SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. ____)
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Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
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] No fee required.
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(1) Title of each class of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set
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the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or Schedule
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<PAGE>
RUDDICK CORPORATION
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON
FEBRUARY 15, 2001
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 15, 2001, at 10:00 A.M., local
time, for the following purposes:
1. To elect four directors of the Company for three-year terms;
2. To consider and vote upon a proposal to approve the Company's
2000 Comprehensive Stock Option and Award 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 8, 2000 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.
DOUGLAS J. YACENDA
Secretary
December 27, 2000
<PAGE>
RUDDICK CORPORATION
Proxy Statement
ANNUAL MEETING OF SHAREHOLDERS
to be held on
FEBRUARY 15, 2001
The following statement, first mailed or delivered to
shareholders on or about December 27, 2000, 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 (the
"Annual Meeting") to be held on Thursday, February 15, 2001, at
10:00 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 301 S.
Tryon Street, Suite 1800, Charlotte, North Carolina 28202.
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 (i) in favor of electing as directors of the Company the
four persons named in this Proxy Statement, each to serve until
the third annual meeting of shareholders following his or her
election, (ii) approving the Company's 2000 Comprehensive Stock
Option and Award Plan, and (iii) in the discretion of the proxy
holders on any other matters presented at the Annual Meeting.
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 (the "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 8, 2000 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 46,251,824 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>
PRINCIPAL SHAREHOLDERS
The following persons are known to the Company to be, as of
October 31, 2000, the beneficial owners 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.
Name and Address of Number of Shares Percent
Beneficial Owner Beneficially Owned(1) Of Class
-------------------------- --------------------- ------------
T. Rowe Price Trust Company 9,636,418 20.8%
Trustee of the Ruddick Employee
Stock Ownership Plan(2)
Post Office Box 89000
Baltimore, Maryland 21289
Alan T. Dickson(3) 3,668,371 7.9%
301 South Tryon Street, Suite 1800
Charlotte, North Carolina 28202
R. Stuart Dickson(4) 2,832,314 6.1%
301 South Tryon Street, Suite 1800
Charlotte, North Carolina 28202
--------------------------
(1) "Beneficial Ownership," for purposes of the table, is
determined according to 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.
(2) T. Rowe Price Trust Company has sole investment power with
respect to the number of shares indicated except under
limited circumstances. T. Rowe Price Trust Company 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 as directed by the fiduciary
named under the ESOP.
(3) The amount shown includes 1,576,759 shares of Common Stock
owned of record and beneficially by Alan T. Dickson or by
certain trusts of which he is a trustee and beneficiary, as
to which he has sole voting and investment power; 83,661
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; 1,854,925 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; 64,730 shares of Common Stock held as trustee
for his niece, as to which he has sole voting and investment
power; and 88,296 shares of Common Stock held in an estate of
which he is sole executor and a beneficiary.
(4) The amount shown includes 865,746 shares of Common Stock
owned of record and beneficially by R. Stuart Dickson, as to
which he has sole voting and investment power; 84,483 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; 1,854,925 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.
<PAGE> 2
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 shall be fixed and determined from
time to time by resolution of the shareholders. The Bylaws
further provide that 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,
and that any vacancies in the Board may be filled by a majority
vote of the Board of Directors or by the shareholders. The
number of directors is currently fixed at twelve.
The terms of four of the directors expire at the Annual
Meeting. The Board of Directors has nominated the four persons
listed below to be elected as directors at the Annual Meeting,
each for a term to expire in 2004. Each nominee currently is a
member of the Board of Directors.
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 four nominees listed below, each to serve until the 2004
annual meeting of shareholders or until his successor shall be
elected and qualified to serve, in each case unless authority to
so vote is withheld. Although the 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 (including abstentions and broker non-votes) 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 or her 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 such person is employed, the period during which
such person has served as a director, all positions and offices
that such person holds with the Company and such person's
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 2004
JOHN W. COPELAND, age 65, is the President of Copeland
Business Service, Inc., an investment management company. He
served as President of the Company from February 1994 to February
1997, and prior to that time, he served as President of American
& Efird, Inc. He has been a director of the Company since 1989.
ALAN T. DICKSON, age 69, has been 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 Bank of
America Corporation, Lance, Inc., Sonoco Products Company and
Bassett Furniture Industries, Inc.
RODDEY DOWD, SR., age 68, is the Chairman of the Executive
Committee of Charlotte Pipe & Foundry Company, a manufacturing
firm. He has been a director of the Company since 1968 and also
serves as a director of First Union Corporation.
<PAGE> 3
ANNA SPANGLER NELSON, age 38, has been President of C.D.
Spangler Construction Co., a company involved in real estate and
investment activities, since August 1997. Ms. Nelson has also
served as a general partner of the Wakefield Group, a venture
capital company, since 1988. She has been a director of the
Company since 1998.
Continuing Directors with Terms Expiring in 2002
EDWIN B. BORDEN, JR., age 66, is the President and Chief
Executive Officer of The Borden Manufacturing Company, a private
textile management holding company. He has been a director of
the Company since 1991 and also serves as a director of Progress
Energy, Jefferson-Pilot Financial and Winston Hotels, Inc.
R. STUART DICKSON, age 71, 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. and Dimon Incorporated.
HUGH L. MCCOLL, JR., age 65, is the Chairman of the Board and
Chief Executive Officer of Bank of America Corporation (formerly
NationsBank Corporation), a bank holding company. Mr. McColl
served as Chairman of the Board of Bank of America Corporation
from 1983 until December 31, 1991, from December 31, 1992 until
January 1997 and has served in that capacity since October 1,
1998. He has been a director of the Company since 1978 and also
serves as a director of Sonoco Products Company.
ISAIAH TIDWELL, age 55, has been the President, Georgia
Banking of Wachovia Bank N.A. since July 1999. Prior to that
time, he served as Executive Vice President in charge of Wachovia
Bank's North Carolina Southern Region from 1995 to 1999 and as
Southern Region executive from 1993 to 1995. Mr. Tidwell has
been a director of the Company since 1999 and also serves as a
director of Lance, Inc.
Continuing Directors with Terms Expiring in 2003
JOHN R. BELK, age 41, has been President - Finance, Systems
and Operations of Belk Inc., retail merchants, since May 1998.
He has also served as President and Chief Operating Officer of
Belk Stores Services Inc., since February 1997 and served as
Senior Vice President of Belk Services, Inc., from February 1992
to February 1997. He has been a director of the Company since
1997 and also serves as a director of ALLTEL Corporation and
Belk, Inc.
THOMAS W. DICKSON, age 45, has been President of the Company
since February 1997. Before his election as President, he served
as Executive Vice President of the Company from February 1996 to
February 1997. Prior to that time, from February 1994 to August
1996 he served as President of, and from February 1991 to
February 1994 he served as Executive Vice 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 1997.
JAMES E. S. HYNES, age 60, was the Chairman of the Board of
Hynes Inc., a manufacturer's representative, from September 1986
until October 2000. He has been a director of the Company since
1983.
HAROLD C. STOWE, age 54, has been President and Chief
Executive Officer of Canal Industries, Inc., a forest products
company, since March 1997. Prior to that time, he served as Co-
President of Canal
<PAGE> 4
Industries, Inc. from 1996 until March 1997 and as Executive Vice
President of CSI Group, Inc., an affiliated company of Canal
Industries, Inc., from 1990 through 1995. Mr. Stowe has been a
director of the Company since 1998 and also serves as a director
of SCANA Corporation.
Alan T. Dickson and R. Stuart Dickson are brothers, and
Thomas W. Dickson 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
The Company compensates each director who is not an employee
of the Company or its subsidiaries in the amount of $15,000 per
year for services as a director, plus $1,000 for each Board of
Directors or committee meeting attended. Non-employee directors
of the Company may defer the payment of the annual fee and
regular board meeting fee to a future period pursuant to the
Company's Director Deferral Plan. The deferred fees are
converted into a number of shares of Common Stock with a fair
market value equal to the value of the retainer or fees deferred,
and the number of shares are then credited to the director's
account (along with the amount of any dividends or stock
distributions). The Company uses a non-qualified trust to
purchase and hold Common Stock to satisfy the Company's
obligation under the Director Deferral Plan, and the directors
are general creditors of the Company in the event the Company
becomes insolvent. Upon termination of service as a director or
in the event of death, shares of Common Stock or cash, in the
discretion of the Compensation and Special Stock Option Committee
of the Board of Directors (the "Compensation Committee") will
be distributed to the director or a designated beneficiary.
Under the Company's 1995 Comprehensive Stock Option Plan
(the "1995 Plan"), the Company automatically granted each non-
employee director at the time the 1995 Plan was adopted a ten-
year option to purchase 10,000 shares of Common Stock at an
exercise price per share equal to the fair market value of the
Common Stock on the date of grant of the option. In addition,
under the 1995 Plan, the Company automatically grants a ten-year
option to purchase 10,000 shares of Common Stock to each new non-
employee director upon his or her initial election as director.
These options are immediately vested, and the exercise price per
share of these options is equal to the fair market value of the
Common Stock on the date of the director's election. The
Company's 2000 Comprehensive Stock Option and Award Plan, which
will be voted upon by the shareholders at the Annual Meeting,
contains a provision to continue such automatic option grants.
In addition to the above compensation, the Company grants
additional stock options to its non-employee directors from time
to time. On November 18, 1999, each of John R. Belk, Edwin B.
Borden, Jr., John W. Copeland, Roddey Dowd, Sr., James E.S.
Hynes, Hugh L. McColl, Jr., Anna Spangler Nelson, Harold C. Stowe
and Isaiah Tidwell, constituting all of the non-employee
directors of the Company at that time, were granted options to
purchase 1,000 shares of Common Stock at an exercise price of
$17.40625 per share, the then fair market value of the Common
Stock, pursuant to the Company's 1997 Comprehensive Stock Option
and Award Plan (the "1997 Plan"). These options are
immediately vested and expire on November 18, 2009.
The Company also provides $100,000 of term life insurance
coverage for each such non-employee director.
The Board of Directors held four meetings during fiscal
2000. All directors attended at least 75% of the aggregate
number of meetings of the Board of Directors and of all
committees of the Board of Directors on which they served during
fiscal 2000, except for Edwin B. Borden, Jr., who attended 50% of
<PAGE> 5
the meetings of the Board of Directors and 67% of such aggregate
number of meetings of the Board of Directors and its committees.
COMMITTEES OF THE BOARD
The Company's Board of Directors has the following standing
committees: (i) the Executive Committee, whose current members
are R. Stuart Dickson, Alan T. Dickson, Thomas W. Dickson, Roddey
Dowd, Sr. and Hugh L. McColl, Jr.; (ii) the Audit Committee,
whose current members are John R. Belk, Anna Spangler Nelson,
Harold C. Stowe and Isaiah Tidwell; (iii) the Compensation
Committee, whose current members are Edwin B. Borden, Jr., James
E. S. Hynes, Anna Spangler Nelson and Harold C. Stowe; (iv) the
Retirement Benefits Committee, whose current members are John R.
Belk, Edwin B. Borden, Jr., John W. Copeland, Roddey Dowd, Sr.
and James E.S. Hynes; and (v) the Nominating Committee, whose
current members are John R. Belk, Edwin B. Borden, Jr., John W.
Copeland, James E. S. Hynes and Hugh L. McColl, Jr. Subject to
limitations under North Carolina law, the Executive Committee may
exercise all of the authority of the Board of Directors in the
management of the Company. The Executive Committee did not meet
during fiscal 2000. 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
2000. The Compensation Committee assesses the Company's overall
compensation programs and philosophies. Among other things, it
recommends to the Board of Directors for its approval the
salaries and incentive compensation for key officers. The
Compensation Committee also approves the salaries and the
incentive compensation for other holding company officers and
reviews the compensation and incentive compensation for other key
employees of the Company's subsidiaries. In addition, the
Compensation Committee grants stock options to the employees of
the Company and its subsidiaries pursuant to the Company's stock
option plans and reports such actions to the Board of Directors.
The Compensation Committee met once and acted once by unanimous
written consent during fiscal 2000. See "REPORT OF THE COMPENSATION
AND SPECIAL STOCK OPTION COMMITTEE." The Retirement Benefits
Committee has the overall responsibility and authority for
Company retirement plans. The Retirement Benefits Committee met
once during fiscal 2000. The Nominating Committee reviews,
evaluates and recommends nominees for the Board of Directors.
The Nominating Committee met once during fiscal 2000. The
Company's Bylaws include provisions setting forth specific
conditions under which persons may be nominated as directors of
the Company at a meeting of shareholders. A copy of such
provision is available upon request to: Ruddick Corporation, 301
South Tryon Street, Suite 1800, Charlotte, North Carolina 28202,
Attention: Corporate Secretary.
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 of
the Company and the executive officers named in the Summary
Compensation Table included herein, and of such directors and all
executive officers of the Company as a group, all as of October
31, 2000. Except as otherwise indicated, the persons named in
the table have sole voting and investment power over the shares
included in the table.
<PAGE> 6
Shares of
Common Stock
Beneficially Percent
Name Owned(1) of Class
--------------------------- ---------------- ---------
John R. Belk 14,472(2) *
Edwin B. Borden, Jr. 28,000(3) *
John W. Copeland 53,594(4) *
Alan T. Dickson 3,668,371(5) 7.9%
R. Stuart Dickson 2,832,314(6) 6.1%
Thomas W. Dickson 262,386(7) *
Roddey Dowd, Sr. 23,231(3) *
James E. S. Hynes 56,780(3) *
Fred A. Jackson 72,231(8) *
Hugh L. McColl, Jr. 16,197(3) *
Frederick J. Morganthall, II 49,456(9) *
Anna Spangler Nelson 24,000(10) *
Harold C. Stowe 13,000(11) *
Isaiah Tidwell 11,000(12) *
John B. Woodlief 5,000(13) *
All directors and executive
officers as a group (15 persons) 5,275,107(14) 11.4%
----------------
* 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 T. Rowe Price Trust Company as
directed by the fiduciary named under the ESOP. See Note 1
to "PRINCIPAL SHAREHOLDERS."
(2) Includes 13,000 shares that may be acquired upon the exercise
of stock options that are currently exercisable, as to which
Mr. Belk would have sole voting and investment power upon
acquisition.
(3) Includes 14,000 shares that may be acquired upon the exercise
of stock options that are currently exercisable, as to which
such director would have sole voting and investment power
upon acquisition.
(4) Includes 46,232 shares owned of record and beneficially by
Mr. Copeland or a corporation of which he is sole
shareholder, as to which he has sole voting and investment
power; 3,140 shares owned by his adult children, as to which
he has sole voting and investment power pursuant to a power
of attorney; 1,222 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 3,000
shares that may be acquired upon the exercise of stock
options that are currently exercisable, as to which
Mr. Copeland would have sole voting and investment power upon
acquisition.
(5) See Note 3 under "PRINCIPAL SHAREHOLDERS."
(6) See Note 4 under "PRINCIPAL SHAREHOLDERS."
(7) Includes 194,325 shares owned of record and beneficially by
Mr. Dickson, as to which he has sole voting and investment
power; 14,885 shares allocated to his ESOP account, as to
which he has sole voting power, but no investment power
except under limited circumstances; 10,676 shares held as
custodian for his minor children, as to which he has sole
voting and investment power; and 42,500 shares that may be
acquired by him upon the exercise of stock options that are
currently exercisable or become exercisable within sixty days
of October 31, 2000, as to which he would have sole voting
and investment power upon acquisition.
(8) Includes 32,688 shares owned of record by Mr. Jackson jointly
with his spouse, as to which he shares voting and investment
power; 16,943 shares allocated to his ESOP account, as to
which he has sole voting power,
<PAGE> 7
but no investment power except under limited circumstances;
and 22,600 shares that may be acquired by him upon the exercise
of stock options that are currently exercisable or become
exercisable within sixty days of October 31, 2000, as to which
he would have sole voting and investment power upon acquisition.
(9) Includes 8,312 shares owned of record and beneficially by Mr.
Morganthall, as to which he has sole voting and investment
power; 7,144 shares allocated to his ESOP account, as to
which he has sole voting power, but no investment power
except under limited circumstances; and 34,000 shares that
may be acquired by him upon the exercise of stock options
that are currently exercisable or become exercisable within
sixty days of October 31, 2000, as to which he would have
sole voting and investment power upon acquisition.
(10) Includes 12,000 shares that may be acquired upon the
exercise of stock options that are currently exercisable, as
to which Ms. Nelson would have sole voting and investment
power upon acquisition; and 12,000 shares owned by a
corporation with respect to which she has shared voting and
investment power and is deemed beneficial owner.
(11) Includes 12,000 shares that may be acquired upon the
exercise of stock options that are currently exercisable, as
to which Mr. Stowe would have sole voting and investment
power upon acquisition.
(12) Represents 11,000 shares that may be acquired upon the
exercise of stock options that are currently exercisable, as
to which Mr. Tidwell would have sole voting and investment
power upon acquisition.
(13) Represents 5,000 shares that may be acquired by Mr.
Woodlief upon the exercise of stock options that are
currently exercisable or become exercisable within sixty days
of October 31, 2000, as to which he would have sole voting
and investment power upon acquisition.
(14) Includes (i) 3,173,906 shares, including 211,100 that
may be acquired upon the exercise of stock options that are
currently exercisable or become exercisable within sixty days
of October 31, 2000, as to which such persons have, or would
have upon acquisition, sole voting and investment power; (ii)
1,866,925 shares as to which they have shared voting and
investment power (certain of such securities are deemed
beneficially owned by more than one of the listed directors
and officers); (iii) 207,116 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 such persons disclaim beneficial
ownership.
<PAGE> 8
REPORT OF THE AUDIT COMMITTEE
The Audit Committee of the Board of Directors is composed of
four independent directors and operates under a written charter
adopted by the Board of Directors which is attached hereto as
Appendix A. The Company has affirmed to the New York Stock
Exchange that the Board of Directors has determined that all
members of the Audit Committee are "independent" as defined in
the New York Stock Exchange Listed Company Manual.
Management is responsible for the Company's internal
controls and the financial reporting process. The independent
auditors are responsible for performing an independent audit of
the Company's consolidated financial statements in accordance
with generally accepted auditing standards and issuing a report
thereon. The Audit Committee, among other things, is responsible
for monitoring and overseeing these processes and recommending to
the Board of Directors the Company's independent auditors.
In this context, the Audit Committee has met and held
discussions with management and the independent auditors.
Management represented to the Audit Committee that the Company's
consolidated financial statements were prepared in accordance
with generally accepted accounting principles, and the Audit
Committee has reviewed and discussed the audited consolidated
financial statements with management and the independent
auditors. The Audit Committee discussed with the independent
auditors matters required to be discussed by Statement on
Auditing Standards No. 61 (Codification of Statements on
Accounting Standards).
The Company's independent auditors also provided to the
Audit Committee the written disclosures and the letter required
by Independence Standards Board Standard No. 1 (Independence
Discussions with Audit Committees), and the Audit Committee
discussed with the independent auditors that firm's independence.
Based upon the Audit Committee's discussion with management
and the independent auditors and the Audit Committee's review of
the representations of management and the report of the
independent auditors to the Audit Committee, the Audit Committee
recommended that the Board of Directors include the audited
consolidated financial statements in the Company's Annual Report
on Form 10-K for the fiscal year ended October 1, 2000.
Submitted by the Audit Committee:
John R. Belk Harold C. Stowe
Anna Spangler Nelson Isaiah Tidwell
<PAGE> 9
EXECUTIVE COMPENSATION
COMPENSATION SUMMARY
The following table sets forth a summary of all compensation
paid to or accrued for each person who was an executive officer
of the Company at fiscal year-end, and for the chief executive
officer of the Company during such fiscal year, in each case for
services rendered in all capacities during the periods indicated:
Summary Compensation Table
Long-Term Compensation
--------------------------
Annual Compensation Underlying Securities
------------------------ Restricted Underlying
Name and Other Stock Options/ LTIP All Other
Principal Fiscal Salary Bonus Annual Award(s) SARs Payouts Compen-
Position Year ($) ($) Compensation ($) (#) ($) sation($)
($)(1)
-----------------------------------------------------------------------------
Alan T.
Dickson 2000 267,800 104,366 0 0 16,474(4)
Chairman 1999 267,800 118,059 0 0 18,058
of the 1998 267,800 117,296 0 0 18,710
Board and
Director of
the Company
R. Stuart 2000 267,800 104,366 0 0 24,410(5)
Dickson 1999 267,800 118,059 0 0 26,317
Chairman 1998 267,800 117,296 0 0 27,210
of the
Executive
Committee
and Director of
the Company
Thomas W. 2000 320,000 124,709 0 8,500 16,534(6)
Dickson 1999 305,000 134,458 0 7,500 19,669
President 1998 290,000 127,020 0 23,000 17,481
and Director
of the Company
John B. 2000 290,000 94,181 0 25,000 12,137(7)
Woodlief 1999 10,417 -- 0 0 --
Vice 1998 -- -- -- -- --
President-
Finance of
the Company(2)
Fred A. 2000 240,000 112,826 0 7,000 19,378(8)
Jackson 1999 228,000 100,619 0 6,000 22,243
President 1998 220,000 63,260 0 10,000 19,429
of American &
Efird, Inc.(3)
Frederick J. 2000 250,000 72,500 0 7,000 16,773(9)
Morganthall,1999 240,000 66,240 0 6,000 18,984
Jr., 1998 230,000 47,150 0 33,000 17,891
President
of Harris
Teeter, Inc.(3)
----------------
(1) During fiscal 2000 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) Mr. Woodlief first became an executive officer of the
Company upon his election as Vice President - Finance of the
Company, effective November 18, 1999.
(3) American & Efird, Inc. and Harris Teeter, Inc. are indirect
wholly owned subsidiaries of the Company.
(4) Includes the value of certain premiums paid by the Company
in fiscal 2000 under a split-dollar life insurance program in
the amount of $10,582, and contributions by the Company in
fiscal 2000 to certain defined contribution plans in the
amount of $5,892.
(5) Includes the value of certain premiums paid by the Company
in fiscal 2000 under a split-dollar life insurance program in
the amount of $18,513, and contributions by the Company in
fiscal 2000 to certain defined contribution plans in the
amount of $5,897.
<PAGE> 10
(6) Includes the value of certain premiums paid by the Company
in fiscal 2000 under various split-dollar life insurance
programs in the amount of $10,782, and contributions by the
Company in fiscal 2000 to certain defined contribution plans
in the amount of $5,752.
(7) Includes the value of certain premiums paid by the Company
in fiscal 2000 under a split-dollar life insurance program in
the amount of $12,137.
(8) Includes the value of certain premiums paid by the Company
in fiscal 2000 under various split-dollar life insurance
programs in the amount of $12,368, and contributions by the
Company in fiscal 2000 to certain defined contribution plans
in the amount of $7,010.
(9) Includes the value of certain premiums paid by the Company
in fiscal 2000 under various split-dollar life insurance
programs in the amount of $11,052, and contributions by the
Company in fiscal 2000 to certain defined contribution plans
in the amount of $5,721.
<PAGE> 11
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)
Final Average Annual Benefit upon Retirement
Earnings with Years of Service Indicated(2)
---------- -----------------------------------------------------------
5 Years 10 Years 15 Years 20 Years 25 Years 30 Years 35 Years
$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
--------------------
(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 as a result of these participants
being entitled to SERP benefits equal to 60% of their final
average earnings as opposed to the 55% received by other
participants and reflected in the table.
"Final average earnings" is the average of the participants
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 considered in any given year
to determine the "final average earnings" of a participant
consists of amounts that typically would be included in the
Salary and Bonus columns of the Summary Compensation Table. The
table above describes annual benefits beginning at normal
retirement, assuming payment in the form of a joint and 75%
survivor annuity for SERP and Pension Plan amounts. 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 the fiscal 2000
year-end, for each of the executive officers included in the
Summary Compensation Table that have been employed by the Company
for a complete calendar year were as follows: $402,622, age 69
and 47 years for Alan T. Dickson; $402,622, age 71 and 48 years
for R. Stuart Dickson; $424,624, age 45 and 20 years for Thomas
W. Dickson; $307,276, age 50 and 23 years for Fred A. Jackson;
and $279,963, age 49 and 14 years for Frederick J.
Morganthall, II.
<PAGE> 12
STOCK OPTION PLANS
The following table sets forth information regarding options
granted to the executive officers named in the Summary
Compensation Table during fiscal 2000. No free-standing stock
appreciation rights ("SARs") were granted to executive officers
during such year.
Option/SAR Grants in Last Fiscal Year
Individual Grants
----------------------------------------------------------------------------
Potential Realizable
Value at Assumed
Number of Percent of Annual Rates
Securities Total Options/ of Stock Price
Underlying SARs Granted Exercise Appreciation for
Options/SARs to Employees or Base Option Term(3)
Granted in Fiscal Price Expiration 5% 10%
Name (#) (1) Year(2) ($/sh) Date ($) ($)
---------- ----------- ------------ ---------- --------- ------ -------
Thomas W.
Dickson 7,496 1.9% $17.40625 11/17/06 $ 53,117 $123,786
1,004 .3% $17.40625 11/17/09 $ 10,990 $ 27,852
John B.
Woodlief 25,000 6.3% $17.40625 11/17/06 $177,152 $412,840
Fred A.
Jackson 5,251 1.3% $17.40625 11/17/06 $ 37,209 $ 86,713
1,749 .4% $17.40625 11/17/09 $ 19,146 $ 48,519
Frederick J.
Morganthall,II 5,283 1.3% $17.40625 11/17/06 $ 37,436 $ 87,241
1,717 .4% $17.40625 11/17/09 $ 18,795 $ 47,631
--------------------
(1) Represents the number of shares covered by options granted to
the named executives on November 17, 1999 pursuant to the
Company's 1995 and 1997 Plans. Such options have an exercise
price equal to 100% of fair market value of such shares on
the date of grant. All such options vest at the rate of 20%
per year over five years, based on the date of grant.
Vesting of such options may be accelerated in certain
circumstances involving a change in control of the Company.
Furthermore, the number of shares subject to options will be
appropriately adjusted in the event of a stock dividend or
reclassification or in the event of certain mergers or
consolidations involving the Company. Options expire if the
employment of the optionee is terminated for any reason other
than death, disability, retirement with the consent of the
Company or termination without cause by the Company.
(2) Based upon options to purchase 399,000 shares granted to all
employees during fiscal 2000.
(3) The amounts represent assumed rates of appreciation in the
price of Common Stock during the terms of the options in
accordance with rates specified in applicable federal
securities regulations. Actual gains, if any, on stock
option exercises will depend on the actual future price of
the Common Stock. The 5% rate of appreciation of the
$17.40625 exercise price over the seven and ten year option
terms results in pro forma prices per share of $24.49 and
$28.35, respectively. The 10% rate of appreciation of the
$17.40625 exercise price over the seven and ten year option
terms results in pro forma prices per share of $33.92 and
$45.15, respectively. There is no representation that the
rates of appreciation reflected in this table will be
achieved.
<PAGE> 13
The following table sets forth information regarding options
exercised during fiscal 2000 by the executive officers named in
the Summary Compensation Table and the value of each such
executive officer's unexercised stock options held at fiscal
year-end.
Aggregated Option/SAR Exercises in Last Fiscal Year and Fiscal
Year-End Option/SAR Values
Number of
Securities Value of
Underlying Unexercised In-
Unexercised the-Money
Shares Options/SARs at Options/SARs at
Acquired on FY-End (#) FY-End ($)(1)
Exercise Value Realized (Exercisable/ (Exercisable/
Name (#) ($) Unexercisable) Unexercisable)
----------------- -------- ------------- --------------- ---------------
Thomas W. Dickson(2) 8,000 $ 64,260 32,300/30,700 $53,775/$5,850
John B. Woodlief - - 0/25,000 0/0
Fred A. Jackson - - 14,000/24,200 $ 7,500/$6,300
Frederick J.
Morganthall, II - - 22,600/34,400 $16,500/$4,500
--------------
(1) Based on the closing price of the Company's Common Stock on
the New York Stock Exchange on September 29, 2000 of $13.875.
(2) Mr. Dickson exercised options to purchase 8,000 shares of the
Company's Common Stock at a price of $9.155 per share on
November 1, 1999. Mr. Dickson did not sell such shares
during fiscal 2000; however, for purposes of the above table,
it is assumed that all such shares were sold on the exercise
date, at the closing price on such date, which was $17.1875.
<PAGE> 14
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, currently composed of the four
outside directors listed at the conclusion of this report, met
one time and acted once by unanimous written consent during
fiscal 2000.
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 stock options.
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 included herein. 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 certain 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 American & Efird, Inc., incentive pay is based on
pre-tax earnings, as a percentage of beginning capital employed,
and for an executive employed by Harris Teeter, Inc., incentive
pay is based on the percentage of operating profit to sales. If
the Company or a subsidiary, as applicable, achieves the
predetermined minimum goals, executives are paid a predetermined
percentage of base compensation as incentive pay. The percentage
of base compensation payable as incentive compensation increases
<PAGE> 15
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
grant of options pursuant to its stock option plans. The
Compensation Committee believes that one important goal of the
executive compensation program should be to provide executives -
who have significant responsibility for the management, growth
and future success of the Company - with an opportunity to
increase their ownership and potentially to gain financially from
the Company's stock price increases. Options generally are
granted at the prevailing market value of the Company's Common
Stock and will only have value if the Company's stock price
increases. This approach ensures that the best interests of the
stockholders and executives will be closely aligned and will
provide incentive for executives to enhance the long-term
financial performance of, and therefore shareholder value in, the
Company.
The Compensation Committee administers the Company's various
stock option plans, including the determination of the employees
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.
During fiscal 2000, the Compensation Committee granted
options to a number of employees, including certain executives,
based primarily on criteria such as length of employment with the
Company or its subsidiaries, new employment and promotions. The
Compensation Committee also considers the number of options
previously granted to employees when it determines new option
grants.
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. The Company
maintains the SERP, in which executives participate at the
discretion of the SERP administrative committee, whose members
are the same as the Compensation Committee. The Company also
maintains the Pension Plan, the ESOP and the Ruddick Savings Plan
in which executives are entitled to participate upon satisfaction
of the eligibility requirements set forth in the respective
plans.
Compensation for Thomas W. Dickson
The general philosophy and policies of the Compensation
Committee described above are equally applicable to the
compensation recommendations made with respect to Thomas W.
Dickson, the President of the Company.
The overall level of annual compensation in fiscal 2000 for
Mr. Dickson generally was determined based on the process
described above in "Annual Compensation." The increase in the
base salary paid to Mr. Dickson in fiscal 2000 is in recognition
of Mr. Dickson's continued efforts during the last year.
Fiscal 2000 annual incentive compensation under the bonus
plan for Mr. Dickson was determined based on return on beginning
shareholders' equity. Pursuant to this formula, if a
predetermined minimum
<PAGE> 16
return is achieved in a given year, Mr. Dickson 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. During the 2000 fiscal year, Mr.
Dickson received incentive compensation equal to 39% of his base pay.
His incentive compensation for fiscal 1999 was 44.1% of his fiscal 1999 base
pay.
Submitted by the Compensation and Special Stock Option Committee
Edwin B. Borden, Jr. James E.S. Hynes
Anna Spangler Nelson Harold C. Stowe
<PAGE> 17
COMPARISON OF TOTAL CUMULATIVE SHAREHOLDER RETURN
FOR FIVE-YEAR PERIOD ENDING SEPTEMBER 30, 2000
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 the (i) Standard &
Poor's 500 Index, (ii) Standard & Poor's Midcap 400 Index, (iii)
Standard & Poor's Retail -- Food Chains Index, and (iv) Standard
& Poor's Textile -- Apparel Index for the five-year period ended
September 30, 2000.
Comparison of Five-Year Cumulative Total Return*
Among Ruddick Corporation and Certain Indices**
[A line graph is pictured here with the following plot points]
Measurement Period Ruddick Corp. S&P 500 S&P Midcap S&P Retail S&P Textile
400 Food Chain Apparel
------------------ ------------ -------- --------- ---------- ----------
9/30/95 100.00 100.00 100.00 100.00 100.00
9/30/96 104.02 120.34 114.00 125.95 135.78
9/30/97 124.59 169.01 158.58 134.89 147.42
9/30/98 133.62 184.30 142.74 203.09 100.05
9/30/99 126.99 235.54 179.13 161.76 80.63
9/30/00 114.07 266.83 256.53 146.81 80.51
* $100 invested on 09/30/95 in stock or index -- including
reinvestment of dividends.
** The Company utilizes two indices, rather than a single index,
for its peer group comparison: Standard & Poor's Retail --
Food Chains Index and Standard & Poor's Textile - Apparel
Index. The Company believes that the separate presentation of
these indices more accurately corresponds to the Company's
primary lines of business.
PROPOSED 2000 COMPREHENSIVE STOCK OPTION AND AWARD PLAN
As of November 30, 2000, there were 65,500 shares of Common
Stock available for future grants of options under the Company's
four existing stock option plans. The Compensation Committee
determined that it would be desirable to have an additional
1,200,000 shares of Common Stock available for future grants of
options and other stock-based awards to employees of the Company
and its subsidiaries, as well as to directors of the Company who
are not also employees of the Company or any of its subsidiaries.
Therefore, the Board of Directors has adopted the Ruddick
Corporation 2000 Comprehensive Stock Option and Award 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 B, 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 votes cast with respect to this matter at the
Annual Meeting. Accordingly, while abstentions and broker non-
votes, if any, will count for purposes of establishing a quorum
with respect to this matter at the Annual Meeting, neither
abstentions nor broker non-votes will have the effect of a
negative vote with respect to this matter. The Board of
Directors recommends that the shareholders vote FOR the adoption
of the Plan.
<PAGE> 18
General
The purpose of the Plan is to provide the Company with a
means of providing employees of the Company and its subsidiaries
and directors of the Company the benefits of ownership of the
Common Stock. The Plan is designed to help attract and retain for
the Company and its subsidiaries personnel of superior ability
and for positions of exceptional responsibility, to reward
employees and directors for past services and to motivate such
individuals through added incentives to further contribute to the
future growth and the success of the Company.
Under the Plan, stock options, shares of restricted stock,
stock awards or performance shares, or a combination of any such
awards (collectively, "Awards") may be granted from time to
time to Eligible Persons (hereinafter defined), all generally in
the discretion of the Committee responsible for administering the
Plan (hereinafter described). Each Award under the Plan will be
evidenced by a separate written agreement which sets forth the
terms and conditions of the Award. Eligible Persons generally
include any employee of the Company or its subsidiaries, members
of the Board of Directors of the Company and any other person
whose participation the Committee determines is in the best
interest of the Company. There is no maximum number of persons
eligible to receive Awards under the Plan, nor is there any limit
on the amount of Awards that may be granted to any such person,
except as described below with respect to incentive stock
options. The Company intends that stock options or other grants
of Awards under the Plan to persons subject to Section 16 of the
Exchange Act will satisfy the requirements of Rule 16b-3.
The Company has reserved 1,200,000 shares of its Common
Stock for issuance under the Plan, subject to adjustment to
protect against dilution in the event of certain changes in
capitalization of the Company.
Administration
The Plan will be administered by a committee of the Board of
Directors of the Company that consists of two or more directors
(the "Committee"). To the extent necessary to comply with Rule
16b-3 under the Exchange Act, the Committee will consist solely
of two or more "non-employee directors," as that term is
defined in Rule 16b-3. Under the Plan, generally the Committee
will have complete authority to determine the persons to whom
Awards will be granted from time to time, as well as the terms
and conditions of such Awards. The Committee also will have
discretion to interpret the Plan and the Awards granted under the
Plan and to make other determinations necessary or advisable for
the administration of the Plan. Under the Plan, the full Board
of Directors can act as the Committee, if all of the members of
the Board of Directors otherwise are eligible to serve on the
Committee. The Compensation and Special Stock Option Committee
of the Board of Directors will act as the Committee until
otherwise determined by the Board of Directors.
Stock Options
General. The Committee may grant either incentive stock
options for purposes of the Internal Revenue Code of 1986, as
amended (the "Code"), or nonqualified stock options under the
Plan. Except as described below for incentive stock options, the
Committee generally has the discretion to determine the persons
to whom stock 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, the terms of such
options, as well as the period, if any, following a participant's
Termination of Service (as defined in the Plan) during which such
option may be exercised, and the circumstances in which all or a
portion of an option may become immediately exercisable or be
forfeited. The Committee also has the discretion, exercisable
either at the time an option is granted or at the time of a
participant's Termination of Service,
<PAGE> 19
to provide for accelerated vesting of the exercisability of an
option for a limited period following such Termination of Service.
Such terms may differ among the various persons to whom the options
are granted and among the various options granted to any such person.
Notwithstanding the foregoing, under the terms of the Plan, no
options may be exercised following the Termination of Service of
a participant for cause.
The Plan also provides that, to the extent an award is not
made pursuant to any of the Company's other option plans, any
person who was not a director of the Company as of the date the
Board of Directors adopted the 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 price per share that is not less than 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 after the date the Plan is
approved by shareholders, 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.
In the discretion of the Committee, the price due upon
exercise of an option 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, in the Committee's discretion. Also in the
discretion of the Committee, a participant may exercise an 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.
Generally, options granted under the Plan may not be
transferred by a participant other than by will or by the laws of
descent and distribution and generally will be exercisable during
the participant's lifetime only by such participant or his or her
guardian or legal representative. With respect to nonqualified
stock options, however, the Committee may, in its sole and
absolute discretion, permit a participant to transfer such option
for no consideration to or for the benefit of one or more members
of the participant's immediate family (as defined in the Plan) or
in certain circumstances family trusts, partnerships or limited
liability companies.
The Committee may also, in its discretion, allow the
voluntary surrender of all or a portion of a stock option
conditioned upon the granting to the participant of a new stock
option for the same or a different number of shares, or may
require the surrender as a condition precedent to the grant of a
new stock option. The Committee may also purchase a
participant's outstanding option, on such terms and conditions as
the Committee in its discretion determines.
Holders of options shall have no rights as shareholders of
the Company unless and until such options are exercised and
shares are delivered to such persons in accordance with the Plan.
Incentive Stock Options. Incentive stock options may be
granted only to persons who are employees of the Company or its
subsidiaries (including directors of the Company who are also
employees of the Company or a subsidiary but excluding non-
employee directors of the Company). Generally, incentive stock
options must be granted within ten years of the date the Plan is
adopted, and the term of any incentive stock option may not
exceed ten years. Furthermore, the aggregate Fair Market Value
(as defined in the Plan) of shares of Common Stock with respect
to which any incentive stock options are exercisable for the
first time by a participant during any calendar year, whether
such incentive stock options are granted under the Plan or any
other plans of the Company, may not exceed $100,000.
<PAGE> 20
Under the Plan, however, if the aggregate Fair Market Value of such
incentive stock options exceeds this limit (whether due to its
original terms, or due to accelerated exercisability following a
Termination of Service due to death, Disability or Retirement (as
such terms are defined in the Plan), or following a Change of
Control (as hereinafter defined)), then to the extent permitted
by Section 422 of the Code, the excess will be treated as a
nonqualified stock option. Furthermore, the exercise price of
incentive stock options must be at least 100% of the Fair Market
Value of the Common Stock at the time the incentive stock option
is granted, and 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
incentive stock option is granted, owns more than 10% of the
total combined voting power of all classes of stock of the
Company.
The Plan also provides that, with respect to incentive stock
options, the period during which an option may be exercisable
following a Termination of Service generally may not exceed three
months, unless (i) employment is terminated as the result of
Disability, in which case the incentive stock options may be
exercised during a period of one year following the date of such
Disability, or (ii) employment is terminated as the result of
death, or if the employee dies following a Termination of Service
and during the period that the incentive stock option is still
exercisable, in which case the incentive stock option may be
exercised during a period of one year following the date of such
death. In no event, however, may an incentive stock option be
exercised after the expiration of its original term.
Restricted Stock, Stock Awards and Performance Shares
Under the Plan, the Committee has broad discretion to grant
other equity-based incentives and compensation in the form of
restricted stock or other stock awards, as well as performance
shares.
Restricted Stock. The Committee may award shares of
restricted stock under the Plan to any Eligible Person, for such
consideration, if any, as may be determined by the Committee or
required by law, as a reward for past service and an incentive
for the performance of future services that will contribute
materially to the successful operation of the Company or its
subsidiaries. Restricted stock generally consists of shares of
Common Stock that at the time of award are subject to
restrictions or limitations as to the participant's ability to
sell, transfer, pledge or assign such shares. Shares of
restricted stock may vest, and all or a portion of the applicable
restrictions may lapse, from time to time over one or more
restricted periods, based on such factors as continued
employment, the passage of time or other measures as the
Committee determines. The Committee also may determine the
circumstances, if any, in which shares of restricted stock that
have not previously vested may be forfeited by the participant or
may be required to be resold to the Company, as well as the
circumstances, if any, in which the vesting of such shares might
be accelerated or delayed. Generally, in the discretion of the
Committee, any shares of restricted stock that have not vested in
full will be forfeited upon the participant's Termination of
Service and shall be cancelled by the Company. Unless otherwise
provided in the applicable award agreement, however, the
Committee may in its discretion waive any remaining restrictions
in the event of the death, Disability or Retirement of the
participant during the applicable restricted period or in other
cases of special circumstances. Notwithstanding the foregoing,
under the terms of the Plan all shares of restricted stock which
have not vested in full shall be forfeited and cancelled if the
participant is terminated for cause, as determined by the
Committee. In the discretion of the Committee, cash dividends
with respect to shares of restricted stock may be automatically
reinvested in additional shares of stock subject to the same
restrictions, or cash dividends (or other distributions) with
respect to such shares may be withheld by the Committee for the
account of the participant, with or without interest. Except as
expressly provided otherwise, persons to whom shares of
restricted stock have been awarded will have all rights of a
shareholder of the Company with respect to such shares, unless
and until such shares are otherwise forfeited by such person.
<PAGE> 21
Stock Awards. The Committee may grant stock awards under
the Plan to any Eligible Person in payment of compensation that
has been earned or as compensation to be earned. All shares
subject to a stock award shall be valued at not less than 100% of
the Fair Market Value of the shares of Common Stock on the grant
date of such stock award. Upon the issuance of shares subject to
a stock award and the delivery of certificate(s) representing
such shares to the participant, the participant will become a
shareholder of the Company fully entitled to receive dividends,
to vote and to exercise all other rights of a shareholder of the
company with respect to such shares.
Performance Shares. The Committee may award performance
shares under the Plan to any Eligible Person, for such
consideration, if any, as may be determined by the Committee or
required by law, as an incentive for the performance of future
services that will contribute materially to the successful
operation of the Company and its subsidiaries. A performance
share generally consists of a unit valued by reference to the
Common Stock; the value of one performance share will be equal at
any given time to the Fair Market Value of one share of Common
Stock. Performance shares generally may be earned by a
participant only if the participant achieves certain performance
objectives that are determined by the Committee at the time of
the award. The performance objectives generally will be measured
over one or more performance periods applicable to the Award of
such shares as determined by the Committee at the time of the
award. The Committee also has the discretion to determine the
number of performance shares that will be paid to a participant
if the applicable performance objectives are exceeded or met in
whole or in part and the form of settlement of a performance
share. Performance objectives may vary from participant to
participant and will be based on such performance criteria (for
example, minimum earnings per share or return on equity) as the
Committee in its sole discretion determines appropriate. The
Committee also has the discretion to revise the performance
objectives during the duration of the performance period if it
determines that significant events that have a substantial effect
on the existing performance objectives have occurred. Generally,
any performance shares that have not been earned or vested in
full will be forfeited upon a participant's Termination of
Service. Unless otherwise provided in the applicable award
agreement, however, the Committee may in its discretion determine
to make a settlement of such performance shares based on the
extent to which the applicable performance objectives were
satisfied and pro rated for the portion of the period during
which the Participant was employed. Notwithstanding the
foregoing, under the terms of the Plan all performance shares
which have not been earned in full shall be forfeited and
cancelled if the participant is terminated for cause, as
determined by the Committee.
The settlement of a performance share may be made in cash,
in whole shares of Common Stock, or any combination thereof. The
Committee may also, in its discretion, place restrictions on the
transfer of any shares of Common Stock delivered to the
participant in payment of the performance shares. Performance
shares are not transferable by a participant.
Change of Control or Other Fundamental Change
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 Company's outstanding Common Stock, each participant
generally shall be entitled upon the exercise of his or her stock
options to receive the number and class of securities or other
property to which such participant would have been entitled in
the merger or reorganization if such participant had exercised
such stock option prior to such merger or reorganization. The
Committee, in its discretion, may provide for similar adjustments
upon the occurrence of such events with respect to other Awards
outstanding under the Plan.
The Plan also provides that, upon the occurrence of a Change
of Control: (i) outstanding stock 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, and shall remain
<PAGE> 22
exercisable for the remaining term of the option; (ii) outstanding
performance shares will be deemed 100% earned and a pro rata portion
of such performance shares (based on the portion of the applicable
performance period that has elapsed at such time) shall be paid
to the participant; and (iii) outstanding shares of restricted
stock shall be deemed vested and all restrictions thereon shall
be deemed lapsed. A Change of Control is defined under the Plan
as (a) the adoption of a plan of merger or consolidation of the
Company with any other corporation or association 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, (b) 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
(c) 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 Exchange Act other than a
person, or group including a person, who beneficially owned, at
the date of adoption of the Plan by the Board of Directors, more
than 6.0% of the Company's voting capital stock. In addition,
the Committee generally has the discretion to take such actions
and make such adjustments with respect to outstanding Awards as
it deems necessary or advisable, and fair and equitable, in the
event of a Change of Control or other similar event.
Upon the dissolution or liquidation of the Company, all
outstanding Awards under the Plan shall terminate. Upon the
adoption, however, of a plan of such dissolution or liquidation,
all outstanding Awards shall be exercisable in full and all
restrictions shall lapse, to the extent described in the previous
paragraph.
Miscellaneous
The Board of Directors generally may amend or terminate the
Plan or any provision of the Plan at any time. To the extent
required by the Exchange Act or the Code, however, absent
approval by the Company's shareholders, no amendment may (i)
materially alter the group of persons eligible to participate in
the Plan; (ii) except as specifically provided in the Plan,
increase the number of shares available for Awards under the
Plan; (iii) extend the period during which incentive stock
options may be granted beyond November 16, 2010; or (iv) alter
the class of individuals eligible to receive an incentive stock
option or increase the limit on incentive stock options or the
value of shares of Common Stock for which eligible employees may
be granted an incentive stock option. Furthermore, without the
consent of the participant, no amendment to or discontinuance of
the Plan or any provision thereof shall adversely affect (in the
sole discretion of the Committee) any Award granted to the
participant under the Plan, except that the Committee shall
always have the right and power to annul any Award if the
participant is terminated for cause and to convert any
outstanding incentive stock option to a nonqualified stock
option.
If a participant is required to pay to the Company any
amount with respect to income or employment tax withholding
obligations in connection with an Award, no Common Stock will be
transferred to such participant until the Committee in its sole
discretion is satisfied as to the payment of such liabilities.
The Committee in its discretion may allow a participant to
satisfy any such obligation by withholding shares of Company
Stock that otherwise would be delivered to such participant with
a Fair Market Value equal to the amount of the withholding
obligation.
Federal Income Tax Consequences
The following is a brief description of the federal income
tax consequences to the participants and the Company of the
issuance and exercise of stock options under the Plan, as well as
the grant of restricted stock, stock awards and performance
shares. All ordinary income recognized by a participant with
respect to Awards under the Plan shall be subject to both wage
withholding and employment taxes. The deduction allowed to the
Company for the ordinary income recognized by a participant with
respect
<PAGE> 23
to an Award under the Plan will be limited to amounts
that constitute reasonable, ordinary and necessary business
expenses of the Company.
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 participant 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 participant 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 a participant'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 participant, the Company generally will be entitled to a
deduction in the amount of such ordinary income in the year of
the disposition.
If a participant delivers shares of the Company's Common
Stock in payment of the option price, the participant 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 participant 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 participant'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 a participant 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 participant generally will recognize income.
Nonqualified Stock Options. The grant of nonqualified stock
options under the Plan will not result in any income being taxed
to the participant at the time of the grant or in any tax
deduction for the Company at such time. At the time a
nonqualified stock option is exercised, the participant 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 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 participant upon exercise. The participant'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.
Restricted Stock. If a participant receiving a grant of
restricted stock under the Plan makes an election with respect to
such shares under Section 83(b) of the Code not later than 30
days after the date
<PAGE> 24
the shares are transferred to the participant pursuant to such grant,
the participant will recognize ordinary income at the time of transfer
in an amount equal to the excess of the Fair Market Value of the shares
of Common Stock as of the date of transfer over the price paid (if any)
for such restricted stock (determined without regard to any vesting
conditions or other restrictions other than a restriction which by
its terms will never lapse). In the absence of such an election, the
participant will recognize ordinary income at the time the
restrictions lapse in an amount equal to the excess of the Fair
Market Value of the shares of Common Stock as of the date the
restrictions lapse over the price paid (if any) for such stock.
At the first to occur of the election or the lapsing of the
restrictions, the Company will be allowed a deduction for federal
income tax purposes equal to the amount of ordinary income
attributable to the participant. The participant's holding
period for the shares of Common Stock acquired will commence upon
the first to occur of the date the participant makes an election
under Section 83(b) of the Code or on the date that the
restrictions lapse, and the tax basis of the shares will be the
greater of their Fair Market Value on that date or the price paid
for the shares (if any).
If an election is made under Section 83(b) of the Code,
dividends received on shares which are subject to restrictions
will be treated as ordinary income. If a participant does not
make an election under Section 83(b) of the Code, dividends
received on the restricted shares prior to the date that such
restrictions lapse will be treated as additional compensation and
not as dividend income for federal income tax purposes.
If (i) an election is made under Section 83(b) of the Code
and (ii) before the restrictions on the shares lapse, the shares
which are subject to such election are forfeited to the Company,
then (a) no deduction would be allowed to such participant for
the amount included in the income of such participant by reason
of such election, and (b) the participant would realize a loss in
an amount equal to the excess, if any, of the ordinary income
previously recognized by the participant with respect to such
shares over the value of such shares at the time of forfeiture.
Such loss would be a capital loss if the shares are held as a
capital asset at such time. In such event, the Company would be
required to include in its income the amount of any deduction
previously allowable to it in connection with the transfer of
such shares.
Stock Awards. At the time a stock award is granted, the
participant will be treated as having received ordinary income
equal to the Fair Market Value of the shares of Common Stock
acquired. At that time, the Company will be allowed a deduction
for federal income tax purposes equal to the amount of ordinary
income which the participant receives. The participant's holding
period for the shares of Common Stock acquired will commence on
the date of grant, and the tax basis of the shares will be their
Fair Market Value at that time.
Performance Shares. At the time performance shares are
earned, the participant will be treated as having received
ordinary income equal to the Fair Market Value of the shares of
Common Stock subject to such performance shares, whether paid in
cash of by delivery of shares of Common Stock. At that time, the
Company will be allowed a deduction for federal income tax
purposes equal to the amount of ordinary income which the
participant receives. The participant's holding period for the
shares of Common Stock acquired (if any) will commence on the
date of grant, and the tax basis of such shares will be their
Fair Market Value at that time.
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. A representative of
Arthur Andersen LLP, the Company's principal accountants for the
<PAGE> 25
fiscal year ended October 1, 2000, is expected to attend the
Annual Meeting and will have an opportunity to make a statement,
if he wishes to do so, and to respond to questions from
shareholders.
SECTION 16(a) BENEFICIAL OWNERSHIP
REPORTING COMPLIANCE
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, based solely on a review of such copies or written
representations relating thereto, insiders of the Company
complied with all filing requirements, except that John B.
Woodlief's initial statement of beneficial ownership on Form 3
was filed on an untimely basis.
SHAREHOLDER PROPOSALS
The deadline for submission of shareholder proposals pursuant
to Rule 14a-8 under the Exchange Act for inclusion in the
Company's proxy statement for its 2002 annual meeting of
shareholders is August 29, 2001. Any shareholder proposal to be
submitted at the 2002 annual meeting of shareholders (but not
required to be included in the Company's proxy statement),
including nominations for election to the Board of Directors,
must also comply with Article III , Section 12 of the Company's
Bylaws, which requires that a shareholder give written notice to
the Company not later than the 45th day prior to the first
anniversary of the date the Company first mailed its proxy
materials for the preceding year's annual meeting of
shareholders. Shareholder proposals submitted at the 2002 annual
meeting of shareholders (but not required to be included in the
Company's proxy statement) will not be considered timely unless
the notice required by the Bylaws is delivered to the Secretary
of the Company not later than November 12, 2001.
ANNUAL REPORT
The Annual Report of the Company for the year ended October 1,
2000, 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
DOUGLAS J. YACENDA
Secretary
December 27, 2000
<PAGE> 26
APPENDIX A
May, 2000
RUDDICK CORPORATION
Audit Committee Charter
The Audit Committee was established on February 2, 1989.
Membership, duties, and responsibilities of the Committee are:
1. Membership
- The members of Ruddick's Audit Committee shall be
appointed by the Board of Directors. The
Committee shall consist of between three and five
members of the Board of Directors. The members of
the Committee shall meet the independence and
experience requirements of the New York Stock
Exchange which are in effect from time to time.
Members of the Committee shall serve at the
pleasure of the Board or until successors are
appointed. One member shall be designated by the
Board as Chairman of the Committee and shall serve
in that capacity until a successor is appointed.
- Ruddick's Audit Committee may rely on Ruddick's
existing staff and its outside auditors for help
in performing its duties and responsibilities.
The Committee has direct access to financial,
legal, and other staff and advisers of Ruddick.
Such advisers may assist the Committee members in
defining their roles and responsibilities, consult
with Committee members regarding a specific audit
or other issues that may arise in the course of
the Committee's duties, and conduct independent
investigations, studies, or tests. The Committee
has the authority to employ accountants,
attorneys, or other advisers to assist the
Committee, though this power is typically used
only in special circumstances.
2. Duties and Responsibilities
General
- Assess the quality of the financial reporting and
the system of internal control.
- Understand internal and external auditors' process
of assessing risks.
- Review and approve internal audit plan and review
significant findings.
- Review and understand scope of the external audit
and related fees.
<PAGE> A-1
External Financial Reporting
- With management and independent auditors, review,
understand and assess-
* The annual financial statements, including but
not limited to significant accruals, reserves,
other estimates, and income tax matters.
* Significant accounting and reporting issues,
including any significant assumptions in
judgment matters and any audit adjustments
proposed by external auditors.
* The effect of new auditing standards.
* The effect of current and new accounting
principles.
* Any disagreements between management and either
internal or external auditors.
- The Committee shall receive periodic reports from
the independent auditors regarding their
independence. The Committee shall review and
assess with management and the independent
auditors such reports and the nature and cost of
non-audit services provided by the independent
auditors and the possible effect of the
performance of those services on the independence
of the auditors, and if so determined by the
Committee, recommend that the Board take
appropriate action to satisfy itself of the
independence of the auditors.
- Evaluate, approve and recommend to the Board for
approval -
* The selection, retention or termination of the
independent auditors, which firm is ultimately
accountable to the Committee and the Board, and
related fees.
* The annual SEC financial reporting.
Internal Controls
- Obtain from management, the internal auditors and
the independent auditors periodic reports of their
assessments as to the adequacy of Ruddick's system
of internal accounting controls, which provide
awareness of any significant control deficiencies
encountered.
- Periodically update the Board's understanding of
the extent to which internal and external
auditors' work can be relied upon to detect
control weakness or fraud. The focus will be on
changes in the business and their impact on
controls.
- Periodically update the Board's understanding of
the extent to which the Company relies on computer
systems and the effectiveness or weaknesses in
computer-related controls. The focus will be on
changes in the systems and their impact
on controls.
<PAGE> A-2
- Review and approve the annual internal audit plan
prepared by management.
Environmental
- Review with management its periodic reports and
reviews and management's assessment of any
significant environmental issues and exposures.
Foreign
- Review with management its periodic reports and
reviews of significant capital at risk in foreign
operations and political and currency intervention
risks.
Operational
- Hold at least two scheduled meetings each year.
Hold an executive session with only the Audit
Committee and external auditors present at least
twice a year.
- Be available to meet on an unscheduled basis,
privately and separately, with the independent
auditors or internal auditors, if necessary, in
order to resolve problems that arise in connection
with their audit or non-audit services.
- Establish a predetermined arrangement with the
independent auditors that they will advise the
Committee through the Chairman and management of
the Corporation of any significant events,
transactions and changes in accounting estimates,
which were considered by the independent auditors
in performing the quarterly review to have
affected the quality of Ruddick's financial
reporting, and such notification is to be made
prior to the related press release or, if not
practicable, prior to filing the Form 10-Q.
- Keep minutes of its proceedings and report its
actions to next succeeding meeting of the Board.
- Prepare the report required by the rules of the
SEC to be included in Ruddick's annual proxy
statement and to otherwise report to shareholders
if directed by the Board.
Legal Compliance and Code of Conduct
- Annually review the Company's process for
monitoring compliance with laws and regulations.
- Annually review management's programs to ensure
adherence to and distribution of, the code of
conduct, which prohibits questionable, improper or
illegal activities by all officers and employees.
<PAGE> A-3
- Report to the Chairman any matter that the
Committee feels should be brought to the Board,
including but not limited to inadequate controls,
inordinate undisclosed risks, quality of
reporting, conflict of interest, illegal
activities or dishonesty.
- Annually review and reassess the adequacy of this
Charter and recommend any proposed changes to the
Board for approval.
Scope of Responsibility
- While the Audit Committee has the responsibilities
and powers set forth in this Charter, it is not
the duty of the Committee to plan or conduct
audits or to determine that Ruddicks financial
statements are complete and accurate and are in
accordance with generally accepted accounting
principles. This is the responsibility of
management and the independent auditors. Nor is
it the duty of the Committee to conduct
investigations, to resolve disagreements, if any,
between management and the independent auditors or
to assure compliance with laws and regulations and
Ruddick's code of conduct.
<PAGE> A-4
APPENDIX B
RUDDICK CORPORATION 2000
COMPREHENSIVE STOCK OPTION AND AWARD PLAN
ARTICLE I - PREAMBLE
1.1 The Ruddick Corporation 2000 Comprehensive Stock Option and
Award Plan is intended to secure for the Corporation, its
Subsidiaries and its shareholders the benefits arising from
ownership of the Corporation's Common Stock by the employees
of the Corporation and its Subsidiaries and by the directors
of the Corporation, all of whom are and will be responsible
for the Corporation's future growth. The Plan is designed
to help attract and retain for the Corporation and its
Subsidiaries personnel of superior ability for positions of
exceptional responsibility, to reward employees and
directors for past services and to motivate such individuals
through added incentives to further contribute to the
success of the Corporation. With respect to persons subject
to Section 16 of the Act, transactions under this Plan are
intended to satisfy the requirements of Rule 16b-3 of the
Act.
1.2 Awards under the Plan may be made to Eligible Persons in the
form of (i) Incentive Stock Options (to Eligible Employees
only); (ii) Nonqualified Stock Options; (iii) Restricted
Stock; (iv) Stock Awards; (v) Performance Shares; or (vi)
any combination of the foregoing.
1.3 The Plan shall be effective November 16, 2000 (the
"Effective Date"), subject to approval by the shareholders
of the Corporation to the extent necessary to satisfy the
requirements of the Code, the New York Stock Exchange, Inc.,
or other applicable federal or state law.
<PAGE> B-1
ARTICLE II - DEFINITIONS
DEFINITIONS. Except where the context otherwise indicates, the
following definitions apply:
2.1 "Act" means the Securities Exchange Act of 1934, as now in
effect or as hereafter amended.
2.2 "Award" means an award granted to a Participant in
accordance with the provisions of the Plan, including, but
not limited to, Stock Options, Restricted Stock, Stock
Awards, Performance Shares, or any combination of the
foregoing.
2.3 "Award Agreement" means the separate written agreement
evidencing each Award granted to a Participant under the
Plan.
2.4 "Board of Directors" means the Board of Directors of the
Corporation.
2.5 "Change of Control" shall mean (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 by 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, more than 6%
of the Corporation's voting capital stock.
2.6 "Code" means the Internal Revenue Code of 1986, as now in
effect or as hereafter amended. (All citations to sections
of the Code are to such sections as they may from time to
time be amended or renumbered.)
2.7 "Committee" means a committee of the Board of Directors
established by the Board of Directors for the administration
of the Plan pursuant to Article III and consisting of two or
more Directors. To the extent necessary to comply with Rule
16b-3 under the Act, the Committee shall consist solely of
two or more Non-Employee Directors. The Compensation and
Special Stock Option Committee of the Board of Directors
shall constitute the Committee until otherwise determined by
the Board of Directors.
2.8 "Common Stock" means the common stock of the Corporation
to be issued pursuant to the Plan.
2.9 "Corporation" means Ruddick Corporation, a North Carolina
corporation, and its successors and assigns.
<PAGE> B-2
2.10 "Director" means a member of the Board of Directors of the
Corporation.
2.11 "Disability" means disability as determined under
procedures established by the Committee or in any Award, as
set forth in a Participant's Award Agreement.
2.12 "Effective Date" shall be the date set forth in Section
1.3 of the Plan.
2.13 "Eligible Employee" means an Eligible Person who is an
employee of the Corporation or any Subsidiary.
2.14 "Eligible Person" means any employee of the Corporation or
any Subsidiary or any Director, as well as any other person
whose participation the Committee determines is in the best
interest of the Corporation, subject to limitations as may
be provided by the Code, the Act or the Committee.
2.15 "ERISA" means the Employee Retirement Income Security Act
of 1974, as now in effect or as hereafter amended.
2.16 "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 Nasdaq 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 Nasdaq 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 Nasdaq
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.
2.17 "Grant Date" means, as to any Award, the latest of:
(a) the date on which the Committee authorizes the grant of
the Award; or
(b) the date the Participant receiving the Award becomes an
employee or a director of the Corporation or its
Subsidiaries, to the extent employment status is a
condition of the grant or a requirement of the Code or
the Act; or
(c) such other date (later than the dates described in (a)
and (b) above) as the Committee may designate and as
set forth in the Participant's Award Agreement.
2.18 "Immediate Family" means any child, stepchild, grandchild,
parent, stepparent, grandparent, spouse, sibling, mother-in-
law, father-in-law, son-in-law, daughter-in-law, brother-in-
law or sister-in-law and shall include adoptive
relationships.
<PAGE> B-3
2.19 "Incentive Stock Option" means a Stock Option that meets
the requirements of Section 422 of the Code and is granted
under Article IV of the Plan and designated as an Incentive
Stock Option in a Participant's Award Agreement.
2.20 "Non-Employee Director" shall have the meaning set forth
in Rule 16b-3 under the Act.
2.21 "Nonqualified Stock Option" means a Stock Option that does
not meet the requirements of Section 422 of the Code and is
granted under Article V of the Plan, or, even if meeting the
requirements of Section 422 of the Code, is not intended to
be an Incentive Stock Option and is not so designated in the
Participant's Award Agreement.
2.22 "Option Period" means the period during which a Stock
Option may be exercised from time to time, as established by
the Committee and contained in the Award Agreement for each
Participant who is granted a Stock Option.
2.23 "Option Price" means the purchase price for a share of
Common Stock subject to purchase pursuant to a Stock Option,
as established by the Committee and contained in the Award
Agreement for each Participant who is granted a Stock
Option.
2.24 "Participant" means an Eligible Person to whom an Award
has been granted and who has entered into an Award Agreement
evidencing the Award.
2.25 "Performance Share" means an Award under Article IX of the
Plan of a unit valued by reference to the Common Stock, the
payout of which is subject to achievement of such
Performance Objectives, measured during one or more
Performance Periods, as the Committee, in its sole
discretion, shall establish at the time of such Award and
set forth in a Participant's Award Agreement.
2.26 "Performance Objectives" shall have the meaning set forth
in Article IX of the Plan.
2.27 "Performance Period" shall have the meaning set forth in
Article IX of the Plan.
2.28 "Plan" means the Ruddick Corporation 2000 Comprehensive
Stock Option and Award Plan, as amended from time to time.
2.29 "Restricted Stock" means an Award under Article VII of the
Plan of shares of Common Stock that are at the time of the
Award subject to restrictions or limitations as to the
Participant's ability to sell, transfer, pledge or assign
such shares, which restrictions or limitations may lapse
separately or in combination at such time or times, in
installments or otherwise, as the Committee, in its sole
discretion, shall determine at the time of such Award and
set forth in a Participant's Award Agreement.
2.30 "Restriction Period" means the period commencing on the
Grant Date with respect to such shares of Restricted Stock
and ending on such date as the Committee, in its sole
discretion, shall establish and set forth in a Participant's
Award Agreement.
<PAGE> B-4
2.31 "Retirement" means retirement as determined under
procedures established by the Committee or in any Award, as
set forth in a Participant's Award Agreement.
2.32 "Stock Award" means an Award of shares of Common Stock
under Article VIII of the Plan.
2.33 "Stock Option" means an Award under Article IV or Article
V of the Plan of an option to purchase Common Stock. A
Stock Option may be either an Incentive Stock Option or a
Nonqualified Stock Option.
2.34 "Subsidiary" means a subsidiary corporation of the
Corporation as that term is defined in Code section 424(f).
"Subsidiaries" means more than one Subsidiary.
2.35 "Termination of Service" means (i) in the case of an
Eligible Employee, the discontinuance of employment of such
Participant with the Corporation or its Subsidiaries for any
reason other than a transfer to another member of the group
consisting of the Corporation and its Subsidiaries and (ii)
in the case of a Director who is not an employee of the
Corporation or any Subsidiary, the date such Participant
ceases to serve as a Director. The determination of whether
a Participant has discontinued employment shall be made by
the Committee in its sole discretion. In determining
whether a Termination of Service has occurred, the Committee
may provide that service as a consultant or service with a
business enterprise in which the Corporation has a
significant ownership interest shall be treated as
employment with the Corporation.
<PAGE> B-5
ARTICLE III - ADMINISTRATION
3.1 The Plan shall be administered by the Committee. Except as
otherwise required by Rule 16b-3 under the Act, the
Committee, in its discretion, may delegate to one or more of
its members such of its powers as it deems appropriate. The
Committee also may limit the power of any member to the
extent necessary to comply with Rule 16b-3 under the Act or
any other law, rule or regulation. The Board of Directors
may serve as the Committee, if by the terms of the Plan all
members of the Board of Directors are otherwise eligible to
serve on the Committee.
3.2 The Committee shall meet at such times and places as it
determines. The Committee shall at all times operate and be
governed, and Committee meetings shall be conducted and
action taken, in accordance with the provisions of the
Corporation's Bylaws or resolutions or policies adopted by
the Board of Directors from time to time regarding the
operation of committees of the Corporation.
3.3 Subject to the provisions of Section 5.4 regarding grants of
Nonqualified Stock Options by the Board of Directors, the
Committee shall have the exclusive right to interpret,
construe and administer the Plan, to select the Eligible
Persons who shall receive an Award, and to act in all
matters pertaining to the grant of an Award and the
determination and interpretation of the provisions of the
related Award Agreement, including, without limitation, the
determination of the number of shares subject to Stock
Options and the Option Period(s) and Option Price(s)
thereof, the number of shares of Restricted Stock or shares
subject to Stock Awards or Performance Shares subject to an
Award, the vesting periods (if any) and the form, terms,
conditions and duration of each Award, and any amendment
thereof consistent with the provisions of the Plan. All
acts, determinations and decisions of the Committee made or
taken pursuant to the Plan or with respect to any questions
arising in connection with the administration and
interpretation of the Plan or any Award Agreement, including
the severability of any and all of the provisions thereof,
shall be conclusive, final and binding upon all
Participants, Eligible Persons and their beneficiaries.
3.4 The Committee may adopt such rules, regulations and
procedures of general application for the administration of
this Plan as it deems appropriate.
3.5 Without limiting the provisions of this Article III, and
subject to the provisions of Article X, the Committee is
authorized to take such action as it determines to be
necessary or advisable, and fair and equitable to
Participants and to the Corporation, with respect to an
outstanding Award in the event of a Change of Control as
described in Article X or other similar event. Such action
may include, but shall not be limited to, establishing,
amending or waiving the form, terms, conditions and duration
of an Award and the related Award Agreement, so as to
provide for earlier, later, extended or additional times for
exercise or payments, differing methods for calculating
payments, alternate forms and amounts of payment, an
accelerated release of restrictions or other modifications.
The Committee may take such actions pursuant to this Section
3.5 by adopting rules and regulations of general
applicability to all Participants or to certain categories
of
<PAGE> B-6
Participants, by including, amending or waiving terms and
conditions in an Award and the related Award Agreement, or
by taking action with respect to individual Participants
from time to time.
3.6 Subject to the provisions of Section 3.11, the aggregate
number of shares of Common Stock which may be issued
pursuant to Awards under the Plan shall be One Million Two
Hundred Thousand (1,200,000) shares. Such shares of Common
Stock shall be made available from authorized and unissued
shares of the Corporation.
(a) For all purposes under the Plan, each Performance Share
awarded shall be counted as one share of Common Stock
subject to an Award.
(b) If, for any reason, any shares of Common Stock
(including shares of Common Stock subject to
Performance Shares) that have been awarded or are
subject to issuance or purchase pursuant to Awards
outstanding under the Plan are not delivered or
purchased, or are reacquired by the Corporation, for
any reason, including but not limited to a forfeiture
of Restricted Stock or failure to earn Performance
Shares or the termination, expiration or cancellation
of a Stock Option, or any other termination of an Award
without payment being made in the form of shares of
Common Stock (whether or not Restricted Stock), such
shares of Common Stock shall not be charged against the
aggregate number of shares of Common Stock available
for Award under the Plan and shall again be available
for Awards under the Plan. In no event, however, may
Common Stock that is surrendered or withheld to pay the
exercise price of a Stock Option be available for
future grants under the Plan.
(c) The foregoing subsections (a) and (b) of this Section
3.6 shall be subject to any limitations provided by the
Code or by Rule 16b-3 under the Act or by any other
applicable law, rule or regulation.
3.7 Each Award granted under the Plan shall be evidenced by a
written Award Agreement, which shall be subject to and shall
incorporate (by reference or otherwise) the applicable terms
and conditions of the Plan, and shall include any other
terms and conditions (not inconsistent with the Plan)
required by the Committee.
3.8 The Corporation shall not be required to issue or deliver
any certificates for shares of Common Stock under the Plan
prior to:
(a) any required approval of the Plan by the shareholders
of the Corporation; and
(b) the completion of any registration or qualification of
such shares of Common Stock under any federal or state
law, or any ruling or regulation of any governmental
body that the Corporation shall, in its discretion,
determine to be necessary or advisable.
<PAGE> B-7
3.9 The Committee may require any Participant acquiring shares
of Common Stock pursuant to any Award under the Plan to
represent to and agree with the Corporation in writing that
such person is acquiring the shares of Common Stock for
investment purposes and without a view to resale or
distribution thereof. Shares of Common Stock issued and
delivered under the Plan shall also be subject to such stop-
transfer orders and other restrictions as the Committee may
deem advisable under the rules, regulations and other
requirements of the Securities and Exchange Commission, any
stock exchange upon which the Common Stock is then listed
and any applicable federal or state laws, and the Committee
may cause a legend or legends to be placed on the
certificate or certificates representing any such shares to
make appropriate reference to any such restrictions. In
making such determination, the Committee may rely upon an
opinion of counsel for the Corporation.
3.10 Except as otherwise expressly provided in the Plan or in an
Award Agreement with respect to an Award, no Participant
shall have any right as a shareholder of the Corporation
with respect to any shares of Common Stock subject to such
Participant's Award except to the extent that, and until,
one or more certificates representing such shares of Common
Stock shall have been delivered to the Participant. No
shares shall be required to be issued, and no certificates
shall be required to be delivered, under the Plan unless and
until all of the terms and conditions applicable to such
Award shall have, in the sole discretion of the Committee,
been satisfied in full and any restrictions shall have
lapsed in full, and unless and until all of the requirements
of law and of all regulatory bodies having jurisdiction over
the offer and sale, or issuance and delivery, of the shares
shall have been fully complied with.
3.11 The total amount of shares with respect to which Awards may
be granted under the Plan and rights of outstanding Awards
(both as to the number of shares subject to the outstanding
Awards and the Option Price(s) or other purchase price(s) of
such shares, as applicable) 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 stock
split or subdivision or combination of shares of the Common
Stock, or a reorganization or reclassification of the Common
Stock, or any other change in the structure of shares of the
Common Stock. The foregoing adjustments and the manner of
application of the foregoing provisions shall be determined
by the Committee in its sole discretion. Any such
adjustment may provide for the elimination of any fractional
shares which might otherwise become subject to an Award.
All adjustments made as the result of the foregoing in
respect of each Incentive Stock Option shall be made so that
such Incentive Stock Option shall continue to be an
Incentive Stock Option, as defined in Section 422 of the
Code.
3.12 In addition to such other rights of indemnification as they
may have as Directors or as members of the Committee, the
members of the Committee shall be indemnified by the
Corporation against reasonable expenses, including
attorney's fees, actually and necessarily incurred in
connection with the defense of any action, suit or
proceeding, or in connection with any appeal thereof, to
which they or any of them may be a party by reason of any
action taken or failure to act under or in connection with
the Plan or any
<PAGE> B-8
Award granted thereunder, and against all
amounts paid by them in settlement thereof (provided such
settlement is approved by independent legal counsel selected
by the Corporation) or paid by them in satisfaction of a
judgment or settlement in any such action, suit or
proceeding, except as to matters as to which the Committee
member has been negligent or engaged in misconduct in the
performance of his duties; provided, however, that within
sixty (60) days after institution of any such action, suit
or proceeding, a Committee member shall in writing offer the
Corporation the opportunity, at its own expense, to handle
and defend the same.
3.13 The Committee shall be authorized to make adjustments in any
performance based criteria or in the other terms and
conditions of outstanding Awards in recognition of unusual
or nonrecurring events affecting the Corporation (or any
Subsidiary, if applicable) or its financial statements or
changes in applicable laws, regulations or accounting
principles. The Committee may correct any defect, supply
any omission or reconcile any inconsistency in the Plan or
any Award Agreement in the manner and to the extent it shall
deem necessary or desirable to reflect any such adjustment.
In the event the Corporation (or any Subsidiary, if
applicable) shall assume outstanding employee benefit awards
or the right or obligation to make future such awards in
connection with the acquisition of another corporation or
business entity, the Committee may, in its discretion, make
such adjustments in the terms of outstanding Awards under
the Plan as it shall deem appropriate.
3.14 Subject to the express provisions of the Plan, the Committee
shall have full power and authority to determine whether, to
what extent and under what circumstances any outstanding
Award shall be terminated, canceled, forfeited or suspended.
Notwithstanding the foregoing or any other provision of the
Plan or an Award Agreement, all Awards to any Participant
that are subject to any restriction or have not been earned
or exercised in full by the Participant shall be terminated
and canceled if the Participant is terminated for cause, as
determined by the Committee in its sole discretion.
<PAGE> B-9
ARTICLE IV - INCENTIVE STOCK OPTIONS
4.1 The Committee, in its sole discretion, may from time to time
on or after the Effective Date grant Incentive Stock Options
to Eligible Employees, subject to the provisions of this
Article IV and Articles III and VI and subject to the
following conditions:
(a) Incentive Stock Options shall be granted only to
Eligible Employees, each of whom may be granted one or
more of such Incentive Stock Options at such time or
times determined by the Committee; provided, however,
that Incentive Stock Options shall be granted only to
an Eligible Employee who, at the time of the Grant
Date, does not own stock possessing more than ten
percent (10%) of the total combined voting power of all
classes of stock of the Corporation.
(b) The Option Price per share of Common Stock for an
Incentive Stock Option shall be set in the Award
Agreement, but shall not be less than one hundred
percent (100%) of the Fair Market Value of the Common
Stock at the Grant Date.
(c) An Incentive Stock Option may be exercised in full or
in part from time to time within ten (10) years from
the Grant Date, or such shorter period as may be
specified by the Committee as the Option Period and set
forth in the Award Agreement; provided, however, that
in any event the Incentive Stock Option shall lapse and
cease to be exercisable upon a Termination of Service
or within such period following a Termination of
Service as shall have been determined by the Committee
and set forth in the related Award Agreement; and
provided, further, that such period following a
Termination of Service shall not exceed three (3)
months unless employment shall have terminated:
(i) as a result of Disability, in which event such
period shall not exceed one year after the date of
Disability; or
(ii) as a result of death, or if death shall have
occurred following a Termination of Service (other
than as a result of Disability) and during the
period that the Incentive Stock Option was still
exercisable, in which event such period may not
exceed one year after the date of death; and
provided, further, that such period following a
Termination of Service shall in no event extend beyond
the original Option Period of the Incentive Stock
Option.
(d) The aggregate Fair Market Value of the shares of Common
Stock with respect to which any incentive stock options
(whether under this Plan or any other plan established
by the Corporation) are first exercisable during any
calendar year by any Eligible Employee shall not exceed
one hundred thousand dollars ($100,000), determined
based on the Fair Market Value(s) of such shares as of
their respective grant dates; provided, however, that
to the extent permitted under Section 422 of the Code:
<PAGE> B-10
(i) if the aggregate Fair Market Values of the shares
of Common Stock with respect to which incentive
stock options are first exercisable during any
calendar year (whether such Incentive Stock
Options are granted under this Plan or any other
plan established by the Corporation) exceeds one
hundred thousand dollars ($100,000), such excess
shall be treated as a Nonqualified Stock Option;
(ii) if a Participant's employment is terminated by
reason of death, Disability or Retirement and the
portion of any incentive stock option that is
otherwise exercisable during the post-termination
period applied without regard to the one hundred
thousand dollar ($100,000) limitation contained in
Section 422 of the Code is greater than the
portion of such option that is immediately
exercisable as an Incentive Stock Option during
such post-termination period under Section 422,
such excess shall be treated as a Nonqualified
Stock Option; and
(iii) if the exercise of an Incentive Stock Option
is accelerated by reason of a Change of Control,
any portion of such Award that is not exercisable
as an incentive stock option by reason of the one
hundred thousand dollar ($100,000) limitation
contained in Section 422 of the Code shall be
treated as a Nonqualified Stock Option.
(e) No Incentive Stock Options may be granted more than ten
(10) years from the Effective Date.
4.2 Subject to the limitations of Section 3.6, the maximum
number of shares of Common Stock subject to Incentive Stock
Option Awards shall be the maximum number of shares
available for Awards under the Plan.
4.3 The Committee may provide for any other terms and conditions
which it determines should be imposed for an Incentive Stock
Option to qualify under Section 422 of the Code, as well as
any other terms and conditions not inconsistent with this
Article IV or Articles III or VI, as determined in its
discretion and set forth in the Award Agreement for such
Incentive Stock Option.
4.4 Each provision of this Article IV and of each Incentive
Stock Option granted hereunder shall be construed in
accordance with the provisions of Section 422 of the Code,
and any provision hereof that cannot be so construed shall
be disregarded.
<PAGE> B-11
ARTICLE V - NONQUALIFIED STOCK OPTIONS
5.1 The Committee, in its sole discretion, may from time to time
on or after the Effective Date grant Nonqualified Stock
Options to Eligible Persons, subject to the provisions of
this Article V and Articles III and VI and subject to the
following conditions:
(a) Nonqualified Stock Options may be granted to any
Eligible Persons, each of whom may be granted one or
more of such Nonqualified Stock Options, at such time
or times determined by the Committee, subject to the
provisions of Section 5.3 below.
(b) The Option Price per share of Common Stock for a
Nonqualified Stock Option shall be set in the Award
Agreement and may be less than one hundred percent
(100%) of the Fair Market Value of the Common Stock at
the Grant Date.
(c) A Nonqualified Stock Option may be exercised in full or
in part from time to time within the Option Period
specified by the Committee and set forth in the Award
Agreement; provided, however, that in any event the
Nonqualified Stock Option shall lapse and cease to be
exercisable upon a Termination of Service or within
such period following a Termination of Service as shall
have been determined by the Committee and set forth in
the related Award Agreement.
5.2 The Committee may provide for any other terms and conditions
for a Nonqualified Stock Option not inconsistent with this
Article V or Articles III or VI, as determined in its
discretion and set forth in the Award Agreement for such
Nonqualified Stock Option.
5.3 In addition to, and not in limitation of, the right of the
Committee to grant Nonqualified Stock Options to Eligible
Persons as described in this Article V, the full Board of
Directors may from time to time grant Nonqualified Stock
Options to Directors who are not also employees of the
Corporation or any Subsidiary, pursuant to the terms and
conditions of this Article V and Articles III and VI, and
subject to the requirements of Rule 16b-3 under the Act.
5.4 Except as otherwise provided in section 5.4(f), any
individual who is not a Non-Employee Director on the
Effective Date but who is elected a Non-Employee Director
within ten (10) years after the Effective Date shall be
granted, as of the date of such election as Non-Employee
Director, a Nonqualified Stock Option to purchase 10,000
shares of Common Stock. The Corporation shall tender to
each Director for signature an Award Agreement, which Award
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 Nonqualified Stock Option shall not be less than
100% of the Fair Market Value of such shares on the
Grant Date (as that term is defined in Section
2.17(b)).
<PAGE> B-12
(b) No Nonqualified Stock Option granted pursuant to this
Section 5.4 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 Non-
Employee Director dies during the six month period;
(iii) After the expiration of ten (10) years
from the Grant Date; provided, however, that each
Nonqualified Stock Option shall be subject to
termination before its date of expiration as herein
provided;
(iv) Except as set forth in Section 5.4(c) or
5.5(d) hereof, more than three months after the Non-
Employee Director ceases to be a Director; provided,
however, that if the Non-Employee 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 Non-Employee Director ceases to be a Director for
reason of death or Disability, the Nonqualified Stock
Option may be exercised (subject to the limitations of
Sections 5.4 (b)(ii) and 5.4(b)(iii)) within one year
after his death or Disability by the Non-Employee
Director or person to whom the Non-Employee Director's
rights under the Nonqualified Stock Option shall have
passed by will or by the laws of dissent and
distribution.
(d) If a Non-Employee Director dies after he ceases to be a
Director, but within the time period during which his
outstanding Nonqualified Stock Options are still
exercisable, the Nonqualified Stock Option may be
exercised (subject to the limitations of Sections
5.4(b)(i) and 5.4(b)(iii)) within one year after his
death by the person to whom the Non-Employee Director's
rights under the Nonqualified Stock Option shall have
passed by will or by the laws of descent and
distribution.
(e) Nonqualified Stock Options granted pursuant to this
Section 5.4 may be exercised in the manner set forth in
Section 6.3 hereof. Notwithstanding anything herein to
the contrary, however, Nonqualified 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.
(f) Notwithstanding the foregoing, the grant of a
Nonqualified Stock Option to a Non-Employee Director
will not be made under this Section 5.4 if either (i)
such Non-Employee Director receives a grant of no less
than 10,000 shares of Common Stock pursuant to Section
9 of the Ruddick Corporation 1995 Comprehensive Stock
Option Plan or (ii) the Committee in its sole
discretion
<PAGE> B-13
determines that the grant of the Nonqualified Stock
Options under this Section 5.4 will
not be made to one or more Non-Employee Directors.
<PAGE> B-14
ARTICLE VI - INCIDENTS OF STOCK OPTIONS
6.1 Each Stock Option shall be granted subject to such terms and
conditions, if any, not inconsistent with this Plan, as
shall be determined by the Committee and set forth in the
related Award Agreement, including any provisions as to
continued employment as consideration for the grant or
exercise of such Stock Option and any provisions which may
be advisable to comply with applicable laws, regulations or
rulings of any governmental authority.
6.2 Except as hereinafter described, a Stock Option shall not be
transferable by the Participant other than by will or by the
laws of descent and distribution, and shall be exercisable
during the lifetime of the Participant only by the
Participant or the Participant's guardian or legal
representative. In the event of the death of a Participant,
any unexercised Stock Options may be exercised to the extent
otherwise provided herein or in such Participant's Award
Agreement by the executor or personal representative of such
Participant's estate or by any person who acquired the right
to exercise such Stock Options by bequest under the
Participant's will or by inheritance. The Committee, in its
sole and absolute discretion, may at any time permit a
Participant to transfer a Nonqualified Stock Option for no
consideration to or for the benefit of one or more members
of the Participant's Immediate Family (including, without
limitation, to a trust for the benefit of the Participant
and/or one or more members of such Participant's Immediate
Family or a corporation, partnership or limited liability
company established and controlled by the Participant and/or
one or more members of such Participant's Immediate Family),
subject to such limits as the Committee may establish. The
transferee of such Nonqualified Stock Option shall remain
subject to all terms and conditions applicable to such
Nonqualified Stock Option prior to such transfer. The
foregoing right to transfer the Nonqualified Stock Option,
if granted by the Committee, shall apply to the right to
consent to amendments to the Award Agreement.
6.3 Shares of Common Stock purchased upon exercise of a Stock
Option shall be paid for in such amounts, at such times and
upon such terms as shall be determined by the Committee,
subject to limitations set forth in the Stock Option Award
Agreement. The Committee may, in its sole and absolute
discretion, permit the exercise of a Stock Option by payment
in cash or by tendering shares of Common Stock (either by
actual delivery of such shares or by attestation), or any
combination thereof, as determined by the Committee. In the
discretion of the Committee, payment in shares of Common
Stock also may be made with shares received upon the
exercise or partial exercise of the Stock 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 Participant. The
Committee also may, in its sole and absolute discretion,
permit the exercise of a Stock Option by payment of the
voluntary surrender of all or a portion of the Stock Option.
Shares of Common Stock previously held by the Participant
and surrendered in payment of the Option Price of a Stock
Option shall be valued for such purpose at the Fair Market
Value thereof on the date the Stock Option is exercised.
<PAGE> B-15
6.4 No cash dividends shall be paid on shares of Common Stock
subject to unexercised Stock Options.
6.5 The Committee may permit the voluntary surrender of all or a
portion of any Stock Option granted under the Plan to be
conditioned upon the granting to the Participant of a new
Stock Option for the same or a different number of shares of
Common Stock as the Stock Option surrendered, or may require
such voluntary surrender as a condition precedent to a grant
of a new Stock Option to such Participant. Subject to the
provisions of the Plan, such new Stock Option shall be
exercisable at such Option Price, during such Option Period
and on such other terms and conditions as are specified by
the Committee at the time the new Stock Option is granted.
Upon surrender, the Stock Options surrendered shall be
canceled and the shares of Common Stock previously subject
to them shall be available for the grant of other Stock
Options.
6.6 The Committee may at any time offer to purchase a
Participant's outstanding Stock Option for a payment equal
to the value of such Stock Option payable in cash, shares of
Common Stock or Restricted Stock or other property upon
surrender of the Participant's Stock Option, based on such
terms and conditions as the Committee shall establish and
communicate to the Participant at the time that such offer
is made.
6.7 The Committee shall have the discretion, exercisable either
at the time the Award is granted or at the time the
Participant discontinues employment, to establish as a
provision applicable to the exercise of one or more Stock
Options that, during a limited period of exercisability
following a Termination of Service, the Stock Option may be
exercised not only with respect to the number of shares of
Common Stock for which it is exercisable at the time of the
Termination of Service but also with respect to one or more
subsequent installments for which the Stock Option would
have become exercisable had the Termination of Service not
occurred.
<PAGE> B-16
ARTICLE VII - RESTRICTED STOCK
7.1 The Committee, in its sole discretion, may from time to time
on or after the Effective Date award shares of Restricted
Stock to Eligible Persons as a reward for past service and
an incentive for the performance of future services that
will contribute materially to the successful operation of
the Corporation and its Subsidiaries, subject to the terms
and conditions set forth in this Article VII.
7.2 The Committee shall determine the terms and conditions of
any Award of Restricted Stock, which shall be set forth in
the related Award Agreement, including without limitation:
(a) the purchase price, if any, to be paid for such
Restricted Stock, which may be zero, subject to such
minimum consideration as may be required by applicable
law;
(b) the duration of the Restriction Period or Restriction
Periods with respect to such Restricted Stock and
whether any events may accelerate or delay the end of
such Restriction Period(s);
(c) the circumstances upon which the restrictions or
limitations shall lapse, and whether such restrictions
or limitations shall lapse as to all shares of
Restricted Stock at the end of the Restriction Period
or as to a portion of the shares of Restricted Stock in
installments during the Restriction Period by means of
one or more vesting schedules;
(d) whether such Restricted Stock is subject to repurchase
by the Corporation or to a right of first refusal at a
predetermined price or if the Restricted Stock may be
forfeited entirely under certain conditions;
(e) whether any performance goals may apply to a
Restriction Period to shorten or lengthen such period;
and
(f) whether dividends and other distributions with respect
to such Restricted Stock are to be paid currently to
the Participant or withheld by the Corporation for the
account of the Participant.
7.3 Awards of Restricted Stock must be accepted within a period
of thirty (30) days after the Grant Date (or such shorter or
longer period as the Committee may specify at such time) by
executing an Award Agreement with respect to such Restricted
Stock and tendering the purchase price, if any. A
prospective recipient of an Award of Restricted Stock shall
not have any rights with respect to such Award, unless such
recipient has executed an Award Agreement with respect to
such Restricted Stock, has delivered a fully executed copy
thereof to the Committee and has otherwise complied with the
applicable terms and conditions of such Award.
<PAGE> B-17
7.4 In the discretion of the Committee and as set forth in the
Award Agreement for an Award of Restricted Stock, all shares
of Restricted Stock held by a Participant and still subject
to restrictions shall be forfeited by the Participant upon
the Participant's Termination of Service and shall be
reacquired, canceled and retired by the Corporation.
Notwithstanding the foregoing, unless otherwise provided in
an Award Agreement with respect to an Award of Restricted
Stock, in the event of the death, Disability or Retirement
of a Participant during the Restriction Period, or in other
cases of special circumstances (including hardship or other
special circumstances of a Participant whose employment is
involuntarily terminated), the Committee may elect to waive
in whole or in part any remaining restrictions with respect
to all or any part of such Participant's Restricted Stock,
if it finds that a waiver would be appropriate.
7.5 Except as otherwise provided in this Article VII, no shares
of Restricted Stock received by a Participant shall be sold,
exchanged, transferred, pledged, hypothecated or otherwise
disposed of during the Restriction Period.
7.6 Upon an Award of Restricted Stock to a Participant, a
certificate or certificates representing the shares of such
Restricted Stock will be issued to and registered in the
name of the Participant. Unless otherwise determined by the
Committee, such certificate or certificates will be held in
custody by the Corporation until (i) the Restriction Period
expires and the restrictions or limitations lapse, in which
case one or more certificates representing such shares of
Restricted Stock that do not bear a restrictive legend
(other than any legend as required under applicable federal
or state securities laws) shall be delivered to the
Participant, or (ii) a prior forfeiture by the Participant
of the shares of Restricted Stock subject to such
Restriction Period, in which case the Corporation shall
cause such certificate or certificates to be canceled and
the shares represented thereby to be retired, and the shares
represented thereby to be retired, all as set forth in the
Participant's Award Agreement. It shall be a condition of an
Award of Restricted Stock that the Participant deliver to
the Corporation a stock power endorsed in blank relating to
the shares of Restricted Stock to be held in custody by the
Corporation.
7.7 Except as provided in this Article VII or in the related
Award Agreement, a Participant receiving an Award of shares
of Restricted Stock Award shall have, with respect to such
shares, all rights of a shareholder of the Corporation,
including the right to vote the shares and the right to
receive any distributions; provided, however, the Committee
may require that any cash dividends with respect to such
shares of Restricted Stock shall be automatically reinvested
in additional shares of Restricted Stock subject to the same
restrictions as the underlying Award, or may require that
cash dividends and other distributions on Restricted Stock
shall be withheld by the Corporation or its Subsidiaries for
the account of the Participant. The Committee shall
determine whether interest shall be paid on amounts
withheld, the rate of any such interest, and the other terms
applicable to such withheld amounts.
<PAGE> B-18
ARTICLE VIII - STOCK AWARDS
8.1 The Committee, in its sole discretion, may from time to time
on or after the Effective Date grant Stock Awards to
Eligible Persons in payment of compensation that has been
earned or as compensation to be earned, including without
limitation compensation awarded or earned concurrently with
or prior to the grant of the Stock Award, subject to the
terms and conditions set forth in this Article VIII.
8.2 For the purposes of this Plan, in determining the value of a
Stock Award, all shares of Common Stock subject to such
Stock Award shall be valued at not less than one hundred
percent (100%) of the Fair Market Value of such shares of
Common Stock on the Grant Date of such Stock Award,
regardless of when such shares of Common Stock are issued,
and one or more certificates delivered, to the Participant.
8.3 Unless otherwise determined by the Committee and set forth
in the related Award Agreement, shares of Common Stock
subject to a Stock Award will be issued, and one or more
certificates representing such shares will be delivered, to
the Participant as soon as practicable following the Grant
Date of such Stock Award. Upon the issuance of such shares
and the delivery of one or more certificates representing
such shares to the Participant, such Participant shall be
and become a shareholder of the Corporation fully entitled
to receive dividends, to vote and to exercise all other
rights of a shareholder of the Corporation. Notwithstanding
any other provision of this Plan, unless the Committee
expressly provides otherwise respect to a Stock Award, as
set forth in the related Award Agreement, no Stock Award
shall be deemed to be an outstanding Award for purposes of
the Plan.
<PAGE> B-19
ARTICLE IX - PERFORMANCE SHARES
9.1 The Committee, in its sole discretion, may from time to time
on or after the Effective Date award Performance Shares to
Eligible Persons as an incentive for the performance of
future services that will contribute materially to the
successful operation of the Corporation and its
Subsidiaries, subject to the terms and conditions set forth
in this Article IX.
9.2 The Committee shall determine the terms and conditions of
any Award of Performance Shares, which shall be set forth in
the related Award Agreement, including without limitation:
(a) the purchase price, if any, to be paid for such
Performance Shares, which may be zero, subject to such
minimum consideration as may be required by applicable
law;
(b) the performance period (the "Performance Period")
and/or performance objectives (the "Performance
Objectives") applicable to such Awards;
(c) the number of Performance Shares that shall be paid to
the Participant if the applicable Performance
Objectives are exceeded or met in whole or in part; and
(d) the form of settlement of a Performance Share.
9.3 At any date, each Performance Share shall have a value equal
to the Fair Market Value of a share of Common Stock,
determined as set forth in Section 2.17.
9.4 Performance Periods may overlap, and Participants may
participate simultaneously with respect to Performance
Shares for which different Performance Periods are
prescribed.
9.5 Performance Objectives may vary from Participant to
Participant and between Awards and shall be based upon such
performance criteria or combination of factors as the
Committee may deem appropriate, including, but not limited
to, minimum earnings per share or return on equity. If
during the course of a Performance Period there shall occur
significant events which the Committee expects to have a
substantial effect on the applicable Performance Objectives
during such period, the Committee may revise such
Performance Objectives.
9.6 In the discretion of the Committee and as set forth in the
Award Agreement for an Award of Performance Shares, all
Performance Shares held by a Participant and not earned
shall be forfeited by the Participant upon the Participant's
Termination of Service. Notwithstanding the foregoing,
unless otherwise provided in an Award Agreement with respect
to an Award of Performance Shares, in the event of the
death, Disability or Retirement of Participant during the
applicable Performance Period, or in other cases of special
circumstances (including hardship or other special
circumstances of a Participant whose employment is
involuntarily terminated), the Committee may determine to
make a
<PAGE> B-20
payment in settlement of such Performance Shares at
the end of the Performance Period, based upon the extent to
which the Performance Objectives were satisfied at the end
of such period and pro rated for the portion of the
Performance Period during which the Participant was employed
by the Corporation or a Subsidiary; provided, however, that
the Committee may provide for an earlier payment in
settlement of such Performance Shares in such amount and
under such terms and conditions as the Committee deems
appropriate or desirable.
9.7 The settlement of a Performance Share shall be made in cash,
whole shares of Common Stock or a combination thereof and
shall be made as soon as practicable after the end of the
applicable Performance Period. Notwithstanding the
foregoing, the Committee in its discretion may allow a
Participant to defer payment in settlement of Performance
Shares on terms and conditions approved by the Committee and
set forth in the related Award Agreement entered into in
advance of the time of receipt or constructive receipt of
payment by the Participant.
9.8 The Committee shall have the authority to place restrictions
on the Performance Shares including, but not limited to,
restrictions on transfer following receipt of such shares.
<PAGE> B-21
ARTICLE X - CHANGES OF CONTROL OR OTHER FUNDAMENTAL CHANGES
10.1 Upon the occurrence of a Change of Control and unless
otherwise provided in the Award Agreement with respect to a
particular Award:
(a) all outstanding Stock Options shall become immediately
exercisable in full, subject to any appropriate
adjustments in the number of shares subject to the
Stock Option and the Option Price determined pursuant
to the provisions of the Plan, and shall remain
exercisable for the remaining term of such Stock
Option, regardless of any provision in the related
Award Agreement limiting the exercisability of such
Stock Option or any portion thereof for any length of
time;
(b) all outstanding Performance Shares with respect to
which the applicable Performance Period has not been
completed shall be paid out as soon as practicable as
follows:
(i) all Performance Objectives applicable to the Award
of Performance Shares shall be deemed to have been
satisfied to the extent necessary to result in
payment of one hundred percent (100%) of the
Performance Shares covered by the Award;
(ii) the applicable Performance Period shall be deemed
to have been completed upon occurrence of the
Change of Control;
(iii) the payment to the Participant in settlement
of the Performance Shares shall be the amount
determined by the Committee, in its sole
discretion, or in the manner stated in the Award
Agreement, as multiplied by a fraction, the
numerator of which is the number of full calendar
months of the applicable Performance Period that
have elapsed prior to occurrence of the Change of
Control, and the denominator of which is the total
number of months in the original Performance
Period; and
(iv) upon the making of any such payment, the Award
Agreement as to which it relates shall be deemed
terminated and of no further force and effect.
(c) all outstanding shares of Restricted Stock with respect
to which the restrictions have not lapsed shall be
deemed vested, and all such restrictions shall be
deemed lapsed and the Restriction Period ended.
10.2 Anything contained herein to the contrary notwithstanding,
upon the dissolution or liquidation of the Corporation each
Award granted under the Plan and then outstanding shall
terminate; provided, however, that following the adoption of
a plan of dissolution or liquidation, and in any event prior
to the effective date of such dissolution or liquidation,
each such outstanding Award granted hereunder shall be
exercisable in full and all restrictions shall lapse, to the
extent set forth in Section 10.1(a), (b) and (c) above.
<PAGE> B-22
10.3 After the merger of one or more corporations into the
Corporation or any Subsidiary, 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 Common Stock,
each Participant shall, at no additional cost, be entitled,
upon any exercise of such Participant's Stock Option, to
receive, in lieu of the number of shares as to which such
Stock Option shall then be so exercised, the number and
class of shares of stock or other securities or such other
property to which such Participant would have been entitled
to pursuant to the terms of the agreement of merger or
consolidation or reorganization, if at the time of such
merger or consolidation or reorganization, such Participant
had been a holder of record of a number of shares of Common
Stock equal to the number of shares as to which such Stock
Option shall then be so exercised. Comparable rights shall
accrue to each Participant in the event of successive
mergers, consolidations or reorganizations of the character
described above. The Committee may, in its discretion,
provide for similar adjustments upon the occurrence of such
events with regard to other outstanding Awards under this
Plan. The foregoing adjustments and the manner of
application of the foregoing provisions shall be determined
by the Committee in its sole discretion. Any such
adjustment may provide for the elimination of any fractional
shares which might otherwise become subject to an Award.
All adjustments made as the result of the foregoing in
respect of each Incentive Stock Option shall be made so that
such Incentive Stock Option shall continue to be an
Incentive Stock Option, as defined in Section 422 of the
Code.
<PAGE> B-23
ARTICLE XI - AMENDMENT AND TERMINATION
11.1 Subject to the provisions of Section 11.2, the Board of
Directors, upon recommendation of the Committee or
otherwise, at any time and from time to time may amend or
terminate the Plan as may be necessary or desirable to
implement or discontinue the Plan or any provision hereof.
To the extent required by the Act or the Code, however, no
amendment, without approval by the Corporation's
shareholders, shall:
(a) materially alter the group of persons eligible to
participate in the Plan;
(b) except as provided in Section 3.6, increase the maximum
number of shares of Common Stock that are available for
Awards under the Plan;
(c) extend the period during which Incentive Stock Option
Awards may granted beyond November 16, 2010; or
(d) alter the class of individuals eligible to receive an
Incentive Stock Option or increase the limit on
Incentive Stock Options set forth in Section 4.1(d) or
the value of shares of Common Stock for which an
Eligible Employee may be granted an Incentive Stock
Option.
11.2 No amendment to or discontinuance of the Plan or any
provision hereof by the Board of Directors or the
shareholders of the Corporation shall, without the written
consent of the Participant, adversely affect (in the sole
discretion of the Committee) any Award theretofore granted
to such Participant under this Plan; provided, however, that
the Committee retains the right and power to:
(a) annul any Award if the Participant is terminated for
cause as determined by the Committee; and
(b) convert any outstanding Incentive Stock Option to a
Nonqualified Stock Option.
11.3 If a Change of Control has occurred, no amendment or
termination shall impair the rights of any person with
respect to an outstanding Award as provided in Article X.
<PAGE> B-24
ARTICLE XII - MISCELLANEOUS PROVISIONS
12.1 Nothing in the Plan or any Award granted hereunder shall
confer upon any Participant any right to continue in the
employ of the Corporation or its Subsidiaries or to serve as
a Director or shall interfere in any way with the right of
the Corporation or its Subsidiaries or the shareholders of
the Corporation, as applicable, to terminate the employment
of a Participant or to release or remove a Director at any
time. Unless specifically provided otherwise, no Award
granted under the Plan shall be deemed salary or
compensation for the purpose of computing benefits under any
employee benefit plan or other arrangement of the
Corporation or its Subsidiaries for the benefit of their
respective employees unless the Corporation shall determine
otherwise. No Participant shall have any claim to an Award
until it is actually granted under the Plan and an Award
Agreement has been executed and delivered to the
Corporation. To the extent that any person acquires a right
to receive payments from the Corporation under the Plan,
such right shall, except as otherwise provided by the
Committee, be no greater than the right of an unsecured
general creditor of the Corporation. All payments to be
made hereunder shall be paid from the general funds of the
Corporation, and no special or separate fund shall be
established and no segregation of assets shall be made to
assure payment of such amounts, except as provided in
Article VII with respect to Restricted Stock and except as
otherwise provided by the Committee.
12.2 The Plan and the grant of Awards shall be subject to all
applicable federal and state laws, rules, and regulations
and to such approvals by any government or regulatory agency
as may be required. Any provision herein relating to
compliance with Rule 16b-3 under the Act shall not be
applicable with respect to participation in the Plan by
Participants who are not subject to Section 16 of the Act.
12.3 The terms of the Plan shall be binding upon the Corporation,
its successors and assigns.
12.4 Neither a Stock Option nor any other type of equity-based
compensation provided for hereunder shall be transferable
except as provided for in Section 6.2. In addition to the
transfer restrictions otherwise contained herein, additional
transfer restrictions shall apply to the extent required by
federal or state securities laws. If any Participant makes
such a transfer in violation hereof, any obligation
hereunder of the Corporation to such Participant shall
terminate immediately.
12.5 This Plan and all actions taken hereunder shall be governed
by the laws of the State of North Carolina.
12.6 Each Participant exercising an Award hereunder agrees to
give the Committee prompt written notice of any election
made by such Participant under Section 83(b) of the Code, or
any similar provision thereof.
12.7 If any provision of this Plan or an Award Agreement is or
becomes or is deemed invalid, illegal or unenforceable in
any jurisdiction, or would disqualify the Plan or any Award
Agreement under any law deemed applicable by the Committee,
such provision shall be
<PAGE> B-25
construed or deemed amended to conform to applicable laws or
if it cannot be construed or deemed amended without, in the
determination of the Committee, materially altering the intent
of the Plan or the Award Agreement, it shall be stricken and
the remainder of the Plan or the Award Agreement shall remain
in full force and effect.
12.8 The grant of an Award 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, reclassification,
reorganizations, or changes of its capital or business
structure, or to merge or consolidate, or to dissolve,
liquidate or sell, or transfer all or part of its business
or assets.
12.9 The Plan is not subject to the provisions of ERISA or
qualified under Section 401(a) of the Code.
12.10 If a Participant is required to pay to the Corporation
an amount with respect to income and employment tax
withholding obligations in connection with (i) the exercise
of a Nonqualified Stock Option, (ii) certain dispositions of
Common Stock acquired upon the exercise of an Incentive
Stock Option, or (iii) the receipt of Common Stock pursuant
to any other Award, then the transfer of Common Stock to
such Participant shall not be made unless such withholding
tax or other withholding liabilities shall have been
satisfied in a manner acceptable to the Corporation. The
Committee, in its sole discretion and subject to such rules
as it may adopt, may permit the Participant to satisfy such
obligation, in whole or in part, by making an irrevocable
election that a portion of the total Fair Market Value of
the shares of Common Stock be paid in the form of cash in
lieu of the issuance of Common Stock and that such cash
payment be applied to the satisfaction of the withholding
obligations. The amount to be withheld shall not exceed the
statutory minimum federal and state income and employment
tax liability arising from the transfer of the Common Stock
to the Participant. Notwithstanding any other provision of
the Plan, any election under this Section 6.5 is required to
satisfy the applicable requirements of Rule 16b-3 under the
Act.
<PAGE> B-26
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
RUDDICK CORPORATION
ANNUAL MEETING, FEBRUARY 15, 2001
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., and each of them, attorneys and proxies, with
full power of substitution, to act for and on behalf of the
undersigned to vote all shares of Ruddick Corporation Common
Stock that the undersigned is entitled to 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 15, 2001, at 10:00 A.M.,
E.S.T. and any adjournment or adjournments thereof, as set forth
on the reverse side.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER
DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION
IS MADE AND THIS PROXY CARD IS SIGNED AND RETURNED, THIS PROXY
WILL BE VOTED IN FAVOR OF EACH OF THE NOMINEES FOR DIRECTOR
LISTED IN PROPOSAL 1, IN FAVOR OF PROPOSAL 2 AND IN THE
DISCRETION OF THE PROXY HOLDERS ON ANY OTHER BUSINESS THAT
PROPERLY COMES BEFORE THE MEETING.
This proxy card, when signed and returned, will also constitute
voting instructions to T. Rowe Price Trust Company to vote or
cause to be voted the shares held by T. Rowe Price Trust Company
for the account of the undersigned in the Ruddick Employee Stock
Ownership Plan. If this proxy card is not returned, or is
returned unsigned, the shares will not be voted.
The undersigned hereby acknowledges receipt of the Notice of
Annual Meeting of Shareholders, dated December 27, 2000, and the
Proxy Statement furnished therewith.
PLEASE VOTE, DATE AND SIGN ON REVERSE, AND
RETURN PROMPTLY IN THE ENCLOSED ENVELOPE
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
------------------------------- ----------------------------------------
------------------------------- -----------------------------------------
------------------------------- -----------------------------------------
<PAGE>
[X] PLEASE MARK VOTES AS IN THIS EXAMPLE.
RUDDICK CORPORATION
Mark box at right if an address change or comment has been noted
on the reverse side of this card. [ ]
RECORD DATE SHARES:
Please be sure to sign and
date this Proxy. Date
--------------------------------- -------------------------
--------------------------------- --------------------------
Shareholder sign here Co-owner sign here
1. Election of the following four nominees as Directors listed
below for three-year terms.
John W. Copeland Alan T. Dickson Roddey Dowd, Sr. Anna Spangler Nelson
For All Nominees Withhold For All Except
[ ] [ ] [ ]
NOTE: If you do not wish your shares voted "For" a particular
nominee, mark the "For All Except" box and strike a line
through the name(s) of the nominee(s). Your shares will be
voted for the remaining nominee(s).
2. Approval of the 2000 Comprehensive Stock Option and Award Plan
For Against Abstain
[ ] [ ] [ ]
3. The proxies are authorized to act upon any other business
which may properly be brought before said meeting or any
adjournment thereof.
Please sign exactly as your name(s) appear(s) on the stock
certificate, as printed on this proxy card. Joint owners should
each sign personally. Trustees and other fiduciaries should
indicate the capacity in which they sign, and where more than one
name appears, a majority must sign. If a corporation or a
partnership, this signature should be that of an authorized
officer or partner who should state his or her title.
DETACH CARD DETACH CARD
