Document:

exv10w2

 

EXHIBIT 10.2

TOTAL ENTERTAINMENT RESTAURANT CORP.

1997 DIRECTORS STOCK OPTION PLAN

ARTICLE I

PURPOSE

          The purpose of the Total Entertainment Restaurant Corp. 1997 Directors
Stock Option Plan (the “Plan”) is to secure for Total Entertainment Restaurant
Corp. and its stockholders the benefits arising from stock ownership by its
Directors. The Plan will provide a means whereby such Directors may purchase
shares of the common stock, $.01 par value, of Total Entertainment Restaurant
Corp. pursuant to options granted in accordance with the Plan.

ARTICLE II

DEFINITIONS

     The following capitalized terms used in the Plan shall have the respective
meanings set forth in this Article:

     2.1      “Board” shall mean the Board of Directors of Total Entertainment
Restaurant Corp.

     2.2      “Chairman” shall mean the duly appointed Chairman of any standing
Committee of the Board.

     2.3      “Committee” shall mean a duly appointed standing committee of the
Board.

     2.4      “Company” shall mean Total Entertainment Restaurant Corp. and any
of its subsidiaries.

     2.5      “Director” shall mean any person who is a member of the Board of
Directors of the Company.

     2.6      “Eligible Director” shall be any Director who is not a full or
part-time Employee of the Company.

     2.7      “Exercise Price” shall mean the price per Share at which an
Option may be exercised.

     2.8      “Fair Market Value” shall mean the closing sales price of a Share
as quoted on the National Association of Securities Dealers Automated Quotation
(“Nasdaq”) National Market System on the Grant Date or on the preceding date on
which such Shares are traded if no Shares were traded on such Grant Date. If
the Shares are not quoted on the Nasdaq National Market System, Fair Market
value shall be deemed to be the average of the high bid and asked prices of the
Shares on the over-the-counter market on the Grant Date, or the next preceding
date on which the last prices were recorded. With respect to Options granted on
or before the effective date of the Company’s initial public offering pursuant
to a Registration Statement on Form S-1, the Fair Market Value shall be deemed
to be the initial public offering price of the Shares.

     2.9      “Grant Date” shall mean the Initial Grant Date or any other date
that an Option shall be granted pursuant to the Plan as appropriate.

     2.10      “Initial Grant Date” shall mean with respect to each Eligible
Director the date such Eligible Director is first elected as a member of the
Board.

     2.11      “Option” shall mean an Option to purchase Shares granted pursuant
to the Plan.

     2.12      “Option Agreement” shall mean the written agreement described in
Article VI herein.

 

 

     2.13      “Permanent Disability” shall mean the condition of an Eligible
Director who is unable to participate as a member of the Board by reason of any
medically determined physical or mental impairment which can be expected to
result in death or which can be expected to last for a continuous period of not
less than twelve (12) months.

     2.14      “Purchase Price” shall be the Exercise Price multiplied by the
number of whole Shares with respect to which an Option may be exercised.

     2.15      “Shares” shall mean shares of common stock $.01 par value of the
Company.

     2.16      “Subsequent Grant Date” shall mean the anniversary date of the
appointment of an Eligible Director to the Board.

ARTICLE III

ADMINISTRATION

     3.1      General. This Plan shall be administered by the Board in
accordance with the express provisions of this Plan.

     3.2      Powers of the Board. The Board shall have full and complete
authority to adopt such rules and regulations and to make all such other
determinations not inconsistent with the Plan as may be necessary for the
administration of the Plan.

ARTICLE IV

SHARES SUBJECT TO PLAN

     Subject to adjustment in accordance with Article IX an aggregate of
150,000 Shares is reserved for issuance under this Plan. Shares sold under this
Plan may be either authorized, but unissued Shares or reacquired Shares. If an
Option, or any portion thereof, shall expire or terminate for any reason
without having been exercised in full, the unpurchased Shares covered by such
Option shall be available for future grants of Options.

ARTICLE V

GRANTS

     5.1      Initial Grants. On the Initial Grant Date, each Eligible Director
shall receive the grant of an option to purchase 10,000 Shares.

     5.2      Subsequent Grants. On each Subsequent Grant Date, each Eligible
Director shall receive the grant of an Option to purchase 3,000 Shares.

     5.3      Compliance With Rule 16b-3. The terms for the grant of Options to
an Eligible Director may only be changed if permitted under Rule 16b-3 of the
Securities Exchange Act of 1934, as amended, and accordingly the formula for
the grant of Options may not be changed or otherwise modified more than once in
any six month period.

ARTICLE VI

TERMS OF OPTION

     Each Option shall be evidenced by a written Option Agreement executed by
the Company and the Eligible Director which shall specify the Grant Date, the
number of Shares subject to the Option, the Exercise Price and shall also
include or incorporate by reference the substance of all of the following
provisions and such other provisions consistent with this Plan as the Board may
determine.

 

 

     6.1 Term. The term of the Option shall be five (5) years from the
Grant Date of each Option, subject to earlier termination in accordance with
Articles VI and X.

     6.2 Restriction on Exercise. Options shall be exercisable at such
time or times and subject to such terms and conditions as shall be determined
by the Committee at grant, provided, however, that except in the case of the
Eligible Director’s death or Permanent Disability, upon which events the Option
will become immediately exercisable, unless a longer vesting period is
otherwise determined by the Committee at grant, Options shall be exercisable as
follows: up to one-third of the aggregate Shares purchasable under an Option
shall be exercisable commencing one year after the Grant Date, an additional
one-third of the Shares purchasable under an Option shall be exercisable
commencing two years after the Grant Date and the balance commencing on the
third anniversary from the Grant Date. The Committee may waive such installment
exercise provision at any time in whole or in part based on performance and/or
such other factors as the Committee may determine in its sole discretion,
provided, however, that no Option shall be exercisable until more than six
months have elapsed from the Grant Date.

     6.3 Exercise Price. The Exercise Price for each Share subject to an
Option shall be the Fair Market Value of the Share as determined in Section 2.8
herein.

     6.4 Manner of Exercise. An Option shall be exercised in accordance
with its terms, by delivery of a written notice of exercise to the Company and
payment of the full purchase price of the Shares being purchased. An Eligible
Director may exercise an Option with respect to all or less than all of the
Shares for which the Option may then be exercised, but a Director must exercise
the Option in full Shares.

     6.5 Payment. The Purchase Price of Shares purchased pursuant to an
Option or portion thereof, may be paid:

          (a) in United States Dollars, in cash or by check, bank draft or money
order payable to the Company;

          (b) by delivery of Shares already owned by an Eligible Director with an
aggregate Fair Market Value on the date of exercise equal to the Purchase
Price, subject to the provisions of Section 16(b) of the Securities Exchange
Act of 1934;

          (c) through the written election of the Eligible Director to have Shares
withheld by the Company from the Shares otherwise to be received with such
withheld Shares having an aggregate Fair Market Value on the date of exercise
equal to the Purchase Price.

     6.6 Transferability of Options. No Option granted hereunder shall be
transferable otherwise than by (i) will, (ii) the laws of descent and
distribution or (iii) pursuant to a qualified domestic relations order as
defined by the Internal Revenue Code or Title 1 of the Employee Retirement
Income Security Act of 1986, as amended, or the rules and regulations
promulgated thereunder; provided however, that to the extent the option
agreement provisions do not disqualify such option for exemption under Rule
16b-3 under the Act of 1934, as amended, Options may be transferable during an
Optionee’s lifetime to immediate family members of an optionee, partnerships in
which the only partners are members of the Optionee’s immediate family, and
trusts established solely for the benefit of such immediate family members.

     6.7 Termination of Membership on the Board. If an Eligible Director’s
membership on the Board terminates for any reason, any vested Option held on
the date of termination may be exercised in whole or in part at any time within
one (1) year after the date of such termination (but in no event after the term
of the Option expires) and shall thereafter terminate.

 

 

ARTICLE VII

GOVERNMENT AND OTHER REGULATIONS

     7.1 Delivery of Shares. The obligation of the Company to issue or
transfer and deliver Shares for exercised Options under the Plan shall be
subject to all applicable laws, regulations, rules, orders and approvals which
shall then be in effect.

     7.2 Holding of Stock After Exercise of Option. The Option Agreement
shall provide that the Eligible Director, by accepting such Option, represents
and agrees, for the Eligible Director and his permitted transferees hereunder
that none of the Shares purchased upon exercise of the Option shall be acquired
with a view to any sale, transfer or distribution of the Shares in violation of
the Securities Act of 1933, as amended (the “Act”) and the person exercising an
Option shall furnish evidence satisfactory to that Company to that effect,
including an indemnification of the Company in the event of any violation of
the Act by such person. Notwithstanding the foregoing, the Company in its sole
discretion may register under the Act the Shares issuable upon exercise of the
Options under the Plan.

ARTICLE VIII

WITHHOLDING TAX

     The Company may in its discretion, require an Eligible Director to pay to
the Company, at the time of exercise of an Option an amount that the Company
deems necessary to satisfy its obligations to withhold federal, state or local
income or other taxes (which for purposes of this Article includes an Eligible
Director’s FICA obligation) incurred by reason of such exercise. When the
exercise of an Option does not give rise to the obligation to withhold federal
income taxes on the date of exercise, the Company may, in its discretion,
require an Eligible Director to place Shares purchased under the Option in
escrow for the benefit of the Company until such time as federal income tax
withholding is required on amounts included in the Eligible Director’s gross
income as a result of the exercise of an Option. At such time, the Company, in
its discretion, may
require an Eligible Director to pay to the Company an amount that the Company
deems necessary to satisfy its obligation to withhold federal, state or local
taxes incurred by reason of the exercise of the Option, in which case the
Shares will be released from escrow upon such payment by an Eligible Director.

ARTICLE IX

ADJUSTMENTS

     9.1 Proportionate Adjustments. If the outstanding Shares are
increased, decreased, changed into or exchanged into a different number or kind
of Shares or securities of the Company through reorganization,
recapitalization, reclassification, stock dividend, stock split, reverse stock
split or other similar transaction, an appropriate and proportionate adjustment
shall be made to the maximum number and kind of Shares as to which Options may
be granted under this Plan. A corresponding adjustment changing the number or
kind of Shares allocated to unexercised Options or portions thereof, which
shall have been granted prior to any such change, shall likewise be made. Any
such adjustment in the outstanding Options shall be made without change in the
Purchase Price applicable to the unexercised portion of the Option with a
corresponding adjustment in the Exercise Price of the Shares covered by the
Option. Notwithstanding the foregoing, there shall be no adjustment for the
issuance of Shares on conversion of notes, preferred stock or exercise of
warrants or Shares issued by the Board for such consideration as the Board
deems appropriate.

     9.2 Dissolution or Liquidation. Upon the dissolution or liquidation
of the Company, or upon a reorganization, merger or consolidation of the
Company with one or more corporations as a result of which the Company is not
the surviving corporation, or upon a sale of substantially all of the property
or more than 80% of the then outstanding Shares of the Company to another
corporation, the Company shall give to each Eligible Director at the time of
adoption of the plan for liquidation, dissolution, merger or sale either (1) a
reasonable time thereafter within which to exercise the Option prior to the
effective date of such liquidation or dissolution, merger or sale, or (2) the
right to exercise the Option as to an equivalent number of Shares of stock of
the corporation succeeding the Company or acquiring its business by reason of
such liquidation, dissolution, merger, consolidation or reorganization.

 

 

ARTICLE X

AMENDMENT OR TERMINATION OF PLAN

     10.1 Amendments. The Board may at any time amend or revise the terms
of the Plan, provided no such amendment or revision shall, unless appropriate
stockholder approval of such amendment or revision is obtained:

          (a) increase the maximum number of Shares which may be sold pursuant to
Options granted under the Plan, except as permitted under the provisions of
Article IX;

          (b) change the minimum Exercise Price set forth in Article VI;

          (c) increase the maximum term of Options provided for in Article VI; or

          (d) permit the granting of Options to any one other than as provided in
Article V.

     10.2 Termination. The Board at any time may suspend or terminate this
Plan. This Plan, unless sooner terminated, shall terminate on the tenth (10th)
anniversary of its adoption by the Board. No Option may be granted under this
Plan while this Plan is suspended or after it is terminated.

     10.3 Holder of Consent. No amendment, suspension or termination of the
Plan shall, without the consent of the holder of Options, alter or impair any
rights or obligations under any Option theretofore granted under the Plan.

ARTICLE XI

MISCELLANEOUS PROVISIONS

     11.1 Privilege of Stock Ownership. No Eligible Director entitled to
exercise any Option granted under the Plan shall have any of the rights or
privileges of a stockholder of the Company with respect to any Shares issuable
upon exercise of an Option until certificates representing the Shares shall
have been issued and delivered.

     11.2 Plan Expenses. Any expenses incurred in the administration of the
Plan shall be borne by the Company.

     11.3 Use of Proceeds. Payments received from an Eligible Director upon
the exercise of Options shall be used for general corporate purposes of the
Company.

     11.4 Governing Law. The Plan has been adopted under the laws of the
State of Delaware. The Plan and all Options which may be granted hereunder and
all matters related thereto, shall be governed by and construed and enforceable
in accordance with the laws of the State of Delaware as it then exists.

ARTICLE XII

STOCKHOLDER APPROVAL

     This Plan is subject to approval at a duly held stockholders’ meeting
within twelve (12) months after the date the Board approves this Plan, by the
affirmative vote of holders of a majority of the voting Shares of the Company
represented in person or by proxy and entitled to vote at the meeting. Options
may be granted, but not exercised, before such stockholder approval. If the
stockholders fail to approve the Plan within the required time period, any
Options granted under this Plan shall be void, and no additional Options may
thereafter be granted.

 

 

FIRST AMENDMENT

TO

TOTAL ENTERTAINMENT RESTAURANT CORP.

1997 DIRECTORS STOCK OPTION PLAN

     1.      The first sentence of Article IV of the Total Entertainment Restaurant
Corp. 1997 Directors Stock Option Plan (the “Plan”), is hereby amended by
replacing it with the following sentence:

	 	 	Subject to adjustment in accordance with Article IX
hereof, an aggregate of 400,000 Shares of Common
Stock, $0.01 par value (“Stock”) of the Company shall
be subject to the Plan.

     2.      Except as modified by Paragraph 1 above, the Plan shall remain in full
force and effect.

     3.      The foregoing First Amendment to the Total Entertainment Restaurant
Corp. 1997 Directors Stock Option Plan was duly adopted by the Board of
Directors of Total Entertainment Restaurant Corp. (the “Company”) on January
10, 2002, and approved by the Company’’ stockholders at the Company’s annual
stockholder meeting on May 17, 2002.exv10w2w2

 

EXHIBIT 10.2.2

SECOND AMENDMENT

TO

TOTAL ENTERTAINMENT RESTAURANT CORP.

1997 DIRECTORS STOCK OPTION PLAN

     1. Section 5.2 of Article V of the Total Entertainment Restaurant Corp.
1997 Directors Stock Option Plan, as amended by that certain First Amendment
dated January 14, 1999 (the “Plan”), is hereby amended by deleting it in its
entirety and replacing it with the following sentence:

     5.2 Subsequent Grants. On April 30, 2003 through
April 30, 2005, each Eligible Director shall receive
Option grants as follows:

April 30, 2003 – Each Eligible Director shall
receive a grant to purchase shares equal to
the greater of 1) $91,667 divided by the Fair
Market Value or 2) 7,500 shares.

April 30, 2004 – Each Eligible Director shall
receive a grant to purchase shares equal to
the greater of 1) $100,833 divided by the
Fair Market Value or 2) 7,500 shares.

April 30, 2005 – Each Eligible Director shall
receive a grant to purchase shares equal to
the greater of 1) $110,917 divided by the
Fair Market Value or 2) 7,500 shares.

     2. Except as modified by Paragraph 1 above, the Plan shall remain in full
force and effect.

     3. The foregoing Second Amendment to the Total Entertainment Restaurant
Corp. 1997 Directors Stock Option Plan was duly adopted by the Board of
Directors of Total Entertainment Restaurant Corp. (the “Company”) on April 10,
2002.

	 	 	 
	

	 	/s/ Steven M. Johnson

	

	 	Steven M. Johnson, CEO

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