<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 12, 1998
REGISTRATION NO. 333-______
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
DIEDRICH COFFEE, INC.
(Exact name of registrant as specified in its charter)
2144 MICHELSON DRIVE
IRVINE, CALIFORNIA 92612
(714) 260-1600
(Address of Principal Executive Offices)
DELAWARE 33-0086628
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1997 NON-EMPLOYEE DIRECTORS STOCK OPTION PLAN
(Full title of the plan)
------------------------
ANN WRIDE
CHIEF FINANCIAL OFFICER
DIEDRICH COFFEE, INC.
2144 MICHELSON DRIVE
IRVINE, CALIFORNIA 92612
(949) 260-1600
(Name, address, zip code, and telephone number,
including area code, of agent for service)
------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
================================================================================================
PROPOSED
PROPOSED MAXIMUM
MAXIMUM AGGREGATE AMOUNT OF
TITLE OF SECURITIES TO AMOUNT TO BE OFFERING PRICE OFFERING REGISTRATION
BE REGISTERED REGISTERED(1) PER SHARE(2) PRICE(2) FEE
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value
$0.01 per share 20,000 $6.125 $122,500 $36
================================================================================================
</TABLE>
- -------------------
(1) There is also being registered hereunder such additional shares as may
he issued pursuant to the anti-dilution provisions of the 1997
Non-Employee Directors Stock Option Plan dated April 25, 1997.
(2) Estimated solely for purposes of determining the registration fee
pursuant to Rule 457(h) and Rule 457(c) and based on the average of the
high and low prices of the Common Stock of Diedrich Coffee, Inc. as
reported on August 10, 1998 on the Nasdaq National Market.
<PAGE> 2
INTRODUCTION
This Registration Statement on Form S-8 is filed by Diedrich Coffee,
Inc. (the "Registrant") relating to 20,000 shares of the Registrant's Common
Stock, par value $0.01 per share (the "Common Stock"), issuable to Peter Churm
and Paul Heeschen, Non-Employee Directors of the Registrant pursuant to the 1997
Non-Employee Director's Stock Option Plan and Agreement dated as of April 25,
1997 (the "Plan").
PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
ITEM 1. PLAN INFORMATION.
Information required by Part I of Form S-8 to be contained in the
Section 10(a) prospectus is omitted from this Registration Statement in
accordance with Rule 428 under the Securities Act of 1933, as amended (the
"Securities Act"), and the Note to Part I of Form S-8.
ITEM 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION.
The Registrant's documents and public reports listed in Item 3 below,
and all subsequent public reports, are and will be available to Messrs. Churm
and Heeschen without charge, upon request to the Company, attention Ann Wride,
Chief Financial Officer, at 2144 Michelson Drive, Irvine, CA 92614 (949)
260-1600.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents, which previously have been filed by the
Registrant with the Securities and Exchange Commission (the "Commission"), are
incorporated herein by reference and made a part hereof:
(a) The Registrant's annual report on Form 10-K for the year ended
January 28, 1998 filed with the Commission on April 23, 1998.
(b) All other reports filed pursuant to Section 13(a) or 15(d) of the
Exchange Act since the end of the fiscal year ended January 28,
1998.
(c) The description of the Registrant's Common Stock contained in the
Registrant's Registration Statement on Form 8-A (Registration No.
000-21203) filed with the Commission on August 14, 1996, which
incorporates by reference the description of the Registrant's
Common Stock contained in the Registrant's Registration Statement
on Form S-1 (Registration No. 333-08633), as amended, including
any amendment or report filed for the purpose of updating such
description.
All documents filed by the Registrant pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Securities Exchange Act of 1934, as amended,
subsequent to the date of this Registration Statement and prior to the filing of
a post-effective amendment hereto which indicates that all securities offered
hereunder have been sold or which deregisters all securities then remaining
unsold, shall be deemed to be incorporated by reference herein and to be a part
hereof from the date of filing of such documents.
For purposes of this Registration Statement, any statement contained
herein or in a document incorporated or deemed to be incorporated herein by
reference shall be deemed to be modified or superseded to the extent that a
statement contained herein or in any other subsequently filed document that also
is or is deemed to be incorporated herein by reference modifies or supersedes
such statement in such document. Any statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this
Registration Statement.
2
<PAGE> 3
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Registrant is a Delaware corporation. Section 145 of the General
Corporation Law of the State of Delaware (the "GCL") provides that a Delaware
corporation has the power to indemnify its officers and directors in certain
circumstances.
Subsection (a) of Section 145 of the GCL empowers a corporation to
indemnify any director or officer, or former director or officer, who was or is
a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation),
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred in connection with such action,
suit or proceeding provided that such director or officer acted in good faith
and in a manner reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, provided that such director or officer had no cause to believe his
or her conduct was unlawful.
Subsection (b) of Section 145 of the GCL empowers a corporation to
indemnify any director or officer, or former director or officer, who was or is
a party or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the corporation to procure a
judgment in its favor by reason of the fact that such person acted in any of the
capacities set forth above, against expenses actually and reasonably incurred in
connection with the defense or settlement of such action or suit provided that
such director or officer acted in good faith and in a manner reasonably believed
to be in or not opposed to the best interests of the corporation, except that no
indemnification may be made in respect of any claim, issue or matter as to which
such director or officer shall have been adjudged to be liable to the
corporation unless and only to the extent that the Court of Chancery or the
court in which such action was brought shall determine that despite the
adjudication of liability such director or officer is fairly and reasonably
entitled to indemnity for such expenses which the court shall deem proper.
Section 145 of the GCL further provides that to the extent a director
or officer of a corporation has been successful in the defense of any action,
suit or proceeding referred to in subsections (a) and (b) or in the defense of
any claim, issue or matter therein, he or she shall be indemnified against
expenses (including attorneys' fees) actually and reasonably incurred by him or
her in connection therewith; that indemnification provided for in Section 145
shall not be deemed exclusive of any other rights to which the indemnified party
may be entitled; and that the corporation shall have power to purchase and
maintain insurance on behalf of a director or officer of the corporation against
any liability asserted against him or her or incurred by him or her in any such
capacity or arising out of his or her status as such whether or not the
corporation would have the power to indemnify him or her against such
liabilities under Section 145.
Article VIII of the Registrant's Certificate of Incorporation currently
provides that each director shall not be personally liable to the Registrant or
its stockholders for monetary damages for breach of fiduciary duty as a
director, except for liability (i) for any breach of the directors' duty of
loyalty to the Registrant or its stockholders, (ii) for acts or omissions not in
good faith or which involve intentional misconduct or a knowing violation of
law, (iii) under Section 174 of the GCL, or (iv) for any transaction from which
the director derived an improper benefit. The Certificate of Incorporation
further provides that the Registrant shall indemnify, to the fullest extent
permitted by the GCL, any person made a party to an action or proceeding by
reason of the fact that such person was a director, officer, employee or agent
of the Registrant.
3
<PAGE> 4
Article VII of the Registrant's Bylaws provides that the Registrant may
indemnify its officers and directors to the fullest extent permitted by law.
Subject to the Registrant's Certificate of Incorporation, the Bylaws provide
that the Registrant shall indemnify directors and officers for all costs
reasonably incurred in connection with any action, suit or proceeding in which
such director or officer is made a party by virtue of his being an officer or
director of the Registrant except where such director or officer is finally
adjudged to have been derelict in the performance of his duties as such director
or officer.
The Registrant has entered into separate indemnification agreements
with its directors and officers containing provisions that provide for the
maximum indemnity allowed to directors and officers by the GCL and the
Registrant's Bylaws, subject to certain exceptions. The indemnification
agreements may require the Registrant, among other obligations, to indemnify
such directors and officers against certain liabilities that may arise by reason
of their status as directors or officers, other than liabilities arising from
willful misconduct of a culpable nature, provided that such person acted in good
faith and in a manner that he or she reasonably believed to be in or not opposed
to the best interests of the Registrant and, in the case of a criminal
proceeding, had no reasonable cause to believe that his conduct was unlawful. In
addition, the indemnification agreements provide generally that the Registrant
will, subject to certain exceptions, advance the expenses incurred by directors
and officers as a result of any proceeding against them as to which they may be
entitled to indemnification. The Registrant also maintains directors' and
officers' liability insurance.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
4.1 Certificate of Incorporation of the Registrant(1)
4.2 Bylaws of the Registrant(1)
4.3 1997 Non-Employee directors Stock Option Plan dated as of April
25, 1997
5 Opinion of Gibson, Dunn & Crutcher LLP as to the legality of the
securities being registered
23.1 Consent of KPMG Peat Marwick LLP
23.2 Consent of BDO Seidman, LLP
23.3 Consent of Gibson, Dunn & Crutcher LLP (contained in Exhibit 5
hereto)
24.1 Power of Attorney (contained on signature page hereto)
- -------------------
(1) Incorporated by reference to the Registrant's Registration Statement on
Form S-1 (Reg. No. 333-08633), as amended.
ITEM 9. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
4
<PAGE> 5
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or
the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the Registration
Statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the
Registration Statement or any material change to such
information in the Registration Statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 that is incorporated by reference in the Registration
Statement shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by a final adjudication of such issue.
5
<PAGE> 6
SIGNATURES
THE REGISTRANT
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Irvine, State of California, on this 11th day of
August, 1998.
DIEDRICH COFFEE, INC.
By: /s/ ANN WRIDE
-------------------------------
Ann Wride
Chief Financial Officer
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Ann
Wride and John B. Bayley his true and lawful attorneys-in-fact and agents, each
acting alone, with full power of substitution and resubstitution, for him and in
his name, place and stead, in any and all capacities, to sign any and all
amendments (including post-effective amendments) to this Registration Statement
and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorneys-in-fact and agents, each acting alone, with full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in and about the premises, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming that all said
attorneys-in-fact and agents, each acting alone, or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
NAME AND SIGNATURE TITLE DATE
------------------ ----- ----
<S> <C> <C>
/s/ JOHN E. MARTIN Chairman of the Board August 6, 1998
- ------------------------------------
John E. Martin
/s/ TIMOTHY J. RYAN Director and President and Chief
- ------------------------------------ Executive Officer (Principal Executive August 5, 1998
Timothy J. Ryan Officer)
/s/ ANN WRIDE Vice President, Chief Financial Officer August 5, 1998
- ------------------------------------ (Principal Financial and Accounting
Ann Wride Officer)
/s/ MARTIN R. DIEDRICH Chief Coffee Officer, Vice Chairman of August 5, 1998
- ------------------------------------ Board of Directors and Secretary
Martin R. Diedrich
Director August _, 1998
- ------------------------------------
Lawrence Goelman
/s/ PAUL C. HEESCHEN Director August 6, 1998
- ------------------------------------
Paul C. Heeschen
Director August _, 1998
- ------------------------------------
Peter Churm
</TABLE>
6
<PAGE> 7
INDEX TO EXHIBITS
Exhibit No. Description
- ----------- -----------
4.1 Certificate of Incorporation of the Registrant(1)
4.2 Bylaws of the Registrant(1)
4.3 1997 Non-Employee Directors Stock Option Plan and Agreement dated
as of April 25, 1997
5 Opinion of Gibson, Dunn & Crutcher LLP as to the legality of the
securities being registered
23.1 Consent of KPMG Peat Marwick LLP
23.2 Consent of BDO Seidman, LLP
23.3 Consent of Gibson, Dunn & Crutcher LLP (contained in Exhibit 5
hereto)
24.1 Power of Attorney (contained on signature page hereto)
- ---------------------
(1) Incorporated by reference to the Registrant's Registration Statement on Form
S-1 (Reg. No. 333-08633), as amended.
<PAGE> 1
EXHIBIT 4.3
1997 NON-EMPLOYEE DIRECTOR
STOCK OPTION PLAN AND AGREEMENT
This 1997 Non-Employee Director Stock Option Plan and Agreement, dated
as of April 25, 1997 (the "AGREEMENT") is entered into by and among Diedrich
Coffee, Inc., a Delaware corporation (the "COMPANY"), on the one hand, and Peter
Churm and Paul C. Heeschen (individually, the "GRANTEE" and collectively, the
"GRANTEES") on the other hand.
RECITALS
A. Messrs. Churm and Heeschen have served as independent directors of
the Company since the Company's initial public offering in September 1996. In
light of the operational challenges and management transition that the Company
has experienced this year, the independent directors have been called upon to
work closely with the Company's officers providing invaluable advice and
direction beyond that which would ordinarily be expected from members of the
Board of Directors.
B. In appreciation of the service rendered by the independent directors
and for the purpose of encouraging and rewarding their continuing contributions
to the performance of the Company and further aligning their interests with the
interests of the Company's stockholders, the Company believes that it is in the
best interests of the Company and its stockholders to grant to each of the
Grantees options to purchase 10,000 shares of common stock, $0.01 par value per
share (the "COMMON STOCK"), of the Company.
AGREEMENT
NOW, THEREFORE, to evidence the grant of options by the Company and to
set forth the terms and conditions of the grant of options, the Company and
Grantees hereby agree as follows:
1. DEFINITIONS. The following terms, as used in this Agreement, have
the meanings ascribed to them in this Section 1.
(a) "BOARD" means the Board of Directors of the Company.
(b) "CLOSING PRICE" means the closing price on any given
trading day of the Common Stock on the Nasdaq National Market (or any subsequent
exchange or market system upon which the Company's Common Stock is principally
traded) as reported in the Transaction Index of the Wall Street Journal.
(c) "EXCHANGE ACT" means the Securities Exchange Act of 1934,
as amended.
(d) "EXERCISE DATE" means any date on which Grantee exercises
Options.
<PAGE> 2
(e) "EXERCISE DATE VALUE" means the product of: (i) the number
of shares of Common Stock delivered to the Company and (ii) the Closing Price of
the Common Stock on the Exercise Date.
(f) "EXERCISE SHARES" means those shares of Common Stock with
respect to which Options are being exercised.
(g) "NON-EMPLOYEE DIRECTOR" means a duly elected or appointed
member of the Company's Board of Directors who is not and has not since the
beginning of the Company's most recently completed fiscal year been an employee
of or a compensated consultant to the Company or any of its affiliates.
(h) "OPTIONS" means options to purchase shares of Common Stock
granted under this Agreement.
(i) "SECURITIES ACT" means the Securities Act of 1933, as
amended.
2. GRANT OF OPTIONS. The Company hereby grants options to Grantees as
follows:
(a) The Company grants to Mr. Churm, effective as of the date
hereof, Options to purchase up to 10,000 shares of Common Stock on the terms
and subject to the conditions set forth herein; and
(b) The Company grants to Mr. Heeschen, effective as of the
date hereof, Options to purchase up to 10,000 shares of Common Stock on the
terms and subject to the conditions set forth herein.
3. EXERCISABILITY AND EXERCISE PRICES. The Options will become
exercisable at an option exercise price of $2.75 per share of Common Stock on
April 25, 1998, if the Grantee has remained a Non-Employee Director for the
entire period from the date hereof to April 25, 1998. Any Options that have not
become exercisable at the time the Grantee ceases to be a Non-Employee Director
shall terminate.
4. TERMINATION OF OPTIONS.
(a) Unless an earlier termination date occurs as specified in
Section 4(b), the Options will expire and become unexercisable (whether or not
then exercisable) on the tenth (10th) anniversary of the date hereof
("EXPIRATION DATE").
(b) If a Grantee ceases to be a Non-Employee Director for any
reason prior to the Expiration Date: (i) all Options that have not otherwise
become exercisable, as of the date Grantee ceases to be a Non-Employee Director,
will immediately terminate and become unexercisable; and (ii) all Options that
have become exercisable will terminate and become unexercisable on and after the
date one hundred eighty (180) days following the date of Grantee's termination
of employment.
2
<PAGE> 3
5. REGISTRATION OF OPTIONS. After execution of this Agreement, the
Company, at its expense, shall file a registration statement on Form S-8 to
register the issuance and exercise of the Options.
6. RESTRICTIONS ON EXERCISE. All options granted under the Plan shall
be subject to the requirement that, if at any time the Company shall determine,
in its discretion, that the listing, registration or qualification of the shares
subject to options granted under the Plan upon any securities exchange or under
any state or federal law, or the consent or approval of any government or
regulatory body or authority, is necessary or desirable as a condition of, or in
connection with, the granting of such an option or the issuance, if any, or
purchase of shares in connection therewith, such option may not be exercised in
whole or in part unless such listing, registration, qualification, consent or
approval shall have been effected or obtained free of any conditions not
acceptable to the Company. Unless the shares of stock to be issued upon exercise
of an option granted under the Plan have been effectively registered under the
Securities Act of 1933, as amended (the "Securities Act") as now in force or
hereafter amended, the Company shall be under no obligation to issue any shares
of stock covered by any option unless the person who exercises such option, in
whole or in part, shall give a written representation and undertaking to the
Company satisfactory in form and scope to counsel to the Company and upon which,
in the opinion of such counsel, the Company may reasonably rely, that he or she
is acquiring the shares of stock issued to him or her pursuant to such exercise
of the option for his or her own account as an investment and not with a view
to, or for sale in connection with, the distribution of any such shares of
stock, and that he or she will make no transfer of the same except in compliance
with any rules and regulations in force at the time of such transfer under the
Securities Act, or any other applicable law or regulation, and that if shares of
stock are issued without such registration, a legend to this effect may be
endorsed upon the securities so issued and the Company may order its transfer
agent to stop transfer of such shares.
7. NON-TRANSFERABILITY OF OPTIONS. None of the Options are assignable
or transferable, in whole or in part, and may not, directly or indirectly, be
offered, transferred, sold, pledged, assigned, alienated, hypothecated or
otherwise disposed of or encumbered (including without limitation by gift,
operation of law or otherwise) other than by will or by the laws of descent and
distribution to the estate of Grantee upon his death, provided that the deceased
Grantee's beneficiary or the representative of his estate acknowledge and agree
in writing, in a form reasonably acceptable to the Board of Directors to be
bound by this Agreement as if such beneficiary or the estate were Grantee.
8. WITHHOLDING. Whenever shares of Common Stock are to be issued
pursuant to the exercise of Options, the Board of Directors may require the
recipient of the shares of Common Stock to remit to the Company an amount
sufficient to satisfy any applicable federal, state and local tax withholding
requirements. Upon request by Grantee, the Company may also withhold shares of
Common Stock to satisfy applicable withholding requirements, subject to any
rules adopted by the Board of Directors regarding compliance with applicable
law, including, but not limited to, Section 16(b) of the Exchange Act.
3
<PAGE> 4
9. MANNER OF EXERCISE:
(a) To the extent that the Options have become and remain
exercisable as provided in Sections 3 and 4, and subject to such reasonable
administrative regulations as the Board of Directors may adopt, the Options may
be exercised, by written notice to the Board of Directors, specifying the number
of Exercise Shares and the Exercise Date. On or before the Exercise Date,
Grantee shall deliver to the Company full payment for the Options being
exercised in cash, or cash equivalent satisfactory to the Board of Directors,
and in an amount equal to the aggregate purchase price for the Exercise Shares.
(b) Subject to the discretion of the Board of Directors,
Grantee may, in lieu of cash, either: (i) deliver shares of Common Stock having
an Exercise Date Value equal to the purchase price of the Exercise Shares; or
(ii) deliver a combination of cash and shares of Common Stock with an aggregate
value and Exercise Date Value equal to the purchase price of the Exercise
Shares, subject to such rules and regulations as may be adopted by the Board of
Directors to provide for the compliance of such payment procedure with
applicable law, including Section 16(b) of the Exchange Act.
(c) The Board of Directors may require Grantee to furnish or
execute such other documents as the Board of Directors reasonably deems
necessary: (i) to evidence such exercise and (ii) to comply with or satisfy the
requirements of the Securities Act, applicable state securities laws or any
other law.
10. NO RIGHTS AS STOCKHOLDER. Grantee will have no voting or other
rights as a stockholder of the Company with respect to any shares of Common
Stock covered by the Options until the exercise of such Options and the issuance
of a certificate or certificates to him for such shares of Common Stock. No
adjustment will be made for dividends or other rights for which the record date
is prior to the issuance of such certificate or certificates.
11. CAPITAL ADJUSTMENTS. The number and any applicable option price of
the shares of Common Stock covered by the Options will be proportionately and
appropriately adjusted by the Board of Directors to reflect any stock dividend,
stock split or share combination of the Common Stock or any recapitalization of
the Company. Subject to any required action by the stockholders of the Company,
in any merger, consolidation, reorganization, exchange of shares, liquidation or
dissolution, the Options will pertain to the securities and other property, if
any, that a holder of the number of shares of Common Stock covered by the
Options would have been entitled to receive in connection with such event.
12. REORGANIZATIONS; MERGERS; CHANGES IN CONTROL. Subject to the other
provisions of this Section 12, if the Company shall consummate any
reorganization or merger or consolidation in which holders of shares of the
Company's Common Stock are entitled to receive in respect of such shares any
other consideration (including, without limitation, a different number of such
shares), each option outstanding under this Agreement shall thereafter be
exercisable, in accordance with the Agreement, only for the kind and amount of
securities, cash and/or other property receivable upon such reorganization or
merger or consolidation by a holder of the same number of shares of Common Stock
as are subject to that option immediately prior to
4
<PAGE> 5
such reorganization or merger or consolidation, and any appropriate adjustments
will be made to the exercise price thereof. In addition, if a Change in Control
occurs and in connection with such Change in Control any recipient of an option
granted under the Plan ceases to be a director of the Company, then such
recipient shall have the right to exercise his or her options granted under the
Plan in whole or in part during the applicable time period provided in Section 4
without regard to any vesting requirements. For purposes hereof, but without
limitation, a director will be deemed to have ceased to be a director of the
Company in connection with a Change in Control if such director (i) is removed
by or resigns upon request of a Person (as defined in paragraph (a) below)
exercising practical voting control over the Company following the Change in
Control, or a person acting upon authority or at the instruction of such Person,
or (ii) is willing and able to continue as a director of the Company but is not
re-elected to or retained on the Company's Board of Directors by the Company's
stockholders through the stockholder vote or consent action for election of
directors that precedes and is taken in connection with, or next follows, the
Change of Control. For purposes hereof, a "Change in Control" means the
following and shall be deemed to occur if any of the following events occur:
(a) Any person, entity or group, within the meaning of Section
13(d) or 14(d) of the Exchange Act, but excluding the Company and its
subsidiaries and any employee benefit or stock ownership plan of the Company or
its subsidiaries and also excluding an underwriter or underwriting syndicate
that has acquired the Company's securities solely in connection with a public
offering thereof (such person, entity or group being referred to herein as a
"Person"), becomes the beneficial owner (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of 50% or more of either the then
outstanding shares of Common Stock or the combined voting power of the Company's
then outstanding securities entitled to vote generally in the election of
directors; or
(b) Individuals who, as of the effective date hereof,
constitute the Board of Directors of the Company (the "Incumbent Board") cease
for any reason to constitute at least a majority of the Board of Directors of
the Company, provided that any individual who becomes a director after the
effective date hereof whose election, or nomination for election by the
Company's stockholders, is approved by a vote of at least a majority of the
directors then comprising the Incumbent Board shall be considered to be a member
of the Incumbent Board unless that individual was nominated or elected by any
Person having the power to exercise, through beneficial ownership, voting
agreement and/or proxy, 20% or more of either the then outstanding shares of
Common Stock or the combined voting power of the Company's then outstanding
voting securities entitled to vote generally in the election of directors, in
which case that individual shall not be considered to be a member of the
Incumbent Board unless such individual's election or nomination for election by
the Company's stockholders is approved by a vote of at least two-thirds of the
directors then comprising the Incumbent Board; or
(c) Consummation by the Company of the sale or other
disposition by the Company of all or substantially all of the Company's assets
or a reorganization or merger or consolidation of the Company with any other
person, entity or corporation, other than
5
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(i) a reorganization or merger or consolidation that
would result in the voting securities of the Company outstanding immediately
prior thereto (or, in the case of a reorganization or merger or consolidation
that is preceded or accomplished by an acquisition or series of related
acquisitions by any Person, by tender or exchange offer or otherwise, of voting
securities representing 5% or more of the combined voting power of all
securities of the Company, immediately prior to such acquisition or the first
acquisition in such series of acquisitions) continuing to represent, either by
remaining outstanding or by being converted into voting securities of another
entity, more than 50% of the combined voting power of the voting securities of
the Company or such other entity outstanding immediately after such
reorganization or merger or consolidation (or series of related transactions
involving such a reorganization or merger or consolidation), or
(ii) a reorganization or merger or consolidation
effected to implement a recapitalization or reincorporation of the Company (or
similar transaction) that does not result in a material change in beneficial
ownership of the voting securities of the Company or its successor; or
(d) Approval by the stockholders of the Company or an order by
a court of competent jurisdiction of a plan of liquidation of the Company.
13. NOTICES. All notices and other communications required or permitted
to be given under this Agreement shall be in writing and shall be deemed to have
been given if delivered personally or sent by certified or express mail, return
receipt requested, postage prepaid, or by any recognized international
equivalent of such delivery, to the Company, or Grantee, as the case may be, at
the address of the Company's principal executive office. All such notices and
communications shall be deemed to have been received on the date of delivery or
on the third business day after the mailing thereof.
14. BINDING EFFECT; BENEFITS. This Agreement shall be binding upon and
inure to the benefit of the parties to this Agreement and their respective
successors and assigns. Nothing in this Agreement, express or implied, is
intended or shall be construed to give any person other than the parties to this
Agreement or their respective successors or assigns any legal or equitable
right, remedy or claim under or in respect of any agreement or any provision
contained herein.
15. AMENDMENT. This Agreement may be amended, modified or supplemented
only by a written instrument executed by Grantees and the Company.
16. APPLICABLE LAW. This Agreement shall be governed by and construed
in accordance with the law of the State of Delaware, regardless of the law that
might be applied under principles of conflict of laws.
17. SECTION AND OTHER HEADINGS. The section and other headings
contained in this Agreement are for reference purposes only and shall not affect
the meaning or interpretation of this Agreement.
6
<PAGE> 7
18. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the Company and Grantees have executed this
Agreement as of the date first above written.
DIEDRICH COFFEE, INC.,
a Delaware corporation
BY: /s/ MARTIN DIEDRICH
-----------------------------------
NAME: MARTIN DIEDRICH
TITLE: VICE CHAIRMAN
THE GRANTEES
/s/ PETER CHURM
----------------------------------------
PETER CHURM
/s/ PAUL C. HEESCHEN
----------------------------------------
PAUL C. HEESCHEN
7
<PAGE> 1
EXHIBIT 5
August 11, 1998
(949) 451-3800 C 22453-00008
Diedrich Coffee, Inc.
2144 Michelson Drive
Irvine, California 92612
Re: Registration Statement on Form S-8
for 1997 Non-Employee Directors Stock Option Plan and Agreement
Ladies and Gentlemen:
We have acted as your counsel in connection with the preparation of a
Registration Statement on Form S-8 (the "Registration Statement") to be filed
with the Securities and Exchange Commission on the date hereof, to register
under the Securities Act of 1933, as amended (the "Act"), 20,000 shares of the
Company's Common Stock, par value $0.01 per share (the "Common Stock"),
available to be issued pursuant to awards granted under the Company's 1997
Non-Employee Directors Stock Option Plan and Agreement (the "Plan").
For purposes of rendering this opinion, we have made such legal and
factual examinations as we have deemed necessary under the circumstances and, as
part of such examination, we have examined originals and copies, certified or
otherwise, identified to our satisfaction, of the Plan, the Company's
Certificate of Incorporation and Bylaws, and the records of corporate
proceedings and other actions taken by the Company in connection with the Plan
and the Common Stock issuable thereunder, and such other documents, corporate
records and other instruments as we have deemed necessary or appropriate. Based
upon the foregoing and in reliance thereon, and subject to (i) compliance with
applicable state securities laws and (ii) the effectiveness of the Registration
Statement pursuant to the Act, it is our opinion that the
<PAGE> 2
Diedrich Coffee, Inc.
August 11, 1998
Page 2
Common Stock, when issued and paid for in accordance with the Registration
Statement and the Plan, will be validly issued, fully paid and non-assessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement, and we further consent to the use of our name under the
caption "Legal Matters" in the Prospectus forming a part of said Registration
Statement. In giving this consent, we do not thereby admit that we are within
the category of persons whose consent is required under Section 7 of the Act or
the Rules and Regulations thereunder.
Very truly yours,
/s/ GIBSON, DUNN & CRUTCHER LLP
GIBSON, DUNN & CRUTCHER LLP
JBE/REA
OA981880.030
<PAGE> 1
EXHIBIT 23.1
ACCOUNTANTS' CONSENT
The Board of Directors
Diedrich Coffee, Inc.:
We consent to the incorporation by reference in the registration statements
(Form S-8 with John E. Martin, Form S-8 with Timothy J. Ryan, Form S-8 Stock
Option Plan, Form S-3) of Diedrich Coffee, Inc. of our report dated March 28,
1998, relating to the balance sheets of Diedrich Coffee as of January 28, 1998
and January 27, 1997 and cash flows for each of the years in the two-year
period ended January 28, 1998 and all related schedules, which report appears
in the January 28, 1998 annual report on Form 10-K of Diedrich Coffee, Inc.
We consent to the reference to our firm under the heading "Experts" in the
prospectus.
/s/ KPMG Peat Marwick LLP
Orange County, California
August 11, 1998
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS
Diedrich Coffee, Inc.
Irvine, California
We hereby consent to the incorporation by reference in the Prospectus
constituting a part of this Registration Statement of our report dated March
11, 1996, relating to the financial statements of Diedrich Coffee, Inc.
appearing in the Company's Annual Report on Form 10-K for the year ended
January 31, 1996.
/s/ BDO SEIDMAN, LLP
----------------------------------------
BDO SEIDMAN, LLP
Costa Mesa, California
August 11, 1998
