As filed with the Securities and Exchange Commission on September 23, 1999
File No. 333-
-------------
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
--------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
JOHN B. SANFILIPPO & SON, INC.
------------------------------
(Exact Name of Registrant as Specified in Its Charter)
Delaware 36-2419677
-------- ----------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
2299 Busse Road
Elk Grove Village, Illinois 60007
----------------------------------
(Address of Principal Executive Offices)(Zip Code)
THE JOHN B. SANFILIPPO & SON, INC.
1998 EQUITY INCENTIVE PLAN
--------------------------
(Full Title of the Plan)
JASPER B. SANFILIPPO
Chairman of the Board and Chief Executive Officer
John B. Sanfilippo & Son, Inc.
2299 Busse Road
Elk Grove Village, Illinois 60007
-----------------------------------
(Name and Address of Agent For Service)
Telephone: (847) 593-2300
-------------------------
(Telephone Number, Including Area Code, of Agent For Service)
Copies of Communications to:
Timothy R. Donovan, Esq.
Jenner & Block
One IBM Plaza
Chicago, Illinois 60611
(312) 222-9350
--------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Title of Securities Amount to be Proposed Proposed Amount of
to be Registered Registered Maximum Maximum Registration Fee
Offering Price Aggregate
Per Share(*) Offering Price(*)
- ------------------------------------- ------------ -------------- ----------------- ----------------
<S> <C> <C> <C> <C>
Common stock, $.01 par value per 49,500 $4.0101 $ 198,500 $ 55.18
share granted under the John B.
Sanfilippo & Son, Inc. 1998 Equity
Incentive Plan
Common stock, $.01 par value per 300,500 $3.8594 $1,159,750 $322.41
share to be granted under the John B.
Sanfilippo & Son, Inc. 1998 Equity
Incentive Plan
------- ---------- -------
TOTAL 350,000 $1,358,250 $377.59
======= ========== =======
</TABLE>
(*) Calculated in accordance with Rule 457(h) (l) and 457(c) under the Act,
the proposed maximum offering price per share and the proposed maximum
offering price have been calculated on the basis of $3.8594 per share,
the average of the high and the low sales prices of the Common Stock,
$.01 par value per share, quoted on the Nasdaq Stock Market on September
20, 1999 with respect to 300,500 shares and on the basis of the exercise
price of options previously granted with respect to 49,500 shares under
the plan.
PART I
------
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
----------------------------------------------------
Item 1. Plan Information.
- -------------------------
Not required to be included herewith.
Item 2. Registrant Information and Employee Plan Annual Information.
- --------------------------------------------------------------------
Not required to be included herewith.
PART II
-------
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
--------------------------------------------------
Item 3. Incorporation of Documents by Reference.
- ------------------------------------------------
This Registration Statement on Form S-8 (the "Registration
Statement") relates to the registration of shares of the common stock,
$.01 par value per share (the "Common Stock") of John B. Sanfilippo &
Son, Inc. (the "Company" or the "Registrant").
The following documents heretofore filed by the Company with the
Securities and Exchange Commission (the "Commission") are hereby
incorporated by reference into this Registration Statement and made a
part hereof:
(1) The Company's Annual Report on Form 10-K for the fiscal year
ended June 24, 1999 (Commission File No. 0-19681);
(2) All other reports filed pursuant to Sections 13(a) or 15(d) of
the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), since the end of the Registrant's fiscal year ended
June 25, 1998; and
(3) The description of the Registrant's Common Stock, $0.01 par
value per share, contained in the Company's Registration
Statement on Form S-1 (Amendment No. 3) (Commission File No.
33-43353) as filed with the Commission on November 25, 1991,
including any amendments or reports filed for the purpose of
updating such description.
In addition, all documents subsequently filed by the Registrant
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act,
prior to the filing of a post-effective amendment to this Registration
Statement which indicates that all of the securities registered hereunder
have been issued or which deregisters all of such securities then
remaining unissued, shall be deemed to be incorporated by reference in
this Registration Statement and to be a part hereof from the date of
filing of such documents.
Any statement, including financial statements, contained in a
document incorporated or deemed to be incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this
Registration Statement to the extent that a statement contained herein,
or in any other subsequently filed document which also is or is deemed
to be incorporated by reference herein, modifies or supersedes such
statement. Any such statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this
Registration Statement.
Item 4. Description of Securities.
- ----------------------------------
Not applicable.
Item 5. Interests of Named Experts and Counsel.
- -----------------------------------------------
The legality of the Common Stock to which this Registration
Statement applies has been passed upon by Jenner & Block, Chicago,
Illinois, special securities counsel for the Registrant. Timothy R.
Donovan, a partner of Jenner & Block, is married to Elaine Karacic, who
holds individually and as trustee a total of 168,986 shares of Common
Stock of the Registrant.
Item 6. Indemnification of Directors and Officers.
- --------------------------------------------------
Section 145 of the General Corporation Law of the State of
Delaware provides that a corporation may indemnify any person who was or
is a party to or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative, by reason of the fact that he is or was
a director, officer, employee or agent of the corporation, or is or was
serving at the request of the corporation as a director, officer,
employee of another corporation, partnership, joint venture, trust or
other enterprise, against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he
acted in good faith and in a manner he reasonably believed to be in or
not opposed to the best interests of the corporation, and, with respect
to any criminal action or proceedings, had no reasonable cause to believe
his conduct was unlawful; provided, however, in a suit by or in the right
of the corporation no indemnification shall be made in respect of any
claim, issue or matter as to which such person shall have been adjudged
to be liable to the corporation unless and only to the extent that the
Court of Chancery of the State of Delaware or the court in which such
action or suit was brought has determined upon application that, despite
the adjudication of liability but in view of all of the circumstances of
the case, such person is fairly and reasonably entitled to indemnity or
such expenses deemed proper by the court.
The Company has adopted provisions in its Restated Certificate of
Incorporation and By-Laws which provide for indemnification of its
officers and directors to the maximum extent permitted under the Delaware
General Corporation Law. In addition, the Company has entered into
separate indemnification agreements with each of its directors and
certain officers which may require the Company, among other things, to
indemnify them against certain liabilities that may arise by reason of
their status or service as such directors and officers and to advance
their expenses incurred as a result of any proceeding against them as to
which they could be indemnified.
As authorized by the Delaware General Corporation Law, the
Restated Certificate of Incorporation limits the liability of directors
to the Company for monetary damages. The effect of this provision in the
Restated Certificate of Incorporation is to eliminate the rights of the
Company and its stockholders (through stockholders' derivative suits on
behalf of the Company) to recover monetary damages against a director for
breach of the fiduciary duty of care as a director (including breaches
resulting from negligent or grossly negligent behavior) except in certain
limited situations. This provision does not limit or eliminate the
rights of the Company or any stockholder to seek non-monetary relief such
as an injunction or rescission in the event of a breach of a director's
duty of care. These provisions will not alter the liability of directors
under federal securities laws.
Effective January 1, 1987, the Company elected to be treated as an
S corporation for income tax purposes. The Company's status as an S
corporation automatically terminated upon the completion of its initial
public offering in December 1991. During the period in which the Company
was treated as an S corporation, the earnings of the Company were taxed
directly to the Company's stockholders rather than to the Company. The
Company has entered into a Tax Indemnification Agreement with each of the
then existing stockholders prior to the closing of its initial public
offering (the "Pre-Offering Stockholders") which provides for, among
other things, the indemnification of each Pre-Offering Stockholder from
any losses or liabilities (including additional taxes, interest,
penalties and legal fees) with respect to any adjustments to such
stockholder's taxable income or loss, tax credits or tax credits
recapture made by any taxing authority as a result of a change in the
Company's taxable income or loss, tax credit or tax recapture during the
period in which it was an S Corporation.
In addition, the Company maintains an insurance policy that covers
certain liabilities of persons serving as directors and officers of the
Company or certain of its subsidiaries.
Item 7. Exemption from Registration Claimed.
- --------------------------------------------
Not applicable.
Item 8. Exhibits.
- -----------------
The following exhibits are filed as part of this Registration
Statement.
Exhibit No. Description of Exhibits
- ----------- --------------------------------------------------------
4.1 Specimen Common Stock Certificate of the Registrant. (1)
4.2 Restated Certificate of Incorporation of the Registrant. (2)
4.3 Certificate of Correction to Restated Certificate of
Incorporation of the Registrant. (2)
4.4 By-laws of the Registrant. (3)
5.1 Opinion of Jenner & Block regarding validity of registered
securities.
15 None.
23.1 Consent of PricewaterhouseCoopers LLP.
23.2 Consent of Jenner & Block (included in Exhibit 5.1).
24 None.
99.1 The John B. Sanfilippo & Son, Inc. 1998 Equity Incentive Plan.
(1) Incorporated by reference to the Registrant's Registration
Statement on Form S-1 (Amendment No. 3), as filed with the Commission
on November 26, 1991 (Commission File No. 33-43353).
(2) Incorporated by reference to the Registrant's Annual Report on Form
10-K for the fiscal year ended December 31, 1991 (File No. 0-19681).
(3) Incorporated by reference to the Registrant's Registration
Statement on Form S-1 as filed with the Commission on October 15, 1991
(Commission File No. 33-43353).
Item 9. Undertakings.
- ---------------------
1. Subsequent Disclosure.
The Registrant hereby undertakes:
1. To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(1) To include any prospectus required by Section 10(a)(3)
of the Act;
(2) To reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or the
most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in this Registration
Statement. Notwithstanding the foregoing, any increase or
decrease in the volume of securities offered (if the total
dollar value of securities offered would not exceed that which
was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the
form of prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume and price
represent no more than 20 percent change in the maximum
aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective Registration
Statement;
(3) To include any material information with respect to the
plan of distribution not previously disclosed in the
Registration Statement or any material change to such
information in this Registration Statement.
Provided, however, that paragraphs (i) and (ii) above do not apply
if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports
filed with or furnished to the Commission by the Registrant
pursuant to Section 13 or 15(d) of the Exchange Act that are
incorporated by reference in the Registration Statement.
2. That, for the purpose of determining any liability under the
Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
3. To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
2. Incorporation by Reference.
The Registrant hereby undertakes that, for purposes of determining
any liability under the Act, each filing of the Registrant's annual
report pursuant to Section 13(a) or 15(d) of the Exchange Act that is
incorporated by reference in this Registration Statement shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
3. Commission Position on Indemnification.
Insofar as indemnification for liabilities arising under the Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of
expenses incurred or paid by a director, officer or controlling person
of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will,
unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of
such issue.
SIGNATURES
----------
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-8 and has duly caused
this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the city of Elk Grove Village,
State of Illinois, on this 23rd day of September, 1999.
JOHN B. SANFILIPPO & SON, INC.
By /s/ Jasper B. Sanfilippo
------------------------
Jasper B. Sanfilippo,
Chairman of the Board and Chief
Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Capacity Date
/s/ Jasper B. Sanfilippo Chairman of the Board, Chief September 23, 1999
- ------------------------ Executive Officer and
Jasper B. Sanfilippo Director
/s/ Mathias A. Valentine President and Director September 23, 1999
- ------------------------
Mathias A. Valentine
/s/ Gary P. Jensen Executive Vice President September 23, 1999
- ------------------------ Finance and Chief
Gary P. Jensen Financial Officer
/s/ William R. Pokrajac Controller September 23, 1999
- ------------------------
William R. Pokrajac
/s/ Michael J. Valentine Senior Vice President, September 23, 1999
- ------------------------ Secretary and Director
Michael J. Valentine
/s/ William D. Fischer Director September 23, 1999
- ------------------------
William D. Fischer
/s/ John W. A. Buyers Director September 23, 1999
- ------------------------
John W. A. Buyers
/s/ J. William Petty Director September 23, 1999
- ------------------------
J. William Petty
/s/ Jeffrey T. Sanfilippo Senior Vice President Sales September 23, 1999
- ------------------------- and Marketing and Director
Jeffrey T. Sanfilippo
EXHIBIT INDEX
-------------
Exhibit No. Description of Exhibits
- ----------- ---------------------------------------------------------
4.1 Specimen Common Stock Certificate of the Registrant. (1)
4.2 Restated Certificate of Incorporation of the Registrant. (2)
4.3 Certificate of Correction to Restated Certificate of
Incorporation of the Registrant. (2)
4.4 By-laws of the Registrant. (3)
5.1 Opinion of Jenner & Block regarding validity of registered
securities.
15 None.
23.1 Consent of PricewaterhouseCoopers LLP.
23.2 Consent of Jenner & Block (included in Exhibit 5.1).
24 None.
99.1 The John B. Sanfilippo & Son, Inc. 1998 Equity Incentive Plan.
(1) Incorporated by reference to the Registrant's Registration Statement
on Form S-1 (Amendment No. 3), as filed with the Commission on November
26, 1991 (Commission File No. 33-43353).
(2) Incorporated by reference to the Registrant's Annual Report on Form
10-K for the fiscal year ended December 31, 1991 (File No. 0-19681).
(3) Incorporated by reference to the Registrant's Registration Statement
on Form S-1 as filed with the Commission on October 15, 1991 (Commission
File No. 33-43353).
September 23, 1999
John B. Sanfilippo & Son, Inc.
2299 Busse Road
Elk Grove Village, IL 60007
RE: John B. Sanfilippo & Son, Inc. (the "Company")
Registration Statement on Form S-8
350,000 Shares of Common Stock, par value $.01 per share
--------------------------------------------------------
Ladies and Gentlemen:
We have served as your special securities counsel in connection with the
registration pursuant to a Registration Statement (the "Registration
Statement") on Form S-8, to be filed with the Securities and Exchange
Commission under the Securities Act of 1933, as amended (the "Act"), relating
to the sale of up to 350,000 shares of your Common Stock, $.01 par value per
share (the "Common Stock"), pursuant to The John B. Sanfilippo & Son, Inc.
1998 Equity Incentive Plan (the "Plan").
We have examined original (or copies certified or otherwise identified to our
satisfaction) instruments, certificates and documents and have reviewed such
questions of law as we have deemed necessary or appropriate for the purpose
of the opinions rendered below. In such examination, we have assumed the
genuineness of all signatures, the authenticity of all documents submitted to
us as copies. As to any facts material to our opinion, we have, when
relevant facts were not independently established, relied upon the aforesaid
certificates.
Based upon the foregoing, it is our opinion that:
1. The Company is a legally organized and validly existing corporation in
good standing under the laws of the State of Delaware.
2. The 350,000 shares of Common Stock covered by the Registration
Statement when issued and delivered by the Company in accordance with the
Plan will be validly issued, fully paid and non-assessable.
This opinion is limited in all respects to the laws of the State of Illinois,
the General Corporation Law of the State of Delaware and the federal laws of
the United States of America, and we express no opinion as to the law of any
other jurisdiction or the effect thereof. Our opinions expressed herein are
limited to the specific issues addressed and are limited in all respects to
laws and facts existing on the date hereof. By rendering this opining, we do
not undertake to advise you of any changes in such laws or facts which occur
after the date hereof.
We hereby consent to the inclusion of this opinion as Exhibit 5.1 to the
Registration Statement and to any and all references to our firm in the
Registration Statement. In giving this consent, we do not hereby admit that
we are in the category of persons whose consent is required under Section 7
of the Act or the rules and regulations of the Securities and Exchange
Commission.
Very truly yours,
JENNER & BLOCK
/s/ Timothy R. Donovan
----------------------
By: Timothy R. Donovan
September 16, 1999
Page 2
CONSENT OF INDEPENDENT ACCOUNTANTS
----------------------------------
We consent to the incorporation by reference in this Registration Statement
on Form S-8 of our report dated August 20, 1999 relating to the financial
statements, which appears in the 1999 Annual Report to Stockholders of John
B. Sanfilippo & Son, Inc., which is incorporated by reference in John B.
Sanfilippo & Son, Inc.'s Annual Report on Form 10-K for the year ended
June 24, 1999. We also consent to the incorporation by reference of our
report dated August 20, 1999 relating to the financial statement schedule,
which appears in such Annual Report on Form 10-K.
/s/ PRICEWATERHOUSECOOPERS LLP
- ------------------------------
PRICEWATERHOUSECOOPERS LLP
September 23, 1999
Chicago, Illinois
THE JOHN B. SANFILIPPO & SON, INC.
----------------------------------
1998 EQUITY INCENTIVE PLAN
--------------------------
John B. Sanfilippo & Son, Inc. (the "Company") hereby
establishes The John B. Sanfilippo & Son, Inc. 1998 Equity Incentive Plan
(the "Plan"), to become effective September 1, 1998 (the "Effective
Date"), subject to approval by the holders of a majority of the combined
voting power of the Common Stock, $.01 par value, of the Company ("Common
Stock") and Class A Common Stock, $.01 par value, of the Company ("Class
A Stock") present, or represented, and entitled to vote at a meeting duly
called and held. Grants may be made hereunder prior to such stockholder
approval, provided that any such grants shall be subject to such
stockholder approval.
1. Definitions.
- ---------------
In this Plan, except where the context otherwise indicates,
the following definitions apply:
1.1. "Agreement" means a written agreement implementing a grant of
an Option.
1.2. "Board" means the Board of Directors of the Company.
1.3. "Change in Control" shall have the meaning set forth in
Subsection 15.1 hereof.
1.4. "Class A Stock" means the Class A Common Stock, $.01 par value
per share, of the Company.
1.5. "Code" means the Internal Revenue Code of 1986, as amended.
1.6. "Committee" means the entire Board or any committee of the
Board appointed by the Board to administer the Plan, meeting the
standards of Rule 16b-3(d)(1) under the Exchange Act, or any similar
successor rule and Temp. Treas. Reg. Section 1.162-27(e)(3) or any
similar successor rule. Unless otherwise determined by the Board, the
entire Board shall be the Committee and shall administer the Plan.
1.7. "Common Stock" means the Common Stock, par value $.01 per
share, of the Company, and any other shares into which such common stock
shall thereafter be exchanged by reason of a recapitalization, merger,
consolidation, split-up, combination, exchange of shares or the like.
1.8. "Company" means John B. Sanfilippo & Son, Inc., a Delaware
corporation, its successors and assigns.
1.9. "Current Grant" shall have the meaning set forth in Subsection
6.4(e) hereof.
1.10. "Date of Exercise" means the date on which the Company
receives notice of the exercise of an Option in accordance with the terms
of Section 8 hereof.
1.11. "Date of Grant" means the date on which an Option is granted
by the Committee (or such later date as specified in advance by the
Committee) or, in the case of a Nonstatutory Stock Option granted to an
Outside Director, the date on which such Nonstatutory Stock Option is
granted pursuant to and in accordance with the provisions of Section 10
hereof.
1.12. "Effective Date" means September 1, 1998, subject to approval
by the holders of the combined voting power of the Common Stock and
Class A Stock present, or represented, and entitled to vote at a meeting
duly called and held.
1.13. "Employee" means any person determined by the Committee to be
an employee of the Company or any Subsidiary.
1.14. "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
1.15. "Fair Market Value" of a Share means:
(1) If on the applicable date the Common Stock is listed for
trading on a national or regional securities exchange or authorized
for quotation on the Nasdaq National Market System, the closing
price of the Common Stock on such exchange or Nasdaq National Market
System, as the case may be, on the applicable date, or if no sales
of Common Stock shall have occurred on such exchange or Nasdaq
National Market System, as the case may be, on the applicable date,
the closing price of the Common Stock on the next preceding date on
which there were such sales;
(2) If on the applicable date the Common Stock is not listed
for trading on a national or regional securities exchange or
authorized for quotation on the Nasdaq National Market System, the
mean between the closing bid price and the closing ask price of the
Common Stock as otherwise reported by the Nasdaq Stock Market, Inc.
with respect to the applicable date or, if closing bid and ask
prices for the Common Stock shall not have been so reported with
respect to the applicable date, on the next preceding date with
respect to which such bid and ask prices were so reported; or
(3) If on the applicable date the Common Stock is not listed
for trading on a national or regional securities exchange or
authorized for quotation on the Nasdaq National Market System or
otherwise reported by the Nasdaq Stock Market, Inc., the fair market
value of a Share as determined by the Committee pursuant to a
reasonable method adopted in good faith for such purpose.
Such Fair Market Value shall be subject to adjustment as provided in
Section 23 hereof.
1.16. "For Cause" shall have the meaning set forth in
Subsection 14.2 hereof.
1.17. "Incentive Stock Option" means an Option granted under the
Plan that qualifies as an incentive stock option under Section 422 of the
Code and that the Company designates as such in the Agreement granting
the Option.
1.18. "Insider" means a director, officer or beneficial owner of
more than 10% of the Common Stock of the Company for purposes of Section
16 of the Exchange Act.
1.19. "Nonstatutory Stock Option" means an Option granted under the
Plan that is not an Incentive Stock Option.
1.20. "Option" means a right to purchase Common Stock granted under
the Plan in accordance with the terms of either Section 6 or Section 10
hereof.
1.21. "Optionee" means an Outside Director or an Employee to whom an
Option has been granted.
1.22. "Option Period" means the period during which an Option may be
exercised.
1.23. "Option Price" means the price per Share at which an Option
may be exercised. The Option Price shall be determined by the Committee
in accordance with the terms and conditions of the Plan, except that, in
the case of Nonstatutory Stock Options granted to Outside Directors
pursuant to the provisions of Section 10, in no event shall the Option
Price be less than 100% of the Fair Market Value per Share determined as
of the Date of Grant.
1.24. "Other Plans" shall have the meaning set forth in
Subsection 6.4(d) hereof.
1.25. "Outside Director" means any person who is a director of the
Company and who is not also an employee of either the Company, any
Subsidiary or any of their respective affiliates.
1.26. "Permanent Disability" means a mental or physical condition
which, in the opinion of the Committee, renders an Optionee unable or
incompetent to carry out the job responsibilities which such Optionee
held or tasks to which such Optionee was assigned at the time the
disability was incurred and which is expected to be permanent or for an
indefinite period.
1.27. "Plan" means The John B. Sanfilippo & Son, Inc. 1998 Equity
Incentive Plan.
1.28. "Prior Grants" shall have the meaning set forth in
Subsection 6.4(e) hereof.
1.29. "Reload Option" means a new Option granted to an Optionee
pursuant to and in accordance with Subsections 4.3(f)(v) and 8.2 hereof,
upon the surrender of Shares to pay the Option Price of a previously
granted Option.
1.30. "Share" means a share of Common Stock.
1.31. "Share Withholding" shall have the meaning set forth in
Subsection 13.1 hereof.
1.32. "Subsidiary" means a corporation at least 50% of the total
combined voting power of all classes of stock of which is owned by the
Company either directly or through one or more Subsidiaries.
1.33. "Ten Percent Owner" shall have the meaning set forth in
Subsection 6.4(a) hereof.
1.34. "Termination of Employment" shall have the meaning set forth
in Subsection 14.1 hereof.
1.35. "$100,000 Limit" shall have the meaning set forth in
Subsection 6.4(d) hereof.
2. Purpose.
- -----------
The purpose of the Plan is to advance the interests of the
Company and its Subsidiaries by encouraging and facilitating the
acquisition of a larger personal financial interest in the Company by
Outside Directors and those Employees upon whose judgment and interest
the Company and its Subsidiaries are largely dependent for the successful
conduct of their operations, and by making executive positions in the
Company and its Subsidiaries more attractive. It is anticipated that the
acquisition of such financial interest will stimulate the efforts of such
Employees and Outside Directors on behalf of the Company and its
Subsidiaries and strengthen their desire to continue in the service of
the Company and its Subsidiaries. It is also anticipated that the
opportunity to obtain such a financial interest will prove attractive to
promising executive talent and will assist the Company and its
Subsidiaries in attracting such persons. The Plan is intended to meet
the requirements of Rule 16b-3 of the Exchange Act at all times during
which Insiders are subject to the requirements of Section 16 of the
Exchange Act.
3. Scope of the Plan.
- ---------------------
3.1. Shares Available. An aggregate of 350,000 Shares is hereby
authorized and made available and shall be reserved for issuance under
the Plan with respect to the exercise of Options. Such number of Shares
shall be reduced by the aggregate number of Shares acquired from time to
time to be held as treasury Shares reserved for use under the Plan.
Subject to the foregoing and the other provisions of this Section 3,
Shares that are issued upon the exercise of Options awarded under the
Plan may be issued out of either the Company's authorized and unissued
or treasury shares of Common Stock. The aggregate number of Shares
available under this Plan shall be subject to adjustment upon the
occurrence of any of the events and in the manner set forth in Section 23
hereof.
3.2. Shares Subject to Terminated Options. If, and to the extent,
an Option shall expire or terminate for any reason without having been
exercised in full, the Shares subject thereto which have not become
outstanding shall (unless the Plan shall have terminated) become
available under the Plan for other grants.
3.3. Authority to Purchase Shares. The Board, such committee of
the Board that the Board shall specifically authorize or direct on its
behalf, or the Committee shall have the authority to cause the Company
to purchase from time to time, in such amounts and at such prices as the
Board, in its discretion, shall deem advisable or appropriate, Shares to
be held as treasury Shares and reserved and used solely for or in
connection with grants under the Plan, at the discretion of the
Committee.
4. Administration.
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4.1. The Committee. The Plan shall be administered by the
Committee.
4.2. Authority of the Committee. The Committee shall have full and
final authority, in its discretion, but subject to the express provisions
of the Plan, as follows:
(1) to grant Options;
(2) subject to Sections 6 and 10, to determine (a) the
Option Price of the Shares subject to each Option, (b) the
Employees and Outside Directors to whom, and the time or times at
which, Options shall be granted, and (c) subject to Section 3, the
number of Shares subject to an Option to be granted to each Optionee
thereof;
(3) to determine all other terms and provisions of each
Agreement (which may, but need not be, identical), other than the
exercisability of Options which is governed by Subsection 6.2
hereof, and, with the consent of the Optionee, to modify any
Agreement;
(4) to construe and interpret the Plan and Agreements;
(5) to prescribe, amend and rescind rules and regulations
relating to the Plan, including, without limitation and subject to
Section 14 hereof, the rules with respect to the exercisability of
Options;
(6) to require, whether or not provided for in the pertinent
Agreement, of any person exercising an Option, at the time of such
exercise, the making of any representations or agreements which the
Committee may deem necessary or advisable in order to comply with
the securities laws of the United States of America or of any state;
(7) to prescribe the method by which grants of Options shall
be evidenced;
(8) to cancel, with the consent of the Optionee thereof,
outstanding Options and to grant new Options in substitution
therefor;
(9) to require withholding from or payment by an Optionee of
any federal, state or other governmental taxes;
(10) to prohibit the election described in Section 11 hereof;
(11) to make all other determinations deemed necessary or
advisable for the administration of the Plan; and
(12) to impose such additional conditions, restrictions and
limitations upon the exercise, vesting or retention of Options as
the Committee may, prior to or concurrently with the grant or award
thereof, deem appropriate, including, but not limited to, limiting
the percentage of Options which may from time to time be exercised
by an Optionee.
4.3. Agreements Evidencing Stock Options.
(1) Options awarded under the Plan shall be evidenced by
Agreements which shall not be inconsistent with the terms and
provisions of the Plan, and which shall contain such provisions as
the Committee may in its sole discretion deem necessary or
desirable. Without limiting the generality of the foregoing, the
Committee may in any Agreement impose such restrictions or
conditions upon the exercise of such Option or upon the sale or
other disposition of the shares of Common Stock issuable upon
exercise of such Option as the Committee may in its sole discretion
determine. By accepting an award pursuant to the Plan each Optionee
shall thereby agree that each such award shall be subject to all of
the terms and provisions of the Plan, including, but not limited to,
the provisions of Section 4.6.
(2) Each Agreement shall set forth the number of shares of
Common Stock subject to the Option granted thereby, subject to
adjustment by the Committee to reflect changes in capitalization as
contemplated by Section 23.
(3) Each Agreement relating to Options shall set forth the
amount payable by the Optionee to the Company upon exercise of the
Option evidenced thereby, subject to adjustment by the Committee to
reflect changes in capitalization as contemplated by Section 23.
(4) Each Agreement shall set forth the period during
which the Option shall be exercisable, which shall be determined by
the Committee in its discretion, subject to the terms of Subsection
6.4(b) and Section 10 hereof; provided, however, that no Option
shall be exercisable after the expiration of ten (10) years from the
Date of Grant, and each Option shall be subject to earlier
termination as herein provided.
(5) Each Agreement shall specify whether the Option is a
Nonstatutory Stock Option or an Incentive Stock Option.
(6) Without limiting the foregoing, the Committee shall
provide, in its discretion, in any Agreement:
(1) for an agreement by the Optionee to render
services to the Company or a Subsidiary upon such terms and
conditions as may be specified in the Agreement, provided that
the Committee shall not have the power to commit the Company
or a Subsidiary to employ or otherwise retain any Optionee;
(2) for restrictions on the transfer, sale or other
disposition of Shares issued to the Optionee upon the exercise
of an Option;
(3) for an agreement by the Optionee to resell to the
Company, under specified conditions, Shares issued upon the
exercise of an Option;
(4) for the payment of the Option Price upon the
exercise of an Option otherwise than in cash, including
without limitation by delivery of Shares valued at Fair Market
Value on the Date of Exercise of the Option in accordance with
the terms of Subsection 8.1 hereof, or a combination of cash
and Shares, or for the payment in part of the Option Price
with a promissory note in accordance with the terms of
Subsection 8.3 hereof;
(5) for the automatic issuance of a Reload Option
covering a number of Shares equal to the number of any Shares
used to pay the Option Price in accordance with the terms of
Subsection 8.2 hereof; or
(6) for the right of the Optionee to surrender to the
Company an Option (or a portion thereof) that has become
exercisable and to receive upon such surrender, without any
payment to the Company or a Subsidiary (other than required
tax withholding amounts), that number of Shares (equal to the
highest whole number of Shares) having an aggregate Fair
Market Value as of the date of surrender equal to that number
of Shares subject to the Option (or portion thereof) being
surrendered multiplied by an amount equal to the excess of
(i) the Fair Market Value of a Share on the date of surrender,
over (ii) the Option Price, plus an amount of cash equal to
the Fair Market Value of any fractional Share to which the
Optionee might be entitled. Any such surrender shall be
treated as the exercise of the Option (or portion thereof).
4.4. Finality of Committee Determinations: Liability of Members.
The determination of the Committee on all matters relating to the Plan
or any Agreement shall be final, binding and conclusive. No member of
the Committee shall be liable for any action or determination made in
good faith with respect to the Plan, any Agreement or any grant
thereunder.
4.5. Periodic Committee Review and Meetings with Management. The
Committee shall from time to time review the implementation and results
of the Plan to determine the extent to which the Plan's purpose is being
accomplished. In addition, the Committee shall periodically meet with
senior management of the Company to review their suggestions regarding
grants under the Plan, including the individuals who are proposed to
receive grants and the amount and terms of such grants; provided,
however, that all such grants shall be determined solely by the Committee
in its discretion.
4.6. Indemnification of Committee. In addition to such other
rights of indemnification as they may have as directors of the Company
or as members of the Committee, the members of the Committee shall be
indemnified by the Company against the reasonable expenses, including
attorneys' fees, actually and reasonably incurred in connection with the
defense of any action, suit or proceeding, or in connection with any
appeal therein, 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 Option granted hereunder, and against all amounts reasonably paid
by them in settlement thereof or paid by them in satisfaction of a
judgment in any such action, suit or proceeding, other than for actions
involving wilful misfeasance, gross negligence or reckless disregard of
the member's duties.
5. Eligibility.
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Options may be granted only to Outside Directors and
Employees, except that (i) Outside Directors are not eligible to receive
Options other than pursuant to Section 10 and (ii)neither Jasper B.
Sanfilippo, Sr. nor Mathias A. Valentine shall be eligible to receive
Options under the Plan. Subject to the provisions of Section 3 and
Subsection 6.5 hereof, an Employee or Outside Director who has been
granted an Option may be granted additional Options; provided, however,
that grants of Nonstatutory Stock Options to Outside Directors are
subject to the limitations set forth in Section 10. In selecting the
individuals to whom Options shall be granted as well as in determining
the number of Shares subject to each Option to be granted, the Committee
shall take into consideration such factors as it deems relevant in
connection with promoting the purposes of the Plan.
6. Conditions to Grants and Awards.
- -----------------------------------
6.1. General. Subject to the provisions of Sections 5 and 10
hereof, the Committee is hereby authorized to grant Nonstatutory Stock
Options to Outside Directors and Employees and Incentive Stock Options
to Employees. All Options designated as Incentive Stock Options shall
be, in addition to the other provisions of this Plan, subject to the
terms and conditions of Subsection 6.4 below. Subject to the provisions
of Section 3 hereof, an individual who has been granted an Option may,
if such individual is otherwise eligible, be granted additional Options
if the Committee shall so determine. Subject to the other provisions of
this Plan, the Committee may grant Options with terms and conditions
which differ among the Optionees thereof.
6.2. Exercisability. Each Option granted under this Plan shall
provide that the Option shall become exercisable in equal installments
of 25% of the total number of Shares subject to being purchased
thereunder on each of the first, second, third and fourth anniversaries
of the Option's Date of Grant; provided, however, that the Optionee
remains an Employee (or a director of the Company in the case of a
Nonstatutory Stock Option granted to an Outside Director pursuant to
Section 10 hereof) on each such anniversary of the Date of Grant. To the
extent not set forth in the Plan, the terms and conditions of each grant
shall be set forth in an Agreement.
6.3. Grants of Options and Option Price. Subject to the provisions
of Section 10, before the grant of any Option, the Committee shall
determine the Option Price of the Shares subject to such Option; provided
that, except as provided in Subsection 6.4 below with respect to
Incentive Stock Options, the Option Price shall not be less than fifty
percent (50%) of the Fair Market Value of a Share on the Date of Grant.
6.4. Grants of Incentive Stock Options. Any Option designated as
an Incentive Stock Option may be granted only to an Employee and shall:
(1) have an Option Price of (i) not less than 100% of the
Fair Market Value of a Share on the Date of Grant, or (ii) in the
case of an Employee who owns stock (including stock treated as owned
under Section 424(d) of the Code) possessing more than 10% of the
total combined voting power of all classes of stock of the Company
or any of its Subsidiaries (a "Ten Percent Owner"), not less than
110% of the Fair Market Value of a Share on the Date of Grant;
(2) have an Option Period of not more than ten (10) years
(five (5) years, in the case of a Ten Percent Owner) from the Date
of Grant, and shall be subject to earlier termination as herein
provided;
(3) notwithstanding the provisions relating to termination
of employment set forth in Section 14 hereof, not be exercisable
more than three (3) months (or one (1) year, in the case of an
Optionee who is disabled within the meaning of Section 22(e)(3) of
the Code) after termination of employment;
(4) not have an aggregate Fair Market Value of Shares
(determined for each Incentive Stock Option at the time it is
granted) with respect to which Incentive Stock Options are
exercisable for the first time by such Optionee during any calendar
year (under this Plan and any other employee stock option plan of
the Optionee's employer or any parent or 50%-or-more owned
subsidiary thereof ("Other Plans")), determined in accordance with
the provisions of Section 422 of the Code, which exceeds $100,000
(the "$100,000 Limit");
(5) if the aggregate Fair Market Value of Shares (determined
on the Date of Grant) with respect to all Incentive Stock Options
previously granted under this Plan and the Other Plans ("Prior
Grants") and any Incentive Stock Options under such grant (the
"Current Grant") which are exercisable for the first time during any
calendar year would exceed the $100,000 Limit, be exercisable as
follows:
(1) the portion of the Current Grant exercisable for
the first time by the Optionee during any calendar year which
would be, when added to any portions of any Prior Grants
exercisable for the first time by the Optionee during any such
calendar year with respect to Shares which would have an
aggregate Fair Market Value (determined at the time of each
such grant) in excess of the $100,000 Limit shall,
notwithstanding the terms of the Current Grant, be exercisable
for the first time by the Optionee in the first subsequent
calendar year or years in which it could be exercisable for
the first time by the Optionee when added to all Prior Grants
without exceeding the $100,000 Limit; and
(2) if, viewed as of the date of the Current Grant, any
portion of a Current Grant could not be exercised under the
provisions of the immediately preceding sentence during any
calendar year commencing with the calendar year in which it is
first exercisable through and including the last calendar year
in which it may by its terms be exercised, such portion of the
Current Grant shall not be an Incentive Stock Option, but
shall be exercisable as a separate Option at such date or
dates as are provided in the Current Grant.
(f) be granted within ten (10) years from the earlier of the date
the Plan is adopted or the date the Plan is approved by the
stockholders of the Company; and
(g) require the Optionee to notify the Committee of any
disposition of any Shares issued pursuant to the exercise of
the Incentive Stock Option under the circumstances described
in Section 421(b) of the Code (relating to certain
disqualifying dispositions), within ten (10) days of such
disposition.
6.5. Code Section 162(m) Compliance for Option Grants. The maximum
number of Shares subject to Options which may be awarded to any Optionee
in any one calendar year shall not exceed 50,000 Shares. In all events,
determinations under the preceding sentence shall be made in a manner
which is consistent with Code Section 162 and the regulations promulgated
thereunder.
7. Non-transferability.
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Each Option granted hereunder shall by its terms not be
assignable or transferable other than by will or the laws of descent and
distribution. During the life of the Optionee, all rights granted to the
Optionee under the Plan or under any Agreement shall be exercisable only
by the Optionee.
8. Exercise of Options.
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8.1. Manner of Exercise and Payment. Subject to the provisions
hereof and the provisions of the Agreement under which it was granted,
each Option shall be exercised by delivery to the Company's treasurer of
written notice of intent to purchase a specific whole number of Shares
subject to the Option. The Option Price of any Shares as to which an
Option is exercised shall be paid in full at the time of the exercise,
unless and to the extent that the Committee agreed in the Agreement in
which the Option was granted to accept a promissory note as provided in
Subsection 8.3 below. Payment may, at the election of the Optionee, be
made in (i) cash, (ii) Shares valued at their Fair Market Value on the
Date of Exercise, (iii) surrender of an exercisable Option covering
Shares with an aggregate Fair Market Value as of the date of exercise in
excess of the aggregate dollar amount of the Option Prices of such Shares
under such Option equal to the Option Price of the Options sought to be
exercised, (iv) through the delivery of irrevocable instructions to a
broker to deliver promptly to the Company an amount in cash equal to the
Option Price, (v) any combination of the foregoing, or (vi) in accordance
with the terms of the Agreement under which the Options sought to be
exercised were granted. In certain circumstances, payment may also be
made in accordance with Subsection 8.3 below.
8.2. Reload Option. Pursuant to Subsection 4.3(f)(v) hereof, the
Committee may, in its sole discretion, award Reload Options in an amount
equal to the number of Shares that could be delivered in payment of the
Option Price (as set forth in Subsection 8.1 above) in connection with
the exercise of an Option. To the extent required by applicable law, the
number of Reload Options available to each Optionee shall be set forth
in each grant. The Option Price for any Reload Option shall be the Fair
Market Value of a Share on the date that Shares are surrendered in
payment of the Option Price. Other terms of the Reload Option shall be
the same as the terms contained in the Agreement relating to the Option
being exercised, provided that if a Reload Option is granted in
connection with the use of Shares to pay the exercise price of an
Incentive Stock Option, the Reload Option shall be a Nonstatutory Stock
Option.
8.3. Deferred Payment of Option Price. To the extent permitted by
applicable law, the Committee may agree in the Agreement in which an
Option is granted to accept as partial payment for the Shares a
promissory note of the Optionee evidencing his or her obligation to make
future cash payment therefor; provided, however, that in no event may the
Committee accept a promissory note for an amount in excess of the
difference between the aggregate Option Price and the par value of the
Shares purchased pursuant to the Option. Promissory notes made pursuant
to this Subsection 8.3 shall be payable as determined by the Committee,
shall be secured by a pledge of the Shares in respect of the purchase of
which the promissory is being delivered and shall bear interest at a rate
fixed by the Committee (which rate shall not be lower than a reasonable
commercial rate).
9. Accelerated Exercise.
- ------------------------
Notwithstanding any other provisions of the Plan, all unexercised
Options may be exercised or disposed of commencing on the date of a
Change of Control, as defined in Section 15 hereof; provided, however,
that the Company may cancel all such Options under the Plan as of the
date of a Change of Control by giving notice to each Optionee thereof of
its intention to do so and by permitting the purchase during the thirty-
day period next preceding such effective date of all of the Shares
subject to such outstanding Options.
10. Grant of Stock Options to Outside Directors.
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Each Outside Director shall be eligible to be granted
Nonstatutory Stock Options and all such grants shall only be made under
and in accordance with the provisions in this Section 10.
10.1. Grant to Outside Directors. Each person who becomes an
Outside Director shall be granted on the date such person first becomes
elected as an Outside Director, and on each date such person is re-
elected as an Outside Director, which in each case shall be the Date of
Grant, a Nonstatutory Stock Option to purchase 1,000 Shares at an Option
Price equal to the Fair Market Value of such Shares on the Date of Grant.
Each such Nonstatutory Stock Option shall provide that it may be
exercised no later than ten (10) years following the Date of Grant and
that the Nonstatutory Stock Option shall become exercisable in equal
installments of 250 Shares on each of the first, second, third and fourth
anniversaries of the Date of Grant, provided, however, that the Optionee
remains a director of the Company on each such anniversary of the Date
of Grant.
10.2. Insufficient Shares Available. If on any date on which
Nonstatutory Stock Options are to be granted pursuant to Subsection 10.1
above there is an insufficient number of Shares available pursuant to
Section 3 hereof for such grant, the number of Shares subject to each
Option granted pursuant to Subsection 10.1 on such date shall equal the
number of Shares that otherwise would be subject to such Nonstatutory
Stock Options but for such limitation multiplied by a fraction, the
numerator of which shall be the total number of Shares then available
pursuant to Section 3 for the grant of Nonstatutory Stock Options,. and
the denominator of which shall be the aggregate number of Shares that
otherwise would be granted pursuant to Subsection 10.1, such product to
be rounded down to the nearest whole number.
10.3. Amendments to Section. Notwithstanding Section 24 hereof,
the provisions in this Section 10 may not be amended more than once every
six (6) months, other than to comport with changes in the Code, the
Employee Retirement Income Security Act, or the rules thereunder.
11. Notification under Section 83(b).
- -------------------------------------
Provided that the Committee has not prohibited such Optionee
from making the following election, if an Optionee shall, in connection
with the exercise of any Option, make the election permitted under
Section 83(b) of the Code (i e., an election to include in such
Optionee's gross income in the year of transfer the amounts specified in
Section 83(b) of the Code), such Optionee shall notify the Committee of
such election within ten (10) days of filing notice of the election with
the Internal Revenue Service, in addition to any filing and notification
required pursuant to regulations issued under the authority of
Section 83(b) of the Code.
12. Withholding Taxes.
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12.1. Remittance of Tax as Condition of Delivery. The Company shall
be entitled to require as a condition of delivery of Shares hereunder
that the Optionee remit an amount sufficient to satisfy all federal,
state and other governmental withholding tax requirements related
thereto.
12.2. Mandatory Withholding on Officers, Directors and Greater Than
10% Stockholders. In the case of an Optionee who is an officer,
director or beneficial owner of more than 10% of the Common Stock of the
Company (as determined in accordance with Rule 13d-3 under the Exchange
Act), whenever under the Plan, Shares are to be delivered, the Company
shall withhold an amount sufficient to satisfy all federal, state and
other governmental withholding tax requirements related thereto.
13. Elective Share Withholding.
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13.1. An Optionee, other than an Insider, may, subject to Committee
approval, elect the withholding ("Share Withholding") by the Company of
a portion of the Shares otherwise deliverable to such Optionee upon his
or her exercise of an Option having a Fair Market Value equal to either
(a) the amount necessary to satisfy such Optionee's required federal,
state or other governmental withholding tax liability with respect
thereto, or (b) a greater amount, not to exceed the estimated total
amount of such Optionee's tax liability with respect thereto.
13.2. Share Withholding Is Subject to Committee Approval. Share
Withholding is subject to Committee approval and each Share Withholding
election by an Optionee shall also be subject to the following
restrictions:
(1) the election must be made prior to the date on which the
amount of tax to be withheld is determined; and
(2) the election shall be irrevocable.
14. Termination of Employment.
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14.1. Forfeiture. Subject to the provisions of Subsection 6.4
hereof with respect to Incentive Stock Options, an unexercised Option
shall terminate and/or be forfeited upon the date on which the Optionee
thereof is no longer an Employee ("Termination of Employment") if the
Termination of Employment was the result of the resignation of the
Optionee or the Optionee was terminated For Cause (as defined in
Subsection 14.2 below) or otherwise, except that:
(1) Death. If the Optionee's Termination of Employment is
by reason of his or her death, unexercised Options to the extent
exercisable on the date of the Optionee's death, may be exercised,
in whole or in part, at any time within one (1) year after the date
of death by the Optionee's personal representative or by the person
to whom the Options are transferred by will or the applicable laws
of descent and distribution.
(2) Retirement. If the Optionee's employment is terminated
as a result of retirement under the provisions of a retirement plan
of the Company or a Subsidiary applicable to the Optionee (or on or
after age 60 if no retirement plan of the Company or Subsidiary is
applicable to the Optionee), any unexercised Option, to the extent
exercisable at the date of such Termination of Employment, may be
exercised, in whole or in part, at any time within ninety (90) days
after the date of such Termination of Employment; provided that, if
the Optionee dies after such Termination of Employment and before
the expiration of such 90-day period, unexercised Options held by
such deceased Optionee may be exercised by his or her personal
representative or by the person to whom the Option is transferred
by will or the applicable laws of descent and distribution within
one (1) year after the Optionee's Termination of Employment.
(3) Permanent Disability. If the Optionee's employment is
terminated as a result of his or her Permanent Disability, any
unexercised Option, to the extent exercisable at the date of such
Termination of Employment, may be exercised, in whole or in part,
at any time within one (1) year after the date of such Termination
of Employment; provided that, if an Optionee dies after such
Termination of Employment and before the expiration of such one (1)
year period, the unexercised Options may be exercised by the
deceased Optionee's personal representative or by the person to whom
the unexercised Options are transferred by will or the applicable
laws of descent and distribution within one (1) year after the
Optionee's Termination of Employment, or, if later, within 180 days
after the Optionee's death.
(4) Other Reasons for Termination. If the Optionee has a
Termination of Employment for any reason other than by death,
retirement, Permanent Disability, resignation or For Cause, any
unexercised Option to the extent exercisable on the date of such
Termination of Employment, may be exercised, in whole or in part,
at any time within three (3) months from the date of such
Termination of Employment.
14.2. "For Cause." A Termination of Employment "For Cause" shall
mean a Termination of Employment that, in the judgment of the Committee,
is the result of (i) the breach by the Employee of any employment
agreement, employment arrangement or any other agreement with the Company
or a Subsidiary, (ii) the Employee engaging in a business that competes
with the Company or a Subsidiary, (iii) the Employee disclosing business
secrets, trade secrets or confidential information of the Company or a
Subsidiary to any party, (iv) dishonesty, misconduct, fraud or disloyalty
by the Employee, (v) misappropriation of corporate funds, or (vi) such
other conduct by the Employee of an incompetent, insubordinate, immoral
or criminal nature as to have rendered the continued employment of the
Employee incompatible with the best interests of the Company and its
Subsidiaries.
14.3. Option Term. Any of the provisions herein to the contrary
notwithstanding, no Option shall be exercisable beyond the term specified
in the related Agreement thereof.
15. Change of Control.
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15.1. Definition of "Change of Control." A "Change of Control"
occurs if, and as of the first date on which, no shares of Class A Stock
remain outstanding.
15.2. Notice of Change of Control. The Company shall notify all
Optionees of the occurrence of a Change of Control promptly after its
occurrence, but any failure of the Company to notify shall not deprive
the Optionees of any rights accruing hereunder by virtue of a Change of
Control.
16. Substituted Options.
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If the Committee cancels, with the consent of an Optionee, any
Option granted under the Plan, and a new Option is substituted therefor,
then the Committee may, in its discretion, provide that the Date of Grant
of the canceled Option shall be the date used to determine the earliest
date or dates for exercising the new substituted Option under
Subsection 6.2 hereof so that the Optionee may exercise or dispose of the
substituted Option at the same time as if the Optionee had held the
substituted Option since the Date of Grant of the canceled Option;
provided, however, that no Optionee who for purposes of Section 16 of the
Exchange Act is treated as an officer, director or 10% stockholder of the
Company may dispose of a substituted Option, within less than six months
after the Date of Grant (calculated without reference to this
Section 16).
17. Securities Law Matters.
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17.1. Investment Intent Representation: Restrictive Legend. Where
an investment intent representation or restrictive legend is deemed
necessary to comply with the Securities Act of 1933, as amended, the
Committee may require a written representation to that effect by the
Optionee, or may require that such legend be affixed to certificates for
Shares at the time the Option is exercised.
17.2. Company's Right to Postpone Exercise. If based upon the
opinion of counsel to the Company, the Committee determines that the
exercise of any Options would violate any applicable provision of
(i) state or federal securities law, (ii) the listing requirements of any
securities exchange registered under the Exchange Act on which are listed
any of the Company's equity securities, (iii) the listing requirements
of the Nasdaq National Market if any of the Company's equity securities
are listed thereon, or (iv) the listing requirements of The Nasdaq Small
Cap Market if any of the Company's equity securities are listed thereon,
then the Committee may postpone any such exercise; provided, however,
that the Company shall use its best efforts to cause such exercise to
comply with all such provisions at the earliest practicable date; and
provided further, that the Committee's authority under this
Subsection 17.2 shall expire from and after the date of any Change of
Control.
17.3. Rule 16b-3 Compliance. With respect to Insiders, transactions
under the Plan are intended to comply with all applicable conditions of
Rule 16b-3 or its successors under the Exchange Act. To the extent any
provision of the Plan or action by the Board or the Committee fails to
so comply, it shall be deemed null and void, to the extent permitted by
law and deemed advisable by the Board and the Committee.
18. Funding.
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Benefits payable under the Plan to any person shall be paid
directly by the Company. The Company shall not be required to fund, or
otherwise segregate assets to be used for payment of, benefits under the
Plan.
19. No Employment Rights.
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Neither the establishment of the Plan, nor the granting of any
rights under the Plan, shall be construed to (a) give any Optionee the
right to remain employed by the Company, any Subsidiary or any of their
affiliates or to any benefits not specifically provided by the Plan, or
(b) in any manner modify the right of the Company, any Subsidiary or any
of their affiliates to modify, amend or terminate any of its employee
benefit plans.
20. Stockholder Rights.
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An Optionee shall not, by reason of any right granted
hereunder, have any right as a stockholder of the Company with respect
to the Shares which may be deliverable upon exercise of such Option until
such Shares have been delivered to him or her.
21. Nature of Payments.
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Any and all grants or deliveries of Shares hereunder shall
constitute special incentive payments to the Optionee and shall not be
taken into account in computing the amount of salary or compensation of
the Optionee for the purposes of determining any pension, retirement,
death or other benefits under (a) any pension, retirement, profit-
sharing, bonus, life insurance or other employee benefit plan of the
Company, any Subsidiary or any of their affiliates, or (b) any agreement
between the Company, any Subsidiary or any of their affiliates, on the
one hand, and the Optionee, on the other hand, except as such plan or
agreement shall otherwise expressly provide.
22. Non-Uniform Determinations.
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Neither the Committee's nor the Board's determinations under
the Plan need be uniform and may be made by the Committee or the Board
selectively among persons who receive, or are eligible to receive, grants
under the Plan (whether or not such persons are similarly situated).
Without limiting the generality of the foregoing, the Committee shall be
entitled, among other things, to make non-uniform and selective
determinations, and to enter into non-uniform and selective Option
agreements as to (a) the persons to receive grants under the Plan, (b)
the terms and provisions of grants under the Plan, and (c) the treatment,
under Section 14 hereof, of leaves of absence.
23. Adjustments.
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Any Option entered into hereunder may contain such provisions as the
Committee shall determine for equitable adjustment of (a) the number of
Shares covered thereby, (b) the Option Price, or (c) otherwise, to
reflect a stock dividend, stock split, reverse stock split, Share
combination, recapitalization, merger, consolidation, asset spin-off,
reorganization or similar event, of or by the Company. In any such
event, regardless of whether specified in an Agreement, the aggregate
number of Shares available under the Plan shall be appropriately adjusted
to equitably reflect such event.
24. Amendment of the Plan.
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Subject to Subsection 10.3 hereof, the Board may make such
modifications of the Plan as it shall deem advisable; provided, however,
no modifications shall be made which would impair the rights of any
Option theretofore granted without the Optionee's consent; and provided
further, the Board may not, without further approval of the stockholders
of the Company, except as provided in Section 23 above, either:
(1) materially increase the number of Shares reserved for
issuance under the Plan;
(2) materially increase the benefits accruing to
participants under the Plan;
(3) materially modify the requirements as to eligibility for
participation in the Plan; or
(4) extend the date of termination of the Plan.
25. Termination of the Plan.
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The Plan shall terminate on the tenth (10th) anniversary of
the Effective Date or at such earlier time as the Board may determine.
Any termination, whether in whole or in part, shall not affect any
rights then outstanding under the Plan.
26. Controlling Law.
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The Plan shall be governed, construed and administered in
accordance with the laws of the State of Delaware, except its laws with
respect to choice of law.
27. Action by the Company.
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Any action required by the Company under the Plan shall be by
resolution of the Board.
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