1
Exhibit 99(b)
UNO RESTAURANT CORPORATION
1997 NON-QUALIFIED STOCK OPTION PLAN
FOR NON-EMPLOYEE DIRECTORS
1. Purpose. The purpose of this 1997 Non-Qualified Stock Option Plan for
Non-Employee Directors is to attract and retain the services of experienced and
knowledgeable independent directors of the Corporation for the benefit of the
Corporation and its stockholders and to provide additional incentives for such
independent directors to continue to work for the best interests of the
Corporation and its stockholders through continuing ownership of its common
stock.
2. Definitions. As used herein, each of the following terms has the
indicated meaning:
"Board" means the Board of Directors of the Corporation.
"Corporation" means Uno Restaurant Corporation.
"Fair Market Value" means the closing sale price quoted on the New York
Stock Exchange or such other national securities exchange or the Nasdaq National
Market on which the Shares may be traded on the date of the granting of the
Option, or if the Shares are not then traded on such exchanges or market, as
reasonably determined by the Board.
"Option" means the contractual right to purchase Shares upon the specific
terms set forth in this Plan.
"Option Exercise Period" means the period commencing one (1) year after
the date of grant of an Option pursuant to this Plan, or at such earlier time as
may be provided in Section 6(d) of this Plan as a result of a Change of Control,
and ending ten years from the date of grant.
"Plan" means this Uno Restaurant Corporation 1997 Non-Qualified Stock
Option Plan for Non-Employee Directors.
"Shares" means the Common Stock, $.01 par value, of the Corporation.
"Subsidiary" means any corporation in an unbroken chain of corporations
beginning with the Corporation if, at the time of grant of the Option, each of
the corporations other than the last in the unbroken chain owns stock possessing
50% or more of the total combined voting power of all classes of stock in one of
the other corporations in such chain.
3. Stock Subject to the Plan. The aggregate number of Shares that may be
issued and sold under the Plan shall be 75,000. The Shares to be issued upon
exercise of Options granted under this Plan shall be made available, at the
discretion of the Board of Directors, from (i) treasury Shares and Shares
reacquired by the Corporation for such purposes, including Shares purchased in
the open market, (ii) authorized but unissued Shares, and (iii) Shares
previously reserved for issuance upon exercise of Options which have expired or
been terminated. If any Option granted under this Plan shall expire or terminate
for any reason without having been exercised in full, the unpurchased Shares
covered thereby shall become available for grant under additional Options under
the Plan so long as it shall remain in effect.
4. Administration of the Plan. The Plan shall be administered by the
Board. The Board shall, subject to the provisions of the Plan, grant options
under the Plan and shall have the power to construe the Plan, to determine all
questions as to eligibility, and to adopt and amend such rules and regulations
for the administration of the Plan as it may deem desirable.
II-19
2
5. Eligibility; Grant of Option. An Option to purchase 5,000 shares shall
be granted to each current director of the Corporation or of a Subsidiary who is
not otherwise an employee of the Corporation or any Subsidiary (each a
"Non-Employee Director") as of the date of the adoption of the Plan by the
Board, subject to the subsequent approval by the stockholders of the Corporation
pursuant to Section 11(a). In addition, each year immediately following the
Company's annual meeting of stockholders at which one or more directors are
elected, each then Non-Employee Director shall be granted an Option to purchase
1,156 Shares.
6. Terms of Options and Limitations Thereon.
(a) Option Agreement. Each Option granted under this Plan shall be
evidenced by an Option agreement between the Corporation and the Option
holder and shall be upon such terms and conditions not inconsistent with
this Plan as the Board may determine.
(b) Price. The price at which any Shares may be purchased pursuant to
the exercise of an Option shall be the Fair Market Value of the Shares on
the date of grant, but in no event shall the price be less than the par
value of the Shares.
(c) Exercise of Option. Subject to Section 4 of this Plan, each
Option granted under this Plan may be exercised in full at one time or in
part from time to time only during the Option Exercise Period by the giving
of written notice, signed by the person or persons exercising the Option,
to the Corporation stating the numbers of Shares with respect to which the
Option is being exercised, accompanied by full payment for such Shares
pursuant to Section 7(a) hereof; provided however, (i) if a person to whom
an Option has been granted ceases to be a Non-Employee Director during the
Option Exercise Period by reason of retirement, death or any reasons other
than termination for cause, such Option shall be exercisable by him or her
or by the executors, administrators, legatees or distributees of his or her
estate until the earlier of (A) the end of the Option Exercise Period or
(B) 36 months following his or her retirement or death or the date on which
he or she ceased to be a Non-Employee Director; and (ii) if a person to
whom an Option has been granted ceases to be a Non-Employee Director of the
Corporation by reason of termination for cause, such Option shall terminate
as of the date such person ceased to be a Non-Employee Director.
Termination for cause shall be defined as termination on account of (i)
fraud or intentional misrepresentation, (ii) embezzlement, misappropriation
or conversion of assets or opportunities of the Corporation or any
Subsidiary, (iii) deliberate dishonesty significantly detrimental to the
best interests of the Corporation or any Subsidiary, (iv) conduct by the
Option holder constituting an act of moral turpitude, or (v) willful
disloyalty to the Corporation or any Subsidiary.
(d) Acceleration in Event of Change of Control. Notwithstanding any
other provision of the Plan to the contrary, in the event of a Change of
Control, if an Option is not yet exercisable pursuant to the definition of
Option Exercise Period as set forth in Section 2, the Option shall become
fully exercisable to the full extent of the original grant.
(e) Change of Control. For purposes of this Plan, "Change of Control"
shall mean:
(i) the beneficial ownership interest (as determined in accordance
with Rule 13d-3 promulgated under the Securities and Exchange Act of
1934, as amended (hereafter "the Exchange Act")) on the part of Aaron D.
Spencer is reduced below 15% of the outstanding Shares; or
(ii) the death of Mr. Spencer, or the physical or mental incapacity
of Mr. Spencer as a result of which voting or investment control over
Mr. Spencer's Shares is transferred to a guardian, conservator or
attorney-in-fact under a power of attorney; or
II-20
3
(iii) a transaction with respect to the Corporation is of a nature
that would be required to be reported (assuming such event has not been
"previously reported") in response to item 1(a) of the Current Report on
Form 8-K, as in effect on the date hereof, pursuant to Section 13 or
15(d) of the Exchange Act; or
(iv) a person (as that term is used in Sections 13(d) and 14(d)(2)
of the Exchange Act), other than a trustee or other fiduciary holding
securities under an employee benefit plan of the Corporation, is or
becomes the beneficial owner (as that term is used in Rule 13d-3 of the
Exchange Act), directly or indirectly, of 35% or more of the voting
securities of the Corporation; or
(v) during any period of two consecutive years, individuals who at
the beginning of any such two-year period constitute the Board of
Directors of the Corporation ("Incumbent Board"), cease for any reason
to constitute at least a majority thereof, provided however, that any
person becoming a director of the Corporation after the beginning of the
period whose election was approved by a vote of at least 2/3 of the
directors comprising the Incumbent Board shall, for purposes hereof, be
considered as though he or she were a member of the Incumbent Board; or
(vi) the sale of all or substantially all of the assets of the
Corporation; or
(vii) a change in control of the Corporation of a nature that would
be required to be reported in response to item 6(e) of Schedule 14A of
Regulation 14A, as in effect on the date hereof, promulgated under the
Exchange Act.
(f) Non-Assignability. No Option or right or interest in an Option
shall be assignable or transferable by the holder except by will or the
laws of descent and distribution and during the lifetime of the holder
shall be exercisable only by him or her.
7. Payment.
(a) The purchase price of Shares upon exercise of an Option shall be
paid by the Option holder in full upon exercise and may be paid (i) in cash
or by check payable to the order of the Corporation, (ii) by delivery of
Shares, or (iii) any combination of cash and Shares (valued at their Fair
Market Value on the date of such exercise), including by way of so-called
"cashless exercise" and the netting of the number of Shares issuable upon
exercise against that number of Shares subject to the Option having an
aggregate Fair Market Value equal to the purchase price, as the Board may
determine, in its sole discretion.
(b) No Shares shall be issued or transferred upon exercise of any
Option under this Plan unless and until all legal requirements applicable
to the issuance or transfer of such Shares and such other requirements as
are consistent with the Plan have been complied with to the satisfaction of
the Board, including without limitation those described in Section 10
hereof.
8. Stock Adjustments.
(a) If the Corporation is a party to any merger or consolidation, any
purchase or acquisition of property or stock, or any separation,
reorganization or liquidation, the Board (or, if the Corporation is not the
surviving corporation, the board of directors of the surviving corporation)
shall have the power to make arrangements, which shall be binding upon the
holders of unexpired Options, for the substitution of new options for, or
the assumption by another corporation of, any unexpired Options then
outstanding hereunder.
(b) If by reason of recapitalization, reclassification, stock
split-up, combination of shares, separation (including a spin-off) or
dividend on the stock payable in Shares, the outstanding Shares of the
Corporation are increased or decreased or changed into or exchanged for a
different number or kind of
II-21
4
shares or other securities of the Corporation, the Board shall conclusively
determine the appropriate adjustment in the exercise prices of outstanding
Options and in the number and kind of shares as to which outstanding
Options shall be exercisable.
(c) In the event of a transaction of the type described in paragraphs
(a) and (b) above, the total number of Shares on which Options may be
granted under this Plan shall be appropriately adjusted by the Board.
9. No Rights Other Than Those Expressly Created. No person affiliated
with the Corporation or any Subsidiary or other person shall have any claim or
right to be granted an Option hereunder. Neither this Plan nor any action taken
hereunder shall be construed as (i) giving any Option holder any right to
continue to be affiliated with the Corporation, (ii) giving any Option holder
any equity or interest of any kind in any assets of the Corporation, or (iii)
creating a trust of any kind or a fiduciary relationship of any kind between the
Corporation and any such person. No Option holder shall have any of the rights
of a stockholder with respect to Shares covered by an Option until such time as
the Option has been exercised and Shares have been issued to such person.
10. Miscellaneous.
(a) Withholding of Taxes. Pursuant to applicable federal, state,
local or foreign laws, the Corporation may be required to collect income or
other taxes upon the grant of an Option to, or exercise of an Option by, a
holder. The Corporation may require, as a condition to the exercise of an
Option, that the recipient pay the Corporation, at such time as the Board
determines, the amount of any taxes which the Board may determine is
required to be withheld.
(b) Securities Law Compliance. Upon exercise of an Option, the holder
shall be required to make such representations and furnish such information
as may, in the opinion of counsel for the Corporation, be appropriate to
permit the Corporation to issue or transfer the Shares in compliance with
the provisions of applicable federal or state securities laws. The
Corporation, in its discretion, may postpone the issuance and delivery of
Shares upon any exercise of an Option until completion of such registration
or other qualification of such Shares under any federal or state laws, or
stock exchange listing, as the Corporation may consider appropriate. The
Corporation is not obligated to register or qualify the Shares under
federal or state securities laws and may refuse to issue such Shares if
neither registration nor exemption therefrom is practical. The Board may
require that prior to the issuance or transfer of any Shares upon exercise
of an Option, the recipient enter into a written agreement to comply with
any restrictions on subsequent disposition that the Board or the
Corporation deems necessary or advisable under any applicable federal and
state securities laws. Certificates representing the Shares issued
hereunder may be legended to reflect such restrictions.
(c) Indemnity. The Board shall not be liable for any act, omission,
interpretation, construction or determination made in good faith in
connection with their responsibilities with respect to the Plan, and the
Corporation hereby agrees to indemnify the members of the Board, in respect
of any claim, loss, damage, or expense (including counsel fees) arising
from any such act, omission, interpretation, construction or determination
to the full extent permitted by law.
(d) Options Not Deemed Incentive Stock Options. Options granted under
the Plan shall not be deemed incentive stock options as that term is
defined in Section 422A of the Internal Revenue Code of 1986, as amended
(the "Internal Revenue Code").
II-22
5
11. Effective Date; Amendment; Termination.
(a) The effective date of this Plan shall be the date of approval by
the Board, subject to the approval of stockholders of the Corporation
holding at least a majority of the voting stock of the Corporation present
or represented and entitled to vote at a meeting of the stockholders.
(b) The date of grant of any Option granted hereunder shall be the
date upon which such Option shall be voted by the Board, unless the vote
expressly otherwise provides.
(c) The Board may at any time, and from time to time, amend, suspend
or terminate this Plan in whole or in part, provided, however, that the
provisions of this Plan relating to the amount and price of securities to
be awarded and the timing of such awards may not be amended more than once
every six months, other than to comport with changes in the Internal
Revenue Code, the Employee Retirement Income Security Act, or the rules
thereunder. However, except as provided herein, no amendment, suspension or
termination of this Plan may affect the rights of any person to whom an
Option has been granted without such person's consent.
(d) This Plan shall terminate ten years from its effective date, and
no Option shall be granted under this Plan thereafter, but such termination
shall not affect the validity of Options granted prior to the date of
termination.
II-23