-----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, Oca+bLlvq/r3D0xc7rqVm4PFEO4Lglyvn4rmkJEqvXzeaQ4zma4HjVlA9RJZhDDI u0PnxWNK9JMc/YI/9AFwhA== 0001012870-98-000509.txt : 19980220 0001012870-98-000509.hdr.sgml : 19980220 ACCESSION NUMBER: 0001012870-98-000509 CONFORMED SUBMISSION TYPE: S-8 PUBLIC DOCUMENT COUNT: 8 FILED AS OF DATE: 19980219 EFFECTIVENESS DATE: 19980219 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: BARBEQUES GALORE LTD CENTRAL INDEX KEY: 0001047326 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-EATING PLACES [5812] IRS NUMBER: 000000000 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-8 SEC ACT: SEC FILE NUMBER: 333-46529 FILM NUMBER: 98545112 BUSINESS ADDRESS: STREET 1: 15041 STREET 2: BAKE PARKWAY #A CITY: IRVINE STATE: CA ZIP: 92718 BUSINESS PHONE: 7145972400 MAIL ADDRESS: STREET 1: 15041 BAKE PARKWAY A CITY: IRVINE STATE: CA ZIP: 92718 S-8 1 FORM S-8 As filed with the Securities and Exchange Commission on February 19, 1998 Registration No. 333-_______________ =============================================================================== SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ----------------------- FORM S-8 REGISTRATION STATEMENT Under The Securities Act of 1933 ----------------------- BARBEQUES GALORE LIMITED (Exact name of registrant as specified in its charter) AUSTRALIAN CAPITAL TERRITORY, AUSTRALIA NOT APPLICABLE (State or other jurisdiction (IRS Employer Identification No.) of incorporation or organization) 327 CHISHOLM ROAD, AUBURN, SYDNEY, NSW 2144, AUSTRALIA (Address of principal executive offices) (Zip code) ------------------------ BARBEQUES GALORE LIMITED 1997 SHARE OPTION PLAN (Full title of the Plans) ----------------------- SYDNEY SELATI BARBEQUES GALORE LIMITED 15041 BAKE PARKWAY #A IRVINE, CALIFORNIA 92718 (Name and address of agent for service) (714) 597-2400 (Telephone number, including area code, of agent for service) ------------------------ CALCULATION OF REGISTRATION FEE
========================================================================================== Proposed Proposed Title of Amount Maximum Maximum Amount of Securities to be to be Offering Price Aggregate Registration Registered(1) Registered(2) per Share(3) Offering Price(3) Fee - ------------------------ ------------ -------------- ---------------- ------------ Options to Purchase Ordinary Shares 329,254 N/A N/A N/A Ordinary Shares 329,254 shares $6.59 $2,169,783.86 $640.09 ==========================================================================================
(1) American Depository Shares which may be issued with respect to Ordinary Shares registered hereunder have been registered on a separate registration statement on Form F-6 (File No. 333-07726). (2) This Registration Statement shall also cover any additional Ordinary Shares which become issuable under the 1997 Share Option Plan by reason of any bonus issue, recapitalization or other similar transaction effected without the receipt of consideration which results in an increase in the number of the Registrant's outstanding Ordinary Shares. (3) Calculated solely for purposes of this offering under Rule 457(h) of the Securities Act of 1933, as amended, on the basis of the average of the high and low selling prices per American Depository Shares evidencing one Ordinary Share of Barbeques Galore Limited on February 17, 1998 as reported by the Nasdaq National Market. PART II INFORMATION REQUIRED IN THE REGISTRATION STATEMENT Item 3. Incorporation of Documents by Reference --------------------------------------- Barbeques Galore Limited (the "Registrant") hereby incorporates by reference into this Registration Statement the following documents previously filed with the Securities and Exchange Commission (the "SEC"): (a) The Registrant's prospectus filed with the SEC pursuant to Rule 424(b) of the Securities Act of 1933, as amended (the "1933 Act"), in connection with the Registration Statement Number 333-37259 on Form F- 1, together with the amendments thereto, filed with the SEC on October 6, 1997, in which there is set forth audited financial statements of the Registrant; and (b) The Registrant's Report of Foreign Issuer on Form 6-K, file number 333-37259, for the fiscal quarter ended October 31, 1997, as filed with the SEC on December 16, 1997; (c) The Registrant's Registration Statement No. 00-029512 on Form 8-A filed with the SEC on October 23, 1997 pursuant to Section 12 of the Securities Act of 1934 (the "1934 Act"), in which there is described the terms, rights and provisions applicable to the Registrant's outstanding Ordinary Shares. All reports and definitive proxy or information statements filed pursuant to Section 13(a), 13(c), 14 or 15(d) of the 1934 Act after the date of this Registration Statement and prior to the filing of a post-effective amendment which indicates that all securities offered hereby have been sold or which deregisters all securities then remaining unsold shall be deemed to be incorporated by reference into this Registration Statement and to be a part hereof from the date of filing of such documents. Any statement contained in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Registration Statement to the extent that a statement contained herein or in any subsequently filed document which also is deemed to be incorporated by reference herein modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Registration Statement. 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's Memorandum and Articles of Association provide that subject to the laws of Australia, every Director or other officer shall be entitled to be indemnified by the Registrant against all losses or liabilities incurred by him in the execution and discharge of his duties, or in relation thereto, including any liability in defending any proceedings, civil or criminal, which relate to anything done or omitted or alleged to have been done or omitted by him as an officer or employee of the Registrant and (i) in which judgment is given in his favor, (ii) in which he is acquitted or (iii) in connection with an application in relation to such proceedings in which the court grants relief to the person under the Corporations Law. The Underwriting Agreement will contain provisions indemnifying officers and directors of the Registrant against certain liabilities. The Registrant's Memorandum and Articles of Association further provide that no director or other officer shall be liable, except in the case of his own negligence, default, breach of duty or breach of trust, for (i) the acts or omissions of any other director or officer, (ii) joining in any act for conformity, (iii) losses due to inadequacy of title to property or securities acquired on behalf of the Registrant, (iv) losses due to insolvency or tortious acts of persons with whom monies, property or securities are deposited or (v) losses due to errors of judgment, omissions or oversights. The Registrant maintains a policy of directors' and officers' liability insurance with an Australian insurer for the Registrant and all subsidiaries protecting against all losses for which directors and officers are not otherwise indemnified by the Registrant. Such insurance has a A$5 million policy limit and excludes (i) fines and penalties imposed by law, (ii) claims made by entities owning 10% or more of the outstanding Ordinary Shares of the Registrant, (iii) claims based on pollution, bodily injury, property damage or loss, insider trading, the receipt of illegal or improper benefit, deliberately fraudulent acts or omissions or violation of fiduciary duties with respect to pension or benefit plans, (iv) certain insured versus insured actions and, specifically in the United States and Canada, (v) claims relating to violations of securities laws or the Employee Retirement Income Security Act of 1974 (ERISA) or any similar federal, state or local law. Prior to the consummation of the Offering, the Company intends to obtain a policy of directors' and officers' liability insurance that will insure United States directors and officers against the cost of defense, settlement or payment of a judgment under certain circumstances, including certain violations of the securities laws. Item 7. Exemption from Registration Claimed ----------------------------------- Not Applicable. Item 8. Exhibits -------- Exhibit Number Exhibit - -------------- ------- 4 Instruments Defining the Rights of Shareholders. Reference is made to Registrant's Registration Statement No. 00-029512 on Form 8-A which is incorporated herein by reference pursuant to Item 3(c). 5 Opinion and Consent of Freehill, Hollingdale & Page. 23.1 Consent of Horwath Sydney Partnership. 23.2 Consent of KPMG. 23.3 Consent of Freehill, Hollingdale & Page is contained in Exhibit 5. 24 Power of Attorney. Reference is made to page II-4 of this Registration Statement. 99.1 1997 Share Option Plan. 99.2 Form of Notice of Grant under the 1997 Share Option Plan. 99.3 Stock Option Agreement under the 1997 Share Option Plan. 99.4 Addendum to Stock Option Agreement under the 1997 Share Option Plan. 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, as amended (the "1933 Act"), (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, and (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 clauses -------- (1)(i) and (1)(ii) shall not apply if the information required II-2 to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed by the Registrant pursuant to Section 13 or Section 15(d) of the 1934 Act that are incorporated by reference into the Registration Statement; (2) that for the purpose of determining any liability under the 1933 Act, 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; and (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 1997 Share Option Plan. B. The undersigned Registrant hereby undertakes that, for purposes of determining any liability under the 1933 Act, each filing of the Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the 1934 Act that is incorporated by reference into 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 1933 Act may be permitted to directors, officers or controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been informed that, in the opinion of the SEC, such indemnification is against public policy as expressed in the 1933 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 1933 Act, and will be governed by the final adjudication of such issue. II-3 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 Sydney, Australia on this 18th day of February, 1998. BARBEQUES GALORE LIMITED By: /s/ Robert Gavshon _______________________________________ Robert Gavshon Deputy Chairman of the Board and General Counsel POWER OF ATTORNEY ----------------- KNOW ALL MEN BY THESE PRESENTS: That the undersigned officers and directors of Barbeques Galore Limited, an Australia corporation, do hereby constitute and appoint Robert Gavshon and Sydney Selati, or either of them, each with the power of substitution, the lawful attorneys and agents, with full power and authority to do any and all acts and things and to execute any and all instruments which said attorneys and agents, and any one of them, determine may be necessary or advisable or required to enable said corporation to comply with the Securities Act of 1933, as amended, and any rules or regulations or requirements of the Securities and Exchange Commission in connection with this Registration Statement. Without limiting the generality of the foregoing power and authority, the powers granted include the power and authority to sign the names of the undersigned officers and directors in the capacities indicated below to this Registration Statement, to any and all amendments, both pre-effective and post-effective, and supplements to this Registration Statement, and to any and all instruments or documents filed as part of or in conjunction with this Registration Statement or amendments or supplements thereof, and each of the undersigned hereby ratifies and confirms all that said attorneys and agents, or any of them, shall do or cause to be done by virtue hereof. This Power of Attorney may be signed in several counterparts. IN WITNESS WHEREOF, each of the undersigned has executed this Power of Attorney as of the date indicated. Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed below by the following persons in the capacities and on the dates indicated.
Signatures Title Date - ---------- ----- ---- /s/ Sam Linz Chairman of the Board February 18, 1998 - ------------------- (Principal Sam Linz Executive Officer)
II-4 /s/ Robert Gavshon Deputy Chairman of the Board February 18, 1998 - ------------------ and General Counsel Robert Gavshon /s/ John Price Head of Research and Product February 18, 1998 - ------------------- Development and Director John Price /s/ Sydney Selati President of Galore USA February 18, 1998 - ------------------ and Director (Authorized Sydney Selati U.S. Representative) /s/ Philip Gardiner Director February 18, 1998 - ------------------- Philip Gardiner /s/ Gordon Howlett Director February 18, 1998 - ------------------- Gordon Howlett /s/ David James Chief Financial Officer February 18, 1998 - ------------------- (Principal Financial and David James Accounting Officer)
II-5 EXHIBIT INDEX ------------- Exhibit Number Exhibit ------ ------- 4 Instruments Defining the Rights of Shareholders. Reference is made to Registrant's Registration Statement No. 00-029512 on Form 8-A which is incorporated herein by reference pursuant to Item 3(c). 5 Opinion and Consent of Freehill, Hollingdale & Page. 23.1 Consent of Horwath Sydney Partnership. 23.2 Consent of KPMG. 23.3 Consent of Freehill, Hollingdale & Page is contained in Exhibit 5. 24 Power of Attorney. Reference is made to page II-4 of this Registration Statement. 99.1 1997 Share Option Plan. 99.2 Form of Notice of Grant under the 1997 Share Option Plan. 99.3 Stock Option Agreement under the 1997 Share Option Plan. 99.4 Addendum to Stock Option Agreement under the 1997 Share Option Plan. EX-5 2 OPINION AND CONSENT OF FREEHILL, HOLLINGDALE & PAGE EXHIBIT 5 [Letterhead of Freehill Hollingdale & Page] 10 February 1998 Our ref Rick Narev Phone 02 9225 5604 File no 1811824 Doc no SYDCP\98174045.3 Barbeques Galore Limited 327 Chisholm Road AUBURN NSW 2144 AUSTRALIA Ladies and Gentlemen REGISTRATION STATEMENT ON FORM S-8 We have examined the Registration Statement on Form S-8 to be filed by you with the Securities and Exchange Commission on the date hereof (the REGISTRATION STATEMENT), in connection with the registration under the Securities Act of 1933, as amended (the ACT), of 329,254 ordinary shares, of Barbeques Galore Limited, a corporation registered under the national Corporations Law of Australia (the COMPANY) issuable under the Company's 1997 Share Option Plan (the 1997 PLAN). We have examined a copy of the Memorandum and Articles of Association of the Company, as amended, certified as true copies by the company secretary of the Company on 6 October 1997. We have assumed that there have been no amendments to the Memorandum and Articles of Association subsequent to the certification by the company secretary on 6 October 1997. In our examination, we have assumed the genuineness of all signatures, the authenticity of all documents presented to us as copies of originals, the conformity to the originals of all documents presented to us as copies, the authenticity of the originals of such latter documents and that there have not been, nor will there by any other actions of the Company, its directors, shareholders or creditors or of any other person or body or authority, governmental or non-governmental which alters, supersedes or overrides the effect on their face of the Memorandum and Articles of Association. Based upon the foregoing, we are of the opinion that, as a matter of Australian law, and assuming that upon valid exercise of any options the board of directors resolves to issue the relevant shares in accordance with the Articles of Association of the Company, and that the authorised capital of the Company is sufficient at that time, then when such shares have been issued and sold pursuant to the applicable provisions of the 1997 Plan and in accordance with the Registration Statement, such shares will be validly issued, fully paid and non-assessable ordinary shares of the Company. This opinion may be relied upon exclusively by you, and may not be relied upon by any other person without our prior written consent. This opinion is confined to matters of Australian law only. In particular, we are not qualified to, nor do we express any opinion on the effectiveness of any action under, nor as to any question of compliance with, any United States Federal or state law or requirement of any regulatory body. We consent to the use of this opinion as an exhibit to the Registration Statement and further consent to the use of our name whenever appearing in the Registration Statement and any amendment thereto. In giving this consent, we do not thereby admit that we are within the category of persons whose consent is required by Section 7 of the Act or the rules and regulations of the Securities and Exchange Commissioner thereunder. Yours faithfully FREEHILL HOLLINGDALE & PAGE /s/ Rick Narev - ----------------------- RICK NAREV Partner EX-23.1 3 CONSENT OF HORWATH SYDNEY PARTNERSHIP EXHIBIT 23.1 CONSENT OF HORWATH SYDNEY PARTNERSHIP Barbeques Galore Limited 15041 Bake Parkway #A Irvine, CA 92718 USA Re: Barbeques Galore Limited (the "Company") S-8 Registration Statement for Offering of an Aggregate of 329,254 Ordinary Shares ------------------------------------------------------------------ Ladies and Gentlemen: We consent to the incorporation by reference in this Registration of Barbeques Galore Limited on Form S-8 of our audit report dated August 8, 1997 appearing in Registration Statement No. 333-37259 on Form F-1 of Barbeques Galore Limited. HORWATH SYDNEY PARTNERSHIP /s/ Horwath Sydney Partnership - --------------------------------------- February 18, 1998 Sydney, Australia EX-23.2 4 CONSENT OF KPMG EXHIBIT 23.2 [LETTERHEAD OF KPMG APPEARS HERE] INDEPENDENT AUDITORS' CONSENT The Board of Directors Barbeques Galore Limited We consent to the incorporation by reference in this Registration Statement on Form S-8 of Barbeques Galore Limited of our audit report dated August 8, 1997 relating to the consolidated balance sheet of Barbeques Galore Limited and subsidiaries as of January 31, 1997, the related consolidated statement of operations, shareholders' equity and cash flows for the seven month period ended January 31, 1997 which report appears in the Registration Statement No. 333-37259 on Form F-1 of Barbeques Galore Limited. KPMG February 18, 1998 Sydney, Australia EX-99.1 5 1997 SHARE OPTION PLAN EXHIBIT 99.1 BARBEQUES GALORE LIMITED ACN 008 577 759 1997 SHARE OPTION PLAN ---------------------- ARTICLE ONE GENERAL PROVISIONS ------------------ I. PURPOSE OF THE PLAN This 1997 Share Option Plan is intended to promote the interests of Barbeques Galore Limited, a corporation organized under the laws of New South Wales, Australia, by providing eligible persons with the opportunity to acquire a proprietary interest, or otherwise increase their proprietary interest, in the Corporation as an incentive for them to remain in the service of the Corporation. Capitalized terms shall have the meanings assigned to such terms in the attached Appendix. II. ADMINISTRATION OF THE PLAN A. The Plan shall be administered by the Board. However, any or all administrative functions otherwise exercisable by the Board may be delegated to the Committee. Members of the Committee shall serve for such period of time as the Board may determine and shall be subject to removal by the Board at any time. The Board may also at any time terminate the functions of the Committee and reassume all powers and authority previously delegated to the Committee. B. The Plan Administrator shall have full power and authority (subject to the provisions of the Plan) to establish such rules and regulations as it may deem appropriate for proper administration of the Plan and to make such determinations under, and issue such interpretations of, the Plan and any outstanding options as it may deem necessary or advisable. Decisions of the Plan Administrator shall be final and binding on all parties who have an interest in the Plan or any option or shares issued thereunder. III. ELIGIBILITY A. The persons eligible to participate in the Plan are as follows: (i) Employees, (ii) non-employee members of the Board or the board of directors of any Parent or Subsidiary, and (iii) consultants and other independent advisors who provide services to the Corporation (or any Parent or Subsidiary). B. The Plan Administrator shall have full authority (subject to the provisions of the Plan) to determine, (i) which eligible persons are to receive option grants, the time or times when such option grants are to be made, the number of shares to be covered by each such grant, the status of the granted option as either an Incentive Option or a Non-Statutory Option, the time or times at which each option is to become exercisable, the vesting schedule (if any) applicable to the option shares and the maximum term for which the option is to remain outstanding. C. The Plan Administrator shall have the absolute discretion to grant options in accordance with the Plan. IV. STOCK SUBJECT TO THE PLAN A. The maximum number of Ordinary Shares which may be issued over the term of the Plan shall initially not exceed 329,254/1/ shares. Such authorized share reserve shall be drawn from the Corporation's authorized but unissued Ordinary Shares. B. The number of Ordinary Shares available for issuance under the Plan shall automatically increase on the first trading day of each calendar year during the term of the Plan, beginning with the 1999 calendar year, by an amount equal to one percent (1%) of the Ordinary Shares outstanding on December 31 of the immediately preceding calendar year. No Incentive Options may be granted on the basis of the additional Ordinary Shares resulting from such annual increases. C. No one person participating in the Plan may receive options and separately exercisable stock appreciation rights for more than 27,438/1/ -- Ordinary Shares in the aggregate per calendar year, beginning with the 1997 calendar year. D. Ordinary Shares subject to outstanding options shall be available for subsequent issuance under the Plan to the extent (i) the options expire or terminate for any reason prior to exercise in full or (ii) the options are cancelled in accordance with the cancellation-regrant provisions of Article Two. All Ordinary Shares issued under the Plan shall reduce on a share-for-share basis the number of Ordinary Shares available for subsequent issuance under the Plan. E. Should any change be made to the Ordinary Shares by reason of any stock split, stock dividend, recapitalization, combination of shares, exchange of shares or other change affecting the outstanding Ordinary Shares as a class without the Corporation's receipt of - ----------------- /1/ Reflects the 1-to-18.223 reverse split of the Ordinary Shares approved by the Board on October 1, 1997, subject to shareholder approval. 2. consideration, appropriate adjustments shall be made to (i) the maximum number and/or class of securities issuable under the Plan, (ii) the number and/or class of securities for which any one person may be granted stock options under this Plan per calendar year and (iii) the number and/or class of securities and the exercise price per share in effect under each outstanding option in order to prevent the dilution or enlargement of benefits thereunder. The adjustments determined by the Plan Administrator shall be final, binding and conclusive. 3. ARTICLE TWO OPTION GRANT PROGRAM -------------------- I. OPTION TERMS Each option shall be evidenced by one or more documents in the form approved by the Plan Administrator; provided, however, that each such document -------- shall comply with the terms specified below. Each document evidencing an Incentive Option shall, in addition, be subject to the provisions of the Plan applicable to such options. A. Exercise Price. -------------- 1. The exercise price per share shall be fixed by the Plan Administrator but shall not be less than eighty-five percent (85%) of the Fair Market Value per Ordinary Share on the option grant date. 2. The exercise price shall become immediately due upon exercise of the option and shall, subject to the provisions of Section I of Article Three and the documents evidencing the option, be payable in one or more of the forms specified below: (i) cash or check made payable to the Corporation, (ii) Ordinary Shares held for the requisite period necessary to avoid a charge to the Corporation's earnings for financial reporting purposes and valued at Fair Market Value on the Exercise Date, or (iii) to the extent the option is exercised for vested shares, through a special sale and remittance procedure pursuant to which the Optionee shall concurrently provide irrevocable written instructions to (a) a Corporation-designated brokerage firm to effect the immediate sale of the purchased shares and remit to the Corporation, out of the sale proceeds available on the settlement date, sufficient funds to cover the aggregate exercise price payable for the purchased shares plus all applicable Federal, state, local and foreign income and employment taxes required to be withheld by the Corporation by reason of such exercise and (b) the Corporation to deliver the certificates for the purchased shares directly to such brokerage firm in order to complete the sale. Except to the extent such sale and remittance procedure is utilized, payment of the exercise price for the purchased shares must be made on the Exercise Date. 4. B. Exercise and Term of Options. Each option shall be exercisable at ---------------------------- such time or times, during such period and for such number of shares as shall be determined by the Plan Administrator and set forth in the documents evidencing the option. However, no option shall have a term in excess of ten (10) years measured from the option grant date. C. Effect of Termination of Service. -------------------------------- 1. The following provisions shall govern the exercise of any options held by the Optionee at the time of cessation of Service or death: (i) Any option outstanding at the time of the Optionee's cessation of Service for any reason shall remain exercisable for such period of time thereafter as shall be determined by the Plan Administrator and set forth in the documents evidencing the option, but no such option shall be exercisable after the expiration of the option term. (ii) Any option exercisable in whole or in part by the Optionee at the time of death may be exercised subsequently by the personal representative of the Optionee's estate or by the person or persons to whom the option is transferred pursuant to the Optionee's will or in accordance with the laws of descent and distribution. (iii) During the applicable post-Service exercise period, the option may not be exercised in the aggregate for more than the number of vested shares for which the option is exercisable on the date of the Optionee's cessation of Service. Upon the expiration of the applicable exercise period or (if earlier) upon the expiration of the option term, the option shall terminate and cease to be outstanding for any vested shares for which the option has not been exercised. However, the option shall, immediately upon the Optionee's cessation of Service, terminate and cease to be outstanding to the extent the option is not otherwise at that time exercisable for vested shares. (iv) Should the Optionee's Service be terminated for Misconduct, then all outstanding options held by the Optionee shall terminate immediately and cease to be outstanding. (v) In the event of an Involuntary Termination following a Corporate Transaction, the provisions of Section III of this Article Two shall govern the period for which the outstanding options are to remain exercisable following the Optionee's cessation of Service and shall supersede any provisions to the contrary in this section. 5. 2. The Plan Administrator shall have the discretion, exercisable either at the time an option is granted or at any time while the option remains outstanding, to: (i) extend the period of time for which the option is to remain exercisable following the Optionee's cessation of Service from the period otherwise in effect for that option to such greater period of time as the Plan Administrator shall deem appropriate, but in no event beyond the expiration of the option term, and/or (ii) permit the option to be exercised, during the applicable post-Service exercise period, not only with respect to the number of vested Ordinary Shares for which such option is exercisable at the time of the Optionee's cessation of Service but also with respect to one or more additional installments in which the Optionee would have vested under the option had the Optionee continued in Service. D. Shareholder Rights. The holder of an option shall have no ------------------ shareholder rights with respect to the shares subject to the option until such person shall have exercised the option, paid the exercise price and become a holder of record of the purchased shares. E. Repurchase Rights. The Plan Administrator shall have the ----------------- discretion to grant options which are exercisable for unvested Ordinary Shares. Should the Optionee cease Service while holding such unvested shares, the Corporation shall, subject to limitations imposed under Australian law, have the right to repurchase, at the exercise price paid per share, any or all of those unvested shares. The terms upon which such repurchase right shall be exercisable (including the period and procedure for exercise and the appropriate vesting schedule for the purchased shares) shall be established by the Plan Administrator and set forth in the document evidencing such repurchase right. F. Limited Transferability of Options. During the lifetime of the ---------------------------------- Optionee, Incentive Options shall be exercisable only by the Optionee and shall not be assignable or transferable other than by will or by the laws of descent and distribution following the Optionee's death. However, a Non-Statutory Option may, in connection with the Optionee's estate plan, be assigned in whole or in part during the Optionee's lifetime to one or more members of the Optionee's immediate family or to a trust established exclusively for one or more such family members. The assigned portion may only be exercised by the person or persons who acquire a proprietary interest in the option pursuant to the assignment. The terms applicable to the assigned portion shall be the same as those in effect for the option immediately prior to such assignment and shall be set forth in such documents issued to the assignee as the Plan Administrator may deem appropriate. 6. II. INCENTIVE OPTIONS The terms specified below shall be applicable to all Incentive Options. Except as modified by the provisions of this Section II, all the provisions of Articles One, Two and Three shall be applicable to Incentive Options. Options which are specifically designated as Non-Statutory Options when issued under the Plan shall not be subject to the terms of this Section II. --- A. Eligibility. Incentive Options may only be granted to Employees. ----------- B. Exercise Price. The exercise price per share shall not be less -------------- than one hundred percent (100%) of the Fair Market Value per Ordinary Share on the option grant date. C. U.S. Dollar Limitation. The aggregate Fair Market Value of the ---------------------- Ordinary Shares (determined as of the respective date or dates of grant) for which one or more options granted to any Employee under the Plan (or any other option plan of the Corporation or any Parent or Subsidiary) may for the first time become exercisable as Incentive Options during any one (1) calendar year shall not exceed the sum of One Hundred Thousand U.S. Dollars (US$100,000). To the extent the Employee holds two (2) or more such options which become exercisable for the first time in the same calendar year, the foregoing limitation on the exercisability of such options as Incentive Options shall be applied on the basis of the order in which such options are granted. D. 10% Shareholder. If any Employee to whom an Incentive Option is --------------- granted is a 10% Shareholder, then the exercise price per share shall not be less than one hundred ten percent (110%) of the Fair Market Value per Ordinary Share on the option grant date, and the option term shall not exceed five (5) years measured from the option grant date. III. CORPORATE TRANSACTION/CHANGE IN CONTROL A. In the event of any Corporate Transaction, each outstanding option shall automatically accelerate so that each such option shall, immediately prior to the effective date of the Corporate Transaction, become fully exercisable for all of the Ordinary Shares at the time subject to such option and may be exercised for any or all of those shares as fully-vested Ordinary shares. However, an outstanding option shall not so accelerate if and to the extent: (i) such option is, in connection with the Corporate Transaction, either to be assumed by the successor corporation (or parent thereof) or to be replaced with a comparable option to purchase shares of the capital stock of the successor corporation (or parent thereof), (ii) such option is to be replaced with a cash incentive program of the successor corporation which preserves the spread existing on the unvested option shares at the time of the Corporate Transaction and provides for subsequent payout in accordance with the same vesting schedule applicable to such 7. option or (iii) the acceleration of such option is subject to other limitations imposed by the Plan Administrator at the time of the option grant. The determination of option comparability under clause (i) above shall be made by the Plan Administrator, and its determination shall be final, binding and conclusive. B. All outstanding repurchase rights shall also terminate automatically, and the Ordinary Shares subject to those terminated rights shall immediately vest in full, in the event of any Corporate Transaction, except to the extent: (i) those repurchase rights are to be assigned to the successor corporation (or parent thereof) in connection with such Corporate Transaction or (ii) such accelerated vesting is precluded by other limitations imposed by the Plan Administrator at the time the repurchase right is issued. C. The Plan Administrator shall have the discretion, exercisable either at the time the option is granted or at any time while the option remains outstanding, to provide for the automatic acceleration of one or more outstanding options (and the automatic termination of one or more outstanding repurchase rights with the immediate vesting of the Ordinary Shares subject to those rights) upon the occurrence of a Corporate Transaction, whether or not those options are to be assumed or replaced (or those repurchase rights are to be assigned) in the Corporate Transaction. The Plan Administrator shall also have the discretion to grant options which do not accelerate whether or not such options are assumed (and to provide for repurchase rights that do not terminate whether or not such rights are assigned) in connection with a Corporate Transaction. D. Immediately following the consummation of the Corporate Transaction, all outstanding options shall terminate and cease to be outstanding, except to the extent assumed by the successor corporation (or parent thereof). E. Each option which is assumed in connection with a Corporate Transaction shall be appropriately adjusted, immediately after such Corporate Transaction, to apply to the number and class of securities which would have been issuable to the Optionee in consummation of such Corporate Transaction had the option been exercised immediately prior to such Corporate Transaction. Appropriate adjustments shall also be made to (i) the number and class of securities available for issuance under the Plan following the consummation of such Corporate Transaction, (ii) the exercise price payable per share under each outstanding option, provided the aggregate exercise price payable for such -------- securities shall remain the same and (iii) the maximum number of securities and/or class of securities for which any one person may be granted stock options, and separately exercisable stock appreciation rights under the Plan per calendar year. F. Any options which are assumed or replaced in the Corporate Transaction and do not otherwise accelerate at that time shall automatically accelerate (and any of the Corporation's outstanding repurchase rights which do not otherwise terminate at the time of the Corporate Transaction shall automatically terminate and the Ordinary Shares subject to those terminated rights shall immediately vest in full) in the event the Optionee's Service should 8. subsequently terminate by reason of an Involuntary Termination within eighteen (18) months following the effective date of such Corporate Transaction. Any options so accelerated shall remain exercisable for fully-vested shares until the earlier of (i) the expiration of the option term or (ii) the expiration of ------- the one (1)-year period measured from the effective date of the Involuntary Termination. G. The Plan Administrator shall have the discretion, exercisable either at the time the option is granted or at any time while the option remains outstanding, to (i) provide for the automatic acceleration of one or more outstanding options (and the automatic termination of one or more outstanding repurchase rights with the immediate vesting of the Ordinary Shares subject to those rights) upon the occurrence of a Change in Control or (ii) condition any such option acceleration (and the termination of any outstanding repurchase rights) upon the subsequent Involuntary Termination of the Optionee's Service within a specified period following the effective date of such Change in Control. Any options accelerated in connection with a Change in Control shall remain fully exercisable until the expiration or sooner termination of the option term. H. The portion of any Incentive Option accelerated in connection with a Corporate Transaction or Change in Control shall remain exercisable as an Incentive Option only to the extent the applicable One Hundred Thousand U.S. Dollar (US$100,000) limitation is not exceeded. To the extent such dollar limitation is exceeded, the accelerated portion of such option shall be exercisable as a Non-Statutory Option under the Federal tax laws. I. The grant of options under the Option Grant Program shall in no way affect the right of the Corporation to adjust, reclassify, reorganize or otherwise change its capital or business structure or to merge, consolidate, dissolve, liquidate or sell or transfer all or any part of its business or assets. IV. CANCELLATION AND REGRANT OF OPTIONS The Plan Administrator shall have the authority to effect, at any time and from time to time, with the consent of the affected option holders, the cancellation of any or all outstanding options under the Option Grant Program and to grant in substitution new options covering the same or different number of Ordinary Shares but with an exercise price per share based on the Fair Market Value per Ordinary Share on the new grant date. V. STOCK APPRECIATION RIGHTS A. The Plan Administrator shall have full power and authority to grant to selected Optionees tandem stock appreciation rights. 9. B. One or more Optionees may be granted the right, exercisable upon such terms as the Plan Administrator may establish, to elect between the exercise of the underlying option for Ordinary Shares and the surrender of that option in exchange for a distribution from the Corporation in an amount equal to the excess of (a) the Fair Market Value (on the option surrender date) of the number of shares in which the Optionee is at the time vested under the surrendered option (or surrendered portion thereof) over (b) the aggregate exercise price payable for such shares. C. No such option surrender shall be effective unless it is approved by the Plan Administrator. If the surrender is so approved, then the distribution to which the Optionee shall be entitled may be made in Ordinary Shares valued at Fair Market Value on the option surrender date, in cash, or partly in shares and partly in cash, as the Plan Administrator shall in its sole discretion deem appropriate. D. If the surrender of an option is rejected by the Plan Administrator, then the Optionee shall retain whatever rights the Optionee had under the surrendered option (or surrendered portion thereof) on the option surrender date and may exercise such rights at any time prior to the later of ----- (a) five (5) business days after the receipt of the rejection notice or (b) the last day on which the option is otherwise exercisable in accordance with the terms of the documents evidencing such option, but in no event may such rights be exercised more than five (5) years after the option grant date. 10. ARTICLE THREE MISCELLANEOUS ------------- I. FINANCING A. Subject to compliance with applicable law, the Plan Administrator may permit any Optionee to pay the option exercise price by delivering a promissory note payable in one or more installments. The terms of any such promissory note (including the interest rate and the terms of repayment) shall be established by the Plan Administrator in its sole discretion. Promissory notes may be authorized with or without security or collateral. In all events, the maximum credit available to the Optionee may not exceed the sum of (i) the aggregate option exercise price or purchase price payable for the purchased shares plus (ii) any Federal, state, local and foreign income and employment tax liability incurred by the Optionee in connection with the option exercise or share purchase. B. The Plan Administrator may, in its discretion, determine that one or more such promissory notes shall be subject to forgiveness by the Corporation in whole or in part upon such terms as the Plan Administrator may deem appropriate. II. TAX WITHHOLDING A. The Corporation's obligation to deliver Ordinary Shares upon the exercise of options or upon the issuance or vesting of such shares under the Plan shall be subject to the satisfaction of all applicable Federal, state, local and foreign income and employment tax withholding requirements. B. The Plan Administrator may, in its discretion, provide any or all holders of Non-Statutory Options or unvested Ordinary Shares under the Plan with the right to use Ordinary Shares in satisfaction of all or part of the Taxes incurred by such holders in connection with the exercise of their options or the vesting of their shares. Such right may be provided to any such holder in either or both of the following formats: (i) Stock Withholding: The election to have the Corporation ----------------- withhold, from the Ordinary Shares otherwise issuable upon the exercise of such Non-Statutory Option or the vesting of such shares, a portion of those shares with an aggregate Fair Market Value equal to the percentage of the Taxes (not to exceed one hundred percent (100%)) designated by the holder. 11. (ii) Stock Delivery: The election to deliver to the Corporation, -------------- at the time the Non-Statutory Option is exercised or the shares vest, one or more Ordinary Shares previously acquired by such holder (other than in connection with the option exercise or share vesting triggering the Taxes) with an aggregate Fair Market Value equal to the percentage of the Taxes (not to exceed one hundred percent (100%)) designated by the holder. III. EFFECTIVE DATE AND TERM OF THE PLAN A. The Plan shall become effective on the Plan Effective Date. Options may be granted under the Plan at any time on or after the Plan Effective Date. However, no options granted under the Plan may be exercised, and no shares shall be issued under the Plan, until the Plan is approved by the Corporation's shareholders. If such shareholder approval is not obtained within twelve (12) months after the date the Plan is adopted by the Board, then all options previously granted under this Plan shall terminate and cease to be outstanding, and no further options shall be granted and no shares shall be issued under the Plan. B. The Plan shall terminate upon the earliest of (i) September 30, -------- 2007, (ii) the date on which all shares available for issuance under the Plan shall have been issued pursuant to the exercise of the options or the issuance of shares (whether vested or unvested) under the Plan or (iii) the termination of all outstanding options in connection with a Corporate Transaction. Upon such Plan termination, all outstanding options and unvested stock issuances shall continue to have force and effect in accordance with the provisions of the documents evidencing such options or issuances. IV. AMENDMENT OF THE PLAN A. The Board shall have complete and exclusive power and authority to amend or modify the Plan in any or all respects. However, no such amendment or modification shall adversely affect any rights and obligations with respect to options, stock appreciation rights or unvested stock issuances at the time outstanding under the Plan unless the Optionee consents to such amendment or modification. In addition, certain amendments may require shareholder approval pursuant to applicable law or regulation. B. Options to purchase Ordinary Shares may be granted under the Plan that are in excess of the number of shares then available for issuance under the Plan, provided any excess shares actually issued under that program are held in escrow until there is obtained shareholder approval of an amendment sufficiently increasing the number of Ordinary Shares available for issuance under the Plan. If such shareholder approval is not obtained within twelve (12) months after the date the first such excess grants or issuances are made, then (i) any unexercised options granted on the basis of such excess shares shall terminate and cease to be 12. outstanding and (ii) the Corporation shall promptly refund to the Optionees the exercise or purchase price paid for any excess shares issued under the Plan and held in escrow, together with interest (at the applicable Short Term Federal Rate) for the period the shares were held in escrow, and such shares shall thereupon be automatically cancelled and cease to be outstanding. V. USE OF PROCEEDS Any cash proceeds received by the Corporation from the sale of Ordinary Shares under the Plan shall be used for general corporate purposes. VI. REGULATORY APPROVALS A. The implementation of the Plan, the granting of any option or stock appreciation right under the Plan and the issuance of any Ordinary Shares upon the exercise of any option or stock appreciation right shall be subject to the Corporation's procurement of all approvals and permits required by regulatory authorities having jurisdiction over the Plan, the options and stock appreciation rights granted under it and the Ordinary Shares issued pursuant to it. B. No Ordinary Shares or other assets shall be issued or delivered under the Plan unless and until there shall have been compliance with (i) all applicable requirements of Federal and state securities laws, including the filing and effectiveness of the Form S-8 registration statement for the Ordinary Shares issuable under the Plan, (ii) all applicable listing requirements of any stock exchange (or the Nasdaq National Market, if applicable) on which Ordinary Shares (or the American Depositary Shares representing the Ordinary Shares) are then listed for trading, and (iii) all applicable requirements of Australian law. VII. NO EMPLOYMENT/SERVICE RIGHTS Nothing in the Plan shall confer upon the Optionee any right to continue in Service for any period of specific duration or interfere with or otherwise restrict in any way the rights of the Corporation (or any Parent or Subsidiary employing or retaining such person) or of the Optionee, which rights are hereby expressly reserved by each, to terminate such person's Service at any time for any reason, with or without cause. 13. APPENDIX -------- The following definitions shall be in effect under the Plan: A. BOARD shall mean the Corporation's Board of Directors. ----- B. CHANGE IN CONTROL shall mean a change in ownership or control of the ----------------- Corporation effected through either of the following transactions: (i) the acquisition, directly or indirectly, by any person or related group of persons (other than the Corporation or a person that directly or indirectly controls, is controlled by, or is under common control with, the Corporation), of beneficial ownership (within the meaning of Rule 13d-3 of the 1934 Act) of securities possessing more than fifty percent (50%) of the total combined voting power of the Corporation's outstanding securities pursuant to a tender or exchange offer made directly to the Corporation's shareholders, or (ii) a change in the composition of the Board over a period of thirty-six (36) consecutive months or less such that a majority of the Board members ceases, by reason of one or more contested elections for Board membership, to be comprised of individuals who either (A) have been Board members continuously since the beginning of such period or (B) have been elected or nominated for election as Board members during such period by at least a majority of the Board members described in clause (A) who were still in office at the time the Board approved such election or nomination. C. CODE shall mean the Internal Revenue Code of 1986, as amended. ---- D. COMMITTEE shall mean a committee of two (2) or more board members --------- appointed by the Board to administer the Plan with respect to eligible persons. E. CORPORATE TRANSACTION shall mean either of the following shareholder- --------------------- approved transactions to which the Corporation is a party: (i) a merger or consolidation in which securities possessing more than fifty percent (50%) of the total combined voting power of the Corporation's outstanding securities are transferred to a person or persons different from the persons holding those securities immediately prior to such transaction; or (ii) the sale, transfer or other disposition of all or substantially all of the Corporation's assets in complete liquidation or dissolution of the Corporation. A-1. F. CORPORATION shall mean Barbeques Galore Limited, a corporation ----------- organized under the laws of New South Wales, Australia, and any corporate successor to all or substantially all of the assets or voting stock of Barbeques Galore Limited which shall by appropriate action adopt the Plan. G. EMPLOYEE shall mean an individual who is in the employ of the -------- Corporation (or any Parent or Subsidiary), subject to the control and direction of the employer entity as to both the work to be performed and the manner and method of performance. H. EXERCISE DATE shall mean the date on which the Corporation shall have ------------- received written notice of the option exercise. I. FAIR MARKET VALUE per Ordinary Share on any relevant date shall be ----------------- determined in accordance with the following provisions: (i) If the Ordinary Share (or any American Depositary Share representing the Ordinary Share) is at the time traded on the Nasdaq National Market, then the Fair Market Value shall be the closing selling price per Ordinary Share (or American Depositary Share) on the date in question, as such price is reported by the National Association of Securities Dealers on the Nasdaq National Market or any successor system. If there is no closing selling price for the Ordinary Share (or American Depositary Share) on the date in question, then the Fair Market Value shall be the closing selling price on the last preceding date for which such quotation exists. (ii) If the Ordinary Share (or any American Depositary Share) is at the time listed on any Stock Exchange, then the Fair Market Value shall be the closing selling price per Ordinary Share (or American Depositary Share) on the date in question on the Stock Exchange determined by the Plan Administrator to be the primary market for the Ordinary Share (or American Depositary Share), as such price is officially quoted in the composite tape of transactions on such exchange. If there is no closing selling price for the Ordinary Share (or American Depositary Share) on the date in question, then the Fair Market Value shall be the closing selling price on the last preceding date for which such quotation exists. (iii) For purposes of any option grants made on the Plan Effective Date, the Fair Market Value shall be deemed to be equal to the price per share at which the Ordinary Share (or American Depositary Share) is sold in the initial public offering pursuant to the Underwriting Agreement. J. INCENTIVE OPTION shall mean an option which satisfies the requirements ---------------- of Code Section 422. A-2. K. INVOLUNTARY TERMINATION shall mean the termination of the Service of ----------------------- any individual which occurs by reason of: (i) such individual's involuntary dismissal or discharge by the Corporation for reasons other than Misconduct, or (ii) such individual's voluntary resignation following (A) a change in his or her position with the Corporation which materially reduces his or her level of responsibility, (B) a reduction in his or her level of compensation (including base salary, fringe benefits and participation in corporate-performance based bonus or incentive programs) by more than fifteen percent (15%) or (C) a relocation of such individual's place of employment by more than fifty (50) miles, provided and only if such change, reduction or relocation is effected by the Corporation without the individual's consent. L. MISCONDUCT shall mean the commission of any act of fraud, embezzlement ---------- or dishonesty by the Optionee, any unauthorized use or disclosure by such person of confidential information or trade secrets of the Corporation (or any Parent or Subsidiary), or any other intentional misconduct by such person adversely affecting the business or affairs of the Corporation (or any Parent or Subsidiary) in a material manner. The foregoing definition shall not be deemed to be inclusive of all the acts or omissions which the Corporation (or any Parent or Subsidiary) may consider as grounds for the dismissal or discharge of any Optionee or other person in the Service of the Corporation (or any Parent or Subsidiary). M. 1934 ACT shall mean the Securities Exchange Act of 1934, as amended. -------- N. NON-STATUTORY OPTION shall mean an option not intended to satisfy the -------------------- requirements of Code Section 422. O. OPTIONEE shall mean any person to whom an option is granted under the -------- Discretionary Option Grant Program. P. OPTION GRANT PROGRAM shall mean the option grant program in effect -------------------- under the Plan. Q. ORDINARY SHARE shall mean the Corporation's ordinary share, par value -------------- of A$0.20 per share. R. PARENT shall mean any corporation (other than the Corporation) in an ------ unbroken chain of corporations ending with the Corporation, provided each corporation in the unbroken chain (other than the Corporation) owns, at the time of the determination, stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. A-3. S. PLAN shall mean the Corporation's 1997 Share Option Plan, as set forth ---- in this document. T. PLAN ADMINISTRATOR shall mean the particular entity, whether the ------------------ Committee or the Board which is authorized to administer the Plan with respect to one or more classes of eligible persons, to the extent such entity is carrying out its administrative functions under that program with respect to the persons under its jurisdiction. U. PLAN EFFECTIVE DATE shall mean the date on which the Underwriting ------------------- Agreement is executed and the initial public offering price of both the Ordinary Shares and American Depositary Shares is established. V. SERVICE shall mean the performance of services to the Corporation (or ------- any Parent or Subsidiary) by a person in the capacity of an Employee, a non- employee member of the board of directors or a consultant or independent advisor, except to the extent otherwise specifically provided in the documents evidencing the option grant or stock issuance. W. STOCK EXCHANGE shall mean either the American Stock Exchange, the New -------------- York Stock Exchange, or the Australian Stock Exchange. X. SUBSIDIARY shall mean any corporation (other than the Corporation) in ---------- an unbroken chain of corporations beginning with the Corporation, provided each corporation (other than the last corporation) in the unbroken chain owns, at the time of the determination, stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. Y. TAXES shall mean the Federal, state, local and foreign income and ----- employment tax liabilities incurred by the holder of Non-Statutory Options or unvested Ordinary Shares in connection with the exercise of those options or the vesting of those shares. Z. 10% SHAREHOLDER shall mean the owner of stock (as determined under Code --------------- Section 424(d) possessing more than ten percent (10%) of the total combined voting power of all classes of stock of the Corporation (or any Parent or Subsidiary). AA. UNDERWRITING AGREEMENT shall mean the agreement between the ---------------------- Corporation and the underwriter or underwriters managing the initial public offering of the Ordinary Share (or American Depositary Share). A-4. EX-99.2 6 FORM OF NOTICE OF GRANT EXHIBIT 99.2 BARBEQUES GALORE LIMITED NOTICE OF GRANT OF STOCK OPTION ------------------------------- Notice is hereby given of the following option grant (the "Option") to purchase Ordinary Shares of Barbeques Galore Limited (the "Corporation"): Optionee: -------- ---------------------------------------------------------- Grant Date: ---------- --------------------------------------------------------- Vesting Commencement Date: ------------------------- Exercise Price: $ per share -------------- ---------------------------------------- Number of Option Shares: shares ----------------------- ------------------------------------ Expiration Date: --------------- -------------------------------------------------- Type of Option: ______ Incentive Stock Option -------------- ______ Non-Statutory Stock Option Exercise Schedule: The Option shall become exercisable in three (3) ----------------- equal successive annual installments upon Optionee's completion of each year of Service with the first such installment becoming exercisable on the third anniversary of the Vesting Commencement Date. In no event shall the Option become exercisable for any additional Option Shares after Optionee's cessation of Service. Optionee understands and agrees that the Option is granted subject to and in accordance with the terms of the Barbeques Galore Limited 1997 Share Option Plan (the "Plan"). Optionee further agrees to be bound by the terms of the Plan and the terms of the Option as set forth in the Stock Option Agreement and any Addenda to such Stock Option Agreement attached hereto as Exhibit A. A copy of the Plan is available upon request made to the U.S. Corporate Secretary at the U.S. Corporation's principal offices. No Employment or Service Contract. Nothing in this Notice or in the --------------------------------- attached Stock Option Agreement or in the Plan shall confer upon Optionee any right to continue in Service for any period of specific duration or interfere with or otherwise restrict in any way the rights of the Corporation (or any Parent or Subsidiary employing or retaining Optionee) or of Optionee, which rights are hereby expressly reserved by each, to terminate Optionee's Service at any time for any reason, with or without cause. Definitions. All capitalized terms in this Notice shall have the ----------- meaning assigned to them in this Notice or in the attached Stock Option Agreement. DATED: , 199 ----------------------- --- BARBEQUES GALORE LIMITED By: ---------------------------------- Title: ---------------------------------- OPTIONEE Address: -------------------------------- ----------------------------------------- ATTACHMENTS - ----------- EXHIBIT A - STOCK OPTION AGREEMENT AND ADDENDA 2. EXHIBIT A --------- STOCK OPTION AGREEMENT ---------------------- EX-99.3 7 STOCK OPTION AGREEMENT EXHIBIT 99.3 BARBEQUES GALORE LIMITED STOCK OPTION AGREEMENT ---------------------- RECITALS - -------- A. The Board has adopted the Plan for the purpose of retaining the services of selected Employees, non-employee members of the Board or of the board of directors of any Parent or Subsidiary and consultants and other independent advisors who provide services to the Corporation (or any Parent or Subsidiary). B. Optionee is to render valuable services to the Corporation (or a Parent or Subsidiary), and this Agreement is executed pursuant to, and is intended to carry out the purposes of, the Plan in connection with the Corporation's grant of an option to Optionee. C. All capitalized terms in this Agreement shall have the meaning assigned to them in the attached Appendix. NOW, THEREFORE, it is hereby agreed as follows: 1. GRANT OF OPTION. The Corporation hereby grants to Optionee, as --------------- of the Grant Date, an option to purchase up to the number of Option Shares specified in the Grant Notice. The Option Shares shall be purchasable from time to time during the option term specified in Paragraph 2 at the Exercise Price. 2. OPTION TERM. This option shall have a maximum term of ten (10) ----------- years measured from the Grant Date and shall accordingly expire at the close of business on the Expiration Date, unless sooner terminated in accordance with Paragraph 5 or 6. 3. LIMITED TRANSFERABILITY. This option shall be neither ----------------------- transferable nor assignable by Optionee other than by will or by the laws of descent and distribution following Optionee's death and may be exercised, during Optionee's lifetime, only by Optionee. However, if this option is designated a Non-Statutory Option in the Grant Notice, then this option may, in connection with the Optionee's estate plan, be assigned in whole or in part during Optionee's lifetime to one or more members of the Optionee's immediate family or to a trust established for the exclusive benefit of one or more such family members. The assigned portion shall be exercisable only by the person or persons who acquire a proprietary interest in the option pursuant to such assignment. The terms applicable to the assigned portion shall be the same as those in effect for this option immediately prior to such assignment and shall be set forth in such documents issued to the assignee as the Plan Administrator may deem appropriate. 4. DATES OF EXERCISE. This option shall become exercisable for the ----------------- Option Shares in one or more installments as specified in the Grant Notice. As the option becomes exercisable for such installments, those installments shall accumulate, and the option shall remain exercisable for the accumulated installments until the Expiration Date or sooner termination of the option term under Paragraph 5 or 6. 5. CESSATION OF SERVICE. The option term specified in Paragraph 2 -------------------- shall terminate (and this option shall cease to be outstanding) prior to the Expiration Date should any of the following provisions become applicable: (i) Should Optionee cease to remain in Service for any reason (other than death, Permanent Disability or Misconduct) while this option is outstanding, then Optionee shall have a period of three (3) months (commencing with the date of such cessation of Service) during which to exercise this option, but in no event shall this option be exercisable at any time after the Expiration Date. (ii) Should Optionee dies while holding this option, then the personal representative of Optionee's estate or the person or persons to whom the option is transferred pursuant to Optionee's will or in accordance with the laws of descent and distribution shall have the right to exercise this option. Such right shall lapse, and this option shall cease to be outstanding, upon the earlier of (A) the expiration of the twelve (12)- ------- month period measured from the date of Optionee's death or (B) the Expiration Date. (iii) Should Optionee cease Service by reason of Permanent Disability while this option is outstanding, then Optionee shall have a period of twelve (12) months (commencing with the date of such cessation of Service) during which to exercise this option. In no event shall this option be exercisable at any time after the Expiration Date. (iv) During the limited period of post-Service exercisability, this option may not be exercised in the aggregate for more than the number of vested Option Shares for which the option is exercisable at the time of Optionee's cessation of Service. Upon the expiration of such limited exercise period or (if earlier) upon the Expiration Date, this option shall terminate and cease to be outstanding for any vested Option Shares for which the option has not been exercised. However, this option shall, immediately upon Optionee's cessation of Service for any reason, terminate and cease to be outstanding with respect to any Option Shares in which Optionee is not otherwise at that time vested or for which this option is not otherwise at that time exercisable. 2. (v) Should Optionee's Service be terminated for Misconduct, then this option shall terminate immediately and cease to remain outstanding. 6. SPECIAL ACCELERATION OF OPTION. ------------------------------ (a) In the event of a Corporate Transaction, this option, to the extent outstanding at that time, but not otherwise fully exercisable, shall automatically accelerate so that this option shall, immediately prior to the effective date of the Corporate Transaction, become exercisable for all of the Option Shares at the time subject to this option and may be exercised for any or all of those Option Shares as fully-vested Ordinary Shares. No such acceleration of this option, however, shall occur if and to the extent: (i) this option is, in connection with the Corporate Transaction, to be assumed by the successor corporation (or parent thereof) or to be replaced with a comparable option to purchase shares of the capital stock of the successor corporation (or parent thereof) or (ii) this option is to be replaced with a cash incentive program of the successor corporation which preserves the spread existing at the time of the Corporate Transaction on the Option Shares for which this option is not otherwise at that time exercisable (the excess of the Fair Market Value of those Option Shares over the aggregate Exercise Price payable for such shares) and provides for subsequent pay-out in accordance with the same option exercise/vesting schedule set forth in the Grant Notice. (b) Immediately following the Corporate Transaction, this option shall terminate and cease to be outstanding, except to the extent assumed by the successor corporation (or parent thereof) in connection with the Corporate Transaction. (c) If this option is assumed in connection with a Corporate Transaction, then this option shall be appropriately adjusted, immediately after such Corporate Transaction, to apply to the number and class of securities which would have been issuable to Optionee in consummation of such Corporate Transaction had the option been exercised immediately prior to such Corporate Transaction, and appropriate adjustments shall also be made to the Exercise Price, provided the aggregate Exercise Price shall remain the same. -------- (d) This Agreement shall not in any way affect the right of the Corporation to adjust, reclassify, reorganize or otherwise change its capital or business structure or to merge, consolidate, dissolve, liquidate or sell or transfer all or any part of its business or assets. 7. ADJUSTMENT IN OPTION SHARES. Should any change be made to the --------------------------- Ordinary Shares by reason of any stock split, stock dividend, recapitalization, combination of shares, exchange of shares or other change affecting the outstanding Ordinary Shares as a class without the Corporation's receipt of consideration, appropriate adjustments shall be made to (i) the total number and/or class of securities subject to this option and (ii) the Exercise Price in order to reflect such change and thereby preclude a dilution or enlargement of benefits hereunder. 3. 8. SHAREHOLDER RIGHTS. The holder of this option shall not have any ------------------ shareholder rights with respect to the Option Shares until such person shall have exercised the option, paid the Exercise Price and become a holder of record of the purchased shares. 9. MANNER OF EXERCISING OPTION. --------------------------- (a) In order to exercise this option with respect to all or any part of the Option Shares for which this option is at the time exercisable, Optionee (or any other person or persons exercising the option) must take the following actions: (i) Execute and deliver to the Corporation a Notice of Exercise for the Option Shares for which the option is exercised. (ii) Pay the aggregate Exercise Price for the purchased shares in one or more of the following forms: (A) cash or check made payable to the Corporation; (B) a promissory note payable to the Corporation, but only to the extent authorized by the Plan Administrator in accordance with Paragraph 13; (C) Ordinary Shares held by Optionee (or any other person or persons exercising the option) for the requisite period necessary to avoid a charge to the Corporation's earnings for financial reporting purposes and valued at Fair Market Value on the Exercise Date; or (D) to the extent the option is exercised for vested Option Shares, through a special sale and remittance procedure pursuant to which Optionee (or any other person or persons exercising the option) shall concurrently provide irrevocable written instructions (I) to a Corporation-designated brokerage firm to effect the immediate sale of the purchased shares and remit to the Corporation, out of the sale proceeds available on the settlement date, sufficient funds to cover the aggregate Exercise Price payable for the purchased shares plus all applicable U.S. Federal, state, local and foreign income and employment taxes required to be withheld by the Corporation by reason of such exercise and (II) to the Corporation to deliver the certificates for the purchased shares directly to such brokerage firm in order to complete the sale. 4. Except to the extent the sale and remittance procedure is utilized in connection with the option exercise, payment of the Exercise Price must accompany the Notice of Exercise delivered to the Corporation in connection with the option exercise. (iii) Furnish to the Corporation appropriate documentation that the person or persons exercising the option (if other than Optionee) have the right to exercise this option. (iv) Make appropriate arrangements with the Corporation (or Parent or Subsidiary employing or retaining Optionee) for the satisfaction of all U.S. Federal, state, local and foreign income and employment tax withholding requirements applicable to the option exercise. (b) As soon as practical after the Exercise Date, the Corporation shall issue to or on behalf of Optionee (or any other person or persons exercising this option) a certificate for the purchased Option Shares, with the appropriate legends affixed thereto. (c) In no event may this option be exercised for any fractional shares. 10. COMPLIANCE WITH LAWS AND REGULATIONS. ------------------------------------ (a) The exercise of this option and the issuance of the Option Shares upon such exercise shall be subject to compliance by the Corporation and Optionee with all applicable requirements of law relating thereto and with all applicable regulations of any stock exchange (or the Nasdaq National Market, if applicable) on which the Ordinary Shares may be listed for trading at the time of such exercise and issuance. (b) The inability of the Corporation to obtain approval from any regulatory body having authority deemed by the Corporation to be necessary to the lawful issuance and sale of any Ordinary Shares pursuant to this option shall relieve the Corporation of any liability with respect to the non- issuance or sale of the Ordinary Shares as to which such approval shall not have been obtained. The Corporation, however, shall use its best efforts to obtain all such approvals. 11. SUCCESSORS AND ASSIGNS. Except to the extent otherwise provided ---------------------- in Paragraphs 3 and 6, the provisions of this Agreement shall inure to the benefit of, and be binding upon, the Corporation and its successors and assigns and Optionee, Optionee's assigns and the legal representatives, heirs and legatees of Optionee's estate. 5. 12. NOTICES. Any notice required to be given or delivered to the ------- Corporation under the terms of this Agreement shall be in writing and addressed to the Corporation at its principal U.S. corporate offices. Any notice required to be given or delivered to Optionee shall be in writing and addressed to Optionee at the address indicated below Optionee's signature line on the Grant Notice. All notices shall be deemed effective upon personal delivery or upon deposit in the U.S. mail, postage prepaid and properly addressed to the party to be notified. 13. FINANCING. The Plan Administrator may, in its absolute --------- discretion and without any obligation to do so, permit Optionee to pay the Exercise Price for the purchased Option Shares by delivering a full-recourse promissory note payable to the Corporation. The terms of any such promissory note (including the interest rate, the requirements for collateral and the terms of repayment) shall be established by the Plan Administrator in its sole discretion. 14. CONSTRUCTION. This Agreement and the option evidenced hereby are ------------ made and granted pursuant to the Plan and are in all respects limited by and subject to the terms of the Plan. All decisions of the Plan Administrator with respect to any question or issue arising under the Plan or this Agreement shall be conclusive and binding on all persons having an interest in this option. 15. GOVERNING LAW. The interpretation, performance and enforcement ------------- of this Agreement shall be governed by the laws of the State of California without resort to that State's conflict-of-laws rules. 16. EXCESS SHARES. If the Option Shares covered by this Agreement ------------- exceed, as of the Grant Date, the number of Ordinary Shares which may without shareholder approval be issued under the Plan, then this option shall be void with respect to those excess shares, unless shareholder approval of an amendment sufficiently increasing the number of Ordinary Shares issuable under the Plan is obtained in accordance with the provisions of the Plan. 17. ADDITIONAL TERMS APPLICABLE TO AN INCENTIVE OPTION. In the event -------------------------------------------------- this option is designated an Incentive Option in the Grant Notice, the following terms and conditions shall also apply to the grant: (i) This option shall cease to qualify for favorable tax treatment as an Incentive Option if (and to the extent) this option is exercised for one or more Option Shares: (A) more than three (3) months after the date Optionee ceases to be an Employee for any reason other than death or Permanent Disability or (B) more than twelve (12) months after the date Optionee ceases to be an Employee by reason of Permanent Disability. 6. (ii) No installment under this option shall qualify for favorable tax treatment as an Incentive Option if (and to the extent) the aggregate Fair Market Value (determined at the Grant Date) of the Ordinary Shares for which such installment first becomes exercisable hereunder would, when added to the aggregate value (determined as of the respective date or dates of grant) of the Ordinary Shares or other securities for which this option or any other Incentive Options granted to Optionee prior to the Grant Date (whether under the Plan or any other option plan of the Corporation or any Parent or Subsidiary) first become exercisable during the same calendar year, exceed One Hundred Thousand Dollars ($100,000) in the aggregate. Should such One Hundred Thousand Dollar ($100,000) limitation be exceeded in any calendar year, this option shall nevertheless become exercisable for the excess shares in such calendar year as a Non-Statutory Option. (iii) Should the exercisability of this option be accelerated upon a Corporate Transaction, then this option shall qualify for favorable tax treatment as an Incentive Option only to the extent the aggregate Fair Market Value (determined at the Grant Date) of the Ordinary Shares for which this option first becomes exercisable in the calendar year in which the Corporate Transaction occurs does not, when added to the aggregate value (determined as of the respective date or dates of grant) of the Ordinary Shares or other securities for which this option or one or more other Incentive Options granted to Optionee prior to the Grant Date (whether under the Plan or any other option plan of the Corporation or any Parent or Subsidiary) first become exercisable during the same calendar year, exceed One Hundred Thousand Dollars ($100,000) in the aggregate. Should the applicable One Hundred Thousand Dollar ($100,000) limitation be exceeded in the calendar year of such Corporate Transaction, the option may nevertheless be exercised for the excess shares in such calendar year as a Non-Statutory Option. (iv) Should Optionee hold, in addition to this option, one or more other options to purchase Ordinary Shares which become exercisable for the first time in the same calendar year as this option, then the foregoing limitations on the exercisability of such options as Incentive Options shall be applied on the basis of the order in which such options are granted. 18. LEAVE OF ABSENCE. The following provisions shall apply upon the ---------------- Optionee's commencement of an authorized leave of absence: (i) The exercise schedule in effect under the Grant Notice shall be frozen as of the first day of the authorized leave, and this option shall not become exercisable for any additional installments of the Option Shares during the period Optionee remains on such leave. 7. (ii) Should Optionee resume active Employee status within sixty (60) days after the start date of the authorized leave, Optionee shall, for purposes of the exercise schedule set forth in the Grant Notice, receive Service credit for the entire period of such leave. If Optionee does not resume active Employee status within such sixty (60)-day period, then no Service credit shall be given for the period of such leave. (iii) If the option is designated as an Incentive Option in the Grant Notice, then the following additional provision shall apply: (A) If the leave of absence continues for more than ninety (90) days, then this option shall automatically convert to a Non- Statutory Option under the Federal tax laws at the end of the three (3)-month period measured from the ninety-first (91st) day of such leave, unless the Optionee's reemployment rights are guaranteed by statute or by written agreement. Following any such conversion of the option, all subsequent exercises of such option, whether effected before or after Optionee's return to active Employee status, shall result in an immediate taxable event, and the Corporation shall be required to collect from Optionee the Federal, state and local income and employment withholding taxes applicable to such exercise. (iv) In no event shall this option become exercisable for any additional Option Shares or otherwise remain outstanding if Optionee does not resume Employee status prior to the Expiration Date of the option term. 8. EXHIBIT I NOTICE OF EXERCISE I hereby notify Barbeques Galore Limited (the "Corporation") that I elect to purchase ______ Ordinary Shares of the Corporation (the "Purchased Shares") at the option exercise price of $_____ per share (the "Exercise Price") pursuant to that certain option (the "Option") granted to me under the Corporation's 1997 Share Option Plan on ____________, 199___. Concurrently with the delivery of this Exercise Notice to the Corporation, I shall hereby pay to the Corporation the Exercise Price for the Purchased Shares in accordance with the provisions of my agreement with the Corporation (or other documents) evidencing the Option and shall deliver whatever additional documents may be required by such agreement as a condition for exercise. Alternatively, I may utilize the special broker-dealer sale and remittance procedure specified in my agreement to effect payment of the Exercise Price. ________________________, 199__ Date ----------------------------------------------- Optionee Address: ------------------------------------- ----------------------------------------------- Print name in exact manner it is to appear on the stock certificate: ----------------------------------------------- Address to which certificate is to be sent, if different from address above: ----------------------------------------------- ----------------------------------------------- Social Security Number: ----------------------------------------------- Employee Number: ----------------------------------------------- APPENDIX -------- The following definitions shall be in effect under the Agreement: A. AGREEMENT shall mean this Stock Option Agreement. --------- B. BOARD shall mean the Corporation's Board of Directors. ----- C. CODE shall mean the U.S. Internal Revenue Code of 1986, as amended. ---- D. CORPORATE TRANSACTION shall mean either of the following shareholder- --------------------- approved transactions to which the Corporation is a party: (i) a merger or consolidation in which securities possessing more than fifty percent (50%) of the total combined voting power of the Corporation's outstanding securities are transferred to a person or persons different from the persons holding those securities immediately prior to such transaction, or (ii) the sale, transfer or other disposition of all or substantially all of the Corporation's assets in complete liquidation or dissolution of the Corporation. E. CORPORATION shall mean Barbeques Galore Limited, a corporation ----------- organized under the laws of New South Wales, Australia, and any corporate successor to all or substantially all of the assets or voting stock of Barbeques Galore Limited which shall by appropriate action adopt the Plan. F. EMPLOYEE shall mean an individual who is in the employ of the -------- Corporation (or any Parent or Subsidiary), subject to the control and direction of the employer entity as to both the work to be performed and the manner and method of performance. G. EXERCISE DATE shall mean the date on which the option shall have been ------------- exercised in accordance with Paragraph 9 of the Agreement. H. EXERCISE PRICE shall mean the exercise price per share as specified in -------------- the Grant Notice. I. EXPIRATION DATE shall mean the date on which the option expires as --------------- specified in the Grant Notice. J. FAIR MARKET VALUE per Ordinary Share on any relevant date shall be ----------------- determined in accordance with the following provisions: A-1. (i) If the Ordinary Shares (or any American Depositary Shares representing the Ordinary Shares) are at the time traded on the Nasdaq National Market, then the Fair Market Value shall be the closing selling price per Ordinary Share (or American Depositary Share) on the date in question, as the price is reported by the National Association of Securities Dealers on the Nasdaq National Market or any successor system. If there is no closing selling price for the Ordinary Shares (or American Depositary Shares) on the date in question, then the Fair Market Value shall be the closing selling price on the last preceding date for which such quotation exists. (ii) If the Ordinary Shares (or any American Depositary Shares representing the Ordinary Shares) are at the time listed on any Stock Exchange, then the Fair Market Value shall be the closing selling price per Ordinary Share (or American Depositary Share) on the date in question on the Stock Exchange determined by the Plan Administrator to be the primary market for the Ordinary Shares, as such price is officially quoted in the composite tape of transactions on such exchange. If there is no closing selling price for the Ordinary Shares (or American Depositary Shares) on the date in question, then the Fair Market Value shall be the closing selling price on the last preceding date for which such quotation exists. K. GRANT DATE shall mean the date of grant of the option as specified in ---------- the Grant Notice. L. GRANT NOTICE shall mean the Notice of Grant of Stock Option ------------ accompanying the Agreement, pursuant to which Optionee has been informed of the basic terms of the option evidenced hereby. M. INCENTIVE OPTION shall mean an option which satisfies the requirements ---------------- of Code Section 422. N. MISCONDUCT shall mean the commission of any act of fraud, embezzlement ---------- or dishonesty by Optionee, any unauthorized use or disclosure by Optionee of confidential information or trade secrets of the Corporation (or any Parent or Subsidiary), or any other intentional misconduct by Optionee adversely affecting the business or affairs of the Corporation (or any Parent or Subsidiary) in a material manner. The foregoing definition shall not be deemed to be inclusive of all the acts or omissions which the Corporation (or any Parent or Subsidiary) may consider as grounds for the dismissal or discharge of Optionee or any other individual in the Service of the Corporation (or any Parent or Subsidiary). O. NON-STATUTORY OPTION shall mean an option not intended to satisfy the -------------------- requirements of Code Section 422. A-2. P. NOTICE OF EXERCISE shall mean the notice of exercise in the form ------------------ attached hereto as Exhibit I. Q. OPTION SHARES shall mean the number of Ordinary Shares subject to the ------------- option as specified in the Grant Notice. R. OPTIONEE shall mean the person to whom the option is granted as -------- specified in the Grant Notice. S. ORDINARY SHARE shall mean the Corporation's ordinary share, par value -------------- of A$0.20 per share. T. PARENT shall mean any corporation (other than the Corporation) in an ------ unbroken chain of corporations ending with the Corporation, provided each corporation in the unbroken chain (other than the Corporation) owns, at the time of the determination, stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. U. PERMANENT DISABILITY shall mean the inability of Optionee to engage in -------------------- any substantial gainful activity by reason of any medically determinable physical or mental impairment which is expected to result in death or has lasted or can be expected to last for a continuous period of twelve (12) months or more. V. PLAN shall mean the Corporation's 1997 Share Option Plan. ---- W. PLAN ADMINISTRATOR shall mean either the Board or a committee of the ------------------ Board acting in its administrative capacity under the Plan. X. SERVICE shall mean the Optionee's performance of services for the ------- Corporation (or any Parent or Subsidiary) in the capacity of an Employee, a non- employee member of the board of directors or a consultant or independent advisor. Y. STOCK EXCHANGE shall mean the American Stock Exchange or the New York -------------- Stock Exchange. Z. SUBSIDIARY shall mean any corporation (other than the Corporation) in ---------- an unbroken chain of corporations beginning with the Corporation, provided each corporation (other than the last corporation) in the unbroken chain owns, at the time of the determination, stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. A-3. EX-99.4 8 ADDENDUM TO STOCK OPTION AGREEMENT EXHIBIT 99.4 ADDENDUM TO STOCK OPTION AGREEMENT The following provisions are hereby incorporated into, and are hereby made a part of, that certain Stock Option Agreement (the "Option Agreement") by and between Barbeques Galore Limited (the "Corporation") and _________________ ("Optionee") evidencing the stock option (the "Option") granted on __________, 199____ to Optionee under the terms of the Corporation's 1997 Share Option Plan, and such provisions shall be effective immediately. All capitalized terms in this Addendum, to the extent not otherwise defined herein, shall have the meanings assigned to them in the Option Agreement. INVOLUNTARY TERMINATION FOLLOWING CORPORATE TRANSACTION/CHANGE IN CONTROL 1. To the extent the Option is, in connection with a Corporate Transaction, to be assumed by the successor entity (or its parent company), the Option shall not accelerate upon the occurrence of that Corporate Transaction, and the Option shall accordingly continue, over Optionee's period of Service after the Corporate Transaction, to become exercisable for the Option Shares in one or more installments in accordance with the provisions of the Option Agreement. However, immediately upon an Involuntary Termination of Optionee's Service within twelve (12) months following such Corporate Transaction, the Option (or any replacement grant), to the extent outstanding at the time but not otherwise fully exercisable, shall automatically accelerate so that the Option shall become immediately exercisable for all the Option Shares at the time subject to the Option and may be exercised for any or all of those Option Shares as fully vested shares. 2. The Option shall not accelerate upon the occurrence of a Change in Control, and the Option shall, over Optionee's period of Service following such Change in Control, continue to become exercisable for the Option Shares in one or more installments in accordance with the provisions of the Option Agreement. However, immediately upon an Involuntary Termination of Optionee's Service within twelve (12) months following the Change in Control, the Option, to the extent outstanding at the time but not otherwise fully exercisable, shall automatically accelerate so that the Option shall become immediately exercisable for all the Option Shares at the time subject to the Option and may be exercised for any or all of those Option Shares as fully vested shares. 3. The Option as accelerated under Paragraphs 1 or 2 shall remain so exercisable until the earlier of (i) the Expiration Date or (ii) the expiration ------- of the one (1)-year period measured from the date of the Optionee's Involuntary Termination. 4. For purposes of this Addendum the following definitions shall be in effect: (i) An INVOLUNTARY TERMINATION shall mean the termination of Optionee's Service by reason of: (A) Optionee's involuntary dismissal or discharge by the Corporation for reasons other than Misconduct, or (B) Optionee's voluntary resignation following (A) a change in Optionee's position with the Corporation (or Parent or Subsidiary employing Optionee) which materially reduces Optionee's level of responsibility, (B) a reduction in Optionee's level of compensation (including base salary, fringe benefits and target bonus under any corporate-performance based bonus or incentive programs) by more than fifteen percent (15%) or (C) a relocation of Optionee's place of employment by more than fifty (50) miles, provided and only if such change, reduction or relocation is effected by the Corporation without Optionee's consent. (ii) A CHANGE IN CONTROL shall be deemed to occur in the event of a change in ownership or control of the Corporation effected through either of the following transactions: (A) the acquisition, directly or indirectly, by any person or related group of persons (other than the Corporation or a person that directly or indirectly controls, or is controlled by, or is under common control with, the Corporation) of beneficial ownership (within the meaning of Rule 13d-3 of the Securities Exchange Act of 1934, as amended) of securities possessing more than fifty percent (50%) of the total combined voting power of the Corporation's outstanding securities pursuant to a tender or exchange offer made directly to the Corporation's stockholders which the Board does not recommend such stockholders to accept, or (B) a change in the composition of the Board over a period of thirty-six (36) consecutive months or less such that a majority of the Board members ceases, by reason of one or more contested elections for Board membership, to be comprised of individuals who either (i) have been Board members continuously since the beginning of such period or (ii) have been elected or nominated for election as Board members during such period by at least a majority of the Board members described in clause (i) who were still in office at the time such election or nomination was approved by the Board. 2. (iii) MISCONDUCT shall mean the commission of any act of fraud, embezzlement or dishonesty by the Participant, any unauthorized use or disclosure by the Participant of confidential information or trade secrets of the Corporation (or any Parent or Subsidiary), or any other intentional misconduct by the Participant adversely affecting the business or affairs of the Corporation (or any Parent or Subsidiary) in a material manner. The foregoing definition shall not be deemed to be inclusive of all the acts or omissions which the Corporation (or any Parent or Subsidiary) may consider as grounds for the dismissal or discharge of the Participant or other person in the Service of the Corporation (or any Parent or Subsidiary). 5. The provisions of Paragraph 3 of this Addendum shall govern the period for which the Option is to remain exercisable following the Involuntary Termination of Optionee's Service within twelve (12) months after the Corporate Transaction or Change in Control and shall supersede any provisions to the contrary in Paragraph 5 of the Option Agreement. IN WITNESS WHEREOF, Barbeques Galore Limited has caused this Addendum to be executed by its duly-authorized officer as of the Effective Date specified below. BARBEQUES GALORE LIMITED By: ---------------------------------------- Title: ---------------------------------------- EFFECTIVE DATE: _________________, 199__ 3. -----END PRIVACY-ENHANCED MESSAGE-----