As filed with the Securities and Exchange Commission on June 16, 1998
Registration No. 333-_______
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 2O549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
DOUGHTIE'S FOODS, INC.
(Exact name of registrant as specified in its charter)
VIRGINIA 54-0903892
(State of incorporation) (IRS Employer Identification No.)
2410 WESLEY STREET
PORTSMOUTH, VIRGINIA 23707
(Address of Principal Executive Offices) (Zip Code)
DOUGHTIE'S FOODS, INC.
1998 STOCK INCENTIVE PLAN
(Full title of the plan)
MICHAEL S. LAROCK
SECRETARY
DOUGHTIE'S FOODS, INC.
2410 WESLEY STREET
PORTSMOUTH, VIRGINIA 23707
(757) 399-2451
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
-----------------------------
<PAGE>
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
===========================================================================================================
TITLE OF PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
SECURITIES TO AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING REGISTRATION
BE REGISTERED REGISTERED (1) SHARE (2) PRICE FEE
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $1.00 par 112,500 $7.375 $829,687.50 $244.76
value
</TABLE>
(1) This Registration Statement also covers such indeterminable number of
additional shares that may hereafter become issuable to prevent dilution
in the event of a stock split, stock dividend, reclassification or other
similar transaction, pursuant to the adjustment provisions of the
Doughtie's Foods, Inc. 1998 Stock Incentive Plan (the "Plan").
(2) Determined in accordance with Rules 457 (c) and (h), the registration fee
is based on the average of the high and low prices of the Registrant's
Common Stock reported on the Nasdaq SmallCap Market on June 10, 1998.
PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
(a) The documents constituting Part I of this
Registration Statement will be sent or given to participants in the Plan as
specified by Rule 428(b)(1) under the Securities Act of 1933, as amended.
(b) Upon written or oral request, the Company will
provide, without charge, the documents incorporated by reference in Item 3 of
Part II of this Registration Statement. The documents are incorporated by
reference in the Section 10(a) prospectus. The Company will also provide,
without charge, upon written or oral request, other documents required to be
delivered to employees pursuant to Rule 428(b). Requests for the above mentioned
information, should be directed to Michael S. LaRock, Corporate Secretary, at
(757) 399-2451.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed by Doughtie's Foods, Inc. (the "Company")
with the Securities and Exchange Commission (the "Commission")pursuant to the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), are
incorporated by reference into this Registration Statement:
(a) The Company's Annual Report on Form 10-K (File No.
0-07166)for the fiscal year ended December 27, 1997.
(b) All other reports filed pursuant to Section 13(a) or
15(d) of the Exchange Act since the end of the fiscal year covered by the
document incorporated pursuant to (a) above, including the Company's Quarterly
Report on Form 10-Q for the quarter ended March 28, 1998.
(c) The description of the Company's Common Stock, $1.00
par value per share, which is contained in the Company's Registration Statement
filed under Section 12 of the Exchange Act, including any amendment or
report filed for the purpose of updating such description.
All documents subsequently filed by the Company pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act prior to the filing of a
post-effective amendment to this Registration Statement which indicates that all
securities offered hereby have been sold or which deregisters all such
securities then remaining unsold, shall be deemed to be incorporated by
reference herein and to be a part hereof from the date of the filing of such
documents.
ITEM 4. DESCRIPTION OF SECURITIES. Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
William R. Waddell, a director of the Company, is a partner in the law
firm of McGuire, Woods, Battle & Boothe, LLP, which is the Company's outside
general corporate counsel and which provided the opinion contained in Exhibit 5
of this Registration Statement.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Virginia Stock Corporation Act authorizes the Company to indemnify
its officers, directors, employees or agents against certain liabilities.
In addition to the availability of any statutory rights, the Company's Bylaws
provide that directors and officers of the Company will be indemnified from
the reasonable expenses, including attorney's fee, incurred by such officer
or director in connection with being made a party to any action, suit or
proceeding by reason of his or her being a director or officer of the
Company, except to the extent that there is an adjudication that such director
or officer is liable for negligence or misconduct in the performance of his
or her duties.
The Company has purchased directors' and officers' liability insurance
covering many of the possible actions and omissions of persons acting or failing
to act in such capacities.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED. Not applicable.
ITEM 8. EXHIBITS.*
4(a) Registrant's Articles of Incorporation (incorporated by
reference from Exhibit 3(a) to the Company's Annual Report
on Form 10-K for the year ended December 29, 1984).
<PAGE>
4(b) Registrant's Bylaws (incorporated by reference from Exhibit 3(b)
to the Company's Annual Report on Form 10-K for the year ended
December 30, 1995).
5 Opinion and Consent of McGuire, Woods, Battle & Boothe, LLP.
23(a) Consent of Counsel (included in Exhibit 5).
23(b) Consent of Price Waterhouse LLP.
24 Power of Attorney (included on signature pages to this
Registration Statement.
99 Doughtie's Foods, Inc. 1998 Stock Incentive Plan, filed
herewith.
- ---------------
* Exhibits are numbered in accordance with Item 601 of Regulation S-K.
ITEM 9. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(a) (1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by section
10(a)(3) of the Securities Act of 1933 (the "Securities Act");
(ii) To reflect in the prospectus any facts or events
arising after the effective date of this Registration Statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in this
Registration Statement; and
(iii) To include any material information with respect
to the plan of distribution not previously disclosed in this Registration
Statement or any material change in such information in this Registration
Statement;
provided, however, that paragraphs (a)(l)(i) and (a)(l)(ii) above do not
apply if the registration statement is on Form S-3 or Form S-8, and the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Registrant pursuant to
Section 13 or Section 15(d) of the Exchange Act that are incorporated by
reference in the registration statement.
(2) That, for the purpose of determining any liability under
the Securities Act, each such post-effective amendment and each filing of
Registrant's annual report pursuant to Section 13(a) or 15(d) of the Exchange
Act shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) That, for purposes of determining any liability under the
Securities Act, each filing of the Registrant's annual report pursuant to
Section 13(a) or Section 15(d) of the Exchange Act (and, where applicable, each
filing of an employee benefit plan's annual report pursuant to Section 15(d) of
the Exchange Act) that is incorporated by reference in this Registration
Statement shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
<PAGE>
(c) That, insofar as indemnification for liabilities arising under
the Securities Act may be permitted to directors, officers, and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a director, officer, or
controlling person of the Registrant in the successful defense of any action,
suit, or proceeding) is asserted by such director, officer, or controlling
person in connection with the securities being registered, the Registrant will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
<PAGE>
SIGNATURES
The Registrant. Pursuant to the requirements of the Securities Act of
1933, the Registrant, Doughtie's Foods, Inc., certifies that it has reasonable
grounds to believe that it meets all of the requirements for filing on Form S-8
and has duly caused this Registration Statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Portsmouth,
Commonwealth of Virginia, on June 15, 1998.
DOUGHTIE'S FOODS, INC.
Registrant
By: /s/ Steven C. Houfek
--------------------------------
Steven C. Houfek
President and Chief Executive Officer
<PAGE>
POWER OF ATTORNEY
Each person whose signature appears below hereby appoints Steven C.
Houfek and Marion S. Whitfield, Jr. and each of them severally, acting alone and
without the other, his/her true and lawful attorney-in-fact with the authority
to execute in the name of each such person, and to file with the Securities and
Exchange Commission, together with any exhibits thereto and other documents
therewith, any and all amendments (including without limitation post-effective
amendments) to this Registration Statement on Form S-8 necessary or advisable to
enable the Registrant to comply with the Securities Act of 1933, as amended, and
any rules, regulations, and requirements of the Securities and Exchange
Commission in respect thereof, which amendments may make such other changes in
the Registration Statement as the aforesaid attorney-in-fact executing the same
deems appropriate.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities on June 15, 1998.
SIGNATURE TITLE
/s/ Vernon W. Mules Chairman of the Board of
----------------------------------- Directors
Vernon W. Mules
/s/ Steven C. Houfek President, Chief Executive
----------------------------------- Officer and Director
Steven C. Houfek
/s/ Marion S. Whitfield, Jr. Senior Vice President and
----------------------------------- Director (Principal Financial
Marion S. Whitfield, Jr. and Accounting Officer)
/s/ Adolphus W. Hawkins, Jr. Director
-----------------------------------
Adolphus W. Hawkins, Jr.
/s/ Donald B. Ratcliffe Director
-----------------------------------
Donald B. Ratcliffe
/s/ James F. Cerza, Jr. Director
-----------------------------------
James F. Cerza, Jr.
/s/ William R. Waddell Director
-----------------------------------
William R. Waddell
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NUMBER* DESCRIPTION
- --------------- -----------
<S> <C>
4(a) Registrant's Articles of Incorporation (incorporated by
reference from Exhibit 3(a) to the Company's Annual Report
on Form 10-K for the year ended December 29, 1984).
4(b) Registrant's Bylaws (incorporated by reference from Exhibit
3(b) to the Company's Annual Report on Form 10-K for the
year ended December 30, 1995).
5 Opinion and Consent of McGuire, Woods, Battle & Boothe, LLP.
23(a) Consent of McGuire, Woods, Battle & Boothe, LLP (included in
Exhibit 5).
23(b) Consent of Price Waterhouse LLP.
24 Power of Attorney (included on signature pages to this
Registration Statement).
99 Doughtie's Foods, Inc. 1998 Stock Incentive Plan, filed
herewith.
</TABLE>
- --------------
*Exhibits are numbered in accordance with Item 601 of Regulation S-K.
EXHIBIT 5
McGuire, Woods, Battle & Boothe, LLP
World Trade Center
Suite 9000
101 West Main Street
Norfolk, Virginia 23510-1655
June 12, 1998
Doughtie's Foods, Inc.
2410 Wesley Street
Portsmouth, Virginia 23707
Doughtie's Foods, Inc. (the "Company")
Ladies and Gentlemen:
You propose to file as soon as possible with the Securities and
Exchange Commission a registration statement on Form S-8 (the "Registration
Statement") relating to the 1998 Doughtie's Foods, Inc. Stock Incentive Plan
(the "Plan"). The Registration Statement covers 112,500 shares of the Company's
Common Stock, par value $1.00, which have been reserved for issuance under the
Plan.
In rendering this opinion, we have examined such certificates of public
officials, certificates of officers of the Company, documents and records of the
Company (or copies of such documents and records certified to our satisfaction)
and such other documents, certificates, records and papers as we have deemed
necessary as a basis for such opinion.
Based on the foregoing and on such legal considerations as we deem
relevant, we are of the opinion that the 112,500 shares of the Company's Common
Stock which are authorized for sale under the Plan, when issued and sold in
accordance with the terms and provisions of the Plan, will be duly authorized,
legally issued, fully paid and nonassessable.
We hereby consent to the filing of this opinion as Exhibit 5 to the
Registration Statement and further consent to the use of our name wherever
appearing in the Registration Statement.
Sincerely,
/s/ MCGUIRE, WOODS, BATTLE & BOOTHE, LLP
EXHIBIT 23(b)
Consent of Price Waterhouse LLP
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated February 12, 1998 appearing on page 16
of Doughtie's Foods, Inc. Annual Report on Form 10-K for the year ended December
27, 1997.
/s/ Price Waterhouse LLP
Price Waterhouse LLP
Norfolk, Virginia
June 10, 1998
EXHIBIT 99
DOUGHTIE'S FOODS, INC.
1998 STOCK INCENTIVE PLAN
As Adopted Effective
January 1, 1998
1. Purpose. The purpose of this Doughtie's Foods, Inc. 1998 Stock
Incentive Plan is to further the long term stability and financial success of
Doughtie's Foods, Inc. by attracting and retaining key employees through the use
of cash and stock incentives. It is believed that ownership of Company Stock and
the use of cash incentives will stimulate the efforts of those employees upon
whose judgment and interests the Company is and will be largely dependent for
the successful conduct of its business. It is also believed that Incentive
Awards granted to such employees under this Plan will strengthen their desire to
remain employed with the Company and will further the identification of those
employees' interests with those of the Doughtie's Foods, Inc. shareholders. The
Plan is intended to operate in compliance with the provisions of Securities and
Exchange Commission Rule 16b- 3.
2. Definitions. As used in the Plan, the following terms have the
meanings indicated:
(a) "Act" means the Securities Exchange Act of 1934, as
amended.
(b) "Affiliate" means another corporation in which the Company
owns stock possessing at least 50 percent of the combined voting power of all
classes of stock.
(c) "Annual Meeting" means the annual meeting of shareholders
at which a class of members of the Board are routinely elected.
(d) "Applicable Withholding Taxes" means the aggregate amount
of federal, state and local income and payroll taxes that an Employer is
required to withhold in connection with any Performance Award, any lapse of
restrictions on Restricted Stock, any grant of Performance Stock, or any
exercise of a Nonstatutory Stock Option.
(e) "Board" means the Board of Directors of Doughtie's Foods,
Inc.
(f) "Change of Control" means the occurrence of any of the
following events:
(i) any person, including a "group" as defined in
Section 13(d)(3) of the Act becomes the owner or beneficial owner of
Company securities having 30% or more of the combined voting power of
the then outstanding Company securities that may be cast for the
election of the Company's directors (other than as a result of an
issuance of securities initiated by the Company, or open market
purchases approved by the Board, as long as the majority of the Board
approving the purchases is also the majority at the time the purchases
are made);
(ii) as the direct or indirect result of, or in
connection with, a cash tender or exchange offer, a merger or other
business combination, a sale of assets, a contested election, or any
combination of these transactions, the persons who were directors of
<PAGE>
the Company before such transactions cease to constitute a majority of
the Board, or any successor's board, within two years of the last of
such transactions; or
(iii) with respect to a particular Participant, an
event occurs with respect to the Employer that employs that Participant
such that, after the event, the Employer is no longer an Affiliate.
(g) "Code" means the Internal Revenue Code of 1986, as
amended.
(h) "Committee" means the Compensation Committee of the Board,
provided that, if any member of the Compensation Committee does not qualify as
both an outside director for purposes of Code section 162(m) and a non-employee
director for purposes of Rule 16b-3, the remaining members of the committee (but
not be less than two members) shall be constituted as a subcommittee of the
Compensation Committee to act as the Committee for purposes of the Plan.
(i) "Company" means Doughtie's Foods, Inc.
(j) "Company Stock" means common stock of the Company. In the
event of a change in the capital structure of the Company (as provided in
Section 13), the shares resulting from such a change shall be deemed to be
Company Stock within the meaning of the Plan.
(k) "Date of Grant" means the date on which an Incentive Award
is granted by the Committee or is automatically awarded under Section 8.
(l) "Director Option" means an Option granted to an Eligible
Director pursuant to Section 8.
(m) "Disability" or "Disabled" means, as to an Incentive Stock
Option, a Disability within the meaning of Code section 22(e)(3). As to all
other Incentive Awards, the Committee shall determine whether a Disability
exists and such determination shall be conclusive.
(n) "Eligible Director" means a Participant who is a member of
the Board who is not an employee of the Company or any Subsidiary.
(o) "Employer" means the Company, and each Affiliate that
employs one or more Participants.
(p) "Fair Market Value" means:
(i) If the Company 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 Committee deems reliable, or
(ii) If (i) does not apply, the Fair Market Value
shall be determined by the Committee using any reasonable method in
good faith.
(q) "Incentive Award" means, collectively, an award of
Restricted Stock or an Option under the Plan.
(r) "Incentive Stock Option" means an Option intended to meet
the requirements of, and qualify for favorable federal income tax treatment
under, Code section 422.
(s) "Mature Shares" means shares of Company Stock for which
the holder thereof has good title, free and clear of all liens and encumbrances
and which such holder either (i) has held for at least six months or (ii) has
purchased on the open market.
<PAGE>
(t) "Nonstatutory Stock Option" means an Option that does not
meet the requirements of Code section 422, or, even if meeting the requirements
of Code section 422, is not intended to be an Incentive Stock Option and is so
designated.
(u) "Option" means a right to purchase Company Stock granted
under the Plan, at a price determined in accordance with the Plan.
(v) "Participant" means any employee of the Company or an
Affiliate or an Eligible Director who receives an Incentive Award under the
Plan.
(w) "Restricted Stock" means Company Stock awarded upon the
terms and subject to the restrictions set forth in Section 6.
(x) "Rule 16b-3" means Rule 16b-3 of the Securities and
Exchange Commission promulgated under the Act. A reference in the Plan to Rule
16b-3 shall include a reference to any corresponding rule (or number
redesignation) of any amendments to Rule 16b-3 enacted after the effective date
of the Plan's adoption.
(y) "Taxable Year" means the fiscal period used by the Company
for reporting taxes on income under the Code.
3. General. The following types of Incentive Awards may be granted
under the Plan: Restricted Stock or Options. Options granted under the Plan may
be Incentive Stock Options or Nonstatutory Stock Options.
4. Stock. Subject to Section 13 of the Plan, there shall be reserved
for issuance under the Plan an aggregate of seventy-five thousand (75,000)
shares of Company Stock, which shall be authorized, but unissued shares. Shares
allocable to Options or portions thereof granted under the Plan that expire or
otherwise terminate unexercised may again be subjected to an Incentive Award
under the Plan. No more than twenty thousand (20,000) shares may be allocated to
the Incentive Awards that are granted to any Participant during any single
Taxable Year.
5. Eligibility.
(a) All present and future employees of the Company or an
Affiliate (whether now existing or hereafter created or acquired) whom the
Committee determines to have contributed or who can be expected to contribute
significantly to the Company or an Affiliate shall be eligible to receive
Incentive Awards under the Plan. The Committee shall have the power and complete
discretion, as provided in Section 14, to select eligible employees to receive
Incentive Awards and to determine for each employee the nature of the award and
the terms and conditions of each Incentive Award. The eligibility of Eligible
Directors is determined under Section 8.
(b) The grant of an Incentive Award shall not obligate an
Employer to pay an employee any particular amount of remuneration, to continue
the employment of the employee after the grant or to make further grants to the
employee at any time thereafter.
6. Restricted Stock Awards.
(a) The Committee may make grants of Restricted Stock to
Participants. Whenever the Committee deems it appropriate to grant Restricted
Stock, notice shall be given to the Participant stating the number of shares of
Restricted Stock granted and the terms and conditions to which the Restricted
Stock is subject. This notice, when accepted in writing by the Participant shall
become an award agreement between the Employer and the Participant and
certificates representing the shares shall be issued and delivered to the
Participant. Restricted Stock may be awarded by the Committee in its discretion
without cash consideration.
<PAGE>
(b) No shares of Restricted Stock may be sold, assigned,
transferred, pledged, hypothecated, or otherwise encumbered or disposed of until
the restrictions on such shares as set forth in the Participant's award
agreement have lapsed or been removed pursuant to paragraph (d) or (e) below.
(c) Upon the acceptance by a Participant of an award of
Restricted Stock, such Participant shall, subject to the restrictions set forth
in paragraph (b) above, have all the rights of a shareholder with respect to
such shares of Restricted Stock, including, but not limited to, the right to
vote such shares of Restricted Stock and the right to receive all dividends and
other distributions paid thereon. Certificates representing Restricted Stock
shall bear a legend referring to the restrictions set forth in the Plan and the
Participant's award agreement.
(d) The Committee shall establish as to each award of
Restricted Stock the terms and conditions upon which the restrictions set forth
in paragraph (b) above shall lapse. Such terms and conditions may also include,
without limitation, the lapsing of such restrictions as a result of the
Disability, death or retirement of the Participant or the occurrence of a Change
of Control.
(e) Notwithstanding the provisions of paragraph (b) above, the
Committee may at any time, in its sole discretion, accelerate the time at which
any or all restrictions will lapse or remove any and all such restrictions.
(f) Each Participant shall agree at the time his or her
Restricted Stock is granted, and as a condition thereof, to pay to the Employer,
or make arrangements satisfactory to the Employer regarding the payment to the
Employer of, Applicable Withholding Taxes. Until such amount has been paid or
arrangements satisfactory to the Employer have been made, no stock certificate
free of a legend reflecting the restrictions set forth in paragraph (b) above
shall be issued to such Participant. As an alternative to making a cash payment
to the Employer to satisfy Applicable Withholding Taxes, if the grant so
provides, the Participant may elect to (i) deliver Mature Shares or (ii) have
the Employer retain that number of shares of Company Stock that would satisfy
all or a specified portion of the Applicable Withholding Taxes.
7. Stock Options.
(a) The Committee may make grants of Options to Participants.
Whenever the Committee deems it appropriate to grant Options, notice shall be
given to the Participant stating the number of shares for which Options are
granted, the Option price per share, whether the Options are Incentive Stock
Options or Nonstatutory Stock Options, and the conditions to which the grant and
exercise of the Options are subject. This notice, when duly accepted in writing
by the Participant, shall become a stock option agreement.
(b) The exercise price of shares of Company Stock covered by
an Option shall be not less than 100% of the Fair Market Value of such shares on
the Date of Grant.
(c) Options may be exercised in whole or in part at such times
as may be specified by the Committee in the Participant's stock option
agreement; provided that, the exercise provisions for Incentive Stock Options
shall in all events not be more liberal than the following provisions:
(i) No Incentive Stock Option may be exercised after
the first to occur of (x) ten years from the Date of Grant,
(y) three months following the date of the Participant's
retirement or termination of employment with all Employers for
reasons other than Disability, or (z) one year following the
date of the Participant's termination of employment on account
of Disability.
(ii) An Incentive Stock Option by its terms, shall be
exercisable in any calendar year only to the extent that the
aggregate Fair Market Value (determined at the Date of Grant)
<PAGE>
of the Company Stock with respect to which Incentive Stock
Options are exercisable for the first time during the calendar
year does not exceed $100,000 (the "Limitation Amount").
Incentive Stock Options granted under the Plan and all other
plans of any Employer shall be aggregated for purposes of
determining whether the Limitation Amount has been exceeded.
The Committee granting the Option may impose such conditions
as it deems appropriate on an Incentive Stock Option to ensure
that the foregoing requirement is met. If Incentive Stock
Options that first become exercisable in a calendar year
exceed the Limitation Amount, the excess Options will be
treated as Nonstatutory Stock Options to the extent permitted
by law.
(d) The Committee may, in its discretion, grant Options that
by their terms become fully exercisable upon a Change of Control,
notwithstanding other conditions on exercisability in the stock option
agreement.
8. Options For Eligible Directors.
(a) Each Eligible Director who was not an employee of the
Company or Subsidiary for at least one year before the Date of Grant of a
Director Option under the Plan shall be eligible to receive Director Options
under Section 8. All Director Options granted under Section 8 shall be
Nonstatutory Stock Options. Each Director Option shall be evidenced by a written
agreement in such form as the Board shall from time to time approve, which
agreement shall comply with and be subject to the terms and conditions under
Section 8. Except to the extent inconsistent with Section 8, all provisions of
the Plan relating to Options shall apply to Director Options. An Eligible
Director may not receive any Incentive Award under the Plan except as provided
in Section 8.
(b) At each Annual Meeting beginning with the Annual Meeting
at which this Plan is approved by shareholders, each Eligible Director (other
than a director not reelected) shall automatically receive a Director Option to
purchase a number of shares of Company Stock equal to $3,000 divided by the Fair
Market Value of the Company Stock as of the day before the Annual Meeting. If at
any time under the Plan there are not sufficient shares available to permit
fully the automatic Director Option grants described in this paragraph, the
Director Option grants shall be reduced pro rata (to zero if necessary) so as
not to exceed the number of shares available.
(c) The exercise price of a Director Option shall be the Fair
Market Value of the Company Stock on the Date of Grant.
(d) Subject to Section 8(e) below, all Options shall become
exercisable as follows: one-third on the day before the first annual meeting of
shareholders after the Date of Grant; one-third on the day before the second
annual meeting after the Date of Grant; and the remainder on the day before the
third annual meeting of shareholders after the Date of Grant; provided that the
Eligible Director is a director of the Company on each such day. If the Eligible
Director ceases to be a director of the Company before an Option is fully
exercisable, the unexercisable portion of the Option shall be forfeited
immediately. Once exercisable, all or any portion of an Option may be exercised
until the earlier of:
(i) thirty-six months after the date the Eligible
Director ceases to be a director of the Company for any reason,
including death or disability; or
(ii) the expiration of ten (10) years from the Date
of Grant.
(e) Director Options shall become fully exercisable upon a
Change of Control.
<PAGE>
(f) In the case of the purchase of shares under a Director
Option, the Eligible Director may pay the exercise price at his or her election:
(i) in cash, (ii) by delivery of Mature Shares (valued at their Fair Market
Value on the date of exercise) in satisfaction of all or any part of the
exercise price, or (iii) by delivery of a properly executed exercise notice
together with irrevocable instructions to a broker to deliver promptly to the
Employer, from the sale or loan proceeds with respect to the sale of Company
Stock or a loan secured by Company Stock, the amount necessary to pay the
exercise price.
9. Method of Exercise of Options. (a) Options may be exercised by the
Participant giving written notice of the exercise to the Employer, stating the
number of shares the Participant has elected to purchase under the Option. In
the case of the purchase of shares under an Option, such notice shall be
effective only if accompanied by the exercise price in full in cash; provided,
however, that if the terms of an Option so permit, the Participant may (i)
deliver Mature Shares (valued at their Fair Market Value on the date of
exercise) in satisfaction of all or any part of the exercise price, (ii) cause
to be withheld from the Option shares, shares of Company Stock (valued at their
Fair Market Value on the date of exercise) in satisfaction of all or any part of
the exercise price, (iii) deliver a properly executed exercise notice together
with irrevocable instructions to a broker to deliver promptly to the Employer,
from the sale or loan proceeds with respect to the sale of Company Stock or a
loan secured by Company Stock, the amount necessary to pay the exercise price
and, if required by the terms of the Option, Applicable Withholding Taxes, or
(iv) deliver an interest bearing promissory note, payable to the Company, in
payment of all or part of the exercise price together with such collateral as
may be required by the Committee at the time of exercise. The interest rate
under any such promissory note shall be established by the Committee and shall
be at least equal to the minimum interest rate required at the time to avoid
imputed interest under the Code.
(b) The Company may place on any certificate representing
Company Stock issued upon the exercise of an Option any legend deemed desirable
by the Company's counsel to comply with federal or state securities laws, and
the Company may require a customary written indication of the Participant's
investment intent. Until the Participant has made any required payment,
including any Applicable Withholding Taxes, and has had issued a certificate for
the shares of Company Stock acquired, he or she shall possess no shareholder
rights with respect to the shares.
(c) Each Participant shall agree as a condition of the
exercise of an Option to pay to the Employer, or make arrangements satisfactory
to the Employer regarding the payment to the Employer of, Applicable Withholding
Taxes. Until such amount has been paid or arrangements satisfactory to the
Employer have been made, no stock certificate shall be issued upon the exercise
of an Option.
(d) As an alternative to making a cash payment to the Employer
to satisfy Applicable Withholding Taxes, if the Option agreement so provides,
the Participant may elect to (i) deliver Mature Shares or (ii) have the Employer
retain that number of shares of Company Stock that would satisfy all or a
specified portion of the Applicable Withholding Taxes.
10. Nontransferability of Options. Nonstatutory Stock Options shall be
transferable to the extent specifically provided in the Incentive Award.
Incentive Stock Options, by their terms, shall not be transferable except by
will or by the laws of descent and distribution and shall be exercisable, during
the Participant's lifetime, only by the Participant.
11. Effective Date of the Plan. The effective date of the Plan is
January 1, 1998. The Plan shall be submitted to the shareholders of the Company
for approval. Until (i) the Plan has been approved by the Company's
shareholders, and (ii) the requirements of any applicable Federal or State
securities laws have been met, no Restricted Stock shall be awarded that is not
contingent on these events and no Option granted shall be exercisable.
<PAGE>
12. Termination, Modification, Change. If not sooner terminated by the
Board, this Plan shall terminate at the close of business on December 31, 2007.
No Incentive Awards shall be made under the Plan after its termination. The
Board may amend or terminate the Plan in such respects as it shall deem
advisable; provided that, if and to the extent required by the Code, no change
shall be made that increases the total number of shares of Company Stock
reserved for issuance pursuant to Incentive Awards granted under the Plan
(except pursuant to Section 13), materially modifies the requirements as to
eligibility for participation in the Plan, or materially increases the benefits
accruing to Participants under the Plan, unless such change is authorized by the
shareholders of the Company. Notwithstanding the foregoing, the Board may
unilaterally amend the Plan and Incentive Awards with respect to Participants as
it deems appropriate to ensure compliance with Rule 16b-3 and to cause Incentive
Stock Options to meet the requirements of the Code and regulations thereunder.
Except as provided in the preceding two sentences, a termination or amendment of
the Plan shall not, without the consent of the Participant, adversely affect a
Participant's rights under an Incentive Award previously granted to him or her.
13. Change in Capital Structure. (a) In the event of a stock dividend,
stock split or combination of shares, recapitalization or merger in which the
Company is the surviving corporation or other change in the Company's capital
stock (including, but not limited to, the creation or issuance to shareholders
generally of rights, options or warrants for the purchase of common stock or
preferred stock of the Company), the number and kind of shares of stock or
securities of the Company to be subject to the Plan and to Options then
outstanding or to be granted thereunder, the maximum number of shares or
securities which may be delivered under the Plan, the exercise price and other
relevant provisions shall be appropriately adjusted by the Committee, whose
determination shall be binding on all persons. If the adjustment would produce
fractional shares with respect to any unexercised Option, the Committee may
adjust appropriately the number of shares covered by the Option so as to
eliminate the fractional shares.
(b) If the Company is a party to a consolidation or a merger
in which the Company is not the surviving corporation, a transaction that
results in the acquisition of substantially all of the Company's outstanding
stock by a single person or entity, or a sale or transfer of substantially all
of the Company's assets, the Committee may take such actions with respect to
outstanding Incentive Awards as the Committee deems appropriate.
(c) Notwithstanding anything in the Plan to the contrary, the
Committee may take the foregoing actions without the consent of any Participant,
and the Committee's determination shall be conclusive and binding on all persons
for all purposes.
14. Administration of the Plan. The Plan shall be administered by the
Committee. The Committee shall have general authority to impose any limitation
or condition upon an Incentive Award the Committee deem appropriate to achieve
the objectives of the Incentive Award and the Plan and, without limitation and
in addition to powers set forth elsewhere in the Plan, shall have the following
specific authority:
(a) The Committee shall have the power and complete discretion
to determine (i) which eligible employees shall receive Incentive Awards and the
nature of each Incentive Award, (ii) the number of shares of Company Stock to be
covered by each Incentive Award, (iii) whether Options shall be Incentive Stock
Options or Nonstatutory Stock Options, (iv) the time or times when an Incentive
Award shall be granted, (v) whether an Incentive Award shall become vested over
a period of time and when it shall be fully vested, (vi) when Options may be
exercised, (vii) whether a Disability exists, (viii) the manner in which payment
will be made upon the exercise of Options, (ix) conditions relating to the
length of time before disposition of Company Stock received upon the exercise of
Options is permitted, (x) whether to authorize a Participant (A) to use Mature
Shares to satisfy Applicable Withholding Taxes or (B) to have the Employer
withhold from the shares to be issued upon the exercise of a Nonstatutory Stock
Option the number of shares necessary to satisfy Applicable Withholding Taxes,
(xi) the terms and conditions applicable to Restricted Stock awards, (xii) the
<PAGE>
terms and conditions on which restrictions upon Restricted Stock shall lapse,
(xiii) whether to accelerate the time at which any or all restrictions with
respect to Restricted Stock will lapse or be removed, (xiv) notice provisions
relating to the sale of Company Stock acquired under the Plan, and (xv) any
additional requirements relating to Incentive Awards that the Committee deems
appropriate. Notwithstanding the foregoing, no "tandem stock options" (where two
stock options are issued together and the exercise of one option affects the
right to exercise the other option) may be issued in connection with Incentive
Stock Options. The Committee shall have the power to amend the terms of
previously granted Incentive Awards that were granted by the Committee so long
as the terms as amended are consistent with the terms of the Plan and provided
that the consent of the Participant is obtained with respect to any amendment
that would be detrimental to him or her, except that such consent will not be
required if such amendment is for the purpose of complying with Rule 16b-3 or
any requirement of the Code applicable to the Incentive Award.
(b) The Committee may adopt rules and regulations for carrying
out the Plan with respect to Participants. The interpretation and construction
of any provision of the Plan by the Committee shall be final and conclusive as
to any Participant. The Committee may consult with counsel, who may be counsel
to the Employer, and shall not incur any liability for any action taken in good
faith in reliance upon the advice of counsel.
(c) A majority of the members of the Committee shall
constitute a quorum, and all actions of the Committee shall be taken by a
majority of the members present. Any action may be taken by a written instrument
signed by all of the members, and any action so taken shall be fully effective
as if it had been taken at a meeting.
15. Notice. All notices and other communications required or permitted
to be given under this Plan shall be in writing and shall be deemed to have been
duly given if delivered personally or mailed first class, postage prepaid, as
follows (a) if to an Employer - at the principal business address of the Company
to the attention of the Treasurer; (b) if to any Participant - at the last
address of the Participant known to the sender at the time the notice or other
communication is sent.
16. Interpretation. The terms of this Plan are subject to all present
and future regulations and rulings of the Secretary of the Treasury or his or
her delegate relating to the qualification of Incentive Stock Options under the
Code. If any provision of the Plan conflicts with any such regulation or ruling,
then that provision of the Plan shall be void and of no effect. The terms of
this Plan shall be governed by the laws of the Commonwealth of Virginia.
IN WITNESS WHEREOF, this instrument has been executed this 10th day of
June, 1998, effective as of January 1, 1998.
DOUGHTIE'S FOODS, INC.
By: /s/ Steven C. Houfek
--------------------------------
Steven C. Houfek
President and Chief Executive Officer
