<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
GRIFFIN LAND & NURSERIES, INC.
(Name of Registrant as Specified In Its Charter)
(Name(s) of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE>
GRIFFIN LAND & NURSERIES, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be Held May 10, 1999
PLEASE TAKE NOTICE that the Annual Meeting of Stockholders of Griffin Land &
Nurseries, Inc. ("Griffin") will be held on the 11th floor of the Corporate
Headquarters of Chase Manhattan Bank, 270 Park Avenue, New York, New York, on
the 10th day of May 1999, at 11:00 A.M., local time, to consider and act upon:
1. The election of directors of Griffin;
2. The approval of Griffin's 1997 Stock Option Plan, as amended;
3. The approval of the selection of Griffin's independent accountants
for 1999; and
4. Such other business as may properly be brought before the Annual
Meeting or any adjournment thereof.
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE COMPLETE, DATE AND
SIGN THE ENCLOSED PROXY CARD AND RETURN IT IN THE ENCLOSED ENVELOPE.
Only stockholders of record at the close of business on April 9, 1999 are
entitled to notice of, and to vote at, the Annual Meeting.
ANTHONY J. GALICI
SECRETARY
Dated: April 14, 1999
<PAGE>
GRIFFIN LAND & NURSERIES, INC.
ONE ROCKEFELLER PLAZA
NEW YORK, NEW YORK 10020
------------------------
PROXY STATEMENT
This Proxy Statement is furnished to the stockholders of Griffin Land &
Nurseries, Inc. ("Griffin") in connection with the solicitation by the Board of
Directors of proxies for the Annual Meeting of Stockholders to be held on May
10, 1999 on the 11th floor of the Corporate Headquarters of Chase Manhattan
Bank, 270 Park Avenue, New York, New York, for the purposes set forth in the
accompanying notice of meeting.
GENERAL
This solicitation is being made on behalf of the Board of Directors of
Griffin. The initial distribution of proxy materials is expected to be made on
or about April 14, 1999. Any proxy received in the accompanying form may be
revoked by the person executing it at any time before the authority thereby
granted is exercised. Proxies received by the Board of Directors in such form
will be voted at the meeting or any adjournment thereof as specified therein by
the person giving the proxy; if no specification is made, the shares represented
by such proxy will be voted (i) for the election of directors as described in
this Proxy Statement; (ii) for the approval of Griffin's 1997 Stock Option Plan,
as amended; and (iii) for approval of the selection of PricewaterhouseCoopers
LLP as independent accountants for Griffin for 1999. For voting purposes (as
opposed to for purposes of establishing a quorum) abstentions and broker
non-votes will not be counted in determining whether the directors standing for
election have been elected or whether the other matters to be voted on have been
approved. Proposals by stockholders for Griffin's 2000 Annual Meeting of
Stockholders must be received by Griffin before December 18, 1999 if such
proposal is to be considered for inclusion in the 2000 proxy materials of
Griffin. Any such proposal received after March 2, 2000 will be considered
untimely for purposes of the 2000 Annual Meeting, and proxies delivered for the
2000 Annual Meeting will confer discretionary authority to vote on any such
matters.
Management knows of no matters which may be brought before the Annual
Meeting or any adjournment thereof other than those described in the
accompanying notice of meeting and routine matters incidental to the conduct of
the meeting. However, if any other matter should come before the meeting or any
adjournment thereof, it is the intention of the persons named in the
accompanying form of proxy or their substitutes to vote the proxy in accordance
with their judgment on such matters.
The cost of solicitation of proxies by the Board of Directors will be borne
by Griffin. Such solicitation will be made by mail and in addition may be made
by officers and employees of Griffin personally or by telephone, facsimile or
telegram. Proxies and proxy material will also be distributed through brokers,
custodians and other similar parties.
Each holder of a share of Common Stock, par value $0.01 per share, of
Griffin (the "Common Stock") will be entitled to one vote for each share held of
record by such person at the close of business on April 9, 1999 (the "Record
Date"), which is the Record Date fixed by the Board of Directors for the
determination of stockholders entitled to notice of, and to vote at, the Annual
Meeting or any adjournment thereof. As of such date, Griffin had outstanding
4,842,704 shares of Common Stock (none of which constituted shares of treasury
stock). 2,278,095 shares of Common Stock, representing 47.0% of the outstanding
shares of Common Stock, are held by members of the Cullman & Ernst Group (as
defined herein). Prior to July 3, 1997 (the "Distribution Date"), Griffin was a
wholly-owned subsidiary of Culbro Corporation ("Culbro"). Approximately 50% of
the voting securities of Culbro were held by the members of the Cullman & Ernst
Group prior to the Distribution Date. On the Distribution Date, Culbro
distributed to its stockholders Griffin's Common Stock in a tax-free
distribution (the "Distribution"). Subsequent to the Distribution, Griffin has
operated and is operating as an independent stand-alone entity.
1
<PAGE>
I. ELECTION OF DIRECTORS
At the 1999 Annual Meeting of Stockholders, five (5) directors (which will
comprise the entire Board) are to be elected. The Board of Directors proposes
the nominees listed below for election as directors to serve until the 2000
Annual Meeting of Stockholders and until their successors are duly elected and
qualified. The directors must be elected by a plurality of the votes cast in
person or by proxy by stockholders entitled to vote at the meeting. If for any
reason any nominee or nominees become unavailable for election, the proxy
holders will vote for such substitute nominee or nominees as may be designated
by the Board of Directors.
INFORMATION CONCERNING DIRECTORS
<TABLE>
<CAPTION>
(AGE) AND DATE
SINCE WHICH HAS
CONTINUOUSLY PRINCIPAL OCCUPATION AND
NAME (LETTERS REFER TO COMMITTEE SERVED AS A BUSINESS EXPERIENCE DURING PAST
MEMBERSHIPS, IDENTIFIED BELOW) DIRECTOR OF GRIFFIN FIVE YEARS (1)
- -------------------------------------- -------------------------- --------------------------------
<S> <C> <C> <C>
Winston J. Churchill, Jr. (a) (b)..... (58) 1997 Managing General Partner of SCP
Private Equity Partners, L.P., a
private equity fund
Edgar M. Cullman...................... (81) 1997 Chairman of the Board of
Directors of General Cigar
Holdings, Inc. (1996); Chief
Executive Officer of Culbro
Corporation (1962-1996)
Frederick M. Danziger (2)............. (59) 1997 President and Chief Executive
Officer (1997); Of Counsel to
Latham & Watkins (1995-1997);
Member of Mudge Rose Guthrie
Alexander & Ferdon (1974-1995)
John L. Ernst (b) (3)................. (58) 1997 Chairman of the Board and
President of Bloomingdale
Properties, Inc.
David F. Stein (a).................... (58) 1997 Vice Chairman of J&W Seligman &
Co. Inc., an asset management
firm (1996); Managing Director
of J&W Seligman & Co. Inc.
(1990-1996); Co-Chairman of
Seligman Henderson Co.
(1991-1998)
<CAPTION>
NAME (LETTERS REFER TO COMMITTEE ALSO SERVES AS A DIRECTOR OF THE
MEMBERSHIPS, IDENTIFIED BELOW) FOLLOWING CORPORATIONS
- -------------------------------------- --------------------------------
<S> <C>
Winston J. Churchill, Jr. (a) (b)..... Central Sprinkler Corporation;
CinemaStar Luxury Theaters;
Churchill Investment Partners,
Inc.; CIP Capital, Inc.; CIP
Capital Management Inc.; Amkor
Technology Group, Inc.
Edgar M. Cullman...................... General Cigar Holdings, Inc.;
Centaur Communications Limited;
Bloomingdale Properties, Inc.
(4)
Frederick M. Danziger (2)............. Monro Muffler/Brake, Inc.;
Bloomingdale Properties, Inc.;
Centaur Communications Limited;
Linguaphone Group plc
John L. Ernst (b) (3)................. Doral Financial Corporation;
General Cigar Holdings, Inc.
David F. Stein (a).................... J&W Seligman & Co. Inc.;
Seligman Data Corp.
</TABLE>
- ------------------------
Member of the: (a) Audit Committee; and (b) Compensation Committee.
(1) Except as otherwise indicated each director has had the same principal
occupation during the past five years. Positions not otherwise identified
are with Griffin.
(2) Mr. Danziger is the son-in-law of Mr. Cullman.
(3) Mr. Ernst is the nephew of Mr. Cullman.
(4) Mr. Cullman served as director of The Eli Witt Company which filed for
relief from its creditors under Chapter 11 of the Federal Bankruptcy Code in
November 1996.
The Board of Directors held six meetings during 1998. Griffin's Board of
Directors has an Audit Committee and a Compensation Committee. Committee
memberships of the Board of Directors are indicated in the above table.
Directors as a whole attended 100% of the aggregate of all Board and Committee
meetings (of Committees of which they were members).
2
<PAGE>
Members of the Board of Directors who are not employees of Griffin received
$10,000 per year and $500 for each Board and Committee meeting attended in 1998.
The 1997 Stock Option Plan, as amended, provides that non-employee Directors who
are not members of the Cullman & Ernst Group receive annually options
exercisable for 2,000 shares of Common Stock at an exercise price that is the
market price at the time of grant. In 1998 Griffin granted Mr. Churchill and Mr.
Stein each options exercisable for 2,000 shares of Common Stock, and expects to
grant additional options to Messrs. Churchill and Stein in 1999 consistent with
the 1997 Stock Option Plan, as amended. See "Description of the 1997 Stock
Option Plan--Options Issued Under the 1997 Stock Option Plan."
The Audit Committee reviews audit reports and the scope of audit by
Griffin's independent accountants and related matters pertaining to the
preparation and examination of Griffin's financial statements. From time to time
such Committee makes recommendations to the Board of Directors with respect to
the foregoing matters as well as with respect to the appointment of Griffin's
independent accountants. The Audit Committee held one meeting in 1998 and
recommended to the Board of Directors the selection of PricewaterhouseCoopers
LLP (See "Selection of Independent Accountants").
For information about the Compensation Committee, see "Compensation
Committee Report on Executive Compensation--Interlocks and Insider
Participation" on page 13.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires Griffin's officers and directors, and persons who own
more than ten percent of its Common Stock, to file reports of ownership and
changes in ownership with the Securities and Exchange Commission. Such persons
are required by regulation to furnish Griffin with copies of all Section 16(a)
forms they file. Based upon its involvement in the preparation of certain of
such forms and a review of the copies of other such forms received by it,
Griffin believes that with respect to 1998, all such Section 16(a) filing
requirements were satisfied.
3
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT AND PRINCIPAL HOLDERS
The following table lists the number of shares and exercisable options to
purchase shares of Common Stock of Griffin beneficially owned or held by (i)
each person known by Griffin to beneficially own more than 5% of the outstanding
shares of Common Stock, (ii) the nominees for election as directors (who are all
current directors), (iii) the Named Executive Officers (as defined below) and
(iv) by all directors and officers of Griffin collectively. Unless otherwise
indicated, information is provided as of November 28, 1998.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY
NAME AND ADDRESS (1) OWNED(2) PERCENT OF TOTAL
- --------------------------------------------------------------------- -------------------------- -----------------
<S> <C> <C>
Edgar M. Cullman(3).................................................. 955,342 19.7
Edgar M. Cullman, Jr.(3)............................................. 963,038 19.9
Louise B. Cullman(3)................................................. 824,775 17.0
Susan R. Cullman(3).................................................. 758,607 15.7
Frederick M. Danziger(3)............................................. 199,120 4.1
Lucy C. Danziger(3).................................................. 1,029,692 21.3
John L. Ernst(3)..................................................... 421,250 8.7
Winston J. Churchill, Jr............................................. 30,000 *
David F. Stein....................................................... 25,000 *
Anthony J. Galici.................................................... 7,641 *
B. Bros Realty Limited Partnership(4)................................ 233,792 4.8
Gabelli Funds Inc.(5)................................................ 1,417,537 29.3
All directors and officers collectively, consisting of 6 persons
(6)................................................................ 1,372,232 28.3
</TABLE>
- ------------------------
* Less than 1%
(1) Unless otherwise indicated, the address of each person named in the table is
641 Lexington Avenue, New York, New York 10022.
(2) This information reflects the definition of beneficial ownership adopted by
the Securities and Exchange Commission (the "Commission"). Beneficial
ownership reflects sole investment and voting power, except as reflected in
footnote 3. Where more than one person shares investment and voting power in
the same shares, such shares may be shown more than once. Such shares are
reflected only once, however, in the total for all directors and officers.
Includes options exercisable within 60 days granted to Directors pursuant to
the 1997 Stock Option Plan. Excluded are shares held by charitable
foundations and trusts of which members of the Cullman and Ernst families,
including persons referred to in this footnote 2, are officers and
directors. As of November 28, 1998, a group (the "Cullman & Ernst Group")
consisting of Messrs. Cullman, direct members of their families and trusts
for their benefit; Mr. Ernst, his sister and direct members of their
families and trusts for their benefit; a partnership in which members of the
Cullman and Ernst families hold substantial direct and indirect interests;
and charitable foundations and trusts of which members of the Cullman and
Ernst families are directors or trustees, owned an aggregate of
approximately 2,278,095 shares of Common Stock (approximately 47.0% of the
outstanding shares of Common Stock). Among others, Edgar M. Cullman, Edgar
M. Cullman, Jr., Mr. Ernst and Mr. Danziger (who is a member of the Cullman
& Ernst Group) hold investment and voting power or shared investment and
voting power over such shares. Certain of such shares are pledged as
security for loans payable under standard pledge arrangements. A form filed
with the Commission on behalf of the Cullman & Ernst Group states that there
is no formal agreement governing the group's holding and voting of such
shares but that there is an informal understanding that the persons and
entities included in the group will hold and vote together the shares owned
by each of them in each case subject to any applicable fiduciary
responsibilities. Louise B. Cullman is the wife of Edgar M. Cullman; Edgar
M. Cullman, Jr. is the son of Edgar
4
<PAGE>
M. Cullman and Louise B. Cullman; Susan R. Cullman and Lucy C. Danziger are
the daughters of Edgar M. Cullman and Louise B. Cullman; and Lucy C.
Danziger is the wife of Frederick M. Danziger.
(3) Included within the shares shown as beneficially owned by Edgar M. Cullman
are 844,204 shares in which he holds shared investment and/or voting power;
included within the shares shown as beneficially owned by Mr. Ernst are
411,321 shares in which he holds shared investment and/or voting power; and
included within the shares shown as beneficially owned by Frederick M.
Danziger are 182,587 shares in which he holds shared investment and/or
voting power. Included within the shares shown as beneficially owned by
Edgar M. Cullman, Jr. are 733,918 shares in which he holds shared investment
and/or voting power; included with the shares owned by Louise B. Cullman are
721,365 shares in which she holds shared investment and/or voting power;
included within the shares shown as beneficially owned by Susan R. Cullman
are 670,842 shares in which she holds shared investment and/or voting power;
and included within the shares shown as beneficially owned by Lucy C.
Danziger are 947,850 shares in which she holds shared investment and/or
voting power. Excluded in each case are shares held by charitable
foundations and trusts in which such persons or their families or trusts for
their benefit are officers and directors. Messrs. Cullman, Danziger and
Ernst disclaim beneficial interest in all shares over which there is shared
investment and/or voting power and in all excluded shares.
(4) The address of B. Bros. Realty Limited Partnership ("B. Bros.") is 641
Lexington Avenue, New York, New York 10022. Lucy C. Danziger and John L.
Ernst are the general partners of B. Bros.
(5) The address of such person is Gabelli Funds, Inc., One Corporate Center,
Rye, New York 10580. A form filed with the Securities and Exchange
Commission in July 1997, and amended as of May 11, 1998 by Gabelli Funds,
Inc., indicates that the securities have been acquired by Gabelli Funds,
Inc. and its wholly-owned subsidiaries on behalf of their investment
advisory clients. Griffin has been informed that no individual client of
Gabelli Funds, Inc. has ownership of more than 5% of Griffin's outstanding
Common Stock.
(6) Excluding shares held by certain charitable foundations the officers and/or
directors of which include certain officers and directors of Griffin.
INTERESTS IN CERTAIN TRANSACTIONS
For the information of stockholders, attention is called to the following
transactions between Griffin and other parties in which the persons mentioned
below might have had a direct or indirect interest.
1. Messrs. Cullman, Danziger and Ernst are members of the Board of
Directors of Bloomingdale Properties, Inc. ("Bloomingdale Properties") of which
Mr. Ernst is Chairman and President and other members of the Cullman & Ernst
Group are associated. Real estate management and advisory services have been
provided to Griffin by John Fletcher, an employee of Bloomingdale Properties,
for which Mr. Fletcher receives compensation at a rate of approximately $50,000
per year.
2. Edgar M. Cullman, the Chairman of Griffin, is also the Chairman of
General Cigar Holdings, Inc., the successor to Culbro ("GC Holdings"). In
addition, certain members of the Cullman & Ernst Group who may be deemed to
beneficially own more than five percent of Griffin's Common Stock (see "Security
Ownership of Management and Principal Holders") also may be deemed to
beneficially own more than five percent of the Class A Common Stock of GC
Holdings. Prior to the Distribution in 1997, Griffin, as lessor, and General
Cigar Co., Inc. ("General Cigar"), a wholly owned subsidiary of GC Holdings, as
lessee, entered into a lease for certain agricultural land in Connecticut and
Massachusetts (the "Agricultural Lease"). The Agricultural Lease is for
approximately 500 acres of arable land held by Griffin for possible development
in the long-term, but which is being used by General Cigar for growing
Connecticut Shade wrapper tobacco. General Cigar's use of the land is limited to
the cultivation of cigar
5
<PAGE>
wrapper tobacco. The Agricultural Lease has an initial term of ten years and
provides for the extension of the lease for additional periods thereafter. In
addition, at Griffin's option, the Agricultural Lease may be terminated with
respect to 100 acres of such land annually upon one year's prior notice. In 1998
GC Holdings made a total of $80,000 in rental payments to Griffin in respect of
the Agricultural Lease.
Also in 1997, Griffin, as lessor, and General Cigar, as lessee, entered into
a lease for approximately 40,000 square feet of office space in the Griffin
Center South office complex in Bloomfield, Connecticut (the "Commercial Lease").
The Commercial Lease has an initial term of ten years and provides for the
extension of the lease for additional annual periods thereafter. In 1998 GC
Holdings made a total of $437,000 in rental payments to Griffin in respect of
the Commercial Lease.
In 1997, Griffin entered into a Services Agreement (the "Services
Agreement") with Culbro. Pursuant to the Services Agreement, Culbro, and its
successor, GC Holdings, provided Griffin, for a period of one year after the
Distribution, with certain administrative services, including internal audit,
tax preparation, legal and transportation services. The Services Agreement was
terminated with respect to all services provided by GC Holdings as of July 1998,
except for certain transportation services, with respect to which the Services
Agreement was amended and extended through June 1999. In 1998, Griffin paid
$400,000 to GC Holdings under the Services Agreement.
See "Compensation Committee Report on Executive Compensation--Interlocks and
Insider Participation" on page 13 for certain other interests.
The information given in this Proxy Statement with respect to the five-year
business experience of each director, beneficial ownership of stock, interlocks
and the respective interests of persons in transactions to which Griffin or any
of its subsidiaries was a party (other than as appears from the records of
Griffin), is based upon statements furnished to Griffin by its directors and
officers.
6
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth the annual and long-term compensation for Mr.
Danziger, Griffin's President and Chief Executive Officer and Mr. Galici,
Griffin's Vice President, Chief Financial Officer and Secretary (the "Named
Executive Officers"), as well as the total compensation paid by Griffin during
1998 and 1997 to the Named Executive Officers. Mr. Danziger and Mr. Galici were
not employed by Griffin prior to 1997.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
AWARDS
-------------
ANNUAL COMPENSATION SECURITIES
---------------------------------- OTHER ANNUAL UNDERLYING
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION(1) OPTIONS
- ---------------------------------------------------- --------- ---------- ----------- ----------------- -------------
<S> <C> <C> <C> <C> <C>
Frederick M. Danziger............................... 1998 $ 300,000 $ 0 $ 5,112 --
President and Chief Executive Officer 1997 126,213 0 692 150,000
Anthony J. Galici................................... 1998 162,558 0 60,511(2) --
Vice President, Chief Financial Officer; and 1997 71,256 0 1,688 15,000
Secretary
</TABLE>
- ------------------------
(1) Amounts shown under Other Annual Compensation include matching contributions
made by Griffin under its Savings Plan and other miscellaneous cash
benefits, but do not include funding for or receipt of retirement plan
benefits (See "Other Employee Benefit Plans"). No Executive Officer who
would otherwise have been includable in such table resigned or terminated
employment during 1998.
(2) Includes $56,097 for reimbursement of relocation costs.
II. APPROVAL OF 1997 STOCK OPTION PLAN, AS AMENDED
At the 1999 Annual Meeting, the stockholders of Griffin will be asked to
consider and vote upon the approval of Griffin's 1997 Stock Option Plan, as
amended by the First Amendment thereto (the "1997 Stock Option Plan"). The Board
and Griffin's sole stockholder previously approved the 1997 Stock Option Plan in
1997 immediately prior to the Distribution. A total of 700,000 shares of Common
Stock (including shares issuable upon exercise of options previously granted by
Culbro, which were redenominated as options with respect to Griffin's Common
Stock in connection with the Distribution) were originally reserved for issuance
under the 1997 Stock Option Plan when it was adopted in 1997. By the terms of
the 1997 Stock Option Plan, the Compensation Committee of the Board of Directors
(the "Committee") or the Board may amend the 1997 Stock Option Plan, from time
to time, with respect to the number of shares reserved for issuance under the
1997 Stock Option Plan, subject to stockholder approval. The 1997 Stock Option
Plan, as amended, must be approved by a majority of the votes cast in person or
by proxy by stockholders entitled to vote at the meeting. As of November 29,
1998, options to purchase 647,202 shares of Common Stock were outstanding under
the 1997 Stock Option Plan. Because the Board believes it is in the best
interests of Griffin to continue to incentivize its employees, consultants, and
directors who are not employees of Griffin or members of the Cullman & Ernst
Group ("Independent Directors") by granting options as part of their overall
compensation, an increase in the number of available shares is needed to permit
Griffin to continue to grant options under the 1997 Stock Option Plan. On
January 11, 1999, the Committee approved the First Amendment to the Plan,
effective as of January 11, 1999, increasing the aggregate number of shares of
Common Stock which may be issued under the 1997 Stock Option Plan to 1,000,000
(including shares issuable upon exercise of options previously granted by
Culbro, which were redenominated as options with respect to Griffin's Common
Stock in connection with the Distribution). At the time of the Distribution,
438,202 of the stock options issued by Griffin related to holders of Culbro
7
<PAGE>
stock options. Of those options, only 12,653 were held by persons who were
employed by Griffin after the Distribution. Of the additional 300,000 options
which may be granted under the First Amendment to the Plan, the Committee
awarded 150,000 options to Mr. Danziger, 15,000 options to Mr. Galici, and
83,100 options to other persons, all subject to approval by Griffin's
stockholders of the 1997 Stock Option Plan.
DESCRIPTION OF THE 1997 STOCK OPTION PLAN
ADMINISTRATION
The Committee has the authority to conduct the general administration of the
1997 Stock Option Plan. Under the terms of the 1997 Stock Option Plan, the
Committee consists of two or more Independent Directors, appointed by the Board,
each of whom must be both a "non-employee director" as defined by Rule 16b-3 and
an "outside director" for purposes of Section 162(m) of the Internal Revenue
Code of 1986, as amended (the "Code"). At present, the Committee is comprised of
Messrs. Churchill and Ernst. The Committee has the power to interpret the 1997
Stock Option Plan and any stock option agreement entered into under the 1997
Stock Option Plan, as well as to adopt, amend and rescind rules for the
administration, interpretation, and application of the 1997 Stock Option Plan.
The full Board conducts the general administration of the 1997 Stock Option Plan
with respect to options granted to independent directors. In addition, the
Board, in its absolute discretion, may at any time, and from time to time,
exercise any and all rights and duties of the Committee under the 1997 Stock
Option Plan, except with respect to matters which under Rule 16b-3 or Section
162(m) of the Code are required to be determined in the sole discretion of the
Committee.
ELIGIBILITY
The Committee, in its absolute discretion, may from time to time grant
options to any number of key employees or consultants of Griffin (or any
subsidiary of Griffin). The Committee determines at the time of each grant the
number of shares subject to such options and whether the options will be
incentive stock options or non-qualified stock options. The maximum number of
shares which may be granted under the 1997 Stock Option Plan to any employee or
consultant in any fiscal year of Griffin cannot exceed 150,000. Expired or
canceled options which have not been fully exercised before expiration or
cancellation may be granted again by Griffin under the 1997 Stock Option Plan.
As consideration for receipt of an option, the employee, consultant or director
must agree pursuant to the applicable stock option agreement to remain an
employee or consultant to Griffin for at least one year. The Committee may, in
its discretion, require as a condition to the grant of an option to an employee
or consultant that the employee or consultant surrender for cancellation some or
all of the unexercised options previously granted to him under the 1997 Stock
Option Plan or otherwise.
In addition, the 1997 Stock Option Plan provides that each person who is an
Independent Director on the date of the Distribution or who is elected to the
Board after the Distribution shall automatically be granted (i) non-qualified
stock options to purchase 3,000 shares of Common Stock on the date of the
Distribution or initial election, as applicable, and (ii) non-qualified stock
options to purchase 2,000 shares of Common Stock on the date of each annual
meeting of stockholders after the date of the Distribution or initial election,
as applicable, at which the independent director is reelected to the Board. As
consideration for the receipt of the options, the Independent Director must
agree to serve as an independent director for at least one year. There are
presently two independent directors and approximately 29 key employees and
consultants eligible to receive options under the 1997 Stock Option Plan.
TERMS OF OPTION
The Committee sets the exercise price of options granted. In the case of (i)
options qualifying as performance-based compensation (as described in
162(m)(4)(C) of the Code), (ii) incentive stock options, and (iii) options
granted to Independent Directors, the exercise price per share may not be less
than the
8
<PAGE>
fair market value of a share of Common Stock on the date of grant. In the case
of incentive stock options granted to an individual owning more than 10% of the
total combined voting power of all the classes of stock of Griffin (or any
subsidiary), the exercise price per share may not be less than 110% of the fair
market value of a share of Common Stock on the date of grant. The Committee, in
its discretion, may allow payment upon exercise of an option through the
delivery of shares of Common Stock owned by the optionee or through surrender of
shares of Common Stock then issuable upon exercise of the option.
The Committee also sets the term of each option, provided that (i) the term
of any option granted to an independent director must be 10 years from the date
of grant and (ii) the term of any incentive stock option may not be more than 10
years from the date of grant (or 5 years from the date of grant if granted to an
individual then owning more than 10% of the total combined voting power of all
classes of stock of Griffin or any subsidiary or parent corporation).
The Committee also determines the date on which each option becomes
exercisable. Unless otherwise determined by the Committee, (i) options granted
to employees or consultants become exercisable on the third anniversary of the
date of grant, (ii) options granted to Independent Directors on the date of
initial election become exercisable immediately on the date of grant, and (iii)
options granted to Independent Directors upon re-election vest on the second
anniversary of the date of grant. To date, options previously granted to
employees or consultants become exercisable in equal installments on the third,
fourth and fifth anniversaries of the date of grant. No portion of an option
which is unexercisable upon termination of an optionee's employment,
directorship or consultancy shall thereafter become exercisable unless otherwise
provided by the Committee. No option granted to an Independent Director may be
exercised by anyone (i) twelve months from the date of the optionee's death,
(ii) twelve months from the optionee's termination of directorship by reason of
permanent and total disability; (iii) three months from the date of optionee's
termination of directorship for any reason other than by death or permanent and
total disability; or (iv) ten years from the date of grant.
ADJUSTMENTS, FORFEITURE, AND TRANSFERABILITY
The 1997 Stock Option Plan provides that the Committee (or the Board, in the
case of options granted to Independent Directors) may make equitable adjustments
(i) to the number and kind of shares of Common Stock which may be granted under
the 1997 Stock Option Plan, (ii) the number and kind of shares of Common Stock
subject to outstanding options; and (iii) the exercise price of any option in
the event of certain corporate events, such as a dividend or other
distributions, recapitalizations, reorganizations or mergers, or other similar
corporate transactions. Upon the occurrence of such corporate event, the
Committee (or the Board, in the case of options granted to Independent
Directors) may also, in its sole and absolute discretion, by the terms of the
stock option agreement or by action taken prior to the event, (i) purchase any
option; (ii) provide that the option may not vest, be exercised or become
payable after such event; (iii) provide that all shares under the option covered
thereby shall be exercisable for a specified period before the event; (iv)
provide that the option is assumed or substituted by the successor or survivor
corporation upon such event; and (v) make adjustments in the number and type of
shares of Common Stock subject to outstanding options and/or terms and
conditions (excluding the exercise price) of outstanding options or options
which may be granted in the future.
The 1997 Stock Option Plan further provides that the Committee, pursuant to
its general authority to determine the terms and conditions of options, has the
right to require the optionee to agree to return any proceeds received by the
optionee and terminate the option and forfeit the unexercised portion thereof if
the optionee's employment, consultancy, or directorship terminates before or
during a specified time or the optionee engages in any activity in competition
with or harmful to the interests of Griffin.
The Committee (or Board, in the case of options granted to Independent
Directors), in its absolute discretion, may impose such restrictions on the
ownership and transferability of the shares purchasable upon the exercise of an
option. Unless and until the options have been exercised, options granted under
9
<PAGE>
the 1997 Stock Option Plan may not be sold, pledged, assigned or transferred in
any manner other than by will or the laws of descent and distribution or under a
qualified domestic relations order.
FEDERAL INCOME TAX CONSEQUENCES
The following discussion summarizes U.S. federal tax treatment of options
granted under the 1997 Stock Option Plan under federal tax laws currently in
effect. The rules governing the tax treatment of options are quite technical and
the following discussion is necessarily general in nature and does not purport
to be complete. The statutory provisions and interpretations described below
are, of course, subject to change, and their application may vary in individual
circumstances.
INCENTIVE STOCK OPTIONS
Generally, an optionee recognizes no taxable income when an incentive stock
option which meets the requirements set forth in Section 422 of the Code is
granted to him or when that option is exercised by him. However, upon exercise
of such incentive stock option the optionee's alternative minimum taxable income
will generally include an amount by which the fair market value of the Common
Stock acquired at the time of exercise exceeds the option exercise price. If the
optionee holds the shares acquired upon exercise of option for at least two
years after the date of grant and for at least one year after the date of
exercise (the "Holding Period"), the difference between the sale price and
exercise price upon subsequent disposal of the shares will be treated as long
term capital gain or loss. If the optionee disposes of the shares without
holding such shares for the appropriate period (a "Disqualifying Disposition"),
at the time of the Disqualifying Disposition the optionee will generally
recognize ordinary income in an amount equal to the fair market value of the
Common Stock on the date of exercise over the option exercise price. Any gain in
excess of this amount will be taxed as capital gain. If the optionee does not
hold the shares for the Holding Period, and the sale price is below the exercise
price, the difference between the amount realized on the sale and exercise price
is treated as a loss.
NON-QUALIFIED STOCK OPTIONS
There is no taxable income to an optionee when a non-qualified stock option
is granted to him. However, upon exercise of the option, the optionee will
generally recognize ordinary income in an amount equal to the excess of the fair
market value of the shares of Common Stock acquired upon exercise, determined on
the date of exercise, over the aggregate exercise price of such option. An
optionee's basis for the shares of Common Stock acquired upon exercise for
purposes of determining his gain or loss on his subsequent disposition of the
shares will be equal to the option price paid plus the ordinary income
recognized upon exercise.
BUSINESS DEDUCTIONS
In general, if Griffin complies with applicable income reporting
requirements, Griffin will be allowed a business expense deduction to the extent
an optionee recognizes ordinary income upon the exercise of a non-qualified
stock option or upon the Disqualifying Disposition of an incentive stock option.
SECTION 162(M)
Under Section 162(m) of the Code, income tax deductions of publicly held
companies may be limited to the extent total annual compensation for certain
executive officers exceeds $1 million in any one year. However, the deduction
limit under Section 162(m) does not apply to certain "performance-based
compensation" established by an independent compensation committee which is
adequately disclosed to, and approved by, stockholders. Under a Section 162(m)
transition rule of compensation plans of subsidiaries that become separate
publicly held corporations (whether by spinoff or otherwise), options granted
under the 1997 Stock Option Plan prior to the approval of the 1997 Stock Option
Plan will not be subject
10
<PAGE>
to Section 162(m). The Committee may designate a key employee a Section 162(m)
Participant and determine whether the options granted to such key employee will
qualify as performance-based compensation as described in Section 162(m)(4)(C).
Stock option agreements granting options intended to qualify as
performance-based compensation shall contain such terms and conditions as may be
necessary to meet the applicable provisions of Section 162(m)(4)(C) and the
regulations issued thereunder.
CASHLESS EXERCISES
The tax consequences resulting from the exercise of an option through
delivery of already-owned company shares is not completely certain. For
incentive stock options, the IRS, in published rulings, has taken the position
that, (i) to the extent an equivalent value of shares is acquired, the optionee
will recognize no gain, (ii) the employee's basis in the stock acquired upon
such exercise is equal to the employee's basis in the surrendered shares
increased by any compensation income recognized by the employee, (iii) the
employee's basis in any additional shares acquired upon such exercise is zero,
(iv) if the shares delivered were acquired upon exercise of an incentive stock
option and are delivered prior to the Holding Period, the delivery of the shares
constitutes a Disqualifying Disposition as to which the rules described above
will apply, and (v) any sale or disposition of the acquired shares within the
Holding Period will be viewed first as a disposition of the shares with the
lowest basis. For non-qualified stock options, the IRS, in published rulings,
has taken the position that, (i) to the extent an equivalent value of shares is
acquired, the optionee will recognize no gain, (ii) the employee's basis in the
stock acquired upon such exercise is equal to the employee's basis in the
surrendered shares, (iii) any additional shares acquired upon such exercise are
compensation to the optionee, and (iv) the employee's basis in any such
additional shares is their then-fair market value.
OPTIONS ISSUED UNDER THE 1997 STOCK OPTION PLAN
Since the inception of the 1997 Stock Option Plan through November 28, 1998:
Mr. Danziger has acquired options relating to 150,000 shares of Common Stock at
a weighted average exercise price of $14.69 (excluding an additional 150,000
options granted subsequent to November 28, 1998 subject to stockholder approval
of the 1997 Stock Option Plan); Mr. Galici has acquired options relating to
22,641 shares of Common Stock at a weighted average exercise price of $10.45
(excluding an additional 15,000 options granted subsequent to November 28, 1998
subject to stockholder approval of the 1997 Stock Option Plan); Mr. Churchill
has acquired options relating to 5,000 shares of Common Stock at a weighted
average exercise price of $15.61; and Mr. Stein has acquired options relating to
5,000 shares of Common Stock at a weighted average exercise price of $15.13. Mr.
Fletcher has acquired options relating to 15,000 shares of Common Stock at a
weighted average exercise price of $14.69 (excluding an additional 15,000
options granted subsequent to November 28, 1998 subject to stockholder approval
of the 1997 Stock Option Plan). In addition, as of November 28, 1998, all
executive officers as a group have acquired options relating to a total of
190,141 shares of Common Stock at a weighted average exercise price of $14.18;
all current directors who are not executive officers of Griffin have acquired
options relating to a total of 10,000 shares of Common Stock at a weighted
average exercise price of $15.37, and all employees who are not executive
officers have acquired options relating to 7,500 shares of Common Stock at a
weighted average exercise price of $14.69 (excluding an additional 38,100
options granted subsequent to November 28, 1998 subject to stockholder approval
of the 1997 Stock Option Plan). As options granted under the 1997 Stock Option
Plan are discretionary and are determined by the Committee from time to time,
the number of shares of Common Stock that will be acquired by these persons in
the future under the 1997 Stock Option Plan is not currently determinable. In
addition, since the value of options depends upon the future market price of
Common Stock, the value of outstanding options is not presently determinable.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE 1997 STOCK
OPTION PLAN, AS AMENDED.
11
<PAGE>
STOCK OPTION INFORMATION
There were no stock options granted to Named Executive Officers during
fiscal 1998 nor were there any options exercised by the Named Executive Officers
in 1998. The following table presents the value of unexercised options held by
the Named Executive Officers at November 28, 1998.
<TABLE>
<CAPTION>
VALUE OF
UNEXERCISED
IN-THE-MONEY
NUMBER OF SECURITIES OPTIONS AT
SHARES UNDERLYING OPTIONS HELD FISCAL YEAR
ACQUIRED VALUE AT FISCAL YEAR END(#) END (1)
ON EXERCISE REALIZED ---------------------------- -----------
NAME (#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE
- -------------------------------------------- --------------- ------------- ------------- ------------- -----------
<S> <C> <C> <C> <C> <C>
Frederick M. Danziger....................... -- -- -- 150,000 $ 0
Anthony Galici.............................. -- -- 6,435 16,206 71,852
<CAPTION>
NAME UNEXERCISABLE
- -------------------------------------------- ---------------
<S> <C>
Frederick M. Danziger....................... $ 0
Anthony Galici.............................. 9,286
</TABLE>
- ------------------------
(1) The amounts presented in this column have been calculated based upon the
difference between the fair market value of $12.75 per share (the average of
the high and low prices of Griffin's Common Stock on November 27, 1998) and
the exercise price of each stock option. See "Description of the 1997 Stock
Option Plan--Options Issued Under the 1997 Stock Option Plan."
OTHER EMPLOYEE BENEFIT PLANS
INCENTIVE COMPENSATION PLANS
Griffin maintains Annual Incentive Compensation Plans (the "Incentive
Compensation Plans") for certain officers and other employees of Griffin and its
subsidiaries. Annual cash bonus payments may be paid under the Incentive
Compensation Plans provided certain financial targets are achieved.
SAVINGS PLAN
Griffin's Board of Directors adopted the Griffin 401(k) Plan (the "Savings
Plan") in 1997 covering salaried and hourly employees of Griffin and its
subsidiary who are employed in the U.S., are age 21 or over and have at least
one year of service. In 1998, a participating employee could have (i) deferred
up to 5% of base salary through payroll deductions, with Griffin contributing an
additional $0.60 for each dollar contributed by the employee and (ii) deferred
an additional 10% of annual base salary without receiving any matching
contributions. Highly compensated employees are limited to an additional 3% of
annual base salary without receiving any contributions. Contributions made in
1998 through payroll deductions not in excess of $10,000 per employee may have
been accumulated as pre-tax savings pursuant to Section 401(k) of the Internal
Revenue Code. Participants are permitted to allocate their contributions among
several alternative investment options. Employees are always 100% vested in
their own contributions. Vesting with respect to Griffin's matching
contributions occurs at two different rates: (i) those employees who enrolled in
the Savings Plan on or before November 1, 1997 vest at the rate of 20% per year
over the first five years of service; or (ii) those employees who enrolled in
the Savings Plan after November 1, 1997 are cliff vested after five years of
service.
Griffin's matching contributions under the Savings Plan for the accounts of
the individuals named under "Summary Compensation Table" are included under
Other Annual Compensation.
INSURANCE AND HEALTH PROGRAMS
Griffin maintains a variety of employee welfare plans providing medical,
hospitalization and life insurance for all of its salaried employees and for
certain hourly employees. Griffin provides long-term disability insurance for
its salaried employees and accidental death & dismemberment insurance for
certain hourly employees.
12
<PAGE>
Griffin also provides life, hospitalization and medical benefits for those
retired employees who were (i) hired prior to December 31, 1993 and had a
minimum of five years of service with Griffin prior to retirement and were 55
years of age as of December 31, 1993; or (ii) hired prior to December 31, 1993
and had a minimum of ten years of service with Griffin prior to retirement.
Griffin's aggregate contributions for such employee welfare benefit plans in
fiscal 1998 amounted to approximately $1.2 million.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION--
INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee supervises management compensation and employee
benefits and administers Griffin's stock option, savings, health, incentive
compensation and other employee benefit plans. It held one meeting in 1998.
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
GENERAL
Pursuant to its authority to designate committees to exercise the powers and
authority of the Board, the Board of Directors has designated the Compensation
Committee to review, consider and approve the recommendations of management as
to all compensation paid by Griffin and its subsidiaries exceeding $75,000 per
annum.
Mr. Cullman, the Chairman of the Board of Directors, and Mr. Danziger, the
President and Chief Executive Officer, are both members of the Cullman & Ernst
Group which owns Common Stock representing approximately 47.0% of Griffin's
Common Stock (see "Security Ownership of Management and Principal Holders"). Mr.
Danziger has been granted options under Griffin's Stock Option Plan. See
"Description of the 1997 Stock Option Plan--Options Issued Under the 1997 Stock
Option Plan." Mr. Cullman has not been granted any options under Griffin's Stock
Option Plan.
POLICIES
The Committee intends that stock options serve as a significant part of the
total compensation package for executive officers of Griffin. The Committee
intends that cash bonuses pursuant to the Annual Compensation Plans serve as a
significant part of the total compensation for other key employees of Griffin
and its subsidiaries. The stock options and cash bonuses are intended to offer
these employees long-term incentives to increase their efforts on behalf of
Griffin and its subsidiaries and to focus managerial efforts on enhancing
stockholder value and operating performance.
SALARY AND CASH BONUSES
No cash bonus was paid, under any Incentive Compensation Plan or otherwise,
with respect to 1998 to the Named Executive Officers. The Committee does not
believe it need now adopt any policy with respect to the $1,000,000 deduction
cap of Internal Revenue Code Section 162(m). While the Compensation Committee
will continue to give due consideration to the deductibility of compensation
payments on compensation arrangements with Griffin's executive officers, the
Compensation Committee will make its compensation decisions based on an overall
determination of what it believes to be in the best interests of Griffin and its
stockholders, and deductibility will be only one among a number of factors used
by the Compensation Committee in making its compensation decisions.
STOCK OPTION PLAN
The Committee administers the plan described under "Approval of 1997 Stock
Option Plan, as amended--Description of the 1997 Stock Option Plan." In 1997
Griffin granted options under the 1997
13
<PAGE>
Stock Option Plan to the holders of Culbro options in connection with the
Distribution. There are presently two independent directors and approximately 29
key employees and consultants eligible to receive options under the 1997 Stock
Option Plan. See "Approval of 1997 Stock Option Plan, as amended--Description of
the 1997 Stock Option Plan."
COMPENSATION COMMITTEE
Winston J. Churchill, Jr.
John L. Ernst
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Messrs. Cullman, Danziger, and Ernst are members of the Board of Directors
of Bloomingdale Properties, Inc. ("Bloomingdale Properties") of which Mr. Ernst
is Chairman and President and other members of the Cullman & Ernst Group are
associated. Mr. Danziger also serves as trustee of the retirement plan for
Bloomingdale Properties.
STOCK PERFORMANCE GRAPH
The following graph compares the total percentage changes in the cumulative
total stockholder return (assuming the reinvestment of dividends) on Griffin's
Common Stock with the cumulative total return of the Russell 2000 Index from
July 7, 1997 (the date on which Griffin's Common Stock was registered pursuant
to Section 12 of the Securities Exchange Act of 1934, as amended) to November
28, 1998. It is assumed in the graph that the value of each investment was $100
at July 7, 1998. Griffin is not aware of any other company that substantially
participates in both the nursery and real estate businesses, and would therefore
be suitable for comparison to Griffin as a "peer issuer" within Griffin's line
of business.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
GROWTH OF A $100 INVESTMENT
<S> <C> <C>
July 7, 1997 = 100
GL&N RUSSELL 2000
July 7, 1997 $100.00 $100.00
Nov. 29, 1997 $100.43 $108.49
Nov. 28, 1998 $86.81 $101.47
</TABLE>
14
<PAGE>
III. SELECTION OF INDEPENDENT ACCOUNTANTS
The Board of Directors has selected the firm of PricewaterhouseCoopers LLP
as independent accountants to audit the financial statements of Griffin for the
fiscal year ending November 27, 1999. This selection was recommended by the
Audit Committee of the Board of Directors. PricewaterhouseCoopers LLP and its
predecessor, Price Waterhouse LLP, have been the independent accountants for
Culbro (and its successor, General Cigar) for many years, and for Griffin since
the date of the Distribution. The fees of PricewaterhouseCoopers LLP
approximated $137,000 for all services rendered to Griffin with respect to its
1998 fiscal year.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE SELECTION OF
PRICEWATERHOUSECOOPERS LLP.
The submission of this proposal to a vote of stockholders is not legally
required. If this selection of PricewaterhouseCoopers LLP is not approved, the
Board of Directors will reconsider its selection. A vote of the majority of the
shares of Common Stock of Griffin represented (in person or by proxy) and voting
at the meeting, provided that at least a majority of such stock is represented
at the meeting, is required to adopt this proposal.
A representative of PricewaterhouseCoopers LLP is expected to be present at
the Annual Meeting and will be given an opportunity to make a statement if so
desired and to respond to appropriate questions.
A COPY OF GRIFFIN'S ANNUAL REPORT ON FORM 10-K FILED WITH THE COMMISSION IS
AVAILABLE TO GRIFFIN'S STOCKHOLDERS WITHOUT CHARGE AT THE WEB SITE
(HTTP://WWW.SEC.GOV/) MAINTAINED BY THE COMMISSION AND AT THE PUBLIC REFERENCE
FACILITIES MAINTAINED BY THE COMMISSION AT JUDICIARY PLAZA, 450 FIFTH STREET,
N.W., WASHINGTON, DC 20549. COPIES ALSO MAY BE OBTAINED AT PRESCRIBED RATES AT
THE COMMISSION'S REGIONAL OFFICE IN NEW YORK LOCATED AT 7 WORLD TRADE CENTER,
15TH FLOOR, NEW YORK, NEW YORK 10048. IN ADDITION, A LIMITED NUMBER OF COPIES
ARE AVAILABLE AT GRIFFIN'S OFFICES AND MAY BE OBTAINED UPON WRITTEN REQUEST TO:
GRIFFIN LAND & NURSERIES, INC.
ONE ROCKEFELLER PLAZA
SUITE 2301
NEW YORK, NEW YORK 10020
ATTENTION: CORPORATE SECRETARY
Dated: April 14, 1999
15
<PAGE>
APPENDIX I TO PROXY STATEMENT
ONE ROCKEFELLER PLAZA
SUITE 2301
NY, NY 10020
SOLICITED BY THE BOARD OF DIRECTORS FOR ANNUAL MEETING OF STOCKHOLDERS
The undersigned holder of Common Stock of Griffin Land & Nurseries, Inc.
("Griffin") hereby authorizes and appoints Frederick M. Danziger and John L.
Ernst, or either of them, as proxies with full power of substitution in each,
to represent the undersigned at the Annual Meeting of Stockholders of Griffin
to be held on the 11th floor of the Corporate Headquarters of Chase Bank, 270
Park Avenue, New York, New York 10017 at 11:00 a.m. local time, on May 10,
1999 and any adjournment or adjournments of said meeting and thereat to vote
and act with respect to all the shares of Common Stock of Griffin that the
undersigned would be entitled to vote if then personally present in
accordance with the instructions listed on the reverse hereof.
Such proxies may vote in their discretion upon such other business as may
properly be brought before the meeting or any adjournment thereof.
Receipt of the Notice of Meeting and the related Proxy Statement is
hereby acknowledged.
(CONTINUED, AND TO BE SIGNED, ON THE OTHER SIDE)
SEE REVERSE SIDE
FOLD AND DETACH HERE
<PAGE>
FOR ALL WITHHELD
LISTED AS TO ALL
NOMINEES NOMINEES
No. 1-ELECTION OF DIRECTORS, / / / /
NOMINEES ARE LISTED BELOW: / / / /
Winston J. Churchill, Jr.; / / / /
Edgar M. Cullman; Frederick M. Danziger;
John L. Ernst; and David F. Stein
(INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominee's name in the space provided below.)
- ----------------------------------------------------------------------
FOR AGAINST ABSTAIN
No. 2-Approval of Griffin's 1997 Stock / / / / / /
Option Plan, as amended. / / / / / /
No. 3-Approval of Selection of Independent / / / / / /
Accountants. / / / / / /
I plan to attend the Annual Meeting. / /
/ /
SIGNATURE(S) DATE 1999
--------------------------------------------- ----------
NOTE: Please sign as name appears hereon. Joint owners should each sign. When
signing as attorney, executor, administrator, trustee or guardian, please
give full title as such.
FOLD AND DETACH HERE
<PAGE>
APPENDIX II TO PROXY STATEMENT
GRIFFIN LAND & NURSERIES, INC.
1997 STOCK OPTION PLAN
Griffin Land & Nurseries, Inc., a Delaware corporation, has adopted
The Griffin Land & Nurseries, Inc. 1997 Stock Option Plan (the "Plan"),
effective as of the Distribution Date (as such term is defined below), for the
benefit of its eligible employees, consultants and directors. The Plan consists
of two plans, one for the benefit of key Employees (as such term is defined
below) and consultants and one for the benefit of Independent Directors (as such
term is defined below).
The purposes of this Plan are as follows:
(1) To provide an additional incentive for directors, key Employees
and consultants to further the growth, development and financial success of the
Company by personally benefiting through the ownership of Company Common Stock
and thus to benefit directly from its growth, development and financial success.
(2) To enable the Company to obtain and retain the services of
directors, key Employees and consultants considered essential to the long range
success of the Company by offering them an opportunity to own Common Stock of
the Company which will reflect the growth, development and financial success of
the Company.
ARTICLE I
DEFINITIONS
1.1 General. Wherever the following terms are used in this Plan they
shall have the meanings specified below, unless the context clearly indicates
otherwise.
1.2 Award Limit. "Award Limit" shall mean 150,000 shares of Common
Stock, as adjusted pursuant to Section 7.3.
1.3 Board. "Board" shall mean the Board of Directors of the Company.
1.4 Change in Control. "Change in Control" shall mean a change in
ownership or control of the Company effected through either of the following
transactions:
(a) any person or related group of persons (other than the Company
or a person that directly or indirectly controls, is controlled by, or is
under common control with, the Company) directly or indirectly acquires
beneficial ownership (within the meaning of Rule 13d-3 under the Exchange
Act) of securities possessing more than fifty percent (50%) of the total
combined voting power of the Company's outstanding
<PAGE>
securities pursuant to a tender or exchange offer made directly to the
Company's stockholders which the Board does not recommend such
stockholders to accept; or
(b) there is a change in the composition of the Board over a period
of thirty-six (36) consecutive months (or less) such that a majority of
the Board members (rounded up to the nearest whole number) ceases, by
reason of one or more proxy contests for the election of Board members, to
be comprised of individuals who either (i) have been Board members
continuously since the beginning of such period or (ii) have been elected
or nominated for election as Board members during such period by at least
a majority of the Board members described in clause (i) who were still in
office at the time such election or nomination was approved by the Board.
1.5 Code. "Code" shall mean the Internal Revenue Code of 1986, as
amended.
1.6 Committee. "Committee" shall mean the Compensation Committee of
the Board, or another committee or subcommittee of the Board, appointed as
provided in Section 6.1.
1.7 Common Stock. "Common Stock" shall mean the common stock of the
Company, par value $0.01 per share, and any equity security of the Company
issued or authorized to be issued in the future, but excluding any preferred
stock and any warrants, options or other rights to purchase Common Stock. Debt
securities of the Company convertible into Common Stock shall be deemed equity
securities of the Company.
1.8 Company. "Company" shall mean Griffin Land & Nurseries, Inc., a
Delaware corporation.
1.9 Corporate Transaction. "Corporate Transaction" shall mean any of
the following stockholder-approved transactions to which the Company is a party:
(a) a merger or consolidation in which the Company is not the
surviving entity, except for a transaction the principal purpose of which
is to change the State in which the Company is incorporated, form a
holding company or effect a similar reorganization as to form whereupon
this Plan and all Options are assumed by the successor entity;
(b) the sale, transfer, exchange or other disposition of all or
substantially all of the assets of the Company, in complete liquidation or
dissolution of the Company in a transaction not covered by the exceptions
to clause (a), above; or
(c) any reverse merger in which the Company is the surviving entity
but in which securities possessing more than fifty percent (50%) of the
total combined voting power of the Company's outstanding securities are
transferred or issued to a person or persons different from those who held
such securities immediately prior to such merger.
2
<PAGE>
1.10 Cullman Group. "Cullman Group" shall mean the group consisting
of Edgar M. Cullman, Edgar M. Cullman, Jr., Susan R. Cullman, John L. Ernst,
Frederick M. Danziger and the members of their families and trusts for their
benefit, partnerships in which they own substantial interests and charitable
foundations on whose boards of directors they sit.
1.11 Director. "Director" shall mean a member of the Board.
1.12 Distribution. "Distribution" shall mean the special
distribution by Culbro Corporation, a New York corporation, of one share of the
Company's Common Stock for each share of Culbro Corporation common stock, par
value $1.00 per share.
1.13 Distribution Date. "Distribution Date" shall mean the date the
Distribution is consummated.
1.14 Employee. "Employee" shall mean any officer or other employee
(as defined in accordance with Section 3401(c) of the Code) of the Company, or
of any corporation which is a Subsidiary.
1.15 Exchange Act. "Exchange Act" shall mean the Securities Exchange
Act of 1934, as amended.
1.16 Fair Market Value. "Fair Market Value" of a share of Common
Stock as of a given date shall be (i) the closing price of a share of Common
Stock on the principal exchange on which shares of Common Stock are then
trading, if any (or as reported on any composite index which includes such
principal exchange), on the trading day previous to such date, or if shares were
not traded on the trading day previous to such date, then on the next preceding
date on which a trade occurred, or (ii) if Common Stock is not traded on an
exchange but is quoted on Nasdaq or a successor quotation system, the mean
between the closing representative bid and asked prices for the Common Stock on
the trading day previous to such date as reported by Nasdaq or such successor
quotation system; or (iii) if Common Stock is not publicly traded on an exchange
and not quoted on Nasdaq or a successor quotation system, the Fair Market Value
of a share of Common Stock as established by the Committee (or the Board, in the
case of Options granted to Independent Directors) acting in good faith;
provided, however, that with respect to Options granted to any individual in
connection with the Distribution, the "Fair Market Value" of a share of Common
Stock shall be the mean between the opening representative bid and asked price
for the Common Stock as reported on Nasdaq on the first trading day immediately
following the date of the Distribution.
1.17 Incentive Stock Option. "Incentive Stock Option" shall mean an
option which conforms to the applicable provisions of Section 422 of the Code
and which is designated as an Incentive Stock Option by the Committee.
1.18 Independent Director. "Independent Director" shall mean a
member of the Board who is not an Employee of the Company and who is not a
member of the Cullman Group.
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1.19 Non-Qualified Stock Option. "Non-Qualified Stock Option" shall
mean an Option which is not designated as an Incentive Stock Option by the
Committee.
1.20 Option. "Option" shall mean a stock option granted under
Article III of this Plan. An Option granted under this Plan shall, as determined
by the Committee, be either a Non-Qualified Stock Option or an Incentive Stock
Option; provided, however, that Options granted to Independent Directors and
consultants shall be Non-Qualified Stock Options.
1.21 Optionee. "Optionee" shall mean an Employee, consultant or
Independent Director granted an Option under this Plan.
1.22 Plan. "Plan" shall mean the Griffin Land & Nurseries, Inc. 1997
Stock Option Plan.
1.23 QDRO. "QDRO" shall mean a qualified domestic relations order as
defined by the Code or Title I of the Employee Retirement Income Security Act of
1974, as amended, or the rules thereunder.
1.24 Rule 16b-3. "Rule 16b-3" shall mean that certain Rule 16b-3
under the Exchange Act, as such Rule may be amended from time to time.
1.25 Section 162(m) Participant. "Section 162(m) Participant" shall
mean any key Employee designated by the Committee as a key Employee whose
compensation for the fiscal year in which the key Employee is so designated or a
future fiscal year may be subject to the limit on deductible compensation
imposed by Section 162(m) of the Code.
1.26 Subsidiary. "Subsidiary" shall mean any corporation in an
unbroken chain of corporations beginning with the Company if each of the
corporations other than the last corporation in the unbroken chain then owns
stock possessing 50 percent or more of the total combined voting power of all
classes of stock in one of the other corporations in such chain.
1.27 Termination of Consultancy. "Termination of Consultancy" shall
mean the time when the engagement of an Optionee as a consultant to the Company
or a Subsidiary is terminated for any reason, with or without cause, including,
but not by way of limitation, by resignation, discharge, death or retirement;
but excluding terminations where there is a simultaneous commencement of
employment with the Company or any Subsidiary. The Committee, in its absolute
discretion, shall determine the effect of all matters and questions relating to
Termination of Consultancy, including, but not by way of limitation, the
question of whether a Termination of Consultancy resulted from a discharge for
good cause, and all questions of whether a particular leave of absence
constitutes a Terminations of Consultancy. Notwithstanding any other provision
of this Plan, the Company or any Subsidiary has an absolute and unrestricted
right to terminate a consultant's service at any time for any reason whatsoever,
with or without cause, except to the extent expressly provided otherwise in
writing.
1.28 Termination of Directorship. "Termination of Directorship"
shall mean the time when an Optionee who is an Independent Director ceases to be
a Director for any
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reason, including, but not by way of limitation, a termination by resignation,
failure to be elected, death or retirement. The Board, in its sole and absolute
discretion, shall determine the effect of all matters and questions relating to
Termination of Directorship with respect to Independent Directors.
1.29 Termination of Employment. "Termination of Employment" shall
mean the time when the employee-employer relationship between an Optionee and
the Company or any Subsidiary is terminated for any reason, with or without
cause, including, but not by way of limitation, a termination by resignation,
discharge, death, disability or retirement; but excluding (i) terminations where
there is a simultaneous reemployment or continuing employment of an Optionee by
the Company or any Subsidiary, (ii) at the discretion of the Committee,
terminations which result in a temporary severance of the employee-employer
relationship, and (iii) at the discretion of the Committee, terminations which
are followed by the simultaneous establishment of a consulting relationship by
the Company or a Subsidiary with the former employee. The Committee, in its
absolute discretion, shall determine the effect of all matters and questions
relating to Termination of Employment, including, but not by way of limitation,
the question of whether a Termination of Employment resulted from a discharge
for good cause, and all questions of whether a particular leave of absence
constitutes a Terminations of Employment; provided, however, that, with respect
to Incentive Stock Options unless otherwise determined by the Committee in its
discretion, a leave of absence, change in status from an employee to an
independent contractor or other change in the employee-employer relationship
shall constitute a Termination of Employment if, and to the extent that, such
leave of absence, change in status or other change interrupts employment for the
purposes of Section 422(a)(2) of the Code and the then applicable regulations
and revenue rulings under said Section. Notwithstanding any other provision of
this Plan, the Company or any Subsidiary has an absolute and unrestricted right
to terminate an Employee's employment at any time for any reason whatsoever,
with or without cause, except to the extent expressly provided otherwise in
writing.
ARTICLE II
SHARES SUBJECT TO PLAN
2.1 Shares Subject to Plan.
(a) The shares of stock subject to Options shall be Common Stock,
initially shares of the Company's Common Stock, par value $0.01 per share. The
aggregate number of such shares which may be issued upon exercise of such
Options under the Plan shall not exceed
(i) seven hundred thousand (700,000), reduced by
(ii) the number of shares of Common Stock into which shares
of the par value $1.00 common stock of Culbro Corporation previously
granted and outstanding under the Culbro Corporation 1991 Employees
Incentive Stock Option Plan, the Culbro Corporation 1992 Stock Plan, the
Culbro Corporation 1996 Stock Plan, the 1993 Stock Option Plan for
Non-Employee Directors of Culbro Corporation, and the 1996 Stock
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Option Plan for Non-Employee Directors of Culbro Corporation are
redenominated as options with respect to the Company's Common Stock in
connection with the Distribution. The shares of Common Stock issuable upon
exercise of such Options may be either previously authorized but unissued
shares or treasury shares.
(b) The maximum number of shares which may be subject to Options
granted under the Plan to any individual in any fiscal year shall not exceed the
Award Limit. To the extent required by Section 162(m) of the Code, shares
subject to Options which are canceled continue to be counted against the Award
Limit and if, after grant of an Option, the price of shares subject to such
Option is reduced, the transaction is treated as a cancellation of the Option
and a grant of a new Option and both the Option deemed to be canceled and the
Option deemed to be granted are counted against the Award Limit.
2.2 Add-back of Options. If any Option expires or is canceled
without having been fully exercised, the number of shares subject to such Option
but as to which such Option was not exercised prior to its expiration,
cancellation or exercise may again be optioned hereunder, subject to the
limitations of Section 2.1. Furthermore, any shares subject to Options which are
adjusted pursuant to Section 7.3 and become exercisable with respect to shares
of stock of another corporation shall be considered cancelled and may again be
optioned hereunder, subject to the limitations of Section 2.1. Shares of Common
Stock which are delivered by the Optionee or withheld by the Company upon the
exercise of any Option, in payment of the exercise price thereof, may again be
optioned subject to the limitations of Section 2.1. Notwithstanding the
provisions of this Section 2.2, no shares of Common Stock may again be optioned
if such action would cause an Incentive Stock Option to fail to qualify as an
incentive stock option under Section 422 of the Code.
ARTICLE III
GRANTING OF OPTIONS
3.1 Eligibility. Any Employee or consultant selected by the
Committee pursuant to Section 3.4(a)(i) shall be eligible to be granted an
Option. Each Independent Director of the Company shall be eligible to be granted
Options at the times and in the manner set forth in Section 3.4(d).
3.2 Disqualification for Stock Ownership. No person may be granted
an Incentive Stock Option under this Plan if such person, at the time the
Incentive Stock Option is granted, owns stock possessing more than ten percent
(10%) of the total combined voting power of all classes of stock of the Company
or any then existing Subsidiary or parent corporation (within the meaning of
Section 422 of the Code) unless such Incentive Stock Option conforms to the
applicable provisions of Section 422 of the Code.
3.3 Qualification of Incentive Stock Options. No Incentive Stock
Option shall be granted to any person who is not an Employee.
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3.4 Granting of Options
(a) The Committee shall from time to time, in its absolute
discretion, and subject to applicable limitations of this Plan:
(i) Determine which Employees are key Employees and select
from among the key Employees or consultants (including Employees or
consultants who have previously received Options under this Plan) such of
them as in its opinion should be granted Options;
(ii) Subject to the Award Limit, determine the number of
shares to be subject to such Options granted to the selected key Employees
or consultants;
(iii) Subject to Section 3.3, determine whether such Options
are to be Incentive Stock Options or Non-Qualified Stock Options and
whether such Options are to qualify as performance-based compensation as
described in Section 162(m)(4)(C) of the Code; and
(iv) Determine the terms and conditions of such Options,
consistent with this Plan; provided, however, that the terms and
conditions of Options intended to qualify as performance-based
compensation as described in Section 162(m)(4)(C) of the Code shall
include, but not be limited to, such terms and conditions as may be
necessary to meet the applicable provisions of Section 162(m) of the Code.
(b) Upon the selection of a key Employee or consultant to be granted
an Option, the Committee shall instruct the Secretary of the Company to issue
the Option and may impose such conditions on the grant of the Option as it deems
appropriate. Without limiting the generality of the preceding sentence, the
Committee may, in its discretion and on such terms as it deems appropriate,
require as a condition on the grant of an Option to an Employee or consultant
that the Employee or consultant surrender for cancellation some or all of the
unexercised Options which have been previously granted to him under this Plan or
otherwise. An Option, the grant of which is conditioned upon such surrender, may
have an Option price lower (or higher) than the exercise price of such
surrendered Option, may cover the same (or a lesser or greater) number of shares
as such surrendered Option, may contain such other terms as the Committee deems
appropriate, and shall be exercisable in accordance with its terms, without
regard to the number of shares, price, exercise period or any other term or
condition of such surrendered Option.
(c) Any Incentive Stock Option granted under this Plan may be
modified by the Committee to disqualify such Option from treatment as an
"incentive stock option" under Section 422 of the Code.
(d) During the term of the Plan, each person who is an Independent
Director on the date of the Distribution shall automatically be granted (i) an
Option to purchase three thousand (3,000) shares of Common Stock (subject to
adjustment as provided in Section 7.3) on the date of the Distribution and (ii)
an Option to purchase two thousand (2,000) shares of
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Common Stock (subject to adjustment as provided in Section 7.3) on the date of
each annual meeting of stockholders following the Distribution at which the
Independent Director is reelected to the Board. During the term of the Plan, a
person who is initially elected to the Board after the date of the Distribution
and who is an Independent Director at the time of such initial election
automatically shall be granted (i) an Option to purchase three thousand (3,000)
shares of Common Stock (subject to adjustment as provided in Section 7.3) on the
date of such initial election and (ii) an Option to purchase two thousand
(2,000) shares of Common Stock (subject to adjustment as provided in Section
7.3) on the date of each annual meeting of stockholders after such initial
election at which the Independent Director is reelected to the Board. Members of
the Board who are employees of the Company who subsequently retire from the
Company and remain on the Board will not receive an initial Option grant
pursuant to clause (i) of the preceding sentence, but to the extent that they
are otherwise eligible, will receive, after retirement from employment with the
Company, Options as described in clause (ii) of the preceding sentence. All the
foregoing Option grants authorized by this Section 3.4(d) are subject to
stockholder approval of the Plan.
ARTICLE IV
TERMS OF OPTIONS
4.1 Option Agreement. Each Option shall be evidenced by a written
Stock Option Agreement, which shall be executed by the Optionee and an
authorized officer of the Company and which shall contain such terms and
conditions as the Committee (or the Board, in the case of Options granted to
Independent Directors) shall determine, consistent with this Plan. Stock Option
Agreements evidencing Options intended to qualify as performance-based
compensation as described in Section 162(m)(4)(C) of the Code shall contain such
terms and conditions as may be necessary to meet the applicable provisions of
Section 162(m) of the Code. Stock Option Agreements evidencing Incentive Stock
Options shall contain such terms and conditions as may be necessary to meet the
applicable provisions of Section 422 of the Code.
4.2 Option Price. The price per share of the shares subject to each
Option shall be set by the Committee; provided, however, that such price shall
be no less than the par value of a share of Common Stock, unless otherwise
permitted by applicable state law, and (i) in the case of Options intended to
qualify as performance-based compensation as described in Section 162(m)(4)(C)
of the Code, such price shall not be less than 100% of the Fair Market Value of
a share of Common Stock on the date the Option is granted; (ii) in the case of
Incentive Stock Options such price shall not be less than 100% of the Fair
Market Value of a share of Common Stock on the date the Option is granted (or
the date the Option is modified, extended or renewed for purposes of Section
424(h) of the Code); (iii) in the case of Incentive Stock Options granted to an
individual then owning (within the meaning of Section 424(d) of the Code) more
than 10% of the total combined voting power of all classes of stock of the
Company or any Subsidiary or parent corporation thereof (within the meaning of
Section 422 of the Code), such price shall not be less than 110% of the Fair
Market Value of a share of Common Stock on the date the Option is granted (or
the date the Option is modified, extended or renewed for purposes of Section
424(h) of the Code); and (iv) in the case of Options granted to Independent
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Directors, such price shall equal 100% of the Fair Market Value of a share of
Common Stock on the date the Option is granted.
4.3 Option Term. The term of an Option shall be set by the Committee
in its discretion; provided, however, that, (i) in the case of Options granted
to Independent Directors, the term shall be ten (10) years from the date the
Option is granted, without variation or acceleration hereunder, but subject to
Section 5.6, and (ii) in the case of Incentive Stock Options, the term shall not
be more than ten (10) years from the date the Incentive Stock Option is granted,
or five (5) years from such date if the Incentive Stock Option is granted to an
individual then owning (within the meaning of Section 424(d) of the Code) more
than 10% of the total combined voting power of all classes of stock of the
Company or any Subsidiary or parent corporation thereof (within the meaning of
Section 422 of the Code). Except as limited by requirements of Section 422 of
the Code and regulations and rulings thereunder applicable to Incentive Stock
Options, the Committee may extend the term of any outstanding Option in
connection with any Termination of Employment or Termination of Consultancy of
the Optionee, or amend any other term or condition of such Option relating to
such a termination.
4.4 Option Vesting
(a) The period during which the right to exercise an Option in whole
or in part vests in the Optionee shall be set by the Committee and the Committee
may determine that an Option may not be exercised in whole or in part for a
specified period after it is granted; provided, however, that unless otherwise
determined by the Committee, Options granted to Employees and consultants shall
become fully exercisable upon the third anniversary of the date of the Option
grant, without variation or acceleration hereunder except as provided in Section
7.3(b); provided, further, that initial Option grants to Independent Directors
(upon the Distribution Date or initial election to the Board) shall be fully
exercisable immediately upon the date of the Option grant, and subsequent Option
grants to Independent Directors shall become fully exercisable upon the second
anniversary of the date of the Option grant, without variation or acceleration
hereunder except as provided in Section 7.3(b). At any time after grant of an
Option, the Committee may, in its sole and absolute discretion and subject to
whatever terms and conditions it selects, accelerate the period during which an
Option (except an Option granted to an Independent Director) vests.
(b) No portion of an Option which is unexercisable at Termination of
Employment, Termination of Directorship or Termination of Consultancy, as
applicable, shall thereafter become exercisable, except as may be otherwise
provided by the Committee in the case of Options granted to Employees or
consultants either in the Stock Option Agreement or by action of the Committee
following the grant of the Option.
(c) To the extent that the aggregate Fair Market Value of stock with
respect to which "incentive stock options" (within the meaning of Section 422 of
the Code, but without regard to Section 422(d) of the Code) are exercisable for
the first time by an Optionee during any calendar year (under the Plan and all
other incentive stock option plans of the Company and any parent or subsidiary
corporation (within the meaning of Section 422 of the Code) of the Company)
exceeds $100,000, such Options shall be treated as Non-Qualified Options to the
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extent required by Section 422 of the Code. The rule set forth in the preceding
sentence shall be applied by taking Options into account in the order in which
they were granted. For purposes of this Section 4.4(c), the Fair Market Value of
stock shall be determined as of the time the Option with respect to such stock
is granted.
4.5 Consideration. In consideration of the granting of an Option,
the Optionee shall agree, in the written Stock Option Agreement, to remain in
the employ of (or to consult for or to serve as an Independent Director of, as
applicable) the Company or any Subsidiary for a period of at least one year (or
such shorter period as may be fixed in the Stock Option Agreement or by action
of the Committee following grant of the Option) after the Option is granted (or,
in the case of an Independent Director, until the next annual meeting of
stockholders of the Company). Nothing in this Plan or in any Stock Option
Agreement hereunder shall confer upon any Optionee any right to continue in the
employ of, or as a consultant for, the Company or any Subsidiary, or as a
director of the Company, or shall interfere with or restrict in any way the
rights of the Company and any Subsidiary, which are hereby expressly reserved,
to discharge any Optionee at any time for any reason whatsoever, with or without
good cause.
ARTICLE V
EXERCISE OF OPTIONS
5.1 Partial Exercise. An exercisable Option may be exercised in
whole or in part. However, an Option shall not be exercisable with respect to
fractional shares and the Committee (or the Board, in the case of Options
granted to Independent Directors) may require that, by the terms of the Option,
a partial exercise be with respect to a minimum number of shares.
5.2 Manner of Exercise. All or a portion of an exercisable Option
shall be deemed exercised upon delivery of all of the following to the Secretary
of the Company or his office:
(a) A written notice complying with the applicable rules established
by the Committee (or the Board, in the case of Options granted to Independent
Directors) stating that the Option, or a portion thereof, is exercised. The
notice shall be signed by the Optionee or other person then entitled to exercise
the Option or such portion of the Option;
(b) Such representations and documents as the Committee (or the
Board, in the case of Options granted to Independent Directors), in its absolute
discretion, deems necessary or advisable to effect compliance with all
applicable provisions of the Securities Act of 1933, as amended, and any other
federal or state securities laws or regulations. The Committee or Board may, in
its absolute discretion, also take whatever additional actions it deems
appropriate to effect such compliance including, without limitation, placing
legends on share certificates and issuing stop-transfer notices to agents and
registrars;
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(c) In the event that the Option shall be exercised pursuant to
Section 7.1 by any person or persons other than the Optionee, appropriate proof
of the right of such person or persons to exercise the Option; and
(d) Full cash payment to the Secretary of the Company for the shares
with respect to which the Option, or portion thereof, is exercised. However, the
Committee (or the Board, in the case of Options granted to Independent
Directors), may in its discretion (i) allow a delay in payment up to thirty (30)
days from the date the Option, or portion thereof, is exercised; (ii) allow
payment, in whole or in part, through the delivery of shares of Common Stock
owned by the Optionee, duly endorsed for transfer to the Company with a Fair
Market Value on the date of delivery equal to the aggregate exercise price of
the Option or exercised portion thereof; (iii) allow payment, in whole or in
part, through the surrender of shares of Common Stock then issuable upon
exercise of the Option having a Fair Market Value on the date of Option exercise
equal to the aggregate exercise price of the Option or exercised portion
thereof; (iv) allow payment, in whole or in part, through the delivery of
property of any kind which constitutes good and valuable consideration; (v)
allow payment, in whole or in part, through the delivery of a full recourse
promissory note bearing interest (at no less than such rate as shall then
preclude the imputation of interest under the Code) and payable upon such terms
as may be prescribed by the Committee or the Board; (vi) allow payment, in whole
or in part, through the delivery of a notice that the Optionee has placed a
market sell order with a broker with respect to shares of Common Stock then
issuable upon exercise of the Option, and that the broker has been directed to
pay a sufficient portion of the net proceeds of the sale to the Company in
satisfaction of the Option exercise price; or (vii) allow payment through any
combination of the consideration provided in the foregoing subparagraphs (ii),
(iii), (iv), (v) and (vi). In the case of a promissory note, the Committee (or
the Board, in the case of Options granted to Independent Directors) may also
prescribe the form of such note and the security to be given for such note. The
Option may not be exercised, however, by delivery of a promissory note or by a
loan from the Company when or where such loan or other extension of credit is
prohibited by law.
5.3 Conditions to Issuance of Stock Certificates. The Company shall
not be required to issue or deliver any certificate or certificates for shares
of stock purchased upon the exercise of any Option or portion thereof prior to
fulfillment of all of the following conditions:
(a) The admission of such shares to listing on all stock exchanges
on which such class of stock is then listed;
(b) The completion of any registration or other qualification of
such shares under any state or federal law, or under the rulings or regulations
of the Securities and Exchange Commission or any other governmental regulatory
body which the Committee or Board shall, in its absolute discretion, deem
necessary or advisable;
(c) The obtaining of any approval or other clearance from any state
or federal governmental agency which the Committee (or Board, in the case of
Options granted to Independent Directors) shall, in its absolute discretion,
determine to be necessary or advisable;
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(d) The lapse of such reasonable period of time following the
exercise of the Option as the Committee (or Board, in the case of Options
granted to Independent Directors) may establish from time to time for reasons of
administrative convenience; and
(e) The receipt by the Company of full payment for such shares,
including payment of any applicable withholding tax.
5.4 Rights as Stockholders. The holders of Options shall not be, nor
have any of the rights or privileges of, stockholders of the Company in respect
of any shares purchasable upon the exercise of any part of an Option unless and
until certificates representing such shares have been issued by the Company to
such holders.
5.5 Ownership and Transfer Restrictions. The Committee (or Board, in
the case of Options granted to Independent Directors), in its absolute
discretion, may impose such restrictions on the ownership and transferability of
the shares purchasable upon the exercise of an Option as it deems appropriate.
Any such restriction shall be set forth in the respective Stock Option Agreement
and may be referred to on the certificates evidencing such shares. The Committee
may require the Employee to give the Company prompt notice of any disposition of
shares of Common Stock acquired by exercise of an Incentive Stock Option within
(i) two years from the date of granting (including the date the Option is
modified, extended or renewed for purposes of Section 424(h) of the Code) such
Option to such Employee or (ii) one year after the transfer of such shares to
such Employee. The Committee may direct that the certificates evidencing shares
acquired by exercise of an Option refer to such requirement to give prompt
notice of disposition.
5.6 Limitations on Exercise of Options Granted to Independent
Directors. No Option granted to an Independent Director may be exercised to any
extent by anyone after the first to occur of the following events:
(a) The expiration of twelve (12) months from the date of the
Optionee's death;
(b) the expiration of twelve (12) months from the date of the
Optionee's Termination of Directorship by reason of his permanent and total
disability (within the meaning of Section 22(e)(3) of the Code);
(c) the expiration of three (3) months from the date of the
Optionee's Termination of Directorship for any reason other than such Optionee's
death or his permanent and total disability, unless the Optionee dies within
said three-month period; or
(d) The expiration of ten years from the date the Option was
granted.
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ARTICLE VI
ADMINISTRATION
6.1 Compensation Committee. The Compensation Committee (or another
committee or a subcommittee of the Board assuming the functions of the Committee
under this Plan) shall consist solely of two or more Independent Directors
appointed by and holding office at the pleasure of the Board, each of whom is
both a "non-employee director" as defined by Rule 16b-3 and an "outside
director" for purposes of Section 162(m) of the Code. Appointment of Committee
members shall be effective upon acceptance of appointment. Committee members may
resign at any time by delivering written notice to the Board. Vacancies in the
Committee may be filled by the Board.
6.2 Duties and Powers of Committee. It shall be the duty of the
Committee to conduct the general administration of this Plan in accordance with
its provisions. The Committee shall have the power to interpret this Plan and
the agreements pursuant to which Options are granted, and to adopt such rules
for the administration, interpretation, and application of this Plan as are
consistent therewith and to interpret, amend or revoke any such rules.
Notwithstanding the foregoing, the full Board, acting by a majority of its
members in office, shall conduct the general administration of the Plan with
respect to Options granted to Independent Directors. Any such grant under this
Plan need not be the same with respect to each Optionee. Any such
interpretations and rules with respect to Incentive Stock Options shall be
consistent with the provisions of Section 422 of the Code. In its absolute
discretion, the Board may at any time and from time to time exercise any and all
rights and duties of the Committee under this Plan except with respect to
matters which under Rule 16b-3 or Section 162(m) of the Code, or any regulations
or rules issued thereunder, are required to be determined in the sole discretion
of the Committee.
6.3 Majority Rule; Unanimous Written Consent. The Committee shall
act by a majority of its members in attendance at a meeting at which a quorum is
present or by a memorandum or other written instrument signed by all members of
the Committee.
6.4 Compensation; Professional Assistance; Good Faith Actions.
Members of the Committee shall receive such compensation, if any, for their
services as members as may be determined by the Board. All expenses and
liabilities which members of the Committee incur in connection with the
administration of this Plan shall be borne by the Company. The Committee may,
with the approval of the Board, employ attorneys, consultants, accountants,
appraisers, brokers, or other persons. The Committee, the Company and the
Company's officers and Directors shall be entitled to rely upon the advice,
opinions or valuations of any such persons. All actions taken and all
interpretations and determinations made by the Committee or the Board in good
faith shall be final and binding upon all Optionees, the Company and all other
interested persons. No members of the Committee or Board shall be personally
liable for any action, determination or interpretation made in good faith with
respect to this Plan or Options and the Board shall be fully protected by the
Company in respect of any such action, determination or interpretation.
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ARTICLE VII
MISCELLANEOUS PROVISIONS
7.1 Not Transferable. Options under this Plan may not be sold,
pledged, assigned, or transferred in any manner other than by will or the laws
of descent and distribution or pursuant to a QDRO, unless and until Options have
been exercised. No Option shall be liable for the debts, contracts or
engagements of the Optionee or his successors in interest or shall be subject to
disposition by transfer, alienation, anticipation, pledge, encumbrance,
assignment or any other means whether such disposition be voluntary or
involuntary or by operation of law by judgment, levy, attachment, garnishment or
any other legal or equitable proceedings (including bankruptcy), and any
attempted disposition thereof shall be null and void and of no effect, except to
the extent that such disposition is permitted by the preceding sentence.
During the lifetime of the Optionee, only he may exercise an Option
(or any portion thereof) granted to him under the Plan, unless it has been
disposed of pursuant to a QDRO. After the death of the Optionee, any exercisable
portion of an Option may, prior to the time when such portion becomes
unexercisable under the Plan or the applicable Stock Option Agreement, be
exercised by his personal representative or by any person empowered to do so
under the deceased Optionee's will or under the then applicable laws of descent
and distribution.
7.2 Amendment, Suspension or Termination of this Plan. Except as
otherwise provided in this Section 7.2, this Plan may be wholly or partially
amended or otherwise modified, suspended or terminated at any time or from time
to time by the Board or the Committee. However, without approval of the
Company's stockholders given within twelve months before or after the action by
the Board or the Committee, no action of the Board or the Committee may, except
as provided in Section 7.3, increase the limits imposed in Section 2.1 on the
maximum number of shares which may be issued under this Plan, and no action of
the Board or the Committee may be taken that would otherwise require stockholder
approval as a matter of applicable law, regulation or rule. Furthermore, no
modification of the Award Limit shall be effective prior to the approval of the
Company's stockholders. No amendment, suspension or termination of this Plan
shall, without the consent of the holder of Options, alter or impair any rights
or obligations under any Options theretofore granted unless the Stock Option
Agreement (described in Section 4.1) itself otherwise expressly so provides. No
Options may be granted during any period of suspension or after termination of
this Plan, and in no event may any Incentive Stock Option be granted under this
Plan after the first to occur of the following events:
(a) The expiration of ten years from the date the Plan is adopted by
the Board; or
(b) The expiration of ten years from the date the Plan is approved
by the Company's stockholders under Section 7.4.
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7.3 Changes in Common Stock or Assets of the Company, Acquisition or
Liquidation of the Company and Other Corporate Events.
(a) Subject to Section 7.3(d), in the event that the Committee (or
the Board, in the case of Options granted to Independent Directors) determines
that any dividend or other distribution (whether in the form of cash, Common
Stock, other securities, or other property), recapitalization, reclassification,
stock split, reverse stock split, reorganization, merger, consolidation,
split-up, spin-off, combination, repurchase, liquidation, dissolution, or sale,
transfer, exchange or other disposition of all or substantially all of the
assets of the Company (including, but not limited to, a Corporate Transaction),
or exchange of Common Stock or other securities of the Company, issuance of
warrants or other rights to purchase Common Stock or other securities of the
Company, or other similar corporate transaction or event, in the Committee's
sole discretion (or in the case of Options granted to Independent Directors, the
Board's sole discretion), affects the Common Stock such that an adjustment is
determined by the Committee to be appropriate in order to prevent dilution or
enlargement of the benefits or potential benefits intended to be made available
under the Plan or with respect to an Option, then the Committee (or the Board,
in the case of Options granted to Independent Directors) shall, in such manner
as it may deem equitable, adjust any or all of
(i) the number and kind of shares of Common Stock (or other
securities or property) with respect to which Options may be granted under
the Plan, (including, but not limited to, adjustments of the limitations
in Section 2.1 on the maximum number and kind of shares which may be
issued and adjustments of the Award Limit),
(ii) the number and kind of shares of Common Stock (or other
securities or property) subject to outstanding Options, and
(iii) the exercise price with respect to any Option.
(b) Subject to Sections 7.3(b)(vi) and 7.3(d), in the event of any
Corporate Transaction or other transaction or event described in Section 7.3(a)
or any unusual or nonrecurring transactions or events affecting the Company, any
affiliate of the Company, or the financial statements of the Company or any
affiliate, or of changes in applicable laws, regulations, or accounting
principles, the Committee (or the Board, in the case of Options granted to
Independent Directors) in its discretion is hereby authorized to take any one or
more of the following actions whenever the Committee (or the Board, in the case
of Options granted to Independent Directors) determines that such action is
appropriate in order to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under the Plan or with respect
to any Option granted under this Plan, to facilitate such transactions or events
or to give effect to such changes in laws, regulations or principles:
(i) In its sole and absolute discretion, and on such terms
and conditions as it deems appropriate, the Committee (or the Board, in
the case of Options granted to Independent Directors) may provide, either
by the terms of the agreement or by action taken prior to the occurrence
of such transaction or event and either
15
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automatically or upon the optionee's request, for either the purchase of
any such Option, for an amount of cash equal to the amount that could have
been attained upon the exercise of such Option or realization of the
Optionee's rights had such Option been currently exercisable or the
replacement of such Option with other rights or property selected by the
Committee (or the Board, in the case of Options granted to Independent
Directors) in its sole discretion;
(ii) In its sole and absolute discretion, the Committee (or
the Board, in the case of Options granted to Independent Directors) may
provide, either by the terms of such Option, or by action taken prior to
the occurrence of such transaction or event that it cannot vest, be
exercised or become payable after such event;
(iii) In its sole and absolute discretion, and on such terms
and conditions as it deems appropriate, the Committee (or the Board, in
the case of Options granted to Independent Directors) may provide, either
by the terms of such Option or by action taken prior to the occurrence of
such transaction or event, that for a specified period of time prior to
such transaction or event, such Option shall be exercisable as to all
shares covered thereby, notwithstanding anything to the contrary in (i)
Section 4.4 or (ii) the provisions of such Option;
(iv) In its sole and absolute discretion, and on such terms
and conditions as it deems appropriate, the Committee (or the Board, in
the case of Options granted to Independent Directors) may provide, either
by the terms of such Option, or by action taken prior to the occurrence of
such transaction or event, that upon such event, such Option, be assumed
by the successor or survivor corporation, or a parent or subsidiary
thereof, or shall be substituted for by similar options, covering the
stock of the successor or survivor corporation, or a parent or subsidiary
thereof, with appropriate adjustments as to the number and kind of shares
and prices; and
(v) In its sole and absolute discretion, and on such terms
and conditions as it deems appropriate, the Committee (or the Board, in
the case of Options granted to Independent Directors) may make adjustments
in the number and type of shares of Common Stock (or other securities or
property) subject to outstanding Options, and/or in the terms and
conditions of (including the exercise price), and the criteria included
in, outstanding Options, and Options which may be granted in the future.
(vi) None of the foregoing discretionary actions taken under
this Section 7.3(b) shall be permitted with respect to Options granted
under Section 3.4(d) to Independent Directors to the extent that such
discretion would be inconsistent with the applicable exemptive conditions
of Rule 16b-3. In the event of a Change in Control or a Corporate
Transaction, to the extent that the Board does not have the ability under
Rule 16b-3 to take or to refrain from taking the discretionary actions set
forth in Section 7.3(b)(iii) above, each Option granted to an Independent
Director shall be exercisable as to all shares covered thereby upon such
Change in Control or during the five days immediately preceding the
consummation of such Corporate Transaction and subject to such
consummation, notwithstanding anything to the contrary in Section 4.4 or
the
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vesting schedule of such Options. In the event of a Corporate Transaction,
to the extent that the Board does not have the ability under Rule 16b-3 to
take or to refrain from taking the discretionary actions set forth in
Section 7.3(b)(ii) above, no Option granted to an Independent Director may
be exercised following such Corporate Transaction unless such Option is,
in connection with such Corporate Transaction, either assumed by the
successor or survivor corporation (or parent or subsidiary thereof) or
replaced with a comparable right with respect to shares of the capital
stock of the successor or survivor corporation (or parent or subsidiary
thereof).
(c) Subject to Section 7.3(d) and 7.8, the Committee (or the Board,
in the case of Options granted to Independent Directors) may, in its discretion,
include such further provisions and limitations in any Option agreement or
certificate, as it may deem equitable and in the best interests of the Company.
(d) With respect to Options which are granted to Section 162(m)
Participants and are intended to qualify as performance-based compensation under
Section 162(m)(4)(C), no adjustment or action described in this Section 7.3 or
in any other provision of the Plan shall be authorized to the extent that such
adjustment or action would cause the Plan to violate Section 422(b)(1) of the
Code or would cause such Option to fail to so qualify under Section
162(m)(4)(C), as the case may be, or any successor provisions thereto.
Furthermore, no such adjustment or action shall be authorized to the extent such
adjustment or action would result in short-swing profits liability under Section
16 or violate the exemptive conditions of Rule 16b-3 unless the Committee (or
the Board, in the case of Options granted to Independent Directors) determines
that the Option is not to comply with such exemptive conditions. The number of
shares of Common Stock subject to any Option shall always be rounded to the next
whole number.
7.4 Approval of Plan by Stockholders. This Plan will be submitted
for the approval of the Company's stockholders within twelve months after the
date of the Board's initial adoption of this Plan. Options may be granted prior
to such stockholder approval, provided that such Options shall not be
exercisable prior to the time when this Plan is approved by the stockholders,
and provided further that if such approval has not been obtained at the end of
said twelve-month period, all Options previously granted under this Plan shall
thereupon be canceled and become null and void.(1)
7.5 Tax Withholding. The Company shall be entitled to require
payment in cash or deduction from other compensation payable to each Optionee of
any sums required by federal, state or local tax law to be withheld with respect
to exercise of any Option. The Committee (or the Board, in the case of Options
granted to Independent Directors) may in its discretion and in satisfaction of
the foregoing requirement allow such Optionee to elect to have the Company
withhold shares of Common Stock otherwise issuable under such Option (or allow
the return of shares of Common Stock) having a Fair Market Value equal to the
sums required to be withheld.
- ---------------------------
(1) See note 2.
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7.6 Loans. The Committee may, in its discretion, extend one or more
loans to key Employees in connection with the exercise or receipt of an Option
granted under this Plan. The terms and conditions of any such loan shall be set
by the Committee.
7.7 Forfeiture Provisions. Pursuant to its general authority to
determine the terms and conditions applicable to awards under the Plan, the
Committee (or the Board, in the case of Options granted to Independent
Directors) shall have the right (to the extent consistent with the applicable
exemptive conditions of Rule 16b-3) to provide, in the terms of Options to
require the recipient to agree by separate written instrument, that (i) any
proceeds, gains or other economic benefit actually or constructively received by
the recipient upon any receipt or exercise of the Option, or upon the receipt or
resale of any Common Stock underlying such Option, must be paid to the Company,
and (ii) the Option shall terminate and any unexercised portion of such Option
(whether or not vested) shall be forfeited, if (a) a Termination of Employment,
Termination of Consultancy or Termination of Directorship occurs prior to a
specified date, or within a specified time period following receipt or exercise
of the Option, or (b) the recipient at any time, or during a specified time
period, engages in any activity in competition with the Company, or which is
inimical, contrary or harmful to the interests of the Company, as further
defined by the Committee (or the Board, as applicable).
7.8 Limitations Applicable to Section 16 Persons and
Performance-Based Compensation. Notwithstanding any other provision of this
Plan, this Plan, and any Option granted to any individual who is then subject to
Section 16 of the Exchange Act, shall be subject to any additional limitations
set forth in any applicable exemptive rule under Section 16 of the Exchange Act
(including any amendment to Rule 16b-3 of the Exchange Act) that are
requirements for the application of such exemptive rule. To the extent permitted
by applicable law, the Plan, Options granted hereunder shall be deemed amended
to the extent necessary to conform to such applicable exemptive rule.
Furthermore, notwithstanding any other provision of this Plan, any Option which
is granted to a Section 162(m) Participant and is intended to qualify as
performance-based compensation as described in Section 162(m)(4)(C) of the Code
shall be subject to any additional limitations set forth in Section 162(m) of
the Code (including any amendment to Section 162(m) of the Code) or any
regulations or rulings issued thereunder that are requirements for qualification
as performance-based compensation as described in Section 162(m)(4)(C) of the
Code, and this Plan shall be deemed amended to the extent necessary to conform
to such requirements.
7.9 Effect of Plan Upon Options and Compensation Plans. The adoption
of this Plan shall not affect any other compensation or incentive plans in
effect for the Company or any Subsidiary. Nothing in this Plan shall be
construed to limit the right of the Company (i) to establish any other forms of
incentives or compensation for Employees, Directors or Consultants of the
Company or any Subsidiary or (ii) to grant or assume options or other rights or
awards otherwise than under this Plan in connection with any proper corporate
purpose including but not by way of limitation, the grant or assumption of
options in connection with the acquisition by purchase, lease, merger,
consolidation or otherwise, of the business, stock or assets of any corporation,
partnership, limited liability company, firm or association.
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7.10 Compliance with Laws. This Plan, the granting and vesting of
Options under this Plan and the issuance and delivery of shares of Common Stock
and the payment of money under this Plan or under Options hereunder are subject
to compliance with all applicable federal and state laws, rules and regulations
(including but not limited to state and federal securities law and federal
margin requirements) and to such approvals by any listing, regulatory or
governmental authority as may, in the opinion of counsel for the Company, be
necessary or advisable in connection therewith. Any securities delivered under
this Plan shall be subject to such restrictions, and the person acquiring such
securities shall, if requested by the Company, provide such assurances and
representations to the Company as the Company may deem necessary or desirable to
assure compliance with all applicable legal requirements. To the extent
permitted by applicable law, the Plan and Options granted hereunder shall be
deemed amended to the extent necessary to conform to such laws, rules and
regulations.
7.11 Titles. Titles are provided herein for convenience only and are
not to serve as a basis for interpretation or construction of this Plan.
7.12 Governing Law. This Plan and any agreements hereunder shall be
administered, interpreted and enforced under the internal laws of the State of
Delaware without regard to conflicts of laws thereof.
* * *
I hereby certify that the foregoing Plan was duly adopted by the
Board of Directors of Griffin Land & Nurseries, Inc. on June 2, 1997.
Executed on this 2nd day of June, 1997.
GRIFFIN LAND & NURSERIES, INC.
/s/ Anthony Galici
------------------------------
Secretary
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FIRST AMENDMENT TO THE
GRIFFIN LAND & NURSERIES, INC.
1997 STOCK OPTION PLAN
Griffin Land & Nurseries, Inc. (the "Company"), a corporation
organized under the laws of the State of Delaware, by resolution of its Board of
Directors adopted on June 2, 1997, adopted the Griffin Land & Nurseries, Inc.
1997 Stock Option Plan (the "Plan"), effective as of July 3, 1997.
In order to amend the Plan in certain respects, this Amendment to
the Plan has been adopted by a resolution of the Compensation Committee of the
Board of Directors of the Company on January 11, 1999, effective as set forth
below. This amendment to the Plan, together with the Plan, constitutes the
entire Plan as amended to date.
1. Effective as of January 11, 1999, Section 2.1(a)(i) of the Plan
is hereby amended by replacing the phrase "seven hundred thousand (700,000)"
with the phrase "one million (1,000,000)".
* * * * * * * *
Executed at New York, New York, this 11th day of January, 1999.
GRIFFIN LAND & NURSERIES, INC.
By: /s/ Anthony Galici
------------------------------
Secretary
