EXHIBIT 10.16
DREYER'S GRAND ICE CREAM, INC.
STOCK OPTION PLAN (1993)
(AS AMENDED)*
1. Purpose
The purpose of the Plan is to provide a vehicle under which a variety of
stock option awards may be granted to employees and directors of the Company and
its Subsidiaries to further the profits and prosperity of the Company and its
Subsidiaries.
2. Definitions
A. "Award" means any form of stock option granted under the Plan.
B. "Award Notice" means any written notice from the Company to a
Participant or agreement between the Company and a Participant
that establishes the terms applicable to an Award.
C. "Board of Directors" means the Board of Directors of the Company.
D. "Code" means the Internal Revenue Code of 1986, as amended.
E. "Committee" means the Compensation Committee of the Board of
Directors, or such other committee designated by the Board of
Directors, which is authorized to administer the Plan under
Section 3 hereof. The Committee, and any separate committee to
which it delegates any of its authority and duties under the
Plan, shall each have membership composition which enable the
Plan to qualify under Rule 16b-3 with regard to Awards to persons
who are subject to Section 16 of the Exchange Act.
F. "Common Stock" means common stock of the Company.
G. "Company" means Dreyer's Grand Ice Cream, Inc., a Delaware
corporation.
H. "Director" means a member of the Board of Directors.
I. "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
J. "Fair Market Value" means, as of a specified date, the mean of
the high and the low sales price of one share of Common Stock on
the over-the-counter market or the closing price on the principal
stock exchange where the Company's stock prices are officially
quoted, or if not traded on that date, then on the date last
___________________________
* As amended through May 9, 2001, the effective date of the most recent
amendment to the Plan. Also reflects adjustments for October 30, 1997 2-for-1
Stock Split.
traded. If for any reason the Company's stock ceases to be traded
on the over-the-counter market or listed on a stock exchange, the
Committee shall establish the method for determining the Fair
Market Value of the Common Stock.
K. "Key Employee" means any employee of the Company or a Subsidiary
responsible for the management of the business of the Company (or
a Subsidiary) who is in a position to make substantial
contributions to the sound performance of the Company (or a
Subsidiary). The term "Key Employee" shall include officers as
well as other employees devoting full time to the Company (or a
Subsidiary) and shall include Directors who are also active
officers or employees of the Company (or a Subsidiary).
L. "Non-Employee Director" means a Director who is not an employee
of the Company or a Subsidiary.
M. "Participant" means any individual to whom an Award is granted
under the Plan.
N. "Plan" means this Plan, which shall be known as the Dreyer's
Grand Ice Cream, Inc. Stock Option Plan (1993).
O. "Rule 16b-3" means Rule 16b-3 issued under the Exchange Act or
any successor rule.
P. "Subsidiary" means a corporation or other business entity (i) of
which the Company directly or indirectly has an ownership
interest of 50% or more, or (ii) of which it has a right to elect
or appoint 50% or more of the board of directors or other
governing body.
3. Administration.
A. The Plan shall be administered by the Committee. Subject to the
terms and conditions of this Plan, the Committee shall have the
authority to:
(i) interpret and determine all questions of policy and
expediency pertaining to the Plan;
(ii) adopt such rules, regulations, agreements and instruments
as it deems necessary for the Plan's proper
administration;
(iii) select Key Employees to receive Awards;
(iv) determine the form and terms of Awards;
(v) determine the number of shares subject to Awards;
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(vi) determine whether Awards will be granted singly, in
combination, in tandem, in replacement of, or as
alternatives to other grants under the Plan or any other
incentive or compensation plan of the Company, a
Subsidiary or an acquired business unit;
(vii) grant waivers of Plan or Award conditions;
(viii) accelerate the vesting of Awards;
(ix) correct any defect, supply any omission, or reconcile any
inconsistency in the Plan, any Award or any Award Notice;
and
(x) take any and all other actions it deems necessary or
advisable for the proper administration of the Plan.
B. The interpretation and construction of any provision of the Plan
by the Committee shall be final, conclusive and binding on all
parties, including the Company, its Subsidiaries and
stockholders, and the Participants, their estates, executors,
administrators, heirs and assigns. No member of the Committee
shall be liable for any action or determination made by him in
good faith.
C. The Committee may adopt such Plan amendments, procedures,
regulations, subplans and the like as it deems are necessary to
enable Key Employees and Directors who are foreign nationals or
employed outside the United States to receive Awards.
D. The Committee may delegate its authority to grant and administer
Awards to a separate committee; however, only the Committee may
grant and administer Awards with respect to persons who are
subject to Section 16 of the Exchange Act.
4. Eligibility
A. Any Key Employee is eligible to become a Participant in the Plan.
B. Non-Employee Directors shall receive Awards in accordance with
Section 7.
5. Stock Subject to the Plan.
A. The aggregate number of shares of Common Stock which may be
delivered on exercise of options under this Plan shall not exceed
six million four hundred thousand (6,400,000) shares, subject to
adjustment as provided hereinafter; provided, however, that the
aggregate amount of shares of Common Stock which may be delivered
upon exercise of options under this Plan shall increase,
effective on the date of each annual meeting of stockholders,
beginning 2001 and ending with the annual meeting in 2005, by
848,425 shares. If, at any time during the
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term of this Plan, an option granted under this Plan shall have
expired or terminated for any reason without having been
exercised in full, the unpurchased shares shall become available
for option to other employees.
B. In the event that (i) the number of outstanding shares of Common
Stock shall be changed by reason of split-ups, combinations or
reclassifications of shares or otherwise, (ii) any share
dividends are distributed to the holders of Common Stock or (iii)
the Common Stock is converted into or exchanged for other shares
as a result of any merger, consolidation or recapitalization
then, in any such case, the number of shares for which options
may thereafter be granted under this Plan, both in the aggregate
and as to any individual, and the number of shares then subject
to options theretofore granted under this Plan and the price per
share payable upon exercise of such options shall be
appropriately adjusted by the Committee so as to reflect such
change.
C. The shares of Common Stock available under the Plan may be
authorized and unissued shares or treasury shares.
6. Term
This Plan shall be effective and operative, subject to approval of the
stockholders of the Company within twelve months after its adoption by the Board
of Directors, from the date that the Plan is approved by the Board of Directors
and shall remain in effect until terminated by the Board of Directors.
7. Awards to Non-Employee Directors
Non-Employee Directors shall receive awards in accordance with the
following terms:
A. On the day of adoption of this Plan by the Company's stockholders
(the "Approval Date"), each Non-Employee Director shall receive a
non-qualified option for 10,000 shares of Common Stock.
B. After the Approval Date, any person who is appointed or elected a
Non-Employee Director shall receive a non-qualified stock option
for 10,000 shares of Common Stock on the date such person is so
appointed or elected.
C. On each anniversary of the Approval Date each Non-Employee
Director shall receive a non-qualified stock option for 3,000
shares of Common Stock.
D. Options to Non-Employee Directors shall be subject to the
following terms: (i) the exercise price shall be equal to 100% of
the Fair Market Value of the Common Stock on the date of the
grant, payable in accordance with all the
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alternatives stated in Section 8.B(ii); (ii) the term of the
options shall be 10 years; (iii) the options shall be exercisable
beginning 6 months after the date of the grant; and (iv) the
options shall be subject to Section 10.
8. Stock Options
A. Awards shall be granted in the form of stock options. Stock
options may be incentive stock options within the meaning of
Section 422 of the Code or non-qualified stock options (i.e.,
stock options which are not incentive stock options).
B. Subject to Section 8.C relating to incentive stock options,
options shall be in such form and contain such terms as the
Committee deems appropriate. While the terms of options need not
be identical, each option shall be subject to the following
terms:
(i) The exercise price shall be the price set by the Committee
but may not be less than 100% of the Fair Market Value of
the Common Stock on the date of the grant.
(ii) The exercise price shall be paid in cash (including check,
bank draft, or money order), or all or part of the
purchase price may be paid by delivery of the optionee's
delivery of Common Stock, already owned by the Participant
for at least six (6) months and valued at its Fair Market
Value, or any combination of the foregoing methods of
payment.
(iii) An option shall be treated as exercised on the later of
(i) the date that proper notice of exercise accompanied by
the aggregate exercise price is received by the Company,
or (ii) such exercise date as may be specified in such
proper notice when accompanied by such aggregate exercise
price.
(iv) The term of an option may not be greater than 10 years
from the date of the grant.
(v) Neither a person to whom an option is granted nor his
legal representative, heir, legatee or distributee shall
be deemed to be the holder of, or to have any of the
rights of a holder with respect to, any shares subject to
such option unless and until he has exercised his option.
C. The following special terms shall apply to grants of incentive
stock options:
(i) No incentive stock option shall be granted after the tenth
(10th) anniversary of the date the Plan is adopted by the
Board of Directors.
(ii) Subject to Section 8.C. (iii), the exercise price under
each incentive stock option shall not be less than 100% of
the Fair Market Value of the Common Stock on the date of
the grant.
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(iii) No incentive stock option shall be granted to any employee
who directly or indirectly owns stock possessing more than
10% of the total combined voting power of all classes of
stock of the Company, unless the exercise price is at
least 110% of the Fair Market Value of the Common Stock on
the date of the grant and such option is not exercisable
after the expiration of 5 years from the date of the
grant.
(iv) No incentive stock option shall be granted to a person in
his capacity as a Key Employee of a Subsidiary if the
Company has less than a 50% ownership interest in such
Subsidiary.
(v) Incentive stock options shall contain such other terms as
may be necessary to qualify the options granted therein as
incentive stock options pursuant to Section 422 of the
Code, or any successor statute.
9. Reload Options
A. Concurrently with the award of options to any Participant, the
Committee may authorize reload options ("Reload Options") to
purchase for cash or shares a number of shares of the Common
Stock. The number of Reload Options shall equal:
(i) the number of shares of Common Stock used to exercise the
underlying options; and
(ii) the number of shares of Common Stock used to satisfy any
tax withholding requirement incident to the exercise of
the underlying option, including shares withheld from
those that would otherwise be issuable to the optionee
pursuant to exercise of the subject option. The grant of a
Reload Option will become effective upon the exercise of
the underlying options or Reload Options through the use
of shares of Common Stock held by the optionee for at
least six (6) months.
B. Notwithstanding the fact that the underlying option may be an
Incentive Stock Option, a Reload Option is not intended to
qualify as an "incentive stock option" within the meaning of
Section 422 of the Code.
C. Each Award Notice shall state whether the Committee has
authorized Reload Options with respect to the underlying options.
Upon the exercise of an underlying option or other Reload Option,
the Reload Option will be evidenced by an amendment to the
underlying Award Notice.
D. The option price per share of Common Stock deliverable upon the
exercise of a Reload Option shall be the Fair Market Value of a
share of Common Stock on the date the grant of the Reload Option
becomes effective.
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E. Each Reload Option is fully exercisable six (6) months from the
effective date of grant. The term of each Reload Option shall be
equal to the remaining option term of the underlying option.
F. No additional Reload Options shall be granted when options or
Reload Options are exercised pursuant to the terms of this Plan
following cessation of the optionee's employment with the Company
for any reason.
10. Exercise of Stock Option Upon Termination of Employment or Services
A. Options granted under Section 7 shall be exercisable upon the
Participant's termination of service within the following periods
only. Subject to Section 17, stock options to other Participants
may permit the exercise of options upon the Participant's
termination of employment within the following periods, or such
shorter periods as determined by the Committee at the time of
grant:
(i) if on account of death, within 24 months of such event by
the person or persons to whom the Participant's rights
pass by will or the laws of descent or distribution.
(ii) if on account of disability (as defined in Section
22(e)(3) of the Code or any successor statute),
non-qualified stock options may be exercised within 24
months of such termination and incentive stock options
within 12 months.
(iii) if on account of retirement (as defined from time to time
by Company policy), non-qualified stock options may be
exercised within 24 months of such termination and
incentive stock options with 3 months.
(iv) if for any reason other than death, disability or
retirement (as defined from time to time by Company
policy), options may be exercised within 3 months of such
termination.
B. An unexercised option shall be exercisable only to the extent
that such option was exercisable on the date the Participant's
employment or service terminated. However, terms relating to the
exercisability of options may be amended by the Committee before
or after such termination, except in respect to options granted
under Section 7.
C. In no case may an unexercised option be exercised to any extent
by anyone after expiration of its term.
11. Acceleration of Vesting of Options.
A. In the event of a Change in Control (as defined below), death of
an optionee or retirement of an optionee (as defined from time to
time by Company policy), all
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options which have not yet vested shall vest, mature and become
exercisable in whole or in part immediately prior to the event
constituting the Change of Control, or immediately upon the death
or retirement of such optionee.
B. A Change of Control for these purposes shall be defined as, (i)
the acquisition by any person of beneficial ownership of forty
percent (40%) or more of the combined voting power of the
Company's outstanding securities immediately after such
acquisition (which forty percent (40%) shall be calculated after
including the dilutive effect of the conversion or exchange of
any outstanding securities of the Company convertible into or
exchangeable for voting securities), or (ii) a change in the
composition of majority membership of the Board of Directors over
any two-year period beginning with the date of adoption of this
Plan by the Board of Directors, or (iii) a change in ownership of
the Company such that the Company becomes subject to the
delisting of its Common Stock from the NASDAQ National Market
System, or (iv) the approval by the Board of Directors of the
sale of all or substantially all of the assets of the Company, or
(v) the approval by the Board of Directors of any merger,
consolidation, issuance of securities or purchase of assets, the
result of which would be the occurrence of any event described in
clause (i), (ii) or (iii) above. Notwithstanding anything to the
contrary in this Section 11.B, acquisitions by any person (or any
group of which such a person is a member) who is as of the date
of adoption of this Plan by the Board of Directors, a member of
the Board of Directors, of beneficial ownership of forty percent
(40%) or more of the combined voting power of the Company's
outstanding securities immediately after such acquisition
(calculation of such forty percent (40%) being made as described
above), shall not be deemed a Change of Control for purposes of
this Plan.
12. Nonassignability
The rights of a Participant under the Plan shall not be assignable by
such Participant, by operation of law or otherwise, except by will or the laws
of descent and distribution. During the lifetime of the person to whom a stock
option is granted, he or she alone may exercise it.
13. Payment of Withholding Taxes
A. As a condition to receiving or exercising an Award, as the case
may be, the Participant shall pay to the Company the amount of
all applicable federal, state, local and foreign taxes required
by law to be paid or withheld relating to receipt or exercise of
the Award.
B. An optionee may satisfy such withholding requirements in whole or
in part by directing the Company to withhold shares from those
that would otherwise be issuable to the Participant or by
otherwise tendering other shares of Common Stock owned by the
Participant. The withheld shares and other tendered shares will
be valued at the Fair Market Value as of the date that the tax
withholding obligation arises.
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14. Amendments
The Board of Directors may amend the Plan at any time and from time to
time, provided however that the Board shall not amend the terms of the Plan more
frequently than permitted under Rule 16b-3 in regard to provisions that affect
persons receiving Awards under Section 7. Rights and obligations under any Award
granted before amendment of the Plan shall not be materially altered or impaired
adversely by such amendment, except with consent of the person to whom the Award
was granted.
15. Regulatory Approvals and Listings
Notwithstanding any other provision in the Plan, the Company shall have
no obligation to issue or deliver certificates of Common Stock under the Plan
prior to (A) obtaining approval from any governmental agency which the Company
determines is necessary or advisable, (B) admission of such shares to listing on
the stock exchange on which the Common Stock may be listed and (C) completion of
any registration or other qualification of such shares under any state or
federal law or ruling of any governmental body which the Company determines to
be necessary or advisable.
16. No Right to Continued Employment or Grants
Participation in the Plan shall not give any Key Employee any right to
remain in the employ of the Company or any Subsidiary. Further, the adoption of
this Plan shall not be deemed to give any Key Employee or other individual the
right to be selected as a Participant or to be granted an Award.
17. Special Provision Pertaining to Persons Subject to Section 16
Notwithstanding any other term of this Plan, the following shall apply
to persons subject to Section 16 of the Exchange Act, except in the case of
death or disability:
A. No stock option granted pursuant to the Plan may be exercisable
for at least 6 months after the date of grant.
18. Limitations on Awards Under the Plan
No one Participant shall receive in the aggregate Awards granting him
more than fifty percent (50%) of the aggregate number of shares which may be
delivered on exercise of options under the Plan.
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