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EXHIBIT 10.17
1996 INCENTIVE STOCK OPTION PLAN OF BEVERAGE WORKS, INC.
1. PURPOSES OF THE PLAN. This stock option plan (the "Plan") is
designed to provide an incentive to key employees of Beverage Works, Inc., a
California corporation (the "Company"), and its present and future subsidiary
corporations, as defined in Paragraph 16 ("Subsidiaries"), and to offer an
additional inducement in obtaining the services of such individuals. The Plan
provides for the grant of "incentive stock options," within the meaning of
Section 422 of the Internal Revenue Code of 1986, as amended (the "Code").
2. STOCK SUBJECT TO THE PLAN. Options may be granted under the Plan to
purchase in the aggregate not more than One Million Five Hundred Thousand
(1,500,000) shares of Common Stock, no par value, of the Company ("Common
Stock"), which shares may, in the discretion of the Board of Directors, consist
either in whole or in part of authorized but unissued shares of Common Stock or
shares of Common Stock held in the treasury of the Company. The Company shall at
all times during the term of the Plan reserve and keep available such number of
shares of Common Stock as will be sufficient to satisfy the requirements of the
Plan. Subject to the provision of Paragraph 12, any shares subject to an option
which for any reason expires, is cancelled or is terminated unexercised as to
such shares shall again become available for option under the Plan.
3. ADMINISTRATION OF THE PLAN. The Plan shall be administered by a
Committee (the "Committee") consisting of not less than three members of the
Board of Directors. A majority of the members shall constitute a quorum, and the
acts of a majority of the members present at any meeting at which a quorum is
present, and any acts approved in writing by all members without a meeting,
shall be the acts of the Committee. Each member of the Committee shall be a
Non-Employee Director, as defined in Rule 16b-3(b)(3) or its successors under
the Securities Exchange Act of 1934 ("1934 Act"). Subject to the express
provisions of the Plan, the Committee shall have the authority, in its sole
discretion, to determine the individuals who shall receive options; the times
when they shall receive them; the number of shares to be subject to each option;
the term of each option; the date each option shall become exercisable; whether
an option shall be exercisable in whole, in part or in installments, and if in
installments, the number of shares to be subject to each installment; the date
each installment shall become exercisable and the term of each installment; to
accelerate the date of exercise of any installment; whether shares may be issued
on exercise of an option as partly paid, and, if so, the dates when future
installments of the exercise price shall become due and the amounts of each
installments; the exercise price; the form of payment upon exercise; to require
that the individual remain employed in some capacity with the Company or its
Subsidiaries for a period of time from and after the date the option is granted
to him; the amount necessary to satisfy the Company's withholding obligation; to
restrict the sale or other disposition of the shares of Common Stock acquired
upon the exercise of an option and to waive any such restriction; to construe
the respective option agreements and the Plan; to prescribe, amend and rescind
rules and regulations relating to the Plan; to make all other determinations
necessary or advisable for administering the Plan; and, with the consent of the
optionee, to cancel or modify an option, provided such option as modified does
not violate the terms of the Plan. The determinations of the Committee on the
matters referred to in this Paragraph 3 shall be conclusive. No member of the
Committee shall be liable for anything whatsoever in
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connection with the administration of the Plan except such member's own willful
misconduct. Under no circumstances shall any member of the Committee be liable
for any act or omission of any other member of the Committee. In the performance
of its functions with respect to the Plan, the Committee shall be entitled to
rely upon information and advice furnished by the Company's officers, the
Company's accountants, the Company's counsel and any other party the Committee
deems necessary and no member of the Committee shall be liable for any action
taken or not taken in reliance upon any such advice.
4. ELIGIBILITY. The Committee may, consistent with the purposes of the
Plan, grant options from time to time, within 10 years from the date of adoption
of the Plan by the Board of Directors, to key employees of the Company or any of
its Subsidiaries, including officers, and covering such number of shares of
Common Stock as it may determine; provided, however, that the aggregate market
value (determined at the time the stock option is exercisable) of the shares for
which any eligible person may be granted incentive stock options under the Plan
or any other plan of the Company, or of a Subsidiary of the Company which are
exercisable for the first time by such optionee during any calendar year shall
not exceed $100,000. Any option (or the portion thereof) granted in excess of
such amount shall be treated as a non-qualified stock option.
5. EXERCISE PRICE. The exercise price of the shares of Common Stock
under each option shall be determined by the Committee, but in no event shall
such purchase price be less than 100% of the fair market value of the Common
Stock on the date of grant; provided, however, that if, at the time an option is
granted, the optionee owns (or is deemed to own) stock possessing more than 10%
of the total combined voting power of all classes of stock of the Company or of
any of its Subsidiaries, the exercise price shall not be less than 110% of the
fair market value of the Common Stock subject to the option at the time of the
granting of such option. The fair market value of the Common Stock on any day
shall be (a) if the principal market for the Common Stock is a national
securities exchange, the closing sale price of the Common Stock on such day as
reported by such exchange or on a consolidated tape reflecting transactions on
such exchange, (b) if the principal market for the Common Stock is not a
national securities exchange and the Common Stock is quoted on the Nasdaq, and
(i) if the Common Stock is quoted on the Nasdaq National Market System, the
closing sale price of the Common Stock on such day, or (ii) if the Common Stock
is not quoted on the Nasdaq National Market System, the average between the
highest bid and the lowest asked prices for the Common Stock on such day on
Nasdaq, or (c) if the principal market for the Common Stock is not a national
securities exchange and the Common Stock is not quoted on Nasdaq, the average
between the highest bid and lowest asked prices for the Common Stock on such day
as reported by National Quotation Bureau, Incorporated; provided that if clauses
(a), (b) and (c) of this Paragraph are all inapplicable, or if no trades have
been made or no quotes are available for such day, the fair market value of the
Common Stock shall be determined by the Committee by any method consistent with
applicable regulations adopted by the Treasury Department relating to incentive
stock options. The determination of the Committee shall be conclusive in
determining the fair market value of the stock.
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6. TERM OF OPTION. The term of each option granted pursuant to the Plan
shall be such term as is established by the Committee, in its sole discretion,
at the time such option is granted; provided, however, that the term of each
incentive stock option granted pursuant to the Plan shall be for a period not
exceeding 10 years from the date of granting thereof, and further, provided,
that if, at the time an option is granted, the optionee owns (or is deemed to
own) stock possessing more than 10% of the total combined voting power of all
classes of stock of the Company, or of any of its Subsidiaries, the term of the
incentive stock option shall be for a period not exceeding five years. Options
shall be subject to earlier termination as hereinafter provided.
7. EXERCISE OF OPTION. An option (or any part or installment thereof)
shall be exercised by giving written notice to the Company at its principal
office specifying the number of shares as to which such option is being
exercised and accompanied by payment in full of the aggregate exercise price
therefor (or the amount due on exercise if the Stock Option Contract permits
installment payments). The Company shall have the right to deduct and withhold
from any cash otherwise payable to an optionee, or require that an optionee make
arrangements satisfactory to the Company for payment of, such amounts as the
Company shall determine for the purpose of satisfying its liability to withhold
Federal, state or local income or FICA taxes incurred by reason of the grant or
exercise of an option. Certificates representing the shares purchased shall be
issued as promptly as practicable, provided that the Company may postpone
issuing certificates for such shares for such time as the Company, in its sole
discretion, may deem necessary or desirable in order to enable it to comply with
any requirements of the Securities Act of 1933, as amended ("Securities Act"),
the 1934 Act, any Rules or Regulations of the Securities and Exchange Commission
promulgated under either of the foregoing acts, the listing requirements of any
securities exchange on which the Company's Common Stock may now or hereafter be
listed, or any applicable laws of any jurisdiction relating to the
authorization, issuance or sale of securities. The holder of an option shall not
have the rights of a stockholder with respect to the shares covered by his
option until the date of issuance of a stock certificate to him for such shares;
provided, however, that until such stock certificate is issued, any option
holder using previously acquired shares in payment of an option exercise price
shall have the rights of a shareholder with respect to such previously acquired
shares. In no case may a fraction of a share be purchased or issued under the
Plan.
8. TERMINATION OF EMPLOYMENT. Any optionee whose employment with the
Company (and its Subsidiaries) has terminated for any reason other than
termination for cause (as defined in the Stock Option Contract), death or
permanent and total disability (as defined in Section 22(e)(3) of the Code) may
exercise his option, to the extent exercisable on the date of such termination,
at any time within four months after the date of termination, but in no event
after the expiration of the term of the option. Options granted to any employee
under the Plan shall not be affected by any changes in the status of an optionee
so long as he continues to be employed in some capacity with the Company, or any
of the Subsidiaries, or a Constituent Corporation. Nothing in the Plan or in any
option granted under the Plan shall confer on any individual any right to
continue in the employ of the Company or any of its Subsidiaries, or interfere
in any way with the right of the Company or any of its Subsidiaries
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to terminate the employee's employment at any time for any reason whatsoever
without liability to the Company or any of its Subsidiaries.
9. DEATH OR DISABILITY OF AN OPTIONEE. If an optionee dies while he is
employed by the Company or any of its Subsidiaries, or within three months after
the termination of his employment, or if the optionee's employment has
terminated by reason of a permanent and total disability (as defined in Section
22(e)(3) of the Code), options granted under this Plan shall become immediately
exercisable by his executor, administrator or other person at the time entitled
by law to his rights under the option.
10. STOCK OPTION CONTRACTS. Each option shall be evidenced by an
appropriate Stock Option Contract, and may contain such terms and conditions not
inconsistent herewith as may be determined by the Committee, and which may
provide, among other things, (a) that in the event of the exercise of such
option, unless the shares of Common Stock received upon such exercise shall have
been registered under an effective registration statement under the Securities
Act, such shares will be acquired for investment and not with a view to
distribution thereof, and that such shares may not be sold except in compliance
with the applicable provisions of the Securities Act, and (b) that in the event
of any disposition of the shares of Common Stock acquired upon the exercise of
an incentive stock option within two years from the date of grant of the option
or one year from the date of issuance of such shares to him (a "Disqualifying
Disposition") the optionee will notify the Company thereof in writing within 30
days after such disposition, pay the Company, on demand, in cash an amount
necessary to satisfy its obligation, if any, to withhold any Federal, state or
local income taxes or other taxes by reason of such Disqualifying Disposition
and provide the Company, on demand, with such information as the Company shall
reasonably request to determine such obligation. The Stock Option Contract may
provide for the issuance of Shares which are registered under the Securities
Act. The Plan shall not obligate the Company to issue Shares which are
registered under the Securities Act. The Stock Option Contract may provide that
if the Shares are issued upon the exercise of an Option, and such Shares are not
registered under the Securities Act, that the Company may grant to the Optionee
certain rights to cause such Shares to be so registered and to require the
Optionee to deliver to the Company sufficient representations and investment
letters as may be reasonably required by the Company in order to assure that the
Company's issuance of Shares to such Optionee is either exempt from registration
under the Securities Act or does not constitute a violation of the Securities
Act which determination shall be made by counsel selected by the Company.
11. ADJUSTMENTS. The number of shares reserved for issuance hereunder
shall be subject to adjustment as follows:
(a) In case the Company shall (i) pay a dividend in shares of
Common Stock or make a distribution in shares of Common Stock, (ii) subdivide
its outstanding shares of Common Stock, (iii) combine its outstanding shares of
Common Stock into a smaller number of shares of Common Stock or (iv) issue by
reclassification of its shares of Common Stock other securities of the Company,
the number of shares purchasable upon exercise of the options
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authorized under the Plan immediately prior thereto shall be adjusted so that
the kind and number of shares or other securities of the Company authorized
under the Plan that a grantee would have owned or have been entitled to receive
after the happening of any of such event or any record date with respect
thereto. An adjustment made pursuant to this paragraph (a) shall become
effective immediately after the effective date of such event retroactive to the
record date, if any, for such event.
(b) The Committee is authorized to provide in any particular
Stock Option Contract for adjustments to the number or kind of securities that a
grantee may receive or the exercise price of such option based on (i) the
Company's reorganization, consolidation or merger with another corporation, (ii)
dissolution or liquidation of the Company, or (iii) a change in ownership of the
outstanding voting shares of the Company. The determination of the Committee as
to what adjustments shall be made, and the extent thereof, shall be final.
Unless otherwise determined by the Committee, such adjustments shall be subject
to the same vesting schedule and restrictions to which the underlying option is
subject. No fractional shares of Company Stock shall be reserved or authorized
or made subject to any outstanding option by any such adjustment.
12. AMENDMENTS AND TERMINATION OF THE PLAN. No options may be granted
under the Plan after the tenth anniversary of the Effective Date. The Board of
Directors, without further approval of the Company's stockholders, may at any
time suspend or terminate the Plan, in whole or in part, or amend it from time
to time in such respects as it may deem advisable; provided, however, the Plan
shall not be amended more than once every six months other than to comport with
any changes under the Code thereafter enacted and conform to any change in
applicable law or to regulations or rulings of administrative agencies. No
termination, suspension or amendment of the Plan shall, without the consent of
the holder of an existing option affected thereby, adversely affect his rights
under such option.
13. NON-TRANSFERABILITY OF OPTIONS. No option granted under the Plan
shall be transferable otherwise than by will or the laws of descent and
distribution or a qualified domestic relations order as defined in the Code, and
options may be exercised, during the lifetime of the holder thereof, only by
him. Except to the extent provided in Paragraph 9, options may not be assigned,
transferred, pledged, hypothecated or disposed of in any way (whether by
operation of law or otherwise) and shall not be subject to execution, attachment
or similar process.
14. DESIGNATION OF BENEFICIARY. The optionee may designate in writing
on forms prescribed by and filed with the Committee prior to the optionee's
death a beneficiary or beneficiaries to receive all or part of the options to be
delivered to the optionee under this Plan in the event of the death of the
optionee at any time on forms prescribed by and filed with the Committee. In the
event of the optionee's death, the options to be delivered to the optionee under
this Plan with respect to which a designation of a beneficiary has been made (to
the extent such designation is valid and enforceable under applicable law) shall
be delivered, in accordance with the Plan, to the designated beneficiary or
beneficiaries. Any options to be delivered as to
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which a designation has not been made shall be delivered to the optionee's
estate. If there is any question as to the legal right of any beneficiary to
receive delivery of the Options pursuant to the Plan, the options (and shares
issuable upon the exercise thereof) may be delivered in the sole discretion of
the Committee to the estate of the optionee, in which event neither the Company
nor any Subsidiary shall have any further liability to anyone with respect to
such options.
15. SUBSTITUTIONS AND ASSUMPTIONS OF OPTIONS OF CERTAIN CONSTITUENT
CORPORATIONS. Anything in this Plan to the contrary notwithstanding, the Board
of Directors may, without further approval by the stockholders, substitute new
options for prior options of a Constituent Corporation (as defined in Paragraph
16) or assume the prior options of such Constituent Corporation.
16. DEFINITIONS.
(a) Subsidiary. The term "Subsidiary" shall have the same
definition as "subsidiary corporation" in Section 425(f) of the Code.
(b) Parent. The term "Parent" shall have the same definition
as "parent corporation" in Section 425(e) of the Code.
(c) Constituent Corporation. The term "Constituent
Corporation" shall mean any corporation which engages with the Company or any
Subsidiary in a transaction to which Section 425(a) of the Code applies (or
would apply if the option assumed or substituted were an incentive stock
option), or any Parent or any Subsidiary of such corporation.
17. EFFECTIVE DATE OF PLAN. This Plan shall be effective upon its
adoption by the Board of Directors ("Effective Date"). The Plan shall be
submitted to the shareholders of the Company for approval within twelve (12)
months after its adoption by the Board of Directors and, if the Plan shall not
be approved by the shareholders within such twelve month period, the Plan shall
be void and of no effect. Any Options granted under the Plan prior to the date
of approval by the stockholders shall be void if such shareholders, approval is
not timely obtained.
18. GOVERNING LAW. The Plan and all rights hereunder shall be construed
in accordance with an governed by the internal laws of the State of California.
BEVERAGE WORKS, INC.
By: Frederik G.M. Rodenhuis,
Chief Executive Officer
BEVERAGE WORKS, INC.
By: Lyle R. Maul,
Secretary
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