Registration No. 33-_____
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
Ruddick Corporation
(Exact name of registrant as specified in its charter)
NORTH CAROLINA 56-0905940
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
2000 TWO FIRST UNION CENTER
CHARLOTTE, NORTH CAROLINA 28282
(Address of Principal Executive Offices) (Zip Code)
RUDDICK CORPORATION 1993 INCENTIVE
STOCK OPTION AND STOCK APPRECIATION RIGHTS PLAN
(Full Title of the Plan)
DONALD B. WILLIFORD
RUDDICK CORPORATION
2000 TWO FIRST UNION CENTER
CHARLOTTE, NORTH CAROLINA 28282
(Name and address of agent for service)
(704) 372-5404
(Telephone number, including area code, of agent for service)
Copy To:
LARRY J. DAGENHART
SMITH HELMS MULLISS & MOORE, L.L.P
227 NORTH TRYON STREET
CHARLOTTE, NORTH CAROLINA 28202
Approximate date of commencement of the proposed sale to the
public: From time to time after the effective date of this
Registration Statement
CALCULATION OF REGISTRATION FEE
Title of each Class of Amount to be Proposed Maximum
Securities to be Registered Registered Offering
Price PerShare (1)
Common Stock . . . . . . . .500,000 shares $19 1/4
Proposed Maximum Amount of
Aggregate Registration Fee
Offering Price(1)
$9,625,000 $3,319
(1) Pursuant to Rules 457(h) and 457(c), based on the price of
the Common Stock with respect to which options granted may be
exercised.<PAGE>
PART I. INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
The documents constituting the Prospectus of Ruddick
Corporation (the "Registrant")with respect to this Registration
Statement in accordance with Rule 428 promulgated pursuant to the
Securities Act of 1933, as amended (the "Securities Act"), are
kept on file at the offices of the Registrant. The Registrant
will provide without charge to employees, on the written or oral
request of any such person, a copy of any or all of the documents
constituting the Prospectus. Written requests for such copies
should be directed to the Secretary,Ruddick Corporation, 2000 Two
First Union Center, Charlotte, North Carolina 28282. Telephone
requests may be directed to (704) 372-5404.
PART II. INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed by the Registrant with the
Securities and Exchange Commission (the "Commission") are
incorporated by reference herein and in the Prospectus
constituting a part of this Registration Statement:
(a) The Registrant's Annual Report on Form 10-K
for the fiscal year ended October 3, 1993;
(b) The Registrant's Quarterly Reports on Form
10-Q for the quarters ended January 2, 1994, April 3, 1994 and
July 3, 1994;
(c) The Registrant's Current Report on Form 8-K
dated November 18, 1993; and
(d) The description of the Common Stock to which
this Registration Statement relates contained in the Registrant's
Registration Statement filed under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), as amended by all
subsequent amendments and reports filed for the purposes of
updating such description.
Any document filed by the Registrant with the Commission
pursuant to Sections 13(a),13(c), 14 and 15(d) of the Exchange
Act subsequent to the effectiveness of this Registration
Statement and prior to the filing of a post-effective amendment
hereto, which either indicates that all securities offered hereto
have been sold or deregisters all securities then remaining
unsold, shall be deemed to be incorporated by reference in this
Registration Statement and the Prospectus and to be a part hereof
or thereof from the date of filing of such documents. Any
statement contained in a document incorporated or deemed to be
incorporated by reference herein or therein shall be deemed to be
modified or superseded for purposes of this Registration
Statement and the Prospectus to the extent that a statement
contained herein or therein or in any other subsequently filed
document which also is or is deemed to be incorporated by
reference herein or therein 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 and the Prospectus.
The Registrant will provide without charge to each person to
whom the Prospectus constituting a part of this Registration
Statement is delivered, on the written or oral request of any
such person, a copy of any or all of the documents incorporated
herein and in the Prospectus by reference (other than exhibits to
such documents which are not specifically incorporated by
reference in such documents). Written requests for such copies
should be directed to the Secretary, Ruddick Corporation, 2000
Two First Union Center, Charlotte,North Carolina 28282.
Telephone requests may be directed to (704) 372-5404.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
The validity of the shares of the Registrant's Common Stock
to be issued pursuant to this Registration Statement were passed
upon by Smith Helms Mulliss & Moore, L.L.P., 227 North Tryon
Street, Charlotte, North Carolina 28202.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
There are no provisions in the Registrant's Restated
Articles of Incorporation, and no contracts between the
Registrant and its directors and officers and no resolutions
adopted by the Registrant, relating to indemnification. However,
in accordance with the provisions of the North Carolina Business
Corporation Act (the "Act"), the Registrant's Amended and
Restated Bylaws provide that, in addition to the indemnification
of directors and officers otherwise provided by the Act, the
Registrant shall, under certain circumstances, indemnify its
directors, officers, employees or agents against liability and
expenses, including reasonable attorneys' fees, arising
out of their status or activities as such, except for liability
or expenses incurred on account of activities that were at the
time known or reasonably should have been known by such person to
be clearly in conflict with the best interests of the Registrant.
The Registrant shall also indemnify such persons for reasonable
costs, expenses and attorneys' fees in connection with
enforcement of rights to indemnification granted therein, if it
is determined, by judicial decision or by agreement of the
parties, that such person is entitled to indemnification
thereunder. As authorized by statute, the Registrant
maintains insurance on behalf of its directors and officers
against liability asserted against such persons in such capacity
whether or not such directors or officers have the right to
indemnification pursuant to the bylaw or otherwise. In addition,
the Registrant's Restated Articles of Incorporation
prevent the recovery by the Registrant of monetary damages
against its directors.
In addition to the above-described provisions, Sections
55-8-50 through 55-8-58 of the Act contain provisions prescribing
the extent to which directors and officers shall or may be
indemnified. Section 55-8-51 of the Act permits a corporation,
with certain exceptions, to indemnify a present or former
director against liability if (i) he conducted himself in
good faith, (ii) he reasonably believed (x) that his conduct in
his official capacity with the corporation was in its best
interests and (y) in all other cases his conduct was at least not
opposed to the corporation's best interest and (iii) in the case
of any criminal proceeding, he had no reasonable cause to believe
his conduct was unlawful. A corporation may not indemnify a
director in connection with a proceeding by or in the right of
the corporation in which the director was adjudged liable to the
corporation or in connection with a proceeding charging improper
personal benefit to him. The above standard of conduct is
determined by the Board of Directors, or a committee or special
legal counsel or the shareholders as prescribed in Section
55-8-55 of the Act.
Sections 55-8-52 and 55-8-56 of the Act require a
corporation to indemnify a director or officer in the defense of
any proceeding to which he was a party against reasonable
expenses when he is wholly successful in his defense, unless the
articles of incorporation provide otherwise. Upon application,
the court may order indemnification of the director or officer if
he is adjudged fairly and reasonably so entitled under Section
55-8-54 of the Act.
In addition, Section 55-8-57 of the Act permits a
corporation to provide for indemnification of directors,
officers, employees or agents, in its articles of incorporation
or bylaws or by contract or resolution, against liability in
various proceedings and to purchase and maintain insurance
policies on behalf of these individuals.
THE FOREGOING IS ONLY A GENERAL SUMMARY OF CERTAIN ASPECTS
OF NORTH CAROLINA LAW DEALING WITH INDEMNIFICATION OF DIRECTORS
AND OFFICERS AND DOES NOT PURPORT TO BE COMPLETE. IT IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE RELEVANT STATUTES
WHICH CONTAIN DETAILED SPECIFIC PROVISIONS REGARDING THE
CIRCUMSTANCES UNDER WHICH AND THE PERSON FOR WHOSE BENEFIT
INDEMNIFICATION SHALL OR MAY BE MADE AND ACCORDINGLY ARE SET
FORTH IN EXHIBIT 99.2 HERETO AND INCORPORATED HEREIN BY
REFERENCE.
ITEM 8. EXHIBITS.
The following exhibits are filed with or are incorporated by
reference in this Registration Statement.
EXHIBIT NO. DESCRIPTION OF EXHIBIT
5.1 Opinion of Smith Helms Mulliss & Moore, L.L.P.
as to legality of securities
23.1 Consent of Smith Helms Mulliss & Moore, L.L.P.
(included in Exhibit 5.1)
23.2 Consent of Arthur Andersen LLP
24.1 Power of Attorney
24.2 Certified Resolution authorizing signature of
Registration Statement
99.1 Ruddick Corporation 1993 Incentive Stock Option
and Stock Appreciation Rights Plan
99.2 Provisions of North Carolina law relating to
indemnification
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;
(ii) To reflect in the prospectus any facts or
events arising after the effective date of the Registration
Statement (or the most recent post-effective amendment thereof)
which, individually or in the aggregate, represent a fundamental
change in the information set forth in the Registration
Statement;
(iii) To include any material information with
respect to the plan of distribution not previously disclosed in
the Registration Statement or any material change to such
information in the Registration Statement;
PROVIDED, HOWEVER, that paragraphs (a)(1)(i) and (a)(1)(ii) do
not apply if the Registration Statement is on Form S-3 or Form
S-8 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 to the Commission by the
Registrant pursuant to Section 13 or Section 15(d) of the
Exchange Act that are incorporated by reference in the
Registration Statement.
(2) That, for the purpose of determining any
liability under the Securities Act, each such post-effective
amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of 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, each filing of the Registrant's annual report pursuant to
Section 13(a) or Section 15(d) of the Exchange Act (and, where
applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Exchange Act) 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 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, therefore, unenforceable.
In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of
the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
the 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,
as amended, 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 Charlotte, State of
North Carolina, on November 22, 1994.
RUDDICK CORPORATION
By: /s/ JOHN W. COPELAND
John W. Copeland
President
Pursuant to the requirements of the Securities Act of 1933,
as amended, the Registration Statement has been signed by the
following persons in the capacities and on the date indicated.
SIGNATURE TITLE DATE
/S/ JOHN W. COPELAND President and November 22, 1994
John W. Copeland Director (Principal
Executive Officer)
/S/ RICHARD N. BRIGDEN Vice President November 22, 1994
Richard N. Brigden -Finance (Principal
Financial Officer)
/S/ DOUGLAS A. STEPHENSON Treasurer November 22, 1994
Douglas A. Stephenson (Principal
Accounting Officer)
THOMAS M. BELK* Director November 22, 1994
Thomas M. Belk
EDWIN B. BORDEN, JR.* Director November 22, 1994
Edwin B. Borden, Jr.
ALAN T. DICKSON* Director November 22, 1994
Alan T. Dickson
R. STUART DICKSON* Director November 22, 1994
R. Stuart Dickson
BEVERLY F. DOLAN* Director November 22, 1994
Beverly F. Dolan
RODDEY DOWD, SR.* Director November 22, 1994
Roddey Dowd, Sr.
JAMES E. S. HYNES* Director November 22, 1994
James E. S. Hynes
HUGH L. MCCOLL, JR.* Director November 22, 1994
Hugh L. McColl, Jr.
E. C. WALL, JR.* Director November 22, 1994
E. C. Wall, Jr.
*By: /S/ RICHARD N. BRIGDEN
Richard N. Brigden
Attorney-in-Fact
SMITH HELMS MULLISS & MOORE, L.L.P.
P. O. Box 31247
Charlotte, North Carolina 28231
Telephone (704) 343-2000
November 22, 1994
Ruddick Corporation
2000 Two First Union Center
Charlotte, North Carolina 28282
Re: Registration Statement on Form S-8
500,000 Shares of Common Stock
Gentlemen:
In connection with the possible offering and sale from time
to time of up to 500,000 shares of the Common Stock of Ruddick
Corporation (the "Shares"), upon the terms and conditions set
forth in the Registration Statement on Form S-8 (the
"Registration Statement"), filed on November 22, 1994 by the
Corporation with the Securities and Exchange Commission under the
Securities Act of 1933, as amended, we are of the opinion that
when (a) the Registration Statement shall become effective and
(b) the Shares have been sold upon the terms and conditions set
forth in the Registration Statement and the prospectus
constituting a part thereof, the Shares will be validly
authorized and legally issued, fully paid and non-assessable.
We hereby consent (1) to be named in the Registration
Statement and in the Prospectus which constitutes a part thereof
as attorneys who will pass upon the legality of the Shares and
(2) to the filing of a copy of this opinion as Exhibit 5.1 to the
Registration Statement.
Very truly yours,
SMITH HELMS MULLISS & MOORE, L.L.P.
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference in this Registration Statement on Form
S-8 of our reports dated October 28, 1993 included in Ruddick
Corporation and subsidiaries' Form 10-K for the year ended
October 3, 1993.
ARTHUR ANDERSEN LLP
Charlotte, North Carolina
November 18, 1994
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each of Ruddick
Corporation ("Ruddick") and the several undersigned Officers and
Directors thereof whose signatures appear below hereby makes,
constitutes and appoints Richard N. Brigden and Douglas A.
Stephenson, and each of them acting individually, its and his
true and lawful attorneys, with full power to act without the
other and with full power of substitution, to execute, deliver
and file in its and his name and on its and his behalf, and in
each of the undersigned Officer's and Director's capacity or
capacities as shown below, (a) a Registration Statement on Form
S-8 (or other appropriate form) with respect to the registration
under the Securities Act of 1933, as amended (the "Securities
Act"), of 500,000 shares of the Common Stock of Ruddick for sale
from time to time by Ruddick to various of its key employees
pursuant to the exercise of options granted under the Ruddick
Corporation 1993 Incentive Stock Option and Stock Appreciation
Rights Plan, and any and all amendments, including any and all
post-effective amendments, to the foregoing and any and all
documents in support thereof or supplemental thereto, and
(b) such registration statements, petitions, applications,
consents to service of process or other instruments, and any and
all amendments or supplements to the foregoing and any and all
documents in support thereof or supplemental thereto, as may be
necessary or advisable to qualify or register the securities
covered by said Registration Statement under such state or other
securities laws, regulations and requirements as may be
applicable; and each of Ruddick and said Officers and Directors
hereby grants to said attorneys, and to each of them, full power
and authority to do and perform each and every act and thing
whatsoever as said attorneys or attorney may deem necessary or
advisable to carry out fully the intent of this power of attorney
to the same extent and with the same effect as Ruddick might or
could do, and as each of said Officers and Directors might or
could do personally in his capacity or capacities as aforesaid,
and each of Ruddick and said Officers and Directors hereby
ratifies and confirms all acts and things which said attorneys or
attorney might do or cause to be done by virtue of this power of
attorney and its or his signature as the same may be signed by
said attorneys or attorney, or either of them, to any or all of
the following (and/or any and all amendments and supplements to
any or all thereof): such Registration Statement under the
Securities Act, and all such registration statements, petitions,
applications, consents to service of process and other
instruments, and any and all amendments to the foregoing and any
and all documents in support thereof or supplemental thereto,
under such securities laws, regulations and requirements as may
be applicable.
IN WITNESS WHEREOF, Ruddick Corporation has caused this
power of attorney to be signed on its behalf, and each of the
undersigned Officers and Directors of the Corporation in the
capacity or capacities noted has hereunto set his hand on the
date indicated.
RUDDICK CORPORATION
By: /s/ John W. Copeland
_____________________
John W. Copeland
President
Dated: November 17, 1994<PAGE>
Signature
/s/ John W. Copeland President and Director November 17,
____________________ (Principal Executive 1994
John W. Copeland Officer)
/s/Richard N. Brigden Vice President-Finance November 17,
_____________________ (Principal Financial 1994
Richard N. Brigden Officer)
/s/Douglas A. Stephenson Treasurer (Principal November 17,
________________________ Accounting Officer) 1994
Douglas A. Stephenson
/s/Thomas M. Belk Director November 17,
_______________________ 1994
Thomas M. Belk
/s/Edwin B. Borden, Jr. Director November 17,
_______________________ 1994
Edwin B. Borden, Jr.
/s/Alan T. Dickson Director November 17,
_______________________ 1994
Alan T. Dickson
/s/R. Stuart Dickson Director November 17,
_______________________ 1994
R. Stuart Dickson
/s/Beverly F. Dolan Director November 17,
_______________________ 1994
Beverly F. Dolan
/s/Roddey Dowd, Sr. Director November 17,
_______________________ 1994
Roddey Dowd, Sr.
/s/James E. S. Hynes Director November 17,
_______________________ 1994
James E. S. Hynes
/s/Hugh L. McColl, Jr. Director November 17,
_______________________ 1994
Hugh L. McColl, Jr.
/s/E. C. Wall, Jr. Director November 17,
_______________________ 1994
E. C. Wall, Jr.
CERTIFICATE OF SECRETARY
I, DONALD B. WILLIFORD, Secretary of Ruddick Corporation, a
corporation duly organized and existing under the laws of the
State of North Carolina, do hereby certify that attached hereto
as Exhibit A is a true and correct copy of a resolution duly
adopted by the Board of Directors of said corporation at a
meeting of said Board of Directors duly called and held on
November 17, 1994, and that such resolution is in full force and
effect and has not been amended or rescinded as of the date
hereof.
IN WITNESS WHEREOF, I have hereupon set my hand and affixed
the seal of the corporation this 22nd day of November, 1994.
DONALD B. WILLIFORD
Donald B. Williford
Secretary
(CORPORATE SEAL)<PAGE>
EXHIBIT A
FURTHER RESOLVED, that Richard N. Brigden and Douglas A.
Stephenson and each of them with full power to act without the
other, be, and they hereby are, authorized and empowered to sign
the aforesaid Registration Statement and any amendment or
amendments (including post-effective amendments) thereto on
behalf of and as attorneys for the Corporation and on behalf of
and as attorneys for any of the following, to wit: the principal
executive officer, the principal financial officer, the principal
accounting officer, and any other officer of the Corporation,
including the President, the Chairman of the Board of Directors
and the Chairman of the Executive Committee;
RUDDICK CORPORATION
1993 INCENTIVE STOCK OPTION AND STOCK APPRECIATION RIGHTS
PLAN
Ruddick Corporation, a North Carolina corporation (the
"Corporation"), hereby establishes the following Incentive Stock
Option and Stock Appreciation Rights Plan for the benefit of Key
Employees of the Corporation and its Subsidiaries:
1. DEFINITIONS:
(a) The "Act" means the Securities Exchange Act of
1934, as amended.
(b) "Code" means the Internal Revenue Code of 1986, as
amended.
(c) "Committee" means the Stock Option Committee
appointed by the Board of Directors of the
Corporation to administer the Plan.
(d) "Common Stock" means the common stock of the
Corporation to be issued pursuant to the Plan.
(e) "Corporation" means Ruddick Corporation.
(f) "Disabled" means the inability of an Optionee to
engage in his profession by reason of any
medically determinable physical or mental
impairment which can be expected to result in
death or which is to last or can be expected to
last for a continuous period of not less than
twelve months.
(g) "Incentive Stock Option Agreement" means a formal
written agreement between the Corporation and an
Optionee in such form and containing such
provisions not inconsistent with the provisions of
the Plan as the Committee shall from time to time
approve setting forth the terms and conditions of
the grant of an option to purchase shares of
Common Stock pursuant to the Plan. Such Incentive
Stock Option Agreement may be combined in the same
written agreement as a Stock Appreciation Right
Agreement.
(h) "Key Employee" means an active full time employee
of the Corporation or its Subsidiaries who has
significant responsibility for the growth and
financial success of the Corporation, including
officers and other employees of the Corporation
and its Subsidiaries. The term "Key Employee"
does not include a director of the Corporation or
a Subsidiary who is not otherwise an active
employee of the Corporation or a Subsidiary, or a
person who has retired from the active employment
of the Corporation or a Subsidiary.
(i) "Option" means the right granted to a Key Employee
by the Corporation pursuant to the Plan to
purchase shares of Common Stock.
(j) "Optionee" means the individual granted an Option.
(k) "Plan" means the Ruddick Corporation 1993
Incentive Stock Option and Stock Appreciation
Rights Plan.
(l) "Right" means the right of a Key Employee to
receive, pursuant to the terms of such Key
Employee's Stock Appreciation Right Agreement, a
payment in cash based upon the increase in the
fair market value of the Units of Stock
Appreciation Rights granted to such Key Employee,
as more particularly described in Section 9
hereof.
(m) "Stock Appreciation Right Agreement" means a
formal written agreement between the Corporation
and a Key Employee in such form and containing
such provisions not inconsistent with the
provisions of the Plan as the Committee shall from
time to time approve setting forth the terms and
conditions of the grant of a Right. Such Stock
Appreciation Right Agreement may be combined in
the same written agreement as an Incentive Stock
Option Agreement.
(n) "Subsidiaries" means subsidiary corporations of
the Corporation as that term is defined in Section
424(f) of the Code.
(o) "Unit" means an entry on the books and records of
the Corporation to be used solely as an instrument
of measure for purposes of determining the value
of Rights awarded under the Plan, with each Unit
equalling one share of Common Stock for such
purpose.
2. PURPOSE:
This Plan is for the purpose of securing or retaining the
services of Key Employees of the Corporation and its
Subsidiaries. The Board of Directors of the Corporation believes
the Plan will promote and increase personal interest in the
welfare of the Corporation by, and provide incentive to, those
who are primarily responsible not only for its regular operations
but also for shaping and carrying out the long-range plans of the
Corporation and aiding its continued growth and financial
success. It is intended that Options issued pursuant to the Plan
shall constitute incentive stock options within the meaning of
Section 422 of the Code and that the Plan shall satisfy the
requirements of Rule 16b-3 under the Act.
3. ADMINISTRATION:
The Plan shall be administered by the Committee which shall
consist of not fewer than three members of the Board of Directors
of the Corporation who shall be appointed by the Board. No
person shall serve on the Committee who is at the time of such
person's appointment to the Committee or has at any time within
one year prior thereto received an Option or a Right under the
Plan or who otherwise is not at the time of such person's
appointment a "disinterested person" for purposes of Rule 16b-3
under the Act.
The members of the Committee shall serve at the pleasure of
the Board of Directors, which may fill vacancies, however caused,
in the Committee. The Committee shall select one of its members
as its chairman and shall hold its meetings at such times and
places as it shall deem advisable. A majority of its members
shall constitute a quorum, and all actions of the Committee shall
be taken by a majority of its members. Any action of the
Committee evidenced by a written instrument, signed by a majority
of its members, shall be fully as effective as if it had been
taken by a vote of a majority of its members at a meeting duly
called and held. The Committee shall appoint a secretary, who
may be but need not be a member of the Committee; shall keep
minutes of its meetings; and shall make such rules and
regulations for the conduct of its business as it shall deem
advisable.
Subject to the express provisions of the Plan, the Committee
shall have complete authority, in its discretion, to determine
the Key Employees of the Corporation and of the Subsidiaries to
whom, the time or times when, and the price or prices at which,
Options and Rights shall be granted, the option periods, the
award periods, and the number of shares to be subject to each
Option or Units subject to each Right. The Committee shall also
have complete authority to interpret the Plan, to prescribe,
amend and rescind rules and regulations relating to it, to
determine the terms and provisions of the respective Incentive
Stock Option Agreements (which need not be identical) and the
respective Stock Appreciation Right Agreements (which need not be
identical), and to make all other determinations necessary or
advisable for the administration of the Plan. The Committee's
determinations on the matters referred to in this section shall
be conclusive and binding upon all persons including, without
limitation, the Corporation and its Subsidiaries, the Committee
and each of the members thereof, and the Directors, officers, and
employees of the Corporation and its Subsidiaries, the Optionees
and their respective successors in interest.
4. ELIGIBILITY:
Options and Rights may be granted only to Key Employees.
Except as provided in Section 13 hereof, no Key Employee shall be
eligible to receive an Option if such employee would beneficially
own, directly or indirectly, capital stock of the Corporation
possessing more than ten percent of the total combined voting
power of all classes of capital stock of the Corporation. For
purposes of the preceding sentence, the rules of Section 424(d)
of the Code shall apply, and capital stock of the Corporation
which an employee may purchase under outstanding options shall
NOT be treated as stock owned by such employee. In determining
the employees to whom Options or Rights will be granted and the
number of shares to be covered by each Option or Units subject to
each Right, the Committee shall take into account the duties of
the respective employees, their present and potential
contributions to the success of the Corporation, the anticipated
number of years of effective service remaining, and such other
factors as they shall deem relevant in connection with
accomplishing the purposes of the Plan. Subject to the limits
set forth in this Plan, a Key Employee who has been granted an
Option or Right may be granted additional Options and Rights if
the Committee shall so determine.
Notwithstanding the foregoing provisions of the Plan, no
employee may be granted an Option pursuant to which the aggregate
fair market value (determined as of the time the Option is
granted) of the stock with respect to which incentive stock
options are exercisable for the first time by such employee
during any calendar year, under this and all other incentive
stock option plans (as defined in Section 422 of the Code) of the
Corporation or its Subsidiaries, would exceed $100,000. No
member of the Committee shall be eligible to receive an Option or
a Right.
5. STOCK SUBJECT TO OPTION:
An aggregate of 500,000 shares of Common Stock will be
authorized and reserved for issuance for purposes of the Plan.
Such shares may be in whole or in part, as the Board of Directors
of the Corporation shall from time to time determine, authorized
but unissued shares of Common Stock or issued shares of Common
Stock which have been reacquired by the Corporation. If any
Option granted under the Plan shall expire or terminate for any
reason without having been exercised in full, the Option may be
granted to other Key Employees with respect to such unpurchased
shares.
To the extent permitted in the case of "incentive stock
options" by Sections 421, 422 and 424 of the Code, the total
amount of shares on which Options may be granted under the Plan
and option rights (both as to the number of shares and the option
price) shall be appropriately adjusted for any increase or
decrease in the number of outstanding shares of Common Stock of
the Corporation resulting from payment of a stock dividend on the
Common Stock, a subdivision or combination of shares of the
Common Stock, or a reclassification of the Common Stock, and (in
accordance with the provisions contained in the next following
paragraph) in the event of a merger or consolidation.
After the merger of one or more corporations into the
Corporation or any Subsidiary of the Corporation, any merger of
the Corporation into another corporation, any consolidation of
the Corporation or any Subsidiary of the Corporation and one or
more corporations, or any other corporate reorganization of any
form involving the Corporation as a party thereto involving any
exchange, conversion, adjustment or other modification of the
outstanding shares of the Corporation's Common Stock, each
optionee shall, at no additional cost, be entitled, upon any
exercise of his Option, to receive, in lieu of the number of
shares as to which such Option shall then be so exercised, the
number and class of shares of stock or other securities or such
other property to which such optionee would have been entitled to
pursuant to the terms of the agreement of merger or
consolidation, if at the time of such merger or consolidation,
such optionee had been a holder of record of a number of shares
of Common Stock of the Corporation equal to the number of shares
as to which such Option shall then be so exercised. Comparable
rights shall accrue to each Optionee in the event of successive
mergers or consolidations of the character described above.
The foregoing adjustments and the manner of application of
the foregoing provisions shall be determined by the Committee in
its sole discretion. Any such adjustment may provide for the
elimination of any fractional share which might otherwise become
subject to an Option.
In the event of (i) the adoption of a plan of merger or
consolidation of the Corporation with any other corporation or
association as a result of which the holders of the voting
capital stock of the Corporation as a group would receive less
than 50% of the voting capital stock of the surviving or
resulting corporation; (ii) the approval by the Board of
Directors of an agreement providing for the sale or transfer
(other than as security for obligations of the Corporation) of
substantially all the assets of the Corporation, or (iii) the
acquisition of more than 20% of the Corporation's voting capital
stock by any person within the meaning of Section 13(d)(3) of the
Act, other than a person, or group including a person, who
beneficially owned, as of the effective date hereof, more than 5%
of the Corporation's securities in the absence of a prior
expression of approval of the Board of Directors of the
Corporation; any Option granted hereunder shall become
immediately exercisable in full, subject to any appropriate
adjustments in the number of shares subject to the Option and the
option price, and shall remain exercisable for the remaining term
of such Option, regardless of whether such Option has been
outstanding for six months or of any provision contained in the
Incentive Stock Option Agreement with respect thereto limiting
the exercisability of the Option or any portion thereof for any
length of time, subject to all of the terms hereof and of the
Incentive Stock Option Agreement with respect thereto not
inconsistent with this paragraph.
Anything contained herein to the contrary notwithstanding,
upon the dissolution or liquidation of the Corporation each
Option granted under the Plan shall terminate; provided, however,
that following the adoption of a plan of dissolution or
liquidation, and in any event prior to such dissolution or
liquidation (and as provided above regarding certain mergers and
consolidations), each Option granted hereunder shall be
exercisable in full, regardless of whether such Option has been
outstanding for six months or of any provision contained in the
Incentive Stock Option Agreement with respect thereto limiting
the exercisability of the Option or any portion thereof for any
length of time, subject to all of the terms hereof and of the
Incentive Stock Option Agreement with respect thereto not
inconsistent with this paragraph.
The grant of an Option pursuant to this Plan shall not
affect in any way the right or power of the Corporation or any of
its Subsidiaries to make adjustments, reclassifications,
reorganizations, or changes of its capital or business structure,
or to merge or consolidate, or to dissolve, liquidate or sell, or
transfer all or any part of its business or assets.
6. GRANTING OF OPTIONS; OPTION PRICE:
Following the selection by the Committee of a Key Employee
to whom an Option shall be granted, the Corporation shall tender
to such Key Employee for signature an Incentive Stock Option
Agreement. The date on which an Option shall be granted shall be
the date of the Committee's authorization of such grant, or such
later date as may be determined by the Committee at the time such
grant is authorized.
The purchase price of the Common Stock under each Option
shall be determined by the Committee, but shall be not less than
100% of the fair market value of the stock at the time of the
granting of the Option, and in no event shall the purchase price
with respect to authorized but theretofore unissued shares of
stock be less than the par value of the stock.
For so long as the Common Stock is listed on a national
securities exchange or the NASDAQ National Market System, "fair
market value" shall mean, for purposes of this Plan, as of a
given date, the mean between the high and low sales prices for
the stock on such date, or, if no such shares were sold on such
date, the most recent date on which shares of such stock were
sold, as reported in The Wall Street Journal. If the Common
Stock is not listed on a national securities exchange or the
NASDAQ National Market System, fair market value shall mean the
average of the closing bid and asked prices for such stock in the
over-the-counter market as reported by the National Association
of Securities Dealers Automated Quotation System. If the Common
Stock is not listed on a national securities exchange, the NASDAQ
National Market System or the over-the-counter market, fair
market value shall be the fair value thereof determined in good
faith by the Board of Directors of the Corporation.
7. EXERCISE OF OPTION:
An Option may be exercised by written notice to the
Corporation at its offices at 2000 Two First Union Center,
Charlotte, North Carolina 28282, or such other address to which
the office may be relocated, which notice shall be signed by the
Key Employee or by the Key Employee's successors, as hereinafter
described in Section 10, and which shall state the number of
shares with respect to which the Option is being exercised, and
shall contain the representation that it is the Optionee's
present intention to acquire the shares being purchased for
investment and not for resale. Payment in full of the option
price of said shares must be made at the time of the exercise of
the Option, and payment may be made in cash or shares of the
Common Stock of the Corporation previously held by the Optionee,
or a combination of both. Payment in shares may be made with
shares received upon the exercise or partial exercise of an
Option, whether or not involving a series of exercises or partial
exercises and whether or not share certificates for such shares
surrendered have been delivered to the Optionee. Shares of
Common Stock previously held by the Optionee and surrendered in
accordance with rules and regulations adopted by the Committee
for the purpose of making full or partial payment of the option
price, shall be valued for such purpose at the "fair market
value" thereof ("fair market value" to be determined in the
manner provided in Section 6) on the date the Option is
exercised. As soon as practicable after said notice shall have
been received, the Corporation shall deliver to the Optionee a
stock certificate registered in the Optionee's name representing
the Option shares.
The Optionee shall not have any rights of a shareholder of
the Corporation with respect to the shares covered by the Option
except to the extent that, and until, one or more certificates
for shares of Common Stock shall have been delivered to the
Optionee upon the due exercise of the Option.
8. OPTION PERIOD:
The Options granted hereunder shall be exercisable in whole
or in part or in installments, from time to time, as may be
specified by the Committee, except that no Option granted under
the Plan shall be exercisable within six months of, or after ten
years from, the date the Option is granted.
9. RIGHTS:
A Right may be granted contemporaneously with the grant of
an Option or independent of the grant of an Option. The
Committee may grant up to a total of 500,000 Units to be
allocated to Key Employees as the Committee shall determine
according to individual Stock Appreciation Rights Agreements with
the Key Employees. The Corporation may at any time add
additional Units to the Plan to provide for grants to new Key
Employees or to make additional grants to Key Employees.
Appropriate adjustments for the valuation of Units will be made
in the individual Stock Appreciation Rights Agreements covering
such Key Employees at the discretion of the Committee.
The Rights awarded to a Key Employee under this Plan shall
be
in effect for the period beginning with the date such Units are
awarded through the earlier of (i) termination of employment as
described in section 10 herein; (ii) the merger, consolidation,
dissolution or liquidation of the Corporation pursuant to Section
5 hereof; (iii) the termination of the Plan as provided in
Section 14 herein; or (iv) the surrender or forfeiture of the
Units as provided in this Section 9. (The earlier of the dates
specified in the preceding sentence is referred to herein as the
"Determination Date".)
Units awarded to a Key Employee shall vest in equal annual
installments at each December 31 over a period designated by the
Committee in the individual Stock Appreciation Rights Agreement
(the "Vesting Period"), but the Vesting Period shall not exceed
ten (10) years. At the time the Units are awarded, the Committee
shall notify the Key Employee of the number of years in the
Vesting Period for the Units awarded.
All unvested Units of a Key Employee shall immediately vest
upon the occurrence of the events specified in the Plan that
results in an immediate vesting of any unvested Options held by
such Key Employee.
Except as otherwise provided in this Section 9, for purposes
of this Plan the increase in the value of one Unit shall be equal
to the difference between (i) the fair market value (as
determined pursuant to Section 6 of this Plan) of one share of
Common Stock of the Corporation as of the date of grant of the
Unit or such other beginning value as determined by the
Committee, and (ii) the fair market value (as so determined) of
one share of Common Stock of the Corporation on the Determination
Date.
The Units shall be used solely as a device for the
measurement and determination of the benefits to be paid to Key
Employees as provided in this Plan. Units shall not constitute
or be treated as property or as a trust fund of any kind. All
amounts at any time attributable to Units shall be and remain the
sole property of the Corporation, and no Key Employee shall
acquire any property rights hereunder except the right to receive
a payment of cash at such times as are provided herein. Units
are not entitled to cash dividends in the event such dividends
are payable to shareholders.
A Key Employee may elect, by written request to the
Committee, within ninety (90) days following each December 31, to
receive payment for the increase in value through such December
31 attributable to the number of Units specified by the Key
Employee and to the extent such Units are vested. Such election
shall constitute the Determination Date as to the number of Units
designated by the Key Employee, and shall also constitute a
complete termination of such Key Employee's right and interest in
such Units, and terminate his further participation in the Plan
with respect to the designated Units.
Section 5 of this Plan shall govern the effect of a merger,
consolidation, liquidation or dissolution of the Corporation upon
any Units then held by any Key Employee. Section 10 of this Plan
shall govern the effect of any termination of employment upon any
Units then held by the affected Key Employee.
Payment of benefits to Key Employees shall begin within
ninety (90) days following the relevant Determination Date and
shall, at the discretion of the Committee, be paid in a single
lump sum payment or in equal quarterly installments over a period
not to exceed three (3) years from the relevant Determination
Date.
In the event of a stock split, stock dividend,
reclassification, reorganization or other adjustment of shares of
Common Stock of the Corporation, appropriate adjustments shall be
made by action of the Committee, whose determinations shall be
conclusive, to the number of Units of each Key Employee, the
value of such Units, the maximum number of Units which may be
granted in total, per year and to any one Key Employee, with the
intent of such adjustments being to give the Key Employees the
same total dollar increase in the value of his or her Units after
such occurrence as prior thereto, and to maintain the same
proportion of Units to outstanding Common Stock available as just
prior thereto.
There shall be deducted from each distribution under the
Plan the amount of any tax required by any governmental authority
to be withheld and paid over by the Corporation to such
governmental authority for the account of the person entitled to
such distribution.
The Stock Appreciation Rights component of this Plan is
intended to be "unfunded" and maintained "primarily for the
purpose of providing deferred compensation for a select group of
management or highly compensated employees" for purposes of the
Employment Retirement Security Act of 1974, as amended, and is to
be so construed.
Notwithstanding anything to the contrary contained herein,
if a Key Employee is a person who is regularly required to report
his ownership and change of ownership of Common Stock to the
Securities and Exchange Commission and is subject to short-swing
profit liability under the provisions of Section 16(b) of the
Act, then any election to exercise such Key Employee's Units, as
well as any exercise of such Key Employee's Units, shall be made
only in accordance with the terms of this Plan and during the
period beginning on the third business day and ending on the
twelfth business day following the release for publication by the
Corporation of quarterly or annual summary statements of sales
and earnings. This condition shall be deemed to be satisfied if
the specified financial data appears (i) on a wire service, (ii)
in a financial news service, (iii) in a newspaper of general
circulation, or (iv) is otherwise made publicly available.
Notwithstanding further anything to the contrary contained
herein, Rights shall always be granted and exercised in such a
manner as to satisfy the conditions of Rule 16b-3 of the Act.
10. TERMINATION OF EMPLOYMENT:
(a) If the employment of any person to whom an Option or
Right has been granted is terminated for any reason other than
death, disability, retirement with the consent of the Corporation
or termination without cause, his Option or Options and the
related Right or Rights shall terminate immediately. If an
Optionee retires with the consent of the Corporation or if an
Optionee is terminated without cause by the Corporation, or any
of its Subsidiaries, the Optionee may exercise his Option or
Right to the extent that he was entitled to exercise it as of the
date of said retirement or termination but only within three
months after said retirement or termination and in no event after
the expiration of ten years from the date such Option or Right
was granted. A temporary leave of absence approved by the
Corporation or any if its Subsidiaries shall not be deemed to be
a termination of employment, unless, under any applicable
provisions of the Code or regulations promulgated thereunder, as
then in effect, the affected Optionee would be accorded different
tax treatment than if such Optionee were an active employee of
the Corporation or any of its Subsidiaries.
(b) If an Optionee dies or becomes Disabled while he is an
employee of the Corporation or any of its Subsidiaries, or shall
die within three months after retirement (provided that such
retirement is with the consent of the Corporation), the
Optionee's Option or Right may be exercised (to the extent he
would have been entitled to do so on the date of his death or
disability) at any time within one year after the date of his
death or disability or, if he dies within three months after
retirement (provided that such retirement is with the consent of
the Corporation), at any time within one year after such
retirement, but in no event may an Option be exercised after the
expiration of ten years from the date the Option is granted. In
the event of the Optionee's death, such Options or Rights may be
exercisable to the extent otherwise provided herein by the
executor or personal representative of the Optionee's estate or
by any person who acquired the right to exercise such Options by
bequest under the Optionee's will or by inheritance. In the
event the Optionee is Disabled, such Options or Rights may be
exercised to the extent otherwise provided herein by the personal
representative of the Optionee or such other person designated by
a court of competent jurisdiction or by power of attorney to
handle the Optionee's personal estate or affairs. The Committee,
in its sole discretion, must determine that an Optionee is
Disabled upon certification thereof by a qualified physician
selected by the Committee after such physician examines the
Optionee.
11. THE RIGHT OF THE CORPORATION TO TERMINATE EMPLOYMENT:
Nothing contained in the Plan or in any Option or Right
granted pursuant to the Plan shall confer upon any Optionee or
Key Employee any right to be continued in the employment of the
Corporation or one of its Subsidiaries, or shall interfere in any
way with the right of the Corporation or any of its Subsidiaries,
as the case may be, to terminate his or her employment at any
time for any reason.
12. NON-TRANSFERABILITY OF OPTIONS AND RIGHTS:
No Option or Right granted under the Plan shall be
transferable by the Optionee or Key Employee other than by will,
or, if he or she dies intestate, by the laws of descent and
distribution of the state of his or her domicile at the time of
his or her death. During the Optionee's or Key Employee's
lifetime, the Option or Right shall be exercisable only by the
Optionee.
13. TEN PERCENT SHAREHOLDERS:
Notwithstanding the provisions of Section 4 regarding the
ineligibility of certain ten percent owners of the Corporation's
capital stock, any such Key Employee may be granted an Option
hereunder which (a) provides for an option price of at least 110%
of the fair market value of the stock at the time of the granting
of the Option, (b) is not exercisable before the expiration of
six months or after the expiration of five years from the date
such Option is granted, and (c) is subject to all of the other
terms and conditions of the Plan including, without limitation,
the restrictions of Section 4 regarding Options to purchase
shares having a fair market value in excess of $100,000.
14. AMENDMENT AND TERMINATION:
The Plan may be amended, modified, discontinued or
terminated by the Board of Directors without stockholder approval
as deemed in the best interests of the Corporation; provided,
that no such amendment or modification shall (i) materially
increase the benefits accruing to eligible employees, (ii)
increase the number of shares which may be issued pursuant to
Options, (iii) materially modify the requirements as to
eligibility for participation, or (iv) without the consent of the
holder, reduce the amount of any benefit or adversely change the
terms and conditions of any outstanding Option or Right.
15. EFFECTIVE DATE OF THE PLAN:
The effective date of the Plan shall be November 18, 1993,
subject to approval of the Plan by the shareholders of the
Corporation. Notwithstanding any other provision hereof, no
Option or Right granted hereunder may be exercised prior to
approval of the Plan by the shareholders of the Corporation and,
in the event the shareholders do not approve the Plan within one
year from the effective date of the Plan, all Options or Rights
granted hereunder shall be void. No Options may be granted under
this Plan after the expiration of ten years from and including
the effective date.
RUDDICK CORPORATION
ATTEST:
By: /S/ ALAN T. DICKSON
President
/S/ DONALD B. WILLIFORD
Secretary
(CORPORATE SEAL) By: /S/ R. STUART DICKSON
Chairman of the Board
PROVISIONS OF NORTH CAROLINA BUSINESS CORPORATION ACT
REGARDING INDEMNIFICATION
"SECTION 55-8-50. POLICY STATEMENT AND DEFINITIONS.
(a) It is the public policy of this State to enable
corporations organized under this Chapter to attract and maintain
responsible, qualified directors, officers, employees and agents,
and, to that end, to permit corporations organized under this
Chapter to allocate the risk of personal liability of directors,
officers, employees and agents through indemnification and
insurance as authorized in this Part.
(b) Definitions in this Part:
(1) 'Corporation' includes any domestic or foreign
predecessor entity of a corporation in a merger or
other transaction in which the predecessor's
existence ceased upon consummation of the
transaction.
(2) 'Director' means an individual who is or was a
director of a corporation or an individual who,
while a director of a corporation, is or was
serving at the corporation's request as a
director, officer, partner, trustee, employee, or
agent of another foreign or domestic corporation,
partnership, joint venture, trust, employee
benefit plan, or other enterprise. A director is
considered to be serving an employee benefit plan
at the corporation's request if his duties to the
corporation also impose duties on, or otherwise
involve services by, him to the plan or to
participants in or beneficiaries of the plan.
'Director' includes, unless the context requires
otherwise, the estate or personal representative
of a director.
(3) 'Expenses' means expenses of every kind incurred
in defending a proceeding, including counsel fees.
(4) 'Liability' means the obligation to pay a
judgment, settlement, penalty, fine (including an
excise tax assessed with respect to an employee
benefit plan), or reasonable expenses incurred
with respect to a proceeding.
(5) 'Official capacity' means: (i) when used with
respect to a director, the office of director in a
corporation; and (ii) when used with respect to an
individual other than a director, as contemplated
in G.S. 55-8-56, the office in a corporation held
by the officer or the employment or agency
relationship undertaken by the employee or agent
on behalf of the corporation. 'Official capacity'
does not include service for any other foreign or
domestic corporation or any partnership, joint
venture, trust, employee benefit plan, or other
enterprise.
(6) 'Party' includes an individual who was, is, or is
threatened to be made a named defendant or
respondent in a proceeding.
(7) 'Proceeding' means any threatened, pending, or
completed action, suit, or proceeding, whether
civil, criminal, administrative, or investigative
and whether formal or informal.
SECTION55-8-51. AUTHORITY TO INDEMNIFY.
(a) Except as provided in subsection (d), a corporation may
indemnify an individual made a party to a proceeding because he
is or was a director against liability incurred in the proceeding
if:
(1) He conducted himself in good faith; and
(2) He reasonably believed (i) in the case of conduct
in his official capacity with the corporation,
that his conduct was in its best interests; and
(ii) in all other cases, that his conduct was at
least not opposed to its best interests; and
(3) In the case of any criminal proceeding, he had no
reasonable cause to believe his conduct was
unlawful.
(b) A director's conduct with respect to an employee
benefit plan for a purpose he reasonably believed to be in the
interests of the participants in and beneficiaries of the plan is
conduct that satisfies the requirement of subsection (a)(2)(ii).
(c) The termination of a proceeding by judgment, order,
settlement, conviction, or upon a plea of no contest or its
equivalent is not, of itself, determinative that the director did
not meet the standard of conduct described in this section.
(d) A corporation may not indemnify a director under this
section:
(1) In connection with a proceeding by or in the right
of the corporation in which the director was
adjudged liable to the corporation; or
(2) In connection with any other proceeding charging
improper personal benefit to him, whether or not
involving action in his official capacity, in
which he was adjudged liable on the basis that
personal benefit was improperly received by him.
(e) Indemnification permitted under this section in
connection with a proceeding by or in the right of the
corporation that is concluded without a final adjudication on the
issue of liability is limited to reasonable expenses incurred in
connection with the proceeding.
(f) The authorization, approval or favorable recommendation
by the board of directors of a corporation of indemnification, as
permitted by this section, shall not be deemed an act or
corporate transaction in which a director has a conflict of
interest, and no such indemnification shall be void or voidable
on such ground.
SECTION 55-8-52. MANDATORY INDEMNIFICATION.
Unless limited by its articles of incorporation, a
corporation shall indemnify a director who was wholly successful,
on the merits or otherwise, in the defense of any proceeding to
which he was a party because he is or was a director of the
corporation against reasonable expenses incurred by him in
connection with the proceeding.
SECTION 55-8-53. ADVANCE FOR EXPENSES.
Expenses incurred by a director in defending a proceeding
may be paid by the corporation in advance of the final
disposition of such proceeding as authorized by the board of
directors in the specific case or as authorized or required under
any provision in the articles of incorporation or bylaws or by
any applicable resolution or contract upon receipt of an
undertaking by or on behalf of the director to repay such amount
unless it shall ultimately be determined that he is entitled to
be indemnified by the corporation against such expenses.
SECTION 55-8-54. COURT-ORDERED INDEMNIFICATION.
Unless a corporation's articles of incorporation provide
otherwise, a director of the corporation who is a party to a
proceeding may apply for indemnification to the court conducting
the proceeding or to another court of competent jurisdiction. On
receipt of an application, the court after giving any notice the
court considers necessary may order indemnification if it
determines:
(1) The director is entitled to mandatory
indemnification under G.S. 55-8-52, in which case
the court shall also order the corporation to pay
the director's reasonable expenses incurred to
obtain court-ordered indemnification; or
(2) The director is fairly and reasonably entitled to
indemnification in view of all the relevant
circumstances, whether or not he met the standard
of conduct set forth in G.S. 55-8-51 or was
adjudged liable as described in G.S. 55-8-51(d),
but if he was adjudged so liable his
indemnification is limited to reasonable expenses
incurred.
SECTION 55-8-55. DETERMINATION AND AUTHORIZATION OF
INDEMNIFICATION.
(a) A corporation may not indemnify a director under
G.S. 55-8-51 unless authorized in the specific case after a
determination has been made that indemnification of the director
is permissible in the circumstances because he has met the
standard of conduct set forth in G.S. 55-8-51.
(b) The determination shall be made:
(1) By the board of directors by majority vote of a
quorum consisting of directors not at the time
parties to the proceeding;
(2) If a quorum cannot be obtained under subdivision
(1), by majority vote of a committee duly
designated by the board of directors (in which
designation directors who are parties may
participate), consisting solely of two or more
directors not at the time parties to the
proceeding;
(3) By special legal counsel (i) selected by the board
of directors or its committee in the manner
prescribed in subdivision (1) or (2); or (ii) if a
quorum of the board of directors cannot be
obtained under subdivision (1) and a committee
cannot be designated under subdivision (2),
selected by majority vote of the full board of
directors (in which selection directors who are
parties may participate); or
(4) By the shareholders, but shares owned by or voted
under the control of directors who are at the time
parties to the proceeding may not be voted on the
determination.
(c) Authorization of indemnification and evaluation as to
reasonableness of expenses shall be made in the same manner as
the determination that indemnification is permissible, except
that if the determination is made by special legal counsel,
authorization of indemnification and evaluation as to
reasonableness of expenses shall be made by those entitled under
subsection (b)(3) to select counsel.
SECTION 55-8-56. INDEMNIFICATION OF OFFICERS, EMPLOYEES, AND
AGENTS.
Unless a corporation's articles of incorporation provide
otherwise:
(1) An officer of the corporation is entitled to
mandatory indemnification under G.S. 55-8-52, and
is entitled to apply for court-ordered
indemnification under G.S. 55-8-54, in each case
to the same extent as a director;
(2) The corporation may indemnify and advance expenses
under this Part to an officer, employee, or agent
of the corporation to the same extent as to a
director; and
(3) A corporation may also indemnify and advance
expenses to an officer, employee, or agent who is
not a director to the extent, consistent with
public policy, that may be provided by its
articles of incorporation, bylaws, general or
specific action of its board of directors, or
contract.
SECTION 55-8-57. ADDITIONAL INDEMNIFICATION AND INSURANCE.
(a) In addition to and separate and apart from the
indemnification provided for in G.S. 55-8-51, 55-8-52, 55-8-54,
55-8-55 and 55-8-56, a corporation may in its articles of
incorporation or bylaws or by contract or resolution indemnify or
agree to indemnify any one or more of its directors, officers,
employees, or agents against liability and expenses in any
proceeding (including without limitation a proceeding brought by
or on behalf of the corporation itself) arising out of their
status as such or their activities in any of the foregoing
capacities; provided, however, that a corporation may not
indemnify or agree to indemnify a person against liability or
expenses he may incur on account of his activities which were at
the time taken known or believed by him to be clearly in conflict
with the best interests of the corporation. A corporation may
likewise and to the same extent indemnify or agree to indemnify
any person who, at the request of the corporation, is or was
serving as a director, officer, partner, trustee, employee, or
agent of another foreign or domestic corporation, partnership,
joint venture, trust or other enterprise or as trustee or
administrator under an employee benefit plan. Any provision in
any articles of incorporation, bylaw, contract, or resolution
permitted under this section may include provisions for recovery
from the corporation of reasonable costs, expenses, and
attorneys' fees in connection with the enforcement of rights to
indemnification granted therein and may further include
provisions establishing reasonable procedures for determining and
enforcing the rights granted therein.
(b) The authorization, adoption, approval, or favorable
recommendation by the board of directors of a public corporation
of any provision in any articles of incorporation, bylaw,
contract or resolution, as permitted in this section, shall not
be deemed an act or corporate transaction in which a director has
a conflict of interest, and no such articles of incorporation or
bylaw provision or contract or resolution shall be void or
voidable on such grounds. The authorization, adoption, approval,
or favorable recommendation by the board of directors of a
nonpublic corporation of any provision in any articles of
incorporation, bylaw, contract or resolution, as permitted in
this section, which occurred on or prior to the effective date of
this act, shall not be deemed an act or corporate transaction in
which a director has a conflict of interest, and no such articles
of incorporation, bylaw provision, contract or resolution shall
be void or voidable on such grounds. Except as permitted in
G.S. 55-8-31, no such bylaw, contract, or resolution not adopted,
authorized, approved or ratified by shareholders shall be
effective as to claims made or liabilities asserted against any
director prior to its adoption, authorization, or approval by the
board of directors.
(c) A corporation may purchase and maintain insurance on
behalf of an individual who is or was a director, officer,
employee, or agent of the corporation, or who, while a director,
officer, employee, or agent of the corporation, is or was serving
at the request of the corporation as a director, officer,
partner, trustee, employee, or agent of another foreign or
domestic corporation, partnership, joint venture, trust, employee
benefit plan, or other enterprise, against liability asserted
against or incurred by him in that capacity or arising from his
status as a director, officer, employee, or agent, whether or not
the corporation would have power to indemnify him against the
same liability under any provision of this act.
SECTION55-8-58. APPLICATION OF PART.
(a) If articles of incorporation limit indemnification or
advance for expenses, indemnification and advance for expenses
are valid only to the extent consistent with the articles.
(b) This Part does not limit a corporation's power to pay
or reimburse expenses incurred by a director in connection with
his appearance as a witness in a proceeding at a time when he has
not been made a named defendant or respondent to the proceeding.
(c) This Part shall not affect rights or liabilities
arising out of acts or omissions occurring before July 1, 1990."
