-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, IPHXatYVZZ9sw5BGJFWsK4r+RDlt9ConAvTrYRkStWeewpnXFh1jCTKdExSNOzJF qR2peCGW8O+QTZ0cJ28Knw== 0000950142-98-000663.txt : 19980901 0000950142-98-000663.hdr.sgml : 19980901 ACCESSION NUMBER: 0000950142-98-000663 CONFORMED SUBMISSION TYPE: S-8 PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 19980831 EFFECTIVENESS DATE: 19980831 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: US FRANCHISE SYSTEMS INC CENTRAL INDEX KEY: 0001020350 STANDARD INDUSTRIAL CLASSIFICATION: HOTELS & MOTELS [7011] IRS NUMBER: 582190911 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-8 SEC ACT: SEC FILE NUMBER: 333-62519 FILM NUMBER: 98701174 BUSINESS ADDRESS: STREET 1: 13 CORPORATE SQUARE STREET 2: STE 250 CITY: ATLANTA STATE: GA ZIP: 30329 BUSINESS PHONE: 4043214045 MAIL ADDRESS: STREET 1: 13 CORPORATE SQUARE STREET 2: STE 250 CITY: ATLANTA STATE: GA ZIP: 30329 S-8 1 FORM S-8 As filed with the Securities and Exchange Commission on August 31, 1998 Registration No. 333-50707 ================================================================================ SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 POST-EFFECTIVE AMENDMENT NO. 1 TO FORM S-8 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 U.S. FRANCHISE SYSTEMS, INC. (Exact name of registrant as specified in its charter) DELAWARE 58-2361501 (State or other jurisdiction of (IRS Employer incorporation or organization) Identification No.) 13 Corporate Square, Suite 250 Atlanta, Georgia 30326 (404) 321-4045 (Address of Principal Executive Offices) (Zip Code) U.S. FRANCHISE SYSTEMS, INC. AMENDED AND RESTATED 1996 STOCK OPTION PLAN U.S. FRANCHISE SYSTEMS, INC. 1996 STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS (Full titles of the plans) Michael A. Leven Chairman, President and Chief Executive Officer U.S. Franchise Systems, Inc. 13 Corporate Square Atlanta, Georgia 30329 (404) 321-4045
CALCULATION OF REGISTRATION FEE Title of Each Class of Amount to be Proposed Maximum Offering Proposed Maximum Amount of Securities to be Registered Registered Price Per Share (1) Aggregate Offering Price (1) Registration Fee - ------------------------------ ----------------- ----------------------------- ------------------------------ ------------------- Class A Common Stock, par value $0.01 per share 400,000 (2) $6.16 $2,464,000 $726.88 - ------------------------------ ----------------- ----------------------------- ------------------------------ -------------------
(1) Estimated solely for the purpose of computing the registration fee in accordance with Rule 457(c) and 457(h) under the Securities Act of 1933, as amended (the "Securities Act"). The Proposed Maximum Offering Price was determined by averaging the high ($6.25) and low prices ($6.0625) of the Class A Common Stock, $.01 per share par value ("Class A Common Stock"), of U.S. Franchise Systems, Inc. ("USFS") as reported by the NASDAQ National Market System, the automated quotation system of the National Association of Securities Dealers, Inc. on August 26, 1998. (2) Consists of 400,000 shares of Class A Common Stock to be issued to certain employees, consultants, advisors and other persons whose skills would be an asset to U.S. Franchise Systems, Inc. or any of its subsidiaries upon the exercise by such persons of options granted to them pursuant to the U.S. Franchise Systems, Inc. Amended and Restated 1996 Stock Option Plan. Does not include 325,000 shares of Class A Common Stock to be issued pursuant to the U.S. Franchise Systems, Inc. Amended and Restated 1996 Stock Option Plan and 125,000 shares of Class A Common Stock to be issued pursuant to the U.S. Franchise Systems, Inc. 1996 Stock Option Plan for Non-Employee Directors previously registered under the Registrant's Registration Statement on Form S-8 (Registration No. 333-50707) (the "Registration Statement") for which a registration fee had previously been paid. This Post-Effective Amendment No. 1 registers an additional 400,000 shares of Class A Common Stock in accordance with Instruction E of Form S-8. ================================================================================ This Post-Effective Amendment No. 1 to the Registrant's Registration Statement on Form S-8 (Registration No. 333-50707) incorporates by reference the contents of such earlier Registration Statement. EXPLANATORY NOTE On April 22, 1998, U.S. Franchise Systems, Inc. (the "Registrant") filed Registration Statement No. 333-50707 on Form S-8 (the "Registration Statement"), which registered 325,000 shares of the Class A Common Stock, par value $.01, of the Registrant (the "Class A Common Stock") for issuance under the U.S. Franchise Systems, Inc. Amended and Restated 1996 Stock Option Plan (the "Option Plan") and 125,000 shares of Class A Common Stock for issuance under the U.S. Franchise Systems, Inc. 1996 Stock Option Plan for Non-Employee Directors (the "Directors Plan"). As part of an amendment and restatement of the Option Plan in June, 1998, the number of shares of Class A Common Stock covered by the Option Plan increased by 400,000. By this Post-Effective Amendment No. 1, the Registrant increases the number of shares registered under the Option Plan to 725,000 and, together with the Directors Plan, to a total of 850,000 shares of Class A Common Stock under both the Option Plan and the Directors Plan. PART II INFORMATION REQUIRED IN THE REGISTRATION STATEMENT Item 8. Exhibits Exhibits - -------- 4.1 -- Certificate of Incorporation of the Company, as amended (incorporated by reference from the Company's Registration Statement on Form S-4 (Registration No. 333-46185)). 4.2 -- By-laws of the Company (incorporated by reference from the Company's Registration Statement on Form S-4 (Registration No. 333-46185)). 4.3 -- U.S. Franchise Systems, Inc. Amended and Restated 1996 Stock Option Plan. 4.4 -- U.S. Franchise Systems, Inc. 1996 Stock Option Plan for Non-Employee Directors (incorporated by reference from the Company's Registration Statement on Form S-4 (Registration No. 333-46185)). 5.1 -- Opinion of Paul, Weiss, Rifkind, Wharton & Garrison, counsel to the Company, regarding the legality of the Class A Common Stock being registered. 23.1 -- Consent of Deloitte & Touche LLP. 23.2 -- Consent of Paul, Weiss, Rifkind, Wharton & Garrison (included in Exhibit 5). SIGNATURES Pursuant to the requirements of the Securities Act of 1933, as amended, 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 Atlanta, State of Georgia, on August 31, 1998. U.S. FRANCHISE SYSTEMS, INC. (Registrant) By: /s/ Michael A. Leven ------------------------ Michael A. Leven Chairman, President and Chief Executive Officer Pursuant to the requirements of the Securities Act of 1933, as amended, this registration statement has been signed by the following persons in the capacities and on the dates indicated: Signatures Title Date ---------- ----- ---- /s/ Michael A. Leven Chairman, President, Chief August 31, 1998 - -------------------- Executive Officer and Director Michael A. Leven (Principal Executive Officer) /s/ Neal K. Aronson Executive Vice President, Chief August 31, 1998 - -------------------- Financial Officer and Director Neal K. Aronson (Principal Financial and Accounting Officer) * Director August 31, 1998 - -------------------- Dean S. Adler * Director August 31, 1998 - -------------------- Irwin Chafetz * Director August 31, 1998 - -------------------- Douglas G. Geoga Signatures Title Date ---------- ----- ---- * Director August 31, 1998 - -------------------- Richard D. Goldstein * Director August 31, 1998 - -------------------- David Hamamoto * Executive Vice President - August 31, 1998 - -------------------- Franchise Sales and Steven Romaniello Development and Director * Director August 31, 1998 - -------------------- Jeffrey A. Sonnenfeld * Director August 31, 1998 - -------------------- Barry Sternlicht * By: /s/ Neal K. Aronson ----------------------- Neal K. Aronson ATTORNEY-IN-FACT INDEX TO EXHIBITS ----------------- Exhibits - -------- 4.1 -- Certificate of Incorporation of the Company, as amended (incorporated by reference from the Company's Registration Statement on Form S-4 (Registration No. 333-46185)). 4.2 -- By-laws of the Company (incorporated by reference from the Company's Registration Statement on Form S-4 (Registration No. 333-46185)). 4.3 -- U.S. Franchise Systems, Inc. Amended and Restated 1996 Stock Option Plan. 4.4 -- U.S. Franchise Systems, Inc. 1996 Stock Option Plan for Non-Employee Directors (incorporated by reference from the Company's Registration Statement on Form S-4 (Registration No. 333-46185)). 5.1 -- Opinion of Paul, Weiss, Rifkind, Wharton & Garrison, counsel to the Company, regarding the legality of the Class A Common Stock being registered. 23.1 -- Consent of Deloitte & Touche LLP. 23.2 -- Consent of Paul, Weiss, Rifkind, Wharton & Garrison (included in Exhibit 5). EX-4.3 2 EXHIBIT 4.3 Exhibit 4.3 U.S. FRANCHISE SYSTEMS, INC. AMENDED AND RESTATED 1996 STOCK OPTION PLAN SECTION 1. Purpose. The purposes of this U.S. Franchise Systems, Inc. 1996 Stock Option Plan are to promote the interests of U.S. Franchise Systems, Inc. ("USFS" or the "Company") and its stockholders by (i) attracting and retaining exceptional officers and other key employees of the Company and its Subsidiaries, and consultants, advisors and others whom the Committee determines possess skills that would be an asset to the Company or any of its Subsidiaries; (ii) motivating such individuals by means of performance-related incentives to achieve longer-range performance goals; and (iii) enabling such individuals to participate in the long-term growth and financial success of the Company. SECTION 2. Definitions. As used in the Plan, the following terms shall have the meanings set forth below: "Affiliate" shall mean (i) any entity that, directly or indirectly, is controlled by or controls the Company and (ii) any entity in which the Company has a significant equity interest, in either case as determined by the Committee. "Board" shall mean the Board of Directors of the Company. "Change of Control" shall mean the occurrence of any of the following: (i) the sale, lease, transfer, conveyance or other disposition, in one or a series of related transactions, of all or substantially all of the assets of the Company to any "person" or "group" (as such terms are used in Sections 13(d)(3) and 14(d)(2) of the Exchange Act) other than the Permitted Holders, (ii) any person or group, other than the Permitted Holders, is or becomes the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that a person shall be deemed to have "beneficial ownership" of all shares that any such person has the right to acquire, whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of more than 50% of the total voting power of the voting stock of the Company, including by way of merger, consolidation or otherwise or (iii) during any period of two consecutive years, individuals who at the beginning of such period constituted the Board (together with any new directors whose election by such Board or whose nomination for election by the stockholders of the Company was approved by a vote of a majority of the directors of the Company then still in office who were either directors at the beginning of such period or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of the Board. "Code" shall mean the Internal Revenue Code of 1986, as amended from time to time. "Committee" shall mean (i) a committee of the Board designated by the Board to administer the Plan and composed of not less two directors, each of whom is intended to be a "Non-Employee Director" (within the meaning of Rule 16b-3) and an "outside director" (within the meaning of Code section 162(m)) to the extent Rule 16b-3 and Code section 162(m), respectively, are applicable to the Company or (ii) if at any time such a committee has not been so designated by the Board, the Board or any authorized committee thereof. "Company" shall mean U.S. Franchise Systems, Inc., together with any successor thereto. 6 "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended. "Fair Market Value" shall mean, (A) with respect to any property other than Shares, the fair market value of such property determined by such methods or procedures as shall be established from time to time by the Committee and (B) with respect to the Shares, as of any date, (i) the mean between the high and low sales prices of the Shares as reported on the composite tape for securities traded on the New York Stock Exchange for such date (or if not then trading on the New York Stock Exchange, the mean between the high and low sales price of the Shares on the stock exchange or over-the-counter market on which the Shares are principally trading on such date), or if, there were no sales on such date, on the closest preceding date on which there were sales of Shares or (ii) in the event there shall be no public market for the Shares on such date, the fair market value of the Shares as determined in good faith by the Committee. "Incentive Stock Option" shall mean a right to purchase Shares from the Company that is granted under Section 6 of the Plan and that is intended to meet the requirements of Section 422 of the Code or any successor provision thereto. "Non-Qualified Stock Option" shall mean a right to purchase Shares from the Company that is granted under Section 6 of the Plan and that is not intended to be an Incentive Stock Option. "Option" shall mean an Incentive Stock Option or a Non-Qualified Stock Option. "Option Agreement" shall mean any written agreement, contract, or other instrument or document evidencing any Option, which may, but need not, be executed or acknowledged by a Participant. "Participant" shall mean any officer or other key employee (including any prospective officer or key employee) of the Company or its Subsidiaries, and any consultant, advisor or other person whom the Committee determines possesses skills that would be an asset to the Company or any of its Subsidiaries, in each case who is eligible for an Option under Section 5 and selected by the Committee to receive an Option under the Plan. "Permitted Holders" shall mean, as of the date of determination, any and all of Neal K. Aronson and Michael A. Leven, their spouses, their siblings and their siblings' spouses, their parents and descendants of any of them (whether natural or adopted) (collectively, the "Family Group") and (iii) any trust established and maintained primarily for the benefit of any member of the Family Group and any entity controlled by any member of the Family Group. "Person" shall mean any individual, corporation, partnership, association, joint-stock company, trust, unincorporated organization, government or political subdivision thereof or other entity. "Plan" shall mean this U.S. Franchise Systems, Inc. 1996 Stock Option Plan. "Rule 16b-3" shall mean Rule 16b-3 as promulgated and interpreted by the SEC under the Exchange Act, or any successor rule or regulation thereto as in effect from time to time. 7 "SEC" shall mean the Securities and Exchange Commission or any successor thereto and shall include the Staff thereof. "Shares" shall mean shares of the Class A Common Stock of the Company, $.01 par value, or such other securities of the Company (i) into which such common shares shall be changed by reason of a recapitalization, merger, consolidation, split-up, combination, exchange of shares or other similar transaction or (ii) as may be determined by the Committee pursuant to Section 4(b). "Subsidiary" shall mean (i) any entity that, directly or indirectly, is controlled by the Company and (ii) any entity in which the Company has a significant equity interest, in either case as determined by the Committee "Substitute Awards" shall have the meaning specified in Section 4(c). SECTION 3. Administration. (a) The Plan shall be administered by the Committee. Subject to the terms of the Plan and applicable law, and in addition to other express powers and authorizations conferred on the Committee by the Plan, the Committee shall have full power and authority to: (i) designate Participants; (ii) determine the type or types of Options to be granted to a Participant; (iii) determine the number of Shares to be covered by, or with respect to which payments, rights, or other matters are to be calculated in connection with, Options; (iv) determine the terms and conditions of any Option; (v) determine whether, to what extent, and under what circumstances Options may be settled or exercised in cash, Shares, other securities, or other property, or canceled, forfeited, or suspended and the method or methods by which Options may be settled, exercised, canceled, forfeited, or suspended; (vi) determine whether, to what extent, and under what circumstances cash, Shares, other securities, other property, and other amounts payable with respect to an Option shall be deferred either automatically or at the election of the holder thereof or of the Committee; (vii) interpret, administer reconcile any inconsistency, correct any default and/or supply any omission in the Plan and any instrument or agreement relating to, or Option made under, the Plan; (viii) establish, amend, suspend, or waive such rules and regulations and appoint such agents as it shall deem appropriate for the proper administration of the Plan; and (ix) make any other determination and take any other action that the Committee deems necessary or desirable for the administration of the Plan. (b) Unless otherwise expressly provided in the Plan, all designations, determinations, interpretations, and other decisions under or with respect to the Plan or any Option shall be within the sole discretion of the Committee, may be made at any time and shall be final, conclusive, and binding upon all Persons, including the Company, any Affiliate, any Participant, any holder or beneficiary of any Option, and any shareholder. (c) The mere fact that a Committee member shall fail to qualify as a "Non- Employee Director" or "outside director" within the meaning of Rule 16b-3 and Code section 162(m), respectively, shall not invalidate any Option granted by the Committee which Option is otherwise validly made under the Plan. (d) No member of the Committee shall be liable for any action or determination made in good faith with respect to the Plan or any Option granted hereunder. 8 SECTION 4. Shares Available for Options. (a) Shares Available. Subject to adjustment as provided in Section 4(b), the aggregate number of Shares with respect to which Options may be granted under the Plan shall be 725,000 and the maximum number of Shares with respect to which Options may be granted to any Participant in any fiscal year shall be 250,000. If, after the effective date of the Plan, any Shares covered by an Option granted under the Plan, or to which such an Option relates, are forfeited, or if an Option has expired, terminated or been canceled for any reason whatsoever (other than by reason of exercise or vesting) and in either such case a Participant has received no benefits of ownership with respect to the forfeited Shares or the Shares to which such expired, terminated or canceled Option relates (other than voting rights and dividends that were forfeited in connection with such forfeiture, expiration, termination or cancellation), then the Shares covered by such Option shall, to the maximum extent permitted under Section 162(m) of the Code during any period when Section 162(m) is applicable to the Company, again be, or shall become, Shares with respect to which Options may be granted hereunder. (b) Adjustments. In the event that the Committee determines that any dividend or other distribution (whether in the form of cash, Shares, other securities, or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase, or exchange of Shares or other securities of the Company, issuance of warrants or other rights to purchase Shares or other securities of the Company, or other similar corporate transaction or event affects the Shares such that an adjustment is determined by the Committee in its discretion to be appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan, then the Committee shall, in such manner as it may deem equitable, adjust any or all of (i) the number of Shares or other securities of the Company (or number and kind of other securities or property) with respect to which Options may be granted, (ii) the number of Shares or other securities of the Company (or number and kind of other securities or property) subject to outstanding Options, and (iii) the grant or exercise price with respect to any Option or, if deemed appropriate, make provision for a cash payment to the holder of an outstanding Option in consideration for the cancellation of such Option. (c) Substitute Awards. Options may, in the discretion of the Committee, be made under the Plan in assumption of, or in substitution for, outstanding awards previously granted by the Company or its Affiliates or a company acquired by the Company or with which the Company combines ("Substitute Awards"). The number of Shares underlying any Substitute Awards shall be counted against the aggregate number of Shares available for Options under the Plan. (d) Sources of Shares Deliverable Under Options. Any Shares delivered pursuant to an Option may consist, in whole or in part, of authorized and unissued Shares or of treasury Shares. SECTION 5. Eligibility. Any officer or other key employee of the Company or any of its Subsidiaries (including any prospective officer or key employee), and any consultant, advisor or other person whom the Committee determines possesses skills that would be an asset to the Company or any of its Subsidiaries, who is not a member of the Committee, shall be eligible to be designated a Participant. 9 SECTION 6. Stock Options. (a) Grant. Subject to the provisions of the Plan, the Committee shall have sole and complete authority to determine the Participants to whom Options shall be granted, the number of Shares to be covered by each Option, the exercise price therefor and the conditions and limitations applicable to the exercise of the Option. The Committee shall have the authority to grant Incentive Stock Options, or to grant Non-Qualified Stock Options, or to grant both types of Options. In the case of Incentive Stock Options, the terms and conditions of such grants shall be subject to and comply with such rules as may be prescribed by Section 422 of the Code, as from time to time amended, and any regulations implementing such statute. All Options when granted under the Plan are intended to be Non-Qualified Stock Options, unless the applicable Option Agreement expressly states that the Option is intended to be an Incentive Stock Option. If an Option is intended to be an Incentive Stock Option, and if for any reason such Option (or any portion thereof) shall not qualify as an Incentive Stock Option, then, to the extent of such nonqualification, such Option (or portion thereof) shall be regarded as a Non-Qualified Stock Option appropriately granted under the Plan; provided that such Option (or portion thereof) otherwise complies with the Plan's requirements relating to Non-Qualified Stock Options. (b) Exercise Price. The Committee shall establish the exercise price at the time each Option is granted, which exercise price shall be set forth in the applicable Option Agreement. (c) Exercise. Each Option shall be exercisable at such times and subject to such terms and conditions as the Committee may, in its sole discretion, specify in the applicable Option Agreement or thereafter. The Committee may impose such conditions with respect to the exercise of Options, including without limitation, any relating to the application of federal or state securities laws, as it may deem necessary or advisable; (d) Payment. No Shares shall be delivered pursuant to any exercise of an Option until payment in full of the aggregate exercise price therefor is received by the Company. Such payment may be made in cash, or its equivalent, or, if and to the extent permitted by the Committee, (i) by exchanging Shares owned by the optionee (which are not the subject of any pledge or other security interest and which have been owned by such optionee for at least six months) or (ii) if permitted by and subject to such rules as may be established by the Committee, through delivery of irrevocable instructions to a broker to sell such Shares and deliver promptly to the Company an amount equal to the aggregate exercise price, or by a combination of the foregoing, provided that the combined value of all cash and cash equivalents and the Fair Market Value of any such Shares so tendered to the Company as of the date of such tender is at least equal to such aggregate exercise price. SECTION 7. Amendment and Termination. (a) Amendments to the Plan. The Board may amend, alter, suspend, discontinue, or terminate the Plan or any portion thereof at any time; provided that no such amendment, alteration, suspension, discontinuation or termination shall be made without shareholder approval if such approval is necessary to comply with any tax or regulatory requirement, including for these purposes any approval requirement which is a prerequisite for exemptive relief from Section 16(b) of the Exchange Act or necessary to qualify the options granted hereunder as performance based compensation for purposes of Code Section 162(m) (provided that the 10 Company is subject to the requirements of Section 16 of the Exchange Act or Code Section 162(m), as the case may be, as of the date of such action). (b) Amendments to Options. The Committee may waive any conditions or rights under, amend any terms of, or alter, suspend, discontinue, cancel or terminate, any Option theretofore granted, prospectively or retroactively; provided that any such waiver, amendment, alteration, suspension, discontinuance, cancellation or termination that would impair the rights of any Participant or any holder or beneficiary of any Option theretofore granted shall not to that extent be effective without the consent of the affected Participant, holder or beneficiary. (c) Adjustment of Options Upon the Occurrence of Certain Unusual or Nonrecurring Events. The Committee is hereby authorized to make adjustments in the terms and conditions of, and the criteria included in, Options in recognition of unusual or nonrecurring events (including, without limitation, the events described in Section 4(b) hereof) affecting the Company, any Affiliate, or the financial statements of the Company or any Affiliate, or of changes in applicable laws, regulations, or accounting principles, whenever the Committee determines that such adjustments are appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan. SECTION 8. Change of Control. In the event of a Change of Control after the date of the adoption of this Plan, any outstanding Options then held by Participants which are unexercisable or otherwise unvested shall automatically be deemed exercisable or otherwise vested, as the case may be, as of immediately prior to such Change of Control. SECTION 9. General Provisions. (a) Nontransferability. Each Option and each right under any Option shall be exercisable only by the Participant during the Participant's lifetime, or, if permissible under applicable law, by the Participant's legal guardian or representative. No Option may be assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered by a Participant otherwise than by will or by the laws of descent and distribution and any such purported assignment, alienation, pledge, attachment, sale, transfer or encumbrance shall be void and unenforceable against the Company or any Affiliate; provided that the designation of a beneficiary shall not constitute an assignment, alienation, pledge, attachment, sale, transfer or encumbrance. (b) No Rights to Options. No Participant or other Person shall have any claim to be granted any Option, and there is no obligation for uniformity of treatment of Participants, or holders or beneficiaries of Options. The terms and conditions of Options and the Committee's determinations and interpretations with respect thereto need not be the same with respect to each Participant (whether or not such Participants are similarly situated). (c) Share Certificates. All certificates for Shares or other securities of the Company or any Affiliate delivered under the Plan pursuant to any Option or the exercise thereof shall be subject to such stop transfer orders and other restrictions as the Committee may deem advisable under the Plan or the rules, regulations, and other requirements of the Securities and Exchange Commission, any stock exchange upon which such Shares or other securities are then listed, and any applicable Federal or state laws, and the Committee may cause a legend or legends to be put on any such certificates to make appropriate reference to such restrictions. 11 (d) Withholding. A Participant may be required to pay to the Company or any Affiliate and the Company or any Affiliate shall have the right and is hereby authorized to withhold from any Option, from any payment due or transfer made under any Option or under the Plan or from any compensation or other amount owing to a Participant the amount (in cash, Shares, other securities, or other property) of any applicable withholding taxes in respect of an Option, its exercise, or any payment or transfer under an Option or under the Plan and to take such other action as may be necessary in the opinion of the Company to satisfy all obligations for the payment of such taxes. (e) Option Agreements. Each Option hereunder shall be evidenced by an Option Agreement which shall be delivered to the Participant and shall specify the terms and conditions of the Option and any rules applicable thereto, including but not limited to the effect on such Option of the death, disability or termination of employment or service of a Participant and the effect, if any, of such other events as may be determined by the Committee. (f) No Limit on Other Compensation Arrangements. Nothing contained in the Plan shall prevent the Company or any Affiliate from adopting or continuing in effect other compensation arrangements, which may, but need not, provide for the grant of options (subject to shareholder approval if such approval is required), and such arrangements may be either generally applicable or applicable only in specific cases. (g) No Right to Employment. The grant of an Option shall not be construed as giving a Participant the right to be retained in the employ of, or in any consulting relationship to, the Company or any Affiliate. Further, the Company or an Affiliate may at any time dismiss a Participant from employment or discontinue any consulting relationship, free from any liability or any claim under the Plan, unless otherwise expressly provided in the Plan or in any Option Agreement. (h) No Rights as Stockholder. Subject to the provisions of the applicable Option, no Participant or holder or beneficiary of any Option shall have any rights as a stockholder with respect to any Shares to be distributed under the Plan until he or she has become the holder of such Shares. (i) Governing Law. The validity, construction, and effect of the Plan and any rules and regulations relating to the Plan and any Option Agreement shall be determined in accordance with the laws of the State of Delaware. (j) Severability. If any provision of the Plan or any Option is or becomes or is deemed to be invalid, illegal, or unenforceable in any jurisdiction or as to any Person or Option, or would disqualify the Plan or any Option under any law deemed applicable by the Committee, such provision shall be construed or deemed amended to conform the applicable laws, or if it cannot be construed or deemed amended without, in the determination of the Committee, materially altering the intent of the Plan or the Option, such provision shall be stricken as to such jurisdiction, Person or Option and the remainder of the Plan and any such Option shall remain in full force and effect. (k) Other Laws. The Committee may refuse to issue or transfer any Shares or other consideration under an Option if, acting in its sole discretion, it determines that the issuance or transfer of such Shares or such other consideration might violate any applicable law or regulation or entitle the Company to recover the same under Section 16(b) of the Exchange 12 Act, and any payment tendered to the Company by a Participant, other holder or beneficiary in connection with the exercise of such Option shall be promptly refunded to the relevant Participant, holder or beneficiary. Without limiting the generality of the foregoing, no Option granted hereunder shall be construed as an offer to sell securities of the Company, and no such offer shall be outstanding, unless and until the Committee in its sole discretion has determined that any such offer, if made, would be in compliance with all applicable requirements of the U.S. federal and any other applicable securities laws. (l) No Trust or Fund Created. Neither the Plan nor any Option shall create or be construed to create a trust or separate fund of any kind or a fiduciary relationship between the Company or any Affiliate and a Participant or any other Person. To the extent that any Person acquires a right to receive payments from the Company or any Affiliate pursuant to an Option, such right shall be no greater than the right of any unsecured general creditor of the Company or any Affiliate. (m) No Fractional Shares. No fractional Shares shall be issued or delivered pursuant to the Plan or any Option, and the Committee shall determine whether cash, other securities, or other property shall be paid or transferred in lieu of any fractional Shares or whether such fractional Shares or any rights thereto shall be canceled, terminated, or otherwise eliminated. (n) Headings. Headings are given to the Sections and subsections of the Plan solely as a convenience to facilitate reference. Such headings shall not be deemed in any way material or relevant to the construction or interpretation of the Plan or any provision thereof. SECTION 16. Term of the Plan. (a) Effective Date. The Plan shall be effective as of the date of its approval by the shareholders of the Company. (b) Expiration Date. No Option shall be granted under the Plan after October 24, 2003. Unless otherwise expressly provided in the Plan or in an applicable Option Agreement, any Option granted hereunder may, and the authority of the Board or the Committee to amend, alter, adjust, suspend, discontinue, or terminate any such Option or to waive any conditions or rights under any such Option shall, continue after October 24, 2003. EX-5.1 3 EXHIBIT 5.1 Exhibit 5.1 August 31, 1998 U.S. Franchise Systems, Inc. 13 Corporate Square, Suite 250 Atlanta, Georgia 30329 Ladies and Gentlemen: In connection with the Post-Effective Amendment No. 1 to the Registration Statement on Form S-8 (the "Registration Statement") filed by U.S. Franchise Systems, Inc., a Delaware corporation (the "Company"), with the Securities and Exchange Commission pursuant to the Securities Act of 1933, as amended (the "Act"), and the rules and regulations promulgated thereunder (the "Rules"), which relates to an additional 400,000 shares (the "Option Shares") of Class A Common Stock, par value $.01 per share (the "Class A Common Stock"), of the Company to be issued pursuant to the U.S. Franchise Systems, Inc. Amended and Restated 1996 Stock Option Plan (the "Amended and Restated Option Plan"), we have been requested by the Company to render this opinion as to the legality of the Option Shares. In this connection, we have examined originals or copies certified or otherwise identified to our satisfaction, of (i) the Registration Statement, (ii) the Amended and Restated Option Plan, (iii) the Certificate of Incorporation and the By-laws of the Company, each as amended to date, and (iv) all such corporate records of the Company and all such other documents as we have considered necessary in order to form a basis for the opinion hereinafter expressed. In our examination of documents, we have assumed, without independent investigation, the genuineness of all signatures, the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as certified photostatic, reproduced or conformed copies of valid existing agreements or other documents, the authenticity of all such latter documents and the legal capacity of all individuals who have executed any of the aforesaid documents. As to certain matters of fact, we have relied on representations, statements or certificates of officers of the Company and of public authorities. Based on the foregoing, and subject to the assumptions, exceptions and qualifications stated herein, we are of the opinion that the Option Shares have been duly authorized for issuance and that such Option Shares, when issued and delivered by the Company and paid for in accordance with the terms and provisions of the Amended and Restated Option Plan, will be validly issued, fully paid and nonassessable. Our opinion expressed above is limited to the General Corporation Law of the State of Delaware. Our opinion is also rendered only with respect to the laws and the rules, regulations and orders thereunder, which are currently in effect. Please be advised that no member of this firm is admitted to practice in the State of Delaware. We hereby consent to the filing of this opinion as an exhibit to the Registration Statement. In giving this consent, we do not hereby agree that we come within the category of persons whose consent is required by the Act or the Rules. Very truly yours, /s/ Paul, Weiss, Rifkind, Wharton & Garrison -------------------------------------------- PAUL, WEISS, RIFKIND, WHARTON & GARRISON EX-23.1 4 EXHIBIT 23.1 Item 23.1 INDEPENDENT AUDITORS' CONSENT We consent to the incorporation by reference in this Post-Effective Amendment No. 1 to this Registration Statement of U.S. Franchise Systems, Inc. on Form S-8 of our report dated February 20, 1998 (April 28, 1998 as to Note 14), appearing in the Prospectus which is part of the Registration Statement relating to 4,250,000 shares of Class A Common Stock of U.S. Franchise Systems, Inc. (No. 333-50291) on Form S-3. /s/ Deloitte & Touche LLP - ------------------------- DELOITTE & TOUCHE LLP Atlanta, Georgia August 28, 1998 -----END PRIVACY-ENHANCED MESSAGE-----