Registration No. 333-_____
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------------
HARVEST STATES COOPERATIVES
(Exact name of registrant as specified in its charter)
Minnesota 41-0251095
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1667 North Snelling
P.O. Box 64594
St. Paul, Minnesota 55164
(Address, including zip code, of principal executive offices)
--------------------
HARVEST STATES COOPERATIVES
KEY EMPLOYEE SHARE OPTION PLAN
(Full title of the plan)
--------------------
Thomas F. Baker
Group Vice President--Finance
1667 North Snelling
P.O. Box 64594
St. Paul, Minnesota 55164
(612) 641-3736
(Name, address, including zip code, and telephone number, including area code,
of, agent for service)
--------------------
Copy To:
William B. Payne, Esq.
Dorsey & Whitney LLP
220 South Sixth Street
Minneapolis, Minnesota 55402-1498
--------------------
CALCULATION OF REGISTRATION FEE
================================================================================
Proposed Maximum
Title of Securities Aggregate Amount of
to be Registered Offering Price(1) Registration Fee
- --------------------------------------------------------------------------------
Options to Purchase
Securities $ 10,000,000 $ 2,950
================================================================================
(1) In accordance with Rule 457(o).
<PAGE>
PART II.
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents which have been filed with the Securities and
Exchange Commission (the "Commission") by Harvest States Cooperatives (the
"Company") pursuant to the Securities Exchange Act of 1934 (the "Exchange Act"),
are incorporated herein by reference:
(a) Annual Report on Form 10-K for the fiscal year ended May 31,
1997.
(b) Quarterly Report on Form 10-Q for the quarter ended August 31,
1997.
All documents filed by the Company pursuant to Sections 13(a), 13(c),
14 and 15(d) of the Exchange Act subsequent to the date hereof and prior to the
filing of a post-effective amendment which indicates that all securities offered
hereby have been sold or which deregisters all securities remaining unsold shall
be deemed to be incorporated by reference herein and to be a part hereof from
the respective dates of filing of such documents. Any statement contained herein
or in a document all or part of which is incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Registration Statement to the extent that a statement
contained herein or in any subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Registration
Statement.
Item 4. Description of Securities.
The Plan provides for the right to receive an option to purchase
securities in exchange for a reduction in future bonus or salary. The options
must be held for at least six months after being granted before the exercise and
expire upon the earliest of the following: 90 days after the participant's
termination of employment for cause; 120 months after the participant's
termination of employment for any other reason; or 20 years after being granted.
In exchange for a reduction in bonus or salary in a specified dollar amount, the
participant will receive the right to purchase securities with a fair market
value of 133 1/3% of the specified dollar amount at a price of 33 1/3% of the
specified dollar amount. The option's exercise price will remain unchanged,
except for stock dividends, stock splits, rights offerings, recapitalizations or
similar transactions.
Item 5. Interests of Named Experts and Counsel.
Not applicable.
Item 6. Indemnification of Directors and Officers.
<PAGE>
The statutes of the State of Minnesota give the Company the power to
indemnify any director, officer, manager, employee or agent, who was or is a
party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative, against certain
liabilities and expenses incurred in connection with the action, suit or
proceeding.
Article VII of the Bylaws of the Company provides that the Company
shall indemnify each director, officer, manager, employee, or agent of the
Company, and any person serving at the request of the Company as a director,
officer, manager, employee, or agent of another corporation, partnership, joint
venture, trust, or other enterprise, against expenses, including attorneys'
fees, judgments, fines, and amounts paid in settlement actually and reasonably
incurred to he fullest extent to which such directors, officers, managers,
employee or agents of an association may be indemnified under the law of the
State of Minnesota or any amendments thereto or substitutions therefor. Article
VII provides that the Company shall have power to purchase and maintain
insurance against any liability asserted against such persons and incurred by
such persons in any such capacity.
Article X of the Company's Amended and Restated Articles of
Incorporation provides that a director shall not be personally liable to the
Company or its members for monetary damages for breach of fiduciary duty as a
director, except for liability: (i) for a breach of the director's duty of
loyalty to the Company or its members; (ii) for acts of omissions not in good
faith or that involve intentional misconduct or a knowing violation of law;
(iii) for a transaction from which the director derived an improper personal
benefit; or (iv) for an act or omission occurring prior to the date when the
provisions of such Article (or predecessor thereto) became effective. It is the
stated intention of the members of the Company to eliminate or limit the
personal liability of the directors of the Company to the greatest extent
permitted under Minnesota law. Such Article X provides that if amendments to the
Minnesota Statues are passed after the effective date of such Article X which
authorize associations to act to further eliminate or limit the personal
liability of directors, then the liability of the directors of the Company shall
be eliminated or limited to the greatest extent permitted by the Minnesota
Statues, as so amended.
The Company maintains a standard policy of officers' and directors'
liability insurance.
Item 7. Exemption from Registration Claimed.
No securities are to be reoffered or resold pursuant to this
Registration Statement.
Item 8. Exhibits.
4.1 Harvest States Cooperatives Key Employee Share Option Plan.
5.1 Opinion and Consent of Dorsey & Whitney LLP.
<PAGE>
23.1 Consent of Deloitte & Touche LLP.
23.2 Consent of Dorsey & Whitney LLP. (Included in Exhibit 5.1.)
24.1 Power of Attorney. (Included on signature page.)
Item 9. Undertakings.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the Registration Statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the Registration
Statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar
value of securities would not exceed that which was
registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form
of prospectus filed with the Securities and Exchange
Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20%
change in the maximum aggregate offering price set forth in
the "Calculation of Registration Fee" table in the effective
Registration Statement; and
(iii) To include any material information with
respect to the plan of distribution not previously disclosed
in the Registration Statement or any material change to such
information in the Registration Statement;
PROVIDED, HOWEVER, that paragraphs (a)(1)(i) and (a)(1)(ii) above will
not apply if the Registration Statement is on Form S-3, Form S-8, or
Form F-3, and the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic
reports filed with or furnished by the registrant pursuant to Section
13 or Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new Registration Statement relating to the securities
offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
<PAGE>
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act and is, therefor, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or other
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of St. Paul, State of Minnesota, November 17, 1997.
HARVEST STATES COOPERATIVES
By /s/ John D. Johnson
----------------------------------------
John D. Johnson
President and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints John D. Johnson and T.F. Baker as his or
her true and lawful attorney-in-fact and agent, with full powers of substitution
and resubstitution, for him or her and in his or her name, place and stead, in
any and all capacities, to sign any additional Registration Statement pursuant
to Rule 462(b) under the Securities Act of 1933, as amended, and any or all
amendments (including post-effective amendments) to this Registration Statement
on Form S-8 (or Registration Statements, if an additional Registration Statement
is filed pursuant to Rule 462(b)), and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the Securities and
Exchange Commission granting unto said attorney-in-fact and agent full power and
authority to do and perform each and every act and thing requisite or necessary
to be done in and about the premises, as fully to all intents and purposes as he
or she might or could do in person, hereby ratifying and confirming all that
said attorney-in-fact and agent, or his substitute or substitutes, may lawfully
do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated on November 17, 1997.
Signature Title
--------- -----
/s/John D. Johnson President and Chief Executive Officer
- ----------------------------- (Principal Executive Officer)
John D. Johnson
/s/T. F. Baker Group Vice President--Finance
- ----------------------------- (Principal Financial Officer)
T. F. Baker
/s/John Schmitz Vice President--Corporate Accounting
- ----------------------------- (Principal Accounting Officer)
John Schmitz
/s/Steven Burnet Chairman of the Board of Directors
- -----------------------------
Steven Burnet
<PAGE>
/s/Steve Carney Director
- -----------------------------
Steve Carney
/s/Sheldon Haaland Director
- -----------------------------
Sheldon Haaland
/s/Jerry C. Hasnedl Director
- -----------------------------
Jerry C. Hasnedl
/s/Edward Hereford Director
- -----------------------------
Edward Hereford
/s/Gerald Kuster Director
- -----------------------------
Gerald Kuster
/s/Tyrone A. Moos Director
- -----------------------------
Tyrone A. Moos
/s/Duane G. Risan Director
- -----------------------------
Duane G. Risan
/s/William J. Zarak, Jr. Director
- -----------------------------
William J. Zarak, Jr.
/s/Edward Ellison Director
- -----------------------------
Edward Ellison
/s/Leonard D. Larsen Director
- -----------------------------
Leonard D. Larsen
/s/Duane Stenzel Director
- -----------------------------
Duane Stenzel
/s/Russell W. Twedt Director
- -----------------------------
Russell W. Twedt
/s/Merlin Van Walleghen Director
- -----------------------------
Merlin Van Walleghen
<PAGE>
EXHIBIT INDEX
Exhibit Page
- ------- ----
4.1 Harvest States Cooperatives Key Employee Share Option Plan
5.1 Opinion and Consent of Dorsey & Whitney LLP
23.1 Consent of Deloitte & Touche LLP
23.2 Consent of Dorsey & Whitney LLP (included in Exhibit 5.1)
24.1 Power of Attorney (included on Signature page)
HARVEST STATES COOPERATIVES
KEY EMPLOYEE SHARE OPTION PLAN
(Effective as of January 1, 1998)
<PAGE>
TABLE OF CONTENTS
ARTICLE PAGE
- ------------------------------------------------------------------------
ARTICLE I
Purpose 1
ARTICLE II
Definitions and Construction 1
ARTICLE III
Option Grant 3
ARTICLE IV
Option Exercise 7
ARTICLE V
Amendment or Termination 9
ARTICLE VI
Administration 10
ARTICLE VII
Trust Provisions 12
ARTICLE VIII
Miscellaneous Provisions 12
<PAGE>
HARVEST STATES COOPERATIVES
KEY EMPLOYEE SHARE OPTION PLAN
ARTICLE I
PURPOSE
1.1 PURPOSE. The purpose of the Plan is to provide stock options to
certain key individuals, commensurate with their contributions to the success of
the Employer, in a form that will provide incentives and rewards for superior
performance, and encourage the recipients to continue in the employment of the
Employer.
1.2 INTENT. The Plan is intended to be a nonqualified stock option plan
within the meaning of section 83 of the Code. The Plan is not intended to be a
plan covered by the Employee Retirement Income Security Act of 1974, as amended.
ARTICLE II
DEFINITIONS AND CONSTRUCTION
As used herein, the following capitalized words and phrases shall have
the respective meanings set forth below:
2.1 "BENEFICIARY" means the person or persons designated by a
Participant, pursuant to Section 3.7, to exercise an Option after the
Participant's death.
2.2 "BOARD OF DIRECTORS" or "BOARD" means the board of directors of the
Employer.
2.3 "CHANGE OF CONTROL" means any change in (a) the ownership of the
Employer, (b) the effective control of the Employer, as defined under section
280G of the Code, or (c) the ownership of a substantial portion of the assets of
the Employer, as defined under section 280G of the Code, except as otherwise
provided by written agreement executed by the Employer and a Participant prior
to such Change of Control.
2.4 "CODE" means the Internal Revenue Code of 1986, any amendments
thereto, and any regulations or rulings issued thereunder.
2.5 "COMMITTEE" means the Harvest States Key Employee Share Option Plan
Committee appointed in accordance with Section 6.1.
2.6 "EFFECTIVE DATE" means January 1, 1998.
<PAGE>
2.7 "EMPLOYEE" means any individual who is employed by the Employer.
2.8 "EMPLOYER" means Harvest States Cooperatives, and any successor
thereto, and any affiliated entity that is related to the Employer pursuant to
the rules under Code sections 414(b), (c), or (d) and the regulations
thereunder, which adopts the Plan as a participating Employer.
2.9 "ERISA" means the Employee Retirement Income Security Act of 1974,
any amendments thereto, and any regulations or rulings issued thereunder.
2.10 "EXERCISE DATE" means, with respect to any Option, the date on which
the Option is exercised by a Participant.
2.11 "EXERCISE PERIOD" means the period during which a Participant may
exercise an Option, as determined under Section 4.1.
2.12 "EXERCISE PRICE" means the price to be paid by a Participant to
exercise an Option, as determined under Section 3.3 or under an Option Agreement
signed by the Participant and the Committee.
2.13 "GRANT DATE" means, with respect to any Option, the date on which
the Option Agreement is executed by the Employer and the Participant.
2.14 "MARKET PRICE" means the closing price of a share of Stock reflected
in the consolidated trading tables of the Wall Street Journal or other
recognized market source, as determined by the Committee, on the applicable date
of reference hereunder, or if there is no sale on such date, then the closing
price on the last previous day on which a sale is reported. In the case of
open-end mutual fund shares, the Market Price means the net asset value per
share as reported by the fund on the applicable date of reference hereunder.
2.15 "OPTION" means the right of a Participant, granted by the Employer
in accordance with Section 3.2, to purchase Stock from the Employer at the
Exercise Price.
2.16 "OPTION AGREEMENT" means an agreement executed by the Employer and a
Participant to whom options have been awarded acknowledging the issuance of the
options and setting forth any terms pursuant to Section 3.2.
2.17 "PARTICIPANT" means any individual who meets the eligibility
requirements of Section 3.1, who has received an award of Options in accordance
with Section 3.2, and whose Options have been completely exercised or lapsed.
After a Participant's death, his Beneficiary is considered to be a Participant
to the extent necessary to facilitate the exercise of any Options that continue
to be exercisable under the terms of the Plan. In the event of a Participant's
disability or other legal incapacity, the Participant's legal representative is
considered to be a Participant to the extent necessary to facilitate the
exercise of any Options that are or become exercisable under the terms of the
Plan. If a Participant has assigned his Options under Section 3.8 then the
Participant's assignee is considered a Participant able to exercise Options
under the terms of the Plan.
2.18 "PLAN" means the Harvest States Cooperatives Key Employee Share
Option Plan, as set forth herein and from time to time amended.
<PAGE>
2.19 "STOCK" means shares of common or preferred stock of a corporation
listed on a national securities exchange or shares of a regulated investment
company designated by the Committee as subject to purchase through the exercise
of an Option.
2.20 "TERMINATION OF EMPLOYMENT" means an Employee's separation from the
service with the Employer (including all affiliates of the Employer) by reason
of resignation, discharge, death, disability, or other termination of
relationship. The Committee may, in its discretion, determine whether any leave
or other absence from service constitutes a Termination of Employment for
purposes of the Plan.
2.21 "TRUST" means the trust established pursuant to Article VII to hold
the Stock that is subject to purchase through the exercise of an Option.
2.22 "TRUST AGREEMENT" means an agreement setting forth the terms of the
Trust established pursuant to Article VII.
2.23 "TRUST FUND" means the Stock subject to an Option that is held in
the Trust.
2.24 "TRUSTEE" means the persons or institution acting as trustee of the
Trust.
ARTICLE III
OPTION GRANT
3.1 ELIGIBILITY. Options may be granted to an Employee selected by the
Committee from the executive officers and other key employees of the Employer
who occupy senior management or professional positions and whom the Committee
determines to have the capability of making a substantial contribution to the
success of the Employer. In making this selection and in determining the form
and amount of Options, the Committee shall consider any factors that it deems
relevant, including the individual's functions, responsibilities, value of
services to the Employer and past and potential contributions to the Employer's
success and growth. Participation shall commence on the next January 1 following
a current Employee's selection by the Committee or on the next July 1 following
the selection of a new Employee hired by the Employer after January 1.
3.2 GRANT OF OPTIONS. Options may be granted by the Committee at any
time on or after the Effective Date and prior to the termination of the Plan.
Options may be granted, at the discretion of the Committee, in the form of
outright awards, in exchange for a requested reduction in the compensation or
bonus of the Participant, or in return for the Participant's Agreement to
relinquish rights to unfunded, nonqualified deferred compensation that he or she
has accrued but does not have a current right to receive. While a Participant
may agree to exchange all or a portion of any bonus or incentive compensation
payable to him or her for an Option, in the manner prescribed by the Committee
and prior to the fiscal year in which such compensation is earned, the maximum
percentage of base compensation which a Participant may exchange for an Option
during
<PAGE>
a calendar year shall not exceed 30 percent. An option granted in exchange for a
reduction in the compensation or bonus of the Participant shall be granted on or
about August 31 of each year to Participants who are employed by the Employer
and shall reflect the requested reduction in the base compensation of the
Participant for the entire calendar year and the requested bonus or incentive
compensation reduction determined with respect to the preceding fiscal year of
the Employer ending May 31.
In the event that a Participant's employment with the Employer terminates prior
to the grant of his or her Option on or about August 31, an amount of
compensation equivalent to the reduction in compensation or bonus shall be paid
to the Participant by the Employer upon his or her Termination of Employment.
Options shall become effective upon the execution by Employer and the
Participant of an Option Agreement specifying the Stock, the number of shares
subject to the Option, the Exercise Price, and such other terms and in such form
as the Committee may from time to time determine in accordance with the Plan.
(a) IN GENERAL. The minimum total Market Price of the Stock underlying
an Option Agreement executed during any calendar year is $2,500.00. Any terms
not specified in the Plan shall be specified in the Option Agreement. No
Committee member may take part in any way in determining the amount of any award
of Options to himself or herself.
(b) EFFECT OF DIVIDENDS AND DISTRIBUTIONS WITH RESPECT TO STOCK. The
Employer agrees to reinvest all dividends and distributions received with
respect to Stock in additional property of the same kind (or as nearly the same
kind as feasible, if property of the same kind is not available). Any property
acquired through reinvestment will be added to the Stock by rounding to the
nearest one thousandth of a share and will be subject to the applicable Option,
without any adjustment to the Exercise Price.
3.3 EXERCISE PRICE. The Exercise Price shall be initially determined by
the Committee and shall be noted on the individual Option Agreement signed by
the eligible Participant and the Committee. The Committee has determined that
the initial Exercise Price shall equal 25 percent of the Market Price of the
Stock on the Grant Date. The Exercise Price shall subsequently be adjusted as
otherwise provided in the Option Agreement or for the following events:
In the event of a stock dividend, stock split, reverse stock split,
rights offering, return of capital distribution, recapitilization or similar
transaction that materially affects the Market Price of the Stock, the Committee
shall adjust the Exercise Price so that it retains the same ratio to the Market
Price of the Stock as existed immediately before such transactions,, or as
otherwise provided in the Option Agreement
3.4 CONDITIONS OF GRANT. As a condition to the grant of a Stock Option,
the Committee may, in its discretion, require a Participant to enter into an
agreement on or before the Grant Date to remain in the employ of the Employer
for at least six months after the Grant Date of an Option.
<PAGE>
3.5 STOCK TO BE HELD IN TRUST. Upon the grant of an Option, the
Employer, in accordance with the Trust Agreement, shall instruct the Trustee to
purchase securities underlying each Option Agreement as of the dare of the
Option Agreement. The Employer shall transfer to the Trustee an amount of funds
equal to the amount of reduced base compensation, award or bonus being exchanged
by the Plan Participant for the Option. Such funds shall be applied by the
Trustee for the purpose of payment for such underlying securities. In addition,
if on the date the Committee grants the Option, the principal of the Trust, and
any earnings thereon, are not sufficient to purchase such underlying securities,
the Employer shall transfer to the Trustee an amount of funds sufficient to
purchase the underlying securities.
The Trustee shall establish a separate account for each Option Agreement in
which the Trustee shall hold funds to purchase securities, as well as securities
already purchased, underlying the Option Agreement. The Trustee shall hold the
securities in its own name until the Plan Participant exercises the Option to
purchase securities.
The Stock shall not be subject to any security interest, whether or not
perfected, or to any option or contract under which any other person may acquire
any interest in it, except as otherwise provided in the Trust Agreement.
3.6 SUBSTITUTION OF ASSETS HELD IN TRUST. The Committee may, in its
discretion, after consultation with the Participant, substitute Stock of equal
Market Price for any Stock subject to purchase through the exercise of an
Option. When such substitution occurs, both parties are required to terminate
the Option Agreement and to adopt a new Option Agreement which awards Options of
equal Market Price on the new Stock. Such change in Option property shall be
considered the grant of a new Option and the terms of the Plan, including
Articles III and IV, shall apply to the grant of the new Option except that the
Exercise Period under the new Option Agreement shall not exceed the Exercise
Period under the original Option Agreement.
In the event that the listing, registration or qualification of the
Option or the Stock on any securities exchange or under any state or federal
law, or the consent or approval of any governmental regulatory body, or the
availability of any exemption therefrom, is necessary as a condition of, or in
connection with, the exercise of the Option, then the Option shall not be
exercised in whole or in part until such listing, registration, qualification,
consent or approval has been affected or obtained.
3.7 DESIGNATION OF BENEFICIARY. As soon as practicle after the grant of
an Option, the Participant shall designate one or more Benefeciareis and
successor Benefirciares, and may change them ar any time, by filling the
prescribed form with the Committee. The consent of the Participant's current
beneficiary shall not be required for a change of beneficiary. No beneficiary
shall have any rights under the Plan or an Option Agreement during the lifetime
of the Participant.
(a) The Beneficiary of a Participant who dies without having
designated a Beneficiary in accordance with this Section 3.7 and who is
lawfully married on the date of death shall be the Participant's
surviving spouse.
(b) The Beneficiary of any other Participant who dies without
having designated a Beneficiary in accordance with this Section 3.7
shall be the Participant's estate.
<PAGE>
3.8 GENERAL NON-TRANSFERABILITY. No Option granted under this Plan may
be transferred, assigned, or alienated (whether by operation of law or
otherwise), except as provided herein, and no Option shall be subject to
execution, attachment or similar process. An Option may be exercised only by the
Participant (or the Participant's Beneficiary pursuant to Section 3.7).
3.9 PERMITTED TRANSFERS. Notwithstanding the provisions of Section 3.8,
a Participant may at any time prior to death, assign all or any portion of an
Option to:
(a) the Participant's spouse or lineal descendants,
(b) the trustee of a trust for the primary benefit of the
Participant's spouse or lineal descendants, or
(c) a partnership of which the participant's spouse and lineal
descendants are the only partners.
Any such assignment shall be permitted only if an assignment
is expressly permitted in the Option Agreement, or approved in writing by the
Committee, and the Participant receives no consideration for the assignment. Any
such assignment shall be evidenced by an appropriate written document executed
by the Participant, and delivered to the Committee on or before the effective
date of the assignment. In the event of such assignment, the spouse, lineal
descendent, trustee, or partnership shall be entitled to all of the rights of
the Participant with respect to the assigned portion of the Option, and such
portion of the Option, shall continue to be subject to all of the terms,
conditions and restrictions applicable to the Option, as set forth in the Plan
and the Option Agreement.
ARTICLE IV
OPTION EXERCISE
4.1 EXERCISE PERIOD. A Participant (or the Participant's Beneficiary
pursuant to Section 3.7) may exercise the adjusted portion of an Option as
determined under Section 4.2 at any time during the period beginning six months
after the Grant Date and ending on the earliest of the following:
(a) 90 days after the Participant's Termination of Employment,
if such Participant is terminated involuntarily for cause, as
determined by the Committee based upon the records of the Employer;
(b) 120 months after the Participant's Termination of
Employment, if such Participant's employment terminates for any other reason not
set forth in Paragraph (a); or
(c) 20 years after the Grant Date.
If a Participant or his Beneficiary fails to exercise an Option within the
Exercise Period then the Stock becomes the permanent property of the Employer
with the Participant or his Beneficiary or
<PAGE>
assignee losing any right to any Option or Stock that was not exercised within
the eligible Exercise Period pursuant to Section 4.1. Notwithstanding the
foregoing, at no time shall the Exercise Period be less than six months from the
Grant Date.
4.2 EXERCISE OF ADJUSTED PORTION OF OPTION. A Participant (or the
Participant's Beneficiary pursuant to Section 3.7) may exercise 100 percent of
his or her Options granted in exchange for a reduction in the base compensation
of a Participant if the Participant remains employed with the Employer through
the end of the calendar year in which the Option is granted, provided the Option
is held for at least six months. If the Participant experiences a Termination of
Employment with the Employer before the end of that calendar year, he or she may
exercise the "Adjusted Portion" of the Option shares or units granted in the
calendar year in which the employment terminates. For purposes of this Plan,
"Adjusted Portion" shall be determined as follows, based upon the date of the
Participant's commencement of participation in the Plan:
(a) PARTICIPATION COMMENCING ON JANUARY 1. The Adjusted Portion of an
Option granted to such Participant who commenced participation in the
Plan on January 1 shall be equal to the full number of payroll periods
during which the Participant was employed with the Employer during the
calendar year in which the Option was granted, divided by 24.
(b) PARTICIPATION COMMENCING ON JULY 1. The Adjusted Portion of an
Option granted to such Participant who commenced participation in the
Plan on July 1 shall be equal to the full number of payroll periods
during which the Participant was employed with the Employer following
commencement of participation in the Plan during the calendar year in
which the Option was granted, divided by 12.
The Participant shall exercise the Adjusted Portion of the Option by
giving written notice to the Committee and tendering full payment of the
Exercise Price by bank-certified or cashiers check on or before the date of
exercise. That percentage of a Participant's Option granted in exchange for a
reduction in the base compensation of a Participant which is not an Adjusted
Portion of an Option shall be forfeited by the Participant upon Termination of
Employment during the calendar year in which the Option was granted. The terms
of the Participant's Option Agreement will determine the percentage of an Option
eligible for exercise in the case of an Option granted to a Participant in the
form of an outright award or in exchange for a reduction in the bonus of a
Participant. The minimum portion of an Option allowed to be exercised at any one
time is the number of shares of Stock for which the Market Price of such Stock
totals $5,000.
In the event that the listing, registration or qualification of the
Option or the Stock on any securities exchange or under any state or federal
law, or the consent or approval of any governmental regulatory body, or the
availability of any exemption therefrom, is necessary as a condition of, or in
connection with, the exercise of the Option, then the Option shall not be
exercised in whole or in part until such listing, registration, qualification,
consent, approval, or exemption has been affected, obtained, or established to
the satisfaction of the Committee.
4.3 DELIVERY OF STOCK. On the date of exercise, or as soon as
practicable thereafter (but in no event later than fifteen business days after
the date of exercise), the Employer shall deliver or cause to be delivered the
Stock then being purchased to the Participant (or the Participant's Beneficiary
pursuant to Section 3.7).
<PAGE>
4.4 TAX WITHHOLDING. Whenever Stock is to be delivered upon exercise of
an Option under the Plan, the Employer shall require as a condition of such
delivery:
(a) the cash payment by the Participant of an amount sufficient to
satisfy all federal, state and local tax withholding requirements related
thereto,
(b) the withholding of such amount from any Stock to be delivered to
the Participant, or
(c) a combination of the foregoing, at the election of the Participant
with the consent of the Employer. Such election shall be made before the date on
which the amount of tax to be withheld is determined by the Employer, and such
election shall be irrevocable.
4.5 ADDITIONAL WITHHOLDING. With the consent of the Employer, the
Participant may elect a greater amount of withholding, not to exceed the
estimated amount of the Participant's total tax liability with respect to the
delivery of Stock under the Plan. Such election shall be made at the same time
and in the same manner as provided under Section 4.4.
4.6 FAILURE TO EXERCISE. No Option shall be exercised, in whole or in
part, after the end of the Exercise Period, and the Employer shall have no
obligation to deliver or cause to be delivered to the Participant (or the
Participant's Beneficiary) the Stock subject to such Option.
ARTICLE V
AMENDMENT OR TERMINATION
5.1 PLAN AMENDMENT. The Board may, from time to time in its discretion,
amend any provision of the Plan, in whole or in part, with respect to any
Participant or group of Participants. Such amendment shall be effective as of
the date specified therein and shall be binding upon the Committee, all
Participants and Beneficiaries, and all other persons claiming an interest under
the Plan.
5.2 PLAN TERMINATION. The Plan shall terminate on the twentieth
anniversary of the Effective Date or such earlier date as the Board may
determine in its discretion. Such termination shall be effective as of the date
determined by the Board and shall be binding upon the Committee, all
Participants and Beneficiaries, and all other persons claiming an interest under
the Plan. Options shall continue to be exercisable after the effective date of
such termination, and may be exercised in accordance with Article IV, but no new
Options shall be granted. However, in the event of a termination of the Plan in
connection with compliance with or any addition or change in the Code or ERISA,
federal or state securities laws, or any other law or regulation, all Options
shall be required to be exercised immediately.
5.3 AMENDMENT OF OPTION. An Option Agreement may be amended by the
Committee at any time if the Committee determines that an amendment is necessary
or advisable in connection with
<PAGE>
(a) compliance with or any addition to or change in the Code or
ERISA, federal or state securities laws, or any other law or
regulation,
(b) any substitution of Stock held in Trust pursuant to Section
3.6,
(c) any Plan amendment pursuant to Section 5.1, or Plan
termination pursuant to Section 5.2, provided that the amendment does
not materially and adversely affect the terms, conditions and
restrictions applicable to the Option, or
(d) any circumstances not specified in Paragraphs (a), (b), or
(c), with the consent of the Participant.
5.4 CHANGE OF CONTROL. Notwithstanding any other provision of the Plan
or an Option Agreement, in the event of a Change of Control:
(a) the Participant shall not be required to remain in the employ
of the Employer for at least six months after the Grant Date of an
Option under Section 3.4,
(b) the Exercise Period under Section 4.1(b) shall not end prior
to six months after such Change of Control,
(c) an Option Agreement shall not be amended by the Committee
under Section 5.3 for any reason other than pursuant to subparagraph
(a) thereof without the consent of the Participant, and
(d) an Option Agreement may be terminated by the Committee on any
date after a Change of Control, in its sole discretion and without the
consent of the Participant, if the Committee makes a cash payment to
the Participant on such date in an amount equal to the Market Price of
the Stock underlying such Option Agreement reduced by the Exercise
Price, multiplied by the number of shares underlying such Option
Agreement, and further reduced by all applicable tax withholding
required by Section 4.4.
ARTICLE VI
ADMINISTRATION
6.1 THE COMMITTEE. The Plan shall be administered by a Committee
consisting of one or more persons appointed by the Board of Directors. The
Committee shall act by a majority of its members at the time in office and may
take action either by vote at a meeting or by consent in writing without a
meeting.
(a) The Board may remove any member of the Committee at any
time, with or without cause, and may fill any vacancy. If a vacancy
occurs, the remaining member or members of the Committee shall have
full authority to act.
<PAGE>
(b) Any member of the Committee may resign by written
resignation delivered to the Board. Any such resignation shall become
effective upon its receipt by the Board or on such other date as agreed
to by the Board and the resigning member.
6.2 POWERS OF THE COMMITTEE. In carrying out its duties with respect to
the general administration of the Plan, the Committee shall have, in addition to
any other powers conferred by the Plan or by law, the following powers:
(a) to determine eligibility to participate in the Plan and
eligibility to receive Options;
(b) to grant Options, and to determine the form, amount and
timing of such Options;
(c) to determine the terms and provisions of the Option
Agreements, and to modify such Option Agreements as provided in Section
5.3;
(d) to substitute stock held in Trust as provided in Section
3.6,
(e) to maintain all records necessary for the administration of
the Plan;
(f) to prescribe, amend, and rescind rules for the
administration of the Plan to the extent not inconsistent with the
terms thereof;
g) to appoint such individuals and subcommittees as it deems
desirable for the conduct of its affairs and the administration of the
Plan;
(h) to employ counsel, accountants and other consultants to aid
in exercising its powers and carrying out its duties under the Plan;
and
(i) to perform any other acts necessary and proper for the
conduct of its affairs and the administration of the Plan, except those
reserved by the Board.
6.3 DETERMINATIONS BY THE COMMITTEE. The Committee shall interpret and
construe the Plan and the Option Agreements, and its interpretations and
determinations shall be conclusive and binding on all Participants,
Beneficiaries and any other persons claiming an interest under the Plan or any
Option Agreement. The Committee's interpretations and determinations under the
Plan and the Option Agreements need not be uniform and may be made by it
selectively among Participants, Beneficiaries and any other persons whether or
not they are similarly situated.
6.4 INDEMNIFICATION OF THE COMMITTEE. The Employer shall indemnify and
hold harmless each member of the Committee against any and all expenses and
liabilities arising out of such member's action or failure to act in such
capacity, excepting only expenses and liabilities arising out of such member's
own willful misconduct or gross negligence.
(a) Expenses and liabilities against which a member of the
Committee is indemnified hereunder shall include, without limitation,
the amount of any settlement or judgment, costs, counsel fees and
related charges reasonably incurred in connection with a claim
<PAGE>
asserted or a proceeding brought against him or the settlement thereof,
provided that the Employer shall not be liable for any settlement to
which it does not consent but such consent shall not be unreasonably
withheld.
(b) This right of indemnification shall be in addition to any
other rights to which any member of the Committee may be entitled.
(c) The Employer may, at its own expense, settle any claim
asserted or proceeding brought against any member of the Committee when
such settlement appears to be in the best interests of the Employer,
provided that such settlement includes a complete release from
liability of such member and is otherwise reasonably acceptable to such
member.
The provisions of this Section 6.4 are for the benefit of each member of the
Committee, his or her heirs, successors and assigns and as to each such member
shall survive the termination of his service as such. Any amendment of this
Section 6.4 shall not materially impair the rights of members and former members
of the Committee thereunder as to any period prior to such amendment.
6.5 EXPENSES OF THE COMMITTEE. The members of the Committee shall serve
without compensation for services as such. All reasonable expenses of the
Committee shall be paid by the Employer.
ARTICLE VII
TRUST PROVISIONS
7.1 ESTABLISHMENT OF THE TRUST. The Trust shall be established to hold
all Stock contributed by the Employer pursuant to Section 3.5. Except as
otherwise provided in the Trust Agreement, the Trust shall be irrevocable and no
portion of the Trust Fund shall be used for any purpose other than the delivery
of Stock pursuant to the exercise of an Option, and the payment of expenses of
the Plan and Trust.
7.2 TRUST STATUS. The Trust is intended to be a grantor trust, within
the meaning of section 671 of the Code, of which the Employer is the grantor,
and this Plan is to be construed in accordance with that intention.
Notwithstanding any other provision of this Plan, the Trust Fund shall remain
the property of the Employer and shall be subject to the claims of its creditors
in the event of its bankruptcy or insolvency. No Participant shall have any
priority claim on the Trust Fund or any security interest or other right
superior to the rights of a general creditor of the Employer.
ARTICLE VIII
MISCELLANEOUS PROVISIONS
<PAGE>
8.1 HEADINGS. The headings of articles, sections and paragraphs are
solely for convenience of reference. If there is any conflict between such
headings and the text of this Plan, the text shall control.
8.2 GENDER. Unless the context clearly requires a different meaning,
all pronouns shall refer indifferently to persons of any gender.
8.3 SINGULAR AND PLURAL. Unless the context clearly requires a
different meaning, singular terms shall also include the plural and vice versa.
8.4 GOVERNING LAW. Except to the extent preempted by federal law, the
construction and operation of the Plan shall be governed by the laws of the
State of Minnesota without regard to the choice of law principles of such state.
8.5 SEVERABILITY. If any provision of this Plan is held illegal or
invalid by any court or governmental authority for any reason, the remaining
provisions shall remain in full force and effect and shall be construed and
enforced in accordance with the purposes of the Plan as if the illegal or
invalid provision did not exist.
8.6 NO OBLIGATION TO EXERCISE. The granting of an Option shall impose
no obligation upon a Participant to exercise such Option.
8.7 NO RIGHTS OF SHAREHOLDER. Neither the Participant, nor a
Beneficiary shall be, or shall have any of the rights and privileges of, a
stockholder with respect to any Stock purchasable or issuable upon the exercise
of an Option, prior to the date of exercise of such Option.
8.8 NO RIGHT TO CONTINUED EMPLOYMENT. Nothing contained in the Plan
shall be deemed to give any person the right to be retained in the employ of the
Employer, or to interfere with the right of the Employer to discharge any person
at any time without regard to the effect that such discharge shall have upon
such person's rights or potential rights, if any, under the Plan. The provisions
of the Plan are in addition to, and not a limitation on, any rights that a
Participant may have against the Employer by reason of any employment or other
agreement with the Employer.
8.9 NOTICES. Unless otherwise specified in an Option Agreement, any
notice to be provided under the Plan to the Committee shall be mailed (by
certified mail, postage prepaid) or delivered to the Committee in care of the
Employer at its executive offices, and any notice to the Participant shall be
mailed (by certified mail, postage prepaid) or delivered to the Participant at
the current address shown on the payroll records of the Employer. No notice
shall be binding on the Committee until received by the Committee.
December 12, 1997
Harvest States Cooperatives
1667 North Snelling
P.O. Box 64594
St. Paul, Minnesota 55164
Re: Registration Statement on Form S-8
Options to Purchase Securities
Ladies and Gentlemen:
We have acted as counsel to Harvest States Cooperatives, a
Minnesota corporation (the "Company"), in connection with a Registration
Statement on Form S-8 (the "Registration Statement") relating to options to
purchase securities pursuant to the Harvest States Cooperatives Key Employee
Share Option Plan (the "Plan").
We have examined such documents and have reviewed such
questions of law as we have considered necessary and appropriate for the
purposes of our opinions set forth below. In rendering our opinions, we have
assumed the authenticity of all documents submitted to us as originals, the
genuineness of all signatures and the conformity to authentic originals of all
documents submitted to us as copies. We have also assumed the legal capacity for
all purposes relevant hereto of all natural persons and, with respect to all
parties to agreements or instruments relevant hereto other than the Company,
that such parties had the requisite power and authority (corporate or otherwise)
to execute, deliver and perform such agreements or instruments, that such
agreements or instruments have been duly authorized by all requisite action
(corporate or otherwise), executed and delivered by such parties and that such
agreements or instruments are the valid, binding and enforceable obligations of
such parties. As to questions of fact material to our opinions, we have relied
upon certificates of officers of the Company and of public officials.
In rendering our opinions, we have assumed that the definitive
documents relating to the Plan, including the Plan,
<PAGE>
Harvest States Cooperatives
December 12, 1997
Page 2
the form of participation agreement, the form of option agreement, the form of
investment fund preference form and the form of beneficiary designation form
will be identical to the drafts of these documents examined by us as of the date
hereof.
Based on the foregoing, we are of the opinion that when an
option agreement and the related participation agreement have been duly executed
and delivered by the Company and the grantee thereunder pursuant to the Plan,
the option to purchase securities specified therein will constitute a valid and
legally binding obligation of the Company, enforceable against the Company in
accordance with the terms of the option agreement.
Our opinions expressed above are limited to the laws of the
State of Minnesota and the federal laws of the United States of America.
We hereby consent to your filing this opinion as an exhibit to
the Registration Statement.
Very truly yours,
/s/ Dorsey & Whitney LLP
WBP
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
Harvest States Cooperatives on Form S-8 relating to the Key Employee Share
Option Plan of our reports on the consolidated financial statements of Harvest
States Cooperatives, the Oilseed Processing and Refining Defined Business Unit
(a defined business unit of Harvest States Cooperatives), and the Wheat Milling
Defined Business Unit (a defined business unit of Harvest States Cooperatives),
each dated August 15, 1997, respectively, appearing in the Annual Report on Form
10-K of Harvest States Cooperatives for the year ended May 31, 1997.
/s/ Deloitte & Touche LLP
Minneapolis, Minnesota
December 11, 1997
