-----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, VkuSnufiqAIfAWKqgwxINaxfk1iS62WegsOPQVm6BVaqnzGP6zD29KDXoOvLwGCT V7idKNe4dTuDnRcqaqrgzw== /in/edgar/work/20000804/0000950134-00-006351/0000950134-00-006351.txt : 20000921 0000950134-00-006351.hdr.sgml : 20000921 ACCESSION NUMBER: 0000950134-00-006351 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 6 FILED AS OF DATE: 20000804 GROUP MEMBERS: FRANK J MILAN GROUP MEMBERS: HAMPTON HODGES GROUP MEMBERS: MCLEAN ROBERT H GROUP MEMBERS: ROBERT KORMAN GROUP MEMBERS: TERRY KEARNEY GROUP MEMBERS: WALTER D ROGERS JR SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: BFX HOSPITALITY GROUP INC CENTRAL INDEX KEY: 0000351220 STANDARD INDUSTRIAL CLASSIFICATION: [3679 ] IRS NUMBER: 751732794 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: SC 13D SEC ACT: SEC FILE NUMBER: 005-35264 FILM NUMBER: 686628 BUSINESS ADDRESS: STREET 1: 226 BAILEY AVE STE 101 CITY: FORT WORTH STATE: TX ZIP: 76107 BUSINESS PHONE: 8173324761 MAIL ADDRESS: STREET 1: 226 BAILEY AVE STE 101 CITY: FORT WORTH STATE: TX ZIP: 76107 FORMER COMPANY: FORMER CONFORMED NAME: BUFFTON CORP DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: BUFFTON OIL & GAS INC DATE OF NAME CHANGE: 19830405 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: MCLEAN ROBERT H CENTRAL INDEX KEY: 0000949456 STANDARD INDUSTRIAL CLASSIFICATION: [3679 ] STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 226 BAILEY AVE STE 101 CITY: FORT WORTH STATE: TX ZIP: 76107 BUSINESS PHONE: 8173324761 MAIL ADDRESS: STREET 1: 226 BAILEY AVE STE 101 CITY: FORT WORTH STATE: TX ZIP: 76107 SC 13D 1 sc13d.txt SCHEDULE 13D 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 13D UNDER THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. ___)* BFX Hospitality Group, Inc. - -------------------------------------------------------------------------------- (Name of Issuer) Common Stock, $.05 par value per share - -------------------------------------------------------------------------------- (Title of Class of Securities) 119885200 - -------------------------------------------------------------------------------- (CUSIP Number) Robert H. McLean BFX Hospitality Group, Inc. 226 Bailey Avenue, Suite 101 Fort Worth, Texas 76107 (817) 332-4761 - -------------------------------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) July 29 - August 1, 2000 - -------------------------------------------------------------------------------- (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Section 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box [ ]. NOTE: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Section 240.13d-7(b). *The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). 2 SCHEDULE 13D CUSIP NO. 119885200 PAGE 2 OF 13 PAGES --------- --- --- - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Hampton Hodges - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [X] (b) [ ] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* PF - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION United States - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER NUMBER OF 58,000 SHARES BENEFICIALLY ------------------------------------------------- OWNED BY 8 SHARED VOTING POWER EACH REPORTING -0- PERSON ------------------------------------------------- WITH 9 SOLE DISPOSITIVE POWER 58,000 ------------------------------------------------- 10 SHARED DISPOSITIVE POWER -0- - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 58,000 - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 1.46% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* IN - -------------------------------------------------------------------------------- *SEE INSTRUCTIONS BEFORE FILLING OUT! 3 SCHEDULE 13D CUSIP NO. 119885200 PAGE 3 OF 13 PAGES - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON. S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY) Terry Kearney - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (SEE INSTRUCTIONS) (a) [X] (b) [ ] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* (SEE INSTRUCTIONS) PF; OO - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION United States - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER NUMBER OF SHARES 63,000 BENEFICIALLY ----------------------------------------------------------------- OWNED BY 8 SHARED VOTING POWER EACH REPORTING -0- PERSON ----------------------------------------------------------------- WITH 9 SOLE DISPOSITIVE POWER 63,000 ----------------------------------------------------------------- 10 SHARED DISPOSITIVE POWER -0- - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 63,000 - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* (SEE INSTRUCTIONS) [ ] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 1.58% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* (SEE INSTRUCTIONS) IN - -------------------------------------------------------------------------------- *SEE INSTRUCTIONS BEFORE FILLING OUT! 4 SCHEDULE 13D CUSIP NO. 119885200 PAGE 4 OF 13 PAGES - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON. S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY) Robert Korman - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS) (a) [X] (b) [ ] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS (SEE INSTRUCTIONS) PF - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION United States - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER NUMBER OF SHARES 134,530 BENEFICIALLY ----------------------------------------------------------------- OWNED BY 8 SHARED VOTING POWER EACH REPORTING -0- PERSON ----------------------------------------------------------------- WITH 9 SOLE DISPOSITIVE POWER 134,530 ----------------------------------------------------------------- 10 SHARED DISPOSITIVE POWER -0- - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 134,530 - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS) [ ] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 3.33% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON (SEE INSTRUCTIONS) IN - -------------------------------------------------------------------------------- 5 SCHEDULE 13D CUSIP NO. 119885200 PAGE 5 OF 13 PAGES - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON. S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY) Robert H. McLean - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (SEE INSTRUCTIONS) (a) [X] (b) [ ] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* (SEE INSTRUCTIONS) PF - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION United States - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER NUMBER OF SHARES 667,501 BENEFICIALLY ----------------------------------------------------------------- OWNED BY 8 SHARED VOTING POWER EACH REPORTING -0- PERSON ----------------------------------------------------------------- WITH 9 SOLE DISPOSITIVE POWER 667,501 ----------------------------------------------------------------- 10 SHARED DISPOSITIVE POWER -0- - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 667,501 - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* (SEE INSTRUCTIONS) [X] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 15.64% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* (SEE INSTRUCTIONS) IN - -------------------------------------------------------------------------------- *SEE INSTRUCTIONS BEFORE FILLING OUT! 6 SCHEDULE 13D CUSIP NO. 119885200 PAGE 6 OF 13 PAGES - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON. S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY) Frank J. Milan - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (SEE INSTRUCTIONS) (a) [X] (b) [ ] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* (SEE INSTRUCTIONS) PF; 00 - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION United States - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER NUMBER OF SHARES 74,000 BENEFICIALLY ----------------------------------------------------------------- OWNED BY 8 SHARED VOTING POWER EACH REPORTING -0- PERSON ----------------------------------------------------------------- WITH 9 SOLE DISPOSITIVE POWER 74,000 ----------------------------------------------------------------- 10 SHARED DISPOSITIVE POWER -0- - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 74,000 - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* (SEE INSTRUCTIONS) [ ] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 1.85% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* (SEE INSTRUCTIONS) IN - -------------------------------------------------------------------------------- *SEE INSTRUCTIONS BEFORE FILLING OUT! 7 SCHEDULE 13D CUSIP NO. 119885200 PAGE 7 OF 13 PAGES - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON. S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY) Walter D. Rogers, Jr. - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (SEE INSTRUCTIONS) (a) [X] (b) [ ] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* (SEE INSTRUCTIONS) SC - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION United States - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER NUMBER OF SHARES 123,783 BENEFICIALLY ----------------------------------------------------------------- OWNED BY 8 SHARED VOTING POWER EACH REPORTING -0- PERSON ----------------------------------------------------------------- WITH 9 SOLE DISPOSITIVE POWER 123,783 ----------------------------------------------------------------- 10 SHARED DISPOSITIVE POWER -0- - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 123,783 - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* (SEE INSTRUCTIONS) [ ] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 3.12% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* (SEE INSTRUCTIONS) IN - -------------------------------------------------------------------------------- *SEE INSTRUCTIONS BEFORE FILLING OUT! 8 SCHEDULE 13D CUSIP NO. 119885200 PAGE 8 OF 13 PAGES --------- --- --- ITEM 1: SECURITY AND ISSUER. This statement relates to the common stock, $.05 par value per share (the "Common Stock"), of BFX Hospitality Group, Inc., a Delaware corporation (the "Company"). The address of the principal executive offices of the Company is 226 Bailey Avenue, Suite 101, Fort Worth, Texas 76107. ITEM 2: IDENTITY AND BACKGROUND. This statement is being filed by Hampton Hodges, Terry Kearney, Robert Korman, Robert H. McLean, Frank J. Milan and Walter D. Rogers, Jr. (the "Group Members"). The Group Members intend to form two Delaware limited liability companies, to be named "Hospitality Concepts, L.L.C." ("Hospitality"), and "American Hospitality, L.L.C." ("American"). The Group Members will own all of the outstanding equity interests in Hospitality, which will own all of the outstanding equity interests in American. The purpose of forming Hospitality and American is to acquire the Company through a merger of the Company with and into American. Concurrently with the proposed merger, it is intended that three additional wholly owned subsidiaries of Hospitality will acquire the assets of three of the Company's four operating subsidiaries (Cat's Meow, Lucile's and Stockyards Hotel) and that Hospitality will acquire all of the outstanding stock of the Company's fourth operating subsidiary (Cabo-Fort Worth #1, L.L.C.). The proposed merger is subject to many conditions, including (a) approval by an independent committee of the Company's board of directors and by the Company's board of directors, (b) execution and delivery of a merger agreement, (c) approval by the Company's stockholders pursuant to definitive proxy materials to be filed with the Securities and Exchange Commission and mailed to the shareholders at the earliest practicable date, (d) no significantly increased liability related to the Company's superfund sight in Vestal, New York, in excess of that provided in the Company's financial statements, (e) extension on satisfactory terms of the existing lease for the Company's Cat's Meow facility in New Orleans, Louisiana, (f) renewal of the existing lease of the Company's Vestal, New York plant sight, (g) the sale by the Company of the Cabo concept and the Company's two Cabo units in Houston, Texas, for $3,500,000 in cash and (h) obtaining financing on satisfactory terms. Information about the address and present principal occupation or employment of each of the Group Members is as follows:
RESIDENCE OR PRINCIPAL OCCUPATION NAME OF GROUP MEMBER BUSINESS ADDRESS OR EMPLOYMENT - -------------------- ---------------- --------------------- Hampton Hodges 7307 Tokalon Dr. Investments Dallas, Texas 75214 Terry Kearney 226 Bailey Ave., Suite 101 Vice President Operations of Fort Worth, Texas 76107 the Company Robert Korman 226 Bailey Ave., Suite 101 Chief Financial Officer of the Fort Worth, Texas 76107 Company Robert H. McLean 226 Bailey Ave., Suite 101 President of the Company Fort Worth, Texas 76107 Frank J. Milan 226 Bailey Ave., Suite 101 Vice President Operations of Fort Worth, Texas 76107 the Company Walter D. Rogers, Jr. 6737 Trinity Landing Dr. N. Investments Fort Worth, Texas 76132
9 During the last five years, no Group Member has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or has been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction as a result of which he was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. Each Group Member is a citizen of the United States. ITEM 3: SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION Of the shares of the Common Stock currently beneficially owned by Mr. Hodges, 55,000 shares were acquired by stock grants from the Company, and the remaining 3,000 shares were acquired by the use of personal funds. Of the shares of the Common Stock currently beneficially owned by Mr. Kearney, 40,000 shares were acquired by stock grants from the Company, and the remaining 23,000 shares are issuable pursuant to unexercised stock options. Of the shares of the Common Stock currently beneficially owned by Mr. Korman, 57,176 shares were acquired by the use of funds lent to him by the Company, which have been repaid to the Company, 2,354 shares were acquired pursuant to the Company's employee stock ownership plan, and the remaining 75,000 shares are issuable pursuant to unexercised stock options. Of the shares of the Common Stock currently beneficially owned by Mr. McLean, 215,570 shares were acquired by the use of funds lent to him by the Company, which have been repaid to the Company, 100,000 shares were acquired by stock grants from the Company, 4,831 shares were acquired pursuant to the Company's employee stock ownership plan, 68,200 shares were acquired by the use of personal funds and the remaining 300,000 shares are issuable pursuant to unexercised stock options. Of the shares of the Common Stock currently beneficially owned by Mr. Milan, 40,000 shares were acquired by stock grants from the Company, and the remaining 34,000 shares are issuable pursuant to unexercised stock options. Of the shares of Common Stock currently beneficially owned by Mr. Rogers, 61,558 shares were acquired by the use of funds lent to him by the Company, which have been repaid to the Company, 60,000 shares were acquired by stock grants from the Company, 2,125 shares were acquired pursuant to the Company's employee stock ownership plan and the remaining 100 shares were acquired by the use of personal funds. The Group Members anticipate that Hospitality or one of its subsidiaries will borrow funds to finance the acquisition pursuant to the merger. It is expected that these funds will consist of $2,200,000 to be borrowed from John Hancock Real Estate Finance, Inc. in connection with the acquisition of the assets of the Stockyards Hotel and $5,000,000 to be borrowed from AMRESCO Commercial Finance, Inc. in connection with the Cat's Meow. The Group Members have not yet entered into any agreements with respect to these proposed loans. 10 ITEM 4: PURPOSE OF TRANSACTION The shares of the Common Stock currently owned by each Group Member were acquired for investment purposes. The Group Members intend to effect the merger and related transactions described in Item 2 of this Schedule 13D, which is incorporated into this Item 4 by reference. American will be the surviving company of the merger. The officers and the sole director of American immediately following the merger are expected to be as follows: Robert H. McLean President and sole Director Robert Korman Vice President, Secretary and Treasurer Terry Kearney Vice President Frank J. Milan Vice President
As a result of the merger and the related transactions, the Company will cease to exist, and the limited liability company agreement of Hospitality and American will constitute the charter documents of those companies. Also as a result of the merger, the Common Stock will no longer be listed on the American Stock Exchange, will no longer be publicly traded and will cease to be registered under Section 12(g) of the Securities Exchange Act of 1934. 11 ITEM 5. INTEREST IN SECURITIES OF THE ISSUER The following table sets forth information regarding the beneficial ownership of Common Stock by each Group Member. Except as otherwise noted, each named beneficial owner has sole voting and investment power with respect to the shares owned.
AMOUNT AND NATURE OF NAME OF GROUP MEMBER BENEFICIAL OWNERSHIP PERCENT OF CLASS - -------------------- -------------------- ---------------- Hampton Hodges 58,000 1.46% Terry Kearney 63,000(1) 1.58%(2) Robert Korman 134,530(3) 3.33%(4) Robert H. McLean 688,601(5) 16.13%(6) Frank J. Milan 74,000(7) 1.85%(8) Walter D. Rogers, Jr 123,783 3.12% All Group Members 1,141,914(9) 25.95%(10) (6 in Number)
- ---------- (1) This figure includes 23,000 shares of Common Stock issuable to Kearney pursuant to employee incentive stock options which are currently exercisable. (2) This percentage is calculated including the 23,000 shares covered by the stock options owned by Mr. Kearney. (3) This figure includes 2,354 shares which are owned by the Employee Stock Ownership Plan and are voted by Mr. Korman pursuant to the plan and includes 75,000 shares issuable to Mr. Korman pursuant to employee incentive stock options which are currently exercisable. (4) This percentage is calculated including the 75,000 shares covered by the stock options owned by Mr. Korman. (5) This figure includes 4,831 shares owned by the Company's Employee Stock Ownership Plan which are voted by Mr. McLean pursuant to such plan and 300,000 shares of Common Stock issuable to Mr. McLean pursuant to non-qualified stock options which are currently exercisable. This figure includes 21,100 shares owned by a limited partnership that Mr. McLean controls. This figure also includes 20,000 shares owned by a limited partnership of which Mr. McLean is a limited partner and an officer of the general partner but does not have an ownership interest in the general partner, and 1,100 shares owned by Mr. McLean's spouse. Mr. McLean disclaims beneficial ownership of these 21,100 shares. (6) This percentage is calculated including the 300,000 shares covered by the stock options owned by Mr. McLean. (7) This figure includes 34,000 shares of Common Stock issuable to Mr. Milan pursuant to employee incentive stock options which are currently exercisable. (8) This percentage is calculated including the 34,000 shares covered by the stock options owned by Mr. Milan. 12 (9) This figure includes the 432,000 shares of the Common Stock issuable pursuant to the stock options described in notes 1, 3, 5 and 7 hereinabove. (10) This percentage is calculated including the 432,000 shares of the Common Stock issuable pursuant to the stock options described in notes 1, 3, 5 and 7 hereinabove, and all percentages are rounded to the nearest one-hundredth of a percent. None of the Group Members has effected any transactions in the Common Stock within the past sixty days. ITEM 6: CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER There are currently no contracts, arrangements, understandings or relationships among the Group Members or between the Group Members and any person with respect to any securities of the Company, other than (a) those general understandings described in Item 2 of this Schedule 13D, which is incorporated into this Item 6 by reference, and (b) various stock option agreements granting options to purchase shares of the Common Stock to Messrs. Kearney, Korman, McLean and Milan, copies of which are attached as exhibits to and listed in Item 7 of this Schedule 13D and incorporated into this Item 6 by reference. ITEM 7: MATERIAL TO BE FILED AS EXHIBITS a. Agreement among the Group Members to jointly file this Schedule 13D pursuant to Rule 13d-1(k) of the Securities Exchange Act of 1934. b. Employee Incentive Stock Option Agreement dated August 2, 1995, between the Company and Mr. Kearney; Amendment No. 1 to Employee Incentive Stock Option Agreement dated May 1, 1998, between the Company and Mr. Kearney; Incentive Stock Option Agreement dated February 10, 1999, between the Company and Mr. Kearney; and Incentive Stock Option Agreement dated October 4, 1999, between the Company and Mr. Kearney. c. Incentive Stock Option Agreement dated February 10, 1999, between the Company and Mr. Korman; and Non-Qualified Stock Option Agreement dated October 4, 1999, between the Company and Mr. Korman. d. Non-Qualified Stock Option Agreement dated October 4, 1999, between the Company and Mr. McLean. e. Employee Incentive Stock Option Agreement dated August 2, 1995, between the Company and Mr. Milan; Employee Incentive Stock Option Agreement dated December 26, 1995, between the Company and Mr. Milan; Amendment No. 1 to Employee Incentive Stock Option Agreement dated May 1, 1998, between the Company and Mr. Milan; Incentive Stock Option Agreement dated February 10, 1999, between the Company and Mr. Milan; and Incentive Stock Option Agreement dated October 4, 1999, between the Company and Mr. Milan. 13 After reasonable inquiry and to the best of the knowledge and belief of each of the undersigned, each of the undersigned certifies that the information set forth in this statement is true, complete and correct. August 4, 2000 /s/ Terry Kearney ----------------------------- /s/ Frank J. Milan ----------------------------- /s/ Robert H. McLean ----------------------------- /s/ Walter D. Rogers, Jr. ----------------------------- /s/ Robert Korman ----------------------------- /s/ Hampton Hodges ----------------------------- 14 EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION - ------- ----------- a. Agreement among the Group Members to jointly file this Schedule 13D pursuant to Rule 13d-1(k) of the Securities Exchange Act of 1934. b. Employee Incentive Stock Option Agreement dated August 2, 1995, between the Company and Mr. Kearney; Amendment No. 1 to Employee Incentive Stock Option Agreement dated May 1, 1998, between the Company and Mr. Kearney; Incentive Stock Option Agreement dated February 10, 1999, between the Company and Mr. Kearney; and Incentive Stock Option Agreement dated October 4, 1999, between the Company and Mr. Kearney. c. Incentive Stock Option Agreement dated February 10, 1999, between the Company and Mr. Korman; and Non-Qualified Stock Option Agreement dated October 4, 1999, between the Company and Mr. Korman. d. Non-Qualified Stock Option Agreement dated October 4, 1999, between the Company and Mr. McLean. e. Employee Incentive Stock Option Agreement dated August 2, 1995, between the Company and Mr. Milan; Employee Incentive Stock Option Agreement dated December 26, 1995, between the Company and Mr. Milan; Amendment No. 1 to Employee Incentive Stock Option Agreement dated May 1, 1998, between the Company and Mr. Milan; Incentive Stock Option Agreement dated February 10, 1999, between the Company and Mr. Milan; and Incentive Stock Option Agreement dated October 4, 1999, between the Company and Mr. Milan.
EX-7.A 2 ex7-a.txt JOINT FILING AGREEMENT 1 EXHIBIT 7.a AGREEMENT PURSUANT TO RULE 13d-1(k)(1) UNDER THE SECURITIES ACT OF 1934 For purposes of filing a statement on Schedule 13D with respect to shares of common stock, $0.05 par value, of BFX Hospitality Group, Inc. that may be deemed to be beneficially owned by the undersigned persons, each of the undersigned persons agrees that the Schedule 13D to which this agreement is attached as an exhibit may be filed on behalf of each of the undersigned. /s/ Terry Kearney ---------------------------------- /s/ Frank J. Milan ---------------------------------- /s/ Robert H. McLean ---------------------------------- /s/ Walter D. Rogers ---------------------------------- /s/ Robert Korman ---------------------------------- /s/ Hampton Hodges ---------------------------------- EX-7.B 3 ex7-b.txt EMPLOYEE INCENTIVE STOCK OPTION AGREEMENT-8/2/95 1 EXHIBIT 7.b EMPLOYEE INCENTIVE STOCK OPTION AGREEMENT This Option Agreement (the "Agreement") made as of the 2nd day of August, 1995, between BUFFTON CORPORATION, a Delaware corporation (the "Corporation"), and TERRY KEARNEY, an employee of the Corporation or one or more of its subsidiaries (the "Employee"). WHEREAS, the Corporation desires to carry out the purpose of the Employee Incentive Stock Option Plan of Buffton Corporation, dated December 17, 1985, (the "Plan") by affording Employee the opportunity to purchase shares of Corporation $.05 par value common stock. NOW, WHEREFORE, in consideration of the mutual covenants hereinafter set forth and for other good and valuable consideration, the parties hereto agree as follows: 1. Grant of Option. The Corporation hereby grants to the Employee the right and option (the "Option") to purchase an aggregate of 10,000 shares of Corporation's $.05 par value common stock (the "Shares"), such Shares being subject to adjustment as provided in Paragraph 7 hereof, and on the terms and conditions herein set forth. 2. Purchase Price. The purchase price of the Shares covered by the Option shall be $1.50 per Share, ex-dividend, such purchase price being 100% of the fair market value of such shares on the date first appearing above. 3. Term of Option. The term of Option shall be for a period of six (6) years from the date hereof, subject to earlier termination as provided herein. 4. Exercise of Option. The Option, subject to the terms, conditions and limitations contained herein, shall be exercisable as follows: The Shares included in this Option Agreement shall be divided into five (5) installments, each installment to be of approximately equal size. The first installment shall not be exercisable until one (1) year from the date first appearing above, and each succeeding installment shall not be exercisable. When the right to exercise any installment accrues, the Shares included in that installment may be purchased at that time or from time to time thereafter during the term of the Option. 2 5. Termination of Employment. In the Event Employee's employment with the Corporation (which term includes subsidiaries of the Corporation) is terminated for cause, by Employee or for any other reason other than death, total and permanent disability or by the Corporation without cause, then the Option granted under this Agreement, or any unexercised portion thereof, shall terminate and be unexercisable as of the effective date of such termination of employment. For purposes of this Section 5, the term "cause" shall mean (a) the failure to refusal to perform diligently the duties of Employee's employment after written notice of such failure or refusal and a reasonable opportunity to remedy such is provided, (b) dishonesty, (c) the commission of an offense involving moral turpitude or (d) willful misconduct in connection with the performance of duties to the Corporation. Upon termination of employment with the Corporation without cause, then any portion of the Option which, on the effective date of termination, was unexercisable shall be accelerated and become exercisable for a period of thirty (30) days following the effective date of termination of employment, after which period any unexercised portion of the Option shall terminate and be unexercisable. Any part of the Option which was exercisable on the effective date of any termination of employment without cause, shall remain exercisable for a period of 30 days following the effective date of such termination, after which period any unexercised portion of the Option shall terminate and be unexercisable. If termination of Employee's employment with the Corporation is due to the death of the Employee, any part of the Option then exercisable under this Agreement shall remain exercisable for a period of three (3) months from the date of Employee's death, after which time the Option granted under this Agreement, or any unexercised portion thereof, shall terminate and be unexercisable. If termination of Employee's employment with the Corporation is due to Employee's total and permanent disability, as that term is defined in Section 105(d)(4) of the Internal Revenue Code of 1986, as amended, then any part of the Option then exercisable under this Agreement shall remain exercisable for a period of twelve (12) months from the date of termination of Employee's employment, after which time the Option granted under this Agreement, or any unexercised portion thereof, shall terminate and be unexercisable. No provision of this Section 5 shall operate to extend the term of this Option beyond the term set forth in Section 3 hereof. -2- 3 6. Vesting Following a Change in Control. Notwithstanding anything to the contrary contained elsewhere herein, upon a Change in Control (as hereinafter defined) Employee's right and option to purchase the aggregate number of shares granted to Employee in paragraph 1. hereof shall become fully vested and immediately exercisable for the balance of the term of the option. For purposes of this Agreement, a "Change in Control" shall be deemed to have occurred upon any of the following events: (i) The acquisition, directly or indirectly, by any person (as such terms as used in Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as amended), other than the Corporation, any of its subsidiaries or any employee benefit plan maintained by the Corporation or any such subsidiary, of beneficial ownership of securities of the Corporation representing 15% or more of the combined voting power of the Corporation's then outstanding securities; (ii) Any sale, transfer, liquidation or other disposition of all or substantially all of the Corporation's assets or earning power, or any merger, consolidation or reorganization to which the Corporation is a party and pursuant to which the Corporation or an entity controlled by the Corporation is not a surviving entity; or (iii) The election during any period of 24 months or less of 20% or more of the members of the Corporation's Board of Directors without the approval of the nomination of such new members by a majority of the members of the Board who were members at the beginning of the period, or members of the Board thereafter recommended to succeed such original members (or their successors hereunder) by a majority of the members of the Board who were members at the beginning of the period (or their successors hereunder); Unless, the Continuing Board of Directors of the Corporation (as hereinafter defined) determines that the happening of any of the foregoing events in a particular case should not be deemed a Change in Control. The "Continuing Board of Directors of the Corporation" shall mean (i) the members of the Corporation's Board of Directors in office immediately prior to the Change in Control, excluding any who initiate a Change in Control, excluding any who initiate a Change in Control or are affiliated with one who initiates a Change in Control, and (ii) any subsequent directors who may be selected, nominated or approved by a majority of the other Continuing Board of Directors of the Corporation. -3- 4 7. Transferability of Option. No Option shall be transferable by Employee otherwise than by Will or the laws of descent and distribution. During the lifetime of the Employee, any Option granted herein shall be exercisable only by the Employee and shall not be assignable or transferable by Employee; no other person shall acquire any rights therein. 8. Adjustment of Shares Subject to Option. If any Shares shall at any time be changed or exchanged by declaration of a stock dividend, a stock split, split-up, combination of shares, recapitalization or a merger, then the aggregate number of shares subject to this Agreement and the purchase price of such Shares under this Agreement shall be appropriately and equitably adjusted so as to maintain the proportionate number of Shares without changing the aggregate purchase price; provided, however, no adjustment shall be made by reason of the distribution of subscription rights on outstanding shares. 9. Rights as a Shareholder. The Employee or Employee's permitted transferee shall have no rights as a stockholder with respect to any Shares covered by the Option until the date of issuance of a stock certificate for such Shares. No adjustments, other than as provided in paragraph 8 above, shall be made for dividends (ordinary or extraordinary, whether in cash, securities or other property) or distributions for which the record date is prior to the date such stock certificate is issued. 10. Restriction on Issuance of Shares. Any other provision of this Agreement notwithstanding, the Corporation shall not be obligated to sell or issue Shares pursuant to this Agreement unless the Shares with respect to which the Option is being exercised are at that time effectively registered or exempt from registration under the Securities Act of 1933, as amended, and any applicable state securities law. An opinion of counsel for the Corporation providing that the Shares with respect to which an Option is being exercised will comply with the Securities Act of 1933, as amended, or any applicable state securities law will be sufficient to allow the Corporation to sell or issue such Shares. 11. Method of Exercising Option. Subject to the terms and conditions of this Agreement, the Option may be exercised by written notice to the Corporation at its offices located at 1415 First RepublicBank Tower, 801 Cherry Street, Fort Worth, Texas 76102. Such notice shall state the election to exercise the Option and the number of Shares in respect of which it is being exercised, and shall be signed by the person or persons so exercising the Option. Such notice shall either: -4- 5 (a) be accompanied by payment of the full purchase price of such Shares, in which event the Corporation shall deliver a certificate or certificates representing such Shares as soon as practicable after the notice shall be received; or (b) fix a date, not less than five (5) nor more than ten (10) business days from the date such notice shall be received by the Corporation, for the payment of the full purchase price of such Shares against delivery of a certificate or certificates representing such Shares. Payment of such purchase price shall, in either case, be made in cash or cashier's check payable to the order of the Corporation. The Corporation hereby agrees to loan Employee such amount of money as is needed by Employee to pay the purchase price for such shares. Such loan shall be evidenced by a promissory note, payable in full twelve (12) months from date of execution, bearing interest at the rate of 8% per annum, and secured by the shares of stock purchased with the proceeds of the loan or other collateral acceptable to the Corporation. The certificate or certificates for the Shares as to which the Option shall have been so exercised shall be registered in the name of the person or persons so exercising the Option; or if the option shall be exercised by the Employee, and if the Employee shall so request in the notice exercising the Option, such Option shall be registered in the name of the Employee and another person, as joint tenants with right of survivorship, and shall be delivered as provided above to or upon the written order of the person or persons exercising the Option. In the event the Option shall be exercised, pursuant to Paragraph 5 hereof, by any person or persons other than the Employee, such notice shall be accompanied by appropriate proof satisfactory to the Corporation of the right of such person or persons to exercise the Option. All Shares that shall be purchased upon the exercise of the Option as provided herein shall be fully paid and non-assessable. 12. Subsidiary. As used herein the term "Subsidiary" shall mean any present or future corporation which would be a "Subsidiary Corporation" of the Corporation, as that term is defined in Section 425 of the Code. 13. Binding Effect. This Agreement shall be binding upon the heirs, executors, administrators and successors of the parties hereto. 14. Governing Law. This Agreement shall be construed and interpreted in accordance with the laws of the State of Texas. -5- 6 15. Headings. Headings are for the convenience of the parties, and are not deemed to be a part of this Agreement. EXECUTED the day and year first above written. EMPLOYER: BUFFTON CORPORATION By: /s/ ROBERT H. McLEAN ------------------------------------ Robert H. McLean, President and Chief Executive Officer EMPLOYEE: /s/ TERRY KEARNEY ---------------------------------------- Terry Kearney -6- 7 AMENDMENT NO. 1 TO EMPLOYEE INCENTIVE STOCK OPTION AGREEMENT This Amendment No. 1 to Employee Incentive Stock Option Agreement (the "Amendment") is made and entered into as of the 1st day of May, 1998, between BFX Hospitality Group, Inc. (formerly Buffton Corporation), a Delaware corporation (the "Corporation"), and Terry Kearney, an employee of the Corporation or one or more of its subsidiaries (the "Employee"). WHEREAS, the Corporation and Employee entered into an Employee Incentive Stock Option Agreement, dated August 2, 1995 (the "Agreement"); and WHEREAS, a phrase was inadvertently omitted from one of the provisions of the Agreement, and the Corporation and Employee desire to correct such inadvertent omission. NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration, the parties hereto agree as follows: 1. Paragraph 4 of the Agreement is hereby amended in its entirety to read as follows" "4. Exercise of Option. The Option, subject to the terms, conditions and limitations contained herein, shall be exercisable as follows: The Shares included in this Option Agreement shall be divided into five (5) installments, each installment to be of approximately equal size. The first installment shall not be exercisable until one (1) year from the date first appearing above, and each succeeding installment shall not be exercisable until one (1) year from the date that the prior installment becomes exercisable. When the right to exercise any installment accrues, the Shares included in that installment may be purchased at that time or from time to time thereafter during the term of the Option." 2. Except to the extent amended herein, the Agreement remains unamended and unmodified, and in full force and effect. Executed the date and year first above written. EMPLOYER: BFX HOSPITALITY GROUP,INC. (formerly Buffton Corporation) By: /s/ ROBERT H. MCLEAN ------------------------------------------ Robert H. McLean, Chief Executive Officer EMPLOYEE: /s/ TERRY KEARNY ------------------------------------------ Terry Kearny 8 INCENTIVE STOCK OPTION AGREEMENT This Option Agreement (the "Agreement") made and effective as of the 10th day of February, 1999, between BFX Hospitality Group, Inc., a Delaware corporation (the "Corporation"), and Terry Kearney, an Employee of the Corporation or one or more of its Subsidiaries (the "Employee"). WHEREAS, pursuant to the BFX Hospitality Group, Inc. 1997 Employee Stock Option Plan (the "Plan") the Corporation desires to afford Employee the opportunity to purchase shares of Corporation's $.05 par value common stock, as a reward for past performance as a key employee of the Corporation, and as an incentive for future performance. NOW, WHEREFORE, in consideration of the mutual covenants hereinafter set forth and for other good and valuable consideration, the parties hereto agree as follows: 1. Grant of Option. The Corporation hereby grants to the Employee the right and option (the "Option") to purchase an aggregate of 25,000 shares of Corporation's $.05 par value common stock (the "Shares"), such Shares being subject to adjustment as provided in Section 4.5 of the Plan, and on the terms and conditions herein set forth. 2. Purchase Price. The purchase price of the Shares covered by the Option shall be $1.50 per Share. 3. Term of Option. The term of the Option shall be for a period of six (6) years from the date hereof, beginning on February 10, 1999, and ending on February 9, 2005, subject to earlier termination pursuant to Section 5.7 of the Plan. 4. Exercise of Option. The Option, subject to the terms, conditions and limitations contained herein, shall be exercisable as follows: The Shares included in this Option Agreement shall be divided into five (5) installments, each installment to be of approximately equal size. The first installment shall not be exercisable until one (1) year from the date first appearing above, and each succeeding installment shall not be exercisable until one (1) year from the date that the prior installment becomes exercisable. When the right to exercise any installment accrues, the Shares included in that installment may be purchased at that time or from time to time thereafter during the term of the Option. 5. Transferability of Option. This Option may be transferred by Employee by Will or by the laws of descent and distribution, but not otherwise. Upon such presentation for transfer, the Company shall promptly execute and deliver a new Option Agreement or Option in the form hereof in the name of assignee or assignees and in the denominations specified in such instructions. The Company shall pay all expenses incurred by it in connection with the preparation, issuance and delivery of Options under this Paragraph. Incentive Stock Option Agreement Page 1 9 6. Exercise on Termination of Employment. Employee's rights to exercise the Options following a severance of employment of the Employee from the Company shall be governed by Section 5.7 of the Plan. 7. Rights as a Shareholder. The Employee or Employee's permitted transferee shall have no rights as a stockholder with respect to any Shares covered by the Option until the date of issuance of a stock certificate for such Shares. No adjustments, other than as provided in Section 4.5 of the Plan, shall be made for dividends (ordinary or extraordinary, whether in cash, securities, or other property) or distributions for which the record date is prior to the date such stock certificate is issued. 8. Listing; Governmental Approval. The Option granted herein is subject to the requirement that, if at any time the listing or qualification of Shares issuable upon exercise of the Option is required by any securities exchange or under any state or federal law, or the consent or approval of any governmental regulatory body is necessary as a condition of, or in connection with the issuance of any Shares, no Shares shall be issued in whole or in part, unless such listing, qualification, consent or approval has been obtained. The Corporation agrees, at its own expense, to take all action necessary to obtain such listing, qualification, consent or approval so the Corporation can perform its contractual obligation to issue the Shares covered by this Option. 9. Method of Exercising Option. Subject to the terms and conditions of this Agreement, the Option may be exercised by written notice delivered in person or by first class mail to the Corporation at its offices located at 226 Bailey Avenue, Suite 101, Fort Worth, Texas 76107. Such notice shall state the election to exercise the Option and the number of Shares in respect of which it is being exercised, and shall be signed by the person or persons so exercising the Option. Such notice shall be accompanied by payment of the full purchase price of such Shares, in which event the Corporation shall deliver a certificate or certificates representing such Shares as soon as practicable after the notice shall be received. Payment of such purchase price shall, in either case, be made in (i) cash, or (ii) cashier's certified or personal check payable to the order of the Corporation, (iii) in whole shares of the Corporation's common stock previously acquired by Employee and evidenced by negotiable certificates, or (iv) by the Corporation withholding Shares that otherwise would be acquired upon such exercise. Any Shares transferred to the Corporation (or withheld upon exercise) as payment of the purchase price under this option shall be valued at the Fair Market Value on the day preceding the date of exercise of the Option. The certificate or certificates for the Shares as to which the Option shall have been so exercised shall be registered in the name of the person or persons so exercising the Option; or if the Option shall be exercised by the Employee, and if the Employee shall so request in the notice exercising the Option, such Option shall be registered in the name of the Employee and another person, as joint tenants with right of survivorship, and shall be delivered as provided above to or upon the written order of the person or persons other than the Employee, such Incentive Stock Option Agreement Page 2 10 notice shall be accompanied by appropriate proof satisfactory to the Corporation of the right of such person or persons to exercise the Option. All Shares that shall be purchased upon the exercise of the Option as provided herein shall be fully paid and non-assessable. Upon the exercise of less than all of the Options hereunder, the Corporation shall promptly execute and deliver a new Option Agreement in the form hereof covering the balance of unexercised Options. The Company shall pay all expenses incurred by it in connection with the preparation, issuance and delivery of such new Option Agreements. 10. Withholding of Taxes. At such times as an Employee recognizes taxable income in connection with the receipt of shares hereunder (a "Taxable Event), Employee shall pay to the Corporation an amount equal to the federal, state and local income taxes and other amounts as may be required by law to be withheld by the Corporation in connection with the Taxable Event (the "Withholding Taxes") prior to the issuance, or release from escrow, of such Shares. In satisfaction of the obligation to pay Withholding Taxes to the Corporation, Employee may make a written election (the "Tax Election"), which shall be binding upon the Corporation, to have withheld a portion of the Shares then issuable to Employee having an aggregate Fair Market Value equal to the Withholding Taxes. 11. Incentive Stock Options. The Options granted hereunder are intended to qualify as incentive stock option under Section 422 of the Internal Revenue Code of 1986, as amended. 12. Subsidiary. As used herein, the term "Subsidiary" shall mean any present or future corporation in which the Corporation shall own 50% or more of its accrued voting stock. 13. Binding Effect. This Agreement shall be binding upon and inure to the benefit of the respective heirs, executors, administrators and successors of the parties hereto. 14. Governing Law. This Agreement shall be construed and interpreted in accordance with the laws of the State of Delaware. 15. Headings. Headings are for the convenience of the parties are not deemed to be part of this Agreement. EXECUTED as of the day and year first written above. EMPLOYER: BFX HOSPITAL GROUP, INC.: By: /s/ ROBERT H. MCLEAN ------------------------------------ Chief Executive Officer EMPLOYEE: /s/ TERRY KEARNEY ------------------------------------ Terry Kearney Incentive Stock Option Agreement Page 3 11 INCENTIVE STOCK OPTION AGREEMENT This Option Agreement (the "Agreement") made and effective as of the 4th day of October, 1999, between BFX Hospitality Group, Inc., a Delaware corporation (the "Corporation"), and Terry Kearney, an Employee of the Corporation or one or more of its Subsidiaries (the "Employee"). WHEREAS, pursuant to the BFX Hospitality Group, Inc. 1997 Employee Stock Option Plan (the "Plan") the Corporation desires to afford Employee the opportunity to purchase shares of Corporation's $.05 par value common stock, as a reward for past performance as a key employee of the Corporation, and as an incentive for future performance. NOW, WHEREFORE, in consideration of the mutual covenants hereinafter set forth and for other good and valuable consideration, the parties hereto agree as follows: 1. Grant of Option. The Corporation hereby grants to the Employee the right and option (the "Option") to purchase an aggregate of 15,000 shares of Corporation's $.05 par value common stock (the "Shares"), such Shares being subject to adjustment as provided in Section 4.5 of the Plan, and on the terms and conditions herein set forth. 2. Purchase Price. The purchase price of the Shares covered by the Option shall be $1.00 per Share. 3. Term of Option. The term of the Option shall be for a period of six (6) years from the date hereof, beginning on October 4, 1999, and ending on October 3, 2005, subject to earlier termination pursuant to Section 5.7 of the Plan. 4. Exercise of Option. The Option, subject to the terms, conditions and limitations contained herein, shall be exercisable as follows: The Shares included in this Option Agreement shall be divided into five (5) installments, each installment to be of approximately equal size. The first installment shall not be exercisable until one (1) year from the date first appearing above, and each succeeding installment shall not be exercisable until one (1) year from the date that the prior installment becomes exercisable. When the right to exercise any installment accrues, the Shares included in that installment may be purchased at that time or from time to time thereafter during the term of the Option. 5. Transferability of Option. This Option may be transferred by Employee by Will or by the laws of descent and distribution, but not otherwise. Upon such presentation for transfer, the Company shall promptly execute and deliver a new Option Agreement or Option in the form hereof in the name of assignee or assignees and in the denominations specified in such instructions. The Company shall pay all expenses incurred by it in connection with the preparation, issuance and delivery of Options under this Paragraph. Incentive Stock Option Agreement Page 1 12 6. Exercise on Termination of Employment. Employee's rights to exercise the Options following a severance of employment of the Employee from the Company whether with or without cause, or because of death, retirement or disability shall be governed by the applicable provisions of Section 5.7 of the Plan. 7. Rights as a Shareholder. The Employee or Employee's permitted transferee shall have no rights as a stockholder with respect to any Shares covered by the Option until the date of issuance of a stock certificate for such Shares. No adjustments, other than as provided in Section 4.5 of the Plan, shall be made for dividends (ordinary or extraordinary, whether in cash, securities, or other property) or distributions for which the record date is prior to the date such stock certificate is issued. 8. Listing; Governmental Approval. The Option granted herein is subject to the requirement that, if at any time the listing or qualification of Shares issuable upon exercise of the Option is required by any securities exchange or under any state or federal law, or the consent or approval of any governmental regulatory body is necessary as a condition of, or in connection with the issuance of any Shares, no Shares shall be issued in whole or in part, unless such listing, qualification, consent or approval has been obtained. The Corporation agrees, at its own expense, to take all action necessary to obtain such listing, qualification, consent or approval so the Corporation can perform its contractual obligation to issue the Shares covered by this Option. 9. Method of Exercising Option. Subject to the terms and conditions of this Agreement, the Option may be exercised by written notice delivered in person or by first class mail to the Corporation at its offices located at 226 Bailey Avenue, Suite 101, Fort Worth, Texas 76107. Such notice shall state the election to exercise the Option and the number of Shares in respect of which it is being exercised, and shall be signed by the person or persons so exercising the Option. Such notice shall be accompanied by payment of the full purchase price of such Shares, in which event the Corporation shall deliver a certificate or certificates representing such Shares as soon as practicable after the notice shall be received. Payment of such purchase price shall, in either case, be made in (i) cash, or (ii) cashier's certified or personal check payable to the order of the Corporation, (iii) in whole shares of the Corporation's common stock previously acquired by Employee and evidenced by negotiable certificates, or (iv) by the Corporation withholding Shares that otherwise would be acquired upon such exercise. Any Shares transferred to the Corporation (or withheld upon exercise) as payment of the purchase price under this option shall be valued at the Fair Market Value on the day preceding the date of exercise of the Option. The certificate or certificates for the Shares as to which the Option shall have been so exercised shall be registered in the name of the person or persons so exercising the Option; or if the Option shall be exercised by the Employee, and if the Employee shall so request in the notice exercising the Option, such Option shall be registered in the name of the Employee and another person, as joint tenants with right of survivorship, and shall be delivered as Incentive Stock Option Agreement Page 2 13 provided above to or upon the written order of the person or persons other than the Employee, such notice shall be accompanied by appropriate proof satisfactory to the Corporation of the right of such person or persons to exercise the Option. All Shares that shall be purchased upon the exercise of the Option as provided herein shall be fully paid and non-assessable. Upon the exercise of less than all of the Options hereunder, the Corporation shall promptly execute and deliver a new Option Agreement in the form hereof covering the balance of unexercised Options. The Company shall pay all expenses incurred by it in connection with the preparation, issuance and delivery of such new Option Agreements. 10. Withholding of Taxes. At such times as an Employee recognizes taxable income in connection with the receipt of shares hereunder (a "Taxable Event), Employee shall pay to the Corporation an amount equal to the federal, state and local income taxes and other amounts as may be required by law to be withheld by the Corporation in connection with the Taxable Event (the "Withholding Taxes") prior to the issuance, or release from escrow, of such Shares. In satisfaction of the obligation to pay Withholding Taxes to the Corporation, Employee may make a written election (the "Tax Election"), which shall be binding upon the Corporation, to have withheld a portion of the Shares then issuable to Employee having an aggregate Fair Market Value equal to the Withholding Taxes. 11. Incentive Stock Options. The Options granted hereunder are intended to qualify as incentive stock option under Section 422 of the Internal Revenue Code of 1986, as amended. 12. Subsidiary. As used herein, the term "Subsidiary" shall mean any present or future corporation in which the Corporation shall own 50% or more of its accrued voting stock. 13. Binding Effect. This Agreement shall be binding upon and inure to the benefit of the respective heirs, executors, administrators and successors of the parties hereto. 14. Governing Law. This Agreement shall be construed and interpreted in accordance with the laws of the State of Delaware. 15. Headings. Headings are for the convenience of the parties are not deemed to be part of this Agreement. EXECUTED as of the day and year first written above. EMPLOYER: BFX HOSPITALITY GROUP, INC.: By: /s/ ROBERT H. MCLEAN --------------------------- Chief Executive Officer EMPLOYEE: /s/ TERRY KEARNEY ------------------------------ Terry Kearney Incentive Stock Option Agreement Page 3 EX-7.C 4 ex7-c.txt INCENTIVE STOCK OPTION AGREEMENT-2/10/99 1 EXHIBIT 7.C INCENTIVE STOCK OPTION AGREEMENT This Option Agreement (the "Agreement") made and effective as of the 10th day of February, 1999, between BFX Hospitality Group, Inc., a Delaware corporation (the "Corporation"), and Robert Korman, an Employee of the Corporation or one or more of its Subsidiaries (the "Employee"). WHEREAS, pursuant to the BFX Hospitality Group, Inc. 1997 Employee Stock Option Plan (the "Plan") the Corporation desires to afford Employee the opportunity to purchase shares of Corporation's $.05 par value common stock, as a reward for past performance as a key employee of the Corporation, and as an incentive for future performance. NOW, WHEREFORE, in consideration of the mutual covenants hereinafter set forth and for other good and valuable consideration, the parties hereto agree as follows: 1. Grant of Option. The Corporation hereby grants to the Employee the right and option (the "Option") to purchase an aggregate of 25,000 shares of Corporation's $.05 par value common stock (the "Shares"), such Shares being subject to adjustment as provided in Section 4.5 of the Plan, and on the terms and conditions herein set forth. 2. Purchase Price. The purchase price of the Shares covered by the Option shall be $1.50 per Share. 3. Term of Option. The term of the Option shall be for a period of five (5) years from the date hereof, beginning on February 10, 1999, and ending on February 9, 2004, subject to earlier termination pursuant to Section 5.7 of the Plan. 4. Exercise of Option. From and after one hundred eighty-one (181) days from the effective date hereof, the Option shall be fully exercisable, in whole or in part, for the remaining term of the Option, subject to the terms of the Plan. The Option granted herein shall be exercisable only by the Employee, the Administrator or Executor of the Estate of the Employee or the heirs of the Employee taking title to the Option pursuant to the Employee's Will or the laws of descent and distribution. 5. Transferability of Option. This Option may be transferred by Employee by Will or by the laws of descent and distribution, but not otherwise. Upon such presentation for transfer, the Company shall promptly execute and deliver a new Option Agreement or Option in the form hereof in the name of assignee or assignees and in the denominations specified in such instructions. The Company shall pay all expenses incurred by it in connection with the preparation, issuance and delivery of Options under this Paragraph. Incentive Stock Option Agreement Page 1 2 6. Exercise on Termination of Employment. Employee's rights to exercise the Options following a severance of employment of the Employee from the Company shall be governed by Section 5.7 of the Plan. 7. Rights as a Shareholder. The Employee or Employee's permitted transferee shall have no rights as a stockholder with respect to any Shares covered by the Option until the date of issuance of a stock certificate for such Shares. No adjustments, other than as provided in Section 4.5 of the Plan, shall be made for dividends (ordinary or extraordinary, whether in cash, securities, or other property) or distributions for which the record date is prior to the date such stock certificate is issued. 8. Listing; Registration; Governmental Approval. (a) Issuance. The Option granted herein is subject to the requirement that, if at any time the listing, registration, or qualification of Shares issuable upon exercise of the Option is required by any securities exchange or under any state or federal law, or the consent or approval of any governmental regulatory body is necessary as a condition of, or in connection with the issuance of any Shares, no Shares shall be issued in whole or in part, unless such listing, registration, qualification, consent or approval has been obtained. The Corporation agrees, at its own expense, to take all action necessary to obtain such listing, registration, qualification, consent or approval so the Corporation can perform its contractual obligation to issue the Shares covered by this Option. (b) Registration Rights. (1) Employee shall have the right, exercisable by written notice to the Corporation from time to time for three (3) years following the date of exercise of the options, to have the Corporation prepare and file with the Securities and Exchange Commission (the "Commission"), at the sole expense of the Corporation, registration statements and such other documents, including prospectuses, as may be necessary in the opinion of both counsel for the Corporation and counsel for Employee, in order to comply with the provisions of the Securities Act of 1933, as amended (the "Act"), so as to permit a public offering and sale by Employee of his Registrable Securities (as hereinafter defined). (2) If, at any time within to three (3) years following the exercise of the Option, the Corporation proposes to prepare and file a registration statement covering equity or debt securities of the Corporation, or any such securities of the Corporation held by its shareholders (in any such case, other than in connection with a merger, acquisition or pursuant to Form S-8 or successor form), it will give written notice of its intention to do so by registered mail ("Notice"), at least thirty (30) business days prior to the filing of each such registration statement, to Employee. Upon the written request of Employee, make within twenty (20) business days after receipt of the Notice, that the Corporation include any of Employee's Registrable Securities in the proposed registration statement, the Corporation shall, as to Employee, use its best efforts to effect the Incentive Stock Option Agreement Page 2 3 registration under the Act of Registrable Securities which it has been so requested to register and include them in the sale by the underwriter ("Piggyback Registration"), at the Corporation's sole cost and expense and at no cost or expense to Employee; provided, however, that if, in the written opinion of the Corporation's managing underwriter, if any, for such offering, the inclusion of a specific percentage (up to 100%) of the Registrable Securities requested to be registered, when added to the securities being registered by the Corporation or the selling shareholder(s), will exceed the maximum amount of the Corporation's securities which can be marketed (i) at a price reasonably related to their then current market value, or (ii) without otherwise materially adversely affecting the entire offering, then the Corporation may exclude from such offering the percentage of the Registrable Securities which it has been requested to register specified by such managing underwriter. To avail himself of the registration right granted herein, Employee shall (a) firmly commit to sell his shares and to escrow them pending completion of the registration; and (b) agree to a pre-offering lock-up for ninety (90) days prior to the effective date of such registration and a post-offering lock-up for an additional ninety (90) days. Notwithstanding the provisions of paragraph 8(b)(1), the Corporation shall have the right at any time after it shall have given written notice pursuant to this paragraph 8(b)(1) (irrespective of whether any written request for inclusion of such securities shall have already been made) to elect not to file any such proposed registration statement, or to withdraw the same after the filing but prior to the effective date thereof. (3) As used herein the term "Registrable Security" means all of the Shares; provided, however, that with respect to any particular Registrable Security, such security shall cease to be a Registrable Security when, as of the date of determination, (i) it has been effectively registered under the Act and disposed of pursuant thereto, (ii) registration under the Act is no longer required for the immediate public distribution of such security or (iii) it has ceased to be outstanding. In the event of any merger, reorganization, consolidation, recapitalization or other change in corporate structure affecting the common stock of Employer, such adjustment shall be made in the definition of "Registrable Security" as is appropriate in order to prevent any dilution or enlargement of the registration rights granted pursuant to this paragraph 8. (4) In connection with any registration under this paragraph 8, the Corporation shall file the registration statement as expeditiously as possible, but in no event later than thirty (30) business days following receipt of any demand therefor, shall use its best efforts to have any such Registration Statements declared effective at the earliest possible time, and shall furnish Employee such number of prospectuses as shall reasonably be requested. (5) The Corporation shall pay all costs, fees and expenses in connection with any such registration statements filed pursuant to this paragraph 8 including, without limitation, the Corporation's legal and accounting fees, printing expenses, and blue sky fees and expenses, except for underwriting commissions and discounts relating to Employee's shares. (6) The Corporation will take all necessary action which may be required in qualifying or registering the Registrable Securities included in a Registration Statement for offering and sale under the securities or blue sky laws of such states as are requested by Employee; provided Incentive Stock Option Agreement Page 3 4 that the Corporation shall not be obligated to execute or file any general consent to service of process or to qualify as a foreign corporation to do business under the laws of any such jurisdiction. (7) Employee may, at his option, require the Corporation to satisfy its obligation with respect to this paragraph 8 by including the Registrable Securities, to the extent permissible, in a registration statement on Form S-8 (or a successor form thereto) filed with the Commission which contains a "reoffer prospectus" as required by General Instruction C of Form S-8; provided, however, that Employee's rights under this paragraph 8 shall continue with respect to any Registrable Securities not included in such registration statement on Form S-8. 9. Method of Exercising Option. Subject to the terms and conditions of this Agreement, the Option may be exercised by written notice delivered in person or by first class mail to the Corporation at its offices located at 226 Bailey Avenue, Suite 101, Fort Worth, Texas 76107. Such notice shall state the election to exercise the Option and the number of Shares in respect of which it is being exercised, and shall be signed by the person or persons so exercising the Option. Such notice shall be accompanied by payment of the full purchase price of such Shares, in which event the Corporation shall deliver a certificate or certificates representing such Shares as soon as practicable after the notice shall be received. Payment of such purchase price shall, in either case, be made in (i) cash, or (ii) cashier's certified or personal check payable to the order of the Corporation, (iii) in whole shares of the Corporation's common stock previously acquired by Employee and evidenced by negotiable certificates, or (iv) by the Corporation withholding Shares that otherwise would be acquired upon such exercise. Any Shares transferred to the Corporation (or withheld upon exercise) as payment of the purchase price under this option shall be valued at the Fair Market Value on the day preceding the date of exercise of the Option. The certificate or certificates for the Shares as to which the Option shall have been so exercised shall be registered in the name of the person or persons so exercising the Option; or if the Option shall be exercised by the Employee, and if the Employee shall so request in the notice exercising the Option, such Option shall be registered in the name of the Employee and another person, as joint tenants with right of survivorship, and shall be delivered as provided above to or upon the written order of the person or persons other than the Employee, such notice shall be accompanied by appropriate proof satisfactory to the Corporation of the right of such person or persons to exercise the Option. All Shares that shall be purchased upon the exercise of the Option as provided herein shall be fully paid and non-assessable. Upon the exercise of less than all of the Options hereunder, the Corporation shall promptly execute and deliver a new Option Agreement in the form hereof covering the balance of unexercised Options. The Company shall pay all expenses incurred by it in connection with the preparation, issuance and delivery of such new Option Agreements. 10. Withholding of Taxes. At such times as an Employee recognizes taxable income in connection with the receipt of shares hereunder (a "Taxable Event), Employee shall pay to the Corporation an amount equal to the federal, state and local income taxes and other amounts as may Incentive Stock Option Agreement Page 4 5 be required by law to be withheld by the Corporation in connection with the Taxable Event (the "Withholding Taxes") prior to the issuance, or release from escrow, of such Shares. In satisfaction of the obligation to pay Withholding Taxes to the Corporation, Employee may make a written election (the "Tax Election"), which shall be binding upon the Corporation, to have withheld a portion of the Shares then issuable to Employee having an aggregate Fair Market Value equal to the Withholding Taxes. 11. Incentive Stock Options. The Options granted hereunder are intended to qualify as incentive stock option under Section 422 of the Internal Revenue Code of 1986, as amended. 12. Subsidiary. As used herein, the term "Subsidiary" shall mean any present or future corporation in which the Corporation shall own 50% or more of its accrued voting stock. 13. Binding Effect. This Agreement shall be binding upon and inure to the benefit of the respective heirs, executors, administrators and successors of the parties hereto. 14. Governing Law. This Agreement shall be construed and interpreted in accordance with the laws of the State of Delaware. 15. Headings. Headings are for the convenience of the parties are not deemed to be part of this Agreement. EXECUTED as of the day and year first written above. EMPLOYER: BFX HOSPITALITY GROUP, INC.: By: ------------------------------- Chief Executive Officer EMPLOYEE: ------------------------------- Robert Korman Incentive Stock Option Agreement Page 5 6 NON-QUALIFIED STOCK OPTION AGREEMENT This Option Agreement (the "Agreement") made and effective as of the 4th day of October, 1999, between BFX Hospitality Group, Inc., a Delaware corporation (the "Corporation"), and Robert Korman, an Employee of the Corporation or one or more of its Subsidiaries (the "Employee"). WHEREAS, the Corporation desires to afford Employee the opportunity to purchase shares of Corporation's $.05 par value common stock, as a reward for past performance as a key employee of the Corporation, and as an incentive for future performance. NOW, WHEREFORE, in consideration of the mutual covenants hereinafter set forth and for other good and valuable consideration, the parties hereto agree as follows: 1. Grant of Option. The Corporation hereby grants to the Employee the right and option (the "Option") to purchase an aggregate of 25,000 shares of Corporation's $.05 par value common stock (the "Shares"), such Shares being subject to adjustment as provided in paragraph 6 hereof, and on the terms and conditions herein set forth. 2. Purchase Price. The purchase price of the Shares covered by the Option shall be $1.00 per Share. 3. Term of Option. The term of the Option shall be for a period of five (5) years from the date hereof, beginning on October 4, 1999 and ending on October 3, 2004. 4. Exercise of Option. From and after October 4, 1999, the Option shall be fully exercisable, in whole or in part, for the remaining term of the Option. The Option granted herein shall be exercisable only by the Employee, the Administrator or Executor of the Estate of the Employee, the heirs of the Employee taking title to the Option pursuant to the Employee's Will or the laws of descent and distribution, a court appointed guardian of the Employee, or by power of attorney duly appointed by the Employee. 5. Transferability of Option. This Option may be transferred by Employee by Will or by the laws of descent and distribution, but not otherwise. Upon such presentation for transfer, the Company shall promptly execute and deliver a new Option Agreement or Option in the form hereof in the name of assignee or assignees and in the denominations specified in such instructions. The Company shall pay all expenses incurred by it in connection with the preparation, issuance and delivery of Options under this Paragraph. 6. Anti-Dilution Provisions. (a) In case at any time or from time to time after the date of this Option, the holders of common stock of the Company shall have received or shall have become legally entitled to receive, 7 (i) other or additional stock or other securities or property (other than cash) by way of a dividend or other distribution, or (ii) other or additional (or less) stock or other securities or property (including cash) by way of stock-split, spin-off, split-up, reclassification, combination or shares or similar corporate rearrangements, then and in each such case the holder of this Option, upon the exercise hereof s provided herein, shall be entitled to receive, in lieu of (or in addition to, as the case may be) the Shares theretofore receivable upon the exercise of this Option, the amount of stock and other securities and property (including cash in the case referred to in clause (ii) above) which such holder would have held on the date of such exercise of on the date such dividend, distribution, corporate rearrangement or such other event as described in clause (ii) above such holder had been the holder of record of the number of Shares receivable upon the exercise of this Option and had thereafter, during the period from the date thereof to and including the date of such exercise, obtained such Shares and all other or additional (or less) stock and other securities and property (including cash in the case referred to in clause (ii) above) receivable by him as aforesaid during such period, giving effect to all adjustments called for during such period by the following subparagraph. (b) In case of any reorganization of the Company (or any other corporation the stock or other securities of which are at the time receivable on the exercise of this Option) after the date hereof, or in case, after such date, the Company (or any such other corporation) shall consolidate, amalgamate or merge with or into or enter into a mandatory share exchange with another entity, then and in each such case the holder of this Option, upon the exercise hereof as provided herein at any time after the consummation of such reorganization, consolidation, amalgamation, merger, mandatory share exchange, or conveyance, shall be entitled to receive, and any third parties participating in such transaction shall acknowledge in writing that the holder is entitled to receive, in lieu of the Shares, stock or other securities and property receivable upon the exercise of this Option prior to such consummation, the stock or other securities or property to which such holder would have been entitled upon such consummation if such holder had exercised this Option immediately prior thereto, all subject to further adjustment as provided in the preceding subparagraph (a). (c) So long as this Option shall be outstanding and unexercised, if the Company shall enter into any transactions referred to in this Section 6, which effects a change in the securities or other property to which the holder is entitled upon exercise of this Option, then, in any such case, the Company shall cause to be sent to the holder a brief statement of the event giving rise to such effect, and a description thereof, together with advance notice of the record date relevant to any such transaction. 7. Rights as a Shareholder. The Employee or Employee's permitted transferee shall have no rights as a stockholder with respect to any Shares covered by the Option until the date of Page 2 8 issuance of a stock certificate for such Shares. No adjustments, other than as provided in paragraph 6 above, shall be made for dividends (ordinary or extraordinary, whether in cash, securities, or other property) or distributions for which the record date is prior to the date such stock certificate is issued. 8. Listing; Registration; Governmental Approval. (a) Issuance. The Option granted herein is subject to the requirement that, if at any time the listing, registration, or qualification of Shares issuable upon exercise of the Option is required by any securities exchange or under any state or federal law, or the consent or approval of any governmental regulatory body is necessary as a condition of, or in connection with the issuance of any Shares, no Shares shall be issued in whole or in part, unless such listing, registration, qualification, consent or approval has been obtained. The Corporation agrees, at its own expense, to take all action necessary to obtain such listing, registration, qualification, consent or approval so the Corporation can perform its contractual obligation to issue the Shares covered by this Option. (b) Registration Rights. (1) Employee shall have the right, exercisable by written notice to the Corporation from time to time for three (3) years following the date of exercise of the Options, to have the Corporation prepare and file with the Securities and Exchange Commission (the "Commission"), at the sole expense of the Corporation, registration statements and such other documents, including prospectuses, as may be necessary in the opinion of both counsel for the Corporation and counsel for Employee, in order to comply with the provisions of the Securities Act of 1933, as amended (the "Act"), so as to permit a public offering and sale by Employee of his Registrable Securities (as hereinafter defined). (2) If, at any time within to three (3) years following the exercise of the Option, the Corporation proposes to prepare and file a registration statement covering equity or debt securities of the Corporation, or any such securities of the Corporation held by its shareholders (in any such case, other than in connection with a merger, acquisition or pursuant to Form S-8 or successor form), it will give written notice of its intention to do so by registered mail ("Notice"), at least thirty (30) business days prior to the filing of each such registration statement, to Employee Upon the written request of Employee, made within twenty (20) business days after receipt of the Notice, that the Corporation include any of Employee's Registrable Securities in the proposed registration statement, the Corporation shall, as to Employee, use its best efforts to effect the registration under the Act of the Registrable Securities which it has been so requested to register and include them in the sale by the underwriter ("Piggyback Registration"), at the Corporation's sole cost and expense and at no cost or expense to Employee; provided, however, that if, in the written opinion of the Corporation's managing underwriter, if any, for such offering, the inclusion of a specific percentage (up to 100%) of the Registrable Securities requested to be registered, when added to the securities being registered by the Corporation or the selling shareholder(s), will exceed the maximum amount of the Corporation's securities which can be marketed (i) at a price reasonably related to their then current market value, or (ii) without otherwise materially adversely affecting the entire offering, then the Corporation may exclude from such offering the percentage of the Page 3 9 Registrable Securities which it has been requested to register specified by such managing underwriter. To avail himself of the registration right granted herein, Employee shall (a) firmly commit to sell his shares and to escrow them pending completion of the registration; and (b) agree to a pre-offering lock-up for ninety (90) days prior to the effective date of such registration and a post-offering lock-up for an additional ninety (90) days. Notwithstanding the provisions of this paragraph 8(b)(1), the Corporation shall have the right at any time after it shall have given written notice pursuant to this paragraph 8(b)(2) (irrespective of whether any written request for inclusion of such securities shall have already been made) to elect not to file any such proposed registration statement, or to withdraw the same after the filing but prior to the effective date thereof. (3) As used herein the term "Registrable Security" means all of the Shares; provided, however, that with respect to any particular Registrable Security, such security shall cease to be a Registrable Security when, as of the date of determination, (i) it has been effectively registered under the Act and disposed of pursuant thereto, (ii) registration under the Act is no longer required for the immediate public distribution of such security or (iii) it has ceased to be outstanding. In the event of any merger, reorganization, consolidation, recapitalization or other change in corporate structure affecting the common stock of Employer, such adjustment shall be made in the definition of "Registrable Security" as is appropriate in order to prevent any dilution or enlargement of the registration rights granted pursuant to this paragraph 8. (4) In connection with any registration under this paragraph 8, the Corporation shall file the registration statement as expeditiously as possible, but in no event later than thirty (30) business days following receipt of any demand therefor, shall use its best efforts to have any such Registration Statements declared effective at the earliest possible time, and shall furnish Employee such number of prospectuses as shall reasonably be requested. (5) The Corporation shall pay all costs, fees and expenses in connection with any such registration statements filed pursuant to this paragraph 8 including, without limitation, the Corporation's legal and accounting fees, printing expenses, and blue sky fees and expenses, except for underwriting commissions and discounts relating to Employee's shares. (6) The Corporation will take all necessary action which may be required in qualifying or registering the Registrable Securities included in a Registration Statement for offering and sale under the securities or blue sky laws of such states as are requested by Employee; provided that the Corporation shall not be obligated to execute or file any general consent to service of process or to qualify as a foreign corporation to do business under the laws of any such jurisdiction. (7) Employee may, at his option, require the Corporation to satisfy its obligation with respect to this paragraph 9, by including the Registrable Securities, to the extent permissible, in a registration statement on Form S-8 (or a successor form thereto) filed with the Commission which contains a "reoffer prospectus" as required by General Instruction C of Form S-8; provided, however, that Employee's rights under this paragraph 8 shall continue with respect to any Registrable Securities not included in such registration statement on Form S-8. Page 4 10 9. Method of Exercising Option. Subject to the terms and conditions of this Agreement, the Option may be exercised by written notice delivered in person or by first class mall to the, Corporation at its offices presently located at 226 Bailey Avenue, Suite 101, Fort Worth, Texas 76107. Such notice shall state the election to exercise the Option and the number of Shares in respect of which it is being exercised, and shall be signed by the person or persons so exercising the Option. Such notice shall be accompanied by payment of the full purchase price of such Shares, in which event the Corporation shall deliver a certificate representing such Shares as soon as practicable after the notice shall be received. Payment of such purchase price shall, in either case, be made in (i) cash, (ii) cashier's, certified or personal check payable to the order of the Corporation, (iii) in whole shares of the Corporation's common stock previously acquired by Employee and evidenced by negotiable certificates, or (iv) by the Corporation withholding Shares that otherwise would be acquired upon such exercise. Any Shares transferred to the Corporation (or withheld upon exercise) as payment of the purchase price under this option shall be valued at the Fair Market Value on the day preceding the date of exercise of the Option. The certificate or certificates for the Shares as to which the Option shall have been so exercised shall be registered in the name of the person or persons so exercising the Option; or if the Option shall be exercised by the Employee, and if the Employee shall so request in the notice exercising the Option, such Option shall be registered in the name of the Employee and another person, as joint tenants with right of survivorship, and shall be delivered as provided above to or upon the written order of the person or persons other than the Employee, such notice shall be accompanied by appropriate proof satisfactory to the Corporation of the right of such person or persons to exercise the Option. All shares that shall be purchased upon the exercise of the Option as provided herein shall be fully paid and non-assessable. Upon the exercise of less than all of the Options hereunder, the Company shall promptly execute and deliver a new Option Agreement in the form hereof covering the balance of unexercised Options. The Company shall pay all expenses incurred by it in connection with the preparation, issuance and delivery of such new Option Agreements. Upon request by Employee, the Company hereby agrees to loan Employee such amount of money as is needed by Employee to pay the purchase price for such shares. Such loan shall be evidenced by a promissory note, payable in full twelve (12) months from date of execution, bearing interest at the rate of 8% per annum, and secured by the shares of stock purchased with the proceeds of the loan or other collateral acceptable to Company. 10. Withholding of Taxes. At such times as Employee recognizes taxable income in connection with the receipt of shares hereunder (a "Taxable Event"), Employee shall pay to the Corporation an amount equal to the federal, state and local income taxes and other amounts as may be required by law to be withheld by the Corporation in connection with the Taxable Event (the "Withholding Taxes") prior to the issuance, or release from escrow, of such Shares. In satisfaction of the obligation to pay Withholding Taxes to the Corporation, Employee may take a written election (the "Tax Election"), which shall be binding upon the Corporation to have withheld a portion of the Shares then issuable to Employee having an aggregate Fair Market Value equal to the Withholding Taxes. Page 5 11 11. Non-Qualified Options. The Options granted hereunder are not part of or authorized pursuant to any plan or arrangement which is qualified or created incident to any provision of the Internal Revenue Code of 1986, as amended. 12. Subsidiary. As used herein, the term "Subsidiary" shall mean any present or future corporation in which the Corporation shall own 50% or more of its accrued voting stock. 13. Binding Effect. This Agreement shall be binding upon and inure to the benefit of the respective heirs, executors, administrators and successors of the parties hereto. 14. Governing Law. This Agreement shall be construed and interpreted in accordance with the laws of the State of Delaware. 15. Headings. Headings are for the convenience of the parties are not deemed to be part of this Agreement. EXECUTED as of the day and year first written above. CORPORATION: BFX HOSPITALITY GROUP, INC. By: /s/ ROBERT H. MCLEAN ---------------------------------------- Robert H. McLean Chief Executive Officer EMPLOYEE: /s/ ROBERT KORMAN ----------------------------------------- Robert Korman Page 6 EX-7.D 5 ex7-d.txt NON-QUALIFIED STOCK OPTION AGREEMENT-10/4/99 1 EXHIBIT 7.d NON-QUALIFIED STOCK OPTION AGREEMENT This Option Agreement (the "Agreement") made and effective as of the 4th day of October, 1999, between BFX Hospitality Group, Inc., a Delaware corporation (the "Corporation"), and Robert H. McLean, an Employee of the Corporation or one or more of its Subsidiaries (the "Employee"). WHEREAS, the Corporation desires to afford Employee the opportunity to purchase shares of Corporation's $.05 par value common stock, as a reward for past performance as a key employee of the Corporation, and as an incentive for future performance. NOW, WHEREFORE, in consideration of the mutual covenants hereinafter set forth and for other good and valuable consideration, the parties hereto agree as follows: 1. Grant of Option. The Corporation hereby grants to the Employee the right and option (the "Option") to purchase an aggregate of 300,000 shares of Corporation's $.05 par value common stock (the "Shares"), such Shares being subject to adjustment as provided in paragraph 6 hereof, and on the terms and conditions herein set forth. 2. Purchase Price. The purchase price of the Shares covered by the Option shall be $1.00 per Share. 3. Term of Option. The term of the Option shall be for a period of five (5) years from the date hereof, beginning on October 4, 1999 and ending on October 3, 2004. 4. Exercise of Option. From and after October 4, 1999, the Option shall be fully exercisable, in whole or in part, for the remaining term of the Option. The Option granted herein shall be exercisable only by the Employee, the Administrator or Executor of the Estate of the Employee, the heirs of the Employee taking title to the Option pursuant to the Employee's Will or the laws of descent and distribution, a court appointed guardian of the Employee, or by power of attorney duly appointed by the Employee. 5. Transferability of Option. This Option may be transferred by Employee by Will or by the laws of descent and distribution, but not otherwise. Upon such presentation for transfer, the Company shall promptly execute and deliver a new Option Agreement or Option in the form hereof in the name of assignee or assignees and in the denominations specified in such instructions. The Company shall pay all expenses incurred by it in connection with the preparation, issuance and delivery of Options under this Paragraph. 6. Anti-Dilution Provisions. (a) In case at any time or from time to time after the date of this Option, the holders of common stock of the Company shall have received or shall have become legally entitled to receive, 2 (i) other or additional stock or other securities or property (other than cash) by way of a dividend or other distribution, or (ii) other or additional (or less) stock or other securities or property (including cash) by way of stock-split, spin-off, split-up, reclassification, combination or shares or similar corporate rearrangements, then and in each such case the holder of this Option, upon the exercise hereof provided herein, shall be entitled to receive, in lieu of (or in addition to, as the case may be) the Shares theretofore receivable upon the exercise of this Option, the amount of stock and other securities and property (including cash in the case referred to in clause (ii) above) which such holder would have held on the date of such exercise or on the date such dividend, distribution, corporate rearrangement or such other event as described in clause (ii) above such holder had been the holder of record of the number of Shares receivable upon the exercise of this Option and had thereafter, during the period from the date thereof to and including the date of such exercise, obtained such Shares and all other or additional (or less) stock and other securities and property (including cash in the case referred to in clause (ii) above) receivable by him as aforesaid during such period, giving effect to all adjustments called for during such period by the following subparagraph. (b) In case of any reorganization of the Company (or any other corporation the stock or other securities of which are at the time receivable on the exercise of this Option) after the date hereof, or in case, after such date, the Company (or any such other corporation) shall consolidate, amalgamate or merge with or into or enter into a mandatory share exchange with another entity, then and in each such case the holder of this Option, upon the exercise hereof as provided herein at any time after the consummation of such reorganization, consolidation, amalgamation, merger, mandatory share exchange, or conveyance, shall be entitled to receive, and any third parties participating in such transaction shall acknowledge in writing that the holder is entitled to receive, in lieu of the Shares, stock or other securities and property receivable upon the exercise of this Option prior to such consummation, the stock or other securities or property to which such holder would have been entitled upon such consummation if such holder had exercised this Option immediately prior thereto, all subject to further adjustment as provided in the preceding subparagraph (a). (c) So long as this Option shall be outstanding and unexercised, if the Company shall enter into any transactions referred to in this Section 6, which effects a change in the securities or other property to which the holder is entitled upon exercise of this Option, then, in any such case, the Company shall cause to be sent to the holder a brief statement of the event giving rise to such effect, and a description thereof, together with advance notice of the record date relevant to any such transaction. 7. Rights as a Shareholder. The Employee or Employee's permitted transferee shall Page 2 3 have no rights as a stockholder with respect to any Shares covered by the Option until the date of issuance of a stock certificate for such Shares. No adjustments, other than as provided in paragraph 6 above, shall be made for dividends (ordinary or extraordinary, whether in cash, securities, or other property) or distributions for which the record date is prior to the date such stock certificate is issued. 8. Listing; Registration; Governmental Approval. (a) Issuance. The Option granted herein is subject to the requirement that, if at any time the listing, registration, or qualification of Shares issuable upon exercise of the Option is required by any securities exchange or under any state or federal law, or the consent or approval of any governmental regulatory body is necessary as a condition of, or in connection with the issuance of any Shares, no Shares shall be issued in whole or in part, unless such listing, registration, qualification, consent or approval has been obtained. The Corporation agrees, at its own expense, to take all action necessary to obtain such listing, registration, qualification, consent or approval so the Corporation can perform its contractual obligation to issue the Shares covered by this Option. (b) Registration Rights. (1) Employee shall have the right, exercisable by written notice to the Corporation from time to time for three (3) years following the date of exercise of the Options, to have the Corporation prepare and file with the Securities and Exchange Commission (the "Commission"), at the sole expense of the Corporation, registration statements and such other documents, including prospectuses, as may be necessary in the opinion of both counsel for the Corporation and counsel for Employee, in order to comply with the provisions of the Securities Act of 1933, as amended (the "Act"), so as to permit a public offering and sale by Employee of his Registrable Securities (as hereinafter defined). (2) If, at any time within to three (3) years following the exercise of the Option, the Corporation proposes to prepare and file a registration statement covering equity or debt securities of the Corporation, or any such securities of the Corporation held by its shareholders (in any such case, other than in connection with a merger, acquisition or pursuant to Form S-8 or successor form), it will give written notice of its intention to do so by registered mail ("Notice"), at least thirty (30) business days prior to the filing of each such registration statement, to Employee. Upon the written request of Employee, made within twenty (20) business days after receipt of the Notice, that the Corporation include any of Employee's Registrable Securities in the proposed registration statement, the Corporation shall, as to Employee, use its best efforts to effect the registration under the Act of the Registrable Securities which it has been so requested to register and include them in the sale by the underwriter ("Piggyback Registration"), at the Corporation's sole cost and expense and at no cost or expense to Employee; provided, however, that if, in the written opinion of the Corporation's managing underwriter, if any, for such offering, the inclusion of a specific percentage (up to 100%) of the Registrable Securities requested to be registered, when added to the securities being registered by the Corporation or the selling shareholder(s), will exceed the maximum amount of the Corporation's securities which can be marketed (i) at a price reasonably related to their then current market value, or (ii) without otherwise materially adversely affecting the Page 3 4 entire offering, then the Corporation may exclude from such offering the percentage of the Registrable Securities which it has been requested to register specified by such managing underwriter. To avail himself of the registration right granted herein, Employee shall (a) firmly commit to sell his shares and to escrow them pending completion of the registration; and (b) agree to a pre-offering lock-up for ninety (90) days prior to the effective date of such registration and a post-offering lock-up for an additional ninety (90) days. Notwithstanding the provisions of this paragraph 8(b)(1), the Corporation shall have the right at any time after it shall have given written notice pursuant to this paragraph 8(b)(2) (irrespective of whether any written request for inclusion of such securities shall have already been made) to elect not to file any such proposed registration statement, or to withdraw the same after the filing but prior to the effective date thereof. (3) As used herein the term "Registrable Security" means all of the Shares; provided, however, that with respect to any particular Registrable Security, such security shall cease to be a Registrable Security when, as of the date of determination, (i) it has been effectively registered under the Act and disposed of pursuant thereto, (ii) registration under the Act is no longer required for the immediate public distribution of such security or (iii) it has ceased to be outstanding. In the event of any merger, reorganization, consolidation, recapitalization or other change in corporate structure affecting the common stock of Employer, such adjustment shall be made in the definition of "Registrable Security" as is appropriate in order to prevent any dilution or enlargement of the registration rights granted pursuant to this paragraph 8. (4) In connection with any registration under this paragraph 8, the Corporation shall file the registration statement as expeditiously as possible, but in no event later than thirty (30) business days following receipt of any demand therefor, shall use its best efforts to have any such Registration Statements declared effective at the earliest possible time, and shall furnish Employee such number of prospectuses as shall reasonably be requested. (5) The Corporation shall pay all costs, fees and expenses in connection with any such registration statements filed pursuant to this paragraph 8 including, without limitation, the Corporation's legal and accounting fees, printing expenses, and blue sky fees and expenses, except for underwriting commissions and discounts relating to Employee's shares. (6) The Corporation will take all necessary action which may be required in qualifying or registering the Registrable Securities included in a Registration Statement for offering and sale under the securities or blue sky laws of such states as are requested by Employee; provided that the Corporation shall not be obligated to execute or file any general consent to service of process or to qualify as a foreign corporation to do business under the laws of any such jurisdiction. (7) Employee may, at his option, require the Corporation to satisfy its obligation with respect to this paragraph 9, by including the Registrable Securities, to the extent permissible, in a registration statement on Form S-8 (or a successor form thereto) filed with the Commission which contains a "reoffer prospectus" as required by General Instruction C of Form S-8; provided, however, that Employee's rights under this paragraph 8 shall continue with respect to any Page 4 5 Registrable Securities not included in such registration statement on Form S-8. 9. Method of Exercising Option. Subject to the terms and conditions of this Agreement, the Option may be exercised by written notice delivered in person or by first class mail to the Corporation at its offices presently located at 226 Bailey Avenue, Suite 101, Fort Worth, Texas 76107. Such notice shall state the election to exercise the Option and the number of Shares in respect of which it is being exercised, and shall be signed by the person or persons so exercising the Option. Such notice shall be accompanied by payment of the full purchase price of such Shares, in which event the Corporation shall deliver a certificate representing such Shares as soon as practicable after the notice shall be received. Payment of such purchase price shall, in either case, be made in (i) cash, (ii) cashier's, certified or personal check payable to the order of the Corporation, (iii) in whole shares of the Corporation's common stock previously acquired by Employee and evidenced by negotiable certificates, or (iv) by the Corporation withholding Shares that otherwise would be acquired upon such exercise. Any Shares transferred to the Corporation (or withheld upon exercise) as payment of the purchase price under this option shall be valued at the Fair Market Value on the day preceding the date of exercise of the Option. The certificate or certificates for the Shares as to which the Option shall have been so exercised shall be registered in the name of the person or persons so exercising the Option; or if the Option shall be exercised by the Employee, and if the Employee shall so request in the notice exercising the Option, such Option shall be registered in the name of the Employee and another person, as joint tenants with right of survivorship, and shall be delivered as provided above to or upon the written order of the person or persons other than the Employee, such notice shall be accompanied by appropriate proof satisfactory to the Corporation of the right of such person or persons to exercise the Option. All shares that shall be purchased upon the exercise of the Option as provided herein shall be fully paid and non-assessable. Upon the exercise of less than all of the Options hereunder, the Company shall promptly execute and deliver a new Option Agreement in the form hereof covering the balance of unexercised Options. The Company shall pay all expenses incurred by it in connection with the preparation, issuance and delivery of such new Option Agreements. Upon request by Employee, the Company hereby agrees to loan Employee such amount of money as is needed by Employee to pay the purchase price for such shares. Such loan shall be evidenced by a promissory note, payable in full twelve (12) months from date of execution, bearing interest at the rate of 8% per annum, and secured by the shares of stock purchased with the proceeds of the loan or other collateral acceptable to Company. 10. Withholding of Taxes. At such times as Employee recognizes taxable income in connection with the receipt of shares hereunder (a "Taxable Event"), Employee shall pay to the Corporation an amount equal to the federal, state and local income taxes and other amounts as may be required by law to be withheld by the Corporation in connection with the Taxable Event (the "Withholding Taxes") prior to the issuance, or release from escrow, of such Shares. In satisfaction of the obligation to pay Withholding Taxes to the Corporation, Employee may take a written election (the "Tax Election"), which shall be binding upon the Corporation to have withheld a portion of the Page 5 6 Shares then issuable to Employee having an aggregate Fair Market Value equal to the Withholding Taxes. 11. Non-Qualified Options. The Options granted hereunder are not part of or authorized pursuant to any plan or arrangement which is qualified or created incident to any provision of the Internal Revenue Code of 1986, as amended. 12. Subsidiary. As used herein, the term "Subsidiary" shall mean any present or future corporation in which the Corporation shall own 50% or more of its accrued voting stock. 13. Binding Effect. This Agreement shall be binding upon and inure to the benefit of the respective heirs, executors, administrators and successors of the parties hereto. 14. Governing Law. This Agreement shall be construed and interpreted in accordance with the laws of the State of Delaware. 15. Headings. Headings are for the convenience of the parties are not deemed to be part of this Agreement. EXECUTED as of the day and year first written above. CORPORATION: BFX HOSPITALITY GROUP, INC. By: /s/ Robert H. McLean ------------------------------ Robert H. McLean, Chief Executive Officer EMPLOYEE: /s/ Robert H. McLean ------------------------------ Robert H. McLean, Individually Page 6 EX-7.E 6 ex7-e.txt EMPLOYEE INCENTIVE STOCK OPTION AGREEMENT-8/2/95 1 EXHIBIT 7.e EMPLOYEE INCENTIVE STOCK OPTION AGREEMENT This Option Agreement (the "Agreement") made as of the 2nd day of August, 1995, between BUFFTON CORPORATION, a Delaware corporation (the "Corporation"), and FRANK J. MILAN, an employee of the Corporation or one or more of its subsidiaries (the "Employee"). WHEREAS, the Corporation desires to carry out the purpose of the Employee Incentive Stock Option Plan of Buffton Corporation, dated December 17, 1985, (the "Plan") by affording Employee the opportunity to purchase shares of Corporation $.05 par value common stock. NOW, WHEREFORE, in consideration of the mutual covenants hereinafter set forth and for other good and valuable consideration, the parties hereto agree as follows: 1. Grant of Option. The Corporation hereby grants to the Employee the right and option (the "Option") to purchase an aggregate of 25,000 shares of Corporation's $.05 par value common stock (the "Shares"), such Shares being subject to adjustment as provided in Paragraph 7 hereof, and on the terms and conditions herein set forth. 2. Purchase Price. The purchase price of the Shares covered by the Option shall be $1.50 per Share, ex-dividend, such purchase price being 100% of the fair market value of such shares on the date first appearing above. 3. Term of Option. The term of Option shall be for a period of six (6) years from the date hereof, subject to earlier termination as provided herein. 4. Exercise of Option. The Option, subject to the terms, conditions and limitations contained herein, shall be exercisable as follows: The Shares included in this Option Agreement shall be divided into five (5) installments, each installment to be of approximately equal size. The first installment shall not be exercisable until one (1) year from the date first appearing above, and each succeeding installment shall not be exercisable. When the right to exercise any installment accrues, the Shares included in that installment may be purchased at that time or from time to time thereafter during the term of the Option. 2 5. Termination of Employment. In the Event Employee's employment with the Corporation (which term includes subsidiaries of the Corporation) is terminated for cause, by Employee or for any other reason other than death, total and permanent disability or by the Corporation without cause, then the Option granted under this Agreement, or any unexercised portion thereof, shall terminate and be unexercisable as of the effective date of such termination of employment. For purposes of this Section 5, the term "cause" shall mean (a) the failure to refusal to perform diligently the duties of Employee's employment after written notice of such failure or refusal and a reasonable opportunity to remedy such is provided, (b) dishonesty, (c) the commission of an offense involving moral turpitude or (d) willful misconduct in connection with the performance of duties to the Corporation. Upon termination of employment with the Corporation without cause, then any portion of the Option which, on the effective date of termination, was unexercisable shall be accelerated and become exercisable for a period of thirty (30) days following the effective date of termination of employment, after which period any unexercised portion of the Option shall terminate and be unexercisable. Any part of the Option which was exercisable on the effective date of any termination of employment without cause, shall remain exercisable for a period of 30 days following the effective date of such termination, after which period any unexercised portion of the Option shall terminate and be unexercisable. If termination of Employee's employment with the Corporation is due to the death of the Employee, any part of the Option then exercisable under this Agreement shall remain exercisable for a period of three (3) months from the date of Employee's death, after which time the Option granted under this Agreement, or any unexercised portion thereof, shall terminate and be unexercisable. If termination of Employee's employment with the Corporation is due to Employee's total and permanent disability, as that term is defined in Section 105(d)(4) of the Internal Revenue Code of 1986, as amended, then any part of the Option then exercisable under this Agreement shall remain exercisable for a period of twelve (12) months from the date of termination of Employee's employment, after which time the Option granted under this Agreement, or any unexercised portion thereof, shall terminate and be unexercisable. No provision of this Section 5 shall operate to extend the term of this Option beyond the term set forth in Section 3 hereof. -2- 3 6. Vesting Following a Change in Control. Notwithstanding anything to the contrary contained elsewhere herein, upon a Change in Control (as hereinafter defined) Employee's right and option to purchase the aggregate number of shares granted to Employee in paragraph 1. hereof shall become fully vested and immediately exercisable for the balance of the term of the option. For purposes of this Agreement, a "Change in Control" shall be deemed to have occurred upon any of the following events: (i) The acquisition, directly or indirectly, by any person (as such terms as used in Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as amended), other than the Corporation, any of its subsidiaries or any employee benefit plan maintained by the Corporation or any such subsidiary, of beneficial ownership of securities of the Corporation representing 15% or more of the combined voting power of the Corporation's then outstanding securities; (ii) Any sale, transfer, liquidation or other disposition of all or substantially all of the Corporation's assets or earning power, or any merger, consolidation or reorganization to which the Corporation is a party and pursuant to which the Corporation or an entity controlled by the Corporation is not a surviving entity; or (iii) The election during any period of 24 months or less of 20% or more of the members of the Corporation's Board of Directors without the approval of the nomination of such new members by a majority of the members of the Board who were members at the beginning of the period, or members of the Board thereafter recommended to succeed such original members (or their successors hereunder) by a majority of the members of the Board who were members at the beginning of the period (or their successors hereunder); Unless, the Continuing Board of Directors of the Corporation (as hereinafter defined) determines that the happening of any of the foregoing events in a particular case should not be deemed a Change in Control. The "Continuing Board of Directors of the Corporation" shall mean (i) the members of the Corporation's Board of Directors in office immediately prior to the Change in Control, excluding any who initiate a Change in Control, excluding any who initiate a Change in Control or are affiliated with one who initiates a Change in Control, and (ii) any subsequent directors who may be selected, nominated or approved by a majority of the other Continuing Board of Directors of the Corporation. -3- 4 7. Transferability of Option. No Option shall be transferable by Employee otherwise than by Will or the laws of descent and distribution. During the lifetime of the Employee, any Option granted herein shall be exercisable only by the Employee and shall not be assignable or transferable by Employee; no other person shall acquire any rights therein. 8. Adjustment of Shares Subject to Option. If any Shares shall at any time be changed or exchanged by declaration of a stock dividend, a stock split, split-up, combination of shares, recapitalization or a merger, then the aggregate number of shares subject to this Agreement and the purchase price of such Shares under this Agreement shall be appropriately and equitably adjusted so as to maintain the proportionate number of Shares without changing the aggregate purchase price; provided, however, no adjustment shall be made by reason of the distribution of subscription rights on outstanding shares. 9. Rights as a Shareholder. The Employee or Employee's permitted transferee shall have no rights as a stockholder with respect to any Shares covered by the Option until the date of issuance of a stock certificate for such Shares. No adjustments, other than as provided in paragraph 8 above, shall be made for dividends (ordinary or extraordinary, whether in cash, securities or other property) or distributions for which the record date is prior to the date such stock certificate is issued. 10. Restriction on Issuance of Shares. Any other provision of this Agreement notwithstanding, the Corporation shall not be obligated to sell or issue Shares pursuant to this Agreement unless the Shares with respect to which the Option is being exercised are at that time effectively registered or exempt from registration under the Securities Act of 1933, as amended, and any applicable state securities law. An opinion of counsel for the Corporation providing that the Shares with respect to which an Option is being exercised will comply with the Securities Act of 1933, as amended, or any applicable state securities law will be sufficient to allow the Corporation to sell or issue such Shares. 11. Method of Exercising Option. Subject to the terms and conditions of this Agreement, the Option may be exercised by written notice to the Corporation at its offices located at 1415 First RepublicBank Tower, 801 Cherry Street, Fort Worth, Texas 76102. Such notice shall state the election to exercise the Option and the number of Shares in respect of which it is being exercised, and shall be signed by the person or persons so exercising the Option. Such notice shall either: -4- 5 (a) be accompanied by payment of the full purchase price of such Shares, in which event the Corporation shall deliver a certificate or certificates representing such Shares as soon as practicable after the notice shall be received; or (b) fix a date, not less than five (5) nor more than ten (10) business days from the date such notice shall be received by the Corporation, for the payment of the full purchase price of such Shares against delivery of a certificate or certificates representing such Shares. Payment of such purchase price shall, in either case, be made in cash or cashier's check payable to the order of the Corporation. The Corporation hereby agrees to loan Employee such amount of money as is needed by Employee to pay the purchase price for such shares. Such loan shall be evidenced by a promissory note, payable in full twelve (12) months from date of execution, bearing interest at the rate of 8% per annum, and secured by the shares of stock purchased with the proceeds of the loan or other collateral acceptable to the Corporation. The certificate or certificates for the Shares as to which the Option shall have been so exercised shall be registered in the name of the person or persons so exercising the Option; or if the option shall be exercised by the Employee, and if the Employee shall so request in the notice exercising the Option, such Option shall be registered in the name of the Employee and another person, as joint tenants with right of survivorship, and shall be delivered as provided above to or upon the written order of the person or persons exercising the Option. In the event the Option shall be exercised, pursuant to Paragraph 5 hereof, by any person or persons other than the Employee, such notice shall be accompanied by appropriate proof satisfactory to the Corporation of the right of such person or persons to exercise the Option. All Shares that shall be purchased upon the exercise of the Option as provided herein shall be fully paid and non-assessable. 12. Subsidiary. As used herein the term "Subsidiary" shall mean any present or future corporation which would be a "Subsidiary Corporation" of the Corporation, as that term is defined in Section 425 of the Code. 13. Binding Effect. This Agreement shall be binding upon the heirs, executors, administrators and successors of the parties hereto. 14. Governing Law. This Agreement shall be construed and interpreted in accordance with the laws of the State of Texas. -5- 6 15. Headings. Headings are for the convenience of the parties, and are not deemed to be a part of this Agreement. EXECUTED the day and year first above written. EMPLOYER: BUFFTON CORPORATION By: /s/ ROBERT H. MCLEAN --------------------------- Robert H. McLean, President and Chief Executive Officer EMPLOYEE: /s/ FRANK J. MILAN ------------------------------- Frank J. Milan -6- 7 EMPLOYEE INCENTIVE STOCK OPTION AGREEMENT This Option Agreement (the "Agreement") made as of the 26th day of December, 1995, between BUFFTON CORPORATION, a Delaware corporation (the "Corporation"), and FRANK J. MILAN, an employee of the Corporation or one or more of its subsidiaries (the "Employee"). WHEREAS, the Corporation desires to carry out the purpose of the Employee Incentive Stock Option Plan of Buffton Corporation, dated December 17, 1985, (the "Plan") by affording Employee the opportunity to purchase shares of Corporation $.05 par value common stock. NOW, WHEREFORE, in consideration of the mutual covenants hereinafter set forth and for other good and valuable consideration, the parties hereto agree as follows: 1. Grant of Option. The Corporation hereby grants to the Employee the right and option (the "Option") to purchase an aggregate of 5,000 shares of Corporation's $.05 par value common stock (the "Shares"), such Shares being subject to adjustment as provided in Paragraph 8 hereof, and on the terms and conditions herein set forth. 2. Purchase Price. The purchase price of the Shares covered by the Option shall be $1.50 per Share, ex-dividend, such purchase price being 100% of the fair market value of such shares on the date first appearing above. 3. Term of Option. The term of Option shall be for a period of six (6) years from the date hereof, subject to earlier termination as provided herein. 4. Exercise of Option. The Option, subject to the terms, conditions and limitations contained herein, shall be exercisable as follows: The Shares included in this Option Agreement shall be exercisable at the rate of 20% per year. The first installment shall be exercisable one (1) year from the date first appearing above, and each succeeding installment shall be exercisable on the anniversary date thereof. Notwithstanding the foregoing, the shares included in this Option Agreement shall become immediately exercisable upon a Change in Control (as hereinafter defined). When the right to exercise any installment accrues, the Shares included in that installment may be -1- 8 purchased at that time or from time to time thereafter during the term of the Option. 5. Termination of Employment. In the Event Employee's employment with the Corporation (which term includes subsidiaries of the Corporation) is terminated for cause, by Employee or for any other reason other than death, total and permanent disability or by the Corporation without cause, then the Option granted under this Agreement, or any unexercised portion thereof, shall terminate and be unexercisable as of the effective date of such termination of employment. For purposes of this Section 5, the term "cause" shall mean (a) the failure to refusal to perform diligently the duties of Employee's employment after written notice of such failure or refusal and a reasonable opportunity to remedy such is provided, (b) dishonesty, (c) the commission of an offense involving moral turpitude or (d) willful misconduct in connection with the performance of duties to the Corporation. Upon termination of employment with the Corporation without cause, then any portion of the Option which, on the effective date of termination, was unexercisable shall be accelerated and become exercisable for a period of thirty (30) days following the effective date of termination of employment, after which period any unexercised portion of the Option shall terminate and be unexercisable. Any part of the Option which was exercisable on the effective date of any termination of employment without cause, shall remain exercisable for a period of 30 days following the effective date of such termination, after which period any unexercised portion of the Option shall terminate and be unexercisable. If termination of Employee's employment with the Corporation is due to the death of the Employee, any part of the Option then exercisable under this Agreement shall remain exercisable for a period of three (3) months from the date of Employee's death, after which time the Option granted under this Agreement, or any unexercised portion thereof, shall terminate and be unexercisable. If termination of Employee's employment with the Corporation is due to Employee's total and permanent disability, as that term is defined in Section 105(d)(4) of the Internal Revenue Code of 1986, as amended, then any part of the Option then exercisable under this Agreement shall remain exercisable for a period of twelve (12) months from the date of termination of Employee's employment, after which time the Option granted under this Agreement, or any unexercised portion thereof, shall terminate and be unexercisable. -2- 9 No provision of this Section 5 shall operate to extend the term of this Option beyond the term set forth in Section 3 hereof. 6. Vesting Following a Change in Control. Notwithstanding anything to the contrary contained elsewhere herein, upon a Change in Control (as hereinafter defined) Employee's right and option to purchase the aggregate number of shares granted to Employee in paragraph 1. hereof shall become fully vested and immediately exercisable for the balance of the term of the option. For the purposes of this Agreement, a "Change in Control" shall be deemed to have occurred upon any of the following events: (i) the acquisition directly or indirectly, by any person (as such terms are used in Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as amended), other than the Corporation, any of its subsidiaries or any employee benefit plan maintained by the Corporation or any such subsidiary, of beneficial ownership of securities of the Corporation representing fifteen percent (15%) or more of the combined voting power of the Corporation's then outstanding securities (with the terms used herein and in Sections 13(d) and/or 14(d) of the Securities Exchange Act of 1934, as amended, having the meanings of such terms in such Sections); (ii) if the stockholders of the Corporation approve a merger or consolidation, a sale or disposition of all or substantially all of the Corporation's assets or a plan of liquidation or dissolution of the Corporation; (iii) the election during any period of twenty-four (24) months or less of a member or members of the Corporation's Board of Directors without the approval of the election or nomination for election of such new member or members by a majority of the members of the Board who were members at the beginning of the period, or members of the Board thereafter recommended to succeed such original members (or their successors hereunder) by a majority of the members of the Board who were members at the beginning of the period (or their successors hereunder); or (iv) any person (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended) other than the Corporation, any of its subsidiaries or any employee benefit plan maintained by the Corporation or any such subsidiary, makes a tender or exchange offer for any shares of the Corporation's outstanding voting securities at any point in time, pursuant to which any such shares are purchased. -3- 10 Unless, the Continuing Board of Directors of the Corporation (as hereafter defined) determines that the happening of any of the foregoing events in a particular case should not be deemed a Change in Control. The "Continuing Board of Directors of the Corporation" shall mean (i) the members of the Corporation's Board of Directors in office immediately prior to the Change in Control, excluding any who initiate a Change in Control or are affiliated with one who initiates a Change in Control, and (ii) any subsequent directors who may be selected, nominated or approved by a majority of the other Continuing Board of Directors of the Corporation. 7. Transferability of Option. No Option shall be transferable by Employee otherwise than by Will or the laws of descent and distribution. During the lifetime of the Employee, any Option granted herein shall be exercisable only by the Employee and shall not be assignable or transferable by Employee; no other person shall acquire any rights therein. 8. Adjustment of Shares Subject to Option. If any Shares shall at any time be changed or exchanged by declaration of a stock dividend, a stock split, split-up, combination of shares, recapitalization or a merger, then the aggregate number of shares subject to this Agreement and the purchase price of such Shares under this Agreement shall be appropriately and equitably adjusted so as to maintain the proportionate number of Shares without changing the aggregate purchase price; provided, however, no adjustment shall be made by reason of the distribution of subscription rights on outstanding shares. 9. Rights as a Shareholder. The Employee or Employee's permitted transferee shall have no rights as a stockholder with respect to any Shares covered by the Option until the date of issuance of a stock certificate for such Shares. No adjustments, other than as provided in paragraph 8 above, shall be made for dividends (ordinary or extraordinary, whether in cash, securities or other property) or distributions for which the record date is prior to the date such stock certificate is issued. 10. Restriction on Issuance of Shares. Any other provision of this Agreement notwithstanding, the Corporation shall not be obligated to sell or issue Shares pursuant to this Agreement unless the Shares with respect to which the Option is being exercised are at that time effectively registered or exempt from registration under the Securities Act of 1933, as amended, and any applicable state securities law. An opinion of counsel for the Corporation providing that the Shares with respect to which an Option is being exercised will comply with the Securities Act -4- 11 of 1933, as amended, or any applicable state securities law will be sufficient to allow the Corporation to sell or issue such Shares. 11. Method of Exercising Option. Subject to the terms and conditions of this Agreement, the Option may be exercised by written notice to the Corporation at its offices located at 226 Bailey Avenue, Suite 101, Fort Worth, Texas 76107. Such notice shall state the election to exercise the Option and the number of Shares in respect of which it is being exercised, and shall be signed by the person or persons so exercising the Option. Such notice shall either: (a) be accompanied by payment of the full purchase price of such Shares, in which event the Corporation shall deliver a certificate or certificates representing such Shares as soon as practicable after the notice shall be received; or (b) fix a date, not less than five (5) nor more than ten (10) business days from the date such notice shall be received by the Corporation, for the payment of the full purchase price of such Shares against delivery of a certificate or certificates representing such Shares. Payment of such purchase price shall, in either case, be made in cash or cashier's check payable to the order of the Corporation. The Corporation hereby agrees to loan Employee such amount of money as is needed by Employee to pay the purchase price for such shares. Such loan shall be evidenced by a promissory note, payable in full twelve (12) months from date of execution, bearing interest at the rate of 8% per annum, and secured by the shares of stock purchased with the proceeds of the loan or other collateral acceptable to the Corporation. The certificate or certificates for the Shares as to which the Option shall have been so exercised shall be registered in the name of the person or persons so exercising the Option; or if the option shall be exercised by the Employee, and if the Employee shall so request in the notice exercising the Option, such Option shall be registered in the name of the Employee and another person, as joint tenants with right of survivorship, and shall be delivered as provided above to or upon the written order of the person or persons exercising the Option. In the event the Option shall be exercised, pursuant to Paragraph 5 hereof, by any person or persons other than the Employee, such notice shall be accompanied by appropriate proof satisfactory to the Corporation of the right of such person or persons to exercise the Option. All Shares that shall be purchased upon the exercise of the Option as provided herein shall be fully paid and non-assessable. -5- 12 12. Subsidiary. As used herein the term "Subsidiary" shall mean any present or future corporation which would be a "Subsidiary Corporation" of the Corporation, as that term is defined in Section 425 of the Code. 13. Binding Effect. This Agreement shall be binding upon the heirs, executors, administrators and successors of the parties hereto. 14. Governing Law. This Agreement shall be construed and interpreted in accordance with the laws of the State of Texas. 15. Headings. Headings are for the convenience of the parties, and are not deemed to be a part of this Agreement. EXECUTED the day and year first above written. BUFFTON CORPORATION By: /s/ ROBERT H. MCLEAN --------------------------- Robert H. McLean, President and Chief Executive Officer EMPLOYEE: /s/ FRANK J. MILAN ------------------------------ Frank J. Milan -6- 13 AMENDMENT NO. 1 TO EMPLOYEE INCENTIVE STOCK OPTION AGREEMENT This Amendment No. 1 to Employee Incentive Stock Option Agreement (the "Amendment") is made and entered into as of the 1st day of May, 1998, between BFX Hospitality Group, Inc. (formerly Buffton Corporation), a Delaware corporation (the "Corporation"), and Frank J. Milan, an employee of the Corporation or one or more of its subsidiaries (the "Employee"). WHEREAS, the Corporation and Employee entered into an Employee Incentive Stock Option Agreement, dated August 2, 1995 (the "Agreement"); and WHEREAS, a phrase was inadvertently omitted from one of the provisions of the Agreement, and the Corporation and Employee desire to correct such inadvertent omission. NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration, the parties hereto agree as follows: 1. Paragraph 4 of the Agreement is hereby amended in its entirety to read as follows" "4. Exercise of Option. The Option, subject to the terms, conditions and limitations contained herein, shall be exercisable as follows: The Shares included in this Option Agreement shall be divided into five (5) installments, each installment to be of approximately equal size. The first installment shall not be exercisable until one (1) year from the date first appearing above, and each succeeding installment shall not be exercisable until one (1) year from the date that the prior installment becomes exercisable. When the right to exercise any installment accrues, the Shares included in that installment may be purchased at that time or from time to time thereafter during the term of the Option." 2. Except to the extent amended herein, the Agreement remains unamended and unmodified, and in full force and effect. Executed the date and year first above written. EMPLOYER: BFX HOSPITALITY GROUP, INC. (formerly Buffton Corporation) By: /s/ ROBERT H. MCLEAN ------------------------------------------ Robert H. McLean, Chief Executive Officer EMPLOYEE: /s/ FRANK J. MILAN ------------------------------------------ Frank J. Milan 14 INCENTIVE STOCK OPTION AGREEMENT This Option Agreement (the "Agreement") made and effective as of the 10th day of February, 1999, between BFX Hospitality Group, Inc., a Delaware corporation (the "Corporation"), and Frank J. Milan, an Employee of the Corporation or one or more of its Subsidiaries (the "Employee"). WHEREAS, pursuant to the BFX Hospitality Group, Inc. 1997 Employee Stock Option Plan (the "Plan") the Corporation desires to afford Employee the opportunity to purchase shares of Corporation's $.05 par value common stock, as a reward for past performance as a key employee of the Corporation, and as an incentive for future performance. NOW, WHEREFORE, in consideration of the mutual covenants hereinafter set forth and for other good and valuable consideration, the parties hereto agree as follows: 1. Grant of Option. The Corporation hereby grants to the Employee the right and option (the "Option") to purchase an aggregate of 25,000 shares of Corporation's $.05 par value common stock (the "Shares"), such Shares being subject to adjustment as provided in Section 4.5 of the Plan, and on the terms and conditions herein set forth. 2. Purchase Price. The purchase price of the Shares covered by the Option shall be $1.50 per Share. 3. Term of Option. The term of the Option shall be for a period of six (6) years from the date hereof, beginning on February 10, 1999, and ending on February 9, 2005, subject to earlier termination pursuant to Section 5.7 of the Plan. 4. Exercise of Option. The Option, subject to the terms, conditions and limitations contained herein, shall be exercisable as follows: The Shares included in this Option Agreement shall be divided into five (5) installments, each installment to be of approximately equal size. The first installment shall not be exercisable until one (1) year from the date first appearing above, and each succeeding installment shall not be exercisable until one (1) year from the date that the prior installment becomes exercisable. When the right to exercise any installment accrues, the Shares included in that installment may be purchased at that time or from time to time thereafter during the term of the Option. 5. Transferability of Option. This Option may be transferred by Employee by Will or by the laws of descent and distribution, but not otherwise. Upon such presentation for transfer, the Company shall promptly execute and deliver a new Option Agreement or Option in the form hereof in the name of assignee or assignees and in the denominations specified in such instructions. The Company shall pay all expenses incurred by it in connection with the preparation, issuance and delivery of Options under this Paragraph. Incentive Stock Option Agreement Page 1 15 6. Exercise on Termination of Employment. Employee's rights to exercise the Options following a severance of employment of the Employee from the Company shall be governed by Section 5.7 of the Plan. 7. Rights as a Shareholder. The Employee or Employee's permitted transferee shall have no rights as a stockholder with respect to any Shares covered by the Option until the date of issuance of a stock certificate for such Shares. No adjustments, other than as provided in Section 4.5 of the Plan, shall be made for dividends (ordinary or extraordinary, whether in cash, securities, or other property) or distributions for which the record date is prior to the date such stock certificate is issued. 8. Listing: Governmental Approval. The Option granted herein is subject to the requirement that, if at any time the listing or qualification of Shares issuable upon exercise of the Option is required by any securities exchange or under any state or federal law, or the consent or approval of any governmental regulatory body is necessary as a condition of, or in connection with the issuance of any Shares, no Shares shall be issued in whole or in part, unless such listing, qualification, consent or approval has been obtained. The Corporation agrees, at its own expense, to take all action necessary to obtain such listing, qualification, consent or approval so the Corporation can perform its contractual obligation to issue the Shares covered by this Option. 9. Method of Exercising Option. Subject to the terms and conditions of this Agreement, the Option may be exercised by written notice delivered in person or by first class mail to the Corporation at its offices located at 226 Bailey Avenue, Suite 101, Fort Worth, Texas 76107. Such notice shall state the election to exercise the Option and the number of Shares in respect of which it is being exercised, and shall be signed by the person or persons so exercising the Option. Such notice shall be accompanied by payment of the full purchase price of such Shares, in which event the Corporation shall deliver a certificate or certificates representing such Shares as soon as practicable after the notice shall be received. Payment of such purchase price shall, in either case, be made in (i) cash, or (ii) cashier's certified or personal check payable to the order of the Corporation, (iii) in whole shares of the Corporation's common stock previously acquired by Employee and evidenced by negotiable certificates, or (iv) by the Corporation withholding Shares that otherwise would be acquired upon such exercise. Any Shares transferred to the Corporation (or withheld upon exercise) as payment of the purchase price under this option shall be valued at the Fair Market Value on the day preceding the date of exercise of the Option. The certificate or certificates for the Shares as to which the Option shall have been so exercised shall be registered in the name of the person or persons so exercising the Option; or if the Option shall be exercised by the Employee, and if the Employee shall so request in the notice exercising the Option, such Option shall be registered in the name of the Employee and another person, as joint tenants with right of survivorship, and shall be delivered as provided above to or upon the written order of the person or persons other than the Employee, such Incentive Stock Option Agreement Page 2 16 notice shall be accompanied by appropriate proof satisfactory to the Corporation of the right of such person or persons to exercise the Option. All Shares that shall be purchased upon the exercise of the Option as provided herein shall be fully paid and non-assessable. Upon the exercise of less than all of the Options hereunder, the Corporation shall promptly execute and deliver a new Option Agreement in the form hereof covering the balance of unexercised Options. The Company shall pay all expenses incurred by it in connection with the preparation, issuance and delivery of such new Option Agreements. 10. Withholding of Taxes. At such times as an Employee recognizes taxable income in connection with the receipt of shares hereunder (a "Taxable Event), Employee shall pay to the Corporation an amount equal to the federal, state and local income taxes and other amounts as may be required by law to be withheld by the Corporation in connection with the Taxable Event (the "Withholding Taxes") prior to the issuance, or release from escrow, of such Shares. In satisfaction of the obligation to pay Withholding Taxes to the Corporation, Employee may make a written election (the "Tax Election"), which shall be binding upon the Corporation, to have withheld a portion of the Shares then issuable to Employee having an aggregate Fair Market Value equal to the Withholding Taxes. 11. Incentive Stock Options. The Options granted hereunder are intended to qualify as incentive stock option under Section 422 of the Internal Revenue Code of 1986, as amended. 12. Subsidiary. As used herein, the term "Subsidiary" shall mean any present or future corporation in which the Corporation shall own 50% or more of its accrued voting stock. 13. Binding Effect. This Agreement shall be binding upon and inure to the benefit of the respective heirs, executors, administrators and successors of the parties hereto. 14. Governing Law. This Agreement shall be construed and interpreted in accordance with the laws of the State of Delaware. 15. Headings. Headings are for the convenience of the parties are not deemed to be part of this Agreement. EXECUTED as of the day and year first written above. EMPLOYER: BFX HOSPITALITY GROUP, INC.: By: /s/ ROBERT H. MCLEAN ------------------------------- Chief Executive Officer EMPLOYEE /s/ FRANK J. MILAN ------------------------------- Frank J. Milan Incentive Stock Option Agreement Page 3 17 INCENTIVE STOCK OPTION AGREEMENT This Option Agreement (the "Agreement") made and effective as of the 4th day of October, 1999, between BFX Hospitality Group, Inc., a Delaware corporation (the "Corporation"), and Frank J. Milan, an Employee of the Corporation or one or more of its Subsidiaries (the "Employee"). WHEREAS, pursuant to the BFX Hospitality Group, Inc. 1997 Employee Stock Option Plan (the "Plan") the Corporation desires to afford Employee the opportunity to purchase shares of Corporation's $.05 par value common stock, as a reward for past performance as a key employee of the Corporation, and as an incentive for future performance. NOW, WHEREFORE, in consideration of the mutual covenants hereinafter set forth and for other good and valuable consideration, the parties hereto agree as follows: 1. Grant of Option. The Corporation hereby grants to the Employee the right and option (the "Option") to purchase an aggregate of 25,000 shares of Corporation's $.05 par value common stock (the "Shares"), such Shares being subject to adjustment as provided in Section 4.5 of the Plan, and on the terms and conditions herein set forth. 2. Purchase Price. The purchase price of the Shares covered by the Option shall be $1.00 per Share. 3. Term of Option. The term of the Option shall be for a period of six (6) years from the date hereof, beginning on October 4, 1999, and ending on October 3, 2005, subject to earlier termination pursuant to Section 5.7 of the Plan. 4. Exercise of Option. The Option, subject to the terms, conditions and limitations contained herein, shall be exercisable as follows: The Shares included in this Option Agreement shall be divided into five (5) installments, each installment to be of approximately equal size. The first installment shall not be exercisable until one (1) year from the date first appearing above, and each succeeding installment shall not be exercisable until one (1) year from the date that the prior installment becomes exercisable. When the right to exercise any installment accrues, the Shares included in that installment may be purchased at that time or from time to time thereafter during the term of the Option. 5. Transferability of Option. This Option may be transferred by Employee by Will or by the laws of descent and distribution, but not otherwise. Upon such presentation for transfer, the Company shall promptly execute and deliver a new Option Agreement or Option in the form hereof in the name of assignee or assignees and in the denominations specified in such instructions. The Company shall pay all expenses incurred by it in connection with the preparation, issuance and delivery of Options under this Paragraph. Incentive Stock Option Agreement Page 1 18 6. Exercise on Termination of Employment. Employee's rights to exercise the Options following a severance of employment of the Employee from the Company whether with or without cause, or because of death, retirement or disability shall be governed by the applicable provisions of Section 5.7 of the Plan. 7. Rights as a Shareholder. The Employee or Employee's permitted transferee shall have no rights as a stockholder with respect to any Shares covered by the Option until the date of issuance of a stock certificate for such Shares. No adjustments, other than as provided in Section 4.5 of the Plan, shall be made for dividends (ordinary or extraordinary, whether in cash, securities, or other property) or distributions for which the record date is prior to the date such stock certificate is issued. 8. Listing; Governmental Approval. The Option granted herein is subject to the requirement that, if at any time the listing or qualification of Shares issuable upon exercise of the Option is required by any securities exchange or under any state or federal law, or the consent or approval of any governmental regulatory body is necessary as a condition of, or in connection with the issuance of any Shares, no Shares shall be issued in whole or in part, unless such listing, qualification, consent or approval has been obtained. The Corporation agrees, at its own expense, to take all action necessary to obtain such listing, qualification, consent or approval so the Corporation can perform its contractual obligation to issue the Shares covered by this Option. 9. Method of Exercising Option. Subject to the terms and conditions of this Agreement, the Option may be exercised by written notice delivered in person or by first class mail to the Corporation at its offices located at 226 Bailey Avenue, Suite 101, Fort Worth, Texas 76107. Such notice shall state the election to exercise the Option and the number of Shares in respect of which it is being exercised, and shall be signed by the person or persons so exercising the Option. Such notice shall be accompanied by payment of the full purchase price of such Shares, in which event the Corporation shall deliver a certificate or certificates representing such Shares as soon as practicable after the notice shall be received. Payment of such purchase price shall, in either case, be made in (i) cash, or (ii) cashier's certified or personal check payable to the order of the Corporation, (iii) in whole shares of the Corporation's common stock previously acquired by Employee and evidenced by negotiable certificates, or (iv) by the Corporation withholding Shares that otherwise would be acquired upon such exercise. Any Shares transferred to the Corporation (or withheld upon exercise) as payment of the purchase price under this option shall be valued at the Fair Market Value on the day preceding the date of exercise of the Option. The certificate or certificates for the Shares as to which the Option shall have been so exercised shall be registered in the name of the person or persons so exercising the Option; or if the Option shall be exercised by the Employee, and if the Employee shall so request in the notice exercising the Option, such Option shall be registered in the name of the Employee and another person, as joint tenants with right of survivorship, and shall be delivered as Incentive Stock Option Agreement Page 2 19 provided above to or upon the written order of the person or persons other than the Employee, such notice shall be accompanied by appropriate proof satisfactory to the Corporation of the right of such person or persons to exercise the Option. All Shares that shall be purchased upon the exercise of the Option as provided herein shall be fully paid and non-assessable. Upon the exercise of less than all of the Options hereunder, the Corporation shall promptly execute and deliver a new Option Agreement in the form hereof covering the balance of unexercised Options. The Company shall pay all expenses incurred by it in connection with the preparation, issuance and delivery of such new Option Agreements. 10. Withholding of Taxes. At such times as an Employee recognizes taxable income in connection with the receipt of shares hereunder (a "Taxable Event"), Employee shall pay to the Corporation an amount equal to the federal, state and local income taxes and other amounts as may be required by law to be withheld by the Corporation in connection with the Taxable Event (the "Withholding Taxes") prior to the issuance, or release from escrow, of such Shares. In satisfaction of the obligation to pay Withholding Taxes to the Corporation, Employee may make a written election (the "Tax Election"), which shall be binding upon the Corporation, to have withheld a portion of the Shares then issuable to Employee having an aggregate Fair Market Value equal to the Withholding Taxes. 11. Incentive Stock Options. The Options granted hereunder are intended to qualify as incentive stock option under Section 422 of the Internal Revenue Code of 1986, as amended. 12. Subsidiary. As used herein, the term "Subsidiary" shall mean any present or future corporation in which the Corporation shall own 50% or more of its accrued voting stock. 13. Binding Effect. This Agreement shall be binding upon and inure to the benefit of the respective heirs, executors, administrators and successors of the parties hereto. 14. Governing Law. This Agreement shall be construed and interpreted in accordance with the laws of the State of Delaware. 15. Headings. Headings are for the convenience of the parties are not deemed to be part of this Agreement. EXECUTED as of the day and year first written above. EMPLOYER: BFX HOSPITALITY GROUP, INC.: By: /s/ ROBERT H. MCLEAN --------------------------------------- Chief Executive Officer EMPLOYEE: /s/ FRANK J. MILAN --------------------------------------- Frank J. Milan Incentive Stock Option Agreement Page 3 -----END PRIVACY-ENHANCED MESSAGE-----