-----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, Mxzegr2vc9jXv+J42o07zK20Y1Wf1l5NWcK4NdR/9C5b00uN4jzcx6wjcwcS0Xg0 b5C6o9JQgJwSL8Wk4YsvOw== 0000950134-02-007439.txt : 20020620 0000950134-02-007439.hdr.sgml : 20020620 20020620164606 ACCESSION NUMBER: 0000950134-02-007439 CONFORMED SUBMISSION TYPE: S-8 PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 20020620 EFFECTIVENESS DATE: 20020620 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HASTINGS ENTERTAINMENT INC CENTRAL INDEX KEY: 0001054579 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL- COMPUTER & PRERECORDED TAPE STORES [5735] IRS NUMBER: 751386375 STATE OF INCORPORATION: TX FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: S-8 SEC ACT: 1933 Act SEC FILE NUMBER: 333-90860 FILM NUMBER: 02683454 BUSINESS ADDRESS: STREET 1: 3601 PLANS BLVD STREET 2: SUITE 1 CITY: AMARILLO STATE: TX ZIP: 79102 BUSINESS PHONE: 8063512300 MAIL ADDRESS: STREET 1: P O BOX 35350 CITY: AMARILLO STATE: TX ZIP: 79120-5350 S-8 1 d97825sv8.txt FORM S-8 As filed with the Securities and Exchange Commission on June 20, 2002. Registration No. 333-______ ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ---------- FORM S-8 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ---------- HASTINGS ENTERTAINMENT, INC. (Exact name of registrant as specified in its charter) TEXAS 75-1386375 (State or other jurisdiction (I.R.S. Employer of incorporation or organization) Identification No.) 3601 PLAINS BOULEVARD AMARILLO, TEXAS 79102 (Address of principal executive offices) HASTINGS ENTERTAINMENT, INC. 2002 STOCK OPTION PLAN FOR OUTSIDE DIRECTORS (Full title of plan) JOHN H. MARMADUKE PRESIDENT AND CHIEF EXECUTIVE OFFICER HASTINGS ENTERTAINMENT, INC. 3601 PLAINS BOULEVARD AMARILLO, TEXAS 79102 (Name and address of agent for service) (806) 351-2300 (Telephone number, including area code, of agent for service) WITH COPIES TO: DAN CROW ROBERT L. ESTEP, ESQ. VICE PRESIDENT AND CHIEF FINANCIAL OFFICER JONES, DAY, REAVIS & POGUE 3601 PLAINS BOULEVARD 2727 NORTH HARWOOD STREET AMARILLO, TEXAS 79102 DALLAS, TEXAS 75201 (806) 351-2300 (214) 220-3939 ---------- CALCULATION OF REGISTRATION FEE
================================================================================================================================= Proposed Proposed Maximum Maximum Title of Amount Offering Aggregate Amount of Securities to to be Price per Offering Registration be Registered Registered(1) Share(2) Price(2) Fee(2) - ------------- ------------- --------- --------- ------------ Common Stock, par value $.01 per share................ 100,000 $6.53 $653,000 $60.08 =================================================================================================================================
1. Represents shares issuable upon exercise of options granted under the Hastings Entertainment, Inc. 2002 Stock Option Plan for Outside Directors (the "Plan"). Pursuant to Rule 416, there are also registered hereunder such indeterminate number of additional shares as may become subject to awards under the Plan as a result of the antidilution provisions contained therein. 2. The registration fee with respect to these shares has been computed in accordance with paragraphs (c) and (h) of Rule 457, based upon the average of the reported high and low sale prices of shares of the common stock on the Nasdaq National Market System on June 18, 2002. EXPLANATORY NOTE The information called for by Part I of Form S-8 is included in the description of the Hastings Entertainment, Inc. 2002 Stock Option Plan for Outside Directors (the "Plan") to be delivered to persons purchasing shares pursuant to the Plan. Pursuant to the Note to Part I of Form S-8, this information is not being filed with or included in this Form S-8. PART II INFORMATION REQUIRED IN THE REGISTRATION STATEMENT ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE. The following documents, which we have filed with the Securities and Exchange Commission (the "Commission"), are incorporated by reference into this registration statement: (a) Our annual report on Form 10-K for the fiscal year ended January 31, 2002; (b) Our quarterly report on Form 10-Q for the fiscal quarter ended April 30, 2002; (c) The description of our common stock, par value $.01 per share, contained in our registration statement on Form 8-A12G (Commission File No. 000-24381), filed on June 3, 1998; and (d) The information set forth under the heading "Description of Capital Stock" in the prospectus that is part of the Registration Statement on Form S-1, as amended, originally filed on March 13, 1998 (Commission File No. 333-47969). In addition, all documents we subsequently file with the Commission pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934 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 later-dated documents supplements, modifies or supersedes statements contained in earlier-dated documents. ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS. Our certificate of incorporation limits the liability of our directors to us or our shareholders for monetary damages for an act or omission in the director's capacity as a director, except to the extent that a director is found liable for (i) a breach of such directors duty of loyalty to us or our shareholders; (ii) an act or omission not in good faith that constitutes a breach of duty of the director to us or an act or omission that involves intentional misconduct or a knowing violation of the law; (iii) a transaction from which the director received an improper benefit, whether or not the benefit resulted from an action taken within the scope of the director's office; or (iv) an act or omission for which the liability of a director is expressly provided by an applicable statute. Texas law provides that a director of a corporation may not be indemnified in respect of a proceeding in which the director (i) is found liable on the basis that personal benefit was improperly received by him or her, whether or not the benefit resulted from an action taken in the director's official capacity or (ii) is found liable to the corporation. This limitation of liability does not apply to liabilities arising under federal securities laws and does not affect the availability of equitable remedies such as injunctive relief or rescission. Article 2.02-1 of the Texas Business Corporation Act provides that a corporation may indemnify directors and officers, as well as other employees and individuals, against judgments, penalties (including excise and similar taxes), fines, settlements and reasonable expenses actually incurred by such person in connection with any threatened, pending or completed actions, suits or proceedings, whether civil, criminal, administrative, arbitrative or investigative, any appeal in such actions, suits or proceedings, and any inquiry or investigation that could lead to such actions, suits or proceedings. But if the person is found liable to the corporation or is found liable on the basis that personal benefit was improperly received by the person, the indemnification (i) is limited to reasonable expenses actually incurred by the person in connection with the proceeding and (ii) shall not be made in respect of any proceeding in which the person shall have been found liable for willful or intentional misconduct in the performance of his duty to the corporation. Our certificate of incorporation requires that we indemnify our directors and officers, and any other person who is or was serving at our request as a director, officer, manager, partner, venturer, proprietor, trustee, employee, agent or similar functionary of another foreign or domestic corporation, limited liability company, partnership, joint venture, sole proprietorship, trust, employee benefit plan or other enterprise, to the fullest extent authorized by the Texas Business Corporation Act. Our certificate of incorporation also requires that we advance expenses incurred by such a person in connection with the defense of any proceeding arising out of that person's status or service to us. Our bylaws require that we indemnify our directors and officers to the fullest extent permitted by the Texas Business Corporation Act and may indemnify any person not covered by the grant of mandatory indemnification under our certificate of incorporation and bylaws to the fullest extent permitted by law. In addition, we have entered into indemnity agreements with certain of our executive officers and directors. We have procured insurance that purports (i) to insure us against certain costs of indemnification that may be incurred by us pursuant to the provisions referred to above or otherwise and (ii) to insure our directors and officers against certain liabilities incurred by them in the discharge of their functions as directors and officers except for liabilities arising from their own malfeasance. ITEM 8. EXHIBITS. The following is a list of all exhibits filed as a part of this registration statement on Form S-8, including those incorporated herein by reference. Exhibit Number Description of Exhibit 4.1 Third Restated Articles of Incorporation of the Company.(1) 4.2 Amended and Restated Bylaws of the Company.(1) 4.3 Specimen of Certificate of Common Stock of the Company.(1) 5.1 Opinion of Jones, Day, Reavis & Pogue. 23.1 Consent of Ernst & Young LLP. 23.2 Consent of KPMG LLP. 23.3 Consent of Jones, Day, Reavis & Pogue (included in Exhibit 5.1). 24.1 Power of attorney (included on signature pages). 99.1 Hastings Entertainment, Inc. 2002 Stock Option Plan for Outside Directors. - ---------- (1) Previously filed as an exhibit to the Company's Registration Statement on Form S-1 Commission File No. 333-47969, filed March 13, 1998, and incorporated herein by reference. 2 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; (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. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of a prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement; and (iii) to include any material information with respect to the plan of distribution not previously disclosed in this registration statement or any material change to such information in this registration statement; provided, however, that paragraphs (A)(1)(i) and (A)(1)(ii) do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed with or furnished to the Commission by the registrant pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in this registration statement. (2) That, for the purpose of determining any liability under the Securities Act of 1933, 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. (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 offering. B. The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 that is incorporated by reference in this 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 Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Commission such indemnification is against public policy as expressed in the Securities Act of 1933 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 Securities Act of 1933 and will be governed by the final adjudication of such issue. 3 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, 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 Amarillo, State of Texas, on this 19th day of June, 2002. HASTINGS ENTERTAINMENT, INC. By: /s/ DAN CROW -------------------------------------------- Dan Crow Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) POWER OF ATTORNEY Each person whose signature appears below hereby authorizes and constitutes John H. Marmaduke and Dan Crow, and each of them singly, his or her true and lawful attorneys-in-fact with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities to sign and file any and all amendments to this report with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, and he or she hereby ratifies and confirms all that said attorneys-in-fact or any of them, or their substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed below by the following persons in the capacities and on the dates indicated.
Signatures Title Date ---------- ----- ---- /s/ JOHN H. MARMADUKE Chairman of the Board, President and June 19, 2002 - ------------------------------------ Chief Executive Officer (Principal John H. Marmaduke Executive Officer) /s/ GAINES L. GODFREY Director June 19, 2002 - ------------------------------------ Gaines L. Godfrey /s/ PETER A. DALLAS Director June 19, 2002 - ------------------------------------ Peter A. Dallas /s/ STEPHEN S. MARMADUKE Director June 19, 2002 - ------------------------------------ Stephen S. Marmaduke /s/ JEFFREY G. SHRADER Director June 19, 2002 - ------------------------------------ Jeffrey G. Shrader /s/ RON G. STEGALL Director June 19, 2002 - ------------------------------------ Ron G. Stegall /s/ DARYL L. LANSDALE Director June 19, 2002 - ------------------------------------ Daryl L. Lansdale /s/ ANN S. LIEFF Director June 19, 2002 - ------------------------------------ Ann S. Lieff
4 INDEX TO EXHIBITS
EXHIBIT NUMBER DESCRIPTION ------ ----------- 4.1 Third Restated Articles of Incorporation of the Company.(1) 4.2 Amended and Restated Bylaws of the Company.(1) 4.3 Specimen of Certificate of Common Stock of the Company.(1) 5.1 Opinion of Jones, Day, Reavis & Pogue. 23.1 Consent of Ernst & Young LLP. 23.2 Consent of KPMG LLP. 23.3 Consent of Jones, Day, Reavis & Pogue (included in Exhibit 5.1). 24.1 Power of attorney (included on signature pages). 99.1 Hastings Entertainment, Inc. 2002 Stock Option Plan for Outside Directors.
- ---------- (1) Previously filed as an exhibit to the Company's Registration Statement on Form S-1 Commission File No. 333-47969, filed March 13, 1998, and incorporated herein by reference. 5 EX-5.1 3 d97825exv5w1.txt OPINION/CONSENT OF JONES, DAY, REAVIS & POGUE EXHIBIT 5.1 [JONES, DAY, REAVIS & POGUE LETTERHEAD] June 19, 2002 Hastings Entertainment, Inc. 3601 Plains Boulevard Amarillo, Texas 79102 Re: Registration on Form S-8 of 100,000 Shares of common stock, par value $.01 per share, of Hastings Entertainment, Inc. Ladies and Gentlemen: We are acting as counsel to Hastings Entertainment, Inc., a Texas corporation (the "Company"), in connection with the registration pursuant to the Company's Registration Statement on Form S-8 (the "Registration Statement") of the offer and sale by the Company of up to 100,000 shares (the "Shares") of common stock, par value $.01 per share, of the Company upon exercise of options to be granted pursuant to the Company's 2002 Stock Option Plan for Outside Directors (the "Plan"). We have examined such documents, records, and matters of law as we have deemed necessary for purposes of this opinion. Based on such examination and subject to the qualifications and limitations hereinafter specified, we are of the opinion that the Shares are duly authorized and, when issued and delivered in accordance with the provisions of the Plan against payment of the consideration therefor as provided in the Plan and having a value not less than the par value thereof, will be validly issued, fully paid and nonassessable. In rendering this opinion, we have (i) assumed the authenticity of all documents represented to us to be originals, the conformity to original documents of all copies of documents submitted to us, the accuracy and completeness of all corporate records made available to us by the Company, the accuracy of the statements contained in the certificates described in the following clause (ii) and the genuineness of all signatures that purport to have been made in a corporate, governmental, fiduciary or other capacity, and that the persons who affixed such signatures had authority to do so, and (ii) relied as to certain factual matters upon certificates of officers of the Company and public officials, and we have not independently checked or verified the accuracy of the statements contained in those certificates. In addition, our examination of matters of law has been limited to the laws of the State of Texas and the federal laws of the United States of America, in each case as in effect on the date of this letter. We hereby consent to the filing of this opinion as Exhibit 5.1 to the Registration Statement. Very truly yours, /s/ JONES, DAY, REAVIS & POGUE Jones, Day, Reavis & Pogue EX-23.1 4 d97825exv23w1.txt CONSENT OF ERNST & YOUNG LLP EXHIBIT 23.1 CONSENT OF INDEPENDENT AUDITORS We consent to the incorporation by reference in the Registration Statement (Form S-8) pertaining to the Hastings Entertainment, Inc. 2002 Stock Option Plan for Outside Directors of our report dated March 22, 2002, with respect to the consolidated financial statements and schedule of Hastings Entertainment, Inc. included in its Annual Report (Form 10-K) for the year ended January 31, 2002, filed with the Securities and Exchange Commission. /s/ ERNST & YOUNG LLP ----------------------------------------- Ernst & Young LLP Fort Worth, Texas June 17, 2002 EX-23.2 5 d97825exv23w2.txt CONSENT OF KPMG LLP EXHIBIT 23.2 CONSENT OF INDEPENDENT AUDITORS We consent to the incorporation by reference in the Registration Statement (Form S-8) pertaining to Hastings Entertainment, Inc. 2002 Stock Option Plan for Outside Directors of our report dated June 13, 2000, relating to the consolidated statements of operations, shareholders' equity and cash flows for the year ended January 31, 2000 of Hastings Entertainment, Inc. and subsidiaries (the "Company"), and the related financial statement schedule for the year ended January 31, 2000, which report appears in the Company's Annual Report (Form 10-K) for the year ended January 31, 2002, filed with the Securities and Exchange Commission. /s/ KPMG LLP ----------------------------------------- KPMG LLP Dallas, Texas June 19, 2002 EX-99.1 6 d97825exv99w1.txt 2002 STOCK OPTION PLAN FOR OUTSIDE DIRECTORS EXHIBIT 99.1 HASTINGS ENTERTAINMENT, INC. 2002 STOCK OPTION PLAN FOR OUTSIDE DIRECTORS 1. PURPOSE. The purpose of this Stock Option Plan for Outside Directors (the "Plan") is to enable Hastings Entertainment, Inc. ("Hastings") to attract and retain persons of outstanding competence to serve on its Board of Directors and strengthen the link between the Directors and Hastings stockholders by paying Outside Directors a portion of their compensation in options to purchase Hastings' common stock (collectively, the "Options"). 2. DEFINITIONS. (a) The terms "Outside Directors" or "Participant" mean a member of the Board of Directors of Hastings who is not an employee (within the meaning of the Employee Retirement Income Security Act of 1974) of Hastings or any of its subsidiaries. A Director of Hastings who is also an employee of Hastings or any of its subsidiaries shall become eligible to participate in the Plan and shall be entitled to receive Options hereunder upon the termination of such employment. (b) The term "Disability" means a permanent and total disability as defined in Section 22(e)(3) of the Internal Revenue Code of 1986, as amended. (c) The term "Retirement" shall mean normal retirement as an Outside Director under the policy adopted by Hastings. (d) The term "Committee" shall mean the Administrative Committee established pursuant to Section 9 hereof. (e) The term "Fair Market Value" (i) if Hastings' common stock is publicly traded on a national market on the date in question, shall be the average of the high and low sale price for Hastings' common stock on the date in question (or the most recent date prior thereto that sales take place), or (ii) if Hastings' common stock is not publicly traded on a national market on the date in question, the price as determined in the most recent valuation prepared for the Company's Associates' Stock Ownership Plan. 3. ELIGIBILITY. All Outside Directors of Hastings shall be eligible to receive Options hereunder. 4. SHARES SUBJECT TO THE PLAN. Subject to adjustment in accordance with Section 7 hereof, the total number of common stock which may be granted as Options under the Plan is 100,000 ("Shares"). The Shares shall be either authorized and unissued shares or treasury shares. Any Shares subject to the unexercised portion of any Option granted under the Plan which expires or terminates without being exercised shall again be available for grant under the Plan. 5. STOCK OPTION AWARDS. (a) Annual Grants. Subject to the maximum number of Shares available under the Plan, each Outside Director shall automatically receive on June 19, 2002, an Option to purchase 2530 Shares ("Initial Option"). Subject to the maximum number of Shares available under the Plan, Outside Directors who are elected or appointed to the Board of Directors after such date shall automatically receive an Initial Option to purchase 2530 Shares on the date of such Outside Director's initial election or appointment to the Board of Directors. Commencing with the first anniversary of the grant of the Initial Option on June 19, 2002 and on each anniversary thereafter, each such Outside Director, so long as he or she remains an Outside Director, shall automatically receive an additional Option to purchase 2530 Shares. (b) Option Terms. Each Option and the issuance of Shares thereunder shall be subject to the following terms: (i) Each Option shall be evidenced by an option agreement ("Agreement") duly executed on behalf of Hastings. Each Agreement shall comply with and be subject to the terms and conditions of the Plan. Any Agreement may contain such other terms, provisions and conditions not inconsistent with the Plan as may be determined by the Committee, subject to the restrictions on the Committee's powers set forth in Section 9 of this Plan. (ii) The Option exercise price shall be the Fair Market Value of the Shares subject to the Option on the date of grant thereof. (c) Exercisability; Vesting. Subject to Section 7 hereof, each Option shall become exercisable with respect to 20% of the Shares subject thereto on each of the first, second, third, fourth and fifth anniversaries of the date of grant of such Option, provided that if the Participant optionee ("Optionee") ceases to be an Outside Director for any reason, any unvested portion of any Option shall immediately become vested. (The exercise date of each Option is referred to as the "Exercise Date"). (d) Time and Manner of Exercise of Option. (i) From and after its Exercise Date, an Option may be exercised in whole or in part at any time and from time to time; provided, however, that only whole Shares will be issued pursuant to the exercise of any Option. (ii) Any Option may be exercised by giving written notice, signed by the person exercising the Option, stating the number of Shares with respect to which the Option is being exercised with payment to be made in cash. The notice of exercise shall be irrevocable. The Committee may permit other methods of payment, including through broker-assisted same day transactions. (e) Terms of Options. Each Option shall expire ten (10) years from the date of grant, but shall be subject to earlier expiration under the following circumstances: 2 (i) In the event that an Optionee ceases to be an Outside Director for any reason other than the Optionee's death or resignation from the Board due to a Disability, Retirement, a Merger or Consolidation event (as provided in Section 8(a)), or a "Change in Control" (as hereinafter defined), the Options granted to such Optionee shall automatically expire at midnight 270 calendar days following the date such Optionee ceases to be an Outside Director. (ii) In the event of an Optionee's death, Disability or Retirement, a Merger or Consolidation event (as provided in Section 8(a)) or a "Change in Control" (as hereinafter defined), all Options granted to such Optionee shall be exercisable on the date of such event and shall expire three (3) years thereafter. After the date of the Optionee's death, the Options held by such Optionee may be exercised by the Optionee's legal representatives or the Optionee's estate, by any person or persons whom the Optionee shall have designated in writing on forms prescribed by and filed with Hastings or, if no such designation has been made, by the person or persons to whom the Optionee's rights have passed by will or the laws of descent and distribution. (f) Transferability. During an Optionee's lifetime, an Option may be exercised only by the Optionee or the Optionee's legal representative. Options granted under the Plan and the rights and privileges conferred thereby shall not be subject to execution, attachment or similar process and may not be transferred, assigned, pledged or hypothecated in any manner (whether by operation of law or otherwise) other than by will or the laws of descent and distribution or a "qualified domestic relations order" as defined in the Internal Revenue Code of 1986 ("Code") or the Employee Retirement Income Security Act ("ERISA") except that, to the extent permitted by applicable law and Rule 16b-3 under Section 16 of the Securities Exchange Act of 1934, as amended ("Exchange Act"), the Committee may permit an Optionee to designate in writing during the Optionee's lifetime a beneficiary to receive and exercise Options in the event of the Optionee's death, as provided herein. Any attempt to transfer, assign, pledge, hypothecate or otherwise dispose of any Option under the Plan or of any right or privilege conferred thereby, contrary to the provisions of the Plan, or the sale or levy or any attachment or similar process upon rights and privileges conferred hereby, shall be null and void. (g) Optionee's or Successor's Rights as Stockholder. Neither an Optionee nor an Optionee's successors in interest shall have any rights as a stockholder of Hastings with respect to any Shares subject to an Option granted to such person until such person becomes a holder of record of such Shares. 6. EFFECT ON DIRECTORSHIP. Neither the Plan nor the granting of any Options hereunder nor any other action taken pursuant to the Plan shall constitute or be evidence of any agreement or understanding, express or implied, that a Participant has a right to continue as a Director for any period of time. 7. RECAPITALIZATIONS. If as a result of stock dividend, stock split, stock combination, recapitalization (or other change in corporate or capital structure of Hastings), or as the result of a merger, consolidation, or other reorganization, the common stock of Hastings is increased, reduced, or otherwise changed, the aggregate number of Shares for which Options may be granted under this Plan, the number of Shares covered by each grant and each outstanding 3 Option and exercise price per Share shall be appropriately adjusted, and if by virtue thereof a Participant shall be entitled to new or additional or different Options, such options to which the Participant shall be entitled shall be subject to the same terms, conditions, and restrictions herein contained relating to the original date and terms and conditions governing Options. 8. ACCELERATION OF VESTING OF STOCK OPTIONS. (a) Merger or Consolidation. Subject to the provisions of Section 5(e) hereof, in the event of a dissolution or a liquidation of Hastings or a merger or consolidation of Hastings in which Hastings is not the surviving corporation, any unexercised Options granted prior to the date of such dissolution, liquidation, merger or consolidation shall automatically become vested and exercisable immediately prior to such date. (b) Change in Control. Subject to the provisions of Section 5(e) hereof, in the event of a Change in Control, as hereinafter defined, any unexercised Options granted prior to the date of such event shall automatically become vested and exercisable immediately prior to such date. A "Change in Control" shall be deemed to have occurred if (a) absent prior approval by the Board of Directors, thirty percent (30%) or more of Hastings' outstanding securities entitled to vote in elections of Directors shall be beneficially owned, directly or indirectly, by any person (as the term "person" is used in Section 13(d)(3) or Section 14(d)(2) of the Exchange Act); or (b) individuals currently constituting the Board of Directors (or the successors of such individuals nominated by the Board of Directors on which such individuals or such successors constituted a majority) cease to constitute a majority of the Board of Directors. 9. ADMINISTRATIVE COMMITTEE. The Committee shall have full power and authority to construe and administer the Plan; provided that the Committee shall have no power to change (i) the number of shares authorized under the Plan, (ii) the eligibility provisions of Section 3 of this Plan, (iii) the dates of grants or the amounts of grants under Section 5(a) of this Plan; (iv) the Option exercise price under Section 5(b)(ii) of this Plan, (v) the exercisability and vesting of Options under Section 5(c) of this Plan or (vi) the terms of Options under Section 5(e) of this Plan. Any action taken under the provisions of the Plan by the Committee arising out of or in connection with the administration, construction, or effect of the Plan or any rules adopted thereunder shall, in each case, lie within the discretion of the Committee and shall be conclusive and binding upon Hastings and upon all Participants, and all persons claiming under or through any of them. The Committee shall have as members the Chief Executive Officer of Hastings and two other officers of Hastings designated by the Chief Executive Officer. In the absence of such designation, the other members of the Committee shall be the Chief Financial Officer and the most senior Vice President (other than the Chief Financial Officer) of Hastings. 10. APPROVAL; EFFECTIVE DATE. The Plan is subject to the approval of a majority of the holders of Hastings' common stock present and entitled to vote at a meeting of shareholders. Subject to the receipt of such approval, the Plan shall be effective June 19, 2002. 11. AMENDMENT. The Plan may be amended or repealed by the Board of Directors of Hastings, except that any amendment which would materially increase the benefits accruing to Participants, increase the number of Shares which may be issued under the Plan, or materially 4 modify the requirements as to eligibility for participation in the Plan shall require the approval of a majority of the holders of Hastings' common stock present and entitled to vote at a meeting of shareholders, and provided further, that any such action shall not adversely affect any Participant's rights under the Plan with respect to Options outstanding prior to such action. In no event shall the provisions of the Plan be amended more than once every six months, other than to comport with changes in the Code, ERISA, or the rules thereunder. 12. EXPENSES OF THE PLAN. All costs and expenses of the adoption and administration of the Plan shall be borne by Hastings and none of such expenses shall be charged to any Participant. 13. COMPLIANCE WITH RULE 16b-3. It is the intention of Hastings that the Plan comply in all respects with Rule 16b-3 under Section 16(b) of the Exchange Act. Accordingly, if any Plan provision is later found to not be in compliance with Rule 16b-3, that provision shall be deemed null and void, and in all events the Plan shall be construed in favor of its meeting the requirements of Rule 16b-3. 5 -----END PRIVACY-ENHANCED MESSAGE-----