ANNEX A
GROSSMAN'S INC.
1995 DIRECTORS' STOCK AND OPTION PLAN
1. PURPOSE
The purpose of this Plan is to (1) encourage ownership of Company
Stock by non-employee directors and thereby align such directors'
interests more closely with the interests of stockholders of the Company,
and (2) assist the Company in securing and retaining highly qualified
persons to serve as non-employee directors, in which position they may
contribute to the long-term growth and profitability of the Company, by
affording such persons an opportunity to acquire Stock.
2. DEFINITIONS
Whenever used in this Plan, the following terms will have the
respective meanings set forth below:
(a) "Board" means the Company's Board of Directors as
constituted from time to time.
(b) A "Change of Control" will be deemed to have occurred if (i)
any corporation, person or entity (other than the Company, a majority-
owned subsidiary of the Company or an employee benefit plan maintained
by the Company or any of its subsidiaries) or any "group" as defined
in Section 13(d)(3) of the Exchange Act 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 corporation 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
24 consecutive month period, persons who were members of the Board
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
immediately prior to such 24-month period and who constituted a
majority of the Board at the time of such election, cease to
constitute a majority of the Board.
(c) "Committee" means the committee described in Section 4.
(d) "Company" means Grossman's Inc., a Delaware corporation, or
any successor thereto by merger, consolidation, or statutory share
exchange.
(e) "Exchange Act" means the Securities Exchange Act of 1934, as
amended. References to any provision of the Exchange Act or rule
thereunder will be deemed to include successor provisions thereto and
rules thereunder.
(f) "Fair Market Value" of the Stock means average of the
official closing prices of the Stock on the Nasdaq National Market
System or such other automated quotation system or securities exchange
on which the Stock shall be primarily traded at the time of such
determination on the ten trading days preceding the day on which Fair
Market Value is being determined on which Stock transactions took
place, as reported in The Wall Street Journal -- Eastern Edition.
(g) "Option" means the right, granted to a Participant under
Section 6(a), to purchase Stock pursuant to the relevant provisions of
this Plan at the exercise price specified in Section 6(c) for a
specified period of time, not to exceed ten years from the date of
grant, which period of time shall be subject to earlier termination
prior to exercise in accordance with Section 6.
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(h) "Participant" means a non-employee director who is eligible
to receive, and is granted, Options or Stock under the Plan.
(i) "Plan" means this 1995 Directors' Stock and Option Plan.
(j) "Retainer" means the annual retainer payable to a non-
employee director of the Company for a full year's service on the
Board, or such lesser amount as may be payable to any non-employee
director in respect of service on the Board of less than a full year,
excluding any annual retainer payable for service on any standing or
ad hoc committee of the Board or for service as Chairman of any
committee of the Board, and excluding meeting fees payable for
attendance at meetings of the Board or committees for that year.
(k) "Stock" means the Common Stock, par value $.01 per share, of
the Company, and such other securities of the Company as may be
substituted for Stock pursuant to Section 9.
3. NUMBER AND SOURCE OF SHARES AVAILABLE UNDER THE PLAN
The total number of shares of Stock reserved and available for
issuance under the Plan is 700,000, subject to adjustment as provided in
Section 9 below. Such shares may be previously issued and outstanding
shares of Stock reacquired by the Company and held in its treasury, or may
be authorized but unissued shares of Stock, or may consist partly of each.
If any Option expires or terminates for any reason without having been
exercised in full, the unpurchased shares subject to the Option will again
be available for purposes of the Plan. Furthermore, if the holder of an
Option delivers shares of Stock to the Company on exercise of an Option,
pursuant to Section 6(f)(ii), such shares will again be available for
purposes of the Plan.
4. ADMINISTRATION OF THE PLAN
The Plan shall be administered by a committee (the "Committee") of the
Board 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 grant Options
and/or issue Stock in accordance with the formulas set forth in this Plan
to such directors as are eligible to receive Options and/or Stock; (b) to
prescribe the form of forms of instruments evidencing Options 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. Any such determinations made by the
Committee shall be conclusive and shall bind all parties.
5. ELIGIBILITY
Each director of the Company, who on any date on which an Option or
Stock is to be granted (as specified in Sections 6 and 7) is not an
employee of the Company or any parent or subsidiary of the Company (an
"Eligible Director"), will be eligible to receive Options or Stock under
the Plan. No person other than those specified in this Section 5 will be
eligible to participate in the Plan.
6. TERMS AND CONDITIONS OF OPTIONS
(a) Number of Options. On the date that this Plan is approved by the
Company's stockholders, each Eligible Director shall be awarded an Option
covering 25,000 shares of Stock; thereafter, on the date that any new
director is elected to the Board who is an Eligible Director, each such
new Eligible Director shall be awarded an Option covering 25,000 shares of
Stock.
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(b) Additional Options to Chairman of the Board. On the date that
this Plan is approved by the Company's stockholders, Robert K. Swanson,
the Chairman of the Board of the Company, shall be awarded an option
covering 50,000 shares of Stock in addition to the Option awarded to Mr.
Swanson under Section 6(a).
(c) Exercise Price. The exercise price of each option granted under
(a) and (b) above (collectively, the "Director Options") shall be 100% of
the Fair Market Value per share of the Stock at the time the Director
Options are granted. In no event, however, shall the exercise price be
less, in the case of an original issue of authorized stock, than the par
value per share of the stock.
(d) Duration of Director Options. The latest date on which any of the
Director Options may be exercised (the "Final Exercise Date") shall be the
date which is ten years from the date the Director Options were granted.
(e) Exercise of Director Options.
(1) Each Director Option granted pursuant to this Section 6
shall be immediately exercisable to the extent of 20% of the shares of
Stock covered thereby on the date of grant, and shall become
exercisable to the extent of an additional 20% of the shares of Stock
covered thereby on each of the first, second, third and fourth
anniversaries of such date.
(2) Any exercise of a Director Option shall be in writing,
signed by the proper person and delivered or mailed to the Company,
accompanied by (i) any documentation required by the Board and (ii)
payment in full for the number of shares for which the Director Option
is exercised.
(3) If a Director Option is exercised by the executor or
administrator of a deceased director, or by the person or persons to
whom the Director Option has been transferred by the director's will
or the applicable laws of descent and distribution, the Company shall
be under no obligation to deliver Stock pursuant to such exercise
until the Company is satisfied as the authority of the person or
persons exercising the Director Option.
(f) Payment for and Delivery of Stock. Stock purchased under the Plan
pursuant to the exercise of Director Options shall be paid for as follows:
(i) in cash or by check (acceptable to the Company in accordance with
guidelines established by the Committee for this purpose), bank draft or
money order payable to the order of the Company; (ii) through the delivery
of shares of Stock (which, in the case of shares of Stock acquired from
the Company, shall have been outstanding for at least six months) having a
Fair Market Value on the date of exercise equal to the purchase price;
(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 foregoing forms of
payment; provided that if the Stock issued upon exercise of the Director
Option is an original issue of authorized Stock, at least so much of the
exercise price as represents the par value of such Stock shall be paid in
cash or cash equivalents.
The holder of a Director Option shall not have any rights as a
stockholder, except as to Stock actually received by him or her upon
exercise of a Director Option or otherwise under the Plan.
(g) Nontransferability of Director Options. To the extent required by
Rule 16b-3 under the Exchange Act as from time to time in effect, no
Director Option may be transferred other than by will or by the laws of
descent and distribution, and during a director's lifetime a Director
Option may be exercised only by him or her.
(h) Death. Upon the death of any Participant to whom Director Options
have been granted under this Plan, all Director Options not then
exercisable shall terminate. All Director Options held by the Participant
that are exercisable immediately prior to death may be exercised by his or
her executor or administrator, or by
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the person or persons to whom the Director Option is transferred by will
or the applicable laws of descent and distribution, at any time within one
year after the Participant's death (subject, however, to the limitations
of Section 6(d) regarding the maximum exercise period for such Director
Option). At the end of such one-year period, such Director Options shall
terminate to the extent not previously exercised or terminated.
(i) Other Termination of Status as Eligible Director. If an Eligible
Director's service with the Company terminates, or if a director otherwise
ceases to be an Eligible Director, for any reason other than death, all
Director Options (or portions thereof) held by the director that are not
then exercisable shall terminate. Director Options that are exercisable on
the date of termination shall continue to be exercisable for a period of
six months (subject to Section 6(d)). At the end of such six-month period,
such Director Options shall terminate to the extent not previously
exercised or terminated.
(j) Change of Control. In the event of a Change of Control of the
Company, all Director Options granted under the Plan will immediately
become fully exercisable; except that, if the Change of Control involves a
consolidation or merger in which the Company is not the surviving
corporation or which results in the acquisition of all or substantially
all the Stock then outstanding by a single person or entity or by a group
of persons and/or entities acting in concert (each, a "Merger"), all
Director Options granted under the Plan will either (i) terminate and no
longer be exercisable; provided, that 20 days prior to the effective date
of the Merger, all Director Options outstanding hereunder that are not
otherwise exercisable shall become fully exercisable, or (ii) if there is
an acquiring corporation and the consideration to be received in the
Merger consists of voting securities of the acquiring corporation or an
affiliate, and the acquiring corporation so elects, be assumed by the
acquiring corporation, subject to consummation of the Merger, and be
deemed to constitute an option to acquire, on the same terms and
conditions as were applicable prior to the Merger, the voting securities
received in the transaction by the stockholders of the Company, with
appropriate adjustments to the exercise price and the number of shares
subject to the Director Option to preserve the value of the Director
Option.
7. STOCK IN LIEU OF RETAINER
In lieu of the annual cash Retainer payable to each Eligible Director,
Stock will be issued in the amount of such Retainer each year for so long
as this Plan is in effect, to the extent and subject to the terms and
conditions set forth below:
(a) Annual Stock Payment. The number of shares of Stock to be
issued under this Section 7 will be equal to (i) the amount of the
annual Retainer payable to each Eligible Director at the rate then in
effect divided by (ii) the Fair Market Value of Stock as determined on
the date of issuance. No fractional shares of Stock will be issued;
instead, the cash remainder will be paid to the Participant. The
delivery of Stock hereunder shall be contingent upon service by the
Participant through the date of the first meeting of the Board of
Directors in that year. On the date 30 days after the date of the
annual meeting of stockholders at which directors are elected (or, in
the case of a director elected by the Board, the date 30 days after
such election) or as promptly as practicable thereafter, the Company
will deliver to the Participant one or more certificates representing
such Stock, registered in the name of the Participant (or, if directed
by the Participant, in joint names of the Participant and his or her
spouse).
(b) Rights of the Participant. Except for the terms and
conditions set forth in this Plan, a Participant who is issued Stock
in lieu of the annual cash Retainer will have all of the rights of a
holder of the Stock, including the right to receive dividends paid on
such Stock and the right to vote the Stock at meetings of stockholders
of the Company. Upon delivery, such Stock will be nonforfeitable.
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8. STOCK IN LIEU OF CONSULTING FEES
(a) If, while this Plan is in effect, an Eligible Director is serving
as Chairman of the Board (a "Non-Executive Chairman"), and such Non-
Executive Chairman has entered into an agreement with the Company to
provide consulting services to the Company (a "Consulting Agreement"),
then, in consideration of such services, within thirty days after the end
of each calendar quarter during which such Consulting Agreement is in full
effect, the Non-Executive Chairman shall be issued a number of shares of
Stock equal to (i) $1,000 times the number of days that the Non-Executive
Chairman shall have spent working on the affairs of the Company under the
Consulting Agreement during such preceding calendar quarter (whether or
not this Plan was in effect during such period), divided by (ii) the Fair
Market Value of the Stock on the last day of such calendar quarter. No
fractional shares shall be issued; instead, the remainder shall be paid to
the Non-Executive Chairman in cash. Upon delivery, such Stock shall be
nonforfeitable.
(b) In addition to any Stock issuable under Section 8(a), the Company
shall issue to Robert K. Swanson, Chairman of the Board of the Company,
subsequent to the approval of the Plan by the stockholders of the Company
but in any event not later than May 1, 1995, a number of whole shares of
Stock (with fractional shares rounded down) equal to $20,000 divided by
the Fair Market Value of the Stock on the date of such issuance, in
consideration of consulting services rendered by Mr. Swanson to the
Company during 1994. Upon delivery, such Stock shall be nonforfeitable.
9. ADJUSTMENT PROVISIONS
In the event any recapitalization, reorganization, merger,
consolidation, spin-off, combination, repurchase, exchange of shares or
other securities of the Company, stock split or reverse split,
extraordinary dividend, liquidation, dissolution, or other similar
corporate transaction or event affects Stock such that an adjustment is
determined by the Board to be appropriate in order to prevent dilution or
enlargement of Participants' rights under the Plan, then the Board shall,
in a manner that is proportionate to the change to the Stock and is
otherwise equitable, adjust (i) any or all of the number or kind of shares
of Stock reserved for issuance under the Plan and (ii) the number or kind
of shares of Stock to be subject to Director Options thereafter granted
automatically under Section 6, and (iii) the number and kind of shares of
Stock issuable upon exercises of outstanding Director Options, and the
exercise price per share thereof, provided that the number of shares
subject to any Director Option shall always be a whole number.
10. CHANGES TO THE PLAN AND AWARDS.
(a) Changes to the Plan. The Board may amend, alter, suspend,
discontinue, or terminate the Plan or authority to grant Options or issue
Stock under the Plan; provided, however, that, without the consent of an
affected Participant, no such amendment, alteration, suspension,
discontinuation, or termination may impair the rights of such Participant
under any Director Option theretofore granted to him or her hereunder.
(b) Changes to Outstanding Awards. The Board may amend, alter,
suspend, discontinue, or terminate any Director Option theretofore granted
hereunder and any agreement relating thereto; provided, however, that,
without the consent of an affected Participant, no such amendment,
alteration, suspension, discontinuation, or termination may impair the
rights of such Participant under or with respect to any Director Option
theretofore granted to him or her or any agreement relating thereto.
11. GENERAL PROVISIONS
(a) Consideration for Grants; Agreements. Director Options and Stock
will be granted or paid under the Plan in consideration of the services of
Participants and, except for the payment of the exercise price in the case
of an Director Option, no other consideration shall be required therefor.
Grants of Director Options will be evidenced by agreements executed by the
Company and the Participant containing the terms and conditions set forth
in the Plan together with such other terms and conditions not inconsistent
with the Plan as the Board may from time to time approve.
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(b) Compliance with Securities Laws, Listing Requirements, and Other
Laws and Obligations. The Company shall not be obligated to deliver any
shares of Stock under this Plan, upon the exercise of any Director Option
granted under Section 6 or the issuance of Stock under Section 7 or
Section 8, (i) until, in the opinion of the Company's counsel, all
applicable federal and state laws and regulations have been complied with,
(ii) if the outstanding Stock is at the time listed on any stock exchange,
or quoted on any automated quotation system, until the shares to be
delivered have been listed or authorized to be listed or quoted on such
exchange or system upon official notice of issuance, and (iii) 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 Director Option or
the issuance of Stock, 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.
(c) No Right to Continue as a Director. Nothing contained in the Plan
or any agreement hereunder will confer upon any Participant any right to
continue to serve as a director of the Company.
(d) Governing Law. The validity, construction, and effect of the Plan
and any agreement hereunder will be determined in accordance with the laws
of the State of Delaware, without giving effect to principles of conflicts
of laws, and applicable federal law.
12. EFFECTIVE DATE AND DURATION OF PLAN
The Plan will become effective at the time that it is approved by the
Board, subject to approval by the stockholders of the Company by the
affirmative votes of the holders of a majority of the securities of the
Company present in person or represented by proxy, and entitled to vote at
a meeting of Company stockholders duly held. The Plan will remain in
effect until such time as the Board may act to terminate the Plan pursuant
to Section 10(a), or until such time as no Stock remains available for
issuance under the Plan and the Company has no further rights or
obligations under the Plan with respect to Director Options granted or
Stock issued under the Plan.
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ANNEX B
GROSSMAN'S INC.
1995 RESTRICTED STOCK PLAN
I. Purpose. The purpose of this 1995 Restricted Stock Plan
(the "Plan") is to advance the interests of Grossman's Inc. (the
"Company") and its subsidiaries by enhancing the Company's ability
to reward officers and key employees for their contributions to the
success of the Company and its subsidiaries and to create an
incentive for their efforts to increase the profitability of the
Company and its subsidiaries.
II. Effective Date. This Plan shall become effective on the
date on which it is approved by the shareholders of the Company,
although awards may be made prior to that time subject to such
approval. Awards may thereafter be made pursuant to the terms of
this Plan until December 31, 2005.
III. Administration of the Plan. The Plan shall be
administered by the Compensation Committee of the Board of
Directors of the Company (the "Board") or by such other committee
as the Board shall appoint from among its members and designate to
administer the Plan (the "Committee"). The Committee shall be
authorized, subject to the express provisions of this Plan, to
adopt, amend and rescind rules for the administration of the Plan
and its own proceedings, and to take all action necessary or
appropriate to administer the Plan, to interpret its provisions,
and to decide all questions and resolve all disputes which may
arise in connection therewith. Such determinations of the Committee
shall be conclusive and shall bind all parties. The Committee shall
consist of not fewer than two members of the Board, all of whom
shall be "disinterested persons" within the meaning of Rule 16b-3
under the Securities Exchange Act of 1934 (the "Exchange Act").
IV. Eligibility. Officers and key employees of the Company
or its subsidiaries shall be eligible to receive awards pursuant to
the Plan ("Awards"). To the extent that their eligibility would
cause them to fail to be "disinterested persons" within the meaning
of Rule 16b-3 under the Exchange Act, members of the Committee and
directors who are not employees shall not be eligible to receive
Awards. Receipt of an Award shall not preclude an officer or
employee from receiving additional awards under this Plan or any
other plan of the Company.
V. Shares Subject to Plan. Awards made pursuant to the Plan
shall consist of shares of the Company's Common Stock, par value
$.01 per share (the "Shares"). Shares awarded pursuant to the Plan
shall in the discretion of the Committee be authorized but unissued
Shares or Shares held in treasury. The aggregate number of Shares
which may be issued under this Plan (excluding forfeited and
reissued Shares described below) shall not exceed 250,000, subject
to adjustment by the Committee in the event of a stock dividend,
stock split, combination of Shares, recapitalization, or other
change in the Company's Common Stock. Shares which are forfeited as
provided herein may be reissued pursuant to this Plan.
VI. Terms and Conditions of the Plan.
A. Grant of Awards.
Subject to the express provisions of this Plan, the Committee
shall have the sole authority and discretion (i) to make Awards to
such eligible employees as the Committee shall select at such times
as the Committee shall determine, and (ii) to determine the size of
each such Award and the terms and conditions thereof (including any
provisions relating to forfeiture in addition to those required
herein). In making an Award, the Committee may require a cash or
other payment from the person to whom an Award is made
(the "Recipient"), unless it shall determine that the consideration
from the Recipient to the Company for services
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rendered in excess of the compensation otherwise paid to the
Recipient prior to or at the time of the Award is at least equal to
the par value of the Shares being issued. Each Recipient shall, as
a condition of receiving any Award hereunder, enter into a
Restricted Stock Agreement with the Company setting forth the terms
and conditions of the Award, including forfeiture provisions, in
such form as the Committee shall determine, and a stock certificate
registered in the name of the Recipient shall be issued under the
conditions set forth in Section V.C. below.
B. Terms of Awards.
An Award shall consist of a specified number of Shares, and
shall be subject to such terms and conditions as are set forth in
the Restricted Stock Agreement.
C. Stock Certificates.
Prior to the time specified in the Restricted Stock Agreement
when a portion of an Award ceases to be subject to forfeiture, the
stock certificates representing Shares constituting that portion of
the Award shall bear a legend indicating the restrictions thereon.
Recipients shall receive all dividends, stockholder communications
and proxy materials with regard to the Shares constituting Awards.
A certificate or certificates for forfeited Shares shall be
returned to the Company. A Recipient shall be entitled to any
dividends or other distributions attributable to forfeited Shares
paid after forfeiture of such Shares with respect to a record date
prior to forfeiture.
D. Payment.
On the date specified in the Restricted Stock Agreement that
a portion of an Award ceases to be subject to forfeiture, a
Recipient shall be entitled to delivery of unlegended certificates
representing Shares which have vested and the Shares represented
thereby shall cease to be subject to forfeiture.
VII. Nontransferability of Awards. No Shares, nor any
interest therein, shall be transferable by the Recipient (by sale,
pledge, gift or otherwise) prior to a Vesting Date, otherwise than
by will or by the laws of descent and distribution, and Shares
shall be delivered only to the Recipient or, in the case of his
death, to his estate.
VIII. Tax Matters. The Committee shall require a Recipient
receiving an Award hereunder to reimburse the Company for any taxes
required by any government to be withheld or otherwise deducted and
paid by the Company or any of its subsidiaries in respect of the
issuance of Shares pursuant to the Award. In lieu thereof, the
Company shall have the right to withhold the amount of such taxes
from any other sums due or to become due from the Company to the
Recipient upon such terms and conditions as the Committee shall
prescribe. Subject to the consent of the Committee, a Recipient may
make an irrevocable election to have Shares otherwise issuable
under an Award withheld, tender back to the Company Shares received
pursuant to an Award or deliver to the Company previously acquired
Shares having a fair market value sufficient to satisfy all or part
of the Recipient's estimated tax obligations associated with the
transaction. Such election must be made by a Recipient prior to the
date on which the relevant tax obligation arises. The Committee may
disapprove of any election and may limit, suspend or terminate the
right to make such elections.
IX. Delivery of Shares. Recipients of Shares shall cooperate
to effect delivery thereof in accordance with the terms of all
federal and state laws and regulations as interpreted by counsel
for the Company. Without in any way limiting the generality of the
foregoing, the Company may require that the certificates
representing Shares awarded hereunder bear a legend restricting
the transfer thereof except upon compliance with the conditions of
the Award, as stated herein and in the Restricted Stock Agreement
relating thereto, and the federal and state securities laws; and
that each Recipient, as a condition of such delivery, make such
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representations or agreements, if any, as may be required in the
opinion of such counsel to avoid violation of any laws or
regulations, including without limitation the registration or other
provisions of the Securities Act of 1933.
X. Employment Rights. Neither the adoption of the Plan nor
the granting of Awards shall confer upon any Recipient the right to
continued employment with the Company or its subsidiaries, nor
affect in any way the right of the Company or its subsidiaries to
terminate the employment of any Recipient at any time.
XI. Adjustment, Amendment and Termination.
A. The Committee may adjust the number of Shares awarded to
Recipients and otherwise adjust the Plan to take into consideration
material changes in accounting practices or principles,
recapitalizations, mergers, consolidations, stock splits,
acquisitions or dispositions of stock or property, changes in
fiscal year, or other events, if it is determined by the Committee
that such adjustment is appropriate to avoid distortion in the
operation of the Plan.
B. The Committee may cease making awards hereunder at any
time, but in no event shall an Award be made after December 31,
2005. The Plan may be terminated, amended or modified at any time
by the Board; provided, however, that the Board may not, without
the affirmative vote of the shareholders, (i) increase the maximum
number of Shares which may be issued under the Plan in the
aggregate or to any one Recipient (except in the case of any
adjustment as provided in paragraphs V. and XI.A), (ii) extend
beyond December 31, 2005 the date after which Awards may no longer
be made, or (iii) provide for administration of the Plan other than
by a committee consisting of directors of the Company not eligible
to receive Awards under the Plan.
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April 25, 1995
Grossman's Inc.
200 Union Street
Braintree, MA 02184-4997
Gentlemen:
You have asked our opinion regarding certain matters
relating to 950,000 shares of Common Stock, par value $.01 per
share (the "Shares"), of Grossman's Inc. (the "Company") issuable
pursuant to, or upon the exercise of options granted under, the
Company's 1995 Directors' Stock and Option Plan and issuable
pursuant to the Company's 1995 Restricted Stock Plan
(collectively, the "Plans"). You have informed us that the Shares
issuable under, or upon the exercise of options granted under, the
Plans 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
Plans;
Grossman's Inc. -2- April 25, 1995
(e) a copy of each of the Plans; and
(f) such other documents and records as we deem
necessary for purposes of this opinion.
We have assumed that the Shares proposed to be issued under,
and upon the exercise of options granted under, the Plans will be
issued only against payment therefor, or in lieu of cash payments
otherwise payable for services rendered to the Company, as
provided in the Plans, and that the purchase price for such shares
or the amount of cash payments so avoided 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 Shares, when issued pursuant to the terms and
conditions of the Plans, will be duly authorized, validly issued,
fully paid and nonassessable.
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
CONSENT OF ERNST & YOUNG LLP, 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 the 1995 Directors' Stock and Option Plan and the 1995
Restricted Stock Plan of Grossman's Inc. and to the incorporation by
reference therein and in the related prospectuses of our report dated
January 31, 1995, with respect to the consolidated financial statements
and schedule of Grossman's Inc. and subsidiaries included in its Annual
Report (Form 10-K) for the year ended December 31, 1994, filed with the
Securities and Exchange Commission.
ERNST & YOUNG LLP
Boston, Massachusetts
April 20, 1995
