Exhibit 10.2

 

Repurchase Option Agreement

 

This Repurchase Option Agreement (this “Agreement”) is executed as of October 8,
2019 (the “Effective Date”) by and between Good Times Restaurants Inc. (the
“Company”) and Boyd E. Hoback (“Hoback”). The Company and Hoback are each a
“Party,” and collectively are the “Parties,” to this Agreement.

 

WHEREAS, Hoback currently holds 119,605 shares of the common stock of the
Company, par value $0.001 (the “Common Stock”) and the other equity interests or
related rights described herein;

 

WHEREAS, Hoback desires to exercise all rights he has to acquire shares of
Common Stock and to obtain the right sell such shares of Common Stock as
described herein; and

 

WHEREAS, by its execution hereof, the Company authorizes and approves the grant
of an option and other rights and transactions as described herein.

 

NOW, THEREFORE, in consideration of the premises and mutual covenants herein,
the Parties agree as follows:

 

1.RSUs and Options. On the Effective Date:

 

a.The Parties agree that all unvested Restricted Stock Units granted to Hoback
under the Company’s 2008 Omnibus Equity Incentive Compensation Plan or its 2018
Omnibus Equity Incentive Compensation Plan (together, the “Incentive Plans”)
shall vest as of the Effective Date and that, in respect of all such newly
vested Restricted Stock Units, Hoback shall receive 40,697 shares of Common
Stock in settlement thereof; and

 

b.The Parties agree that all unvested stock options granted to Hoback under the
Plans shall vest as of the Effective Date.

 

c.Hoback is exercising, through a cashless exercise, all stock options he holds
to acquire shares, of Common Stock at an exercise price of less than $1.75 per
share, in exchange for 2,413 shares of Common Stock. For the avoidance of doubt,
all Incentive Stock Options and Non-qualified Stock Options Hoback holds having
an exercise price of more than $1.75 per share of Common Stock are fully vested
as of the date of this Agreement and the exercise prices and terms of such
Options are being kept in full force by the Company pursuant to their original
terms.

 

2.Option. Subject to the provisions of Section 8, the Company hereby grants
Hoback the right to sell to the Company up to 43,110 shares of Common Stock at a
price per share of $1.75 (the “Option”). The Option shall be exercised by
delivering written notice to the Company (x) indicating that Hoback intends to
exercise the Option, (y) number of shares which Hoback is then selling to the
Company and (z) reaffirming each of the representations set forth in Section 6
as if made as of the date of such notice, which notice must be received by the
Company no later than the close of business on January 3, 2020. If notice is not
timely delivered, the Option shall expire. The Option is non-transferable. The
Option may only be exercised in connection with one sale of shares Common Stock
to the Company at one time (i.e., it may not be exercised more than once). Upon
the exercise of the Option:

 

a.Hoback shall deliver any shares of Common Stock held in certificated form to
the Company with a fully executed stock power within 5 business days after the
date the Option is exercised. Hoback shall direct the Company’s transfer agent
to reflect the transfer of any shares of Common Stock held in electronic book
entry form to the Company within 2 business days after the Option is exercised.

 

 Repurchase Option Agreement – Page 1

 

 

b.The Company shall pay to Hoback by check or by wire transfer of immediately
available funds the price of $1.75 per share of Common Stock sold to the Company
under the Option within 3 business days after the Company’s receipt of the
shares being transferred. The Company may deduct and withhold from the amounts
otherwise payable pursuant to this Agreement such amounts as such party, as
applicable, determines in good faith that it is required to withhold or deduct
under the Internal Revenue Code of 1986, as amended, or any provision of
applicable state or local tax law with respect to the making of such payment.
Any such amounts so withheld by the Company shall be timely remitted to the
appropriate governmental entity and shall be treated for all purposes of this
Agreement as having been paid to Hoback.

 

3.No Further Equity Rights. As a result of the transactions described in Section
1 and the shares of Common Stock previously held by Hoback, the parties agree
that Hoback owns, beneficially or of record, (a) 162,715 shares of Common Stock
(“Owned Shares”) and (b) the options set forth on Exhibit A hereto (which are
subject to the exercise prices and expiration dates set forth thereupon), in
each case as of close of business on the Effective Date. Hoback agrees that,
except for the Owned Shares, the options set forth on Exhibit A, and for his
rights under that certain Separation Agreement, dated as of the date hereof by
and between Hoback and the Company, Hoback has no further equity or similar
interest in the Company, and hereby disclaims all other rights to any Common
Stock, restricted stock, other equity securities, options (whether issued under
the Incentive Plans or any other plan), Restricted Stock Units (whether issued
under an Incentive Plan or otherwise), phantom equity rights, bonus rights, or
any other rights to, or options to acquire or dispose of, any equity security or
compensation right based on the equity value of the Company.

 

4.Further Assurances. In connection with this Agreement and the transactions
contemplated hereby, each Party shall execute and deliver any additional
documents and instruments and perform any additional acts that may be necessary
or appropriate to effectuate and perform the provisions of this Agreement and
those transactions.

 

5.Approval. The Company hereby authorizes and approves the transactions
hereunder.

 

6.Hoback Representations. Hoback hereby represents as follows:

 

a.Hoback is a sophisticated party.

 

b.Hoback has full right, title and interest (legal and beneficial) in and to the
Equity Interests, free and clear of all liens, pledges, security interests,
charges, claims, equity or encumbrances of any kind. Upon paying for the Equity
Interests in accordance with this Agreement, The Company will acquire full
ownership of the Equity Interests, free and clear of all liens, pledges,
security interests, charges, claims, or encumbrances of any kind.

 

c.Hoback has had an opportunity to review with Hoback’s tax advisers the
federal, state, local and foreign tax consequences of the transactions
contemplated by this Agreement. Hoback understands that Hoback (and not the
Company) shall be responsible for Hoback’s tax liability and any related
interest or penalties that may arise as a result of the transactions
contemplated by this Agreement.

 

 Repurchase Option Agreement – Page 2

 

 

d.Hoback understands that there may be a disparity in the price being paid for
the Equity Interests hereunder and the price that may be achievable in sales on
the applicable public securities exchange and Hoback is proceeding with the
transactions hereunder notwithstanding such potential disparity in pricing.

 

7.Company Representations. The Company hereby represents as follows:

 

a.The Company is duly organized and validly existing under the laws of the state
of Nevada.

 

b.The Company has the absolute and unrestricted right, power, and authority to
enter into and perform its obligations under this Agreement.

 

c.Upon execution hereof by Hoback the execution, delivery and performance by the
Company of this Agreement has been duly authorized by all necessary action.

 

8.Lender Approval. The parties hereto acknowledge and agree that the credit
facilities to which the Company is a party may prohibit the Company’s repurchase
of shares of Common Stock pursuant to the Option. The Company shall use its best
efforts to cause such prohibition to be waived as promptly as possible and the
Company’s obligation to repurchase the shares shall continue until completed and
Hoback shall have the right to retract the repurchase option at any time if not
completed within 15 days of exercise of the Option

 

9.Satisfaction of Employment Agreement terms. Hoback agrees that this Agreement,
including the Option rights granted hereunder (subject to the limitations set
forth herein), are in full satisfaction of any rights of Hoback to require a
repurchase of his shares of Common Stock under Section 7(f) of his Employment
Agreement dated September 27, 2016 in connection with the termination of
Hoback’s employment with the Company, and that Hoback shall have no other rights
(and the Company shall have no other obligations) in respect of any required
purchase and sale of Company stock in connection with such termination of
employment.

 

10.Attorney’s Fees. Should one Party sue the other for a breach of this
Agreement, the prevailing Party shall be entitled to recover its reasonable
attorney’s fees, costs of court, and litigation expenses, in addition to any
other remedy.

 

11.Severability. If any provision or term of this Agreement is held to be
illegal, invalid, or unenforceable, such provision or term shall be fully
severable; this Agreement shall be construed and enforced as if such illegal,
invalid, or unenforceable provision or term had never comprised part of this
Agreement; and the remaining provisions and terms of this Agreement shall remain
in full force and effect.

 

12.Authority. Hoback expressly warrants and represents that Hoback: (i) is
legally competent and authorized to execute and consummate the terms of this
Agreement; (ii) is the sole legal owner of all right, title and interest in and
to the Equity Interests; and (iii) has full right and authority to enter into
this Agreement.

 

13.Successors and Assigns. This Agreement shall be binding upon and inure to the
benefit of the Parties and their respective heirs, administrators,
representatives, executors, successors and assigns, as applicable.

 

14.Amendment and Waiver. No term or condition of this Agreement shall be deemed
waived other than by a writing signed by the Party against whom the waiver is
sought. A Party's failure to insist upon the other Party's compliance with any
provision of this Agreement or to assert any right that a Party may have under
this Agreement shall not be deemed a waiver of that provision or that right. Any
written waiver shall operate only as to the specific term or condition waived.
No amendment or modification of this Agreement shall be deemed effective unless
stated in a writing signed by the Parties.

 

 Repurchase Option Agreement – Page 3

 

 

15.Entire Agreement. This Agreement constitutes the entire Agreement of the
Parties with regard to the subject matter of this Agreement, and supersedes all
prior and contemporaneous negotiations and agreements, oral or written, with
regard to the same subject matter.

 

16.NO RELIANCE. NO PARTY IS RELYING ON ANY REPRESENTATION OR STATEMENT OF THE
OTHER PARTY OUTSIDE OF THE TERMS OF THIS AGREEMENT; THE PARTIES HAVE ENTERED
INTO THIS AGREEMENT BASED EACH ON THEIR SEPARATE, INDEPENDENT JUDGMENT.

 

17.Governing Law and Venue. This Agreement shall be governed and construed in
accordance with the laws of the State of Colorado, unless preempted by federal
law or otherwise stated in this Agreement. EXCLUSIVE VENUE OF ANY DISPUTE
ARISING FROM OR RELATED TO THIS AGREEMENT SHALL BE DENVER, COLORADO.

 

18.Headings. The headings of this Agreement are for purposes of reference only
and shall not limit or define the meaning of the provisions of this Agreement.

 

19.Construction. The Parties were each fully represented by counsel in
negotiating this Agreement. The language of all parts of this Agreement shall in
all cases be construed as a whole, according to its fair meaning, and not
strictly for or against any Party. As used herein, the singular or plural number
shall be deemed to include the other whenever the context so indicates or
requires.

 

20.Counterparts. This Agreement may be executed in multiple originals and/or
counterparts, each of which shall be deemed an original for all purposes, but
all such counterparts together shall constitute one and the same instrument.

 

NOTICES – PLEASE READ CAREFULLY BEFORE SIGNING BELOW:

 

UNDERSTANDING OF AGREEMENT: HOBACK HAS CAREFULLY READ THIS AGREEMENT INCLUDING
ITS ADDENDA, AND INCLUDING THIS AND THE ABOVE NOTICES. HOBACK UNDERSTANDS AND
ACCEPTS THE TERMS OF THIS AGREEMENT. HOBACK SIGNS THIS AGREEMENT FREELY AND
VOLUNTARILY, BASED ON ITS EXPRESS TERMS.

 

 

 

 

 

 

 

THE SIGNATURE PAGE IS NEXT.

 

 Repurchase Option Agreement – Page 4

 

 

 

BY EXECUTION OF THIS AGREEMENT, HOBACK ACKNOWLEDGES RECEIPT AND REVIEW OF THE
ABOVE-WRITTEN NOTICES.

 

IN WITNESS WHEREOF, THE PARTIES, INTENDING TO BE LEGALLY BOUND BY THIS
AGREEMENT, HAVE DULY EXECUTED THIS AGREEMENT, AS OF THE DATES INDICATED BELOW:

 

 

 

COMPANY: GOOD TIMES RESTAURANTS INC.    

141 Union Blvd. # 400

Lakewood, CO 80228

 

By: [bailey_sig.jpg]    Name: Geoff Bailey   Title: Chairman of the Board  
Date: October 8, 2019                       EXECUTIVE:    

 

3058 Newton Street

Denver, CO 80228

[bhoback_sig.jpg]   

BOYD E. HOBACK

  Date: October 8, 2019

 

 Repurchase Option Agreement – Page 5

 

 

 

Exhibit A

 

Options

 

 

 

Options Exercise Price Expiration Date 4,550.6212 $3.45 November 6, 2019
45,696.0000 $2.31 January 2, 2023   44,000.0000 $2.48 November 21,2023
17,635.0000 $5.29 November 23, 2025 29,333.0000 $3.15 November 16, 2026
26,817.0000 $3.55 June 27, 2028 14,811.0000 $4.25 July 23, 2028 14,811.0000
$4.25 July 23, 2028 15,000.0000 $5.00 October 12, 2028 20,601.0000 $4.66
November 16, 2028

 

 

Repurchase Option Agreement – Page 6