Registration No. 33-_____
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
GROSSMAN'S INC.
(Exact name of issuer as specified in its charter)
DELAWARE 38-0524830
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
200 Union Street
Braintree, Massachusetts 02184-5761
(Address of Principal Executive offices) (Zip Code)
1993 KEY EMPLOYEE STOCK OPTION PLAN
(Full title of the Plan)
RICHARD E. KENT, ESQ.
GROSSMAN'S INC.
200 UNION STREET
BRAINTREE, MASSACHUSETTS 02184-5761
(Name and address of agent for service)
(617) 848-0100
(Telephone number, including area code, of agent for service)
Please send copies of all communications to:
David C. Chapin, Esq.
Ropes & Gray
One International Place
Boston, Massachusetts 02110-2624
Telephone: (617) 951-7371
Approximate date of commencement of offering or proposed sale to
the public: From time to time after the Effective Date of the
Registration Statement.
The Exhibit Index can be found on pages 6 and 7.
_________________________________________________________________________
Proposed Proposed
Title of Maximum Maximum
Securities Amount Offering Aggregate Amount of
To Be To Be Price Per Offering Registration
Registered Registered Share <F1> Price <F1> Fee
______________________________________________________________________________
Common Stock, 600,000 $4.19 $2,514,000 $867.00
$.01 par value shares
_________________________
<F1> Estimated solely for the purpose of calculating the registration fee on
the basis of the average high and low prices of the Common Stock as reported
by the National Association of Securities Dealers Automated Quotation System
on March 15, 1994.
Part I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
Note: The document(s) containing the 1993 Key Employee
Stock Option Plan information required by Item 1 of this Form S-8 and the
statement of availability of registrant information, and other information
required by Item 2 of this Form will be sent or given to employees as
specified by Rule 428. In accordance with Rule 428 and the requirements of
Part I of Form S-8, such documents are not being filed with the Securities and
Exchange Commission ("Commission") either as part of this Registration
Statement or as prospectuses or prospectus supplements pursuant to Rule 424.
The registrant shall maintain a file of such documents in accordance with the
provisions of Rule 428. Upon request, the registrant shall furnish to the
Commission or its staff a copy of all of the documents included in such file.
Part II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Certain Documents by Reference
The following documents filed with the Securities and Exchange Commission
(the "Commission") are incorporated herein by reference:
(a) The Company's latest annual report filed pursuant to Sections
13(a) or 15(d) of the Securities Exchange Act of 1934 or the latest
prospectus filed pursuant to Rule 424(b) or under the Securities Act of
1933, as amended, which contains, either directly or by incorporation by
reference, audited financial statements for the Company's latest fiscal
year for which such statements have been filed.
(b) All other reports filed pursuant to Sections 13(a) or 15(d) of
the Securities Exchange Act of 1934 since the end of the fiscal year
covered by the Company documents referred to in (a) above.
(c) The description of the Common Stock contained in a registration
statement filed under Section 12 of the Securities Exchange Act of 1934,
as amended, including any amendment or report filed for the purpose of
updating such description.
All reports and other documents subsequently filed by the Company
pursuant to Sections 13(a) and (c), 14 and 15(d) of the Securities Exchange
Act of 1934, as amended, prior to the filing of a post-effective amendment
which indicates that all securities offered hereby have been sold or which
deregisters all securities remaining unsold, shall be deemed to be
incorporated by reference herein and to be a part hereof from the date of the
filing of such reports and documents.
Item 4. Description of Securities
Not Applicable.
Item 5. Interests of Named Experts and Counsel
The validity of the shares of Common Stock offered hereby has been passed
upon by Ropes & Gray, One International Place, Boston, Massachusetts, as
counsel for the Company.
The consolidated financial statements of the Company included in the
Company's Annual Report (Form 10-K) for the year ended December 31, 1993, have
been audited by Ernst & Young, independent auditors, as set forth in their
report thereon included therein and incorporated herein by reference. Such
consolidated financial statements are, and audited consolidated financial
statements to be included in subsequently filed documents will be,
incorporated herein in reliance upon the reports (to the extent covered by
consents filed with the Security and Exchange Commission) given upon the
authority of said firm as experts in accounting and auditing.
Item 6. Indemnification of Directors and Officers
Section 6.1 of the Company's By-laws requires that the Company indemnify
directors and officers to the maximum extent permitted by Delaware law.
Section 6.4 of the Company's By-laws also permits the Company to advance
litigation expenses to directors and officers.
Section 145 of the Delaware General Corporation Law authorizes the
Company to indemnify (and upon request to advance expenses to) directors,
officers, employees and agents against liability incurred by reason of being a
director, officer, employee or agent, and against expenses (including
attorneys' fees) in connection with defending any action seeking to establish
such liability, if such person acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation.
In addition, Article Eighth of the Company's Certificate of Incorporation
provides that no director of the Company shall be liable for any breach of
fiduciary duty, except for liability (i) for any breach of the director's duty
of loyalty to the Company or its stockholders, (ii) for acts or omissions not
in good faith or which involve intentional misconduct or a knowing violation
of law, (iii) under Section 174 of the Delaware General Corporation Law, or
(iv) for any transaction from which the director derived an improper personal
benefit.
Article Eighth eliminates the personal liability of directors, (as
directors, but not as officers) to the Company and its stockholders unless one
of the statutorily required exceptions (such as breach of the duty of loyalty,
bad faith, etc.) applies. As a result, directors are not liable even for
grossly negligent actions or omissions, including grossly negligent decisions
involving control of the Company, in the absence of a breach of the duty of
loyalty, bad faith, improper personal benefit or another statutory exception.
Article Eighth does not affect a director's liability to third parties, nor
the liability of a director to the Company or its stockholders arising from
any legal requirement (such as the federal securities laws) other than the
duty of care imposed by Delaware law.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 (the "Act") may be permitted to directors, officers and
controlling persons of the Company pursuant to the foregoing provisions, or
otherwise, the Company has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Company of expenses incurred or paid by a director, officer or controlling
person of the Company in the successful defense of any action, suit or
precedent) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Company will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act
and will be governed by the final adjudication of such issue.
Item 7. Exemption from Registration Claimed
Not Applicable.
Item 8. Exhibits.
Exhibit 4(a). 1993 Key Employee Stock Option Plan.
Exhibit 4(b). The Company's Restated Certificate of Incorporation,
as in effect November 19, 1986, filed as Exhibit 3(a)
to the Company's Form 8-K, dated November 19, 1986
(File No. 1-542) and incorporated herein by reference.
Exhibit 4(c) Certificate of Designation Relating to Certain
Restrictions on the Acquisition of Common Stock
pursuant to Article Ninth of the Company's Restated
Certificate of Incorporation, filed as Exhibit 3(1)-2
to the Company's Form 8-K dated November 19, 1986
(File No. 1-542) and incorporated herein by reference.
Exhibit 4(d) Certificate of Designation Relating to Certain
Restrictions on the Acquisition of Common Stock
pursuant to Article Ninth of the Company's Restated
Certificate of Incorporation, filed as Exhibit 3(a)-6
to the Company's Annual Report on Form 10-K for the
year ended December 31, 1990 (File No. 1-542) and
incorporated herein by reference.
Exhibit 4(e) Certificate of Designation Relating to Certain
Restrictions on the Acquisition of Common Stock
pursuant to Article Ninth of the Company's Restated
Certificate of Incorporation, filed as Exhibit 3(a)-8
to the Company's Annual Report on Form 10-K for the
year ended December 31, 1993 (File No. 1-542) and
incorporated herein by reference.
Exhibit 4(f). The Company's By-laws, as in effect November 19, 1986,
filed as Exhibit 3(b) to the Company's Form 8-K, dated
December 15, 1987 (File No. 1-542) and incorporated
herein by reference).
Exhibit 4(g). Copy of amendments to the Company's By-laws as adopted
by the Company's Board of Directors on December 15,
1987, filed as Exhibit 3(b)-1 to the Company's Form 8-
K, dated December 15, 1987 (File No. 1-542),
incorporated herein by reference).
Exhibit 5. Opinion of Ropes & Gray.
Exhibit 24(a). Consent of Ropes & Gray (contained in Exhibit 5).
Exhibit 24(b). Consent of Ernst & Young.
Exhibit 25. Power of Attorney (included as part of the signature
pages to this Registration Statement).
Exhibit 28(a). Form of Nonqualified Stock Option Agreement.
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 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 paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if
the registration statement is on Form S-3 or Form S-8, and the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed by the registrant pursuant to Section 13
or Section 15(d) of the Securities Exchange Act of 1934 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 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(s) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of any
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) 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 Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act
and will be governed by the final adjudication of such issue.
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 Boston, Massachusetts, on this 21st day of
March, 1994.
GROSSMAN'S, INC.
By /s/ Thomas R. Schwarz
Thomas R. Schwarz, Chairman of the
Board and Chief Executive Officer
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard E. Kent and David C. Chapin and each
of them, with full power to act without the other, his true and lawful
attorneys-in-fact and agent, with full power of substitution and resubsti-
tution, for him and in his name, place and stead, in any and all capacities to
sign any or all amendments to this registration statement, including post-
effective amendments, and to file the same with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, 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 substitutes
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 dates indicated.
Name Title Date
/s/ Thomas R. Schwarz Chairman of the March 21, 1994
Thomas R. Schwarz Board of Directors
(Chief Executive Officer)
/s/ Russell Cox Director March 21, 1994
Russell Cox
/s/ John R. Grey Director March 21, 1994
John R. Grey
/s/ Maurice Grossman Director March 21, 1994
Maurice Grossman
/s/ Leo Kahn Director March 21, 1994
Leo Kahn
/s/ Sydney L. Katz Director; Executive March 21, 1994
Sydney L. Katz Vice-President and
Chief Financial Officer
/s/ W. Wallace McDowell, Jr.Director March 21, 1994
W. Wallace McDowell, Jr.
/s/ Stephen B. Oresman Director March 21, 1994
Stephen B. Oresman
/s/ Robert K. Swanson Director March 21, 1994
Robert K. Swanson
/s/ Harold Tanner Director March 21, 1994
Harold Tanner
/s/ Dr. Abraham Zaleznik Director March 21, 1994
Dr. Abraham Zaleznik
GROSSMAN'S INC.
1993 Key Employee Stock Option Plan
1. Purpose
The Grossman's Inc. 1993 Key Employee Stock Option Plan (the
"Plan") is intended to provide incentives and rewards to selected
employees of Grossman's Inc. (the "Corporation") and its
subsidiaries who are not executive officers, but whose
performance is critical to the Corporation's success, by
providing them with opportunities to purchase stock in the
Corporation pursuant to options ("Options") which are not
"incentive stock options" under section 422 of the Internal
Revenue Code of 1986, as amended (the "Code").
2. Administration
The board of directors of the Corporation (the "Board")
shall appoint an officer or director (or a committee of officers
or directors) of the Corporation to administer the Plan (such
officer, director or committee shall hereinafter be referred to
as the "Administrator"). If the Board does not appoint an
Administrator, the Corporation's Chief Executive Officer shall be
the Administrator.
The Administrator shall have the authority, subject to the
terms of the Plan, to determine the employees to whom Options
shall be granted, the number of shares to be covered by each
Option, the purchase price of the stock covered by each option,
the time or times at which Options shall be granted, the time or
times at which and the terms and conditions upon which options
shall become exercisable, and the terms and provisions of the
instruments by which Options shall be evidenced. The
Administrator shall also have the authority to interpret the
Plan, to establish such rules and regulations not inconsistent
with the terms of the Plan as it deems necessary or appropriate
for the administration of the Plan and to make all determinations
necessary or advisable for the administration of the Plan. With
the consent of employees to whom Options have been granted, the
Board or any committee thereof designated by the Board (the
"Committee") may grant replacement options, which may be at a
lower exercise price, in substitution for outstanding Options and
to cancel such outstanding options.
No member of the Board or the Committee nor the individual
or individuals serving as the Administrator shall be liable for
any action or determination made in good faith with respect to
the Plan or any Option granted under the Plan.
3. Eligibility
Options may be granted only to key employees of the
Corporation or any of its subsidiaries, including, without
limitation, store management personnel, administrative and
professional staff and merchandising managers, selected by the
Administrator. No executive officer of the Corporation (within
the meaning of section 16(a) of the Securities Exchange Act of
1934, as amended), shall be eligible to receive options under the
Plan. Unless otherwise determined by the Board or the Committee,
no employee of the Corporation or any of its subsidiaries who has
received an option grant under any other option plan maintained
by the Corporation shall thereafter be eligible to receive any
Options hereunder. Granting an Option to an employee shall
neither entitle such employee to, nor disqualify him from,
participation in any other grant of options or in any other
incentive plan or give him any right to, or disqualify him from
receiving, any additional Option grants under the Plan.
4. Stock
The stock as to which options may be granted is the
Corporation's Common Stock ("Stock"). When Options are exercised
the Corporation may either issue unissued Stock or transfer
issued Stock held in its treasury. The total amount of Stock of
the Corporation which may be issued upon the exercise of Options
granted under the Plan shall not exceed 600,000 shares. Any
shares of Stock subject to an option which is forfeited due to
termination of employment or which otherwise lapses without being
exercised shall again be available for grant hereunder.
5. Granting of Options
Unless otherwise determined by the Board or the Committee,
no employee shall receive options under the Plan with respect to
more than 5,000 shares of Stock and options for not more than
300,000 shares shall be granted in any calendar year. The date
of grant of an option under the Plan will be the date on which
the option is awarded by Administrator, unless a later date is
specified by the Administrator at the time of the award with
respect to all or any portion of such award.
6. Terms and Conditions of Options
Options shall be evidenced by instruments in such form as
the Administrator may from time to time approve. Such
instruments shall conform to the following terms and conditions:
(a) Option Price. The Option price per share shall be
not less than the fair market value of a share of Stock on
the day the Option is granted. For purposes of this Plan,
fair market value of a share of Stock shall mean the closing
price of a share on NASDAQ on the relevant date.
(b) Term of options. Each Option shall expire no
later than the tenth anniversary of the date of its Grant.
(c) Exercisability. Each Option shall become
(exercisable immediately or in one or more installments at
such time or times or upon the satisfaction of such
conditions as may be determined by the Administrator and
provided in the instrument evidencing the Option once an
installment becomes exercisable it shall remain (exercisable
until expiration or termination of the Option.
An Option may be exercised from time to time, in whole
or in part, up to the total number of shares with respect to
which it is then exercisable.
(d) Payment. Each instrument evidencing an Option
shall provide for the terms of payment of the Option price.
In accordance with the terms of such instrument, an employee
may purchase Stock upon exercise of the Option for cash or
Stock. If Stock is used as whole or partial payment of the
Option price, such Stock shall be valued at its fair market
value on the date of exercise.
(e) Termination of Employment. If an employee to whom
or for whose benefit an Option is granted ceases to be
employed by the Corporation or any subsidiary other than by
reason of death, no further installments of his options will
become exercisable, and his Options shall terminate after
the passage of three months from the date of termination of
his employment (or such shorter or longer period as may be
approved by the Administrator and provided in the instrument
evidencing the option), except in the case of termination
due to a disability within the meaning of section 22(e)(3)
of the Code, in which case his options shall terminate after
the passage of one year from the date of termination of his
employment, but in any event not later than their specified
expiration dates. Whether authorized leave of absence or
absence on military or governmental service may constitute
employment for the purposes of the Plan shall be
conclusively determined by the Administrator.
(f) Death. If an employee to whom an Option is
granted dies, such option may be exercised, to the extent of
the number of shares with respect to which the employee
could have exercised it on the date of his death, by his
estate, personal representative or beneficiary who acquires
the Option by will or by the laws of descent and
distribution, at any time prior to the earlier of the
specified expiration date of the Option or the first
anniversary of the employee's death on the earlier of such
dates, the option shall terminate.
(g) Assignability. Unless otherwise determined by the
Board or the Committee, no option shall be assignable or
transferable by the employee to whom an Option is granted
except by will or by the laws of descent and distribution,
and during the lifetime of the employee each option shall be
exercisable only by him. At the request of an employee,
stock purchased on exercise of an option may be issued in or
transferred into the name of the employee and another person
jointly with the right of survivorship.
(h) Withholding. The Corporation's obligation to
deliver stock upon the exercise of any option shall be
subject to applicable federal, state and local tax
withholding requirements.
Instruments evidencing options may contain such other
provisions, not inconsistent with the Plan, as the Administrator
deems advisable. Among these provisions may be a provision under
which the Corporation, in the discretion of the Board or the
Committee, shall have the right, in lieu of delivering any or all
Stock as to which the Option has been exercised, to elect instead
to pay the employee an amount in cash or Stock equal to the
difference between the fair market value of such Stock on the date
of exercise and the option exercise price that would otherwise be
payable by the employee to acquire such Stock.
7. Capital Adjustments
The number and purchase price of shares covered by each
Option and the total number of shares that may be sold under the
Plan shall be proportionately adjusted to reflect, as deemed
equitable and appropriate by the Board or the Committee, any
stock dividend, stock split, combination or exchange of shares,
recapitalization, reclassification, or other similar transaction
of the Corporation. Such adjustment may take the form of a grant
of either a substitute option, an additional option, or a change
in the number or purchase price of the shares of stock subject to
an Option. To the extent deemed equitable and appropriate by the
Board or the Committee, subject to any required action by
stockholders, in any other merger, consolidation, reorganization,
liquidation or dissolution, any Option granted under the Plan
shall pertain to the stock and other property which a holder of
the Stock covered by the Option would have been entitled to
receive in connection with such event.
8. Indemnification
In addition to such other rights of indemnification as he
may have by reason of his position with the Corporation, each
member of the Board or the Committee and each and every
individual serving as the Administrator shall be indemnified by
the Corporation against all costs and expenses reasonably
incurred by them in connection with any action, suit or
proceeding to which they or any of them may be party by reason of
any action taken or failure to act under or in connection with
the Plan, or any Option granted thereunder, and against all
amounts paid by them in settlement thereof (provided such
settlement is approved by legal counsel selected by the
Corporation) or paid by them in satisfaction of a judgment in any
such action, suit or proceeding, except a judgment based upon a
finding of bad faith. Upon the institution of any such action,
suit or proceeding a Board or Committee member shall notify the
Corporation in writing, giving the Corporation an opportunity, at
its own expense, to handle and defend the same before such Board
or Committee member undertakes to handle it on his own behalf.
9. Term and Amendment of the Plan
The Plan has been adopted by the Board on April 27, 1993.
The Board or the Committee may terminate or amend the Plan in any
respect at any time, except that no action of the Board or the
Committee may alter or impair an employee's rights under any
outstanding Option without his consent. The Administrator may
amend the Plan at any time provided that such amendment does not
(a) materially increase the cost of the Plan to the Corporation,
(b) increase the number of shares authorized for issuance under
this Plan, (c) reduce the exercise price at which an Option may
be granted below that established under Section 6(a), (d)
increase the maximum number of shares that may be purchased by
any employee pursuant to Options granted under the Plan or (e)
conflict with or violate any applicable provision of Federal,
state or local law.
10. Use of Proceeds
Proceeds from the sale of Stock pursuant to Options granted
under the Plan shall constitute general funds of the Corporation.
Shares of Stock tendered upon the exercise of Options granted
under the Plan shall become treasury shares of the Corporation.
EXHIBIT 5
March 23, 1994
Grossman's, Inc.
200 Union Street
Braintree, MA 02184-4997
Gentlemen:
You have asked our opinion regarding certain matters
relating to 600,000 shares of Common Stock, par value $.01 per
share (the "Additional Shares"), of Grossman's, Inc. (the
"Company") issuable upon the exercise of options granted under
the Company's 1993 Key Employee Stock Option Plan (the "Plan").
You have informed us that the Additional Shares issuable upon the
exercise of options granted under the Plan may be authorized but
unissued shares or shares held from time to time in your
treasury.
We have acted as counsel for the Company in connection with
the preparation of the Registration Statement on Form S-8 which
is being filed with the Securities and Exchange Commission
contemporaneously herewith, and we have examined:
(a) the Restated Certificate of Incorporation of the
Company, as amended to date;
(b) the By-laws of the Company, as amended to date;
(c) a copy of the Registration Statement referred to
above;
(d) the votes of the Board of Directors and the
stockholders of the Company approving and adopting the Plan;
(e) a copy of the Plan; and
(f) such other documents and records as we deem
necessary for purposes of this opinion.
We have assumed that the Additional Shares proposed to be
issued upon the exercise of options granted under the Plan will
be issued only against payment therefor as provided in the Plan
and that the purchase price for such shares will not be less than
the par value per share of the Company's Common Stock. We have
also assumed that the issuance of any such shares will not result
in the issuance by the Company of more than its authorized shares
of Common Stock.
Based upon and subject to the foregoing, we are of the
opinion that:
1. The Company is a duly organized and validly existing
corporation under the laws of the State of Delaware.
2. The Additional Shares, when issued and paid for upon
the exercise of options, pursuant to the terms and conditions of
the Plan, will be validly issued and will be fully paid and
nonassessable.
In connection with any issue and sale of the Additional
Shares, steps should be taken to effect compliance with all
applicable laws, rules and regulations of governmental
authorities regulating sales and offerings of securities.
We understand that this opinion is to be used in connection
with the Registration Statement which is to be filed under the
Securities Act of 1933 contemporaneously herewith. We consent to
the filing of this opinion with and as a part of said
Registration Statement and to the use of our name therein.
Very truly yours,
Ropes & Gray
:DCCAUDLT.GI
CONSENT OF ERNST & YOUNG, INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption
"Interests of Named Experts and Counsel" in the Registration
Statement (Form S-8) pertaining to 1993 Key Employee Stock Option
Plan of Grossman's Inc. and to the incorporation by reference
therein of our report dated January 31, 1994, with respect to the
consolidated financial statements and schedules of Grossman's,
Inc. included in its Annual Report (Form 10-K) for the year ended
December 31, 1993, filed with the Securities and Exchange
Commission.
Ernst & Young
Boston, Massachusetts
March 21, 1994
GROSSMAN'S INC.
----------------------
NONQUALIFIED STOCK OPTION AGREEMENT
----------------------
AGREEMENT, dated as of between GROSSMAN'S
INC., a Delaware Company (the "Company"), and
(the "Optionee"):
Pursuant to the Grossman' s Inc. 1993 Key Employee Stock
Option Plan, as amended, (the "Plan"), the Board of Directors of
the Company (the "Board"), has granted to the Optionee, effective
on , an option to purchase an aggregate of
Shares of the Company's Common Stock (the "Shares") at the option
exercise price of $ per share ("Option Price") the closing
sale price as reported on the NASDAQ National Market System on
, subject to the terms and conditions set forth in
Exhibit A attached hereto. Such option is intended to constitute
a nonqualified stock option.
IN WITNESS WHEREOF, the Company and the optionee have duly
executed this Agreement as of the day first above written.
GROSSMAN'S INC.
By ________________________
Thomas R. Schwarz
Chairman of the Board
_________________________
Optionee
EXHIBIT A TO OPTION AGREEMENT DATED AS OF _________________________
1. Confirmation of Grant; Option Price. An option (the
"Option") to purchase the Shares at the Option Price per share,
as set forth in the Agreement to which this Exhibit A is
appended, is confirmed. The Option is subject to the provisions
of the Plan applicable to nonqualified options.
2. Appointment of Committee. The Board has appointed the
Compensation, Stock Option and Employee Benefits Committee of the
Board (the "Committee") to administer the Plan, and all
references in this Agreement to the "Board" shall be deemed to
include the Committee, and the Committee shall be authorized, in
lieu of the Board, to take all acts and make all determinations
necessary or advisable for the administration of the Plan and
this Agreement.
3. Exercisability. The option shall become exercisable,
subject to the provisions hereof, in four annual installments
equal to 25% of the number of Shares covered by the Option,
commencing on the first anniversary of the date of grant of the
option set forth in the Agreement, provided that in the case of
retirement of Optionee at age 65 or older or upon a Change of
Control (as defined below) of the Company, the Option shall
forthwith become exercisable with respect to all Shares subject
to the Option. On or after any date on which the Option becomes
exercisable with respect to any Shares in accordance with the
foregoing, such Shares may be purchased, in accordance with the
provisions hereof, in whole at any time or in part from time to
time prior to the expiration of the Option. Except as an earlier
termination date is specified by this Agreement, the Option shall
expire on the tenth anniversary of such date of grant.
For purposes of this Agreement, a "Change of Control" shall
be deemed to have occurred if (i) any Company, person or other
entity (other than the Company, a majority-owned subsidiary of
the Company or any of its subsidiaries), including a "group" as
defined in Section 13(d)(3) of the Securities Exchange Act of
1934, as amended (other than the "group" which filed a Schedule
13D with the Securities and Exchange Commission in June, 1987)
becomes the beneficial owner of stock representing more than
twenty-five percent of the voting power of the Company; (ii) the
stockholders of the Company approve a definitive agreement to
merge or consolidate the Company with or into another Company
other than a majority-owned subsidiary of the Company, to sell or
otherwise dispose of all or substantially all of the Company's
assets or to liquidate the Company, or (iii) within any period of
24 consecutive months, persons who were members of the Board of
Directors of the Company immediately prior to such 24-month
period, together with any persons who were first elected as
directors (other than as a result of any settlement of a proxy or
consent solicitation contest or any action taken to avoid such a
contest) during such 24-month period by or upon the
recommendation of persons who were members of the Board of
Directors of the Company immediately prior to such 24-month
period and who constituted a majority of the Board of Directors
of the Company at the time of such election, cease to constitute
a majority of the Board.
4. Exercise by Estate. During the lifetime of the
optionee, the Option may be exercised only by him or her. If the
optionee shall die during his or her employment by the Company or
a subsidiary and prior to the expiration date specified in
section 3 hereof, the Option may be exercised (to the extent of
the number of Shares with respect to which the Optionee could
have exercised it on the date of his or her death) by the
Optionee's estate, personal representative or beneficiary who
acquires the option by will or by the laws of descent and
distribution, at any time prior to the earlier of (a) twelve
months after the Optionee's death or (b) the expiration date
specified in section 3 hereof. On the earlier of such dates, the
Option shall terminate.
5. Exercise After Termination of Employment. If the
optionee shall cease to be employed by the Company or any parent
or subsidiary thereof, other than by reason of death or
retirement at age 65 or older, no further installment of the
option will become exercisable after the date of termination of
such employment. The option shall terminate on the earlier of
the date which is three months after the date of termination of
employment, excluding retirement at age 65 or older, or the
expiration date specified in section 3; provided that in the case
of termination of employment due to a disability within the
meaning of section 105(d) (4) of the Internal Revenue Code of
1986, as amended (the "Code"), the option shall terminate on the
earlier of the date which is twelve months after such date of
termination or the expiration date specified in section 3.
Notwithstanding the foregoing, if the Optionee's employment is
terminated for Cause, i.e., an action or omission by optionee
involving willful malfeasance or gross negligence in a material
respect or commission of a felony, the option shall immediately
be canceled. A transfer of the Optionee's employment from the
Company to any subsidiary or vice versa, or from one subsidiary
to another, without an intervening period, shall not be deemed a
termination of employment. If the Optionee is granted a leave of
absence or absence on military or governmental service, the Board
shall conclusively determine whether the Optionee remains
employed during such leave of absence for the purpose of this
section 5. Nothing in the Plan or in this Agreement shall confer
upon the Optionee any right to continue in the employ of the
Company or any of its affiliates for any period, or interfere in
any way with any right of the Company or any of its affiliates to
terminate his or her employment at any time during such period.
6. Restriction on Exercise. The Option may be exercised
only with respect to full Shares, and no fractional Shares shall
be issued. The Option may not be exercised in whole or in part,
and no certificates representing Shares subject to the Option
shall be delivered
(a) if any requisite approval or consent of any governmental
authority of any kind having jurisdiction over the exercise of
options shall not have been secured and any required registration
under the Securities Act of 1933 shall not be effective;
(b) unless the Shares shall be listed on any stock exchange
on which the Shares are then listed and registered under the
Securities and Exchange Act of 1934, as amended, which listing
and registration may be upon official notice of issuance thereof;
or
(c) unless all applicable federal, state and local tax
withholding requirements are satisfied. The Company shall use
its best efforts to obtain any approval, consent or listing
referred to in clause (a) or (b) above. The Company may (but
need not) require as a condition to the exercise of the option in
whole or in part at any time that the Optionee (or any person
exercising the Option after his or her death in accordance with
the provisions of section 4 hereof) represents to the Company in
writing that he or she is purchasing the Shares to be acquired
upon such exercise for his or her own account for investment and
not with a view to distribution or with any present intention of
reselling any thereof except pursuant to an effective
registration under the Securities Act of 1933, as amended,, or an
applicable exemption therefrom.
7. Manner of Exercise. To the extent the Option shall have
become and remains exercisable as provided in this Agreement, and
subject to such administrative regulations as the Board may from
time to time adopt, the option may be exercised by written notice
to the Secretary of the Company, specifying the number of Shares
with respect to which the Option is being exercised and
accompanied by full payment of the option exercise price for such
Shares plus any withholding taxes, payable in cash. In the event
that the Option shall be exercised by a person other than the
Optionee in accordance with the provisions of section 4 hereof,
such person shall furnish to the Company evidence satisfactory to
it of his or her right to exercise the Option. The Company may
require the Optionee or such other person exercising the Option
to furnish or execute such documents as the Company shall deem
necessary to evidence such exercise, to determine whether
registration is then required under the Securities Act of 1933,
as amended, or to comply with or satisfy the requirements of such
Act or any other law or of this Agreement.
8. Non-Assignability. The option may not be assigned,
transferred or hypothecated by the optionee, except by will or by
the laws of descent and distribution to the extent contemplated
by section 4 hereof. At the request of the Optionee, Shares
purchased on exercise of the option may be issued in or
transferred into the name of the Optionee and another person
jointly with the right of survivorship.
9. Rights as Stockholder. The Optionee shall have no
rights as a stockholder with respect to any Shares covered by the
Option until the issuance of a certificate or certificates to him
or her for such Shares upon exercise of the Option. No
adjustment shall be made for dividends or other rights for which
the record date is prior to the issuance of such certificate or
certificates.
10. Capital Adjustments. In the event of any change in the
outstanding shares of Common Stock by reason of any stock
dividend, stock split, combination or exchange of shares,
recapitalization, reclassification, or other similar transaction,
appropriate adjustments shall be made in the number and purchase
price of Shares covered by the Option, as deemed equitable and
appropriate by the Board, by means of a grant of a substitute
option or an additional option or otherwise. To the extent
deemed equitable and appropriate by the Board, subject to any
required action by the stockholders of the Company, in any
merger, consolidation, reorganization, liquidation or
dissolution, the Option shall pertain to the securities and other
property, if any to which a holder of the number of Shares
covered by the Option would have been entitled to receive in
connection with such transaction.
11. Notice. Notice to the Secretary of the Company shall
be deemed given if in writing and mailed to the Secretary of the
Company by first-class mail at the then principal office of the
Company.
12. Governing Law. This Agreement shall be construed and
enforced in accordance with, and governed by, the laws of the
State of Delaware.
