As filed with the Securities and Exchange Commission on November 25, 1997
Registration No. 333 - _____
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------
THE GRAND UNION COMPANY
(Exact Name of Registrant as Specified in its Charter)
DELAWARE 22-1518276
(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization
201 WILLOWBROOK BOULEVARD
WAYNE, NEW JERSEY 07470
(973) 890-6000
(Address, Including Zip Code, and Telephone Number,
including Area Code, of Registrant's Principal Executive Offices)
THE GRAND UNION COMPANY
1995 EQUITY INCENTIVE PLAN
AND
THE GRAND UNION COMPANY
1995 NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN
(Full Title of Plans)
GLENN J. SMITH, ESQ.
VICE PRESIDENT AND GENERAL COUNSEL
THE GRAND UNION COMPANY
201 WILLOWBROOK BOULEVARD
WAYNE, NEW JERSEY 07470
(973) 890-6000
(Name and Address, Including Zip Code,
and Telephone Number, Including Area Code, of Agent For Service)
Copies to:
TED S. WAKSMAN, ESQ.
WEIL, GOTSHAL & MANGES LLP
767 FIFTH AVENUE
NEW YORK, NEW YORK 10153
(212) 310-8000
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
========================================================================================================================
Proposed Maximum Proposed Maximum
Title of Each Class of Securities Amount to be Offering Price Aggregate Offering Amount of
to be Registered Registered(1) Per Share(2) Price(2) Registration Fee
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value $.01 per share 6,000,000 shares(3) $2.0625 $12,375,000 $3,750.00
- ------------------------------------------------------------------------------------------------------------------------
Common Stock, par value $.01 per share 100,000 shares(4) $2.0625 $ 206,250 $ 62.50
- ------------------------------------------------------------------------------------------------------------------------
Total 6,100,000 shares $2.0625 $12,581,250 $3,812.50
========================================================================================================================
</TABLE>
(1) Plus such indeterminate number of shares of Common Stock of the Registrant
as may be issued to prevent dilution resulting from stock dividends, stock
splits or similar transactions in accordance with Rule 416 under the Securities
Act of 1933.
(2) Estimated pursuant to Rule 457(h) and Rule 457(c) under the Securities Act
of 1933, based upon the average of the bid and asked price of the Registrant's
Common Stock as reported on the Nasdaq Smallcap Market on November 19, 1997.
(3) Represents the number of shares of Common Stock that may be issued under The
Grand Union Company 1995 Equity Incentive Plan.
(4) Represents the number of shares of Common Stock that may be issued under The
Grand Union Company 1995 Non-Employee Directors' Stock Option Plan.
================================================================================
NYFS03...:\18\50318\0005\1708\FRMN187W.37C
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
Item 1.
The documents containing the information specified in Part I of this
Registration Statement will be sent or given to employees as specified by Rule
428(b)(1) of the Securities Act of 1933, as amended (the "Securities Act"). Such
documents are not required to be and are not filed with the Securities and
Exchange Commission (the "Commission") either as part of this Registration
Statement or as prospectuses or prospectus supplements pursuant to Rule 424.
These documents and the documents incorporated by reference in this Registration
Statement pursuant to Item 3 of Part II of this Form S-8, taken together,
constitute a prospectus that meets the requirements of Section 10(a) of the
Securities Act.
Item 2.
Upon written or oral request, any of the documents incorporated by
reference in Item 3 of Part II of this Registration Statement (which documents
are incorporated by reference in this Section 10(a) Prospectus), other documents
required to be delivered to eligible employees pursuant to Rule 428(b) or
additional information about The Grand Union Company 1995 Equity Incentive Plan
or The Grand Union Company 1995 Non-Employee Directors' Stock Option Plan and
the administrators of each are available without charge by contacting:
Glenn J. Smith, Esq.
The Grand Union Company
201 Willowbrook Boulevard
Wayne, New Jersey 07470
(973) 890-6000
I-1
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed with the Commission by The Grand Union
Company (the "Company") are incorporated herein by reference:
(a) The Company's Annual Report on Form 10-K for the fiscal year
ended March 29, 1997.
(b) The Company's Quarterly Report on Form 10-Q for the quarter
ended October 11, 1997.
(c) The Company's Current Reports on Form 8-K dated June 17, 1997,
August 13, 1997, September 4, 1997 and October 29, 1997.
(d) The description of the Company's Common Stock, par value $.01
per share (the "Common Stock"), contained in the Company's Registration
Statement on Form 8-A filed with the Commission pursuant to 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 with the Commission
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to
the filing of a post-effective amendment to this Registration Statement which
indicates that all securities offered have been sold or which deregisters all
securities then remaining unsold, shall be deemed to be incorporated by
reference in this Registration Statement and to be a part hereof from the date
of filing of such documents.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Generally, Section 145 of the General Corporation Law of the State
of Delaware (the "DGCL") permits a corporation, under specified circumstances,
to indemnify certain persons made a party to an action, by reason of the fact
that such person is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise. In the case of an action by or in the right
of the corporation, no indemnification may be made in respect of any matter as
to which that person was adjudged liable to the corporation unless the Delaware
Court of Chancery or the court in which the action was brought determines that
despite the adjudication of liability that person is fairly and reasonably
entitled to indemnity for proper expenses. To the extent that person has been
successful in the defense of any matter, that person shall be indemnified
against expenses actually and reasonably incurred by him.
Paragraph 3 of Article FIFTH of the Certificate of Incorporation of
the Company provides that the Company shall, to the maximum extent permitted
from time to time under the DGCL, indemnify and upon
II-1
<PAGE>
request shall advance expenses to any person who is or was a party or is
threatened to be made a party to any threatened, pending, or completed action,
suit, proceeding or claim, whether civil, criminal, administrative or
investigative, by reason of the fact that such person is or was or has agreed to
be a director or officer of the Company or while a director or officer is or was
serving at the request of the Company as a director, officer, partner, trustee,
employee or agent of any corporation, partnership, joint venture, trust or other
enterprise, including service with respect to employee benefit plans, against
expenses (including attorney's fees and expenses), judgment, fines, penalties
and amounts paid in settlement incurred in connection with the investigation,
preparation to defend or defense of such action, suit, proceeding or claim;
provided, however, that the Company is not required to indemnify or advance
expenses to any person in connection with any action, suit, proceeding, claim or
counterclaim initiated by or on behalf of such person. The Company's Certificate
of Incorporation provides that the respective rights of indemnification shall
not be exclusive of other rights to which any director or officer may be
entitled.
The Company has entered into indemnification agreements with each of
its directors and executive officers pursuant to which the Company has agreed to
indemnify such persons to the fullest extent permitted by law against expenses,
judgments, fines, penalties or amounts paid in settlement actually and
reasonably incurred by such person in connection with legal proceedings in which
the person was involved by reason of being a director or officer of the Company.
Under current law, such indemnification generally is available if such person
acted in good faith and in a manner he or she reasonably believed to be in the
best interests of the Company and, with respect to criminal proceedings, had no
reasonable cause to believe his or her conduct was unlawful. Under current law,
such person is not indemnified in respect of matters as to which he or she has
been adjudged liable to the Company unless a court determines that, under the
circumstances, he or she is reasonably entitled to such indemnification.
Comparable indemnification rights are also provided pursuant to the Company's
Certificate of Incorporation.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers or persons controlling
the Company as disclosed above, the Company has been informed 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.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
4.1 - Certificate of Incorporation of the Company
(incorporated by reference to Exhibit 3.1 to the
Company's Annual Report on Form 10-K for the fiscal
year ended March 29, 1997).
4.2 - Certificate of Designation of Class A Convertible
Preferred Stock (incorporated by reference to
Exhibit 10.4 to the Company's Quarterly Report on
Form 10-0 for the period ended October 12, 1996).
4.3 - Certificate of Designation of Class B Convertible
Preferred Stock (incorporated by reference to
Exhibit 3.3 to the Company's Annual Report on Form
10-K for the fiscal year ended March 29, 1997).
4.4 - By-Laws of the Company (incorporated by reference to
Exhibit 3.1 to the Company's Quarterly Report on
Form 10-Q for the period ended October 12, 1996).
II-2
<PAGE>
4.5 - The Grand Union Company 1995 Equity Incentive Plan.
4.6 - The Grand Union Company 1995 Non-Employee Directors'
Stock Option Plan.
5.1 - Opinion of Weil, Gotshal & Manges LLP.
23.1 - Consent of Price Waterhouse LLP.
23.2 - Consent of Weil, Gotshal & Manges LLP (included in
Exhibit 5.1).
24.1 - Power of Attorney (included as part of the signature
page to this Registration Statement and incorporated
herein by reference).
ITEM 9. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(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;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the 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 the Registration Statement;
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in
the Registration Statement or any material change to
such information in the Registration Statement;
provided, however, that paragraph (a)(1)(i) and (a)(1)(ii) do not
apply if the information required to be included in a post-effective
amendment by the foregoing paragraphs is contained in periodic
reports filed by the Company 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 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) The undersigned registrant hereby undertakes 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 that is incorporated by reference in the
Registration Statement shall be deemed to be a new Registration
Statement relating to the securities offered
II-3
<PAGE>
therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(c) 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 Securities Act and will be governed by the final
adjudication of such issue.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of Wayne, State of New Jersey, on this 20th day of
November, 1997.
THE GRAND UNION COMPANY
By: /s/ Jeffrey P. Freimark
--------------------------------
Name: Jeffrey P. Freimark
Title: Vice President and
Chief Financial and
Administrative Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints each of J. Wayne Harris, Jeffrey P.
Freimark and Francis E. Nicastro acting individually, his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities, to sign any and all amendments to this Registration Statement, and
to file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and
agent, or his or her substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
Signature Title Date
--------- ----- ----
/s/ J. Wayne Harris Chairman of the Board, Chief November 20, 1997
- ----------------------- Executive Officer and
J. Wayne Harris Director (Principal
Executive Officer)
/s/ Jeffrey P. Freimark Vice President and Chief November 20, 1997
- ----------------------- Financial and Administrative
Jeffrey P. Freimark Officer (Principal Financial
and Accounting Officer)
/s/ Gary M. Philbin President, Chief Merchandising November 20, 1997
- ----------------------- Officer and Director
Gary M. Philbin
/s/ Roger E. Stangeland Director November 20, 1997
- -----------------------
Roger E. Stangeland
/s/ James J. Costello Director November 20, 1997
- -----------------------
James J. Costello
/s/ Jordan H. Krimstein Director November 20, 1997
- -----------------------
Jordan H. Krimstein
II-5
<PAGE>
/s/ Mark H. Manski Director November 20, 1997
- -----------------------
Mark H. Manski
/s/ Clifford A. Miller Director November 20, 1997
- -----------------------
Clifford A. Miller
/s/ Geoffrey T. Moore Director November 20, 1997
- -----------------------
Geoffrey T. Moore
/s/ Martha A. Pritchard Director November 20, 1997
- -----------------------
Martha A. Pritchard
/s/ J. Richard Stonesifer Director November 20, 1997
- -------------------------
J. Richard Stonesifer
II-6
<PAGE>
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
- ----------- -----------
4.1 - Certificate of Incorporation of the Company
(incorporated by reference to Exhibit 3.1 to the
Company's Annual Report on Form 10-K for the fiscal year
ended March 29, 1996).
4.2 - Certificate of Designation of Class A Convertible
Preferred Stock (incorporated by reference to Exhibit
10.4 to the Company's Quarterly Report on Form 10-0 for
the period ended October 12, 1996).
4.3 - Certificate of Designation of Class B Convertible
Preferred Stock (incorporated by reference to Exhibit
3.3 to the Company's Annual Report on Form 10-K for the
fiscal year ended March 29, 1997).
4.4 - By-Laws of the Company (incorporated by reference to
Exhibit 3.1 to the Company's Quarterly Report on Form
10-Q for the period ended October 12, 1996).
4.5 - The Grand Union Company 1995 Equity Incentive Plan.
4.6 - The Grand Union Company 1995 Non-Employee Directors'
Stock Option Plan.
5.1 - Opinion of Weil, Gotshal & Manges LLP.
23.1 - Consent of Price Waterhouse LLP.
23.2 - Consent of Weil, Gotshal & Manges LLP (included in
Exhibit 5.1).
24.1 - Power of Attorney (included as part of the signature
page to this Registration Statement and incorporated
herein by reference).
EXHIBIT 4.5
THE GRAND UNION COMPANY
1995 EQUITY INCENTIVE PLAN,
AS AMENDED THROUGH NOVEMBER 20, 1997
1. PURPOSE
The purpose of this Equity Incentive Plan (the "Plan") is to advance
the interests of The Grand Union Company (the "Company") by enhancing its
ability to attract and retain employees and other persons or entities who are in
a position to make significant contributions to the success of the Company and
its subsidiaries through ownership of shares of the Company's common stock
("Stock").
The Plan is intended to accomplish these goals by enabling the Company
to grant Awards in the form of Options, Stock Appreciation Rights, Restricted
Stock or Unrestricted Stock Awards, Deferred Stock Awards, Performance Awards,
Loans or Supplemental Grants, or combinations thereof, all as more fully
described below.
2. ADMINISTRATION
The Plan shall be administered by a committee (the "Committee") of the
Board of Directors (the "Board") of the Company designated by the Board for that
purpose. Unless and until a Committee is appointed, the Plan shall be
administered by the entire Board, and references in the Plan to the "Committee"
shall be deemed references to the Board. A majority of the members of the
Committee shall constitute a quorum, and all determinations of the Committee
shall be made by a majority of its members. Any determination of the Committee
under the Plan may be made without notice or meeting of the Committee by a
writing signed by a majority of the Committee members.
The Committee will have authority, not inconsistent with the express
provisions of the Plan and in addition to other authority granted under the
Plan, to (a) grant Awards at such time or times as it may choose; (b) determine
the size of each Award, including the number of shares of Stock subject to the
Award; (c) determine the type or types of each Award; (d) determine the terms
and conditions of each Award; (e) waive compliance by a Participant (as defined
below) with any obligations to be performed by the Participant under an Award
and waive any term or condition of an Award; (f) amend or cancel an existing
Award in whole or in part (and if an Award is canceled, grant another award in
its place on such terms as the Committee shall specify), except that the
Committee may not, without the consent of the holder of an Award, take any
action under this clause with respect to such Award if such action would
adversely affect the rights of such holder; (g) prescribe the form or forms of
instruments that are required or deemed appropriate under the Plan, including
any written notices and elections required of Participants, and change such
forms from time to time; (h) adopt, amend and rescind rules and regulations for
the administration of the Plan; and (i) interpret the Plan and decide any
questions and settle all controversies and disputes that may arise in connection
with the Plan. Such determinations and actions of the Committee, and all other
determinations and actions of the Committee made or taken under authority
granted by any provision of the Plan, will be conclusive and will bind all
parties. Nothing in this paragraph shall be construed as limiting the power of
the Committee to make adjustments under Section 7.3 or Section 8.6.
3. EFFECTIVE DATE AND TERM OF PLAN
The Plan will be administered by a committee (the "Committee") of the
Board of Directors (the "Board") of the Company. The Committee shall consist of
at least two directors, all of whom shall be "Non-Employee Directors" within the
meaning of Rule 16b-3 under the 1934 Act. A majority of the members of the
<PAGE>
Committee shall constitute a quorum, and all determinations of the Committee
shall be made by a majority of its members. Any determination of the Committee
under the Plan may be made without notice or meeting of the Committee by a
writing signed by a majority of the Committee members.
No Award may be granted under the Plan after October 26, 2005, but
Awards previously granted may extend beyond that date.
4. SHARES SUBJECT TO THE PLAN
Subject to the adjustment as provided in Section 8.6 below, the
aggregate number of shares of Stock that may be delivered under the Plan will be
6,000,000. If any Award requiring exercise by the Participant for delivery of
Stock terminates without having been exercised in full, or if any Award payable
in Stock or cash is satisfied in cash rather than Stock, the number of shares of
Stock as to which such Award was not exercised or for which cash was substituted
will be available for future grants.
Stock delivered under the Plan may be either authorized but unissued
Stock or previously issued Stock acquired by the Company and held in treasury.
No fractional shares of Stock will be delivered under the Plan.
Subject to Section 8.6(a), the maximum number of shares of Stock as to
which Options or Stock Appreciation Rights may be granted under the Plan to any
Participant is 2,000,000 . For purposes of this paragraph, except as otherwise
provided in regulations or other guidelines issued under Section 162(m) of the
Internal Revenue Code of 1986, as amended (the "Code"), any repricing of an
Option or Stock Appreciation Right shall be treated as an original grant.
5. ELIGIBILITY AND PARTICIPATION
Those eligible to receive Awards under the Plan ("Participants") will
be "employees" or "salaried employees" of the Company or any of its subsidiaries
("Employees") and other persons or entities (including without limitation
non-Employee directors of the Company or a subsidiary of the Company) who, in
the opinion of the Committee, are in a position to make a significant
contribution to the success of the Company or its subsidiaries. A "subsidiary"
for purposes of the Plan will be a corporation in which the Company owns,
directly or indirectly, stock possessing 50% or more of the total combined
voting power of all classes of stock.
6. TYPES OF AWARDS
6.1. Options.
(a) Nature of Options. An Option is an Award entitling the recipient on
exercise thereof to purchase Stock at a specified exercise price.
Both "incentive stock options," as defined in Section 422 of the Code
(any Option intended to qualify as an incentive stock option being hereinafter
referred to as an "ISO"), and Options that are not incentive stock options, may
be granted under the Plan. ISOs shall be awarded only to Employees.
(b) Exercise Price. The exercise price of an Option will be determined
by the Committee subject to the following:
<PAGE>
(1) The exercise price of an ISO shall not be less than 100%
(110% in the case of an ISO granted to a ten-percent shareholder) of
the fair market value of the Stock subject to the Option, determined as
of the time the Option is granted. A "ten-percent shareholder" is any
person who at the time of grant owns, directly or indirectly, or is
deemed to own by reason of the attribution rules of Section 424(d) of
the Code, stock possessing more than 10% of the total combined voting
power of all classes of stock of the Company or of any of its
subsidiaries.
(2) In no case may the exercise price paid for Stock which is
part of an original issue of authorized Stock be less than the par
value per share of the Stock.
(3) The Committee may reduce the exercise price of an Option
at any time after the time of grant, but in the case of an Option
originally awarded as an ISO, only with the consent of the Participant.
(c) Duration of Options. The latest date on which an Option may be
exercised will be the tenth anniversary (fifth anniversary, in the case of an
ISO granted to a ten-percent shareholder) of the day immediately preceding the
date the Option was granted, or such earlier date as may have been specified by
the Committee at the time the Option was granted.
(d) Exercise of Options. Options granted under any single Award will
become exercisable at such time or times, and on such conditions, as the
Committee may specify; provided, however, that if the Committee does not so
specify, 25% of the shares subject to the Award may be purchased commencing one
year after the date of grant, and an additional 25% of such shares may be
purchased commencing on the second, third and fourth anniversaries of the grant.
The Committee may at any time and from time to time accelerate the time at which
all or any part of the Option may be exercised.
Any exercise of an Option must be in writing, signed by the proper
person and delivered or mailed to the Company, accompanied by (1) any documents
required by the Committee and (2) payment in full in accordance with paragraph
(e) below for the number of shares for which the Option is exercised.
(e) Payment for Stock. Stock purchased on exercise of an Option must be
paid for as follows: (1) in cash or by check (acceptable to the Company in
accordance with guidelines established for this purpose), bank draft or money
order payable to the order of the Company or (2) if so permitted by the
instrument evidencing the Option (or in the case of an Option which is not an
ISO, by the Committee at or after grant of the Option), (i) through the delivery
of shares of Stock which have been outstanding for at least six months (unless
the Committee expressly approves a shorter period) and which have a fair market
value on the last business day preceding the date of exercise equal to the
exercise price, or (ii) by delivery of a promissory note of the Option holder to
the Company, payable on such terms as are specified by the Committee, or (iii)
by delivery of an unconditional and irrevocable undertaking by a broker to
deliver promptly to the Company sufficient funds to pay the exercise price, or
(iv) by any combination of the permissible forms of payment; provided, that if
the Stock delivered upon exercise of the Option is an original issue of
authorized Stock, at least so much of the exercise price as represents the par
value of such Stock must be paid other than by the Option holder's promissory
note or personal check.
(f) Discretionary Payments. If the market price of shares of Stock
subject to an Option (other than an Option which is in tandem with a Stock
Appreciation Right as described in Section 6.2 below) exceeds the exercise price
of the Option at the time of its exercise, the Committee may cancel the Option
and cause the Company to pay in cash or in shares of Common Stock (at a price
per share equal to the fair market value per share) to the person exercising the
<PAGE>
Option an amount equal to the difference between the fair market value of the
Stock which would have been purchased pursuant to the exercise (determined on
the date the Option is canceled) and the aggregate exercise price which would
have been paid. The Committee may exercise its discretion to take such action
only if it has received a written request from the person exercising the Option,
but such a request will not be binding on the Committee.
6.2. Stock Appreciation Rights.
(a) Nature of Stock Appreciation Rights. A Stock Appreciation Right is
an Award entitling the recipient on exercise of the Right to receive an amount,
in cash or Stock or a combination thereof (such form to be determined by the
Committee), determined in whole or in part by reference to appreciation in Stock
value.
Except as provided below, a Stock Appreciation Right entitles the
Participant to receive, with respect to each share of Stock as to which the
Right is exercised, the excess of the share's fair market value on the date of
exercise over its fair market value on the date the Right was granted. The
Committee may provide at the time of grant that the amount the recipient is
entitled to receive will be adjusted upward or downward under rules established
by the Committee to take into account the performance of the Stock in comparison
with the performance of other stocks or an index or indices of other stocks. The
Committee may also grant Stock Appreciation Rights providing that following a
change in control of the Company, as determined by the Committee, the holder of
such Right will be entitled to receive, with respect to each share of Stock
subject to the Right, an amount equal to the excess of a specified value (which
may include an average of values) for a share of Stock during a period preceding
such change in control over the fair market value of a share of Stock on the
date the Right was granted.
(b) Grant of Stock Appreciation Rights. Stock Appreciation Rights may
be granted in tandem with, or independently of, Options granted under the Plan.
A Stock Appreciation Right granted in tandem with an Option which is not an ISO
may be granted either at or after the time the Option is granted. A Stock
Appreciation Right granted in tandem with an ISO may be granted only at the time
the Option is granted.
(c) Rules Applicable to Tandem Awards. When Stock Appreciation Rights
are granted in tandem with Options, the following will apply:
(1) The Stock Appreciation Right will be exercisable only at
such time or times, and to the extent, that the related Option is
exercisable and will be exercisable in accordance with the procedure
required for exercise of the related Option.
(2) The Stock Appreciation Right will terminate and no longer
be exercisable upon the termination or exercise of the related Option,
except that a Stock Appreciation Right granted with respect to less
than the full number of shares covered by an Option will not be reduced
until the number of shares as to which the related Option has been
exercised or has terminated exceeds the number of shares not covered by
the Stock Appreciation Right.
(3) The Option will terminate and no longer be exercisable
upon the exercise of the related Stock Appreciation Right.
(4) The Stock Appreciation Right will be transferable only
with the related Option.
<PAGE>
(5) A Stock Appreciation Right granted in tandem with an ISO
may be exercised only when the market price of the Stock subject to the
Option exceeds the exercise price of such option.
(d) Exercise of Independent Stock Appreciation Rights. A Stock
Appreciation Right not granted in tandem with an Option will become exercisable
at such time or times, and on such conditions, as the Committee may specify. The
Committee may at any time accelerate the time at which all or any part of the
Right may be exercised.
Any exercise of an independent Stock Appreciation Right must be in
writing, signed by the proper person and delivered or mailed to the Company,
accompanied by any other documents required by the Committee.
6.3. Restricted and Unrestricted Stock.
(a) Nature of Restricted Stock Award. A Restricted Stock Award entitles
the recipient to acquire, for a purchase price equal to par value, shares of
Stock subject to the restrictions described in paragraph (d) below ("Restricted
Stock").
(b) Acceptance of Award. A Participant who is granted a Restricted
Stock Award will have no rights with respect to such Award unless the
Participant accepts the Award by written instrument delivered or mailed to the
Company accompanied by payment in full of the specified purchase price, if any,
of the shares covered by the award. Payment may be by certified or bank check or
other instrument acceptable to the Committee.
(c) Rights as a Stockholder. A Participant who receives Restricted
Stock will have all the rights of a stockholder with respect to the Stock,
including voting and dividend rights, subject to the restrictions described in
paragraph (d) below and any other conditions imposed by the Committee at the
time of grant. Unless the Committee otherwise determines, certificates
evidencing shares of Restricted Stock will remain in the possession of the
Company until such shares are free of all restrictions under the Plan.
(d) Restrictions. Except as otherwise specifically provided by the
Plan, Restricted Stock may not be sold, assigned, transferred, pledged or
otherwise encumbered or disposed of, and if the Participant ceases to be an
Employee or otherwise suffers a Status Change (as defined at Section 7.2(a)
below) for any reason, must be offered to the Company for purchase for the
amount of cash paid for the Stock, or forfeited to the Company if no cash was
paid. These restrictions will lapse at such time or times, and on such
conditions, as the Committee may specify. Upon lapse of all restrictions, Stock
will cease to be restricted for purposes of the Plan. The Committee may at any
time accelerate the time at which the restrictions on all or any part of the
shares will lapse.
(e) Notice of Election. Any Participant making an election under
Section 83(b) of the Code with respect to Restricted Stock must provide a copy
thereof to the Company within 10 days of the filing of such election with the
Internal Revenue Service.
(f) Other Awards Settled with Restricted Stock. The Committee may, at
the time any award described in this Section 6 is granted, provide that any or
all the Stock delivered pursuant to the Award will be Restricted Stock.
(g) Unrestricted Stock. The Committee may, in its sole discretion,
approve the sale to any Participant of shares of Stock free of restrictions
under the Plan for a price which is not less than the par value of the Stock.
<PAGE>
6.4. Deferred Stock.
A Deferred Stock Award entitles the recipient to receive shares of
Stock to be delivered in the future. Delivery of the Stock will take place at
such time or times, and on such conditions, as the Committee may specify. The
Committee may at any time accelerate the time at which delivery of all or any
part of the Stock will take place. At the time any award described in this
Section 6 is granted, the Committee may provide that, at the time Stock would
otherwise be delivered pursuant to the Award, the Participant will instead
receive an instrument evidencing the Participant's right to future delivery of
Deferred Stock.
6.5. Performance Awards; Performance Goals.
(a) Nature of Performance Awards. A Performance Award entitles the
recipient to receive, without payment, an amount in cash or Stock or a
combination thereof (such form to be determined by the Committee) following the
attainment of Performance Goals. "Performance Goals" are goals which may be
related to personal performance, corporate performance, departmental performance
or any other category of performance deemed by the Committee to be important to
the success of the Company. The Committee will determine the Performance Goals,
the period or periods during which performance is to be measured and all other
terms and conditions applicable to the award.
(b) Other Awards Subject to Performance Conditions. The Committee may,
at the time any Award described in this Section 6 is granted, impose the
condition (in addition to any conditions specified or authorized in this Section
6 or any other provision of the Plan) that Performance Goals be met prior to the
Participant's realization of any payment or benefit under the Award.
6.6. Loans and Supplemental Grants.
(a) Loans. The Company may make a loan to a Participant ("Loan"),
either on the date of or after the grant of any Award to the Participant. A Loan
may be made either in connection with the purchase of Stock under the Award or
with the payment of any Federal, state and local income tax with respect to
income recognized as a result of the Award. The Committee will have full
authority to decide whether to make a Loan and to determine the amount, terms
and conditions of the Loan, including the interest rate (which may be zero),
whether the Loan is to be secured or unsecured or with or without recourse
against the borrower, the terms on which the Loan is to be repaid and the
conditions, if any, under which it may be forgiven. However, no Loan may have a
term (including extensions) exceeding ten years in duration.
(b) Supplemental Grants. In connection with any award, the Committee
may at the time such Award is made or at a later date, provide for and grant a
cash award to the Participant ("Supplemental Grant") not to exceed an amount
equal to (1) the amount of any federal, state and local income tax on ordinary
income for which the Participant may be liable with respect to the Award,
determined by assuming taxation at the highest marginal rate, plus (2) an
additional amount on a grossed-up basis intended to make the Participant whole
on an after-tax basis after discharging all the Participant's income tax
liabilities arising from all payments under this Section 6. Any payments under
this subsection (b) will be made at the time the Participant incurs Federal
income tax liability with respect to the Award.
<PAGE>
7. EVENTS AFFECTING OUTSTANDING AWARDS
7.1. Death.
If a Participant dies, the following will apply:
(a) All Options and Stock Appreciation Rights held by the Participant
immediately prior to death, to the extent then exercisable, may be exercised by
the Participant's executor or administrator or the person or persons to whom the
Option or Right is transferred by will or the applicable laws of descent and
distribution, at any time within the one year period ending with the first
anniversary of the Participant's death (or such shorter or longer period as the
Committee may determine), and shall thereupon terminate. In no event, however,
shall an Option or Stock Appreciation Right remain exercisable beyond the latest
date on which it could have been exercised without regard to this Section 7.
Except as otherwise determined by the Committee, all Options and Stock
Appreciation Rights held by a Participant immediately prior to death that are
not then exercisable shall terminate at death.
(b) Except as otherwise determined by the Committee, all Restricted
Stock held by the Participant must be transferred to the Company (and, in the
event the certificates representing such Restricted Stock are held by the
Company, such Restricted Stock will be so transferred without any further action
by the Participant) in accordance with Section 6.3 above.
(c) Any payment or benefit under a Deferred Stock Award, Performance
Award, or Supplemental Grant to which the Participant was not irrevocably
entitled prior to death will be forfeited and the Award canceled as of the time
of death, unless otherwise determined by the Committee.
7.2. Termination of Service (Other Than By Death).
If a Participant who is an Employee ceases to be an Employee for any
reason other than death, or if there is a termination (other than by reason of
death) of the consulting, service or similar relationship in respect of which a
non-Employee Participant was granted an Award hereunder (such termination of the
employment or other relationship being herein referred to as a "Status Change"),
the following will apply:
(a) Except as otherwise determined by the Committee: (i) all
Options and Stock Appreciation Rights held by the Participant that were not
exercisable immediately prior to the Status Change shall terminate at the time
of the Status Change, (ii) any ISOs that were immediately exercisable prior to
the Status Change will continue to be exercisable for a period of three months
from the date of the Status Change and shall thereupon terminate unless the
Status Change results from a discharge for cause which in the opinion of the
Committee casts such discredit on the Participant as to justify immediate
termination of the Option, and (iii) any other Options or Rights that were
exercisable immediately prior to the Status Change will continue to be
exercisable for a period of one year from the date of the Status Change (or such
other period as the Committee may determine), and shall thereupon terminate,
unless the Award provides by its terms for immediate termination in the event of
a Status Change or unless the Status Change results from discharge for cause
which in the opinion of the Committee casts such discredit on the Participant as
to justify immediate termination of the Award. In no event, however, shall an
Option or Stock Appreciation Right remain exercisable beyond the latest date on
which it could have been exercised without regard to this Section 7. For
purposes of this paragraph, in the case of a Participant who is an Employee, a
Status Change shall not be deemed to have resulted by reason of (i) a sick leave
or other bona fide leave of absence of one year or less or approved for purposes
<PAGE>
of the Plan by the Committee, or (ii) a transfer of employment between the
Company and a subsidiary or between subsidiaries, or to the employment of a
corporation (or a parent or subsidiary corporation of such corporation) issuing
or assuming an option in a transaction to which Section 424(a) of the Code
applies.
(b) Except as otherwise determined by the Committee, all Restricted
Stock held by the Participant at the time of the Status Change must be
transferred to the Company (and, in the event the certificates representing such
Restricted Stock are held by the Company, such Restricted Stock will be so
transferred without any further action by the Participant) in accordance with
Section 6.3 above.
(c) Any payment or benefit under a Deferred Stock Award, Performance
Award, or Supplemental Grant to which the Participant was not irrevocably
entitled prior to the Status Change will be forfeited and the Award canceled as
of the date of such Status Change unless otherwise determined by the Committee.
7.3. Certain Corporate Transactions.
(a) Subject to paragraph (c) below, as of the twentieth (20th)
trading day prior to the effective date of a Change of Control, (1) each
outstanding Option and each outstanding Stock Appreciation Right shall become
exercisable in full, (2) the restrictions shall be removed from each outstanding
share of Restricted Stock, (3) the Company shall make all payments and provide
all benefits under each outstanding Deferred Stock Award, Performance Award, and
Supplemental Grant which would have been made or provided with the passage of
time had the transaction not occurred and the Participant not suffered a Status
Change (or died), (4) subject to paragraph (c) of this section, the Company
shall pay to each holder of Options and Restricted Stock whose Options (other
than ISOs granted prior to July 1, 1996) and Restricted Stock have been
terminated, an amount equal to the Award Value with respect to such Options or
Restricted Stock, such payment to be made by cash or certified check within 30
days after the Change in Control, and (5) the Committee may, in its sole
discretion, forgive all or any portion of the principal of or interest on a
Loan. For purposes of this section, the Award Value shall be determined as the
difference between (i) the exercise price of the Option or the purchase price of
the Restricted Stock and (ii) the Market Price, times (iii) the number of shares
covered by the Option or the Restricted Stock award, as the case may be. The
Market Price shall be determined as the average of the fair market value of the
Stock for the period of twenty (20) trading days ending on the effective date of
the covered transaction.
(b) "Change of Control" means any of the following: (1) any
person, entity or Group (persons or entities acting together) is or becomes the
beneficial owner of more than 50% of the Voting Stock of the Company; (2) a
consolidation, merger, or sale of substantially all of the assets of the
Company, with the effect that any person, entity or Group becomes the beneficial
owner of more than 50% of the Voting Stock of the Company or the Company is not
the surviving entity; (3) during any consecutive two-year period commencing July
1, 1996, individuals who constituted the Board of Directors at the beginning of
such period, together with any new directors whose election by the Board or
nomination for election by stockholders was approved by 2/3 of the directors who
were in office at the beginning of the period or whose election or nomination
was so approved, cease to constitute a majority of the Board then in office; or
(4) any order, judgment or decree of dissolution or split-up of the Company, and
such order remains undischarged or unstayed for a period in excess of 60 days.
For purposes of this provision, "more than 50% of the Voting Stock" means more
than 50% of one or more classes of stock pursuant to which the holders have the
general power to vote for the election of members of the Board of Directors, and
the aggregate of such classes for which the person, entity or Group holds more
than 50% has the power to elect more than 50% of the members of the Board of
Directors.
<PAGE>
(c) Notwithstanding the foregoing, the termination of Options
and the payment of Option Values described in paragraph (a) of this section
shall not apply with respect to any transaction in which the holder of an Option
or Restricted Stock receives either: (i) replacement options or restricted
stock, as the case may be, allowing the holder to receive, on the same terms as
in the original Option or Restricted Stock, the greatest amount of securities,
cash or other property to which such holder would have been entitled as a holder
of Common Stock upon consummation of the transaction if such holder had
exercised the rights represented by the Option or restricted stock held by such
holder immediately prior to the transaction, or (ii) if pooling of interests is
a condition of the transaction, a replacement equity interest which enables the
transaction to qualify for pooling of interests.
8. GENERAL PROVISIONS
8.1. Documentation of Awards.
Awards will be evidenced by such written instruments, if any, as may be
prescribed by the Committee from time to time. Such instruments may be in the
form of agreements to be executed by both the Participant and the Company, or
certificates, letters or similar instruments, which need not be executed by the
Participant but acceptance of which will evidence agreement to the terms
thereof.
8.2. Rights as a Stockholder, Dividend Equivalents.
Except as specifically provided by the Plan, the receipt of an Award
will not give a Participant rights as a stockholder; the Participant will obtain
such rights, subject to any limitations imposed by the Plan or the instrument
evidencing the Award, upon actual receipt of Stock. However, the Committee may,
on such conditions as it deems appropriate, provide that a Participant will
receive a benefit in lieu of cash dividends that would have been payable on any
or all Stock subject to the Participant's Award had such Stock been outstanding.
Without limitation, the Committee may provide for payment to the Participant of
amounts representing such dividends, either currently or in the future, or for
investment of such amounts on behalf of the Participant.
8.3. Conditions on Delivery of Stock.
The Company will not be obligated to deliver any shares of Stock
pursuant to the Plan or to remove restriction from shares previously delivered
under the Plan (a) until all conditions of the Award have been satisfied or
removed, (b) until, in the opinion of the Company's counsel, all applicable
federal and state laws and regulations have been complied with, (c) if the
outstanding Stock is at the time listed on any stock exchange, until the shares
to be delivered have been listed or authorized to be listed on such exchange
upon official notice of issuance, and (d) until all other legal matters in
connection with the issuance and delivery of such shares have been approved by
the Company's counsel. If the sale of Stock has not been registered under the
Securities Act of 1933, as amended, the Company may require, as a condition to
exercise of the Award, such representations or agreements as counsel for the
Company may consider appropriate to avoid violation of such Act and may require
that the certificates evidencing such Stock bear an appropriate legend
restricting transfer.
If an Award is exercised by the Participant's legal representative, the
Company will be under no obligation to deliver Stock pursuant to such exercise
until the company is satisfied as to the authority of such representative.
<PAGE>
8.4. Tax Withholding,
The Company will withhold from any cash payment made pursuant to an
Award an amount sufficient to satisfy all federal, state and local withholding
tax requirements (the "withholding requirements").
In the case of an Award pursuant to which Stock may be delivered, the
Committee will have the right to require that the Participant or other
appropriate person remit to the Company an amount sufficient to satisfy the
withholding requirements, or make other arrangements satisfactory to the
Committee with regard to such requirements, prior to the delivery of any Stock.
If and to the extent that such withholding is required, the Committee may permit
the Participant or such other person to elect at such time and in such manner as
the Committee provides to have the Company hold back from the shares to be
delivered, or to deliver to the Company, Stock having a value calculated to
satisfy the withholding requirement.
If at the time an ISO is exercised, the Committee determines that the
Company could be liable for withholding requirements with respect to a
disposition of the Stock received upon exercise, the Committee may require as a
condition of exercise that the person exercising the ISO agree (a) to inform the
Company promptly of any disposition (within the meaning of section 424(c) of the
Code) of Stock receiving upon exercise, and (b) to give such security as the
Committee deems adequate to meet the potential liability of the Company for the
withholding requirements and to augment such security from time to time in any
amount reasonably deemed necessary by the Committee to preserve the adequacy of
such security.
8.5. Nontransferability of Awards.
Unless otherwise provided in the Participant's agreement, no Award
(other than an Award in the form of an outright transfer of cash or Unrestricted
Stock) may be transferred other than by will or by the laws of descent and
distribution, and during a Participant's lifetime an Award requiring exercise
may be exercised only by him or her (or in the event of the Participant's
incapacity, the person or persons legally appointed to act on the Participant's
behalf).
8.6. Adjustments in the Event of Certain Transactions.
(a) In the event of a stock dividend, stock split or combination of
shares, recapitalization or other change in the Company's capitalization, or
other distribution to common stockholders other than normal cash dividends,
after the effective date of the Plan, the Committee will make any appropriate
adjustments to the maximum number of shares that may be delivered under the Plan
under Section 4 above .
(b) In any event referred to in paragraph (a), the Committee will also
make any appropriate adjustments to the number and kind of shares of stock or
securities subject to Awards then outstanding or subsequently granted, any
exercise prices relating to Awards and any other provision of Awards affected by
such change. The Committee may also make such adjustments to take into account
material changes in law or in accounting practices or principles, mergers,
consolidations, acquisitions, dispositions or similar corporate transactions, or
any other event, if it is determined by the Committee that adjustments are
appropriate to avoid distortion in the operation of the Plan.
<PAGE>
8.7. Employment Rights, Etc.
Neither the adoption of the Plan nor the grant of Awards will confer
upon any person any right to continued retention by the Company or any
subsidiary as an Employee or otherwise, or affect in any way the right of the
Company or any subsidiary to terminate an employment, service or similar
relationship at any time. Except as specifically provided by the Committee in
any particular case, the loss of existing or potential profit in Awards granted
under the Plan will not constitute an element of damages in the event of
termination of an employment, service or similar relationship event if the
termination is in violation of an obligation of the Company to the Participant.
8.8. Deferral of Payments.
The Committee may agree at any time, upon request of the Participant,
to defer the date on which any payment under an Award will be made.
8.9. Past Services as Consideration.
Where a Participant purchases Stock under an Award for a price equal to
the par value of the Stock the Committee may determine that such price has been
satisfied by past services rendered by the Participant.
8.10 Applicable Law
This Employee Plan, all options granted hereunder and all actions taken
in connection herewith shall be governed by and construed in accordance with the
laws of the State of Delaware without reference to principles of conflict of
laws, except as superseded by applicable federal law.
9. EFFECT, DISCONTINUANCE, CANCELLATION, AMENDMENT AND TERMINATION
Neither adoption of the Plan nor the grant of Awards to a Participant
will affect the Company's right to grant to such Participant awards that are not
subject to the Plan, to issue to such Participant Stock as a bonus or otherwise,
or to adopt other plans or arrangements under which Stock be issued to
Employees.
The Committee may at any time or times amend the Plan or any
outstanding Award for any purpose which may at the time be permitted by law, or
may at any time terminate the Plan as to any further grants of Awards, provided
that (except to the extent expressly required or permitted by the Plan) no such
amendment will, without the approval of the stockholders of the Company,
effectuate a change for which stockholder approval is required in order for the
Plan to continue to qualify for the award of ISOs under Section 422 of the Code
or for the award of performance-based compensation under Section 162(m) of the
Code and to continue to qualify under Rule 16b-3 promulgated under Section 16 of
the 1934 Act.
EXHIBIT 4.6
THE GRAND UNION COMPANY
1995 NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN
1. Purpose. The purpose of this 1995 Non-Employee Directors' Stock
Option Plan (the "Plan") is to advance the interests of The Grand Union Company
(the "Company") by enhancing the ability of the Company to attract and retain
non-employee directors who are in a position to make significant contributions
to the success of the Company and to reward directors for such contributions
through ownership of shares of the Company's Common Stock (the "Stock").
2. Administration. The Plan shall be administered by a committee (the
"Committee") of the Board of Directors (the "Board") of the Company designated
by the Board for that purpose. Unless and until a Committee is appointed, the
Plan shall be administered by the entire Board, and references in the Plan to
the "Committee" shall be deemed references to the Board. The Committee shall
have authority, not inconsistent with the express provisions of the Plan (a) to
issue options granted in accordance with the formula set forth in this Plan to
Eligible Directors as defined below; (b) to prescribe the form or forms of
instruments evidencing awards and any other instruments required under the Plan
and to change such forms from time to time; (c) to adopt, amend and rescind
rules and regulations for the administration of the Plan; and (d) to interpret
the Plan and to decide any questions and settle all controversies and disputes
that may arise in connection with the Plan. Such determinations of the Committee
shall be conclusive and shall bind all parties.
3. Eligibility of Directors for Stock Options. Directors eligible to
receive options under the Plan ("Eligible Directors") shall be those directors,
who are not, at the time they become an Eligible Director, employees of the
Company or of any subsidiary of the Company and (i) who are directors on the
Effective Date of this Plan (which shall be the eligibility date for such
directors) or (ii) who are first elected a director of the Company after the
Effective Date of this Plan (which election date shall be the eligibility date
for any such director).
4. Grant of Options; Exercise Price. Each individual who is an Eligible
Director shall, on his or her eligibility date as determined under Section 3,
automatically be granted an option ("Option") to purchase 5,000 shares of Stock
of the Company (subject to adjustment as provided in Sections 5 and 10) at an
exercise price equal to the Fair Market Value of the Stock on the effective date
of grant. Thereafter, on each date that an Eligible Director is elected to a new
one-year term of office, such Eligible Director shall automatically be granted
an Option to purchase 1,500 shares of Stock of the Company (subject to
adjustment as provided in Sections 5 and 10) at an exercise price equal to the
Fair Market Value of the Stock on the effective date of grant. All options shall
expire ten years after the effective date of grant.
<PAGE>
5. Number of Shares. The number of shares of Stock of the Company which
may be issued upon the exercise of Options granted under the Plan, including
shares forfeited pursuant to Section 7, shall not exceed 100,000 in the
aggregate, subject to increase under Section 10, which increases and appropriate
adjustments as a result thereof shall be made by the Committee, whose
determination shall be binding on all persons.
6. Stock to be Delivered. Shares of Stock to be delivered pursuant to
an Option granted under this Plan may constitute an original issue of authorized
Stock or may consist of previously issued Stock acquired by the Company, as
shall be determined by the Board. The Board and the proper officers of the
Company shall take any appropriate action required for such delivery. No
fractional shares shall be delivered under the Plan.
The Company will not be obligated to deliver any shares of Stock
pursuant to the Plan (a) until all conditions of the Option have been satisfied,
(b) until, in the opinion of the Company's counsel, all applicable federal and
state laws and regulation have been complied with, (c) if the outstanding Stock
is at the time listed on the New York Stock Exchange or any other stock
exchange, until the shares to be delivered have been listed or authorized to be
listed on the New York Stock Exchange or such other exchange upon official
notice of notice of issuance, and (d) until all other legal matters in
connection with the issuance and delivery of such shares have been approved by
the Company's counsel. If the sale of Stock has not been registered under the
Securities Act of 1933, as amended, the Company may require, as a condition to
exercise of the Options, such representations or agreements as counsel for the
Company may consider appropriate to avoid violation of such Act and may require
that the certificates evidencing such Stock bear an appropriate legend
restricting transfer.
If an Option is exercised by the Eligible Director's legal
representative, the Company will be under no obligation to deliver Stock
pursuant to such exercise until the Company is satisfied as to the authority of
such representative.
7. Exercisability; Exercise; Payment of Exercise Price.
All Options granted under the Plan prior to July 1, 1996, shall,
subject to initial stockholder approval of the Plan, become exercisable
immediately as to one-third of the shares, on the first anniversary of the grant
date as to the second third of the shares and as to one share of any remainder,
and on the second anniversary of the grant date as to the last third of the
shares and the second share of any two-share remainder.
<PAGE>
All Options granted under the Plan on or after July 1, 1996, shall,
subject to initial stockholder approval of the Plan, become exercisable six
months after the grant date as to one-third of the shares, on the earlier of the
first anniversary of the grant date or the annual meeting of stockholders
closest thereto as to the second third of the shares and as to one share of any
remainder, and on the earlier of the second anniversary of the grant date or the
annual meeting of stockholders closest thereto as to the last third of the
shares and the second share of any two-share remainder.
Any exercise of an Option must be in writing, signed by the proper
person and delivered or mailed to the Company, accompanied by (1) any documents
required by the Committee and (2) payment in full as provided below for the
number of shares for which the Option is exercised.
The exercise price of Stock purchased on exercise of an Option must be
paid for as follows: (1) in cash or by check (acceptable to the Company in
accordance with guidelines established for this purpose), bank draft or money
order payable to the order of the Company or (2) through the delivery of shares
of Stock which have been outstanding and held by the Option holder for at least
six months and which have a Fair Market Value on the last business day preceding
the date of exercise equal to the exercise price, or (3) by delivery of a two
year-term promissory note of the Eligible Director to the Company, bearing
interest on amounts outstanding at a rate equal to the prime rate as published
in The Wall Street Journal on the effective date of grant plus 2%, or (4) by
delivery of an unconditional and irrevocable undertaking by a broker to deliver
promptly to the Company sufficient funds to pay the exercise price, or (5) by
any combination of the permissible forms of payment.
To the extent shares of Stock covered under an Option are not delivered
because the Option lapses or is terminated, such forfeited shares may be
regranted in another Option within the limits set forth in Section 5.
8. Termination of Options.
a. Death or Disability. If an Eligible Director ceases to be a director
by reason of death or total and permanent disability (as determined by the
Committee), the following will apply:
All Options held by the Eligible Director that are not exercisable on
the thirtieth day after termination of the Eligible Director's status as a
director will terminate as of such date. All Options that are exercisable as of
said thirtieth day will continue to be exercisable until the earlier of (1) the
first anniversary of the date on which the Eligible Director's status as a
director ended or (2) the date on which the Option would have terminated had the
Eligible Director remained a director. If the Eligible Director has died or is
totally or permanently disabled, the Option may be exercised within such limits
by the Eligible Director's legal representative.
b. Other Termination. If an Eligible Director's service with the
Company terminates for any reason other than death or incapacity as provided
above, all Options held by the director that are not then exercisable shall
terminate. Options that are exercisable on the date of such termination (other
than termination upon a removal for cause, in which event all Options shall
immediately terminate) shall continue to be exercisable until the earlier of (1)
one year thereafter or (2) the date on which the Option would have terminated
had the director remained an Eligible Director, and after completion of that
period, such Options shall terminate to the extent not previously exercised,
expired or terminated.
c. Certain Corporate Transactions. In the event of a Change of Control
of the Company, each outstanding Option not otherwise exercisable shall become
immediately exercisable in full on the twentieth (20th) trading day prior to the
effective date of the Change of Control. Subject to the last paragraph of this
<PAGE>
section, the Company shall pay to those Option holders whose Options have been
terminated, an amount equal to the Option Value, such payment to be made by cash
or certified check within 30 days after the Change in Control. The Option Value
shall be determined as the difference between the exercise price of the Option
and the Market Price times the number of shares covered by the Option. The
Market Price shall be determined as the average of the Fair Market Value, as
determined under section 11, for the period of twenty (20) trading days ending
on the effective date of the Change of Control.
"Change of Control" means any of the following: (1) any person, entity
or Group (persons or entities acting together) is or becomes the beneficial
owner of more than 50% of the Voting Stock of the Company; (2) a consolidation,
merger, or sale of substantially all of the assets of the Company, with the
effect that any person, entity or Group becomes the beneficial owner of more
than 50% of the Voting Stock of the Company or the Company is not the surviving
entity; (3) during any consecutive two-year period commencing July 1, 1996,
individuals who constituted the Board of Directors at the beginning of such
period, together with any new directors whose election by the Board or
nomination for election by stockholders was approved by 2/3 of the directors who
were in office at the beginning of the period or whose election or nomination
was so approved, cease to constitute a majority of the Board then in office; or
(4) any order, judgment or decree of dissolution or split-up of the Company, and
such order remains undischarged or unstayed for a period in excess of 60 days.
For purposes of this provision, "more than 50% of the Voting Stock" means more
than 50% of one or more classes of stock pursuant to which the holders have the
general power to vote for the election of members of the Board of Directors, and
the aggregate of such classes for which the person, entity or Group holds more
than 50% has the power to elect more than 50% of the members of the Board of
Directors.
Notwithstanding the foregoing, the termination of Options and the
payment of Option Values described in the first paragraph of this section shall
not apply with respect to any transaction in which the Option Holder receives
either (i) a replacement option allowing the Option Holder to receive, on the
same terms as in the original Option, the greatest amount of securities, cash or
other property to which such holder would have been entitled as a holder of
Common Stock upon consummation of the transaction if such holder had exercised
the rights represented by the Option held by such holder immediately prior to
the transaction, or (ii) if pooling of interests is a condition of the
transaction, a replacement equity interest which enables the transaction to
qualify for pooling of interests.
9. General Provisions
a. Documentation of Options. Options will be evidenced by written
instruments prescribed by the Committee from time to time. Such instruments may
be in the form of agreements, to be executed by both an Eligible Director and
the Company, or certificates, letters or similar instruments, which need not be
executed by an Eligible Director but acceptance of which will evidence agreement
to the terms thereof.
<PAGE>
b. Rights as a Stockholder. An option holder shall not have the rights
of a stockholder with respect to Options under the Plan except as to Stock
actually received by him or her under the Plan.
c. Tax Withholding. The Eligible Director or other appropriate person
shall remit to the Company an amount sufficient to satisfy the withholding
requirements, or make other arrangements satisfactory to the Committee with
regard to such requirements, prior to the delivery of any Stock. If and to the
extent that such withholding is required, the Committee may permit the Eligible
Director such other person to elect at such time and in such manner as the
Committee provides to have the Company hold back from the shares to be
delivered, or to deliver to the Company, Stock having a value calculated to
satisfy the withholding requirement.
d. Nontransferability of Options. No Option may be transferred other
than by will or by the laws of descent and distribution, and during a director's
lifetime an Option may be exercised only by the director (or, in the event of
the director's incapacity, the person or persons legally appointed to act on the
director's behalf).
10. Adjustments in the Event of Certain Transactions.
a. In the event of a stock dividend, stock split or combination of
shares, recapitalization or other change in the Company's capitalization, or
other distribution to common stockholders other than normal cash dividends, the
Committee will make any appropriate adjustments to the maximum number of shares
that may be delivered under the Plan under Section 5 above.
b. In any event referred to in paragraph (a), the Committee will also
make any appropriate adjustments to the number and kind of shares of stock or
securities subject to Options then outstanding or subsequently granted, exercise
prices relating to Options and any other provision of Options affected by such
change. The Committee may also make such adjustments to take into account
material changes in law or in accounting practices or principles, mergers,
consolidations, acquisitions, dispositions or similar corporate transactions, or
any other event, if it is determined by the Committee that adjustments are
appropriate to avoid distortion in the operation of the Plan.
11. Fair Market Value. For purposes of the Plan, Fair Market Value of a
share of Stock on any date will be the last sale price as reported by the
principal exchange on which the Stock is traded or by the National Association
of Securities Dealers, Inc. Automated Quotations System or such other similar
system then in use, on that date; or, if on any such a date such Stock is not
quoted by any such organization, the average of the closing bid and asked prices
with respect to such Stock, as furnished by a professional market maker making a
market in such Stock selected by the Committee; or if such prices are not
available, the fair market value of such Stock as of such date as determined in
good faith by the Committee.
12. Effective Date and Term. This Plan, having been approved by the
Board of Directors on December 12, 1995, shall become, in accordance with the
term of the approving vote of the Board, effective on December 12, 1995 (the
"Effective Date"), subject to approval of this Plan by vote of a majority of the
shareholders of the Company present and eligible to vote on the question at an
annual or special meeting of stockholders held not later than December 12, 1996.
<PAGE>
Options may be granted under the Plan prior to the date of stockholder approval,
and options so granted shall be effective on the effective date of grant subject
to stockholder approval of the Plan as provided in this Section. No Options may
be awarded under this Plan after December 12, 2005, but the Plan shall continue
thereafter while previously awarded Options remain subject to the Plan.
13. Effect of Termination, and Amendment. Neither adoption of the Plan
nor the grant of Options to an Eligible Director shall confer upon any person
any right to continued status as a director with the Company or any subsidiary
or affect in any way the right of the Company or subsidiary to terminate a
director relationship at any time or shall affect the Company's right to grant
to such director options or other stock awards that are not subject to the Plan,
to issue to such director stock as a bonus or otherwise, or to adopt other plans
or arrangements under which stock may be issued to directors. The Committee may
at any time terminate the Plan as to any further grants of Options. The
Committee may at any time or times amend the Plan for any purpose which may at
the time be permitted by law, but in no event (except to comply with the
provisions of the Internal Revenue Code, the Employee Retirement Income Security
Act or the rules thereunder) more than once in any six-month period.
Exhibit 5.1
WEIL, GOTSHAL & MANGES LLP
767 FIFTH AVENUE
NEW YORK, NY 10153
212-310-8000
(FAX) 212-310-8007
November 25, 1997
The Grand Union Company
201 Willowbrook Boulevard
Wayne, New Jersey 07470
Gentlemen:
We have acted as counsel to The Grand Union Company, a Delaware
corporation (the "Company"), in connection with the preparation and filing of
the Registration Statement of the Company on Form S-8 under the Securities Act
of 1933 (the "Registration Statement"). Terms defined in the Registration
Statement and not otherwise defined herein are used herein with the meanings as
so defined.
In so acting, we have examined originals or copies, certified or
otherwise identified to our satisfaction, of such corporate records, agreements,
documents and other instruments, and such certificates or comparable documents
of public officials and of officers and representatives of the Company, and have
made such inquiries of such officers and representatives, as we have deemed
relevant and necessary as a basis for the opinions hereinafter set forth.
In such examination, we have assumed the genuineness of all
signatures, the authenticity of all documents submitted to us as originals, the
conformity to original documents of documents submitted to us as certified,
conformed or photostatic copies and the authenticity of the originals of such
latter documents. As to all questions of fact material to this opinion that have
not been independently established, we have relied upon certificates or
comparable documents of officers and representatives of the Company.
Based on the foregoing, and subject to the qualifications stated
herein, we are of the opinion that the 6,100,000 shares of common stock, par
value $.01 per share, of the Company (the "Common Stock") to be issued and sold
by the Company
NYFS03...:\18\50318\0005\1708\OPNN197P.44B
<PAGE>
The Grand Union Company
November 25, 1997
Page 2
pursuant to the Registration Statement have been duly authorized and, when
issued and sold as contemplated by the Registration Statement, The Grand Union
Company 1995 Equity Incentive Plan and The Grand Union Company 1995 Non-Employee
Directors' Stock Option Plan will be validly issued, fully paid and
nonassessable.
This opinion is rendered solely for your benefit in connection with
the transactions described above. This opinion may not be used or relied upon by
any other person and may not be disclosed, quoted, filed with a governmental
agency or otherwise referred to without our prior written consent.
We hereby consent to be named in the Prospectus as the attorneys who
have passed upon the legality of the securities being offered thereby and to the
filing of this opinion as an exhibit to the Registration Statement.
Very truly yours,
/s/ Weil, Gotshal & Manges LLP
Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this
Registration Statement on Form S-8 of our reports dated May 29, 1997, except as
to the second, fourth, fifth and sixth paragraphs of Note 8 which are as of June
12, 1997, and May 17, 1996 appearing in The Grand Union Company's Annual Report
on Form 10-K for the year ended March 29, 1997.
/s/ PRICE WATERHOUSE LLP
Morristown, New Jersey
November 25, 1997
