SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [x]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2)
[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
Golden Enterprises, Inc.
_________________________________________________________________
(Name of Registrant as Specified In Its Charter)
_________________________________________________________________
(Name of Person(s) Filing Proxy Statement if other than the
Registrant)
Payment of Filing Fee (Check the appropriate box):
[x] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(i)(2) or Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange
Act Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
1) Title of each class of securities to which transaction
applies:
_________________________________________________________
2) Aggregate number of securities to which transaction
applies:
_________________________________________________________
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth
the amount on which the filing fee is calculated and
state how it was determined):
_________________________________________________________
4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
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4) Date Filed:
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GOLDEN ENTERPRISES, INC.
2101 Magnolia Avenue South
Suite 212
Birmingham, Alabama 35205
NOTICE OF ANNUAL MEETING
Notice Is Hereby Given that the Annual Meeting of the
Stockholders of Golden Enterprises, Inc., (the "Company") a
Delaware Corporation, will be held at the general offices of Golden
Flake Snack Foods, Inc., a subsidiary of the Company at 492 Theta
Street, Birmingham, Alabama, on September 27, 1996, at 11:00 A.M.,
Birmingham time, for the following purposes:
1. To elect a Board of Directors.
2. To approve the Golden Enterprises, Inc. 1996 Long Term
Incentive Plan.
3. To transact such other business as may properly come
before the meeting.
Stockholders of record at the close of business on August 2,
1996, are entitled to notice of and to vote at the meeting. All
Stockholders are cordially invited to attend the meeting.
By Order of the Board of Directors
/s/ John Stein
John Stein
Chairman
Birmingham, Alabama
August 30, 1996
HOLDERS OF A MAJORITY OF THE OUTSTANDING SHARES MUST BE
PRESENT EITHER IN PERSON OR BY PROXY IN ORDER TO HOLD THE MEETING.
TO INSURE YOUR REPRESENTATION AT THE MEETING, YOU ARE REQUESTED TO
SIGN THE ENCLOSED PROXY AND RETURN IT IN THE ACCOMPANYING ENVELOPE.
IF YOU ARE ABLE TO ATTEND THE MEETING YOU MAY REVOKE THE PROXY AND
VOTE YOUR SHARES PERSONALLY AT ANY TIME BEFORE THE PROXY IS
EXERCISED.
PROXY STATEMENT
GENERAL
The annual meeting of the stockholders of Golden Enterprises,
Inc. (the "Company") will be held at the general offices of Golden
Flake Snack Foods, Inc., a subsidiary of the Company at 492 Theta
Street, Birmingham, Alabama, on September 27, 1996, at 11:00 A.M.
All holders of record of common stock as of August 2, 1996, will be
entitled to vote at the meeting and any adjournment thereof.
The purpose of this proxy solicitation is to enable those
stockholders who will be unable to personally attend the meeting to
vote their stock.
PERSONS MAKING THE SOLICITATION
This proxy is solicited on behalf of the Board of Directors of
Golden Enterprises, Inc. The cost of solicitation will be paid by
the Company and will include reimbursement paid to brokerage firms
and others for their expenses in forwarding solicitation material
regarding the meeting to beneficial owners. In addition to
solicitation by mail, officers and regular employees of the Company
may solicit proxies by telephone, telegram, or personal interview
at no additional compensation.
SECURITY HOLDERS ENTITLED TO VOTE
Holders of shares of common stock of the Company of record at
the close of business on August 2, 1996, will be entitled to vote
at the Annual Meeting and at any and all adjournments thereof. Each
share of common stock entitles its owner to one vote. The number of
shares of common stock of the Company (exclusive of treasury
shares) outstanding at the close of business on August 2, 1996 was
12,205,950 shares.
Stockholders who execute proxies retain the right to revoke
them at any time before they are voted. If the enclosed proxy is
properly signed and returned to the Company and not so revoked, the
shares represented thereby will be voted in accordance with its
terms.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
At August 2, 1996, Sloan Y. Bashinsky, Sr., Chairman Emeritus
of the Board and Compass Bank, as Trustee of the Golden
Enterprises, Inc. and subsidiaries Employee Stock Ownership Plan,
were the only persons who beneficially owned more than 5% of the
outstanding voting securities of the Company. The following table
sets forth the number of shares of common stock of the Company
beneficially owned by these persons.
<TABLE>
<CAPTION>
Amount and Nature of
Beneficial Ownership (1)
Name and Address of ________________________ Percent of
Beneficial Owner Direct Indirect Class
___________________ _________ _________ __________
<S> <C> <C> <C>
Sloan Y. Bashinsky, Sr. -0- 6,683,672 (2)(3)(4) 54.8%
2101 Magnolia Ave. So.
Suite 212
Birmingham, Alabama 35205
Compass Bank, as Trustee -0- 995,756 (5) 8.2%
of the Golden Enterprises, Inc.
and subsidiaries Employee
Stock Ownership Plan
701 South 32nd Street
Birmingham, Alabama 35233 (a)
<FN>
(1) An indirect beneficial owner as this term is interpreted by
the Securities and Exchange Commission includes any person who
has or shares the (1) voting power which includes the power to
vote or to direct the voting of such security; and/or (2)
investment power which includes the power to dispose, or to
direct the disposition of such security.
(2) Includes 5,283,128 shares owned by SYB, Inc., a corporation of
which Sloan Y. Bashinsky, Sr. is Chairman of the Board and the
majority stockholder. For Securities and Exchange Commission
reporting purposes, Mr. Bashinsky is deemed the beneficial
owner of such shares. Except for SEC reporting purposes, Mr.
Bashinsky disclaims beneficial ownership of such shares.
(3) Includes 1,000,000 shares owned by SYB, Inc. as Trustee of a
Trust created by Sloan Y. Bashinsky, Sr. SYB, Inc. exercises
the right to vote the shares and the investment power relative
to the shares.
(4) Includes 400,544 shares owned by The Bashinsky Foundation,
Inc. of which Sloan Y. Bashinsky, Sr. is the founder and
Chairman of the Board.
(5) The Employee Stock Ownership Plan provides that the shares
held by the Trustee are voted by an administrative committee
made up of 3 members. The Board of Directors of the Company
determines the members of the committee. Present members of
the administrative committee are: John S. Stein, Chairman of
the Board, President and Chief Executive Officer of the
Company; F. Wayne Pate, a Director of the Company and
President of Golden Flake Snack Foods, Inc. and John H.
Shannon, Vice President and Secretary of the Company.
(a) The Employee Stock Ownership Plan is an employee benefit plan
qualified under Section401(a) of the Internal Revenue Code and
subject to the Employee Retirement Income Security Act of
1974.
</FN>
</TABLE>
Security Ownership Of Management
The following table shows the shares of common stock of Golden
Enterprises, Inc. beneficially owned directly, or indirectly, by
each Director and Nominee for Director and all Directors and
Officers of the Company as a group at August 2, 1996:
<TABLE>
<CAPTION>
Amount and Nature of
Beneficial Ownership (1)
________________________ Percent of
Name Direct Indirect Class
____ ________________________ __________
<S> <C> <C> <C>
John S. Stein (a) (b) 288,854 -0- (4) 2.4%
J. Wallace Nall, Jr. -0- 196,000 (5) 1.6%
Edward R. Pascoe 250,000 -0- 2.0%
F. Wayne Pate 135,217 3,586 (4)(6) 1.1%
John P. McKleroy, Jr. (c) (d) 12,970 (2) -0- *
D. Paul Jones, Jr. 5,865 (3) 2,000 (7) *
James I. Rotenstreich 3,033 -0- *
John S. P. Samford 1,666 -0- *
Joann F. Bashinsky (e) (f) 9,403 -0- *
All Directors and
Officers as a group 757,508 201,586 7.9%
<FN>
*Less than one percent of class.
(1) An indirect beneficial owner as this term is interpreted
by the Securities and Exchange Commission includes any
person who has or shares the (1) voting power which
includes the power to vote or to direct the voting of
such security, and/or (2) investment power which includes
the power to dispose, or to direct the disposition of
such security.
(2) Includes 9,260 shares held by a self-employed pension
plan and personal IRA account for the benefit of John P.
McKleroy, Jr.
(3) Does not include a .0249 fractional share held pursuant
to the Company's Dividend Reinvestment Plan.
(4) Does not include any portion of the 995,756 shares of
common stock of the Company which are owned by Compass
Bank, as Trustee of Golden Enterprises, Inc. and
subsidiaries Employee Stock Ownership Plan. Messrs. Stein
and Pate are members of the plan's administrative
committee and exercise the voting power of the shares.
Messrs. Stein and Pate disclaim any beneficial ownership
of such shares with the exception of the following shares
which are vested in their respective account as an
employee-participant under the Plan: Stein 24,973, Pate
16,666.
(5) Shares owned by Nall Development Corporation, a
corporation of which J. Wallace Nall, Jr. is a Director
and President. For Securities and Exchange Commission
reporting purposes, Mr. Nall is deemed the beneficial
owner of such shares. Except for SEC reporting purposes,
Mr. Nall disclaims beneficial ownership of such shares.
(6) Includes 3,554 shares owned by the estate of Mrs. A. P.
Pate, the mother of F. Wayne Pate, which are registered
in the name of Mrs. A. P. Pate or Joyce P. Stubb or F. W.
(Wayne) Pate and 32 shares owned by the wife of F. Wayne
Pate.
(7) Shares held by Mr. Jones' wife and mother-in-law.
(a) Mr. Stein is a Director and President of SYB, Inc. which
beneficially owns 6,283,128 shares of the Company's
stock. Mr. Stein does not possess and specifically
disclaims any beneficial ownership of these shares.
(b) Mr. Stein is a Director and officer of The Bashinsky
Foundation, Inc., which owns 400,544 shares of the
Company's stock. Mr. Stein does not possess and
specifically disclaims any beneficial ownership of these
shares.
(c) Mr. McKleroy is a Director and Secretary of SYB, Inc.
which beneficially owns 6,283,128 shares of the Company's
stock. Mr. McKleroy does not possess and specifically
disclaims any beneficial ownership of these shares.
(d) Mr. McKleroy is a Director and officer of The Bashinsky
Foundation, Inc., which owns 400,544 shares of the
Company's stock. Mr. McKleroy does not possess and
specifically disclaims any beneficial ownership of these
shares.
(e) Mrs. Bashinsky is a Vice President of SYB, Inc., which
beneficially owns 6,283,128 shares of the Company's
stock. Mrs. Bashinsky does not possess and specifically
disclaims any beneficial ownership of these shares.
(f) Mrs. Bashinsky is a Vice President of Bashinsky
Foundation, Inc., which owns 400,544 shares of the
Company's stock. Mrs. Bashinsky does not possess and
specifically disclaims any beneficial ownership of these
shares.
</FN>
</TABLE>
Each Director has the sole voting and investment power of the
shares directly owned by him.
SYB, Inc., beneficially owns 6,283,128 shares of common stock
of the Company. John S. Stein and John P. McKleroy, Jr., Directors
of the Company, each serve as Directors of SYB, Inc. and as
Vice-President and Secretary, respectively. Joann F. Bashinsky is
Vice President of SYB, Inc. and the wife of Sloan Y. Bashinsky, Sr.
Mr. Bashinsky is Director Emeritus of the Company and owns 80% of
the voting stock of SYB, Inc. and the other 20% is vested in a
trust for the use and benefit of his children and grandchildren of
which John P. McKleroy, Jr., serves as a Co-Trustee. In Mr.
Bashinsky's will and in the trust document, he has provided that in
the event SYB, Inc. or his estate owns any shares of Golden
Enterprises stock at his death, the shares of Golden Enterprises
held by SYB, Inc. and the estate and the voting shares of SYB, Inc.
shall be voted by a committee made up of each member of the Board
of Directors of Golden Enterprises and one member designated by his
executors/trustees.
PROPOSAL ONE
ELECTION OF DIRECTORS
At the Annual Meeting, nine Directors (constituting the entire
Board of Directors) are to be elected, each to hold office until
the next Annual Meeting of Stockholders, or until a successor has
been elected and qualified. All nominees are presently members of
the Board of Directors and were elected to the Board by vote of the
stockholders at the last Annual Meeting except for Joann F.
Bashinsy who was elected by the Board on July 11, 1996 to fill the
vacancy created by the retirement of Sloan Y. Bashinsky, Sr.
Shares represented by your proxy will be voted in accordance
with your direction as to the election as directors of the persons
hereinafter listed as nominees. In the absence of direction, the
shares represented by your proxy will be voted FOR such election.
Should any of the persons listed as nominees become unavailable as
a nominee for election, it is intended that the shares represented
by your proxy will be voted for the balance of those named and for
a substitute nominee or nominees unless the Board of Directors
reduces the number of directors, but the Board knows of no reason
to anticipate that this will occur.
The following table shows the names of the nominees for
election as directors, their respective ages as of August 2, 1996,
the principal occupation, business experience and other
directorships held by such nominees, and the period during which
such nominees have served as directors of the Company.
Principal Occupation,
Business Experiences Director
Name and Age and Other Directorships Since
____________ _______________________ ________
John S. Stein, 59 Mr. Stein is Chairman of the Board, 1971
President and Chief Executive
Officer of the Company. He was
elected Chairman on June 1, 1996 and
has served as President of the
Company since 1985 and assumed the
position of Chief Executive Officer
on June 1, 1991. Mr. Stein has been
employed with the Company and its
subsidiaries since 1961. Mr. Stein
is a Director of Compass Bancshares,
Inc.
Edward R. Pascoe, 59 Mr. Pascoe is employed as Chairman 1971
of the Board of Steel City Bolt &
Screw, Inc., formerly Coosa
Acquisition, Inc. which, on February
8, 1995, acquired the bolt and
special fastener business owned by
the Company. Prior to his present
position which he assumed on
February 8, 1995, he served as
President of Steel City Bolt &
Screw, Inc. and Nall & Associates,
Inc. from 1972 and 1973,
respectively, which were
wholly-owned subsidiaries of the
Company.
John P. McKleroy, Jr., 52 Mr. McKleroy is an attorney and 1976
partner with Spain & Gillon, L.L.C.,
general counsel for the Company. He
has practiced law with this firm
since 1968.
James I. Rotenstreich, 59 Mr. Rotenstreich is Chairman and 1984
Chief Executive Officer of JHF
Holdings, Inc. ("JHF"), a company
formerly doing business under the
name of Jefferson Home Furniture
Company, Inc. He has served as Chief
Executive Officer since 1967 and as
Chairman since 1992. In May of 1994,
JHF sold its retail home furniture
interest and is presently engaged in
real estate and investment holdings.
John S. P. Samford, 46 Mr. Samford is President and sole 1984
owner of Samford Capital
Corporation, an investment holding
company which he formed in 1989.
D. Paul Jones, Jr., 53 Mr. Jones is Chairman of the Board 1991
and Chief Executive Officer of
Compass Bancshares, Inc. (a bank
holding company), and of its
subsidiary, Compass Bank. He assumed
these positions on April 1, 1991.
Mr. Jones has been employed with
Compass Bancshares, Inc. (formerly
Central Bancshares of the South,
Inc.) and Compass Bank (formerly
Central Bank of the South) since
1978.
J. Wallace Nall, Jr., 56 Mr. Nall is President of Nall 1991
Development Corporation and a
General Partner of Nall Partnership,
Ltd. He has held these positions
since 1981. Nall Development
Corporation is an investment holding
company and Nall Partnership, Ltd.
is a real estate investment and
development company.
F. Wayne Pate, 61 Mr. Pate is President of Golden 1992
Flake Snack Foods, Inc., a
wholly-owned subsidiary of the
Company. He was elected President on
September 20, 1991, and has been
employed by Golden Flake since 1968.
During his employment, he has served
as Vice President of Research and
Development, Vice President of
Manufacturing and Executive Vice
President of Manufacturing and
Sales.
Joann F. Bashinsky, 64 Mrs. Bashinsky is Vice President of 1996
SYB, Inc., which position she has
held since 1981. SYB, Inc. is an
investment holding company, which is
the principal owner of the Company.
Mrs. Bashinsky also serves as Vice
President of Bashinsky Foundation,
Inc., a private charitable
foundation. Mrs. Bashinsky is the
wife of Sloan Y. Bashinsky, Sr., who
retired as Chairman of the Board of
the Company on May 31, 1996.
Sloan Y. Bashinsky, Sr., the husband of Joann F. Bashinsky is
a "control person" by reason of his beneficial ownership of voting
securities.
Committees Of The Board Of Directors
The Company has a Compensation Committee, a Stock Option
Committee and an Audit Committee. The Board of Directors has no
standing Nominating Committee.
During the fiscal year ended May 31, 1996, the Compensation
Committee was made up of Sloan Y. Bashinsky, Sr., John S. P.
Samford, James I. Rotenstreich, D. Paul Jones, Jr. and J. Wallace
Nall, Jr. Sloan Y. Bashinsky, Sr. retired from the Board of
Directors and the Compensation Committee as of May 31, 1996 and
John S. Stein was elected to the Compensation Committee as of June
1, 1996. The Compensation Committee reviews the performance of the
Executive Officers of the Company and the top executive officer of
Golden Flake Snack Foods, Inc., a wholly-owned subsidiary, and
recommends to the Board of Directors of the Company the appropriate
compensation level and compensation and benefit programs of such
officers.
During the fiscal year ended May 31, 1996, the Stock Option
Committee was made up of Sloan Y. Bashinsky, Sr., James I.
Rotenstreich, John S. P. Samford, D. Paul Jones, Jr. and J. Wallace
Nall, Jr. Mr. Bashinsky retired from the Stock Option Committee on
May 31, 1996. The Stock Option Committee determines the key
employees of the Company and its subsidiary to whom stock options
and stock appreciation rights will be granted under the 1988 Stock
Option and Stock Appreciation Rights Plan.
The Audit Committee is made up of James I. Rotenstreich, John
S. P. Samford and D. Paul Jones, Jr. The Audit Committee reviews
with the independent auditors, the corporate controller and the
Company's general counsel the results of the independent auditor's
annual report on the Company's financial statements. The Audit
Committee also reviews and confers with management and the Board of
Directors with respect to the selection of the Company's
independent auditors and performs such additional functions as are
necessary or prudent to fulfill the Committee's duties and
responsibilities and reports its recommendations and findings to
the full Board of Directors.
Meetings Of The Board Of Directors and Committees
During the fiscal year ended May 31, 1996, there were four
meetings of the Board of Directors. The Compensation Committee and
the Stock Option Committee met once and the Audit Committee met
twice during the year. All incumbent directors attended all of the
meetings of the Board and the Committees on which they served
except Edward R. Pascoe who attended 75% of the meetings.
Compensation Of Directors
During the fiscal year ended May 31, 1996, the Company paid
each of its non-employee Directors a retainer of $300 per month and
all Directors, including Directors who were employees of the
Company, were paid a fee of $2,000 for each Board meeting attended.
The members of the Compensation Committee were each paid $2,000 for
attending the Compensation Committee meeting and the members of the
Audit Committee were paid $1,000 for each meeting attended.
Stock Ownership Reporting By Directors And Officers
Section 16(a) of the Securities Exchange Act of 1934 requires
that Directors and certain Executive Officers of the Company file
reports of stock ownership and changes in ownership with the
Securities and Exchange Commission. These reports consist of Forms
3, Initial Statement of Ownership, 4, Monthly Reports, and 5,
Annual Reports. Based upon a review of copies of such reports, or
representations that no reports were due to be filed by Directors
or Officers, the Company believes that Section 16(a) filing
requirements applicable to its Directors and Executive Officers
were complied with during the fiscal year 1996, except that F.
Wayne Pate, due to inadvertence, failed to timely report a gift of
53 shares on April 9, 1996 to his children. Mr. Pate subsequently
reported this transaction to the Securities and Exchange Commission
on a Form 5 Report filed in August of this year.
EXECUTIVE COMPENSATION AND OTHER INFORMATION
The following table summarizes the compensation paid or
accrued by the Company and its subsidiaries during the fiscal years
1994, 1995 and 1996 to the Company's Chief Executive Officer and to
the three most highly compensated executive officers, other than
the Chief Executive Officer, whose compensation exceed $100,000 and
who were serving in such capacities at the end of the 1996 fiscal
year.
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
Long-Term
Compensation
Annual Compensation Awards
________________________________ ____________
Securities
Other Annual Underlying All Other
Name and Salary 0 Bonus Compensation Options/SARs Compensation
Principal Position Year ($) ($) ($) (#) (1) ($)
________________________ ____ ________ _______ _____________ ____________ __________________
<S> <C> <C> <C> <C> <C> <C>
John S. Stein 1996 $259,000 $21,195 -- -- $117,846 (3)(4)(5)
President and Chief 1995 $259,000 $53,975 -- -- $118,036
Executive Officer 1994 $259,000 $16,452 -- -- $120,933
Sloan Y. Bashinsky, Sr. 1996 $100,000 -- $79,960 (2) -- $ 11,000 (3)(4)
Chairman of the Board 1995 $100,000 -- $83,158 -- $ 77,970
1994 $100,000 -- $86,251 -- $ 81,420
F. Wayne Pate 1996 $189,000 $21,195 -- -- $143,992 (3)(4)(5)
President of 1995 $180,000 $53,975 -- -- $136,921
Golden Flake 1994 $180,000 $16,452 -- -- $135,514
Snack Foods, Inc.
John H. Shannon 1996 $111,600 -- -- -- $ 5,782 (4)
Vice President, 1995 $106,300 -- -- -- $ 5,990
Secretary & Controller 1994 $106,300 -- -- -- $ 6,080
<FN>
(1) No stock options and Stock Appreciation Rights (SARs) were
granted to the Named Executive Officers during the 1996, 1995
and 1994 Fiscal Years.
(2) Includes payment of personal legal and accounting fees for Mr.
Bashinsky in the amount of $46,282.
(3) Includes director's fees paid by the Company and its
subsidiary as follows: Mr. Bashinsky ($3,500), Mr. Stein
($13,500), Mr. Pate ($13,500).
(4) Includes contributions to the Company's and subsidiary Profit
Sharing Plan and Employee Stock Ownership Plan as follows: Mr.
Bashinsky ($7,500), Mr. Stein ($7,500), Mr. Pate ($3,033) and
Mr. Shannon ($5,782).
(5) Includes amounts accrued, but not paid, to provide for
possible future payments under salary continuation plans
covering Mr. Stein and Mr. Pate. The plans provide for
payments of up to $120,000 per year for fifteen years
following death, disability or retirement at age 65. During
the 1996 Fiscal Year, the amounts accrued, respectively, were
as follows: Mr. Stein ($96,846) and Mr. Pate ($127,459). The
plans are funded in part with life insurance on the life of
Mr. Stein and during the fiscal year ended May 31, 1996, the
Company paid a premium of $11,555 for Mr. Stein.
</FN>
</TABLE>
Profit Sharing Plan And Employee Stock Ownership Plan
The Company and its subsidiary each maintain a Profit Sharing
Plan and Employee Stock Ownership Plan for the benefit of their
employees. Annual contributions are made to the plans in amounts as
determined by the Board of Directors of each company. Contributions
to the Employee Stock Ownership Plan are invested in stock of the
Company which is held for the account of the participating
employees and is distributed to the employees upon their retirement
or termination of employment. All contributions to the Profit
Sharing Plan and Employee Stock Ownership Plan are allocated to the
accounts of the participating employees based upon their annual
compensation and each employee account vests 100% in the employee
after five years of service. The contribution to the plans for the
fiscal year ended May 31, 1996 was $572,406, with the following
amounts being credited to the accounts of the following persons
named in the Cash Compensation Table: Sloan Y. Bashinsky, Sr.,
$7,500; John S. Stein, $7,500; F. Wayne Pate, $3,033; and John H.
Shannon, $5,782. (See Summary Compensation Table on page 8 -- These
amounts are included within compensation shown in table.)
The Employee Stock Ownership Plan provides that the shares
held by the Trustee are voted by an administrative committee made
up of 3 members. The Board of Directors of the Company determines
the members of the committee. Present members of the administrative
committee are: John S. Stein, Chairman of the Board, President and
Chief Executive Officer of the Company; F. Wayne Pate, a Director
of the Company and President of Golden Flake Snack Foods, Inc. and
John H. Shannon, Vice President and Secretary of the Company.
Stock Option And Stock Appreciation Rights Plan
In 1988, the Company's shareholders approved the 1988 Stock
Option and Stock Appreciation Rights Plan (the "Plan"). The purpose
of the Plan is to make shares of the common stock of the Company
available for purchase by key employees and to provide the
employees with the opportunity to participate in the growth and
financial success of the Company and to give them an increased
personal interest in and a greater concern for the Company's
continued success and growth.
Under the Plan, non-qualified Stock Options to purchase up to
175,500 shares of Common Stock of the Company and Stock
Appreciation Rights (SARs) may be granted to key employees.
Directors of the Company who are not officers are not eligible to
participate in the Plan.
The grant of stock options and SARs is administered by the
Stock Option Committee of the Board of Directors. The Committee
selects those key employees of the Company to whom options are
granted, the time at which options are granted, and the number and
price of shares which may be purchased upon the exercise of
options. The option price may be less than, equal to or greater
than the fair market value of the stock on the day the option is
granted and the option price may vary among employees.
The Committee may also grant SARs when granting options. SARs
are exercisable only when the underlying option is exercisable.
SARs granted to an employee shall be equal to the number of shares
that the employee is entitled to purchase under the related option.
An employee to whom an SAR is granted may not exercise the SAR
unless he simultaneously exercises the stock option to which the
SAR relates and the employee shall be deemed to have automatically
exercised his SAR when and at the same time that he exercises his
stock option to which the SAR relates. If an employee does not
exercise his stock option so that it expires, his SAR which relates
to said option shall also expire.
When SARs are exercised, the optionee receives from the
Company a sum of cash equal to the amount of the appreciation in
the underlying common stock as determined by the excess of the fair
market value of a share of common stock on the exercise date of the
related stock option over the option price.
During the fiscal year ended May 31, 1996, no options or SARs
were granted to any employee, including the executive officers
named in the Summary Compensation Table above and no options or
SARs were exercised. There are currently no options or SARs
outstanding which are presently exercisable or may be exercisable
in the future.
Compensation Committee Interlocks And Insider Participation
During the fiscal year ended May 31, 1996, Sloan Y.
Bashinsky, Sr., John S. P. Samford, James I. Rotenstreich, D. Paul
Jones, Jr., and J. Wallace Nall, Jr., constituted the Compensation
Committee of the Company's Board of Directors. Sloan Y. Bashinsky,
Sr. retired from the Board of Directors and the Compensation
Committee as of May 31, 1996. John S. Stein was elected a member of
the Compensation Committee as of June 1, 1996. Mr. Stein is a
member of the Board of Directors of Compass Bancshares, Inc., of
which D. Paul Jones, Jr., a Director of the Company, is Chairman,
Chief Executive Officer and President.
Compensation Committee Report On Executive Compensation for the
Fiscal Year Ended May 31, 1996
The Compensation Committee of the Board of Directors (the
"Compensation Committee") was comprised during fiscal 1996 of Sloan
Y. Bashinsky, Sr., John S. P. Samford, James I. Rotenstreich, D.
Paul Jones, Jr. and J. Wallace Nall, Jr., all of whom, with the
exception of Mr. Bashinsky, are not officers of the Company or its
subsidiary.
The Compensation Committee reviews the compensation structure
of the Executive Officers of the Company and the top executive
officer of Golden Flake Snack Foods, Inc. ("Golden Flake"), a
wholly-owned subsidiary, and recommends to the Board the
appropriate base and incentive bonus compensation of such officers.
The Stock Option Committee during fiscal 1996 was made up of
the same Directors as those who served on the Compensation
Committee. The Stock Option Committee determines the key employees
of the Company and Golden Flake to whom stock options and stock
appreciation rights are granted under the 1988 Stock Option and
Stock Appreciation Rights Plan.
The Company's executive compensation program consists of three
primary components: base salary, annual incentive bonus, and grants
of stock options and stock appreciation rights.
Base salary is the foundation of executive compensation. Base
salaries are reviewed annually and adjusted, if deemed appropriate,
based upon recommendations of the Compensation Committee after its
review of recommendations received from the Chairman of the Board
("Chairman") and Chief Executive Officer ("CEO").
Annual incentive bonus formulas are established for the CEO
and the top executive officer of Golden Flake. The CEO and the top
executive officer of Golden Flake are paid a percentage of that
company's pre-tax operating earnings that exceed a targeted return
on equity.
The base salaries and incentive bonus formulas for fiscal 1996
reported in the Proxy Statement were recommended by the
Compensation Committee in April, 1995 to the Board. The
Compensation Committee received and reviewed recommendations from
the Chairman and CEO, which recommendations were based upon a
number of factors, including overall earnings of the Company and
Golden Flake, pre-tax earnings from operations, return on equity,
the financial performance of the Company and its subsidiary, the
complexities of the job, and individual performance and
achievements of each of the executive officers.
In reviewing the recommendations of the Chairman and CEO and
in making its recommendations to the Board, the Compensation
Committee undertook a subjective consideration of the executive
officers' base salaries and incentive bonus formulas that was not
related to any specific qualitative or quantitative criteria.
The Board's approval of such recommendations of the
Compensation Committee have generally been based on its subjective
analysis of what it considers to be a reasonable and appropriate
base salary and incentive bonus formula for the CEO and other
executive officers taking into consideration their individual job
responsibilities and the financial performance of the Company
during the prior fiscal year.
The Company has used stock options and stock appreciation
rights to reward the performance of executives. These are granted
through the 1988 Stock Option and Stock Appreciation Rights Plan.
Grant of stock options and stock appreciation rights are made by
the Stock Option Committee to key employees after considering the
recommendations of the Chairman and CEO.
The Compensation Committee believes that the incentive bonus
formulas and stock options/stock appreciation rights assure that a
significant portion of the CEO's compensation relate to the
Company's performance.
The base salary and incentive bonus formula for John S. Stein,
the Company's CEO, for fiscal 1996 were determined based upon his
responsibilities and contributions to the Company, and the
performance of the Company. During fiscal 1996, Mr. Stein did not
receive any increase in base salary. His incentive bonus was based
upon a pre-determined percentage of the Company's pre-tax operating
earnings that exceeded a target of return on equity, producing a
bonus for fiscal 1996 of $21,195, which was 8.2% of his base
salary. Mr. Stein did not receive any stock options or stock
appreciation rights during fiscal 1996.
Compensation Committee: Sloan Y. Bashinsky, Sr., John S. P.
Samford, James I. Rotenstreich, D. Paul Jones, Jr., J. Wallace
Nall, Jr.
Shareholder Return Performance Graph
The following graph illustrates, for the period commencing May
31, 1991, and ending May 31, 1996, the yearly percentage change in
the cumulative total shareholder return on the Company's common
stock as compared with the cumulative total returns of other
companies included within the NASDAQ Stock Market (U.S. Companies)
Index and the Company's Peer Group.
The Company has selected a Peer Group consisting of the three
publicly-traded companies named below, which are in the snack food
industry. Virtually all of the Company's direct competitors and peers
are privately-held companies or subsidiaries or divisions of larger
publicly-held companies so that the available members of the Peer Group
are limited.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN AMONG THE COMPANY,
NASDAQ STOCK MARKET INDEX AND PEER GROUP.
NASDAQ PEER GOLDEN
DATE STOCK MKT. GROUP ENTERPRISES
1991 100 100 100
1992 117.4 96.4 146.6
1993 141.2 100.7 120.2
1994 148.6 87.9 113.1
1995 176.9 92.9 114.5
1996 257.1 91 173.2
This graph assumes that $100 was invested in the Company's
common stock on May 31, 1991, in the NASDAQ Stock Market (U.S.
Companies) Index and in the Peer Group, which consisted of Lance,
Inc., Grist Mill Company and J & J Snack Foods Corp., and that
dividends were reinvested.
CERTAIN TRANSACTIONS
During the fiscal year ended May 31, 1996, the law firm of
Spain & Gillon, L.L.C., of which John P. McKleroy, Jr. is a member,
served as General Counsel and performed various legal services for
the Company and its subsidiary. The firm will continue to perform
legal services for the current fiscal year.
Since the beginning of the fiscal year ended May 31, 1996,
Golden Flake Snack Foods, Inc. (Golden Flake), a wholly-owned
subsidiary of the Company, entered into a trailer lease agreement
with SYB, Inc., a corporation principally owned and controlled by
Sloan Y. Bashinsky, Sr. Under this lease, Golden Flake leases 10
trailers for use in its ordinary course of business of distributing
snack food products. The trailers were purchased by SYB, Inc. for
lease to Golden Flake. Golden Flake will make monthly lease
payments of $820 per trailer for three years. Upon expiration of
the lease, Golden Flake has the option to purchase the trailers at
their salvage value at an average of $8,000 each.
Similar leases existed for 20 trailers from prior years and
during the fiscal year ended May 31, 1996, an average monthly lease
payment of $676 was paid per unit.
The Company believes that these transactions were on terms
equal to or better than those available from unaffiliated third
parties.
PROPOSAL TWO
1996 LONG TERM INCENTIVE PLAN
On August 7, 1996, the Golden Enterprises, Inc. (the
"Corporation") Board of Directors adopted and recommended for
submission to the Corporation's shareholders for their approval the
Golden Enterprises, Inc. 1996 Long Term Incentive Plan (the "1996
Plan"). The purpose of the 1996 Plan is to further the growth in
earnings and market appreciation of the Corporation by providing
long term incentives to those officers and key employees of the
Corporation or its subsidiaries who make substantial contributions
to the Corporation through their ability, loyalty, industry and
invention.
The Board of Directors believes that the Corporation should
have shares available to grant awards to certain of its officers
and key employees. The Board of Directors believes that the
Corporation and its shareholders significantly benefit from having
the Corporation's key management employees receive such awards, and
that the opportunity thus afforded these employees to acquire
common stock of the Corporation is an essential element of an
effective management incentive program. The Board of Directors also
believes that stock based awards are very valuable in attracting
and retaining highly qualified management personnel and in
providing additional motivation to management to use their best
efforts on behalf of the Corporation and its shareholders.
The primary features of the 1996 Plan are summarized below.
This summary is qualified in its entirety by reference to the
specific provisions of the 1996 Plan, as proposed, the full text of
which is set forth as Exhibit A to this Proxy Statement.
General Information
The 1996 Plan will be administered by the Stock Option
Committee of the Board of Directors. The Stock Option Committee
consists of three or more members of the Board of Directors who
qualify both as "outside directors" within the meaning of Section
162(m) of the Code and "disinterested persons" within the meaning
of Rule 16b-3 promulgated under the Securities Exchange Act of
1934.
The 1996 Plan would authorize the Stock Option Committee to
grant to the participants in the 1996 Plan (i) stock options (which
may be non-qualified options or incentive stock options for tax
purposes), (ii) stock appreciation rights ("SARs") (which may be
issued in tandem with stock options), (iii) restricted stock
awards, (iv) performance units (which may be in stock, cash or a
combination thereof), and (v) supplemental cash payments. Persons
eligible to participate in the 1996 Plan shall be those officers
and key employees of the Corporation and its subsidiaries who are
in positions in which their decisions, actions and counsel
significantly impact the performance of the Corporation or its
subsidiaries. Participants are chosen from this group by the Stock
Option Committee, at its discretion. Currently, there are
approximately 25 employees of the Corporation and its subsidiary
eligible to participate in the 1996 Plan.
The effective date of the 1996 Plan, subject to the approval
by the Corporation's shareholders, will be August 7, 1996, the date
it was adopted by the Board of Directors. The 1996 Plan shall
continue in effect until all awards under the Plan have been
satisfied by the issuance of shares or the payment of cash, but no
award may be granted after the expiration of ten (10) years
following such effective date.
Stock Based Awards
Shares Reserved for Issuance. The aggregate number of shares
of the Corporation's common stock which may be issued under the
1996 Plan as proposed may not exceed 500,000. Shares subject to
options granted under the 1996 Plan which expire unexercised, or
shares subject to awards which are otherwise forfeited or
cancelled, will not count against this limit. The maximum number of
shares with respect to which awards may be granted to any
individual in any one year under the 1996 Plan is 100,000.
Stock Options. The Stock Option Committee will be authorized
to determine the terms and conditions of all option grants, subject
to the specific limitations set forth in Section 7 of the 1996
Plan, as proposed. In general, no option may be granted with an
exercise price of less than the fair market value of a share of the
Corporation's common stock on the date of grant (110% if the
grantee beneficially owns more than 10% of such stock), the term of
an option may not be longer than ten (10) years, and any option
shall be subject to certain restrictions on transferability.
Payment of the option price may be in cash, check or other
instrument acceptable to the Stock Option Committee, or, in the
discretion of the Stock Option Committee, in the form of
unrestricted common stock of the Corporation owned by the optionee.
Stock Appreciation Rights. The Stock Option Committee will be
authorized to grant SARs either independent of or in connection
with stock options granted under the 1996 Plan. The exercise of
SARs will entitle the holder thereof to an amount (the
"appreciation") equal to the difference between the fair market
value of the common stock on the date the SAR was issued (or, in
the case of SARs issued in connection with options, the exercise
price under the related option agreement) and the fair market value
of a share of common stock of the Corporation on the date the SAR
is exercised. The appreciation will be payable in cash or common
stock of the Corporation, at the discretion of the Stock Option
Committee. The exercise of SARs granted in connection with options
will terminate those options.
The exercise of SARs which are paid in common stock will be
treated as the issuance of the shares of common stock to which the
SARs relate for purposes of calculating the maximum number of
shares which have been issued under the 1996 Plan.
Restricted Stock. The Stock Option Committee will be
authorized to award restricted stock under the 1996 Plan subject to
such terms and conditions as the Stock Option Committee may
determine. The Stock Option Committee will have authority to
determine the number of shares of restricted stock to be awarded,
the price, if any, to be paid by the recipient of the restricted
stock, and the date or dates on which the restricted stock will
vest. The vesting of restricted stock may be conditioned upon the
completion of a specified period of service with the Corporation,
upon the attainment of specified performance goals, or upon such
other criteria as the Stock Option Committee may determine. The
1996 Plan will give the Stock Option Committee discretion to make
loans to the recipients for the purchase price of the restricted
stock and to accelerate the vesting of restricted stock on a case
by case basis at any time.
Stock certificates representing the restricted stock granted
to an eligible employee will be registered in the employee's name.
However, no share of restricted stock may be sold, transferred,
assigned, or pledged by the employee until such share has vested in
accordance with the terms of the restricted stock award. In the
event of an employee's termination of employment before all of his
or her restricted stock has vested, or in the event other
conditions to the vesting of restricted stock have not been
satisfied prior to any deadline for the satisfaction of such
conditions set forth in the award, the shares of restricted stock
which have not vested will be forfeited, provided that the
participant will be entitled to retain any shares of restricted
stock which have been paid for by the participant. At the time
restricted stock vests, a certificate for such vested shares will
be delivered to the employee (or the beneficiary designated by the
employee, in the event of death), free of all restrictions.
Performance Units. The Stock Option Committee may grant
performance units under which payment may be made to the
participant upon the attainment of specific performance goals. Such
performance goals will be established by the Stock Option Committee
and will relate to the performance of the Corporation (or any
segment thereof) over a specified performance period, as judged
under any business criteria deemed appropriate by the Stock Option
Committee, including without limitation, growth in earnings, the
ratio of earnings to shareholder's equity or the ratio of earnings
to total capital.
As an element of each performance goal, the Stock Option
Committee may establish a principal performance target and a
minimum performance target. These targets may be adjusted at any
time prior to payment of the performance unit to reflect major
unforeseen events such as changes in laws, regulations or
accounting procedures, mergers, acquisitions or divestitures or
extraordinary, unusual or nonrecurring items or events, subject to
the limitations of Section 162(m) of the Code discussed below. If
the principal performance target is attained, the participant will
be entitled to receive 100% of the value of the performance unit.
If the minimum performance target is attained, but not the
principal performance target, the participant will be entitled to
receive a lesser percentage of the value of the performance unit,
as determined by the Stock Option Committee. The Stock Option
Committee shall determine the extent to which the performance
targets have been attained, and what, if any, payment is due the
participant on the performance unit. Such payment may be made, at
the Stock Option Committee's discretion, in cash or common stock of
the Corporation (based on the then current fair market value of
such stock).
Notwithstanding any other provision of the 1996 Plan to the
contrary, performance targets established by the Stock Option
Committee with respect to performance units granted to one or more
of the five (5) most highly compensated officers of the Corporation
will be pre-established objective performance goals within the
meaning of Section 162(m) of the Code and treasury regulations
promulgated thereunder. Furthermore, and notwithstanding any other
provision in the 1996 Plan to the contrary, once the Stock Option
Committee has established one or more performance targets with
respect to a performance unit granted to one of the five (5) most
highly compensated officers of the Corporation, the Stock Option
Committee shall have no discretion to waive or alter the targets
after the expiration of the earlier of (i) the expiration of
twenty-five percent of the performance period or (ii) the date on
which the outcome under the target is substantially certain.
Supplemental Cash Payments. A stock option, SAR, restricted
stock or performance unit award may provide for the Corporation to
make a supplemental cash payment to a participant. Payments may be
made for the purpose of, but not limited to, assisting the employee
in paying income taxes resulting from an award under the 1996 Plan.
In no event shall the amount of cash payment exceed the value of
the award to which it relates.
Discussion of Federal Income Tax Consequences
The following statements are based on current interpretations
of existing Federal income tax laws. The law is technical and
complex and the statements represent only a general summary of some
of the applicable provisions.
Stock Options. There are generally no Federal income tax
consequences either to the optionee or to the Corporation upon the
grant of a stock option. On exercise of an incentive stock option,
the optionee will not recognize any income and the Corporation will
not be entitled to a deduction for tax purposes, although such
exercise may give rise to liability for the optionee under the
alternative minimum tax provisions of the Code. Generally, if the
optionee disposes of shares acquired upon exercise of an incentive
stock option within two years of the date of grant or one year of
the date of exercise, the optionee will recognize compensation
income and the Corporation will be entitled to a deduction for tax
purposes in the amount equal to the excess of the fair market value
of the shares on the date of exercise over the option exercise
price (or the gain on sale, if less). Otherwise, the Corporation
will not be entitled to any deduction for tax purposes upon
disposition of such shares, and the entire gain for the optionee
will be treated as a capital gain. On exercise of a non-qualified
stock option, the amount by which the fair market value of the
shares on the date of exercise exceeds the option exercise price
will generally be taxable to the optionee as compensation income
and will generally be deductible for tax purposes by the
Corporation. The disposition of shares acquired upon exercise of a
non-qualified stock option will generally result in a capital gain
or loss for the optionee, but will have no tax consequences for the
Corporation.
Stock Appreciation Rights. The grant of an SAR generally does
not result in income to the grantee or in a deduction for the
Corporation. Upon the exercise of an SAR, the grantee will
recognize ordinary income and the Corporation will be entitled to
a deduction measured by the fair market value of the shares plus
any cash received.
Restricted Stock. The grant of restricted stock generally does
not result in income to the grantee or in a deduction for the
Corporation, assuming the shares transferred are subject to
restrictions which constitute a "substantial risk of forfeiture."
If there are no such restrictions, the grantee would recognize
ordinary income upon receipt of the shares. Dividends paid to the
grantee while the stock is subject to such restrictions would be
treated as compensation for Federal income tax purposes. At the
time the restrictions lapse, the grantee would recognize ordinary
income, and the Corporation would be entitled to a deduction
measured by the fair market value of the shares at the time of
lapse.
Performance Units. The grant of a performance unit generally
does not result in income to the grantee or in a deduction for the
Corporation. Upon the receipt of cash or shares of common stock
under a performance unit, the grantee will recognize ordinary
income and the Corporation will be entitled to a deduction measured
by the fair market value of the shares and/or any cash received.
Supplemental Cash Payments. Supplemental Cash Payments will
result in ordinary income to the grantee and a deduction for the
Corporation.
Change of Control
In the case of a merger or consolidation in which the
Corporation is not the surviving corporation, or a sale of all or
substantially all of the business or property of the Corporation,
or liquidation or dissolution of the Corporation or in the event of
a tender offer or any other change involving a threatened change in
control of the Corporation which, in the opinion of the Stock
Option Committee, could deprive the holders of the benefits
intended to be conferred by awards hereunder, the Committee may, in
anticipation of any such transaction or event, make such
adjustments in the terms and conditions of outstanding awards, as
the Stock Option Committee in its sole discretion determines are
equitably warranted under the circumstances including, without
limitation, (i) acceleration of exercise terms, or (ii)
acceleration of the lapse of restrictions, performance objectives
and other terms.
Vote Required and Board of Director Recommendation
The affirmative vote of a majority of the votes present or
represented by proxy and entitled to vote at the annual meeting of
shareholders, at which a quorum representing a majority of all
outstanding shares of common stock of the Corporation is present
and voting, either in person or by proxy, is required for approval
of this proposal.
The Board of Directors believes that the 1996 Plan is in the
best interests of the Corporation and the shareholders for the
reasons stated above. Therefore, the Board of Directors unanimously
recommends a vote FOR approval of this proposal to adopt the 1996
Plan.
INDEPENDENT ACCOUNTANTS
Dudley, Hopton-Jones, Sims & Freeman PLLP, Certified Public
Accountants, were selected by the Board of Directors as the
independent accountants to audit the Company's financial statements
for the fiscal year ended May 31, 1996. Representatives of Dudley,
Hopton-Jones, Sims & Freeman PLLP will be present at the Annual
Meeting and will have the opportunity to make a statement if they
wish to do so, and will be available to respond to appropriate
questions from stockholders.
During the fiscal year ended May 31, 1996, Dudley,
Hopton-Jones, Sims & Freeman PLLP provided various audit and
non-audit services to the Company and its subsidiary. As a part of
their services as the Company's auditors, they audited the
consolidated financial statements of the Company and its
subsidiary, the individual financial statements of the Company and
Golden Flake Snack Foods, Inc. and its subsidiary and also assisted
in the preparation of the Company's Annual Report (Form 10-K) for
filing with the Securities and Exchange Commission.
The Company has not selected the principal accountants to
audit its financial statements for the current fiscal year. It is
the Company's policy to select its principal accountants after the
preceding year's audit has been completed and the Company has had
time to consider the selection.
FINANCIAL STATEMENTS
Consolidated Financial Statements of the Company and its
subsidiary for the fiscal year ended May 31, 1996, are contained in
the 1996 Annual Report to Stockholders which accompanies this Proxy
Statement. However, such Report and Financial Statements contained
therein are not to be considered a part of this solicitation
material since they are not deemed material to the matters to be
acted upon at the meeting.
STOCKHOLDER PROPOSALS FOR 1997 ANNUAL MEETING
Any stockholder desiring to submit a proposal to be considered
by the Board of Directors for inclusion in the proxy statement and
form of proxy relating to next year's Annual Meeting of
Stockholders must do so in writing received by the Company on or
before May 31, 1997. Any such proposal should be submitted to:
Golden Enterprises, Inc., Attention: John H. Shannon, Vice
President & Secretary, 2101 Magnolia Avenue South, Suite 212,
Birmingham, Alabama 35205.
OTHER BUSINESS
It is not anticipated that there will be presented to the
meeting any business other than the matters set forth herein and
the management was not aware, a reasonable time before this
solicitation of proxies, of any other matters which may properly be
presented for action at the meeting. If any other business should
come before the meeting, the persons named on the enclosed proxy
will have discretionary authority to vote all proxies in accordance
with their best judgment.
By Order of the Board of Directors
/s/ John Stein
John Stein
Chairman
EXHIBIT A
GOLDEN ENTERPRISES, INC.
1996 Long Term Incentive Plan
Section 1. PURPOSE OF THE PLAN; DEFINITIONS. The purpose of
the Golden Enterprises, Inc. 1996 Long Term Incentive Plan (the
"Plan") is to further the growth in earnings and market
appreciation of Golden Enterprises, Inc. (the "Corporation"). The
Plan provides long-term incentives to those officers and key
employees of the Corporation or its subsidiaries who make
substantial contributions to the Corporation through their ability,
loyalty, industry and invention. The Corporation intends that the
Plan will thereby facilitate securing, retaining and motivating
officers and key employees of high caliber and good potential.
For purposes of the Plan, the following terms shall be defined
as set forth below:
(a) "Board" means the Board of Directors of the Corporation.
(b) "Cause" means (i) a willful and material violation of
federal, state and/or local laws and regulations, (ii) dishonesty,
(iii) theft, (iv) fraud, (v) embezzlement, (vi) commission of a
felony or a crime involving moral turpitude, (vii) substantial
dependence or addiction to alcohol or any drug, (viii) conduct
disloyal to the Corporation or its affiliates, or (ix) willful
dereliction of duties or disregard of lawful instructions or
directions of the officers or directors of the Corporation or its
affiliates relating to a material matter.
(c) "Code" means the Internal Revenue Code of 1986, as
amended, or any successors thereto.
(d) "Committee" means the Stock Option Committee of the
Board.
(e) "Common Stock" means the common stock, par value $.66 2/3
per share, of the Corporation.
(f) "Corporation" means Golden Enterprises, Inc., a Delaware
corporation.
(g) "Disability" means total and permanent disability as
determined under the Corporation's long-term disability plan.
(h) "Disinterested Person" shall mean an individual who
qualifies as a "disinterested person" within the meaning set forth
in Rule 16b-3(d)(3) as promulgated by the Securities and Exchange
Commission (the "Commission") under the Securities Exchange Act of
1934, or any successor definition adopted by the Commission and who
qualifies as an "outside director" within the meaning set forth in
Section 162(m) of the Code and the regulations promulgated
thereunder, or any successor definition thereto.
(i) "Early Retirement" means retirement from active
employment with the Corporation or its Subsidiary on or after the
date on which the participant reaches the age of 55 but before the
date on which the participant reaches the age of 65.
(j) "Fair Market Value" means, as of any given date, the
closing price of the Common Stock (or if no transactions were
reported on such date on the next preceding date on which
transactions were reported) in the principal market in which such
Common Stock is traded on such date.
(k) "Incentive Stock Option" means any Stock Option intended
to be and designated as an "Incentive Stock Option" within the
meaning of Section 422 of the Code.
(l) "Non-Qualified Stock Option" means any Stock Option that
is not an Incentive Stock Option.
(m) "Normal Retirement" means retirement from active
employment with the Corporation or its Subsidiary on or after the
date on which the participant reaches the age of 65.
(n) "Performance Units" means an award granted to a
participant pursuant to Section 9 hereof contingent upon achieving
certain performance targets.
(o) "Plan" means the Golden Enterprises, Inc. 1996 Long Term
Incentive Plan.
(p) "Restricted Stock" means an award of shares of Common
Stock granted to a participant pursuant to and subject to the
restrictions set forth in Section 10 hereof.
(q) "Stock Appreciation Rights" means a right granted under
Section 8 hereof, which entitles the holder to receive cash or
Common Stock in an amount equal to the excess of (a) the Fair
Market Value of a specified number of shares of Common Stock at the
time of exercise over (b) a specified price.
(r) "Stock Option" means any option to purchase shares of
Common Stock granted pursuant to Section 7 hereof.
(s) "Subsidiary" means any corporation in an unbroken chain
of corporations beginning with the Corporation if each of the
corporations (other than the last corporation in the unbroken
chain) owns 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 the chain.
(t) "Ten Percent Shareholder" means a person who owns (after
taking into account the attribution rules of Code Section 424(d))
more than ten percent (10%) of the total combined voting power of
all classes of stock of the Corporation.
Section 2. ADMINISTRATION.
(a) The Plan shall be administered by the Committee. The
Committee shall be appointed by the Board and shall consist of
three or more members of the Board who are Disinterested Persons.
No member of the Committee shall be eligible to receive awards
under the Plan while serving on the Committee, and no member of the
Committee shall have been eligible to receive awards for one year
prior to serving on the Committee. The Committee shall have full
and final authority in its discretion to interpret the provisions
of the Plan (and any agreements relating thereto) and to decide all
questions of fact arising in its application; to determine the
employees to whom awards shall be made under the Plan; to determine
the type of award to be made and the amount, size, terms and
conditions of each such award; to determine and establish
additional terms and conditions not inconsistent with the Plan for
any agreements entered into with participants in connection with
the Plan; to determine the time when awards will be granted and
when rights may be exercised, which may be after termination of
employment; to adopt, alter and repeal such administrative rules,
guidelines and practices governing the Plan as it shall, from time
to time, deem advisable; and to make all other determinations
necessary or advisable for the administration of the Plan.
(b) A majority of the Committee shall constitute a quorum,
and the action of a majority of members of the Committee present at
any meeting at which a quorum is present, or acts unanimously
adopted in writing without the holding of a meeting, shall be the
acts of the Committee. Any decision made, or action taken, by the
Committee arising out of or in connection with the interpretation
and administration of the Plan shall be final and conclusive;
provided, however, that any such decision made or action taken may
be reviewed by the Board, in which event the determination of the
Board shall be final and conclusive. This provision shall not be
construed to grant to any person any right to review by the Board
of any decision made or action taken by the Committee.
(c) Neither the Board, the Stock Option Committee, nor any
member of either shall be liable for any act, omission,
interpretation, construction or determination made in connection
with the Plan in good faith, and the members of the Board may be
entitled to indemnification and reimbursement by the Corporation in
respect of any claim, loss, damage or expense (including attorney's
fees) arising therefrom to the full extent permitted by law and
under any directors' and officers' liability insurance that may be
in effect from time to time, in all events as a majority of the
Board then in office may determine from time to time, as evidenced
by a written resolution thereof. In addition, no member of the
Board and no employee of the Corporation shall be liable for any
act or failure to act hereunder, by any other member or other
employee or by any agent to whom duties in connection with the
administration of this Plan have been delegated or for any act or
failure to act by such member or employee, in all events except in
circumstances involving such member's or employee's bad faith,
gross negligence, intentional fraud, or violation of a statute.
Section 3. PARTICIPANTS. Persons eligible to participate in
the Plan shall be those officers and key employees of the
Corporation or its Subsidiaries who are in positions in which their
decisions, actions and counsel significantly impact the performance
of the Corporation or its Subsidiaries. Directors of the
Corporation who are not otherwise salaried employees of the
Corporation shall not be eligible to participate in the Plan.
Section 4. AWARDS UNDER THE PLAN. Awards by the Committee
under the Plan may be in the form of Incentive Stock Options,
Non-Qualified Stock Options, Stock Appreciation Rights, Performance
Units, Restricted Stock, supplemental cash payments and such other
forms as the Committee may in its discretion deem appropriate,
including any combination of the above. No fractional shares shall
be issued under the Plan, and the minimum value of any shares
issued under the Plan shall be the par value at the time of award.
Section 5. SHARES SUBJECT TO PLAN.
(a) The shares that may be issued under the Plan shall not
exceed in the aggregate 500,000 shares of Common Stock. Such shares
may be authorized and unissued shares or treasury shares. Except as
otherwise provided herein, any shares subject to an option or right
which for any reason expires or is terminated unexercised as to
such shares shall again be available under the Plan.
(b) The maximum number of shares subject to awards which may
be granted under the Plan to any individual in any one year is
100,000 (subject to appropriate adjustments to reflect changes in
the capitalization of the Corporation).
(c) In the event of any change in the outstanding Common
Stock of the Corporation by reason of a stock dividend or
distribution, recapitalization, merger, consolidation, split-up,
combination, exchange of shares or otherwise, the Committee shall
adjust the number of shares of Common Stock which may be issued
under the Plan and the Committee shall provide for an equitable
adjustment of any shares issuable pursuant to awards outstanding
under the Plan.
Section 6. EFFECTIVE DATE. The effective date of this Plan
shall be the date it is adopted by the Board, provided that the
stockholders of the Corporation shall approve this Plan in
accordance with Rule 16b-3 of the Securities Exchange Act of 1934
and, to the extent this Plan provides for the issuance of Incentive
Stock Options, the stockholders of the Corporation shall approve
those portions of this Plan related to the granting of Incentive
Stock Options within twelve (12) months after the date of adoption.
If any awards are granted under the Plan before the date of such
stockholder approval, such awards automatically shall be granted
subject to such approval.
Section 7. STOCK OPTIONS. Stock Options may be granted either
alone or in addition to other awards granted under the Plan. Any
Stock Option granted under the Plan shall be in such form as the
Committee may from time to time approve, and the provisions of
Stock Option awards need not be the same with respect to each
optionee. Each Stock Option shall be evidenced by a written option
agreement that shall specify, among other things, the type of Stock
Option granted, the option price, the duration of the Stock Option,
the number of shares of Common Stock to which the Stock Option
pertains, and the schedule on which such Stock Options become
exercisable.
The Stock Options granted under the Plan may be of two types:
(i) Incentive Stock Options and (ii) Non-Qualified Stock Options.
The Committee shall have the authority to grant any optionee
Incentive Stock Options, Non-Qualified Stock Options, or both types
of Stock Options (in each case with or without Stock Appreciation
Rights). To the extent that any Stock Option does not qualify as an
Incentive Stock Option, it shall constitute a separate Non
Qualified Stock Option.
Anything in the Plan to the contrary notwithstanding, no term
of the Plan relating to Incentive Stock Options shall be
interpreted, amended or altered, nor shall any discretion or
authority granted under the Plan be so exercised, so as to
disqualify either the Plan or any Incentive Stock Option under
Section 422 of the Code. Notwithstanding the foregoing, in the
event an optionee voluntarily disqualifies a Stock Option as an
Incentive Stock Option within the meaning of Section 422 of the
Code, the Committee may, but shall not be obligated to, make such
additional grants, awards or bonuses as the Committee shall deem
appropriate, to reflect the tax savings to the Corporation which
result from such disqualification.
Stock Options granted under the Plan shall be subject to the
following terms and conditions and shall contain such additional
terms and conditions, not inconsistent with the terms of the Plan,
as the Committee shall deem desirable:
(a) Option Price. The option price per share of Common Stock
purchasable under a Stock Option shall be determined by the
Committee at the time of grant but shall be not less than the Fair
Market Value of the Common Stock on the date of the grant of the
Stock Option; provided, however, if the Stock Option is an
Incentive Stock Option granted to a Ten Percent Shareholder, the
option price for each share of Common Stock subject to such
Incentive Stock Option shall be no less than one hundred ten
percent (110%) of the Fair Market Value of a share of Common Stock
on the date such Incentive Stock Option is granted.
(b) Option Term. The term of each Stock Option shall be fixed
by the Committee, but no Stock Option shall be exercisable more
than ten (10) years after the date such Stock Option is granted.
(c) Exercisability. Subject to Section 7(j) hereof with
respect to Incentive Stock Options, Stock Options shall be
exercisable at such time or times and subject to such terms and
conditions as shall be determined by the Committee at grant. If the
Committee provides, in its discretion, that any Stock Option is
exercisable only in installments, the Committee may waive such
installment exercise provisions at any time, in whole or in part,
based on performance and/or such other factors as the Committee may
determine in its sole discretion.
(d) Method of Exercise. Stock Options may be exercised in
whole or in part at any time during the option period, by giving
written notice of exercise to the Corporation specifying the number
of shares to be purchased, accompanied by payment in full of the
purchase price, in cash, by check or such other instrument as may
be acceptable to the Committee. As determined by the Committee, in
its sole discretion, at or after grant, payment in full or in part
may also be made in the form of unrestricted Common Stock owned by
the optionee (based on the Fair Market Value of the Common Stock on
the date the option is exercised, as determined by the Committee).
No shares of Common Stock resulting from the exercise of a Stock
Option shall be issued until full payment therefor has been made.
An optionee shall have the rights to dividends or other rights of
a stockholder with respect to shares subject to the Stock Option
when the optionee has given written notice of exercise and has paid
in full for such shares.
(e) Non-transferability of Options. Except as otherwise set
forth in this Section 7(e), no Stock Option shall be transferable
by the optionee otherwise than by will or by the laws of descent
and distribution, and all Stock Options shall be exercisable,
during the optionee's lifetime, only by the optionee. For purposes
of paragraphs (f), (g), (h) and (j) of this Section 7, a
transferred option may be exercised by the transferee only to the
extent that the optionee would have been entitled had the option
not been transferred.
(f) Termination by Death. Unless otherwise determined by the
Committee at grant, if any optionee's employment with the
Corporation or any Subsidiary terminates by reason of death, the
Stock Option may thereafter be immediately exercised, to the extent
then exercisable (or on such accelerated basis as the Committee
shall determine at or after grant), by the legal representative of
the estate or by the legatee of the optionee under the will of the
optionee, for a period of three (3) years from the date of such
death or until the expiration of the stated term of such Stock
Option, whichever period is the shorter. In the event of
termination of employment by reason of death, if an Incentive Stock
Option is exercised after the expiration of the exercise periods
that apply for purposes of Section 422 of the Code, such Stock
Option will thereafter be treated as a Non-Qualified Stock Option.
(g) Termination by Reason of Disability. Unless otherwise
determined by the Committee at grant, if any optionee's employment
with the Corporation or any Subsidiary terminates by reason of
Disability, any Stock Option held by such optionee may thereafter
be exercised, to the extent it was exercisable at the time of
termination due to Disability (or on such accelerated basis as the
Committee shall determine at or after grant), but may not be
exercised after three (3) years from the date of such termination
of employment or the expiration of the stated term of such Stock
Option, whichever period is the shorter; provided, however, that,
if the optionee dies within such three year period, any unexercised
Stock Option held by such optionee shall thereafter be exercisable
to the extent to which it was exercisable at the time of death for
a period of twelve (12) months from the date of such death or for
the stated term of such Stock Option, whichever period is the
shorter. In the event of termination of employment by reason of
Disability, if an Incentive Stock Option is exercised after the
expiration of the exercise periods that apply for purposes of
Section 422 of the Code, such Stock Option will thereafter be
treated as a Non-Qualified Stock Option.
(h) Termination by Reason of Retirement. Unless otherwise
determined by the Committee at grant, if an optionee's employment
with the Corporation or any Subsidiary terminates by reason of
Normal Retirement or Early Retirement (with Committee consent),
under a formal plan or policy of the Corporation, any Stock Option
held by such optionee shall expire upon the earlier of (i) the
expiration date set forth in the Stock Option agreement to which
such Stock Option is subject, or (ii) three (3) years from the date
of such Normal or Early Retirement. An optionee shall not be deemed
to have retired during any leave of absence of the optionee
authorized by the Corporation or any Subsidiary under its standard
personnel practices. In the event of termination of employment by
reason of Retirement, if an Incentive Stock Option is exercised
after the exercise periods that apply for purposes of Section 422
of the Code, such Stock Option will thereafter be treated as a Non
Qualified Stock Option.
(i) Termination for Other Reasons. Except as provided in
7(f), (g) and (h), or except as otherwise determined by the
Committee, all Stock Options shall terminate upon the termination
of the optionee's employment.
(j) Limit on Value of Incentive Stock Option First
Exercisable Annually. The aggregate Fair Market Value (determined
at the time of grant) of the Common Stock for which Incentive Stock
Options are exercisable for the first time by an optionee during
any calendar year under the Plan (and/or any other stock option
plans of the Corporation or any Subsidiary) shall not exceed
$100,000.
Section 8. STOCK APPRECIATION RIGHTS. Stock Appreciation
Rights shall be evidenced by Stock Appreciation Rights agreements
in such form not inconsistent with the Plan as the Committee shall
approve from time to time, which agreements shall contain in
substance the following terms and conditions:
(a) Award. A Stock Appreciation Right shall entitle the
grantee to receive upon exercise the excess of (a) the Fair Market
Value of a specified number of shares of Common Stock at the time
of exercise over (b) a specified price which shall not be less than
one hundred percent (100%) of the Fair Market Value of the Common
Stock at the time the Stock Appreciation Right was granted, or, if
granted in connection with a previously issued Stock Option, not
less than 100% of the Fair Market Value of the Common Stock at the
time such option was granted. A Stock Appreciation Right may be
granted in connection with all or any portion of a previously or
contemporaneously granted Stock Option (including, in addition to
options granted under the Plan, options granted under other plans
of the Corporation), or not in connection with a Stock Option.
(b) Term. Stock Appreciation Rights shall be granted for a
period of not more than ten (10) years, and shall be exercisable in
whole or in part at such time or times and subject to such other
terms and conditions as shall be prescribed by the Committee at the
time of grant.
(c) Payment. Upon exercise of a Stock Appreciation Right,
payment shall be made in the form of Common Stock (at the Fair
Market Value on the date of exercise), in cash, or in a combination
thereof, as the Committee may determine.
(d) Effect on Shares. The exercise of a Stock Appreciation
Right, where payment is made in the form of Common Stock, shall be
treated as the issuance of Common Stock for purposes of calculating
the maximum number of shares which have been issued under the Plan.
(e) Stock Appreciation Right Granted with Incentive Stock
Option. A Stock Appreciation Right granted in connection with an
Incentive Stock Option may be exercised only if and when the Fair
Market Value of the Common Stock subject to the Incentive Stock
Option exceeds the exercise price of such Stock Option.
(f) Termination of Stock Appreciation Rights. An employee who
voluntarily terminates employment or whose employment is terminated
involuntarily for Cause will forfeit all Stock Appreciation Rights.
Section 9. PERFORMANCE UNITS. Performance Units shall be
evidenced by performance unit agreements in such form not
inconsistent with the Plan as the Committee shall approve from time
to time. Such agreements shall contain in substance the following
terms and conditions:
(a) Performance Period. The performance period for a
Performance Unit shall be established by the Committee and shall be
not more than ten (10) years.
(b) Valuation of Units. A value for each Performance Unit
shall be established by the Committee, together with principal and
minimum performance targets to be achieved with respect to the
Performance Unit during the performance period. The participant
shall be entitled to receive one hundred percent (100%) of the
value of the Performance Unit if the principal target is achieved
during the performance period, but shall be entitled to receive
nothing for such Performance Unit if the minimum target is not
achieved during the performance period. The participant shall be
entitled to receive a stated portion of the value of the
Performance Unit for performance during the performance period
which meets or exceeds the minimum target but fails to meet the
principal target.
(c) Performance Targets. The performance targets established
under the Plan shall relate to the performance of the Corporation
or any segment thereof (collectively referred to in this Section 9
as "Corporation's Performance") over the performance period, and
may be established in terms of growth in earnings or equity, ratio
of earnings to stockholders' equity or to total capital, or any
other performance standards as may be determined by the Committee.
Multiple targets may be used and may have the same or different
weighting, and they may relate to the Corporation's absolute
performance or the Corporation's performance as measured against
that of other companies, or any other standards as may be
determined by the Committee.
(d) Adjustments. At any time prior to payment of the
Performance Units, the Committee may adjust previously established
performance targets and other terms and conditions, to reflect
major unforeseen events such as changes in laws, regulations or
accounting policies or procedures, mergers, acquisitions or
divestitures or extraordinary, unusual or nonrecurring items or
events.
(e) Payments of Performance Units. Following the conclusion
of each performance period, the Committee shall determine the
extent to which performance targets have been attained for such
period as well as the other terms and conditions established by the
Committee. The Committee shall determine what, if any, payment is
due on the Performance Units and whether such payment shall be made
in cash, in Common Stock, or partially in cash and partially in
Common Stock. Any payments made in Common Stock shall be calculated
based on the Fair Market Value of the Common Stock. Payments shall
be made as promptly as practicable following the end of the
performance period unless deferred subject to such terms and
conditions as may be prescribed by the Committee.
(f) Termination by Death, Disability or Retirement. Any
employee granted a Performance Unit pursuant to this Section 9,
who, by reason of death, Disability or Normal or Early Retirement,
terminates employment before the end of the performance period, may
be entitled to receive a portion of any earned Performance Unit.
The Committee, in its discretion, will determine the amount, if
any, of the Performance Unit earned and the time at which payment
will be made.
(g) Other Termination. An employee who voluntarily terminates
employment or whose employment is terminated involuntarily for
Cause will forfeit all rights under the Performance Unit.
(h) Section 162(m) Provisions. Notwithstanding any other
provision of the Plan to the contrary, performance targets
established by the Committee for the top five most highly
compensated officers of the Corporation shall be pre-established
objective performance goals within the meaning of Section 162(m) of
the Code and treasury regulations promulgated thereunder.
Furthermore, and notwithstanding any other provision of the Plan to
the contrary, once the Committee has established one or more
performance targets with respect to a Performance Unit granted to
one of the top five most highly compensated officers of the
Corporation, the Committee shall have no discretion to waive or
alter the targets after the earlier of (i) the expiration of
twenty-five percent (25%) of the performance period or (ii) the
date on which the outcome under the targets is substantially
certain.
Section 10. RESTRICTED STOCK AWARDS.
(a) Administration. Shares of Restricted Stock may be issued
either alone or in addition to other awards granted under the Plan.
The Committee shall determine the officers and key employees of the
Corporation and its Subsidiaries to whom, and the time or times at
which, grants of Restricted Stock will be made, the number of
shares to be awarded, the price, if any, to be paid by the
recipient of Restricted Stock (subject to Section 10(b) hereof),
the time or times within which such awards may be subject to
forfeiture, and all other conditions of the awards. The Committee
may also condition the grant of Restricted Stock upon the
attainment of specified performance goals, or such other criteria
as the Committee may determine, in its sole discretion. The
provisions of Restricted Stock awards need not be the same with
respect to each recipient.
(b) Awards and Certificates. The prospective recipient of an
award of shares of Restricted Stock shall not have any rights with
respect to such award, unless and until such recipient has executed
an agreement evidencing the award (a "Restricted Stock Award
Agreement") and has delivered a fully executed copy thereof to the
Corporation, and has otherwise complied with the then applicable
terms and conditions.
(i) Awards of Restricted Stock must be accepted within
a period of ninety (90) days (or such shorter period as the
Committee may specify) after the award date by executing a
Restricted Stock Award Agreement and paying whatever price, if
any, is required.
(ii) A stock certificate in respect of shares of
Restricted Stock shall be issued in the name of each
participant who is awarded Restricted Stock. Such certificate
shall be registered in the name of the participant, and shall
bear an appropriate legend referring to the terms, conditions,
and restrictions applicable to such award, substantially in
the following form:
"The transferability of this certificate and the
shares of stock represented hereby are subject to
the terms and conditions (including forfeiture)
of the Golden Enterprises, Inc. 1996 Long Term
Incentive Plan and a Restricted Stock Award
Agreement entered into between the registered
owner and the Corporation. Copies of such Plan
and Agreement are on file in the offices of the
Corporation, 2101 Magnolia Avenue South, Suite
212, Birmingham, Alabama 35205."
(iii) The Committee shall require that the stock
certificates evidencing such shares be held in custody by the
Corporation until the restrictions thereon shall have lapsed,
and that, as a condition of any Restricted Stock award, the
participant shall have delivered a stock power, endorsed in
blank, relating to the Common Stock covered by such award.
(c) Restrictions and Conditions. The shares of Restricted
Stock awarded pursuant to this Section 10 shall be subject to the
following restrictions and conditions:
(i) Subject to the provisions of this Plan and the
Restricted Stock Award Agreements, during such period as may
be set by the Committee commencing on the grant date (the
"Restriction Period"), the participant shall not be permitted
to sell, transfer, pledge or assign shares of Restricted Stock
awarded under the Plan. Within these limits, the Committee
may, in its sole discretion, provide for the lapse of such
restrictions in installments and may accelerate or waive such
restrictions in whole or in part based on performance and/or
such other factors as the Committee may determine, in its sole
discretion.
(ii) Except as provided in paragraph (c)(i) of this
Section 10, the participant shall have, with respect to the
shares of Restricted Stock, all of the rights of a stockholder
of the Corporation, including the right to vote and to receive
any dividends. Dividends paid in stock of the Corporation or
stock received in connection with a stock split with respect
to Restricted Stock shall be subject to the same restrictions
as on such Restricted Stock. Certificates for shares of
unrestricted Stock shall be delivered to the participant
promptly after, and only after, the period of forfeiture shall
expire without forfeiture in respect of such shares of
Restricted Stock.
(iii) Subject to the provisions of the Restricted Stock
Award Agreement and this Section 10, upon termination of
employment for any reason during the Restriction Period, all
shares still subject to restriction shall be forfeited by the
participant; provided, however, that the participant shall be
entitled to retain the shares of Restricted Stock which have
been paid for by the participant.
(iv) In the event of death or Disability or in the
event that a participant's employment is terminated as the
result of special hardship circumstances (other than for
Cause), the Committee may, in its sole discretion, waive in
whole or in part any or all remaining restrictions with
respect to such participant's shares of Restricted Stock.
Section 11. SUPPLEMENTAL CASH PAYMENTS. Subject to the
Committee's discretion, Stock Options, Stock Appreciation Rights,
Performance Units, or Restricted Stock agreements may provide for
the payment by the Corporation of a supplemental cash payment after
the exercise of a Stock Option or Stock Appreciation Right, at the
time of payment of a Performance Unit or at the end of the
restriction period of a Restricted Stock award. Supplemental cash
payments shall be subject to such terms and conditions as shall be
provided by the Committee at the time of grant, provided that in no
event shall the amount of each payment exceed:
(a) In the case of a Stock Option, the excess of the Fair
Market Value of a share of Common Stock on the date of exercise
over the option price, multiplied by the number of shares for which
such option is exercised, or
(b) In the case of a Stock Appreciation Right, Performance
Unit or Restricted Stock award, the value of the shares and other
consideration issued in payment of such award.
Section 12. SALE OR MERGER OF CHANGE IN CONTROL. In the case
of a merger or consolidation in which the Corporation is not the
surviving corporation, or a sale of all or substantially all of the
business or property of the Corporation, or liquidation or
dissolution of the Corporation, or in the event of a tender offer
or any other change involving a threatened change in control of the
Corporation which, in the opinion of the Committee, could deprive
the holders of the benefits intended to be conferred by awards
hereunder, the Committee may, in anticipation of any such
transaction or event, either at the time of grant or thereafter,
make such adjustments in the terms and conditions of outstanding
awards, as the Committee in its sole discretion determines are
equitably warranted under the circumstances including, without
limitation, (i) acceleration of exercise terms, or (ii)
acceleration of the lapse of restrictions and/or performance
objectives or other terms.
Section 13. GENERAL PROVISIONS.
(a) Governmental or Other Regulations. Each award under the
Plan shall be subject to the requirement that, if at any time the
Committee shall determine that (a) the listing, registration or
qualification of the shares of Common Stock subject or related
thereto upon any securities exchange or under any state or federal
law, or (b) the consent or approval of any government regulatory
authority, or (c) an agreement by the recipient of an award with
respect to the disposition of shares of Common Stock, is necessary
or desirable as a condition of, or in connection with, the granting
of such award or the issue or purchase of shares of Common Stock
thereunder, such award may not be consummated in whole or in part
unless such listing, registration, qualification, consent, approval
or agreement shall have been effected or obtained free of any
conditions not acceptable to the Committee. A participant shall
agree, as a condition of receiving any award under the Plan, to
execute any documents, make any representations, agree to
restrictions on stock transferability and take any actions which in
the opinion of legal counsel to the Corporation is required by any
applicable law, ruling or regulation.
(b) Rights of a Stockholder. The recipient of any award under
the Plan, unless otherwise provided by the Plan, shall have no
rights as a stockholder with respect thereto unless and until
certificates for shares of Common Stock are issued to the
recipient.
(c) No Additional Rights. Nothing set forth in this Plan
shall prevent the Board from adopting other or additional
compensation arrangements, subject to stockholder approval if such
approval is required; and such arrangements may be either generally
applicable or applicable only in specific cases. Nothing in the
Plan or in any agreement entered into pursuant to the Plan shall
confer upon any participant the right to continue in the employment
of the Corporation or its Subsidiaries, or affect any right which
the Corporation or such Subsidiaries may have to terminate the
employment of the participant.
(d) Withholding. Whenever the Corporation proposes or is
required to issue or transfer shares of Common Stock under the
Plan, the Corporation shall have the right to require the recipient
to remit to the Corporation or provide indemnification satisfactory
to the Corporation for, an amount sufficient to satisfy any
federal, state or local withholding tax requirements prior to the
issuance or delivery of any certificate or certificates for such
shares. Whenever payments are to be made in cash, such payments
shall be net of an amount sufficient to satisfy any federal, state
or local withholding tax requirements.
(e) Non-Assignability. No award under the Plan shall be
assignable or transferable by the participant except by will or by
the laws of descent and distribution. During the life of a
participant, such award shall be exercisable only by the
participant or by the participant's guardian or legal
representative.
(f) Unfunded Status of Plan. The Plan is intended to
constitute an "unfunded" plan for incentive and deferred
compensation. With respect to any payments not yet made to a
participant or optionee by the Corporation, nothing set forth
herein shall give any such participant or optionee any rights that
are greater than those of a general creditor of the Corporation. In
its sole discretion, the Committee may authorize the creation of
trusts or other arrangements to meet the obligations created under
the Plan to deliver Common Stock or payments in lieu of or with
respect to awards hereunder; provided, however, that the existence
of such trusts or other arrangements is consistent with the
unfunded status of the Plan.
(g) Non-Uniform Determination. The Committee's determinations
under the Plan (including, without limitation, determinations of
the persons to receive awards, the form, amount and timing of such
awards, the terms and provisions of awards and the agreements
evidencing the awards, and the establishment of values and
performance targets) need not be uniform and may be made by it
selectively among persons who receive, or are eligible to receive,
awards under the Plan, whether or not such persons are similarly
situated. Notwithstanding anything contained in the Plan, the
Corporation may make loans to participants in connection with
awards under the Plan or otherwise.
(h) Amendment or Termination. The Board may amend, modify,
suspend or terminate the Plan at any time; provided, however, that
without stockholder approvals the Board may not increase the
maximum number of shares which may be issued under the Plan (except
increases pursuant to Section 5(c) hereof), change the class of
employees eligible to receive awards, extend the period during
which any award may be exercised, extend the term of the Plan or
change the minimum option price. The termination or any
modification, suspension or amendment of the Plan shall not,
without the consent of a participant, adversely affect the
participant's rights under an award previously granted. The
Committee may amend the terms of any award or option theretofore
granted, prospectively or retroactively, but no such amendment
shall impair the rights of any holder without his consent. The
Committee may also substitute new Stock Options for previously
granted Stock Options including options granted under other plans
applicable to the participant and previously granted Stock Options
having higher option prices.
(i) Use of Proceeds. The proceeds received by the Corporation
from the sale of Common Stock pursuant to the sale or exercise of
awards under the Plan shall be added to the Corporation's general
funds and used for general corporate purposes.
(j) Section 16. It is intended that the Plan and any grants
made to a person subject to Section 16 of the Securities Exchange
Act of 1934 meet all of the requirements of Rule 16b-3 thereunder.
If any provision of the Plan or any award hereunder would
disqualify the Plan or such award, or would otherwise not comply
with Rule 16b-3, such provision or award shall be construed or
deemed amended to conform to Rule 16b-3.
(k) No Restriction on Right of Company to Effect Corporate
Changes. Nothing in the Plan shall affect the right or power of the
Corporation or its stockholders to make or authorize any or all
adjustments, recapitalizations, reorganizations or other changes in
the Corporation's capital structure or its business, or any merger
or consolidation of the Corporation, or any issue of stock or of
options, warrants or rights to purchase stock or of bonds,
debentures, preferred or prior preference stocks whose rights are
superior to or affect the Common Stock or the rights thereof or
which are convertible into or exchangeable for Common Stock, or the
dissolution or liquidation of the Corporation, or any sale or
transfer of all or any part of its assets or business, or any other
corporate act or proceeding, whether of a similar character or
otherwise.
(l) Construction of Plan. The validity, interpretation, and
administration of the Plan and of any rules, regulations,
determinations, or decisions made thereunder, and the rights of any
and all persons having or claiming to have any interest therein or
thereunder, shall be determined exclusively in accordance with the
laws of the State of Alabama.
(m) Duration of the Plan. The Plan shall remain in effect
until all awards under the Plan have been satisfied by the issuance
of shares or the payment of cash, but no award shall be granted
more than ten (10) years after the effective date hereof.
P R O X Y
GOLDEN ENTERPRISES, INC.
2101 Magnolia Avenue South
Birmingham, Alabama 35205
Annual Meeting of Stockholders
September 27, 1996
This Proxy is Solicited on Behalf of the Board of Directors.
The undersigned hereby appoints John S. Stein and John H. Shannon
as Proxies, each with the power to appoint his substitute, and
hereby authorizes them to represent and to vote as designated
below, all the shares of common stock of Golden Enterprises, Inc.
held of record by the undersigned on August 2, 1996 at the annual
meeting of stockholders to be held on September 27, 1996 or any
adjournment thereof.
1. ELECTION OF FOR all nominees listed below WITHHOLD AUTHORITY
DIRECTORS (except as designated [ ] to vote for all [ ]
to the contrary below) nominees listed below
John S. Stein, Edward R. Pascoe, John P. McKleroy, Jr.,
James I. Rotenstreich, John S. P. Samford, D. Paul Jones, Jr.,
J. Wallace Nall, Jr., F. Wayne Pate, Joann F. Bashinsky
(INSTRUCTION: To withhold authority to vote for any individual
nominee write that nominee's name in the space
provided below)
______________________________________________________________________________
2. To consider and act upon The Golden Enterprises, Inc. 1996
Long Term Incentive Plan as adopted and recommended by the
Board of Directors. FOR [ ] AGAINST [ ] ABSTAIN [ ]
3. In their discretion, the Proxies are authorized to vote upon
such other business as may properly come before the meeting,
which business the Board of Directors was not aware of a
reasonable time before the solicitation of Proxies.
This proxy when properly executed will be voted in the manner
directed herein by the undersigned stockholder. If no direction is
made, this proxy will be voted for the election of directors. (To
be signed on other side.)
(Continued on back)
The Board of Directors knows of no other matters that may properly
be, or which are likely to be, brought before the meeting. However,
if any other matters are properly brought before the meeting, the
persons named in the proxy or their substitutes will vote in
accordance with their best judgment on such matters.
The undersigned acknowledges receipt with this Proxy of a copy of
the Notice of Annual Meeting and Proxy Statement dated August 30,
1996, and the 1996 Annual Report to Stockholders.
Please sign exactly as name appears below. When shares are held by
joint tenants, both should sign. When signing as attorney, as
executor, administrator, trustee or guardian, please give full
title as such. If a corporation, please sign in full corporate name
by President or other authorized officer. If a partnership, please
sign in partnership name by authorized person.
DATE ____________________, 1996 __________________________________
Signature
__________________________________
Signature if held jointly
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY
CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
