Under what circumstances can the Benihana Board amend, modify, or terminate the Equity Incentive Plan?
Benihana Franchise · 2024 FDDAnswer from 2024 FDD Document
The Board has the authority to amend, modify or terminate the Equity Incentive Plan, subject to any required approval by the Company's stockholders under applicable law or upon advice of counsel. No such action would affect any options previously granted under the Equity Incentive Plan without the consent of the holders.
Source: Item 22 — CONTRACTS (FDD pages 73–74)
What This Means (2024 FDD)
According to Benihana's 2024 Franchise Disclosure Document, the Benihana Board of Directors has the authority to amend, modify, or terminate the Equity Incentive Plan. However, this authority is subject to certain conditions. Any such action requires approval by the company's stockholders if mandated by applicable law or upon the advice of legal counsel.
It is important to note that any changes to the Equity Incentive Plan cannot retroactively affect stock options that have already been granted. The rights of existing option holders are protected, as their consent is required before any modifications can impact their previously granted options.
This provision ensures that while Benihana retains the flexibility to adjust its Equity Incentive Plan, it must do so in compliance with legal requirements and with due consideration for the rights of those who have already been granted stock options under the plan. This protects the interests of those holding equity in the company.