOURS A DAY-7 DAYS A WEEK
THERE IS NO CHARGE TO YOU FOR THE CALL. - HAVE YOUR PROXY CARD IN HAND.
YOU WILL BE ASKED TO ENTER A CONTROL NUMBER, WHICH IS LOCATED IN THE BOX IN THE
LOWER RIGHT HAND CORNER OF THIS FORM.
OPTION 1 To vote as the Board of Directors recommends on ALL proposals, press 1.
WHEN ASKED, PLEASE CONFIRM BY PRESSING 1.
OPTION 2 If you choose to vote on each proposal separately, press 0. You will
hear these instructions:
PROPOSAL 1 - TO VOTE FOR ALL NOMINEES, PRESS 1; TO WITHHOLD FOR ALL NOMINEES,
PRESS 9.
TO WITHHOLD FOR AN INDIVIDUAL NOMINEE, PRESS 0 AND LISTEN TO THE INSTRUCTIONS
PROPOSAL 2 - TO VOTE FOR, PRESS 1; AGAINST, PRESS 8, ABSTAIN, PRESS 0
AND WHEN ASKED, PLEASE CONFIRM BY PRESSING 1.
THE INSTRUCTIONS ARE THE SAME FOR ALL REMAINING PROPOSALS.
OR
2. VOTE BY INTERNET: FOLLOW THE INSTRUCTIONS AT OUR WEBSITE ADDRESS:
http://www.eproxy.com/dab.
OR
3. VOTE BY PROXY: MARK,SIGN AND DATE YOUR PROXY CARD AND RETURN PROMPTLY
IN THE ENCLOSED ENVELOPE.
NOTE: IF VOTING BY PHONE OR INTERNET, YOU MAY VOTE UNTIL 4:00 P.M. (EST), JUNE
2, 2000. IF YOU VOTE BY INTERNET OR TELEPHONE, THERE IS NO NEED TO MAIL BACK
YOUR PROXY CARD.
THANK YOU FOR VOTING.
