-----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, Q8eGofK7n8n3rNC+k0JnbToa144gu3LRzKdr2mgvHwT1HsESpEPzE3ccI0WBB2kE M1JFT9K7NuifiBMFboLm8Q== 0001005477-97-001093.txt : 19970417 0001005477-97-001093.hdr.sgml : 19970417 ACCESSION NUMBER: 0001005477-97-001093 CONFORMED SUBMISSION TYPE: POS AM PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 19970416 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: BLIMPIE INTERNATIONAL INC CENTRAL INDEX KEY: 0000895477 STANDARD INDUSTRIAL CLASSIFICATION: PATENT OWNERS & LESSORS [6794] IRS NUMBER: 132908793 STATE OF INCORPORATION: NJ FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: POS AM SEC ACT: 1933 Act SEC FILE NUMBER: 333-01530 FILM NUMBER: 97582390 BUSINESS ADDRESS: STREET 1: 1775 THE EXCHANGE STREET 2: SUITE 600 CITY: ATLANTA STATE: GA ZIP: 30339 BUSINESS PHONE: 7709842707 MAIL ADDRESS: STREET 1: 1775 THE EXCHANGE STREET 2: SUITE 600 CITY: ATLANTA STATE: GA ZIP: 30339 POS AM 1 POST EFFECTIVE AMENDMENT NO. 1 TO FORM S-8 As filed with the Securities and Exchange Commission on April 16, 1997 Registration No. 333-1530 ================================================================================ U.S. SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ---------- POST-EFFECTIVE AMENDMENT NO.1 TO FORM S-8/S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ---------- BLIMPIE INTERNATIONAL, INC. (Exact name of Registrant as specified in its charter) New Jersey 13-2908793 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) 740 Broadway, New York, NY 10003 (212) 673-5900 (Address of principal executive offices and telephone number) Blimpie International, Inc. Omnibus Stock Incentive Plan (Full title of the Plan) Charles G. Leaness, Esq. Copy to: Executive Vice President Blimpie International, Inc. Steven D. Dreyer, Esq. 740 Broadway, New York, NY 10003 Hall Dickler Kent Friedman & Wood LLP (212) 673-5900 909 Third Avenue (Name, address and telephone number New York, NY 10022 of agent for service) (212) 339-5400 If the only securities being registered on this form are being offered pursuant to dividend or reinvestment plans, please check the following box. [ ] If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, please check the following box. [X] If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. [ ] CALCULATION OF REGISTRATION FEE
- ----------------------------------------------------------------------------------------------------- Proposed Proposed Maximum Maximum Amount of Amount to be Offering Price Aggregate Registration Title of Each Class of Registered (1) per Share (2) Offering Fee Securities to be Registered Price (2) - ----------------------------------------------------------------------------------------------------- Common Stock, $.01 par value (3) 38,900 $ 11.3125 $ 440,056.25 $ 151.82 - ----------------------------------------------------------------------------------------------------- Common Stock, $.01 par value (4) 83,300 11.3125 942,331.25 325.10 - ----------------------------------------------------------------------------------------------------- Common Stock, $.01 par value (5) 377,800 11.3125 4,273,862.50 1,474.48 - ----------------------------------------------------------------------------------------------------- Common Stock, $.01 par value (6) 450,000 6.75 3,037,500.00 920.45 - ----------------------------------------------------------------------------------------------------- Total 950,000 8,693,750.00 $ 2871.85 - ----------------------------------------------------------------------------------------------------- Previously Paid Fee $1,951.41 - ----------------------------------------------------------------------------------------------------- Total Fee Due $ 920.45 - -----------------------------------------------------------------------------------------------------
(1) Plus such additional numbers of shares as may be issued pursuant to the Plan in the event of a stock dividend, stock split, recapitalization or other similar change in the Common Stock. (2) This calculation is made solely for the purpose of determining the registration fee pursuant to the provisions of Rule 457(h) under the Securities Act of 1933 (the "Securities Act") as follows: (i) in the case of shares of Common Stock which may be purchased upon the exercise of outstanding options, the fee is calculated on the basis of the price at which the options may be exercised; and (ii) in the case of (a) shares of Common Stock for which options have not yet been granted and the option price of which is therefore unknown, and (b) shares of Common Stock which have been, or in the future will be, issued as restricted shares, and which may be resold ("Resale Shares"), the fee is calculated on the basis of the average of the high and low price per share of Common Stock on the NASDAQ National Market as of February 15, 1996 with respect to the 500,000 shares registered pursuant to the original registration statement or as of April 14, 1997 (within 5 business days prior to filing this Amendment) with respect to the 450,000 shares registered pursuant to this Amendment No. 1. (3) Consists of unvested shares issued pursuant to the Company's 1993 Stock Incentive Plan the resale or reoffer of which is now governed by the Company's Omnibus Stock Incentive Plan (the "Plan"). (4) Consists of shares which had been subject to issuance upon the exercise of options granted under the Company's 1993 Stock Incentive Plan the issuance, reoffer or resale of which is now governed by the Plan. (5) Consists of shares to be issued or subject to issuance upon the exercise of options to be granted under the Plan. (6) Consists of additional shares to be issued or subject to issuance upon the exercise of options to be granted under the Plan. Approximate Date of Commencement of Proposed Sales Pursuant to the Plan: As soon as practicable after the effective date of this Registration Statement. EXPLANATORY NOTE In accordance with the instructional Note to Part 1 of Form S-8 as promulgated by the Securities and Exchange Commission, the information specified by Part 1 of Form S-8 has been omitted from this Registration Statement on Form S-8 for offers of Common Stock of Blimpie International, Inc. (the "Common Stock") pursuant to the Plan. The prospectus filed as part of this Registration Statement has been prepared in accordance with the requirements of Form S-3 and may be used for reofferings and resales of (i) shares previously registered under the Securities Act on Form S-8/S-3 (File No. 33-78906) which were issued or subject to issuance upon the exercise of options granted under the Company's 1993 Stock Incentive Plan, and (ii) shares registered hereunder to be issued or subject to issuance upon the exercise of options granted under the Plan (hereinafter such Prospectus will be referred to as the "Prospectus"). ================================================================================ PROSPECTUS BLIMPIE INTERNATIONAL, INC. 950,000 Shares of Common Stock This Prospectus relates to an aggregate of 950,000 shares of the common stock, $.01 par value (the "Common Stock"), of Blimpie International, Inc. (the "Company") issued or issuable under the Company's Omnibus Stock Incentive Plan (the "Plan") to employees, including officers and directors who are employees, of the Company (the "Selling Shareholders") and is to be used in connection with the reoffer and resale of such shares of Common Stock by the Selling Shareholders. Certain of the Selling Shareholders may be deemed to be affiliates of the Company, as defined in Rule 405 of the Securities Act of 1933, as amended (the "Securities Act"). The Company will not receive any of the proceeds from the sale of the Common Stock, but will receive funds upon the exercise of options covered by the Plan. The Common Stock issued or issuable under the Plan may be sold from time to time by the Selling Shareholders or by their respective pledgees, donees, transferees or other successors in interest. Such sales may be made on the National Market System of the National Association of Securities Dealers, Inc. ("NASD"), in the over-the-counter market or otherwise at prices and at terms then prevailing or at prices related to the then current market price, or in negotiated transactions. The Common Stock may be sold by one or more of the following methods: (a) a block trade in which the broker or dealer so engaged will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction; (b) purchases by a broker or dealer as principal and resale by such broker or dealer for its account pursuant to this Prospectus; (c) ordinary brokerage transactions and transactions in which the broker solicits purchases; and (d) face-to-face transactions between sellers and purchasers without a broker-dealer. In effecting sales, brokers or dealers engaged by the Selling Shareholders may arrange for other brokers or dealers to participate. Such brokers or dealers and any other participating brokers or dealers may be deemed to be "underwriters" within the meaning of the Securities Act in connection with such sales. In addition, any securities covered by this Prospectus which qualify for sale pursuant to Rule 144 of the Securities Act ("Rule 144") may be sold under Rule 144 rather than pursuant to this Prospectus. All discounts, commissions or fees incurred in connection with the sale of the Common Stock offered hereby will be paid by the Selling Shareholders, except that the expenses of preparing and filing this Prospectus and the related Registration Statement with the Securities and Exchange Commission, and of registering or qualifying the Common Stock will be paid by the Company. The Common Stock of the Company is listed on the National Market System of the NASD under the symbol "BMPE". The closing price of the Company's Common Stock as reported on April 14, 1997 was $6.75. PURCHASE OF THESE SECURITIES MAY INVOLVE MATERIAL RISKS. SEE "RISK FACTORS" SET FORTH ON PAGE 5. ---------- THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATIONS TO THE CONTRARY IS A CRIMINAL OFFENSE. ---------- The date of this Prospectus is April 16, 1997. -2- AVAILABLE INFORMATION No person is authorized to give any information or to make any representations, other than as contained herein, in connection with the offer made in this Prospectus, and any information or representation not contained herein must not be relied upon as having been authorized by the Company or the Selling Shareholders. This Prospectus does not constitute an offer to sell or a solicitation of an offer to buy any security other than the Common Stock offered by this Prospectus, nor does it constitute an offer to sell or a solicitation of any offer to buy any shares of Common Stock offered hereby to any person in any jurisdiction where it is unlawful to make such an offer or solicitation to such person. Neither the delivery of this Prospectus nor any sale hereunder shall under any circumstances create any implication that information contained herein is correct as of any time subsequent to the date hereof. The Company has filed with the Securities and Exchange Commission (the "Commission") a registration statement on Form S-8/S-3 (the "Registration Statement") under the Securities Act, which includes this Prospectus. This Prospectus does not contain all the information set forth in the Registration Statement and exhibits thereto. For further information with respect to the Company and the Common Stock, reference is made to the Registration Statement and the exhibits thereto. The Company is subject to the periodic reporting requirements of the Securities Exchange Act of 1934 (the "Exchange Act"), and in accordance therewith files reports and other information with the Commission. The Registration Statement and exhibits thereto and reports and other information filed by the Company with the Commission may be inspected and copied at the public reference facilities maintained by the Commission at Judiciary Plaza, 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549, and at the Commission's Regional Offices at 7 World Trade Center, Suite 1300, New York, New York 10048 and Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such material may be obtained upon written request addressed to the Commission at the Public Reference Section, 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. The Commission also maintains a Web site that contains reports, proxy and information statements and other information regarding registrants that file electronically with the Commission. The address of such site is http://www.sec.gov. In addition, the Common Stock is listed for trading on the NASDAQ National Market and reports and other information concerning the Company may be inspected at the offices of the National Association of Securities Dealers, Inc. at 1735 K Street, N.W., Washington, D.C. 20006. -3- The Company distributes to its shareholders, approximately 30 to 60 days prior to each of its annual meetings of shareholders, annual reports containing financial statements audited by its independent public accountants. The Company also distributes reports to its shareholders containing its unaudited financial statements for each of the first three quarters of its fiscal year. The Company's fiscal year ends on June 30. The Company will provide without charge to each person to whom this Prospectus is delivered, upon either the written or oral request of such person, the Annual Report to Shareholders for the Company's latest fiscal year and a copy of any or all of the documents incorporated herein by reference other than exhibits to such documents. See "INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE". Such requests should be directed to Blimpie International, Inc., 1775 The Exchange, Suite 600, Atlanta, Georgia 30339, (404) 984-2707, Attention: Investor Relations. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE The following documents are hereby incorporated by reference in this Prospectus as of their respective dates: (a) The Company's Annual Report on Form 10-KSB for the Company's fiscal year ended June 30, 1996, as filed with the Commission pursuant to the Exchange Act; (b) The Company's Quarterly Reports on Form 10-QSB for the Company's fiscal quarters ended September 30, 1996 and December 31, 1996; and (c) The description of the Company's Common Stock contained in the Company's Registration Statement on Form SB-2 filed with the Commission on June 30,1995, together with any amendment or report filed for the purpose of updating such description, to the extent of such updating. All reports and other documents subsequently filed by the Company with the Commission pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act prior to the filing of a post-effective amendment which indicates that all securities offered hereby have been sold or which deregisters all securities then remaining unsold, shall be deemed to be incorporated by reference herein and to be a part hereof from the date of filing of such reports and documents. Any statement contained herein or in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Prospectus to the extent that a statement contained herein or in any other subsequently filed document which also is or is deemed to be incorporated by reference herein modifies or supersedes such statement. Any statement so modified -4- or superseded shall not be deemed, except as so modified or superseded, to constitute a part hereof. -5- THE COMPANY Blimpie International, Inc. engages in franchising and subfranchising the Blimpie trademarks, service marks, logos, marketing concepts and marketing programs which are the basic attributes of the chain of non-cooking, quick service sandwich restaurants known as "Blimpie" restaurants. The main products sold in a Blimpie restaurant are sub sandwiches and salads. References in this Prospectus to the "Company" refer to Blimpie International, Inc. The Company's executive offices are located at 740 Broadway, New York, New York 10003, and its telephone number at that location is (212) 673-5900. RISK FACTORS In addition to the other information in this Prospectus, the following should be considered carefully in evaluating the Company and its business before purchasing the Common Stock offered by this Prospectus. 1. Effects of Cancellation of Trademark and Marketing System Licensing Agreements The U.S. and international rights to exploit the Blimpie trademarks, service marks, trade names and logos (collectively, the "Blimpie Trademarks") and the methodology and know-how which comprise the Blimpie restaurant marketing concepts and programs (the "Blimpie Marketing System") are not completely owned or controlled by the Company. An undivided 40% interest in the international rights to the Blimpie Trademarks and Blimpie Marketing System, and the right to license the Blimpie Trademarks and Blimpie Marketing System in various territories located throughout the United States are owned by Metropolitan Blimpie, Inc. ("MBI"), a corporation which is unaffiliated with the Company. In accordance with a written agreement executed by the Company and MBI in 1991, the Company acquired the right to license the Blimpie Trademarks and the Blimpie Marketing System for an initial term of 42 months which provided for annual renewals through the year 2090, conditioned upon the payment of a minimum annual fee to MBI of $100,000. In the event that the Company fails to satisfy its payment obligations under the 1991 Agreement, the Company would lose the right to license the Blimpie Trademarks and Blimpie Marketing System outside of the United States and throughout the territories within the United States controlled by MBI. The Company, pursuant to 99 year grants made to it by Messrs. Anthony P. Conza and David L. Siegel, who are controlling shareholders, directors and respectively, the Chief Executive Officer and Chief Operating Officer of the Company, has acquired the exclusive right to license the Blimpie Trademarks and Blimpie Marketing System in the remaining territories throughout the United States not controlled by MBI. In accordance with a written agreement executed by the Company and Messrs. Conza and Siegel in -6- 1997, the Company has acquired, for $4.5 million plus certain income-based fees, ownership of the remaining undivided 60% interest in the international rights to the Blimpie Trademarks and Blimpie Marketing System held by such individuals. Said agreement may be cancelled by Messrs. Conza and Siegel if the Company fails to pay them an annual fee of $150,000 per year (subject to an annual cost of living adjustment) during the fifty years commencing January 1, 2002, provided that the Company derives revenues from its international operations in each of such years of at least $150,000. In the event that the Company fails to satisfy its payment or other obligations under such agreement, the Company would lose its rights to the Blimpie Trademarks and Blimpie Marketing System outside of the United States. The loss of any or all of such rights would have a material adverse effect upon the Company's business operations, and could seriously affect the Company's ability to operate profitably. 2. Risks of International Expansion Until recently, the Company has not engaged in business outside of the United States. The Company's lack of familiarity with the customs and procedures employed in the conduct of business, in general, and the franchised quick service restaurant business in particular, by persons and entities located in other countries may hinder the Company's efforts to establish profitable international franchising operations, or result in an inability to do so, in one or more countries. Furthermore, to the extent that the revenues which the Company may derive from its international franchising operations will be payable in currencies other than the U.S. dollar, the Company will be subject to the potential profit reducing effects of unfavorable fluctuations in currency exchange rates and currency devaluations. 3. Competition. The restaurant industry, and particularly the quick-service segment, is highly competitive with respect to price, service, food quality (including taste, freshness, healthfulness and nutritional value) and location, and there are numerous well-established competitors. These competitors include national and regional fast food chains. The Company's most significant competitor is the Subway(R) chain of sandwich restaurants, whose restaurants offer food products substantially similar to those offered by Blimpie restaurants, at comparable prices. The Company and its franchisees face competition from a broad range of other restaurants and food service establishments. Many of the Company's major chain competitors have achieved significant national, regional and local brand name and product recognition and engage in extensive promotional programs, both generally and in response to efforts by additional competitors to enter new markets or introduce new products. In addition, the quick-service industry is characterized by the frequent introduction of new -7- products, accompanied by substantial promotion campaigns. In recent years, numerous companies in the fast food industry have introduced products positioned to capitalize on growing consumer preference for food products that are, or are perceived to be, healthful, nutritious, low in calories and low in fat content. Many Blimpie authorized products are, or are perceived to be, healthful, nutritious, and in the case of its salads, low in calories, fat and cholesterol. It can be expected that the Company will be subject to increasing competition from companies whose products or marketing strategies address these consumer preferences. There can be no assurance that consumers will continue to regard the Company's products as sufficiently distinguishable from competitive products, that substantially equivalent products will not be introduced by the Company's other competitors or that the Company will be able to compete successfully. 4. Certain Factors Affecting the Quick-Service Restaurant Industry. The Company is required to respond to various consumer preferences, tastes and eating habits; demographic trends and traffic patterns; increases in food and labor costs; and national, regional and local economic conditions. In the past, several quick-service restaurant companies have experienced flat growth rates and declines in average sales per restaurant, in response to which certain of such companies have adopted "value pricing" strategies. Such strategies could have the effect of drawing customers away from companies that do not engage in discount pricing and could also negatively impact the operating margins of competitors that do attempt to match competitors price reductions. Continuing or sustained price discounting in the fast food industry could have an adverse effect on the Company. 5. Franchise Expansion. The rapid growth strategy of the Company is substantially dependent upon its ability to attract, retain and contract with qualified franchisees and the ability of these franchisees to open and operate their restaurants successfully. In addition, continued growth of the Company will depend in part on the ability of existing and future franchisees to obtain sufficient financing or investment capital to meet their market development obligations. If the Company experiences difficulty in contracting with qualified franchisees, if the Subfranchisors are unable to meet their development obligations or if franchisees are unable to operate their restaurants profitably, then the Company's future operating results could be adversely affected. -8- 6. Government Regulation. The Company and its franchisees are subject to various federal, state and local laws affecting their businesses. The Company believes that it is in material compliance with such laws. The laws applicable to franchise operations and relationships are rapidly developing, and the Company is unable to predict the effect on its operations of additional requirements or restrictions that may be enacted or promulgated or of court decisions that may be adverse generally to the franchise industry. The franchisees' restaurants are also subject to regulatory provisions relating to the wholesomeness of food, sanitation, health, safety, fire, land use and environmental standards. Suspension of certain licenses or approvals, due to failure to comply with applicable regulations or otherwise, could interrupt the operations of the affected restaurant or otherwise adversely affect the restaurant. Because Blimpie is a non-cooking sandwich restaurant and uses nearly all biodegradable paper products, the Company believes that the likelihood of an inadvertent failure to comply with applicable environmental standards is remote. The franchisees are also subject to federal and state laws establishing minimum wages and regulating overtime and working conditions. Changes in such laws could result in an increase in labor costs that could adversely affect the restaurant. 7. Dependence Upon Key and Other Personnel. The success of the Company is highly dependent on the efforts of key personnel of the Company, particularly Anthony P. Conza, David L. Siegel, Esq., Patrick Pompeo and Charles G. Leaness, Esq. The loss of the services of any such persons may have a materially adverse effect on the Company. The Company has obtained a key man life insurance policy on Mr. Conza. The Company presently has no employment agreements with any of its employees. The Company's success will be dependent upon its ability to retain existing and hire additional qualified personnel, including certain executive officers. The competition for qualified personnel in the restaurant business is intense and, accordingly, there can be no assurance that the Company will be able to retain or hire necessary personnel. 8. Control by Current Shareholders, Officers and Directors. After giving effect to the issuance of all of the Common Stock issuable under the Plan, Anthony P. Conza, David L. Siegel, Esq., Patrick Pompeo and Charles G. Leaness, Esq., will own, in the aggregate, approximately 56.6% of the outstanding Common Stock of the Company and will have control over the outcome of all matters submitted to the shareholders for approval, including the election of directors of the Company. The shareholders do not -9- have cumulative voting rights with respect to the election of directors. INDEMNIFICATION OF DIRECTORS AND OFFICERS Section 14A:3-5 of the Business Corporation Law of the State of New Jersey provides for the indemnification of a director or officer under certain circumstances against reasonable expenses, including attorney's fees actually and necessarily incurred in connection with the defense of an action brought against him or her by reason of his or her being a director or officer. Article 11 of the Company's By-laws confers upon the Board of Directors the sole discretion to cause the Company to indemnify any person who is or was a director or officer, employee or agent of the Company, or any person who serves or has served in any capacity with any other enterprise at the request of the Company, to the fullest extent permitted by law. If the Board so orders, the Company shall indemnify such persons, in the manner and to the extent determined by the Board of Directors, against expenses and liabilities reasonably incurred by or imposed on them in connection with any proceedings to which they have been or may be made parties, or any proceedings in which they may become involved by reason of being or having been a director or officer of the Company, or by reason of serving or having served another enterprise at the request of the Company, whether or not in the capacities of directors or officers of the Company at the time the expenses or liabilities are incurred. The Company has entered into indemnity agreements (the "Indemnity Agreements") with all of its directors and its executive officers. The Indemnity Agreements provide that the officers and directors will be indemnified to the fullest extent permitted by the Company's Certificate of Incorporation and/or New Jersey law, as amended from time to time, and that absent an adjudication of willful misconduct, breach of a duty of loyalty to the Company or conduct which results in a personal profit to which such person is not legally entitled, the directors and officers shall be indemnified against all expenses (including attorneys' fees), judgments, fines and settlement amounts paid or incurred in defending any proceeding on account of their services as a director or officer of the Company (or any other company when they are serving in such a capacity at the request of the Company). The Company would not be liable under the Indemnity Agreements in respect of any suit in which judgment is rendered against the indemnitee for any transaction in violation of Section 16(b) of the Securities Exchange Act of 1934. The Indemnity Agreements also provide for advance payment of indemnifiable expenses without requiring a case-by-case determination of whether such expenses should be paid. Under these agreements the right to advance payment is also subject to the obligation to reimburse the Company if it is found that such person was not entitled to such indemnification. -10- Except to the extent hereinabove provided, there is no charter or By-Law provision or contract arrangement under which any director or officer of the Company is insured or indemnified in any manner against any liability which he or she may incur in his or her capacity as such. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Company pursuant to the foregoing provisions, or otherwise, the Company has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Company of expenses incurred or paid by a director, officer or controlling person of the Company in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Company will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. SELLING SHAREHOLDERS The following table sets forth the name and relationship with the Company within the past three years of each shareholder (other than nonaffiliates holding less than 1,000 shares of Common Stock) eligible to resell shares of Common Stock under this Prospectus ("Selling Shareholders"), the number of shares of Common Stock that each Selling Shareholder beneficially owned directly or indirectly as of April 14, 1997, the number of shares of Common Stock that are being offered under this Prospectus on behalf of each of the Selling Shareholders hereunder, and the amount and percentage of Common Stock to be owned by each Selling Shareholder after completion of the offering, assuming the sale of all of the shares of Common Stock which may be offered hereunder. None of the Selling Shareholders own greater than 1% of the Company's outstanding shares of Common Stock. -11-
Shares of Shares of Shares of Position with Common Stock Common Stock Common Stock Selling Company (if Beneficially Owned as Covered by this to be held after Shareholder(1) applicable) of April 7 , 1997(2) Prospectus(1) Offering (2) - -------------- ----------- --------------------- ------------- ------------ Anthony Conza President, CEO 3,066,035(3) 8,000(4) 3,058,035 David Siegel Exec. Vice President, 1,505,830(5) 8,000(4) 1,497,830 COO Charles Leaness Exec. Vice President 435,908(6) 4,000(7) 431,908 Patrick Pompeo Exec. Vice President 398,137(8) 4,000(7) 394,137 Robert Sitkoff Sr. Vice President, 59,200(9) 59,000(10) 200 CFO & Treasurer Dennis Fuller Sr. Vice President- 26,410(11) 14,000(12) 12,410 Global Development Joseph Conza Sr. Vice President- 49,913(13) 19,000(14) 30,913 Construction & Design Joseph Morgan Sr. Vice President- 30,750(15) 11,000(16) 19,750 Strategic Planning Bruce Kolbinsky Vice President- 13,157(17) 13,000(18) 157 Operations Becky Killarney Vice President- 13,393(17) 13,000(18) 393 Marketing Art Mancino Vice President- 7,750(19) 2,200(20) 5,550 New Business Sharon Henderson Vice President- 2,200(19) 2,200(20) -- Finance Robert Schnurr Asst. Vice President 4,000(21) 4,000(22) -- Greg Bennett Asst. Vice President 8,100(21) 6,500(22) 1,600 Jack Ritter Asst. Vice President 6,815(21) 6,500(22) 315 Kevin Chachere Asst. Vice President 3,500(23) 3,500(24) -- Lisa Knopf Asst. Vice President 2,500(25) 2,500(26) -- Jill Kirch Asst. Vice President 1,100(27) 1,100(28) -- Steve Spiegel Asst. General Counsel 1,700(29) 1,700(30) -- Courtney Carrasco Senior Marketing Manager 1,000(31) 1,000(32) -- Pam Gower Human Resources Director 1,525(33) 1,400(34) 125 Ron Landry Senior Brand Manager 1,000(31) 1,000(32) -- Melissa Strittmatter Controller 1,000(31) 1,000(32) -- Michael Trogden Construction & 6,200(35) 6,200(36) -- Equipment Manager Christine Brando Executive Legal Assistant/ 1,200(37) 1,200(38) -- Office Manager-New York Don Keller New Concept Manager 1,400(33) 1,400(34) -- Mildred Martin Office Manager-Atlanta 1,400(33) 1,400(34) -- Laura Mastrangelo Executive Legal Assistant 1,400(33) 1,400(34) -- Carolyn Robinson Franchise Development 1,400(33) 1,400(34) -- Manager Mike Kennedy International Operations 1,000(39) 1,000(40) --
-12- (1) The persons listed as Selling Shareholders may not have a present intention of selling shares or, may offer less than the number of shares indicated. (2) Includes shares subject to currently exercisable stock options. Does not include the non-vested portion of stock grants. (3) Includes 8,000 shares of Common Stock subject to currently exercisable stock options. Does not include (a) 36,250 shares owned by Mr. Conza's daughter, (b) 15,750 shares owned by Mr. Morgan (Mr. Conza's son-in-law), (c) 15,000 shares owned jointly by Mr. Conza's daughter and Mr. Morgan over which Mr. Morgan has sole voting power, (d) 4,150 shares owned by Mr. Conza's parents, (e) 49,913 shares owned by Joseph Conza, the brother of Mr. Conza, and (f) 54,000 shares held by Mr. Conza's daughter as Trustee for the Anthony P. Conza Charitable Remainder Trust, as to all of which Mr. Conza disclaims beneficial ownership. (4) Includes 8,000 shares of Common Stock subject to currently exercisable stock options. Does not include 32,000 shares of Common Stock subject to stock options that are not currently exercisable. (5) Includes 8,000 shares of Common Stock subject to currently exercisable stock options. (6) Includes 4,000 shares of Common Stock subject to currently exercisable stock options. (7) Includes 4,000 shares of Common Stock subject to currently exercisable stock options. Does not include 16,000 shares of Common Stock subject to stock options that are not currently exercisable. (8) Includes 4,000 shares of Common Stock subject to currently exercisable stock options. Does not include 6,300 shares held by Mr. Pompeo's sister and brother-in-law, as to which Mr. Pompeo disclaims beneficial ownership. (9) Includes 53,000 shares of Common Stock subject to currently exercisable stock options. (10) Includes 53,000 shares of Common Stock subject to currently exercisable stock options. Does not include 39,500 shares of Common Stock subject to stock options that are not currently exercisable and 1,500 shares representing the non-vested portion of a stock grant. (11) Includes 8,000 shares of Common Stock subject to currently exercisable stock options and 30 shares held by Mr. Fuller as custodian for his daughter under the Georgia Transfers to Minors Act. Does not include 5,355 shares held by Mr. -13- Fuller's mother, 1,900 shares held by Mr. Fuller's father-in-law and 750 shares held by Mr. Fuller's mother as custodian for his daughter under the Georgia Transfers to Minors Act, as to all of which Mr. Fuller disclaims beneficial ownership. (12) Includes 8,000 shares of Common Stock subject to currently exercisable stock options. Does not include 9,500 shares of Common Stock subject to stock options that are not currently exercisable and 1,500 shares representing the non-vested portion of a stock grant. (13) Includes 13,000 shares of Common Stock subject to currently exercisable stock options. (14) Includes 13,000 shares of Common Stock subject to currently exercisable stock options. Does not include 29,500 shares of Common Stock subject to stock options that are not currently exercisable and 1,500 shares representing the non-vested portion of a stock grant. (15) Includes 8,000 shares of Common Stock subject to currently exercisable stock options. Does not include (a) 36,250 shares held by Mr. Morgan's wife (Mr. A. Conza's daughter), (b) 700 shares held by Mr. Morgan's son, and (c) 54,000 shares held by Mr. Morgan's wife as Trustee for the Anthony P. Conza Charitable Remainder Trust, as to all of which Mr. Morgan disclaims beneficial ownership. (16) Includes 8,000 shares of Common Stock subject to currently exercisable stock options. Does not include 20,750 shares of Common Stock subject to stock options that are not currently exercisable and 750 shares representing the non-vested portion of a stock grant. (17) Includes 7,000 shares of Common Stock subject to currently exercisable stock options. (18) Includes 7,000 shares of Common Stock subject to currently exercisable stock options. Does not include 5,500 shares of Common Stock subject to stock options that are not currently exercisable and 1,500 shares representing the non-vested portion of a stock grant. (19) Includes 1,600 shares of Common Stock subject to currently exercisable stock options. (20) Includes 1,600 shares of Common Stock subject to currently exercisable stock options. Does not include 4,400 shares of Common Stock subject to stock options that are not currently exercisable and 400 shares representing the non-vested portion of a stock grant. (21) Includes 3,500 shares of Common Stock subject to currently exercisable stock options. -14- (22) Includes 3,500 shares of Common Stock subject to currently exercisable stock options. Does not include 2,750 shares of Common Stock subject to stock options that are not currently exercisable and 750 shares representing the non-vested portion of a stock grant. (23) Includes 1,000 shares of Common Stock subject to currently exercisable stock options. (24) Includes 1,000 shares of Common Stock subject to currently exercisable stock options. Does not include 3,000 shares of Common stock subject to stock options that are not currently exercisable and 1,000 shares representing the non-vested portion of a stock grant. (25) Includes 1,500 shares of Common Stock subject to currently exercisable stock options. (26) Includes 1,500 shares of Common Stock subject to currently exercisable stock options. Does not include 3,500 shares of Common Stock subject to stock options that are not currently exercisable and 1,500 shares representing the non-vested portion of a stock grant. (27) Includes 800 shares of Common Stock subject to currently exercisable stock options. (28) Includes 800 shares of Common Stock subject to currently exercisable stock options. Does not include 2,200 shares of Common Stock subject to stock options that are not currently exercisable and 200 shares representing the non-vested portion of a stock grant. (29) Includes 1,100 shares of Common Stock subject to currently exercisable stock options. (30) Includes 1,100 shares of Common Stock subject to currently exercisable stock options. Does not include 2,400 shares of Common Stock subject to stock options that are not currently exercisable and 400 shares representing the non-vested portion of a stock grant. (31) Includes 600 shares of Common Stock subject to currently exercisable stock options. (32) Includes 600 shares of Common Stock subject to currently exercisable stock options. Does not include 1,400 shares of Common Stock subject to stock options that are not currently exercisable and 600 shares representing the non-vested portion of a stock grant. (33) Includes 800 shares of Common Stock subject to currently exercisable stock options. -15- (34) Includes 800 shares of Common Stock subject to currently exercisable stock options. Does not include 1,200 shares of Common stock subject to stock options that are not currently exercisable and 400 shares representing the non-vested portion of a stock grant. (35) Includes 3,200 shares of Common Stock subject to currently exercisable stock options. (36) Includes 3,200 shares of Common Stock subject to currently exercisable stock options. Does not include 1,550 shares of Common stock subject to stock options that are not currently exercisable and 750 shares representing the non-vested portion of a stock grant. (37) Includes 700 shares of Common Stock subject to currently exercisable stock options. (38) Includes 700 shares of Common Stock subject to currently exercisable stock options. Does not include 1,200 shares of Common Stock subject to stock options that are not currently exercisable and 400 shares representing the non-vested portion of a stock grant. (39) Includes 500 shares of Common Stock subject to currently exercisable stock options. (40) Includes 500 shares of Common Stock subject to currently exercisable stock options. Does not include 2,000 shares of Common Stock subject to stock options that are not currently exercisable and 2,000 shares representing the non-vested portion of a stock grant. Information regarding additional Selling Shareholders will be provided by means of a supplemental prospectus to be filed at such time as the names of such additional Selling Shareholders and the amounts of securities to be reoffered by them become known. In addition, certain unnamed persons, each of whom is not an affiliate of the Company, may use this Prospectus for reoffers and resales of up to 1,000 shares of Common Stock. PLAN OF DISTRIBUTION The Common Stock may be sold from time to time by the Selling Shareholders or by pledgees, donees, transferees or other successors in interest. Such sales may be made on the NASDAQ National Market, in the over-the-counter market or otherwise at prices and on terms then prevailing or at prices related to the then current market price, or in negotiated transactions. The Common Stock may be sold by one or more of the following methods: (a) a block trade in which the broker or dealer so engaged will attempt to sell the shares as agent but may position and resell a -16- portion of the block as principal to facilitate the transaction; (b) purchases by a broker or dealer as principal and resale by such broker or dealer for its account pursuant to this Prospectus; (c) ordinary brokerage transactions and transactions in which the broker solicits purchases; and (d) face-to-face transactions between sellers and purchasers without a broker-dealer. In effecting sales, brokers or dealers engaged by the Selling Shareholders may arrange for other brokers or dealers to participate. Brokers or dealers will receive commissions or discounts from Selling Shareholders in amounts to be negotiated immediately prior to the sale. Such brokers or dealers and any other participating brokers or dealers may be deemed to be "underwriters" within the meaning of the Act in connection with such sales. In addition, any securities covered by this Prospectus which qualify for sale pursuant to Rule 144 may be sold under Rule 144 rather than pursuant to this Prospectus. The Company will not receive any of the proceeds from the sale of these shares, although it has paid the expenses of preparing this Prospectus and the related Registration Statement. The Selling Shareholders have been advised that they are subject to the applicable provisions of the Securities Exchange Act of 1934, including without limitation, Rules 10b-5, 10b-6 and 10b-7 thereunder. USE OF PROCEEDS The Company will not receive any of the proceeds from the sale of the shares of Common Stock being registered hereunder. The Company will receive, from time to time, proceeds from the exercise of stock options issued under the Plan. Such proceeds, when received by the Company, will be used for general corporate purposes, including working capital. LEGAL MATTERS The validity of the Common Stock being offered hereby will be passed upon for the Company by Hall Dickler Kent Friedman & Wood LLP, 909 Third Avenue, New York, New York 10022-9998. EXPERTS The consolidated balance sheets as of June 30, 1996 and 1995 and the consolidated statements of operations, changes in shareholders' equity and cash flows for the years then ended incorporated by reference in this prospectus have been incorporated herein in reliance on the report of Coopers & Lybrand L.L.P., independent accountants, given on the authority of that firm as experts in accounting and auditing. -17- ADDITIONAL INFORMATION The Company is authorized to issue 20,000,000 shares of Common Stock. On March 1, 1994 (the "Effective Date"), the Company effected a division of its Common Stock. Such division was implemented by splitting each two shares of Common Stock issued and outstanding on the Effective Date into three shares of Common Stock. The certificates evidencing ownership of the additional shares resulting from such split were issued on March 11, 1994. As of April 14, 1997, 9,526,226 shares of the Company's Common Stock were issued and outstanding. Further information concerning the Company's Common Stock may be found in the documents incorporated herein by reference. See. "Incorporation of Certain Documents by Reference." Shares of the Company's Common Stock previously issued under, but not vested, or subject to issuance upon the exercise of options granted under, the Company's 1993 Stock Option Plan are now subject to issuance under the Company's Omnibus Stock Incentive Plan, and when issued, will be issued pursuant to the Registration Statement of which this Prospectus is a part. -18- PART II. INFORMATION REQUIRED IN THE REGISTRATION STATEMENT In accordance with the General Instructions to Form S-8, as amended, the Company has provided the following information that is required in this Registration Statement, pursuant to which shares of the Company's Common Stock shall be registered, including the necessary opinion and consents, which are attached hereto as Exhibits 5.1, 5.2, 23.1. and 23.2. The Company will deliver a prospectus meeting the requirements of Part I of Form S-8 and Rule 428 to all persons granted options, stock purchase rights or stock pursuant to the Plan in accordance with the requirements of Rule 428(b). Item 3. Incorporation of Documents By Reference. The following documents are incorporated by reference in this Registration Statement as of their respective dates: (a) The Company's Annual Report on Form 10-KSB for the Company's fiscal year ended June 30, 1996, as filed with the Commission pursuant to the Exchange Act; (b) The Company's Quarterly Reports on Form 10-QSB for the Company's fiscal quarters ended September 30, 1996 and December 31, 1996; and (c) The description of the Company's Common Stock contained in the Company's Registration Statement on Form SB-2 filed with the Commission on June 30,1995 (File No. 33-93738), together with any amendment or report filed for the purpose of updating such description, to the extent of such updating. All reports and other documents subsequently filed by the Company with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act, prior to the filing of a post-effective amendment which indicates that all securities offered hereby have been sold or which deregisters all securities then remaining unsold, shall be deemed to be incorporated by reference herein and to be a part hereof from the date of filing of such reports and documents. Any statement contained herein or in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this registration statement to the extent that a statement contained herein or in any other subsequently filed document which also is or is deemed to be incorporated by reference herein modifies or supersedes such statement. Any statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part hereof. -II-1- Item 4. Description of Securities. Not applicable. Item 5. Interests of Named Experts and Counsel. Not applicable. Item 6. Indemnification of Directors and Officers. See "Indemnification of Directors and Officers" appearing in Part I of this Registration Statement. Item 7. Exemption from Registration Claimed. This item is not applicable to shares of Common Stock issuable under options granted under the Plan which have not been exercised as of the date hereof. Restricted securities acquired under the Plan either upon the exercise of options or by stock grant are being reoffered or resold pursuant to this Registration Statement by certain Selling Shareholders. These restricted securities were acquired by such Selling Shareholders pursuant to exemptions from registration under Section 4(2) of the Securities Act. Item 8. Exhibits. 4.1 Specimen stock certificate of the Company's common stock (a copy of which was filed with the Commission on June 30,1995 as Exhibit 4.1 to the Company's Registration Statement on Form SB-2 (Registration No. 33-93738), and which is incorporated herein by this reference).* 4.2 Omnibus Stock Incentive Plan, as amended. 5.1 Opinion of Hall Dickler Kent Friedman & Wood, LLP, Esqs. regarding the legality of the Common Stock.* 5.2 Opinion of Hall Dickler Kent Friedman & Wood, LLP, Esqs. regarding the legality of the additional shares of Common Stock registered under Post Effective Amendment No. 1 to the Company's Registration Statement on Form S-8/S-3 (Registration No. 333-1530) 23.1 Consent of Coopers & Lybrand. 23.2 Consent of Counsel. 24 Power of Attorney. (See page II-4.) - ---------- * Previously filed. Item 9. Undertakings. The undersigned registrant hereby undertakes: (1) To file, during any period in which it offers or sells securities, a post-effective amendment to this registration statement to (i) include any prospectus required by Section 10(a)(3) of the Securities Act; (ii) reflect in the prospectus any facts or events which, individually or together, represent a -II-2- fundamental change in the information set forth in the Registration Statement; and (iii) include any additional or changed material information on the plan of distribution; (2) that, for determining liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof;and (3) to remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the small business issuer pursuant to the foregoing provisions, or otherwise, the small business issuer has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. -II-3- SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8/S-3 and has duly caused this post-effective amendment to its registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City, County and State of New York on the 16th day of April, 1997. BLIMPIE INTERNATIONAL, INC. By: /s/ Anthony P. Conza ------------------------------- Anthony P. Conza, President KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Anthony P. Conza his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments) to this registration statement, and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent, full power and authority to do and perform each and every act and thing requisite or necessary to be done in and about the premises, as full to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent or either of them or their or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, this Post-Effective Amendment has been signed by the following persons in the capacities and on the dates indicated. Principal Executive Officer Date: April 16, 1997 /s/ Anthony P. Conza ------------------------------- Anthony P. Conza, Chairman, President and Chief Executive Officer Principal Financial and Accounting Officer Date: April 16, 1997 /s/ Robert S. Sitkoff ------------------------------- Robert S. Sitkoff, Senior Vice President, Chief Financial Officer and Treasurer -II-4- Date: April 16, 1997 /s/ David L. Siegel ------------------------------- David L. Siegel, Vice Chairman Date: April 16, 1997 /s/ Patrick J. Pompeo ------------------------------- Patrick J. Pompeo, Director Date: April 16, 1997 /s/ Charles G. Leanes ------------------------------- Charles G. Leaness, Director Date: April 16, 1997 /s/ Alvin Katz ------------------------------- Alvin Katz, Director Date: April 16, 1997 /s/ Harry G. Chernoff ------------------------------- Harry G. Chernoff, Director -II-5- EX-4.2 2 OMNIBUS STOCK INCENTIVE PLAN BLIMPIE INTERNATIONAL, INC. OMNIBUS STOCK INCENTIVE PLAN(1) ARTICLE I DEFINITIONS 1.01. Agreement means a written agreement between the Company and a Participant or any written instrument issued by the Company to a Participant (including any amendment or supplement thereto) specifying the terms and conditions of an award of Restricted Shares or Performance Shares or a grant of an Option or SAR made to such Participant. 1.02. Board means the Board of Directors of the Company. 1.03. Code means the Internal Revenue Code of 1986, as amended. 1.04. Committee means the Compensation Committee of the Board, consisting solely of not less than two non-employee directors who have been appointed to administer the Plan. 1.05. Common Stock means the Company's common stock, $.01 par value. 1.06. Company means Blimpie International, Inc. 1.07. Corresponding SAR means a SAR that is granted in relation to a particular Option and that can be exercised only upon the surrender to the Company, unexercised, of that portion of the Option to which the SAR relates. 1.08. Date of Exercise means (i) with respect to an Option, the date that the Option price is received by, and (ii) with respect to a SAR, the date that the notice of exercise is received by, the Company. 1.09. Fair Market Value of the Common Stock shall be the mean between the following prices, as applicable, for the date as of which fair market value is to be determined, as quoted in The Wall Street Journal (or in such other reliable publication as the Committee, in its discretion, may determine to rely upon): (a) if the Common Stock is listed on the New York Stock Exchange, the highest and lowest sales prices per share of the Common Stock as quoted in the NYSE-Composite Transactions listing for such date, (b) if the Common Stock is not listed on such exchange, the highest and lowest sales prices per share of Common Stock - ---------- 1 As amended by the Board of Directors on October 7, 1996. for such date on (or on any composite index including) the principal United States securities exchange registered under the Exchange Act on which the Common Stock is listed, or (c) if the Common Stock is not listed on any such exchange, the highest and lowest sales prices per share of the Common Stock for such date on the Nasdaq Stock Market or any successor thereto ("Nasdaq"). If there are no such sale price quotations for the date as of which fair market value is to be determined, but there are such sale price quotations within a reasonable period both before and after such date, then fair market value shall be determined by taking a weighted average of the means between the highest and lowest sales prices per share of the Common Stock as so quoted on the nearest date before and the nearest date after the date as of which fair market value is to be determined. The average should be weighted inversely by the respective numbers of trading days between the selling dates and the date as of which fair market value is to be determined. If there are no such sale price quotations on or within a reasonable period both before and after the date as of which fair market value is to be determined, then fair market value of the Common Stock shall be the mean between the bona fide bid and asked prices per share of Common Stock as so quoted for such date on Nasdaq, or if none, the weighted average of the means between such bona fide bid and asked prices on the nearest trading date before and the nearest trading date after the date as of which fair market value is to be determined, if both such dates are within a reasonable period. The average is to be determined in the manner described above in this paragraph. If the fair market value of the Common Stock cannot be determined on the basis previously set forth in this paragraph on the date as of which fair market value is to be determined, the Committee shall in good faith determine the fair market value of the Common Stock on such date. Fair market value shall be determined without regard to any restriction other than a restriction which, by its terms, will never lapse. 1.10 Incentive Stock Option shall have the meaning given to it by Section 422 of the Code. 1.11. Initial Value means, with respect to a SAR, the Fair Market Value of one share of Common Stock on the date of grant, as set forth in an Agreement. 1.12 Involuntary Termination means a Termination of Employment for a reason other than death, Retirement, Total Disability or voluntary resignation. 1.13 Nonstatutory Option means any Option granted by the Company pursuant to this Plan which is not an Incentive Stock Option. 1.14. Option means any stock option that entitles the holder to purchase from the Company a stated number of shares of Common Stock at the price set forth in an Agreement. 1.15. Participant means an employee of the Company, or of a Subsidiary, including 2 an employee who is a member of the Board, or a non-employee director, and any other person who satisfies the requirements of Article IV and is selected by the Committee or by the Board to receive a Restricted Share or Performance Share award, an Option, a SAR, or a combination thereof. 1.16 Performance Period means an accounting period of the Company or a Subsidiary of not less than one year, as determined by the Committee in its discretion. 1.17. Performance Share means an award, expressed in dollars or shares of Common Stock, granted to a Participant with respect to a Performance Period. Awards of Performace Shares expressed in dollars may be established as fixed dollar amounts, as a percentage of salary, as a percentage of a pool based on earnings of the Company, a Subsidiary or Subsidiaries or any branch, department or other portion thereof or in any other manner determined by the Committee in its discretion, provided that the amount thereof shall be capable of being determined as a fixed dollar amount as of the close of the Performance Period. 1.18 Performance Target means that level of performance established by the Committee which must be met in order for an award of Performance Shares to be fully earned. The Performance Target may be expressed in terms of earnings per share, return on assets, asset growth, ratio of capital to assets or such other level or levels of accomplishment by the Company, a Subsidiary or Subsidiaries, any branch, department or other portion thereof or the Participant individually as may be established or revised from time to time by the Committee. 1.19. Plan means the Blimpie International, Inc. Omnibus Stock Incentive Plan. 1.20. Restricted Shares means shares of Common Stock awarded to a Participant under Article VII. Shares of Common Stock shall cease to be Restricted Shares when, in accordance with the terms of the applicable Agreement, they become transferable and free of substantial risks of forfeiture. 1.21. Retirement means a Termination of Employment by reason of a Participant=s cessation of employment (or, in the case of a non-employee director, the cessation of his or her tenure as such), other than by reason of a Total Disability or Termination for Cause. 1.22. SAR means a stock appreciation right that entitles the holder to receive, with respect to each share of Common Stock encompassed by the exercise of such SAR, the amount determined by the Committee and specified in an Agreement. In the absence of such a determination, the holder shall be entitled to receive, with respect to each share of Common Stock encompassed by the exercise of such SAR, the excess of the Fair Market Value on the Date of Exercise over the Initial Value. References 3 to "SARs" include both Corresponding SARs and SARs granted independently of Options, unless the context requires otherwise. 1.23. Subsidiary means any "subsidiary corporation" as such term is defined in Code section 424. 1.24 Termination of Employment means with respect to (a) Participants who are employees of the Company or a Subsidiary, the time when the employee-employer relationship between the Participant and the Company ceases to exist for any reason including, but not limited to termination by resignation, discharge, death, Total Disability or Retirement; and (b) Participants who are non-employee directors, the time when the Participant ceases to be a director by reason of his or her resignation, failure to stand for re-election or dismissal. 1.25 Termination for Cause means an Involuntary Termination of a Participant: (a) if the Participant has a written employment agreement with the Company or any Subsidiary, "for cause" as that or a similar term is defined in the employment agreement; or (b) if the Participant does not have a written employment agreement with the Company or any Subsidiary, by reason of (i) the Participant=s dishonesty or misconduct (including substance abuse) in the performance of his or her duties; or (ii) a wilful failure by the Participant to perform his or her assigned duties which adversely affects the Company; of (iii) the conviction of the Participant of a felony or other criminal act. All determinations of whether or not a Termination for Employment is "for cause" will be made by the Committee in its sole and absolute discretion. 1.26 Total Disability means the inability of a Participant to engage in any substantial gainful activity by reason of a medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months. All determinations as to the date and extent of disability of a Participant will be made by the Committee in its sole and absolute discretion. 1.27 Non-Employee Director means a director who: (a) is not currently an officer of the Company or a parent or subsidiary of the Company, or otherwise currently employed by the Company or a parent or subsidiary of the Company; (b) does not receive compensation, either directly or indirectly, for services rendered as a consultant or in any capacity other than as a director, except for an amount which does not exceed the dollar amount for which disclosure would be required pursuant to any provision of Regulations S-K promulgated by the Commission; 4 (c) does not possess an interest in any other transaction for which disclosure would be required by any provision of said Regulation S-K; and (d) is not engaged in a business relationship for which disclosure would be required by any provision of said Regulation S-K. ARTICLE II PURPOSES The Plan is intended to assist the Company in recruiting and retaining employees and directors with ability and initiative by enabling them to participate in its future success and to associate their interests with those of the Company and its shareholders. The Plan is intended to permit the award of Restricted Shares, the award of Performance Shares, the grant of SARs, and the grant of both Incentive Stock Options and Nonstatutory Options. The proceeds received by the Company from the sale of Common Stock pursuant to this Plan shall be used for general corporate purposes. ARTICLE III ADMINISTRATION Except as provided in this Article III, the Plan shall be administered by the Committee. The Committee shall have authority to award Restricted Shares and Performance Shares and to grant Options and SARs upon such terms (not inconsistent with the provisions of this Plan) as the Committee may consider appropriate. Such terms may include conditions (in addition to those contained in this Plan) on the exercisability of all or any part of an Option or SAR or on the transferability or forfeitability of Restricted Shares. Notwithstanding any such conditions, the Committee may, in its discretion, accelerate the time at which any Option or SAR may be exercised or the time at which Restricted Shares may become transferable or nonforfeitable. In addition the Committee shall have complete authority to interpret all provisions of this Plan; to prescribe the form of Agreements; to adopt, amend, and rescind rules and regulations pertaining to the administration of the Plan; and to make all other determinations necessary or advisable for the administration of this Plan. The express grant in the Plan of any specific power to the Committee shall not be construed as limiting any power or authority of the Committee. Any decision made, or action taken, by the Committee or in connection with the administration of this Plan shall be final and conclusive. No member of the Committee shall be liable for any act done in good faith with respect to this Plan or any Agreement, or Option, SAR, Restricted Share award or 5 Performance Share award. All expenses of administering this Plan shall be borne by the Company. The Committee, in its discretion, may delegate to one or more officers of the Company all or part of the Committee's authority and duties with respect to Participants who are not subject to the reporting and other provisions of Section 16 of the Securities Exchange Act of 1934, as in effect from time to time (the "Exchange Act"). In the event of such delegation, and as to matters encompassed by the delegation, references in the Plan to the Committee shall be interpreted as a reference to the Committee's delegate or delegates. The Committee may revoke or amend the terms of a delegation at any time, but such action shall not invalidate any prior actions of the Committee's delegate or delegates that were consistent with the terms of the Plan. In addition to, and not in substitution or replacement of, the powers and authority conferred upon the Committee pursuant to this Plan, the Board shall also be entitled to award Restricted Shares or Performance Shares and/or to grant one or more Options, SARs, or Options and SARs to any eligible Participant, and when it makes such awards and/or grants, all of the provisions of this Plan which pertain to the Committee shall be construed as though the word "Board" appeared in place of the word "Committee," and the Board shall have, and shall be entitled to exercise, all of the powers and authority conferred upon the Committee when making, amending, modifying canceling, settling or rescinding any of such awards and/or grants. ARTICLE IV ELIGIBILITY 4.01. General. Any employee of the Company or of any Subsidiary (including any corporation that becomes a Subsidiary after the adoption of this Plan) is eligible to participate in this Plan if the Committee, in its sole discretion, determines that such person has contributed or can be expected to contribute to the profits or growth of the Company or a Subsidiary. Any such employee may be awarded Restricted Shares or Performance Shares or may be granted one or more Options, SARs, or Options and SARs. A director of the Company who is an employee of the Company or a Subsidiary, and a non-employee director of the Company or a Subsidiary, may be awarded Restricted Shares and Performance Shares and may be granted Options or SARs under this Plan. Further, the Committee may from time to time in its sole discretion award Restricted Shares and Performance Shares and may grant Options or SARs to non-employees or non-key employees in conjunction with mergers and acquisition transactions. 4.02. Grants. The Committee will designate individuals to whom Restricted 6 Shares and Performance Shares are to be awarded and to whom Options and SARs are to be granted and will specify the number of shares of Common Stock subject to each award or grant. An Option may be granted with or without a related SAR. The Committee may grant Incentive Stock Options and Nonstatutory Options to the same Participant, but not in tandem. A SAR may be granted with or without a related Option. All Restricted Shares and Performance Shares awarded, and all Options and SARs granted, under this Plan shall be evidenced by Agreements which shall be subject to the applicable provisions of this Plan and to such other provisions as the Committee may adopt. No Participant may be granted Incentive Stock Options or related SARs (under all Incentive Stock Option plans of the Company and its Subsidiaries) which are first exercisable in any year for Common Stock having an aggregate Fair Market Value (determined as of the date an Option is granted) exceeding $100,000. ARTICLE V COMMON STOCK SUBJECT TO PLAN 5.01. Source of Shares. Upon the award of Restricted Shares and when a Performance Share is earned, the Company may issue authorized but unissued shares of Common Stock. Upon the exercise of an Option or SAR, the Company may deliver to the Participant (or the Participant's broker if the Participant so directs), authorized but unissued Common Stock. 5.02. Maximum Number of Shares. The maximum aggregate number of shares of Common Stock that may be issued pursuant to the exercise of Options and SARs and the award of Restricted Shares and the settlement of Performance Shares under this Plan is 500,000, subject to increases and adjustments as provided in this Article V and Article IX. 5.03. Replenishment. The maximum number of shares authorized for issuance under this Plan pursuant to Section 5.02 shall be increased each year by 8% (the "Replenishment Percentage") of the amount, if any, by which the total number of shares of Common Stock outstanding as of the last day of the Company's fiscal year exceeds the total number of shares of Common Stock outstanding as of the first day of such fiscal year. Provided, however, that in no event shall the total number of shares authorized for issuance under this Plan exceed 8% of the authorized and outstanding shares of Common Stock as of the time of any replenishment adjustment. The issuance of shares of Common Stock under this Plan and the application of Article IX shall be disregarded for purposes of applying the preceding sentence. This Section 5.03 shall first apply with respect to the fiscal year of the Company beginning on July 1, 1996. 5.04 Forfeitures, etc. If an Option or SAR is terminated, in whole or in part for any 7 reason other than its exercise, the number of shares of Common Stock allocated to the Option or SAR or portion thereof may be reallocated to other Options, SARs granted, or Restricted Shares and Performance Share awards to be granted under this Plan. Any Restricted Shares that are forfeited or Performance Shares that are unearned may be reallocated to other Options or SARs granted, or Restricted Shares awarded, under this Plan. ARTICLE VI OPTIONS AND STOCK APPRECIATION RIGHTS 6.01 Nonstatutory Options. The Committee may grant Nonstatutory Options under this Plan. Such Nonstatutory Stock Options must comply with all applicable requirements of this Plan except for those which pertain solely to Incentive Stock Options. 6.02 Incentive Stock Options. The Committee may grant Incentive Stock Options under this Plan which shall comply with all of the restrictions and limitations set forth in Section 422 of the Code. To the extent that any Option does not qualify as an Incentive Stock Option, it shall constitute a Nonstatutory Stock Option. 6.03 Vesting of Options. The Participant=s Agreement shall specify the date or dates on which the Participant may begin to exercise all or a portion of his Option. Subsequent to such dates or dates, the Option shall be deemed "vested." Notwithstanding the terms of any Agreement, the Committee at any time may accelerate such date or dates and otherwise waive or amend any conditions of the grant. 6.04 Grant and Exercise of SARs. SARs may be granted to Participants by the Committee independently of any Option granted pursuant to this Article or as a Corresponding SAR. In the case of a Corresponding SAR granted in tandem with a Nonstatutory Option, such SAR may be exercised either at or after the time of the exercise of such Nonstatutory Option. In the case of a Corresponding SAR granted in tandem with an Incentive Stock Option, such SAR may be exercised only at the time of the exercise of such Incentive Stock Option. A Corresponding SAR, shall terminate and no longer be exercisable upon the termination or exercise of related Option. However, if a Corresponding SAR is granted with respect to less than the full number of shares covered by a related Option, such SAR shall terminate only if and to the extent that the number of shares covered by the exercise or termination of the related Option exceeds the number of shares not covered by such SAR. 8 6.05 Exercise of Options and SARs Conditioned on Continuous Employment. Except as otherwise provided in this Plan or by the Compensation Committee, no Participant may exercise an Option or SAR unless at the time of exercise he or she has been continuously in the employ of the Company or a Subsidiary since the date of grant thereof. 6.06 Terms and Conditions of Stock Appreciation Rights. SARs shall be subject to such terms and conditions as shall be determined from time to time by the Committee and embodied in the Agreements and in procedures established by the Committee. The Committee at any time may accelerate the exercisability of any SAR and otherwise waive or amend any conditions of the grant of a SAR. 6.07. Maximum Option or Stock Appreciation Right Period. The maximum period in which an Option or SAR may be exercised shall be determined by the Committee on the date of grant except that no Option that is an Incentive Stock Option and any Corresponding SAR that relates to such Option shall be exercisable after the expiration of ten years from the date the Option or SAR was granted. The terms of any Option or SAR may provide that it is exercisable for a period less than such maximum period. 6.08 Option Exercise Price. The price per share for Common Stock purchased on the exercise of an Option shall not be less than 100% of the Fair Market Value of the Common Stock on the date the Option is granted. 6.09. Payment of Option Exercise Price. Unless otherwise provided by the Agreement, payment of the Option exercise price shall be made in cash or a cash equivalent acceptable to the Committee. If the Agreement so provides, payment of all or part of the exercise price may be made by surrendering shares of Common Stock to the Company. If Common Stock is used to pay all or part of the exercise price, the shares surrendered must have a Fair Market Value (determined as of the day preceding the Date of Exercise) that is not less than such price or part thereof. 6.10. Determination of Payment of Cash and/or Common Stock Upon Exercise of SAR. At the Committee's discretion, the amount payable as a result of the exercise of a SAR may be settled in cash, Common Stock, or a combination of cash and common Stock. A Fractional share shall not be deliverable upon the exercise of a SAR but a cash payment will be made in lieu thereof. 6.11 Reload Options. The Committee shall have the authority to specify at the time of grant that a Participant shall be granted another Option (a "Reload Option") in the event such Participant exercises all or part of a Nonstatutory Option (an "Original Option") by surrendering in accordance with Section 6.08 hereof already owned shares of Common Stock in full or partial payment of the exercise price under such Original Option, subject to the availability of shares of Common Stock 9 under the Plan at the time of exercise. Each Reload Option shall cover a number of shares of Common Stock equal to the number of shares of Common Stock surrendered in payment of the exercise price, shall have an exercise price per share of Common Stock equal to the Fair Market Value of the Common Stock on the date of grant of such Reload Option and shall expire on the stated expiration date of the Original Option. A Reload Option shall be exercisable at any time and from time to time from and after the date of grant of such Reload Option (or, as the Committee, in its sole discretion, shall determine at the time of grant, at such time or times as shall be specified in the Reload Option); provided, however, that a Reload Option granted to a Participant subject to the provisions of Section 16(b) of the Exchange Act shall not be exercisable during the first six months from the date of grant of such Reload Option. The first such Reload Option may provide for the grant, when exercised, of one subsequent Reload Option to the extent and upon such terms and conditions, consistent with this Section 6.11, as the Committee, in its sole discretion, shall specify at or after the time of grant of such Reload Option. A Reload Option shall contain such other terms and conditions which may include a restriction on the transferability of the number of shares of Common Stock received upon exercise of the Original Option reduced by a number of shares equal in value to the tax liability incurred upon exercise as the Committee, in its sole discretion, may deem desirable which may be set forth in the Agreement evidencing the Reload Option. 6.12. Nontransferability. Any Option or SAR granted under this Plan shall be nontransferable except by will or by the laws of descent and distribution. In the event of any such transfer, the Option and any Corresponding SAR that relates to such Option must be transferred to the same person or persons or entity or entities. During the lifetime of a Participant to whom an Option or SAR is granted, the Option or SAR may be exercised only by the Participant. No right or interest of a Participant in any Option or SAR shall be liable for, or subject to, any lien, obligation, or liability of such Participant. 6.13 Cancellation and New Grant of Options. The Committee shall have the authority to effect, at any time, and from time to time, with the consent of the affected Participants, the cancellation of any or all outstanding Options under the Plan and the grant in substitution therefor of new Options under the Plan covering the same or different numbers of shares of Common Stock having an Option exercise price per share which may be lower or higher than the exercise price per share of the canceled Options. 6.14. Shareholder Rights. No Participant shall have any rights as a shareholder with respect to shares subject to an Option or SAR until the Date of Exercise of such Option or SAR. 6.15 Retirement of Holder of Options or Stock Appreciation Rights. If there is a Termination of Employment of a Participant to whom an Option and/or SAR has 10 been granted due to Retirement, each Incentive Stock Option held by the retired Participant, whether or not then vested, may be exercised until the earlier of (a)jthe end of the three month period immediately following the date of such Termination of Employment; or (b)jthe expiration of the term specified in the Option or SAR. In the case of a Nonstatutory Option, there shall be substituted the words, "the end of the twelve month period" for the words "the end of the three month period" in the immediately preceding sentence. 6.16 Total Disability of Holder of Options or Stock Appreciation Rights. If there is a Termination of Employment of a Participant to whom an Option and/or a SAR has been granted by reason of his or her Total Disability, each Option and/or SAR held by the Participant, whether or not then vested, may be exercised until the earlier of: (a)jthe end of the twelve month period immediately following the date of such Termination of Employment; or (b)jthe expiration of the term specified in the Option or SAR. 6.17 Death of Holder of Options or Stock Appreciation Rights. If there is a Termination of Employment of a Participant to whom an Option or SAR has been granted by reason of jhis or her death, or (b)jthe death of a former employee within three months following the date of his or her Retirement (or, in the case of a Non-statutory Option, within twelve months following the date of his or her Retirement), or (c) the death of a former employee within twelve months following the date of his or her Termination of Employment by reason of Total Disability, then each Option and SAR held by the person at the time of his or her death, whether or not then vested, may be exercised by the person or persons to whom the Option or SAR shall pass by will or by the laws of descent and distribution (but by no other persons) until the earlier of (i)jthe end of the twelve month period immediately following the date of death (or such longer period as is permitted by the Committee); and (ii)jthe expiration of the term specified in the Option or SAR. 6.18 Termination of Employment for Cause: Voluntary Termination Prior to Retirement. If there is a Termination of Employment for Cause of a Participant to whom an Option or SAR has been granted under this Plan, or if a Participant voluntarily terminates his or her employment prior to Retirement (other than by reason of Total Disability), then all Options and SARs held by such Participant, whether or not then vested, shall automatically be canceled at the time of such Termination of Employment and shall be of no further force or effect thereafter. This section shall not affect any Common Stock acquired by the Participant upon exercise of Options or SARs prior to such Termination of Employment by the Participant. 11 ARTICLE VII RESTRICTED SHARE AWARDS 7.01. Award. In accordance with the provisions of this Article VII, the Committee will designate each individual to whom an award of Restricted Shares is to be made and will specify the number of shares of Common Stock covered by the award. 7.02. Vesting. The Committee, on the date of the award, may prescribe that a Participant's rights in the Restricted Shares shall be forfeitable or otherwise restricted for a period of time set forth in the Agreement. By way of example and not of limitation, the restrictions may postpone transferability of the shares or may provide that the shares will be forfeited if the Participant separates from the service of the Company and its Subsidiaries before the expiration of a stated term or if the Company and its Subsidiaries or the Participant fail to achieve stated objectives. 7.03. Shareholder Rights; Escrow. Prior to their forfeiture in accordance with the terms as the Agreement and while the shares are Restricted Shares, a Participant will have all rights of a shareholder with respect to Restricted Shares, including the right to receive dividends and vote the shares; provided, however, that (a) a Participant may not sell, transfer, pledge, exchange, hypothecate, or otherwise dispose of Restricted Shares, (b)jthe Company shall retain custody of the certificates evidencing Restricted Shares and (c) the Participant will deliver to the Company a stock power, endorsed in blank, with respect to each award of Restricted Shares. The limitations set forth in the preceding sentence shall not apply after the shares cease to be Restricted Shares. 7.04 Restricted Share Agreement. Restricted Share awards shall be evidenced by an Agreement in the form prescribed by the Committee which shall set forth such terms, conditions and restrictions as the Committee in its discretion deems appropriate. Restricted Share awards shall be effective only upon execution of the applicable Agreement on behalf of the Company by the Chief Executive Officer (if other than the President), the President or any Vice President, and by the Participant. ARTICLE VIII PERFORMANCE SHARE AWARDS 8.01 Award. The Committee may award Performance Shares which shall be earned by a Participant based on the level of performance over a specified period of time by the Company, a Subsidiary or Subsidiaries, any branch, department or other portion thereof or the Participant individually, as determined by the Committee. 12 8.02 Procedure for Earning Award. A Participant shall earn awarded Performance Shares in full by meeting the Performance Target for the Performance Period. If the Minimum Target has not been attained at the end of the Performance Period, no part of the Performance Share shall have been earned by the Participant. If the Minimum Target is attained but the Performance Target is not attained, the portion of the Performance Share award earned by the Participant shall be determined on the basis of a formula established by the Committee. 8.03 Adjustments to Awards. At any time prior to the end of a Performance Period, the Committee may adjust downward (but not upward) the Performance Target and/or the Minimum Target as a result of major events unforeseen at the time of the Performance Share award, such as changes in the economy, the industry, laws affecting the operations of the Company or a Subsidiary or any other event the Committee determines would have a significant impact upon the probability of attaining the previously established Performance Target. 8.04 Payment of Awards. Payment of earned Performance Shares shall be made to Participants following the close of the Performance Period as soon as practicable after the time the amount payable is determined by the Committee. Payment in respect of earned Performance Shares, whether expressed in dollars or shares, may be made in cash, in shares of Common Stock, or partly in cash and partly in shares of Common Stock, as determined by the Committee at the time of payment. For this purpose, Performance Shares expressed in dollars shall be converted to shares, and Performance Shares expressed in shares shall be converted to dollars, based on the Fair Market Value of the Common Stock as of the date the amount payable is determined by the Committee. 8.04 Effects of Termination of Employment. If prior to the close of the Performance Period the employment of a Participant who received an award of Performance Shares is voluntarily terminated with the consent of the Company or a Subsidiary or the Participant retires, or if the Participant dies during employment, the Committee may in its absolute discretion determine to pay all or any part of the Performance Share award based upon the extent to which the Committee determines the Performance Target or Minimum Target has been achieved as of the date of termination of employment, retirement or death, the period of time remaining until the close of the Performance Period and/or such other factors as the Committee may deem relevant. If the Committee in its discretion determines that all or any part of the Performance Share award shall be paid, payment shall be made to the Participant or his or her estate as promptly as practicable following such determination and may be made in cash, in shares of Common Stock, or partly in cash and partly in shares of Common Stock, as determined by the Committee at the time of the payment. For this purpose, Performance Shares expressed in dollars shall be converted to shares, and Performance Shares expressed in shares shall be converted to dollars, based on the Fair Market Value of the Common Stock as of the 13 date the amount payable is determined by the Committee. If, prior to the close of a Performance Period, a Termination of Employment of a Participant who received an award of Performance Shares occurs for any reason other than voluntary termination with the consent of the Company or a Subsidiary, Retirement or death, the Performance Shares of the Participant shall be deemed not to have been earned, and no portion of such Performance Shares may be paid. Whether Termination of Employment is a voluntary termination with the consent of the Company or a Subsidiary shall be determined, in its discretion, by the Committee. Any determination by the Committee on any matter with respect to Performance Shares shall be final and binding on both the Company and the awardee. 8.05 Performance Share Agreement. Performance Share awards shall be evidenced by an Agreement in the form prescribed by the Committee which shall set forth the amount or manner of determining the amount of the Performance Shares, the Performance Period, the Performance Target and any Minimum Target and such other terms and conditions as the Committee in its discretion deems appropriate. Performance Share awards shall be effective only upon execution of the applicable Performance Share Agreement on behalf of the Company by the Chief Executive Officer (if other than the President), the President or any Vice President, and by the Participant. ARTICLE IX ADJUSTMENT UPON CHANGE IN COMMON STOCK The maximum number of shares that may be issued pursuant to the exercise of Options and SARs and the award of Restricted Shares and the settlement of Performance Shares under this Plan and the Replenishment Percentage in Section 5.03 shall be proportionately adjusted, and the terms of outstanding Restricted Share awards, Performance Share Awards, Options, and SARs shall be adjusted, as the Committee shall determine to be equitably required in the event that (a) the Company (i)jeffects one or more stock dividends, stock split-ups, subdivisions or consolidations of shares or (ii) engages in a transaction to which Code section 424 applies or (b) there occurs any other event which, in the judgment of the Committee necessitates such action. Any determination made under this Article IX by the Committee shall be final and conclusive. The issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, for cash or property, or for labor or services, either upon direct sale or upon the exercise of rights or warrants to subscribe therefor, or upon conversion of shares or obligations of the Company 14 convertible into such shares or other securities, shall not affect, and no adjustment by reason thereof shall be made with respect to, outstanding awards of Restricted Shares, Performance Shares, Options or SARs. The Committee may award Restricted Shares and Performance Shares, may grant Options, and may grant SARs in substitution for stock awards, stock options, stock appreciation rights, or similar awards held by an individual who becomes an employee of the Company or a Subsidiary in connection with a transaction described in the first paragraph of this Article IX. Notwithstanding any provision of the Plan (other than the limitations of Article V), the terms of such substituted Restricted Share and Performance Share awards and Option or SAR grants shall be as the Committee, in its discretion, determines is appropriate. ARTICLE X COMPLIANCE WITH LAW AND APPROVAL OF REGULATORY BODIES No Option or SAR shall be exercisable, no Common Stock shall be issued, no certificates for shares of Common Stock shall be delivered, and no payment shall be made under this Plan except in compliance with all applicable federal and state laws and regulations (including, without limitation, withholding tax requirements) and the rules of all domestic stock exchanges on which shares may be listed. The Company shall have the right to rely on an opinion of its counsel as to such compliance. Any share certificate issued to evidence Common Stock for which Restricted Shares are awarded, Performance Shares were earned or for which an Option or SAR is exercised may bear such legends and statements as the Committee may deem advisable to assure compliance with federal and state laws and regulations. No Option or SAR shall be exercisable, no Common Stock shall be issued, no certificate for shares shall be delivered, and no payment shall be made under this Plan until the Company has obtained such consent or approval as the Committee may deem advisable from regulatory bodies having jurisdiction over such matters. ARTICLE XI GENERAL PROVISIONS 11.01. Effect on Employment. Neither the adoption of this Plan, its operation, nor any documents describing or referring to this Plan (or any part thereof) shall confer upon any employee any right to continue in the employ of the Company or a Subsidiary or in any way affect any right and power of the Company or a Subsidiary to terminate the employment of any employee at any time with or without assigning a reason therefor. 15 11.02. Unfunded Plan. The Plan, insofar as it provides for grants and awards, shall be unfunded, and the Company shall not be required to segregate any assets that may at any time be represented by grants or awards under this Plan. Any liability of the Company to any person with respect to any grant under this Plan shall be based solely upon any contractual obligations that may be created pursuant to this Plan. No such obligation of the Company shall be deemed to be secured by any pledge of, or other encumbrance on, any property of the Company or any Subsidiary 11.03. Rules of Construction. Headings are given to the articles and sections of this Plan solely as a convenience to facilitate reference. The reference to any statute, regulation, or other provision of law shall be construed to refer to any amendment to or successor of such provision of law. 11.04. Employee Status. For purposes of determining the applicability of Code section 422 (relating to Incentive Stock Options), or in the event that the terms of any Option or SAR provide that it may be exercised or that awards of Restricted Shares or Performance Shares may become vested or earned only during employment or within a specified period of time after Termination of Employment, the Committee may decide to what extent leaves of absence for governmental or military service, illness, temporary disability, or other reasons shall not be deemed interruptions of continuous employment. 11.05 Tax Withholding. Each Participant shall, no later than the date as of which the value of a grant of an Option or SAR, or an award of any Restricted Shares or Performance Shares or other amount received thereunder first becomes includable in the gross income of the Participant for Federal income tax purposes, pay to the Company, or make arrangements satisfactory to the Committee regarding payment of any Federal, state, or local taxes of any kind required by law to be withheld with respect to such income. The Committee may permit payment of such taxes to be made through the tender of cash or Common Stock, the withholding of Common Stock or cash to be received through grants or awards of any other arrangement satisfactory to the Committee. The Company and its Subsidiaries shall, to the extent permitted by law, have the right to deduct any such taxes from any payment of any kind otherwise due to the Participant. 11.06 Indemnification. No member of the Board or the Committee shall be liable for any action or determination taken or made in good faith with respect to this Plan nor shall any member of the Board or the Committee be liable for any Agreement issued pursuant to this Plan or any grants or awards made under it. Each member of the Board and the Committee shall be indemnified by the Company against any losses incurred in such administration of the Plan, unless his or her action constitutes serious and willful misconduct. 11.07 Other Compensation Plans. The adoption of the Plan shall not affect any 16 other existing or future incentive or compensation plans for directors, officers or employees of the Company or its Subsidiaries. Moreover, the adoption of this Plan shall not preclude the Company or its Subsidiaries from: (a) establishing any other forms for incentive or other compensation for directors, officers or employees of the Company or its Subsidiaries; or (b) assuming any forms of incentives or other compensation of any person or entity in connection with the acquisition or the business or assets, in whole or in part, of any person or entity. 11.08 Non-Contravention of Securities Laws. Notwithstanding anything to the contrary expressed in this Plan, any provisions hereof that vary from or conflict with any applicable Federal or State securities laws (including any regulations promulgated thereunder) shall be deemed to be modified to conform to and comply with such laws. 11.09 Unenforceability of a Particular Provision. The unenforceability of any particular provision of this document shall not affect the other provisions, and the document shall be construed in all respects as if such unenforceable provision were omitted. ARTICLE XII AMENDMENT The Board may amend or terminate this Plan from time to time; provided, however, that no amendment may become effective until shareholder approval is obtained if (i) the amendment increases the aggregate number of shares of Common Stock that may be issued under the Plan or (ii) the amendment changes the class of individuals eligible to become Participants. No amendment shall, without a Participant's consent, adversely affect any rights of such Participant under any outstanding Restricted Share or Performance Share award or under any Option or SAR outstanding at the time such amendment is made. ARTICLE XIII DURATION OF PLAN No Restricted Shares or Performance Shares may be awarded and no Option or SAR may be granted under this Plan after June 30, 2000. Restricted Share and Performance Share awards and Option and SAR grants made before that date shall remain valid in accordance with their terms. Restricted Shares and Performance Shares may be awarded and Options and SARs may be granted under this Plan upon its adoption by the Board, provided that 17 no Restricted Share or Performance Share award, or Option or SAR grant will be effective unless this Plan is approved by a majority of the Company's shareholders voting either in person or by proxy at a duly held shareholders' meeting within twelve months of such adoption. 18 EX-5.2 3 OPINION OF HALL DICKLER KENT FRIEDMAN & WOOD, LLP April 15, 1997 Blimpie International, Inc. 740 Broadway New York, New York 10003 Gentlemen: We previously acted as counsel for Blimpie International, Inc. (the "Company") in connection with the registration under the Securities Act of 1933, as amended (the "Act") of (a) up to 500,000 shares of the Company's $.01 par value common stock (the "Common Stock") issuable by the Company pursuant to its Omnibus Stock Incentive Plan (the "Plan"); and (b) up to 122,200 shares of Common Stock which were issued or subject to issuance upon the exercise of outstanding options granted under the Plan, and which were being offered for sale for the accounts of certain selling securityholders pursuant to the Registration Statement on Form S-8/S-3 filed by the Company with the Securities and Exchange Commission (the "Commission") on February 21, 1996 under Registration No. 333-1530 (the "Registration Statement"). We have also acted as counsel to the Company in connection with the registration under the Act, pursuant to Post-Effective Amendment No. 1 to the Registration Statement, of (a) up to an additional 450,000 shares of Common Stock (the "Shares") issuable pursuant to an amendment to the Plan duly adopted by the Company's shareholders on December 9, 1996; and (b) up to 253,500 shares of Common Stock which were issued or subject to issuance upon the exercise of outstanding options granted under the Plan, as amended, and which are being offered for sale for the accounts of certain selling securityholders (the "Selling Securityholders' Shares" which, together with the Shares, are hereinafter referred to as the "Securities"). In connection with the opinions hereinbelow expressed, we have examined the following documents (or true copies thereof): the Company's Certificate of Incorporation, as amended, its Bylaws, its stock, option and warrant records, the minutes of actions heretofore taken by the Company's shareholders and Blimpie International, Inc. April 15, 1997 Page 2 directors, the Registration Statement filed with the Commission and Post-Effective Amendment No. 1 to the Registration Statement to be filed with the Commission, and such other documents as we deemed necessary or appropriate under the circumstances. Based upon, and subject to the foregoing, we are of the opinion that: 1. The Company is a corporation duly organized, validly existing and in good standing under the laws of the state of New Jersey, and has all requisite power and authority (corporate and other) to own or lease its properties and conduct its business. 2. The Company has taken all necessary corporate action required with respect to the issuance of the Securities. 3. The Company has reserved a sufficient number of its authorized but unissued shares of Common Stock for issuance of the Securities. 4. The Selling Securityholders' Shares have been validly issued, and are fully paid and non-assessable shares of Common Stock. 5. Upon receipt by the Company of the full consideration, if any, payable with respect to the issuance of the Shares, such Shares shall be fully paid and non-assessable shares of Common Stock. 6. Subject to the proviso that none of the Securities shall be issued in any jurisdiction unless and until a valid Blue Sky registration or exemption therefrom pertaining to such Securities shall be in effect, upon receipt of full payment for the Securities, the Shares and Selling Securityholders' Shares shall be (or, in the case of the Selling Securityholder's Shares, already will have been) validly issued and outstanding as fully paid and non-assessable shares of the Company's Common Stock. Very truly yours, Hall Dickler Kent Friedman & Wood, LLP EX-23.1 4 CONSENT OF COOPERS & LYBRAND CONSENT OF INDEPENDENT ACCOUNTANTS We consent to the incorporation by reference in this Post-Effective Amendment No. 1 to the Company's Registration Statement on Form S-8/S-3 of our report dated September 4, 1996 on our audits of the consolidated financial statements of Blimpie International, Inc. and Subsidiaries. We also consent to the reference to our firm under the caption "Experts." COOPERS & LYBRAND, L.L.P. Atlanta, Georgia April 10, 1997 EX-23.2 5 CONSENT OF COUNSEL CONSENT OF COUNSEL We consent to use of our firm's name and to statements with respect to our Firm, as they appear under the heading "Legal Matters" in the Prospectus which is included in Part I of this Post-Effective Amendment No. 1 to the Company's Registration Statement on Form S-8/S-3. -----END PRIVACY-ENHANCED MESSAGE-----