EXHIBIT 10.8
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NON-QUALIFIED PERFORMANCE STOCK OPTION AGREEMENT
UNDER FLEMING COMPANIES, INC.
1990 STOCK OPTION PLAN
THIS NON-QUALIFIED PERFORMANCE STOCK OPTION AGREEMENT (the "Option
Agreement"), made as of this 16th day of February, 1994, at Oklahoma City,
Oklahoma by and between ________________________________________________________
(hereinafter referred to as the "Participant"), and Fleming Companies, Inc.
(hereinafter referred to as the "Company"):
W I T N E S S E T H:
WHEREAS, the Participant is a key employee of the Company, its parent or
any subsidiary of the Company, and it is important to the Company that the
Participant be encouraged to remain in the employ of the Company, its parent or
any subsidiary of the Company; and
WHEREAS, in recognition of such facts, the Company desires to provide to
the Participant an opportunity to purchase shares of the common stock of the
Company, as hereinafter provided, pursuant to the "Fleming Companies, Inc. 1990
Stock Option Plan" (the "Plan").
NOW, THEREFORE, in consideration of the mutual covenants hereinafter set
forth and for good and valuable consideration, the Participant and the Company
hereby agree as follows:
1. GRANT OF STOCK OPTION. The Company hereby grants to the Participant a
nonqualified stock option (the "Stock Option") as described in Sections 83 and
421 of the Internal Revenue Code of 1986 (the "Code") to purchase all or any
part of an aggregate of _______________________________ (______) shares of its
common stock (the "Stock") of the Company as set forth below, under and subject
to the terms and conditions of this Option Agreement and the Plan, each of which
is incorporated herein by reference and made a part hereof for all purposes.
The purchase price per share for each share of Stock to be purchased hereunder
shall be $24.9375.
2. TIMES OF EXERCISE OF STOCK OPTION.
(a) EXERCISE AFTER DETERMINATION DATE. After, and only after, the
conditions of Section 9 hereof have been satisfied, the Participant shall be
eligible to exercise that portion of his Stock Option pursuant to the schedule
set forth hereinafter. If the Participant's employment with the Company (or its
parent or of any one or more of the subsidiaries of the Company) remains full-
time and continuous at all times prior to any of the "Determination Dates" as
such term is hereinafter defined, then the Participant shall be entitled,
subject to the applicable provisions of the Plan and this Option Agreement
having been satisfied, to exercise on or after the applicable Determination
Date, on a cumulative basis, the number of shares of Stock determined by
multiplying the aggregate number of shares set forth in the foregoing Section 1
by the designated percentage set forth hereafter. For purposes of this Option
Agreement, the term "Determination Date"
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shall mean the date on which the Compensation and Organization Committee of the
Board of Directors of the Company (the "Committee") certifies that the average
of the last reported sales price of the Stock on the New York Stock Exchange
Composite Transactions report for any twenty (20) consecutive business day
period shall have equaled or exceeded a target stock price set forth below (the
"Target Stock Price"). In order to fulfill the certification requirement, the
Committee shall meet in person or by telephone or act by unanimous written
consent no later than thirty days after the achievement of a Target Stock Price
for the required period.
Percent of Stock
Target Stock Price Option Exercisable
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$28 10%
$31 20%
$34 30%
$37 40%
$40 50%
$43 60%
$47 70%
$50 80%
$53 90%
$56 100%
(b) ADJUSTMENTS TO TARGET STOCK PRICE. In case of a
recapitalization, stock split, merger, stock dividend, reorganization,
combination, liquidation, or other change in the Stock (an "Adjustment Event"),
the Target Stock Prices shall be automatically adjusted to reflect such
Adjustment Event.
3. TERM OF STOCK OPTION. Except as specifically provided to the contrary
in this Option Agreement or in the Plan, with regard to the death of a
Participant, no Stock Option shall be exercisable within six months from nor
more than ten years after the date of grant (the "Option Period"). Stock
Options shall be exercisable only by the Participant while actively employed by
the Company or a subsidiary, except that (i) any such Stock Option granted and
which is otherwise exercisable, may be exercised by the personal representative
of a deceased Participant within 12 months after the death of such Participant
and (ii) if a Participant terminates his employment with the Company or a
subsidiary, such Participant may exercise any Stock Option which is otherwise
exercisable at any time within three months of such date of termination. If a
Participant should die during the applicable three month period following the
date of such Participant's termination, the rights of the personal
representative of such deceased Participant as such relate to any Stock Options
granted to such deceased Participant shall be governed in accordance with this
Section 3(i).
4. NONTRANSFERABILITY OF STOCK OPTIONS. Except as otherwise herein
provided, any Stock Option granted shall not be transferable otherwise than by
will or the laws of descent and distribution, and the Stock Option may be
exercised, during the lifetime of the Participant, only by him. More
particularly (but without limiting the generality of the foregoing), the Stock
Option may not be assigned, transferred (except as provided above), pledged or
hypothecated in any way, shall not be assignable by operation of law and shall
not be subject to execution, attachment, or similar process. Any attempted
assignment, transfer, pledge, hypothecation or other disposition of the Stock
Option contrary to the provisions hererof shall be null and void and without
effect.
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5. EMPLOYMENT. So long as the Participant shall continue to be a full-
time and continuous employee of the Company, its parent or one of more of the
subsidiaries of the Company, any Stock Option granted to him shall not be
affected by any change of duties or position. Nothing in the Plan or in this
Option Agreement shall confer upon the Participant any right to continue in the
employ of the Company, its parent or any of the subsidiaries of the Company, or
interfere in any way with the right of the Company, its parent or any of the
subsidiaries of the Company to terminate such Participant's employment at any
time.
6. SPECIAL RULES WITH RESPECT TO STOCK OPTIONS. With respect to Stock
Options granted hereunder, the following special rules shall apply:
(a) ACCELERATION OF OTHERWISE UNEXERCISABLE STOCK OPTION ON
TERMINATION OF EMPLOYMENT OR DEATH. The Committee, in its sole discretion, may
permit (i) a Participant who terminates employment with the Company or a
subsidiary or (ii) the personal representative of a deceased Participant, to
exercise and purchase (within three months of such date of termination of
employment or 12 months in the case of a deceased Participant) all or any part
of the shares subject to the Stock Option on the date of the Participant's death
or termination, notwithstanding that all installments, if any, with respect to
such Stock Option, had not accrued on such date. Provided, such discretionary
authority of the Committee may not be exercised with respect to any Stock Option
(or portion thereof) if the applicable six month waiting period for exercise had
not expired except in the event of the death of the Participant when the
personal representative of the deceased Participant may, with the consent of the
Committee, exercise such Stock Option notwithstanding the fact that the
applicable six month waiting period had not yet expired.
(b) NUMBER OF STOCK OPTIONS GRANTED. Participants may be granted
more than one Stock Option. In making any such determination, the Committee
shall obtain the advice and recommendation of the officers of the Company, its
parent, or a subsidiary of the Company which have supervisory authority over
such Participants. Further, the granting of a Stock Option under this Option
Agreement shall not affect any outstanding Stock Option previously granted to a
Participant under the Plan.
(c) RIGHT TO EXERCISE UPON COMPANY CEASING TO EXIST. Where
dissolution or liquidation of the Company or any merger, consolidation or
combination in which the Company is not the surviving corporation occurs, the
Participant shall have the right immediately prior to such dissolution,
liquidation, merger, consolidation or combination, as the case may be, to
exercise, in whole or in part, his then remaining Stock Options whether or not
then exercisable. Provided, the foregoing notwithstanding, after the
Participant has been afforded the opportunity to exercise his then remaining
Stock Options as provided in this Section 6(c), and to the extent such Stock
Options are not timely exercised as provided in this Section 6(c), then, the
terms and provisions of this Option Agreement and the Plan will thereafter
continue in effect, and the Participant will be entitled to exercise any such
remaining and unexercised Stock Options in accordance with the terms and
provisions of this Option Agreement and the Plan as such Stock Options
thereafter become exercisable. Provided, further, that for the purposes of this
Section 6(c), if any merger, consolidation or combination occurs in which the
Company is not the surviving corporation and is the result of a mere change in
the identity, form or place of organization of the Company accomplished in
accordance with Section 368(a)(1)(F) of the Code, then, such event will not
cause an acceleration of the exercisability of such Stock Option granted
hereunder.
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(d) ASSUMPTION OF OUTSTANDING STOCK OPTIONS. To the extent permitted
by the applicable provisions of the Code, any successor to the Company
succeeding to, or assigned the business of, the Company as the result of or in
connection with a corporate merger, consolidation, combination, reorganization
or liquidation transaction shall assume Stock Options outstanding under this
Option Agreement or issue new Stock Options in place of such outstanding Stock
Options. Provided, such assumption of outstanding Stock Options is to be made
on a fair and equivalent basis in accordance with the applicable provisions of
Section 425(a) of the Code; provided, further, in no event will such assumption
result in a modification of any Stock Option as defined in Section 425(h) of the
Code.
(e) PAYMENT OF WITHHOLDING TAXES. Upon the exercise of any Stock
Option as provided herein, no such exercise shall be permitted, nor shall any
Stock be issued to any Participant until the Company receives full payment for
the Stock purchased which shall include any required state and federal
withholding taxes. Further, upon the exercise of any Stock Option the
Participant may direct the
Company to retain from the shares of Stock to be issued upon exercise of the
Stock Option that number of initial shares of Stock (based on fair market value)
that would satisfy the requirements for withholding any amounts due upon the
exercise.
7. METHOD OF EXERCISING STOCK OPTION.
(a) PROCEDURES FOR EXERCISE. Subject to the provisions of Section 2
of this Option Agreement, the manner of exercising the Stock Option herein
granted shall be by written notice to the Company at least two days before the
date the Stock Option, or part thereof, is to be exercised, and in any event
prior to the expiration of the Option Period. Such notice shall state the
election to exercise the Stock Option and the number of shares of Stock with
respect to that portion of the Stock Option being exercised, and shall be signed
by the person or persons so exercising the Stock Option. The notice shall be
accompanied by payment of the full purchase price of such shares, in which event
the Company shall deliver a certificate or certificates representing such shares
to the person or persons entitled thereto as soon as practicable after the
notices shall be received.
(b) FORM OF PAYMENT. Payment for shares of Stock purchased under
this Option Agreement shall be made in full and in cash or check made payable to
the Company. Provided, payment for shares of Stock purchased under this Option
Agreement may also be made in common stock of the Company or a combination of
cash and common stock of the Company. In the event that common stock of the
Company is utilized in consideration for the purchase of Stock upon the exercise
of a Stock Option, then, such common stock shall be valued at the "fair market
value" as defined in Section 1.6 of the Plan. In addition to the foregoing
procedure which may be available for the exercise of any Stock Option, the
Participant may deliver to the Company a notice of exercise including an
irrevocable instruction to the Company to deliver the stock certificate
representing the shares subject to a Stock Option to a broker authorized to
trade in the common stock of the Company. Upon receipt of such notice, the
Company will acknowledge receipt of the executed notice of exercise and forward
this notice to the broker. Upon receipt of the copy of the notice which has
been acknowledged by the Company, and without waiting for issuance of the actual
stock certificate with respect to the exercise of the Stock Option, the broker
may sell the Stock (or that portion of the Stock necessary to cover the Option
Price and any withholding taxes due, if any). Upon receipt of the stock
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certificate from the Company, the broker will deliver directly to the Company
that portion of the sales proceeds to cover the Option Price and any withholding
taxes. Further, the broker may also facilitate a loan to the Participant upon
advance receipt of the exercise notice for issuance of the actual stock
certificate as an alternative means of financing and facilitating the exercise
of any Stock Option. For all purposes of effecting the exercise of a Stock
Option, the date on which the Participant gives the notice of exercise to the
Company will be the date he becomes bound contractually to take and pay for the
shares of Stock underlying the Stock Option. No Stock shall be issued to the
Participant until the Company receives full payment for the Stock purchased
under the Stock Option which shall include any required state and federal
withholding taxes.
(c) FURTHER INFORMATION. In the event the Stock Option is exercised,
pursuant to the foregoing provisions of this Section 7, by any person or persons
other than the Participant in the event of the death of the Participant, such
notice shall also be accompanied by appropriate proof of the right of such
person or persons to exercise the Stock Option. The notice so required shall be
given by personal delivery to the Secretary of the Company or by registered or
certified mail, addressed to the Company at 6301 Waterford Boulevard, Oklahoma
City, Oklahoma 73118, and it shall be deemed to have been given when it is so
personally delivered or when it is deposited in the United States mail in an
envelope addressed to the Company, as aforesaid, properly stamped for delivery
as a registered or certified letter.
8. ACCELERATION OF OPTIONS UPON CHANGE OF CONTROL. In the event that a
Change of Control (as defined herein) has occurred with respect to the Company,
any and all Stock Options will become automatically fully vested and immediately
exercisable with such acceleration to occur without the requirement of any
further act by either the Company or the Participant. For the purposes of this
Section 8, the term "Change of Control" shall mean:
(a) The acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act")) (a "Person") of beneficial ownership (within
the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of
either (i) the then outstanding shares of common stock of the Company or (ii)
the combined voting power of the then outstanding voting securities of the
Company entitled to vote generally in the election of directors; provided,
however, that the following acquisitions shall not constitute a Change of
Control: (i) any acquisition directly from the Company, (ii) any acquisition by
the Company; (iii) any acquisition by any employee benefit plan (or related
trust) sponsored or maintained by the Company or any corporation controlled by
the Company, or (iv) any acquisition by any corporation pursuant to a
transaction which complies with clauses (i), (ii), and (iii) of this Section
8(a); or
(b) Individuals who, as of the date hereof, constitute the Board (the
"Incumbent Board") cease for any reason to constitute at least a majority of the
Board; provided, however, that any individual becoming a director subsequent to
the date hereof whose election, or nomination for election by the Company's
shareholders, was approved by a vote of at least a majority of the directors
then comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of an actual or threatened election contest with respect to the election
or removal of directors or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board.
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9. SECURITIES LAW RESTRICTIONS. Stock Options shall be exercised and
Stock issued only upon compliance with the Securities Act of 1993, as amended
(the "Act"), and any other applicable securities law, or pursuant to an
exemption therefrom.
10. NOTICES. All notices or other communications relating to the Plan and
this Option Agreement as it relates to the Participant shall be in writing and
shall be mailed (U.S. mail) by the Company to the Participant at the then
current address as maintained by the Company or such other address as the
Participant may advise the Company in writing.
IN WITNESS WHEREOF, the Company has caused this Option Agreement to be duly
executed by its officers thereunto duly authorized, and the Participant has
hereunto set his hand and seal, all on the day and year first above written.
COMPANY: FLEMING COMPANIES, INC.
an Oklahoma corporation
By __________________________________________
Larry A. Wagner, Senior Vice President
Human Resources
PARTICIPANT: __________________________________________
Name______________________________________
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