SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended April 15, 2000
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 1-8140
FLEMING COMPANIES, INC.
(Exact name of registrant as specified in its charter)
OKLAHOMA 48-0222760
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
6301 Waterford Boulevard, Box 26647
Oklahoma City, Oklahoma 73126
(Address of principal executive offices) (Zip Code)
(405) 840-7200
(Registrant's telephone number, including area code)
(Former name, former address and former fiscal year,
if changed since last report.)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
The number of shares outstanding of each of the issuer's classes
of common stock, as of May 12, 2000 is as follows:
Class Shares Outstanding
Common stock, $2.50 par value 39,255,000
<PAGE>
INDEX
Part I. FINANCIAL INFORMATION:
Item 1. Financial Statements
Consolidated Condensed Statements of Operations -
16 Weeks Ended April 15, 2000,
and April 17, 1999
Consolidated Condensed Balance Sheets -
April 15, 2000, and December 25, 1999
Consolidated Condensed Statements of Cash Flows -
16 Weeks Ended April 15, 2000,
and April 17, 1999
Notes to Consolidated Condensed Financial Statements
Independent Accountants' Review Report
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures
about Market Risk
Part II. OTHER INFORMATION:
Item 1. Legal Proceedings
Item 4. Results of Votes of Security Holders
Item 6. Exhibits and Reports on Form 8-K
Signatures
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
Consolidated Condensed Statements of Operations
For the 16 weeks ended April 15, 2000, and April 17, 1999
(In thousands, except per share amounts)
<CAPTION>
==============================================================================
2000 1999
- ------------------------------------------------------------------------------
<S> <C> <C>
Net sales $4,444,804 $4,465,246
Costs and expenses:
Cost of sales 4,028,130 4,036,868
Selling and administrative 372,307 376,995
Interest expense 53,101 51,606
Interest income (9,505) (9,350)
Equity investment results 1,891 3,556
Impairment/restructuring charge 42,145 37,036
- ------------------------------------------------------------------------------
Total costs and expenses 4,488,069 4,496,711
- ------------------------------------------------------------------------------
Loss before taxes (43,265) (31,465)
Taxes on loss (17,392) (7,224)
- ------------------------------------------------------------------------------
Net loss $ (25,873) $ (24,241)
==============================================================================
Basic and diluted net loss per share $(.67) $(.64)
Dividends paid per share $.02 $.02
Weighted average shares outstanding:
Basic 38,515 38,143
Diluted 38,515 38,143
==============================================================================
</TABLE>
Fleming Companies, Inc. See notes to consolidated condensed
financial statements and independent accountants' review report.
<PAGE>
<TABLE>
Consolidated Condensed Balance Sheets
(In thousands)
<CAPTION>
==============================================================================
April 15, December 25,
Assets 2000 1999
- ------------------------------------------------------------------------------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 20,719 $ 6,683
Receivables 442,452 496,159
Inventories 860,926 997,805
Other current assets 199,431 228,103
- ------------------------------------------------------------------------------
Total current assets 1,523,528 1,728,750
Investments and notes receivable 97,817 108,895
Investment in direct financing leases 119,492 126,309
Property and equipment 1,507,958 1,539,465
Less accumulated depreciation
and amortization (700,413) (701,289)
- ------------------------------------------------------------------------------
Net property and equipment 807,545 838,176
Deferred income taxes 49,047 54,754
Other assets 155,818 150,214
Goodwill 559,819 566,120
- ------------------------------------------------------------------------------
Total assets $3,313,066 $3,573,218
==============================================================================
Liabilities and Shareholders' Equity
- ------------------------------------------------------------------------------
Current liabilities:
Accounts payable $ 788,913 $ 981,219
Current maturities of long-term debt 67,905 70,905
Current obligations under capital leases 21,096 21,375
Other current liabilities 212,316 210,220
- ------------------------------------------------------------------------------
Total current liabilities 1,090,230 1,283,719
Long-term debt 1,189,934 1,234,185
Long-term obligations under
capital leases 368,124 367,960
Other liabilities 129,738 126,652
Commitments and contingencies
Shareholders' equity:
Common stock, $2.50 par value per share 98,113 97,141
Capital in excess of par value 510,686 511,447
Accumulated deficit (48,199) (22,326)
Accumulated other comprehensive income:
Additional minimum pension liability (25,560) (25,560)
- ------------------------------------------------------------------------------
Accumulated other comprehensive income (25,560) (25,560)
- ------------------------------------------------------------------------------
Total shareholders' equity 535,040 560,702
- ------------------------------------------------------------------------------
Total liabilities and shareholders'
equity $3,313,066 $3,573,218
==============================================================================
</TABLE>
Fleming Companies, Inc. See notes to consolidated condensed
financial statements and independent accountants' review report.
<PAGE>
<TABLE>
Consolidated Condensed Statements of Cash Flows
For the 16 weeks ended April 15, 2000, and April 17, 1999
(In thousands)
<CAPTION>
==============================================================================
2000 1999
- ------------------------------------------------------------------------------
<S> <C> <C>
Cash flows from operating activities:
Net loss $(25,873) $(24,241)
Adjustments to reconcile net loss to
net cash provided by operating activities:
Depreciation and amortization 55,245 46,317
Credit losses 7,698 7,942
Deferred income taxes 8,208 (12,641)
Equity investment results 1,891 3,556
Impairment/restructuring and related charges
(not in other lines) 59,322 45,123
Cash payments on impairment/restructuring
and related charges (41,081) (16,474)
Change in assets and liabilities, excluding
effect of acquisitions:
Receivables 47,639 49,145
Inventories 129,927 111,128
Accounts payable (192,306) (141,788)
Other assets and liabilities 3,592 (36,911)
Other adjustments, net 384 428
- ------------------------------------------------------------------------------
Net cash provided by operating
activities 54,646 31,584
- ------------------------------------------------------------------------------
Cash flows from investing activities:
Collections on notes receivable 9,021 8,031
Notes receivable funded (5,710) (4,541)
Purchase of property and equipment (38,498) (50,041)
Proceeds from sale of property and equipment 7,627 3,465
Investments in customers (1,514) (1,935)
Proceeds from sale of investment 2,616 2,084
Businesses acquired - (10,704)
Proceeds from sale of businesses 36,952 -
Other investing activities 3,753 (51)
- ------------------------------------------------------------------------------
Net cash provided by (used in)
investing activities 14,247 (53,692)
- ------------------------------------------------------------------------------
Cash flows from financing activities:
Proceeds from long-term borrowings 60,000 101,000
Principal payments on long-term debt (107,251) (38,593)
Principal payments on capital
lease obligations (6,982) (3,614)
Sale of common stock under incentive
stock and stock ownership plans 151 178
Dividends paid (775) (787)
Other financing activities - (31)
- ------------------------------------------------------------------------------
Net cash provided by (used in)
financing activities (54,857) 58,153
- ------------------------------------------------------------------------------
Net increase in cash and cash equivalents 14,036 36,045
Cash and cash equivalents, beginning
of period 6,683 5,967
- ------------------------------------------------------------------------------
Cash and cash equivalents, end of period $ 20,719 $ 42,012
==============================================================================
Supplemental information:
Cash paid for interest $41,333 $41,070
Cash paid (refunded) for taxes $(50,491) $11,301
==============================================================================
</TABLE>
Fleming Companies, Inc. See notes to consolidated condensed
financial statements and independent accountants' review report.
<PAGE>
Notes to Consolidated Condensed Financial Statements (See
independent accountants' review report)
1. The consolidated condensed balance sheet as of April 15, 2000,
and the consolidated condensed statements of operations and cash
flows for the 16 weeks ended April 15, 2000 and April 17, 1999,
have been prepared by the company, without audit. In the opinion
of management, all adjustments necessary to present fairly the
company's financial position at April 15, 2000, and the results
of operations and cash flows for the periods presented have been
made. All such adjustments are of a normal, recurring nature
except as disclosed. Both basic and diluted loss per share are
computed based on net loss divided by weighted average shares as
appropriate for each calculation.
The preparation of the consolidated condensed financial
statements in conformity with accounting principles generally
accepted in the United States of America requires management to
make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
Certain reclassifications have been made to prior year amounts to
conform to current year classifications.
2. Certain information and footnote disclosures normally included
in financial statements prepared in accordance with accounting
principles generally accepted in the United States of America
have been condensed or omitted. These consolidated condensed
financial statements should be read in conjunction with the
consolidated financial statements and related notes included in
the company's 1999 annual report on Form 10-K.
3. The LIFO method of inventory valuation is used for determining
the cost of most grocery and certain perishable inventories. The
excess of current cost of LIFO inventories over their stated
value was $58 million at April 15, 2000 ($5 million of which is
recorded in assets held for sale in other current assets) and $54
million at December 25, 1999 ($4 million of which is recorded in
assets held for sale in other current assets).
4. Sales and operating earnings for the company's distribution
and retail segments are presented below.
<TABLE>
<CAPTION>
==============================================================================
For the 16 weeks ended
April 15, April 17,
($ in millions) 2000 1999
- ------------------------------------------------------------------------------
<S> <C> <C>
Sales:
Distribution $3,966 $4,002
Intersegment elimination (582) (675)
- ------------------------------------------------------------------------------
Net distribution 3,384 3,327
Retail 1,061 1,138
- ------------------------------------------------------------------------------
Total sales $4,445 $4,465
==============================================================================
Operating earnings:
Distribution $ 83 $ 83
Retail 12 13
Support services (51) (45)
- ------------------------------------------------------------------------------
Total operating earnings 44 51
Interest expense (53) (51)
Interest income 10 9
Equity investment results (2) (3)
Impairment/restructuring charge (42) (37)
- ------------------------------------------------------------------------------
Loss before taxes $(43) $(31)
==============================================================================
</TABLE>
General support services expenses are not allocated to
distribution and retail segments. The transfer pricing between
segments is at cost.
5. The company's comprehensive loss totaled $25.9 million for the
16 weeks ended April 15, 2000 and $24.2 million for the 16 weeks
ended April 17, 1999. The comprehensive loss in both years was
comprised only of the reported net loss.
6. In accordance with applicable accounting standards, the
company records a charge reflecting contingent liabilities
(including those associated with litigation matters) when
management determines that a material loss is "probable" and
either "quantifiable" or "reasonably estimable." Additionally,
the company discloses material loss contingencies when the
likelihood of a material loss is deemed to be greater than
"remote" but less than "probable." Set forth below is information
regarding certain material loss contingencies:
Class Action Suits. In 1996, the company and certain of its
present and former officers and directors were named as
defendants in nine purported class action suits filed by certain
stockholders and one purported class action suit filed by a
noteholder. In 1997, the court consolidated the stockholder
cases (the noteholder case was also consolidated, but only for
pre-trial purposes). During 1998 the noteholder case was
dismissed and during 1999 the consolidated case was also
dismissed, each without prejudice. The court gave the plaintiffs
the opportunity to restate their claims in each case.
The complaint filed in the consolidated cases asserted liability
for the company's alleged failure to properly account for and
disclose the contingent liability created by the David's
litigation and by the company's alleged "deceptive business
practices." The plaintiffs claim that these alleged practices led
to the David's litigation and to other material contingent
liabilities, caused the company to change its manner of doing
business at great cost and loss of profit, and materially
inflated the trading price of the company's common stock. The
company denied each of these allegations. On February 4, 2000 the
stockholder case was dismissed with prejudice by the district
court. The plaintiffs filed an appeal on March 3, 2000. The
motion to dismiss in the noteholder case has not yet been
decided. The plaintiffs seek undetermined but significant
damages. However, if the district court ruling described below
is upheld, Fleming believes the litigation will not have a
material adverse effect on the company.
In 1997, the company won a declaratory judgment against certain
of its insurance carriers regarding policies issued to Fleming
for the benefit of its officers and directors ("D&O policies").
On motion for summary judgment, the court ruled that the
company's exposure, if any, under the class action suits is
covered by D&O policies written by the insurance carriers
(aggregating $60 million in coverage) and that the "larger
settlement rule" will be applicable to the case. According to
the trial court, under the larger settlement rule a D&O insurer
is liable for the entire amount of coverage available under a
policy even if there is some overlap in the liability created by
the insured individuals and the uninsured corporation. If a
corporation's liability is increased by uninsured parties beyond
that of the insured individuals, then that portion of the
liability is the sole obligation of the corporation. The court
also held that allocation is not available to the insurance
carriers as an affirmative defense. The insurance carriers
appealed. In 1999, the appellate court affirmed the decision
that the class actions were covered by D&O policies aggregating
$60 million in coverage but reversed the trial court's decision
as to allocation as being premature.
Tru Discount Foods. Fleming brought suit in 1994 on a note and
an open account against its former customer, Tru Discount Foods.
The case was initially referred to arbitration but later restored
to the trial court; Fleming appealed. In 1997, the defendant
amended its counter claim against the company alleging fraud,
overcharges for products and violations of the Oklahoma Deceptive
Trade Practices Act. In 1998, the appellate court reversed the
trial court and directed that the matter be sent again to
arbitration. On September 28, 1999, the arbitration panel
entered its award in favor of Fleming against Tru Discount Foods
and its principals in the net amount of $579,443 plus interest at
the rate of six percent per annum from October 29, 1999, and fees
and expenses. On December 27, 1999, Tru Discount Foods and its
principals filed a motion in the trial court to vacate the
arbitration award, on the grounds, among others, that the
arbitration panel prevented them from asserting a RICO
counterclaim for treble damages, and refused to admit alleged new
evidence relating thereto. The company objected to the motion
and moved to confirm the arbitration award. On February 28,
2000, the trial court confirmed the award and entered judgment
against the defendants. The time for appeal by the defendants
has expired.
Don's United Super (and related cases). The company and two
retired executives have been named in a suit filed in 1998 in the
United States District Court for the Western District of Missouri
by several current and former customers of the company (Don's
United Super, et al. v. Fleming, et al.). The eighteen
plaintiffs operate retail grocery stores in the St. Joseph and
Kansas City metropolitan areas. The plaintiffs in this suit
allege product overcharges, breach of contract, breach of
fiduciary duty, misrepresentation, fraud, and RICO violations,
and they are seeking actual, punitive and treble damages, as well
as a declaration that certain contracts are voidable at the
option of the plaintiffs.
During the fourth quarter of 1999, plaintiffs produced reports of
their expert witnesses calculating alleged actual damages of
approximately $112 million. During the first quarter of 2000,
plaintiffs revised a portion of these damage calculations, and
although plaintiffs have not finalized these calculations, it
appears that their revised damage calculations will result in a
claim of approximately $120 million, exclusive of any punitive or
treble damages.
On May 2, 2000, the court granted partial summary judgment to the
defendants, holding that plaintiffs' breach of contract claims
that relate to events that occurred more than four (4) years
before the filing of the litigation are barred by limitations,
and that plaintiffs' fraud claims based upon fraudulent
inducement that occurred more than fifteen (15) years before the
filing of the lawsuit likewise are barred by limitations. The
company is in the process of evaluating what impact, if any,
these rulings are likely to have on the damage calculations of
the plaintiffs' expert witnesses.
In October 1998, the company and the same two retired executives
were named in a suit filed by another group of retailers in the
same court as the Don's suit. (Coddington Enterprises, Inc., et
al. v. Fleming, et al.). Currently, sixteen plaintiffs are
asserting claims in the Coddington suit. All of the plaintiffs
except for one have arbitration agreements with Fleming. The
plaintiffs assert claims virtually identical to those set forth
in the Don's suit, and although plaintiffs have not yet
quantified the damages in their pleadings, it is anticipated that
they will claim actual damages approximating the damages claimed
in the Don's suit.
In July 1999, the court ordered two of the plaintiffs in the
Coddington case to arbitration, and otherwise denied arbitration
as to the remaining plaintiffs. The company has appealed the
district court's denial of arbitration to the Eighth Circuit
Court of Appeals. The two plaintiffs that were ordered to
arbitration have filed motions asking the district court to
reconsider the arbitration ruling.
Two other cases had been filed before the Don's case in the same
district court (R&D Foods, Inc., et al. v. Fleming, et al.; and
Robandee United Super, Inc., et al. v. Fleming, et al.) by ten
customers, some of whom are also plaintiffs in the Don's case.
The earlier two cases, which principally seek an accounting of
the company's expenditure of certain joint advertising funds,
have been consolidated. All proceedings in these cases have been
stayed pending the arbitration of the claims of those plaintiffs
who have arbitration agreements with the company.
The company intends to vigorously defend against the claims in
these related cases but is currently unable to predict the
outcome of the cases. An unfavorable outcome could have a
material adverse effect on the financial condition and prospects
of the company.
Storehouse Markets. In 1998, the company and one of its division
officers were named in a suit filed in the United States District
Court for the District of Utah by several current and former
customers of the company (Storehouse Markets, Inc., et al. v.
Fleming Companies, Inc., et al.). The plaintiffs have alleged
product overcharges, fraudulent misrepresentation, fraudulent
nondisclosure and concealment, breach of contract, breach of duty
of good faith and fair dealing, and RICO violations, and they are
seeking actual, punitive and treble damages. The plaintiffs have
made these claims on behalf of a class that would purportedly
include current and former customers of Fleming's Salt Lake City
division covering a four state region. On March 7, 2000 the
court stated that this case would be certified as a class action,
although no formal order had been entered as of the date of this
report. The company is considering an appeal of this ruling once
the court enters its order. Damages have not been quantified by
the plaintiffs; however, the company anticipates that substantial
damages will be claimed. The company intends to vigorously
defend against these claims but is currently unable to predict
the outcome of the case. An unfavorable outcome could have a
material adverse effect on the financial condition and prospects
of the company.
Allen's IGA. In March 2000, the company and two of its former
executives were named in a suit filed in the United States
District Court for the Eastern District of Oklahoma by several
former customers in Oklahoma (Allen's IGA, Inc., et al. v.
Fleming Companies, Inc., et al.). The plaintiffs have alleged
product overcharges, fraud, breach of contract, negligence, RICO
violations, and they seek actual, punitive and treble damages, an
accounting, and other equitable relief. Damages have not been
quantified by the plaintiffs; however, the company anticipates
that substantial damages will be claimed. The court has entered a
scheduling order setting November 6, 2000 as the date on which
the trial of this case will commence.
The company intends to vigorously defend against the claims in
this case but is currently unable to predict the outcome. An
unfavorable outcome could have a material adverse effect on the
financial condition and prospects of the company.
Other. The company's facilities and operations are subject to
various laws, regulations and judicial and administrative orders
concerning protection of the environment and human health,
including provisions regarding the transportation, storage,
distribution, disposal or discharge of certain materials. In
conformity with these provisions, the company has a comprehensive
program for testing, removal, replacement or repair of its
underground fuel storage tanks and for site remediation where
necessary. The company has established reserves that it believes
will be sufficient to satisfy the anticipated costs of all known
remediation requirements.
The company and others have been designated by the U.S.
Environmental Protection Agency ("EPA") and by similar state
agencies as potentially responsible parties under the
Comprehensive Environmental Response, Compensation and Liability
Act ("CERCLA") or similar state laws, as applicable, with respect
to EPA-designated Superfund sites. While liability under CERCLA
for remediation at such sites is generally joint and several with
other responsible parties, the company believes that, to the
extent it is ultimately determined to be liable for the expense
of remediation at any site, such liability will not result in a
material adverse effect on its consolidated financial position or
results of operations. The company is committed to maintaining
the environment and protecting natural resources and human health
and to achieving full compliance with all applicable laws,
regulations and orders.
The company is a party to various other litigation and contingent
loss situations arising in the ordinary course of its business
including: disputes with customers and former customers; disputes
with owners and former owners of financially troubled or failed
customers; disputes with employees and former employees regarding
labor conditions, wages, workers' compensation matters and
alleged discriminatory practices; disputes with insurance
carriers; tax assessments and other matters, some of which are
for substantial amounts. However, the company does not believe
any such action will result in a material adverse effect on the
company.
7. Certain indebtedness is guaranteed by all direct and indirect
subsidiaries of the company (except for certain inconsequential
subsidiaries), all of which are wholly owned. The guarantees are
joint and several, full, complete and unconditional. There are
no restrictions on the ability of the subsidiary guarantors to
transfer funds to the company in the form of cash dividends,
loans or advances. Full financial statements for the subsidiary
guarantors are not presented herein because management does not
believe such information would be material.
The following summarized financial information, which includes
allocations of material corporate-related expenses, for the
combined subsidiary guarantors may not necessarily be indicative
of the results of operations or financial position had the
subsidiary guarantors been operated as independent entities.
<TABLE>
<CAPTION>
April 15, April 17,
(In millions) 2000 1999
-------------------------------------------------
<S> <C> <C>
Current assets $378 $28
Noncurrent assets $493 $51
Current liabilities $164 $15
Noncurrent liabilities $147 $7
</TABLE>
<TABLE>
<CAPTION>
16 weeks ended
---------------------------
April 15, April 17,
(In millions) 2000 1999
------------------------------------------------
<S> <C> <C>
Net sales $1,163 $104
Costs and expenses $1,169 $106
Net loss $(3) $(1)
</TABLE>
8. The accompanying operating statements include the following:
<TABLE>
<CAPTION>
16 weeks ended
---------------------------
April 15, April 17,
(In thousands) 2000 1999
---------------------------------------------------------
<S> <C> <C>
Depreciation and amortization
(includes amounts below) $55,245 $46,317
Amortized costs in interest
expense $1,496 $1,498
Excess depreciation and
amortization due to the
strategic plan $4,395 $-
</TABLE>
9. In December 1998, the company announced the implementation of
a strategic plan designed to improve the competitiveness of the
retailers the company serves and improve the company's
performance by building stronger operations that can better
support long-term growth. The four major initiatives of the
strategic plan are to consolidate wholesale operations, grow
wholesale sales, improve retail performance, and reduce overhead
and operating expenses. On April 25, 2000, the company announced
the exploration of strategic alternatives for the remaining
conventional retail chains, including the potential sale of these
operations.
The total pre-tax charge of the strategic plan is presently
estimated at $949 million ($229 million cash and $720 million non-
cash). The plan originally announced in December 1998 had an
estimated pre-tax charge totaling $782 million. The increase is
due primarily to closing the Peoria, York and Philadelphia
divisions ($73 million), updating impairment amounts on the five
retail chains in the original plan ($11 million), the divestiture
or closing of the two chains not in the original plan ($36
million), decreasing costs related to a scheduled closing no
longer planned ($18 million), and other costs including those
related to the company's low cost pursuit program and
centralization of administrative functions ($65 million).
Updating the impairment amounts was necessary as decisions to
close additional operating units were made. Additionally, sales
negotiations provided more current information regarding the fair
value on certain chains. There were changes in the list of
operating units to be divested or closed since they no longer fit
into the current business strategy. Also, the cost of severance,
relocation and other periodic expenses related to the company's
low cost pursuit program and centralization of administrative
functions has been accrued as incurred. The pre-tax charge
recorded to-date is $869 million ($64 million in 2000, $137
million in 1999, and $668 million recorded in 1998). After tax,
the expense for the first quarter of 2000 was $38 million or $.99
per share. The $80 million of costs relating to the strategic
plan not yet charged against income will primarily be recorded
throughout 2000 at the time such costs are accruable.
The $64 million charge in the first quarter of 2000 was included
on several lines of the Consolidated Statements of Operations as
follows: $13 million was included in cost of sales and was
primarily related to inventory valuation adjustments and
additional depreciation and amortization on assets to be disposed
of but not yet held for sale; $8 million was included in selling
and administrative expense and equity investment results as
disposition related costs recognized on a periodic basis; and the
remaining $43 million was included in the
impairment/restructuring charge line. The first quarter charge
consisted of the following components:
o Impairment of assets of $2 million. The impairment related
to other long-lived assets.
o Restructuring charges of $41 million. The restructuring
charges consisted primarily of severance related expenses and
pension withdrawal liabilities for the divested or closed
operating units announced during the first quarter of 2000. The
restructuring charges also consisted of operating lease
liabilities and professional fees incurred related to the
restructuring process.
o Other disposition and related costs of $21 million. These
costs consisted primarily of inventory valuation adjustments,
additional depreciation and amortization on assets to be disposed
of but not yet held for sale, disposition related costs
recognized on a periodic basis and other costs.
The first quarter of 2000 charge relates to the company's
segments as follows: $37 million relates to the distribution
segment and $17 million relates to the retail segment with the
balance relating to support services expenses.
The charges related to workforce reductions are as follows:
<TABLE>
<CAPTION>
($'s in thousands) Amount Headcount
------ ---------
<S> <C> <C>
1998 Activity:
Charge $25,441 1,430
Terminations (3,458) (170)
------- -------
Ending Liability 21,983 1,260
1999 Activity:
Charge 12,029 1,350
Terminations (24,410) (1,950)
------- -------
Ending Liability 9,602 660
2000 Quarter 1 Activity:
Charge 25,509 1,020
Terminations (4,250) (560)
------- -------
Ending Liability $30,861 1,120
======= =======
</TABLE>
The breakdown of the 1,020 headcount reduction recorded during
2000 is: 910 from the distribution segment; 100 from the retail
segment; and 10 from support services.
Additionally, the strategic plan includes charges related to
lease obligations which will be utilized as operating units or
retail stores close, but ultimately reduced over remaining lease
terms ranging from 1 to 20 years. The charges and utilization
have been recorded to-date as follows:
<TABLE>
<CAPTION>
($'s in thousands) Amount
------
<S> <C>
1998 Activity:
Charge $28,101
Utilized (385)
-------
Ending Liability 27,716
1999 Activity:
Charge 15,074
Utilized (10,281)
-------
Ending Liability 32,509
2000 Quarter 1 Activity:
Charge 9,062
Utilized (9,957)
-------
Ending Liability $31,614
=======
</TABLE>
Assets held for sale included in other current assets at the end
of the first quarter of 2000 were approximately $69 million,
consisting of $27 million of distribution operating units and $42
million of retail stores.
The pre-tax charge of the strategic plan in the first quarter of
1999 totaled $46 million. After tax, the expense for the first
quarter of 1999 was $32 million or $.84 per share. The $46
million charge was included on several lines of the Consolidated
Condensed Statements of Operations for the first quarter of 1999
as follows: $6 million was included in cost of sales and was
primarily related to inventory valuation adjustments; $3 million
was included in selling and administrative expense as disposition
related costs recognized on a periodic basis; and the remaining
$37 million was included in the impairment/restructuring charge
line. The $46 million charge consisted of the following
components:
o Impairment of assets of $24 million. The impairment
components were $22 million for goodwill and $2 million for other
long-lived assets. All of the goodwill charge of $22 million was
related to the 1994 "Scrivner" acquisition.
o Restructuring charges of $13 million. The restructuring
charges consisted of severance related expenses and pension
withdrawal liabilities for the Peoria distribution operating unit
and Consumers retail chain. The restructuring charges also
consisted of operating lease liabilities for the Peoria
distribution operating unit.
o Other disposition and related costs of $9 million. These
costs consist primarily of inventory valuation adjustments,
disposition related costs recognized on a periodic basis and
other costs.
The $46 million charge relates to the company's segments as
follows: $32 million relates to the distribution segment and $8
million relates to the retail segment with the balance relating
to corporate overhead expenses.
Asset impairments were recognized in accordance with SFAS No. 121
- - Accounting for the Impairment of Long-Lived Assets and for Long-
Lived Assets to be Disposed Of, and such assets were written down
to their estimated fair values based on estimated proceeds of
operating units to be sold or discounted cash flow projections.
The operating costs of operating units to be sold or closed are
treated as normal operations during the period they remain in
use. Salaries, wages and benefits of employees at these
operating units are charged to operations during the time such
employees are actively employed. Depreciation expense is
continued for assets that the company is unable to remove from
operations.
Independent Accountants' Review Report
TO THE BOARD OF DIRECTORS AND SHAREHOLDERS
FLEMING COMPANIES, INC.
We have reviewed the accompanying condensed consolidated balance
sheet of Fleming Companies, Inc. and subsidiaries as of April 15,
2000, and the related condensed consolidated statements of
operations and of cash flows for the sixteen weeks ended April
15, 2000 and April 17, 1999. These financial statements are the
responsibility of the company's management.
We conducted our reviews in accordance with standards established
by the American Institute of Certified Public Accountants. A
review of interim financial information consists principally of
applying analytical procedures to financial data and of making
inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit
conducted in accordance with auditing standards generally
accepted in the United States of America, the objective of which
is the expression of an opinion regarding the financial
statements taken as a whole. Accordingly, we do not express such
an opinion.
Based on our reviews, we are not aware of any material
modifications that should be made to such condensed consolidated
financial statements for them to be in conformity with accounting
principles generally accepted in the United States of America.
We have previously audited, in accordance with auditing standards
generally accepted in the United States of America, the
consolidated balance sheet of Fleming Companies Inc. and
subsidiaries as of December 25, 1999, and the related
consolidated statements of operations, shareholders' equity, and
cash flows for the year then ended (not presented herein); and in
our report dated February 18, 2000, we expressed an unqualified
opinion on those consolidated financial statements. In our
opinion, the information set forth in the accompanying condensed
consolidated balance sheet as of December 25, 1999 is fairly
stated, in all material respects, in relation to the consolidated
balance sheet from which it has been derived.
DELOITTE & TOUCHE LLP
Oklahoma City, Oklahoma
May 3, 2000
Item 2. Management's Discussion and Analysis of Financial
Condition And Results of Operations
General
In early 1998, the Board of Directors and senior management began
an extensive strategic planning process that evaluated all
aspects of Fleming's business. With the help of a consulting
firm, the evaluation and planning process was completed late in
1998. In December 1998, the strategic plan was approved and
implementation efforts began.
The strategic plan consists of the following four major
initiatives:
o Consolidate distribution operations. The strategic plan
initially included closing eleven operating units (El Paso, TX;
Portland, OR; Houston, TX; Huntingdon, PA; Laurens, IA; Johnson
City, TN; Sikeston, MO; San Antonio, TX; Buffalo, NY; an
unannounced operating unit still to be closed; and an unannounced
operating unit scheduled for 1999 closure, but due to increased
cash flows from new business it will not be closed). Of the nine
closings announced, all have been completed. Three additional
closings were announced which were not originally part of the
strategic plan bringing the total operating units to be closed to
thirteen. The closing of Peoria was added to the plan in the
first quarter of 1999 when costs associated with continuing to
service customers during a strike coupled with costs of reopening
the operating unit made closing the operating unit an
economically sound decision. During the first quarter of 2000,
the closings of York and Philadelphia were announced as part of
an effort to grow in the northeast by consolidating distribution
operations and expanding the Maryland facility. The York and
Philadelphia closings are expected to be complete by the end of
the second quarter of 2000. The last full year of operations for
the 13 operating units closed or to be closed was in 1998 with
sales totaling approximately $3.1 billion. Most of these sales
have been or are expected to be retained by transferring customer
business to the company's higher volume, better utilized
facilities. The company believes that this consolidation process
benefits customers with better product variety and improved
buying opportunities. The company has also benefited with better
coverage of fixed expenses. The closings result in savings due
to reduced depreciation, payroll, lease and other operating
costs, and the company begins recognizing these savings
immediately upon closure. The capital returned from the
divestitures and closings has been and will continue to be
reinvested in the business.
o Grow distribution sales. Higher volume, better-utilized
distribution operations and the dynamics of the market place
represent an opportunity for sales growth. The improved
efficiency and effectiveness of the remaining distribution
operations enhances their competitiveness, and the company
intends to capitalize on these improvements.
o Improve retail performance. This not only requires
divestiture or closing of under-performing company-owned retail
chains, but also requires increased investments in the retail
concepts on which the company is focused. As of year-end 2000,
the strategic plan included the divestiture or closing of seven
retail chains (Hyde Park, Consumers, Boogaarts, New York Retail,
Pennsylvania Retail, Baker's Oklahoma, and Thompson Food Basket).
The sale of Baker's Oklahoma as well as the divestiture or
closing of Thompson Food Basket were not in the original
strategic plan, but no longer fit into the current business
strategy. The last full year of operations for these seven
divested or closed (or to be divested or closed) chains was in
1998 with sales totaling approximately $844 million. The sale or
closing of these chains is expected to be substantially completed
by the end of the second quarter of 2000. On April 25, 2000, the
company announced the exploration of strategic alternatives for
the remaining conventional retail chains (Rainbow Foods, Baker's
Nebraska, Sentry Foods, and ABCO Foods), including the potential
sale of these operations.
o Reduce overhead and operating expenses. Overhead has been
and will continue to be reduced through the company's low cost
pursuit program which includes organization and process changes,
such as a reduction in workforce through productivity
improvements and elimination of work, centralization of
administrative and procurement functions, and reduction in the
number of management layers. The low cost pursuit program also
includes other initiatives to reduce complexity in business
systems and remove non-value-added costs from operations, such as
reducing the number of SKU's, creating a single point of contact
with customers, reducing the number of decision points within the
company, and centralizing vendor negotiations. These initiatives
are well underway and have reflected reduced costs for the
company which ultimately reflect improved profitability and
competitiveness.
Implementation of the strategic plan is expected to continue
through 2000. This time frame accommodates the company's limited
resources and customers' seasonal marketing requirements.
Additional expenses will continue for some time beyond 2000
because certain disposition related costs can only be expensed
when incurred.
The total pre-tax charge of the strategic plan is presently
estimated at $949 million ($229 million cash and $720 million non-
cash). The plan originally announced in December 1998 had an
estimated pre-tax charge totaling $782 million. The increase is
due primarily to closing the Peoria, York and Philadelphia
divisions ($73 million), updating impairment amounts on the five
retail chains in the original plan ($11 million), the divestiture
or closing of the two chains not in the original plan ($36
million), decreasing costs related to a scheduled closing no
longer planned ($18 million), and other costs including those
related to the company's low cost pursuit program and
centralization of administrative functions ($65 million).
Updating the impairment amounts was necessary as decisions to
close additional operating units were made. Additionally, sales
negotiations provided more current information regarding the fair
value on certain chains. There were changes in the list of
operating units to be divested or closed since they no longer fit
into the current business strategy as described above. Also, the
cost of severance, relocation and other periodic expenses related
to the company's low cost pursuit program and centralization of
administrative functions has been accrued as incurred. No
additional charge has been or is expected to be added related to
the strategic alternatives being explored for the remaining
conventional retail chains. The pre-tax charge recorded to-date
is $869 million ($64 million in 2000, $137 million in 1999, and
$668 million recorded in 1998). After tax, the expense for the
first quarter of 2000 was $38 million or $.99 per share.
Of the $64 million charge in the first quarter of 2000, $19
million is expected to require cash expenditures. The remaining
$45 million charge consisted of noncash items. The $64 million
charge consisted of the following components:
o Impairment of assets of $2 million. The impairment related
to other long-lived assets.
o Restructuring charges of $41 million. The restructuring
charges consisted primarily of severance related expenses and
pension withdrawal liabilities for the divested or closed
operating units announced during the first quarter of 2000. The
restructuring charges also consisted of operating lease
liabilities and professional fees incurred related to the
restructuring process.
o Other disposition and related costs of $21 million. These
costs consisted primarily of inventory valuation adjustments,
additional depreciation and amortization on assets to be disposed
of but not yet held for sale, disposition related costs
recognized on a periodic basis and other costs.
The company recorded a net loss of $26 million or $.67 per share
for the first quarter of 2000. The after-tax effect of the
strategic plan charge on the company's first quarter of 2000 was
$38 million or $.98 per share. Excluding the strategic plan
charge, the company would have recorded net income of $12 million
or $.30 per share. Adjusted EBITDA for the first quarter of 2000
was $128 million. "Adjusted EBITDA" is earnings before
extraordinary items, interest expense, income taxes, depreciation
and amortization, equity investment results, LIFO provision and
one-time adjustments (e.g., strategic plan charges and specific
litigation charges). Adjusted EBITDA should not be considered as
an alternative measure of the company's net income, operating
performance, cash flow or liquidity. It is provided as
additional information related to the company's ability to
service debt; however, conditions may require conservation of
funds for other uses. Although the company believes adjusted
EBITDA enhances a reader's understanding of the company's
financial condition, this measure, when viewed individually, is
not necessarily a better indicator of any trend as compared to
conventionally computed measures (e.g., net sales, net earnings,
net cash flows, etc.). Finally, amounts presented may not be
comparable to similar measures disclosed by other companies. The
following table sets forth the calculation of adjusted EBITDA for
the first quarter of 2000 (in millions):
Net loss $(26)
Add back:
Taxes on loss (17)
Depreciation/amortization 54
Interest expense 53
Equity investment results 2
LIFO provision 3
----
EBITDA 69
Add back noncash strategic plan charges * 40
----
EBITDA excluding noncash
strategic plan charges 109
Add back strategic plan charges
requiring cash 19
----
Adjusted EBITDA $128
====
* Excludes amounts for depreciation/amortization and
equity investment results already added back.
The adjusted EBITDA amount represents cash flow from operations
excluding unusual or infrequent items. In the company's opinion,
adjusted EBITDA is the best starting point when evaluating the
company's ability to service debt. In addition, the company
believes it is important to identify the cash flows relating to
unusual or infrequent charges and strategic plan charges, which
should also be considered in evaluating the company's ability to
service debt.
Additional pre-tax expense relating to the strategic plan of
approximately $80 million is expected throughout the rest of 2000
as implementation of the strategic plan continues. Approximately
$78 million of these future expenses are expected to require cash
expenditures. The remaining $2 million of the future expense
relates to noncash items. These future expenses will consist
primarily of severance, relocation, real estate-related expenses
and other costs expensed when incurred. The company does not
expect any charge related to the strategic alternatives being
explored for the remaining conventional retail chains.
The pre-tax charges relating to the strategic plan for 1999 and
1998 totaled $137 million and $668 million, respectively, and are
described in the Form 10-K and Form 10-K/A for 1998 and the Form
10-K for 1999.
The expected benefit of the plan is improved earnings. Net
earnings for 1999 after excluding strategic plan charges and one-
time items ("adjusted earnings") was $43 million or $1.12 per
share. Adjusted earnings for the first quarter of 2000 was $12
million or $.30 per share with earnings per share of $1.50
expected for 2000. The company continues to expect annual
earnings per share to exceed $3.00 by the year 2003. Sales in the
distribution segment are also expected to increase, but the
growth will not be evident in 2000 because of the previously
announced loss of two significant customers. Sales in the retail
segment may decrease dramatically depending on the outcome of the
strategic alternatives being explored for the remaining
conventional retail chains.
The company has assessed the strategic significance of all
operating units. Under the plan, certain divestitures have been
announced and are planned as described above. The company
anticipates the improved performance of several strategic
operating units. However, in the event that performance is not
improved, the strategic plan will be revised and additional
operating units could be sold or closed.
Results of Operations
Set forth in the following table is information regarding the
company's net sales and certain components of earnings expressed
as a percent of sales which are referred to in the accompanying
discussion:
<TABLE>
<CAPTION>
==============================================================================
April 15, April 17,
For the 16-weeks ended 2000 1999
- ------------------------------------------------------------------------------
<S> <C> <C>
Net sales 100.00 % 100.00 %
Gross margin 9.38 9.60
Less:
Selling and administrative 8.38 8.44
Interest expense 1.19 1.16
Interest income (.21) (.21)
Equity investment results .04 .08
Impairment/restructuring charge .95 .83
- ------------------------------------------------------------------------------
Total expenses 10.35 10.30
- ------------------------------------------------------------------------------
Loss before taxes (.97) (.70)
Taxes on loss (.39) (.16)
- ------------------------------------------------------------------------------
Net loss (.58)% (.54)%
==============================================================================
</TABLE>
Net sales.
Sales for the first quarter (16 weeks) of 2000 decreased by $20
million, or less than 1%, to $4.4 billion from the same period in
1999.
Net sales for the distribution segment were $3.4 billion in 2000
compared to $3.3 billion in 1999. The 2% increase in sales was
due to new business added from independent retailers, convenience
stores, e-tailers, and supercenter customers. This increase was
partially offset by a loss of sales previously announced from
Randall's (in 1999). The increase in the distribution segment
sales is the largest in five years. Sales have also been impacted
by the planned closing and consolidation of certain distribution
operating units. Future sales comparisons in 2000 will be
affected by the previously announced prospective loss of sales to
United. In 1999, sales to Randall's and United accounted for less
than 4% of the company's sales.
Retail segment sales decreased $77 million, or 7%, in 2000 to
$1.1 billion from the same period in 1999. The decrease in sales
was due to the divestiture of underperforming and non-strategic
stores as well as a decrease of 5.1% in same-store sales for the
first quarter of 2000 compared to the same period in 1999. The
decrease was offset partially by sales of new stores opened since
the first quarter of 1999. Depending on the outcome of the
strategic alternatives being explored for the conventional
chains, sales may dramatically decrease in the retail segment.
Fleming measures inflation using data derived from the average
cost of a ton of product sold by the company. Food price
inflation for the first quarter of 2000 was down at 1.3% compared
to 2.3% for the same period in 1999.
Gross margin.
Gross margin for the first quarter of 2000 decreased by $12
million, or 3%, to $417 million from $428 million for the same
period in 1999, and also decreased as a percentage of net sales
to 9.38% from 9.60% for the same period in 1999. After excluding
the strategic plan charges, gross margin for the first quarter of
2000 decreased by $4 million, or less than 1%, compared to the
same period in 1999, and decreased as a percentage of net sales
to 9.68% from 9.72% for the same period in 1999. The decrease in
dollars was due primarily to the overall sales decrease, but was
partly offset by positive results from leveraging the company's
buying power and cutting costs. The decrease in percentage to
net sales was due to a change in mix. The sales of the
distribution segment represent a larger portion of total company
sales than the retail segment and the distribution segment has
lower margins as a percentage of sales versus the retail segment.
For the distribution segment, gross margin as a percentage of net
sales improved slightly in the first quarter of 2000 compared to
the same period in 1999 reflecting the benefits of asset
rationalization and the centralization of procurement. This was
partially offset by competitive pricing actions. For the retail
segment, gross margin as a percentage of net sales improved
significantly in the first quarter of 2000 compared to the same
period in 1999 due to the divesting or closing of underperforming
stores and the centralization of procurement. The strategic plan
charges were higher in the first quarter of 2000 compared to the
same period in 1999 and were primarily related to inventory
valuation adjustments and additional depreciation and
amortization on assets to be disposed of but not yet held for
sale.
Selling and administrative expenses.
Selling and administrative expenses for the first quarter of 2000
decreased by $5 million, or 1%, to $372 million from $377 million
for the same period in 1999 and decreased as a percentage of net
sales to 8.38% for 2000 from 8.44% in 1999. After excluding the
strategic plan charges, selling and administrative expenses for
the first quarter of 2000 decreased by $10 million, or 3%,
compared to the same period in 1999, and decreased as a
percentage of net sales to 8.20% from 8.38% for the same period
in 1999. The decreases were due to asset rationalization and
centralizing administrative functions, but also due to reducing
the significance of retail. The sales of the distribution segment
represent a larger portion of total company sales than the retail
segment and the distribution segment has lower operating expenses
as a percentage of sales versus the retail segment.
For the distribution segment, selling and administrative expenses
as a percentage of net sales improved in the first quarter of
2000 compared to the same period in 1999 due to asset
rationalization and the centralization of administrative
functions. For the retail segment, selling and administrative
expenses as a percentage of net sales decreased in the first
quarter of 2000 compared to the same period in 1999 due to the
costs of closing certain retail stores in continuing retail
chains. The was partially offset by the divestiture or closing
of underperforming stores and the centralization of
administrative functions. The strategic plan charges were higher
in the first quarter of 2000 compared to the same period in 1999
due primarily to moving and training costs associated with the
consolidation of the accounting and human resource functions.
The company has a significant amount of credit extended to its
customers through various methods. These methods include
customary and extended credit terms for inventory purchases and
equity investments in, and secured and unsecured loans to,
certain customers. Secured loans generally have terms up to ten
years. Credit loss expense is included in selling and
administrative expenses and was $8 million for the first quarter
of both 2000 and 1999.
Operating earnings.
Operating earnings for the distribution segment remained
unchanged for the first quarter of 2000 from the same period of
1999 at $83 million. After excluding the strategic plan charges,
operating earnings increased by $6 million, or 7%, to $94 million
from $88 million for the same period of 1999. Operating earnings
improved primarily due to the benefits of the consolidation of
distribution operating units, reduction of costs and centralizing
of certain procurement and administrative functions in support
services. The improvements were offset by higher strategic plan
charges in 2000 relating primarily to additional depreciation and
amortization on assets to be disposed of but not yet held for
sale.
Operating earnings for the retail segment decreased by less than
$1 million to $12 million for the first quarter of 2000 from $13
million for the same period of 1999. After excluding the
strategic plan charges, operating earnings increased by $2
million to $18 million in the first quarter of 2000 from $16
million for the same period of 1999. Operating earnings were
improved primarily by divesting or closing underperforming chains
and increased benefits received from the distribution segment.
Operating earnings also improved due to centralizing certain
administrative functions in support services. The improvements
were partially offset by higher strategic plan charges in 2000
relating to inventory valuation adjustments.
Support services expenses increased in the first quarter of 2000
compared to the same period of 1999 by approximately $6 million
to $51 million from $45 million. After excluding the strategic
plan charges, support services expenses increased by $1 million
to $46 million in the first quarter of 2000 from $45 million for
the same period of 1999. The increase in expense was primarily
due to centralizing certain procurement and administrative
functions from the distribution and retail segments. The increase
was also due to lease termination and real estate disposition
expenses that were higher in the first quarter of 2000 than
similar costs for the same period in 1999. Strategic plan
charges were higher in 2000 due to moving and training expenses
associated with the centralization of the procurement and
administrative functions.
Interest expense.
Interest expense for the first quarter of 2000 of $53 million was
$1 million higher than the same period in 1999 due primarily to
higher average debt balances.
The company's derivative agreements consist of simple "floating-
to-fixed rate" interest rate swaps. For the first quarter of
2000, interest rate hedged agreements contributed $0.5 million of
net interest expense compared to the $1.7 million contribution
made in 1999. The amount contributed for hedges was lower in
2000 due to lower applicable notional principal balances and a
higher interest income component. For a description of these
derivatives, see Item 7A. Quantitative and Qualitative
Disclosures about Market Risk in the company's Annual Report on
Form 10-K for the fiscal year ended December 25, 1999.
Interest income.
Interest income of $10 million for the first quarter of 2000 was
slightly higher than the same period of 1999 primarily due to
higher average interest rates offset in part by lower average
balances for direct financing leases.
Equity investment results.
The company's portion of operating losses from equity investments
improved to $2 million for the first quarter of 2000 from $4
million for the same period of 1999.
Impairment/restructuring charge.
The pre-tax charge recorded in the Consolidated Condensed
Statements of Operations (associated with the implementation of
the company's strategic plan announced in 1998) was $64 million
for the first quarter of 2000 compared to $46 million for the
same period of 1999. The $64 million charge in 2000 was recorded
with $42 million reflected in the Impairment/restructuring charge
line and the balance reflected in other financial statement
lines. The $46 million charge in 1999 was recorded with $37
million reflected in the Impairment/restructuring charge line and
the balance reflected in other financial statement lines. See
"General" above and Note 9 in the notes to the consolidated
condensed financial statements for further discussion regarding
the strategic plan.
Taxes on income.
The effective tax rate used for the first quarters of 2000 and
1999 were 40.2% and 23.0%, respectively. These were both blended
rates taking into account operations activity, strategic plan
activity, write-offs of non-deductible goodwill and the timing of
these items during the year.
Other.
Several factors negatively affecting earnings in the first 16-
weeks of 2000 are likely to continue for the near term. The
company believes that these factors include costs relating to the
strategic plan, negative same-store sales and operating losses in
certain company-owned retail stores. Additionally, although the
company cannot predict the outcome of the strategic alternatives
being explored for the remaining conventional retail chains, an
adverse affect on earnings is not expected.
Liquidity and Capital Resources
In the first quarter ended April 15, 2000, the company's
principal sources of liquidity were cash flows from operating
activities, borrowings under its credit facility, and the sale of
certain assets and liabilities. The company's principal sources
of capital, excluding shareholders' equity, during this period
were banks and lessors.
Net cash provided by operating activities.
Operating activities generated $55 million of net cash flows for
the first quarter ended April 15, 2000 compared to $32 million
for the same period in 1999. In the first quarter of 2000, $65
million provided by net cash earnings and a $5 million net
decrease in other assets and other liabilities was offset by a
$15 million increase in net working capital items.
Cash requirements related to the implementation and completion of
the strategic plan (on a pre-tax basis) are expected to be $112
million for the full year 2000. The company believes working
capital reductions, proceeds from asset sales, and increased
earnings related to the successful implementation of the
strategic plan are expected to provide adequate cash flows to
cover all of these costs. The company cannot predict the outcome
of the strategic alternatives being explored for the remaining
conventional retail chains, and no amount is included in the cash
requirements described above. The company does not anticipate any
alternative having a negative effect on cash requirements.
Net cash provided by investing activities.
Total investment-related activity resulted in $14 million of
positive net cash flow for the first quarter ended April 15, 2000
compared to a $54 million use of funds in the same period of
1999. Cash provided by asset sales, collections on notes
receivable and other investing-related activities was only
partially offset by capital expenditures.
Net cash used in financing activities.
Net cash expended by financing activities was $55 million for the
first quarter ended April 15, 2000 compared to a $58 million
source of cash flows for the same period last year. Total debt
decreased by $45 million in the first quarter of 2000 and this
included $7 million in principal payments for capital leases.
At the end of the first quarter of 2000, outstanding loans and
letters of credit under the credit facility totaled $180 million
in term loans, $230 million in revolver loans, and $39 million in
letters of credit. Based on actual borrowings and letters of
credit issued, the company could have borrowed an additional $331
million under the revolver.
On April 25, 2000, the company announced it was exploring
strategic alternatives with respect to its conventional retail
chains, including their potential sale. Any such sale could
provide substantial net cash flows which could potentially be
used to prepay debt, repurchase common stock or help to finance
business investment.
For the foreseeable future, the company's principal sources of
liquidity and capital are expected to be cash flows from
operating activities, the company's ability to borrow under its
credit facility, and asset sale proceeds. In addition, lease
financing may be employed for new retail stores and certain
equipment. Management believes these sources will be adequate to
meet working capital needs, capital expenditures, expenditures
for acquisitions (if any), strategic plan implementation costs
and other capital needs for the next 12 months.
Contingencies
From time to time the company faces litigation or other
contingent loss situations resulting from owning and operating
its assets, conducting its business or complying (or allegedly
failing to comply) with federal, state and local laws, rules and
regulations which may subject the company to material contingent
liabilities. In accordance with applicable accounting standards,
the company records as a liability amounts reflecting such
exposure when a material loss is deemed by management to be both
"probable" and "quantifiable" or "reasonably estimable."
Furthermore, the company discloses material loss contingencies in
the notes to its financial statements when the likelihood of a
material loss has been determined to be greater than "remote" but
less than "probable." Such contingent matters are discussed in
Note 6 in the notes to the consolidated condensed financial
statements. An adverse outcome experienced in one or more of
such matters, or an increase in the likelihood of such an
outcome, could have a material adverse effect on the company.
Also see Legal Proceedings.
Forward-Looking Information
This report includes statements that (a) predict or forecast
future events or results, (b) depend on future events for their
accuracy, or (c) embody projections and assumptions which may
prove to have been inaccurate, including expectations for years
2000 and beyond, the company's ability to successfully achieve
the goals of its strategic plan and reverse sales declines, cut
costs and improve earnings; the company's assessment of the
probability and materiality of losses associated with litigation
and other contingent liabilities; the company's ability to expand
portions of its business or enter new facets of its business; and
the company's expectations regarding the adequacy of capital and
liquidity. The management of the company has prepared the
financial projections included in this document on a reasonable
basis, and such projections reflect the best currently available
estimates and judgments and present, to the best of management's
knowledge and belief, the expected course of action and the
expected future financial performance of the company. However,
this information is not fact and should not be relied upon as
necessarily indicative of future results, and readers of this
document are cautioned not to place undue reliance on the
projected financial information. The projections were not
prepared with a view to compliance with the guidelines
established by the American Institute of Certified Public
Accountants regarding projections. These projections, forward-
looking statements and the company's business and prospects are
subject to a number of factors which could cause actual results
to differ materially including the risks associated with the
successful execution of the company's strategic business plan;
adverse effects of labor disruptions; adverse effects of the
changing industry environment and increased competition; sales
declines and loss of customers; disruption caused by exploration
of strategic alternatives regarding conventional retail; exposure
to litigation and other contingent losses; failure of the company
to achieve necessary cost savings; and the negative effects of
the company's substantial indebtedness and the limitations
imposed by restrictive covenants contained in the company's debt
instruments. These and other factors are described in the
company's Annual Report on Form 10-K for the fiscal year ended
December 25, 1999 and in other periodic reports available from
the Securities and Exchange Commission.
Item 3. Quantitative and Qualitative Disclosures about Market
Risk
No material change has occurred since year-end 1999. See Item
7A. Quantitative and Qualitative Disclosures about Market Risk in
the company's Annual Report on Form 10-K for the fiscal year
ended December 25, 1999.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Set forth below and in Note 6 in the notes to the consolidated
condensed financial statements, which information is incorporated
herein by reference, is information regarding litigation which
became reportable or as to which a material development has
occurred since the date of the company's Annual Report on Form 10-
K for the fiscal year ended December 25, 1999:
(1) Tobacco Cases. During the first quarter of 2000, the
dismissal and tolling agreement expired which had prevented the
running of the statute of limitations and assertion of other
defenses against 30 claimants who had filed or registered claims
related to tobacco use in the Court of Common Pleas, Philadelphia
County, Pennsylvania and the Court of Common Pleas, Dauphin
County, Pennsylvania. None of these claimants has filed a
complaint since the expiration of the dismissal and tolling
agreement. During the second quarter of 2000, two cases which
were scheduled for trial in the Court of Common Pleas,
Philadelphia County, Pennsylvania in October, 2000 and January,
2001 were dismissed by the plaintiffs.
The only pending tobacco case is a case formerly pending in
Cameron Parish, Louisiana. This case was removed to the federal
district court. The district court's decision to deny a motion to
remand the case to the state court has been appealed to the
United States Court of Appeals for the Fifth Circuit, where no
decision has been rendered. The Company is being defended and
indemnified by a substantial co-defendant.
(2) Other Customer Cases. In March 2000, the company and one
former executive were named in a suit filed in the United States
District Court for the Eastern District of Missouri by current
and former customers that operated five retail grocery stores in
and around Kansas City, Missouri, and four retail grocery stores
in and around Phoenix, Arizona (J&A Foods, Inc., et al. v. Dean
Werries and Fleming Companies, Inc.). The plaintiffs have
alleged product overcharges, fraudulent misrepresentation,
fraudulent nondisclosure and concealment, breach of contract,
breach of duty of good faith and fair dealing, and RICO
violations, and they are seeking actual, punitive and treble
damages, as well as other relief. The damages have not been
quantified by the plaintiffs; however, the company anticipates
that substantial damages will be claimed.
In April 2000, the operators of two grocery stores in Van Horn
and Marfa, Texas filed an amended complaint in the United States
District Court for the Western District of Texas, Pecos Division
(Welsh v. Fleming Foods of Texas, L.P.). The amended complaint
alleges product overcharges, breach of contract, fraud,
conversion, breach of fiduciary duty, negligent
misrepresentation, and breach of the Texas Deceptive Trade
Practices Act. The amended complaint seeks unspecified actual
damages, punitive damages, attorneys' fees and prejudgment and
postjudgment interest. The court has entered a scheduling order
setting August 1, 2000 as the date on which the trial of this
case will commence.
From time to time, the company is a party to litigation in which
claims against the company are made by present and former customers,
sometimes in situations involving financially troubled or failed
customers. Except as noted in this report, the company does not
believe that any such claim will result in a material adverse effect
on the company.
Item 4. Results of Votes of Security Holders
The company held its annual meeting on May 10, 2000. Matters
voted on were as follows:
Election of directors - Carol B. Hallett, Guy A. Osborn, and
David A. Rismiller were each elected members of the Board of
Directors for terms expiring in 2001. Directors whose terms of
office continued are Herbert M. Baum, Archie R. Dykes, Edward C.
Joullian III, Alice M. Peterson and Mark S. Hansen. Jack W.
Baker, whose term expires in 2002, retired from the Board of
Directors effective May 10, 2000.
2000 stock incentive plan - Shareholders approved the proposal
authorizing the grant of stock options and award of restricted
stock pursuant to the terms of the plan.
Ratification of independent auditors - Shareholders ratified the
appointment of Deloitte & Touche LLP as independent auditors for
2000.
The number of votes cast is as follows (votes in thousands):
<TABLE>
<CAPTION>
For Withheld
--- --------
<S> <C> <C>
Election of directors
Carol B. Hallett 33,319 2,391
Guy A. Osborn 33,320 2,390
David A. Rismiller 33,320 2,391
</TABLE>
<TABLE>
<CAPTION>
For Against Abstain
--- ------- -------
<S> <C> <C> <C>
2000 stock incentive plan 27,535 8,039 137
Ratification of independent auditors 33,735 1,938 38
</TABLE>
No other business came before the meeting.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
Exhibit Number
--------------
4.9 Second Amendment dated as of December
21, 1999 to Credit Agreement dated
July 25, 1997
10.61* Employment Agreement for Lenore T.
Graham dated as of January 18, 2000
10.62* Employment Agreement for Neal J. Rider
dated as of January 18, 2000
10.63* Restricted Stock Award Agreement for
Lenore T. Graham dated as of January
18, 2000
10.64* Restricted Stock Award Agreement for
Neal J. Rider dated as of January 18,
2000
10.65* Restricted Stock Award Agreement for
Mark S. Hansen dated as of February
29, 2000
10.66* Restricted Stock Award Agreement for
David R. Almond dated as of February
29, 2000
10.67* Amendment to the Amended and Restated
Restricted Award Agreement for David
R. Almond dated as of February 29, 2000
10.68* Amendment to Nonqualified Stock Option
Agreement for David R. Almond
dated as of February 29, 2000
10.69* Amendment to Restricted Stock Award
Agreement for E. Stephen Davis dated
as of February 29, 2000
10.70* 2000 Stock Incentive Plan for Fleming
Companies, Inc. is incorporated herein
by reference to Exhibit A to the
company's Proxy Statement dated March
27, 2000.
10.71* Form of Nonqualified Stock Option
Agreement between eMAR.net, Inc. and
each director of the registrant
(4,000 shares each) except for
Mark S. Hansen dated as of
January 18, 2000
10.72* Form of Stock Option Agreement
between eMAR.net, Inc. and
Mark S. Hansen (150,000 shares),
William H. Marquard (100,000 shares),
John M. Thompson (75,000 shares)
and the other executive officers of
the registrant (25,000 shares each)
dated as of January 18, 2000
12 Computation of Ratio of Earnings
to Fixed Charges
15 Letter from Independent Accountants
as to Unaudited Interim Financial
Information
27 Financial Data Schedule
- -----------------
* Management contract, compensatory plan or arrangement.
(b) Reports on Form 8-K:
On February 10, 2000, pursuant to Item 5, the company filed a
descriptive narrative of a presentation to the Donaldson, Lufkin
& Jenrette Retail Equity Conference scheduled that day.
On April 25, 2000, pursuant to Item 5, the company announced that
it was exploring strategic alternatives concerning its five
conventional supermarket chains, including the potential sale of
these operations.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
FLEMING COMPANIES, INC.
(Registrant)
Date: May 25, 2000 KEVIN TWOMEY
Kevin Twomey
Senior Vice President-Finance
and Controller
(Principal Accounting Officer)
<PAGE>
<TABLE>
EXHIBIT INDEX
<CAPTION>
Exhibit
No. Description Method of Filing
- ------- ----------- ----------------
<S> <C> <C>
4.9 Second Amendment dated as of December Filed herewith electronically
21, 1999 to Credit Agreement dated
July 25, 1997
10.61 Employment Agreement for Lenore T. Filed herewith electronically
Graham dated as of January 18, 2000
10.62 Employment Agreement for Neal J. Rider Filed herewith electronically
dated as of January 18, 2000
10.63 Restricted Stock Award Agreement for Filed herewith electronically
Lenore T. Graham dated as of January
18, 2000
10.64 Restricted Stock Award Agreement for Filed herewith electronically
Neal J. Rider dated as of January 18,
2000
10.65 Restricted Stock Award Agreement for Filed herewith electronically
Mark S. Hansen dated as of February
29, 2000
10.66 Restricted Stock Award Agreement for Filed herewith electronically
David R. Almond dated as of February
29, 2000
10.67 Amendment to the Amended and Restated Filed herewith electronically
Restricted Award Agreement for David
R. Almond dated as of February 29, 2000
10.68 Amendment to Nonqualified Stock Option Filed herewith electronically
Agreement for David R. Almond
dated as of February 29, 2000
10.69 Amendment to Restricted Stock Award Filed herewith electronically
Agreement for E. Stephen Davis dated
as of February 29, 2000
10.70 2000 Stock Incentive Plan for Fleming Incorporated herein by
Companies, Inc. reference
10.71 Form of Nonqualified Stock Option Filed herewith electronically
Agreement between eMAR.net, Inc. and
each director of the registrant
(4,000 shares each) except for
Mark S. Hansen dated as of
January 18, 2000
10.72 Form of Stock Option Agreement Filed herewith electronically
between eMAR.net, Inc. and
Mark S. Hansen (150,000 shares),
William H. Marquard (100,000 shares),
John M. Thompson (75,000 shares)
and the other executive officers of
the registrant (25,000 shares each)
dated as of January 18, 2000
12 Computation of Ratio of Earnings Filed herewith electronically
to Fixed Charges
15 Letter from Independent Accountants Filed herewith electronically
as to Unaudited Interim Financial
Information
27 Financial Data Schedule Filed herewith electronically
</TABLE>
Exhibit 4.9
SECOND AMENDMENT dated as of
December 21, 1999 (this
"Amendment"), to the Credit
Agreement, dated as of July 25,
1997, as amended by the First
Amendment dated as of October 5,
1998 (as so amended and as the same
may be further amended, restated,
modified or supplemented from time
to time, the "Credit Agreement"),
among FLEMING COMPANIES, INC. (the
"Borrower"), the LENDERS from time
to time party thereto (the
"Lenders"), BANCAMERICA SECURITIES,
INC., as Syndication Agent (the
"Syndication Agent"), SOCIETE
GENERALE, as Documentation Agent
(the "Documentation Agent") and THE
CHASE MANHATTAN BANK, as
Administrative Agent for the
Lenders (the "Administrative
Agent").
WHEREAS, the Borrower, the Lenders, the Syndication
Agent, the Documentation Agent and the Administrative Agent are
parties to the Credit Agreement;
WHEREAS, the Borrower has requested that certain
provisions of the Credit Agreement be modified in the manner
provided for in this Amendment, and the undersigned Lenders are
willing to agree to such modifications.
NOW THEREFORE, for and in consideration of the premises
and the mutual covenants herein set forth and other good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the undersigned parties hereby agree as
follows:
Section 1. Definitions. All capitalized terms which are
defined in the Credit Agreement and not otherwise defined herein
or in the recitals hereof shall have the same meanings herein as
in the Credit Agreement.
Section 2. Amendment of Credit Agreement. The Credit
Agreement is hereby amended by:
(a) Inserting the following sentence at the end of the
definition of "Affiliate":
At all times when the Borrower owns an equity interest
in Netco, Netco and each of its subsidiaries will be
deemed to be Affiliates of the Borrower.
(b) Amending clause (a) of the definition of "Asset Disposition"
to read as follows:
(a) any sale, transfer or other disposition of any
capital stock of any Subsidiary or of Netco to any
Person other than the Borrower or any Wholly Owned
Subsidiary (including, without limitation, through the
merger of any Subsidiary or Netco with or into any
Person other than the Borrower or any Wholly Owned
Subsidiary),
(c) Amending the definition of "Collateral Requirement" to read
as follows:
"Collateral Requirement" means at any date that
(a) the Pledge Agreement creates in favor of the
Collateral Agent, for the benefit of the Lenders, first
priority perfected pledges of and security interests in
all capital stock or other equity interests owned by
the Borrower or any Subsidiary (other than Netco) in
any Subsidiary or in Netco, and (b) the Security
Agreement creates in favor of the Collateral Agent, for
the benefit of the Lenders, first priority perfected
security interests in Inventory and Accounts Receivable
representing at least 95% of the consolidated Inventory
and Accounts Receivable of the Borrower and the
Subsidiaries; provided, that (i) the Borrower and the
Subsidiaries will in no event be required, in order to
satisfy the Collateral Requirement, to subject to the
Lien of the Security Agreement Inventory or Accounts
Receivable of Joint Ventures or of Netco and (ii) the
Borrower will not be required to cause Richmar Foods,
Inc. to pledge the capital stock of Netco Foods, Inc.
unless and until Richmar Foods, Inc. becomes a Wholly
Owned Subsidiary.
(d) Amending the definition of "Designated Subsidiary" to read
as follows:
"Designated Subsidiary" means a Subsidiary that is
neither an Equity Store nor a Business Development
Venture; provided that for purposes of Article VI,
neither Netco nor any subsidiary of Netco shall be
considered a Designated Subsidiary.
(e) Amending the first sentence of the definition of "Guarantee
Requirement" to read as follows:
"Guarantee Requirement" means at any date that (a)
all Wholly Owned Subsidiaries (other than Netco or any
subsidiary of Netco) are Guarantors and (b) the assets
of the Guarantors, together with the assets of the
Borrower, constituted as at the last day of the most
recently ended fiscal quarter of the Borrower at least
95% of the consolidated total assets of the Borrower
and its Subsidiaries (other than Netco or any
subsidiary of Netco); provided, however, that the
Guarantee Requirement shall in no event be met unless
each Subsidiary that guarantees the Subordinated Notes
or any other subordinated Indebtedness of the Borrower
shall be a Guarantor.
(f) Amending the definition of "Subsidiary" to read as follows:
"Subsidiary" means any subsidiary of the Borrower;
provided that for purposes of Article V (other than
Sections 5.01) and Sections 6.03(b), 6.03(c), 6.05 and
6.06(b), neither Netco nor any subsidiary of Netco
shall be considered a Subsidiary of the Borrower.
(g) Inserting in its proper alphabetical order the following new
definitions:
"Netco" means a subsidiary formed or to be formed
by the Borrower to which the Visionet Business will be
transferred.
"Visionet Business" means the ownership and
operation of an interactive internet medium
facilitating open communication among food
manufacturers, food wholesalers and retail grocery
businesses which as of the date of this Amendment is
operated as a division of the Borrower.
(h) Inserting the words "or any Subsidiary" immediately after
the word "Borrower" in Section 5.01(j).
(i) Inserting "(a)" immediately after the heading of Section
6.06 and inserting the following new paragraph at the end of such
Section:
(b) Neither the Borrower nor any Subsidiary shall
make any Investment in or to Netco other than (i) the
contribution to Netco of assets associated with the
Visionet Business, which assets will at the time of
such contribution have a book value of approximately
$3,000,000, and (ii) other Investments the amount or
book value, as applicable, of which does not exceed
$10,000,000 in the aggregate for all such Investments.
Investments in Netco that are permitted by this
paragraph will not be prohibited by any other covenant
contained in Section 6.05 or elsewhere in this
Agreement.
(j) Inserting the following new sentence at the end of Article
VI:
For purposes of computing the ratios referred to in
Sections 6.08 and 6.09, (a) the net income of Netco
shall be included in Consolidated Net Income to the
extent (and only to the extent) that it is dividended
to and received by the Borrower or a Designated
Subsidiary in cash and (b) except as provided in the
preceding clause (a), the assets, liabilities, cash
flows and results of operations of Netco shall be
excluded.
Section 3. Representations and Warranties. The Borrower
represents and warrants to the Administrative Agent on behalf of
the Lenders as of the date hereof as follows:
(a) Before and after giving effect to this Amendment, the
representations and warranties set forth in the Credit Agreement
are true and correct as of the date hereof.
(b) Immediately before and after giving effect to this
Amendment, no Event of Default or Default has occurred and is
continuing.
(c) The execution, delivery and performance by the Borrower of
this Amendment have been duly authorized by all necessary
corporate and other action and do not and will not require any
registration with, consent or approval of, notice to or action
by, any person (including any governmental agency) in order to be
effective and enforceable. The Credit Agreement as amended by
this Amendment constitutes the legal, valid and binding
obligation of the Borrower, enforceable against it in accordance
with its terms, subject only to the operation of the bankruptcy
code and other similar statutes for the benefit of debtors
generally and to the application of general equitable principles.
Section 4. Conditions to Effectiveness. This Amendment
shall become effective when the Administrative Agent shall have
received counterparts hereof signed by each of the parties hereto
(or, in the case of any party as to which an executed counterpart
shall not have been received, telegraphic, telex or other written
confirmation from such party of the execution of a counterpart
hereof by such party).
Section 5. Credit Agreement. Except as specifically
stated herein, the Credit Agreement shall continue in full force and
effect in accordance with the provisions thereof. As used
therein, the terms "Agreement", "herein", "hereunder", "hereto",
"hereof" and words of similar import shall, unless the context
otherwise requires, refer to the Credit Agreement as modified
hereby.
Section 6. Counterparts. This Amendment may be executed
in any number of counterparts and by different parties hereto on
separate counterparts, each of which when so executed and
delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument.
Delivery of an executed counterpart of a signature page of this
Amendment by facsimile transmission shall be as effective as
delivery of a manually executed counterpart hereof.
Section 7. Applicable Law. THIS AMENDMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed by their duly authorized officers,
all as of the date and year first above written.
FLEMING COMPANIES, INC.
KEVIN TWOMEY
Name: Kevin Twomey
Title: Vice President &
Treasurer
THE CHASE MANHATTAN BANK,
individually and as Administrative
Agent,
BARRY K. BERGMAN
Name: Barry K. Bergman
Title: Vice President
BANK OF AMERICA, N.A.,
LYNN DURNING
Name: Lynn Durning
Title: Principal
BANK OF HAWAII,
DANIEL J. FALSTAD
Name: Daniel J. Falstad
Title: Vice President
BANK OF MONTREAL,
RJ MCCLOVEY
Name: RJ McClovey
Title: Director
BANK OF SCOTLAND,
ANNIE GLYNN
Name: Annie Glynn
Title: Senior Vice
President
BEAR STEARNS INVESTMENT PRODUCTS
INC.,
GREGORY HANLEY
Name: Gregory Hanley
Title: Vice President
COMERICA BANK,
MARK B. GROVER
Name: Mark B. Grover
Title: Vice President
CREDIT LYONNAIS NEW YORK BRANCH,
ROBERT IVOSEVICH
Name: Robert Ivosevich
Title: Senior Vice
President
THE DAI-ICHI KANGYO BANK, LTD.,
PARESH R. SHAH
Name: Paresh R. Shah
Title: Assistant Vice President
FIRST HAWAIIAN BANK,
Name:
Title:
THE FUJI BANK, LIMITED,
TEIJI TERAMOTO
Name: Teiji Teramoto
Title: Vice President &
Manager
IBJ WHITEHALL BANK & TRUST COMPANY,
CHARLES B. FEARS
Name: Charles B. Fears
Title: Director
BANK ONE, OKLAHOMA, NA,
MARK C. DEMOS
Name: Mark C. Demos
Title: Senior Vice
President
MANUFACTURERS AND TRADERS TRUST
COMPANY,
CHRISTOPHER KANIA
Name: Christopher Kania
Title: Vice President
THE MITSUBISHI TRUST AND BANKING
CORPORATION,
NOBUO TOMINAGA
Name: Nobuo Tominaga
Title: Chief Manager
NATEXIS BANQUE-BFCE,
MARK A. HARRINGTON
Name: Mark A. Harrington
Title: Senior Vice
President and
Regional Manager
PAUL H. DIOURI
Name: Paul H. Diouri
Title: Assistant
Treasurer
NATIONAL BANK OF CANADA,
RANDALL K. WILHOT
Name: Randall K. Wilhot
Title: Vice President
BILL HANDLEY
Name: Bill Handley
Title: Vice President
NATIONAL CITY BANK, KENTUCKY,
TODD ETHINGTON
Name: Todd Ethington
Title: Vice President
PARIBAS,
LARRY ROBINSON
Name: Larry Robinson
Title: Vice President
THE SANWA BANK LIMITED,
Name:
Title:
SENIOR DEBT PORTFOLIO,
Name:
Title:
SOCIETE GENERALE,
J. BLAINE SHAUM
Name: J. Blaine Shaum
Title: Managing Director
Director
THE SUMITOMO BANK, LIMITED,
SURESH S. TATA
Name: Suresh S. Tata
Title: Senior Vice President
SUMMIT BANK,
CATHERINE E. GARRITY
Name: Catherine E. Garrity
Title: Vice President
TRANSAMERICA BUSINESS CREDIT
CORPORATION,
PERRY VAVOULES
Name: Perry Vavoules
Title: Senior Vice
President
VAN KAMPEN CLO I LIMITED,
by Van Kampen American
Capital Management, Inc.
As Collateral Manager
DARVIN D. PIERCE
Name: Darvin D. Pierce
Title: Vice President
GE CAPITAL CORPORATION,
W. JEROME MCDERMOTT
Name: W. Jerome McDermott
Title: Vice President
MEESPIERSON CAPITAL CORP.,
Name:
Title:
PAM CAPITAL FUNDING, L.P.,
Name:
Title:
CALIFORNIA BANK & TRUST,
Name:
Title:
Exhibit 10.61
EMPLOYMENT AGREEMENT
AGREEMENT, dated as of January 18, 2000, by and between
FLEMING COMPANIES, INC., an Oklahoma corporation (the "Company")
and LENORE T. GRAHAM ("Executive").
IN CONSIDERATION of the premises and the mutual
covenants set forth below, the parties hereby agree as follows:
1. Employment. The Company hereby agrees to employ
Executive as Senior Vice President, General Counsel and Corporate
Secretary of the Company, and Executive hereby accepts such employ-
ment, on the terms and conditions hereinafter set forth.
2. Term. The period of employment of Executive by the
Company hereunder (the "Employment Period") shall commence on January
18, 2000 (the "Commencement Date") and shall continue through January
17, 2005. The Employment Period may be sooner terminated in
accordance with Section 6 of this Agreement.
3. Position and Duties. During the Employment Period,
Executive shall report directly to the Chairman and Chief
Executive Officer of the Company. Executive shall have those
powers and duties normally associated with the position of Senior
Vice President, General Counsel and Corporate Secretary.
Executive shall devote substantially all of her working time,
attention and energies (other than absences due to illness or
vacation) to the performance of her duties for the Company.
Notwithstanding the above, Executive shall be permitted, to the
extent such activities do not interfere with the performance by
Executive of her duties and responsibilities hereunder or violate
Sections 10(a), (b) or (c) of this Agreement, to (i) manage
Executive's personal, financial and legal affairs, (ii) serve on
civic or charitable boards or committees and (iii) subject to the
approval of the board of directors of the Company (the "Board")
(which approval shall not be unreasonably withheld), serve on the
board of directors or other similar governing body of any other
corporation or other business entity or trade organization.
4. Place of Performance. The principal place of employment
of Executive shall be at the Company's principal executive offices.
5. Compensation and Related Matters.
(a) Base Salary. During the Employment Period the Company
shall pay Executive a base salary at the rate of not less than $250,000
per year ("Base Salary"). Executive's Base Salary shall be paid
in approximately equal installments in accordance with the
Company's customary payroll practices. Executive's Base Salary
shall be subject to increase, but not decrease, pursuant to
annual review by the Compensation and Organization Committee of
the Board (the "Compensation Committee"). Such increased Base
Salary shall then constitute the Base Salary for all purposes of
this Agreement.
(b) Company Stock Option. The Company has granted to
Executive, on the Commencement Date, (i) a stock option to purchase
55,800 shares of the common stock of the Company, par value $2.50 per
share (the "Company Stock"), at an exercise price of $8.9688 per
share, pursuant to the Company's 1990 Stock Option Plan and (ii)
a stock option to purchase 44,200 shares of Company Stock at an
exercise price of $8.9375 per share, pursuant to the Company's
1996 Stock Incentive Plan (collectively, the "Company Options").
Each of the Company Options has a scheduled 10-year term and,
subject to the terms of the applicable stock option agreements
between the Company and Executive, shall vest and become
exercisable (i) with respect to 25% of the shares of Company
Stock subject to such Company Options on each of the first four
anniversaries of the Commencement Date and (ii) upon the
occurrence of a Change of Control (as such term is defined in
that certain Change of Control Employment Agreement, dated as of
the date of this Agreement, between the Company and Executive)
with respect to 100% of the Company Stock subject to Company
Options.
(c) Annual Bonus. Executive shall have a target annual
bonus of 55% of Base Salary and a maximum annual bonus of 110% of Base
Salary, based upon meeting performance goals established by the
Compensation Committee. The performance goals and corresponding
bonus amounts during the Employment Period shall be established
by the Compensation Committee.
(d) Expenses. The Company shall promptly reimburse
Executive for all reasonable business expenses upon the presentation
of reasonably itemized statements of such expenses in accordance
with the Company's policies and procedures now in force or as
such policies and procedures may be modified with respect to all
senior executive officers of the Company.
(e) Vacation. Executive shall be entitled to the
number of weeks of vacation per year provided to the Company's senior
executive officers.
(f) Restricted Stock Grant. The Company has granted to
Executive, on the Commencement Date, ten thousand (10,000) shares
of restricted Company Stock (the "Restricted Stock") pursuant to
the Company's 1996 Stock Incentive Plan. In connection with the
grant of the Restricted Stock, Executive shall make an election
prior to February 17, 2000 to include in gross income the value
of the Restricted Stock on the date of grant pursuant to Section
83(b) of the Internal Revenue Code of 1986, as amended (the
"Code"). Upon notification from Executive that she has made such
election, the Company shall pay to Executive an additional
payment in an amount necessary to cause the net amount of such
payment that is retained by Executive after the calculation and
deduction of any and all federal, state and local income taxes
and employment taxes on such payment to be equal to Executive's
income taxes attributable to the Restricted Stock and Executive's
election under Section 83(b) of the Code in connection with the
Restricted Stock.
(g) Welfare, Pension and Incentive Benefit Plans. During
the Employment Period, Executive (and her spouse and dependents to
the extent provided therein) shall be entitled to participate in
and be covered under all the welfare benefit plans or programs
maintained by the Company from time to time for the benefit of
its senior executives including, without limitation, all medical,
life, hospitalization, dental, disability, accidental death and
dismemberment and travel accident insurance plans and programs.
In addition, during the Employment Period, Executive shall be
eligible to participate in all pension, retirement, savings and
other employee benefit plans and programs maintained from time to
time by the Company for the benefit of its senior executives or
any annual incentive or long-term performance plans.
(h) Offices. Executive shall serve, without additional
compensation, as a director or trustee of the Company's wholly-
owned subsidiaries, (and as a member of any committees of the
board of directors of any such entities), and in one or more
executive positions of any of such subsidiaries, provided that
Executive is indemnified for serving in any and all such
capacities on a basis no less favorable than is then provided to
any other director of such entity.
(i) Relocation. The Executive shall be provided with
the Company's standard relocation program for transferred senior
executive officers in order to relocate to the Company's
principal executive offices in Lewisville, Texas, including
travel costs, temporary housing, moving costs of household
belongings, storage costs for up to one year, and any other
expenses necessary to efficiently effect Executive's relocation
(collectively, the "Relocation Payment"). Also, at the
Executive's option, at any time during up to the first two (2)
years of the employment period, the Company shall purchase the
Executive's residence in Oklahoma City at a purchase price equal
to the greater of the appraised value (as set by an appraiser
designated by the Company) or the Executive's invested cost in
the residence (the "Residence Payment"). In addition to these
payments, the Company shall pay the Executive an additional
payment in an amount (the "Tax Gross-Up Amount") necessary to
cause the net amount of such payment that is retained by the
Executive after the calculation and deduction of all federal,
state and local income taxes and employment taxes on such
payments to be equal to the Executive's income tax attributable
to such payments for the Relocation Payment and the Residence
Payment. In the event the Executive voluntarily leaves her
employment with the Company, other than for "good reason" (as
such term is hereafter defined), prior to January 18, 2002, the
Executive shall repay the Company an amount equal to the
Relocation Payment, plus the Tax Gross-Up Amount attributable to
the Relocation Payment within thirty (30) days after her
termination of employment; provided, however, that this repayment
obligation shall be waived in equal increments each of one eighth
(1/8th) of the total amount, for each three consecutive months
during which the Executive is employed following January 18, 2000.
(j) Indemnification and Insurance. Executive shall
be indemnified and held harmless by the Company during the term of
this Agreement and following any termination of this Agreement
for any reason whatsoever in the same manner as would any other
key management associate of the Company with respect to acts or
omissions occurring prior to the termination of employment of the
Executive under this Agreement. In addition, during the
Employment Period and for a period of five years following the
termination of employment of the Executive under this Agreement
for any reason whatsoever, the Executive shall be covered by a
Company-held directors and officers liability insurance policy
covering acts or omissions occurring prior to the termination of
employment of the Executive under this Agreement.
6. Termination. Executive's employment hereunder may be
terminated during the Employment Period under the following
circumstances:
(a) Death. Executive's employment hereunder shall
terminate upon her death.
(b) Disability. If, as a result of Executive's
incapacity due to physical or mental illness, Executive shall have
been substantially unable to perform her duties hereunder for an
entire period of six (6) consecutive months, and within thirty
(30) days after written Notice of Termination is given after such
six (6) month period, Executive shall not have returned to the
substantial performance of her duties on a full-time basis, the
Company shall have the right to terminate Executive's employment
hereunder for "Disability", and such termination in and of itself
shall not be, nor shall it be deemed to be, a breach of this
Agreement.
(c) Cause. The Company shall have the right to terminate
Executive's employment for Cause, and such termination shall not
be, nor shall it be deemed to be, a breach of this Agreement.
For purposes of this Agreement, the Company shall have "Cause" to
terminate Executive's employment upon:
(i) Executive's conviction of a felony by a federal or
state court of competent jurisdiction; or
(ii) an act or acts of dishonesty taken by Executive and
intended to result in substantial personal enrichment of
Executive at the expense of the Company; or
(iii) Executive's "willful" failure to follow a direct,
reasonable and lawful order from the Board and/or the Chairman
and Chief Executive Officer, within the reasonable scope of
Executive's duties, which failure is not cured within thirty (30)
days.
For purposes of this Section 6(c), no act, or failure to act, by
Executive shall be considered "willful" unless done, or omitted
to be done, by Executive not in good faith and without a
reasonable belief that the act or omission was in the best
interests of the Company. Cause shall not exist under paragraphs
(i), (ii) or (iii) above unless and until the Company has
delivered to Executive a copy of a resolution duly adopted by not
less than three-fourths (3/4ths) of the Board (excluding
Executive) at a meeting of the Board called and held for such
purpose (after reasonable notice to Executive and an opportunity
for Executive, together with her counsel, to be heard before the
Board), finding that in the good faith opinion of the Board,
Executive was guilty of the conduct set forth in paragraphs
(i),(ii) or (iii) and specifying the particulars thereof in
detail.
(d) Good Reason. Executive may terminate her employment
for "Good Reason" by providing Notice of Termination (as defined in
Section 7(a)) to the Company within one hundred and twenty (120)
days after Executive has actual knowledge of the occurrence,
without the written consent of Executive, of one of the events
set forth below. Executive's Date of Termination for Good Reason
shall be fifteen (15) days after Notice of Termination, unless
the basis for Good Reason has been cured by the Company prior to
such date:
(i) the assignment to Executive of duties materially and
adversely inconsistent with Executive's status as Executive Vice
President and Chief Financial Officer of the Company or a
material and adverse alteration in the nature of Executive's
duties and/or responsibilities, reporting obligations, titles or
authority;
(ii) a reduction by the Company in Executive's Base Salary;
(iii) the relocation of (a) the Company's principal
executive offices or Executive's own office location to a
location more than twenty five (25) miles from Oklahoma City
except with respect to one relocation during the term of this
Agreement, provided such relocation is pursuant to recommenda-
tion of the Chairman and Chief Executive Officer or an action
by the Board concurred in by the Chairman and Chief Executive
Officer, as evidenced by her vote, or (b) Executive's office
location to a place other than the Company's principal
executive offices;
(iv) the Company's failure to provide any material employee
benefits due to be provided to Executive (other than any such
failure which affects all senior executive officers); or
(v) the failure of any successor to the Company to assume
this Agreement pursuant to Section 12(a).
Executive's right to terminate her employment hereunder for Good
Reason shall not be affected by her incapacity due to physical or
mental illness. Executive's continued employment during the one
hundred and twenty (120) day period referred to above in this
paragraph (d) shall not constitute consent to, or a waiver of
rights with respect to, any act or failure to act constituting
Good Reason hereunder.
(e) Without Cause. The Company shall have the right
to terminate Executive's employment hereunder without Cause by
providing Executive with a Notice of Termination, and such
termination shall not in and of itself be, nor shall it be deemed
to be, a breach of this Agreement.
7. Termination Procedure.
(a) Notice of Termination. Any termination of Execu-
tive's employment by the Company or by Executive during the Employment
Period (other than termination pursuant to Section 6(a)) shall be
communicated by written Notice of Termination to the other party
hereto in accordance with Section 13. For purposes of this
Agreement, a "Notice of Termination" shall mean a written notice
which shall indicate the specific termination provision in this
Agreement relied upon and shall set forth in reasonable detail
the facts and circumstances claimed to provide a basis for
termination of Executive's employment under the provision so indicated.
(b) Date of Termination. "Date of Termination" shall
mean (i) if Executive's employment is terminated by her death, the date
of her death, (ii) if Executive's employment is terminated pursuant
to Section 6(b), thirty (30) days after Notice of Termination
(provided that Executive shall not have returned to the
substantial performance of her duties on a full-time basis during
such thirty (30) day period), (iii) if Executive's employment is
terminated pursuant to Section 6(d), the date provided in such
Section, and (iv) if Executive's employment is terminated for any
other reason, the date on which a Notice of Termination is given
or any later date (within thirty (30) days after the giving of
such notice) set forth in such Notice of Termination.
8. Compensation Upon Termination or During Disability.
In the event Executive is disabled or her employment terminates during
the Employment Period, the Company shall provide Executive with
the payments and benefits set forth below. Executive acknowledges
and agrees that the payments set forth in this Section 8, and the
other agreements and plans referenced in this Agreement, constitute
the sole and liquidated damages for termination of her employment
during the Employment Period. The Executive also agrees that the
Company shall have the right to deduct any amounts owed by the
Executive to the Company for any reason, including, without limi-
tation, due to the Executive's misappropriation of Company funds,
from the payments set forth in this Section 8.
(a) Termination By Company without Cause or By
Executive for Good Reason. If Executive's employment is terminated
by the Company without Cause or by Executive for Good Reason:
(i) the Company shall pay to Executive (A) her Base Salary
and accrued vacation pay through the Date of Termination, as
soon as practicable following the Date of Termination, and (B)
continued Base Salary (as provided for in Section 5(a)) for
a period of twenty-four (24) months following the Date of
Termination;
(ii) the Company shall maintain in full force and effect,
for the continued benefit of Executive, her spouse and her
dependents for a period of twenty-four (24) months following
the Date of Termination the medical, hospitalization, dental,
and life insurance programs in which Executive, her spouse and
her dependents were participating immediately prior to the Date
of Termination at the level in effect and upon substantially the
same terms and conditions (including without limitation
contributions required by Executive for such benefits) as existed
immediately prior to the Date of Termination; provided, that if
Executive, her spouse or her dependents cannot continue to
participate in the Company programs providing such benefits, the
Company shall arrange to provide Executive, her spouse and her
dependents with the economic equivalent of such benefits which
they otherwise would have been entitled to receive under such
plans and programs ("Continued Benefits"); provided, that if
Executive becomes reemployed with another employer and is
eligible to receive medical or other welfare benefits under
another employer-provided plan, the medical and other welfare
benefits described herein shall be secondary to those provided
under such other plan during such applicable period;
(iii) the Company shall reimburse Executive pursuant to
Section 5(d) for reasonable expenses incurred, but not paid,
prior to such termination of employment; and
(iv) Executive shall be entitled to any other rights,
compensation and/or benefits as may be due to Executive following
such termination to which she is otherwise entitled in accordance
with the terms and provisions of any agreements, plans or
programs of the Company.
(b) Cause or By Executive Without Good Reason. If Executive's
employment is terminated by the Company for Cause or by Executive
(other than for Good Reason):
(i) the Company shall pay Executive her Base Salary and her
accrued vacation pay (to the extent required by law or the
Company's vacation policy) through the Date of Termination, as
soon as practicable following the Date of Termination;
(ii) the Company shall reimburse Executive pursuant to
Section 5(d) for reasonable expenses incurred, but not paid,
prior to such termination of employment, unless such termi-
nation resulted from a misappropriation of Company funds; and
(iii) Executive shall be entitled to any other rights,
compensation and/or benefits as may be due to Executive following
such termination to which she is otherwise entitled in accordance
with the terms and provisions of any agreements, plans or
programs of the Company.
(c) Disability. During any period that Executive fails
to perform her duties hereunder as a result of incapacity due to
physical or mental illness ("Disability Period"), Executive shall
continue to receive her full Base Salary set forth in Section
5(a) until her employment is terminated pursuant to Section 6(b).
In the event Executive's employment is terminated for Disability
pursuant to Section 6(b):
(i) the Company shall pay to Executive (A) her Base Salary
and accrued vacation pay through the Date of Termination, as
soon as practicable following the Date of Termination, and (B)
provide Executive with disability benefits pursuant to the
terms of the Company's disability programs;
(ii) the Company shall reimburse Executive pursuant to
Section 5(d) for reasonable expenses incurred, but not paid,
prior to such termination of employment; and
(iii) Executive shall be entitled to any other rights,
compensation and/or benefits as may be due to Executive following
such termination to which she is otherwise entitled in accordance
with the terms and provisions of any agreements, plans or
programs of the Company.
(d) Death. If Executive's employment is terminated by her
death:
(i) the Company shall pay in a lump sum to Executive's
beneficiary, legal representatives or estate, as the case may be,
Executive's Base Salary through the Date of Termination;
(ii) the Company shall reimburse Executive's beneficiary,
legal representatives, or estate, as the case may be, pursuant to
Section 5(d) for reasonable expenses incurred, but not paid,
prior to such termination of employment; and
(iii) Executive's beneficiary, legal representatives or
estate, as the case may be, shall be entitled to any other
rights, compensation and benefits as may be due to any such
persons or estate following such termination to which such
persons or estate is otherwise entitled in accordance with the
terms and provisions of any agreements, plans or programs of the
Company.
9. Mitigation. Executive shall not be required to mitigate
amounts payable under this Agreement by seeking other employment
or otherwise, and, not withstanding Section 8 hereof, there shall
be no offset against amounts due Executive under this Agreement
on account of subsequent employment except as specifically
provided herein.
10. Confidential Information, Ownership of Documents; Non-
Competition.
(a) Confidential Information. Executive shall hold
in a fiduciary capacity for the benefit of the Company all trade
secrets and confidential information, knowledge or data relating
to the Company and its businesses and investments and its
Affiliates, which shall have been obtained by Executive during
Executive's employment by the Company and which is not generally
available public knowledge (other than by acts by Executive in
violation of this Agreement). Except as may be required or
appropriate in connection with her carrying out her duties under
this Agreement, Executive shall not, without the prior written
consent of the Company or as may otherwise be required by law or
any legal process, or as is necessary in connection with any
adversarial proceeding against the Company (in which case
Executive shall use her reasonable best efforts in cooperating
with the Company in obtaining a protective order against
disclosure by a court of competent jurisdiction), communicate or
divulge any such trade secrets, information, knowledge or data to
anyone other than the Company and those designated by the Company
or on behalf of the Company in the furtherance of its business or
to perform duties hereunder.
(b) Removal of Documents; Rights to Products; Other
Property. All records, files, drawings, documents, models, equipment,
and the like relating to the Company's business and its Affiliates,
which Executive has control over shall not be removed from the
Company's premises without its written consent, unless such
removal is in the furtherance of the Company's business or is in
connection with Executive's carrying out her duties under this
Agreement and, if so removed, shall be returned to the Company
promptly after termination of Executive's employment hereunder,
or otherwise promptly after removal if such removal occurs
following termination of employment. Executive shall assign to
the Company all rights to trade secrets and other products
relating to the Company's business developed by her alone or in
conjunction with others at any time while employed by the
Company. Executive shall also return to the Company all Company-
provided vehicles in her possession or control.
(c) Protection of Business. During the Employment
Period and until the second anniversary of Executive's Date of Termina-
tion (other than if such termination is by the Company without Cause
or by Executive for Good Reason), the Executive will not in the
capacity of a businessperson, directly or indirectly, be a
shareholder, principal, agent, partner, officer, director,
employee or consultant of SUPERVALU, Inc., Nash Finch Company,
Richfood Holdings, Inc. or any other direct competitor of the
Company, excluding, national retail chains, or any subsidiary,
affiliate or successor of any direct competitor of the Company
(collectively, the "Competitors"); provided, however, that
nothing in this Section 10(c) is intended to preclude the
Executive from being employed or otherwise acting in the capacity
of a lawyer on behalf of any of the Competitors unless such
employment or activity would result in a breach of her conflict
of interest and/or confidentiality obligations as an attorney or
former attorney for and an officer or former officer of the
Company or based on the confidentiality requirements contained in
Section 10(a). Notwithstanding the preceding sentence, the
Executive shall not be prohibited from owning less than one
percent (1%) of any publicly traded corporation (or from owning
any greater percentage if such ownership is through a mutual fund
or other diversified investment vehicle in which she has a
passive and minority interest), whether or not such corporation
is a Competitor. If, at any time, the provisions of this Section
10(c) shall be determined to be invalid or unenforceable, by
reason of being vague or unreasonable as to area, duration or
scope of activity, this Section 10(c) shall be considered
divisible and shall become and be immediately amended to only
such area, duration and scope of activity as shall be determined
to be reasonable and enforceable by the court or other body
having jurisdiction over the matter; and Executive agrees that
this Section 10(c) as so amended shall be valid and binding as
though any invalid or unenforceable provision had not been
included herein. The parties agree that the duration and
geographic area for which the covenant not to compete set forth
in this Section 10(c) is to be effective are reasonable.
(d) Injunctive Relief. In the event of a breach or
threatened breach of this Section 10, Executive agrees that the Company
shall be entitled to injunctive relief in a court of appropriate
jurisdiction to remedy any such breach or threatened breach,
Executive acknowledging that damages would be inadequate and
insufficient.
(e) Continuing Operation. Except as specifically provided
in this Section 10, the termination of Executive's employment or of
this Agreement shall have no effect on the continuing operation
of this Section 10.
11. Arbitration; Legal Fees and Expenses. The parties
agree that Executive's employment and this Agreement relate to
interstate commerce, and that any disputes, claims or
controversies between Executive and the Company which may arise
out of or relate to the Executive's employment relationship or
this Agreement shall be settled by arbitration. This agreement
to arbitrate shall survive the termination of this Agreement.
Any arbitration shall be in accordance with the Rules of the
American Arbitration Association and shall be undertaken pursuant
to the Federal Arbitration Act. Arbitration will be held in
Dallas, Texas unless the parties mutually agree on another
location. The decision of the arbitrator(s) will be enforceable
in any court of competent jurisdiction. The parties agree that
punitive, liquidated or indirect damages shall not be awarded by
the arbitrator(s). Nothing in this agreement to arbitrate,
however, shall preclude the Company from obtaining injunctive
relief from a court of competent jurisdiction prohibiting any on-
going breaches by Executive of this Agreement including, without
limitation, violations of Section 10. If any contest or dispute
shall arise between the Company and Executive regarding any
provision of this Agreement, the Company shall reimburse
Executive for all legal fees and expenses reasonably incurred by
Executive in connection with such contest or dispute, but only if
Executive is successful in respect of one or more of Executive's
material claims or defenses brought, raised or pursued in
connection with such contest or dispute. Such reimbursement
shall be made as soon as practicable following the resolution of
such contest or dispute to the extent the Company receives
reasonable written evidence of such fees and expenses.
12. Successors Binding Agreement.
(a) Company's Successors. No rights or obligations
of the Company under this Agreement may be assigned or transferred
except that the Company will require any successor (whether
direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or
assets of the Company to expressly assume and agree to perform
this Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such succession had
taken place. As used in this Agreement, "Company" shall mean the
Company as hereinbefore defined and any successor to its business
and/or assets (by merger, purchase or otherwise) which executes
and delivers the agreement provided for in this Section 12 or
which otherwise becomes bound by all the terms and provisions of
this Agreement by operation of law.
(b) Executive's Successors. No rights or obligations
of Executive under this Agreement may be assigned or transferred by
Executive other than her rights to payments or benefits
hereunder, which may be transferred only by will or the laws of
descent and distribution. Upon Executive's death, this Agreement
and all rights of Executive hereunder shall inure to the benefit
of and be enforceable by Executive's beneficiary or
beneficiaries, personal or legal representatives, or estate, to
the extent any such person succeeds to Executive's interests
under this Agreement. Executive shall be entitled to select and
change a beneficiary or beneficiaries to receive any benefit or
compensation payable hereunder following Executive's death by
giving the Company written notice thereof. In the event of
Executive's death or a judicial determination of her
incompetence, reference in this Agreement to Executive shall be
deemed, where appropriate, to refer to her beneficiary(ies),
estate or other legal representative(s). If Executive should die
following her Date of Termination while any amounts would still
be payable to her hereunder if she had continued to live, all
such amounts unless otherwise provided herein shall be paid in
accordance with the terms of this Agreement to such person or
persons so appointed in writing by Executive, or otherwise to her
legal representatives or estate.
13. Notice. For the purposes of this Agreement, notices,
demands and all other communications provided for in this
Agreement shall be in writing and shall be deemed to have been
duly given when delivered either personally or by United States
certified or registered mail, return receipt requested, postage
prepaid, addressed as follows:
If to Executive:
At her last known address
evidenced on the Company's
payroll records.
If to the Company:
Fleming Companies, Inc.
6301 Waterford Boulevard
Oklahoma City, Oklahoma 73126-0647
Attention: Senior Vice President - Human Resources
or to such other address as any party may have furnished to the
others in writing in accordance herewith, except that notices of
change of address shall be effective only upon receipt.
14. Miscellaneous. No provisions of this Agreement may
be amended, modified, or waived unless such amendment or
modification is agreed to in writing signed by Executive and by a
duly authorized officer of the Company, and such waiver is set
forth in writing and signed by the party to be charged. No
waiver by either party hereto at any time of any breach by the
other party hereto of any condition or provision of this
Agreement to be performed by such other party shall be deemed a
waiver of similar or dissimilar provisions or conditions at the
same or at any prior or subsequent time. The respective rights
and obligations of the parties hereunder shall survive
Executive's termination of employment and the termination of this
Agreement to the extent necessary for the intended preservation
of such rights and obligations. The validity, interpretation,
construction and performance of this Agreement shall be governed
by the laws of the State of Texas without regard to its conflicts
of law principles.
15. Validity. The invalidity or unenforceability of any
provision or provisions of this Agreement shall not affect the
validity or enforceability of any other provision of this
Agreement, which shall remain in full force and effect.
16. Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed to be an original but
all of which together will constitute one and the same instrument.
17. Entire Agreement. This Agreement sets forth the entire
agreement of the parties hereto in respect of the subject matter
contained herein and supersedes all prior agreements, promises,
covenants, arrangements, communications, representations or
warranties, whether oral or written, by any officer, employee or
representative of any party hereto in respect of such subject
matter. Any prior agreement of the parties hereto in respect of
the subject matter contained herein is hereby terminated and
cancelled.
18. Withholding. All payments hereunder shall be subject to
any required withholding of Federal, state and local taxes pursuant
to any applicable law or regulation.
19. Section Headings. The section headings in this Agree-
ment are for convenience of reference only, and they form no part of
this Agreement and shall not affect its interpretation.
IN WITNESS WHEREOF, the parties hereto have executed
this Agreement on the date first above written.
FLEMING COMPANIES, INC.
By SCOTT M. NORTHCUTT
Scott M. Northcutt, Senior Vice
President- Human Resources
LENORE T. GRAHAM
Lenore T. Graham
Exhibit 10.62
EMPLOYMENT AGREEMENT
AGREEMENT, dated as of January 18, 2000, by and between
FLEMING COMPANIES, INC., an Oklahoma corporation (the "Company")
and NEAL RIDER ("Executive").
IN CONSIDERATION of the premises and the mutual
covenants set forth below, the parties hereby agree as follows:
1. Employment. The Company hereby agrees to employ
Executive as Executive Vice President and Chief Financial Officer
of the Company, and Executive hereby accepts such employment, on
the terms and conditions hereinafter set forth.
2. Term. The period of employment of Executive by
the Company hereunder (the "Employment Period") shall commence on
January 18, 2000 (the "Commencement Date") and shall continue
through January 17, 2005. The Employment Period may be sooner
terminated in accordance with Section 6 of this Agreement.
3. Position and Duties. During the Employment
Period, Executive shall report directly to the Chairman and Chief
Executive Officer of the Company. Executive shall have those
powers and duties normally associated with the position of
Executive Vice President and Chief Financial Officer. Executive
shall devote substantially all of his working time, attention and
energies (other than absences due to illness or vacation) to the
performance of his duties for the Company. Notwithstanding the
above, Executive shall be permitted, to the extent such
activities do not interfere with the performance by Executive of
his duties and responsibilities hereunder or violate Sections
10(a), (b) or (c) of this Agreement, to (i) manage Executive's
personal, financial and legal affairs, (ii) serve on civic or
charitable boards or committees and (iii) subject to the approval
of the board of directors of the Company (the "Board") (which
approval shall not be unreasonably withheld), serve on the board
of directors or other similar governing body of any other
corporation or other business entity or trade organization.
4. Place of Performance. The principal place of
employment of Executive shall be at the Company's principal
executive offices.
5. Compensation and Related Matters.
(a) Base Salary. During the Employment Period
the Company shall pay Executive a base salary at the rate of not
less than $450,000 per year ("Base Salary"). Executive's Base
Salary shall be paid in approximately equal installments in
accordance with the Company's customary payroll practices.
Executive's Base Salary shall be subject to increase, but not
decrease, pursuant to annual review by the Compensation and
Organization Committee of the Board (the "Compensation
Committee"). Such increased Base Salary shall then constitute
the Base Salary for all purposes of this Agreement.
(b) Company Stock Option. The Company has granted
to Executive, on the Commencement Date, (i) a stock option to
purchase 250,000 shares of the common stock of the Company, par
value $2.50 per share (the "Company Stock"), at an exercise price
of $8.9688 per share, pursuant to the Company's 1990 Stock Option
Plan and (ii) a stock option to purchase 100,000 shares of
Company Stock at an exercise price of $8.9375 per share, pursuant
to the Company's 1996 Stock Incentive Plan (collectively, the
"Company Options"). Each of the Company Options has a scheduled
10-year term and, subject to the terms of the applicable stock
option agreements between the Company and Executive, shall vest
and become exercisable (i) with respect to 25% of the shares of
Company Stock subject to such Company Options on each of the
first four anniversaries of the Commencement Date and (ii) upon
the occurrence of a Change of Control (as such term is defined in
that certain Change of Control Employment Agreement, dated as of
the date of this Agreement, between the Company and Executive)
with respect to 100% of the Company Stock subject to Company
Options.
(c) Annual Bonus. Executive shall have a target
annual bonus of 65% of Base Salary and a maximum annual bonus of
130% of Base Salary, based upon meeting performance goals
established by the Compensation Committee. The performance goals
and corresponding bonus amounts during the Employment Period
shall be established by the Compensation Committee.
(d) Expenses. The Company shall promptly
reimburse Executive for all reasonable business expenses upon the
presentation of reasonably itemized statements of such expenses
in accordance with the Company's policies and procedures now in
force or as such policies and procedures may be modified with
respect to all senior executive officers of the Company.
(e) Vacation. Executive shall be entitled to the
number of weeks of vacation per year provided to the Company's
senior executive officers.
(f) Restricted Stock Grant. The Company has
granted to Executive, on the Commencement Date, twenty-five
thousand (25,000) shares of restricted Company Stock (the
"Restricted Stock") pursuant to the Company's 1996 Stock
Incentive Plan. In connection with the grant of the Restricted
Stock, Executive shall make an election prior to February 17,
2000 to include in gross income the value of the Restricted Stock
on the date of grant pursuant to Section 83(b) of the Internal
Revenue Code of 1986, as amended (the "Code"). Upon notification
from Executive that he has made such election, the Company shall
pay to Executive an additional payment in an amount necessary to
cause the net amount of such payment that is retained by
Executive after the calculation and deduction of any and all
federal, state and local income taxes and employment taxes on
such payment to be equal to Executive's income taxes attributable
to the Restricted Stock and Executive's election under Section
83(b) of the Code in connection with the Restricted Stock.
(g) Welfare, Pension and Incentive Benefit Plans.
During the Employment Period, Executive (and his spouse and
dependents to the extent provided therein) shall be entitled to
participate in and be covered under all the welfare benefit plans
or programs maintained by the Company from time to time for the
benefit of its senior executives including, without limitation,
all medical, life, hospitalization, dental, disability,
accidental death and dismemberment and travel accident insurance
plans and programs. In addition, during the Employment Period,
Executive shall be eligible to participate in all pension,
retirement, savings and other employee benefit plans and programs
maintained from time to time by the Company for the benefit of
its senior executives or any annual incentive or long-term
performance plans.
(h) Offices. Executive shall serve, without
additional compensation, as a director or trustee of the
Company's wholly-owned subsidiaries, (and as a member of any
committees of the board of directors of any such entities), and
in one or more executive positions of any of such subsidiaries,
provided that Executive is indemnified for serving in any and all
such capacities on a basis no less favorable than is then
provided to any other director of such entity.
(i) Relocation. The Executive shall be provided
with the Company's standard relocation program for transferred
senior executive officers in order to relocate to the Company's
principal executive offices in Lewisville, Texas, including
travel costs, temporary housing, moving costs of household
belongings, storage costs for up to one year, and any other
expenses necessary to efficiently effect Executive's relocation
(collectively, the "Relocation Payment"). Also, at the
Executive's option, at any time during up to the first two (2)
years of the employment period, the Company shall purchase the
Executive's residence and the residence of the Executive's father-
in-law, both of which are located in Knoxville, Tennessee, at a
purchase price equal to the greater of their respective appraised
values (as set by an appraiser designated by the Company) or the
Executive's and his father-in-law's respective documented
invested costs in the residences (collectively, the "Residence
Payment"). In addition to these payments, the Company shall pay
the Executive an additional payment in an amount (the "Tax Gross-
Up Amount") necessary to cause the net amount of such payment
that is retained by the Executive after the calculation and
deduction of all federal, state and local income taxes and
employment taxes on such payments to be equal to the Executive's
income tax attributable to such payments for the Relocation
Payment and the Residence Payment. In the event the Executive
voluntarily leaves his employment with the Company, other than
for "Good Reason" (as such term is hereafter defined), prior to
January 18, 2002, the Executive shall repay the Company an amount
equal to the Relocation Payment, plus the Tax Gross-Up Amount
attributable to the Relocation Payment within thirty (30) days
after his termination of employment; provided, however, that this
repayment obligation shall be waived in equal increments each of
one eighth (1/8th) of the total amount, for each three
consecutive months during which the Executive is employed
following January 18, 2000.
(j) Indemnification and Insurance. Executive
shall be indemnified and held harmless by the Company during the
term of this Agreement and following any termination of this
Agreement for any reason whatsoever in the same manner as would
any other key management associate of the Company with respect to
acts or omissions occurring prior to the termination of
employment of the Executive under this Agreement. In addition,
during the Employment Period and for a period of five years
following the termination of employment of the Executive under
this Agreement for any reason whatsoever, the Executive shall be
covered by a Company-held directors and officers liability
insurance policy covering acts or omissions occurring prior to
the termination of employment of the Executive under this
Agreement.
(k) Signing Bonus. Within thirty days after the
Commencement Date, the Executive will receive a cash bonus from
the Company ("Signing Bonus") in the gross amount necessary to
cause the net amount of the Signing Bonus, after the calculation
and deduction of any and all federal, state and local income
taxes and employment taxes on the Signing Bonus payment to be
equal to $50,000.
6. Termination. Executive's employment hereunder may
be terminated during the Employment Period under the following
circumstances:
(a) Death. Executive's employment hereunder
shall terminate upon his death.
(b) Disability. If, as a result of Executive's
incapacity due to physical or mental illness, Executive shall
have been substantially unable to perform his duties hereunder
for an entire period of six (6) consecutive months, and within
thirty (30) days after written Notice of Termination is given
after such six (6) month period, Executive shall not have
returned to the substantial performance of his duties on a full-
time basis, the Company shall have the right to terminate
Executive's employment hereunder for "Disability", and such
termination in and of itself shall not be, nor shall it be deemed
to be, a breach of this Agreement.
(c) Cause. The Company shall have the right to
terminate Executive's employment for Cause, and such termination
shall not be, nor shall it be deemed to be, a breach of this
Agreement. For purposes of this Agreement, the Company shall
have "Cause" to terminate Executive's employment upon:
(i) Executive's conviction of a felony by a
federal or state court of competent jurisdiction;
or
(ii) an act or acts of dishonesty taken by
Executive and intended to result in substantial
personal enrichment of Executive at the expense of
the Company; or
(iii) Executive's "willful" failure to
follow a direct, reasonable and lawful order from
the Board and/or the Chairman and Chief Executive
Officer, within the reasonable scope of
Executive's duties, which failure is not cured
within thirty (30) days.
For purposes of this Section 6(c), no act, or failure to act, by
Executive shall be considered "willful" unless done, or omitted
to be done, by Executive not in good faith and without a
reasonable belief that the act or omission was in the best
interests of the Company. Cause shall not exist under paragraphs
(i), (ii) or (iii) above unless and until the Company has
delivered to Executive a copy of a resolution duly adopted by not
less than three-fourths (3/4ths) of the Board (excluding
Executive) at a meeting of the Board called and held for such
purpose (after reasonable notice to Executive and an opportunity
for Executive, together with his counsel, to be heard before the
Board), finding that in the good faith opinion of the Board,
Executive was guilty of the conduct set forth in paragraphs
(i),(ii) or (iii) and specifying the particulars thereof in
detail.
(d) Good Reason. Executive may terminate his
employment for "Good Reason" by providing Notice of Termination
(as defined in Section 7(a)) to the Company within one hundred
and twenty (120) days after Executive has actual knowledge of the
occurrence, without the written consent of Executive, of one of
the events set forth below. Executive's Date of Termination for
Good Reason shall be fifteen (15) days after Notice of
Termination, unless the basis for Good Reason has been cured by
the Company prior to such date:
(i) the assignment to Executive of duties
materially and adversely inconsistent with
Executive's status as Executive Vice President and
Chief Financial Officer of the Company or a
material and adverse alteration in the nature of
Executive's duties and/or responsibilities,
reporting obligations, titles or authority;
(ii) a reduction by the Company in
Executive's Base Salary;
(iii) the relocation of (a) the Company's
principal executive offices or Executive's own
office location to a location more than twenty
five (25) miles from Oklahoma City except with
respect to one relocation during the term of this
Agreement, provided such relocation is pursuant
to recommendation of the Chairman and Chief
Executive Officer or an action by the Board
concurred in by the Chairman and Chief Executive
Officer, as evidenced by his vote, or (b)
Executive's office location to a place other than
the Company's principal executive offices;
(iv) the Company's failure to provide any
material employee benefits due to be provided to
Executive (other than any such failure which
affects all senior executive officers); or
(v) the failure of any successor to the
Company to assume this Agreement pursuant to
Section 12(a).
Executive's right to terminate his employment hereunder for Good
Reason shall not be affected by his incapacity due to physical or
mental illness. Executive's continued employment during the one
hundred and twenty (120) day period referred to above in this
paragraph (d) shall not constitute consent to, or a waiver of
rights with respect to, any act or failure to act constituting
Good Reason hereunder.
(e) Without Cause. The Company shall have the
right to terminate Executive's employment hereunder without Cause
by providing Executive with a Notice of Termination, and such
termination shall not in and of itself be, nor shall it be deemed
to be, a breach of this Agreement.
7. Termination Procedure.
(a) Notice of Termination. Any termination of
Executive's employment by the Company or by Executive during the
Employment Period (other than termination pursuant to Section
6(a)) shall be communicated by written Notice of Termination to
the other party hereto in accordance with Section 13. For
purposes of this Agreement, a "Notice of Termination" shall mean
a written notice which shall indicate the specific termination
provision in this Agreement relied upon and shall set forth in
reasonable detail the facts and circumstances claimed to provide
a basis for termination of Executive's employment under the
provision so indicated.
(b) Date of Termination. "Date of Termination"
shall mean (i) if Executive's employment is terminated by his
death, the date of his death, (ii) if Executive's employment is
terminated pursuant to Section 6(b), thirty (30) days after
Notice of Termination (provided that Executive shall not have
returned to the substantial performance of his duties on a full-
time basis during such thirty (30) day period), (iii) if
Executive's employment is terminated pursuant to Section 6(d),
the date provided in such Section, and (iv) if Executive's
employment is terminated for any other reason, the date on which
a Notice of Termination is given or any later date (within thirty
(30) days after the giving of such notice) set forth in such
Notice of Termination.
8. Compensation Upon Termination or During
Disability. In the event Executive is disabled or his employment
terminates during the Employment Period, the Company shall
provide Executive with the payments and benefits set forth below.
Executive acknowledges and agrees that the payments set forth in
this Section 8, and the other agreements and plans referenced in
this Agreement, constitute the sole and liquidated damages for
termination of his employment during the Employment Period. The
Executive also agrees that the Company shall have the right to
deduct any amounts owed by the Executive to the Company for any
reason, including, without limitation, due to the Executive's
misappropriation of Company funds, from the payments set forth in
this Section 8.
(a) Termination By Company without Cause or By
Executive for Good Reason. If Executive's employment is
terminated by the Company without Cause or by Executive for Good
Reason:
(i) the Company shall pay to Executive (A)
his Base Salary and accrued vacation pay through
the Date of Termination, as soon as practicable
following the Date of Termination, and (B)
continued Base Salary (as provided for in Section
5(a)) for a period of twenty-four (24) months
following the Date of Termination;
(ii) the Company shall maintain in full
force and effect, for the continued benefit of
Executive, his spouse and his dependents for a
period of twenty-four (24) months following the
Date of Termination the medical, hospitalization,
dental, and life insurance programs in which
Executive, his spouse and his dependents were
participating immediately prior to the Date of
Termination at the level in effect and upon
substantially the same terms and conditions
(including without limitation contributions
required by Executive for such benefits) as
existed immediately prior to the Date of
Termination; provided, that if Executive, his
spouse or his dependents cannot continue to
participate in the Company programs providing such
benefits, the Company shall arrange to provide
Executive, his spouse and his dependents with the
economic equivalent of such benefits which they
otherwise would have been entitled to receive
under such plans and programs ("Continued
Benefits"); provided, that if Executive becomes
reemployed with another employer and is eligible
to receive medical or other welfare benefits under
another employer-provided plan, the medical and
other welfare benefits described herein shall be
secondary to those provided under such other plan
during such applicable period;
(iii) the Company shall reimburse
Executive pursuant to Section 5(d) for reasonable
expenses incurred, but not paid, prior to such
termination of employment; and
(iv) Executive shall be entitled to any other
rights, compensation and/or benefits as may be due
to Executive following such termination to which
he is otherwise entitled in accordance with the
terms and provisions of any agreements, plans or
programs of the Company.
(b) Cause or By Executive Without Good Reason.
If Executive's employment is terminated by the Company for Cause
or by Executive (other than for Good Reason):
(i) the Company shall pay Executive his Base
Salary and his accrued vacation pay (to the extent
required by law or the Company's vacation policy)
through the Date of Termination, as soon as
practicable following the Date of Termination;
(ii) the Company shall reimburse Executive
pursuant to Section 5(d) for reasonable expenses
incurred, but not paid, prior to such termination
of employment, unless such termination resulted
from a misappropriation of Company funds; and
(iii) Executive shall be entitled to any
other rights, compensation and/or benefits as may
be due to Executive following such termination to
which he is otherwise entitled in accordance with
the terms and provisions of any agreements, plans
or programs of the Company.
(c) Disability. During any period that Executive
fails to perform his duties hereunder as a result of incapacity
due to physical or mental illness ("Disability Period"),
Executive shall continue to receive his full Base Salary set
forth in Section 5(a) until his employment is terminated pursuant
to Section 6(b). In the event Executive's employment is
terminated for Disability pursuant to Section 6(b):
(i) the Company shall pay to Executive (A)
his Base Salary and accrued vacation pay through
the Date of Termination, as soon as practicable
following the Date of Termination, and (B) provide
Executive with disability benefits pursuant to the
terms of the Company's disability programs;
(ii) the Company shall reimburse Executive
pursuant to Section 5(d) for reasonable expenses
incurred, but not paid, prior to such termination
of employment; and
(iii) Executive shall be entitled to any
other rights, compensation and/or benefits as may
be due to Executive following such termination to
which he is otherwise entitled in accordance with
the terms and provisions of any agreements, plans
or programs of the Company.
(d) Death. If Executive's employment is terminated
by his death:
(i) the Company shall pay in a lump sum to
Executive's beneficiary, legal representatives or
estate, as the case may be, Executive's Base
Salary through the Date of Termination;
(ii) the Company shall reimburse Executive's
beneficiary, legal representatives, or estate, as
the case may be, pursuant to Section 5(d) for
reasonable expenses incurred, but not paid, prior
to such termination of employment; and
(iii) Executive's beneficiary, legal
representatives or estate, as the case may be,
shall be entitled to any other rights,
compensation and benefits as may be due to any
such persons or estate following such termination
to which such persons or estate is otherwise
entitled in accordance with the terms and
provisions of any agreements, plans or programs of
the Company.
9. Mitigation. Executive shall not be required to
mitigate amounts payable under this Agreement by seeking other
employment or otherwise, and, notwithstanding Section 8 hereof,
there shall be no offset against amounts due Executive under this
Agreement on account of subsequent employment except as
specifically provided herein.
10. Confidential Information, Ownership of Documents;
Non-Competition.
(a) Confidential Information. Executive shall
hold in a fiduciary capacity for the benefit of the Company all
trade secrets and confidential information, knowledge or data
relating to the Company and its businesses and investments and
its Affiliates, which shall have been obtained by Executive
during Executive's employment by the Company and which is not
generally available public knowledge (other than by acts by
Executive in violation of this Agreement). Except as may be
required or appropriate in connection with his carrying out his
duties under this Agreement, Executive shall not, without the
prior written consent of the Company or as may otherwise be
required by law or any legal process, or as is necessary in
connection with any adversarial proceeding against the Company
(in which case Executive shall use his reasonable best efforts in
cooperating with the Company in obtaining a protective order
against disclosure by a court of competent jurisdiction),
communicate or divulge any such trade secrets, information,
knowledge or data to anyone other than the Company and those
designated by the Company or on behalf of the Company in the
furtherance of its business or to perform duties hereunder.
(b) Removal of Documents; Rights to Products;
Other Property. All records, files, drawings, documents, models,
equipment, and the like relating to the Company's business and
its Affiliates, which Executive has control over shall not be
removed from the Company's premises without its written consent,
unless such removal is in the furtherance of the Company's
business or is in connection with Executive's carrying out his
duties under this Agreement and, if so removed, shall be returned
to the Company promptly after termination of Executive's
employment hereunder, or otherwise promptly after removal if such
removal occurs following termination of employment. Executive
shall assign to the Company all rights to trade secrets and other
products relating to the Company's business developed by him
alone or in conjunction with others at any time while employed by
the Company. Executive shall also return to the Company all
Company-provided vehicles in his possession or control.
(c) Protection of Business. During the
Employment Period and until the second anniversary of Executive's
Date of Termination (other than if such termination is by the
Company without Cause or by Executive for Good Reason), the
Executive will not directly or indirectly, be a shareholder,
principal, agent, partner, officer, director, employee or
consultant of SUPERVALU, Inc., Nash Finch Company, Richfood
Holdings, Inc. or any other direct competitor of the Company,
excluding, national retail chains, or any subsidiary, affiliate
or successor of any direct competitor of the Company
(collectively, the "Competitors"). Notwithstanding the preceding
sentence, the Executive shall not be prohibited from owning less
than one percent (1%) of any publicly traded corporation (or from
owning any greater percentage if such ownership is through a
mutual fund or other diversified investment vehicle in which he
has a passive and minority interest), whether or not such
corporation is a Competitor. If, at any time, the provisions of
this Section 10(c) shall be determined to be invalid or
unenforceable, by reason of being vague or unreasonable as to
area, duration or scope of activity, this Section 10(c) shall be
considered divisible and shall become and be immediately amended
to only such area, duration and scope of activity as shall be
determined to be reasonable and enforceable by the court or other
body having jurisdiction over the matter; and Executive agrees
that this Section 10(c) as so amended shall be valid and binding
as though any invalid or unenforceable provision had not been
included herein. The parties agree that the duration and
geographic area for which the covenant not to compete set forth
in this Section 10(c) is to be effective are reasonable.
(d) Injunctive Relief. In the event of a breach
or threatened breach of this Section 10, Executive agrees that
the Company shall be entitled to injunctive relief in a court of
appropriate jurisdiction to remedy any such breach or threatened
breach, Executive acknowledging that damages would be inadequate
and insufficient.
(e) Continuing Operation. Except as specifically
provided in this Section 10, the termination of Executive's
employment or of this Agreement shall have no effect on the
continuing operation of this Section 10.
11. Arbitration; Legal Fees and Expenses. The parties
agree that Executive's employment and this Agreement relate to
interstate commerce, and that any disputes, claims or
controversies between Executive and the Company which may arise
out of or relate to the Executive's employment relationship or
this Agreement shall be settled by arbitration. This agreement
to arbitrate shall survive the termination of this Agreement.
Any arbitration shall be in accordance with the Rules of the
American Arbitration Association and shall be undertaken pursuant
to the Federal Arbitration Act. Arbitration will be held in
Dallas, Texas unless the parties mutually agree on another
location. The decision of the arbitrator(s) will be enforceable
in any court of competent jurisdiction. The parties agree that
punitive, liquidated or indirect damages shall not be awarded by
the arbitrator(s). Nothing in this agreement to arbitrate,
however, shall preclude the Company from obtaining injunctive
relief from a court of competent jurisdiction prohibiting any on-
going breaches by Executive of this Agreement including, without
limitation, violations of Section 10. If any contest or dispute
shall arise between the Company and Executive regarding any
provision of this Agreement, the Company shall reimburse
Executive for all legal fees and expenses reasonably incurred by
Executive in connection with such contest or dispute, but only if
Executive is successful in respect of one or more of Executive's
material claims or defenses brought, raised or pursued in
connection with such contest or dispute. Such reimbursement
shall be made as soon as practicable following the resolution of
such contest or dispute to the extent the Company receives
reasonable written evidence of such fees and expenses.
12. Successors Binding Agreement.
(a) Company's Successors. No rights or
obligations of the Company under this Agreement may be assigned
or transferred except that the Company will require any successor
(whether direct or indirect, by purchase, merger, consolidation
or otherwise) to all or substantially all of the business and/or
assets of the Company to expressly assume and agree to perform
this Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such succession had
taken place. As used in this Agreement, "Company" shall mean the
Company as hereinbefore defined and any successor to its business
and/or assets (by merger, purchase or otherwise) which executes
and delivers the agreement provided for in this Section 12 or
which otherwise becomes bound by all the terms and provisions of
this Agreement by operation of law.
(b) Executive's Successors. No rights or
obligations of Executive under this Agreement may be assigned or
transferred by Executive other than his rights to payments or
benefits hereunder, which may be transferred only by will or the
laws of descent and distribution. Upon Executive's death, this
Agreement and all rights of Executive hereunder shall inure to
the benefit of and be enforceable by Executive's beneficiary or
beneficiaries, personal or legal representatives, or estate, to
the extent any such person succeeds to Executive's interests
under this Agreement. Executive shall be entitled to select and
change a beneficiary or beneficiaries to receive any benefit or
compensation payable hereunder following Executive's death by
giving the Company written notice thereof. In the event of
Executive's death or a judicial determination of his
incompetence, reference in this Agreement to Executive shall be
deemed, where appropriate, to refer to his beneficiary(ies),
estate or other legal representative(s). If Executive should die
following his Date of Termination while any amounts would still
be payable to him hereunder if he had continued to live, all such
amounts unless otherwise provided herein shall be paid in
accordance with the terms of this Agreement to such person or
persons so appointed in writing by Executive, or otherwise to his
legal representatives or estate.
13. Notice. For the purposes of this Agreement,
notices, demands and all other communications provided for in
this Agreement shall be in writing and shall be deemed to have
been duly given when delivered either personally or by United
States certified or registered mail, return receipt requested,
postage prepaid, addressed as follows:
If to Executive:
At his last known address
evidenced on the Company's
payroll records.
If to the Company:
Fleming Companies, Inc.
6301 Waterford Boulevard
Oklahoma City, Oklahoma 73126-0647
Attention: General Counsel
or to such other address as any party may have furnished to the
others in writing in accordance herewith, except that notices of
change of address shall be effective only upon receipt.
14. Miscellaneous. No provisions of this Agreement
may be amended, modified, or waived unless such amendment or
modification is agreed to in writing signed by Executive and by a
duly authorized officer of the Company, and such waiver is set
forth in writing and signed by the party to be charged. No
waiver by either party hereto at any time of any breach by the
other party hereto of any condition or provision of this
Agreement to be performed by such other party shall be deemed a
waiver of similar or dissimilar provisions or conditions at the
same or at any prior or subsequent time. The respective rights
and obligations of the parties hereunder shall survive
Executive's termination of employment and the termination of this
Agreement to the extent necessary for the intended preservation
of such rights and obligations. The validity, interpretation,
construction and performance of this Agreement shall be governed
by the laws of the State of Texas without regard to its conflicts
of law principles.
15. Validity. The invalidity or unenforceability of
any provision or provisions of this Agreement shall not affect
the validity or enforceability of any other provision of this
Agreement, which shall remain in full force and effect.
16. Counterparts. This Agreement may be executed in
one or more counterparts, each of which shall be deemed to be an
original but all of which together will constitute one and the
same instrument.
17. Entire Agreement. This Agreement sets forth the
entire agreement of the parties hereto in respect of the subject
matter contained herein and supersedes all prior agreements,
promises, covenants, arrangements, communications,
representations or warranties, whether oral or written, by any
officer, employee or representative of any party hereto in
respect of such subject matter. Any prior agreement of the
parties hereto in respect of the subject matter contained herein
is hereby terminated and cancelled.
18. Withholding. All payments hereunder shall be
subject to any required withholding of Federal, state and local
taxes pursuant to any applicable law or regulation.
19. Section Headings. The section headings in this
Agreement are for convenience of reference only, and they form no
part of this Agreement and shall not affect its interpretation.
IN WITNESS WHEREOF, the parties hereto have executed
this Agreement on the date first above written.
FLEMING COMPANIES, INC.
By SCOTT M. NORTHCUTT
Scott M. Northcutt, Senior
Vice President- Human Resources
NEAL RIDER
Neal Rider
Exhibit 10.63
RESTRICTED STOCK AWARD AGREEMENT FOR
THE FLEMING COMPANIES, INC.
1996 STOCK INCENTIVE PLAN
THIS RESTRICTED STOCK AWARD AGREEMENT (the "Agreement")
entered into as of the 18th day of January, 2000, by and between
Fleming Companies, Inc., an Oklahoma corporation (the "Company"),
and Lenore T. Graham (herein referred to as the "Participant");
W I T N E S S E T H:
WHEREAS, the Company has previously adopted the Fleming
Companies, Inc. 1996 Stock Incentive Plan and certain amendments
thereto (the "Plan");
WHEREAS, in connection with her employment with the
Company, the Company has awarded the Participant 10,000 shares of
common stock under the Plan subject to the terms and conditions
of this Agreement; and
WHEREAS, the Participant has previously entered into an
Employment Agreement with the Company dated as of January 18,
2000 (the "Employment Agreement").
NOW, THEREFORE, in consideration of the premises and
the mutual promises and covenants herein contained, the
Participant and the Company agree as follows (all capitalized
terms used herein, unless otherwise defined, have the meaning
ascribed to such terms as set forth in the Plan):
1. The Plan. The Plan, a copy of which is attached
hereto as Exhibit A, is hereby incorporated by reference herein
and made a part hereof for all purposes, and when taken with this
Agreement shall govern the rights of the Participant and the
Company with respect to the Award (as defined below).
2. Grant of Award. The Company hereby grants to the
Participant an award (the "Award") of 10,000 shares of Company
common stock, par value $2.50 per share (the "Stock"), on the
terms and conditions set forth herein and in the Plan.
3. Terms of Award.
(a) Escrow of Shares. A certificate representing
the shares of Stock subject to the Award (the "Restricted Stock")
shall be issued in the name of the Participant and shall be
escrowed with the Secretary of the Company (the "Escrow Agent")
subject to removal of the restrictions placed thereon or
forfeiture pursuant to the terms of this Agreement.
(b) Vesting. One-half of the shares of
Restricted Stock will vest based on the Participant's continuous
employment with the Company or a Subsidiary through January 18,
2001 and the remaining one-half of the shares of Restricted Stock
will vest based on the Participant's continuous employment with
the Company or a Subsidiary through January 18, 2002. In the
event the Participant's employment with the Company or a
Subsidiary is terminated by reason of (i) death, (ii) disability,
(iii) without "Cause" (as such term is defined in the Employment
Agreement), or (iv) by the Participant for "Good Reason" (as such
term is defined in the Employment Agreement), then all remaining
shares of Restricted Stock (including any "Accrued Dividends," as
such term is hereafter defined) which have not yet been vested
shall immediately vest. Once vested pursuant to the terms of
this Agreement, the Restricted Stock shall be deemed "Vested
Stock."
(c) Voting Rights and Dividends. The Participant
shall not have the voting rights attributable to the shares of
Restricted Stock issued to her. Any dividends declared and paid
by the Company with respect to shares of Restricted Stock
("Accrued Dividends") shall not be paid to the Participant until
such Restricted Stock becomes Vested Stock. Such Accrued
Dividends shall be held by the Company as a general obligation
and paid to the Participant at the time the underlying Restricted
Stock becomes Vested Stock.
(d) Vested Stock - Removal of Restrictions. Upon
Restricted Stock becoming Vested Stock, all restrictions shall be
removed from the certificates representing such Stock and the
Secretary of the Company shall deliver to the Participant
certificates representing such Vested Stock free and clear of all
restrictions, except for any applicable securities laws
restrictions, together with a check in the amount of all Accrued
Dividends attributed to such Vested Stock without interest thereon.
(e) Forfeiture. Restricted Stock that does not
become Vested Stock pursuant to the terms of this Agreement shall
be absolutely forfeited and the Participant shall have no future
interest therein of any kind whatsoever. In the event the
Participant's employment with the Company or a Subsidiary is
terminated prior to all shares of Restricted Stock becoming
Vested Stock for any reason other than (i) death, (ii)
disability, (iii) without Cause, or (iv) by the Participant for
Good Reason, then all remaining shares of Restricted Stock which
have not yet been vested (including any Accrued Dividends) shall
be absolutely forfeited and the Participant shall have no further
interest therein of any kind whatsoever.
4. Change of Control. Upon the occurrence of a
Change of Control Event on or prior to January 18, 2002, all
Restricted Stock shall become Vested Stock and the Company shall
deliver to the Participant certificates representing the Vested
Stock free and clear of all restrictions, except for any
applicable securities law restrictions, together with any Accrued
Dividends attributable to such Vested Stock without interest
thereon.
5. Legends. The shares of Stock which are the
subject of the Award shall be subject to the following legend:
"THE SHARES OF STOCK EVIDENCED BY THIS CERTIFICATE ARE
SUBJECT TO AND ARE TRANSFERABLE ONLY IN ACCORDANCE WITH THAT
CERTAIN RESTRICTED STOCK AWARD AGREEMENT FOR THE FLEMING
COMPANIES, INC. 1996 STOCK INCENTIVE PLAN DATED THE 18th DAY OF
JANUARY, 2000. ANY ATTEMPTED TRANSFER OF THE SHARES OF STOCK
EVIDENCED BY THIS CERTIFICATE IN VIOLATION OF SUCH AGREEMENT
SHALL BE NULL AND VOID AND WITHOUT EFFECT. A COPY OF THE
AGREEMENT MAY BE OBTAINED FROM THE SECRETARY OF FLEMING
COMPANIES, INC."
6. Stock Power. The Participant hereby agrees to
execute and deliver to the Secretary of the Company a stock power
(endorsed in blank) in the form of Exhibit B hereto covering her
Award and authorizes the Secretary to deliver to the Company any
and all shares of Restricted Stock that are forfeited under the
provisions of this Agreement. The Participant further authorizes
the Company to hold as a general obligation of the Company any
Accrued Dividends and to pay such dividends to the Participant at
the time the underlying Restricted Stock becomes Vested Stock.
7. Nontransferability of Award. The Participant
shall not have the right to sell, assign, transfer, convey,
dispose, pledge, hypothecate, burden, encumber or charge any
shares of Restricted Stock or any interest therein in any manner
whatsoever.
8. Notices. All notices or other communications
relating to the Plan and this Agreement as it relates to the
Participant shall be in writing, shall be deemed to have been
made if personally delivered in return for a receipt, or if
mailed, by regular U.S. mail, postage prepaid, by the Company to
the Participant at her last known address evidenced on the
payroll records of the Company.
9. Binding Effect and Governing Law. This Agreement
shall be (i) binding upon and inure to the benefit of the parties
hereto and their respective heirs, successors and assigns except
as may be limited by the Plan and (ii) governed and construed
under the laws of the State of Texas.
10. Withholding. The Company and the Participant
shall comply with all federal and state laws and regulations with
respect to the withholding, deposit and payment of any income,
employment or other taxes relating to the Award (including
Accrued Dividends).
11. Award Subject to Claims or Creditors. The
Participant shall not have any interest in any particular assets
of the Company, its parent, if applicable, or any Subsidiary by
reason of the right to earn an Award (including Accrued
Dividends) under the Plan and this Agreement; and the Participant
or any other person shall have only the rights of a general
unsecured creditor of the Company, its parent, if applicable, or
a Subsidiary with respect to any rights under the Plan or this
Agreement.
12. Captions. The captions of specific provisions of
this Agreement are for convenience and reference only, and in no
way define, describe, extend or limit the scope of this Agreement
or the intent of any provision hereof.
13. Counterparts. This Agreement may be executed in
any number of identical counterparts, each of which shall be
deemed an original for all purposes, but all of which taken
together shall form but one agreement.
14. Protection of Company's Business as Consideration.
As specific consideration to the Company for this Award, the
Participant agrees:
(a) Limitations on Competition. Subject to subsection
(g), the Participant will not, without the Company's written consent,
as a businessperson, directly or indirectly, be a shareholder,
principal, agent, partner, officer, director, employee or
consultant of SUPERVALU, Inc., Nash Finch Company, Richfood
Holdings, Inc. or any other direct competitor of the Company,
excluding national retail chains, or of any subsidiary, affiliate
or successor of any direct competitor of the Company
(collectively, the "Competitors"); provided, however, that
nothing in this subsection (a) is intended to preclude the
Participant from being employed or otherwise acting in the
capacity of a lawyer on behalf of any of the Competitors unless
such employment or activity would result in a breach of her
conflict of interest and/or confidentiality obligations as an
attorney or former attorney and an officer or former officer of
the Company or any of its Subsidiaries or based on the
confidentiality requirements contained in subsection (b).
(b) Confidential Information; No Disparaging State-
ments. The Participant acknowledges that during the course of the
Participant's employment with the Company or any Subsidiary, she
will have access to and gain knowledge of highly confidential and
proprietary information and trade secrets. The Participant
further acknowledges that the misuse, misappropriation or
disclosure of this information could cause irreparable harm to
the Company and/or a Subsidiary, both during and after the term
of the Participant's employment. Therefore, the Participant
agrees, during her employment and at all times thereafter, she
will hold in a fiduciary capacity for the benefit of the Company
and/or a Subsidiary and will not divulge or disclose, directly or
indirectly, to any other person, firm or business, all
confidential or proprietary information, knowledge and data
(including, but not limited to, processes, programs, trade "know
how," ideas, details of contracts, marketing plans, strategies,
business development techniques, business acquisition plans,
personnel plans, pricing practices and business methods and
practices) relating in any way to the business of the Company or
any Subsidiary, customers, suppliers, joint ventures, licensors,
licensees, distributors and other persons and entities with whom
the Company or any of its Subsidiaries do business ("Confidential
Data"), except upon the Company's written consent or as required
by her duties with the Company or any of its Subsidiaries, for so
long as such Confidential Data remains confidential and all such
Confidential Data, together with all copies thereof and notes and
other references thereto, shall remain the sole property of the
Company or a Subsidiary. The Participant agrees, during her
employment with the Company or any of its Subsidiaries and at all
times thereafter, not to make disparaging statements about the
Company or any of its Subsidiaries or their officers, directors,
agents, employees, products or services which she knows, or has
reason to know, are false or misleading.
(c) No Solicitation of Employees or Business. The
Participant agrees that she will not, either directly or in concert
with others, recruit, solicit or induce, or attempt to induce, any
employees of the Company or any of its Subsidiaries to terminate
their employment with the Company or any of its Subsidiaries
and/or become associated with another employer. The Participant
further agrees that she will not, either directly or in concert
with others, solicit, divert or take away or attempt to divert or
take away, the business of any of the customers or accounts of
the Company or any its Subsidiaries which the Company or a
Subsidiary had or was actively soliciting before and/or on her
date of termination/separation.
(d) Term of the Participant's Promises Under This
Section. The Participant agrees that except as otherwise provided in
subsection (b), her promises contained in this Section 14 shall
continue in effect during her employment with the Company or any
of its Subsidiaries and until the first anniversary of her
termination/separation.
(e) Consequences of Breach of Limitations on Competi-
tion and/or Other Competing Employment. Subject to subsection (g),
if at any time within (i) the term of this Agreement or (ii) within
one (1) year following the Participant's date of termination/separation,
but only if such termination/separation occurs on a date which is
prior to January 18, 2002, or (iii) within one (1) year after
vesting of any portion of the Restricted Stock, whichever is
latest, the Participant, without the Company's written consent,
as a businessperson, directly or indirectly, is a shareholder,
principal, agent, partner, officer, director, employee or
consultant of any of the Competitors, then (x) with respect to
any shares of Restricted Stock, effective the date the
Participant enters into such activity, all such Restricted Stock
(including any Accrued Dividends) shall be absolutely forfeited
and the Participant shall have no further interest therein of any
kind whatsoever (unless forfeited sooner by operation of another
term or condition of this Agreement or the Plan), and (y) with
respect to any shares of Vested Stock, the Participant shall be
required to return to the Company all of the actual shares of
Vested Stock, or other equivalent shares of Company common stock,
within thirty (30) days after the date of written notice from the
Company that pursuant to the provisions of this subsection
delivery of such shares is due and the Participant shall forfeit
all rights to such shares of Vested Stock. This shall be in
addition to any injunctive or other relief to which the Company
may be entitle under subsection (f). This subsection (e) shall
not apply however, if the Participant's employment by or other
activity in connection with the applicable Competitor is in the
capacity of a lawyer unless such employment or activity would
result in a breach of the Participant's conflict of interest
and/or confidentiality obligations as an attorney or former
attorney for and an officer or former officer of the Company or
any of its Subsidiaries or a breach of the confidentiality
requirements contained in subsection (b).
(f) Consequences of Other Breaches of this Section.
The Participant acknowledges that damages which may arise from any
breach of any of her promises contained in this Section 14 may be
impossible to ascertain or prove with certainty. The Participant
agrees if the Participant breaches any of her promises contained
in this Section 14, in addition to the remedies provided under
subsection (e), if applicable, and any other legal remedies which
may be available, the Company shall be entitled to immediate
injunctive relief from a court of competent jurisdiction, pending
arbitration under Section 15 or otherwise, to end such breach,
without further proof of damage.
(g) Permitted Ownership. Nothing in this Section 14
shall prohibit the Participant from owning less than one percent (1%)
of any company that is publicly traded on any national securities
exchange.
(h) Severability and Reasonableness. If, at any time,
the provisions of this Section 14 shall be determined to be invalid
or unenforceable, by reason of being vague or unreasonable as to
geographic area, duration or scope of activity or due to any
other restriction or limitation, this Section 14 shall be
considered divisible and shall become and be immediately amended
to only such geographic area, duration and scope of activity
and/or restrictions or limitations as shall be determined to be
reasonable and enforceable by an arbitrator or a court having
jurisdiction over the matter; and the Participant agrees that
this Section 14 as so amended shall be valid and binding as
though any invalid or unenforceable portion had not been included
herein. The parties agree that the geographic area, duration and
scope of the limitations and the restrictions described in
subsections (a) through (e) are reasonable.
15. Arbitration of Disputes. Any disputes, claims or
controversies between the Participant and the Company which may
arise out of or relate to this Agreement shall be settled by
arbitration. This agreement to arbitrate shall survive the
termination of this Agreement. Any arbitration shall be in
accordance with the Rules of the American Arbitration Association
and shall be undertaken pursuant to the Federal Arbitration Act.
Arbitration will be held in Dallas, Texas unless the parties
mutually agree on another location. The decision of the
arbitrator(s) will be enforceable in any court of competent
jurisdiction. The arbitrator(s) may, but will not be required,
to award such damages or other monetary relief as either party
might be entitled to receive from a court of competent
jurisdiction. Nothing in this agreement to arbitrate shall
preclude the Company from obtaining injunctive relief from a
court of competent jurisdiction prohibiting any on-going breaches
of the Agreement by the Participant pending arbitration. The
arbitrator(s) may also award costs and attorneys' fees in
connection with the arbitration to the prevailing party; however,
in the arbitrator's(s') discretion, each party may be ordered to
bear its/her own costs and attorneys' fees.
IN WITNESS WHEREOF, the parties hereto have executed
this Agreement on the day and year first above written.
"COMPANY"
FLEMING COMPANIES, INC., an
Oklahoma corporation
By SCOTT M. NORTHCUTT
Scott M. Northcutt, Senior
Vice President - Human
Resources
"PARTICIPANT"
LENORE T. GRAHAM
Lenore T. Graham
<PAGE>
Exhibit A
[Copy of 1996 Stock Incentive Plan]
<PAGE>
Exhibit B
ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED, __________________, an individual, hereby
irrevocably assigns and conveys to ________________________,
______________ AND NO/100 (_____) shares of the Common Capital
Stock of Fleming Companies, Inc., an Oklahoma corporation, $2.50
par value.
DATED:
Exhibit 10.64
RESTRICTED STOCK AWARD AGREEMENT FOR
THE FLEMING COMPANIES, INC.
1996 STOCK INCENTIVE PLAN
THIS RESTRICTED STOCK AWARD AGREEMENT (the "Agreement")
entered into as of the 18th day of January, 2000, by and between
Fleming Companies, Inc., an Oklahoma corporation (the "Company"),
and Neal Rider (herein referred to as the "Participant");
W I T N E S S E T H:
WHEREAS, the Company has previously adopted the Fleming
Companies, Inc. 1996 Stock Incentive Plan and certain amendments
thereto (the "Plan");
WHEREAS, in connection with his employment with the
Company, the Company has awarded the Participant 25,000 shares of
common stock under the Plan subject to the terms and conditions
of this Agreement; and
WHEREAS, the Participant has previously entered into an
Employment Agreement with the Company dated as of January 18,
2000 (the "Employment Agreement").
NOW, THEREFORE, in consideration of the premises and
the mutual promises and covenants herein contained, the
Participant and the Company agree as follows (all capitalized
terms used herein, unless otherwise defined, have the meaning
ascribed to such terms as set forth in the Plan):
1. The Plan. The Plan, a copy of which is attached
hereto as Exhibit A, is hereby incorporated by reference herein
and made a part hereof for all purposes, and when taken with this
Agreement shall govern the rights of the Participant and the
Company with respect to the Award (as defined below).
2. Grant of Award. The Company hereby grants to the
Participant an award (the "Award") of 25,000 shares of Company
common stock, par value $2.50 per share (the "Stock"), on the
terms and conditions set forth herein and in the Plan.
3. Terms of Award.
(a) Escrow of Shares. A certificate representing
the shares of Stock subject to the Award (the "Restricted Stock")
shall be issued in the name of the Participant and shall be
escrowed with the Secretary of the Company (the "Escrow Agent")
subject to removal of the restrictions placed thereon or
forfeiture pursuant to the terms of this Agreement.
(b) Vesting. One-half of the shares of
Restricted Stock will vest based on the Participant's continuous
employment with the Company or a Subsidiary through January 18,
2001 and the remaining one-half of the shares of Restricted Stock
will vest based on the Participant's continuous employment with
the Company or a Subsidiary through January 18, 2002. In the
event the Participant's employment with the Company or a
Subsidiary is terminated by reason of (i) death, (ii) disability,
(iii) without "Cause" (as such term is defined in the Employment
Agreement), or (iv) by the Participant for "Good Reason" (as such
term is defined in the Employment Agreement), then all remaining
shares of Restricted Stock (including any "Accrued Dividends," as
such term is hereafter defined) which have not yet been vested
shall immediately vest. Once vested pursuant to the terms of
this Agreement, the Restricted Stock shall be deemed "Vested
Stock."
(c) Voting Rights and Dividends. The Participant
shall not have the voting rights attributable to the shares of
Restricted Stock issued to him. Any dividends declared and paid
by the Company with respect to shares of Restricted Stock
("Accrued Dividends") shall not be paid to the Participant until
such Restricted Stock becomes Vested Stock. Such Accrued
Dividends shall be held by the Company as a general obligation
and paid to the Participant at the time the underlying Restricted
Stock becomes Vested Stock.
(d) Vested Stock - Removal of Restrictions. Upon
Restricted Stock becoming Vested Stock, all restrictions shall be
removed from the certificates representing such Stock and the
Secretary of the Company shall deliver to the Participant
certificates representing such Vested Stock free and clear of all
restrictions, except for any applicable securities laws
restrictions, together with a check in the amount of all Accrued
Dividends attributed to such Vested Stock without interest
thereon.
(e) Forfeiture. Restricted Stock that does not
become Vested Stock pursuant to the terms of this Agreement shall
be absolutely forfeited and the Participant shall have no future
interest therein of any kind whatsoever. In the event the
Participant's employment with the Company or a Subsidiary is
terminated prior to all shares of Restricted Stock becoming
Vested Stock for any reason other than (i) death, (ii)
disability, (iii) without Cause, or (iv) by the Participant for
Good Reason, then all remaining shares of Restricted Stock which
have not yet been vested (including any Accrued Dividends) shall
be absolutely forfeited and the Participant shall have no further
interest therein of any kind whatsoever.
4. Change of Control. Upon the occurrence of a
Change of Control Event on or prior to January 18, 2002, all
Restricted Stock shall become Vested Stock and the Company shall
deliver to the Participant certificates representing the Vested
Stock free and clear of all restrictions, except for any
applicable securities law restrictions, together with any Accrued
Dividends attributable to such Vested Stock without interest
thereon.
5. Legends. The shares of Stock which are the
subject of the Award shall be subject to the following legend:
"THE SHARES OF STOCK EVIDENCED BY THIS CERTIFICATE ARE
SUBJECT TO AND ARE TRANSFERABLE ONLY IN ACCORDANCE WITH THAT
CERTAIN RESTRICTED STOCK AWARD AGREEMENT FOR THE FLEMING
COMPANIES, INC. 1996 STOCK INCENTIVE PLAN DATED THE 18th DAY OF
JANUARY, 2000. ANY ATTEMPTED TRANSFER OF THE SHARES OF STOCK
EVIDENCED BY THIS CERTIFICATE IN VIOLATION OF SUCH AGREEMENT
SHALL BE NULL AND VOID AND WITHOUT EFFECT. A COPY OF THE
AGREEMENT MAY BE OBTAINED FROM THE SECRETARY OF FLEMING
COMPANIES, INC."
6. Stock Power. The Participant hereby agrees to
execute and deliver to the Secretary of the Company a stock power
(endorsed in blank) in the form of Exhibit B hereto covering his
Award and authorizes the Secretary to deliver to the Company any
and all shares of Restricted Stock that are forfeited under the
provisions of this Agreement. The Participant further authorizes
the Company to hold as a general obligation of the Company any
Accrued Dividends and to pay such dividends to the Participant at
the time the underlying Restricted Stock becomes Vested Stock.
7. Nontransferability of Award. The Participant
shall not have the right to sell, assign, transfer, convey,
dispose, pledge, hypothecate, burden, encumber or charge any
shares of Restricted Stock or any interest therein in any manner
whatsoever.
8. Notices. All notices or other communications
relating to the Plan and this Agreement as it relates to the
Participant shall be in writing, shall be deemed to have been
made if personally delivered in return for a receipt, or if
mailed, by regular U.S. mail, postage prepaid, by the Company to
the Participant at his last known address evidenced on the
payroll records of the Company.
9. Binding Effect and Governing Law. This Agreement
shall be (i) binding upon and inure to the benefit of the parties
hereto and their respective heirs, successors and assigns except
as may be limited by the Plan and (ii) governed and construed
under the laws of the State of Texas.
10. Withholding. The Company and the Participant
shall comply with all federal and state laws and regulations with
respect to the withholding, deposit and payment of any income,
employment or other taxes relating to the Award (including
Accrued Dividends).
11. Award Subject to Claims or Creditors. The
Participant shall not have any interest in any particular assets
of the Company, its parent, if applicable, or any Subsidiary by
reason of the right to earn an Award (including Accrued
Dividends) under the Plan and this Agreement; and the Participant
or any other person shall have only the rights of a general
unsecured creditor of the Company, its parent, if applicable, or
a Subsidiary with respect to any rights under the Plan or this
Agreement.
12. Captions. The captions of specific provisions of
this Agreement are for convenience and reference only, and in no
way define, describe, extend or limit the scope of this Agreement
or the intent of any provision hereof.
13. Counterparts. This Agreement may be executed in
any number of identical counterparts, each of which shall be
deemed an original for all purposes, but all of which taken
together shall form but one agreement.
14. Protection of Company's Business as Consideration. As
specific consideration to the Company for this Award, the
Participant agrees:
(a) Limitations on Competition. Subject to subsection
(g), the Participant will not, without the Company's written consent,
directly or indirectly, be a shareholder, principal, agent,
partner, officer, director, employee or consultant of SUPERVALU,
Inc., Nash Finch Company, Richfood Holdings, Inc. or any other
direct competitor of the Company, excluding national retail
chains, or any of their respective subsidiaries, affiliates or
successors (collectively, the "Competitors").
(b) Confidential Information; No Disparaging Statements.
The Participant acknowledges that during the course of Participant's
employment with the Company or any Subsidiary, he will have
access to and gain knowledge of highly confidential and
proprietary information and trade secrets. The Participant
further acknowledges that the misuse, misappropriation or
disclosure of this information could cause irreparable harm to
the Company and/or a Subsidiary, both during and after the term
of the Participant's employment. Therefore, the Participant
agrees that during his employment and at all times thereafter he
will hold in a fiduciary capacity for the benefit of the Company
and/or a Subsidiary and will not divulge or disclose, directly or
indirectly, to any other person, firm or business, all
confidential or proprietary information, knowledge and data
(including, but not limited to, processes, programs, trade "know
how," ideas, details of contracts, marketing plans, strategies,
business development techniques, business acquisition plans,
personnel plans, pricing practices and business methods and
practices) relating in any way to the business of the Company or
any of its Subsidiaries, customers, suppliers, joint ventures,
licensors, licensees, distributors and other persons and entities
with whom the Company or any of its Subsidiaries do business
("Confidential Data"), except upon the Company's written consent
or as required by his duties with the Company or any of its
Subsidiaries, for so long as such Confidential Data remains
confidential and all such Confidential Data, together with all
copies thereof and notes and other references thereto, shall
remain the sole property of the Company or a Subsidiary. The
Participant agrees, during his employment with the Company or any
of its Subsidiaries and at all times thereafter, not to make
disparaging statements about the Company or any of its
Subsidiaries or their respective officers, directors, agents,
employees, products or services which he knows, or has reason to
know, are false or misleading.
(c) No Solicitation of Employees or Business. The
Participant agrees that he will not, either directly or in concert
with others, recruit, solicit or induce, or attempt to induce, any
employee of the Company or any of its Subsidiaries to terminate
employment with the Company or any of its Subsidiaries and/or
become associated with another employer. The Participant further
agrees that he will not, either directly or in concert with
others, solicit, divert or take away or attempt to divert or take
away, the business of any of the customers or accounts of the
Company or any its Subsidiaries which the Company or a Subsidiary
had or was actively soliciting before and/or on his date of
termination/separation.
(d) Term of the Participant's Promises Under This
Section. The Participant agrees that except as otherwise provided in
subsection (b), his promises contained in this Section 14 shall
continue in effect during his employment with the Company or any
of its Subsidiaries and until the first anniversary of his
termination/separation.
(e) Consequences of Breach of Limitations. Subject
to subsection (g), if at any time within (i) the term of this
Agreement or (ii) within one (1) year following the Participant's
date of termination/separation, but only if such
termination/separation occurs on a date prior to January 18,
2002, or (iii) within one (1) year after vesting any portion of
the Restricted Stock, whichever is latest, the Participant,
without the Company's written consent, directly or indirectly, is
a shareholder, principal, agent, partner, officer, director,
employee or consultant of any of the Competitors, then (x) with
respect to any shares of Restricted Stock, effective the date the
Participant enters into such activity, all such Restricted Stock
(including any Accrued Dividends) shall be absolutely forfeited
and the Participant shall have no further interest therein of any
kind whatsoever (unless forfeited sooner by operation of another
term or condition of this Agreement or the Plan), and (y) with
respect to any shares of Vested Stock, the Participant shall be
required to return to the Company all of the actual shares of
Vested Stock, or other equivalent shares of Company common stock,
within thirty (30) days after the date of written notice from the
Company that pursuant to the provisions of this subsection
delivery of such shares is due and the Participant shall forfeit
all rights to such shares of Vested Stock. This shall be in
addition to any injunctive or other relief to which the Company
may be entitle under subsection (f).
(f) Consequences of Other Breaches of this Section.
The Participant acknowledges that damages which may arise from any
breach of any of his promises contained in this Section 14 may be
impossible to ascertain or prove with certainty. The Participant
agrees if Participant breaches any of his promises contained in
this Section 14, in addition to the remedies provided under
subsection (e), if applicable, and any other legal remedies which
may be available, the Company shall be entitled to immediate
injunctive relief from a court of competent jurisdiction, pending
arbitration under Section 15 or otherwise, to end such breach,
without further proof of damage.
(g) Permitted Ownership. Nothing in this Section 14
shall prohibit the Participant from owning less than one percent (1%)
of any company that is publicly traded on any national securities
exchange.
(h) Severability and Reasonableness. If, at any time,
the provisions of this Section 14 shall be determined to be invalid
or unenforceable, by reason of being vague or unreasonable as to
geographic area, duration or scope of activity or due to any
other restriction or limitation, this Section 14 shall be
considered divisible and shall become and be immediately amended
to only such geographic area, duration and scope of activity
and/or restrictions or limitations as shall be determined to be
reasonable and enforceable by an arbitrator or a court having
jurisdiction over the matter; and the Participant agrees that
this Section 14 as so amended shall be valid and binding as
though any invalid or unenforceable portion had not been included
herein. The parties agree that the geographic area, duration and
scope of the limitations and the restrictions described in
subsections (a) through (e) are reasonable.
15. Arbitration of Disputes. Any disputes, claims or
controversies between the Participant and the Company which may
arise out of or relate to this Agreement shall be settled by
arbitration. This agreement to arbitrate shall survive the
termination of this Agreement. Any arbitration shall be in
accordance with the Rules of the American Arbitration Association
and shall be undertaken pursuant to the Federal Arbitration Act.
Arbitration will be held in Dallas, Texas unless the parties
mutually agree on another location. The decision of the
arbitrator(s) will be enforceable in any court of competent
jurisdiction. The arbitrator(s) may, but will not be required,
to award such damages or other monetary relief as either party
might be entitled to receive from a court of competent
jurisdiction. Nothing in this agreement to arbitrate shall
preclude the Company from obtaining injunctive relief from a
court of competent jurisdiction prohibiting any on-going breaches
of the Agreement by the Participant pending arbitration. The
arbitrator(s) may also award costs and attorneys' fees in
connection with the arbitration to the prevailing party; however,
in the arbitrator's(s') discretion, each party may be ordered to
bear its/his own costs and attorneys' fees.
IN WITNESS WHEREOF, the parties hereto have executed
this Agreement on the day and year first above written.
"COMPANY"
FLEMING COMPANIES, INC., an
Oklahoma corporation
By SCOTT M. NORTHCUTT
Scott M. Northcutt
Senior Vice President -
Human Resources
"PARTICIPANT"
NEAL RIDER
Neal Rider
<PAGE>
Exhibit A
[Copy of 1996 Stock Incentive Plan]
<PAGE>
Exhibit B
ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED, __________________, an individual, hereby
irrevocably assigns and conveys to ________________________,
______________ AND NO/100 (_____) shares of the Common Capital
Stock of Fleming Companies, Inc., an Oklahoma corporation, $2.50
par value.
DATED:
Exhibit 10.65
RESTRICTED STOCK AWARD AGREEMENT FOR
THE FLEMING COMPANIES, INC.
1999 STOCK INCENTIVE PLAN
THIS RESTRICTED STOCK AWARD AGREEMENT (the "Agreement")
entered into as of the 29th day of February, 2000, by and between
Fleming Companies, Inc., an Oklahoma corporation (the "Company"),
and Mark S. Hansen (herein referred to as the "Participant");
W I T N E S S E T H:
WHEREAS, the Company has previously adopted the Fleming
Companies, Inc. 1999 Stock Incentive Plan (the "Plan");
WHEREAS, in connection with his employment with the
Company, the Company has awarded the Participant 300,000 shares
of common stock under the Plan subject to the terms and
conditions of this Agreement; and
WHEREAS, the Participant has previously entered into an
Employment Agreement with the Company dated as of November 30,
1998 (the "Employment Agreement").
NOW, THEREFORE, in consideration of the premises and
the mutual promises and covenants herein contained, the
Participant and the Company agree as follows (all capitalized
terms used herein, unless otherwise defined, have the meaning
ascribed to such terms as set forth in the Plan):
1. The Plan. The Plan, a copy of which is attached
hereto as Exhibit A, is hereby incorporated by reference herein and
made a part hereof for all purposes, and when taken with this Agreement
shall govern the rights of the Participant and the Company with
respect to the Award (as defined below).
2. Grant of Award. The Company hereby grants to the
Participant an award (the "Award") of 300,000 shares of Company
common stock, par value $2.50 per share (the "Stock"), on the
terms and conditions set forth herein and in the Plan.
3. Terms of Award.
(a) Escrow of Shares. A certificate representing the
shares of Stock subject to the Award (the "Restricted Stock") shall be
issued in the name of the Participant and shall be escrowed with
the Secretary of the Company (the "Escrow Agent") subject to
removal of the restrictions placed thereon or forfeiture pursuant
to the terms of this Agreement.
(b) Vesting. The shares of Restricted Stock will vest
based on the Participant's continuous employment with the Company
or a Subsidiary through February 28, 2002. In the event the
Participant's employment with the Company or a Subsidiary is
terminated by reason of (i) death, (ii) disability, (iii) without
"Cause" (as such term is defined in the Employment Agreement), or
(iv) by the Participant for "Good Reason" (as such term is
defined in the Employment Agreement), then all remaining shares
of Restricted Stock (including any "Accrued Dividends," as such
term is hereafter defined) which have not yet been vested shall
immediately vest. Once vested pursuant to the terms of this
Agreement, the Restricted Stock shall be deemed "Vested Stock."
(c) Voting Rights and Dividends. The Participant
shall not have the voting rights attributable to the shares of
Restricted Stock issued to him. Any dividends declared and paid by
the Company with respect to shares of Restricted Stock ("Accrued
Dividends") shall not be paid to the Participant until such Restricted
Stock becomes Vested Stock. Such Accrued Dividends shall be held by
the Company as a general obligation and paid to the Participant
at the time the underlying Restricted Stock becomes Vested Stock.
(d) Vested Stock - Removal of Restrictions. Upon
Restricted Stock becoming Vested Stock, all restrictions shall be
removed from the certificates representing such Stock and the Secretary
of the Company shall deliver to the Participant certificates
representing such Vested Stock free and clear of all restrictions,
except for any applicable securities laws restrictions, together with
a check in the amount of all Accrued Dividends attributed to such
Vested Stock without interest thereon.
(e) Forfeiture. Restricted Stock that does not become
Vested Stock pursuant to the terms of this Agreement shall be absolutely
forfeited and the Participant shall have no future interest therein of
any kind whatsoever. In the event the Participant's employment with
the Company or a Subsidiary terminates prior to all shares of Restricted
Stock becoming Vested Stock for any reason other than (i) death, (ii)
disability, (iii) without Cause, or (iv) by the Participant for Good
Reason, then all remaining shares of Restricted Stock which have not
yet been vested (including any Accrued Dividends) shall be absolutely
forfeited and the Participant shall have no further interest
therein of any kind whatsoever.
4. Change of Control. Upon the occurrence of a Change
of Control Event on or prior to February 28, 2002, all Restricted
Stock shall become Vested Stock and the Company shall deliver to
the Participant certificates representing the Vested Stock free
and clear of all restrictions, except for any applicable
securities law restrictions, together with any Accrued Dividends
attributable to such Vested Stock without interest thereon.
5. Legends. The shares of Stock which are the subject of
the Award shall be subject to the following legend:
"THE SHARES OF STOCK EVIDENCED BY THIS CERTIFICATE ARE
SUBJECT TO AND ARE TRANSFERABLE ONLY IN ACCORDANCE WITH THAT
CERTAIN RESTRICTED STOCK AWARD AGREEMENT FOR THE FLEMING
COMPANIES, INC. 1999 STOCK INCENTIVE PLAN DATED THE 29th DAY OF
FEBRUARY, 2000. ANY ATTEMPTED TRANSFER OF THE SHARES OF STOCK
EVIDENCED BY THIS CERTIFICATE IN VIOLATION OF SUCH AGREEMENT
SHALL BE NULL AND VOID AND WITHOUT EFFECT. A COPY OF THE
AGREEMENT MAY BE OBTAINED FROM THE SECRETARY OF FLEMING
COMPANIES, INC."
6. Stock Power. The Participant hereby agrees to execute
and deliver to the Secretary of the Company a stock power (endorsed
in blank) in the form of Exhibit B hereto covering his Award and
authorizes the Secretary to deliver to the Company any and all
shares of Restricted Stock that are forfeited under the provisions
of this Agreement. The Participant further authorizes the Company
to hold as a general obligation of the Company any Accrued Dividends
and to pay such dividends to the Participant at the time the under-
lying Restricted Stock becomes Vested Stock.
7. Nontransferability of Award. The Participant shall not
have the right to sell, assign, transfer, convey, dispose, pledge,
hypothecate, burden, encumber or charge any shares of Restricted
Stock or any interest therein in any manner whatsoever.
8. Notices. All notices or other communications relating
to the Plan and this Agreement as it relates to the Participant
shall be in writing, shall be deemed to have been made if
personally delivered in return for a receipt, or if mailed, by
regular U.S. mail, postage prepaid, by the Company to the
Participant at his last known address evidenced on the payroll
records of the Company.
9. Binding Effect and Governing Law. This Agreement shall
be (i) binding upon and inure to the benefit of the parties hereto
and their respective heirs, successors and assigns except as may
be limited by the Plan and (ii) governed and construed under the
laws of the State of Texas.
10. Withholding. The Company and the Participant shall
comply with all federal and state laws and regulations with respect to
the withholding, deposit and payment of any income, employment or
other taxes relating to the Award (including Accrued Dividends).
11. Award Subject to Claims or Creditors. The Participant
shall not have any interest in any particular assets of the Company,
its parent, if applicable, or any Subsidiary by reason of the
right to earn an Award (including Accrued Dividends) under the
Plan and this Agreement; and the Participant or any other person
shall have only the rights of a general unsecured creditor of the
Company, its parent, if applicable, or a Subsidiary with respect
to any rights under the Plan or this Agreement.
12. Captions. The captions of specific provisions of this
Agreement are for convenience and reference only, and in no way
define, describe, extend or limit the scope of this Agreement or
the intent of any provision hereof.
13. Counterparts. This Agreement may be executed in any
number of identical counterparts, each of which shall be deemed an
original for all purposes, but all of which taken together shall
form but one agreement.
14. Protection of Company's Business as Consideration.
As specific consideration to the Company for this Award, the
Participant agrees:
(a) Limitations on Competition. Subject to sub-
section (g), the Participant will not, without the Company's written
consent, directly or indirectly, be a shareholder, principal, agent,
partner, officer, director, employee or consultant of SUPERVALU,
Inc., Nash Finch Company, Richfood Holdings, Inc. or any other
direct competitor of the Company, excluding national retail
chains, or any of their respective subsidiaries, affiliates or
successors (collectively, the "Competitors").
(b) Confidential Information; No Disparaging Statements.
The Participant acknowledges that during the course of Participant's
employment with the Company or any Subsidiary, he will have access to
and gain knowledge of highly confidential and proprietary information
and trade secrets. The Participant further acknowledges that the mis-
use, misappropriation or disclosure of this information could cause
irreparable harm to the Company and/or a Subsidiary, both during and
after the term of the Participant's employment. Therefore, the Par-
ticipant agrees that during his employment and at all times thereafter
he will hold in a fiduciary capacity for the benefit of the Company
and/or a Subsidiary and will not divulge or disclose, directly or
indirectly, to any other person, firm or business, all confidential
or proprietary information, knowledge and data (including, but not
limited to, processes, programs, trade "know how," ideas, details of
contracts, marketing plans, strategies, business development techniques,
business acquisition plans, personnel plans, pricing practices and
business methods and practices) relating in any way to the business
of the Company or any of its Subsidiaries, customers, suppliers, joint
ventures, licensors, licensees, distributors and other persons and
entities with whom the Company or any of its Subsidiaries do business
("Confidential Data"), except upon the Company's written consent
or as required by his duties with the Company or any of its Sub-
sidiaries, for so long as such Confidential Data remains confidential
and all such Confidential Data, together with all copies thereof and
notes and other references thereto, shall remain the sole property of
the Company or a Subsidiary. The Participant agrees, during his
employment with the Company or any of its Subsidiaries and at all
times thereafter, not to make disparaging statements about the Company
or any of its Subsidiaries or their respective officers, directors,
agents, employees, products or services which he knows, or has reason
to know, are false or misleading.
(c) No Solicitation of Employees or Business. The
Participant agrees that he will not, either directly or in concert with
others, recruit, solicit or induce, or attempt to induce, any employee
of the Company or any of its Subsidiaries to terminate employment with
the Company or any of its Subsidiaries and/or become associated with
another employer. The Participant further agrees that he will not,
either directly or in concert with others, solicit, divert or take
away or attempt to divert or take away, the business of any of the
customers or accounts of the Company or any its Subsidiaries which
the Company or a Subsidiary had or was actively soliciting before
and/or on his date of termination/separation.
(d) Term of the Participant's Promises Under This
Section. The Participant agrees that except as otherwise provided
in subsection (b), his promises contained in this Section 14 shall
continue in effect during his employment with the Company or any
of its Subsidiaries and until the first anniversary of his
termination/separation.
(e) Consequences of Breach of Limitations. Subject
to subsection (g), if at any time within (i) the term of this
Agreement or (ii) within one (1) year following the Participant's
date of termination/separation, but only if such termination/
separation occurs on a date prior to February 28, 2002, or (iii)
within one (1) year after vesting any portion of the Restricted
Stock, whichever is latest, the Participant, without the Company's
written consent, directly or indirectly, is a shareholder, principal,
agent, partner, officer, director, employee or consultant of any
of the Competitors, then (x) with respect to any shares of Restricted
Stock, effective the date the Participant enters into such activity,
all such Restricted Stock (including any Accrued Dividends) shall
be absolutely forfeited and the Participant shall have no further
interest therein of any kind whatsoever (unless forfeited sooner by
operation of another term or condition of this Agreement or the Plan),
and (y) with respect to any shares of Vested Stock, the Participant
shall be required to return to the Company all of the actual shares of
Vested Stock, or other equivalent shares of Company common stock,
within thirty (30) days after the date of written notice from the
Company that pursuant to the provisions of this subsection
delivery of such shares is due and the Participant shall forfeit
all rights to such shares of Vested Stock. This shall be in
addition to any injunctive or other relief to which the Company
may be entitle under subsection (f).
(f) Consequences of Other Breaches of this Section.
The Participant acknowledges that damages which may arise from any
breach of any of his promises contained in this Section 14 may be
impossible to ascertain or prove with certainty. The Participant
agrees if Participant breaches any of his promises contained in
this Section 14, in addition to the remedies provided under
subsection (e), if applicable, and any other legal remedies which
may be available, the Company shall be entitled to immediate
injunctive relief from a court of competent jurisdiction, pending
arbitration under Section 15 or otherwise, to end such breach,
without further proof of damage.
(g) Permitted Ownership. Nothing in this Section 14
shall prohibit the Participant from owning less than one percent (1%)
of any company that is publicly traded on any national securities
exchange.
(h) Severability and Reasonableness. If, at any time,
the provisions of this Section 14 shall be determined to be invalid
or unenforceable, by reason of being vague or unreasonable as to
geographic area, duration or scope of activity or due to any other
restriction or limitation, this Section 14 shall be considered
divisible and shall become and be immediately amended to only such
geographic area, duration and scope of activity and/or restrictions
or limitations as shall be determined to be reasonable and enforce-
able by an arbitrator or a court having jurisdiction over the matter;
and the Participant agrees that this Section 14 as so amended shall
be valid and binding as though any invalid or unenforceable portion
had not been included herein. The parties agree that the geographic
area, duration and scope of the limitations and the restrictions
described in subsections (a) through (e) are reasonable.
15. Arbitration of Disputes. Any disputes, claims or
controversies between the Participant and the Company which may
arise out of or relate to this Agreement shall be settled by
arbitration. This agreement to arbitrate shall survive the
termination of this Agreement. Any arbitration shall be in
accordance with the Rules of the American Arbitration Association
and shall be undertaken pursuant to the Federal Arbitration Act.
Arbitration will be held in Dallas, Texas unless the parties
mutually agree on another location. The decision of the
arbitrator(s) will be enforceable in any court of competent
jurisdiction. The arbitrator(s) may, but will not be required,
to award such damages or other monetary relief as either party
might be entitled to receive from a court of competent
jurisdiction. Nothing in this agreement to arbitrate shall
preclude the Company from obtaining injunctive relief from a
court of competent jurisdiction prohibiting any on-going breaches
of the Agreement by the Participant pending arbitration. The
arbitrator(s) may also award costs and attorneys' fees in
connection with the arbitration to the prevailing party; however,
in the arbitrator's(s') discretion, each party may be ordered to
bear its/his own costs and attorneys' fees.
IN WITNESS WHEREOF, the parties hereto have executed
this Agreement on the day and year first above written.
"COMPANY" FLEMING COMPANIES, INC., an
Oklahoma corporation
SCOTT M. NORTHCUTT
Scott M. Northcutt
Senior Vice President -
Human Resources
"PARTICIPANT" MARK S. HANSEN
Mark S. Hansen
<PAGE>
Exhibit A
[Copy of 1999 Stock Incentive Plan]
<PAGE>
Exhibit B
ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED, Mark S. Hansen, an individual, hereby
irrevocably assigns and conveys to ________________________,
THREE HUNDRED THOUSAND AND NO/100 (300,000) shares of the Common
Capital Stock of Fleming Companies, Inc., an Oklahoma
corporation, $2.50 par value.
DATED:
Mark S. Hansen
EXHIBIT 10.66
RESTRICTED STOCK AWARD AGREEMENT FOR
THE FLEMING COMPANIES, INC.
1996 STOCK INCENTIVE PLAN
THIS RESTRICTED STOCK AWARD AGREEMENT (the "Agreement")
entered into as of the 29th day of February, 2000, by and between
Fleming Companies, Inc., an Oklahoma corporation (the "Company"),
and David R. Almond (herein referred to as the "Participant");
W I T N E S S E T H:
WHEREAS, the Company has previously adopted the Fleming
Companies, Inc. 1996 Stock Incentive Plan and certain amendments
thereto (the "Plan");
WHEREAS, in connection with his employment with the
Company, the Company has awarded the Participant 13,334 shares of
common stock under the Plan subject to the terms and conditions
of this Agreement; and
WHEREAS, the Participant has previously entered into an
Employment Agreement with the Company dated as of March 2, 1995,
as amended dated May 1, 1997, August 18, 1998 and March 2, 1999
(the "Employment Agreement").
NOW, THEREFORE, in consideration of the premises and
the mutual promises and covenants herein contained, the
Participant and the Company agree as follows (all capitalized
terms used herein, unless otherwise defined, have the meaning
ascribed to such terms as set forth in the Plan):
1. The Plan. The Plan, a copy of which is attached hereto as
Exhibit A, is hereby incorporated by reference herein and made a
part hereof for all purposes, and when taken with this Agreement
shall govern the rights of the Participant and the Company with
respect to the Award (as defined below).
2. Grant of Award. The Company hereby grants to the
Participant an award (the "Award") of 13,334 shares of Company
common stock, par value $2.50 per share (the "Stock"), on the
terms and conditions set forth herein and in the Plan.
3. Terms of Award.
(a) Escrow of Shares. A certificate representing the
shares of Stock subject to the Award (the "Restricted Stock") shall be
issued in the name of the Participant and shall be escrowed with
the Secretary of the Company (the "Escrow Agent") subject to
removal of the restrictions placed thereon or forfeiture pursuant
to the terms of this Agreement.
(b) Vesting. The shares of Restricted Stock will vest
based on the Participant's continuous employment with the Company or a
Subsidiary through March 2, 2001. In the event the Participant's
employment with the Company or a Subsidiary is terminated by
reason of (i) death, (ii) disability, (iii) without "Cause" (as
such term is defined in the Employment Agreement), or (iv) by the
Participant for "Good Reason" (as such term is defined in the
Employment Agreement), then all remaining shares of Restricted
Stock (including any "Accrued Dividends," as such term is
hereafter defined) which have not yet been vested shall
immediately vest. Once vested pursuant to the terms of this
Agreement, the Restricted Stock shall be deemed "Vested Stock."
(c) Voting Rights and Dividends. The Participant shall
not have the voting rights attributable to the shares of Restricted Stock
issued to him. Any dividends declared and paid by the Company
with respect to shares of Restricted Stock ("Accrued Dividends")
shall not be paid to the Participant until such Restricted Stock
becomes Vested Stock. Such Accrued Dividends shall be held by
the Company as a general obligation and paid to the Participant
at the time the underlying Restricted Stock becomes Vested Stock.
(d) Vested Stock - Removal of Restrictions. Upon Re-
stricted Stock becoming Vested Stock, all restrictions shall be removed
from the certificates representing such Stock and the Secretary
of the Company shall deliver to the Participant certificates
representing such Vested Stock free and clear of all
restrictions, except for any applicable securities laws
restrictions, together with a check in the amount of all Accrued
Dividends attributed to such Vested Stock without interest
thereon.
(e) Forfeiture. Restricted Stock that does not become
Vested Stock pursuant to the terms of this Agreement shall be absolutely
forfeited and the Participant shall have no future interest
therein of any kind whatsoever. In the event the Participant's
employment with the Company or a Subsidiary is terminated prior
to all shares of Restricted Stock becoming Vested Stock for any
reason other than (i) death, (ii) disability, (iii) without
Cause, or (iv) by the Participant for Good Reason, then all
remaining shares of Restricted Stock which have not yet been
vested (including any Accrued Dividends) shall be absolutely
forfeited and the Participant shall have no further interest
therein of any kind whatsoever.
4. Change of Control. Upon the occurrence of a Change of
Control Event on or prior to March 2, 2001, all Restricted Stock
shall become Vested Stock and the Company shall deliver to the
Participant certificates representing the Vested Stock free and
clear of all restrictions, except for any applicable securities
law restrictions, together with any Accrued Dividends
attributable to such Vested Stock without interest thereon. For
purposes of this Agreement, the words "Change of Control Event"
shall not have the meaning set forth in Section 2.4 of the Plan,
but shall instead be defined as:
(i) the acquisition by any individual, entity or
group (within the meaning of Section 13(d)(3) or 14(d)(2) of
the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) (a "Person") of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of 20% or more (the "Triggering Percentage")
of either (i) the then outstanding shares of common stock of
the Company (the "Outstanding Company Common Stock") or (ii)
the combined voting power of the then outstanding voting
securities of the Company entitled to vote generally in the
election of directors (the "Outstanding Company Voting
Securities"); provided, however, in the event the "Incumbent
Board" (as such term is hereinafter defined) pursuant to
authority granted in any rights agreement to which the
Company is a party (the "Rights Agreement") lowers the
acquisition threshold percentages set forth in such Rights
Agreement, the Triggering Percentage shall be automatically
reduced to equal the threshold percentages set pursuant to
authority granted to the board in the Rights Agreement; and
provided, further, however, that the following acquisitions
shall not constitute a Change of Control: (i) any
acquisition directly from the Company, (ii) any acquisition
by the Company, (iii) any acquisition by any employee
benefit plan (or related trust) sponsored or maintained by
the Company or any corporation controlled by the Company, or
(iv) any acquisition by any corporation pursuant to a
transaction which complies with clauses (x), (y), and (z) of
subsection (iii) of this Section 4(b); or
(ii) Individuals who, as of the date hereof,
constitute the Board (the "Incumbent Board") cease for any
reason to constitute at least a majority of the Board;
provided, however, that any individual becoming a director
subsequent to the date hereof whose election, appointment or
nomination for election by the Company's shareholders, was
approved by a vote of at least a majority of the directors
then comprising the Incumbent Board shall be considered as
though such individual were a member of the Incumbent Board,
but excluding, for purposes of this definition, any such
individual whose initial assumption of office occurs as a
result of an actual or threatened election contest with
respect to the election or removal of directors or other
actual or threatened solicitation of proxies or consents by
or on behalf of a Person other than the Board; or
(iii) Approval by the shareholders of the
Company of a reorganization, share exchange, merger or
consolidation or acquisition of assets of another
corporation (a "Business Combination"), in each case,
unless, following such Business Combination, (x) all or
substantially all of the individuals and entities who were
the beneficial owners, respectively, of the Outstanding
Company Common Stock and Outstanding Company Voting
Securities immediately prior to such Business Combination
will beneficially own, directly or indirectly, more than 50%
of, respectively, the then outstanding shares of common
stock and the combined voting power of the then outstanding
voting securities entitled to vote generally in the election
of directors, as the case may be, of the corporation
resulting from such Business Combination (including, without
limitation, a corporation which as a result of such
transaction will own the Company through one or more
subsidiaries) in substantially the same proportions as their
ownership, immediately prior to such Business Combination of
the Outstanding Company Common Stock and Outstanding Company
Voting Securities, as the case may be, (y) no Person
(excluding any employee benefit plan (or related trust) of
the Company or such corporation resulting from such Business
Combination) will beneficially own, directly or indirectly,
20% or more of, respectively, the then outstanding shares of
common stock of the corporation resulting from such Business
Combination or the combined voting power of the then
outstanding voting securities of such corporation except to
the extent that such ownership existed prior to the Business
Combination, and (z) at least a majority of the members of
the board of directors of the corporation resulting from
such Business Combination will have been members of the
Incumbent Board at the time of the execution of the initial
agreement, or of the action of the Board, providing for such
Business Combination; or
(iv) Approval by the shareholders of the Company
of (x) a complete liquidation or dissolution of the Company
or, (y) the sale or other disposition of all or
substantially all of the assets of the Company, other than
to a corporation, with respect to which following such sale
or other disposition, (A) more than 50% of, respectively,
the then outstanding shares of common stock of such
corporation and the combined voting power of the then
outstanding voting securities of such corporation entitled
to vote generally in the election of directors will be
beneficially owned, directly or indirectly, by all or
substantially all of the individuals and entities who were
the beneficial owners, respectively, of the Outstanding
Company Common Stock and Outstanding Company Voting
Securities immediately prior to such sale or other
disposition in substantially the same proportion as their
ownership, immediately prior to such sale or other
disposition, of the Outstanding Company Common Stock and
Outstanding Company Voting Securities, as the case may be,
(B) less than 20% of, respectively, the then outstanding
shares of common stock of such corporation and the combined
voting power of the then outstanding voting securities of
such corporation entitled to vote generally in the election
of directors will be beneficially owned, directly or
indirectly, by any Person (excluding any employee benefit
plan (or related trust) of the Company or such corporation),
except to the extent that such Person owned 20% or more of
the Outstanding Company Common Stock or Outstanding Company
Voting Securities prior to the sale or disposition, and (C)
at least a majority of the members of the board of directors
of such corporation will have been members of the Incumbent
Board at the time of the execution of the initial agreement,
or of the action of the Board, providing for such sale or
other disposition of assets of the Company.
5. Legends. The shares of Stock which are the subject of
the Award shall be subject to the following legend:
"THE SHARES OF STOCK EVIDENCED BY THIS CERTIFICATE ARE
SUBJECT TO AND ARE TRANSFERABLE ONLY IN ACCORDANCE WITH THAT
CERTAIN RESTRICTED STOCK AWARD AGREEMENT FOR THE FLEMING
COMPANIES, INC. 1996 STOCK INCENTIVE PLAN DATED THE 29th DAY OF
FEBRUARY, 2000. ANY ATTEMPTED TRANSFER OF THE SHARES OF STOCK
EVIDENCED BY THIS CERTIFICATE IN VIOLATION OF SUCH AGREEMENT
SHALL BE NULL AND VOID AND WITHOUT EFFECT. A COPY OF THE
AGREEMENT MAY BE OBTAINED FROM THE SECRETARY OF FLEMING
COMPANIES, INC."
6. Stock Power. The Participant hereby agrees to execute
and deliver to the Secretary of the Company a stock power (endorsed
in blank) in the form of Exhibit B hereto covering his Award and
authorizes the Secretary to deliver to the Company any and all
shares of Restricted Stock that are forfeited under the
provisions of this Agreement. The Participant further authorizes
the Company to hold as a general obligation of the Company any
Accrued Dividends and to pay such dividends to the Participant at
the time the underlying Restricted Stock becomes Vested Stock.
7. Nontransferability of Award. The Participant shall not
have the right to sell, assign, transfer, convey, dispose, pledge,
hypothecate, burden, encumber or charge any shares of Restricted
Stock or any interest therein in any manner whatsoever.
8. Notices. All notices or other communications relating
to the Plan and this Agreement as it relates to the Participant
shall be in writing, shall be deemed to have been made if
personally delivered in return for a receipt, or if mailed, by
regular U.S. mail, postage prepaid, by the Company to the
Participant at his last known address evidenced on the payroll
records of the Company.
9. Binding Effect and Governing Law. This Agreement shall
be (i) binding upon and inure to the benefit of the parties hereto
and their respective heirs, successors and assigns except as may
be limited by the Plan and (ii) governed and construed under the
laws of the State of Texas.
10. Withholding. The Company and the Participant shall
comply with all federal and state laws and regulations with respect to
the withholding, deposit and payment of any income, employment or
other taxes relating to the Award (including Accrued Dividends).
11. Award Subject to Claims or Creditors. The Participant
shall not have any interest in any particular assets of the Company,
its parent, if applicable, or any Subsidiary by reason of the
right to earn an Award (including Accrued Dividends) under the
Plan and this Agreement; and the Participant or any other person
shall have only the rights of a general unsecured creditor of the
Company, its parent, if applicable, or a Subsidiary with respect
to any rights under the Plan or this Agreement.
12. Captions. The captions of specific provisions of this
Agreement are for convenience and reference only, and in no way
define, describe, extend or limit the scope of this Agreement or
the intent of any provision hereof.
13. Counterparts. This Agreement may be executed in any
number of identical counterparts, each of which shall be deemed an
original for all purposes, but all of which taken together shall
form but one agreement.
14. Protection of Company's Business as Consideration.
As specific consideration to the Company for this Award, the
Participant agrees:
(a) Limitations on Competition. Subject to sub-
section (g), the Participant will not, without the Company's written
consent, as a businessperson, directly or indirectly, be a share-
holder, principal, agent, partner, officer, director, employee or
consultant of SUPERVALU, Inc., Nash Finch Company, Richfood
Holdings, Inc. or any other direct competitor of the Company,
excluding national retail chains, or of any subsidiary, affiliate
or successor of any direct competitor of the Company
(collectively, the "Competitors"); provided, however, that
nothing in this subsection (a) is intended to preclude the
Participant from being employed or otherwise acting in the
capacity of a lawyer on behalf of any of the Competitors unless
such employment or activity would result in a breach of his
conflict of interest and/or confidentiality obligations as an
attorney or former attorney and an officer or former officer of
the Company or any of its Subsidiaries or based on the
confidentiality requirements contained in subsection (b).
(b) Confidential Information; No Disparaging State-
ments. The Participant acknowledges that during the course of the
Participant's employment with the Company or any Subsidiary, he
will have access to and gain knowledge of highly confidential and
proprietary information and trade secrets. The Participant
further acknowledges that the misuse, misappropriation or
disclosure of this information could cause irreparable harm to
the Company and/or a Subsidiary, both during and after the term
of the Participant's employment. Therefore, the Participant
agrees, during his employment and at all times thereafter, he
will hold in a fiduciary capacity for the benefit of the Company
and/or a Subsidiary and will not divulge or disclose, directly or
indirectly, to any other person, firm or business, all
confidential or proprietary information, knowledge and data
(including, but not limited to, processes, programs, trade "know
how," ideas, details of contracts, marketing plans, strategies,
business development techniques, business acquisition plans,
personnel plans, pricing practices and business methods and
practices) relating in any way to the business of the Company or
any Subsidiary, customers, suppliers, joint ventures, licensors,
licensees, distributors and other persons and entities with whom
the Company or any of its Subsidiaries do business ("Confidential
Data"), except upon the Company's written consent or as required
by his duties with the Company or any of its Subsidiaries, for so
long as such Confidential Data remains confidential and all such
Confidential Data, together with all copies thereof and notes and
other references thereto, shall remain the sole property of the
Company or a Subsidiary. The Participant agrees, during his
employment with the Company or any of its Subsidiaries and at all
times thereafter, not to make disparaging statements about the
Company or any of its Subsidiaries or their officers, directors,
agents, employees, products or services which he knows, or has
reason to know, are false or misleading.
(c) No Solicitation of Employees or Business. The Par-
ticipant agrees that he will not, either directly or in concert with
others, recruit, solicit or induce, or attempt to induce, any
employees of the Company or any of its Subsidiaries to terminate
their employment with the Company or any of its Subsidiaries
and/or become associated with another employer. The Participant
further agrees that he will not, either directly or in concert
with others, solicit, divert or take away or attempt to divert or
take away, the business of any of the customers or accounts of
the Company or any its Subsidiaries which the Company or a
Subsidiary had or was actively soliciting before and/or on his
date of termination/separation.
(d) Term of the Participant's Promises Under This Section.
The Participant agrees that except as otherwise provided in
subsection (b), his promises contained in this Section 14 shall
continue in effect during his employment with the Company or any
of its Subsidiaries and until the first anniversary of his
termination/separation.
(e) Consequences of Breach of Limitations on Competition
and/or Other Competing Employment. Subject to subsection (g), if at any
time within (i) the term of this Agreement or (ii) within one (1)
year following the Participant's date of termination/separation,
but only if such termination/separation occurs on a date which is
prior to March 2, 2001, or (iii) within one (1) year after
vesting of any portion of the Restricted Stock, whichever is
latest, the Participant, without the Company's written consent,
as a businessperson, directly or indirectly, is a shareholder,
principal, agent, partner, officer, director, employee or
consultant of any of the Competitors, then (x) with respect to
any shares of Restricted Stock, effective the date the
Participant enters into such activity, all such Restricted Stock
(including any Accrued Dividends) shall be absolutely forfeited
and the Participant shall have no further interest therein of any
kind whatsoever (unless forfeited sooner by operation of another
term or condition of this Agreement or the Plan), and (y) with
respect to any shares of Vested Stock, the Participant shall be
required to return to the Company all of the actual shares of
Vested Stock, or other equivalent shares of Company common stock,
within thirty (30) days after the date of written notice from the
Company that pursuant to the provisions of this subsection
delivery of such shares is due and the Participant shall forfeit
all rights to such shares of Vested Stock. This shall be in
addition to any injunctive or other relief to which the Company
may be entitle under subsection (f). This subsection (e) shall
not apply however, if the Participant's employment by or other
activity in connection with the applicable Competitor is in the
capacity of a lawyer unless such employment or activity would
result in a breach of the Participant's conflict of interest
and/or confidentiality obligations as an attorney or former
attorney for and an officer or former officer of the Company or
any of its Subsidiaries or a breach of the confidentiality
requirements contained in subsection (b).
(f) Consequences of Other Breaches of this Section.
The Participant acknowledges that damages which may arise from any
breach of any of his promises contained in this Section 14 may be
impossible to ascertain or prove with certainty. The Participant
agrees if the Participant breaches any of his promises contained
in this Section 14, in addition to the remedies provided under
subsection (e), if applicable, and any other legal remedies which
may be available, the Company shall be entitled to immediate
injunctive relief from a court of competent jurisdiction, pending
arbitration under Section 15 or otherwise, to end such breach,
without further proof of damage.
(g) Permitted Ownership. Nothing in this Section 14 shall
prohibit the Participant from owning less than one percent (1%)
of any company that is publicly traded on any national securities
exchange.
(h) Severability and Reasonableness. If, at any time,
the provisions of this Section 14 shall be determined to be invalid
or unenforceable, by reason of being vague or unreasonable as to
geographic area, duration or scope of activity or due to any
other restriction or limitation, this Section 14 shall be
considered divisible and shall become and be immediately amended
to only such geographic area, duration and scope of activity
and/or restrictions or limitations as shall be determined to be
reasonable and enforceable by an arbitrator or a court having
jurisdiction over the matter; and the Participant agrees that
this Section 14 as so amended shall be valid and binding as
though any invalid or unenforceable portion had not been included
herein. The parties agree that the geographic area, duration and
scope of the limitations and the restrictions described in
subsections (a) through (e) are reasonable.
15. Arbitration of Disputes. Any disputes, claims or
controversies between the Participant and the Company which may
arise out of or relate to this Agreement shall be settled by
arbitration. This agreement to arbitrate shall survive the
termination of this Agreement. Any arbitration shall be in
accordance with the Rules of the American Arbitration Association
and shall be undertaken pursuant to the Federal Arbitration Act.
Arbitration will be held in Dallas, Texas unless the parties
mutually agree on another location. The decision of the
arbitrator(s) will be enforceable in any court of competent
jurisdiction. The arbitrator(s) may, but will not be required,
to award such damages or other monetary relief as either party
might be entitled to receive from a court of competent
jurisdiction. Nothing in this agreement to arbitrate shall
preclude the Company from obtaining injunctive relief from a
court of competent jurisdiction prohibiting any on-going breaches
of the Agreement by the Participant pending arbitration. The
arbitrator(s) may also award costs and attorneys' fees in
connection with the arbitration to the prevailing party; however,
in the arbitrator's(s') discretion, each party may be ordered to
bear its/her own costs and attorneys' fees.
16. Reimbursement of Taxes. In the event that the Partici-
pant makes a timely election to include in gross income the value of
the Restricted Stock on the date of grant pursuant to Section
83(b) of the Internal Revenue Code of 1986, as amended (the
"Code"), and gives notice of such election to the Company, the
Company shall pay to the Participant an amount necessary to cause
the net amount of such payment that is retained by the
Participant after the calculation and deduction of any and all
federal, state and local income taxes and employment taxes on
such payment to be equal to the Participant's income taxes
attributable to the Restricted Stock and the Participant's
election under Section 83(b) of the Code in connection with the
Restricted Stock.
IN WITNESS WHEREOF, the parties hereto have executed
this Agreement on the day and year first above written.
"COMPANY" FLEMING COMPANIES, INC., an
Oklahoma corporation
SCOTT M. NORTHCUTT
Scott M. Northcutt
Senior Vice President - Human
Resources
"PARTICIPANT"
DAVID R. ALMOND
David R. Almond
<PAGE>
Exhibit A
(Fleming Companies, Inc. 1996 Stock Incentive Plan)
<PAGE>
Exhibit B
ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED, David R. Almond, an individual, hereby
irrevocably assigns and conveys to ________________________,
THIRTEEN THOUSAND, THREE HUNDRED THIRTY-FOUR AND NO/100 (13,334)
shares of the Common Capital Stock of Fleming Companies, Inc., an
Oklahoma corporation, $2.50 par value.
DATED:
David R. Almond
EXHIBIT 10.67
AMENDMENT TO THE AMENDED AND RESTATED
RESTRICTED STOCK AWARD AGREEMENT FOR THE
FLEMING COMPANIES, INC. 1996 STOCK INCENTIVE PLAN
THIS AMENDMENT TO THE AMENDED AND RESTATED RESTRICTED STOCK
AWARD AGREEMENT FOR THE FLEMING COMPANIES, INC. 1996 STOCK
INCENTIVE PLAN ("Amendment") is entered into as of the 29th day
of February, 2000 by and between Fleming Companies, Inc., an
Oklahoma corporation (the "Company"), and David R. Almond (the
"Participant").
WITNESSETH:
WHEREAS, the Company and the Participant have previously
entered into that certain Amended and Restated Restricted Stock
Award Agreement for the Fleming Companies, Inc. 1996 Stock
Incentive Plan dated August 18, 1998 (the "Agreement"), which
provided that the Company would grant to the Participant an award
of 20,000 shares of voting common stock of the Company in
exchange for the Participant's performing future services for the
Company pursuant to the terms of the Agreement; and
WHEREAS, as of the date hereof, the Participant has already
become 100% vested in 10,000 shares of Stock (as defined in the
Agreement) pursuant to Section A of Exhibit "B" of the Agreement,
and 3,334 shares of Stock pursuant to Section B of Exhibit "B" of
the Agreement; and
WHEREAS, the parties hereto wish to amend the Exhibit "B" of
the Agreement to provide that the remaining 6,666 unvested shares
of Stock that were subject to performance vesting under Section B
shall instead be subject to vesting after a required period of
continuous employment with the Company and/or any of its
subsidiaries; and
WHEREAS, the parties hereto also wish to amend the Agreement
to provide that the Participant will be reimbursed by the Company
for income taxes attributable to the vesting of the remaining
6,666 unvested shares of Stock in accordance with the Agreement;
and
WHEREAS, this Amendment is not intended and shall not be
construed as increasing the aggregate number of shares of Stock
subject to the Agreement.
NOW, THEREFORE, for good and valuable consideration, the
receipt of which is hereby acknowledged, the parties hereto agree
as follows:
1. The Agreement is hereby amended to add the following new
Section:
"14. Reimbursement of Taxes. The Company shall
pay to the Participant an amount necessary to
cause the net amount of such payment that is
retained by the Participant after the calculation
and deduction of any and all federal, state and
local income taxes and employment taxes on such
payment to be equal to the Participant's income
taxes attributable to the vesting of 6,666 shares
of Stock within the Award on March 2, 2001 in
accordance with the terms of Section A of Exhibit
"B" of this Agreement."
2. Exhibit "B" of the Agreement shall be amended to read as
follows:
"EXHIBIT 'B'
VESTING OF RESTRICTED STOCK
Restricted Stock shall vest in accordance with the
following terms during the 'Award Period' which shall
commence November 1, 1997 and shall terminate March 2,
2001 if not sooner vested. Shares not fully vested
during the Award Period shall be forfeited by the
Participant at the end of the Award Period.
A. Sixteen thousand, six hundred sixty-six (16,666)
shares of Stock in the Award will be subject to vesting
based upon the Participant's continuous employment with
the Company and/or any of its Subsidiaries through the
vesting dates set forth on the following table:
Vesting Date Number of Shares Vested
------------ -----------------------
January 1, 1998 3,334
January 1, 1999 3,333
January 1, 2000 3,333
March 2, 2001 6,666
B. Three thousand, three hundred thirty-four (3,334)
shares of Stock in the Award will be subject to vesting
based upon the Stock of the Company achieving and
maintaining for 20 consecutive trading days from and
after October 31, 1997, the following Current Market
Values:
Current Market Value Number of Shares Vested
-------------------- -----------------------
$18.25 3,334
For purposes of this Agreement, 'Current Market Value'
shall mean the closing price for shares of Stock as reported
on the New York Stock Exchange as reflected in the Wall
Street Journal Southwest Edition. These shares of Stock
have vested."
The Agreement is not amended in any respect except as herein
provided.
IN WITNESS WHEREOF, the parties have executed this Amendment
as of the day and year first above written.
"Company" FLEMING COMPANIES, INC., an
Oklahoma corporation
SCOTT M. NORTHCUTT
Scott M. Northcutt, Senior Vice
President - Human Resources
"Participant" DAVID R. ALMOND
David R. Almond
EXHIBIT 10.68
AMENDMENT TO NON-QUALIFIED STOCK OPTION AGREEMENT
FOR THE
FLEMING COMPANIES, INC. 1999 STOCK INCENTIVE PLAN
THIS AMENDMENT TO NON-QUALIFIED STOCK OPTION AGREEMENT FOR
THE FLEMING COMPANIES, INC. 1999 STOCK INCENTIVE PLAN
("Amendment") is entered into as of the 29th day of February,
2000 by and between Fleming Companies, Inc., an Oklahoma
corporation (the "Company"), and David R. Almond (the
"Participant").
WITNESSETH:
WHEREAS, the Company and the Participant have previously
entered into that certain Non-Qualified Stock Option Agreement
under the Fleming Companies, Inc. 1999 Stock Incentive Plan dated
March 2, 1999 (the "Agreement"), which granted to the Participant
options to purchase 100,000 shares of voting common stock of the
Company in exchange for the Participant's performing future
services for the Company pursuant to the terms of the Agreement;
and
WHEREAS, all capitalized terms used in this Amendment shall
have the same meaning ascribed to them in the Agreement unless
specifically denoted otherwise; and
WHEREAS, effective as of March 2, 2000, the Participant will
become 100% vested in Stock Options to purchase 25,000 shares of
Common Stock pursuant to Section 2 of the Agreement; and
WHEREAS, the parties hereto wish to amend the Agreement to
provide that the 25,000 Stock Options subject to the March 2,
2003 Exercise Date shall instead be subject to the March 2, 2001
Exercise Date; and
WHEREAS, this Amendment is not intended and shall not be
construed as increasing the aggregate number of shares of Common
Stock subject to the Stock Options under the Agreement.
NOW, THEREFORE, for good and valuable consideration, the
receipt of which is hereby acknowledged, the parties hereto agree
that Section 2 of the Agreement is hereby amended to read as
follows:
"2. TIMES OF EXERCISE OF STOCK OPTION. After, and
only after, the conditions of Section 8 hereof have
been satisfied, the Participant shall be eligible to
exercise that portion of his Stock Options pursuant to
the schedule set forth hereinafter. If the
Participant's employment with the Company (or of any
one or more of the Subsidiaries of the Company) remains
full-time and continuous at all times prior to any of
the 'Exercise Dates' set forth in this Section 2, then
the Participant shall be entitled, subject to the
applicable provisions of the Plan and this Option
Agreement having been satisfied, to exercise on or
after the applicable Exercise Date, on a cumulative
basis, the number of shares of Stock determined by
multiplying the aggregate number of shares set forth in
Section 1 of this Option Agreement by the designated
percentage set forth below.
Percent of Stock
Exercise Dates Option Exercisable
-------------- ------------------
On or After March 2, 2000 25%
On or After March 2, 2001 75%
On or After March 2, 2002 100%"
The Agreement is not amended in any respect except as herein
provided.
IN WITNESS WHEREOF, the parties have executed this Amendment
as of the day and year first above written.
"Company" FLEMING COMPANIES, INC., an
Oklahoma corporation
SCOTT M. NORTHCUTT
Scott M. Northcutt, Senior Vice
President - Human Resources
"Participant" DAVID R. ALMOND
David R. Almond
EXHIBIT 10.69
AMENDMENT TO RESTRICTED STOCK AWARD AGREEMENT
FOR THE
FLEMING COMPANIES, INC. 1990 STOCK INCENTIVE PLAN
THIS AMENDMENT TO RESTRICTED STOCK AWARD AGREEMENT FOR THE
FLEMING COMPANIES, INC. 1990 STOCK INCENTIVE PLAN ("Amendment")
is entered into as of the 29th day of February, 2000 by and
between Fleming Companies, Inc., an Oklahoma corporation (the
"Company"), and E. Stephen Davis (the "Participant").
WITNESSETH:
WHEREAS, the Company and the Participant have previously
entered into that certain Restricted Stock Award Agreement for
the Fleming Companies, Inc. 1990 Stock Incentive Plan dated
November 1, 1997 (the "Agreement"), which provided that the
Company would grant to the Participant an award of 100,000 shares
of voting common stock of the Company in exchange for the
Participant's performing future services for the Company pursuant
to the terms of the Agreement; and
WHEREAS, as of the date hereof, the Participant has already
become 100% vested in 33,334 shares of Stock (as defined in the
Agreement) pursuant to Section A of Exhibit "B" of the Agreement,
and 16,667 shares of Stock pursuant to Section B of Exhibit "B"
of the Agreement; and
WHEREAS, the parties hereto wish to amend Exhibit "B" of the
Agreement to provide that the remaining 33,333 unvested shares of
Stock that were subject to performance vesting under Section "B"
shall instead become vested upon achievement by the Company of
other performance standards and requirements as set forth in a
new Section C of Exhibit "B"; and
WHEREAS, this Amendment is not intended and shall not be
construed as increasing the aggregate number of shares of Stock
subject to the Agreement.
NOW, THEREFORE, for good and valuable consideration, the
receipt of which is hereby acknowledged, the parties hereto agree
that Exhibit "B" of the Agreement shall be amended to read as
follows:
"EXHIBIT 'B'
VESTING OF RESTRICTED STOCK
Restricted Stock shall vest in accordance with the
following terms during the 'Award Period' which shall
commence November 1, 1997 and shall terminate July 20,
2001, if not sooner vested. Shares not fully vested
during the Award Period shall be forfeited by the
Participant at the end of the Award Period.
A. Fifty thousand (50,000) shares of Stock in the
Award will be subject to vesting based upon the
Participant's continuous employment with the Company
and/or any of its Subsidiaries through the vesting
dates set forth on the following table:
Vesting Date Number of Shares Vested
------------ -----------------------
January 1, 1998 16,667
January 1, 1999 16,667
January 1, 2000 16,666
B. Sixteen thousand, six hundred sixty-seven (16,667)
shares of Stock in the Award will be subject to vesting
based upon the Stock of the Company achieving and
maintaining for 20 consecutive trading days from and
after October 31, 1997, the following Current Market
Values:
Current Market Value Number of Shares Vested
-------------------- -----------------------
$18.25 16,667
For purposes of this Agreement, 'Current Market Value'
shall mean the closing price for shares of Stock as reported
on the New York Stock Exchange as reflected in the Wall
Street Journal Southwest Edition. These shares of Stock are
vested.
C. Thirty-three thousand, three hundred thirty-three (33,333)
shares of Stock in the Award will be subject to vesting based
upon the fulfillment of all of the following conditions:
(i) The Participant shall have completed continuous employment
with the Company through July 20, 2001;
(ii) The Company shall have achieved the 'Target' as such term is
defined in that certain Letter Agreement effective as of June 1,
1999, between the Company and Ernst & Young LLP covering Phase II
of the Low Cost Pursuit Program (the 'Performance Vesting
Objective'); and
(iii) The Participant shall have taken all necessary steps to
identify and propose to the Company a suitable candidate to
succeed the Participant as Executive Vice President-Wholesale, of
the Company upon the Participant's retirement or termination of
employment from the Company. Such steps will include, but not be
limited to, preparing a job description, conducting a search for
candidates, interviewing candidates, and conducting negotiations
with the prospective candidates.
Any question regarding satisfaction of conditions in
clauses (ii) and (iii) above shall be resolved by the
Chairman and Chief Executive Officer of the Company in
his sole and absolute discretion."
The Agreement is not amended in any respect except as herein
provided.
IN WITNESS WHEREOF, the parties have executed this Amendment
as of the day and year first above written.
"Company" FLEMING COMPANIES, INC., an
Oklahoma corporation
SCOTT M. NORTHCUTT
Scott M. Northcutt, Senior Vice
President - Human Resources
"Participant" E. STEPHEN DAVIS
E. Stephen Davis
Exhibit 10.71
FLEMING BOARD MEMBER
EMAR.NET, INC.
NOTICE OF GRANT OF STOCK OPTION
Notice is hereby given of the following option grant
(the "Option") to purchase shares of the Common Stock of
eMAR.net, Inc. (the "Corporation"):
Optionee:
Grant Date: January 18, 2000
Vesting Commencement Date: January 18, 2000
Exercise Price: $0.20 per share
Number of Option Shares: 4,000 shares of Common Stock
Expiration Date: January 17, 2010
Type of Incentive Stock Option
Option:
X Non-Statutory Stock Option
Date Exercisable: Immediately Exercisable
Vesting Schedule: The Option Shares shall initially be
unvested and subject to repurchase by the Corporation at the
Exercise Price paid per share. Optionee shall acquire a
vested interest in, and the Corporation's repurchase right
shall accordingly lapse with respect to, (i) twenty-five
percent (25%) of the Option Shares upon Optionee's
completion of one (1) year of Service measured from the
Vesting Commencement Date and (ii) the balance of the Option
Shares in a series of thirty-six (36) successive equal
monthly installments upon Optionee's completion of each
additional month of Service over the thirty-six (36)-month
period measured from the first anniversary of the Vesting
Commencement Date. In no event shall any additional Option
Shares vest after Optionee's cessation of Service.
Optionee understands and agrees that the Option is
granted subject to and in accordance with the terms of the
eMAR.net, Inc. 2000 Stock Option/Stock Issuance Plan (the
"Plan"). Optionee further agrees to be bound by the terms of the
Plan and the terms of the Option as set forth in the Stock Option
Agreement attached hereto as Exhibit A.
Optionee understands that any Option Shares purchased
under the Option will be subject to the terms set forth in the
Stock Purchase Agreement attached hereto as Exhibit B. Optionee
hereby acknowledges receipt of a copy of the Plan in the form
attached hereto as Exhibit C.
REPURCHASE RIGHTS. OPTIONEE HEREBY AGREES THAT ALL
OPTION SHARES ACQUIRED UPON THE EXERCISE OF THE OPTION SHALL BE
SUBJECT TO CERTAIN REPURCHASE RIGHTS AND RIGHTS OF FIRST REFUSAL
EXERCISABLE BY THE CORPORATION AND ITS ASSIGNS. THE TERMS OF
SUCH RIGHTS ARE SPECIFIED IN THE ATTACHED STOCK PURCHASE
AGREEMENT.
At Will Employment. Nothing in this Notice or in the
attached Stock Option Agreement or Plan shall confer upon
Optionee any right to continue in Service for any period of
specific duration or interfere with or otherwise restrict in any
way the rights of the Corporation (or any Parent or Subsidiary
employing or retaining Optionee) or of Optionee, which rights are
hereby expressly reserved by each, to terminate Optionee's
Service at any time for any reason, with or without cause.
No Impairment of Rights. Nothing in this Notice or the
attached Stock Option Agreement or Plan shall interfere with or
otherwise impair the rights of Fleming and the Fleming
stockholders to terminate Optionee's service as a Fleming Board
Member at any time in accordance with the provisions of
applicable law.
Definitions. All capitalized terms in this Notice
shall have the meaning assigned to them in this Notice or in the
attached Stock Option Agreement.
DATED: JANUARY 18, 2000
EMAR.NET, INC.
By:
John M. Thompson
Title: Vice President - Chief
Financial Officer and
Treasurer
OPTIONEE
Address:
<PAGE>
Attachments:
Exhibit A - Stock Option Agreement
Exhibit B - Stock Purchase Agreement
Exhibit C - 2000 Stock Option/Stock Issuance Plan
<PAGE>
EXHIBIT A
FLEMING NON-EMPLOYEE BOARD MEMBER
EMAR.NET, INC.
STOCK OPTION AGREEMENT
RECITALS
A. The Board has adopted the Plan for the purpose of retaining
the services of selected Employees, non-employee members of the
Board or the board of directors of any Parent or Subsidiary and
consultants and other independent advisors in the service of the
Corporation (or any Parent or Subsidiary).
B. Optionee is to render valuable services to the Corporation
(or a Parent or Subsidiary), and this Agreement is executed
pursuant to, and is intended to carry out the purposes of, the
Plan in connection with the Corporation's grant of an option to
Optionee.
C. All capitalized terms in this Agreement shall have the
meaning assigned to them in the attached Appendix.
NOW, THEREFORE, it is hereby agreed as follows:
1. Grant of Option. The Corporation hereby grants to
Optionee, as of the Grant Date, an option to purchase up to the number
of Option Shares specified in the Grant Notice. The Option Shares
shall be purchasable from time to time during the option term
specified in Paragraph 2 at the Exercise Price.
2. Option Term. This option shall have a term of ten (10)
years measured from the Grant Date and shall accordingly expire
at the close of business on the Expiration Date, unless sooner
terminated in accordance with Paragraph 5 or 6.
3. Limited Transferability.
(a) Except as otherwise provided in Paragraph 3(b),
this option shall be neither transferable nor assignable by Optionee
other than by will or the laws of inheritance following Optionee's
death and may be exercised, during Optionee's lifetime, only by
Optionee. However, Optionee may designate one or more persons
as the beneficiary or beneficiaries of this option, and this
option shall, in accordance with such designation, automatically
be transferred to such beneficiary or beneficiaries upon the
Optionee's death while holding this option. Such beneficiary or
beneficiaries shall take the transferred option subject to all
the terms and conditions of this Agreement, including (without
limitation) the limited time period during which this option may,
pursuant to Paragraph 5, be exercised following Optionee's death.
(b) This option may be assigned in whole or in part
during Optionee's lifetime to one or more members of Optionee's family
or to a trust established for the exclusive benefit of one or
more such family members or to Optionee's former spouse, to the
extent such assignment is in connection with the Optionee's
estate plan or pursuant to a domestic relations order. The
assigned portion shall be exercisable only by the person or
persons who acquire a proprietary interest in the option pursuant
to such assignment. The terms applicable to the assigned portion
shall be the same as those in effect for this option immediately
prior to such assignment.
4. Dates of Exercise. This option shall become exercisable
for the Option Shares in one or more installments as specified in the
Grant Notice. As the option becomes exercisable for such
installments, those installments shall accumulate, and the option
shall remain exercisable for the accumulated installments until
the Expiration Date or sooner termination of the option term
under Paragraph 5 or 6.
5. Cessation of Service. The option term specified in
Paragraph 2 shall terminate (and this option shall cease to be
outstanding) prior to the Expiration Date should any of the
following provisions become applicable:
(a) Should Optionee cease to remain in Service for any
reason (other than death, Disability or Misconduct) while holding this
option, then Optionee shall have a period of three (3) months
(commencing with the date of such cessation of Service) during
which to exercise this option, but in no event shall this option
be exercisable at any time after the Expiration Date.
(b) Should Optionee die while holding this option,
then the personal representative of Optionee's estate or the person or
persons to whom the option is transferred pursuant to Optionee's
will or the laws of inheritance shall have the right to exercise
this option. However, if Optionee has designated one or more
beneficiaries of this option, then those persons shall have the
exclusive right to exercise this option following Optionee's
death. Any such right to exercise this option shall lapse, and
this option shall cease to be outstanding, upon the earlier of
(i) the expiration of the twelve (12)-month period measured from
the date of Optionee's death or (ii) the Expiration Date.
(c) Should Optionee cease Service by reason of Disability
while holding this option, then Optionee shall have a period of twelve
(12) months (commencing with the date of such cessation of
Service) during which to exercise this option. In no event shall
this option be exercisable at any time after the Expiration Date.
(d) During the limited period of post-Service exercis-
ability, this option may not be exercised in the aggregate for more than
the number of Option Shares in which Optionee is, at the time of
Optionee's cessation of Service, vested pursuant to the Vesting
Schedule specified in the Grant Notice or the special vesting
acceleration provisions of Paragraph 6. Upon the expiration of
such limited exercise period or (if earlier) upon the Expiration
Date, this option shall terminate and cease to be outstanding for
any vested Option Shares for which the option has not been
exercised. To the extent Optionee is not vested in one or more
Option Shares at the time of Optionee's cessation of Service,
this option shall immediately terminate and cease to be
outstanding with respect to those shares.
(e) Should Optionee's Service be terminated for Miscon-
duct or should Optionee otherwise engage in Misconduct while this option
is outstanding, then this option shall terminate immediately and
cease to remain outstanding.
6. Parent Level Change in Control. Should a Parent-Level
Change in Control occur at a time when the Optionee is a Fleming
Board Member, then the Option Shares at the time subject to this
option shall automatically vest in full so that this option
shall, immediately prior to the effective date of such Parent-
Level Change in Control, become exercisable for all of the Option
Shares as fully-vested shares and may be exercised for any or all
of those Option Shares as vested shares. The option shall
remain so exercisable until the expiration or sooner termination
of the option term pursuant to the provisions of this Agreement.
7. Corporate Level Change in Control.
(a) Should a Corporate-Level Change in Control occur at
a time when the Optionee is a Fleming Board Member, then the Option
Shares at the time subject to this option but not otherwise
vested shall automatically vest in full so that this option
shall, immediately prior to the effective date of such Corporate-
Level Change in Control, become exercisable for all of the Option
Shares as fully-vested shares and may be exercised for any or all
of those Option Shares as vested shares.
(b) Immediately following the consummation of the Corpo-
rate-Level Change in Control, this option shall terminate and cease to
be outstanding, except to the extent assumed by the successor
corporation (or parent thereof) or otherwise continued in full
force and effect pursuant to the express terms of the Corporate-
Level Change in Control transaction.
8. Additional Change in Control Provisions.
(a) If this option is assumed in connection with a Corpo-
rate-Level Change in Control, then this option shall be appropriately
adjusted, immediately after such transaction, to apply to the
number and class of securities which would have been issuable to
Optionee in consummation of such Corporate-Level Change in
Control, had the option been exercised immediately prior to such
transaction. Appropriate adjustments shall also be made to the
exercise price provided the aggregate exercise price shall remain
the same. To the extent the actual holders of the Corporation's
outstanding Common Stock receive cash consideration for their
Common Stock in consummation of the Corporate-Level Change in
Control, the successor corporation may, in connection with the
assumption of this option, substitute one or more shares of its
own common stock with a fair market value equivalent to the cash
consideration paid per share of Common Stock in such Corporate-
Level Change in Control.
(b) This Agreement shall not in any way affect the right
of the Corporation or Fleming as the Corporation's Parent to adjust,
reclassify, reorganize or otherwise change its capital or
business structure or to merge, consolidate, dissolve, liquidate
or sell or transfer all or any part of its business or assets.
9. Parent-Level Reduction in Ownership. Should a Parent-
Level Reduction in Ownership occur at a time when the Optionee is a
Fleming Board Member, then the Option Shares at the time subject
to this option but not otherwise vested shall automatically vest
in full so that this option shall, immediately prior to the
effective date of such Parent-Level Reduction in Ownership,
become exercisable for all of the Option Shares as fully-vested
shares and may be exercised for any or all of those Option Shares
as vested shares. The option shall remain so exercisable until
the expiration or sooner termination of the option term pursuant
to the provisions of this Agreement.
10. Approved Termination Event. Should the Optionee's
Service as a Fleming Board Member cease by reason of an Approved
Termination Event, then fifty percent (50%) of any Option Shares
which are not otherwise at that time vested in accordance with
the provisions of this Agreement shall vest so that this option
shall immediately become exercisable for that percentage portion
of the Option Shares as fully-vested shares and may be exercised
for any or all of those vested Option Shares, together with any
other Option Shares which may have vested in accordance with the
provisions of this Agreement. The option shall remain so
exercisable until the expiration or sooner termination of the
option term pursuant to the provisions of this Agreement.
11. Adjustment in Option Shares. Should any change be
made to the Common Stock by reason of any stock split, stock dividend,
recapitalization, combination of shares, exchange of shares or
other change affecting the outstanding Common Stock as a class
without the Corporation's receipt of consideration, appropriate
adjustments shall be made to (i) the total number and/or class of
securities subject to this option and (ii) the Exercise Price in
order to reflect such change and thereby preclude a dilution or
enlargement of benefits hereunder.
12. Stockholder Rights. The holder of this option shall
not have any stockholder rights with respect to the Option Shares
until such person shall have exercised the option, paid the
Exercise Price and become the record holder of the purchased
shares.
13. Manner of Exercising Option.
(a) In order to exercise this option with respect to
all or any part of the Option Shares for which this option is at the
time exercisable, Optionee (or any other person or persons exercising
the option) must take the following actions:
(i) Execute and deliver to the Corporation a Pur-
chase Agreement for the Option Shares for which the option is
exercised.
(ii) Pay the aggregate Exercise Price for the pur-
chased shares in cash or check made payable to the Corporation.
Should the Common Stock be registered under
Section 12 of the 1934 Act at the time the option is
exercised, then the Exercise Price may also be paid as
follows:
(A) in shares of Common Stock held by
Optionee (or any other person or persons exercising the
option) for the requisite period necessary to avoid a
charge to the Corporation's earnings for financial
reporting purposes and valued at Fair Market Value on
the Exercise Date; or
(B) to the extent the option is
exercised for vested Option Shares, through a special
sale and remittance procedure pursuant to which
Optionee (or any other person or persons exercising the
option) shall concurrently provide irrevocable
instructions (a) to a Corporation-designated brokerage
firm to effect the immediate sale of the purchased
shares and remit to the Corporation, out of the sale
proceeds available on the settlement date, sufficient
funds to cover the aggregate Exercise Price payable for
the purchased shares plus all applicable Federal, state
and local income and employment taxes required to be
withheld by the Corporation by reason of such exercise
and (b) to the Corporation to deliver the certificates
for the purchased shares directly to such brokerage
firm in order to complete the sale.
Except to the extent the sale and remittance
procedure is utilized in connection with the option
exercise, payment of the Exercise Price must accompany
the Purchase Agreement delivered to the Corporation in
connection with the option exercise.
(iii) Furnish to the Corporation appropriate docu-
mentation that the person or persons exercising the option (if
other than Optionee) have the right to exercise this option.
(iv) Execute and deliver to the Corporation such
written representations as may be requested by the Corporation in
order for it to comply with the applicable requirements of Federal
and state securities laws.
(v) Make appropriate arrangements with the Corpora-
tion (or Parent or Subsidiary employing or retaining Optionee) for
the satisfaction of all Federal, state and local income and
employment tax withholding requirements applicable to the option
exercise.
(b) As soon as practical after the Exercise Date, the
Corporation shall issue to or on behalf of Optionee (or any other
person or persons exercising this option) a certificate for the
purchased Option Shares, with the appropriate legends affixed
thereto.
(c) In no event may this option be exercised for any
fractional shares.
14. REPURCHASE RIGHTS. ALL OPTION SHARES ACQUIRED UPON THE
EXERCISE OF THIS OPTION SHALL BE SUBJECT TO CERTAIN RIGHTS OF THE
CORPORATION AND FLEMING AND ITS ASSIGNS TO REPURCHASE THOSE
SHARES IN ACCORDANCE WITH THE TERMS SPECIFIED IN THE PURCHASE
AGREEMENT.
15. Compliance with Laws and Regulations.
(a) The exercise of this option and the issuance of the
Option Shares upon such exercise shall be subject to compliance by the
Corporation and Optionee with all applicable requirements of law
relating thereto and with all applicable regulations of any stock
exchange (or the Nasdaq National Market, if applicable) on which
the Common Stock may be listed for trading at the time of such
exercise and issuance.
(b) The inability of the Corporation to obtain approval
from any regulatory body having authority deemed by the Corporation to
be necessary to the lawful issuance and sale of any Common Stock
pursuant to this option shall relieve the Corporation of any
liability with respect to the non-issuance or sale of the Common
Stock as to which such approval shall not have been obtained.
The Corporation, however, shall use its best efforts to obtain
all such approvals.
16. Successors and Assigns. Except to the extent otherwise
provided in Paragraphs 3 and 6, the provisions of this Agreement
shall inure to the benefit of, and be binding upon, the
Corporation and its successors and assigns and Optionee,
Optionee's assigns and the legal representatives, heirs and
legatees of Optionee's estate.
17. Notices. Any notice required to be given or delivered
to the Corporation under the terms of this Agreement shall be in
writing and addressed to the Corporation at its principal
corporate offices. Any notice required to be given or delivered
to Optionee shall be in writing and addressed to Optionee at the
address indicated below Optionee's signature line on the Grant
Notice. All notices shall be deemed effective upon personal
delivery or upon deposit in the U.S. mail, postage prepaid and
properly addressed to the party to be notified.
18. Construction. This Agreement and the option evidenced
hereby are made and granted pursuant to the Plan and are in all
respects limited by and subject to the terms of the Plan. All
decisions of the Plan Administrator with respect to any question
or issue arising under the Plan or this Agreement shall be
conclusive and binding on all persons having an interest in this
option.
19. Governing Law. The interpretation, performance and
enforcement of this Agreement shall be governed by the laws of
the State of Texas without resort to that State's conflict-of-
laws rules.
20. Stockholder Approval. If the Option Shares covered by
this Agreement exceed, as of the Grant Date, the number of shares of
Common Stock which may be issued under the Plan as last approved
by the stockholders, then this option shall be void with respect
to such excess shares, unless stockholder approval of an
amendment sufficiently increasing the number of shares of Common
Stock issuable under the Plan is obtained in accordance with the
provisions of the Plan.
<PAGE>
APPENDIX
The following definitions shall be in effect under the
Agreement:
A. Agreement shall mean this Stock Option Agreement.
B. Approved Termination Event shall mean the Optionee's
voluntary resignation from the Fleming Board of Directors (i) on
or after his or her attainment of age sixty-five (65) or (ii) in
accordance with the governance policy in effect at the time for
members of the Fleming Board of Directors.
C. Board shall mean the Corporation's Board of Directors.
D. Code shall mean the Internal Revenue Code of 1986, as
amended.
E. Common Stock shall mean the Corporation's common stock.
F. Corporate-Level Change in Control shall mean any of the
following transactions involving a change in control or ownership
of the Corporation:
(i) a stockholder-approved merger or consolidation in which
securities possessing more than fifty percent (50%) of the total
combined voting power of the Corporation's outstanding securities
are transferred to a person or persons different from the persons
holding those securities immediately prior to such transaction,
or
(ii) a stockholder-approved sale, transfer or other dis-
position of all or substantially all of the Corporation's assets in
complete liquidation or dissolution of the Corporation, or
(iii) the acquisition, directly or indirectly, by any
person or related group of persons (other than the Corporation or a
person that directly or indirectly controls, is controlled by, or
is under common control with, the Corporation) of beneficial
ownership (within the meaning of Rule 13d-3 of the Securities
Exchange Act of 1934, as amended) of securities possessing more
than fifty percent (50%) of the total combined voting power of
the Corporation's outstanding securities pursuant to a tender or
exchange offer made directly to the Corporation's stockholders.
G. Corporation shall mean eMAR.net, Inc., a Delaware
corporation, and any successor corporation to all or
substantially all of the assets or voting stock of eMAR.net, Inc.
which shall be appropriate action assume this option.
H. Disability shall mean the inability of Optionee to engage
in any substantial gainful activity by reason of any medically
determinable physical or mental impairment and shall be
determined by the Plan Administrator on the basis of such medical
evidence as the Plan Administrator deems warranted under the
circumstances.
I. Employee shall mean an individual who is in the employ of
the Corporation (or any Parent or Subsidiary), subject to the
control and direction of the employer entity as to both the work
to be performed and the manner and method of performance.
J. Exercise Date shall mean the date on which the option
shall have been exercised in accordance with Paragraph 9 of the
Agreement.
K. Exercise Price shall mean the exercise price payable per
Option Share as specified in the Grant Notice.
L. Expiration Date shall mean the date on which the option
expires as specified in the Grant Notice.
M. Fair Market Value per share of Common Stock on any relevant
date shall be determined in accordance with the following
provisions:
(i) If the Common Stock is at the time traded on the Nasdaq
National Market, then the Fair Market Value shall be the closing
selling price per share of Common Stock on the date in question,
as the price is reported by the National Association of
Securities Dealers on the Nasdaq National Market and published in
The Wall Street Journal. If there is no closing selling price
for the Common Stock on the date in question, then the Fair
Market Value shall be the closing selling price on the last
preceding date for which such quotation exists.
(ii) If the Common Stock is at the time listed on any
Stock Exchange, then the Fair Market Value shall be the closing
selling price per share of Common Stock on the date in question on
the Stock Exchange determined by the Plan Administrator to be the
primary market for the Common Stock, as such price is officially
quoted in the composite tape of transactions on such exchange and
published in The Wall Street Journal. If there is no closing
selling price for the Common Stock on the date in question, then
the Fair Market Value shall be the closing selling price on the
last preceding date for which such quotation exists.
(iii) If the Common Stock is at the time neither listed
on any Stock Exchange nor traded on the Nasdaq National Market,
then the Fair Market Value shall be determined by the Plan
Administrator after taking into account such factors as the Plan
Administrator shall deem appropriate.
N. Fleming shall mean Fleming Companies, Inc., an Oklahoma
corporation, which is currently the Parent of the Corporation.
O. Fleming Board Member shall mean any individual who is at the
time of determination serving as a member of the Fleming Board of
Directors.
P. Grant Date shall mean the date of grant of the option as
specified in the Grant Notice.
Q. Grant Notice shall mean the Notice of Grant of Stock Option
accompanying the Agreement, pursuant to which Optionee has been
informed of the basic terms of the option evidenced hereby.
R. Misconduct shall mean the commission of any act of fraud,
embezzlement or dishonesty by Optionee, any unauthorized use or
disclosure by Optionee of confidential information or trade
secrets of the Corporation (or any Parent or Subsidiary), or any
other intentional misconduct by Optionee adversely affecting the
business or affairs of the Corporation (or any Parent or
Subsidiary) in a material manner. The foregoing definition shall
not be deemed to be inclusive of all the acts or omissions which
the Corporation (or any Parent or Subsidiary) may consider as
grounds for the dismissal or discharge of Optionee or any other
individual in the Service of the Corporation (or any Parent or
Subsidiary).
S. 1934 Act shall mean the Securities Exchange Act of 1934, as
amended.
T. Non-Statutory Option shall mean an option not intended to
satisfy the requirements of Code Section 422.
U. Option Shares shall mean the number of shares of Common
Stock subject to the option.
V. Optionee shall mean the person to whom the option is granted
as specified in the Grant Notice.
W. Parent shall mean any corporation (other than the
Corporation) in an unbroken chain of corporations ending with the
Corporation, provided each corporation in the unbroken chain
(other than the Corporation) owns, at the time of the
determination, stock possessing fifty percent (50%) or more of
the total combined voting power of all classes of stock in one of
the other corporations in such chain.
X. Parent-Level Change in Control shall mean any of the
following transactions involving a change in control or ownership
of the Fleming which is effected while, and only while, Fleming
is the Parent of the Corporation:
(i) the acquisition by any individual, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of the 1934 Act (a
"Person") of beneficial ownership (within the meaning of Rule 13d-
3 promulgated under the 1933 Act) of 20% or more (the "Triggering
Percentage") of either (i) the then outstanding shares of Fleming
common stock (the "Outstanding Company Common Stock") or (ii) the
combined voting power of the then outstanding Fleming voting
securities entitled to vote generally in the election of
directors (the "Outstanding Company Voting Securities");
provided, however, in the event the "Incumbent Board" (as such
term is hereinafter defined) pursuant to authority granted in any
rights agreement to which Fleming is a party (the "Rights
Agreement") lowers the acquisition threshold percentages set
forth in such Rights Agreement, the Triggering Percentage shall
be automatically reduced to equal the threshold percentages set
pursuant to authority granted to the board in the Rights
Agreement; and provided, further, however, that the following
acquisitions shall not constitute a Parent-Level Change in
Control: (i) any acquisition directly from Fleming, (ii) any
acquisition by Fleming, (iii) any acquisition by any employee
benefit plan (or related trust) sponsored or maintained by
Fleming or any corporation controlled by Fleming, or (iv) any
acquisition by any corporation pursuant to a transaction which
complies with clauses (x), (y), and (z) of subsection (iii) of
this definition; or
(ii) a change in the composition of the Fleming Board of
Directors such that the individuals who, as of the date of this
Agreement, constitute the Fleming Board of Directors (the
"Incumbent Board") cease for any reason to comprise at least a
majority of the Fleming Board of Directors; provided, however,
that any individual who becomes a member of the Fleming Board of
Directors subsequent to the date of this Agreement and whose
election, appointment or nomination for election by Fleming's
shareholders, was approved by a vote of at least a majority of
the directors then comprising the Incumbent Board shall be
considered as though such individual were a member of the
Incumbent Board, but excluding for purposes of this definition,
any such individual whose initial assumption of office occurs as
a result of an actual or threatened election contest with respect
to the election or removal of directors or other actual or
threatened solicitation of proxies or consents by or on behalf of
a Person other than the Fleming Board of Directors; or
(iii) the approval by the Fleming shareholders of a
reorganization, share exchange, merger or consolidation or
acquisition of assets of another corporation (a "Business
Combination"), in each case, unless, following such Business
Combination, (x) all or substantially all of the individuals and
entities who were the beneficial owners, respectively, of the
Outstanding Company Common Stock and Outstanding Company Voting
Securities immediately prior to such Business Combination will
beneficially own, directly or indirectly, more than 50% of,
respectively, the then outstanding shares of common stock and the
combined voting power of the then outstanding voting securities
entitled to vote generally in the election of directors, as the
case may be, of the corporation resulting from such Business
Combination (including, without limitation, a corporation which
as a result of such transaction will own Fleming through one or
more subsidiaries) in substantially the same proportions as their
ownership, immediately prior to such Business Combination of the
Outstanding Company Common Stock and Outstanding Company Voting
Securities, as the case may be, (y) no Person (excluding any
employee benefit plan (or related trust) of Fleming or such
corporation resulting from such Business Combination) will
beneficially own, directly or indirectly, 20% or more of,
respectively, the then outstanding shares of common stock of the
corporation resulting from such Business Combination or the
combined voting power of the then outstanding voting securities
of such corporation except to the extent that such ownership
existed prior to the Business Combination, and (z) at least a
majority of the members of the board of directors of the
corporation resulting from such Business Combination will have
been members of the Incumbent Board at the time of the execution
of the initial agreement, or of the action of the Incumbent
Board, providing for such Business Combination; or
(iv) the approval by the shareholders of Fleming of (x) a
complete liquidation or dissolution of Fleming or, (y) the sale
or other disposition of all or substantially all of the assets of
Fleming, other than to a corporation, with respect to which
following such sale or other disposition, (A) more than 50% of,
respectively, the then outstanding shares of common stock of such
corporation and the combined voting power of the then outstanding
voting securities of such corporation entitled to vote generally
in the election of directors will be beneficially owned, directly
or indirectly, by all or substantially all of the individuals and
entities who were the beneficial owners, respectively, of the
Outstanding Company Common Stock and Outstanding Company Voting
Securities immediately prior to such sale or other disposition in
substantially the same proportion as their ownership, immediately
prior to such sale or other disposition, of the Outstanding
Company Common Stock and Outstanding Company Voting Securities,
as the case may be, (B) less than 20% of, respectively, the then
outstanding shares of common stock of such corporation and the
combined voting power of the then outstanding voting securities
of such corporation entitled to vote generally in the election of
directors will be beneficially owned, directly or indirectly, by
any Person (excluding any employee benefit plan (or related
trust) of Fleming or such corporation), except to the extent that
such Person owned 20% or more of the Outstanding Company Common
Stock or Outstanding Company Voting Securities prior to the sale
or disposition, and (C) at least a majority of the members of the
board of directors of such corporation will have been members of
the Incumbent Board at the time of the execution of the initial
agreement, or of the action of the Board, providing for such sale
or other disposition of assets of Fleming.
Y. Parent-Level Reduction in Ownership shall mean any
transaction, including (without limitation) any sale or other
disposition by Fleming of its ownership interest in any
outstanding voting securities of the Corporation or any direct
issuance of voting securities by the Corporation, which effects a
reduction to Fleming's combined direct and indirect (through one
or more majority-owned subsidiaries) ownership of the
Corporation's voting securities to an amount which represents
less than fifty percent (50%) of the total combined voting power
of all outstanding classes of stock of the Corporation.
Z. Plan shall mean the Corporation's 2000 Stock Option/Stock
Issuance Plan.
AA. Plan Administrator shall mean either the Board or a
committee of the Board acting in its capacity as administrator of
the Plan.
BB. Purchase Agreement shall mean the stock purchase agreement
in substantially the form of Exhibit B to the Grant Notice.
CC. Service shall mean the Optionee's performance of services
for the Corporation (or any Parent or Subsidiary) in the capacity
of an Employee, a non-employee member of the board of directors
or an independent consultant. Service shall in all events
include the Optionee's service as a Fleming Board Member.
DD. Stock Exchange shall mean the American Stock Exchange or the
New York Stock Exchange.
EE. Subsidiary shall mean any corporation (other than the
Corporation) in an unbroken chain of corporations beginning with
the Corporation, provided each corporation (other than the last
corporation) in the unbroken chain owns, at the time of the
determination, stock possessing fifty percent (50%) or more of
the total combined voting power of all classes of stock in one of
the other corporations in such chain.
FF. Vesting Schedule shall mean the vesting schedule specified
in the Grant Notice pursuant to which the Optionee is to vest in
the Option Shares in a series of installments over his or her
period of Service.
<PAGE>
EXHIBIT B
EMAR.NET, INC.
STOCK PURCHASE AGREEMENT
AGREEMENT made as of this ____ day of February, 2000 by
and between eMAR.net, Inc., a Delaware corporation, and
________________________________, a Participant in the
Corporation's 2000 Stock Option/Stock Issuance Plan.
All capitalized terms in this Agreement shall have the
meaning assigned to them in this Agreement or in the attached
Appendix.
A. PURCHASE OF SHARES
1. Purchase. Participant hereby purchases Four Thousand
(4,000) shares of Common Stock (the "Purchased Shares") pursuant
to that certain option granted Participant on January 18, 2000 to
purchase up to Four Thousand (4,000) shares of Common Stock under
the Plan at the purchase price of $0.20 per share (the "Purchase
Price").
2. Payment. Concurrently with the delivery of this Agreement
to the Corporation, Participant shall pay the Purchase Price for
the Purchased Shares in cash or cash equivalent and shall deliver
a duly-executed blank Assignment Separate from Certificate (in
the form attached hereto as Exhibit I) with respect to the
Purchased Shares.
3. Stockholder Rights. Until such time as the Corporation
exercises the Repurchase Right or the First Refusal Right,
Participant (or any successor in interest) shall have all
stockholder rights (including voting, dividend and liquidation
rights) with respect to the Purchased Shares, subject, however,
to the transfer restrictions of Articles B and C.
B. SECURITIES LAW COMPLIANCE
1. Restricted Securities. The Purchased Shares have not been
registered under the 1933 Act and are being issued to Participant
in reliance upon one of the following exemptions from such
registration requirements: (i) SEC Rule 701 for stock issuances
under compensatory benefit plans such as the Plan, (ii) SEC Rule
504 for limited offering of One Million Dollars ($1,000,000) or
less or (iii) the private placement exemption provided under
Section 4(2) of the 1933 Act. Participant hereby confirms that
Participant has been informed that the Purchased Shares are
restricted securities under the 1933 Act and may not be resold or
transferred unless the Purchased Shares are first registered
under the Federal securities laws or unless an exemption from
such registration is available. Accordingly, Participant hereby
acknowledges that Participant is prepared to hold the Purchased
Shares for an indefinite period and that Participant is aware
that SEC Rule 144 issued under the 1933 Act which exempts certain
resales of unrestricted securities is not presently available to
exempt the resale of the Purchased Shares from the registration
requirements of the 1933 Act.
2. Disposition of Purchased Shares. Participant shall make no
disposition of the Purchased Shares (other than a Permitted
Transfer) unless and until there is compliance with all of the
following requirements:
(i) Participant shall have provided the Corporation with a
written summary of the terms and conditions of the proposed
disposition.
(ii) Participant shall have complied with all requirements of
this Agreement applicable to the disposition of the Purchased
Shares.
(iii) Participant shall have provided the Corporation with
written assurances, in form and substance satisfactory to the
Corporation, that (a) the proposed disposition does not require
registration of the Purchased Shares under the 1933 Act or
(b) all appropriate action necessary for compliance with the
registration requirements of the 1933 Act or any exemption from
registration available under the 1933 Act (including Rule 144)
has been taken.
The Corporation shall not be required (i) to
transfer on its books any Purchased Shares which have been sold
or transferred in violation of the provisions of this Agreement
or (ii) to treat as the owner of the Purchased Shares, or
otherwise to accord voting, dividend or liquidation rights to,
any transferee to whom the Purchased Shares have been transferred
in contravention of this Agreement.
3. Restrictive Legends. The stock certificates for the
Purchased Shares shall be endorsed with one or more of the
following restrictive legends:
"The shares represented by this certificate have not
been registered under the Securities Act of 1933. The
shares may not be sold or offered for sale in the
absence of (a) an effective registration statement for
the shares under such Act, (b) a "no action" letter of
the Securities and Exchange Commission with respect to
such sale or offer or (c) satisfactory assurances to
the Corporation that registration under such Act is not
required with respect to such sale or offer."
"The shares represented by this certificate are subject
to certain repurchase rights and rights of first
refusal granted to the Corporation and accordingly may
not be sold, assigned, transferred, encumbered, or in
any manner disposed of except in conformity with the
terms of a written agreement dated February ____, 2000
between the Corporation and the registered holder of
the shares (or the predecessor in interest to the
shares). A copy of such agreement is maintained at the
Corporation's principal corporate offices."
C. TRANSFER RESTRICTIONS
1. Restriction on Transfer. Except for any Permitted Transfer,
Participant shall not transfer, assign, encumber or otherwise
dispose of any of the Purchased Shares which are subject to the
Repurchase Right. In addition, Purchased Shares which are
released from the Repurchase Right shall not be transferred,
assigned, encumbered or otherwise disposed of in contravention of
the First Refusal Right or the Market Stand-Off.
2. Transferee Obligations. Each person (other than the
Corporation) to whom the Purchased Shares are transferred by
means of a Permitted Transfer must, as a condition precedent to
the validity of such transfer, acknowledge in writing to the
Corporation that such person is bound by the provisions of this
Agreement and that the transferred shares are subject to (i) the
Repurchase Right, (ii) the First Refusal Right and (iii) the
Market Stand-Off, to the same extent such shares would be so
subject if retained by Participant.
3. Market Stand-Off.
(a) In connection with any underwritten public
offering by the Corporation of its equity securities pursuant to
an effective registration statement filed under the 1933 Act,
including the Corporation's initial public offering, Owner shall
not sell, make any short sale of, loan, hypothecate, pledge,
grant any option for the purchase of, or otherwise dispose or
transfer for value or otherwise agree to engage in any of the
foregoing transactions with respect to, any Purchased Shares
without the prior written consent of the Corporation or its
underwriters. Such restriction (the "Market Stand-Off") shall be
in effect for such period of time from and after the effective
date of the final prospectus for the offering as may be requested
by the Corporation or such underwriters. In no event, however,
shall such period exceed one hundred eighty (180) days, and the
Market Stand-Off shall in no event be applicable to any
underwritten public offering effected more than two (2) years
after the effective date of the Corporation's initial public
offering.
(b) Owner shall be subject to the Market Stand-
Off provided and only if the officers and directors of the
Corporation are also subject to similar restrictions.
(c) Any new, substituted or additional securities
which are by reason of any Recapitalization or Reorganization
distributed with respect to the Purchased Shares shall be
immediately subject to the Market Stand-Off, to the same extent
the Purchased Shares are at such time covered by such provisions.
(d) In order to enforce the Market Stand-Off, the
Corporation may impose stop-transfer instructions with respect to
the Purchased Shares until the end of the applicable stand-off
period.
D. REPURCHASE RIGHT
1. Grant. The Corporation is hereby granted the right (the
"Repurchase Right"), exercisable at any time during the sixty
(60)-day period following the date Participant ceases for any
reason to remain in Service, to repurchase at the Purchase Price
any or all of the Purchased Shares in which Participant is not,
at the time of his or her cessation of Service, vested in
accordance with the provisions of the Vesting Schedule set forth
in Paragraph D.3 or the special vesting acceleration provisions
of Paragraphs D.5 through D.8 (such shares to be hereinafter
referred to as the "Unvested Shares").
2. Exercise of the Repurchase Right. The Repurchase Right
shall be exercisable by written notice delivered to each Owner of
the Unvested Shares prior to the expiration of the sixty (60)-day
exercise period. The notice shall indicate the number of
Unvested Shares to be repurchased and the date on which the
repurchase is to be effected, such date to be not more than
thirty (30) days after the date of such notice. The certificates
representing the Unvested Shares to be repurchased shall be
delivered to the Corporation on the closing date specified for
the repurchase. Concurrently with the receipt of such stock
certificates, the Corporation shall pay to Owner, in cash or cash
equivalents (including the cancellation of any purchase-money
indebtedness), an amount equal to the Purchase Price previously
paid for the Unvested Shares which are to be repurchased from
Owner.
3. Termination of the Repurchase Right. The Repurchase Right
shall terminate with respect to any Unvested Shares for which it
is not timely exercised under Paragraph D.2. In addition, the
Repurchase Right shall terminate and cease to be exercisable with
respect to any and all Purchased Shares in which Participant
vests in accordance with the following Vesting Schedule:
(i) Participant shall vest in twenty-five percent (25%) of
the Purchased Shares, and the Repurchase Right shall concurrently
lapse with respect to those Purchased Shares, upon Participant's
completion of one (1) year of Service measured from January 18,
2000.
(ii) Participant shall vest in the remaining seventy-five
percent (75%) of the Purchased Shares, and the Repurchase Right shall
concurrently lapse with respect to those Purchased Shares, in a
series of thirty-six (36) successive equal monthly installments
upon Participant's completion of each additional month of Service
over the thirty-six (36)-month period measured from the date on
which the first twenty-five percent (25%) of the Purchased Shares
vests hereunder.
All Purchased Shares as to which the Repurchase
Right lapses shall, however, remain subject to (i) the First
Refusal Right and (ii) the Market Stand-Off.
4. Recapitalization. Any new, substituted or additional
securities or other property (including cash paid other than as a
regular cash dividend) which is by reason of any Recapitalization
distributed with respect to the Purchased Shares shall be
immediately subject to the Repurchase Right and any escrow
requirements hereunder, but only to the extent the Purchased
Shares are at the time covered by such right or escrow
requirements. Appropriate adjustments to reflect such
distribution shall be made to the number and/or class of
Purchased Shares subject to this Agreement and to the price per
share to be paid upon the exercise of the Repurchase Right in
order to reflect the effect of any such Recapitalization upon the
Corporation's capital structure; provided, however, that the
aggregate purchase price shall remain the same.
5. Corporate-Level Change in Control. Should a Corporate-Level
Change in Control occur at a time when the Participant is a
Fleming Board Member, then the Repurchase Right shall
automatically terminate in its entirety, and all the Purchased
Shares shall vest in full, immediately prior to the consummation
of that Corporate-Level Change in Control.
6. Parent-Level Change in Control. Should a Parent-Level
Change in Control occur at a time when the Participant is a
Fleming Board Member, then the Repurchase Right shall
automatically terminate in its entirety, and all the Purchased
Shares shall vest in full, immediately prior to the consummation
of that Parent-Level Change in Control.
7. Parent-Level Reduction in Ownership. Should a Parent-Level
Reduction in Ownership occur at a time when the Participant is a
Fleming Board Member, then the Repurchase Right shall
automatically terminate in its entirety, and all the Purchased
Shares shall vest in full, immediately prior to the consummation
of the transaction resulting in such Parent-Level Reduction in
Ownership.
8. Approved Termination Event. Should the Participant's
Service as a Fleming Board Member cease by reason of an Approved
Termination Event, then the Repurchase Right shall immediately
terminate with respect to fifty percent (50%) of any Purchased
Shares which are not otherwise at that time vested in accordance
with the provisions of this Agreement, and that portion of the
Purchased Shares shall accordingly vest at such time.
E. RIGHT OF FIRST REFUSAL
1. Grant. The Corporation is hereby granted the right of
first refusal (the "First Refusal Right"), exercisable in connection
with any proposed transfer of the Purchased Shares in which
Participant has vested in accordance with the provisions of
Article D. For purposes of this Article E, the term "transfer"
shall include any sale, assignment, pledge, encumbrance or other
disposition of the Purchased Shares intended to be made by Owner,
but shall not include any Permitted Transfer.
2. Notice of Intended Disposition. In the event any Owner
of Purchased Shares in which Participant has vested desires to
accept a bona fide third-party offer for the transfer of any or
all of such shares (the Purchased Shares subject to such offer to
be hereinafter referred to as the "Target Shares"), Owner shall
promptly (i) deliver to the Corporation written notice (the
"Disposition Notice") of the terms of the offer, including the
purchase price and the identity of the third-party offeror, and
(ii) provide satisfactory proof that the disposition of the
Target Shares to such third-party offeror would not be in
contravention of the provisions set forth in Articles B and C.
3. Exercise of the First Refusal Right. The Corporation
shall, for a period of twenty-five (25) days following receipt of the
Disposition Notice, have the right to repurchase any or all of
the Target Shares subject to the Disposition Notice upon the same
terms as those specified therein or upon such other terms (not
materially different from those specified in the Disposition
Notice) to which Owner consents. Such right shall be exercisable
by delivery of written notice (the "Exercise Notice") to Owner
prior to the expiration of the twenty-five (25)-day exercise
period. If such right is exercised with respect to all the
Target Shares, then the Corporation shall effect the repurchase
of such shares, including payment of the purchase price, not more
than five (5) business days after delivery of the Exercise
Notice; and at such time the certificates representing the Target
Shares shall be delivered to the Corporation.
Should the purchase price specified in the
Disposition Notice be payable in property other than cash or
evidences of indebtedness, the Corporation shall have the right
to pay the purchase price in the form of cash equal in amount to
the value of such property. If Owner and the Corporation cannot
agree on such cash value within ten (10) days after the
Corporation's receipt of the Disposition Notice, the valuation
shall be made by an appraiser of recognized standing selected by
Owner and the Corporation or, if they cannot agree on an
appraiser within twenty (20) days after the Corporation's receipt
of the Disposition Notice, each shall select an appraiser of
recognized standing and the two (2) appraisers shall designate a
third appraiser of recognized standing, whose appraisal shall be
determinative of such value. The cost of such appraisal shall be
shared equally by Owner and the Corporation. The closing shall
then be held on the later of (i) the fifth (5th) business day
following delivery of the Exercise Notice or (ii) the fifth (5th)
business day after such valuation shall have been made.
4. Non-Exercise of the First Refusal Right. In the event
the Exercise Notice is not given to Owner prior to the expiration of
the twenty-five (25)-day exercise period, Owner shall have a
period of thirty (30) days thereafter in which to sell or
otherwise dispose of the Target Shares to the third-party offeror
identified in the Disposition Notice upon terms (including the
purchase price) no more favorable to such third-party offeror
than those specified in the Disposition Notice; provided,
however, that any such sale or disposition must not be effected
in contravention of the provisions of Articles B and C. The
third-party offeror shall acquire the Target Shares subject to
the First Refusal Right and the provisions and restrictions of
Article B and Paragraph C.3, and any subsequent disposition of
the acquired shares must be effected in compliance with the terms
and conditions of such First Refusal Right and the provisions and
restrictions of Article B and Paragraph C.3. In the event Owner
does not effect such sale or disposition of the Target Shares
within the specified thirty (30)-day period, the First Refusal
Right shall continue to be applicable to any subsequent
disposition of the Target Shares by Owner until such right
lapses.
5. Partial Exercise of the First Refusal Right. In the
event the Corporation makes a timely exercise of the First Refusal
Right with respect to a portion, but not all, of the Target
Shares specified in the Disposition Notice, Owner shall have the
option, exercisable by written notice to the Corporation
delivered within five (5) business days after Owner's receipt of
the Exercise Notice, to effect the sale of the Target Shares
pursuant to either of the following alternatives:
(i) sale or other disposition of all the Target Shares to the
third-party offeror identified in the Disposition Notice, but in
full compliance with the requirements of Paragraph E.4, as if the
Corporation did not exercise the First Refusal Right; or
(ii) sale to the Corporation of the portion of the Target
Shares which the Corporation has elected to purchase, such sale to be
effected in substantial conformity with the provisions of
Paragraph E.3. The First Refusal Right shall continue to be
applicable to any subsequent disposition of the remaining Target
Shares until such right lapses.
Owner's failure to deliver timely notification to
the Corporation shall be deemed to be an election by Owner to
sell the Target Shares pursuant to alternative (i) above.
6. Recapitalization/Reorganization.
(a) Any new, substituted or additional securities
or other property which is by reason of any Recapitalization
distributed with respect to the Purchased Shares shall be
immediately subject to the First Refusal Right, but only to the
extent the Purchased Shares are at the time covered by such
right.
(b) In the event of a Reorganization, the First
Refusal Right shall remain in full force and effect and shall
apply to the new capital stock or other property received in
exchange for the Purchased Shares in consummation of the
Reorganization, but only to the extent the Purchased Shares are
at the time covered by such right.
7. Lapse. The First Refusal Right shall lapse upon the
earliest to occur of (i) the first date on which shares of the
Common Stock are held of record by more than five hundred (500)
persons, (ii) a determination made by the Board that a public
market exists for the outstanding shares of Common Stock or (iii)
a firm commitment underwritten public offering, pursuant to an
effective registration statement under the 1933 Act, covering the
offer and sale of the Common Stock in the aggregate amount of at
least twenty million dollars ($20,000,000). However, the Market
Stand-Off shall continue to remain in full force and effect
following the lapse of the First Refusal Right.
F. SPECIAL TAX ELECTION
1. Section 83(b) Election. Under Code Section 83, the excess
of the Fair Market Value of the Purchased Shares on the date any
forfeiture restrictions applicable to such shares lapse over the
Purchase Price paid for those shares will be reportable as
ordinary income on the lapse date. For this purpose, the term
"forfeiture restrictions" includes the right of the Corporation
to repurchase the Purchased Shares pursuant to the Repurchase
Right. Participant may elect under Code Section 83(b) to be
taxed at the time the Purchased Shares are acquired, rather than
when and as such Purchased Shares cease to be subject to such
forfeiture restrictions. Such election must be filed with the
Internal Revenue Service within thirty (30) days after the date
of this Agreement. Even if the Fair Market Value of the
Purchased Shares on the date of this Agreement equals the
Purchase Price paid (and thus no tax is payable), the election
must be made to avoid adverse tax consequences in the future.
THE FORM FOR MAKING THIS ELECTION IS ATTACHED AS
EXHIBIT II HERETO. PARTICIPANT UNDERSTANDS THAT FAILURE TO MAKE
THIS FILING WITHIN THE APPLICABLE THIRTY (30)-DAY PERIOD WILL
RESULT IN THE RECOGNITION OF ORDINARY INCOME AS THE FORFEITURE
RESTRICTIONS LAPSE.
2. FILING RESPONSIBILITY. PARTICIPANT ACKNOWLEDGES THAT
IT IS PARTICIPANT'S SOLE RESPONSIBILITY, AND NOT THE CORPORATION'S,
TO FILE A TIMELY ELECTION UNDER CODE SECTION 83(b), EVEN IF
PARTICIPANT REQUESTS THE CORPORATION OR ITS REPRESENTATIVES TO
MAKE THIS FILING ON HIS OR HER BEHALF.
G. GENERAL PROVISIONS
1. Assignment. The Corporation may assign the Repurchase
Right and/or the First Refusal Right to any person or entity selected
by the Board, including (without limitation) Fleming while the
Parent of the Corporation.
2. At Will Employment/No Impairment of Rights.
(a) Nothing in this Agreement or in the Plan
shall confer upon Participant any right to continue in Service
for any period of specific duration or interfere with or
otherwise restrict in any way the rights of the Corporation (or
any Parent or Subsidiary employing or retaining Participant) or
of Participant, which rights are hereby expressly reserved by
each, to terminate Participant's Service at any time for any
reason, with or without cause.
(b) Nothing in this Agreement or in the Plan
shall interfere with or otherwise impair the rights of Fleming
and the Fleming stockholders to terminate Participant's service
as a Fleming Board Member at any time in accordance with the
provisions of applicable law.
3. Notices. Any notice required to be given under this
Agreement shall be in writing and shall be deemed effective upon
personal delivery or upon deposit in the U.S. mail, registered or
certified, postage prepaid and properly addressed to the party
entitled to such notice at the address indicated below such
party's signature line on this Agreement or at such other address
as such party may designate by ten (10) days advance written
notice under this paragraph to all other parties to this
Agreement.
4. No Waiver. The failure of the Corporation or Fleming in
any instance to exercise the Repurchase Right or the First Refusal
Right shall not constitute a waiver of any other repurchase
rights and/or rights of first refusal that may subsequently arise
under the provisions of this Agreement or any other agreement
between the Corporation and Participant. No waiver of any breach
or condition of this Agreement shall be deemed to be a waiver of
any other or subsequent breach or condition, whether of like or
different nature.
5. Cancellation of Shares. If the Corporation or Fleming
(as assignee) shall make available, at the time and place and in the
amount and form provided in this Agreement, the consideration for
the Purchased Shares to be repurchased in accordance with the
provisions of this Agreement, then from and after such time, the
person from whom such shares are to be repurchased shall no
longer have any rights as a holder of such shares (other than the
right to receive payment of such consideration in accordance with
this Agreement). Such shares shall be deemed purchased in
accordance with the applicable provisions hereof, and the
Corporation or Fleming (as assignee) shall be deemed the owner
and holder of such shares, whether or not the certificates
therefor have been delivered as required by this Agreement.
H. MISCELLANEOUS PROVISIONS
1. Governing Law. This Agreement shall be governed by,
and construed in accordance with, the laws of the State of Texas
without resort to that State's conflict-of-laws rules.
2. Participant Undertaking. Participant hereby agrees to
take whatever additional action and execute whatever additional
documents the Corporation may deem necessary or advisable in
order to carry out or effect one or more of the obligations or
restrictions imposed on either Participant or the Purchased
Shares pursuant to the provisions of this Agreement.
3. Agreement is Entire Contract. This Agreement constitutes
the entire contract between the parties hereto with regard to the
subject matter hereof. This Agreement is made pursuant to the
provisions of the Plan and shall in all respects be construed in
conformity with the terms of the Plan.
4. Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed to be an original,
but all of which together shall constitute one and the same
instrument.
5. Successors and Assigns. The provisions of this Agree-
ment shall inure to the benefit of, and be binding upon, the
Corporation and its successors and assigns and upon Participant,
Participant's assigns and the legal representatives, heirs and
legatees of Participant's estate, whether or not any such person
shall have become a party to this Agreement and have agreed in
writing to join herein and be bound by the terms hereof.
IN WITNESS WHEREOF, the parties have executed this
Agreement on the day and year first indicated above.
EMAR.NET, INC.
By:
John M. Thompson
Title: Vice President - Chief
Financial Officer and
Treasurer
Address: P.O. Box 79910
Dallas, Texas 75379
PARTICIPANT
By:
Address:
<PAGE>
EXHIBIT I
ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED ____________ hereby sell(s),
assign(s) and transfer(s) unto eMAR.net, Inc. (the
"Corporation"), ______________ (_____) shares of the Common Stock
of the Corporation standing in his or her name on the books of
the Corporation represented by Certificate No. _______________
herewith and do(es) hereby irrevocably constitute and appoint
_________________ Attorney to transfer the said stock on the
books of the Corporation with full power of substitution in the
premises.
Dated: ___________
Signature
Instruction: Please do not fill in any blanks other than the
signature line. Please sign exactly as you would like your name
to appear on the issued stock certificate. The purpose of this
assignment is to enable the Corporation to exercise the
Repurchase Right without requiring additional signatures on the
part of Participant.
<PAGE>
EXHIBIT II
SECTION 83(b) TAX ELECTION
This statement is being made under Section 83(b) of the Internal
Revenue Code, pursuant to Treas. Reg. Section 1.83-2.
(1) The taxpayer who performed the services is:
Name:
Address:
Taxpayer Ident. No.:
(2) The property with respect to which the election is being
made is 4,000 shares of the common stock of eMAR.net, Inc.
(3) The property was issued on February ______, 2000.
(4) The taxable year in which the election is being made is the
calendar year 2000.
(5) The property is subject to a repurchase right pursuant to
which the issuer has the right to acquire the property at the
original purchase price if for any reason taxpayer's service with
the issuer terminates. The issuer's repurchase right will lapse
in a series of annual and monthly installments over a four (4)-
year period ending on January 17, 2004.
(6) The fair market value at the time of transfer (determined
without regard to any restriction other than a restriction which
by its terms will never lapse) is $0.20 per share.
(7) The amount paid for such property is $ 0.20 per share.
(8) A copy of this statement was furnished to eMAR.net, Inc. for
whom taxpayer rendered the services underlying the transfer of
property.
(9) This statement is executed on _______________, 2000.
Spouse (if any) Taxpayer
This election must be filed with the Internal Revenue Service
Center with which taxpayer files his or her Federal income tax
returns and must be made within thirty (30) days after the
execution date of the Stock Issuance Agreement. This filing
should be made by registered or certified mail, return receipt
requested. Participant must retain two (2) copies of the
completed form for filing with his or her Federal and state tax
returns for the current tax year and an additional copy for his
or her records.
<PAGE>
EXHIBIT III
2000 STOCK OPTION/STOCK ISSUANCE PLAN
<PAGE>
APPENDIX
The following definitions shall be in effect under the
Agreement:
A. Agreement shall mean this Stock Purchase Agreement.
B. Approved Termination Event shall mean the Participant's
voluntary resignation from the Fleming Board of Directors (i) on
or after his or her attainment of age sixty-five (65) or (ii) in
accordance with the governance policy in effect at the time for
members of the Fleming Board of Directors.
C. Board shall mean the Corporation's Board of Directors.
D. Code shall mean the Internal Revenue Code of 1986, as
amended.
E. Common Stock shall mean the Corporation's common stock.
F. Corporate-Level Change in Control shall mean any of the
following transactions involving a change in control or ownership
of the Corporation:
(i) a stockholder-approved merger or
consolidation in which securities possessing more than
fifty percent (50%) of the total combined voting power
of the Corporation's outstanding securities are
transferred to a person or persons different from the
persons holding those securities immediately prior to
such transaction, or
(ii) a stockholder-approved sale, transfer or
other disposition of all or substantially all of the
Corporation's assets in complete liquidation or
dissolution of the Corporation, or
(iii) the acquisition, directly or
indirectly, by any person or related group of persons
(other than the Corporation or a person that directly
or indirectly controls, is controlled by, or is under
common control with, the Corporation) of beneficial
ownership (within the meaning of Rule 13d-3 of the 1934
Act) of securities possessing more than fifty percent
(50%) of the total combined voting power of the
Corporation's outstanding securities pursuant to a
tender or exchange offer made directly to the
Corporation's stockholders.
G. Corporation shall mean eMAR.net, Inc., a Delaware
corporation, and any successor corporation to all or
substantially all of the assets or voting stock of eMAR.net, Inc.
which shall by appropriate action adopt the Plan.
H. Disposition Notice shall have the meaning assigned to such
term in Paragraph E.2.
I. Exercise Notice shall have the meaning assigned to such term
in Paragraph E.3.
J. Fair Market Value of a share of Common Stock on any relevant
date, prior to the initial public offering of the Common Stock,
shall be determined by the Plan Administrator after taking into
account such factors as it shall deem appropriate.
K. First Refusal Right shall have the meaning assigned to such
term in Article E.
L. Fleming shall mean Fleming Companies, Inc., an Oklahoma
corporation, which is currently the Parent of the Corporation.
M. Fleming Board Member shall mean any individual who is at the
time of determination serving as a member of the Fleming Board of
Directors.
N. Market Stand-Off shall mean the market stand-off restriction
specified in Paragraph C.4.
O. 1933 Act shall mean the Securities Act of 1933, as amended.
P. 1934 Act shall mean the Securities Exchange Act of 1934, as
amended.
Q. Owner shall mean Participant and all subsequent holders of
the Purchased Shares who derive their chain of ownership through
a Permitted Transfer from Participant.
R. Parent shall mean any corporation (other than the
Corporation) in an unbroken chain of corporations ending with the
Corporation, provided each corporation in the unbroken chain
(other than the Corporation) owns, at the time of the
determination, stock possessing fifty percent (50%) or more of
the total combined voting power of all classes of stock in one of
the other corporations in such chain.
S. Parent-Level Change in Control shall mean any of the
following transactions involving a change in control or ownership
of the Fleming which is effected while, and only while, Fleming
is the Parent of the Corporation:
(i) the acquisition by any individual,
entity or group (within the meaning of Section 13(d)(3)
or 14(d)(2) of the 1934 Act (a "Person") of beneficial
ownership (within the meaning of Rule 13d-3 promulgated
under the 1933 Act) of 20% or more (the "Triggering
Percentage") of either (i) the then outstanding shares
of Fleming common stock (the "Outstanding Company
Common Stock") or (ii) the combined voting power of the
then outstanding Fleming voting securities entitled to
vote generally in the election of directors (the
"Outstanding Company Voting Securities"); provided,
however, in the event the "Incumbent Board" (as such
term is hereinafter defined) pursuant to authority
granted in any rights agreement to which Fleming is a
party (the "Rights Agreement") lowers the acquisition
threshold percentages set forth in such Rights
Agreement, the Triggering Percentage shall be
automatically reduced to equal the threshold
percentages set pursuant to authority granted to the
board in the Rights Agreement; and provided, further,
however, that the following acquisitions shall not
constitute a Parent-Level Change in Control: (i) any
acquisition directly from Fleming, (ii) any acquisition
by Fleming, (iii) any acquisition by any employee
benefit plan (or related trust) sponsored or main-
tained by Fleming or any corporation controlled by
Fleming, or (iv) any acquisition by any corporation
pursuant to a transaction which complies with clauses
(x), (y), and (z) of subsection (iii) of this definition;
or
(ii) a change in the composition of the
Fleming Board of Directors such that the individuals
who, as of the date of this Agreement, constitute the
Fleming Board of Directors (the "Incumbent Board")
cease for any reason to comprise at least a majority of
the Fleming Board of Directors; provided, however, that
any individual who becomes a member of the Fleming
Board of Directors subsequent to the date of this
Agreement and whose election, appointment or nomination
for election by Fleming's shareholders, was approved by
a vote of at least a majority of the directors then
comprising the Incumbent Board shall be considered as
though such individual were a member of the Incumbent
Board, but excluding for purposes of this definition,
any such individual whose initial assumption of office
occurs as a result of an actual or threatened election
contest with respect to the election or removal of
directors or other actual or threatened solicitation of
proxies or consents by or on behalf of a Person other
than the Fleming Board of Directors; or
(iii) the approval by the Fleming
shareholders of a reorganization, share exchange,
merger or consolidation or acquisition of assets of
another corporation (a "Business Combination"), in each
case, unless, following such Business Combination, (x)
all or substantially all of the individuals and
entities who were the beneficial owners, respectively,
of the Outstanding Company Common Stock and Outstanding
Company Voting Securities immediately prior to such
Business Combination will beneficially own, directly or
indirectly, more than 50% of, respectively, the then
outstanding shares of common stock and the combined
voting power of the then outstanding voting securities
entitled to vote generally in the election of
directors, as the case may be, of the corporation
resulting from such Business Combination (including,
without limitation, a corporation which as a result of
such transaction will own Fleming through one or more
subsidiaries) in substantially the same proportions as
their ownership, immediately prior to such Business
Combination of the Outstanding Company Common Stock and
Outstanding Company Voting Securities, as the case may
be, (y) no Person (excluding any employee benefit plan
(or related trust) of Fleming or such corporation
resulting from such Business Combination) will
beneficially own, directly or indirectly, 20% or more
of, respectively, the then outstanding shares of common
stock of the corporation resulting from such Business
Combination or the combined voting power of the then
outstanding voting securities of such corporation except
to the extent that such ownership existed prior to the
Business Combination, and (z) at least a majority of
the members of the board of directors of the
corporation resulting from such Business Combination
will have been members of the Incumbent Board at the
time of the execution of the initial agreement, or of
the action of the Incumbent Board, providing for such
Business Combination; or
(iv) the approval by the shareholders of
Fleming of (x) a complete liquidation or dissolution of
Fleming or, (y) the sale or other disposition of all or
substantially all of the assets of Fleming, other than
to a corporation, with respect to which following such
sale or other disposition, (A) more than 50% of,
respectively, the then outstanding shares of common
stock of such corporation and the combined voting power
of the then outstanding voting securities of such
corporation entitled to vote generally in the election
of directors will be beneficially owned, directly or
indirectly, by all or substantially all of the
individuals and entities who were the beneficial
owners, respectively, of the Outstanding Company Common
Stock and Outstanding Company Voting Securities
immediately prior to such sale or other disposition in
substantially the same proportion as their ownership,
immediately prior to such sale or other disposition, of
the Outstanding Company Common Stock and Outstanding
Company Voting Securities, as the case may be, (B) less
than 20% of, respectively, the then outstanding shares
of common stock of such corporation and the combined
voting power of the then outstanding voting securities
of such corporation entitled to vote generally in the
election of directors will be beneficially owned,
directly or indirectly, by any Person (excluding any
employee benefit plan (or related trust) of Fleming or
such corporation), except to the extent that such
Person owned 20% or more of the Outstanding Company
Common Stock or Outstanding Company Voting Securities
prior to the sale or disposition, and (C) at least a
majority of the members of the board of directors of
such corporation will have been members of the
Incumbent Board at the time of the execution of the
initial agreement, or of the action of the Board,
providing for such sale or other disposition of assets
of Fleming.
T. Parent-Level Reduction in Ownership shall mean any
transaction, including (without limitation) any sale or other
disposition by Fleming of its ownership interest in any
outstanding voting securities of the Corporation or any direct
issuance of voting securities by the Corporation, which effects a
reduction to Fleming's combined direct and indirect (through one
or more majority-owned subsidiaries) ownership of the
Corporation's voting securities to an amount which represents
less than fifty percent (50%) of the total combined voting power
of all outstanding classes of stock of the Corporation.
U. Participant shall mean the person to whom shares are issued
under the Plan.
V. Permitted Transfer shall mean (i) a gratuitous transfer of
the Purchased Shares, provided and only if Participant obtains
the Corporation's prior written consent to such transfer, (ii) a
transfer of title to the Purchased Shares effected pursuant to
Participant's will or the laws of inheritance following
Participant's death or (iii) a transfer to the Corporation in
pledge as security for any purchase-money indebtedness incurred
by Participant in connection with the acquisition of the
Purchased Shares.
W. Plan shall mean the Corporation's 2000 Stock Option/Stock
Issuance Plan attached hereto as Exhibit III.
X. Plan Administrator shall mean either the Board or a
committee of the Board acting in its capacity as administrator of
the Plan.
Y. Purchase Price shall have the meaning assigned to such term
in Paragraph A.1.
Z. Purchased Shares shall have the meaning assigned to such
term in Paragraph A.1.
AA. Recapitalization shall mean any stock split, stock dividend,
recapitalization, combination of shares, exchange of shares or
other change affecting the Corporation's outstanding Common Stock
as a class without the Corporation's receipt of consideration.
BB. Reorganization shall mean any of the following transactions:
(i) a merger or consolidation in which the
Corporation is not the surviving entity,
(ii) a sale, transfer or other disposition of
all or substantially all of the Corporation's assets,
(iii) a reverse merger in which the
Corporation is the surviving entity but in which the
Corporation's outstanding voting securities are
transferred in whole or in part to a person or persons
different from the persons holding those securities
immediately prior to the merger, or
(iv) any transaction effected primarily to
change the state in which the Corporation is
incorporated or to create a holding company structure.
CC. Repurchase Right shall mean the right granted to the
Corporation in accordance with Article D.
DD. SEC shall mean the Securities and Exchange Commission.
EE. Service shall mean the Participant's performance of services
for the Corporation (or any Parent or Subsidiary) in the capacity
of an employee, subject to the control and direction of the
employer entity as to both the work to be performed and the
manner and method of performance, a non-employee member of the
board of directors or an independent consultant. Service shall
in all events include the Participant's service as a Fleming
Board Member.
FF. Subsidiary shall mean any corporation (other than the
Corporation) in an unbroken chain of corporations beginning with
the Corporation, provided each corporation (other than the last
corporation) in the unbroken chain owns, at the time of the
determination, stock possessing fifty percent (50%) or more of
the total combined voting power of all classes of stock in one of
the other corporations in such chain.
GG. Target Shares shall have the meaning assigned to such term
in Paragraph E.2.
HH. Vesting Schedule shall mean the vesting schedule specified
in Paragraph D.3 pursuant to which Participant is to vest in the
Purchased Shares in a series of installments over the
Participant's period of Service.
II. Unvested Shares shall have the meaning assigned to such term
in Paragraph D.1.
EXHIBIT C
EMAR.NET, INC.
2000 STOCK OPTION/STOCK ISSUANCE PLAN
ARTICLE ONE
GENERAL PROVISIONS
I. PURPOSE OF THE PLAN
This 2000 Stock Option/Stock Issuance Plan is intended
to promote the interests of eMAR.net, Inc., a Delaware
corporation, by providing eligible persons in the Corporation's
employ or service with the opportunity to acquire a proprietary
interest, or otherwise increase their proprietary interest, in
the Corporation as an incentive for them to continue in such
employ or service.
Capitalized terms herein shall have the meanings
assigned to such terms in the attached Appendix.
II. STRUCTURE OF THE PLAN
A. The Plan shall be divided into two (2) separate equity
programs:
(i) the Option Grant Program under which eligible persons
may, at the discretion of the Plan Administrator, be granted options
to purchase shares of Common Stock, and
(ii) the Stock Issuance Program under which eligible persons
may, at the discretion of the Plan Administrator, be issued shares of
Common Stock directly, either through the immediate purchase of
such shares or as a bonus for services rendered the Corporation
(or any Parent or Subsidiary).
B. The provisions of Articles One and Four shall apply to both
equity programs under the Plan and shall accordingly govern the
interests of all persons under the Plan.
III. ADMINISTRATION OF THE PLAN
A. The Plan shall be administered by the Board. However,
any or all administrative functions otherwise exercisable by the
Board may be delegated to the Committee. Members of the
Committee shall serve for such period of time as the Board may
determine and shall be subject to removal by the Board at any
time. The Board may also at any time terminate the functions of
the Committee and reassume all powers and authority previously
delegated to the Committee.
B. The Plan Administrator shall have full power and authority
(subject to the provisions of the Plan) to establish such rules
and regulations as it may deem appropriate for proper
administration of the Plan and to make such determinations under,
and issue such interpretations of, the Plan and any outstanding
options or stock issuances thereunder as it may deem necessary or
advisable. Decisions of the Plan Administrator shall be final
and binding on all parties who have an interest in the Plan or
any option grant or stock issuance thereunder.
IV. ELIGIBILITY
A. The persons eligible to participate in the Plan are as
follows:
(i) Employees,
(ii) Other Fleming Service Providers,
(iii) non-employee members of the Board or the non-employee
members of the board of directors of any Parent or Subsidiary,
and
(iv) consultants and other independent advisors who provide
services to the Corporation (or any Parent or Subsidiary).
B. The Plan Administrator shall have full authority to
determine, (i) with respect to the grants made under the Option
Grant Program, which eligible persons are to receive such
grants, the time or times when those grants are to be made, the
number of shares to be covered by each such grant, the status of
the granted option as either an Incentive Option or a Non-
Statutory Option, the time or times when each option is to become
exercisable, the vesting schedule (if any) applicable to the
option shares and the maximum term for which the option is to
remain outstanding, and (ii) with respect to stock issuances made
under the Stock Issuance Program, which eligible persons are to
receive such issuances, the time or times when those issuances
are to be made, the number of shares to be issued to each
Participant, the vesting schedule (if any) applicable to the
issued shares and the consideration to be paid by the Participant
for such shares.
C. The Plan Administrator shall have the absolute dis-
cretion either to grant options in accordance with the Option Grant
Program or to effect stock issuances in accordance with the Stock
Issuance Program.
V. STOCK SUBJECT TO THE PLAN
A. The stock issuable under the Plan shall be shares of
authorized but unissued or reacquired Common Stock. The maximum
number of shares of Common Stock which may be issued over the
term of the Plan shall not exceed 2,724,000 shares. However, not
more than 724,000 shares may be issued to Fleming Service
Providers.
B. Shares of Common Stock subject to outstanding options
shall be available for subsequent issuance under the Plan to the
extent (i) the options expire or terminate for any reason prior
to exercise in full or (ii) the options are cancelled in
accordance with the cancellation-regrant provisions of Article
Two. Unvested shares issued under the Plan and subsequently
repurchased by the Corporation, at the option exercise or direct
issue price paid per share, pursuant to the Corporation's
repurchase rights under the Plan shall be added back to the
number of shares of Common Stock reserved for issuance under the
Plan and shall accordingly be available for reissuance through
one or more subsequent option grants or direct stock issuances
under the Plan. Any unvested shares issued under the Plan and
repurchased by Fleming pursuant to repurchase rights assigned to
it by the Corporation will not be available for reissuance.
C. Should any change be made to the Common Stock by
reason of any stock split, stock dividend, recapitalization, combi-
nation of shares, exchange of shares or other change affecting the
outstanding Common Stock as a class without the Corporation's
receipt of consideration, appropriate adjustments shall be made
to (i) the maximum number and/or class of securities issuable
under the Plan, (ii) the maximum number and/or class of
securities issuable to Fleming Service Providers and (iii) the
number and/or class of securities and the exercise price per
share in effect under each outstanding option in order to prevent
the dilution or enlargement of benefits thereunder. The
adjustments determined by the Plan Administrator shall be final,
binding and conclusive. In no event shall any such adjustments
be made in connection with the conversion of one or more
outstanding shares of the Corporation's preferred stock into
shares of Common Stock.
ARTICLE TWO
OPTION GRANT PROGRAM
I. OPTION TERMS
Each option shall be evidenced by one or more documents
in the form approved by the Plan Administrator; provided,
however, that each such document shall comply with the terms
specified below. Each document evidencing an Incentive Option
shall, in addition, be subject to the provisions of the Plan
applicable to such options.
A. Exercise Price.
1. The exercise price per share shall be fixed by the
Plan Administrator in accordance with the following provisions:
(i) The exercise price per share shall not be less
than eighty-five percent (85%) of the Fair Market Value per share of
Common Stock on the option grant date.
(ii) If the person to whom the option is granted is a 10%
Stockholder, then the exercise price per share shall not be less
than one hundred ten percent (110%) of the Fair Market Value per
share of Common Stock on the option grant date.
2. The exercise price shall become immediately due upon
exercise of the option and shall, subject to the provisions of
Section I of Article Four and the documents evidencing the
option, be payable in cash or check made payable to the
Corporation. Should the Common Stock be registered under Section
12 of the 1934 Act at the time the option is exercised, then the
exercise price may also be paid as follows:
(i) in shares of Common Stock held for the requisite
period necessary to avoid a charge to the Corporation's earnings for
financial reporting purposes and valued at Fair Market Value on
the Exercise Date, or
(ii) to the extent the option is exercised for vested
shares, through a special sale and remittance procedure pursuant to
which the Optionee shall concurrently provide irrevocable instructions
(A) to a Corporation-designated brokerage firm to effect the
immediate sale of the purchased shares and remit to the
Corporation, out of the sale proceeds available on the settlement
date, sufficient funds to cover the aggregate exercise price
payable for the purchased shares plus all applicable Federal,
state and local income and employment taxes required to be
withheld by the Corporation by reason of such exercise and (B) to
the Corporation to deliver the certificates for the purchased
shares directly to such brokerage firm in order to complete the
sale.
Except to the extent such sale and remittance procedure
is utilized, payment of the exercise price for the purchased
shares must be made on the Exercise Date.
B. Exercise and Term of Options. Each option shall be
exercisable at such time or times, during such period and for
such number of shares as shall be determined by the Plan
Administrator and set forth in the documents evidencing the
option grant. However, no option shall have a term in excess of
ten (10) years measured from the option grant date.
C. Effect of Termination of Service.
1. The following provisions shall govern the exercise
of any options held by the Optionee at the time of cessation of Service
or death:
(i) Should the Optionee cease to remain in Service
for any reason other than death, Disability or Misconduct, then the
Optionee shall have a period of three (3) months following the
date of such cessation of Service during which to exercise each
outstanding option held by such Optionee.
(ii) Should Optionee's Service terminate by reason
of Disability, then the Optionee shall have a period of twelve (12)
months following the date of such cessation of Service during which to
exercise each outstanding option held by such Optionee.
(iii) If the Optionee dies while holding an outstanding
option, then the personal representative of his or her estate or
the person or persons to whom the option is transferred pursuant
to the Optionee's will or the laws of inheritance or the
Optionee's designated beneficiary or beneficiaries of that option
shall have a twelve (12)-month period following the date of the
Optionee's death to exercise such option.
(iv) Under no circumstances, however, shall any such
option be exercisable after the specified expiration of the option term.
(v) During the applicable post-Service exercise period,
the option may not be exercised in the aggregate for more than the
number of vested shares for which the option is exercisable on
the date of the Optionee's cessation of Service. Upon the
expiration of the applicable exercise period or (if earlier) upon
the expiration of the option term, the option shall terminate and
cease to be outstanding for any vested shares for which the
option has not been exercised. However, the option shall,
immediately upon the Optionee's cessation of Service, terminate
and cease to be outstanding with respect to any and all option
shares for which the option is not otherwise at the time
exercisable or in which the Optionee is not otherwise at that
time vested.
(vi) Should Optionee's Service be terminated for
Misconduct or should Optionee otherwise engage in Misconduct while
holding one or more outstanding options under the Plan, then all
those options shall terminate immediately and cease to remain
outstanding.
2. The Plan Administrator shall have the discretion,
exercisable either at the time an option is granted or at any
time while the option remains outstanding, to:
(i) extend the period of time for which the option is
to remain exercisable following Optionee's cessation of Service or
death from the limited period otherwise in effect for that option to
such greater period of time as the Plan Administrator shall deem
appropriate, but in no event beyond the expiration of the option
term, and/or
(ii) permit the option to be exercised, during the
applicable post-Service exercise period, not only with respect to
the number of vested shares of Common Stock for which such option is
exercisable at the time of the Optionee's cessation of Service
but also with respect to one or more additional installments in
which the Optionee would have vested under the option had the
Optionee continued in Service.
D. Stockholder Rights. The holder of an option shall have no
stockholder rights with respect to the shares subject to the option until
such person shall have exercised the option, paid the exercise price and
become the recordholder of the purchased shares.
E. Unvested Shares. The Plan Administrator shall have the
discretion to grant options which are exercisable for unvested
shares of Common Stock. Should the Optionee cease Service while
holding such unvested shares, the Corporation shall have the
right to repurchase, at the exercise price paid per share, any or
all of those unvested shares. The terms upon which such
repurchase right shall be exercisable (including the period and
procedure for exercise and the appropriate vesting schedule for
the purchased shares) shall be established by the Plan
Administrator and set forth in the document evidencing such
repurchase right. Any such repurchase rights which pertain to
unvested shares held by a Fleming Service Provider shall be
assignable to Fleming. The Plan Administrator may not impose a
vesting schedule upon any option grant or the shares of Common
Stock subject to that option which is more restrictive than
twenty percent (20%) per year vesting, with the initial vesting
to occur not later than one (1) year after the option grant date.
However, such limitation shall not be applicable to any option
grants made to individuals who are officers of the Corporation,
non-employee Board members or independent consultants.
F. First Refusal Rights. Until such time as the Common
Stock is first registered under Section 12 of the 1934 Act, the
Corporation shall have the right of first refusal with respect to
any proposed disposition by the Optionee (or any successor in
interest) of any shares of Common Stock issued under the Plan.
Such right of first refusal shall be exercisable in
accordance with the terms established by the Plan Administrator
and set forth in the document evidencing such right. Any such
first refusal rights which pertain to shares held by a Fleming
Service Provider shall be assignable to Fleming.
G. Limited Transferability of Options. An Incentive Stock
Option shall be exercisable only by the Optionee during his or
her lifetime and shall not be assignable or transferable other
than by will or by the laws of inheritance following the
Optionee's death. A Non-Statutory Option may be assigned in whole
or in part during the Optionee's lifetime to one or more members
of the Optionee's family or to a trust established exclusively
for one or more such family members or to Optionee's former
spouse, to the extent such assignment is in connection with the
Optionee's estate plan or pursuant to a domestic relations order.
The assigned portion may only be exercised by the person or
persons who acquire a proprietary interest in the Non-Statutory
Option pursuant to the assignment. The terms applicable to the
assigned portion shall be the same as those in effect for the
option immediately prior to such assignment and shall be set
forth in such documents issued to the assignee as the Plan
Administrator may deem appropriate. Notwithstanding the
foregoing, the Optionee may also designate one or more persons as
the beneficiary or beneficiaries of his or her outstanding
options under the Plan, and those options shall, in accordance
with such designation, automatically be transferred to such
beneficiary or beneficiaries upon the Optionee's death while
holding those options. Such beneficiary or beneficiaries shall
take the transferred options subject to all the terms and
conditions of the applicable agreement evidencing each such
transferred option, including (without limitation) the limited
time period during which the option may be exercised following
the Optionee's death.
II. INCENTIVE OPTIONS
The terms specified below shall be applicable to all
Incentive Options. Except as modified by the provisions of this
Section II, all the provisions of Articles One, Two and Four
shall be applicable to Incentive Options. Options which are
specifically designated as Non-Statutory Options shall not be
subject to the terms of this Section II.
A. Eligibility. Incentive Options may only be granted to
Employees.
B. Exercise Price. The exercise price per share shall not be
less than one hundred percent (100%) of the Fair Market Value per
share of Common Stock on the option grant date.
C. Dollar Limitation. The aggregate Fair Market Value of
the shares of Common Stock (determined as of the respective date or
dates of grant) for which one or more options granted to any
Employee under the Plan (or any other option plan of the
Corporation or any Parent or Subsidiary) may for the first time
become exercisable as Incentive Options during any one (1)
calendar year shall not exceed the sum of One Hundred Thousand
Dollars ($100,000). To the extent the Employee holds two (2) or
more such options which become exercisable for the first time in
the same calendar year, the foregoing limitation on the
exercisability of such options as Incentive Options shall be
applied on the basis of the order in which such options are
granted.
D. 10% Stockholder. If any Employee to whom an Incentive
Option is granted is a 10% Stockholder, then the option term
shall not exceed five (5) years measured from the option grant
date.
III. PARENT-LEVEL CHANGE IN CONTROL
A. The Plan Administrator shall have the discretion,
exercisable either at the time the option is granted or at any
time while the option remains outstanding, to incorporate the
following special vesting acceleration provision into one or more
options under the Plan:
To the extent such option is (i) outstanding
at the time of a Parent-Level Change in Control and
(ii) held at that time by a Fleming Service Provider,
the shares of Common Stock at the time subject to such
option but not otherwise vested shall automatically
vest in full so that such option shall, immediately
prior to the effective date of such Parent-Level Change
in Control, become exercisable for all of the shares of
Common Stock at the time subject to that option and may
be exercised for any or all of those shares as fully-
vested shares of Common Stock.
B. The Plan Administrator shall have the discretion to
structure one or more of the Corporation's outstanding repurchase
rights under the Plan so that those repurchase rights shall
terminate automatically, and the shares of Common Stock subject
to those terminated rights shall immediately vest in full, to the
extent those shares are unvested at the time of a Parent-Level
Change in Control and are held at that time by a Fleming Service
Provider.
IV. PARENT-LEVEL REDUCTION IN OWNERSHIP
A. The Plan Administrator shall have the discretion,
exercisable either at the time the option is granted or at any
time while the option remains outstanding, to incorporate the
following special vesting acceleration provision into one or more
options under the Plan:
To the extent such option is (i) outstanding
at the time of a Parent-Level Reduction in Ownership
and (ii) held at that time by a Fleming Service
Provider, the shares of Common Stock at the time
subject to such option but not otherwise vested shall
automatically vest in full so that such option shall,
immediately prior to the effective date of such Parent-
Level Reduction in Ownership, become exercisable for
all of the shares of Common Stock at the time subject
to that option and may be exercised for any or all of
those shares as fully-vested shares of Common Stock.
B. The Plan Administrator shall have the discretion to
structure one or more of the Corporation's outstanding repurchase
rights under the Plan so that those repurchase rights shall
terminate automatically, and the shares of Common Stock subject
to those terminated rights shall immediately vest in full, to the
extent those shares are unvested at the time of a Parent-Level
Reduction in Ownership and are held at that time by a Fleming
Service Provider.
V. CORPORATE-LEVEL CHANGE IN CONTROL
A. The shares subject to each option outstanding under
the Plan at the time of a Corporate-Level Change in Control shall
automatically vest in full so that each such option shall,
immediately prior to the effective date of such Corporate-Level
Change in Control, become exercisable for all of the shares of
Common Stock at the time subject to that option and may be
exercised for any or all of those shares as fully-vested shares
of Common Stock. However, the shares subject to an outstanding
option under the Plan shall not vest on such an accelerated basis
if and to the extent: (i) such option is assumed by the
successor corporation (or parent thereof) in the Corporate-Level
Change in Control or otherwise continued in full force and effect
and any repurchase rights of the Corporation with respect to the
unvested option shares are concurrently assigned to such
successor corporation (or parent thereof) or otherwise continued
in full force and effect or (ii) such option is to be replaced
with a cash incentive program which preserves the spread existing
on the unvested option shares at the time of the Corporate-Level
Change in Control and provides for subsequent payout in
accordance with the same vesting schedule applicable to those
unvested option shares.
B. All outstanding repurchase rights shall also terminate
automatically, and the shares of Common Stock subject to those
terminated rights shall immediately vest in full, in the event of
any Corporate-Level Change in Control, except to the extent those
repurchase rights are assigned to any successor corporation (or
parent thereof) in connection with such Corporate- Level Change
in Control or are otherwise continued in full and effect.
C. Immediately following the consummation of the Corporate-
Level Change in Control, all outstanding options shall terminate
and cease to be outstanding, except to the extent assumed by the
successor corporation (or parent thereof) or otherwise continued
in full force and effect pursuant to the express terms of the
Corporate-Level Change in Control transaction.
D. The Plan Administrator shall have the discretion,
exercisable either at the time the option is granted or at any
time while the option remains outstanding, to structure one or
more options under the Plan so that those options shall
automatically accelerate and vest in full (and any repurchase
rights of the Corporation with respect to the unvested shares
subject to those options shall immediately terminate) upon the
occurrence of a Corporate-Level Change in Control, whether or not
those options are to be assumed in such transaction or otherwise
continued in full force and effect.
E. The Plan Administrator shall also have full power and
authority, exercisable either at the time the option is granted
or at any time while the option remains outstanding, to structure
such option so that the shares subject to that option shall
automatically vest on an accelerated basis should the Optionee's
Service terminate by reason of an Involuntary Termination within
a designated period (not to exceed eighteen (18) months)
following the effective date of any Corporate-Level Change in
Control in which the option is assumed or continued in effect and
the repurchase rights applicable to those shares do not otherwise
terminate. Any option so accelerated shall remain exercisable
for the fully-vested option shares until the expiration or sooner
termination of the option term. In addition, the Plan
Administrator may structure or more of the Corporation's
repurchase rights so that those rights shall immediately
terminate on an accelerated basis with respect to the unvested
shares held by the Optionee at the time of such an Involuntary
Termination, and the shares subject to those terminated rights
shall accordingly vest at that time.
VI. ADDITIONAL CHANGE IN CONTROL PROVISIONS
A. Each option which is assumed in connection with a Corporate-
Level Change in Control or otherwise continued in full force and
effect shall be appropriately adjusted, immediately after such
transaction, to apply to the number and class of securities which
would have been issuable to the Optionee in consummation of such
Corporate-Level Change in Control, had the option been exercised
immediately prior to such transaction. Appropriate adjustments
shall also be made to (i) the number and class of securities
available for issuance under the Plan following the consummation
of such Corporate-Level Change in Control and (ii) the exercise
price payable per share under each outstanding option, provided
the aggregate exercise price payable for such securities shall
remain the same. To the extent the actual holders of the
Corporation's outstanding Common Stock receive cash consideration
for their Common Stock in consummation of the Corporate-Level
Change in Control, the successor corporation may, in connection
with the assumption of the outstanding options under this Plan,
substitute one or more shares of its own common stock with a fair
market value equivalent to the cash consideration paid per share
of Common Stock in such Corporate-Level Change in Control.
B. The portion of any Incentive Option accelerated in
connection with a Parent-Level or Corporate-Level Change in
Control shall remain exercisable as an Incentive Option only to
the extent the applicable One Hundred Thousand Dollar limitation
is not exceeded. To the extent such dollar limitation is
exceeded, the accelerated portion of such option shall be
exercisable as a Non-Statutory Option under the Federal tax laws.
C. The grant of options under the Plan shall in no way
affect the right of the Corporation or Fleming to adjust, reclassify,
reorganize or otherwise change its capital or business structure
or to merge, consolidate, dissolve, liquidate or sell or transfer
all or any part of its business or assets.
VII. CANCELLATION AND REGRANT OF OPTIONS
The Plan Administrator shall have the authority to
effect, at any time and from time to time, with the consent of
the affected option holders, the cancellation of any or all
outstanding options under the Plan and to grant in substitution
therefor new options covering the same or different number of
shares of Common Stock but with an exercise price per share based
on the Fair Market Value per share of Common Stock on the new
option grant date.
ARTICLE THREE
STOCK ISSUANCE PROGRAM
I. STOCK ISSUANCE TERMS
Shares of Common Stock may be issued under the Stock
Issuance Program through direct and immediate issuances without
any intervening option grants. Each such stock issuance shall be
evidenced by a Stock Issuance Agreement which complies with the
terms specified below.
A. Purchase Price.
1. The purchase price per share shall be fixed by
the Plan Administrator but shall not be less than eighty-five percent
(85%) of the Fair Market Value per share of Common Stock on the
issue date. However, the purchase price per share of Common
Stock issued to a 10% Stockholder shall not be less than one
hundred and ten percent (110%) of such Fair Market Value.
2. Subject to the provisions of Section I of Article
Four, shares of Common Stock may be issued under the Stock Issuance
Program for any of the following items of consideration which the
Plan Administrator may deem appropriate in each individual instance:
(i) cash or check made payable to the Corporation, or
(ii) past services rendered to the Corporation (or any
Parent or Subsidiary).
B. Vesting Provisions.
1. Shares of Common Stock issued under the Stock
Issuance Program may, in the discretion of the Plan Administrator, be
fully and immediately vested upon issuance or may vest in one or
more installments over the Participant's period of Service or
upon attainment of specified performance objectives. However,
the Plan Administrator may not impose a vesting schedule upon any
stock issuance effected under the Stock Issuance Program which is
more restrictive than twenty percent (20%) per year vesting, with
initial vesting to occur not later than one (1) year after the
issuance date. Such limitation shall not apply to any Common
Stock issuances made to the officers of the Corporation, non-
employee Board members or independent consultants.
2. Any new, substituted or additional securities or
other property (including money paid other than as a regular cash
dividend) which the Participant may have the right to receive
with respect to the Participant's unvested shares of Common Stock
by reason of any stock dividend, stock split, recapitalization,
combination of shares, exchange of shares or other change affecting
the outstanding Common Stock as a class without the Corporation's
receipt of consideration shall be issued subject to (i) the same
vesting requirements applicable to the Participant's unvested shares
of Common Stock and (ii) such escrow arrangements as the Plan
Administrator shall deem appropriate.
3. The Participant shall have full stockholder rights
with respect to any shares of Common Stock issued to the Participant
under the Stock Issuance Program, whether or not the Participant's
interest in those shares is vested. Accordingly, the Participant
shall have the right to vote such shares and to receive any regular
cash dividends paid on such shares.
4. Should the Participant cease to remain in Service
while holding one or more unvested shares of Common Stock issued under
the Stock Issuance Program or should the performance objectives
not be attained with respect to one or more such unvested shares
of Common Stock, then those shares shall be immediately
surrendered to the Corporation for cancellation, and the
Participant shall have no further stockholder rights with respect
to those shares. To the extent the surrendered shares were
previously issued to the Participant for consideration paid in
cash or cash equivalent (including the Participant's purchase-
money indebtedness), the Corporation shall repay to the
Participant the cash consideration paid for the surrendered
shares and shall cancel the unpaid principal balance of any
outstanding purchase-money note of the Participant attributable
to such surrendered shares.
5. The Plan Administrator may in its discretion waive
the surrender and cancellation of one or more unvested shares of
Common Stock (or other assets attributable thereto) which would
otherwise occur upon the non-completion of the vesting schedule
applicable to those shares. Such waiver shall result in the
immediate vesting of the Participant's interest in the shares of
Common Stock as to which the waiver applies. Such waiver may be
effected at any time, whether before or after the Participant's
cessation of Service or the attainment or non-attainment of the
applicable performance objectives.
C. First Refusal Rights. Until such time as the
Common Stock is first registered under Section 12 of the 1934
Act, the Corporation shall have the right of first refusal with
respect to any proposed disposition by the Participant (or any
successor in interest) of any shares of Common Stock issued
under the Stock Issuance Program. Such right of first refusal
shall be exercisable in accordance with the terms established by
the Plan Administrator and set forth in the document evidencing
such right. Any such first refusal rights which pertain to
shares held by a Fleming Service Provider shall be assignable to
Fleming.
II. PARENT-LEVEL CHANGE IN CONTROL
The Plan Administrator shall have the discretion to
structure one or more of the Corporation's outstanding repurchase
rights under the Stock Issuance Program so that those repurchase
rights shall terminate automatically, and the shares of Common
Stock subject to those terminated rights shall immediately vest in
full, to the extent those shares are unvested at the time of a Parent-
Level Change in Control and are held at that time by a Fleming
Service Provider.
III. PARENT-LEVEL REDUCTION IN OWNERSHIP
The Plan Administrator shall have the discretion to
structure one or more of the Corporation's outstanding repurchase
rights under the Stock Issuance Program so that those repurchase
rights shall terminate automatically, and the shares of Common
Stock subject to those terminated rights shall immediately vest
in full, to the extent those shares are unvested at the time of a
Parent-Level Reduction in Ownership and are held at that time by
a Fleming Service Provider.
IV. CORPORATE-LEVEL CHANGE IN CONTROL
A. Upon the occurrence of a Corporate-Level Change in
Control, all outstanding repurchase rights under the Stock Issuance
Program shall terminate automatically, and the shares of Common
Stock subject to those terminated rights shall immediately vest
in full, except to the extent those repurchase rights are
assigned to the successor corporation (or parent thereof) in
connection with such Corporate-Level Change in Control or
otherwise continued in full force and effect.
B. The Plan Administrator shall have the discretionary
authority, exercisable either at the time the unvested shares are
issued or any time while the Corporation's repurchase rights with
respect to those shares remain outstanding, to provide that those
rights shall automatically terminate on an accelerated basis, and
the shares of Common Stock subject to those terminated rights
shall immediately vest, in the event the Participant's Service
should subsequently terminate by reason of an Involuntary
Termination within a designated period (not to exceed eighteen
(18) months) following the effective date of any Corporate-Level
Change in Control in which those repurchase rights are assigned
to the successor corporation (or parent thereof) or are otherwise
continued in full force and effect.
C. The Plan Administrator shall have the discretion to
structure one or more of the Corporation's outstanding repurchase
rights under the Stock Issuance Program so that those repurchase
rights shall terminate automatically, and the shares of Common
Stock subject to those terminated rights shall immediately vest
in full, upon the occurrence of a Corporate-Level Change in
Control.
V. SHARE ESCROW/LEGENDS
Unvested shares may, in the Plan Administrator's
discretion, be held in escrow by the Corporation until the
Participant's interest in such shares vests or may be issued
directly to the Participant with restrictive legends on the
certificates evidencing those unvested shares.
ARTICLE FOUR
MISCELLANEOUS
I. FINANCING
The Plan Administrator may permit any Optionee or
Participant to pay the option exercise price under the Option
Grant Program or the purchase price for shares issued under the
Stock Issuance Program by delivering a full-recourse, interest
bearing promissory note payable in one or more installments and
secured by the purchased shares. In no event, however, may the
maximum credit available to the Optionee or Participant exceed
the sum of (i) the aggregate option exercise price or purchase
price payable for the purchased shares (less the par value of
those shares) plus (ii) any Federal, state and local income and
employment tax liability incurred by the Optionee or the
Participant in connection with the option exercise or share
purchase.
II. EFFECTIVE DATE AND TERM OF PLAN
A. The Plan shall become effective when adopted by the
Board, but no option granted under the Plan may be exercised, and no
shares shall be issued under the Plan, until the Plan is approved
by the Corporation's stockholders. If such stockholder approval
is not obtained within twelve (12) months after the date of the
Board's adoption of the Plan, then all options previously granted
under the Plan shall terminate and cease to be outstanding, and
no further options shall be granted and no shares shall be issued
under the Plan. Subject to such limitation, the Plan
Administrator may grant options and issue shares under the Plan
at any time after the effective date of the Plan and before the
date fixed herein for termination of the Plan.
B. The Plan shall terminate upon the earliest of (i) the
expiration of the ten (10)-year period measured from the date the
Plan is adopted by the Board, (ii) the date on which all shares
available for issuance under the Plan shall have been issued as
vested shares or (iii) the termination of all outstanding options
in connection with a Corporate Transaction. All options and
unvested stock issuances outstanding at the time of a clause (i)
termination event shall continue to have full force and effect in
accordance with the provisions of the documents evidencing those
options or issuances.
III. AMENDMENT OF THE PLAN
A. The Board shall have complete and exclusive power and
authority to amend or modify the Plan in any or all respects.
However, no such amendment or modification shall adversely affect
the rights and obligations with respect to options or unvested
stock issuances at the time outstanding under the Plan unless the
Optionee or the Participant consents to such amendment or
modification. In addition, certain amendments may require
stockholder approval pursuant to applicable laws and regulations.
B. Options may be granted under the Option Grant Program
and shares may be issued under the Stock Issuance Program which are in
each instance in excess of the number of shares of Common Stock then
available for issuance under the Plan, provided any excess shares
actually issued under those programs shall be held in escrow
until there is obtained stockholder approval of an amendment
sufficiently increasing the number of shares of Common Stock
available for issuance under the Plan. If such stockholder
approval is not obtained within twelve (12) months after the date
the first such excess grants or issuances are made, then (i) any
unexercised options granted on the basis of such excess shares
shall terminate and cease to be outstanding and (ii) the
Corporation shall promptly refund to the Optionees and the
Participants the exercise or purchase price paid for any excess
shares issued under the Plan and held in escrow, together with
interest (at the applicable Short Term Federal Rate) for the
period the shares were held in escrow, and such shares shall
thereupon be automatically cancelled and cease to be outstanding.
IV. USE OF PROCEEDS
Any cash proceeds received by the Corporation from the
sale of shares of Common Stock under the Plan shall be used for
general corporate purposes.
V. WITHHOLDING
The Corporation's obligation to deliver shares of
Common Stock upon the exercise of any options granted under the
Plan or upon the issuance or vesting of any shares issued under
the Plan shall be subject to the satisfaction of all applicable
Federal, state and local income and employment tax withholding
requirements.
VI. REGULATORY APPROVALS
The implementation of the Plan, the granting of any
options under the Plan and the issuance of any shares of Common
Stock (i) upon the exercise of any option or (ii) under the Stock
Issuance Program shall be subject to the Corporation's
procurement of all approvals and permits required by regulatory
authorities having jurisdiction over the Plan, the options
granted under it and the shares of Common Stock issued pursuant
to it.
VII. NO EMPLOYMENT OR SERVICE RIGHTS
Nothing in the Plan shall confer upon the Optionee or
the Participant any right to continue in Service for any period
of specific duration or interfere with or otherwise restrict in
any way the rights of the Corporation (or any Parent or
Subsidiary employing or retaining such person) or of the Optionee
or the Participant, which rights are hereby expressly reserved by
each, to terminate such person's Service at any time for any
reason, with or without cause.
VIII. FINANCIAL REPORTS
The Corporation shall deliver a balance sheet and an
income statement at least annually to each individual holding an
outstanding option under the Plan, unless such individual is a
key Employee whose duties in connection with the Corporation (or
any Parent or Subsidiary) assure such individual access to
equivalent information.
<PAGE>
APPENDIX
The following definitions shall be in effect under the
Plan:
A. Board shall mean the Corporation's Board of Directors.
B. Code shall mean the Internal Revenue Code of 1986, as
amended.
C. Committee shall mean a committee of one (1) or more
Board members appointed by the Board to exercise one or more
administrative functions under the Plan.
D. Common Stock shall mean the Corporation's common stock.
E. Corporate-Level Change in Control shall mean any of the
following transactions involving a change in control or ownership
of the Corporation:
(i) a stockholder-approved merger or consolidation in which
securities possessing more than fifty percent (50%) of the total
combined voting power of the Corporation's outstanding securities
are transferred to a person or persons different from the persons
holding those securities immediately prior to such transaction,
or
(ii) a stockholder-approved sale, transfer or other
disposition of all or substantially all of the Corporation's assets
in complete liquidation or dissolution of the Corporation, or
(iii) the acquisition, directly or indirectly, by any
person or related group of persons (other than the Corporation or a
person that directly or indirectly controls, is controlled by, or
is under common control with, the Corporation) of beneficial
ownership (within the meaning of Rule 13d-3 of the Securities
Exchange Act of 1934, as amended) of securities possessing more
than fifty percent (50%) of the total combined voting power of
the Corporation's outstanding securities pursuant to a tender or
exchange offer made directly to the Corporation's stockholders.
F. Corporation shall mean eMAR.net, Inc., a Delaware
corporation, and any successor corporation to all or
substantially all of the assets or voting stock of eMAR.net, Inc.
which shall by appropriate action adopt the Plan.
G. Disability shall mean the inability of the Optionee or
the Participant to engage in any substantial gainful activity by
reason of any medically determinable physical or mental
impairment and shall be determined by the Plan Administrator on
the basis of such medical evidence as the Plan Administrator
deems warranted under the circumstances.
H. Employee shall mean an individual who is in the employ
of the Corporation (or any Parent or Subsidiary of the Corporation),
subject to the control and direction of the employer entity as to
both the work to be performed and the manner and method of
performance.
I. Exercise Date shall mean the date on which the Corporation
shall have received written notice of the option exercise.
J. Fair Market Value per share of Common Stock on any relevant
date shall be determined in accordance with the following
provisions:
(i) If the Common Stock is at the time traded on the Nasdaq
National Market, then the Fair Market Value shall be the closing
selling price per share of Common Stock on the date in question,
as such price is reported by the National Association of
Securities Dealers on the Nasdaq National Market and published in
The Wall Street Journal. If there is no closing selling price
for the Common Stock on the date in question, then the Fair
Market Value shall be the closing selling price on the last
preceding date for which such quotation exists.
(ii) If the Common Stock is at the time listed on any Stock
Exchange, then the Fair Market Value shall be the closing selling
price per share of Common Stock on the date in question on the
Stock Exchange determined by the Plan Administrator to be the
primary market for the Common Stock, as such price is officially
quoted in the composite tape of transactions on such exchange and
published in The Wall Street Journal. If there is no closing
selling price for the Common Stock on the date in question, then
the Fair Market Value shall be the closing selling price on the
last preceding date for which such quotation exists.
(iii) If the Common Stock is at the time neither listed on
any Stock Exchange nor traded on the Nasdaq National Market, then
the Fair Market Value shall be determined by the Plan Administrator
after taking into account such factors as the Plan Administrator
shall deem appropriate.
K. Fleming shall mean Fleming Companies, Inc., an Oklahoma
corporation, which is currently the Parent of the Corporation.
L. Fleming Service Provider shall mean any individual who
is in a direct service relationship with Fleming or any Fleming
Subsidiary (and not with the Corporation or any other Parent or
Subsidiary of the Corporation), whether as an employee, associate,
board member or independent contractor, at a time when
Fleming is the Parent of the Corporation.
M. Fleming Subsidiary shall mean any corporation (other
than Fleming) in an unbroken chain of corporations beginning with
Fleming, provided each corporation (other than the last
corporation) in the unbroken chain owns, at the time of the
determination, stock possessing fifty percent (50%) or more of
the total combined voting power of all classes of stock in one of
the other corporations in such chain. In no event, however,
shall a Fleming Subsidiary include the Corporation or any Parent
or Subsidiary of the Corporation.
N. Incentive Option shall mean an option which satisfies the
requirements of Code Section 422.
O. Involuntary Termination shall mean the termination of the
Service of any individual which occurs by reason of:
(i) such individual's involuntary dismissal or discharge
by the Corporation for reasons other than Misconduct, or
(ii) such individual's voluntary resignation following
(A) a change in his or her position with the Corporation which
materially reduces his or her duties and responsibilities or the
level of management to which he or she reports, (B) a reduction
in his or her level of compensation (including base salary,
fringe benefits and target bonus under any corporate-performance
based bonus or incentive programs) by more than fifteen percent
(15%) or (C) a relocation of such individual's place of
employment by more than fifty (50) miles, provided and only if
such change, reduction or relocation is effected without the
individual's consent.
P. Misconduct shall mean the commission of any act of
fraud, embezzlement or dishonesty by the Optionee or Participant, any
unauthorized use or disclosure by such person of confidential
information or trade secrets of the Corporation (or any Parent or
Subsidiary), or any other intentional misconduct by such person
adversely affecting the business or affairs of the Corporation
(or any Parent or Subsidiary) in a material manner. The
foregoing definition shall not be deemed to be inclusive of all
the acts or omissions which the Corporation (or any Parent or
Subsidiary) may consider as grounds for the dismissal or
discharge of any Optionee, Participant or other person in the
Service of the Corporation (or any Parent or Subsidiary).
Q. 1934 Act shall mean the Securities Exchange Act of 1934,
as amended.
R. Non-Statutory Option shall mean an option not intended to
satisfy the requirements of Code Section 422.
S. Option Grant Program shall mean the option grant program in
effect under the Plan.
T. Optionee shall mean any person to whom an option is granted
under the Plan.
U. Parent shall mean any corporation (other than the
Corporation) in an unbroken chain of corporations ending with the
Corporation, provided each corporation in the unbroken chain
(other than the Corporation) owns, at the time of the
determination, stock possessing fifty percent (50%) or more of
the total combined voting power of all classes of stock in one of
the other corporations in such chain.
V. Parent-Level Change in Control shall mean any of the
following transactions involving a change in control or ownership
of Fleming which is effected while, and only while, Fleming is
the Parent of the Corporation:
(i) the acquisition by any individual, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of the 1934 Act
(a "Person") of beneficial ownership (within the meaning of Rule 13d-
3 promulgated under the 1933 Act) of 20% or more (the "Triggering
Percentage") of either (i) the then outstanding shares of Fleming
common stock (the "Outstanding Company Common Stock") or (ii) the
combined voting power of the then outstanding Fleming voting
securities entitled to vote generally in the election of
directors (the "Outstanding Company Voting Securities");
provided, however, in the event the "Incumbent Board" (as such
term is hereinafter defined) pursuant to authority granted in any
rights agreement to which Fleming is a party (the "Rights
Agreement") lowers the acquisition threshold percentages set
forth in such Rights Agreement, the Triggering Percentage shall
be automatically reduced to equal the threshold percentages set
pursuant to authority granted to the board in the Rights
Agreement; and provided, further, however, that the following
acquisitions shall not constitute a Parent-Level Change in
Control: (i) any acquisition directly from Fleming, (ii) any
acquisition by Fleming, (iii) any acquisition by any employee
benefit plan (or related trust) sponsored or maintained by
Fleming or any corporation controlled by Fleming, or (iv) any
acquisition by any corporation pursuant to a transaction which
complies with clauses (x), (y), and (z) of subsection (iii) of
this definition; or
(ii) a change in the composition of the Fleming Board of
Directors such that the individuals who, as of the effective date
of the Plan, constitute the Fleming Board of Directors (the
"Incumbent Board") cease for any reason to comprise at least a
majority of the Fleming Board of Directors; provided, however,
that any individual who becomes a member of the Fleming Board of
Directors subsequent to the effective date of the Plan and whose
election, appointment or nomination for election by Fleming's
shareholders, was approved by a vote of at least a majority of
the directors then comprising the Incumbent Board shall be
considered as though such individual were a member of the
Incumbent Board, but excluding for purposes of this definition,
any such individual whose initial assumption of office occurs as
a result of an actual or threatened election contest with respect
to the election or removal of directors or other actual or
threatened solicitation of proxies or consents by or on behalf of
a Person other than the Fleming Board of Directors; or
(iii) the approval by the Fleming shareholders of a
reorganization, share exchange, merger or consolidation or
acquisition of assets of another corporation (a "Business
Combination"), in each case, unless, following such Business
Combination, (x) all or substantially all of the individuals and
entities who were the beneficial owners, respectively, of the
Outstanding Company Common Stock and Outstanding Company Voting
Securities immediately prior to such Business Combination will
beneficially own, directly or indirectly, more than 50% of,
respectively, the then outstanding shares of common stock and the
combined voting power of the then outstanding voting securities
entitled to vote generally in the election of directors, as the
case may be, of the corporation resulting from such Business
Combination (including, without limitation, a corporation which
as a result of such transaction will own Fleming through one or
more subsidiaries) in substantially the same proportions as their
ownership, immediately prior to such Business Combination of the
Outstanding Company Common Stock and Outstanding Company Voting
Securities, as the case may be, (y) no Person (excluding any
employee benefit plan (or related trust) of Fleming or such
corporation resulting from such Business Combination) will
beneficially own, directly or indirectly, 20% or more of,
respectively, the then outstanding shares of common stock of the
corporation resulting from such Business Combination or the
combined voting power of the then outstanding voting securities
of such corporation except to the extent that such ownership
existed prior to the Business Combination, and (z) at least a
majority of the members of the board of directors of the
corporation resulting from such Business Combination will have
been members of the Incumbent Board at the time of the execution
of the initial agreement, or of the action of the Incumbent
Board, providing for such Business Combination; or
(iv) the approval by the shareholders of Fleming of (x) a
complete liquidation or dissolution of Fleming or, (y) the sale
or other disposition of all or substantially all of the assets of
Fleming, other than to a corporation, with respect to which
following such sale or other disposition, (A) more than 50% of,
respectively, the then outstanding shares of common stock of such
corporation and the combined voting power of the then outstanding
voting securities of such corporation entitled to vote generally
in the election of directors will be beneficially owned, directly
or indirectly, by all or substantially all of the individuals and
entities who were the beneficial owners, respectively, of the
Outstanding Company Common Stock and Outstanding Company Voting
Securities immediately prior to such sale or other disposition in
substantially the same proportion as their ownership, immediately
prior to such sale or other disposition, of the Outstanding
Company Common Stock and Outstanding Company Voting Securities,
as the case may be, (B) less than 20% of, respectively, the then
outstanding shares of common stock of such corporation and the
combined voting power of the then outstanding voting securities
of such corporation entitled to vote generally in the election of
directors will be beneficially owned, directly or indirectly, by
any Person (excluding any employee benefit plan (or related
trust) of Fleming or such corporation), except to the extent that
such Person owned 20% or more of the Outstanding Company Common
Stock or Outstanding Company Voting Securities prior to the sale
or disposition, and (C) at least a majority of the members of the
board of directors of such corporation will have been members of
the Incumbent Board at the time of the execution of the initial
agreement, or of the action of the Board, providing for such sale
or other disposition of assets of Fleming.
W. Parent-Level Reduction in Ownership shall mean any
transaction, including (without limitation) any sale or other
disposition by Fleming of its ownership interest in any
outstanding voting securities of the Corporation or any direct
issuance of voting securities by the Corporation, which effects a
reduction to Fleming's combined direct and indirect (through one
or more majority-owned subsidiaries) ownership of the
Corporation's voting securities to an amount which represents
less than fifty percent (50%) of the total combined voting power
of all outstanding classes of stock of the Corporation.
X. Participant shall mean any person who is issued shares
of Common Stock under the Stock Issuance Program.
Y. Plan shall mean the Corporation's 2000 Stock Option/Stock
Issuance Plan, as set forth in this document.
Z. Plan Administrator shall mean either the Board or the
Committee acting in its capacity as administrator of the Plan.
AA. Service shall mean (i) the provision of services to the
Corporation (or any Parent or Subsidiary of the Corporation) in
the capacity of an Employee, a non-employee member of the board
of directors or a consultant or independent advisor, except to
the extent otherwise specifically provided in the documents
evidencing the option grant, or (ii) the provision of services to
Fleming or any Fleming Subsidiary in the capacity of an employee
or associate of that entity, a non-employee member of the board
of directors or a consultant or independent advisor, but only to
the extent such clause (ii) services are performed while Fleming
remains the Parent of the Corporation.
BB. Stock Exchange shall mean either the American Stock Exchange
or the New York Stock Exchange.
CC. Stock Issuance Agreement shall mean the agreement entered
into by the Corporation and the Participant at the time of issuance of
shares of Common Stock under the Stock Issuance Program.
DD. Stock Issuance Program shall mean the stock issuance program
in effect under the Plan.
EE. Subsidiary shall mean any corporation (other than the
Corporation) in an unbroken chain of corporations beginning with
the Corporation, provided each corporation (other than the last
corporation) in the unbroken chain owns, at the time of the
determination, stock possessing fifty percent (50%) or more of
the total combined voting power of all classes of stock in one of
the other corporations in such chain.
FF. 10% Stockholder shall mean the owner of stock (as determined
under Code Section 424(d)) possessing more than ten percent (10%) of the
total combined voting power of all classes of stock of the Corporation
(or any Parent or Subsidiary).
Exhibit 10.72
EMAR.NET, INC.
NOTICE OF GRANT OF STOCK OPTION
Notice is hereby given of the following option grant
(the "Option") to purchase shares of the Common Stock of
eMAR.net, Inc. (the "Corporation"):
Optionee:
Grant Date: January 18, 2000
Vesting Commencement Date: January 18, 2000
Exercise Price: $0.20 per share
Number of Option Shares: _________ shares of Common Stock
Expiration Date: January 17, 2010
Type of Incentive Stock Option
Option:
X Non-Statutory Stock Option
Date Exercisable: Immediately Exercisable
Vesting Schedule: The Option Shares shall initially be
unvested and subject to repurchase by the Corporation at the
Exercise Price paid per share. Optionee shall acquire a
vested interest in, and the Corporation's repurchase right
shall accordingly lapse with respect to, (i) twenty-five
percent (25%) of the Option Shares upon Optionee's
completion of one (1) year of Service measured from the
Vesting Commencement Date and (ii) the balance of the Option
Shares in a series of thirty-six (36) successive equal
monthly installments upon Optionee's completion of each
additional month of Service over the thirty-six (36)-month
period measured from the first anniversary of the Vesting
Commencement Date. In no event shall any additional Option
Shares vest after Optionee's cessation of Service.
Optionee understands and agrees that the Option is
granted subject to and in accordance with the terms of the
eMAR.net, Inc. 2000 Stock Option/Stock Issuance Plan (the
"Plan"). Optionee further agrees to be bound by the terms of the
Plan and the terms of the Option as set forth in the Stock Option
Agreement attached hereto as Exhibit A.
Optionee understands that any Option Shares purchased
under the Option will be subject to the terms set forth in the
Stock Purchase Agreement attached hereto as Exhibit B. Optionee
hereby acknowledges receipt of a copy of the Plan in the form
attached hereto as Exhibit C.
REPURCHASE RIGHTS. OPTIONEE HEREBY AGREES THAT ALL
OPTION SHARES ACQUIRED UPON THE EXERCISE OF THE OPTION SHALL BE
SUBJECT TO CERTAIN REPURCHASE RIGHTS AND RIGHTS OF FIRST REFUSAL
EXERCISABLE BY THE CORPORATION AND ITS ASSIGNS. THE TERMS OF
SUCH RIGHTS ARE SPECIFIED IN THE ATTACHED STOCK PURCHASE
AGREEMENT.
At Will Employment. Nothing in this Notice or in the
attached Stock Option Agreement or Plan shall confer upon
Optionee any right to continue in Service for any period of
specific duration or interfere with or otherwise restrict in any
way the rights of the Corporation (or any Parent or Subsidiary
employing or retaining Optionee) or of Optionee, which rights are
hereby expressly reserved by each, to terminate Optionee's
Service at any time for any reason, with or without cause.
No Impairment of Rights. Nothing in this Notice or the
attached Stock Option Agreement or Plan shall interfere with or
otherwise impair the rights of Fleming and the Fleming
stockholders to terminate Optionee's service as a Fleming Board
Member at any time in accordance with the provisions of
applicable law.
Definitions. All capitalized terms in this Notice
shall have the meaning assigned to them in this Notice or in the
attached Stock Option Agreement.
DATED: JANUARY 18, 2000
EMAR.NET, INC.
By:
John M. Thompson
Title: Vice President - Chief
Financial Officer and
Treasurer
OPTIONEE
Address:
<PAGE>
Attachments:
Exhibit A - Stock Option Agreement
Exhibit B - Stock Purchase Agreement
Exhibit C - 2000 Stock Option/Stock Issuance Plan
<PAGE>
EXHIBIT A
STOCK OPTION AGREEMENT
EXHIBIT B
STOCK PURCHASE AGREEMENT
EXHIBIT C
2000 STOCK OPTION/STOCK ISSUANCE PLAN
<PAGE>
EXHIBIT A
EMAR.NET, INC.
STOCK OPTION AGREEMENT
RECITALS
A. The Board has adopted the Plan for the purpose of retaining
the services of selected Employees, non-employee members of the
Board or the board of directors of any Parent or Subsidiary and
consultants and other independent advisors in the service of the
Corporation (or any Parent or Subsidiary).
B. Optionee is to render valuable services to the Corporation
(or a Parent or Subsidiary), and this Agreement is executed
pursuant to, and is intended to carry out the purposes of, the
Plan in connection with the Corporation's grant of an option to
Optionee.
C. All capitalized terms in this Agreement shall have the
meaning assigned to them in the attached Appendix.
NOW, THEREFORE, it is hereby agreed as follows:
1. Grant of Option. The Corporation hereby grants to
Optionee, as of the Grant Date, an option to purchase up to the number
of Option Shares specified in the Grant Notice. The Option Shares
shall be purchasable from time to time during the option term
specified in Paragraph 2 at the Exercise Price.
2. Option Term. This option shall have a term of ten (10)
years measured from the Grant Date and shall accordingly expire
at the close of business on the Expiration Date, unless sooner
terminated in accordance with Paragraph 5 or 6.
3. Limited Transferability.
(a) This option shall be neither transferable nor as-
signable by Optionee other than by will or the laws of inheritance fol-
lowing Optionee's death and may be exercised, during Optionee's
lifetime, only by Optionee. However, Optionee may designate one
or more persons as the beneficiary or beneficiaries of this
option, and this option shall, in accordance with such designa-
tion, automatically be transferred to such beneficiary or
beneficiaries upon the Optionee's death while holding this
option. Such beneficiary or beneficiaries shall take the
transferred option subject to all the terms and conditions of
this Agreement, including (without limitation) the limited time
period during which this option may, pursuant to Paragraph 5, be
exercised following Optionee's death.
(b) If this option is designated a Non-Statutory Option
in the Grant Notice, then this option may be assigned in whole or in
part during Optionee's lifetime to one or more members of Optionee's
family or to a trust established for the exclusive benefit of one
or more such family members or to Optionee's former spouse, to
the extent such assignment is in connection with the Optionee's
estate plan or pursuant to a domestic relations order. The
assigned portion shall be exercisable only by the person or
persons who acquire a proprietary interest in the option pursuant
to such assignment. The terms applicable to the assigned portion
shall be the same as those in effect for this option immediately
prior to such assignment.
4. Dates of Exercise. This option shall become exercisable
for the Option Shares in one or more installments as specified in the
Grant Notice. As the option becomes exercisable for such
installments, those installments shall accumulate, and the option
shall remain exercisable for the accumulated installments until
the Expiration Date or sooner termination of the option term
under Paragraph 5 or 7.
5. Cessation of Service. The option term specified in
Paragraph 2 shall terminate (and this option shall cease to be
outstanding) prior to the Expiration Date should any of the
following provisions become applicable:
(a) Should Optionee cease to remain in Service for any
reason (other than death, Disability or Misconduct) while holding this
option, then Optionee shall have a period of three (3) months
(commencing with the date of such cessation of Service) during
which to exercise this option, but in no event shall this option
be exercisable at any time after the Expiration Date.
(b) Should Optionee die while holding this option, then
the personal representative of Optionee's estate or the person or
persons to whom the option is transferred pursuant to Optionee's
will or the laws of inheritance shall have the right to exercise
this option. However, if Optionee has designated one or more
beneficiaries of this option, then those persons shall have the
exclusive right to exercise this option following Optionee's
death. Any such right to exercise this option shall lapse, and
this option shall cease to be outstanding, upon the earlier of
(i) the expiration of the twelve (12)-month period measured from
the date of Optionee's death or (ii) the Expiration Date.
(c) Should Optionee cease Service by reason of Dis-
ability while holding this option, then Optionee shall have a period
of twelve (12) months (commencing with the date of such cessation of
Service) during which to exercise this option. In no event shall
this option be exercisable at any time after the Expiration Date.
Note: Exercise of this option on a date
later than three (3) months following
cessation of Service due to Disability will
result in loss of favorable Incentive Option
treatment, unless such Disability constitutes
Permanent Disability. In the event that
Incentive Option treatment is not available,
this option will be taxed as a Non-Statutory
Option upon exercise.
(d) During the limited period of post-Service exercis-
ability, this option may not be exercised in the aggregate for more
than the number of Option Shares in which Optionee is, at the time of
Optionee's cessation of Service, vested pursuant to the Vesting
Schedule specified in the Grant Notice or the special vesting
acceleration provisions of Paragraph 6. Upon the expiration of
such limited exercise period or (if earlier) upon the Expiration
Date, this option shall terminate and cease to be outstanding for
any vested Option Shares for which the option has not been
exercised. To the extent Optionee is not vested in one or more
Option Shares at the time of Optionee's cessation of Service,
this option shall immediately terminate and cease to be
outstanding with respect to those shares.
(e) Should Optionee's Service be terminated for Mis-
conduct or should Optionee otherwise engage in Misconduct while this
option is outstanding, then this option shall terminate immediately and
cease to remain outstanding.
6. Parent Level Change in Control. Should a Parent-Level
Change in Control occur at a time when the Optionee is a Fleming
Service Provider, then the Option Shares at the time subject to
this option shall automatically vest in full so that this option
shall, immediately prior to the effective date of such Parent-
Level Change in Control, become exercisable for all of the Option
Shares as fully-vested shares and may be exercised for any or all
of those Option Shares as vested shares. The option shall
remain so exercisable until the expiration or sooner termination
of the option term pursuant to the provisions of this Agreement.
7. Corporate Level Change in Control
(a) Should a Corporate-Level Change in Control occur
at a time when the Optionee is a Fleming Service Provider, then the
Option Shares at the time subject to this option but not
otherwise vested shall automatically vest in full so that this
option shall, immediately prior to the effective date of such
Corporate-Level Change in Control, become exercisable for all of
the Option Shares as fully-vested shares and may be exercised for
any or all of those Option Shares as vested shares. If the
Optionee is not a Fleming Service Provider at the time of the
Corporate-Level Change in Control but is still in a Service
relationship at that time, then the Option Shares shall vest on
an accelerated basis at the time of such Corporate-Level Change
in Control only if and to the extent: (i) this option is not to
be assumed by the successor corporation (or parent thereof) in
the Corporate-Level Change in Control or otherwise continued in
full force and effect and any repurchase rights of the
Corporation with respect to the unvested Option Shares are
assigned to any such successor corporation (or parent thereof) or
otherwise continued in full force and effect or (ii) this option
is not to be replaced with a cash incentive program which
preserves the spread existing on the unvested Option Shares at
the time of the Corporate-Level Change in Control (the excess of
the Fair Market Value of those Option Shares over the Exercise
Price payable for such shares) and provides for subsequent payout
in accordance with the same Vesting Schedule applicable to those
unvested Option Shares as set forth in the Grant Notice.
(b) Immediately following the consummation of the Corpo-
rate-Level Change in Control, this option shall terminate and cease to
be outstanding, except to the extent assumed by the successor
corporation (or parent thereof) or otherwise continued in full
force and effect pursuant to the express terms of the Corporate-
Level Change in Control transaction.
8. Additional Change in Control Provisions
(a) If this option is assumed in connection with a
Corporate-Level Change in Control, then this option shall be
appropriately adjusted, immediately after such transaction, to
apply to the number and class of securities which would have been
issuable to Optionee in consummation of such Corporate-Level
Change in Control, had the option been exercised immediately
prior to such transaction. Appropriate adjustments shall also be
made to the exercise price provided the aggregate exercise price
shall remain the same. To the extent the actual holders of the
Corporation's outstanding Common Stock receive cash consideration
for their Common Stock in consummation of the Corporate-Level
Change in Control, the successor corporation may, in connection
with the assumption of this option, substitute one or more shares
of its own common stock with a fair market value equivalent to
the cash consideration paid per share of Common Stock in such
Corporate-Level Change in Control.
(b) This Agreement shall not in any way affect the
right of the Corporation or Fleming as the Corporation's Parent to
adjust, reclassify, reorganize or otherwise change its capital or
business structure or to merge, consolidate, dissolve, liquidate
or sell or transfer all or any part of its business or assets.
9. Parent-Level Reduction in Ownership. Should a Parent-
Level Reduction in Ownership occur at a time when the Optionee is a
Fleming Service Provider, then the Option Shares at the time
subject to this option shall automatically vest in full so that
this option shall, immediately prior to the effective date of
such Parent-Level Reduction in Ownership, become exercisable for
all of the Option Shares as fully-vested shares and may be
exercised for any or all of those Option Shares as vested shares.
The option shall remain so exercisable until the expiration or
sooner termination of the option term pursuant to the provisions
of this Agreement.
10. Adjustment in Option Shares. Should any change be
made to the Common Stock by reason of any stock split, stock dividend,
recapitalization, combination of shares, exchange of shares or
other change affecting the outstanding Common Stock as a class
without the Corporation's receipt of consideration, appropriate
adjustments shall be made to (i) the total number and/or class of
securities subject to this option and (ii) the Exercise Price in
order to reflect such change and thereby preclude a dilution or
enlargement of benefits hereunder.
11. Stockholder Rights. The holder of this option shall
not have any stockholder rights with respect to the Option Shares
until such person shall have exercised the option, paid the
Exercise Price and become the record holder of the purchased
shares.
12. Manner of Exercising Option.
(a) In order to exercise this option with respect to
all or any part of the Option Shares for which this option is at the
time exercisable, Optionee (or any other person or persons exercising
the option) must take the following actions:
(i) Execute and deliver to the Corporation a Pur-
chase Agreement for the Option Shares for which the option is
exercised.
(ii) Pay the aggregate Exercise Price for the pur-
chased shares in one or more of the following forms:
(A) cash or check made payable to the Corpo-
ration; or
(B) a promissory note payable to the Corpo-
ration, but only to the extent authorized by the Plan
Administrator in accordance with Paragraph 17.
Should the Common Stock be registered under
Section 12 of the 1934 Act at the time the option
is exercised, then the Exercise Price may also be
paid as follows:
(C) in shares of Common Stock held by Optionee
(or any other person or persons exercising the option) for the
requisite period necessary to avoid a charge to the Corpora-
tion's earnings for financial reporting purposes and valued at
Fair Market Value on the Exercise Date; or
(D) to the extent the option is exercised for
vested Option Shares, through a special sale and remittance
procedure pursuant to which Optionee (or any other person or
persons exercising the option) shall concurrently provide
irrevocable instructions (a) to a Corporation-designated
brokerage firm to effect the immediate sale of the purchased
shares and remit to the Corporation, out of the sale proceeds
available on the settlement date, sufficient funds to cover
the aggregate Exercise Price payable for the purchased shares
plus all applicable Federal, state and local income and
employment taxes required to be withheld by the Corporation
by reason of such exercise and (b) to the Corporation to
deliver the certificates for the purchased shares directly
to such brokerage firm in order to complete the sale.
Except to the extent the sale and remittance
procedure is utilized in connection with the
option exercise, payment of the Exercise Price
must accompany the Purchase Agreement delivered to
the Corporation in connection with the option
exercise.
(iii) Furnish to the Corporation appropriate docu-
mentation that the person or persons exercising the option (if
other than Optionee) have the right to exercise this option.
(iv) Execute and deliver to the Corporation such
written representations as may be requested by the Corporation
in order for it to comply with the applicable requirements of
Federal and state securities laws.
(v) Make appropriate arrangements with the
Corporation (or Parent or Subsidiary employing or retaining
Optionee) for the satisfaction of all Federal, state and local
income and employment tax withholding requirements applicable
to the option exercise.
(b) As soon as practical after the Exercise Date, the
Corporation shall issue to or on behalf of Optionee (or any other
person or persons exercising this option) a certificate for the
purchased Option Shares, with the appropriate legends affixed
thereto.
(c) In no event may this option be exercised for any
fractional shares.
13. REPURCHASE RIGHTS. ALL OPTION SHARES ACQUIRED UPON THE
EXERCISE OF THIS OPTION SHALL BE SUBJECT TO CERTAIN RIGHTS OF THE
CORPORATION AND FLEMING AND ITS ASSIGNS TO REPURCHASE THOSE SHARES IN
ACCORDANCE WITH THE TERMS SPECIFIED IN THE PURCHASE AGREEMENT.
14. Compliance with Laws and Regulations.
(a) The exercise of this option and the issuance of
the Option Shares upon such exercise shall be subject to compliance by
the Corporation and Optionee with all applicable requirements of law
relating thereto and with all applicable regulations of any stock
exchange (or the Nasdaq National Market, if applicable) on which
the Common Stock may be listed for trading at the time of such
exercise and issuance.
(b) The inability of the Corporation to obtain approval
from any regulatory body having authority deemed by the Corporation
to be necessary to the lawful issuance and sale of any Common Stock
pursuant to this option shall relieve the Corporation of any
liability with respect to the non-issuance or sale of the Common
Stock as to which such approval shall not have been obtained.
The Corporation, however, shall use its best efforts to obtain
all such approvals.
15. Successors and Assigns. Except to the extent otherwise
provided in Paragraphs 3 and 7, the provisions of this Agreement
shall inure to the benefit of, and be binding upon, the Corporation
and its successors and assigns and Optionee, Optionee's assigns
and the legal representatives, heirs and legatees of Optionee's estate.
16. Notices. Any notice required to be given or delivered
to the Corporation under the terms of this Agreement shall be in
writing and addressed to the Corporation at its principal
corporate offices. Any notice required to be given or delivered
to Optionee shall be in writing and addressed to Optionee at the
last known payroll address for Optionee evidenced on the payroll
records of the Corporation or its Parent or Subsidiary. All
notices shall be deemed effective upon personal delivery or upon
deposit in the U.S. mail, postage prepaid and properly addressed
to the party to be notified.
17. Financing. The Plan Administrator may, in its absolute
discretion and without any obligation to do so, permit Optionee
to pay the Exercise Price for the purchased Option Shares (to the
extent such Exercise Price is in excess of the par valued of
those shares) by delivering a full-recourse, interest-bearing
promissory note secured by those Option Shares. The payment
schedule in effect for any such promissory note shall be
established by the Plan Administrator in its sole discretion.
18. Construction. This Agreement and the option evidenced
hereby are made and granted pursuant to the Plan and are in all
respects limited by and subject to the terms of the Plan. All
decisions of the Plan Administrator with respect to any question
or issue arising under the Plan or this Agreement shall be
conclusive and binding on all persons having an interest in this
option.
19. Governing Law. The interpretation, performance and
enforcement of this Agreement shall be governed by the laws of
the State of Texas without resort to that State's conflict-of-
laws rules.
20. Stockholder Approval. If the Option Shares covered
by this Agreement exceed, as of the Grant Date, the number of shares of
Common Stock which may be issued under the Plan as last approved
by the stockholders, then this option shall be void with respect
to such excess shares, unless stockholder approval of an
amendment sufficiently increasing the number of shares of Common
Stock issuable under the Plan is obtained in accordance with the
provisions of the Plan.
21. Additional Terms Applicable to an Incentive Option.
In the event this option is designated an Incentive Option in the Grant
Notice, the following terms and conditions shall also apply to the grant:
(a) This option shall cease to qualify for favorable
tax treatment as an Incentive Option if (and to the extent) this
option is exercised for one or more Option Shares: (i) more than
three (3) months after the date Optionee ceases to be an Employee
for any reason other than death or Permanent Disability or (ii)
more than twelve (12) months after the date Optionee ceases to be
an Employee by reason of Permanent Disability.
(b) This option shall not become exercisable in the
calendar year in which granted if (and to the extent) the aggregate
Fair Market Value (determined at the Grant Date) of the Common Stock
for which this option would otherwise first become exercisable in
such calendar year would, when added to the aggregate value
(determined as of the respective date or dates of grant) of the
Common Stock and any other securities for which one or more other
Incentive Options granted to Optionee prior to the Grant Date
(whether under the Plan or any other option plan of the Corpora-
tion or any Parent or Subsidiary) first become exercisable during
the same calendar year, exceed One Hundred Thousand Dollars ($100,000)
in the aggregate. To the extent the exercisability of this option
is deferred by reason of the foregoing limitation, the deferred
portion shall become exercisable in the first calendar year or years
thereafter in which the One Hundred Thousand Dollar ($100,000) limi-
tation of this Paragraph 21(b) would not be contravened, but such
deferral shall in all events end immediately prior to the effective
date of (i) a Parent-Level Change in Control at a time when Optionee
is a Fleming Service Provider or (ii) a Corporate-Level Change in
Control in which this option is not to be assumed, whereupon the
option shall become immediately exercisable as a Non-Statutory
Option for the deferred portion of the Option Shares.
(c) Should Optionee hold, in addition to this option,
one or more other options to purchase Common Stock which become
exercisable for the first time in the same calendar year as this
option, then the foregoing limitations on the exercisability of
such options as Incentive Options shall be applied on the basis
of the order in which such options are granted.
<PAGE>
APPENDIX
The following definitions shall be in effect under the
Agreement:
A. Agreement shall mean this Stock Option Agreement.
B. Board shall mean the Corporation's Board of Directors.
C. Code shall mean the Internal Revenue Code of 1986, as
amended.
D. Common Stock shall mean the Corporation's common stock.
E. Corporate-Level Change in Control shall mean any of the
following transactions involving a change in control or ownership
of the Corporation:
(i) a stockholder-approved merger or
consolidation in which securities possessing more than
fifty percent (50%) of the total combined voting power
of the Corporation's outstanding securities are
transferred to a person or persons different from the
persons holding those securities immediately prior to
such transaction, or
(ii) a stockholder-approved sale, transfer
or other disposition of all or substantially all of
the Corporation's assets in complete liquidation or
dissolution of the Corporation, or
(iii) the acquisition, directly or
indirectly, by any person or related group of persons
(other than the Corporation or a person that directly
or indirectly controls, is controlled by, or is under
common control with, the Corporation) of beneficial
ownership (within the meaning of Rule 13d-3 of the
Securities Exchange Act of 1934, as amended) of
securities possessing more than fifty percent (50%) of
the total combined voting power of the Corporation's
outstanding securities pursuant to a tender or exchange
offer made directly to the Corporation's stockholders.
F. Corporation shall mean eMAR.net, Inc., a Delaware
corporation, and any successor corporation to all or
substantially all of the assets or voting stock of eMAR.net, Inc.
which shall be appropriate action assume this option.
G. Disability shall mean the inability of Optionee to engage
in any substantial gainful activity by reason of any medically
determinable physical or mental impairment and shall be
determined by the Plan Administrator on the basis of such medical
evidence as the Plan Administrator deems warranted under the
circumstances. Disability shall be deemed to constitute
Permanent Disability in the event that such Disability is
expected to result in death or has lasted or can be expected to
last for a continuous period of twelve (12) months or more.
H. Employee shall mean an individual who is in the employ of
the Corporation (or any Parent or Subsidiary), subject to the
control and direction of the employer entity as to both the work
to be performed and the manner and method of performance.
I. Exercise Date shall mean the date on which the option
shall have been exercised in accordance with Paragraph 9 of the
Agreement.
J. Exercise Price shall mean the exercise price payable per
Option Share as specified in the Grant Notice.
K. Expiration Date shall mean the date on which the option
expires as specified in the Grant Notice.
L. Fair Market Value per share of Common Stock on any relevant
date shall be determined in accordance with the following provisions:
(i) If the Common Stock is at the time traded on the Nasdaq
National Market, then the Fair Market Value shall be the closing
selling price per share of Common Stock on the date in question,
as the price is reported by the National Association of
Securities Dealers on the Nasdaq National Market and published in
The Wall Street Journal. If there is no closing selling price
for the Common Stock on the date in question, then the Fair
Market Value shall be the closing selling price on the last
preceding date for which such quotation exists.
(ii) If the Common Stock is at the time listed on any Stock
Exchange, then the Fair Market Value shall be the closing selling
price per share of Common Stock on the date in question on the
Stock Exchange determined by the Plan Administrator to be the
primary market for the Common Stock, as such price is officially
quoted in the composite tape of transactions on such exchange and
published in The Wall Street Journal. If there is no closing
selling price for the Common Stock on the date in question, then
the Fair Market Value shall be the closing selling price on the
last preceding date for which such quotation exists.
(iii) If the Common Stock is at the time neither listed on
any Stock Exchange nor traded on the Nasdaq National Market, then
the Fair Market Value shall be determined by the Plan Administrator
after taking into account such factors as the Plan Administrator
shall deem appropriate.
M. Fleming shall mean Fleming Companies, Inc., an Oklahoma
corporation, which is currently the Parent of the Corporation.
N. Fleming Service Provider shall mean any individual who
is in a direct service relationship with Fleming or any Fleming
Subsidiary (and not with the Corporation or any other Parent or
Subsidiary of the Corporation), whether as an employee, associate,
board member or independent contractor, at a time when Fleming is
the Parent of the Corporation.
O. Fleming Subsidiary shall mean any corporation (other than
Fleming) in an unbroken chain of corporations beginning with
Fleming, provided each corporation (other than the last
corporation) in the unbroken chain owns, at the time of the
determination, stock possessing fifty percent (50%) or more of
the total combined voting power of all classes of stock in one of
the other corporations in such chain. In no event, however,
shall a Fleming Subsidiary include the Corporation or any Parent
or Subsidiary of the Corporation.
P. Grant Date shall mean the date of grant of the option as
specified in the Grant Notice.
Q. Grant Notice shall mean the Notice of Grant of Stock Option
accompanying the Agreement, pursuant to which Optionee has been
informed of the basic terms of the option evidenced hereby.
R. Incentive Option shall mean an option which satisfies the
requirements of Code Section 422.
S. Misconduct shall mean the commission of any act of fraud,
embezzlement or dishonesty by Optionee, any unauthorized use or
disclosure by Optionee of confidential information or trade
secrets of the Corporation (or any Parent or Subsidiary), or any
other intentional misconduct by Optionee adversely affecting the
business or affairs of the Corporation (or any Parent or
Subsidiary) in a material manner. The foregoing definition shall
not be deemed to be inclusive of all the acts or omissions which
the Corporation (or any Parent or Subsidiary) may consider as
grounds for the dismissal or discharge of Optionee or any other
individual in the Service of the Corporation (or any Parent or
Subsidiary).
T. 1933 Act shall mean the Securities Act of 1933, as amended.
U. 1934 Act shall mean the Securities Exchange Act of 1934, as
amended.
V. Non-Statutory Option shall mean an option not intended to
satisfy the requirements of Code Section 422.
W. Option Shares shall mean the number of shares of Common
Stock subject to the option.
X. Optionee shall mean the person to whom the option is granted
as specified in the Grant Notice.
Y. Parent shall mean any corporation (other than the
Corporation) in an unbroken chain of corporations ending with the
Corporation, provided each corporation in the unbroken chain
(other than the Corporation) owns, at the time of the
determination, stock possessing fifty percent (50%) or more of
the total combined voting power of all classes of stock in one of
the other corporations in such chain.
Z. Parent-Level Change in Control shall mean any of the
following transactions involving a change in control or ownership
of the Fleming which is effected while, and only while, Fleming
is the Parent of the Corporation:
(i) the acquisition by any individual, entity or group (with-
in the meaning of Section 13(d)(3) or 14(d)(2) of the 1934 Act (a
"Person") of beneficial ownership (within the meaning of Rule 13d-
3 promulgated under the 1933 Act) of 20% or more (the "Triggering
Percentage") of either (i) the then outstanding shares of Fleming
common stock (the "Outstanding Company Common Stock") or (ii) the
combined voting power of the then outstanding Fleming voting
securities entitled to vote generally in the election of
directors (the "Outstanding Company Voting Securities");
provided, however, in the event the "Incumbent Board" (as such
term is hereinafter defined) pursuant to authority granted in any
rights agreement to which Fleming is a party (the "Rights
Agreement") lowers the acquisition threshold percentages set
forth in such Rights Agreement, the Triggering Percentage shall
be automatically reduced to equal the threshold percentages set
pursuant to authority granted to the board in the Rights
Agreement; and provided, further, however, that the following
acquisitions shall not constitute a Parent-Level Change in
Control: (i) any acquisition directly from Fleming, (ii) any
acquisition by Fleming, (iii) any acquisition by any employee
benefit plan (or related trust) sponsored or maintained by
Fleming or any corporation controlled by Fleming, or (iv) any
acquisition by any corporation pursuant to a transaction which
complies with clauses (x), (y), and (z) of subsection (iii) of
this definition; or
(ii) a change in the composition of the Fleming Board of
Directors such that the individuals who, as of the effective date
of the Plan, constitute the Fleming Board of Directors (the
"Incumbent Board") cease for any reason to comprise at least a
majority of the Fleming Board of Directors; provided, however,
that any individual who becomes a member of the Fleming Board of
Directors subsequent to the effective date of the Plan and whose
election, appointment or nomination for election by Fleming's
shareholders, was approved by a vote of at least a majority of
the directors then comprising the Incumbent Board shall be
considered as though such individual were a member of the
Incumbent Board, but excluding for purposes of this definition,
any such individual whose initial assumption of office occurs as
a result of an actual or threatened election contest with respect
to the election or removal of directors or other actual or
threatened solicitation of proxies or consents by or on behalf of
a Person other than the Fleming Board of Directors; or
(iii) the approval by the Fleming shareholders of a
reorganization, share exchange, merger or consolidation or
acquisition of assets of another corporation (a "Business
Combination"), in each case, unless, following such Business
Combination, (x) all or substantially all of the individuals and
entities who were the beneficial owners, respectively, of the
Outstanding Company Common Stock and Outstanding Company Voting
Securities immediately prior to such Business Combination will
beneficially own, directly or indirectly, more than 50% of,
respectively, the then outstanding shares of common stock and the
combined voting power of the then outstanding voting securities
entitled to vote generally in the election of directors, as the
case may be, of the corporation resulting from such Business
Combination (including, without limitation, a corporation which
as a result of such transaction will own Fleming through one or
more subsidiaries) in substantially the same proportions as their
ownership, immediately prior to such Business Combination of the
Outstanding Company Common Stock and Outstanding Company Voting
Securities, as the case may be, (y) no Person (excluding any
employee benefit plan (or related trust) of Fleming or such
corporation resulting from such Business Combination) will
beneficially own, directly or indirectly, 20% or more of,
respectively, the then outstanding shares of common stock of the
corporation resulting from such Business Combination or the
combined voting power of the then outstanding voting securities
of such corporation except to the extent that such ownership
existed prior to the Business Combination, and (z) at least a
majority of the members of the board of directors of the
corporation resulting from such Business Combination will have
been members of the Incumbent Board at the time of the execution
of the initial agreement, or of the action of the Incumbent
Board, providing for such Business Combination; or
(iv) the approval by the shareholders of Fleming of (x) a
complete liquidation or dissolution of Fleming or, (y) the sale
or other disposition of all or substantially all of the assets of
Fleming, other than to a corporation, with respect to which
following such sale or other disposition, (A) more than 50% of,
respectively, the then outstanding shares of common stock of such
corporation and the combined voting power of the then outstanding
voting securities of such corporation entitled to vote generally
in the election of directors will be beneficially owned, directly
or indirectly, by all or substantially all of the individuals and
entities who were the beneficial owners, respectively, of the
Outstanding Company Common Stock and Outstanding Company Voting
Securities immediately prior to such sale or other disposition in
substantially the same proportion as their ownership, immediately
prior to such sale or other disposition, of the Outstanding
Company Common Stock and Outstanding Company Voting Securities,
as the case may be, (B) less than 20% of, respectively, the then
outstanding shares of common stock of such corporation and the
combined voting power of the then outstanding voting securities
of such corporation entitled to vote generally in the election of
directors will be beneficially owned, directly or indirectly, by
any Person (excluding any employee benefit plan (or related
trust) of Fleming or such corporation), except to the extent that
such Person owned 20% or more of the Outstanding Company Common
Stock or Outstanding Company Voting Securities prior to the sale
or disposition, and (C) at least a majority of the members of
the board of directors of such corporation will have been members
of the Incumbent Board at the time of the execution of the initial
agreement, or of the action of the Board, providing for such sale
or other disposition of assets of Fleming.
AA. Parent-Level Reduction in Ownership shall mean any
transaction, including (without limitation) any sale or other
disposition by Fleming of its ownership interest in any
outstanding voting securities of the Corporation or any direct
issuance of voting securities by the Corporation, which effects a
reduction to Fleming's combined direct and indirect (through one
or more majority-owned subsidiaries) ownership of the
Corporation's voting securities to an amount which represents
less than fifty percent (50%) of the total combined voting power
of all outstanding classes of stock of the Corporation.
BB. Plan shall mean the Corporation's 2000 Stock Option/Stock
Issuance Plan.
CC. Plan Administrator shall mean either the Board or a
committee of the Board acting in its capacity as administrator of
the Plan.
DD. Purchase Agreement shall mean the stock purchase agreement
in substantially the form of Exhibit B to the Grant Notice.
EE. Service shall mean (i) the Optionee's performance of
services for the Corporation (or any Parent or Subsidiary) in the
capacity of an Employee, a non-employee member of the board of
directors or an independent consultant or (ii) the Optionee's
performance of services for Fleming or any Fleming Subsidiary in
the capacity of an employee or associate of that entity, a non-
employee member of the board of directors or an independent
consultant, but only to the extent such clause (ii) services are
performed while Fleming remains the Parent of the Corporation.
FF. Stock Exchange shall mean the American Stock Exchange or
the New York Stock Exchange.
GG. Subsidiary shall mean any corporation (other than the
Corporation) in an unbroken chain of corporations beginning with
the Corporation, provided each corporation (other than the last
corporation) in the unbroken chain owns, at the time of the
determination, stock possessing fifty percent (50%) or more of
the total combined voting power of all classes of stock in one of
the other corporations in such chain.
HH. Vesting Schedule shall mean the vesting schedule specified
in the Grant Notice pursuant to which the Optionee is to vest in
the Option Shares in a series of installments over his or her
period of Service.
<PAGE>
EXHIBIT B
EMAR.NET, INC.
STOCK PURCHASE AGREEMENT
AGREEMENT made this _____ day of ___________________,
_____ by and between eMAR.net, Inc., a Delaware corporation, and
_____________________, Optionee under the Corporation's 2000
Stock Option/Stock Issuance Plan.
All capitalized terms in this Agreement shall have the
meaning assigned to them in this Agreement or in the attached
Appendix.
A. EXERCISE OF OPTION
1. Exercise. Optionee hereby purchases _______ shares of
Common Stock (the "Purchased Shares") pursuant to that certain
option (the "Option") granted Optionee on ____________________,
_______ (the "Grant Date") to purchase up to _______________
shares of Common Stock (the "Option Shares") under the Plan at
the exercise price of $___________ per share (the "Exercise
Price").
2. Payment. Concurrently with the delivery of this Agreement
to the Corporation, Optionee shall pay the Exercise Price for the
Purchased Shares in accordance with the provisions of the Option
Agreement and shall deliver whatever additional documents may be
required by the Option Agreement as a condition for exercise,
together with a duly-executed blank Assignment Separate from
Certificate (in the form attached hereto as Exhibit I) with
respect to the Purchased Shares.
3. Stockholder Rights. Until such time as the Corporation
exercises the Repurchase Right or the First Refusal Right,
Optionee (or any successor in interest) shall have all the rights
of a stockholder (including voting, dividend and liquidation
rights) with respect to the Purchased Shares, subject, however,
to the transfer restrictions of Articles B and C.
B. SECURITIES LAW COMPLIANCE
1. Restricted Securities. The Purchased Shares have not been
registered under the 1933 Act and are being issued to Optionee in
reliance upon the exemption from such registration provided by
SEC Rule 701 for stock issuances under compensatory benefit plans
such as the Plan. Optionee hereby confirms that Optionee has
been informed that the Purchased Shares are restricted securities
under the 1933 Act and may not be resold or transferred unless
the Purchased Shares are first registered under the Federal
securities laws or unless an exemption from such registration is
available. Accordingly, Optionee hereby acknowledges that
Optionee is prepared to hold the Purchased Shares for an
indefinite period and that Optionee is aware that SEC Rule 144
issued under the 1933 Act which exempts certain resales of
unrestricted securities is not presently available to exempt the
resale of the Purchased Shares from the registration requirements
of the 1933 Act.
2. Restrictions on Disposition of Purchased Shares. Optionee
shall make no disposition of the Purchased Shares (other than a
Permitted Transfer) unless and until there is compliance with all
of the following requirements:
(i) Optionee shall have provided the Corporation with
a written summary of the terms and conditions of the proposed
disposition.
(ii) Optionee shall have complied with all requirements
of this Agreement applicable to the disposition of the Purchased
Shares.
(iii) Optionee shall have provided the Corporation with
written assurances, in form and substance satisfactory to the
Corporation, that (a) the proposed disposition does not require
registration of the Purchased Shares under the 1933 Act or (b)
all appropriate action necessary for compliance with the
registration requirements of the 1933 Act or any exemption from
registration available under the 1933 Act (including Rule 144)
has been taken.
The Corporation shall not be required (i) to transfer
on its books any Purchased Shares which have been sold or
transferred in violation of the provisions of this Agreement or
(ii) to treat as the owner of the Purchased Shares, or otherwise
to accord voting, dividend or liquidation rights to, any
transferee to whom the Purchased Shares have been transferred in
contravention of this Agreement.
3. Restrictive Legends. The stock certificates for the
Purchased Shares shall be endorsed with one or more of the
following restrictive legends:
"The shares represented by this certificate
have not been registered under the Securities Act of
1933. The shares may not be sold or offered for sale
in the absence of (a) an effective registration
statement for the shares under such Act, (b) a "no
action" letter of the Securities and Exchange
Commission with respect to such sale or offer or (c)
satisfactory assurances to the Corporation that
registration under such Act is not required with
respect to such sale or offer."
"The shares represented by this certificate
are subject to certain repurchase rights and rights of
first refusal granted to the Corporation and
accordingly may not be sold, assigned, transferred,
encumbered, or in any manner disposed of except in
conformity with the terms of a written agreement dated
____________, ______ between the Corporation and the
registered holder of the shares (or the predecessor in
interest to the shares). A copy of such agreement is
maintained at the Corporation's principal corporate
offices."
C. TRANSFER RESTRICTIONS
1. Restriction on Transfer. Except for any Permitted
Transfer, Optionee shall not transfer, assign, encumber or otherwise
dispose of any of the Purchased Shares which are subject to the
Repurchase Right. In addition, Purchased Shares which are
released from the Repurchase Right shall not be transferred,
assigned, encumbered or otherwise disposed of in contravention of
the First Refusal Right or the Market Stand-Off.
2. Transferee Obligations. Each person (other than the
Corporation) to whom the Purchased Shares are transferred by
means of a Permitted Transfer must, as a condition precedent to
the validity of such transfer, acknowledge in writing to the
Corporation that such person is bound by the provisions of this
Agreement and that the transferred shares are subject to (i) the
Repurchase Right, (ii) the First Refusal Right and (iii) the
Market Stand-Off, to the same extent such shares would be so
subject if retained by Optionee.
3. Market Stand-Off.
(a) In connection with any underwritten public offering
by the Corporation of its equity securities pursuant to an effective
registration statement filed under the 1933 Act, including the
Corporation's initial public offering, Owner shall not sell, make
any short sale of, loan, hypothecate, pledge, grant any option
for the purchase of, or otherwise dispose or transfer for value
or otherwise agree to engage in any of the foregoing transactions
with respect to, any Purchased Shares without the prior written
consent of the Corporation or its underwriters. Such restriction
(the "Market Stand-Off") shall be in effect for such period of
time from and after the effective date of the final prospectus
for the offering as may be requested by the Corporation or such
underwriters. In no event, however, shall such period exceed one
hundred eighty (180) days, and the Market Stand-Off shall in no
event be applicable to any underwritten public offering effected
more than two (2) years after the effective date of the
Corporation's initial public offering.
(b) Owner shall be subject to the Market Stand-Off
provided and only if the officers and directors of the Corporation are also
subject to similar restrictions.
(c) Any new, substituted or additional securities which
are by reason of any Recapitalization or Reorganization distributed with
respect to the Purchased Shares shall be immediately subject to
the Market Stand-Off, to the same extent the Purchased Shares are
at such time covered by such provisions.
(d) In order to enforce the Market Stand-Off, the
Corporation may impose stop-transfer instructions with respect to the
Purchased Shares until the end of the applicable stand-off period.
D. REPURCHASE RIGHT
1. Grant. The Corporation is hereby granted the right (the
"Repurchase Right"), exercisable at any time during the sixty
(60)-day period following the date Optionee ceases for any reason
to remain in Service or (if later) during the sixty (60)-day
period following the execution date of this Agreement, to
repurchase at the Exercise Price any or all of the Purchased
Shares in which Optionee is not, at the time of his or her
cessation of Service, vested in accordance with the Vesting
Schedule applicable to those shares or the special vesting
acceleration provisions of Paragraphs D.6 through D.8 of this
Agreement (such shares to be hereinafter referred to as the
"Unvested Shares").
2. Exercise of the Repurchase Right. The Repurchase Right
shall be exercisable by written notice delivered to each Owner of
the Unvested Shares prior to the expiration of the sixty (60)-day
exercise period. The notice shall indicate the number of
Unvested Shares to be repurchased and the date on which the
repurchase is to be effected, such date to be not more than
thirty (30) days after the date of such notice. The certificates
representing the Unvested Shares to be repurchased shall be
delivered to the Corporation on the closing date specified for
the repurchase. Concurrently with the receipt of such stock
certificates, the Corporation shall pay to Owner, in cash or cash
equivalents (including the cancellation of any purchase-money
indebtedness), an amount equal to the Exercise Price previously
paid for the Unvested Shares which are to be repurchased from
Owner.
3. Termination of the Repurchase Right. The Repurchase
Right shall terminate with respect to any Unvested Shares for which it
is not timely exercised under Paragraph D.2. In addition, the
Repurchase Right shall terminate and cease to be exercisable with
respect to any and all Purchased Shares in which Optionee vests
in accordance with the Vesting Schedule. All Purchased Shares as
to which the Repurchase Right lapses shall, however, remain
subject to (i) the First Refusal Right and (ii) the Market Stand-
Off.
4. Aggregate Vesting Limitation. If the Option is exercised
in more than one increment so that Optionee is a party to one or
more other Stock Purchase Agreements (the "Prior Purchase
Agreements") which are executed prior to the date of this
Agreement, then the total number of Purchased Shares as to which
Optionee shall be deemed to have a fully-vested interest under
this Agreement and all Prior Purchase Agreements shall not exceed
in the aggregate the number of Purchased Shares in which Optionee
would otherwise at the time be vested, in accordance with the
Vesting Schedule, had all the Purchased Shares (including those
acquired under the Prior Purchase Agreements) been acquired
exclusively under this Agreement.
5. Recapitalization. Any new, substituted or additional
securities or other property (including cash paid other than as a
regular cash dividend) which is by reason of any Recapitalization
distributed with respect to the Purchased Shares shall be
immediately subject to the Repurchase Right and any escrow
requirements hereunder, but only to the extent the Purchased
Shares are at the time covered by such right or escrow
requirements. Appropriate adjustments to reflect such distribution
shall be made to the number and/or class of Purchased Shares subject
to this Agreement and to the price per share to be paid upon the
exercise of the Repurchase Right in order to reflect the effect
of any such Recapitalization upon the Corporation's capital structure;
provided, however, that the aggregate purchase price shall remain
the same.
6. Corporate-Level Change in Control
(a) Should a Corporate-Level Change in Control
occur at a time when the Optionee is a Fleming Service Provider,
then the Repurchase Right shall automatically terminate in its
entirety, and all the Purchased Shares shall vest in full,
immediately prior to the consummation of that Corporate-Level
Change in Control. However, if the Optionee is not a Fleming
Service Provider at the time of the Corporate-Level Change in
Control but is still in a Service relationship, then the
Repurchase Right shall terminate on such an accelerated basis
only to the extent (if any) such Repurchase Right is not to be
assigned to the successor entity in the Corporate-Level Change in
Control or otherwise continued in full force and effect pursuant
to the express terms of the Corporate-Level Change in Control
transaction, and the Purchased Shares subject to any such
assigned or continuing Repurchase Right shall not vest at the
time of the Corporate-Level Change in Control.
(b) To the extent the Repurchase Right is
assigned to the successor entity or otherwise remains in effect
following a Corporate-Level Change in Control, such right shall
apply to any new securities or other property (including any cash
payments) received in exchange for the Purchased Shares in
consummation of the Corporate-Level Change in Control, but only
to the extent the Purchased Shares are at the time covered by
such right. Appropriate adjustments shall be made to the price
per share payable upon exercise of the Repurchase Right to
reflect the effect (if any) of the Corporate-Level Change in
Control upon the Corporation's capital structure; provided,
however, that the aggregate purchase price shall remain the same.
The new securities or other property (including any cash
payments) issued or distributed with respect to the Purchased
Shares in consummation of the Corporate-Level Change in Control
shall be immediately deposited in escrow with the Corporation (or
the successor entity) and shall not be released from escrow until
Optionee vests in such securities or other property in accordance
with the same Vesting Schedule in effect for the Purchased
Shares.
7. Parent-Level Change in Control. Should a Parent-Level
Change in Control occur at a time when the Optionee is a Fleming
Service Provider, then the Repurchase Right shall automatically
terminate in its entirety, and all the Purchased Shares shall
vest in full, immediately prior to the consummation of that
Parent-Level Change in Control.
8. Parent-Level Reduction in Ownership. Should a Parent-
Level Reduction in Ownership occur at a time when the Optionee is a
Fleming Service Provider, then the Repurchase Right shall
automatically terminate in its entirety, and all the Purchased
Shares shall vest in full, immediately prior to the consummation
of the transaction resulting in that Parent-Level Reduction in
Ownership.
E. RIGHT OF FIRST REFUSAL
1. Grant. The Corporation is hereby granted the right of
first refusal (the "First Refusal Right"), exercisable in connection
with any proposed transfer of the Purchased Shares in which
Optionee has vested in accordance with the provisions of Article
D. For purposes of this Article E, the term "transfer" shall
include any sale, assignment, pledge, encumbrance or other
disposition of the Purchased Shares intended to be made by Owner,
but shall not include any Permitted Transfer.
2. Notice of Intended Disposition. In the event any Owner
of Purchased Shares in which Optionee has vested desires to accept a
bona fide third-party offer for the transfer of any or all of
such shares (the Purchased Shares subject to such offer to be
hereinafter referred to as the "Target Shares"), Owner shall
promptly (i) deliver to the Corporation written notice (the
"Disposition Notice") of the terms of the offer, including the
purchase price and the identity of the third-party offeror, and
(ii) provide satisfactory proof that the disposition of the
Target Shares to such third-party offeror would not be in
contravention of the provisions set forth in Articles B and C.
3. Exercise of the First Refusal Right. The Corporation
shall, for a period of twenty-five (25) days following receipt of the
Disposition Notice, have the right to repurchase any or all of
the Target Shares subject to the Disposition Notice upon the same
terms as those specified therein or upon such other terms (not
materially different from those specified in the Disposition
Notice) to which Owner consents. Such right shall be exercisable
by delivery of written notice (the "Exercise Notice") to Owner
prior to the expiration of the twenty-five (25)-day exercise
period. If such right is exercised with respect to all the
Target Shares, then the Corporation shall effect the repurchase
of such shares, including payment of the purchase price, not more
than five (5) business days after delivery of the Exercise
Notice; and at such time the certificates representing the Target
Shares shall be delivered to the Corporation.
Should the purchase price specified in the Disposition
Notice be payable in property other than cash or evidences of
indebtedness, the Corporation shall have the right to pay the
purchase price in the form of cash equal in amount to the value
of such property. If Owner and the Corporation cannot agree on
such cash value within ten (10) days after the Corporation's
receipt of the Disposition Notice, the valuation shall be made by
an appraiser of recognized standing selected by Owner and the
Corporation or, if they cannot agree on an appraiser within
twenty (20) days after the Corporation's receipt of the
Disposition Notice, each shall select an appraiser of recognized
standing and the two (2) appraisers shall designate a third
appraiser of recognized standing, whose appraisal shall be
determinative of such value. The cost of such appraisal shall be
shared equally by Owner and the Corporation. The closing shall
then be held on the later of (i) the fifth (5th) business day
following delivery of the Exercise Notice or (ii) the fifth (5th)
business day after such valuation shall have been made.
4. Non-Exercise of the First Refusal Right. In the event
the Exercise Notice is not given to Owner prior to the expiration
of the twenty-five (25)-day exercise period, Owner shall have a
period of thirty (30) days thereafter in which to sell or
otherwise dispose of the Target Shares to the third-party offeror
identified in the Disposition Notice upon terms (including the
purchase price) no more favorable to such third-party offeror
than those specified in the Disposition Notice; provided,
however, that any such sale or disposition must not be effected
in contravention of the provisions of Articles B and C. The
third-party offeror shall acquire the Target Shares subject to
the First Refusal Right and the provisions and restrictions of
Article B and Paragraph C.3, and any subsequent disposition of
the acquired shares must be effected in compliance with the terms
and conditions of such First Refusal Right and the provisions and
restrictions of Article B and Paragraph C.3. In the event Owner
does not effect such sale or disposition of the Target Shares
within the specified thirty (30)-day period, the First Refusal
Right shall continue to be applicable to any subsequent
disposition of the Target Shares by Owner until such right
lapses.
5. Partial Exercise of the First Refusal Right. In the
event the Corporation makes a timely exercise of the First Refusal
Right with respect to a portion, but not all, of the Target
Shares specified in the Disposition Notice, Owner shall have the
option, exercisable by written notice to the Corporation
delivered within five (5) business days after Owner's receipt of
the Exercise Notice, to effect the sale of the Target Shares
pursuant to either of the following alternatives:
(i) sale or other disposition of all the Target
Shares to the third-party offeror identified in the Disposition
Notice, but in full compliance with the requirements of Paragraph
E.4, as if Fleming did not exercise the First Refusal Right; or
(ii) sale to the Corporation of the portion of the
Target Shares which the Corporation has elected to purchase, such
sale to be effected in substantial conformity with the provisions of
Paragraph E.3. The First Refusal Right shall continue to be
applicable to any subsequent disposition of the remaining Target
Shares until such right lapses.
Owner's failure to deliver timely notification to the
Corporation shall be deemed to be an election by Owner to sell
the Target Shares pursuant to alternative (i) above.
6. Recapitalization/Reorganization.
(a) Any new, substituted or additional securities or
other property which is by reason of any Recapitalization distributed
with respect to the Purchased Shares shall be immediately subject
to the First Refusal Right, but only to the extent the Purchased
Shares are at the time covered by such right.
(b) In the event of a Reorganization, the First Refusal
Right shall remain in full force and effect and shall apply to the new
capital stock or other property received in exchange for the
Purchased Shares in consummation of the Reorganization, but only
to the extent the Purchased Shares are at the time covered by
such right.
7. Lapse. The First Refusal Right shall lapse upon the
earliest to occur of (i) the first date on which shares of the
Common Stock are held of record by more than five hundred (500)
persons, (ii) a determination made by the Board that a public
market exists for the outstanding shares of Common Stock or (iii)
a firm commitment underwritten public offering, pursuant to an
effective registration statement under the 1933 Act, covering the
offer and sale of the Common Stock in the aggregate amount of at
least twenty million dollars ($20,000,000). However, the Market
Stand-Off shall continue to remain in full force and effect
following the lapse of the First Refusal Right.
F. SPECIAL TAX ELECTION
The acquisition of the Purchased Shares may result in
adverse tax consequences which may be avoided or mitigated by
filing an election under Code Section 83(b). Such election must
be filed within thirty (30) days after the date of this
Agreement. A description of the tax consequences applicable to
the acquisition of the Purchased Shares and the form for making
the Code Section 83(b) election are set forth in Exhibit II.
OPTIONEE SHOULD CONSULT WITH HIS OR HER TAX ADVISOR TO DETERMINE
THE TAX CONSEQUENCES OF ACQUIRING THE PURCHASED SHARES AND THE
ADVANTAGES AND DISADVANTAGES OF FILING THE CODE SECTION 83(b)
ELECTION. OPTIONEE ACKNOWLEDGES THAT IT IS OPTIONEE'S SOLE
RESPONSIBILITY, AND NOT THE CORPORATION'S, TO FILE A TIMELY
ELECTION UNDER CODE SECTION 83(b), EVEN IF OPTIONEE REQUESTS THE
CORPORATION OR ITS REPRESENTATIVES TO MAKE THIS FILING ON HIS OR
HER BEHALF.
G. GENERAL PROVISIONS
1. Assignment. The Corporation may assign the Repurchase
Right and/or the First Refusal Right to any person or entity selected
by the Board, including (without limitation) Fleming while the
Parent of the Corporation.
2. At Will Employment. Nothing in this Agreement or in the
Plan shall confer upon Optionee any right to continue in Service
for any period of specific duration or interfere with or
otherwise restrict in any way the rights of the Corporation (or
any Parent or Subsidiary employing or retaining Optionee) or of
Optionee, which rights are hereby expressly reserved by each, to
terminate Optionee's Service at any time for any reason, with or
without cause.
3. Notices. Any notice required to be given under this
Agreement shall be in writing and shall be deemed effective upon
personal delivery or upon deposit in the U.S. mail, registered or
certified, postage prepaid and properly addressed to the party
entitled to such notice at the address indicated below such
party's signature line on this Agreement or at such other address
as such party may designate by ten (10) days advance written
notice under this paragraph to all other parties to this
Agreement.
4. No Waiver. The failure of the Corporation or Fleming
in any instance to exercise the Repurchase Right or the First Refusal
Right shall not constitute a waiver of any other repurchase
rights and/or rights of first refusal that may subsequently arise
under the provisions of this Agreement or any other agreement
between the Corporation and Optionee. No waiver of any breach or
condition of this Agreement shall be deemed to be a waiver of any
other or subsequent breach or condition, whether of like or
different nature.
5. Cancellation of Shares. If the Corporation or Fleming (as
assignee) shall make available, at the time and place and in the
amount and form provided in this Agreement, the consideration for
the Purchased Shares to be repurchased in accordance with the
provisions of this Agreement, then from and after such time, the
person from whom such shares are to be repurchased shall no
longer have any rights as a holder of such shares (other than the
right to receive payment of such consideration in accordance with
this Agreement). Such shares shall be deemed purchased in
accordance with the applicable provisions hereof, and the
Corporation or Fleming (as assignee) shall be deemed the owner
and holder of such shares, whether or not the certificates
therefor have been delivered as required by this Agreement.
H. MISCELLANEOUS PROVISIONS
1. Optionee Undertaking. Optionee hereby agrees to
take whatever additional action and execute whatever additional
documents the Corporation may deem necessary or advisable in
order to carry out or effect one or more of the obligations or
restrictions imposed on either Optionee or the Purchased Shares
pursuant to the provisions of this Agreement.
2. Agreement is Entire Contract. This Agreement constitutes
the entire contract between the parties hereto with regard to the
subject matter hereof. This Agreement is made pursuant to the
provisions of the Plan and shall in all respects be construed in
conformity with the terms of the Plan.
3. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Texas
without resort to that State's conflict-of-laws rules.
4. Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed to be an original,
but all of which together shall constitute one and the same
instrument.
5. Successors and Assigns. The provisions of this Agree-
ment shall inure to the benefit of, and be binding upon, the
Corporation and its successors and assigns and upon Optionee,
Optionee's permitted assigns and the legal representatives, heirs
and legatees of Optionee's estate, whether or not any such person
shall have become a party to this Agreement and have agreed in
writing to join herein and be bound by the terms hereof.
IN WITNESS WHEREOF, the parties have executed this
Agreement on the day and year first indicated above.
EMAR.NET, INC.
By:
Title:
Address:
OPTIONEE
Address:
<PAGE>
SPOUSAL ACKNOWLEDGMENT
The undersigned spouse of Optionee has read and hereby
approves the foregoing Stock Purchase Agreement. In
consideration of the Corporation's granting Optionee the right to
acquire the Purchased Shares in accordance with the terms of such
Agreement, the undersigned hereby agrees to be irrevocably bound
by all the terms of such Agreement, including (without
limitation) the right of the Corporation (or its assigns) to
purchase any Purchased Shares in which Optionee is not vested at
time of his or her cessation of Service.
OPTIONEE'S SPOUSE
Address:
<PAGE>
EXHIBIT I
ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED ____________ hereby sell(s),
assign(s) and transfer(s) unto eMAR.net, Inc. (the
"Corporation"), _______________ (_________) shares of the Common
Stock of the Corporation standing in his or her name on the books
of the Corporation represented by Certificate No.
________________ herewith and do(es) hereby irrevocably
constitute and appoint _____________________ Attorney to
transfer the said stock on the books of the Corporation with full
power of substitution in the premises.
Dated: ____________________
Signature
<PAGE>
Instruction: Please do not fill in any blanks other than the
signature line. Please sign exactly as you would like your name
to appear on the issued stock certificate. The purpose of this
assignment is to enable the Corporation to exercise the
Repurchase Right without requiring additional signatures on the
part of Optionee.
<PAGE>
EXHIBIT II
FEDERAL INCOME TAX CONSEQUENCES AND
SECTION 83(b) TAX ELECTION
I. Federal Income Tax Consequences and Section 83(b) Election
For Exercise of Non-Statutory Option. If the Purchased Shares
are acquired pursuant to the exercise of a Non-Statutory Option,
as specified in the Grant Notice, then under Code Section 83, the
excess of the Fair Market Value of the Purchased Shares on the
date any forfeiture restrictions applicable to such shares lapse
over the Exercise Price paid for those shares will be reportable
as ordinary income on the lapse date. For this purpose, the term
"forfeiture restrictions" includes the right of the Corporation
to repurchase the Purchased Shares pursuant to the Repurchase
Right. However, Optionee may elect under Code Section 83(b) to
be taxed at the time the Purchased Shares are acquired, rather
than when and as such Purchased Shares cease to be subject to
such forfeiture restrictions. Such election must be filed with
the Internal Revenue Service within thirty (30) days after the
date of the Agreement. Even if the Fair Market Value of the
Purchased Shares on the date of the Agreement equals the Exercise
Price paid (and thus no tax is payable), the election must be
made to avoid adverse tax consequences in the future. The form
for making this election is attached as part of this exhibit.
FAILURE TO MAKE THIS FILING WITHIN THE APPLICABLE THIRTY (30)-DAY
PERIOD WILL RESULT IN THE RECOGNITION OF ORDINARY INCOME BY
OPTIONEE AS THE FORFEITURE RESTRICTIONS LAPSE.
II. Federal Income Tax Consequences and Conditional Section
83(b) Election For Exercise of Incentive Option. If the
Purchased Shares are acquired pursuant to the exercise of an
Incentive Option, as specified in the Grant Notice, then the
following tax principles shall be applicable to the Purchased
Shares:
(i) For regular tax purposes, no taxable income will be
recognized at the time the Option is exercised.
(ii) The excess of (a) the Fair Market Value of the Purchased
Shares on the date the Option is exercised or (if later) on the
date any forfeiture restrictions applicable to the Purchased
Shares lapse over (b) the Exercise Price paid for the Purchased
Shares will be includible in Optionee's taxable income for
alternative minimum tax purposes.
(iii) If Optionee makes a disqualifying disposition of the
Purchased Shares, then Optionee will recognize ordinary income in
the year of such disposition equal in amount to the excess of (a)
the Fair Market Value of the Purchased Shares on the date the
Option is exercised or (if later) on the date any forfeiture
restrictions applicable to the Purchased Shares lapse over (b)
the Exercise Price paid for the Purchased Shares. Any additional
gain recognized upon the disqualifying disposition will be either
short-term or long-term capital gain depending upon the period
for which the Purchased Shares are held prior to the disposition.
(iv) For purposes of the foregoing, the term "forfeiture
restrictions" will include the right of the Corporation to
repurchase the Purchased Shares pursuant to the Repurchase Right.
The term "disqualifying disposition" means any sale or other
disposition(1) of the Purchased Shares within two (2) years after
the Grant Date or within one (1) year after the exercise date of
the Option.
(v) In the absence of final Treasury Regulations relating to
Incentive Options, it is not certain whether Optionee may, in
connection with the exercise of the Option for any Purchased
Shares at the time subject to forfeiture restrictions, file a
protective election under Code Section 83(b) which would limit
Optionee's ordinary income upon a disqualifying disposition to
the excess of the Fair Market Value of the Purchased Shares on
the date the Option is exercised over the Exercise Price paid for
the Purchased Shares. Accordingly, such election if properly
filed will only be allowed to the extent the final Treasury
Regulations permit such a protective election.
(vi) The Code Section 83(b) election will be effective in
limiting the Optionee's alternative minimum taxable income to the
excess of the Fair Market Value of the Purchased Shares at the
time the Option is exercised over the Exercise Price paid for
those shares.
Page 2 of the attached form for making the election
should be filed with any election made in connection with the
exercise of an Incentive Option.
___________________
(1) Generally, a disposition of shares purchased under an Incentive
Option includes any transfer of legal title, including a transfer by
sale, exchange or gift, but does not include a transfer to the Optionee's
spouse, a transfer into joint ownership with right of survivorship if
Optionee remains one of the joint owners, a pledge, a transfer by bequest
or inheritance or certain tax free exchanges permitted under the Code.
<PAGE>
SECTION 83(b) ELECTION
This statement is being made under Section 83(b) of the
Internal Revenue Code, pursuant to Treas. Reg. Section 1.83-2.
(1) The taxpayer who performed the services is:
Name:
Address:
Taxpayer Ident. No.:
(2) The property with respect to which the election is being
made is _____________ shares of the common stock of eMAR.net,
Inc.
(3) The property was issued on ______________, _____.
(4) The taxable year in which the election is being made is the
calendar year _____.
(5) The property is subject to a repurchase right pursuant to
which the issuer has the right to acquire the property at the
original purchase price if for any reason taxpayer's service with
the issuer terminates. The issuer's repurchase right will lapse
in a series of annual and monthly installments over a four (4)-
year period ending on ___________, 200__.
(6) The fair market value at the time of transfer (determined
without regard to any restriction other than a restriction which
by its terms will never lapse) is $__________per share.
(7) The amount paid for such property is $___________ per share.
(8) A copy of this statement was furnished to eMAR.net, Inc. for
whom taxpayer rendered the services underlying the transfer of
property.
(9) This statement is executed on _________________, ______.
Spouse (if any) Taxpayer
This election must be filed with the Internal Revenue Service
Center with which taxpayer files his or her Federal income tax
returns and must be made within thirty (30) days after the
execution date of the Stock Purchase Agreement. This filing
should be made by registered or certified mail, return receipt
requested. Optionee must retain two (2) copies of the completed
form for filing with his or her Federal and state tax returns for
the current tax year and an additional copy for his or her
records.
The property described in the above Section 83(b)
election is comprised of shares of common stock acquired pursuant
to the exercise of an incentive stock option under Section 422 of
the Internal Revenue Code (the "Code"). Accordingly, it is the
intent of the Taxpayer to utilize this election to achieve the
following tax results:
1. One purpose of this election is to have the alternative
minimum taxable income attributable to the purchased shares
measured by the amount by which the fair market value of such
shares at the time of their transfer to the Taxpayer exceeds the
purchase price paid for the shares. In the absence of this
election, such alternative minimum taxable income would be
measured by the spread between the fair market value of the
purchased shares and the purchase price which exists on the
various lapse dates in effect for the forfeiture restrictions
applicable to such shares.
2. Section 421(a)(1) of the Code expressly excludes from income
any excess of the fair market value of the purchased shares over
the amount paid for such shares. Accordingly, this election is
also intended to be effective in the event there is a
"disqualifying disposition" of the shares, within the meaning of
Section 421(b) of the Code, which would otherwise render the
provisions of Section 83(a) of the Code applicable at that time.
Consequently, the Taxpayer hereby elects to have the amount of
disqualifying disposition income measured by the excess of the
fair market value of the purchased shares on the date of transfer
to the Taxpayer over the amount paid for such shares. Since
Section 421(a) presently applies to the shares which are the
subject of this Section 83(b) election, no taxable income is
actually recognized for regular tax purposes at this time, and no
income taxes are payable, by the Taxpayer as a result of this
election. The foregoing election is to be effective to the full
extent permitted under the Code.
THIS PAGE 2 IS TO BE ATTACHED TO ANY SECTION 83(b) ELECTION FILED
IN CONNECTION WITH THE EXERCISE OF AN INCENTIVE STOCK OPTION
UNDER THE FEDERAL TAX LAWS.
<PAGE>
APPENDIX
The following definitions shall be in effect under the
Agreement:
A. Agreement shall mean this Stock Purchase Agreement.
B. Board shall mean the Corporation's Board of Directors.
C. Code shall mean the Internal Revenue Code of 1986, as
amended.
D. Common Stock shall mean the Corporation's common stock.
E. Corporate-Level Change in Control shall mean any of the
following transactions involving a change in control or ownership
of the Corporation:
(i) a stockholder-approved merger or consolidation in
which securities possessing more than fifty percent (50%) of
the total combined voting power of the Corporation's
outstanding securities are transferred to a person or
persons different from the persons holding those securities
immediately prior to such transaction, or
(ii) a stockholder-approved sale, transfer or other
disposition of all or substantially all of the Corporation's
assets in complete liquidation or dissolution of the
Corporation, or
(iii) the acquisition, directly or indirectly, by
any person or related group of persons (other than the
Corporation or a person that directly or indirectly
controls, is controlled by, or is under common control with,
the Corporation) of beneficial ownership (within the meaning
of Rule 13d-3 of the Securities Exchange Act of 1934, as
amended) of securities possessing more than fifty percent
(50%) of the total combined voting power of the
Corporation's outstanding securities pursuant to a tender or
exchange offer made directly to the Corporation's
stockholders.
F. Corporation shall mean eMAR.net, Inc., a Delaware
corporation, and any successor corporation to all or
substantially all of the assets or voting stock of eMAR.net, Inc.
which shall by appropriate action adopt the Plan.
G. Disposition Notice shall have the meaning assigned to such
term in Paragraph E.2.
H. Exercise Price shall have the meaning assigned to such term
in Paragraph A.1.
I. Fair Market Value of a share of Common Stock on any relevant
date, prior to the initial public offering of the Common Stock,
shall be determined by the Plan Administrator after taking into
account such factors as it shall deem appropriate.
J. First Refusal Right shall mean the right granted to the
Corporation and its assigns in accordance with Article E.
K. Fleming shall mean Fleming Companies, Inc., an Oklahoma
corporation, which is currently the Parent of the Corporation.
L. Fleming Service Provider shall mean any individual who
is in a direct service relationship with Fleming or any Fleming
Subsidiary (and not with the Corporation or any other Parent or
Subsidiary of the Corporation), whether as an employee,
associate, board member or independent contractor, at a time when
Fleming is the Parent of the Corporation.
M. Fleming Subsidiary shall mean any corporation (other than
Fleming) in an unbroken chain of corporations beginning with
Fleming, provided each corporation (other than the last
corporation) in the unbroken chain owns, at the time of the
determination, stock possessing fifty percent (50%) or more of
the total combined voting power of all classes of stock in one of
the other corporations in such chain. In no event, however,
shall a Fleming Subsidiary include the Corporation or any Parent
or Subsidiary of the Corporation.
N. Grant Date shall have the meaning assigned to such term in
Paragraph A.1.
O. Grant Notice shall mean the Notice of Grant of Stock Option
pursuant to which Optionee has been informed of the basic terms
of the Option.
P. Incentive Option shall mean an option which satisfies the
requirements of Code Section 422.
Q. Market Stand-Off shall mean the market stand-off restriction
specified in Paragraph C.3.
R. 1933 Act shall mean the Securities Act of 1933, as amended.
S. 1934 Act shall mean the Securities Exchange Act of 1934, as
amended.
T. Non-Statutory Option shall mean an option not intended to
satisfy the requirements of Code Section 422.
U. Option shall have the meaning assigned to such term in
Paragraph A.1.
V. Option Agreement shall mean all agreements and other
documents evidencing the Option.
W. Optionee shall mean the person to whom the Option is granted
under the Plan.
X. Owner shall mean Optionee and all subsequent holders of the
Purchased Shares who derive their chain of ownership through a
Permitted Transfer from Optionee.
Y. Parent shall mean any corporation (other than the Corporation)
in an unbroken chain of corporations ending with the Corporation,
provided each corporation in the unbroken chain (other than the
Corporation) owns, at the time of the determination, stock
possessing fifty percent (50%) or more of the total combined
voting power of all classes of stock in one of the other
corporations in such chain.
Z. Parent-Level Change in Control shall mean any of the
following transactions involving a change in control or ownership
of the Fleming which is effected while, and only while, Fleming
is the Parent of the Corporation:
(i) the acquisition by any individual, entity or
group (within the meaning of Section 13(d)(3) or
14(d)(2) of the 1934 Act (a "Person") of beneficial
ownership (within the meaning of Rule 13d-3 promulgated
under the 1933 Act) of 20% or more (the "Triggering
Percentage") of either (i) the then outstanding shares
of Fleming common stock (the "Outstanding Company
Common Stock") or (ii) the combined voting power of the
then outstanding Fleming voting securities entitled to
vote generally in the election of directors (the
"Outstanding Company Voting Securities"); provided,
however, in the event the "Incumbent Board" (as such
term is hereinafter defined) pursuant to authority
granted in any rights agreement to which Fleming is a
party (the "Rights Agreement") lowers the acquisition
threshold percentages set forth in such Rights
Agreement, the Triggering Percentage shall be
automatically reduced to equal the threshold
percentages set pursuant to authority granted to the
board in the Rights Agreement; and provided, further,
however, that the following acquisitions shall not
constitute a Parent-Level Change in Control: (i) any
acquisition directly from Fleming, (ii) any acquisition
by Fleming, (iii) any acquisition by any employee
benefit plan (or related trust) sponsored or maintained
by Fleming or any corporation controlled by Fleming, or
(iv) any acquisition by any corporation pursuant to a
transaction which complies with clauses (x), (y), and
(z) of subsection (iii) of this definition; or
(ii) a change in the composition of the Fleming
Board of Directors such that the individuals who, as of
the effective date of the Plan, constitute the Fleming
Board of Directors (the "Incumbent Board") cease for
any reason to comprise at least a majority of the
Fleming Board of Directors; provided, however, that any
individual who becomes a member of the Fleming Board of
Directors subsequent to the effective date of the Plan
and whose election, appointment or nomination for
election by Fleming's shareholders, was approved by a
vote of at least a majority of the directors then
comprising the Incumbent Board shall be considered as
though such individual were a member of the Incumbent
Board, but excluding for purposes of this definition,
any such individual whose initial assumption of office
occurs as a result of an actual or threatened election
contest with respect to the election or removal of
directors or other actual or threatened solicitation of
proxies or consents by or on behalf of a Person other
than the Fleming Board of Directors; or
(iii) the approval by the Fleming shareholders
of a reorganization, share exchange, merger or
consolidation or acquisition of assets of another
corporation (a "Business Combination"), in each case,
unless, following such Business Combination, (x) all or
substantially all of the individuals and entities who
were the beneficial owners, respectively, of the
Outstanding Company Common Stock and Outstanding
Company Voting Securities immediately prior to such
Business Combination will beneficially own, directly or
indirectly, more than 50% of, respectively, the then
outstanding shares of common stock and the combined
voting power of the then outstanding voting securities
entitled to vote generally in the election of
directors, as the case may be, of the corporation
resulting from such Business Combination (including,
without limitation, a corporation which as a result of
such transaction will own Fleming through one or more
subsidiaries) in substantially the same proportions as
their ownership, immediately prior to such Business
Combination of the Outstanding Company Common Stock and
Outstanding Company Voting Securities, as the case may
be, (y) no Person (excluding any employee benefit plan
(or related trust) of Fleming or such corporation
resulting from such Business Combination) will
beneficially own, directly or indirectly, 20% or more
of, respectively, the then outstanding shares of common
stock of the corporation resulting from such Business
Combination or the combined voting power of the then
outstanding voting securities of such corporation
except to the extent that such ownership existed prior
to the Business Combination, and (z) at least a
majority of the members of the board of directors of
the corporation resulting from such Business
Combination will have been members of the Incumbent
Board at the time of the execution of the initial
agreement, or of the action of the Incumbent Board,
providing for such Business Combination; or
(iv) the approval by the shareholders of Fleming
of (x) a complete liquidation or dissolution of Fleming
or, (y) the sale or other disposition of all or
substantially all of the assets of Fleming, other than
to a corporation, with respect to which following such
sale or other disposition, (A) more than 50% of,
respectively, the then outstanding shares of common
stock of such corporation and the combined voting power
of the then outstanding voting securities of such
corporation entitled to vote generally in the election
of directors will be beneficially owned, directly or
indirectly, by all or substantially all of the
individuals and entities who were the beneficial
owners, respectively, of the Outstanding Company Common
Stock and Outstanding Company Voting Securities
immediately prior to such sale or other disposition in
substantially the same proportion as their ownership,
immediately prior to such sale or other disposition, of
the Outstanding Company Common Stock and Outstanding
Company Voting Securities, as the case may be, (B) less
than 20% of, respectively, the then outstanding shares
of common stock of such corporation and the combined
voting power of the then outstanding voting securities
of such corporation entitled to vote generally in the
election of directors will be beneficially owned,
directly or indirectly, by any Person (excluding any
employee benefit plan (or related trust) of Fleming or
such corporation), except to the extent that such
Person owned 20% or more of the Outstanding Company
Common Stock or Outstanding Company Voting Securities
prior to the sale or disposition, and (C) at least a
majority of the members of the board of directors of
such corporation will have been members of the
Incumbent Board at the time of the execution of the
initial agreement, or of the action of the Board,
providing for such sale or other disposition of assets
of Fleming.
AA. Parent-Level Reduction in Ownership shall mean any
transaction, including (without limitation) any sale or other
disposition by Fleming of its ownership interest in any
outstanding voting securities of the Corporation or any direct
issuance of voting securities by the Corporation, which effects a
reduction to Fleming's combined direct and indirect (through one
or more majority-owned subsidiaries) ownership of the
Corporation's voting securities to an amount which represents
less than fifty percent (50%) of the total combined voting power
of all outstanding classes of stock of the Corporation.
BB. Permitted Transfer shall mean (i) a gratuitous transfer of
the Purchased Shares, provided and only if Optionee obtains the
Corporation's prior written consent to such transfer, (ii) a
transfer of title to the Purchased Shares effected pursuant to
Optionee's will or the laws of inheritance following Optionee's
death or (iii) a transfer to the Corporation in pledge as
security for any purchase-money indebtedness incurred by Optionee
in connection with the acquisition of the Purchased Shares.
CC. Plan shall mean the Corporation's 2000 Stock Option/Stock
Issuance Plan.
DD. Plan Administrator shall mean either the Board or a
committee of the Board acting in its capacity as administrator of
the Plan.
EE. Prior Purchase Agreement shall have the meaning assigned to
such term in Paragraph D.4.
FF. Purchased Shares shall have the meaning assigned to such
term in Paragraph A.1.
GG. Recapitalization shall mean any stock split, stock dividend,
recapitalization, combination of shares, exchange of shares or
other change affecting the Corporation's outstanding Common Stock
as a class without the Corporation's receipt of consideration.
HH. Reorganization shall mean any of the following transactions:
(i) a merger or consolidation in which the Corporation is not
the surviving entity,
(ii) a sale, transfer or other disposition of all or
substantially all of the Corporation's assets,
(iii) a reverse merger in which the Corporation is the
surviving entity but in which the Corporation's outstanding
voting securities are transferred in whole or in part to a person
or persons different from the persons holding those securities
immediately prior to the merger, or
(iv) any transaction effected primarily to change the
state in which the Corporation is incorporated or to create a holding
company structure.
II. Repurchase Right shall mean the right granted to Fleming in
accordance with Article D.
JJ. SEC shall mean the Securities and Exchange Commission.
KK. Service shall mean (i) the Optionee's performance of
services for the Corporation (or any Parent or Subsidiary) in the
capacity of an employee, subject to the control and direction of
the employer entity as to both the work to be performed and the
manner and method of performance, a non-employee member of the
board of directors or an independent consultant, or (ii) the
Optionee's performance of services for Fleming or any Fleming
Subsidiary in the capacity of an employee or associate of that
entity, a non-employee member of the board of directors or an
independent consultant, but only to the extent such clause (ii)
services are performed while Fleming remains the Parent of the
Corporation.
LL. Subsidiary shall mean any corporation (other than the
Corporation) in an unbroken chain of corporations beginning with
the Corporation, provided each corporation (other than the last
corporation) in the unbroken chain owns, at the time of the
determination, stock possessing fifty percent (50%) or more of
the total combined voting power of all classes of stock in one of
the other corporations in such chain.
MM. Target Shares shall have the meaning assigned to such term
in Paragraph E.2.
NN. Vesting Schedule shall mean the vesting schedule specified
in the Grant Notice pursuant to which the Optionee is to vest in
the Option Shares in a series of installments over his or her
period of Service.
OO. Unvested Shares shall have the meaning assigned to such term
in Paragraph D.1.
<PAGE>
EXHIBIT C
EMAR.NET, INC.
2000 STOCK OPTION/STOCK ISSUANCE PLAN
ARTICLE ONE
GENERAL PROVISIONS
I. PURPOSE OF THE PLAN
This 2000 Stock Option/Stock Issuance Plan is intended
to promote the interests of eMAR.net, Inc., a Delaware
corporation, by providing eligible persons in the Corporation's
employ or service with the opportunity to acquire a proprietary
interest, or otherwise increase their proprietary interest, in
the Corporation as an incentive for them to continue in such
employ or service.
Capitalized terms herein shall have the meanings
assigned to such terms in the attached Appendix.
II. STRUCTURE OF THE PLAN
A. The Plan shall be divided into two (2) separate equity
programs:
(i) the Option Grant Program under which eligible persons
may, at the discretion of the Plan Administrator, be granted options
to purchase shares of Common Stock, and
(ii) the Stock Issuance Program under which eligible persons
may, at the discretion of the Plan Administrator, be issued shares of
Common Stock directly, either through the immediate purchase of
such shares or as a bonus for services rendered the Corporation
(or any Parent or Subsidiary).
B. The provisions of Articles One and Four shall apply to both
equity programs under the Plan and shall accordingly govern the
interests of all persons under the Plan.
III. ADMINISTRATION OF THE PLAN
A. The Plan shall be administered by the Board. However,
any or all administrative functions otherwise exercisable by the
Board may be delegated to the Committee. Members of the
Committee shall serve for such period of time as the Board may
determine and shall be subject to removal by the Board at any
time. The Board may also at any time terminate the functions of
the Committee and reassume all powers and authority previously
delegated to the Committee.
B. The Plan Administrator shall have full power and authority
(subject to the provisions of the Plan) to establish such rules
and regulations as it may deem appropriate for proper
administration of the Plan and to make such determinations under,
and issue such interpretations of, the Plan and any outstanding
options or stock issuances thereunder as it may deem necessary or
advisable. Decisions of the Plan Administrator shall be final
and binding on all parties who have an interest in the Plan or
any option grant or stock issuance thereunder.
IV. ELIGIBILITY
A. The persons eligible to participate in the Plan are as
follows:
(i) Employees,
(ii) Other Fleming Service Providers,
(iii) non-employee members of the Board or the non-employee
members of the board of directors of any Parent or Subsidiary,
and
(iv) consultants and other independent advisors who provide
services to the Corporation (or any Parent or Subsidiary).
B. The Plan Administrator shall have full authority to
determine, (i) with respect to the grants made under the Option
Grant Program, which eligible persons are to receive such
grants, the time or times when those grants are to be made, the
number of shares to be covered by each such grant, the status of
the granted option as either an Incentive Option or a Non-
Statutory Option, the time or times when each option is to become
exercisable, the vesting schedule (if any) applicable to the
option shares and the maximum term for which the option is to
remain outstanding, and (ii) with respect to stock issuances made
under the Stock Issuance Program, which eligible persons are to
receive such issuances, the time or times when those issuances
are to be made, the number of shares to be issued to each
Participant, the vesting schedule (if any) applicable to the
issued shares and the consideration to be paid by the Participant
for such shares.
C. The Plan Administrator shall have the absolute dis-
cretion either to grant options in accordance with the Option Grant
Program or to effect stock issuances in accordance with the Stock
Issuance Program.
V. STOCK SUBJECT TO THE PLAN
A. The stock issuable under the Plan shall be shares of
authorized but unissued or reacquired Common Stock. The maximum
number of shares of Common Stock which may be issued over the
term of the Plan shall not exceed 2,724,000 shares. However, not
more than 724,000 shares may be issued to Fleming Service
Providers.
B. Shares of Common Stock subject to outstanding options
shall be available for subsequent issuance under the Plan to the
extent (i) the options expire or terminate for any reason prior
to exercise in full or (ii) the options are cancelled in
accordance with the cancellation-regrant provisions of Article
Two. Unvested shares issued under the Plan and subsequently
repurchased by the Corporation, at the option exercise or direct
issue price paid per share, pursuant to the Corporation's
repurchase rights under the Plan shall be added back to the
number of shares of Common Stock reserved for issuance under the
Plan and shall accordingly be available for reissuance through
one or more subsequent option grants or direct stock issuances
under the Plan. Any unvested shares issued under the Plan and
repurchased by Fleming pursuant to repurchase rights assigned to
it by the Corporation will not be available for reissuance.
C. Should any change be made to the Common Stock by
reason of any stock split, stock dividend, recapitalization, combi-
nation of shares, exchange of shares or other change affecting the
outstanding Common Stock as a class without the Corporation's
receipt of consideration, appropriate adjustments shall be made
to (i) the maximum number and/or class of securities issuable
under the Plan, (ii) the maximum number and/or class of
securities issuable to Fleming Service Providers and (iii) the
number and/or class of securities and the exercise price per
share in effect under each outstanding option in order to prevent
the dilution or enlargement of benefits thereunder. The
adjustments determined by the Plan Administrator shall be final,
binding and conclusive. In no event shall any such adjustments
be made in connection with the conversion of one or more
outstanding shares of the Corporation's preferred stock into
shares of Common Stock.
ARTICLE TWO
OPTION GRANT PROGRAM
I. OPTION TERMS
Each option shall be evidenced by one or more documents
in the form approved by the Plan Administrator; provided,
however, that each such document shall comply with the terms
specified below. Each document evidencing an Incentive Option
shall, in addition, be subject to the provisions of the Plan
applicable to such options.
A. Exercise Price.
1. The exercise price per share shall be fixed by the
Plan Administrator in accordance with the following provisions:
(i) The exercise price per share shall not be less
than eighty-five percent (85%) of the Fair Market Value per share of
Common Stock on the option grant date.
(ii) If the person to whom the option is granted is a 10%
Stockholder, then the exercise price per share shall not be less
than one hundred ten percent (110%) of the Fair Market Value per
share of Common Stock on the option grant date.
2. The exercise price shall become immediately due upon
exercise of the option and shall, subject to the provisions of
Section I of Article Four and the documents evidencing the
option, be payable in cash or check made payable to the
Corporation. Should the Common Stock be registered under Section
12 of the 1934 Act at the time the option is exercised, then the
exercise price may also be paid as follows:
(i) in shares of Common Stock held for the requisite
period necessary to avoid a charge to the Corporation's earnings for
financial reporting purposes and valued at Fair Market Value on
the Exercise Date, or
(ii) to the extent the option is exercised for vested
shares, through a special sale and remittance procedure pursuant to
which the Optionee shall concurrently provide irrevocable instructions
(A) to a Corporation-designated brokerage firm to effect the
immediate sale of the purchased shares and remit to the
Corporation, out of the sale proceeds available on the settlement
date, sufficient funds to cover the aggregate exercise price
payable for the purchased shares plus all applicable Federal,
state and local income and employment taxes required to be
withheld by the Corporation by reason of such exercise and (B) to
the Corporation to deliver the certificates for the purchased
shares directly to such brokerage firm in order to complete the
sale.
Except to the extent such sale and remittance procedure
is utilized, payment of the exercise price for the purchased
shares must be made on the Exercise Date.
B. Exercise and Term of Options. Each option shall be
exercisable at such time or times, during such period and for
such number of shares as shall be determined by the Plan
Administrator and set forth in the documents evidencing the
option grant. However, no option shall have a term in excess of
ten (10) years measured from the option grant date.
C. Effect of Termination of Service.
1. The following provisions shall govern the exercise
of any options held by the Optionee at the time of cessation of Service
or death:
(i) Should the Optionee cease to remain in Service
for any reason other than death, Disability or Misconduct, then the
Optionee shall have a period of three (3) months following the
date of such cessation of Service during which to exercise each
outstanding option held by such Optionee.
(ii) Should Optionee's Service terminate by reason
of Disability, then the Optionee shall have a period of twelve (12)
months following the date of such cessation of Service during which to
exercise each outstanding option held by such Optionee.
(iii) If the Optionee dies while holding an outstanding
option, then the personal representative of his or her estate or
the person or persons to whom the option is transferred pursuant
to the Optionee's will or the laws of inheritance or the
Optionee's designated beneficiary or beneficiaries of that option
shall have a twelve (12)-month period following the date of the
Optionee's death to exercise such option.
(iv) Under no circumstances, however, shall any such
option be exercisable after the specified expiration of the option term.
(v) During the applicable post-Service exercise period,
the option may not be exercised in the aggregate for more than the
number of vested shares for which the option is exercisable on
the date of the Optionee's cessation of Service. Upon the
expiration of the applicable exercise period or (if earlier) upon
the expiration of the option term, the option shall terminate and
cease to be outstanding for any vested shares for which the
option has not been exercised. However, the option shall,
immediately upon the Optionee's cessation of Service, terminate
and cease to be outstanding with respect to any and all option
shares for which the option is not otherwise at the time
exercisable or in which the Optionee is not otherwise at that
time vested.
(vi) Should Optionee's Service be terminated for
Misconduct or should Optionee otherwise engage in Misconduct while
holding one or more outstanding options under the Plan, then all
those options shall terminate immediately and cease to remain
outstanding.
2. The Plan Administrator shall have the discretion,
exercisable either at the time an option is granted or at any
time while the option remains outstanding, to:
(i) extend the period of time for which the option is
to remain exercisable following Optionee's cessation of Service or
death from the limited period otherwise in effect for that option to
such greater period of time as the Plan Administrator shall deem
appropriate, but in no event beyond the expiration of the option
term, and/or
(ii) permit the option to be exercised, during the
applicable post-Service exercise period, not only with respect to
the number of vested shares of Common Stock for which such option is
exercisable at the time of the Optionee's cessation of Service
but also with respect to one or more additional installments in
which the Optionee would have vested under the option had the
Optionee continued in Service.
D. Stockholder Rights. The holder of an option shall have no
stockholder rights with respect to the shares subject to the option until
such person shall have exercised the option, paid the exercise price and
become the recordholder of the purchased shares.
E. Unvested Shares. The Plan Administrator shall have the
discretion to grant options which are exercisable for unvested
shares of Common Stock. Should the Optionee cease Service while
holding such unvested shares, the Corporation shall have the
right to repurchase, at the exercise price paid per share, any or
all of those unvested shares. The terms upon which such
repurchase right shall be exercisable (including the period and
procedure for exercise and the appropriate vesting schedule for
the purchased shares) shall be established by the Plan
Administrator and set forth in the document evidencing such
repurchase right. Any such repurchase rights which pertain to
unvested shares held by a Fleming Service Provider shall be
assignable to Fleming. The Plan Administrator may not impose a
vesting schedule upon any option grant or the shares of Common
Stock subject to that option which is more restrictive than
twenty percent (20%) per year vesting, with the initial vesting
to occur not later than one (1) year after the option grant date.
However, such limitation shall not be applicable to any option
grants made to individuals who are officers of the Corporation,
non-employee Board members or independent consultants.
F. First Refusal Rights. Until such time as the Common
Stock is first registered under Section 12 of the 1934 Act, the
Corporation shall have the right of first refusal with respect to
any proposed disposition by the Optionee (or any successor in
interest) of any shares of Common Stock issued under the Plan.
Such right of first refusal shall be exercisable in
accordance with the terms established by the Plan Administrator
and set forth in the document evidencing such right. Any such
first refusal rights which pertain to shares held by a Fleming
Service Provider shall be assignable to Fleming.
G. Limited Transferability of Options. An Incentive Stock
Option shall be exercisable only by the Optionee during his or
her lifetime and shall not be assignable or transferable other
than by will or by the laws of inheritance following the
Optionee's death. A Non-Statutory Option may be assigned in whole
or in part during the Optionee's lifetime to one or more members
of the Optionee's family or to a trust established exclusively
for one or more such family members or to Optionee's former
spouse, to the extent such assignment is in connection with the
Optionee's estate plan or pursuant to a domestic relations order.
The assigned portion may only be exercised by the person or
persons who acquire a proprietary interest in the Non-Statutory
Option pursuant to the assignment. The terms applicable to the
assigned portion shall be the same as those in effect for the
option immediately prior to such assignment and shall be set
forth in such documents issued to the assignee as the Plan
Administrator may deem appropriate. Notwithstanding the
foregoing, the Optionee may also designate one or more persons as
the beneficiary or beneficiaries of his or her outstanding
options under the Plan, and those options shall, in accordance
with such designation, automatically be transferred to such
beneficiary or beneficiaries upon the Optionee's death while
holding those options. Such beneficiary or beneficiaries shall
take the transferred options subject to all the terms and
conditions of the applicable agreement evidencing each such
transferred option, including (without limitation) the limited
time period during which the option may be exercised following
the Optionee's death.
II. INCENTIVE OPTIONS
The terms specified below shall be applicable to all
Incentive Options. Except as modified by the provisions of this
Section II, all the provisions of Articles One, Two and Four
shall be applicable to Incentive Options. Options which are
specifically designated as Non-Statutory Options shall not be
subject to the terms of this Section II.
A. Eligibility. Incentive Options may only be granted to
Employees.
B. Exercise Price. The exercise price per share shall not be
less than one hundred percent (100%) of the Fair Market Value per
share of Common Stock on the option grant date.
C. Dollar Limitation. The aggregate Fair Market Value of
the shares of Common Stock (determined as of the respective date or
dates of grant) for which one or more options granted to any
Employee under the Plan (or any other option plan of the
Corporation or any Parent or Subsidiary) may for the first time
become exercisable as Incentive Options during any one (1)
calendar year shall not exceed the sum of One Hundred Thousand
Dollars ($100,000). To the extent the Employee holds two (2) or
more such options which become exercisable for the first time in
the same calendar year, the foregoing limitation on the
exercisability of such options as Incentive Options shall be
applied on the basis of the order in which such options are
granted.
D. 10% Stockholder. If any Employee to whom an Incentive
Option is granted is a 10% Stockholder, then the option term
shall not exceed five (5) years measured from the option grant
date.
III. PARENT-LEVEL CHANGE IN CONTROL
A. The Plan Administrator shall have the discretion,
exercisable either at the time the option is granted or at any
time while the option remains outstanding, to incorporate the
following special vesting acceleration provision into one or more
options under the Plan:
To the extent such option is (i) outstanding
at the time of a Parent-Level Change in Control and
(ii) held at that time by a Fleming Service Provider,
the shares of Common Stock at the time subject to such
option but not otherwise vested shall automatically
vest in full so that such option shall, immediately
prior to the effective date of such Parent-Level Change
in Control, become exercisable for all of the shares of
Common Stock at the time subject to that option and may
be exercised for any or all of those shares as fully-
vested shares of Common Stock.
B. The Plan Administrator shall have the discretion to
structure one or more of the Corporation's outstanding repurchase
rights under the Plan so that those repurchase rights shall
terminate automatically, and the shares of Common Stock subject
to those terminated rights shall immediately vest in full, to the
extent those shares are unvested at the time of a Parent-Level
Change in Control and are held at that time by a Fleming Service
Provider.
IV. PARENT-LEVEL REDUCTION IN OWNERSHIP
A. The Plan Administrator shall have the discretion,
exercisable either at the time the option is granted or at any
time while the option remains outstanding, to incorporate the
following special vesting acceleration provision into one or more
options under the Plan:
To the extent such option is (i) outstanding
at the time of a Parent-Level Reduction in Ownership
and (ii) held at that time by a Fleming Service
Provider, the shares of Common Stock at the time
subject to such option but not otherwise vested shall
automatically vest in full so that such option shall,
immediately prior to the effective date of such Parent-
Level Reduction in Ownership, become exercisable for
all of the shares of Common Stock at the time subject
to that option and may be exercised for any or all of
those shares as fully-vested shares of Common Stock.
B. The Plan Administrator shall have the discretion to
structure one or more of the Corporation's outstanding repurchase
rights under the Plan so that those repurchase rights shall
terminate automatically, and the shares of Common Stock subject
to those terminated rights shall immediately vest in full, to the
extent those shares are unvested at the time of a Parent-Level
Reduction in Ownership and are held at that time by a Fleming
Service Provider.
V. CORPORATE-LEVEL CHANGE IN CONTROL
A. The shares subject to each option outstanding under
the Plan at the time of a Corporate-Level Change in Control shall
automatically vest in full so that each such option shall,
immediately prior to the effective date of such Corporate-Level
Change in Control, become exercisable for all of the shares of
Common Stock at the time subject to that option and may be
exercised for any or all of those shares as fully-vested shares
of Common Stock. However, the shares subject to an outstanding
option under the Plan shall not vest on such an accelerated basis
if and to the extent: (i) such option is assumed by the
successor corporation (or parent thereof) in the Corporate-Level
Change in Control or otherwise continued in full force and effect
and any repurchase rights of the Corporation with respect to the
unvested option shares are concurrently assigned to such
successor corporation (or parent thereof) or otherwise continued
in full force and effect or (ii) such option is to be replaced
with a cash incentive program which preserves the spread existing
on the unvested option shares at the time of the Corporate-Level
Change in Control and provides for subsequent payout in
accordance with the same vesting schedule applicable to those
unvested option shares.
B. All outstanding repurchase rights shall also terminate
automatically, and the shares of Common Stock subject to those
terminated rights shall immediately vest in full, in the event of
any Corporate-Level Change in Control, except to the extent those
repurchase rights are assigned to any successor corporation (or
parent thereof) in connection with such Corporate- Level Change
in Control or are otherwise continued in full and effect.
C. Immediately following the consummation of the Corporate-
Level Change in Control, all outstanding options shall terminate
and cease to be outstanding, except to the extent assumed by the
successor corporation (or parent thereof) or otherwise continued
in full force and effect pursuant to the express terms of the
Corporate-Level Change in Control transaction.
D. The Plan Administrator shall have the discretion,
exercisable either at the time the option is granted or at any
time while the option remains outstanding, to structure one or
more options under the Plan so that those options shall
automatically accelerate and vest in full (and any repurchase
rights of the Corporation with respect to the unvested shares
subject to those options shall immediately terminate) upon the
occurrence of a Corporate-Level Change in Control, whether or not
those options are to be assumed in such transaction or otherwise
continued in full force and effect.
E. The Plan Administrator shall also have full power and
authority, exercisable either at the time the option is granted
or at any time while the option remains outstanding, to structure
such option so that the shares subject to that option shall
automatically vest on an accelerated basis should the Optionee's
Service terminate by reason of an Involuntary Termination within
a designated period (not to exceed eighteen (18) months)
following the effective date of any Corporate-Level Change in
Control in which the option is assumed or continued in effect and
the repurchase rights applicable to those shares do not otherwise
terminate. Any option so accelerated shall remain exercisable
for the fully-vested option shares until the expiration or sooner
termination of the option term. In addition, the Plan
Administrator may structure or more of the Corporation's
repurchase rights so that those rights shall immediately
terminate on an accelerated basis with respect to the unvested
shares held by the Optionee at the time of such an Involuntary
Termination, and the shares subject to those terminated rights
shall accordingly vest at that time.
VI. ADDITIONAL CHANGE IN CONTROL PROVISIONS
A. Each option which is assumed in connection with a Corporate-
Level Change in Control or otherwise continued in full force and
effect shall be appropriately adjusted, immediately after such
transaction, to apply to the number and class of securities which
would have been issuable to the Optionee in consummation of such
Corporate-Level Change in Control, had the option been exercised
immediately prior to such transaction. Appropriate adjustments
shall also be made to (i) the number and class of securities
available for issuance under the Plan following the consummation
of such Corporate-Level Change in Control and (ii) the exercise
price payable per share under each outstanding option, provided
the aggregate exercise price payable for such securities shall
remain the same. To the extent the actual holders of the
Corporation's outstanding Common Stock receive cash consideration
for their Common Stock in consummation of the Corporate-Level
Change in Control, the successor corporation may, in connection
with the assumption of the outstanding options under this Plan,
substitute one or more shares of its own common stock with a fair
market value equivalent to the cash consideration paid per share
of Common Stock in such Corporate-Level Change in Control.
B. The portion of any Incentive Option accelerated in
connection with a Parent-Level or Corporate-Level Change in
Control shall remain exercisable as an Incentive Option only to
the extent the applicable One Hundred Thousand Dollar limitation
is not exceeded. To the extent such dollar limitation is
exceeded, the accelerated portion of such option shall be
exercisable as a Non-Statutory Option under the Federal tax laws.
C. The grant of options under the Plan shall in no way
affect the right of the Corporation or Fleming to adjust, reclassify,
reorganize or otherwise change its capital or business structure
or to merge, consolidate, dissolve, liquidate or sell or transfer
all or any part of its business or assets.
VII. CANCELLATION AND REGRANT OF OPTIONS
The Plan Administrator shall have the authority to
effect, at any time and from time to time, with the consent of
the affected option holders, the cancellation of any or all
outstanding options under the Plan and to grant in substitution
therefor new options covering the same or different number of
shares of Common Stock but with an exercise price per share based
on the Fair Market Value per share of Common Stock on the new
option grant date.
ARTICLE THREE
STOCK ISSUANCE PROGRAM
I. STOCK ISSUANCE TERMS
Shares of Common Stock may be issued under the Stock
Issuance Program through direct and immediate issuances without
any intervening option grants. Each such stock issuance shall be
evidenced by a Stock Issuance Agreement which complies with the
terms specified below.
A. Purchase Price.
1. The purchase price per share shall be fixed by
the Plan Administrator but shall not be less than eighty-five percent
(85%) of the Fair Market Value per share of Common Stock on the
issue date. However, the purchase price per share of Common
Stock issued to a 10% Stockholder shall not be less than one
hundred and ten percent (110%) of such Fair Market Value.
2. Subject to the provisions of Section I of Article
Four, shares of Common Stock may be issued under the Stock Issuance
Program for any of the following items of consideration which the
Plan Administrator may deem appropriate in each individual instance:
(i) cash or check made payable to the Corporation, or
(ii) past services rendered to the Corporation (or any
Parent or Subsidiary).
B. Vesting Provisions.
1. Shares of Common Stock issued under the Stock
Issuance Program may, in the discretion of the Plan Administrator, be
fully and immediately vested upon issuance or may vest in one or
more installments over the Participant's period of Service or
upon attainment of specified performance objectives. However,
the Plan Administrator may not impose a vesting schedule upon any
stock issuance effected under the Stock Issuance Program which is
more restrictive than twenty percent (20%) per year vesting, with
initial vesting to occur not later than one (1) year after the
issuance date. Such limitation shall not apply to any Common
Stock issuances made to the officers of the Corporation, non-
employee Board members or independent consultants.
2. Any new, substituted or additional securities or
other property (including money paid other than as a regular cash
dividend) which the Participant may have the right to receive
with respect to the Participant's unvested shares of Common Stock
by reason of any stock dividend, stock split, recapitalization,
combination of shares, exchange of shares or other change affecting
the outstanding Common Stock as a class without the Corporation's
receipt of consideration shall be issued subject to (i) the same
vesting requirements applicable to the Participant's unvested shares
of Common Stock and (ii) such escrow arrangements as the Plan
Administrator shall deem appropriate.
3. The Participant shall have full stockholder rights
with respect to any shares of Common Stock issued to the Participant
under the Stock Issuance Program, whether or not the Participant's
interest in those shares is vested. Accordingly, the Participant
shall have the right to vote such shares and to receive any regular
cash dividends paid on such shares.
4. Should the Participant cease to remain in Service
while holding one or more unvested shares of Common Stock issued under
the Stock Issuance Program or should the performance objectives
not be attained with respect to one or more such unvested shares
of Common Stock, then those shares shall be immediately
surrendered to the Corporation for cancellation, and the
Participant shall have no further stockholder rights with respect
to those shares. To the extent the surrendered shares were
previously issued to the Participant for consideration paid in
cash or cash equivalent (including the Participant's purchase-
money indebtedness), the Corporation shall repay to the
Participant the cash consideration paid for the surrendered
shares and shall cancel the unpaid principal balance of any
outstanding purchase-money note of the Participant attributable
to such surrendered shares.
5. The Plan Administrator may in its discretion waive
the surrender and cancellation of one or more unvested shares of
Common Stock (or other assets attributable thereto) which would
otherwise occur upon the non-completion of the vesting schedule
applicable to those shares. Such waiver shall result in the
immediate vesting of the Participant's interest in the shares of
Common Stock as to which the waiver applies. Such waiver may be
effected at any time, whether before or after the Participant's
cessation of Service or the attainment or non-attainment of the
applicable performance objectives.
C. First Refusal Rights. Until such time as the
Common Stock is first registered under Section 12 of the 1934
Act, the Corporation shall have the right of first refusal with
respect to any proposed disposition by the Participant (or any
successor in interest) of any shares of Common Stock issued
under the Stock Issuance Program. Such right of first refusal
shall be exercisable in accordance with the terms established by
the Plan Administrator and set forth in the document evidencing
such right. Any such first refusal rights which pertain to
shares held by a Fleming Service Provider shall be assignable to
Fleming.
II. PARENT-LEVEL CHANGE IN CONTROL
The Plan Administrator shall have the discretion to
structure one or more of the Corporation's outstanding repurchase
rights under the Stock Issuance Program so that those repurchase
rights shall terminate automatically, and the shares of Common
Stock subject to those terminated rights shall immediately vest in
full, to the extent those shares are unvested at the time of a Parent-
Level Change in Control and are held at that time by a Fleming
Service Provider.
III. PARENT-LEVEL REDUCTION IN OWNERSHIP
The Plan Administrator shall have the discretion to
structure one or more of the Corporation's outstanding repurchase
rights under the Stock Issuance Program so that those repurchase
rights shall terminate automatically, and the shares of Common
Stock subject to those terminated rights shall immediately vest
in full, to the extent those shares are unvested at the time of a
Parent-Level Reduction in Ownership and are held at that time by
a Fleming Service Provider.
IV. CORPORATE-LEVEL CHANGE IN CONTROL
A. Upon the occurrence of a Corporate-Level Change in
Control, all outstanding repurchase rights under the Stock Issuance
Program shall terminate automatically, and the shares of Common
Stock subject to those terminated rights shall immediately vest
in full, except to the extent those repurchase rights are
assigned to the successor corporation (or parent thereof) in
connection with such Corporate-Level Change in Control or
otherwise continued in full force and effect.
B. The Plan Administrator shall have the discretionary
authority, exercisable either at the time the unvested shares are
issued or any time while the Corporation's repurchase rights with
respect to those shares remain outstanding, to provide that those
rights shall automatically terminate on an accelerated basis, and
the shares of Common Stock subject to those terminated rights
shall immediately vest, in the event the Participant's Service
should subsequently terminate by reason of an Involuntary
Termination within a designated period (not to exceed eighteen
(18) months) following the effective date of any Corporate-Level
Change in Control in which those repurchase rights are assigned
to the successor corporation (or parent thereof) or are otherwise
continued in full force and effect.
C. The Plan Administrator shall have the discretion to
structure one or more of the Corporation's outstanding repurchase
rights under the Stock Issuance Program so that those repurchase
rights shall terminate automatically, and the shares of Common
Stock subject to those terminated rights shall immediately vest
in full, upon the occurrence of a Corporate-Level Change in
Control.
V. SHARE ESCROW/LEGENDS
Unvested shares may, in the Plan Administrator's
discretion, be held in escrow by the Corporation until the
Participant's interest in such shares vests or may be issued
directly to the Participant with restrictive legends on the
certificates evidencing those unvested shares.
ARTICLE FOUR
MISCELLANEOUS
I. FINANCING
The Plan Administrator may permit any Optionee or
Participant to pay the option exercise price under the Option
Grant Program or the purchase price for shares issued under the
Stock Issuance Program by delivering a full-recourse, interest
bearing promissory note payable in one or more installments and
secured by the purchased shares. In no event, however, may the
maximum credit available to the Optionee or Participant exceed
the sum of (i) the aggregate option exercise price or purchase
price payable for the purchased shares (less the par value of
those shares) plus (ii) any Federal, state and local income and
employment tax liability incurred by the Optionee or the
Participant in connection with the option exercise or share
purchase.
II. EFFECTIVE DATE AND TERM OF PLAN
A. The Plan shall become effective when adopted by the
Board, but no option granted under the Plan may be exercised, and no
shares shall be issued under the Plan, until the Plan is approved
by the Corporation's stockholders. If such stockholder approval
is not obtained within twelve (12) months after the date of the
Board's adoption of the Plan, then all options previously granted
under the Plan shall terminate and cease to be outstanding, and
no further options shall be granted and no shares shall be issued
under the Plan. Subject to such limitation, the Plan
Administrator may grant options and issue shares under the Plan
at any time after the effective date of the Plan and before the
date fixed herein for termination of the Plan.
B. The Plan shall terminate upon the earliest of (i) the
expiration of the ten (10)-year period measured from the date the
Plan is adopted by the Board, (ii) the date on which all shares
available for issuance under the Plan shall have been issued as
vested shares or (iii) the termination of all outstanding options
in connection with a Corporate Transaction. All options and
unvested stock issuances outstanding at the time of a clause (i)
termination event shall continue to have full force and effect in
accordance with the provisions of the documents evidencing those
options or issuances.
III. AMENDMENT OF THE PLAN
A. The Board shall have complete and exclusive power and
authority to amend or modify the Plan in any or all respects.
However, no such amendment or modification shall adversely affect
the rights and obligations with respect to options or unvested
stock issuances at the time outstanding under the Plan unless the
Optionee or the Participant consents to such amendment or
modification. In addition, certain amendments may require
stockholder approval pursuant to applicable laws and regulations.
B. Options may be granted under the Option Grant Program
and shares may be issued under the Stock Issuance Program which are in
each instance in excess of the number of shares of Common Stock then
available for issuance under the Plan, provided any excess shares
actually issued under those programs shall be held in escrow
until there is obtained stockholder approval of an amendment
sufficiently increasing the number of shares of Common Stock
available for issuance under the Plan. If such stockholder
approval is not obtained within twelve (12) months after the date
the first such excess grants or issuances are made, then (i) any
unexercised options granted on the basis of such excess shares
shall terminate and cease to be outstanding and (ii) the
Corporation shall promptly refund to the Optionees and the
Participants the exercise or purchase price paid for any excess
shares issued under the Plan and held in escrow, together with
interest (at the applicable Short Term Federal Rate) for the
period the shares were held in escrow, and such shares shall
thereupon be automatically cancelled and cease to be outstanding.
IV. USE OF PROCEEDS
Any cash proceeds received by the Corporation from the
sale of shares of Common Stock under the Plan shall be used for
general corporate purposes.
V. WITHHOLDING
The Corporation's obligation to deliver shares of
Common Stock upon the exercise of any options granted under the
Plan or upon the issuance or vesting of any shares issued under
the Plan shall be subject to the satisfaction of all applicable
Federal, state and local income and employment tax withholding
requirements.
VI. REGULATORY APPROVALS
The implementation of the Plan, the granting of any
options under the Plan and the issuance of any shares of Common
Stock (i) upon the exercise of any option or (ii) under the Stock
Issuance Program shall be subject to the Corporation's
procurement of all approvals and permits required by regulatory
authorities having jurisdiction over the Plan, the options
granted under it and the shares of Common Stock issued pursuant
to it.
VII. NO EMPLOYMENT OR SERVICE RIGHTS
Nothing in the Plan shall confer upon the Optionee or
the Participant any right to continue in Service for any period
of specific duration or interfere with or otherwise restrict in
any way the rights of the Corporation (or any Parent or
Subsidiary employing or retaining such person) or of the Optionee
or the Participant, which rights are hereby expressly reserved by
each, to terminate such person's Service at any time for any
reason, with or without cause.
VIII. FINANCIAL REPORTS
The Corporation shall deliver a balance sheet and an
income statement at least annually to each individual holding an
outstanding option under the Plan, unless such individual is a
key Employee whose duties in connection with the Corporation (or
any Parent or Subsidiary) assure such individual access to
equivalent information.
<PAGE>
APPENDIX
The following definitions shall be in effect under the
Plan:
A. Board shall mean the Corporation's Board of Directors.
B. Code shall mean the Internal Revenue Code of 1986, as
amended.
C. Committee shall mean a committee of one (1) or more Board
members appointed by the Board to exercise one or more
administrative functions under the Plan.
D. Common Stock shall mean the Corporation's common stock.
E. Corporate-Level Change in Control shall mean any of the
following transactions involving a change in control or ownership
of the Corporation:
(i) a stockholder-approved merger or consolidation in which
securities possessing more than fifty percent (50%) of the total
combined voting power of the Corporation's outstanding securities
are transferred to a person or persons different from the persons
holding those securities immediately prior to such transaction,
or
(ii) a stockholder-approved sale, transfer or other
disposition of all or substantially all of the Corporation's assets
in complete liquidation or dissolution of the Corporation, or
(iii) the acquisition, directly or indirectly, by any
person or related group of persons (other than the Corporation or a
person that directly or indirectly controls, is controlled by, or
is under common control with, the Corporation) of beneficial
ownership (within the meaning of Rule 13d-3 of the Securities
Exchange Act of 1934, as amended) of securities possessing more
than fifty percent (50%) of the total combined voting power of
the Corporation's outstanding securities pursuant to a tender or
exchange offer made directly to the Corporation's stockholders.
F. Corporation shall mean eMAR.net, Inc., a Delaware
corporation, and any successor corporation to all or
substantially all of the assets or voting stock of eMAR.net, Inc.
which shall by appropriate action adopt the Plan.
G. Disability shall mean the inability of the Optionee or
the Participant to engage in any substantial gainful activity by
reason of any medically determinable physical or mental
impairment and shall be determined by the Plan Administrator on
the basis of such medical evidence as the Plan Administrator
deems warranted under the circumstances.
H. Employee shall mean an individual who is in the employ
of the Corporation (or any Parent or Subsidiary of the Corporation),
subject to the control and direction of the employer entity as to
both the work to be performed and the manner and method of
performance.
I. Exercise Date shall mean the date on which the Corporation
shall have received written notice of the option exercise.
J. Fair Market Value per share of Common Stock on any relevant
date shall be determined in accordance with the following
provisions:
(i) If the Common Stock is at the time traded on the Nasdaq
National Market, then the Fair Market Value shall be the closing
selling price per share of Common Stock on the date in question,
as such price is reported by the National Association of
Securities Dealers on the Nasdaq National Market and published in
The Wall Street Journal. If there is no closing selling price
for the Common Stock on the date in question, then the Fair
Market Value shall be the closing selling price on the last
preceding date for which such quotation exists.
(ii) If the Common Stock is at the time listed on any Stock
Exchange, then the Fair Market Value shall be the closing selling
price per share of Common Stock on the date in question on the
Stock Exchange determined by the Plan Administrator to be the
primary market for the Common Stock, as such price is officially
quoted in the composite tape of transactions on such exchange and
published in The Wall Street Journal. If there is no closing
selling price for the Common Stock on the date in question, then
the Fair Market Value shall be the closing selling price on the
last preceding date for which such quotation exists.
(iii) If the Common Stock is at the time neither listed on
any Stock Exchange nor traded on the Nasdaq National Market, then
the Fair Market Value shall be determined by the Plan Administrator
after taking into account such factors as the Plan Administrator
shall deem appropriate.
K. Fleming shall mean Fleming Companies, Inc., an Oklahoma
corporation, which is currently the Parent of the Corporation.
L. Fleming Service Provider shall mean any individual who
is in a direct service relationship with Fleming or any Fleming
Subsidiary (and not with the Corporation or any other Parent or
Subsidiary of the Corporation), whether as an employee, associate,
board member or independent contractor, at a time when
Fleming is the Parent of the Corporation.
M. Fleming Subsidiary shall mean any corporation (other
than Fleming) in an unbroken chain of corporations beginning with
Fleming, provided each corporation (other than the last
corporation) in the unbroken chain owns, at the time of the
determination, stock possessing fifty percent (50%) or more of
the total combined voting power of all classes of stock in one of
the other corporations in such chain. In no event, however,
shall a Fleming Subsidiary include the Corporation or any Parent
or Subsidiary of the Corporation.
N. Incentive Option shall mean an option which satisfies the
requirements of Code Section 422.
O. Involuntary Termination shall mean the termination of the
Service of any individual which occurs by reason of:
(i) such individual's involuntary dismissal or discharge
by the Corporation for reasons other than Misconduct, or
(ii) such individual's voluntary resignation following
(A) a change in his or her position with the Corporation which
materially reduces his or her duties and responsibilities or the
level of management to which he or she reports, (B) a reduction
in his or her level of compensation (including base salary,
fringe benefits and target bonus under any corporate-performance
based bonus or incentive programs) by more than fifteen percent
(15%) or (C) a relocation of such individual's place of
employment by more than fifty (50) miles, provided and only if
such change, reduction or relocation is effected without the
individual's consent.
P. Misconduct shall mean the commission of any act of
fraud, embezzlement or dishonesty by the Optionee or Participant, any
unauthorized use or disclosure by such person of confidential
information or trade secrets of the Corporation (or any Parent or
Subsidiary), or any other intentional misconduct by such person
adversely affecting the business or affairs of the Corporation
(or any Parent or Subsidiary) in a material manner. The
foregoing definition shall not be deemed to be inclusive of all
the acts or omissions which the Corporation (or any Parent or
Subsidiary) may consider as grounds for the dismissal or
discharge of any Optionee, Participant or other person in the
Service of the Corporation (or any Parent or Subsidiary).
Q. 1934 Act shall mean the Securities Exchange Act of 1934,
as amended.
R. Non-Statutory Option shall mean an option not intended to
satisfy the requirements of Code Section 422.
S. Option Grant Program shall mean the option grant program in
effect under the Plan.
T. Optionee shall mean any person to whom an option is granted
under the Plan.
U. Parent shall mean any corporation (other than the
Corporation) in an unbroken chain of corporations ending with the
Corporation, provided each corporation in the unbroken chain
(other than the Corporation) owns, at the time of the
determination, stock possessing fifty percent (50%) or more of
the total combined voting power of all classes of stock in one of
the other corporations in such chain.
V. Parent-Level Change in Control shall mean any of the
following transactions involving a change in control or ownership
of Fleming which is effected while, and only while, Fleming is
the Parent of the Corporation:
(i) the acquisition by any individual, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of the 1934 Act
(a "Person") of beneficial ownership (within the meaning of Rule 13d-
3 promulgated under the 1933 Act) of 20% or more (the "Triggering
Percentage") of either (i) the then outstanding shares of Fleming
common stock (the "Outstanding Company Common Stock") or (ii) the
combined voting power of the then outstanding Fleming voting
securities entitled to vote generally in the election of
directors (the "Outstanding Company Voting Securities");
provided, however, in the event the "Incumbent Board" (as such
term is hereinafter defined) pursuant to authority granted in any
rights agreement to which Fleming is a party (the "Rights
Agreement") lowers the acquisition threshold percentages set
forth in such Rights Agreement, the Triggering Percentage shall
be automatically reduced to equal the threshold percentages set
pursuant to authority granted to the board in the Rights
Agreement; and provided, further, however, that the following
acquisitions shall not constitute a Parent-Level Change in
Control: (i) any acquisition directly from Fleming, (ii) any
acquisition by Fleming, (iii) any acquisition by any employee
benefit plan (or related trust) sponsored or maintained by
Fleming or any corporation controlled by Fleming, or (iv) any
acquisition by any corporation pursuant to a transaction which
complies with clauses (x), (y), and (z) of subsection (iii) of
this definition; or
(ii) a change in the composition of the Fleming Board of
Directors such that the individuals who, as of the effective date
of the Plan, constitute the Fleming Board of Directors (the
"Incumbent Board") cease for any reason to comprise at least a
majority of the Fleming Board of Directors; provided, however,
that any individual who becomes a member of the Fleming Board of
Directors subsequent to the effective date of the Plan and whose
election, appointment or nomination for election by Fleming's
shareholders, was approved by a vote of at least a majority of
the directors then comprising the Incumbent Board shall be
considered as though such individual were a member of the
Incumbent Board, but excluding for purposes of this definition,
any such individual whose initial assumption of office occurs as
a result of an actual or threatened election contest with respect
to the election or removal of directors or other actual or
threatened solicitation of proxies or consents by or on behalf of
a Person other than the Fleming Board of Directors; or
(iii) the approval by the Fleming shareholders of a
reorganization, share exchange, merger or consolidation or
acquisition of assets of another corporation (a "Business
Combination"), in each case, unless, following such Business
Combination, (x) all or substantially all of the individuals and
entities who were the beneficial owners, respectively, of the
Outstanding Company Common Stock and Outstanding Company Voting
Securities immediately prior to such Business Combination will
beneficially own, directly or indirectly, more than 50% of,
respectively, the then outstanding shares of common stock and the
combined voting power of the then outstanding voting securities
entitled to vote generally in the election of directors, as the
case may be, of the corporation resulting from such Business
Combination (including, without limitation, a corporation which
as a result of such transaction will own Fleming through one or
more subsidiaries) in substantially the same proportions as their
ownership, immediately prior to such Business Combination of the
Outstanding Company Common Stock and Outstanding Company Voting
Securities, as the case may be, (y) no Person (excluding any
employee benefit plan (or related trust) of Fleming or such
corporation resulting from such Business Combination) will
beneficially own, directly or indirectly, 20% or more of,
respectively, the then outstanding shares of common stock of the
corporation resulting from such Business Combination or the
combined voting power of the then outstanding voting securities
of such corporation except to the extent that such ownership
existed prior to the Business Combination, and (z) at least a
majority of the members of the board of directors of the
corporation resulting from such Business Combination will have
been members of the Incumbent Board at the time of the execution
of the initial agreement, or of the action of the Incumbent
Board, providing for such Business Combination; or
(iv) the approval by the shareholders of Fleming of (x) a
complete liquidation or dissolution of Fleming or, (y) the sale
or other disposition of all or substantially all of the assets of
Fleming, other than to a corporation, with respect to which
following such sale or other disposition, (A) more than 50% of,
respectively, the then outstanding shares of common stock of such
corporation and the combined voting power of the then outstanding
voting securities of such corporation entitled to vote generally
in the election of directors will be beneficially owned, directly
or indirectly, by all or substantially all of the individuals and
entities who were the beneficial owners, respectively, of the
Outstanding Company Common Stock and Outstanding Company Voting
Securities immediately prior to such sale or other disposition in
substantially the same proportion as their ownership, immediately
prior to such sale or other disposition, of the Outstanding
Company Common Stock and Outstanding Company Voting Securities,
as the case may be, (B) less than 20% of, respectively, the then
outstanding shares of common stock of such corporation and the
combined voting power of the then outstanding voting securities
of such corporation entitled to vote generally in the election of
directors will be beneficially owned, directly or indirectly, by
any Person (excluding any employee benefit plan (or related
trust ) of Fleming or such corporation), except to the extent that
such Person owned 20% or more of the Outstanding Company Common
Stock or Outstanding Company Voting Securities prior to the sale
or disposition, and (C) at least a majority of the members of the
board of directors of such corporation will have been members of
the Incumbent Board at the time of the execution of the initial
agreement, or of the action of the Board, providing for such sale
or other disposition of assets of Fleming.
W. Parent-Level Reduction in Ownership shall mean any
transaction, including (without limitation) any sale or other
disposition by Fleming of its ownership interest in any
outstanding voting securities of the Corporation or any direct
issuance of voting securities by the Corporation, which effects a
reduction to Fleming's combined direct and indirect (through one
or more majority-owned subsidiaries) ownership of the
Corporation's voting securities to an amount which represents
less than fifty percent (50%) of the total combined voting power
of all outstanding classes of stock of the Corporation.
X. Participant shall mean any person who is issued shares of
Common Stock under the Stock Issuance Program.
Y. Plan shall mean the Corporation's 2000 Stock Option/Stock
Issuance Plan, as set forth in this document.
Z. Plan Administrator shall mean either the Board or the
Committee acting in its capacity as administrator of the Plan.
AA. Service shall mean (i) the provision of services to the
Corporation (or any Parent or Subsidiary of the Corporation) in
the capacity of an Employee, a non-employee member of the board
of directors or a consultant or independent advisor, except to
the extent otherwise specifically provided in the documents
evidencing the option grant, or (ii) the provision of services to
Fleming or any Fleming Subsidiary in the capacity of an employee
or associate of that entity, a non-employee member of the board
of directors or a consultant or independent advisor, but only to
the extent such clause (ii) services are performed while Fleming
remains the Parent of the Corporation.
BB. Stock Exchange shall mean either the American Stock Exchange
or the New York Stock Exchange.
CC. Stock Issuance Agreement shall mean the agreement entered
into by the Corporation and the Participant at the time of issuance of
shares of Common Stock under the Stock Issuance Program.
DD. Stock Issuance Program shall mean the stock issuance program
in effect under the Plan.
EE. Subsidiary shall mean any corporation (other than the
Corporation) in an unbroken chain of corporations beginning with
the Corporation, provided each corporation (other than the last
corporation) in the unbroken chain owns, at the time of the
determination, stock possessing fifty percent (50%) or more of
the total combined voting power of all classes of stock in one of
the other corporations in such chain.
FF. 10% Stockholder shall mean the owner of stock (as determined
under Code Section 424(d)) possessing more than ten percent (10%) of the
total combined voting power of all classes of stock of the Corporation
(or any Parent or Subsidiary).
Exhibit 12
Fleming Companies, Inc.
Computation of Ratio of Earnings to Fixed Charges
<TABLE>
<CAPTION>
16 Weeks Ended
--------------------
April 15, April 17,
(In thousands of dollars) 2000 1999
- ------------------------------------------------------------------------------
<S> <C> <C>
Earnings:
Pretax loss $(43,265) $(31,465)
Fixed charges, net 61,135 60,246
Total earnings $ 17,870 $ 28,781
Fixed charges:
Interest expense $ 53,101 $ 51,606
Portion of rental charges
deemed to be interest 7,876 8,500
Capitalized interest 185 -
Total fixed charges $ 61,162 $ 60,106
Deficiency $ 43,292 $ 31,325
Ratio of earnings
to fixed charges .29 .48
</TABLE>
"Earnings" consists of income before income taxes and fixed
charges excluding capitalized interest. Capitalized
interest amortized during the respective periods is added
back to earnings.
"Fixed charges, net" consists of interest expense, an
estimated amount of rental expense which is deemed to be
representative of the interest factor and amortization of
capitalized interest.
The pro forma ratio of earnings to fixed charges is omitted
as it is not applicable.
Under the company's long-term debt agreements, "earnings"
and "fixed charges" are defined differently and amounts and
ratios differ accordingly.
Exhibit 15
Fleming Companies, Inc.
6301 Waterford Boulevard, Box 26647
Oklahoma City, OK 73126
We have made a review, in accordance with standards
established by the American Institute of Certified Public
Accountants, of the unaudited interim financial information
of Fleming Companies, Inc. and subsidiaries for the 16 weeks
ended April 15, 2000 and April 17, 1999, as indicated in our
report dated May 3, 2000; because we did not perform an
audit, we expressed no opinion on that information.
We are aware that our report referred to above, which is
included in your Quarterly Report on Form 10-Q for the 16
weeks ended April 15, 2000, is incorporated by reference in
the following:
(i) Registration Statement No. 2-98602 (1985 Stock Option
Plan) on Form S-8;
(ii) Registration Statement No. 33-36586 (1990 Fleming Stock
Option Plan) on Form S-8;
(iii) Registration Statement No. 33-56241 (Dividend
Reinvestment and Stock Purchase Plan) on Form S-3;
(iv) Registration Statement No. 333-11317 (1996 Stock
Incentive Plan) on Form S-8;
(v) Registration Statement No. 333-35703 (Senior
Subordinated Notes) on Form S-4;
(vi) Registration Statement No. 333-28219 (Associate Stock
Purchase Plan) on Form S-8;
(vii) Registration Statement No. 333-80445 (1999 Stock
Incentive Plan) on Form S-8; and
(viii) Registration Statement No. 333-89375 (Consolidated
Savings Plus and Stock Ownership Plan) on Form S-8.
We also are aware that the aforementioned report, pursuant
to Rule 436(c) under the Securities Act of 1933, is not
considered a part of a registration statement prepared or
certified by an accountant or a report prepared or certified
by an accountant within the meaning of Sections 7 and 11 of
that Act.
DELOITTE & TOUCHE LLP
Oklahoma City, Oklahoma
May 25, 2000
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FORM
10-Q FOR THE FISCAL QUARTER ENDED APRIL 15, 2000 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-30-2000
<PERIOD-START> DEC-25-1999
<PERIOD-END> APR-15-2000
<CASH> 20,719
<SECURITIES> 0
<RECEIVABLES> 478,409
<ALLOWANCES> 35,957
<INVENTORY> 860,926
<CURRENT-ASSETS> 1,523,528
<PP&E> 1,507,958
<DEPRECIATION> 700,413
<TOTAL-ASSETS> 3,313,066
<CURRENT-LIABILITIES> 1,090,230
<BONDS> 1,189,934
0
0
<COMMON> 98,113
<OTHER-SE> 436,927
<TOTAL-LIABILITY-AND-EQUITY> 3,313,066
<SALES> 4,444,804
<TOTAL-REVENUES> 4,444,804
<CGS> 4,028,130
<TOTAL-COSTS> 4,427,270
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 7,698
<INTEREST-EXPENSE> 53,101
<INCOME-PRETAX> (43,265)
<INCOME-TAX> (17,392)
<INCOME-CONTINUING> (25,873)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (25,873)
<EPS-BASIC> (.67)
<EPS-DILUTED> (.67)
</TABLE>
