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EXHIBIT 10.18
BEVERAGE WORKS, INC.
1996 INCENTIVE COMPENSATION PLAN
This BEVERAGE WORKS, INC. 1996 INCENTIVE COMPENSATION PLAN (the
"Plan") is adopted by Beverage Works, Inc., a California corporation (the
"Corporation") in order to attract, motivate and retain eligible employees.
The Plan is intended to promote the interests of the Corporation and its
shareholders by providing eligible employees with the opportunity to earn
incentive compensation that is linked to the financial performance of the
Corporation.
Incentive compensation provided under the Plan is intended to qualify
as performance based compensation under Section 162(m) of the Internal Revenue
Code of 1986, as amended, and the Plan shall be interpreted consistently with
such intent. Existence of this Plan is not intended to preclude the
Corporation from providing additional incentive compensation to eligible
employees or incentive compensation under other plans, agreements or
arrangements to an employee, whether such employee is eligible to participate
in the Plan or actually participates in the Plan.
I. Definitions
A. "Award" means the amount of money payable to a Participant who
has received an IC Agreement.
B. "Board" means the Board of Directors of the Corporation.
C. "Code" means the Internal Revenue Code of 1986, as amended.
D. "Committee" means the committee appointed pursuant to Article
II to administer the Plan.
E. "Corporation" means Beverage Works, Inc., a California
corporation.
F. "Fiscal Year" means the fiscal year of the Corporation.
G. "IC Agreement" means the incentive compensation agreement
evidencing the terms of a Participant's participation in the Plan.
H. "Modified EBITDA" means the consolidated net income of the
Corporation and its subsidiaries before interest, federal and state income
taxes, depreciation and amortization determined in accordance with U.S.
Generally Accepted Accounting Principles ("GAAP"), applied consistent with past
practices of the Corporation, provided, however, to the extent included in the
consolidated net income of the Corporation, excluding the effect of the
following items:
(1) the gain or loss from any sale, exchange or other
disposition of assets other than in the ordinary course of business consistent
with past practice;
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(2) any extraordinary gain or loss;
(3) any gain, loss, income or expense resulting from a
change in the Corporation's accounting methods, principles or practices or a
change in GAAP or any GAAP election or treatment not made or utilized by the
Corporation in its audited financial statements for its fiscal year 1996;
(4) any reserves or adjustments to reserves which are not
consistent with past practices of the Corporation;
(5) cash bonuses paid pursuant to this Plan; and
(6) compensation paid to the members of the board of
directors.
I. "Participant" means an eligible employee of the Corporation
that has received an IC Agreement under the Plan.
J. "Plan" means this Incentive Compensation Plan.
II. Administration
The regularly appointed compensation committee of the Board shall
serve as the Committee that administers the Plan unless the Board shall appoint
another compensation committee of members of the Board to administer the Plan.
In all cases, the Committee shall have at least two (2) members and no member
of the Board may serve on the Committee unless such person is an "outside
director" within the meaning of Section 162(m)(4)(C)(i) of the Code, and
applicable guidance issued thereunder.
The Committee shall have the full power and authority, subject to
provisions of the Plan, to select employees to receive IC Agreements, determine
the terms of IC Agreements, promulgate rules and regulations as it deems
appropriate for the proper administration of the Plan, interpret the terms of
the Plan, certify whether the Performance Goals and the material terms of an IC
Agreement are met prior to payment of any amount under the Plan, and to
otherwise take any and all action as it deems to be necessary or appropriate in
connection with the operation of the Plan. Decisions and selections of the
Committee shall be made by a majority of its members, and if made pursuant to
the terms of the Plan shall be final.
Action of the Committee may be evidenced by approved minutes of a
meeting of the Committee, or a document executed by any member of the Committee
or an officer of the Corporation authorized by the Committee to execute
documents on the Committee's behalf.
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III. Participation
A. Eligibility. Only officers and key employees (as determined
by the Committee) of the Corporation shall be eligible to participate in the
Plan and receive an IC Agreement under the Plan.
B. Designation of Participants. The Committee shall select those
eligible employees who shall receive an IC Agreement under the Plan. The IC
Agreement shall be in writing, shall specify the period to which the IC
Agreement relates, and shall include any other material terms of the IC
Agreement.
IV. Incentive Compensation Agreement
A. Performance Periods. IC Agreements under the Plan shall be
for at least one Fiscal Year and for a total of no more than four (4)
consecutive Fiscal Years. The Committee shall specify the number of Fiscal
Years applicable to each IC Agreement. An IC Agreement for a Fiscal Year must
be established not later than ninety (90) days after the beginning of the first
day of such Fiscal Year.
B. Performance Goals. The right to receive an Award and amount
of an Award is conditioned on the Corporation's performance with respect to
Modified EBITDA of the Corporation for the relevant Fiscal Year.
C. Calculation of Award. The Award to a Participant is
determined based on the Corporation's attainment of Modified EBITDA specified
in the Participant's IC Agreement for the relevant Fiscal Year. A
Participant's Award for the entire period covered by an IC Agreement is
determined in accordance with the following steps:
Step 1. Based on the Modified EBITDA, determine a Participant's
Percentage Award under the IC Agreement. The Percentage Award shall not exceed
the following table:
PERCENTAGE TOTAL MAXIMUM
MODIFIED EBITDA AWARD AUTHORIZED
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(IS LESS THAN OR EQUAL TO) 0 0% 0%
(IS GREATER THAN) 0 but (IS LESS THAN OR EQUAL TO) $1,000,000 2% 8.45%
(IS GREATER THAN) $1,000,000 but (IS LESS THAN OR EQUAL TO) $2,000,000 2% 8.45%
(IS GREATER THAN) $2,000,000 but (IS LESS THAN OR EQUAL TO) $4,000,000 2% 8.45%
(IS GREATER THAN) $4,000,000 4% 12.45%
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Step 2. Determine the Participant's Award, if any, under the following
formula: Modified EBITDA x Percentage Award = Award
D. Total Maximum Authorized. The total percentage of Modified
EBITDA that may be awarded under this Plan to all Participants for any Fiscal
Year is stated in Step 1 of Paragraph C under the column "Total Maximum
Authorized."
V. Payment of Awards.
A. Certification and Payment. No payment of any Award shall be
made to a Participant until the Committee has certified in writing that the
material terms of an IC Agreement have been met and the Participant is entitled
to payment. The amount of an Award to a Participant for a Fiscal Year shall be
determined not later than the last day of February following the end of such
Fiscal Year. The full amount shall be payable not later than such
determination date.
B. Employment on Payment Date Generally Required. No Participant
shall receive payment of an amount with respect to an Award unless such
Participant is an active employee of the Corporation (or a subsidiary) as of
the 180th day of the Fiscal Year. A Participant so employed on or after the
180th day of a Fiscal Year but not so employed as of the last day of such
Fiscal Year shall be entitled to an Award prorated based on the number of days
employed for such Fiscal Year divided by the number of days of such Fiscal
Year. A Participant who dies or is disabled during the Fiscal Year shall
continue to receive amounts payable under an IC Agreement for such Fiscal Year.
For purposes of this paragraph, a Participant shall be disabled if the
participant is determined to be disabled under the Participant's employment
agreement with the Corporation.
VI. Amendment or Termination
The Board reserves the right to amend, suspend, or terminate the Plan
or adopt a new plan at any time; provided that no such amendment shall without
the consent of the Participant affect the payment of any IC Agreement to such
Participant. In case any one or more of the provisions contained in the Plan
shall for any reason be held to be invalid, illegal or unenforceable in any
respect, such invalidity, illegality or unenforceability shall not affect any
other provision of the Plan.
VII. Miscellaneous
A. Nonassignment. The interest of any Participant under the Plan
shall not be assignable either by voluntary or involuntary assignment or by
operation of law, except by will or the laws of descent and distribution.
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B. Interpretation. This Plan is intended to provide Participants
with the opportunity to receive incentive compensation that is deductible by
the Corporation without regard to the limitations of Section 162(m)(1) of the
Code and shall be construed accordingly. The Plan shall otherwise be governed
by the laws of the State of California and construed in accordance therewith.
C. No Employment Right. The granting of an IC Agreement confers
on no employee the right to employment or continued employment by the
Corporation. The right of the Corporation to terminate the employment of a
Participant shall not be diminished or affected by reason of receipt of an IC
Agreement under the Plan.
VIII. Effective Date
This Plan is adopted effective as of January 1, 1997, provided that no
payment of an Award shall be made under the Plan unless the Plan is approved by
the shareholders of the Corporation.
BEVERAGE WORKS, INC.
/s/ FREDERIK G.M. RODENHUIS /s/ LYLE R. MAUL
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Frederik G.M. Rodenhuis Lyle R. Maul
Chief Executive Officer Secretary
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