UNITED CRAFT BREWERS, INC.
1997 STOCK OPTION AND AWARD PLAN
UNITED CRAFT BREWERS, INC., a Delaware corporation, hereby adopts the
United Craft Brewers, Inc. Stock Option and Award Plan, effective as of July __,
1997, as follows:
SECTION 1
BACKGROUND AND PURPOSE
1.1 BACKGROUND. The Plan permits the grant of Options, SARs,
Restricted Stock, Performance Shares and/or Performance Units to certain
Eligible Employees.
1.2 PURPOSE OF THE PLAN. The Plan is intended to attract, motivate
and retain those Eligible Employees upon whose judgment, initiative and
continued efforts the Corporation is largely dependent for the successful
conduct of its business. The Plan also is intended to align Participants'
interests with those of the Corporation's stockholders.
SECTION 2
DEFINITIONS
The following words and phrases shall have the following meanings
unless a different meaning is plainly required by the context:
2.1 "1934 ACT" means the Securities Exchange Act of 1934, as amended.
Reference to a specific section of the 1934 Act or regulation thereunder shall
include such section or regulation, any valid regulation promulgated under such
section, and any comparable provision of any future legislation or regulation
amending, supplementing or superseding such section or regulation.
2.2 "AFFILIATE" means any corporation in which the Corporation owns,
directly or indirectly, twenty-five percent or more of the voting stock.
2.3 "AWARD" means, individually or collectively, a grant under the
Plan of Options, SARs, Restricted Stock, Performance Shares and/or Performance
Units.
2.4 "AWARD AGREEMENT" means the written agreement setting forth the
terms and provisions applicable to each Award granted under the Plan.
2.5 "BOARD" means the Board of Directors of the Corporation.
2.6 "CODE" means the Internal Revenue Code of 1986, as amended.
Reference to a specific section of the Code or regulation thereunder shall
include such section or regulation, any valid regulation promulgated under such
section, and any comparable provision of any future legislation or regulation
amending, supplementing or superseding such section or regulation.
2.7 "COMMITTEE" means the committee appointed by the Board (pursuant
to Section 3.1) to administer the Plan.
2.8 "CONSULTANT" means any consultant, independent contractor, or
other person who provides significant services to the Company or its Affiliates,
but who is neither an Employee of the Company or its Affiliates, nor a Director
of the Company.
2.9 "CORPORATION" means United Craft Brewers, Inc., a Delaware
corporation, or any successor thereto.
2.10 "DIRECTOR" means any individual who is a member of the Board of
Directors of the Company.
2.11 "DISABILITY" means a permanent and total disability as determined
by the Committee (in its discretion) in accordance with uniform and non-
discriminatory standards adopted by it from time to time.
2.12 "EMPLOYEE" means an employee of the Corporation or of an
Affiliate, whether such employee is so employed at the time the Plan is adopted
or becomes so employed subsequent to the adoption of the Plan.
2.13 "EXERCISE PRICE" means the price at which a Share may be
purchased by a Participant pursuant to the exercise of an Option or SAR.
2.14 "FAIR MARKET VALUE" means the last quoted per Share selling price
for Shares on the relevant date, as quoted in The Nasdaq Stock Market, or if
there were no sales on such date, the last quoted selling price on the nearest
day after the relevant date, as determined by the Committee.
2.15 "GRANT DATE" means, with respect to an Award, the date that the
Award was granted.
2.16 "OPTION" means an option to purchase Shares granted to a
Participant pursuant to Section 5. Options are not intended to meet the
requirements of section 422 of the Code.
2.17 "PARTICIPANT" means an Employee or a Consultant to whom an Award
has been granted.
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2.18 "PERFORMANCE SHARE" means an Award granted to a Participant
pursuant to Section 8.
2.19 "PERFORMANCE UNIT" means an Award granted to a Participant
pursuant to Section 8.
2.20 "PERIOD OF RESTRICTION" means the period during which the
transfer of Restricted Stock is subject to restrictions and therefore, subject
to a substantial risk of forfeiture.
2.21 "PLAN" means the United Craft Brewers, Inc. Stock Option and
Award Plan, as set forth in this instrument and as hereafter amended from time
to time.
2.22 "RESTRICTED STOCK" means an Award granted to a Participant
pursuant to Section 7.
2.23 "RETIREMENT" means a Termination of Employment by reason of the
Employee's retirement at or after his or her earliest permissible retirement
date pursuant to and in accordance with his or her employer's regular retirement
plan or practice.
2.24 "SHARES" means the shares of common stock of the Corporation.
2.25 "STOCK APPRECIATION RIGHT" or "SAR" means an Award (granted
pursuant to Section 6) which is granted independently or in connection or tandem
with a related Option.
2.26 "TERMINATION OF EMPLOYMENT" means a cessation of the
employee-employer relationship between an Employee and the Corporation or an
Affiliate for any reason, including, but not by way of limitation, a termination
by resignation, discharge, death, Disability, Retirement, or the disaffiliation
of an Affiliate, but excluding any such termination where there is a
simultaneous reemployment by the Corporation or an Affiliate or, in the case of
a Consultant, a cessation of the contractual relationship by which such
Consultant provided services to the Corporation.
SECTION 3
ADMINISTRATION
3.1 THE COMMITTEE. The Plan shall be administered by the Committee.
The Committee shall consist of not less than two (2) members of the Board. The
members of the Committee shall be appointed from time to time by, and shall
serve at the pleasure of, the Board.
3.2 AUTHORITY OF THE COMMITTEE. It shall be the duty of the
Committee to administer the Plan in accordance with the Plan's provisions. The
Committee shall have all powers and discretion necessary or appropriate to
administer the Plan and to control its operation, including, but not limited to,
the power to (a) determine which Employees and Consultants shall be granted
Awards, (b) prescribe the terms and conditions of the Awards,
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(c) interpret the Plan and the Awards, (d) adopt such procedures and subplans as
are necessary or appropriate to permit participation in the Plan by Employees
and Consultants who are foreign nationals or employed outside of the United
States, (e) adopt rules for the administration, interpretation and application
of the Plan as are consistent therewith, and (f) interpret, amend or revoke any
such rules.
3.3 DELEGATION BY THE COMMITTEE. The Committee, in its sole
discretion and on such terms and conditions as it may provide, may delegate all
or any part of its authority and powers under the Plan to one or more members of
the Board or officers of the Corporation.
3.4 MATTERS RELATING TO TERMINATIONS OF EMPLOYMENT. The Committee,
in its sole discretion, shall determine the effect of all matters and questions
relating to Terminations of Employment, including, but not by way of limitation,
the question of whether a Termination of Employment resulted from Retirement or
Disability, and all questions of whether particular leaves of absence constitute
Terminations of Employment.
3.5 DECISIONS BINDING. All determinations and decisions made by the
Committee and any delegate of the Committee pursuant to the provisions of the
Plan shall be final, conclusive, and binding on all persons, and shall be given
the maximum deference permitted by law.
SECTION 4
SHARES SUBJECT TO THE PLAN
4.1 NUMBER OF SHARES. Subject to adjustment as provided in
Section 4.3, the total number of Shares available for grant under the Plan shall
not exceed One Million (1,000,000). Shares granted under the Plan may be either
authorized but unissued Shares or treasury Shares.
4.2 LAPSED AWARDS. If an Award (or portion thereof) is cancelled,
terminates, expires, or lapses for any reason, any Shares subject to such Award
again shall be available to be the subject of an Award.
4.3 ADJUSTMENTS IN AWARDS AND AUTHORIZED SHARES. In the event of any
merger, reorganization, consolidation, recapitalization, separation,
liquidation, stock dividend, split-up, Share combination, or other change in the
corporate structure of the Corporation affecting the Shares, the Committee shall
adjust the number and class of Shares which may be delivered under the Plan, and
the number, class, and price of Shares subject to outstanding Awards, in such
manner as the Committee (in its sole discretion) shall determine to be
appropriate to prevent the dilution or diminution of such Awards.
Notwithstanding the foregoing, the number of Shares subject to any Award always
shall be a whole number.
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SECTION 5
OPTIONS
5.1 GRANT OF OPTIONS. Subject to the terms and provisions of the
Plan, Options may be granted to Employees and Consultants at any time and from
time to time as determined by the Committee in its sole discretion. The
Committee, in its sole discretion, shall determine (a) the number of Shares
subject to each such Option, and (b) the terms and conditions of each such
Option, consistent with the Plan.
5.2 AWARD AGREEMENT. Each Option shall be evidenced by an Award
Agreement that shall specify the Exercise Price, the expiration date of the
Option, the number of Shares to which the Option pertains, any conditions to
exercise of the Option, and such other terms and conditions as the Committee, in
its discretion, shall determine.
5.3 EXERCISE PRICE. The Exercise Price of each Option shall be
determined by the Committee in its discretion; provided, however, that such
Price shall not be less than 85% of the Fair Market Value of a Share on the
Grant Date. Notwithstanding the preceding sentence, in the event that the
Corporation or an Affiliate consummates a transaction described in section
424(a) of the Code (E.G., the acquisition of property or stock from an unrelated
corporation), persons who become Employees on account of such transaction may be
granted Options in substitution for options granted by their former employer, in
which case the Committee, in its sole discretion and consistent with
section 424(a) of the Code, shall determine the exercise price of such
substitute Options.
5.4 EXPIRATION OF OPTIONS.
5.4.1 COMMITTEE DISCRETION. Subject to the limits of Section
5.4.2, the Committee, in its sole discretion, (a) shall provide in each Award
Agreement when each Option expires and becomes unexercisable, and (b) may, after
an Option is granted, extend the maximum term of the Option.
5.4.2 MAXIMUM TERM. In no event shall an Option terminate later
than the date ten (10) years from the Grant Date.
5.5 EXERCISABILITY OF OPTIONS. Options shall be exercisable at such
times and be subject to such restrictions and conditions as the Committee shall
determine in its sole discretion. After an Option is granted, the Committee, in
its sole discretion, may accelerate the exercisability of such Option (or any
portion thereof).
5.6 PAYMENT. Options shall be exercised by the delivery by the
Participant (or other person then entitled to exercise such Option or portion
thereof) of a written notice of exercise to the Secretary of the Corporation (or
his or her designee), setting forth the number of full Shares with respect to
which the Option is to be exercised, accompanied by full payment for the Shares.
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Upon the exercise of any Option, the Exercise Price shall be payable
to the Corporation in full in cash or its equivalent. The Committee, in its
sole discretion, also may permit exercise (a) by tendering previously acquired
Shares having an aggregate Fair Market Value at the time of exercise equal to
the total Exercise Price, or (b) by any other means which the Committee, in its
sole discretion, determines to both provide legal consideration for the Shares,
and to be consistent with the purposes of the Plan.
As soon as practicable after receipt of a written notification of
exercise and full payment for the Shares purchased, the Corporation shall
deliver to the Participant (or the Participant's designated broker), Share
certificates (which may be in book entry form) representing such Shares.
5.7 RESTRICTIONS ON SHARE TRANSFERABILITY. The Committee may impose
such restrictions on any Shares acquired pursuant to the exercise of an Option
as it may deem advisable, including, but not limited to, restrictions related to
applicable Federal securities laws, the requirements of any national securities
exchange or system upon which Shares are then listed or traded, or any blue sky
or state securities laws.
5.8 GRANT OF RELOAD OPTIONS. The Committee may provide in an Award
Agreement that a Participant who exercises all or part of an Option by payment
of the Exercise Price with already-owned Shares, shall be granted an additional
option (a "RELOAD OPTION") for a number of shares of stock equal to the number
of Shares tendered to exercise the previously granted Option plus, if the
Committee so determines, any Shares withheld or delivered in satisfaction of any
tax withholding requirements. As determined by the Committee, each Reload
Option shall: (a) have a Grant Date which is the date as of which the previously
granted Option is exercised, and (b) be exercisable on the same terms and
conditions as the previously granted Option, except that the Exercise Price
shall be determined as of the Grant Date.
SECTION 6
STOCK APPRECIATION RIGHTS
6.1 GRANT OF SARS. Subject to the terms and conditions of the Plan,
SARs may be granted to Employees and Consultants at any time and from time to
time as shall be determined by the Committee, in its sole discretion.
6.2 EXERCISE PRICE AND OTHER TERMS. The Committee, in its sole
discretion, shall determine (a) the number of Shares subject to each SAR granted
under the Plan, (b) the exercisability of each SAR, and (c) the other terms and
conditions of each SAR, consistent with the Plan; provided, however, that the
Exercise Price of any SAR shall be not less than one hundred percent (100%) of
the Fair Market Value of a Share on the Grant Date.
6.3 AWARD AGREEMENT. Each SAR shall be evidenced by an Award
Agreement that shall specify the Exercise Price, the term of the SAR, the
conditions of exercise of the SAR, and such other terms and conditions as the
Committee, in its sole discretion, shall determine.
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6.4 EXPIRATION OF SARS. Each SAR shall expire upon the date
determined by the Committee, in its sole discretion, and set forth in the
applicable Award Agreement. Notwithstanding the foregoing, the rules of Section
5.4 (regarding the expiration and maximum term of Options) also shall apply to
SARs.
6.5 PAYMENT OF SAR AMOUNT. Upon the exercise of an SAR, the
Participant shall be entitled to receive payment from the Corporation in an
amount determined by multiplying:
(a) The difference obtained by subtracting the Exercise Price thereof
from the Fair Market Value or such other measure specified by the Committee
in its discretion in the related Award Agreement (E.G., the Change of
Control Value) of a Share on the date of exercise; by
(b) The number of Shares with respect to which the SAR is exercised.
6.6 PAYMENT UPON EXERCISE OF SAR. At the discretion of the
Committee, the payment upon exercise of an SAR may be in cash, in Shares of
equivalent value, or in a combination thereof.
SECTION 7
RESTRICTED STOCK
7.1 GRANT OF RESTRICTED STOCK. Subject to the terms and conditions
of the Plan, the Committee, at any time and from time to time, may grant Shares
of Restricted Stock to Employees and Consultants in such amounts as the
Committee, in its sole discretion, shall determine. The Committee, in its sole
discretion, shall determine the number of Shares of Restricted Stock to be
granted to each Participant.
7.2 AWARD AGREEMENT. Each grant of Restricted Stock shall be
evidenced by an Award Agreement that shall specify the Period of Restriction,
the number of Shares granted, any price to be paid for the Shares, and such
other terms and conditions as the Committee, in its sole discretion, shall
determine. Unless the Committee determines otherwise, Shares of Restricted
Stock shall be held by the Corporation as escrow agent until the restrictions on
such Shares have lapsed.
7.3 TRANSFERABILITY. Shares of Restricted Stock may not be sold,
transferred, pledged, assigned, or otherwise alienated or hypothecated until the
end of the applicable Period of Restriction.
7.4 OTHER RESTRICTIONS. The Committee, in its sole discretion, may
impose such other restrictions on Shares of Restricted Stock as it may deem
advisable or appropriate, in accordance with this Section 7.4. For example, the
Committee may set restrictions based
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upon the passage of time, achievement of specific performance objectives
(Corporation-wide, divisional, or individual), applicable Federal or state
securities laws, or any other basis determined by the Committee in its
discretion. The Committee, in its discretion, may legend the certificates
representing Restricted Stock to give appropriate notice of the restrictions
applicable to such Shares.
7.5 REMOVAL OF RESTRICTIONS. Except as otherwise provided in this
Section 7, Shares of Restricted Stock granted under the Plan shall be released
from escrow as soon as practicable after the last day of the applicable Period
of Restriction. The Committee, in its discretion, may accelerate the time at
which any restrictions shall lapse, and remove any restrictions. After the
restrictions have lapsed, the Participant shall be entitled to have any legend
or legends under Section 7.4 removed from his or her Share certificate, and the
Shares shall be freely transferable by the Participant.
7.6 VOTING RIGHTS. During the Period of Restriction, Participants
holding Shares of Restricted Stock granted hereunder may exercise full voting
rights with respect to those Shares, unless otherwise provided in the applicable
Award Agreement.
7.7 DIVIDENDS AND OTHER DISTRIBUTIONS. During the Period of
Restriction, Participants holding Shares of Restricted Stock shall be entitled
to receive all dividends and other distributions paid with respect to such
Shares unless otherwise provided in the Award Agreement. If any such dividends
or distributions are paid in Shares, the Shares shall be subject to the same
restrictions on transferability and forfeitability as the Shares of Restricted
Stock with respect to which they were paid.
7.8 RETURN OF RESTRICTED STOCK TO CORPORATION. On the date set forth
in the Award Agreement, the Restricted Stock for which restrictions have not
lapsed shall revert to the Corporation and again shall become available for
grant under the Plan.
SECTION 8
PERFORMANCE SHARES AND PERFORMANCE UNITS
8.1 GRANT OF PERFORMANCE SHARES/UNITS. Performance Shares and
Performance Units may be granted to Employees and Consultants at any time and
from time to time, as shall be determined by the Committee, in its sole
discretion. The Committee shall have complete discretion in determining the
number of Performance Shares and/or Performance Units to be granted to any
Participant.
8.2 INITIAL VALUE. Each Performance Share shall have an initial
value equal to the Fair Market Value of a Share on the Grant Date. Each
Performance Unit shall have an initial value that is established by the
Committee on or before the Grant Date.
8.3 PERFORMANCE OBJECTIVES AND OTHER TERMS. The Committee shall set
performance objectives in its discretion which, depending on the extent to which
they are met, will determine the number or value of Performance Shares or Units
that will be paid out to the
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Participants. The Committee may set performance objectives based upon the
achievement of Corporation-wide, divisional, or individual goals, or any other
basis determined by the Committee in its discretion. The time period during
which the performance objectives must be met shall be called the "PERFORMANCE
PERIOD". Each Award of Performance Shares/Units shall be evidenced by an Award
Agreement that shall specify the Performance Period, and such other terms and
conditions as the Committee, in its sole discretion, shall determine.
8.4 EARNING OF PERFORMANCE SHARES AND PERFORMANCE UNITS. After the
applicable Performance Period has ended, the Participant shall be entitled to
receive a payout of the number of Performance Shares or Units earned during the
Performance Period, depending upon the extent to which the applicable
performance objectives have been achieved. After the grant of a Performance
Share or Unit, the Committee, in its sole discretion, may reduce or waive any
performance objectives for such Award.
8.5 FORM AND TIMING OF PAYMENT. Payment of earned Performance Shares
or Performance Units shall be made as soon as practicable after the expiration
of the applicable Performance Period. The Committee, in its sole discretion,
may pay earned Performance Shares/Units in cash, in Shares (which have an
aggregate Fair Market Value equal to the value of the earned Performance
Shares/Units at the close of the applicable Performance Period) or in a
combination thereof.
8.6 CANCELLATION. On the date set forth in the Award Agreement, all
unearned or unvested Performance Shares or Performance Units shall be forfeited
to the Corporation, and again shall be available for grant under the Plan.
SECTION 9
MISCELLANEOUS
9.1 NO EFFECT ON EMPLOYMENT. Nothing in the Plan shall interfere
with or limit in any way the right of the Corporation or any Affiliate to
terminate any Participant's employment at any time, with or without cause. For
purposes of the Plan, transfer of employment of a Participant between the
Corporation and any one of its Affiliates (or between Affiliates) shall not be
deemed a Termination of Employment. Employment with the Corporation and its
Affiliates is on an at-will basis only.
9.2 PARTICIPATION. No Employee or Consultant shall have the right to
be selected to receive an Award under this Plan, or, having been so selected, to
be selected to receive a future Award.
9.3 INDEMNIFICATION. Each person who is or shall have been a member
of the Committee, or of the Board, shall be indemnified and held harmless by the
Corporation against and from (a) any loss, cost, liability, or expense that may
be imposed upon or reasonably incurred by him or her in connection with or
resulting from any claim, action, suit, or proceeding to which he or she may be
a party or in which he or she may be involved by reason of any action taken or
failure to act under the Plan or any Award Agreement, and (b) from any
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and all amounts paid by him or her in settlement thereof, with the Corporation's
approval, or paid by him or her in satisfaction of any judgment in any such
claim, action, suit, or proceeding against him or her, provided he or she shall
give the Corporation an opportunity, at its own expense, to handle and defend
the same before he or she undertakes to handle and defend it on his or her own
behalf. The foregoing right of indemnification shall not be exclusive of any
other rights of indemnification to which such persons may be entitled under the
Corporation's Certificate of Incorporation or Bylaws, by contract, as a matter
of law, or otherwise, or under any power that the Corporation may have to
indemnify them or hold them harmless.
9.4 SUCCESSORS. All obligations of the Corporation under the Plan,
with respect to Awards granted hereunder, shall be binding on any successor to
the Corporation, whether the existence of such successor is the result of a
direct or indirect purchase, merger, consolidation, or otherwise, of all or
substantially all of the business or assets of the Corporation.
9.5 BENEFICIARY DESIGNATIONS. If permitted by the Committee, a
Participant under the Plan may name a beneficiary or beneficiaries to whom any
vested but unpaid Award shall be paid in the event of the Participant's death.
Each such designation shall revoke all prior designations by the Participant and
shall be effective only if given in a form and manner acceptable to the
Committee. In the absence of any such designation, any vested benefits
remaining unpaid at the Participant's death shall be paid to the Participant's
estate and, subject to the terms of the Plan and of the applicable Award
Agreement, any unexercised vested Award may be exercised by the person empowered
to do so under the Participant's will, or the appropriate person under
applicable law. The Committee may require appropriate proof from any such other
person of his or her right or power to exercise the Award or any portion
thereof. This Section 9.5 shall not be effective until specifically authorized
by the Committee.
9.6 DOMESTIC RELATIONS ORDERS. If permitted by the Committee, and
under such procedures as the Committee may adopt from time to time, an Award may
be transferred to a Participant's spouse, former spouse or dependent pursuant to
a court-approved domestic relations order which relates to the provision of
child support, alimony payments or marital property rights. This Section 9.6
shall not be effective until specifically authorized by the Committee.
9.7 BONA FIDE GIFTS. If permitted by the Committee, and under such
procedures as the Committee may adopt from time to time, an Award may be
transferred, by bona fide gift and not for any consideration, to a member of the
Participant's immediate family or tax-qualified, not for profit organization.
This Section 9.7 shall not be effective until specifically authorized by the
Committee.
9.8 NONTRANSFERABILITY OF AWARDS. No Award may be sold, transferred,
pledged, assigned, or otherwise alienated or hypothecated, other than (a) by
will, (b) by the laws of descent and distribution, or (c) to the limited extent
provided in Sections 9.5, 9.6 and 9.7. Except as provided in Sections 9.6 and
9.7, all rights with respect to an Award granted to a Participant shall be
available during his or her lifetime only to the Participant.
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9.9 NO RIGHTS AS STOCKHOLDER. Except to the limited extent provided
in Sections 7.6 and 7.7, no Participant (nor any beneficiary) shall have any of
the rights or privileges of a stockholder of the Corporation with respect to any
Shares issuable pursuant to an Award (or exercise thereof), unless and until
certificates representing such Shares shall have been issued, recorded on the
records of the Corporation or its transfer agents or registrars, and delivered
to the Participant (or beneficiary).
9.10 WITHHOLDING REQUIREMENTS. Prior to the delivery of any Shares
or cash pursuant to an Award (or exercise thereof), the Corporation shall have
the power and the right to deduct or withhold, or require a Participant to remit
to the Corporation, an amount sufficient to satisfy Federal, state, and local
taxes (including the Participant's FICA obligation) required to be withheld with
respect to such Award (or exercise thereof).
9.11 WITHHOLDING ARRANGEMENTS. The Committee, in its sole discretion
and pursuant to such procedures as it may specify from time to time, may permit
or require a Participant to satisfy all or part of the tax withholding
obligations in connection with an Award by (a) having the Corporation withhold
otherwise deliverable Shares, or (b) delivering to the Corporation already-owned
Shares having a Fair Market Value equal to the amount required to be withheld.
The amount of the withholding requirement shall be deemed to include any amount
which the Committee determines, not to exceed the amount determined by using the
maximum federal, state or local marginal income tax rates applicable to the
Participant with respect to the Award on the date that the amount of tax to be
withheld is to be determined. The Fair Market Value of the Shares to be
withheld or delivered shall be determined as of the date that the taxes are
required to be withheld.
9.12 DEFERRALS. The Committee, in its sole discretion, may permit a
Participant to defer receipt of the payment of cash or the delivery of Shares
that would otherwise be delivered to a Participant under the Plan. Any such
deferral elections shall be subject to such rules and procedures as shall be
determined by the Committee in its sole discretion.
SECTION 10
AMENDMENT, TERMINATION, AND DURATION
10.1 AMENDMENT, SUSPENSION, OR TERMINATION. The Board, in its sole
discretion, may amend or terminate the Plan, or any part thereof, at any time
and for any reason. The amendment, suspension, or termination of the Plan shall
not, without the consent of the Participant, alter or impair any rights or
obligations under any Award theretofore granted to such Participant. No Award
may be granted during any period of suspension or after termination of the Plan.
10.2 DURATION OF THE PLAN. The Plan shall commence on the date
specified herein, and subject to Section 10.1 (regarding the Board's right to
amend or terminate the Plan), shall remain in effect thereafter.
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SECTION 11
LEGAL CONSTRUCTION
11.1 GENDER AND NUMBER. Except where otherwise indicated by the
context, any masculine term used herein also shall include the feminine; the
plural shall include the singular and the singular shall include the plural.
11.2 SEVERABILITY. In the event any provision of the Plan shall be
held illegal or invalid for any reason, the illegality or invalidity shall not
affect the remaining parts of the Plan, and the Plan shall be construed and
enforced as if the illegal or invalid provision had not been included.
11.3 REQUIREMENTS OF LAW. The granting of Awards and the issuance of
Shares under the Plan shall be subject to all applicable laws, rules, and
regulations, and to such approvals by any governmental agencies or national
securities exchanges as may be required.
11.4 GOVERNING LAW. The Plan and all Award Agreements shall be
construed in accordance with and governed by the laws of the State of
California.
11.5 CAPTIONS. Captions are provided herein for convenience only, and
shall not serve as a basis for interpretation or construction of the Plan.
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EXECUTION
IN WITNESS WHEREOF, the Corporation, by its duly authorized officers,
has executed the Plan on the dates indicated below.
UNITED CRAFT BREWERS, INC.
Dated: July __, 1997 By
-------------------------------
Vijay Mallya
Chairman of the Board and
Chief Executive Officer
Dated: July __, 1997 By
-------------------------------
James W. Bernau
President
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UNITED CRAFT BREWERS, INC.
STOCK OPTION AND AWARD PLAN
TABLE OF CONTENTS
Page
SECTION 1
BACKGROUND AND PURPOSE
1.1 Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Purpose of the Plan. . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 2
DEFINITIONS
2.1 "1934 Act" . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2.2 "Affiliate". . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2.3 "Award". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2.4 "Award Agreement". . . . . . . . . . . . . . . . . . . . . . . . . 1
2.5 "Board". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2.6 "Code" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.7 "Committee". . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.8 "Consultant" . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.9 "Corporation". . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.10 "Director" . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.11 "Disability" . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.12 "Employee" . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.13 "Exercise Price" . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.14 "Fair Market Value". . . . . . . . . . . . . . . . . . . . . . . . 2
2.15 "Grant Date" . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.16 "Option" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.17 "Participant". . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.18 "Performance Share". . . . . . . . . . . . . . . . . . . . . . . . 3
2.19 "Performance Unit" . . . . . . . . . . . . . . . . . . . . . . . . 3
2.20 "Period of Restriction". . . . . . . . . . . . . . . . . . . . . . 3
2.21 "Plan" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.22 "Restricted Stock" . . . . . . . . . . . . . . . . . . . . . . . . 3
2.23 "Retirement" . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.24 "Shares" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.25 "Stock Appreciation Right" . . . . . . . . . . . . . . . . . . . . 3
2.26 "Termination of Employment". . . . . . . . . . . . . . . . . . . . 3
SECTION 3
ADMINISTRATION
3.1 The Committee. . . . . . . . . . . . . . . . . . . . . . . . . . . 3
3.2 Authority of the Committee . . . . . . . . . . . . . . . . . . . . 3
3.3 Delegation by the Committee. . . . . . . . . . . . . . . . . . . . 4
3.4 Matters Relating to Terminations of Employment . . . . . . . . . . 4
3.5 Decisions Binding. . . . . . . . . . . . . . . . . . . . . . . . . 4
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SECTION 4
SHARES SUBJECT TO THE PLAN
4.1 Number of Shares . . . . . . . . . . . . . . . . . . . . . . . . . 4
4.2 Lapsed Awards. . . . . . . . . . . . . . . . . . . . . . . . . . . 4
4.3 Adjustments in Awards and Authorized Shares. . . . . . . . . . . . 4
SECTION 5
OPTIONS
5.1 Grant of Options . . . . . . . . . . . . . . . . . . . . . . . . . 5
5.2 Award Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . 5
5.3 Exercise Price . . . . . . . . . . . . . . . . . . . . . . . . . . 5
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
5.4 Expiration of Options. . . . . . . . . . . . . . . . . . . . . . . 5
5.4.1 Committee Discretion. . . . . . . . . . . . . . . . . . . . 5
5.4.2 Maximum Term. . . . . . . . . . . . . . . . . . . . . . . . 5
5.5 Exercisability of Options. . . . . . . . . . . . . . . . . . . . . 5
5.6 Payment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
5.7 Restrictions on Share Transferability. . . . . . . . . . . . . . . 6
5.8 Grant of Reload Options. . . . . . . . . . . . . . . . . . . . . . 6
SECTION 6
STOCK APPRECIATION RIGHTS
6.1 Grant of SARs. . . . . . . . . . . . . . . . . . . . . . . . . . . 6
6.2 Exercise Price and Other Terms . . . . . . . . . . . . . . . . . . 6
6.3 Award Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . 6
6.4 Expiration of SARs . . . . . . . . . . . . . . . . . . . . . . . . 7
6.5 Payment of SAR Amount. . . . . . . . . . . . . . . . . . . . . . . 7
6.6 Payment Upon Exercise of SAR . . . . . . . . . . . . . . . . . . . 7
SECTION 7
RESTRICTED STOCK
7.1 Grant of Restricted Stock. . . . . . . . . . . . . . . . . . . . . 7
7.2 Award Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . 7
7.3 Transferability. . . . . . . . . . . . . . . . . . . . . . . . . . 7
7.4 Other Restrictions . . . . . . . . . . . . . . . . . . . . . . . . 7
7.5 Removal of Restrictions. . . . . . . . . . . . . . . . . . . . . . 8
7.6 Voting Rights. . . . . . . . . . . . . . . . . . . . . . . . . . . 8
7.7 Dividends and Other Distributions. . . . . . . . . . . . . . . . . 8
7.8 Return of Restricted Stock to Corporation. . . . . . . . . . . . . 8
SECTION 8
PERFORMANCE SHARES AND PERFORMANCE UNITS
8.1 Grant of Performance Shares/Units. . . . . . . . . . . . . . . . . 8
8.2 Initial Value. . . . . . . . . . . . . . . . . . . . . . . . . . . 8
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8.3 Performance Objectives and Other Terms . . . . . . . . . . . . . . 8
8.4 Earning of Performance Shares and Performance Units. . . . . . . . 9
8.5 Form and Timing of Payment . . . . . . . . . . . . . . . . . . . . 9
8.6 Cancellation . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 9
MISCELLANEOUS
9.1 No Effect on Employment. . . . . . . . . . . . . . . . . . . . . . 9
9.2 Participation. . . . . . . . . . . . . . . . . . . . . . . . . . . 9
9.3 Indemnification. . . . . . . . . . . . . . . . . . . . . . . . . . 9
9.4 Successors . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
9.5 Beneficiary Designations . . . . . . . . . . . . . . . . . . . . . 10
9.6 Domestic Relations Orders. . . . . . . . . . . . . . . . . . . . . 10
9.7 Bona Fide Gifts. . . . . . . . . . . . . . . . . . . . . . . . . . 10
9.8 Nontransferability of Awards . . . . . . . . . . . . . . . . . . . 10
9.9 No Rights as Stockholder . . . . . . . . . . . . . . . . . . . . . 11
9.10 Withholding Requirements . . . . . . . . . . . . . . . . . . . . . 11
9.11 Withholding Arrangements . . . . . . . . . . . . . . . . . . . . . 11
9.12 Deferrals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 10
AMENDMENT, TERMINATION, AND DURATION
10.1 Amendment, Suspension, or Termination. . . . . . . . . . . . . . . 11
10.2 Duration of the Plan . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 11
LEGAL CONSTRUCTION
11.1 Gender and Number. . . . . . . . . . . . . . . . . . . . . . . . . 12
11.2 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
11.3 Requirements of Law. . . . . . . . . . . . . . . . . . . . . . . . 12
11.4 Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . . . 12
11.5 Captions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
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UNITED CRAFT BREWERS, INC.
STOCK OPTION AND AWARD PLAN
NONQUALIFIED STOCK OPTION AWARD AGREEMENT
1. GRANT OF OPTION. United Craft Brewers, Inc. (the "Company")
hereby grants to _____________________ (the "Participant") under the United
Craft Brewers, Inc. Stock Option and Award Plan (the "Plan"), as a separate
incentive in connection with his or her employment or service with the Company
or a Subsidiary and not in lieu of any fees or other compensation for his or her
services, a nonqualified stock option to purchase, on the terms and conditions
set forth in this Agreement and the Plan, all or any part of an aggregate of
_________ shares of authorized but unissued or treasury shares of the Company's
common stock, $0.001 par value ("Shares"), at the purchase price set forth in
Paragraph 2 of this Agreement. The option granted hereby is not intended to be
an incentive stock option (within the meaning of section 422 of the Internal
Revenue Code of 1986, as amended).
2. OPTION PRICE. The purchase price per Share for this option (the
"Option Price") shall be $___________, which is one hundred percent (100%) of
the Fair Market Value per Share on ____________, the effective date of this
Agreement (the "Grant Date").
3. NUMBER OF SHARES. The number and class of Shares specified in
Paragraph 1 of this Agreement, and/or the Option Price, are subject to
appropriate adjustment by the Committee in the event of any merger,
reorganization, consolidation, recapitalization, separation, liquidation, stock
dividend, split-up, Share combination or other change in the corporate structure
of the Company affecting the Shares; provided, however, that the number of
Shares subject to this option shall always be a whole number. Subject to any
required action of the stockholders of the Company, if the Company is the
surviving corporation in any merger or consolidation, this option (to the extent
that it is still outstanding) shall pertain to and apply to the securities to
which a holder of the same number of Shares that are then subject to the option
would have been entitled.
4. VESTING SCHEDULE. The right to exercise this option shall accrue
as to twenty-five percent (25%) of the Shares subject thereto on the first
anniversary date of the Grant Date, and as to an additional twenty-five percent
(25%) on each succeeding anniversary date, until the right to exercise the
option shall have accrued with respect to one hundred percent (100%) of the
Shares subject thereto.
5. EXPIRATION OF OPTION. In the event of the Participant's
Termination of Service for any reason other than death or Disability, the
Participant may, within three (3) months after the date of the Termination, or
within ten (10) years from the Grant Date,
whichever shall first occur, exercise any vested but unexercised portion of this
option. In the event of the Participant's Termination of Service due to
Disability, the Participant may, within one (1) year after the date of the
Termination, or within ten (10) years from the Grant Date, whichever shall first
occur, exercise any vested but unexercised portion of this option.
6. DEATH OF THE PARTICIPANT. In the event that the Participant dies
while in the employ or service of the Company or a Subsidiary, or during the
three (3) month or one (1) year periods referred to in Paragraph 5 of this
Agreement, the Participant's designated beneficiary or beneficiaries, or if no
beneficiary survives the Participant, the administrator or executor of the
Participant's estate, may, within one (1) year after the date of the
Participant's death, exercise any vested but unexercised portion of this option.
Any such transferee must furnish the Company (a) written notice of his or her
status as a transferee, (b) evidence satisfactory to the Company to establish
the validity of the transfer of this option and compliance with any laws or
regulations pertaining to such transfer, and (c) written acceptance of the terms
and conditions of this option as set forth in this Agreement.
7. PERSONS ELIGIBLE TO EXERCISE. This option shall be exercisable
during the Participant's lifetime only by the Participant. This option is not
transferable, except that the Participant may transfer this option (a) by a
valid beneficiary designation made in a form and manner acceptable to the
Committee, or (b) by will or the applicable laws of descent and distribution.
8. EXERCISE OF OPTION. This option may be exercised by the person
then entitled to do so as to any Shares which may then be purchased (a) by
giving written notice of exercise to the Secretary of the Company (or his or her
designee), specifying the number of full Shares to be purchased and accompanied
by full payment of the Option Price thereof (and the amount of any income tax
the Company is required by law to withhold by reason of such exercise), and
(b) by giving satisfactory assurances in writing if requested by the Company,
signed by the person exercising the option, that the Shares to be purchased upon
such exercise are being purchased for investment and not with a view to the
distribution thereof. The Option Price shall be payable in the legal tender of
the United States or, in the discretion of the Committee, in Shares or in a
combination of such legal tender or Shares.
9. SUSPENSION OF EXERCISABILITY. If at any time the Committee shall
determine, in its discretion, that (a) the listing, registration or
qualification of the Shares upon any securities exchange or under any domestic
or foreign law, or (b) the consent or approval of any governmental regulatory
authority, is necessary or desirable as a condition of the purchase of Shares
hereunder, this option may not be exercised, in whole or in part, unless and
until such listing, registration, qualification, consent or approval shall have
been effected or obtained free of any conditions not acceptable to the
Committee. The Company shall make reasonable efforts to meet the requirements
of any such domestic or foreign law or securities exchange and to obtain any
such consent or approval of any such governmental authority.
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10. NO RIGHTS OF STOCKHOLDER. Neither the Participant nor any
person claiming under or through the Participant shall be or have any of the
rights or privileges of a stockholder of the Company in respect of any of the
Shares issuable pursuant to the exercise of this option, unless and until
certificates representing such Shares shall have been issued, recorded on the
records of the Company or its transfer agents or registrars, and delivered to
the Participant (or such other person).
11. NO EFFECT ON EMPLOYMENT OR SERVICE. Nothing in this Agreement
or the Plan shall interfere with or limit in any way the right of the Company or
any Subsidiary to terminate the Participant's employment or service at any time,
with or without cause.
12. WITHHOLDING. Whenever Shares are to be issued to the
Participant (or any transferee) in satisfaction of the rights conferred hereby,
the Company shall have the right to require the Participant (or transferee) to
remit to the Company an amount sufficient to satisfy applicable federal, state
and local withholding tax requirements prior to the delivery of any certificate
or certificates for such Shares.
13. ADDRESSES FOR NOTICES. Any notice to be given to the Company
under the terms of this Agreement shall be addressed to the Company, in care of
its Secretary, at [ADDRESS], or at such other address as the Company may
hereafter designate in writing. Any notice to be given to the Participant shall
be addressed to the Participant at the address set forth beneath the
Participant's signature hereto, or at such other address as the Participant may
hereafter designate in writing.
14. OPTION IS NOT TRANSFERABLE. Except as otherwise provided
herein, this option and the rights and privileges conferred hereby shall not be
transferred, assigned, pledged or hypothecated in any way (whether by operation
of law or otherwise) and shall not be subject to sale under execution,
attachment or similar process. Upon any attempt to transfer, assign, pledge,
hypothecate or otherwise dispose of this option, or of any right or privilege
conferred hereby, or upon any attempted sale under any execution, attachment or
similar process, this option and the rights and privileges conferred hereby
immediately shall become null and void.
15. MAXIMUM TERM OF OPTION. Notwithstanding any contrary provision
of this Agreement, this option is not exercisable after the expiration of ten
(10) years from the Grant Date.
16. BINDING AGREEMENT. Subject to the limitation on the
transferability of this option contained herein, this Agreement shall be binding
upon and inure to the benefit of the heirs, legatees, legal representatives,
successors and assigns of the parties hereto.
17. PLAN GOVERNS. This Agreement is subject to all of the terms and
provisions of the Plan. In the event of a conflict between one or more
provisions of this Agreement and one or more provisions of the Plan, the
provisions of the Plan shall govern.
3
Capitalized terms and phrases used and not defined in this Agreement shall have
the meaning set forth in the Plan.
18. COMMITTEE AUTHORITY. The Committee shall have the power to
interpret the Plan and this Agreement and to adopt such rules for the
administration, interpretation and application of the Plan as are consistent
therewith. All actions taken and all interpretations and determinations made by
the Committee in such connection shall be final and binding upon the
Participant, the Company and all other interested persons, and shall be given
the maximum deference permitted by law. No member of the Committee shall be
personally liable for any action, determination or interpretation made in good
faith with respect to the Plan or this Agreement.
19. CAPTIONS. The captions provided herein are for convenience only
and are not to serve as a basis for interpretation or construction of this
Agreement.
20. AGREEMENT SEVERABLE. In the event that any provision in this
Agreement shall be held invalid or unenforceable, such provision shall be
severable from, and such invalidity or unenforceability shall not be construed
to have any effect on, the remaining provisions of this Agreement.
4
IN WITNESS WHEREOF, the parties hereto have executed this Agreement,
in duplicate, effective as of the Grant Date.
UNITED CRAFT BREWERS, INC.
By ______________________________
Title:
____________________________
Participant Signature
____________________________
____________________________
Address
____________________________
Social Security Number
5