<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
<TABLE>
<S> <C>
/ / Preliminary Proxy Statement / / Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
RUDDICK CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
RUDDICK CORPORATION
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
RUDDICK CORPORATION
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON
FEBRUARY 1, 1996
To our Shareholders:
The Annual Meeting of the Shareholders of Ruddick Corporation will be held
in the Auditorium, 12th Floor, Two First Union Center, Third and College
Streets, Charlotte, North Carolina, on Thursday, February 1, 1996, at 11:00
A.M., local time, for the following purposes:
1. To elect three directors of the Company for three-year terms;
2. To consider and vote upon a proposal to approve the adoption of the
Company's 1995 Comprehensive Stock Option Plan; and
3. To transact such other business as may properly come before the
Annual Meeting or any adjournment or adjournments thereof.
Pursuant to the provisions of the North Carolina Business Corporation Act,
December 1, 1995 has been fixed as the record date for the determination of
shareholders entitled to notice of and to vote at the Annual Meeting, and
accordingly, only holders of the Company's Common Stock of record at the close
of business on that date will be entitled to notice of and to vote at the Annual
Meeting and any adjournments thereof.
You are cordially invited to attend the Annual Meeting. In the event you
will be unable to attend, please sign, date and return the accompanying proxy
promptly so that your shares may be represented and voted at the Annual Meeting.
A return envelope is enclosed for your convenience.
By Order of the Board of Directors.
DONALD B. WILLIFORD
Secretary
December 20, 1995
<PAGE> 3
RUDDICK CORPORATION
------------------------------------
Proxy Statement
------------------------------------
ANNUAL MEETING OF SHAREHOLDERS
to be held on
FEBRUARY 1, 1996
The following statement, first mailed or delivered to shareholders on or
about December 20, 1995, is furnished in connection with the solicitation by the
Board of Directors of Ruddick Corporation (herein called the "Company") of
proxies to be used at the Annual Meeting of Shareholders of the Company to be
held on Thursday, February 1, 1996, at 11:00 A.M., local time, in the
Auditorium, 12th Floor, Two First Union Center, Third and College Streets,
Charlotte, North Carolina, and at any adjournment or adjournments thereof. The
principal executive offices of the Company are located at 2000 Two First Union
Center, Charlotte, North Carolina 28282.
The accompanying form of proxy is for use at the Annual Meeting if a
shareholder will be unable to attend in person. The proxy may be revoked in
writing by the person giving it at any time before it is exercised either by
notice to the Corporate Secretary or by submitting a proxy having a later date,
or it may be revoked by such person by appearing at the Annual Meeting and
electing to vote in person. All shares represented by valid proxies received
pursuant to this solicitation, and not revoked before they are exercised, will
be voted in the manner specified therein. Where specifications are not made,
proxies will be voted in favor of (i) electing as directors of the Company the
three persons named in this Proxy Statement, each to serve until the third
annual meeting of shareholders following his election and (ii) approving the
adoption of the Company's 1995 Comprehensive Stock Option Plan.
The entire cost of soliciting these proxies will be borne by the Company.
In addition to the original solicitation of the proxies by mail, the Company may
request banks, brokers and other record holders to send proxies and proxy
materials to the beneficial owners of the Company's Common Stock ("Common
Stock") and secure their voting instructions and will reimburse them for their
reasonable expense in so doing. If necessary, the Company may also use one or
more of its regular employees, who will not be specially compensated, to solicit
proxies from the shareholders, either in person, by telephone or by special
letter.
Pursuant to the provisions of the North Carolina Business Corporation Act,
December 1, 1995 has been fixed as the record date for the determination of
shareholders entitled to notice of and to vote at the Annual Meeting.
Accordingly, only holders of the Common Stock of record at the close of business
on that date will be entitled to notice of and to vote at the Annual Meeting. On
the record date, there were 46,378,930 shares of Common Stock outstanding and
entitled to vote at the Annual Meeting. Each share is entitled to one vote on
each matter expected to be presented at the Annual Meeting, including the
election of directors.
<PAGE> 4
PRINCIPAL SHAREHOLDERS
The following persons are known to the Company to be, as of October 31,
1995, the beneficial owners (within the meaning of applicable securities
regulations and based on a review of reports filed with the Securities and
Exchange Commission pursuant to Section 13(d) of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), as of such date) of more than five
percent of the Common Stock. The nature of beneficial ownership of the shares
included is presented in the notes following the table.
<TABLE>
<CAPTION>
NUMBER OF SHARES PERCENT
NAME AND ADDRESS OF BENEFICIAL OWNER BENEFICIALLY OWNED OF CLASS
- ----------------------------------------------------------------- ------------------ --------
<S> <C> <C>
Trust Company Bank,.............................................. 14,358,616 31.0%
Trustee of the Ruddick Employee
Stock Ownership Plan(1)
Post Office Box 4655
Atlanta, Georgia 30302
Alan T. Dickson(2)............................................... 3,985,442 8.6%
2000 Two First Union Center
Charlotte, North Carolina 28282
R. Stuart Dickson(3)............................................. 3,356,728 7.2%
2000 Two First Union Center,
Charlotte, North Carolina 28282
Mitchell Hutchins Institutional Investors Inc.(4)................ 2,959,534 6.4%
1285 Avenue of the Americas
New York, New York 10019
</TABLE>
- ---------------
(1) Trust Company Bank has sole investment power with respect to the number of
shares indicated except under limited circumstances. Trust Company Bank
votes shares held by the Ruddick Employee Stock Ownership Plan (the "ESOP")
that have been allocated to individual accounts in accordance with the
participants' instructions, does not vote allocated shares as to which no
instructions are received and votes the unallocated shares in its sole
discretion.
(2) The amount shown includes 1,572,932 shares of Common Stock owned of record
and beneficially by Alan T. Dickson or by certain trusts of which Alan T.
Dickson is a trustee and beneficiary, as to which he has sole voting and
investment power; 80,580 shares of Common Stock allocated to his ESOP
account, as to which he has sole voting power but no investment power
except under limited circumstances; 2,259,800 shares of Common Stock owned
of record and beneficially by The Dickson Foundation, Inc., a charitable
foundation, as to which he shares voting and investment power and which are
also included in the table as being beneficially owned by R. Stuart
Dickson; and 72,130 shares of Common Stock held as trustee for his niece,
as to which he has sole voting and investment power.
(3) The amount shown includes 857,058 shares of Common Stock owned of record and
beneficially by R. Stuart Dickson or by certain trusts of which R. Stuart
Dickson is a trustee and beneficiary, as to which he has sole voting and
investment power; 81,390 shares of Common Stock allocated to his ESOP
account, as to which he has sole voting power but no investment power
except under limited circumstances; 131,320 shares of Common Stock held as
custodian or trustee for his daughter, as to which he has sole voting and
investment power; 2,259,800 shares of Common Stock owned of record and
beneficially by The Dickson Foundation, Inc., a charitable foundation, as
to which he shares voting and investment power and which are also included
in the table as being beneficially owned by Alan T. Dickson; and 27,160
shares of Common Stock owned of record and beneficially by his spouse, as
to which she has sole voting and investment power and as to which he
disclaims beneficial ownership.
(4) The information regarding ownership of the Company's Common Stock by
Mitchell Hutchins Institutional Investors Inc. has been obtained from its
Schedule 13G dated February 13, 1995 and has been adjusted to reflect the
two-for-one stock split effective October 1, 1995. The Schedule 13G
indicates that Mitchell Hutchins has shared voting and investment power
with respect to all such shares.
2
<PAGE> 5
ELECTION OF DIRECTORS
Under the Company's Bylaws, the Board of Directors of the Company shall
consist of not less than nine nor more than thirteen members, which number of
members shall be fixed and determined from time to time by resolution of the
shareholders, and the directors shall be divided into three classes having
staggered three-year terms, so that the terms of approximately one-third of the
directors will expire each year. The number of directors is currently fixed at
ten. The terms of three of the directors expire at the Annual Meeting.
It is intended that the persons named as proxies in the accompanying form
of proxy will vote to elect as a director each of the three nominees listed
below, unless authority to so vote is withheld, each to serve until the third
annual meeting of shareholders following his election or until his successor
shall be elected and qualified to serve. Each nominee currently is a member of
the Board of Directors. Although the current Board of Directors expects that
each of the nominees will be available for election, in the event a vacancy in
the slate of nominees is occasioned by death or other unexpected occurrence, it
is intended that shares represented by proxies in the accompanying form will be
voted for the election of a substitute nominee selected by the persons named in
the proxy. Directors will be elected by a plurality of the votes cast.
Therefore, while votes withheld from director nominees will be counted for
purposes of determining whether a quorum exists at the Annual Meeting, such
votes withheld will not have the effect of a "negative" vote with respect to the
election of directors. The Board of Directors unanimously recommends that the
shareholders vote to elect all of the nominees as directors.
Set forth below is the name of each nominee for election to the Board of
Directors and each member of the Board of Directors whose term will not expire
at the Annual Meeting, as well as each such person's age, his current principal
occupation (which has continued for at least the past five years unless
otherwise indicated) together with the name and principal business of the
company by which he is employed, the period during which he has served as a
director, all positions and offices that he holds with the Company and his
directorships in other companies with a class of securities registered pursuant
to Section 12 of the Exchange Act or subject to the requirements of Section
15(d) of such Act or companies registered as an investment company under the
Investment Company Act of 1940.
NOMINEES FOR TERMS EXPIRING IN 1999
EDWIN B. BORDEN, JR., age 61, is the President and Chief Executive Officer
of The Borden Manufacturing Company, a company engaged in the manufacture and
sale of high quality cotton and polyester/cotton yarns. He has been a director
of the Company since 1991 and also serves as a director of Carolina Power &
Light Company, Jefferson-Pilot Corporation, Triangle Bancorp, Inc. and Winston
Hotels, Inc.
R. STUART DICKSON, age 66, has been Chairman of the Executive Committee of
the Company since February 1994. Prior to that time, he served as Chairman of
the Board of the Company. He has been a director of the Company since 1968 and
also serves as a director of Textron, Inc., First Union Corporation, United
Dominion Industries Limited and PCA International, Inc.
HUGH L. MCCOLL, JR., age 60, is the Chairman of the Board and Chief
Executive Officer of NationsBank Corporation, a bank holding company. He has
been a director of the Company since 1978 and also serves as a director of CSX
Corporation, Sonoco Products Company and Jefferson-Pilot Corporation.
3
<PAGE> 6
DIRECTORS WITH TERMS EXPIRING IN 1998
JOHN W. COPELAND, age 60, has been President of the Company since February
1994. Prior to that time, he served as President of American & Efird, Inc., a
wholly owned subsidiary of the Company engaged in the manufacture and
distribution of sewing thread. He has been a director of the Company since 1989.
ALAN T. DICKSON, age 64, has been the Chairman of the Board of the Company
since February 1994. Prior to that time, he served as President of the Company.
He has been a director of the Company since 1968 and also serves as a director
of NationsBank Corporation, Lance, Inc., Sonoco Products Company and Bassett
Furniture Industries, Inc.
BEVERLY F. DOLAN, age 68, is the retired Chairman of the Board of Textron,
Inc., a diversified holding company. He also served as President of Textron,
Inc. until January 1990 and Chief Executive Officer until January 1, 1992. Mr.
Dolan has been a director of the Company since 1992 and also serves as a
director of Textron, Inc., First Union Corporation, Florida Power & Light Co.
and Polaris Industries Partners L.P.
RODDEY DOWD, SR., age 63, is the Chairman of the Board of Charlotte Pipe &
Foundry Co., a manufacturing firm. He has been a director of the Company since
1968 and also serves as a director of First Union Corporation.
DIRECTORS WITH TERMS EXPIRING IN 1997
THOMAS M. BELK, age 70, is the President of Belk Stores Services, Inc.,
retail merchants. He has been a director of the Company since 1978 and also
serves as a director of Jefferson-Pilot Corporation.
JAMES E. S. HYNES, age 55, is the Chairman of the Board of Hynes Sales Co.,
Inc., manufacturers' representatives. He has been a director of the Company
since 1983 and also serves as a director of North Carolina Natural Gas Company,
Inc.
E. C. WALL, JR., age 58, is the President of Canal Industries, Inc., a
dealer in forest products. He has been a director of the Company since 1985 and
also serves as a director of Sonoco Products Company, SCANA Corporation and
NationsBank Corporation.
Alan T. Dickson and R. Stuart Dickson are brothers. Thomas W. Dickson,
President of American & Efird, Inc., a wholly owned subsidiary of the Company,
is the son of R. Stuart Dickson and the nephew of Alan T. Dickson. No other
director has a family relationship with any other executive officer, director or
nominee for director of the Company as close as first cousin.
DIRECTORS' FEES AND ATTENDANCE
Each director, other than those receiving payments as a result of
employment by the Company, receives compensation of $10,000 per year ($12,000
per year beginning in fiscal 1996) for his service as a director, plus $1,000
for each Board of Directors or committee meeting attended. In addition, the
Company provides $100,000 of term life insurance coverage for each such
director.
Five meetings of the Board of Directors were held during fiscal 1995. Each
director attended at least 75% of the aggregate of the total number of meetings
of the Board of Directors and the total number of meetings of all committees of
the Board of Directors of which he was a member held during fiscal 1995.
4
<PAGE> 7
COMMITTEES OF THE BOARD
The Company's Board of Directors has the following standing committees: (i)
the Executive Committee, whose members are Messrs. R. Stuart Dickson, Alan T.
Dickson, Copeland, Belk and McColl; (ii) the Audit Committee, whose members are
Messrs. Borden, Dowd and Wall; and (iii) the Compensation and Special Stock
Option Committee (the "Compensation Committee"), whose members are Messrs. Belk,
Dolan and Hynes. Subject to limitations under North Carolina law, the Executive
Committee, which was established by the Board of Directors effective February
1994, may exercise all of the authority of the Board of Directors in the
management of the Company. The Executive Committee did not meet in fiscal 1995.
The Audit Committee recommends independent auditors for the Company and reviews
its financial statements, audit reports, internal financial controls and
internal audit procedures. The Audit Committee met three times during fiscal
1995. The Compensation Committee assesses the Company's overall compensation
programs and philosophies. Among other things, it approves and recommends to the
Board of Directors the compensation and incentive for executive officers, the
incentive for other parent company employees and the compensation for directors.
In addition, the Compensation Committee grants stock options pursuant to the
Company's stock option plans and awards units under the Long Term Key Management
Incentive Program and reports such actions to the Board of Directors. It also
reviews the compensation set for other parent company employees and the
compensation and incentive set for other employees of the Company's
subsidiaries. The Compensation Committee met once during fiscal 1995. See
"Report of the Compensation and Special Stock Option Committee."
The Board of Directors does not have a standing nominating committee or a
committee performing a similar function.
5
<PAGE> 8
BENEFICIAL OWNERSHIP OF COMPANY STOCK
The following table presents information regarding the beneficial ownership
of the Common Stock, within the meaning of applicable securities regulations, of
all current directors and nominees for director of the Company and the executive
officers named in the Summary Compensation Table included elsewhere herein, and
of such directors and nominees and all executive officers of the Company as a
group, all as of October 31, 1995. Except as otherwise indicated, the persons
named in the table have sole voting and investment power over the shares
included in the table.
<TABLE>
<CAPTION>
SHARES OF
COMMON STOCK
BENEFICIALLY PERCENT
NAME OWNED(1) OF CLASS
- --------------------------------------------------------------------- ------------ --------
<S> <C> <C>
Thomas M. Belk....................................................... 1,600 *
Richard N. Brigden................................................... 52,024(2) *
Edwin B. Borden, Jr.................................................. 12,000 *
John W. Copeland..................................................... 97,312(3) *
Alan T. Dickson...................................................... 3,985,442(4) 8.6%
R. Stuart Dickson.................................................... 3,356,728(5) 7.2%
Thomas W. Dickson.................................................... 218,480(6) *
Beverly F. Dolan..................................................... 10,400 *
Roddey Dowd, Sr...................................................... 8,400 *
Edward S. Dunn, Jr................................................... 63,428(7) *
Brian F. Gallagher................................................... 8,000(8) *
James E. S. Hynes.................................................... 40,000 *
Hugh L. McColl, Jr................................................... 2,000 *
E. C. Wall, Jr....................................................... 8,000 *
All directors, nominees for director and executive officers as a
group (14 persons)................................................. 4,909,764(9) 10.6%
</TABLE>
- ---------------
* Less than 1%
(1) The table includes shares allocated under the ESOP to individual accounts
of those named persons and group members who participate in the ESOP, the
voting of which is directed by such named persons or group members, as
appropriate. The table does not include any unallocated shares held by the
ESOP, which are voted by Trust Company Bank in its sole discretion. See
Note 1 to "Principal Shareholders."
(2) The amount shown includes 39,122 shares owned of record and beneficially by
Mr. Brigden, as to which he has sole voting and investment power; and
12,902 shares allocated to his ESOP account, as to which he has sole voting
power, but no investment power except under limited circumstances.
(3) The amount shown includes 37,034 shares owned of record and beneficially by
Mr. Copeland or a corporation of which Mr. Copeland is sole shareholder, as
to which he has sole voting and investment power; 42,278 shares allocated
to his ESOP account, as to which he has sole voting power, but no
6
<PAGE> 9
investment power except under limited circumstances; 1,600 shares owned by
his adult children, as to which he has sole voting and investment power
pursuant to a power of attorney; 400 shares held of record by the Ann F.
Copeland and John W. Copeland Charitable Fund, Inc., as to which he has
sole voting and investment power; and 16,000 shares that may be acquired by
him upon the exercise of stock options that are currently exercisable or
become exercisable within sixty days, as to which he would have sole voting
and investment power upon acquisition.
(4) See Note 2 under "Principal Shareholders."
(5) See Note 3 under "Principal Shareholders."
(6) The amount shown includes 185,760 shares owned of record and beneficially
by Mr. Dickson, as to which he has sole voting and investment power; 12,720
shares allocated to his ESOP account, as to which he has sole voting power,
but no investment power except under limited circumstances; 9,600 shares
that may be acquired by him upon the exercise of stock options that are
currently exercisable or become exercisable within sixty days, as to which
he would have sole voting and investment power upon acquisition; and 10,400
shares of Common Stock held as custodian for his minor children, as to
which he has sole voting and investment power.
(7) The amount shown includes 28,632 shares owned of record and beneficially by
Mr. Dunn, as to which he has sole voting and investment power; and 34,796
shares allocated to his ESOP account, as to which he has sole voting power,
but no investment power except under limited circumstances.
(8) The amount shown represents shares that may be acquired by Mr. Gallagher
upon the exercise of stock options that are currently exercisable or become
exercisable with sixty days, as to which he would have sole voting and
investment power upon acquisition.
(9) The amount shown includes (i) 2,357,778 shares, including 33,600 shares
that may be acquired upon the exercise of stock options that are currently
exercisable or become exercisable within sixty days, as to which directors
and executive officers as a group have, or would have upon acquisition,
sole voting and investment power; (ii) 2,259,800 shares as to which they
have shared voting and investment power; (iii) 264,666 shares allocated to
their respective ESOP accounts, as to which they have sole voting power,
but no investment power except under limited circumstances; and (iv) 27,160
shares beneficially owned by spouses, as to which the directors and
officers disclaim beneficial ownership.
Section 16 of the Exchange Act requires the Company's directors and
executive officers to file reports with the Securities and Exchange Commission
indicating their holdings of and transactions in the Company's equity securities
and to provide copies of such reports to the Company. To the Company's
knowledge, except for Alan T. Dickson and R. Stuart Dickson, each of whom
inadvertently filed his Form 5 late, based solely on a review of such copies or
written representations relating thereto, insiders of the Company complied with
all filing requirements.
7
<PAGE> 10
EXECUTIVE COMPENSATION
COMPENSATION SUMMARY
The following table sets forth a summary of all compensation paid to or
accrued for each named executive officer of the Company for services rendered in
all capacities during the periods indicated:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
------------------------------------
ANNUAL COMPENSATION SECURITIES
---------------------------------------- RESTRICTED UNDERLYING
OTHER STOCK OPTIONS/ LTIP
NAME AND SALARY BONUS ANNUAL AWARD(S) SARS PAYOUTS ALL OTHER
PRINCIPAL POSITION YEAR ($) ($) COMPENSATION($)(1) ($)(2) (#)(3) ($) COMPENSATION($)
- ------------------- ---- -------- -------- ------------------ ---------- ---------- --------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Alan T. Dickson.... 1995 $260,000 $132,340 $ 52,981(8) 0 $19,417(13)
Chairman of the 1994 260,000 101,990 0 0 20,594
Board and 1993 240,000 119,040 0 0 22,662
Director of the
Company(4)
R. Stuart 1995 260,000 132,340 52,981(9) 0 28,228(14)
Dickson.......... 1994 260,000 101,990 0 0 29,409
Chairman of the 1993 240,000 119,040 0 0 31,442
Executive
Committee and
Director of the
Company(4)
John W. Copeland... 1995 288,750 146,974 62,283(10) 0 17,943(15)
President and 1994 270,000 105,598 0 40,000 19,088
Director of the 1993 240,000 106,408 0 0 37,347
Company(4)
Richard N. 1995 246,750 104,622 46,585(11) 0 14,065(16)
Brigden.......... 1994 235,000 76,876 0 0 15,125
Vice President -- 1993 215,000 88,795 0 0 17,365
Finance of the
Company
Thomas W. Dickson.. 1995 189,000 77,290 0 0 11,237(17)
President of 1994 180,000 51,207 0 12,000 8,763
American & Efird, 1993 -- -- 0 -- --
Inc.(5)(6)
Edward S. Dunn, 1995 224,500 110,098 36,270(12) 0 10,122(18)
Jr............... 1994 204,000 80,988 0 0 10,933
President of 1993 189,573 67,962 0 0 12,957
Harris Teeter,
Inc.(5)
Brian F. 1995 123,600 0 0 0 11,740(19)
Gallagher........ 1994 123,600 0 0 20,000 7,704
President of 1993 40,200 0 0 0 0
Jordan Graphics,
Inc.(5)(7)
</TABLE>
- ---------------
(1) During fiscal 1995 the aggregate amount of perquisites and other personal
benefits and other non-cash compensation not reported above for each named
executive officer did not exceed the lesser of $50,000 or 10% of the total
amount reported above as annual salary and bonus for such individual.
(2) Represents the value of shares of restricted stock allocated during fiscal
1995 pursuant to the Long Term Key Management Incentive Program (see "LONG
TERM KEY MANAGEMENT INCENTIVE PROGRAM" included elsewhere herein). Such
shares vest upon the earlier to occur of (i) 20% per year over five
8
<PAGE> 11
years (beginning with fiscal year end 1995), but not beginning before the
participant is 55 years old, or (ii) termination of employment due to death
or disability. Such persons shall receive dividends, and may vote, with
respect to all shares of restricted stock held for the accounts of such
persons.
(3) Numbers have been adjusted to reflect the two-for-one stock split effective
October 1, 1995.
(4) Prior to February 1994, Alan T. Dickson served as President of the Company,
R. Stuart Dickson served as Chairman of the Board of the Company, and John
W. Copeland served as President of American & Efird, Inc., a wholly owned
subsidiary of the Company.
(5) American & Efird, Inc., Harris Teeter, Inc. and Jordan Graphics, Inc. are
wholly owned subsidiaries of the Company.
(6) Mr. Dickson first became an executive officer of the Company upon election
as President of American & Efird, Inc. effective February 1994.
(7) Mr. Gallagher first became an executive officer of the Company upon being
hired to serve as President of Jordan Graphics, Inc. in 1993.
(8) At fiscal year end, following distribution of vested shares, 4,346 shares
of restricted stock valued at $58,671 were held for Mr. Dickson's account.
(9) At fiscal year end, following distribution of vested shares, 4,346 shares
of restricted stock valued at $58,671 were held for Mr. Dickson's account.
(10) At fiscal year end, following distribution of vested shares, 5,110 shares
of restricted stock valued at $68,985 were held for Mr. Copeland's account.
(11) At fiscal year end, following distribution of vested shares, 3,822 shares
of restricted stock valued at $51,597 were held for Mr. Brigden's account.
(12) At fiscal year end, 3,720 shares of restricted stock valued at $50,220 were
held for Mr. Dunn's account.
(13) Includes the value of certain premiums paid by the Company in fiscal 1995
under its split-dollar life insurance program in the amount of $13,732, and
contributions by the Company in fiscal 1995 to certain defined contribution
plans in the amount of $5,685.
(14) Includes the value of certain premiums paid by the Company in fiscal 1995
under its split-dollar life insurance program in the amount of $22,543, and
contributions by the Company in fiscal 1995 to certain defined contribution
plans in the amount of $5,685.
(15) Includes the value of certain premiums paid by the Company in fiscal 1995
under its split-dollar life insurance program in the amount of $11,258, and
contributions by the Company in fiscal 1995 to certain defined contribution
plans in the amount of $6,685.
(16) Includes the value of certain premiums paid by the Company in fiscal 1995
under its split-dollar life insurance program in the amount of $7,380, and
contributions by the Company in fiscal 1995 to certain defined contribution
plans in the amount of $6,685.
(17) Includes the value of certain premiums paid by the Company in fiscal 1995
under its split-dollar life insurance program in the amount of $2,903, and
contributions by the Company in fiscal 1995 to certain defined contribution
plans in the amount of $8,334.
(18) Includes the value of certain premiums paid by the Company in fiscal 1995
under its split-dollar life insurance program in the amount of $3,437, and
contributions by the Company in fiscal 1995 to certain defined contribution
plans in the amount of $6,685.
9
<PAGE> 12
(19) Includes the value of certain premiums paid by the Company in fiscal 1995
under its split-dollar life insurance program in the amount of $6,438, and
contributions by the Company in fiscal 1995 to certain defined contribution
plans in the amount of $5,302.
LONG TERM KEY MANAGEMENT INCENTIVE PROGRAM
The Company has maintained the Long Term Key Management Incentive Program
(the "Incentive Program") since 1989. The Incentive Program is designed to
provide incentives for the Company's top executives to achieve superior
performance in connection with operating the Company and its subsidiaries and is
administered by the Compensation Committee. Pursuant to the Incentive Program,
from time to time the Compensation Committee may establish five-year periods
(each, an "Incentive Period") in which one or more of the executives may
participate, as determined by the Compensation Committee. Upon completion of
each of the five years in an Incentive Period, the Company may make a dollar
contribution to a pool (the "Incentive Pool") established with respect to such
Incentive Period. The amount of the contribution is based upon that year's
return on beginning shareholders' equity. No contributions may be made, however,
if the Company fails to achieve a minimum return on shareholders' equity for
such year. This minimum return on shareholders' equity is established by the
Compensation Committee at the beginning of each Incentive Period and serves as
the minimum required return for each of the five years in the Incentive Period.
Contributions to an Incentive Pool are held in a trust and used to purchase
shares of Common Stock at market price. Throughout the Incentive Period,
dividends paid with respect to such shares of Common Stock are invested in
additional shares of Common Stock to be held in the Incentive Pool. The shares
of Common Stock remain in the Incentive Pool for the duration of the Incentive
Period, at which time they are allocated as hereinafter described.
Upon completion of each of the five years in an Incentive Period, units may
be awarded by the Compensation Committee to the executives participating in such
Incentive Period based primarily upon the relative success of each participant
in achieving certain financial objectives in each such year. The maximum number
of units a participant may receive in a year is one unit for each $10,000 of the
participant's annual cash compensation (salary plus incentive compensation). The
grant of units is based on subjective and objective criteria, as described in
the Report of the Compensation and Special Stock Option Committee. In the event
that the maximum amount of units available to be awarded to a participant is not
awarded in one year, in the discretion of the Compensation Committee, the units
may be awarded in a subsequent year during the Incentive Period. In addition,
also in the discretion of the Compensation Committee, units awarded in a
previous year during the Incentive Period may be reduced. A participant whose
employment terminates during an Incentive Period will forfeit any units
previously awarded, in the discretion of the Compensation Committee. Units have
no particular dollar or share value to executives during the Incentive Period.
The value of such units cannot be determined until the end of such Incentive
Period, at which time the value will be derived from the number of shares of
Common Stock, if any, held in the Incentive Pool, as well as the relative number
of units held by other executives participating in the Incentive Period.
During an Incentive Period, participants have no rights with respect to any
of the shares held in the related Incentive Pool. At the end of the Incentive
Period, shares in the Incentive Pool, if any, will be allocated to a separate
account for each participant, based on the proportionate number of units held by
each participant at the end of such Incentive Period. In the event of a change
in control of the Company during the Incentive Period, shares will be allocated
at that time, based on the units previously awarded. Shares allocated to the
accounts of participants will vest and generally will be distributed at the
earlier to occur of (i) 20% per year over five years, but not beginning before
the participant is 55 years old or (ii) termination of employment
10
<PAGE> 13
due to death or disability. If a participant retires during the vesting period,
the value of any unvested shares will be paid in cash. A participant whose
employment terminates for any reason other than retirement, disability or death
prior to receiving full distribution of shares will forfeit any remaining shares
in the discretion of the Compensation Committee. Once the shares of Common Stock
are allocated to a participant's account, the participant may vote and receive
dividends with respect to such shares. Such participant will not, however, have
investment control with respect to such shares until the shares have vested and
been distributed to the participant.
PENSION PLANS
The Company provides certain retirement benefits for each of the executives
included in the Summary Compensation Table pursuant to the Ruddick Supplemental
Executive Retirement Plan (the "SERP"), the Ruddick Corporation Employees'
Pension Plan (the "Pension Plan") and Social Security. The following table shows
the estimated annual benefits generally payable at normal retirement to an
executive who participates in the SERP and the Pension Plan, in specified
average compensation and years of service classifications.
PENSION PLAN TABLE(1)
<TABLE>
<CAPTION>
ANNUAL BENEFIT UPON RETIREMENT
WITH YEARS OF SERVICE INDICATED(2)
--------------------------------------------------------------------------
FINAL AVERAGE EARNINGS 5 YEARS 10 YEARS 15 YEARS 20 YEARS 25 YEARS 30 YEARS 35 YEARS
- ------------------------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
$125,000................. $ 17,188 $ 34,375 $ 51,563 $ 68,750 $ 68,750 $ 68,750 $ 68,750
150,000................. 20,625 41,250 61,875 82,500 82,500 82,500 82,500
175,000................. 24,063 48,125 72,188 96,250 96,250 96,250 96,250
200,000................. 27,500 55,000 82,500 110,000 110,000 110,000 110,000
225,000................. 30,938 61,875 92,813 123,750 123,750 123,750 123,750
250,000................. 34,375 68,750 103,125 137,500 137,500 137,500 137,500
300,000................. 41,250 82,500 123,750 165,000 165,000 165,000 165,000
400,000................. 55,000 110,000 165,000 220,000 220,000 220,000 220,000
450,000................. 61,875 123,750 185,625 247,500 247,500 247,500 247,500
500,000................. 68,750 137,500 206,250 275,000 275,000 275,000 275,000
</TABLE>
- ---------------
(1) The table sets forth the combined benefits payable under the SERP, the
Pension Plan and Social Security.
(2) The retirement benefits payable to Messrs. R. Stuart Dickson and Alan T.
Dickson would be approximately 9% larger than the amounts shown in the
table.
"Final average earnings" is the average of the participant's highest annual
compensation in any three of the participant's last ten years of employment by
the Company or a participating subsidiary. The annual compensation used to
determine the "final average earnings" of a participant consists of the amounts
shown in the Salary and Bonus columns of the Summary Compensation Table. The
table above describes annual benefits payable in the form of a joint and 75%
survivor annuity beginning at normal retirement. For purposes of this table,
"normal retirement" means retirement at age 60. A participant who retires prior
to normal retirement and after attaining age 55 with 10 years of service will be
entitled to reduced benefits, if payment of such benefits commences prior to age
60.
Final average earnings for purposes of computing benefits, and age and
estimated credited years of service as of October 1, 1995, for each of the
executive officers included in the Summary Compensation Table who
11
<PAGE> 14
currently participates in the SERP were as follows: $371,123, age 64 and 42
years for Alan T. Dickson; $371,123, age 66 and 43 years for R. Stuart Dickson;
$385,910, age 60 and 17 years for John W. Copeland; $322,348, age 56 and 12
years for Richard N. Brigden; $238,001, age 40 and 15 years for Thomas W.
Dickson; and $292,374, age 52 and 21 years for Edward S. Dunn, Jr.
Brian F. Gallagher has been designated to become a participant in the SERP
in April 1998, upon completion of five years of service. Mr. Gallagher currently
participates in the Pension Plan. However, based on his designated date for
participation in the SERP, he will not be vested in any benefits under the
Pension Plan before he begins participation in the SERP. Final average earnings,
age and estimated credited years of service as of October 1, 1995 for Mr.
Gallagher were $123,600, age 48 and two years.
STOCK OPTION PLANS
No options or stock appreciation rights ("SARs") were granted to executive
officers during fiscal year 1995. The following table sets forth a summary of
certain information with respect to the exercise of stock options during fiscal
year 1995 by the executive officers included in the Summary Compensation Table
and the value of such executive's unexercised stock options and SARs, if any,
held at fiscal year end. All numbers have been adjusted to reflect the
two-for-one stock split effective October 1, 1995.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END
OPTION/SAR VALUES
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED IN-
UNEXERCISED THE-MONEY
SHARES OPTIONS/SARS AT OPTIONS/SARS AT
ACQUIRED ON FY-END (#) FY-END ($)(1)
EXERCISE VALUE REALIZED (EXERCISABLE/ (EXERCISABLE/
NAME (#) ($) UNEXERCISABLE) UNEXERCISABLE)
- ---------------------------------------- ----------- -------------- --------------- ---------------
<S> <C> <C> <C> <C>
Alan T. Dickson......................... 40,000 $239,250 0/0 $ 0/0
R. Stuart Dickson....................... 40,000 221,000 0/0 0/0
John W. Copeland........................ 24,000 102,500 16,000/24,000 34,500/51,750
Richard N. Brigden...................... 25,692 201,183 0/0 0/0
Thomas W. Dickson....................... 15,000 117,407 9,600/10,400 31,206/29,429
Edward S. Dunn, Jr...................... 24,912 161,206 0/0 0/0
Brian F. Gallagher...................... -- -- 8,000/12,000 17,240/25,860
</TABLE>
- ---------------
(1) Based on the closing price of the Company's Common Stock on the New York
Stock Exchange on September 29, 1995.
12
<PAGE> 15
REPORT OF THE COMPENSATION AND
SPECIAL STOCK OPTION COMMITTEE
The Compensation and Special Stock Option Committee of the Board of
Directors is responsible for setting the remuneration levels for executives of
the Company and for overseeing the Company's various executive compensation
plans and the overall management compensation program. Periodically, the
Compensation Committee obtains independent and impartial advice from external
compensation consulting firms in executing its responsibilities. The
Compensation Committee, composed of three outside directors listed below, met
one time during fiscal 1995.
GENERAL EXECUTIVE COMPENSATION PHILOSOPHY
A primary objective of the Company's executive compensation program is to
enhance the shareholder value in the Company. To help achieve this objective,
the Company's executive compensation program is designed both to attract and
retain the most qualified executives by creating competitive compensation
packages and to motivate the Company's executives to produce strong financial
performance by tying corporate and individual performance to compensation
levels. The Company's executive compensation package consists generally of
annual base salary and incentive compensation, as well as long term incentive
compensation.
Annual Compensation. The Company's annual compensation for its executives
consists of base salary and incentive compensation. As a starting point for
determining the total annual compensation levels for executives, the
Compensation Committee considers the annual compensation packages of companies
that the Company considers to be its competitors. These competitor companies
typically consist of (i) companies that operate in the specific industries in
which the Company's subsidiaries operate, (ii) regional companies that are
comparable in size to the Company, and (iii) other companies (including
companies for which the Company's directors serve as directors) with which the
Company believes it competes for its top executives. Such competitor companies
include some, but not all, of the companies in the Standard & Poor's ("S&P")
Retail Stores -- Food Chains Index and the S&P Textile -- Apparel Manufacturer
Index used in preparing the graph set forth on page 16. In addition, these
competitor companies may include companies that are not included in any of the
Indices represented in such graph.
The total annual compensation levels of the respective executives are also
designed to reflect the varying duties and responsibilities of each executive's
position with the Company or a subsidiary, as appropriate, with consideration
given to the relative size and complexity of each business unit, as well as the
unit's relative contribution to the consolidated financial condition and results
of operation of the Company. As a general rule, the total annual compensation of
executives employed by the holding company is somewhat higher than the salaries
of the other executives, primarily due to the higher responsibilities of the
holding company executives for the Company's total performance.
Base salary typically is determined by the Compensation Committee within
base salary ranges determined as described above. Annual incentive compensation
is provided through a bonus plan that the Company maintains for all salaried
personnel. The bonus plan directly links incentive pay to achievement of
predetermined, objective performance goals. For an executive employed directly
by the holding company, incentive pay is based on return on beginning
shareholders' equity. For an executive employed by an operating subsidiary,
incentive pay is based on pre-tax earnings, as adjusted for that subsidiary, as
a percentage of beginning capital employed. If the Company, or a subsidiary, as
applicable, achieves the predetermined minimum goals, executives are paid a
predetermined percentage of base compensation as incentive. The
13
<PAGE> 16
percentage of base compensation payable as incentive compensation increases
proportionally until a maximum performance goal, also predetermined, is achieved
with respect to the applicable measure of performance.
Generally, the total annual compensation paid to the Company's executives
is equal to or lower than the median of the range of total annual compensation
provided by the competitor companies, for both the Chief Executive Officer and
the remaining executive officers.
Long Term Incentive Compensation. The Company provides long term incentive
compensation to its executives through the Incentive Program and through the
grant of options pursuant to its various stock option plans. Each of these
programs is designed to reward executives with equity ownership in the Company
or, in some cases, the comparable value of shares of Common Stock. The
Compensation Committee believes that equity-based compensation provides
incentive for executives to enhance long term financial performance of, and
therefore shareholder value in, the Company.
Incentive Program. The Incentive Program is designed to motivate
executives to achieve both superior personal performance and enhanced corporate
performance. The ultimate value to participating executives is directly based on
the number of shares of Common Stock held in an Incentive Pool at the end of an
Incentive Period. As previously described, contributions to an Incentive Pool
are based on annual return on beginning shareholders' equity. If a minimum
return is not achieved in a given year, no contributions are made by the Company
to the Incentive Pool for the purchase of Common Stock. During the past fiscal
year, the Company did not achieve the minimum return on beginning shareholders'
equity, and no contributions were made to the Incentive Pools established under
either of the two Incentive Periods in effect for such year.
The grant of units to a participating executive in any given year in an
Incentive Period generally is based on subjective, individual performance
criteria such as management development and personnel training, as well as
progress toward a mutual set of goals relating to quality, service and customer
satisfaction and other subjective factors. The Compensation Committee also
considers specific quantifiable objectives for each participant (based on return
on beginning shareholders' equity for holding company executives and on pre-tax
income, adjusted for an applicable subsidiary, to capital employed for
subsidiary executives). Units may be awarded, in the discretion of the
Compensation Committee, to a participant who achieves satisfactory subjective
criteria, even if specific quantifiable goals are not satisfied, and vice versa.
Units granted to executive officers with respect to fiscal 1995 performance,
expressed as a percentage of maximum potential units for a participant, ranged
from 70% to 90%.
The first Incentive Period established under the Incentive Program
terminated as of the end of fiscal year 1994. Following the award of units
during fiscal 1995 to participating executives with respect to fiscal 1994
performance, shares of Common Stock held in the Incentive Pool were allocated to
the participating executives based on their proportionate share of units.
Stock Options. Options comprise the final component of core compensation
of executives. The Compensation Committee administers the Company's various
stock option plans, including the determination of the individuals to whom
options are granted, the terms on which such options are granted and the number
of shares subject to such options. In general, criteria to determine which key
employees are eligible to participate in the stock option plans include the
duties of the respective employees, their present and potential contributions to
the success of the Company or its subsidiaries and the anticipated number of
years of effective service remaining. The Compensation Committee typically
considers such criteria as length of employment with the Company or its
subsidiaries, new employment and promotions, as well as the number of options
previously granted to employees, when it determines new option grants. No
options were granted to executive officers of the Company during fiscal year
1995.
14
<PAGE> 17
Other Compensation. In addition to the above forms of compensation, the
Company also maintains a split dollar life insurance program for its executive
officers and certain other key employees of the Company or its subsidiaries. In
addition, the Company maintains the SERP, in which executives are entitled to
participate in the discretion of its administrative committee, and the Pension
Plan, the ESOP, the Ruddick Savings Plan and the Ruddick Deferred Compensation
Plan, in which executives are entitled to participate upon satisfaction of the
eligibility requirements set forth in the respective plans. In addition, Mr.
Thomas W. Dickson participates in the American & Efird, Inc. Employees' Profit
Sharing Plan.
COMPENSATION FOR JOHN W. COPELAND
The general philosophy and policies of the Compensation Committee described
above are equally applicable to the compensation recommendations made with
respect to Mr. John W. Copeland, Chief Executive Officer of the Company.
The overall level of annual compensation in fiscal 1995 for Mr. Copeland
generally was determined based on the process described above in "Annual
Compensation." The increase in the base salary paid to Mr. Copeland in fiscal
1995 reflects primarily a cost of living adjustment.
Fiscal 1995 annual incentive compensation under the bonus plan for Mr.
Copeland was determined based on return on beginning shareholders' equity.
Pursuant to this formula, if a predetermined minimum return is achieved in a
given year, Mr. Copeland is entitled to incentive compensation equal to 30% of
his base compensation. The percentage of base compensation payable as incentive
compensation increases proportionally until a predetermined maximum return is
achieved, where a maximum of 120% of his base compensation will be paid as
incentive compensation. Mr. Copeland's annual incentive compensation for fiscal
1995 reflects the improved earnings of the Company during fiscal 1995.
Mr. Copeland participated in the Incentive Period established under the
Incentive Program for fiscal years 1990-1994. During fiscal 1995, based on
fiscal 1994 performance, the Compensation Committee granted 90% of the units
available to be granted to Mr. Copeland. The decision to grant Mr. Copeland
units with respect to fiscal 1994 performance was based primarily on the
Committee's evaluation of his levels of achievement of personal performance
objectives and earnings performance during fiscal 1994. During fiscal 1995, as
reported in the Summary Compensation Table, Mr. Copeland was allocated shares of
restricted stock based on his proportionate interest in the pool of Common Stock
established for such Incentive Period.
Mr. Copeland also began participation in fiscal 1995 in the Incentive
Period established under the Incentive Program for fiscal years 1995-1999. Based
on fiscal 1995 performance, the Compensation Committee granted 70% of the units
available to be granted to Mr. Copeland. This grant was based primarily on the
Committee's evaluation of his levels of achievement of personal performance
objectives and corporate operating results during fiscal 1995.
SUBMITTED BY THE COMPENSATION AND STOCK OPTION COMMITTEE
Thomas M. Belk Beverly F. Dolan James E.S. Hynes
15
<PAGE> 18
COMPARISON OF TOTAL CUMULATIVE SHAREHOLDER RETURN
FOR FIVE-YEAR PERIOD ENDING SEPTEMBER 30, 1995
The following graph presents a comparison of the yearly percentage change
in the Company's cumulative total shareholders' return on the Company's Common
Stock with (i) Standard & Poor's 500 Index, (ii) Standard & Poor's Midcap 400
Index, (iii) Standard & Poor's Retail Stores -- Food Chains Index and (iv)
Standard & Poor's Textile -- Apparel Manufacturer Index for the fiscal years
ended 1991 to 1995, inclusive.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*
AMONG RUDDICK CORPORATION AND CERTAIN INDICES**
<TABLE>
<CAPTION>
MEASUREMENT PERIOD S&P MIDCAP S&P RETL STRS
(FISCAL YEAR COVERED) RUDDICK CORP S&P 500 400 -FOOD CHNS S&P TEXTILES
<S> <C> <C> <C> <C> <C>
9/90 100 100 100 100 100
9/91 146 131 150 115 178
9/92 162 146 169 131 183
9/93 197 165 210 145 141
9/94 186 171 213 159 155
9/95 269 221 268 195 151
</TABLE>
* $100 Invested on 09/30/90 in stock or index -- including reinvestment of
dividends. Fiscal year ending September 30.
** The Company utilized two indices, rather than a single index, for its peer
group comparison: Standard & Poor's Retail Stores -- Food Chains Index and
Standard & Poor's Textile -- Apparel Manufacturer Index. The Company believes
that the separate presentation of these indices more accurately corresponds
to the Company's primary lines of business.
16
<PAGE> 19
PROPOSED 1995 COMPREHENSIVE STOCK OPTION PLAN
As of November 30, 1995, there were 330,200 shares of Common Stock
available for future grants of options under the Company's three existing
incentive stock option plans. The Compensation Committee determined that it
would be desirable to have an additional 600,000 shares of Common Stock
available for future grants to key employees of the Company and its
subsidiaries, as well as for grants to non-employee directors of the Company.
Therefore, upon recommendation of the Compensation Committee, the Board of
Directors has adopted the Ruddick Corporation 1995 Comprehensive Stock Option
Plan (the "Plan"), which is subject to the approval of the shareholders of the
Company. The text of the Plan is set forth in its entirety as Appendix A, and
the following summary is qualified in its entirety by reference thereto. The
proposal for approval of the Plan will require the affirmative vote of the
holders of a majority of the Common Stock present in person or by proxy and
entitled to vote at the Annual Meeting. Accordingly, abstentions and broker non-
votes with respect to this matter will count for purposes of establishing a
quorum at the Annual Meeting. Abstentions also will have the effect of a
negative vote with respect to this matter, but broker non-votes will not. THE
BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR THE ADOPTION OF THE
PLAN.
The Company has reserved 600,000 shares of its Common Stock for issuance
under the Plan, subject to adjustment to protect against dilution in the event
of changes in capitalization of the Company. Options to be granted under the
Plan may be incentive stock options for purposes of Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code") or nonstatutory stock options. On
November 30, 1995, the closing price per share of the Common Stock as reported
on the New York Stock Exchange was $10.75.
ADMINISTRATION
The Plan will be administered by a committee (the "Committee") to be
appointed by the Board of Directors, consisting of at least two directors who
are "disinterested persons" for purposes of Rule 16b-3 under the Exchange Act
("Rule 16b-3"). It is anticipated that the Plan will be administered by the
Compensation Committee and will satisfy the requirements of Rule 16b-3.
Generally the Committee will have complete authority to determine the key
employees of the Company and its subsidiaries to whom options shall be granted,
as well as the terms of such options, all as hereinafter described. The
Committee also shall have discretion to interpret the Plan and to make other
determinations necessary or advisable for administration of the Plan. The
Committee, however, shall have no discretion with respect to the grant of
options to directors, as hereinafter described.
AUTOMATIC GRANTS TO DIRECTORS
Pursuant to the Plan, upon its adoption by the Board of Directors, each
director of the Company as of such date who was not also an employee of the
Company or a subsidiary automatically was granted a nonstatutory stock option to
purchase 10,000 shares of Common Stock. Options for the purchase of an aggregate
of 70,000 shares were granted pursuant to this provision (10,000 granted to each
of Messrs. Borden and McColl, nominees for director, and Messrs. Belk, Dolan,
Dowd, Hynes and Wall, continuing directors). The exercise price of such options
is $11.94 per share, representing the fair market value (as defined in the Plan)
of the Common Stock on the date of grant. Such options are immediately vested in
full. They generally may not, however, be exercised prior to six months
following approval of the Plan by the shareholders and may not be exercised more
than ten years following date of grant. The Plan also provides that any person
who was not a director of the Company as of the date the Board of Directors
adopted the 1995 Plan and who within ten years thereafter is elected as a
non-employee member of the Board of Directors shall upon such election
automatically receive a nonstatutory stock option to purchase 10,000 shares of
Common Stock at an exercise
17
<PAGE> 20
price per share equal to the fair market value of the Common Stock on the date
of grant. Such options shall be immediately vested and generally will be
exercisable beginning six months, but not more than ten years, following date of
grant. In the event a director ceases to be a director of the Company by reason
of death or disability, generally his option may be exercised for a period of
one year following such death or disability. In the event a director ceases to
be a director for any other reason, his option may be exercised for a period of
three months following such termination as a director.
DISCRETIONARY GRANTS TO KEY EMPLOYEES
Key employees of the Company and its subsidiaries (including officers and
directors who are employees) who are deemed by the Committee to have significant
responsibility for the growth and financial success of the Company or a
subsidiary will be eligible to receive options under the Plan. There is no
maximum number of key employees eligible to receive options or other benefits.
It is currently estimated, however, that the eligible group will comprise
approximately 425 persons, with appropriate adjustments for any significant
change in size or operations of the Company in the future. No options have yet
been granted to any executive officer of the Company or any other employee of
the Company or its subsidiaries.
The Committee may, in its discretion, grant either incentive options or
nonstatutory options to key employees. To comply with certain federal tax
restrictions, however, no employee may be granted an incentive option if taking
into account such option the aggregate fair market value of the stock with
respect to which incentive options are exercisable for the first time by such
employee during any calendar year, under this and all other incentive stock
option plans of the Company, would exceed $100,000.
Pursuant to the Plan, the Committee has discretion to determine the key
employees to whom options will be granted, the numbers of shares subject to such
options, the exercise prices of such options, the vesting schedules with respect
to such options and the periods during which they may be exercised, and vesting
acceleration or termination provisions, and such terms may differ between
optionees. The exercise price of incentive options, however, must be at least
100% of the fair market value of the Common Stock at the time the incentive
option is granted. Furthermore, in the case of incentive options, special
restrictions concerning the option price and the period during which the option
may be exercised will be applicable with respect to any individual who, at the
time the option is granted, owns more than 10% of the total combined voting
power of all classes of stock of the Company. Finally, no option may be
exercised within six months of, or after ten years from, the date it is granted.
If an employee optionee ceases to be an employee by reason of death or
disability (determined as set forth in the Plan), all of such optionee's
options, to the extent not expired or already exercised, will become fully
vested and exercisable, and such options generally may be exercised within one
year following termination of employment but not later than ten years from the
date of grant. If an employee optionee ceases to be an employee by reason of
retirement with the consent of the Company, all of such optionee's options, to
the extent not expired or already exercised, will become fully vested and
exercisable, and such options generally may be exercised within three months
following termination of employment but not later than ten years from the date
of grant. If an employee optionee ceases to be an employee by reason of
termination without cause, his or her outstanding options generally may be
exercised, to the extent such options are vested as of the date of such
termination, within three months following such termination of employment but
not later than ten years from the date of grant. If an employee optionee's
employment ceases for any other reason, all of his or her outstanding options
shall terminate immediately. The Committee generally has the discretion to
establish different terms and conditions pertaining to the effect of termination
of employment.
18
<PAGE> 21
MANNER OF EXERCISE OF OPTIONS
The price due upon exercise of an option by a director or a key employee
may be paid in cash or shares of the Company's Common Stock valued at their then
current fair market value, or a combination of both. Shares delivered in payment
of such price may be shares acquired by prior exercises of options or otherwise.
An optionee may exercise his or her option as to only a part of the shares
covered thereby and then, in an essentially simultaneous transaction, use the
shares so acquired in payment of the exercise price for additional option
shares.
If at any time the Company in its sole discretion determines that
satisfaction of applicable withholding tax or other withholding liabilities is
necessary or desirable in connection with the exercise of a nonstatutory option,
the exercise of such nonstatutory option shall be subject to the payment by such
optionee of the amount necessary to satisfy the Company's withholding
obligation.
MISCELLANEOUS
Options granted under the Plan will be nontransferable other than at death
or pursuant to a qualified domestic relations order and generally will be
exercisable during the optionee's lifetime only by such optionee.
The Plan provides that upon certain mergers or other reorganizations to
which the Company or any subsidiary is a party that involves an exchange or
conversion or other adjustment of the Common Stock, each optionee shall be
entitled upon the exercise of his or her options to receive the number and class
of securities or other property to which such optionee would have been entitled
in the merger or reorganization if such optionee had exercised such option prior
to such merger or reorganization.
The Plan also provides that, upon the occurrence of certain events relating
to a change in control of the Company, outstanding options will become
immediately exercisable in full (subject to any appropriate adjustments in the
number of shares subject to the option and the option price), regardless of
their terms. These events include generally (i) the adoption of a plan of merger
or consolidation of the Company with any other corporation as a result of which
the holders of the voting capital stock of the Company 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 the Company of an
agreement providing for the sale or transfer (other than as security for
obligations of the Company) of substantially all the assets of the Company, or
(iii) in the absence of a prior expression of approval by the Board of Directors
of the Company, the acquisition of more than 20% of the Company's voting capital
stock by any person within the meaning of Section 13(d)(3) of the Act other than
persons who, at the date of adoption of the Plan, owned more than seven percent
of such stock. Such options shall remain exercisable for the remaining term of
such option.
Furthermore, upon the dissolution or liquidation of the Company, all
options granted under the Plan shall terminate. Upon the adoption, however, of a
plan of such dissolution or liquidation, all outstanding options shall become
immediately exercisable in full, regardless of their terms.
The Plan is subject to suspension, termination, modification or amendment
at any time by the Board of Directors without shareholder approval, as deemed in
the best interests of the Company, except 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. Furthermore, to the
extent necessary to comply with Rule 16b-3 or Section 422, shareholder approval
of any Plan amendment
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shall be obtained. Finally, the Committee may amend or modify any option, or
cancel or annul any grant, except that no such action shall adversely affect
outstanding options without the optionee's consent.
No options may be granted under the Plan after November 15, 2005, and,
unless earlier terminated, the Plan shall terminate as of such date.
FEDERAL INCOME TAX CONSEQUENCES
The following is a brief description of the Federal income tax consequences
to the optionees and the Company of the issuance and exercise of options under
the Plan.
Incentive Stock Options. In general, no income will result for Federal
income tax purposes upon either the granting or the exercise of any incentive
option issued under the Plan. If certain holding period requirements (at least
two years from the date of grant of the option and at least one year from
transfer of the shares) are satisfied prior to a disposition of stock acquired
upon exercise of an incentive option, the excess of the sales price over the
option price generally will be recognized by the optionee as a capital gain, and
the Company will not be allowed a business expense deduction.
If the holding period requirements with respect to incentive options are
not met, the optionee generally will recognize, at the time of the disposition
of the stock, ordinary income in an amount equal to the difference between the
option price of such stock and the lower of the fair market value of the stock
on the date of exercise and the amount realized on the sale or exchange. The
difference between the option price of such stock and the fair market value of
the stock on the date of exercise is a tax preference item for purposes of
calculating the alternative minimum tax on an optionee's federal income tax
return. If the amount realized on the sale or exchange exceeds the fair market
value of the stock on the date of exercise, then such excess generally will be
recognized as a capital gain.
In the case of a disposition prior to satisfaction of the holding period
requirements which results in the recognition of ordinary income by the
optionee, the Company generally will be entitled to a deduction in the amount of
such ordinary income in the year of the disposition.
If an optionee delivers shares of the Company's Common Stock in payment of
the option price, the optionee generally will be treated as having made a
like-kind exchange of such shares for an equal number of the shares so
purchased, and no gain or loss will be recognized with respect to the shares
surrendered to the Company in payment of said option price. In such a case, the
optionee will have a tax basis in a number of shares received pursuant to the
exercise of the option equal to the number of shares of Common Stock used to
exercise the option and equal to such optionee's tax basis in the shares of
Common Stock submitted in payment of the option price. The remaining shares of
Common Stock acquired pursuant to the exercise of the option will have a tax
basis equal to the gain, if any, recognized on the exercise of the option and
any other consideration paid for such shares on the exercise of the option.
Notwithstanding the foregoing, if an optionee delivers any stock acquired
through the exercise of a stock option in payment of all or a portion of the
option price, and the holding period requirements described above have not been
satisfied with respect to the shares of stock so delivered, the use of such
stock to pay a portion of the option price will be treated as a disqualifying
disposition, and the optionee generally will recognize income.
Nonstatutory Stock Options. The grant of nonstatutory options under the
Plan will not result in any income being taxed to the optionee at the time of
the grant or in any tax deduction for the Company at such time. At the time a
nonstatutory option is exercised, the optionee will be treated as having
received ordinary income equal to the excess of the fair market value of the
shares of Common Stock acquired as of the date of
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<PAGE> 23
exercise over the price paid for such stock. At that time, the Company will be
allowed a deduction for federal income tax purposes equal to the amount of
ordinary income attributable to the optionee upon exercise. The optionee's
holding period for the shares of Common Stock acquired will commence on the date
of exercise, and the tax basis of the shares will be the greater of their fair
market value at the time of exercise or the exercise price.
SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS
It is the practice of the Board of Directors to select independent public
accountants for the Company for the current fiscal year at the annual meeting of
the Board of Directors, which normally follows the Annual Meeting of
Shareholders. A representative of Arthur Andersen LLP, the Company's principal
accountants for the fiscal year ended October 1, 1995, is expected to attend the
Annual Meeting of Shareholders and will have an opportunity to make a statement,
if he wishes to do so, and to respond to questions from shareholders.
SHAREHOLDER PROPOSALS
In the event any shareholder wishes to present a proposal to the
shareholders of the Company at the 1997 Annual Meeting of Shareholders, such
proposal must be received by the Company for inclusion in the Proxy Statement
and form of proxy relating to such Annual Meeting on or before August 22, 1996.
ANNUAL REPORT
The Annual Report of the Company for the year ended October 1, 1995,
including financial statements, accompanies this Proxy Statement.
OTHER MATTERS
The Board of Directors knows of no other business that will be presented
for consideration at the Annual Meeting. However, if other matters are properly
presented at the Annual Meeting, it is the intention of the proxy holders named
in the accompanying form of proxy to vote the proxies in accordance with their
best judgment.
By Order of the Board of Directors
DONALD B. WILLIFORD
Secretary
December 20, 1995
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APPENDIX A
RUDDICK CORPORATION
1995 COMPREHENSIVE STOCK OPTION PLAN
Ruddick Corporation, a North Carolina corporation (the "Corporation"),
hereby establishes the following Comprehensive Stock Option Plan for the benefit
of employees of the Corporation and its Subsidiaries and non-employee members of
the Board of Directors of the Corporation:
1. Definitions:
(a) "Act" means the Securities Exchange Act of 1934, as amended.
(b) "Board of Directors" means the Board of Directors of the
Corporation.
(c) "Code" means the Internal Revenue Code of 1986, as amended.
(d) "Committee" means the Stock Option Committee appointed by the
Board of Directors of the Corporation to administer the Plan.
(e) "Common Stock" means the common stock of the Corporation to be
issued pursuant to the Plan.
(f) "Corporation" means Ruddick Corporation.
(g) "Director" means a member of the Board of Directors who is not a
full-time employee of the Corporation or any of its Subsidiaries.
(h) "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.
(i) "Effective Date" means November 16, 1995.
(j) "Fair Market Value" means, as of a given date and for so long as
shares of the Common Stock are listed on a national securities exchange or
reported on The NASDAQ Stock Market as a National Market security, the mean
between the high and low sales prices for the Common Stock on such date,
or, if no such shares were sold on such date, the most recent date on which
shares of such Common Stock were sold, as reported in The Wall Street
Journal. If the Common Stock is not listed on a national securities
exchange or reported on The NASDAQ Stock Market as a National Market
security, 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 NASDAQ Stock Market. If the Common Stock is not listed on a national
securities exchange or reported on The NASDAQ Stock Market as a National
Market security, or the over-the-counter market, Fair Market Value shall be
the fair value thereof determined in good faith by the Board of Directors.
(k) "Grant Date" means (i) for purposes of Options granted to Key
Employees under Section 6, the later of (A) the date of the Committee's
authorization of such grant, (B) the date of shareholder approval of the
Plan, or (C) such later date as may be determined by the Committee at the
time such grant is authorized; and (ii) for purposes of Options granted to
Directors under Section 9, either (A) the date of shareholder approval of
the Plan for Directors who are granted Options as of the Effective Date,
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or (B) the election as Director with respect to an individual who is not a
Director on the Effective Date but who is elected a Director within ten
(10) years after the Effective Date.
(l) "Incentive Stock Option" means an Option granted by the
Corporation to a Key Employee which is intended to qualify as an Incentive
Stock Option under Section 422 of the Code.
(m) "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 or a person who has retired from the
active employment of the Corporation or a Subsidiary.
(n) "Nonstatutory Stock Option" means an Option granted by the
Corporation to a Key Employee or Director which does not meet the
requirements of Section 422 of the Code, or even if meeting the
requirements of Section 422 of the Code, is not intended to be an Incentive
Stock Option and is so designated.
(o) "Option" means the right granted to a Key Employee or Director by
the Corporation pursuant to the Plan to purchase shares of Common Stock.
(p) "Optionee" means the individual granted an Option.
(q) "Option Shares" means any of the shares of Common Stock received
by an Optionee pursuant to the exercise of all or a portion of the Option
or Options granted hereunder.
(r) "Plan" means the Ruddick Corporation 1995 Comprehensive Stock
Option Plan.
(s) "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.
(t) "Subsidiaries" means subsidiary corporations of the Corporation as
that term is defined in Section 424(f) of the Code.
2. Purpose:
This Plan is for the purpose of securing or retaining the services of Key
Employees of the Corporation and its Subsidiaries and non-employee members of
the Board of Directors. The Board of Directors 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 designated Options issued to selected Key Employees pursuant to
the Plan will constitute Incentive Stock Options within the meaning of Section
422 of the Code. Furthermore, with respect to persons subject to Section 16 of
the Act, transactions under this Plan are intended to comply with all applicable
conditions of Rule 16b-3 or its successors under the Act. To the extent that any
provision of the Plan or action by the Committee fails to so comply, it shall be
deemed null and void, to the extent permitted by law and deemed advisable by the
Committee.
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3. Administration:
The Plan shall be administered by the Committee which shall consist of not
fewer than two members of the Board of Directors who shall be appointed by the
Board. Each member of the committee shall be a "disinterested person" as defined
in Rule 16b-3(c)(2)(i) under the Act, as such rule may be amended from time to
time.
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. The Committee shall appoint a secretary, who
may be but need not be a member of the Committee and who 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 (i) the Key Employees of the
Corporation and of the Subsidiaries to whom, the number of shares with respect
to which, the time or times when, and the price or prices at which, Options
shall be granted; (ii) the Option periods; (iii) the rate at which such Options
will vest and may be exercised within the appropriate period and any vesting
acceleration or exercisability provisions in the event of a change in control,
termination of employment or termination of the Plan; and (iv) except as
provided in Section 14 hereof, to modify or amend any Option or to waive any
restrictions or conditions applicable to any Option or the exercise thereof. The
Committee shall have complete authority to determine if any Option granted to a
Key Employee is an Incentive Stock Option or a Nonstatutory Stock Option as
provided in Section 4. Except as provided in Section 14 hereof, 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 Stock Option Agreements of Key Employees (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:
Incentive Stock Options and Nonstatutory Stock Options may be granted to
current and future Key Employees in the discretion of the Committee. Except as
provided in Section 13 hereof, no Key Employee shall be eligible to receive an
Incentive Stock 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 that an employee
may purchase under outstanding options shall not be treated as stock owned by
such employee. In determining the employees to whom Options will be granted and
the number of shares to be covered by each Option, the Committee shall take into
account the duties of the respective employees, their current and potential
contributions to the success of the Corporation or its Subsidiaries, the
anticipated number of years of effective service remaining, and such other
factors as it 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 may be granted additional Options if the Committee
shall so determine.
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Notwithstanding the foregoing provisions of the Plan, no Key Employee may
be granted an Incentive Stock Option pursuant to which the aggregate fair market
value (determined as of the time the Incentive Stock Option is granted) of the
stock with respect to which all 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 Director shall be eligible to receive Options pursuant to this Section
4. Each Director of the Corporation shall be eligible to participate in the Plan
and shall receive grants of Nonstatutory Stock Options, pursuant to the terms
and conditions as described in Section 9. Grants of Nonstatutory Stock Options
under the Plan to Directors shall be automatic as described in Section 9.
5. Stock Subject to Option:
An aggregate of 600,000 shares of Common Stock will be authorized and
reserved for issuance for purposes of the Plan. Such shares may consist of, as
the Board of Directors of the Corporation shall from time to time determine,
authorized but unissued shares of Common Stock and/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, shares subject to the portion of the Option so expired or terminated
may be available for Options to be granted to other Key Employees or Directors.
In no event, however, may Common Stock which is surrendered or withheld to pay
the exercise price of an Option be available for additional grants.
The total amount of shares with respect to which Options may be granted
under the Plan and outstanding option rights (both as to the number of shares
subject to Option and the Option price(s) thereof) 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; provided, however, that in the case of Incentive Stock Options,
such adjustments shall be made only to the extent permitted by Sections 421, 422
and 424 of the Code.
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 and 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 or her 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 share which might otherwise
become subject to an Option.
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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),
in the absence of a prior expression of approval of the Board of Directors, 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 7% of the Corporation's securities; then, 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 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 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 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 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 to Key Employees:
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 a Stock Option Agreement. The Committee may designate certain Options
granted pursuant to the Plan as Incentive Stock Options that are subject to
additional terms contained herein regarding the granting of Incentive Stock
Options. An Option granted to a Key Employee shall be deemed granted on the
Grant Date with respect thereto as that term is defined in Section 1(k)(i)
hereunder. In the event that a Key Employee fails to sign and return the Stock
Option Agreement to the Committee or its designee within the time specified by
the Committee, the Option shall be void.
Subject to the terms of this Plan, the purchase price of the Common Stock
under each Nonstatutory Stock Option granted to a Key Employee shall be
determined by the Committee by reference to the Fair Market Value of the Common
Stock, and the purchase price of Common Stock underlying each Incentive Stock
Option shall be no less than the Fair Market Value of the Common Stock at the
Grant Date.
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7. Option Period for Key Employees:
The Options granted to Key Employees hereunder shall be exercisable in
whole or in part or in installments, from time to time, as may be specified by
the Committee as set forth in the Stock Option Agreement, except that no Option
granted to a Key Employee under the Plan shall be exercisable within six months
of, or after ten years from, the Grant Date. Furthermore, no Options may be
granted more than ten (10) years after the expiration of ten years from and
including the Effective Date.
8. Effect of Termination of Employment or Disability of Key Employees:
(a) If the employment of any Key Employee to whom an Option has been
granted is terminated for any reason other than death, disability,
retirement with the consent of the Corporation or termination without
cause, his or her unexercised Option or Options shall terminate
immediately.
(b) If a Key Employee retires with the consent of the Corporation or
any of its Subsidiaries, all Options held by such Key Employee, to the
extent that such Options have not previously expired or been exercised,
shall become fully exercisable and vested, and the Key Employee may
exercise such Options in part or in full at any time within three months
after said retirement or termination, but in no event after the expiration
of ten years from the Grant Date of such Option.
(c) If the employment of a Key Employee is terminated without cause by
the Corporation or any of its Subsidiaries, the Key Employee may exercise
his or her Option to the extent that the Key Employee was entitled to
exercise it as of the date of such termination but only within three months
after said termination and in no event after the expiration of ten years
from the Grant Date of such Option.
(d) If a Key Employee dies or becomes Disabled while he or she 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 or any of its Subsidiaries), all Options held by
such Key Employee, to the extent that such Options have not previously
expired or been exercised, shall become fully exercisable and vested, and
such Options may be exercised in part or in full at any time within one
year after the date of such death or disability or, if he dies within three
months after retirement (provided that such retirement is with the consent
of the Corporation or any of its Subsidiaries), at any time within one year
after such retirement, but in no event after the expiration of ten years
from the Grant Date of the Option. In the event of the Key Employee's
death, such Options may be exercised to the extent otherwise provided
herein by the executor or personal representative of the Key Employee's
estate or by any person who acquired the right to exercise such Options by
bequest under the Key Employee's will or by inheritance. In the event the
Key Employee is Disabled, such Options may be exercised to the extent
otherwise provided herein by the personal representative of the Key
Employee or such other person designated by a court of competent
jurisdiction or by power of attorney to handle the Key Employee's personal
estate or affairs. The Committee, in its sole discretion, must determine
that a Key Employee is Disabled upon certification thereof by a qualified
physician selected by the Committee after such physician examines the Key
Employee.
(e) A temporary leave of absence approved by the Corporation or any of
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 Key Employee would
be accorded different tax treatment than if such Key Employee were an
active employee of the Corporation or any of its Subsidiaries.
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(f) Notwithstanding the provisions of subparagraphs (a), (b), (c), (d)
and (e) above, the Committee may, in its sole discretion, establish
different terms and conditions pertaining to the effect of termination of
employment or disability, to the extent permitted by applicable federal and
state law.
9. Granting of Nonstatutory Stock Options to Directors:
All Options granted under this Section 9 shall be Nonstatutory Stock
Options and shall not be entitled to special tax treatment under Section 422 of
the Code. As of the Effective Date, each Director as of such date shall be
granted a Nonstatutory Stock Option to purchase 10,000 shares of Common Stock.
Each individual who is not a Director on the Effective Date but who is elected a
Director within ten (10) years after the Effective Date shall be granted, as of
the date of such election as Director, a Nonstatutory Stock Option to purchase
10,000 shares of Common Stock. The Corporation shall tender to each Director for
signature a Stock Option Agreement, which Stock Option Agreement shall comply
with and be subject to the following terms and conditions:
(a) The exercise price of shares of Common Stock covered by the
Nonstatutory Stock Option shall not be less than 100% of the Fair Market
Value of such shares on the Grant Date. For purposes of this Section 9, the
Grant Date shall be as defined in Section 1(k)(ii) hereunder.
(b) No Nonstatutory Stock Option granted pursuant to this Section 9
may be exercised:
(i) Before the Plan is approved by the shareholders of the
Corporation;
(ii) If and to the extent required by Rule 16b-3 of the Act,
within the first six months after the date the Plan is approved by the
shareholders; provided that this six month restriction shall not apply
if the Director becomes Disabled or dies during the six month period;
(iii) After the expiration of ten (10) years from the Grant
Date; provided, however, that each Nonstatutory Stock Option shall be
subject to termination before its date of expiration as herein provided;
(iv) Except as set forth in Section 9(c) or 9(d) hereof, more
than three months after the Director ceases to be a Director; provided,
however, that if the Director ceases to be a Director before the lapse
of the six month period described in clause (ii) above, more than three
months after the lapse of such six-month period.
(c) If a Director ceases to be a Director for reason of death or
becoming Disabled, the Nonstatutory Stock Option may be exercised (subject
to the limitations of Sections 9(b)(i) and 9(b)(iii) hereof) within one
year after his death or disability by the Director or person to whom the
Director's rights under the Nonstatutory Stock Option shall have passed by
will or by the laws of descent and distribution.
(d) If a Director dies after he ceases to be a Director, but within
the time period during which his outstanding Nonstatutory Stock Options are
still exercisable, the Nonstatutory Stock Option may be exercised (subject
to the limitations of Sections 9(b)(i) and 9(b)(iii) hereof) within one
year after his death by the person to whom the Director's rights under the
Nonstatutory Stock Option shall have passed by will or by the laws of
descent and distribution.
(e) Nonstatutory Stock Options granted pursuant to this Section 9 may
be exercised in the manner set forth in Section 10 hereof. Notwithstanding
anything herein to the contrary, however, Nonstatutory Stock Options
granted to Directors shall be exercised in such a manner as to conform to
the provisions of Rule 16b-3 of the Act.
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(f) This Section 9 shall not be amended more frequently than once
every six months, other than to comply with changes in the Code or the
Employee Retirement Income Security Act of 1974 or the respective rules
thereunder.
10. Exercise of Options by Optionees:
An Option may be exercised by an Optionee 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 Optionee or by the Optionee's successors, as
described herein, 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 current 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 also 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 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. No shares shall
be required to be issued and delivered upon exercise of any Option under the
Plan unless and until all of the requirements of law and of all regulatory
agencies having jurisdiction over the issuance and delivery of the securities
shall have been fully complied with.
The exercise of any Nonstatutory Stock Option granted under the Plan is
subject to the condition that if at any time the Corporation shall determine, in
its sole discretion, that the satisfaction of withholding tax or other
withholding liabilities under any state or federal law is necessary or desirable
as a condition of, or in connection with, such exercise or the delivery or
purchase of shares pursuant thereto, then in such event, the exercise of the
Option shall not be effective unless such withholding tax or other withholding
liabilities shall have been satisfied by payment to the Corporation or by having
withheld from the Optionee's compensation (if any) any amounts necessary to
satisfy the Corporation's withholding liabilities with respect to such
disposition. In the event of the disposition by an Optionee of shares of Common
Stock acquired pursuant to the exercise of an Incentive Stock Option granted
pursuant to the Plan within two years of the granting of the Incentive Stock
Option or within one year after the exercise of the Incentive Stock Option, the
Corporation shall have the right to require that the Optionee pay to the
Corporation or have withheld from the Optionee's compensation any amounts
necessary to satisfy the Corporation's withholding liabilities with respect to
such disposition.
11. The Right of the Corporation to Terminate Employment and Status:
Nothing contained in the Plan or in any Option granted pursuant to the Plan
shall confer upon any Optionee, Key Employee or Director any right to continued
employment with the Corporation or one of its Subsidiaries, or shall interfere
in any way with the right of the Corporation to release or retain the Director
in
A-8
<PAGE> 32
his status as director, to make additional grants to the Key Employee at any
time thereafter, or to terminate a Key Employee's employment at any time for any
reason.
12. Non-Transferability of Options:
No Option granted under the Plan shall be transferable by the Key Employee
or Director 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 or except pursuant to a qualified domestic relations order. During
the Key Employee's or Director's lifetime, the Option shall be exercisable only
by the Key Employee or Director.
13. Ten Percent Shareholders:
Notwithstanding the provisions of Section 4 hereof regarding the
ineligibility of certain ten percent owners of the Corporation's capital stock,
any such Key Employee may be granted an Incentive Stock 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 Incentive Stock Option, (b) is not
exercisable before the expiration of six months or after the expiration of five
years from the date such Incentive Stock 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 hereof regarding Incentive Stock
Options to purchase shares having a fair market value in excess of $100,000.
14. Amendment and Termination:
Except as set forth in Section 9 hereof, the Plan may be amended, modified,
discontinued or terminated at any time by the Board of Directors as deemed in
the best interests of the Corporation; provided, however, 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. Furthermore, to the extent necessary and desirable to comply with Rule
16b-3 under the Act or with Section 422 of the Code (or any other applicable law
or regulation, including the requirements of any stock exchange on which the
Common Stock is listed or quoted), shareholder approval of any Plan amendment
shall be obtained in such a manner and to such a degree as is required by the
applicable law or regulation.
The Committee may make such amendments or modifications in the terms and
conditions of any Option as it may deem advisable, or cancel or annul any grant
of an Option; provided, however, that no such amendment, modification,
cancellation or annulment may, without the consent of the Optionee, adversely
affect his or her rights under such Option; and provided further, that the
Committee may not reduce the exercise price of any Option below the original
exercise price of such Option.
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<PAGE> 33
15. Effective Date and Duration of the Plan:
The Effective Date of the Plan is November 16, 1995, subject to approval of
the Plan by the shareholders of the Corporation. Notwithstanding any other
provision hereof, no Option 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,
all Options 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 and unless terminated earlier pursuant to Section 14 hereof, the Plan shall
terminate on November 15, 2005.
ATTEST: RUDDICK CORPORATION
/s/ DONALD B. WILLIFORD By: /s/ JOHN W. COPELAND
- --------------------------------------- ------------------------------------
Secretary President
(CORPORATE SEAL)
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<PAGE> 34
<PAGE> 35
<PAGE> 36
APPENDIX B
P
R
O
X
Y
PLEASE SIGN
ON REVERSE SIDE
AND RETURN IN
THE ENCLOSED
POSTAGE-PAID
ENVELOPE
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
RUDDICK CORPORATION
ANNUAL MEETING, FEBRUARY 1, 1996
KNOW ALL MEN BY THESE PRESENTS, that the undersigned shareholder of Ruddick
Corporation, a North Carolina corporation, hereby constitutes and appoints Alan
T. Dickson, R. Stuart Dickson and Roddey Dowd, Sr., attorneys and proxies, with
full power of substitution, for and on behalf of the undersigned to act and vote
at the Annual Meeting of Shareholders to be held in the Auditorium, 12th Floor,
Two First Union Center, Third and College Streets, Charlotte, North Carolina on
Thursday, February 1, 1996, at 11:00 A.M., E.S.T. and any adjournment or
adjournments thereof, as follows:
(1) ELECTION OF DIRECTORS
<TABLE>
<S> <C>
/ / FOR electing the three nominees listed below to serve / / WITHHOLD AUTHORITY to vote for electing the three
for three-year terms (except as marked to the nominees listed below
contrary below)
</TABLE>
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
STRIKE A LINE THROUGH THE NOMINEE'S NAME IN THE LIST BELOW.)
Edwin B. Borden, Jr. R. Stuart Dickson Hugh L. McColl, Jr.
(2) APPROVAL OF THE 1995 COMPREHENSIVE STOCK OPTION PLAN
/ / FOR / / AGAINST / / ABSTAIN
(3) In acting upon any other business which may properly be brought before said
meeting or any adjournment thereof;
according to the number of votes and as fully as the undersigned would be
entitled to act and vote if personally present, hereby ratifying and confirming
all that said attorneys and proxies or any of them lawfully do or cause to be
done by virtue hereof. A majority of said attorneys and proxies who shall be
present and acting as such at the meeting or any adjournment thereof, or if only
one such attorney and proxy be present and acting then that one, shall have and
may exercise all powers hereby conferred.
(Continued on other side)
(Continued from other side)
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE THIS PROXY
WILL BE VOTED IN FAVOR OF PROPOSALS 1 AND 2 AND IN THE DISCRETION OF THE
PROXY HOLDERS ON ANY OTHER BUSINESS THAT PROPERLY COMES BEFORE THE MEETING.
The undersigned hereby acknowledges receipt of the Notice of Annual Meeting
of Shareholders, dated December 20, 1995, and the Proxy Statement furnished
therewith.
Dated this ______ day of _______, 19
_____________________________________
_____________________________________
NOTE: Signature should agree with
name on stock certificate as printed
hereon. Executors, administrators,
trustees and other fiduciaries
should so indicate when signing. If
a corporation, please sign the full
corporate name as shown hereon by
President or other authorized
officer. If a partnership, please
sign in partnership name by
authorized person.
<PAGE> 37
APPENDIX C
THESE VOTING INSTRUCTIONS ARE SOLICITED BY TRUST COMPANY BANK
RUDDICK CORPORATION
ANNUAL MEETING, FEBRUARY 1, 1996
<TABLE>
<C> <S> <C>
VOTING
KNOW ALL MEN BY THESE PRESENTS, that the undersigned participant in the Ruddick Employee Stock
INSTRUCTIONS Ownership Plan hereby authorizes and instructs Trust Company Bank to vote or cause to be voted the
shares held by Trust Company Bank for the account of the undersigned in the Ruddick Employee Stock
Ownership Plan at the Annual Meeting of Shareholders to be held in the Auditorium, 12th Floor, Two
First Union Center, Third and College Streets, Charlotte, North Carolina, on February 1, 1996, at
11:00 A.M., E.S.T. and any adjournment or adjournments thereof, as follows:
PLEASE SIGN (1) ELECTION OF DIRECTORS
ON REVERSE SIDE / / FOR electing the three nominees listed below to / /WITHHOLD AUTHORITY to vote for electing the
AND RETURN IN serve for three-year terms (except as marked to three nominees listed below
THE ENCLOSED the contrary below)
ENVELOPE (INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE A LINE THROUGH THE
NOMINEE'S NAME IN THE LIST BELOW.)
Edwin B. Borden, Jr. R. Stuart Dickson Hugh L. McColl, Jr.
(2) APPROVAL OF THE 1995 COMPREHENSIVE STOCK OPTION PLAN
/ / FOR / / AGAINST / / ABSTAIN
(3) In accordance with the best judgment of Trust Company Bank in acting upon any other business
which may properly be brought before said meeting or any adjournment thereof;
(Continued on other side)
</TABLE>
(Continued from other side)
THESE VOTING INSTRUCTIONS PROPERLY EXECUTED WILL CAUSE THE SHARES REPRESENTED
HEREBY TO BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED PARTICIPANT.
IF NO DIRECTION IS MADE THE SHARES WILL BE VOTED IN FAVOR OF PROPOSALS 1 AND 2.
THE SHARES WILL BE VOTED IN ACCORDANCE WITH THE BEST JUDGMENT OF TRUST COMPANY
BANK ON ANY OTHER MATTER PROPERLY BROUGHT BEFORE THE MEETING.
The undersigned hereby acknowledges receipt of the Notice of Annual Meeting of
Shareholders, dated December 20, 1995, and the Proxy Statement furnished
therewith.
Dated this ________ day of_____, 19__
_______________________________ (SEAL)
NOTE: Signature should agree with
name on the records of Trust Company
Bank as printed hereon.
