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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 (I.R.S. employer
of incorporation or organization) identification number)
(Address of principal executive offices; zip code)
________________________
Associate Stock Purchase Plan
(Full title of the plan)
Glenn J. Smith, Esq.
The Grand Union Company
201 Willowbrook Boulevard, Wayne, New Jersey 07470
(973) 890-6000
(Name, address and telephone number,
including area code, of agent for service)
Copies to:
John D. Schupper, Esq.
Lowenstein, Sandler, Kohl, Fisher & Boylan, P.A.
65 Livingston Avenue
Roseland, New Jersey 07068
(201) 992-8700
________________________
Calculation of Registration Fee
- --------------------------------------------------------------------------------
Proposed Proposed
Maximum Maximum
Title of Amount Offering Aggregate Amount of
Securities to to be Price Offering Registration
be Registered Registered per Share (2) Price (2) Fee
- --------------------------------------------------------------------------------
Common Stock,
par value $.01 1,000,000
per share shares (1) $1.60 $1,600,000 $484.85
- --------------------------------------------------------------------------------
(1) Plus such additional shares of Common Stock as may be issuable pursuant to
the anti-dilution provisions of the Company's Associate Stock Purchase Plan,
as described more fully herein.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) and (h) of the Securities Act of 1933, based upon a
price of $1.60 per share, which was the average of the bid and asked sales
prices of the Common Stock as reported on the Nasdaq SmallCap Market on
September 24, 1997.
<PAGE>
PART I INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
The documents containing the information specified in Part I of this
Registration Statement, which together constitute the prospectus to be used for
offers of up to 1,000,000 shares of common stock, par value $.01 per share
("Common Stock"), of The Grand Union Company (the "Company") in connection with
the Company's Associate Stock Purchase Plan (the "Plan"), will be sent or given
to such persons as specified by Rule 428 (b)(1). 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 of 1933, as
amended (the "Securities Act").
<PAGE>
II-6
PART II INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Certain Documents by Reference
The following documents filed by The Grand Union Company (the "Company")
with the Securities and Exchange Commission (the "Commission") are incorporated
by reference in this Registration Statement:
(i) The Company's Annual Report on Form 10-K for the fiscal year ended
March 29, 1997;
(ii) The Company's Quarterly Report on Form 10-Q for the period ended July
19, 1997;
(iii) The Company's Current Reports on Form 8-K, dated June 17, 1997,
August 13, 1997 and September 4, 1997, respectively.
(iv) The description of the Company's Common Stock contained in the
Company's Registration Statement on Form 8-A including any amendment or report
filed for the purpose of updating such information.
All documents subsequently filed by the Company with the Commission
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), after the date of this Registration
Statement and 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 de-registers all securities then remaining unsold shall be
deemed to be incorporated by reference into this Registration Statement and to
be a part hereof from their respective dates of filing (such documents, and the
documents enumerated above, being hereinafter referred to as "Incorporated
Documents"). Any statement contained in any Incorporated Document shall be
deemed to be modified or superseded for purposes of this Registration Statement
to the extent that a statement contained herein or in any other subsequently
Incorporated Document modifies or supersedes such statement. Any such statement
so modified or superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this Registration Statement.
Item 4. Description of Securities
Not applicable.
Item 5. Interests of Named Experts and Counsel
Not Applicable.
Item 6. Indemnification of Directors and Officers
Article Fifth, paragraph 3 of the Company's Restated Certificate of
Incorporation, as amended ("Certificate of Incorporation") and certain
indemnification agreements entered into between the Company and each of its
officers and directors, provide that the Company shall, to the maximum extent
permitted from time to time under the General Corporation Law of the State of
Delaware (the "GCL"), indemnify each person (including the heirs, executors,
administrators and other personal representatives of such person) against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement, actually and reasonably incurred by such person in connection with
any threatened, pending or actual suit, action or proceeding (whether civil,
criminal, administrative or investigative in nature or otherwise) in which such
person may be involved by reason of the fact that he or she is or was a director
or officer of the Company or is serving any other incorporated or unincorporated
enterprise in any of such capacities at the request of the Company.
Section 145 of the GCL permits a corporation, under specified
circumstances, to indemnify its directors, officers, employees or agents against
expenses (including attorney's fees), judgments, penalties, fines and amounts
paid in settlements actually and reasonably incurred by them in connection with
any action, suit or proceeding brought by third parties by reason of the fact
that they were or are directors, officers, employees or agents of the
corporation, if such directors, officers, employees or agents acted in good
faith and in a manner they reasonably believed to be in or not opposed to the
best interests of the corporation and, with respect to any criminal action or
proceeding, had no reason to believe their conduct was unlawful. In a derivative
action, i.e., one by or in the right of the corporation, indemnification may be
made only for expenses actually and reasonably incurred by directors, officers,
employees or agents in connection with the defense or settlement of an action or
suit, and only with respect to a matter as to which they shall have acted in
good faith and in a manner they reasonably believed to be in or not opposed to
the best interests of the corporation, except that no indemnification shall be
made if such person shall have been judged liable to the corporation unless and
only to the extent that the court in which the action or suit was brought shall
determine upon application that the defendant directors, officers, employees or
agents are fairly and reasonably entitled to indemnity for such expenses despite
such adjudication of liability.
Article Fifth, paragraph 4 of the Certificate of Incorporation also
contains a provision limiting the personal liability of directors to the Company
and its shareholders for monetary damages resulting from breaches of fiduciary
duty as directors except to the extent that exculpation from liability is not
permitted under the GCL at the time such liability is determined.
Item 7. Exemption From Registration Claimed
Not applicable.
Item 8. Exhibits
The Exhibits accompanying this Registration Statement are listed on the
accompanying Exhibit Index.
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 of 1933;
(ii) To reflect in the prospectus any acts 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.
Notwithstanding the foregoing, any increase or decrease in volume of securities
offered (if the total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration Fee"
table in the effective 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 paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
registration statement is on Form S-3, Form S-8 or Form F-3, and the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed with or furnished to the Commission 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 of 1933, 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 of 1933, 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 the 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.
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 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 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.
<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 October 1, 1997.
THE GRAND UNION COMPANY
By: /S/Jeffrey P. Freimark
_______________________________
Jeffrey P. Freimark, Executive
Vice President and Chief Financial
and Administrative Officer
Pursuant to the requirement of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities indicated on October 1, 1997. Each of the undersigned hereby
constitutes and appoints J. Wayne Harris, Jeffrey P. Freimark and Francis
Nicastro and each of them, his true and lawful attorneys-in-fact and agents,
with full power of substitution and resubstitution, for him and in his name,
place and stead, in any and all capacities, to sign any and all amendments
(including post-effective amendments) to this Registration Statement on Form S-8
relating to the Company's Associate Stock Purchase Plan and to file the same,
together with all exhibits thereto and other documents in connection therewith,
with the Securities and Exchange Commission and such other state and federal
government commissions and agencies as may be necessary or advisable, granting
unto said attorneys-in-fact and agents, and each of them, 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
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or any of them or his substitute or substitutes,
may lawfully do or cause to be done by virtue hereof.
Signature Capacity
/s/J. Wayne Harris
_________________________ Director, Chairman and Chief
J. Wayne Harris Executive Officer (Principal
Executive Officer)
/s/Roger E. Strangeland
__________________________ Director, Chairman Emeritus
Roger E. Stangeland
/s/James J. Costello
__________________________ Director
James J. Costello
/s/Clifford A. Miller
__________________________ Director
Clifford A. Miller
/s/Geoffrey T. Moore
__________________________ Director
Geoffrey T. Moore
<PAGE>
/s/J. Richard Stonesifter
__________________________ Director
J. Richard Stonesifer
/s/Jeffrey P. Freimark
__________________________ Executive Vice President, Chief
Jeffrey P. Freimark Financial and Administrative
Officer (Principal Accounting and
Principal Financial Officer)
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description Page No.
4.1 Certificate of Incorporation of The Grand Union
Company (filed as Exhibit 3.1 to the Company's
Annual Report on Form 10-K for the fiscal year
ended March 29, 1997 (File No. 0-26602) and
incorporated herein by reference).
4.2 Certificate of Designation of Class A Convertible
Preferred Stock (filed as Exhibit 10.4 to the
Company's Quarterly Report on Form 10-Q for the
period ended October 12, 1996 (File No. 0-26602)
and incorporated herein by reference).
4.3 Certificate of Designation of Class B Convertible
Preferred Stock (filed as Exhibit 3.3 to the
Company's Annual Report on Form 10-K for the
fiscal year ended March 29, 1997 (File No.
O-26602) herein and incorporated herein by
reference).
4.4 By-laws of The Grand Union Company (filed as
Exhibit 3.1 to the Company's Quarterly Report
on Form 10-Q for period ended October 12,
1996 (File No. O-26602) and incorporated
herein by reference).
5.1 Opinion of Lowenstein, Sandler, Kohl,
Fisher & Boylan, P.A.
23.1 Consent of Price Waterhouse LLP
23.2 Consent of Lowenstein, Sandler, Kohl,
Fisher & Boylan, P.A. (contained in
Exhibit 5.1).
24.1 Power of Attorney (included in signature page)
99.1 Associate Stock Purchase Plan
EXHIBIT 5.1
September 30, 1997
The Grand Union Company
201 Willowbrook Boulevard
Wayne, New Jersey 07470
Dear Sirs:
In connection with the registration under the Securities Act of 1933, as
amended (the "Act"), of 1,000,000 shares of Common Stock, par value $.01 per
share (the "Common Stock"), of The Grand Union Company, a Delaware corporation
(the "Company"), to be issued and sold pursuant to The Grand Union Company
Associate Stock Purchase Plan (the "Plan"), we have examined such corporate
records, certificates and other documents and such questions of law as we have
considered necessary or appropriate for the purposes of this opinion.
Upon the basis of such examination, we advise you that, in our opinion, the
shares of Common Stock to be issued under the Plan have been duly authorized
and, when issued in accordance with the terms and conditions of the Plan, will
be validly issued, fully paid and non-assessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. In giving such consent, we do not thereby admit that we
are in the category of persons whose consent is required under Section 7 of the
Act.
Very truly yours,
/S/ LOWENSTEIN, SANDLER, KOHL
FISHER & BOYLAN
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.
Price Waterhouse LLP
_________________________
/s/Price Waterhouse LLP
Morristown, New Jersey
September 30, 1997
EXHIBIT 99.1
THE GRAND UNION COMPANY
ASSOCIATE STOCK PURCHASE PLAN
The following constitutes the provisions of The Grand Union Company
Associate Stock Purchase Plan (herein, called the "Plan"). As used herein the
terms "Company" and "Grand Union" refer to The Grand Union Company and, where
appropriate, any Participating Company of The Grand Union Company.
1. Purpose.
The purpose of the Plan is to align Associate interests more closely with
stockholder interests, foster continued cordial Associate relations, and provide
additional compensation in exchange for the future services of Associates, all
by providing Associates of the Company with an opportunity to purchase Common
Stock of the Company. It is the intention of the Company that the Plan qualify
as an "employee stock purchase plan" under Section 423 of the Code. The
provisions of the Plan shall be construed in a manner consistent with the
requirements of that section of the Code and the regulations promulgated
thereunder.
2. Definitions.
(a) "Associate" means an employee of The Grand Union Company or a
Participating Company.
(b) "Board" means the Board of Directors of The Grand Union Company.
(c) "Code" means the Internal Revenue Code of 1986, as amended.
(d) "Committee" means the Compensation Committee of the Board, or such
other committee as may be designated by the Board to administer this Plan.
(e) "Common Stock" means the Company's common stock, par value of $0.01 per
share.
(f) "Deduction Account" means a bookkeeping account maintained by the
Company to keep track of a Participant's payroll contributions within a
particular Offering Period prior to the Purchase Date.
(g) "Eligible Associate" has the meaning specified in Section 3.
(h) "Fair Market Value" means, with respect to the Company's Common Stock
as of a specific date, the last sale price on that date as reported by the
principal exchange on which the Company has listed its Common Stock for trading
or by the National Association of Securities Dealers, Inc. Automated Quotations
System or such other similar system then in use (each, a "nationally recognized
exchange"), or if no sale is made on such date, the corresponding last sale
price on the first preceding date on which the Company's Common Stock was sold.
If the Company's Common Stock is not listed for trading on any nationally
recognized exchange, then "Fair Market Value" means 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.
(i) "Offering period" has the meaning specified in Section 4.
(j) "Option Grant Date" means the first Trading Day of' each Offering
Period of the Plan.
(k) "Option Price" has the meaning specified in Section 7.
(1) "Participant" means an Eligible Associate who has become a Participant
in the Plan pursuant to Section 5.
(m) "Participating Company" means any present or future parent or
subsidiary of the Company (determined by reference to Section 424 of the
Internal Revenue Code) designated by the Board to be a Participating Company.
(n) "Plan Agent" means a third party selected by the Company to hold
shares, maintain records and provide administrative services with respect to the
Plan.
(o) "Purchase Account" means an account in the Participant's name
maintained by the Plan Agent, which reflects the number of shares purchased
under the Plan by the Participant and credited pursuant to Section 9.
(p) "Purchase Date" means the last Trading Day of each Offering Period of
the Plan.
(q) "Trading Day" means a day on which, the stock exchange, which trades
Grand Union Common Stock, is open for trading.
3. Eligibility.
Any Associate who has been continuously employed with, the Company for a
period of at least six months ending on or prior to the first day of an Offering
Period shall be an Eligible Associate with respect to such Offering Period,
unless the Associate is on a leave of absence at the beginning of the Offering
Period. An Associate who has been continuously employed shall be an Eligible
Associate as of the date in the sixth month after the Associate's employment
commencement date, which corresponds numerically with the Associate's employment
commencement date. Members of the Board or the Committee who are Eligible
Associates are permitted to participate in the Plan.
4. Offering Period.
Absent action by the Board, each, Offering Period, with the exception of
the initial Offering Period, shall be for a period of three calendar months,
commencing on the first day of January, April, July and October and ending,
respectively on the last day of March, June, September and December. The Board
may, without shareholder approval, (i) change the commencement date and duration
of Offering Periods with, respect to future offerings, if such change is
announced at least thirty (30) days prior to the scheduled beginning of the
first Offering Period to be affected by such change or (ii) cancel an offering
at any time prior to the commencement date. The Board has established that the
initial Offering Period under the Plan shall be for a period of two (2) months
commencing November l, 1997 and concluding December 31, 1997. An Offering Period
shall be deemed to have ended on the effective date upon which the Plan is
terminated in accordance with the provisions of Section 19.
5. Participation.
An Associate may become a Participant by completing an enrollment form
provided by the Company and filing that form with the designated Company office
not later than the fifteenth (15th) day prior to the commencement of an Offering
Period with respect to which he or she is an Eligible Associate, subject to the
limitations imposed by the Plan. Enrollment forms for the initial Offering
Period must be received by the designated Company office not later than seven
(7) says prior to the commencement of the initial Offering Period. An Associate
who becomes an Eligible Associate after the first day of an Offering Period may
not participate in the Plan until the next Offering Period.
6. Contributions.
(a) At the time a Participant files his or her enrollment form, he or she
shall elect to have payroll contributions deducted on each payday during the
Offering Period, subject to the maximum prescribed in Section 6(e). Unless the
Committee provides otherwise, the amount to be deducted from each Participant's
pay is to be designated as a specific dollar amount, with a minimum deduction of
Four Dollars ($4) per weekly payroll period and a maximum deduction of Four
Hundred Dollars ($400) per weekly payroll period. All payroll contributions
authorized by a Participant shall be withheld by the Company from the
Participant's pay and the Company shall maintain a Deduction Account in the name
of the Participant until such amounts are credited to the Participant's Purchase
Account as of the next Purchase Date.
(b) A Participant's payroll deduction election shall remain in effect until
changed or revoked or participation is otherwise terminated as provided in
Section 10, or by the Company. Payroll contributions shall be made for each
payroll period ending during a particular Offering Period.
(c) A Participant may make additional contributions, subject to the limits
of Section 6(e), by making payment in the manner specified by the Company at
least fifteen (15) days prior to the end of the Offering Period.
(d) A Participant may discontinue his or her participation in the Plan as
provided in Section 10, and may decrease or increase the rate of his or her
payroll contributions during the Offering Period by completing and filing with
the Company a new authorization for payroll deduction. The new authorization
must be received by the Company at least fifteen (15) days prior to the proposed
effective date of the change.
(e) The aggregate of all payroll contributions and additional contributions
per Eligible Associate during an Offering Period shall not exceed Five Thousand
Two Hundred Dollars ($5,200), unless the Offering Period is other than a period
of three calendar months, in which case such aggregate deductions and
contributions shall not exceed the product of Four Hundred Dollars ($400) times
the number of weeks during the Offering Period with respect to which such
amounts are accumulated, rounded to the nearest full week.
(f) All payroll contributions or additional contributions received or held
by the Company or the Plan Agent under the Plan are general corporate assets of
the Company and may be used by the Company for any corporate purpose. The
Company shall not be obligated to segregate such amounts.
(g) No interest shall accrue on amounts held in a Participant's Deduction
Account or Purchase Account.
(h) Contributions and deductions during a particular Offering Period may
not be withdrawn prior to the Purchase Date, except as provided under Section
10.
(i) No further contributions may be made by a Participant after the date on
which his or her employment with the Company, or any Participating Company,
terminates for any reason.
7. Grant of Option.
(a) On each Option Grant Date, each Participant in the Plan shall be deemed
to have been granted an option to purchase (at the per share Option Price) a
maximum number of shares of the Company's Common Stock, rounded to the nearest
ten thousandth of a share, determined by dividing: (i) Five Thousand Two Hundred
Dollars ($5,200), by (ii) eighty-five percent (85%) of the Fair Market Value of
a share of the Company's Common Stock on such Option Grant Date; but in, no
event shall such number be greater than the amount permitted under Section 7(b)
of this Plan. For any Offering Period which is not a calendar quarter, the
amount determined under (i) above shall be no greater than Four Hundred Dollars
($400) times the number of weeks during the Offering Period.
(b) Exceptions. Any provisions of the Plan to the contrary notwithstanding,
any option granted to a Participant shall be limited so that:
(i) Immediately after the grant, such Participant would not own
stock possessing five percent (5%) or more of the total combined
voting power or value of all classes of stock of the Company or of any
parent or subsidiary of the Company (including stock which the
Participant may purchase under outstanding options and stock the
ownership of which is attributed to the Participant under Section
424(d) of the Code), and
(ii) the Participant's right to purchase shares under all
employee stock purchase plans of the Company and its parent or
subsidiaries shall not accrue (i.e., first become exercisable) at a
rate which exceeds twenty-five thousand dollars ($25,000) of the Fair
Market Value of such shares (determined at the time such option is
granted) for each calendar year in which such option is exercisable
and outstanding at any time.
(c) The Option price per share of such shares shall be the lower of: (i)
85% of the Fair Market Value of a share of the Company's Common Stock on the
Option Grant Date; or (ii) 85% of the Fair Market Value of a share of the
Company's Common Stock on the Purchase Date. In each case, the per share Option
price shall be rounded to the nearest ten thousandth of a dollar.
8. Exercise of Option.
(a) Automatic Exercise. Unless a Participant withdraws from the Plan as
provided in Section 10, his or her option for the purchase of shares will be
exercised automatically for the number of whole and fractional shares (rounded
to the nearest ten-thousandth) which the amount in the Participant's Purchase
Account on the Purchase Date could purchase at the Option Price, but not in
excess of the number of shares determined in Section 7(a). An option is
exercisable only on the Purchase Date and only to the extent of the amount in
the Participant's Purchase Account. Participant's option to purchase shares
hereunder is exercisable only by the Participant or, in the event of the
Participant's death or incompetence, by the Participant's legal representative.
No options shall be exercisable unless and until stockholders approve this Plan
within twelve months before or after its adoption by the Board of Directors.
(b) Withholding Taxes. The Company may prescribe procedures under which the
amount of federal, state or local taxes required to be withheld must be paid to
the Company by a Participant before shares are issued to that Participant, or
may be deducted, either at the time of exercise or following disposition of
shares purchased, from a Participant's pay, the Participant's Deduction Account
or the Participant's Purchase Account.
(c) Excess Contributions. Any excess contributions remaining in the
Participant's Purchase Account after each purchase of the shares on the Purchase
Date will be credited to the Participant through the Company payroll or
otherwise be paid directly to the Participant by check, at the Company's
discretion.
9. Delivery.
As promptly as practicable after each Purchase Date of each offering, the
Company shall arrange to have credited to the Participant's Purchase Account the
number of whole and fractional shares purchased by the Participant. Shares
issued under the Plan may be issued only in the name of the Participant or in
the street name for the company holding shares for the Plan Agent. Shares held
in a Participant's Purchase Account may be transferred from that account at any
time by sale, gift, will, operation of the laws of descent and distribution, or
domestic relations order. Shares may not be issued to the Participant in
certificate form or transferred (other than by sale, gift, will, operation of
the laws of descent and distribution, or domestic relations order) within two
years from the Option Grant Date applicable to the shares being transferred,
without the written consent of the Company. In the event shares are distributed
to the Participant in certificate form, the Participant shall receive a
certificate for the number of whole shares requested, and if no other whole
shares remain, shall receive cash in lieu of any fractional share, based on the
selling price of shares sold to cover the fractional share.
10. Withdrawal; Termination of Employment.
(a) Retirement. On termination of the Participant's employment by reason of
retirement, in accordance with Company policy, the Participant may withdraw any
or all amounts held in his or her Deduction Account and shares credited to his
or her Purchase Account by filing a written request with the designated office
of the Company at least fifteen (15) days prior to the end of the Offering
Period. Amounts not withdrawn from the Participant's Deduction Account will be
applied to purchase shares at the end of the Offering Period.
(b) Termination. If the Participant's employment is terminated prior to the
end of an Offering Period for any reason other then retirement, including
permanent disability or death, and such termination is recorded on Company
records prior to the end of the Offering Period, the payroll contributions and
additional contributions credited to the Participant's Deduction Account will be
returned to him or her, or in the case of his or her death, to the executor or
administrator of his or her estate, and his or her option will be canceled.
(c) Leave of Absence. An Eligible Associate or a Participant who has been
granted a leave of absence shall, for purposes of the Plan, be deemed an
Associate for the first 90 days of such leave of absence, and thereafter shall,
for the purposes of the Plan, be deemed to have terminated employment on the
91st day of such leave of absence. Payroll contributions for a Participant who
has been on a leave of absence will resume at the same rate as in effect prior
to such leave upon return to work unless changed by such Participant, unless the
Participant has been on a leave of absence for more than ninety (90) days, or
unless the Participant was on leave at the beginning of the Offering Period, in
which cases the Participant shall not be permitted to re-enter the Plan until an
enrollment form is filed by the Participant with respect to a subsequent
Offering Period which commences after such Participant has returned to work from
the leave of absence.
(d) Cessation of Participation. A Participant may terminate participation
in the Plan as of any date during an Offering Period by giving written notice
thereof (on a form approved by the Committee) to an office designated by the
Company at least fifteen (15) days in advance of the proposed effective date of
such termination. Nevertheless, if the revocation becomes effective during an
Offering Period, any accumulated payroll contributions and additional
contributions will be used to purchase shares at the end of the Offering Period.
A Participant who terminates participation in the Plan during an Offering Period
may not re-enter the Plan until the following Offering Period.
(e) Involuntary Closure of Account. At the Company's discretion, a
Participant's Purchase Account may be closed at any time by distributing
directly to the Participant a certificate representing the number of whole
shares in the Purchase Account and paying out any fractional shares in cash. A
Participant's Purchase Account shall be closed upon or after the Participant's
termination of employment if the Participant's Purchase Account consists solely
of shares that were purchased as of the end of an Offering Period the first day
of which is more than two (2) years prior to the date of the termination of the
Participant's employment with the Company or any Participating Company.
11. Stock.
(a) The maximum number of shares of the Company's Common Stock which may be
sold pursuant to all options exercised under the Plan shall be One Million
(1,000,000) shares, subject to adjustment upon changes in capitalization of the
Company as provided in Section 15. The shares to be sold to Participants in the
Plan may be, at the election of the Company, either treasury shares or
authorized but unissued shares. In addition, the Company may acquire shares of
the Company's Common Stock in the open market for resale under this Plan. If the
total number of shares which would otherwise be subject to purchase pursuant to
Section 8 hereof exceeds the number of shares then available under the Plan
(after deduction of all shares for which options have been exercised or are then
outstanding), the Company shall make a pro rata allocation of the shares
remaining available for purchase in as uniform and equitable a manner as is
practicable. In such event, the Company may reduce the rate of payroll
contributions as appropriate.
(b) The Participant will have no interest or voting rights in shares
covered by his or her option until such option has been exercised.
12. Administration.
(a) The Plan shall be administered by the Committee. The Board may from
time to time remove members from or add members to the Committee. Vacancies on
the Committee, however caused, shall be filled by the Board. Acts taken or
approved by a majority of the Committee at which a quorum is present, or acts
approved in writing by a majority of the members of the Committee, shall be the
valid acts of the Committee. The Committee may delegate part or all of its
responsibilities, other than the authority to amend the Plan, subject to the
limitations of law and of the Plan. In the absence of any specific delegation,
such responsibilities shall be deemed delegated to the Company.
(b) The Plan shall be administered in a manner that assures all
Participants the same rights and privileges. The Committee shall have the final
authority to interpret the Plan, and any decision by the Committee in connection
therewith shall be final, conclusive and binding upon all Participants and other
persons.
(c) No member of the Board or the Committee, and no Associate of the
Company shall be liable for any action or determination made in good faith with
respect to the Plan or any option granted under it. In addition to such other
rights of indemnification as they may have, members of the Board, members of the
Committee and Associates shall be indemnified by the Company against the
reasonable expenses, including attorney's fees actually and necessarily incurred
in connection with the defense of any action, suit or proceeding, or in
connection with any appeal therein, to which they or any of them may be a party
by reason of any action taken or failure to act under or in connection, with the
performance of duties under the Plan, and against all amounts paid by them in
settlement thereof (provided such settlement is approved by independent legal
counsel selected by the Company) or paid by them in satisfaction of a judgment
in any such action, suit or proceeding, except in relation to matters as to
which it shall be adjudged in such action, suit or proceeding that the person
seeking indemnification is liable for gross negligence or willful misconduct in
the performance of his or her duties; provided that within sixty (60) days after
institution of any such action, suit or proceeding the person seeking
indemnification shall in writing offer the Company the opportunity, at its own
expense, to handle and defend the same.
(d) All costs and expenses incurred in administering the Plan not
chargeable to the Participant's Deduction and/or Purchase Account shall be paid
by the Company. The Board or the Committee may request advice or assistance or
employ such other persons as are necessary for proper administration of the
Plan.
13. Non-transferability.
Any option to purchase shares under the Plan may not be assigned,
transferred, pledged or otherwise disposed of in any way. Any such attempt at
assignment, transfer, pledge or other disposition, shall be void and without
effect.
14. Statements.
Statements of account will be delivered to Participants promptly following
each Purchase Date, which statements will set forth the amounts of payroll
contributions and additional contributions, the per share purchase price, the
number of shares purchased and any excess contributions.
15. Changes in Capitalization.
In the event of any stock dividend, stock split, spin-off,
recapitalization, merger, consolidation, exchange of shares or the like, the
number of shares then subject to option and the number of authorized shares
remaining available to be sold shall be increased or decreased appropriately.
16. Certain Corporate Transactions.
(a) Cash-Out of Options. Subject to paragraph (c) below, the Board of
Directors may elect to terminate this Plan and any pending Offering Period as of
the effective date of a Change of Control, in which case the Company shall (1)
pay to each Participant whose options have been terminated an amount equal to
the Award Value with respect to such options, such payment to be made within 30
days after the Change of Control, and (2) the Company and the Plan Agent shall
return to each Participant all payroll contributions withheld and additional
contributions credited during the Offering Period in which the Change of Control
occurred. For purposes of this section, the Award Value shall be determined as
(i) the amount by which the Market Price exceeds the Option Price, times (ii)
the aggregate of payroll contributions and additional contributions so returned
to the Participant, divided by the Option Price. The Market Price shall be
determined as the average of the Fair Market Value of the Company's Common Stock
for the period of twenty (20) trading days ending on the effective date of the
Change of Control.
(b) Property in Lieu of Option. Notwithstanding the foregoing, the
termination of options and the payment of Award Values described in paragraph
(a) of this section shall not apply with respect to any transaction in which any
of the following occur: (i) the holder of an option receives replacement
options, as the case may be, allowing the 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) the Plan and all options outstanding thereunder are assumed
by the acquiring company, or (iii) the Participant receives a replacement option
that satisfies the requirements of Code Section 424(a).
(c) "Change of Control" means any of the following: (1) any person, entity
or Group (defined as 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) entry of any order, judgment or decree of dissolution or split-up of the
Company, which remains in effect 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, 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. Beneficial ownership
will be determined by applying the rules applicable under Section 1 3(d) of the
Securities Exchange Act of 1934, as amended.
17. Amendment.
The Board of Directors may at any time amend the Plan. No such amendment
may make any change in any option previously granted which adversely affects the
rights of any Participant without such Participant's consent. No amendment for
which stockholder approval is required shall be effective unless such approval
is obtained within the required time period. Whether stockholder approval is
required shall be determined by the Board and shall be consistent with the rules
of the Securities Exchange Commission, the Code and the rules of the stock
exchange(s) on which the Company's shares are listed, as such rules are in
effect at the time the Plan amendment becomes effective.
18. Stockholder Approval.
Approval of the stockholders may be obtained either by favorable vote of a
majority of the voting stock present or represented and entitled to vote on the
matter at a stockholder's meeting at which a quorum representing a majority of
the outstanding voting stock is present and voting on the Plan, either in person
or by proxy, or by the written consent of the holders of a majority of the
outstanding voting stock, in either case with Common Stock and other voting
shares convertible into Common Stock being considered together for the purpose
of determining a majority of the outstanding voting stock or a majority of the
voting stock present or represented and entitled to vote.
19. Termination.
The Board may terminate the Plan at any time. Unless sooner terminated by
the Board, or extended by a vote of stockholders in the manner provided for in
Section 18, this Plan shall terminate on the earlier of September 30, 2007, or
the date on which all shares authorized to be issued under the Plan have been
purchased. No such termination shall adversely affect options previously granted
without the consent of the affected Participants.
20. Employment Relationship.
Nothing in this Plan shall confer on any person the right to continue in
the employ of the Company, or shall interfere with or restrict the rights of the
Company, which are hereby expressly reserved, to terminate or modify the
employment of any person at any time, with or without cause, subject to the
terms and conditions of any applicable collective bargaining agreement.
21. Notices.
All notices or other communications by a Participant to the Company in
connection with the Plan shall be deemed to have been duly given when received
in the form specified by the Company at the location, or by the person,
designated by the Company for the receipt thereof.
22. Government and Other Regulations.
The Plan, and the grant and exercise of the rights to purchase shares
hereunder, and Grand Union's obligation to sell and deliver shares upon the
exercise of rights to purchase shares, shall be subject to all applicable
Federal, State and foreign laws, rules and regulations, and to such approvals by
any regulatory or government agency as may, in the opinion of counsel for Grand
Union, be required.
23. Applicable Law.
This Plan shall be interpreted in a manner intended to give full effect to
the provisions of the Plan, except where to do so would conflict with the laws
of the State of Delaware.
