EXHIBIT 4(a)
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CAL-MAINE FOODS, INC.
1999 STOCK OPTION PLAN
1. PURPOSE OF THE PLAN: The purpose of this Plan is to attract and
retain qualified officers, directors and other key employees of Cal-Maine
Foods, Inc. (the "Corporation") and its Subsidiaries and to provide such
persons with appropriate incentives. Subject to the approval of the
Corporation's shareholders, the Corporation has adopted the Plan effective as
of April 15, 1999, and unless extended by amendment in accordance with the
terms of the Plan, no Option Rights or Tandem Stock Appreciation Rights
(TSAR), will be granted hereunder after the tenth anniversary of such
effective date.
Options granted under the Plan may be Incentive Stock Options or
Nonstatutory Stock Options, as determined by the Board at the time of grant.
2. DEFINITIONS: As used herein, the following definitions shall apply:
(a) "Administrator" means the Board in accordance with Section 4 of the
Plan.
(b) "Applicable Laws" means the requirements relating to the
administration of stock option plans under U.S. state corporate laws. U.S.
federal and state securities laws, the Code, any stock exchange or quotation
system on which the Common Stock is listed or quoted and the applicable laws
of any foreign country or jurisdiction where options are, or will be, granted
under the Plan.
(c) "Base Price" means the price to be used as the basis for determining
the Spread upon the exercise of a TSAR.
(d) "Board" means the Board of Directors of the Corporation.
(e) "Code" means the Internal Revenue Code of 1986, as amended.
(f) "Common Stock" means the Common Stock of the Corporation.
(g) "Corporation" means CAL-MAINE FOODS, INC.
(h) "Director" means a member of the Board.
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(i) "Employee" means any key employee, including, without limitation,
Officers employed by the Corporation or any Parent or Subsidiary of the
Corporation. A Service Provider shall not cease to be an Employee in the case
of (i) any leave of absence approved by the Corporation or (ii) transfers
between locations of the Corporation or between the Corporation, its Parent,
any Subsidiary, or any successor. For purposes of Incentive Stock Options or
TSAR, no such leave may exceed ninety (90) days, unless reemployment upon
expiration of such leave is guaranteed by statute or contract. If reemployment
upon expiration of a leave of absence approved by the Corporation is not so
guaranteed, on the 181st day of such leave, any Incentive Stock Option held by
the Optionee shall cease to be treated as an Incentive Stock Option and shall
be treated for tax purposes as a Nonstatutory Stock Option. Neither service as
a Director nor payment of the director's fee by the Corporation shall be
sufficient to constitute "employment" by the Corporation. An employee may
serve as a Director of the Company and maintain his status as an employee.
(j) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(k) "Fair Market Value" means, as of any date, the value of Common Stock
determined as follows:
(i) If the Common Stock is listed on any established stock
exchange or a national market system, including without limitation the Nasdaq
National Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market, its
Fair Market Value shall be the closing sales price for such stock (or the
closing bid, if no sales were reported) as quoted on such exchange or system
for the last market trading day prior to the time of determination, as
reported in The Wall Street Journal or such other source as the Administrator
deems reliable;
(ii) If the Common Stock is regularly quoted by a recognized
securities dealer but selling prices are not reported, the Fair Market Value
of a Share of Common Stock shall be the mean between the high bid and low
asked prices for the Common Stock on the last market trading day prior to the
day of determination, as reported in The Wall Street Journal or such other
source as the Administrator deems reliable;
(iii) In the absence of an established market for the Common
Stock, the fair Market Value shall be determined in good faith by the
Administrator.
(l) "Incentive Stock Option" means an Option intended to qualify as an
incentive stock option within the meaning of Section 422 of the Code and the
regulations promulgated thereunder.
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(m) "Nonstatutory Stock Option" means an Option not intended to qualify
as an Incentive Stock Option.
(n) "Notice of Grant" means a written or electronic notice evidencing
certain terms and conditions of an individual Option grant. The Notice of
Grant is part of the Option Agreement.
(o) "Officer" means a person who is an officer of the Corporation within
the meaning of Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder.
(p) "Option" means a stock option granted pursuant to the Plan.
(q) "Option Agreement" means an agreement between the Corporation and an
Optionee evidencing the terms and conditions of an individual option grant.
The Option Agreement is subject to the terms and conditions of the Plan.
(r) "Optioned Stock" means the Common Stock subject to an Option.
(s) "Optionee" means the holder of an outstanding Option and attendant
TSAR granted under the Plan.
(t) "Parent" means a "parent corporation", whether now or hereinafter
existing, as defined in Section 424(e) of the Code.
(u) "Plan" means this 1999 Stock Option Plan, as amended.
(v) "Rule 16b-3" means Rule 16b-3 of the Exchange Act or any successor
to Rule 16b-3, as in effect when discretion is being exercised with respect to
the Plan.
(w) "Service Provider" means an Officer, Key Employee or non-employee
member of the Board.
(x) "Share" means a share of the Common Stock, as adjusted in accordance
with Section 12 of the Plan.
(y) "Spread" means the amount by which the Market Value per Share on the
date when the TSAR is exercised exceeds the Option Price specified in the
related Option Right.
(z) "Subsidiary" means a "subsidiary corporation," whether now or
hereafter existing, as defined in Section 424(f) of the Code.
(aa) Tandem Stock Appreciation Rights (TSAR) means the rights described
in Paragraph 10 hereof.
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3. STOCK SUBJECT TO THE PLAN: Subject to the provisions of Section 12 of
the Plan, the maximum aggregate number of shares which may be optioned and
sold under the Plan is 500,000 Shares. The Shares may be authorized, but
unissued, or reacquired Common Stock.
If an Option expires, is forfeited, or becomes unexercisable without
having been exercised in full, or is surrendered pursuant to a method of
payment under Section 9(c), the unpurchased Shares which were subject thereto
shall become available for future grant or sale under the Plan (unless the
Plan has terminated); provided, however, that Shares that have actually been
issued under the Plan shall not be returned to the Plan and shall not become
available for future distribution under the Plan.
4. ADMINISTRATION OF THE PLAN:
(a) PROCEDURE:
(i) RULE 16b-3. To the extent desirable to qualify transactions
hereunder as exempt under Rule 16b-3, the transactions contemplated hereunder
shall be structured to satisfy the requirements for exemption under Rule
16b-3.
(ii) ADMINISTRATION: The Plan shall be administered by the
Executive Committee of the Board.
(b) POWERS OF THE ADMINISTRATOR: Subject to the provisions of the Plan
the Administrator shall have the authority, in its discretion:
(i) to determine the Fair Market Value;
(ii) to select the Service Providers to whom Options and TSAR may
be granted hereunder;
(iii) to determine the number of shares of Common Stock and TSAR
to be covered by each Option granted hereunder;
(iv) to approve forms of Option Agreement for use under the Plan;
(v) to determine the terms and conditions, not inconsistent with
the terms of the Plan, of any Option or TSAR granted hereunder. Such terms and
conditions include, but are not limited to, the exercise price, the time or
times when Options may be exercised (which may be based on performance
criteria), any vesting acceleration or waiver of forfeiture restrictions,
conditions resulting in forfeiture, and any restriction or limitation
regarding any Option or the shares of Common Stock relating thereto, based in
each case on such factors as the Administrator, in its sole discretion, shall
determine;
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(vi) to construe and interpret the terms of the Plan, Options, and
TSAR, granted pursuant to the Plan;
(vii) to prescribe, amend and rescind rules and regulations
relating to the Plan, including rules and regulations relating to sub-plans
established for the purpose of qualifying for preferred tax treatment under
foreign tax laws;
(viii) to modify or amend each Option, and attendant TSAR (subject
to Section 14(c) of the Plan), including the discretionary authority to extend
the post termination exercisability period of Options and TSAR longer than is
otherwise provided for in the Plan;
(ix) to allow Optionees to satisfy withholding tax obligations by
electing to have the Corporation withhold from the Shares to be issued upon
exercise of an Option that number of Shares having a Fair Market Value equal
to the amount required to be withheld. The fair Market Value of the Shares to
be withheld shall be determined on the date that the amount of tax to be
withheld is to be determined. All elections by an Optionee to have Shares
withheld for this purpose shall be made in such form and under such conditions
as the Administrator may deem necessary or advisable;
(x) to authorize any person to execute on behalf of the
Corporation any instrument required to effect the grant of an Option
previously granted by the Administrator;
(xi) to make all other determinations deemed necessary or
advisable for administering the Plan.
(c) EFFECT OF ADMINISTRATOR'S DECISION: The Administrator's decisions,
determinations and interpretations shall be final and binding on all Optionees
and any other holders of Options.
5. ELIGIBILITY: Nonstatutory Stock Options may be granted to Service
Providers. Incentive Stock Options may be granted only to Service Providers
who are Employees.
6. LIMITATIONS:
(a) Each Option shall be designated in the Option agreement
granting such Option as either an Incentive Stock Option or a Nonstatutory
Stock Option. However, notwithstanding such designation, to the extent that
the aggregate Fair Market Value of the Shares with respect to which Incentive
Stock Options are exercisable for the first time by the Optionee during any
calendar year (under all plans of the Corporation and any Parent or
Subsidiary) exceeds $100,000, such Options shall be treated as Nonstatutory
Stock Options. For purposes of this Section 6(a), Incentive Stock Options
shall be taken into account in the order in which they were granted. The Fair
Market Value of the Shares shall be determined as of the time the option with
respect to such shares is granted.
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(b) Neither the Plan nor any Option shall confer upon an Optionee
any right with respect to continuing the Optionee's relationship as an
Officer, an Employee or a Director of the Corporation, nor shall they
interfere in any way with the Optionee's right or the Corporation's right to
terminate such relationship at any time, with or without cause.
7. TERM OF PLAN: Subject to Section 18 of the Plan, the Plan became
effective on April 15, 1999. It shall continue in effect for a term of ten
(10) years from such date, unless terminated earlier under Section 14 of the
Plan.
8. TERM OF OPTION: The term of each Option shall be stated in the Option
Agreement. In the case of an Incentive Stock Option, the term shall be ten
(10) years from the date of grant or such shorter term as may be provided in
the Option Agreement. Moreover, in the case of an Incentive Stock Option
granted to an Optionee who, at the time the Incentive Stock Option is granted,
owns Stock representing more than ten percent (10%) of the voting power of all
classes of stock of the Corporation or any Parent or Subsidiary, the term of
the Incentive Stock Option shall be five (5) years from the date of grant or
such shorter term as may be provided in the Option Agreement.
9. OPTION EXERCISE PRICE AND CONSIDERATION:
(a) EXERCISE PRICE: The per share exercise price for the Shares to
be issued pursuant to exercise of an Option shall be determined by the
Administrator, subject to the following:
(i) In the case of an Incentive Stock Option
(A) granted to an Employee who, at the time the
Incentive Stock Option is granted, owns stock representing more than ten
percent (10%) of the voting power of all classes of stock of the Corporation
or any Parent or Subsidiary, the per Share exercise price shall be no less
than 110% of the Fair Market Value per Share on the date of grant.
(B) granted to any Employee other than an Employee
described in paragraph (A) immediately above, the per Share exercise price
shall be no less than 100% of the fair Market Value per Share on the date of
grant.
(ii) In the case of Nonstatutory Stock Option, the per Share
exercise price shall be determined by the Administrator, but shall be no less
than 100% of the Fair Market Value per Share on the date of grant.
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(b) WAITING PERIOD AND EXERCISE DATES: At the time an Option is
granted, the Administrator shall fix the period within which the Option may be
exercised and shall determine any conditions which must be satisfied before
the Option may be exercised.
(c) FORM OF CONSIDERATION: The Administrator shall determine the
acceptable form of consideration for exercising an Option, including the
method of payment. In the case of an Incentive Stock Option, the Administrator
shall determine the acceptable form of consideration at the time of grant.
Such consideration may consist entirely of:
(i) cash;
(ii) check;
(iii) previously acquired Shares having an aggregate fair
market value on the date of exercise (determined in accordance with Section
2(m) equal to the aggregate exercise price of all options being exercised;
(iv) in the case of nonstatutory stock option, other Shares
which (A) in the case of Shares acquired upon exercise of an option, have been
owned by the Optionee for more than six months on the date of surrender, and
(B) have a Fair Market Value on the date of surrender equal to the aggregate
exercise price of the Shares as to which said Option shall be exercised;
(v) Shares as to which this Option is then being exercised,
in which case the Corporation is to retain so many shares that would otherwise
have been delivered by the Corporation upon that exercise of this Option as
equals the number of shares that would have been surrendered to the
Corporation if the purchase price had been paid with previously issued stock
which use shall not be construed as a forfeiture of such options; or
(vi) any combination of the foregoing methods of payment; or
(vii) such other consideration and method of payment for the
issuance of Shares to the extent permitted by Applicable Laws.
10. TANDEN STOCK APPRECIATION RIGHTS: The Board shall concurrently with
the grant of an Option, grant the Optionee TSAR on the same number of shares
for which options were granted. A TSAR shall be a right of the Optionee to
receive from the Corporation an amount, which shall be the Spread at the time
of the exercise of an Appreciation Right. Any grant of TSAR under this Plan
shall be upon such terms and conditions as the Board may determine in
accordance with the following provisions:
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(a) Any grant shall specify that the amount payable upon the
exercise of a TSAR shall be paid by the Company in cash.
(b) Any grant may specify that the amount payable upon the
exercise of a TSAR shall not exceed a maximum specified by the Board on the
Date of Grant.
(c) Each grant shall specify that the criteria that must be
satisfied before the TSAR or installments thereof shall become exercisable and
shall be the same on the Options.
(d) Each grant shall be evidenced by an agreement, which shall be
executed on behalf of the Corporation by any designated officer thereof and
delivered to and accepted by the Optionee and shall describe the subject TSAR,
state that the TSAR are subject to all of the terms and conditions of this
Plan and contain such other terms and provisions as the Board may determine
consistent with this Plan.
(e) Each grant shall provide that a TSARS be exercised only (i) at
a time when the related Option (or any similar right granted under any other
plan of the Company) is also exercisable and the Spread is positive and if the
underlying Option is not exercised, such Option shall be forfeited.
11. EXERCISE OF OPTION:
(a) PROCEDURE FOR EXERCISE: Rights as a Shareholder. Any Option or
TSAR granted hereunder shall be exercisable according to the terms of the Plan
and at such times and under such conditions as determined by the Administrator
and set forth in the Option Agreement. Unless the Administrator provides
otherwise, vesting of Options granted hereunder shall be tolled during any
unpaid leave of absence. An Option may not be exercised for a fraction of a
Share.
An Option shall be deemed exercised when the Corporation has
received: (i) written or electronic notice of exercise (in accordance with the
Option Agreement) from the person entitled to exercise the Option, and (ii)
full payment for the Shares with respect to which the Option is exercised.
Full payment may consist of any consideration and method of payment authorized
by the Administrator and permitted by the Option Agreement and the Plan.
Shares issued upon exercise of an Option shall be issued in the name of the
Optionee or, if requested by the Optionee, in the name of the Optionee and his
or her spouse or a family trust. Until the Shares are issued (as evidenced by
the appropriate entry on the books of the Corporation or of a duly authorized
transfer agent of the Corporation), no right to vote or receive dividends or
any other rights as a shareholder shall exist with respect to the Optioned
Stock, notwithstanding the exercise of the Option. The Corporation shall issue
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(or cause to be issued) such Shares promptly after the Option is exercised. No
adjustment will be made for a dividend or other right for which the record
date is prior to the date the Shares are issued, except as provided in Section
12 of the Plan.
Exercising an Option in any manner shall decrease the number of
Shares thereafter available, both for purposes of the Plan and for exercise
under the Option, meaning by the number of Shares as to which the Option is
exercised.
A TSAR shall be deemed exercised when the Corporation has received
written or electronic notice of exercise in accordance with the Option
Agreement. The Corporation shall pay to the Optionee exercising TSAR the
Spread thereon, less amount required by law to be withheld promptly after the
TSAR are exercised.
(b) TERMINATION OF RELATIONSHIP AS A SERVICE PROVIDER: If an
Optionee ceases to be a Service Provider, other than upon the Optionee's
death, the Optionee may exercise his or her Option or TSAR within such period
of time as is specified in the Option Agreement to the extent that the Option
or TSAR is vested on the date of termination (but in no event later than the
expiration of the term of such Option as set forth in the Option Agreement).
In the absence of a specified time in the Option Agreement, the Option shall
remain exercisable for ninety (90) days following the Optionee's termination.
If, on the date of termination, the Optionee is not vested as to his or her
entire Option, the Shares covered by the unvested portion of the Option shall
revert to the Plan. If, after termination, the Optionee does not exercise his
or her Option within the time specified by the Administrator, the Option shall
terminate, and the Shares covered by such Option shall revert to the Plan.
(c) DEATH OF OPTIONEE: If an Optionee dies while a Service
Provider or within ninety (90) days of ceasing to be a Service Provider, the
Option may be exercised within six (6) months after the death of Optionee, by
the Optionee's estate or by a person who acquired the right to exercise the
Option by bequest or inheritance, but only to the extent that the Option is
vested on the date Optionee ceased to be a Service Provider. If, at the time
Optionee ceased to be a Service Provider, the optionee is not vested as to his
or her entire Option, the Shares covered by the unvested portion of the Option
shall immediately revert to the Plan. The Option may be exercised by the
executor or administrator of the Optionee's estate. If the Option is not so
exercised within the time specified herein, the Option shall terminate, and
the Shares covered by such Option shall revert to the Plan.
(d) BUYOUT PROVISIONS: The Administrator may at any time offer to
buy out for a payment in cash or Shares, an Option previously granted based on
such terms and conditions as the Administrator shall establish and communicate
to the Optionee at the time that such offer is made.
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11. NON-TRANSFERABILITY OF OPTIONS: Unless determined otherwise by the
Administrator, an Option may not be sold, pledged, assigned, hypothecated,
transferred, or disposed or in any manner other than by will or by the laws of
descent or distribution and may be exercised, during the lifetime of the
Optionee, only by the Optionee. If the Administrator makes an Option
transferable, such Option shall contain such additional terms and conditions
as the Administrator deems appropriate.
12. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION, DISSOLUTION, MERGER OR
ASSET SALE:
(a) CHANGES IN CAPITALIZATION: Subject to any required action by
the shareholders of the Corporation, the number of shares of Common Stock
covered by each outstanding Option and the attendant TSAR and the number of
shares of Common Stock which have been authorized for issuance under the Plan
but as to which no Options have yet been granted or which have been returned
to the Plan upon cancellation or expiration of an Option, as well as the price
per share of Common Stock covered by each such outstanding Option, shall be
proportionately adjusted for any increase or decrease in the number of issued
shares of Common Stock resulting from a stock split, reverse stock split,
stock dividend, combination or reclassification of the Common Stock, or any
other increase or decrease in the number of issued shares of Common Stock
effected without receipt of consideration by the Corporation; provided,
however, that conversion of any convertible securities of the Corporation
shall not be deemed to have been "effected without receipt of consideration".
Such adjustment shall be made by the Board, whose determination in that
respect shall be final, binding and conclusive. Except as expressly provided
herein, no issuance by the Corporation of Shares of any class, or securities
convertible into shares of stock of any class, shall affect, and no adjustment
by reason thereof shall be made with respect to, the number or price of shares
of Common Stock subject to an Option.
(b) DISSOLUTION OR LIQUIDATION: In the event of the proposed
dissolution or liquidation of the Corporation, the Administrator shall notify
each Optionee as soon as practicable prior to the effective date of such
proposed transaction. The Administrator in its discretion may provide for an
Optionee to have the right to exercise his or her Option or TSAR until ten
(10) days prior to such transaction as to all of the Optioned Stock covered
thereby, including Shares as to which the Option would not otherwise be
exercisable. To the extent it has not been previously exercised, an Option
will terminate immediately prior to the consummation of such proposed action.
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(c) MERGER OR ASSET SALE: In the event of a merger of the
Corporation with or into another corporation, or the sale of substantially all
of the assets of the Corporation, each outstanding Option and TSAR shall be
assumed or an equivalent option or right substituted by the successor
corporation or a Parent or Subsidiary of the successor corporation. In the
event that the successor corporation refuses to assume or substitute for the
Option and TSAR the Optionee shall fully vest in and have the right to
exercise the Option as to all of the Optioned Stock and TSAR, including Shares
as to which it would not otherwise be vested or exercisable. If an Option and
TSAR becomes fully vested and exercisable in lieu of assumption or
substitution in the event of a merger or sale of assets, the Administrator
shall notify the Optionee in writing or electronically that the Option and
TSAR shall be fully vested and exercisable for a period of fifteen (15) days
from the date of such notice, and the Option and TSAR shall terminate upon the
expiration of such period. For the purposes of this paragraph, the Option
shall be considered assumed if, following the merger or sale of assets, the
option or right confers the right to purchase or receive, for each Share of
Optioned Stock subject to the Option immediately prior to the merger or sale
of assets, the consideration (whether stock, cash, or other securities or
property) received in the merger or sale of assets by holders of Common Stock
for each Share held on the effective date of the transaction (and if holders
were offered a choice of consideration, the type of consideration chosen by
the holders of a majority of the outstanding Shares); provided, however, that
if such consideration received in the merger or sale of assets is not solely
common stock of the successor corporation or its Parent, the Administrator
may, with the consent of the successor corporation, provide for the
consideration to be received upon the exercise of the Option, for each Share
of Optioned Stock subject to the Option, to be solely common stock of the
successor corporation or its Parent equal in fair market value to the per
share consideration received by holders of Common Stock in the merger or sale
of assets.
13. DATE OF GRANT: The date of grant of an Option shall be, for all
purposes, the date of which the Administrator makes the determination granting
such Option, or such other later date as is determined by the Administrator.
Notice of the determination shall be provided to each Optionee within a
reasonable time after the date of such grant.
14. AMENDMENT AND TERMINATION OF THE PLAN:
(a) AMENDMENT AND TERMINATION: The Board may at any time amend,
alter, suspend or terminate the Plan.
(b) SHAREHOLDER APPROVAL: The Corporation shall obtain shareholder
approval of any Plan amendment to the extent necessary and desirable to comply
with Applicable Laws.
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(c) EFFECT OF AMENDMENT OR TERMINATION: No amendment, alteration,
suspension or termination of the Plan shall impair the rights of any Optionee,
unless mutually agreed otherwise between the Optionee and the Administrator,
which agreement must be in writing and signed by the Optionee and the
Corporation. Termination of the Plan shall not affect the Administrator's
ability to exercise the powers granted to it hereunder with respect to options
granted under the Plan prior to the date of such termination.
15. CONDITIONS UPON ISSUANCE OF SHARES:
(a) LEGAL COMPLIANCE: Shares shall not be issued pursuant to the
exercise of an Option unless the exercise of such Option and the issuance and
delivery of such Shares shall comply with Applicable Laws and shall be further
subject to the approval of counsel for the Corporation with respect to such
compliance.
(b) INVESTMENT REPRESENTATIONS: As a condition to the exercise of
an Option, the Corporation may require the person exercising such Option to
represent and warrant at the time of any such exercise that the Shares are
being purchased only for investment and without any present intention to sell
or distribute such Shares if, in the opinion of counsel for the Corporation,
such a representation is required.
16. INABILITY TO OBTAIN AUTHORITY: The inability of the Corporation to
obtain authority from any regulatory body having jurisdiction, which authority
is deemed by the Corporation's counsel to be necessary to the lawful issuance
and sale of any shares hereunder, shall relieve the Corporation of any
liability in respect of the failure to issue or sell such Shares as to which
such requisite authority shall not have been obtained.
17. RESERVATION OF SHARES: The Corporation, during the term of this
Plan, will at all times reserve and keep available such number of Shares as
shall be sufficient to satisfy the requirements of the Plan.
18. SHAREHOLDER APPROVAL: This Plan shall be subject to approval by the
shareholders of the Corporation within twelve (12) months after the date of
the adoption of this Amendment. Such shareholder approval shall be obtained in
the manner and to the degree required under Applicable Laws.
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